case at bar, Reyes was only an auditor.

An auditor does not represent the

business or the corporation for whom he works. He does not deal with third
I. persons, and therefore, does not enter into contracts to represent the employer.
As such, and since there is no agency contract between Reyes and Chernow,
Reyes had violated his duty of loyalty to his employer Chernow. As an employee, Reyes is not bound to observe he loyalty that an agent is required to observe with
Reyes is considered as agent of his employer. As an agent, he has the duty to respect to his principal.
observe loyalty to his principal, Chernow, in all his dealings. Also, as provided in
Article 1889, the agent shall be liable for damages if, there being a conflict Further, Reyes was not asked to sign a non-compete contract, therefore, Chernow
between his personal interest and that of his principal, he should prefer his own. cannot now be allowed to cry for disloyalty for his failure to protect his own
interest.
In the case at bar, Reyes formed a corporation to compete against Chernow. By
obtaining three customers from Chernow, there is a clear violation of Art. 1889 II. Secan v. Gogle
because he preferred to favor his own interest. Although it was mentioned that No, Gogle did not violate her duty to Secan. Gogle is a mere real estate agent,
Reyes never solicited any of Chernow’s customers or any customers Chernow who, as commonly used in business, is also considered as a broker. A broker is
had considered soliciting, nor did he slacken his work efforts for Chernow while one who maintains no relation with the partners he is representing; he is merely a
still being an employee of the latter, it cannot be denied that by the mere fact of person who brings parties to the transaction. As mentioned in the facts, Gogle was
establishing a business to complete with Chernow is a violation of his duty of loyalty. also working with two other men who were interested in buying the land. By
representing the interests of three persons, including that of Secan, whose interests
It must also be noted that Reyes, as an auditor, occupies a position that can have are conflicting, Gogle cannot be considered as agent of Secan, and thus, Gogle has
access over sensitive and confidential information with respect to the business of not violated any duty as an agent to Secan.
Chernow. As an employee, Reyes is bound to keep such information exclusively
for the advantage and benefit of Chernow. However, these he did not do so. In
Argument for Secan:
fact, Reyes even copied the standard forms which Chernow is using for his own
business. Clearly, by doing so, and by establishing a business in competition with
Secan has appointed Gogle as his agent, thus Gogle has the duty to transmit to
Chernow, Reyes has violated his loyalty duty to Chernow.
him any counteroffer made by Egelston to the two other men. Article 1870
provides that acceptance of the agent may be express or implied from his acts
which carry out the agency, or from his silence or inaction according to the
Argument for Reyes:
circumstances. By accepting the written offer on the land, and by agreeing to
Reyes is not an agent of Chernow and therefore, is not bound to observe the duty transmit the offer of Secan to Egelston, Gogle has impliedly agreed and accepted
of loyalty to Chernow. As defined in Article 1868, by the contract of agency, a to be the agent of Secan. As such, she is bound to observe the duty of loyalty of
person binds himself to render some service, or to do something inrepresentation an agent, and also to carry out the agency; failure to do so would make her liable
or on behalf of another, with the consent or authority of the latter. By the mere for damages sufferedby the principal. Gogle failed to transmit to Secan the
definition of agency, an agent acts as a representative of the principal, and has counteroffer made by Engelston and because of this, Secan was not able to buy
the power and authority to enter into juridical relations to bind the principal. In the the property.
Clearly, Gogle has failed to observe the diligenceof a good father of a family 10pts
in her duties as an agent. Therefore, she has violated her duties to his
principal. Argument of Connev:

