HOME LAW NOTES + PH ELECTIONS + CASE DIGESTS + TRAVEL GAMES + TOYS

LAW TECH WORLD

Law, Technology and the World

CIVIL LAW BAR EXAM ANSWERS: PARTNERSHIP

Published by adminC on May 10, 2013 | Leave a response

Composition    of   Partnerships;    Spouses;   Corporations (1994)

1)    Can a husband and wife form a limited partnership to engage in real estate business,
with the wife being a limited partner?

2)   Can  two  corporations  organize  a  general  partnership  under the Civil Code of the
Philippines?

3)    Can a corporation and an individual form a general partnership?

SUGGESTED ANSWER:

1)      a) Yes. The Civil Code prohibits a husband and wife from constituting a universal
partnership.   Since a limited partnership is not a universal partnership, a husband and
wife may validly form one.

b)  Yes.  While  spouses  cannot  enter  into  a  universal partnership, they can enter into a

limited partnership or be members thereof (CIR v. Suter,  et. al. , 27 SCRA 152).

SUGGESTED ANSWER:

2)     a)   No,  a corporation is managed by its board of directors.          If the corporation
were to become a partner, co-partners would have the power to make the corporation
party   to  transactions   in   an  irregular   manner   since   the partners are not agents
subject to the control of the Board of  Directors.  But  a  corporation  may  enter  into  a
  joint venture with another corporation as long as the nature of the venture is in line
with the business authorized by its charter (Tuason & Co., Inc. v. Bolano, 95 Phil. 106).

b) As a general rule a corporation may not form a general partnership with another
corporation or an individual because a corporation may not be bound by persons who
are neither directors nor officers of the corporation.

However,  a corporation may  form  a  general  partnership with another corporation or
an individual provided the following conditions are met:
1)    The Articles of Incorporation of the corporation expressly allows the corporation to
enter into partnerships;

2)      The  Articles  of  Partnership  must  provide  that  all  partners   will   manage   the
 partnership,  and  they shall be jointly and severally liable; and

3)      In   case   of   a   foreign   corporation,   it   must   be licensed to do business in the

Philippines.

c) No. A corporation may not be a general partner because the   principle   of   mutual
 agency  in  general  partnership

allowing the other general partner to bind the corporation will violate the corporation
law principle that only the board of directors may bind the corporation.

SUGGESTED ANSWER:

3) No, for the same reasons given in the Answer to Number 2 above.

Conveyance of a Partner’s Share Dissolution (1998)

Dielle, Karlo and Una are general partners in a merchandising firm. Having contributed
equal amounts to the capital, they also agree on equal distribution of whatever net profit
is realized per fiscal period. After two years of operation, however, Una conveys her
whole interest in the partnership to Justine, without the knowledge and consent of Dielle
and Karlo.

1.    Is the partnership dissolved?

2. What are the rights of Justine, if any, should she desire to participate in the
management of the partnership and in the distribution of a net profit of P360.000.00
which was realized after her purchase of Una’s interest?

 SUGGESTED ANSWER:

1.  No, a conveyance by a partner of his whole interest in a partnership does not of itself
dissolve the partnership in the absence of an agreement. (Art. 1813. Civil Code)

SUGGESTED ANSWER:

2. Justine cannot interfere or participate in the management or administration of the

partnership business or  affairs.  She  may,  however,  receive  the  net  profits  to which
Una would have otherwise been entitled. In this case, P120.000 (Art. 1813, Civil Code)

Dissolution of Partnership (1995)

Pauline, Patricia and Priscilla formed a business partnership for the purpose of engaging
in neon advertising for a term of five (5) years. Pauline subsequently assigned to Philip
her interest   in   the   partnership.  When   Patricia   and   Priscilla learned of the
assignment, they decided to dissolve the partnership before the expiration of its term as
they had an unproductive business relationship with Philip in the past. On the other
hand, unaware of the move of Patricia and Priscilla but sensing their negative reaction to
his acquisition of Pauline’s interest, Philip simultaneously petitioned for the dissolution
of the partnership.

1. Is the dissolution done by Patricia and Priscilla without the consent of Pauline or Philip
valid? Explain.

2. Does Philip have any right to petition for the dissolution of  the  partnership  before 
the  expiration  of  its  specified term? Explain.

SUGGESTED ANSWER:

1,  Under Art. 1830 (1) (c) of the NCC, the dissolution by Patricia and Priscilla is valid and
did not violate the contract of partnership even though Pauline and Philip did not
consent thereto. The consent of Pauline is not necessary because she had already
assigned her interest to Philip. The consent of Philip is not also necessary because the
assignment to him of Pauline’s interest did not make him a partner, under Art, 1813 of
the NCC.

ALTERNATIVE ANSWER:

Interpreting Art. 1830 (1) (c) to mean that if one of the partners   had   assigned   his
  interest   on   the   partnership   to  another the remaining partners may not dissolve the
partnership, the dissolution by Patricia and Priscilla without the consent of Pauline or
Philip is not valid.

