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    Midterms Quiz 1 and 2 Essay

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    armiejimenezz
    A, B, and C formed a partnership to operate a restaurant. When the restaurant became profitable, C died. A and B continued operating the business without dissolving the partnership, opening a new branch and incurring new obligations. Creditors demanded payment. A and B are liable for settling partnership obligations because they continued the business after C's death without settling accounts. Creditors can sue the partnership, and if insufficient funds, use A and B's private properties to satisfy debts. Creditors can also sue C's estate, which remains liable for obligations incurred while C was a partner.

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    Midterms Quiz 1 and 2 Essay

    Uploaded by

    armiejimenezz
    15 views2 pages
    A, B, and C formed a partnership to operate a restaurant. When the restaurant became profitable, C died. A and B continued operating the business without dissolving the partnership, opening a new branch and incurring new obligations. Creditors demanded payment. A and B are liable for settling partnership obligations because they continued the business after C's death without settling accounts. Creditors can sue the partnership, and if insufficient funds, use A and B's private properties to satisfy debts. Creditors can also sue C's estate, which remains liable for obligations incurred while C was a partner.

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    533874660-Midterms-Quiz-1-and-2-Essay

    Original Title

    533874660-Midterms-Quiz-1-and-2-Essay

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    A, B, and C formed a partnership to operate a restaurant. When the restaurant became profitable, C died. A and B continued operating the business without dissolving the partnership, opening a new branch and incurring new obligations. Creditors demanded payment. A and B are liable for settling partnership obligations because they continued the business after C's death without settling accounts. Creditors can sue the partnership, and if insufficient funds, use A and B's private properties to satisfy debts. Creditors can also sue C's estate, which remains liable for obligations incurred while C was a partner.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views2 pages

    Midterms Quiz 1 and 2 Essay

    Uploaded by

    armiejimenezz
    A, B, and C formed a partnership to operate a restaurant. When the restaurant became profitable, C died. A and B continued operating the business without dissolving the partnership, opening a new branch and incurring new obligations. Creditors demanded payment. A and B are liable for settling partnership obligations because they continued the business after C's death without settling accounts. Creditors can sue the partnership, and if insufficient funds, use A and B's private properties to satisfy debts. Creditors can also sue C's estate, which remains liable for obligations incurred while C was a partner.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    81. A, B, and C entered into a partnership to operate a restaurant business.

    When the
    restaurant had gone past break-even stage and started to gamer considerable profits, C died.
    A and B continued the business without dissolving the partnership. They in fact opened a
    branch of the restaurant, incurring obligations in the process. Creditors started demanding for
    the payment of their obligations. Who are liable for the settlement of the partnership’s
    obligations? Explain.

     For the settlement of the partnership's obligations, both A and B are


    responsible. According to Article 1841 when a partner retires or dies, and the business
    is continued without any settlement of accounts as between him or his estate and the
    person or partnership continuing the business, then the remaining partners indemnifies
    themselves against all present and future partnership liabilities. In the case of A, B, and
    C, only A and B are liable for the partnership’s liabilities because they continued the
    business even after C’s death, it is also in line with the provisions of Article 1833 where
    the dissolution is caused by the act, death or insolvency of a partner, each partner is
    liable to his co-partners for his share of any liability created by any partner acting for
    the partnership

    82. A, B, and C entered into a partnership to operate a restaurant business. When the
    restaurant had gone past break-even stage and started to gamer considerable profits, C died.
    A and B continued the business without dissolving the partnership. They in fact opened a
    branch of the restaurant, incurring obligations in the process. Creditors started demanding for
    the payment of their obligations. What are the creditors’ recourse/s? Explain.

    In the event of financial difficulty, the creditors may file the appropriate actions, an action to
    collect a sum of money against the "partnership at will," and if there are not sufficient funds,
    the creditor may use the private properties of A and B to satisfy the debt. This conforms to the
    provisions of Article 1816 that states “all partners, including industrial ones, shall be liable pro
    rata with all their property and after all the partnership assets have been exhausted, for the
    contracts which may be entered into in the name and for the account of the partnership, under
    its signature and by a person authorized to act for the partnership”.

    Additionally, creditors may sue the estate of C. Despite C's death, his estate is still liable for the
    obligations of the partnership. Only up until the time he remained a partner. Nevertheless, the
    property of C will be subject to the payment of his separate debts before the liability of his
    individual property arises. In accordance to Article 1835 stating that, the dissolution of the
    partnership does not of itself discharge the existing liability of any partner.
    83. A, B, and C entered into a partnership to operate a restaurant business. When the
    restaurant had gone past break-even stage and started to gamer considerable profits,
    C died. A and B continued the business without dissolving the partnership. They in fact
    opened a branch of the restaurant, incurring obligations in the process. Creditors
    started demanding for the payment of their obligations. a. Who are liable for the
    settlement of the partnership’s obligations? Explain. What are the creditors’
    recourse/s? Explain.

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