Argument of Gogle: Magic City shall be liable for the acts of King. The company had been negligent in
supervising its employees in the conduct of their duties because the supervisor of
Gogle was not an agent of Secan, but a mere broker, whose duties include only King did not stop him from playing the practical joke against Connev. Under the
the bringing together of the parties to the transaction, and to act as the doctrine of respondent superior, the employer is liable for injuries caused by its
intermediary, and does not represent their interest. As distinguished from a employees acting within the scope of his employment. Magic City cannot escape
broker, an agent is one who binds himself to render some service, or to do liability by claiming that King was acting beyond his duties because as decided by
something in representation or on behalf of another, with the consent or authority the Supreme Court in labor law cases, slight deviations from the regular duties of
of the latter. Here, even if Gogle was designated as a real estate agent, her employees cannot be considered as acts beyond their employment. Also, a
duties is in reality, that of a broker because she only brings parties to transactions. supervisor was present during the whole incident. The supervisor did nothing to
Gogle even informed Secan that she was working with two other men who were prevent King from playing the practical joke. In the case, Magic City was negligent
interested in buying the land so Secan cannot expect that Gogle will act as his in supervising its employees. Under the law on quasi-delicts, any person who
agent to represent his interest. causes damage to another, either intentionally or negligently shall be liable. Since
Magic City was negligent in supervising its employee, and under the doctrine of
Thus, by being a mere broker, gogle has not violated any duty of an agent to respondent superior, Magic City should be liable.
Secan.
10pts

III. Connev v. Magic City Trucking Service, Inc. Argument of Magic City

Yes Magic City is liable for the actions of its employee, King. The incident Magic City should not be liable because King was not acting within the scope of
occurred while king was on duty, doing his regular duties of driving a truck of his employment, thus not acting as an agent of the company King’s duty was to
Magic City. Also, the incident took place in the presence of the Magic City drive the company truck and deliver dirt. It is well settled that employees of a
supervisor, who did nothing to prevent King from her prank against Connev. True; company are considered agents of their employees. As agents, they shall execute
the act of King in playing a prank to Connev was not one of his duties, but such their duties in accordance with the instructions of the principal, as provided in
diversion from his regular duties cannot be considered as a gross deviation since Article 1887 of the Civil Code. King was not able to observe this provision in
as mentioned, the event took place while he was having the delivery of dirt. It carrying out his duties when he did the practical joke to Connev. Clearly, his acts
cannot be avoided that sometimes in the workplace, employees play jokes with are beyond the scope of his duties to deliver dirt. By acting beyond the scope of
each other and our Supreme Court has recognized this fact and in fact has his employment, King alone should be liable and the doctrine of respondent
decided that injuries suffered or caused by and to employees are compensable (in superior exempts Magic City from liability.
later law cases). These decisions can also be applied in the case at bar. King can
still be considered as acting within the scope of his employment notwithstanding IV. 10pts
the fact that he played practical joke to Connev . With this, Magic City can be held
liable, under the doctrine of respondent superior which provides that employers Shuptrine vs Brown
are liable for the injuries caused by its employees who were acting within the
Shuptrine and Brown are not partners. As defined in Article 1767 in a contract of
scope of their employment . Thus, Magic City is liable for the injuries caused by
partnership, two or more persons bind themselves to contribute money, property
King to Connev.
or industry to a common fund with the intention of dividing the profits among
themselves. It must be noted that one of the essential characteristics of
partnership is the sharing of net profits. This is absent in the case at bar.
 Shuptrine was to receive 50percent of gross sales revenues not profits. Also, In accordance with the provision of Article 1780, , a universal partnership of profits
Brown was responsible for the losses alone, which agreement, if partnership comprises all that the partners may acquire by their industry or work during the
exists, is considered void by law. existence of the partnership. Also, movable or immovable property which each
Further, Brown has the sole management of the business, which also negates the
partner may possess at the time of the celebration of the contract shall continue to
existence of partnership. Shuptine cannot therefore be considered as partner of
pertain to each, only the usufruct passing to the partnership.
Brown, since she does not share in the profit and loss, and has no authority to
manage the business. At the most, Shuptrine can only be considered as an Based on the forgoing provision, the following shall continue to pertain to A:
independent contractor or supplier of paintings to the business of Brown.
(NOTE OF DEAN: This should be the argument for Shuptrine!) 1. The coconut plantation he purchased from his own funds
2. The fleet of taxis and agricultural land, because only the usufruct and income will go
the partnership
Argument for Shuptrine:
The following will belong to B:
Shuptrine is a mere independent contractor or supplier of paintings since
1. The apartment and shares of stock, because only the income and usufruct will
there was no agreement to form a partnership. In fact a partnership belong to the partnership
agreement was signed only when Brown left for a trip to Israel. Such signing 2. P 1000,000 won in the lotto draw as this was not a result of industry or work
was not due to an intention of creating a partnership but merely for purposes 3. Fishpond, but the usufruct and income belongs to the partnership
of protecting the interest of Brown. Also, such agreement was terminated
upon the return of Brown from Israel. The following belongs to the partnerships:

