Essay

1.Alice, Belen, Carla, and Dencil are partners in Beauty Enterprises Co., a dealer in cosmetics and other beauty products. No one was appointed as manager in the Articles of Partnership. Who will act as manager of the partnership? Explain.

2.Clean Laundry Services Company is a partnership composed of Carpio, Legaspi, Encinas, Alzate and Noval. Without the knowledge of the other partners, Carpio used a coat brought to the shop by a customer for dry-cleaning in a party he attended. The coat was stained with food sauce during the said party. Who will be liable to the customer for damages? Explain.

3.Apply the provisions of law in case of conflict and violations of obligations of the partnership and partners.

Self-Enrichment Activities

1.Go back to Articles 1789 and 1808 provisions of the Civil Code of the Philippines. Analyze how these provisions differ with one another?

2.Go back to article 1800. It was stated that the managing partner may only execute acts of administration. Therefore, acts of strict dominion are not covered by acts of management. How do acts of management differ with acts of strict dominion?

3.Go back to Art. 1797. In case sharing in the profits and losses are not expressly set forth in the articles of partnership[, how will the profits and losses be shared by the partners in the partnership?

4.Go back to Article 1803. In case there is no managing partner designated in the articles of partnership, how will the partnership be managed? What are the governing rules in case of conflict of management among the partners?

Essay:

1.The articles of partnership of ABC co have no provision on the designation of the managing partner. Who will be the managing partner of the partnership?

2.The articles of partnership have no provision on the sharing pf the profits and losses of the partnership. What will govern the sharing of the profits and losses between or among the partners?

3.When there is misappropriation of the property received by the partnership in the course of its business, what is the liability of the partners, partnership and the partner guilty of misappropriation?

4.When an industrial partner engages in any business during the partnership, what is the available recourse of the other partners in the partnership?

5.How managing partners are designated? Differentiate the two ways in which managing partners may be designated?

6.If only the sharing of the profits was designated in the articles of partnership, what will govern the sharing of the losses between or among partners?

7.A sold to B, one of the managing partners of Partnership X, the other being C, a certain number of mining claims without the consent of C. In an action by A to recover unpaid balanceof the purchase priceagainst Partnership X, C claims that the contract is not bindingupon the partnership for the reason that under the articles of partnership, there is stipulation that one of the partnerscannot bind the firm by a written contractwithout the consent of the others?

Is the transaction made by B binding upon the partnership?

8.A, B, and C are the original partners of the partnership X with contributions of P10,000.00 each. X partnership owes D P40,000.00. Later on, E entered the partnershipand contributed P4,000.00 How shall the debt be paid?

9.A, B, and C are partners with the following capital contributions, P30,000.000. P20,000.00 and P10,000.00 respectively, where C is a capitalist-industrial partner. For one year of their operations, their partnership had earned net profits of P17,000. How shall these profitsbe dividedamong the partners if there was no agreement in the articles of partnership?

10.T hired X law, a law firm, to represent Y Company, T's company, in labor negotiation and to advise it on labor matters. P, a senior partner of X Law, was responsible for advising Y Company. T gave money to invest in the common stock of another company. Pmisappropriated the money. Is X responsible for the loss?

RESEARCH:

Research then prepare written agreements on management of partnership and written agreements on the sharing of the profits and losses in the articles of partnership.

Multiple-choice tests

1.Teresa, Olga, Pamela and Sonia, partners in TOPS Company Limited, a trading company, have contributions of P50,000.00 each. Teresa and Olga are general partners; Pamela, a limited partner; and Sonia, a general-limited partner. TOPS Company Limited purchased merchandise on credit from Moret Sales Co amounting to P180,000.00. On due date, however, TOPS CompanyLimitedwas unable to pay . Accordingly, Moret Sales Co. filed a cause of collection against the partnership which by then had assets amounting P150,000.000. from whom may Moret Sales Co. collect the sum of P180,000.00?

a.The partnership for its assets of P150,000.00, thereafter, from Teresa and Olga at P15,000.00 each from their separate assets.

b.Teresa and Olga only at P90,000.00 each from their separate assets.

c.The partnership for its assets of P150,000.00 thereafter, from Teresa, Olga, and Sonia at P10,000.00 each from their separate property. However, Sonia can recover P5,000.00 each from Teresa and Olga.

d.Teresa, Olga and Sonia at P60,000.00 each. Thereafter, Sonia can recover from Teresa and Olga P30,000 each.

2.Gregory, Edmond and Mark are partners in GEM Company with contributions of P10,000, P40,000 and P50,000 respectively. Their agreement shows that they will share in the profits in the ratio of 2:3:4. During the year, the partnership sustained a loss of P9,000.00. How shall this loss be divided among the partners?

a.Equally at P3,000.00 each.

b.Gregory, P900.00; Edmond, P3,600; and Mark P4,500

c.Gregory, P2,000.00; Edmond P3,000.00 and Mark P4,000.00

d.The partners must establish first a loss sharing agreement before the loss may be divided because they failed to have an agreement on the division of loss.

3.Which of the following stipulation is valid?

a.A stipulation excluding a capitalist partner from profits.

b.A stipulation exempting a capitalist partner from losses.

c.A stipulation exempting an industrial partner from losses.

d.A stipulation excluding an industrial partner from profits.

4.A partner can engage in business for himself without the consent of his co-partners if he is:

a.a capitalist partner whether or not the business he will engage in is of the same kind as or different from the partnership business.

b.an industrial partner whether or notthe business he willengage in is of the same kind as or different from the partnership business.

c.a capitalist partner and the business he will engage in is of a kind differentfrom the partnership business.

d.An industrial partner and the business he will engage in is of a kind different from the partnership business.

