PART A Downtrodden, you decided to still go to your law office to drown yourself with work a day after the general elections. Coming from the Writers Bar for your usual afternoon tea, you were surprised when you arrived in your office. The reception area is full of men wearing crisp barong tagalog and earpieces. Your secretary quickly escorted you to your office. Lo and behold, Fernando Marcia II, the leading candidate, is waiting for you. Quickly dismissing your apology for making him wait, he told you to just call him Dos, and that he needs your help considering your known expertise in Partnership law. Dos then began narrating his story, where you learned of the following information: APT GOx | 120xxxxx HDos told you that his family had several business interests; a number of which are in the form of partnership. He reached out to his gold-plated briefcase and handed to you a photocopy of a contract, to wit: GENERAL PARTNERSHIP AGREEMENT KNOW ALL MEN BY THESE PRESENTS: THE GENERAL PARTNERSHIP AGREEMENT is entered into this 30 day of October 2006, in Mandaluyong City, Philippines, by and among: IMMACULADA R. MARCIA., of legal age, Filipino, widow, with residential address at 3 Talisay Rd., Forbes Park, Makati City: and ILUMINADA R. MARCIA, of legal age, Filipino, divorced, with residential address at 3 Talisay Rd., Forbes Park, Makati City: and VINCENZO M. RODRIGO, of legal age, Filipino, married, with office address at 1500 Epifanio Delos Santos Ave, Mandaluyong City: and RYAN JOSE P. NIETA, of legal age, Filipino, single, with residential address at 1058 La Rosa St., Baliwaz, Bulacan;ASTHER MARGARITA J. JOSON, of legalage, Filipino, single, with residential address at 23 Gomez St., Dagupan, Pangasinan; and CAMILLE BRIDGET F.B. ANASTACIA, of legal age, Filipino, singh, with office address at 31/F Menarco Tower, 32d St., Bonifacio Global City, Taguig City: WITNESSETH: WHEREAS, the PARTIES have agreed to make contributions to a common fund for the purpose of acquiring, holding and operating an undertaking described herrin; WHEREAS, the PARTIES have agreed, in pursuit of the undertaking described herrin, to enter into a Partnership in accordance to the Philippine laws on Partnership; NOW, THEREFORE, the PARTIES agree as follows: 1. Name and Business. The PARTIES hanby form a Partnership under the name of Let's Roll Digital Media Pioneers, with the principal office at 1500 Epifanio Delos Santos Ave. Mandaluyong City.2. Term and Undertaking. The Partnership shall commence on 15 May 2007 and, unless terminated, shall continue to exist, and upon the death or legal incapacity of one of the Partners shall be continued by the surviving Partners. The Partnership is formed to act as consultants, advisers and representatives of any individual, firm and corporation engaged in commercial, industrial or other hatoful business; to counsel and advise such persons and entities with respect to the development of business, marketing, product and/or human resources; and to appear for and represent the clients in government departments and offices in the Philippines, and chorwhere when legally authorized to do so. 3. Contributions. The Partnership capital shall be composed of the following contributions: Partner Nature Contribution Value Immaculada Marcia Money Henri Matisse painting P500 Million Tuminada Marcia Property Cash P1 Billion Vincizo Rodrigo Property Office Building P500 Million Ryan Jow Nicta Industry Aother Margarita Jean Industry Camille Bridget Anastacia Industry Total P2 Billion A separate capital account shall be maintained for each Partner. Neither Partner shall withdraw any part of his capital account. Upon the demand of either Partner, the capital accounts of the Partners shall be maintained at all times in the proportions in which the Partners share in the profits and losses of the Partnership.4. Profit and Losses. Both the profits and losses of the Partnership shall be divided and borne equally between the Partners. A separate income account shall be maintained for each Partner. Partnership profits and losses shall be charged or credited to the separate income account of each Partner. If a Partner has no credit balance in his income account, losses shall be charged to his capital account. 5. Salaries and Drawings. No Partner shall receive any salary for services rendered to the Partnership. Each Partner may, from time to time, withdraw the credit balance in his income account. All other expenses incurred by the PARTIES in the pursuit of the Business shall be accounted for according to the policies mutually set by them in keeping with the generally accepted accounting principles. 