8pts a. Fare revenues

b. Crops gathered from the agricultural lot
Argument for Brown: c. Rentals from apartment income
There exists a partnership because there was a contribution of industry by d. Dividends from shares of stock
Shuptrine and by capital by Brown. Although there was no express agreement,
e. Salary of A
the fact that there was contribution to a common fund, there is a partnership.
Shuptrine is an industrial partner, whose paintings are a product of such f. Coconuts from coconut plantation
industry which Brown reproduce and distribute. The stipulation as to the amount g. Fish harvested from the fishpond
of gross sales revenues that are to be paid to Shuptrine can be considered as a
just and. Also, even if only Brown was Since the abovementioned properties are either acquired by the partners industry
or work, or as product of the properties owned by the partners.
the losses.
VI. No points given only “?”
True, the two men terminated their business relationship. However, the act of
Brown in selling the prints, which are partnership assets, can be considered as an The Congress passed a law allowing 100% foreign capitalization of banks. This
act in winding up the business of the partnership. Thus, Shuptrine cannot sure law suspended the requirement that banks shall be owned by Filipino citizen, at
Brown for continually selling the prints. least 60% of the outstanding capital stock. This law will pave the way for foreign
banks to be established here in the Philippines, and allow more competition. This
V. 10pts would lead to more investment opportunities which have the effect of lesser
interest of loans offered by banks to their clients.
 Finals 2014 Other matters that I will tell the would-be partners are:

a. The general partners cannot angage in a similar business (capitalist) or to

1. 13pts any business (industrial)but B can;
b. The general partners are parties to any suit by or against the partnership, but
I will advise that A, B, C and D shall comply with the provisions of the Civil Code not B, unless the suit directly affects him;
concerning the formation of a limited partnership. A limited partnership is one c. Generally, general partners cannot assign their interest in the partnership but
where one or more partners is a limited partner, together with one or more general B may do so;
partners. Since B want to be a passive investor only, he shall be designated as d. B may withdraw his contribution during the existence of the partnership but
alimited partners, and such fact shall be disclosed in the certificate of partnership, the general partners, as a rule cannot.
which shall be filed with the SEC. the name of the partnership shall bear the word
“Limited” or “Ltd” so that it can be legally considered as such. B also wants a fixed 2. 10pts
yearly return for his P5 million investment so I will advise the partners to include The following cannot be entered into or exercised by the lawyer or agent without a
tha rate and the fact of such agreement in the certficate of partnership. special power of attorney, in connection with matters related to litigation:

a. To enter into a compromise

b. To submit a question to arbitration
Lastly, with respect to B, his name shall not be included in the partnership name,
c. To renounce the right to appeal on a judgment
unless he has the same name/surname as that of A, C or D.
d. To waive the right to object to matters of venue
e. To renounce a prescription already obtained
With respect to A and C, they shall be considered as general partners, and as
managers of the partnership. This fact shall also be indicated in the certificate. I 3. 7pts
will tell A and C thata as general partners, they are liable for the partnership debts
to the extent of their contributions as well as to their personal assets. As an agent, a partner cannot make any alteration to an immovable property
without the consent of all other partners even though it may be necessary for
D, being an industrial partner, is also a general partner who is also liable to third administration of such immovable property. However, if the refusal of giving
persons withrespect to partnership debts, and even his personal assets, but being consent to such alteration is prejudicial to the said property, the consent of
an industrial partner, he may recover from either A or C when circumstances dissenting partners may be obtained through a court order.
warrant. On the otherhand, B, being a limited partner, will only be liable to the
extent of his contributions to the partnership. Also the followingcannot be done, without the consent of all partners:

