PARTNERSHIP – DIAGNOSTIC EXERCISES a. Fishpond.

b. Rental of P480,000.00
TEST I – MULTIPLE CHOICE. Select the best answer by writing the letter of your choice. c. Apartment.
d. Vacant land.
1. A contract where two or more persons bind themselves to contribute money, property or
industry to a common fund with the intention of dividing the profits among themselves.
7. Vincent and James entered into a universal partnership of profits. At the time of the execution
a. Voluntary association
of the articles of partnership, Vincent had a two-door apartment which he inherited from his
b. Corporation
father 3 years earlier. James, on the other hand, had a fleet of taxis which he purchased 2 years
c. Partnership
before. In the first year of the partnership, Vincent earned P500, 000.00 as a radio talent while
d. Sole proprietorship
James won P1, 000,000.00 in the lotto. During the same period, rentals of P120, 000.00 were
collected from the apartment, while fare revenues of P200, 000.00 were realized from the
2. One of the following is not a characteristic of contract of partnership
operation of the fleet of taxis. Which of the following belongs to the partnership?
a. Real, in that the partners must deliver their contributions in order for the partnership
a. Two-door apartment.
contract to be perfected.
b. Lotto winnings of P1,000,000.00
b. Principal, because it can stand by itself.
c. Salary of P500,000.00
c. Preparatory, because it is a means by which other contracts will be entered into.
d. Fleet of taxis.
d. Onerous, because the parties contribute money, property or industry to the common fund.
8. A partnership formed for the exercise of a profession which is duly registered is an example of:
3. One of the following is not a requisite of a contract of partnership. Which is it?
a. Universal partnership of profits.
a. There must be a valid contract.
b. Universal partnership of all present property.
b. There must be a mutual contribution of money, property or industry to a common fund.
c. Particular partnership.
c. It is established for the common benefit of the partners which is to obtain profits and divide
d. Partnership by estoppel.
the same among themselves.
d. The articles are kept secret among the members.
9. Three of the following partnership contracts are void. Which one is not?
a. A universal partnership of all present property between husband and wife.
4. The minimum capital in money or property except when immovable property or real rights
b. A universal partnership of profits between a man and a woman living together as husband
thereto are contributed, that will require the contract of partnership to be in a public
and wife without the benefit of marriage.
instrument and be registered with the Securities and Exchange Commission (SEC).
c. A particular partnership between husband and wife.
a. P5,000.00
d. A universal partnership of profits between a private individual and a public officer.
b. P10,000.00
c. P3,000.00
10. John, Albert and Wilfred are partners in JAW Enterprises. Not having established yet their credit
d. P30,000.00
standing, the three partners requested Simon, a well-known businessman, to help them
negotiate a loan from Carlos, a money lender. With the consent of John, Albert and Wilfred,
5. If the partnership has the minimum capital mentioned in No. 4, but the contract is not in a
Simon represented himself as a partner of JAW Enterprises. Thereafter, Carlos granted a loan of
public instrument or the same is not recorded with the SEC, the partnership:
P150, 000.00 to JAW Enterprises. What kind of partner is Simon?
a. is void.
a. Managing partner.
b. is voidable.
b. Liquidating partner.
c. does not acquire juridical personality.
c. Ostensible partner.
d. still acquires juridical personality.
d. Partner by estoppel.
6. Joseph and Edward entered into a universal partnership of all present property. At the time of
11. Refer to No. 10. Assuming that JAW Enterprises was unable to pay the loan on due date at which
their agreement, Joseph had a four-door apartment which he inherited from his father 3 years
time the assets of the partnership amounted only to P120, 000.00. From whom may Carlos
earlier. Edward, on the other hand, had a fishpond which he acquired by dacion en pago from
collect the payment?
Robert. During the first year of the partnership, rentals collected on the four-door apartment
a. Simon only for the whole amount of P120, 000.00.
amounted to P480, 000.00; while fish harvested from the fishpond were sold for P300,000.00.
b. John, Albert and Wilfred who are liable jointly for P150, 000.00 each.
During the same period, Edward received by way of donation a vacant lot from an uncle. The
c. JAW Enterprises for its assets of P120, 000.00; thereafter John, Albert and Wilfred from their
partners had a stipulation that future property shall belong to the partnership. Which of the
separate property at P10, 000.00 each.
following does not belong to the common fund of the partnership?