6. Interest. No interest shall be paid on the initial contributions to the Partnership capital or any subsequent contributions of capital. 7. Management. This Partnership shall be under Camille Bridget Anastacia as General Manager, who shall be in charge of the management of the Partnership affairs. She shall have the power to use the partnership name and in otherwise performing such acts as are Necessary and expedient in the management of the firm and to carry out it's Lawfur! 8. Banking. All funds of the Partnership shall be deposited in its name in such checking account (!) as shall be designated by the Partners. All withdrawals therefrom are to be made upon checks signed by at least two (2) Partners. 9. Books. The Partnership books shall be maintained at the principal office of the Partnership, and each Partner shall at all times have access thereto. The books shall be kept on a fiscal year basis in accordance with generally acorpted accounting principles, and shall be closed and balanced at the end of each fiscal year. An audit shall be made as of the closing date.10. Termination. The Partnership may be dissolved at any time by agreement of the Partners, in which event they shall proceed with reasonable promptness to liquidate the Business and other Partnership affairs. The Partnership name shall be sold with the other assets of the Business. 11. Death. Upon the death of a partner, the surviving partner/'s shall have the right either to purchase the interest of the decedent in the partnership or to terminate and liquidate the partnership business. If the surviving partner elects to purchase the drondent's interest, he shall serve notion in writing of such election, within three months after the death of the deerdent, upon the executor of administrator of the decedent, or, if at the time of such election no legal representation has been appointed, upon any one of the known legal heirs of the decedent at the last-known address of such heir. If the surviving partner/s elect's to purchase the interest of the decedent in the partnership, the purchase price shall be equal to the decedent's capital account as at the date of his death plus the decedent's income account as of the end of the prior fiscal your, increased by his share of partnership profits or decreased by his share of partnership losses for the period from the beginning of the fiscal year in which his death occurred until the end of the calendar mouth in which his death occurred, and decreased by withdrawals charged to his income account during such period. No allowance shall be made for goodwill, trade name, patents, or other intangible assets, exempt as those assets have been reflected on the partnership books immediately prior to the decedent's death; but the survivor shall nevertheless be entitled to use the trade name of the partnership.12. Arbitration. The PARTIES agree that any dispute, claim, or controversy concerning this Agreement or the termination of this Agreement, or any dispute, claim or controversy arising out of or relating to any interpretation, construction, performance or breach of this Agreement, shall be settled in good faith by the parties. If no agreement is reached, the Parties shall refer the same to arbitration in accordance with Philippine arbitration rules them in effect. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusion and binding on the parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction. The Parties will pay the costs and expenses of such arbitration in such proportions as the arbitrator shall decide, and each party shall separately pay its own counsel fors and expenses. 13. Final Agreement. This Agreement terminates and supersedes all prior understandings or agreements on the subject matter hereof. This Agreement may be modified only by a further writing that is duly executed by the PARTIES. 14. Severability. If any form of this Agreement is held by a court of competent jurisdiction to by invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never bern included.15. Implied Waiver. Any PARTY's failure to insist in any one or more instances upon strict performance by the other party of any of the terms of this Agreement shall not be construed as a waiver of any continuing or subsequent failure to perform or delay in performance of any term hereof. IN WITNESS WHEREOF, we have hereunto set our hands this 30th day of October 2006, in Mandaluyong City, Philippines. After handing over the copy of the agreement, Dos explains that contrary to a popular criticism hurled against him he is not really jobless. On the contrary, he claims to be a APT GOx | 120xXXXX secret partner in Let's Roll, having invested in