I will aslo tell them that the death, retirement, insolvency among others, of A, C or a. To assign a specific property in trust of a creditor or to a person who
D will cause dissolution of the paartnership, no dissolution occurs if B suffers such promises to pay the debt of the partnership
causes. b. To make any act as to render it impossible to carry out the ordinary course of
business
c. To dispose of the good will (dean puts a question mark here)
d. To submit a question to arbitration (the word question was encircled by dean)
e. To submit a liability to compromise

4. 5pts
A substituted limited partner is one who has been assigned all the rights and to enter into a transaction and to accept and negotiate with the terms and
obligations of a limited partner who has retired, or one who has been designated conditions of one another; amount agreed upon, and a seller who is willing to
as such by the representative of a deceased partner. (Dean encircled the word accept the amount which the buyer is able to pay. If this would be the case,
“retired” and also with question marks) then the broker may demand for the payment of his commission.

A substituted limited partner may be an heir, a representative (dean encircles this) 6. 17pts
or an assignee who has been consented to become one by all of the other
partners.Also an assignee becomes a substituted limited partner if the limited The property rights of a partner are:
partner has been given the right to make him one, as stipulated in the certificate of
a. His right to participate in the management of the business of the partnership
partnership. An assignee also becomes a substituted limited partner upon consent
b. His right over specific partnership property
of all the partners.(Dean encircles this with a question mark)
c. His interest in the partnership

As a substituted limited partner, he acquires all the rights and obligations of the
The above-mentioned right may be assigned except only the right to participate in
assignor limited partner. He acquires the right to receive the share in the profit and
the management and subject further to certain limitations under the Civil Code.
any interest whuch the limited partners himself may receive. As to obligations, the
substituted limited partner is liable to the extent of the contributed capital by the
A partner’s interest in the partnership means a partner’s share in the profit which
limited partner.
the partnership may obtain in the course of its business. (Dean’s comment:
surplus)
5. 10 pts

The conveyance of a partner of his whole interest in the partnership to a third

a. A commission agent is one who acts as a purchaser and buyer of person does not cause the dissolution of the partnership. It only gives the
personal properties in behalf of his principal. Because of this, the personal assignee the right to receive any profit or interest to which the assignor may be
properties which are the object of the agency are necessarily placed in the entitled to. Also, the assignee does not acquire the right to interfere in the
possession of the agent. The agent maintains a relation not only with his management of the business, demand full account and information of the
principal but also with the properties subject of the agency. transaction relating to the partnership and to inspect the books.

b. A guaranty commission is the amount given to an agent, in addition A charging order is a remedy which may be obtained by a separate creditor of a
to ordinary commission, as payment for the risks which he shoulders partner, through a judicial proceeding. When a separate creditor obtains a
for non- collection of sales made on credit in behalf of the principal. It favorable judgment for the payment of personal debt of a partner, such creditor
may apply with the same court that rendered the judgment to issue a charging
is an additional compensation given to the agent for his undertaking
order with respect to the interest of the debtor-partner in the partnership. When
that in case of failure of the buyers to pay, it is the agent who will pay
such order is issued, the creditor then becomes entitled to any amount of profit or
the principal. interest that may accrue to the debtor-partner, and apply the same for the
payment of the debt due to him. However, this may be redeemed through:
c. The efficient and procuring cause is applicable to a broker. Under this
concept, the broker is entitled only to his commission when the means
employed and the efforts exerted by him are the efficient and procuring cause a. Separate property of any partner;
for the consummation of a transaction or contract between the seller and the b. Partnership property by any partner.
buyer. His efforts must have been the direct cause for the perfection of a
contract of sale between two persons.
7. 7pts
d. The ready-willing-and-able rule is also one that is applicable to a broker.
Under this rule, the broker must be able to convene persons who are ready
Bohatch v. Butler and Binion