5.The partnership will bear the risk of the loss of three of the followingthings. Which is the exception?

a.Things contributed to be sold.

b.Fungible things or those that cannotbe kept without deteriorating.

c.Things contributed so that only their use and fruits will be for the common benefit.

d.Things brought and appraised in the inventory.

6.A partner's interest in the partnership is his shareof the profits and surplus which he may assignto a third person. Which of the following statements concerningsuch right is correct?

a.The conveyance of a partner's interest will cause the dissolution of the partnership

b.The assignee becomes a partner.

c.The assignee has a right to interferein the management of the partnership business.

d.The assignee has the rightto receive the profitswhich the assigning partner would otherwise be entitled to.

7.Torres is indebted for P5,000.000 to MACE Trading Company, a partnership managed by Mendoza to whom Torres also owes P10,000.00. The two debts which are both demandable are unsecured. Torres remits P4,500 to Mendoza in payment of his debt to him. Accordingly, Mendoza issues a receipt for his own credit. To which credit should the payment be applied?

a.To Mendoza's credit becausethe payment made by Torres is intended for his debt to Mendoza who issued his own receipt.

b.To both the partnership credit and Mendoza's credit proportionately at P1,500.00 and P3,000.00 respectively.

c.To Mendoza's credit because its amountis greater than that of the partnership credit.

d.To the partnership credit because the managing partnershould not prefer his own interest to that of the partnership.

8.In three of the following wrongful acts of partners, the partnership is solidarily liable with all the partnersto third persons. Which one is the exception?

a.For loss or injury caused to a third person by reason of the wrongful act or omission of a partner acting in the ordinary course of business.

b.Where a partner acting within the scope of his apparent authorityreceives money or propertyof a third person and misappropriates it.

c.Where the partnership receives money or property of a third person in the ordinary course of business and suchmoney or propertyis misapplied by a partner while it is in the custody of the partnership.

d.For loss or injury caused to a third person by reason of the use of partnership property by a partner for personal purpose.

9.Benito, Ignacio, Gregorio, Artemio and Servando are partners in BIGAS Company which is engaged in the buying and selling of rice. Benito is the manager. Ignacio was also given a special power of attorneyby the partnership to buy a van for the company. No other power was given to all the partners. In which of the following acts or contractsis the partnership not bound by the act of the partner?

a.Ignacio buying rice for the partnership from Teodoro who has no knowledge of Ignacio's lack of authority.

b.Ignacio buying a van for the partnership from Teresa.

c.Gregorio buying a van for the partnership from Thelma who has no knowledge of Gregorio's lack of authority

d.Benito selling rice for the partnership.

10.Statement I.- The profits and losses of the partnership shall be dividedamong the partners if they have no profit and loss sharing agreement .

Statement II. - A stipulation exempting the capitalist partner from losses is valid.

a.Statement I is correct, and Statement II is incorrect.

b.Statement I is incorrect, and Statement II is correct.

c.Statements I and II are correct.

d.Statements I and II are incorrect.

11.Statement I. - A newly admitted partner is liable for partnership debtscontracted before his admission to the extent of his contribution , unless there is contrary stipulation.

Statement II. - A partner may associate anotherperson with him in his share, but the person associated shall not be admitted to the partnership without the consent of all the partners.

a.Statements I and II are correct.

b.Statements I and II are incorrect.

c.Statement I is correct, and Statement II is incorrect.

d.Statement I is incorrect, and Statement II is correct.

12.Statement I. - The partnership shall be solidarily liable with all the partnersif one partner acting within the scope of his authority receives a money or property of a third person and misapplies it.

Statement II. - When a partner is not authorized to act for the partnership and the act of the partner is not for apparently carrying on the business of the partnership shall be bound by the act of such partnerif the third person was not unaware of the partner's lack of authority.

a.Both statements are correct.

b.Both statements are incorrect

c.Statement I is correct, and statement II is incorrect.

d.Statement I is incorrect, and Statement II is correct.

13.The following statements pertain either to partner appointed as manager in the articles of partnership or through a document after the formation of the partnership.

I.He may be removed as manager only for a just or lawful cause by the vote of the partners owning the controlling interest.

II.He may be removed as manager with or without just or lawful cause by the vote of the partners owning the controlling interest.

III.He may perform all acts of administration despite the opposition of his partners provided he is in good faith.

IV.He may perform all acts of administration in good faith but opposing partners may resort to his removal if he persists.

Based on the foregoing :

a.I and IIIpertain to a partnerappointed as manager in the articles of partnership.

b.I and III pertain to a partner appointed as manager through a documentafter the formation of the partnership.

c.II and III pertain to a partnerappointed through a document after the formation of the partnership.

d.I and IV pertain to a partner appointed as manager in the articles of partnership.

14.It refers to the pro rata liability for partnership obligations of the partnersincluding industrial ones , to the extent of their separate property after partnership assets have been exhausted.

a.Subsidiary liability

b.Secondary liability

c.Primary liability

d.None of the foregoing.

15.Statement I. - Persons who, not being partners, include their names in the firm name do not acquire the rights of a partner but they shall be subject the liability of a partner in so far as third persons without notice are concerned.

Statement II. - All partners including industrial ones , shall be liable pro rata with all their propertyand after all the partnership assetshave been exhausted for the contract which may have been entered into in the name of the partnership.

a.Both statements are incorrect.

b.Both statements are correct.

c.Statement I is correct, and Statement II is incorrect.

d.Statement I is incorrect, and Statement II is correct.