the firm upon the execution of the agreement in 2006. Dos claims that all parties agreed that his name should not appear in any documents relating to the business. This was the result of the legal advice he sought from Vincenzo, Dos's long-time lawyer, to prevent any complications. At that time Dos was still a Governor in his home province. Additionally, Dos mentioned that the P500 Million of the P1 Billion Iluminada contributed came from his inheritance.In 2013, the partnership elevated the status of Ryan Jose and Asther Margarita as Co- Managers together with Camille Bridget Anastacia. By scaling the partnership operations, Let's Roll will be at the forefront of digital marketing. Shortly thereafter, their old treasurer resigned to migrate to Canada. So, Camille Bridget promoted the long-time assistant treasurer, whom she hired when the firm was still in its infancy. From the beginning of the partnership, when Camille Bridget was exclusively at the helm, Let's Roll was focused in helping startup companies and other small- and medium-sized companies. By 2010, it expanded to handle social media accounts of those part of Reader's Digest Most Trusted Brands, the biggest companies in the Philippines. It is at this point when Camille Bridget engaged Oxford Analytics, a London-based online marketing consulting firm, in order to fully harness the power of social media for the big accounts. Camille Bridget's long-time policy is never to venture in marketing politicians so as not to affect its corporate clients. In 2015, Ryan Jose engaged Bass Baseaux, a Dutch national, to do the analytics, while Asther Margarita engaged Prof. Anne Ganda, a statistics professor from the University of the Philippines.However, things started to get sour when Ryan Jose and Asther Margarita started getting politicians as clients sometime 2015. As such, the three often quarreled months leading to the 2016 general elections. The treasurer repeatedly did not allow release of various items of expenses requested by Ryan Jose and Asther Margarita for being violative of the company policies on political campaigns. Nevertheless, since Camille Bridget has been on top of the firm from the beginning, the two decided to lie low first. They made sure that their respective incomes will overshadow that of Camille Bridget to prove to the partners that their "new" direction will rightfully benefit the partnership. After that, they promise to pounce on Camille Bridget. By 2019, the income generated from political consulting and marketing already eclipsed that from corporate. According to him, the shutdown of ABC-DEF, the country's biggest network, contributed to lower advertising from corporate brands. Recently, Dos was surprised when Iluminada shared to him the following: Asther Margarita and Ryan Jose called for a meeting alleging that Camille Bridget did not manage the business well. They alleged that her engagement of Oxford Analytics was too costly for the company and did not yield the expected income, unlike what they did. They showed the following table.Revenue Cost of Service Income (In PHP Million) (In PHP Million) (In PHP Million) 2019 2020 2021 2019 2020 2021 2019 2020 2021 Camille Bridget 350 260 250 200 200 200 150 60 50 Ryan Jose 150 200 280 30 50 80 120 150 200 Asther Margarita 140 200 250 15 20 30 125 180 220 Clearly, according to the two, the old way of doing things is not anymore beneficial to the firm. Had they been given the same amount of budget, surely, they claimed, they will be able to bring a much higher income for Let's Roll. Furthermore, they allege that the treasurer is conspiring with Camille Bridget so that they will have a difficult time in rolling out their business plan. It just so happened that they were better and more efficient managers than Camille Bridget that is why, despite their meager budget, they were able to earn more for the firm. Immaculada and Iluminada called all concerned persons where they were apprised of the following concerns.Ryan Jose wanted to expel Camille Bridget from the partnership. Meanwhile, Asther Margarita only wanted to remove Camille Bridget as a co-managing partner. Nonetheless, she mentioned that she will support Ryan Jose's proposal if it will result in the firm reaching new heights. The two anchored their proposal on the following: 1. Camille Bridget cannot engage Oxford Analytics considering the steep price of its fee, which is almost 10% of the total partnership capital. 2. Camille Bridget cannot promote the assistant treasurer without their concurrence, the three of them being co-managing partners. 3. The treasurer cannot, on her own, deny their requests. 