Reviewer for midterms in Law 2

1. What is the obligation of a partner who undertakes to deliver a specific property?

a. To deliver the property at the time it becomes available

b. To warrant the property against possible eviction

c. To deliver the fruits of the thing from the time demand is made

d. All of the above

2. Rolly contributed a lot to the partnership but the partnership was evicted after the real owner Charlie. What is the obligation of B?

a. To pay the agreed interest

b. To pay the legal interest

c. To pay interest from time of eviction

d. To answer for his warranty against eviction as a vendor in a contract of sale

On October 1, 2017, Allan, Bryan, Cha, and Danny entered into a contract of partnership which they named ABCD Sari-sari Store. Allan is an industrial partner, Bryan contributed P500,00.00, Cha contributed the 500 sq.m. lot and building where the sari-sari store is located, and Danny contributed various goods and other merchandise which initially filled the sari-sari store.

3. What is the obligation of Bryan as to his contribution?

a. To deliver the P500,000.00 on October 1, 2017

b. To pay the legal interest of the P500,000.00 starting on October 1, 2017

c. To deliver the P500,000.00 on the date agreed upon by all the partners

d. To pay interest of the P500,000.00 from the date agreed upon by all the partners

4. What is the obligation of Cha as to her contribution?

a. To execute a public instrument contributing to the partnership the specific property

b. To prepare an inventory of her immovable properties

c. To submit an appraisal of the values of her contributions

d. To warrant against hidden defect

5. What is the obligation of Allan?

a. To resign from his part-time job

b. To devote his knowledge, skills and time to the partnership business

c. To remit to the partnership any amount he receives from his pension insurance

d. All of the above.

6. When may an industrial partner engage in business for himself?

a. He does not receive any share in profits of the partnership business.

b. His capitalist partners exclude him from participation in management of the partnership

c. His earnings from the business shall be remitted to the partnership.

d. His partners agreed to his engaging in business of his own..

7. In case of imminent loss of the business of the partnership, the partners are called upon to give additional contribution to save the business, except:

a. If the partnership is insolvent

b. If a partner is exempted by stipulation

c. If he is a managing partner

d. None of the above.

8. A and B are partners where A is the managing partner. X is indebted to A in the amount of P30,000.00 and to the partnership P15,000.00. Both debts are due. X paid P3,000.00 and A issued a receipt in his own name. How should the amount P3,000.00 be applied?

a. The amount of P3,000.00 must be applied to the indebtedness to the partnership.

b. There is conflict of interest, hence, A should prioritize the interest of the partnership over his personal interest; he should waive in favor of the partnership.

c. The amount should be applied to both credits equally, that is P1,500.00 to each.

d. P2,000.00 must be applied to the indebtedness to A, P1,000.00 to the indebtedness to the partnership.

9. When shall the risk of loss be borne by the partnership?

a. When the contribution is non-consumable and only usufruct is for the benefit of the partnership.

b. When the things contributed are to be sold

c. When the thing contributed cannot be kept without deteriorating.

d. When the things were contributed under appraisal in the inventory.

Cardo, Homer, and Elena are partners in the CARHOMEL Partnership. Cardo and Homer are both capitalists partners contributing P1Million each. Elena is an industrial partner.

10. In case the partners failed to include in their partnership contract their profit and losses sharing agreement, how is the share of an Elena in the profits determined?

a. According to agreement of all the partners

b. According to what is just and equitable

c. The gross income of the partnership shall be added together, minus the expenses and losses; only in the difference representing net profits shall the industrial partner share

d. All of the above

11. In case there was no Profits and Losses Sharing Agreement, how is the share of Elena in the losses determined?

a. According to agreement of all the partners

b. According to what is just and equitable

c. According to equal sharing

d. Elena shall not share in the losses

12. How will the shares of Cardo and Homer in the profits and losses be determined?

a. According to agreement of all the partners

b. According to what is just and equitable

c. According to equal sharing

d. According to the recommendation of third party assessors

13. Which of the following does not apply in joint management?

a. Each may separately execute all acts of administration

b. The consent of all the managers is necessary to execute the acts.

c. The absence or incapacity of one of the managers is of no moment, the unanimity is still required unless there is irreparable harm or injury to the partnership.

d. None of the above

14. Which of the following does not apply when the manner of management of the partnership has not been agreed upon?

a. Each partner acting in the name of the partnership can bind the partnership.

b. No one of the managers can act without the consent of the others.

c. If there is an opposition from one of the rest, the majority shall prevail.

d. None of the above

15. Which of the following is correct?

a. Every partner may transfer the whole or part of his interest in the partnership to a third person

b. The assignee of partner's interest can exercise the rights of a partner

c. The assignment of interest needs the consent of all the partners

d. All of the above

16. Who can demand information about partnership affairs?

a. Any partner who has not violated the contract of partnership

b. Legal representative of an assignee

c. Creditors of the partnership

d. All partners.