Argument for Bohatch:

Bohatch had been wrongfully expelled from the partnership. The facts of the case
revealed that after the meeting with Paine, she no longer received work
assignments from the firm. This amounts to constructive expulsion from the firm.
Also, a clear violation of the partnership agreement was committed by Butler and
Binion. The Civil Code provides that every partnermust account and to bring to the
partnership whatever he may have obtained by reason of the formation, conduct
or winding up of the partnership. This duty is deemed written in every contract of
partnership. In the case at bar, it is clear that Butler and Binion failed to comply
with this duty. They failed to render a true account of the actual number of hours
billed by McDonald, and to disclose such fact to Bohacth who is also a partner. It
was also under the agreement that a bonus could not be reduced without notice.
However, Bohatch was not given such notice when the firm stopped paying her.
Clearly, these acts are violations of the partnership agreement and amount to
wrongful constructive expulsion of Bohatch as a partner, which gives her a right to
recover damages.

6pts

Argument for Butler and Binion:

No violation of partnership agreement was committed. Bohatch was not expelled

from the partnership when she found new job. There was no express notice to her
that she is being expelled from the firm. Her expulsion was actually her own doing.
As a partner, Bohatch had the duty to devote her time, effort and skills to the
advancement of the business of the partnership. However, her finding a new job
indicates that she no longer wanted to become part of the firm. The voting made
by the firm to expel her was made only three days after Bohatch found a new job.
The expulsion was also in accordance with the partnership agreement. Thus,
Bohatch’s claim of wrongful expulsion holds no water.
 Midterms 2015 will resign from the company. His copying of the forms can not be said as a
violation of his duty of loyalty to his employer. These forms were standard and
1. (10pts) were generally available to the public. His act of soliciting clients of the company is
also not a violation of his duty of loyalty since he only performed services to them
Argument for Chernow: only when he quit working form the company.

Angelo Reyes violated his duty of loyalty to his employer. 2. (10 pts)

Angelo Reyes is the auditor of the company. Being an auditor, he knew of the Argument for Secan:
processes within the firm. Although not part of the sales force, he has knowledge
of the clients of Chernow. His position, therefore, is one with fiduciary character, Beck Gogle violated her duty to Secan.
similar to that of a principal-agent relationship.
Agency may be express or implies from the acts of the principa, from his silence
As an agent he is bound to observe loyalty to his principal. He must act within the or lack of action or his falure to repudiate the agency knowing that another peron
scope of the authority conferred to him. Furthermore, if there be conflict between is acting on his behal without authority. Acceptance by the agent may also be
his interest and of his principal, he should prefer the latter, otherwise he shall be express, or implied from his acts, which carry out the agency or from his silence or
liable for damages. inaction according to the circumstances.

The act of Reyes forming another corporation to compete against Chernow, The facts of the case warrant that there is an implied agency between Secan and
soliciting and obtaining audit customers as well as copying the company’s Gogle. Noteworthy to sa that the act of Secan giving the written offer, to purchase
standard forms constitute a breach to the fiduciary relation of Reyes and the land of Egelston to Gogleis creating an implied agency. The conclusion is
Chernow. The disloyalty futrher aggravated by the fact that Chernow was unaware strengthened by the fact that Gogle is a real estate agent. If Secan did not intend
of the said acts. to create an agency and merely wantd to transmit a written offer, he should have
given it to a messenger and not to a real estate agent. Moreover, Gogle has
As the principal, Chernow would presume that his agent will act according to his accepted the agency when she in fact complied the request of Secan. They are
instructions and authority he vests to Reyes. He has reposed trust and confidence therefore bound with the rules of agency.
to Reyes as soon as he has hired him as auditor.
Failing to inform Secan of the counteroffer of the two men, Gogle violated her
Present the intentional acts of Reyes to compete with Chernow, the former obligation as an agent to the former.
therefore violate his duty of loyalty to the latter.
(7pts)
(10 pts)
Argument for Gogle:
Argument for Reyes:
Becky Gogle did not violate any duty to Secan. She was merely asked to transmit
Angelo Reyes is not guilty of violation of duty of loyalty. the written offer.