4. Since it was Camille Bridget who named the new treasurer, the fact that the latter denied their requests to approve the budget and/ or release the corresponding funds can be viewed as interference by former in Ryan Jose and Asther Margarita's respective business strategies. 5. Since they were short of budget, Ryan Jose, using his own money, contributed to the partnership the amount of P50 Million so that he and Asther Margaret can fund their respective costs of service for the years 2019-2021. The treasurer reasoned out that she is just doing her job considering the avowed undertaking of the firm: "The Partnership is formed to act as consultants, advisers and representatives of any individual, firm and corporation engaged in commercial, industrial or other lawful business; to counsel and advise such persons and entities with respect to the development of business, marketing, product and/or human resources; and to appear for and represent the clients in government departments and offices in the Philippines, and elsewhere when legally authorized to do so." According to her, the partnership is limited only to being consultants to individuals, firms and corporations engaged in commercial, industrial or other lawful business. Political marketing is not included.Camille Bridget moved to expel Ryan Jose for the following reasons: APT GOx | 120xxxxx 6 1. She learned from a trusted source that Bass Baseaux is Ryan Jose's former classmate in an executive program he attended in Utrecht University in the Netherlands, and that Ryan Jose is a secret partner in Bass's data analytics firm. 2. She learned that Ryan Jose leased the entire third floor of a certain mall in Mindanao to conduct portion of his business in the amount of P830,000/month or around P10 Million per year. Furthermore, the lease period runs from 2019-2022. The mall is allegedly owned by Ryan Jose's distant relative. Surprised by this new information, Asther Margarita confronted Ryan Jose. The latter brushed off the accusation. He said that there is no evidence to prove his involvement in Bass's firm. As to the allegation regarding the lease, he claimed that he did not know that the mall owner is his distant relative, and that the rental price is even 10% lower than the prevailing market rate.Upon learning of the above facts, Dos talked to Immaculada, his mother, and Ilumina, his sister. He shared to them his plan to withdraw from the partnership considering his impending victory in the presidential race. He broached the idea of dissolving the partnership and let the other partners conduct their separate businesses to have a clean cut. Besides, their family already earned millions of pesos from this venture. Hearing this, Immaculada shared that in the first half of 2018, a famous American documentarist from Boston University reached out to her. The documentarist wanted to feature the Marcia family and their political influence in this country. Sometime after being interviewed, Immaculada reported that the rare Matisse painting, which she hang on the wall during one of the interviews, was missing. She suspects that some staff of the documentarist stole the same. Sensing that she will also win as a senator, Ilumina, Dos's sister, expressed her willingness to dissolve Let's Roll. She hurriedly called the auditor so they can move forward with the same. After surveying the partnership books, the following information were discovered. 1. There is a cash on hand in the amount of P1.255 Billion, representing the total income of the partnership business. 2. From the capital contribution, the office building contributed by Vincenzo is now worth P1 Billion. The rare Matisse painting now amounts to $20 Million, roughly around P1 Billion. 3. There is an unpaid corporate income tax of P2.255 Billion.T. There are unpaid partnership liabilities in the amount of Food Million, 5. It was found out that Ryan Jose was secretly funnelling from the partnership to his account the total amount of P100 Million since 2018. Dos proceeded to ask you the following questions concerning this partnership. AFT GOx | 120xxxxx Dos now asks you: (A) Is the contention of the treasurer correct? Explain. (1%) (B) Is the contention that Camille Bridget cannot engage Oxford Analytics considering that the engagement fee is almost 10% of the total partnership capital correct?