SUGGESTED ANSWER:

2. No,  Philip   has   no  right   to  petition   for  dissolution because he does not have the
standing of a partner (Art. 1813 NCC).

Dissolution of Partnership; Termination (1993)

A,    B    and    C    formed    a    partnership    for    the    purpose    of  contracting with the
Government in the construction of one of its bridges. On June 30, 1992, after completion
of the project, the bridge was turned over by the partners to the Government.  On  August
  30,   1992,   D,  a   supplier   of materials used in the project sued A for collection of the
indebtedness to him. A moved to dismiss the complaint against him on the ground that it
was the ABC partnership that is liable for the debt. D replied that ABC partnership was
dissolved upon completion of the project for which purpose the partnership was formed.

Will you dismiss the complaint against A If you were the Judge?

SUGGESTED ANSWER:

As Judge, I would not dismiss the complaint against A. because A is still liable as a general
partner for his pro rata share of 1/3 (Art. 1816, C. C.J. Dissolution of a partnership caused
by the termination of the particular undertaking specified in the agreement does not
extinguish obligations, which must be liquidated during the “winding up” of the
partnership affairs (Articles 1829 and 1830. par. 1-a, Civil Code).

Effect of Death of Partner (1997)

Stating briefly the thesis to support your answer to each of the following cases, will the

death – of a partner terminate the partnership?

SUGGESTED ANSWER:

Yes.  The death of a partner will terminate the partnership, by express provision of par. 5,
Art. 1830 of the Civil Code.

Obligations of a Partner (1992)

W, X, Y and Z organized a general partnership with W and X as industrial partners and Y

and Z as capitalist partners. Y contributed P50,000.00 and Z contributed P20,000.00 to the
common fund. By a unanimous vote of the partners, W and X were appointed managing
partners, without any specification of their respective powers and duties.

A applied for the position of Secretary and B applied for the position of Accountant of the
partnership.

The hiring of A was decided upon by W and X, but was opposed by Y and Z.

The hiring of B was decided upon by W and Z, but was opposed by X and Y.

Who of the applicants should be hired by the partnership? Explain and give your
reasons.

SUGGESTED ANSWER:

A should be hired as Secretary. The decision for the hiring of A prevails because it is an
act of administration which can be performed by the duly appointed managing partners,
W and X.
B cannot be hired, because in case of a tie in the decision of the managing partners, the
deadlock must be decided by the partners owning the controlling interest. In this case,
the opposition of X and Y prevails because Y owns the controlling Interest (Art. 1801, Civil
Code).

Obligations of a Partner; Industrial Partner (2001)

Joe  and  Rudy  formed  a  partnership  to  operate  a  car  repair  shop in Quezon City. Joe
provided the capital while Rudy contributed his labor and industry. On one side of their
shop, Joe opened and operated a coffee shop, while on the other side, Rudy put up a car
accessories store. May they engage in such separate businesses? Why?

SUGGESTED ANSWER:

Joe, the capitalist partner, may engage in the restaurant business because it is not the
same kind of business the partnership is engaged in. On the other hand, Rudy may not
engage in any other business unless their partnership expressly  permits  him  to do so 
because  as  an  industrial partner he has to devote his full time to the business of the
partnership (Art. 1789, CC).

From the ANSWERS TO BAR EXAMINATION QUESTIONS  in CIVIL LAW by the  UP

LAW COMPLEX and PHILIPPINE ASSOCIATION OF LAW SCHOOLS.

Criminal Law Amendment Charter 1040ez

RELATED ARTICLES:

Civil Law Bar Exam Answers: Civil Law Bar Exam Answers:
Sales Succession

Civil Law Bar Exam Answers: Civil Law Bar Exam Answers:
Deposit General Principles

Civil Law Bar Exam Answers: Civil Law Bar Exam Answers:
Commodatum and Mutuum Quasi-Contract

Share this:

0
Posted in Bar Exams, Civil Law

LEAVE A REPLY

Comment

Name * Email *

Website

POST COMMENT

← PREVIOUS NEXT →

SEARCH
 Law Tech World
582 likes

Like Page

Be the first of your friends to like this

POPULAR POSTS

Pokemon Revolution: How to Get to Giovanni in Silph Co Maze (27,992)

Pokemon Revolution: Eevee Mission at Game Corner Guide (20,876)
Pokemon Revolution: How to Get HM01 – Cut (17,670)
2014 Case Digest: Arigo v. Swift (16,985)
2017 Case Digest: Estipona v. Lobrigo and People (13,857)
Pokemon Revolution: How to Get to Articuno in Seafoam Island (13,688)
2015 Case Digest: Diocese of Bacolod v. COMELEC (13,127)
Case Digest: Estrada v. Escritor (12,234)
Case Digest: LA BUGAL B’LAAN TRIBAL ASSOCIATION… (12,132)
Case Digest: THE PROVINCE OF NORTH COTABATO, et al .… (12,120)

This work by Law Tech World is licensed under a Creative Commons Attribution 4.0
International License.

Privacy Policy

Copyright © 2019 Law Tech World.

Powered by WordPress and Live Wire.