Angelo’s work is merely to make sure that the customers were not overcharged. The creation of a principal-agent relationship maybe express or implied. In
He is without any access to confidential information of the company. His position implied agency there must be strong indication that a person intended to create an
therefore is not one with fiduciary character. agency.

Being the employee of Chernow, he is bound with his contract of employment. From the given facts, there are no indicia that Secan wanted to form an agency. In
Noteworthy to say that Reyes was not asked to sign a non-compete contract. addition, the fact that Gogle handed over the written offer to Egelston is not
tantamount to an implies acceptance of the agency; such is just complying with an
With the above circumstances, Reyes has just followed what he is supposed to ordinary request.
do. As there was no “non-compete contract” to which he is bound to observe, he
is therefore free to form a corporation in competition to Chernow as soon as he
Moreover, if indeed there was an agency, the same is void. Purchasing an By the contract of partnership, two or more persons bind themselves to contribute
immovable property is one of the cases where a special power of attorney is money, property or industry to a common fund with the intention of dividing profits
necessary. This document is not presented in the case. among themselves. The word “profits” should be understood as Net Profits ie
amount after expenses are deducted.
Since there was no agency to speak of, Gogle couldn’t have violated any duty in
favour of Secan. The facts say that Skeptive is entitled to 50% gross sales revenues and Brown
shall bear the losses and management of the business. Thepresence of these
3. (8 pts) circumstances render the agreement of the parties not of a partnership. Both
parties should have share the losses and not just Brown. In addition, Skeptive’s
Argument for Conner: share should be net profits and not that of the gross sales.

King did not act within the scope of his employment. Magic City is liable. Hence, partnership did not exist.

The job of David King was to drive Magic City’s truck to A-Pac and dump the dirt (10 pts)
from the truck to the designated place. The scope of King’s employment then is
within function. Any deviation or act beyond the scope of his authority would make Argument for Brown
King liable. In addition, the employer will also be liable for the acts of its
employees as the latter are considered its agents. There was a partnership between Skeptive and Brown.

In the case, it is evident that King acted in excess of his authority chasing and A partnership could be comprised of different kinds of partners such as an
throwing the snake to Conenr are apparently not part of his job. Moreover, King’s industrial, managing, limited or general partner.
employer is also liable. As employer, it is duty bound to select proper employees
and to asure that the latter discharges their functions properly. This alone makes The facts of the case provide that the parties signed a partnership agreement.
Magic City liable. The liability of Magic City howver, was strengthened by the fact Moreover, it can be implied that Skeptive is an industrial partner being the one
that its supervisor was present during the incident and did not do anything to stop who made the paintings. As such, he is not responsible for the losses of the
King’s prank. partnership firm. He is entitled to a just and equitable share of the profits.

