a. Angel, Bea, Shaina and Tony, four sisters, entered into a partnership to form a public relations consultancy group in time for the upcoming Presidential elections. The sisters contributed PhP 5 million each which totaled to PhP 20 million as total capital contribution. They identified Bea, a corporate communication manager with extensive vocabulary, as the managing partner. They targeted local politicians vying for mayoralty posts.

Mr. Fernando Sakalam, an independent candidate, talked to Tony and asked her to help him in his mayoralty campaign. Tony endorsed the request of Fernando to Bea. Bea agreed and took on the consultancy work requested by Mr. Fernando in behalf of the partnership. Mr. Fernando agreed to pay the partnership PhP 120 million pesos for the project. PhP 20 million will be paid upon signing of the contract and the other payments will be made on April (PhP 50 million) and May (PhP 50 million).

The contract was signed in January 2022.

Assessing the situation, Bea saw the need to jumpstart the image build-up of Mr. Fernando as early as February. This is necessary to establish that Mr. Fernando has the competency, qualification and accomplishment to be the next mayor. Bea contacted AMG Broadcasting to place several public service announcements about the projects of Mr. Fernando like the laying out of solar panels in Benguet and others. AMG billed the partnership the amount of PhP 50 million to run the public service announcements for 3 months until April.

After reviewing the partnership books which included the accounting of the operational costs of the partnership with a projection of expenses up to April 2022, Bea found that the payment to AMG will be short of PhP 10 million. In order to run the public service advertisement on time, Bea took money from her personal savings in the amount of PhP 10 million to complete the payment. As a result, the general public had positive response on the image of Mr. Fernando based on the Falls Hearsay Survey.

Tony, seeing that Mr. Fernando is elated with the survey results, approached him and requested if she can borrow money from him in the amount of PhP 5 million. She plans to record a collaborative dance album with Kitty Fairy. Mr. Fernando obliged and extended the loan to Tony. Unfortunately, the collaborative album flopped. Tony fell into a negative financial situation.

In light of the efforts of the partnership, Mr. Fernando won overwhelmingly and paid the full amount with bonus to the partnership.

Bea billed the partnership PhP 500,000.00 as interest for the money she paid in advance. Tony, anticipating that Mr. Fernando will collect the money she borrowed soon and that allowing the billing of Bea will reduce her share in the profits, questioned the interest charge by Bea to the partnership. She claims that: First, they did not ask her to pay in advance; and Second, as managing partner she should make the advance payment as part of her function.

Bea feeling bad asked herself "Bakit parang kasalanan ko".

Shaina in order to diffuse the tension between Bea and Tony, approached you and asked you whether who is in the right between Bea and Tony?

As a concerned sister, she also asked you whether the partnership could also cover for the payment of the loan made by Tony?

How will you advise Shaina?

b. Wendy, Aly, Sam, Brenda and Anna entered in to a partnership which they called SABAW Enterprises. They are into trading noodles to different fast food chain and small food stalls. The partners appointed Aly to manage the partnership. The partners authorized Brenda to buy one franchise of Mang Noodles in a SM Megamall.

After seeing that Mang Noodles was bought by Brenda, Lani operator of Lani Lugaw Special a food stall beside Mang Noodle offered to sell her franchise and stall to Brenda. Brenda counter-offered and said that they can buy it but by four instalment payments payable in four months. Lani agreed. Brenda seeing the opportunity of increasing the market of their product also decided to buy the stall and franchise of Lani and paid the instalment fee.

Sam knowing the customers of Lani Lugaw Stall is low asked you whether she can still have the sale voided in so far as the partnership is concerned.

Seeing that Sam is about to nullify the sale, Brenda hold the payments of the last 3 installments. Sam worried that Lani will come after the partnership, asked you as to whether Lani can file a claim against the partnership.

How will you advise Sam?

c. Glo, Fidel and Ben entered into a partnership to establish a bills payment center in Ilocos Sur. Glo was assigned as the managing partner. Glo bought a 5000 square meter lot in Ilocos Sur where they will build the bills payment center. After the land was surveyed by a geodetic engineer, it was found out that only 200 square meters is viable for a 2 storey building while the rest is rich in gold deposits. Glo found it sensible to only use 200 square meters for the office building of the partnership.

Knowing the profitability of the remaining 4800 square meters, she sold it to Aileen, a gold trader in Ilocos Sur, for PhP 20 million pesos. Aileen agreed and bought it from Glo. Glo signed the contract of sale as seller while Aileen signed it as buyer. Aileen later on realized that she does not have enough funds to mine the gold in the land sold by Glo and decided sell it to Charit, an owner of a mining company, for PhP 25 million.

Ben found out about the sale of the 4800 square meters of lot and was shocked of how much the value of the property. He sought your advice whether the title could still be recovered in favor of the partnership.