17. What information should a partner account for to the other partners?

a. Capitalist partner's income from his other business or businesses.

b. Any benefit derived by a partner without consent of other partners from transactions connected with the partnership.

c. Industrial partner's separate business consented to by the other partners

d. All of the above.

18. What is the effect of capitalist partner's engaging in business similar to the business of the partnership?

a. The capitalist partner shall bring to the partnership all the profits obtained.

b. The losses he will sustain in his business shall be borne in part by the partnership.

c. There shall be no effect because the capitalist partner can engage in his own separate business.

d. None of the above.

19. When can a partner demand a formal account as to partnership affairs?

a. When he has to be excluded from the business due to breach of contract.

b. When he has derived profits from partnership property without consent of the partners.

c. When the right exists under the terms of their agreement.

d. All of the above.

20. What are the property rights of a partner?

a. Right in specific partnership property

b. Interest in the partnership

c. Right to participate in the management

d. All of the above.

21. Which of the following statements is false?

a. A partner has an equal right with his partners to possess specific property for partnership purposes.

b. A partner's right in specific partnership property is not assignable except in connection with the assignment of rights of all the partners in the same property.

c. The partner's right in specific partnership property is assignable.

d. None of the above.

22. Which of the following acts does not need the authority of all the partners?

a. To confess judgment.

b. Assign a partner's interest to a creditor

c. Dispose of the goodwill of the business

d. Enter into a compromise concerning partnership claim or liabilities.

23. In whose name may partnership property be registered?

a. Assignee of a partner

b. Creditor of the partnership

c. One, or not all of the partners

d. Trustee of a partner

24. When is the partnership not liable for damages caused by a partner?

a. The wrongful act or omission is committed in the ordinary course of the business

b. If the act or omission is not wrongful

c. If the loss or injury is caused to a person who is not a partner in the partnership

d. None of the above

25. In partnership, there is mutual agency which means that each partner is acting as a principal on his own behalf, and as an agent for his co-partners. When is the partnership not bound by the acts of a partner?

a. When the partner is expressly authorized

b. When the partner is impliedly authorized

c. When the partner acts in behalf and in the name of the partnership

d. When the other partners do not have notice of the action and do not object

31. Which of the following is an exception to the rule that notice to a partner is notice to the partnership?

a. The notice refer to personal affairs of the partner which might affect his credit standing.

b. The notice must be acquired while he is still a partner.

c. The partner notified is not the partner acting on the particular matter but could and should have communicated it to the acting partner.

d. None of the above

32. Which of the following is correct?

a. The admission of a new partner in an existing partnership makes the new partner a partner by estoppel.

b. A newly admitted partner is liable to the extent of his contribution for the obligations of the partnership incurred prior to his admission.

c. All partners including the newly admitted partner shall be liable to the extent of their separate property for the obligation of the partnership incurred prior to the admission of the new partner.

d. None of the above.

38. Which of the following is not an essential element of a valid contract of partnership?

a. consent

b. mutual trust

c. object

d. cause

39. Who is not capacitated to become a partner?

a. Linda, 18 yrs. old, a bank executive.

b. Masipag partnership, duly registered with SEC.

c. Jose, a deaf-mute, teacher assistant in a SPED institute.

d. Norie Ledesma, 17 years old, pop superstar.

40. Which is not a lawful business a partnership?

a. engaging in the real estate business which will provide lands for government- funded housing projects

b. recruiting workers for job placement in Iraq

c. manufacturing chemicals exclusively for the use of a shabu laboratory

d. all of the above

41. Which of the following is not a valid contribution?

a. P1M winnings of A from jueteng

b. undivided share of A in a 1000 sq. m. lot co-owned with B

c. BMW car of A attached by creditor B

d. Royalties to be received by A from Republic Books Publishing House in December

42. A contributed P100K; B contributed a delivery truck with assessed value of P200K; C is an industrial partner. Which of the following is not a valid division of profits?

a. A, B and C get equal shares in profits, as stipulated.

b. A gets 50%, B gets 10%, C gets 40%, as stipulated

c. A and B gets 50% each, C will be paid a salary for services rendered.

d. A third party shall propose a designation of the shares of each partner for their approval.

43. Which of the following partnership is not allowed by law?

a. Santos and Reyes Law Firm, both lawyers.

b. Santos and Reyes Law Firm, Santos-lawyer, Reyes-CPA lawyer

c. Santos and Reyes Pediatric Clinic, Santos-Pediatrician, Reyes-radiologist

d. Santos and Reyes Construction Firm, Santos-Architect, Reyes-Civil Engineer

44. Which of the following statements is false?

a. A partnership is created by voluntary agreement of the parties.

b. A corporation's birth is on the day a certificate of incorporation is issued by the SEC or when its charter is approved by Congress.

c. Death of a stockholder dissolves the corporation

d. A partner may bind this co-partner for acts with in the scope of the business.

45. Which of the following statements is false?

a. Death of a general partner dissolves the partnership

b. Co-ownership is for common enjoyment

c. Death of a co-owner dissolves the co-ownership

d. The purpose of a partnership is to make profits.