(7 pts) Brown, on the other hand, s the managing partner is the managing partner as well
as the general partner. As such he bears the losses and manages the firm. The
Argument for Magic City: agreement that Skeptive is entitled to 50% of the gross sales revenues does not
make the situation outsidethe purview of a partnership. The parties have the
Magic City could not be made liable. liberality to stipulate in their contract whatever they want provided it is not contrary
to law, good morals, public order or public policy. The parties might have deemed
In an agency, the principal is not liable for the acts of the agent which is beyond the share to be the just and equitable share ofor the industrial partner, SKeptive.
the authority given by the former.
5. (10pts)
In the case, the relationship between Magic City and David Kind could be
compared to that of an agency. Indeed, David King has exceeded his authority by A universal partnership of profits comprises all that the partners may acquire by
making such prank towards Commer. Because King acted beynd theauthority their industry or work during the existence of the partnership. Movable or
given to him, no liability attached to Magic City. immovable property which each of the partners may possess at the time of the
celebration of he contract shall continue to pertain exclusively to each, only the
4. (10 pts) usufruct passing to the partnership

Argument for Skeptive The following properties, therefore belongs o the partnership: fare revenues
realized from the operation of the taxis, the crops, rentals, dividends, A’s salary as
There was no partnership between Skeptive and Brown. a college professor, the coconuts gathered and the fish harvested.
The acquired coconut plantation and donated fishpond shall pertain to the
partnership as well by virtue of the stipulation of the parties. All the usufructuary
rights and fruits of the mentioned movable and immovable property shall also
belong to the partnership.

On the other hand, A retains ownership over the taxis and agricultural lot.
Meanwhile, B retains naked ownership of his apartment.

The prize won by B in the lotto draw shall pertain to him, the same not being a
product of his industry or work it was obtained only through chance.

6. (2 pts)

One of the laws allowed the passage of foreign merchant vessels not only in the
post of Manila but also in the different domestic ports thus decreasing the custom
charges. Nevertheless, this law encourages the exportation and importation of
goods in the country with the decrease of expenses that the merchants will incur.

(Philippine Competition Act, Cabotage Law)

[idk where this belongs, no number and no score indicated]

A “charging order” is that which is issued by the court on application of he creditor

of a debtor-partner. Thei is issued to satisfy the judgment creditor’s debt from the
debtor.-partner’s interest in the partnership and for all money which may be due to
him form the parneship. This order is issued without prejudice to the partnership
creditors, that is the latter will still be preferred thanthe judgement-debtor.
Moreover, with a “charging order” the court may appoint a received for the debtor-
partners interest in the partnership.
 Finals 2015
4. (10 pts)
1. (13pts)
A substituted limited partner is the assignee of a limited partner’s rights and
In order that A, B, C and D may proceed with their enterpricse they have to interest in the partnership, whereby the latter dies or assigns his rights.
determine first what each wil contribute to the partnership to know if there is a
need that te partnership contract should be in a public instrument or not. This is A person who is the assignee of a limited partner may become a substituted
important since the law stated that when real property is contributed to the limited partner.
partnership, the contract must be in a public instrument and an inventory of the
properties shall be made, otherwise the contract is void. The assignee will become a substituted limited partner if the other members of the
partnership consents thereto, or when the assignor, empowered by the cerificate,
Accordingly, C will contribute his land, thus the partnership contract must be in a can give such right to the asignee. Furthermore, the certificate of limited
public instrument and inventory thereof must be made. partnership must be amended appropriately in accordance with law.

To avoid any future issue, they may determine also who will act as managers of A substitued limited partner has all the rights and obligations of his/her assignor,
the partnership. They may also set forth the manner of the management of the except those liabilities in which he/she was ignorant at the time he became such
partnership business. The appointement of the manager may be stipulated in the and which cannot be ascertained in the certificate.
articled of partnership. The appointed manager can then execute all acts of
administration even with the opposition of the other partners. His power shall be 5. (8pts)
irrevocable unless there be a valid cause for his removal. The removal can be
effected nly ipon the vote of the owners of the controlling interest. They may, a. Commission agent is an agent who received the goods of his principal for sale
however, choose not to embody in the articled os partnership who there manager in a commission basis. He accepts the goods in the terms and conditions in which
will be so that he latter’s power will be revocable. they were described in the document evidence in it unless if there be damages
and deterioration and he makes a written statement to that effect to his principal.
A, B, C and D also may agree with their profit-loss sharing. He is obliged to sell the goods generally in cash.

