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PARTNERSHIP

Case Studies

I. On Christmas 2006, childhood friends Bill, Eric, Julio, and Meredith decided to form an
overseas employment recruitment firm. On May 10, 2007, they signed and registered their
Partnership Agreement where Bill, Eric, and Julio would contribute P250,000.00 each
while Meredith would manage the firm. They called the firm Prime Excel.

For almost 2 years, the firm had not operated because of lack of funds as Julio failed to
contribute his share. On May 1, 2009, however, the firm booted out Julio and substituted
him with Scott, Meredith’s husband, who was prepared to give the P250,000.00 stipulated
contribution.

a.) When did the partnership commence?

- The partnership commenced on the Christmas of 2016. Under Art. 1784 of the NCC, a
partnership commences from the time of execution of the contract if there is no contrary
stipulation as to the date of the effectivity of the same.

b.) What kind of partners are Bill, Eric, Julio, and Meredith?

- Bill, Eric, and Julio are Capitalist Partners, while Meredith is an Industrial Partner.

c.) What are the remedies of the partnership against Julio?

- Under Art. 1788 of the NCC, Julio’s failure to contribute to the common fund makes him
ipso jure a debtor of the partnership. The partnership, as a remedy, may file an action for
specific performance (to collect what is owing) with damages and interest from the time he
should have complied with his obligation.
c.1) Is his substitution valid?

- No, the substitution is not valid???

d.) Is Scott legally allowed to join the partnership despite his being Meredith’s husband?
- Yes, Scott is legally allowed to join the general, particular partnership provided all the
partners give their consent under the principle of Delectus Personae. The prohibition?????

II. The top three successful examinees of the 2008 Nursing Board Licensure Exam (Alex, Jim,
and Giselle) formed a review center. Alex and Jim are the financiers while Giselle is the
Center Director.
In 2009, Giselle (who is also a licensed pharmacist) opened a franchise of Mercury Drug
Philippines. This was not known to Alex and Jim.

a.) What kind of partnership did they enter into? Particular Partnership

b.) Is it proper for Giselle to open her pharmacy? Art 1789

c.) Is your answer the same if the one who opened the pharmacy is Alex? Art 1808

d.) Assuming there is impropriety, what are the remedies of the partnership against the
erring partner? Art 1789 and 1808

III. Charles is the managing partner of Sugar and Condiments, a domestic partnership
supplying packed sugar to coffee shops in Metro Manila. Bob is the sole owner of Café
Magnifico. He purchased 1,000 sachets of sugar (at P2.50 per sachet) on loan. Also, he
borrowed from his personal friend Charles P10,000.00 to pay for the unpaid electric bills
of his coffee shop. On June 29, 2009, Bob paid Charles P10,000.00, without any condition.

a.) What is Charles’ duty with respect to the amount paid to him by Bob? Art. 1792

a.1) How much should be applied to the partnership credit? P2,000.00

a.2) How much should accrue to Charles’ credit? P8,000.00

b.) May Bob exclusively apply the P10,000.00 to Charles’ credit? Yes, under the second
paragraph of Art 1792 of the NCC, Bob is given the right to prefer payment of the credit of Charles if it
should be more onerous to him in accordance with his right to application of payment.

IV. Alice, David, and Roger are partners in a school service company. All three contributed P1
Million. Also, aside from contributing money, Roger is the Office Manager; Alice is the
Marketing Officer; while David is the Supervising Driver.

During the life of the business, the partnership lost two mini-vans due to car wrecks
attributable to the negligence of David. On the other hand, the partnership had
outstanding and unpaid telephone and internet bills which were incurred by Roger for the
office.

a.) Who should answer for the damages caused by the loss of the mini-vans? Art 1795
b.) Who should answer for the outstanding and unpaid telephone and internet bills? Art

1796