46. Which of the following statements is false?

a. A partnership in itself is a juridical person

b. A partnership has the capacity to act as a legal entity

c. The partnership is a different person from that of its partners

d. Registration with SEC vests juridical personality to a partnership.

47. What is the effect of registration of a partnership?

a. It vests juridical personality to a partnership so it can validly engage in business.

b. It gives authority to partners to manage the business.

c. It is the means for the partnership to acquire a business name or trade name

d. It gives notice to third parties of the existence of a partnership.

48. A and B are not partners but B represents to X that they (A and B) are partners. The representation was made in the presence of A who did not object. What is the presumption under the law?

a. A and B are not partners in relation to X

b. A and B are partners, in relation to X

c. B and X are considered partners, in relation to A

d. X became a partner of A and B.

49. A and B own an apartment which they lease to X for P10,000.00 per month. The monthly rents are deposited in the joint bank account of A and B and every December of the year, A and B divide the total amount deposited including the interest earned on the deposit. Which of the following is true?

a. A and B are partners engaged in a lawful business?

b. Both A and B are capitalist partners.

c. A and B are co-owners only

d. A and B are co-possessors only.

50. Which of the following destroys the presumption of partnership existence.

a. Receipt of share in the profits by a person.

b. Sharing of gross returns of an undertaking funded from a common fund.

c. Mutual benefits or advantage

d. Receipt of share in the profits as interest on a loan and the amount of the share vary depending on the amount of the profits realized by the partnership.

51. When the partnership is unlawful, which of the following results?

a. The proceeds and instruments used shall be forfeited in favor of the least guilty partner, or to the partner who did not participate in the illegal purpose.

b. The proceeds and instruments used shall not be forfeited if they belong to third parties.

c. Property which were the object of unlawful commerce shall be preserved for later use.

d. The capital contributions of the partners including the profits, if any, will be forfeited.

52. In what form should a partnership contract be constituted?

a. In writing, to be valid

b. In writing, to be enforceable

c. In a public instrument, to have juridical personality

d. In any form, as a rule.

53. A, B, and C formed Masipag Partnership. A contributed a building and the 1,000 sq. m. lot where the building was erected; B contributed three delivery vehicles and on owner-type jeep; C, a CPA-lawyer contributed his expertise as managing partner. Which of the following statements apply to Masipag?

a. Masipag Partnership must be registered with SEC considering the capital contributions of the partners.

b. Masipag Partnership cannot engage in business unless registered with SEC considering its capitalization.

c. A, B, and C should execute a written contract of partnership and attach to the contract an inventory of the capital contribution of partners.

d. The partnership contract should be a public instrument and the inventory of A's contribution only should be attached.

54. Which of the following statements is false?

a. In a general partnership, all partners are liable to the extent of their separate property.

b. An industrial partner in a general partnership is liable to the extent of his separate property.

c. A universal partner is one whose participation refers to the whole or entire business.

d. A secret partner is one whose connection with the business is unknown to the public.

55. A partnership of all present property is that in which the partners contribute all the property which actually belongs to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith.

a. True

b. False

c. Partly false, the profits are not included.

d. Partly false, the property is not included.

56. A and B formed a universal partnership of all present property. A contributed a banana plantation measuring 2000 sq. m. lot where a banana chips factory is erected. Which of the following is correct?

a. The two-hectare land belongs to A; the harvest and use of the plantation belong to the partnership.

b. The building and the lot belongs to B; the use belongs to the partnership.

c. The plantation belongs to the partnership, but the last harvest belongs to A.

d. The partnership owns all properties of A and B including their use and fruits, not only the two-hectare plantation and the 2000 sq. m lot and building.

57. The following are the common funds of a universal partnership of all present properties, except:

a. All the present properties of each partners

b. All the properties to be acquired by the partner by gratuitous title

c. If stipulated, the fruits of properties acquired by a partner by in gratuitous title.

d. All profits that may be derived from all present property of partners.

58. The following are the common funds of a universal partnership of profits, except:

a. All properties that the partners may acquire in the future

b. All properties acquired by each partner from his work or industry

c. Usufruct of movable or immovable property belonging to the partners at the time of perfection of the contract of partnership.

d. Salary, wages, professional fees earned by each partners.

59. Who among the following can enter into a universal partnership.

a. Allan and Roselle, spouses.

b. Allan and Wendy, paramours.

c. Allan, guardian and Mabel, minor under his care.

d. Allan, manager of a company, and Martin, employee of the company.

60. A, B, and C formed partnership Masipag Partnership stipulating that the partnership term is five years. At the end of the fifth year, A terminated his membership in the partnership and went abroad. B and C continued the same business of Masipag. Which of the following statement is correct?

a. Masipag partnership is dissolved at the end of the five years.

b. B and C are not authorized to continue business after five years.

c. Masipag partnership, upon continuation of business by B and C, is deemed to have extended its term.

d. None of the above.