Other stipulations which the “would be” partners want shall also be embodied in b. Guaranty Commission, when accepted, obliged the commission agent to
their contract of partnership. assume the risk of collecting the credit of its buyer. Thus, even though a buyer-
debtor fails to pay at the maturity date the commission agent must remit to the
After considering every thing that the parties would like to stipulate in their principal whatever may be the agreed terms of the credit.
contract, they may register the partnership with the SEC. they may then proceed
with their venture. c. Efficient and Procuring Casue is a series of vent unbroken by any independent
incident whereby the act of the agent is the proximate cause in reachin a
2. (9pts) consummation of a contract between the buyer and principal (seller). When this
occurs, the agent must be compensated by the principal.
A lawyer without a special power of attorney from his client cannot enter into a
compromise agreement with the opposing party, submit the issue to arbitration, d. Ready Willing and Able Rule applies in agency cases. This means that when an
waive the right to appeal a judgment, waive the venue of an action or renounce agent finds a ready, willing and financially capable vendor for the property of his or
the right relative to prescription. her principal he or she must be given compensation thereof.

6. (19 pts)
3. (3 pts)
The following are the property rights of a partner:
The following are the acts which requires unanimity:
a. right over the specific partnership property
[please just check Art. 1818 since her answers are long and wrong anyway. Basta b. right to the partnership interest
7 sila kabuok katung gi report ni Kristine japos] c. right to participate in the management of the partnership
 contract or that which a violation of the agreementcan be inferred, will be
Among these rigts the right over specific partnership property cannot be assigned. considered as a breach therof.
[Dean comment: Only?]
As embodied in the partnership agreement between Butler and Binion and
Bohatch, a parner cn be expelled from the firm only through votation. Moreover, a
bonus to a partner could not be reduced without notice. However, the acts of the
firm is tantamount to violation of the partnership agreement. She was deprived of
any work assignment by the firm. Afer 6 months from that meeting, she was even
A partners’ interest in the partnership is his share in the profits of the partnership. denied of her monthly income and was asked to vacate her office. These acts are
tantamount of Bohatch’s expulsion which cannot be done without votation.
If a partner convery his whole interest in the partnership, it does not automatically
dissolves the partnership. The assignee Absent the votation of Butler and Binion, Bohatch cannot be validly expelled from
cannot interfere with the management of the partnership business or ask for an the partnership. For the way Bohatch was expelled, Butler and Binion violated the
accounting of partnership transaction or inspect partnership books. The assignee, partnership agreement.
however, has the right to receive the share of his assignor based on is contract
with the latter. He may also avail of the usual remedies if there be fraud or (10pts)
mismanagement.
Argument for Butler and Binion
7. (8 pts)

Argument for Bohatch

The firm did not violate the partnership agreement.

In a partnership, fiduciary relationship exists. The relations of the partners is based on

Butler and Binlon violated the partnership agreement.
the trust and confidence to each of the. If at some point a partner no longer has trust
and confidence over his co-partner, he may ask that the latter be removed.
The partnership contract is considered as the law of the partis. Unless the
stipulation thereof is contrary to law, morals, good customs or public policy, the
contract is valid and binding between the parties. Any act prohibited by the
In the case, the trust of the firm towards Bohatch was severed when she met
directly with Louis Paine, the firm’s managing partner for an alleged overbilling
committed by McDOnald, which was later found to b groundless. Moreover, in a
law firm, the works of each partner is essential that any dissatisfaction y a client
may be a ground for one’s removal. Penzoil, an important client of the firm, was
unsatissied of Bohatch’s work. This is also the reason why she was not given
.
additional work assignments Notably, Pennzoil is the firm’s exclusive client. The
firm therefore cannot be expected to give Bohatch further assignments.
For the loss of the firm’s trust and confidence, and the unsatisfactory work of
Colette Bohatch, she may be removed from the firm. The partnership did not
violate the partnership agreement.