(C) Can Camille Bridget validly promote the long-time assistant treasurer to the position of treasurer? Explain. (1%) (D) Suppose Ryan Jose and Asther Margarita actually proved that Camille Bridget instructed the treasurer to not approve and release budget to them. Can Camille Bridget validly do so? Explain. (1%) (E) Can Ryan Jose validly move for the expulsion of Camille Bridget? If so, discuss the mechanism to carry this out as well as the implications to the firm. (2%) (F) Can Asther Margarita validly move for the removal of Camille Bridget as co- managing partner? If so, discuss the mechanism to carry this out as well as the implications to the firm. (2%) (G) Suppose Camille Bridget was able to show proof that Ryan Jose was indeed a partner in Bass's firm, can the former validly move for the latter's removal from the firm? Are there other remedies available? Discuss the mechanism to carry this out as well as the implications to the firm. (2%) (H) Ryan Jose is now raising the fact that he contributed P50 Million to the firm so that he and Asther Margaret can fund their respective costs of service for the years 2019-2021. Will your answer to Item II(F) be the same? Why or why not? (2%) (I) Can Ryan Jose validly lease the third floor of a mall in Mindanao from 2019-2022 even without securing the concurrence of Camille Bridget and Asther Margarita? Explain. (1%)II Dos asks you whether the partnership shall be dissolved: (A) If Iluminda, Dos's sister, will win as senator. Currently, she is ranked fifth in the partial unofficial count conducted by the Commission on Election. Explain. (1%) (B) If Dos appoints Vincenzo as the Executive Secretary should he win as President of the Philippines, since he feels good about his lead. Explain. (1%) III Upon learning of the planned dissolution, the Bureau of Internal Revenue (BIR) sent a demand letter to Dos, in his capacity as the appointed administrator of the estate of Fernando Marcia I, to settle the unpaid income tax of P2.3 Billion. This amount has already been the subject of a Supreme Court case.Can it move to attach or garnish the assets of the partnership to ensure that the state will receive the rightful payment of the uncollected estate tax? Explain the mechanism how the state, through the BIR, can protect its interest? (3%) IV Dos shares that his partners are exploring to dissolve the firm. He asks for your comprehensive legal advice should there be insufficient fund to pay off its liabilities. (A) Is Dos correct that he is a secret partner? Explain why or why not. Can he himself initiate the dissolution of Let's Roll? (2%) (B) How much is the total partnership assets? (0.5%) (C) How much is the total partnership liabilities? (0.5%) (D) Dos is looking to suggest auctioning off the Matisse painting. However, if the same cannot be retrieved anymore, Dos asks who shall bear the loss. (2%) (E) Comprehensively walk Dos through the entire process of the termination of Let's Roll, citing relevant rules and the corresponding amounts in applying those rules. (5%)V Moreover, when Camille Bridget learned about it, she opposed the termination claiming that pursuant to the agreement, the partnership is clearly with a specific undertaking, which has not been accomplished yet. She also offered to buy-out the interest of all her partners. She is willing to gamble her entire earnings in order to preserve the goodwill of Let's Roll which she painstakingly built since 2007. (A) May Camille Bridget validly invoke the above ground to oppose the termination of Let's Roll? Explain comprehensively. (2%) (B) If not, can she buy her partners out from the business? Comprehensively walk Dos through the entire process to pursue this. (2%)PART B Before leaving, Dos remembered that he intends to file a case against Atty. Hilario Agdon for non-payment of his share. Dos claims that he, his wife, Atty. Eloisa C. Marcia, and Atty. Agdon are partners in I So Love New York Travel and Tours Agency. This travel agency is located in the 1500 Epifanio Delos Santos Ave. in Mandaluyong City. According to Dos, although merely verbally, the three of them agreed to form this partnership on 25 December 2015. They agreed that both he and Eloisa will contribute P25 Million to this venture, while Atty. Agdon will manage the firm. His share shall be 30% from the total revenue earned by the firm. Dos claims that the travel APT GOx | 120xxxxx 9 agency already earned P100 Million as a result of revenge spending after the pandemic.Since you know Atty. Agdon, you reached out to him so that you can try to settle the case. VI Atty. Agdon made the following claims. Respond to them and cite your legal basis. (A) There is no such partnership in the absence of a written instrument. (1%) (B) And even if there is one, such is a void agreement since a husband and wife cannot validly enter into a partnership with one another. (1%) (C) Lastly, even if they can, such a claim has already prescribed, it being made after six (6) years. (1%)