d. JAW Enterprises for its assets of P120, 000.00; thereafter, John, Albert, Wilfred and Simon b. An industrial partner whether or not the business he will engage in is of the same kind as or
from their separate assets at P7, 500.00 each. different from the partnership business.
c. A capitalist partner and the business he will engage in is of a kind different from the
12. Teresa, Olga, Pamela and Sonia, partners in TOPS Company Limited, a trading company, have partnership business.
contributions of P50, 000.00 each. Teresa and Olga are general partners; Pamela, a limited d. An industrial partner and the business he will engage in is of a kind different from the
partner; and Sonia, a general-limited partner. TOPS Company Limited purchased merchandise partnership business.
on credit from Moret Sales Co. amounting to P180, 000.00. On due date, however, TOPS
Company Limited was unable to pay. Accordingly, Moret Sales Co. filed a case of collection 17. Which of the following statements is false when no one among the partners was appointed as
against the partnership which by then had assets amounting to P150, 000.00. From whom may manager?
Moret Sales Co. collect the sum of P180, 000.00? a. Each partner will be considered as agent of the partnership.
a. The partnership for its assets of P150, 000.00; thereafter, from Teresa and Olga at b. Any one may make an important alteration in the immovable property of the partnership
P15,000.00 each from their separate assets. without the consent of the others provided it is useful to the partnership.
b. Teresa and Olga only at P90, 000.00 each from their separate assets. c. In case the act of one partner is opposed by another, the decision of the majority of the
c. The partnership for its assets of P150, 000.00; thereafter, from Teresa, Olga and Sonia at partners will prevail
P10,000.00 each from their separate property. However, Sonia can recover P5, 000.00 each d. In case of a tie in the voting, the tie shall be resolved by the vote of the partner owning the
from Teresa and Olga. controlling interest.
d. Teresa, Sonia can recover from Teresa and Olga P30, 000.00 each.
18. The following statements pertain either to a partner appointed as manager in the articles of
13. Which of the following losses will not cause the dissolution of a partnership? partnership or through a document after the formation of the partnership.
a. Loss before delivery of a specific thing which a partner has promised to contribute to the I. He may be removed as manager only for a just or lawful cause by the vote of the
partnership. partners owning the controlling interest.
b. Loss of a specific thing after its delivery to and acquisition of its ownership by the II. He may be removed as manager with or without just or lawful cause by the vote of the
partnership from the partner who contributed the same. partner owing the controlling interest.
c. Loss after delivery of a specific thing where the partner contributed only its use and III. He may perform all acts of administration despite the opposition of his partners
enjoyment, he having reserved the ownership thereof. provided he is in good faith.
d. Loss before delivery of a specific thing where the partner promised to contribute only its use IV. He may perform all acts of administration in good faith but opposing partners may
and enjoyment, reserving the ownership thereof. resort to his removal if he persists.

14. Gregory, Edmond and Mark are partners in GEM Company with contributions of P10, 000.00, Based on the foregoing:
P40, 000.00 and P50,000.00 respectively. Their agreement shows that they will share in the
a. I and II pertain to a partner appointed as manager in the articles of partnership.
profits in the ratio of 2:3:4. During the year, the partnership sustained a loss of P9, 000.00. How
b. I and III pertain to a partner appointed as manager through a document after the formation
shall this loss be divided among the partners?
of the partnership.
a. Equally at P3, 000.00 each.
c. II and III pertain to a partner appointed through a document after the formation of the
b. Gregory P900.00; Edmond, P3, 600.00; and Mark, P4, 500.00
partnership
c. Gregory, P2, 000.00; Edmond, P3, 000.00 and Mark, P4, 000.00.
d. I and IV pertain to a partner appointed as manager in the articles of partnership.
d. The partners must establish first a loss sharing agreement before the loss may be divided
because they failed to have an agreement on the division of loss.
19. Campos, Urbano, Tamesis and Encanto are partners in CUTE Company each one contributing
P300, 000.00 except for Encanto who is an industrial partner. The partners agreed that Campos
15. Which of the following stipulation is valid?
shall be exempted from liability to the third persons. Three years of continued losses after the
a. A stipulation excluding a capitalist partner from profits.
formation of the partnership resulted in unpaid partnership liabilities to third persons
b. A stipulation exempting a capitalist partner from losses.
amounting to P500, 000.00 Partnership assets have also been reduced to P200, 000.00. From
c. A stipulation exempting an industrial partner from losses.
whom may third persons collect the partnership debts?
d. A stipulation excluding an industrial partner from profits.
a. From the partnership assets of P200, 000.00 thereafter, from the partners for their separate
assets at P100, 000.00 each except Campos who was exempted from liability to third
16. A partner can engage in business for himself without the consent of his co-partners if he is:
persons by agreement.
a. A capitalist partner whether or not the business he will engage in is of the same kind as or
different from the partnership business.
 b. From the partnership assets of P200, 000.00; thereafter, from the partners for their 24. Benito, Ignacio, Gregorio, Artemio and Servando are partners in BIGAS Company which is
separate assets at P100, 000.00 each except for Encanto since an industrial partner does not engaged in the buying and selling of rice. Benito is the manager. Ignacio was also given a special
share in the losses. power of attorney by the partnership to buy a van for the company. No other power was given
c. From the partnership assets of P200, 000.00; thereafter, from all the partners for their to all the partners. In which of the following acts or contracts is the partnership not bound by
separate assets at P75, 000.00 each including Campos an Encanto. the act of the partner?
d. From the partnership assets of P200, 000.00; thereafter, from Urbano and Tamesis only for a. Ignacio buying rice for the partnership from Teodoro who has no knowledge of Ingnacio’s
their separate assets at P150, 000.00 since Campos was exempted from liability by lack of authority.
agreement, while Encanto, being an industrial partner is not liable for losses. b. Ignacio buying a van for the partnership from Teresa.
c. Gregorio buying a van for the partnership from Thelma who has no knowledge of Gregorio’s
20. The partnership will bear the risk of the loss of three of the following things. Which is the lack of authority.
exception? d. Benito selling rice for the partnership.
a. Thins contributed to be sold.
b. Fungible things or those that cannot be kept without deteriorating. 25. Assuming that no fraud is committed by or consented to buy the partner concerned, which of
c. Things contributed so that only their use and fruits will be for the common benefit. the following statements is false?
d. Things brought and appraised in the inventory. a. Notice to any partner relating to partnership affairs while already a partner is notice to the
partnership.
21. A partner’s interest in the partnership is his share of the profits and surplus which he may assign b. Knowledge of a partner acting on the particular matter acquired by him while already a
to a third person. Which of the following statements concerning such right is correct? partner is knowledge of the partnership.
a. The conveyance of the partner’s interest will cause the dissolution of the partnership. c. Knowledge of a partner acting on the particular matter obtained by him before he became a
b. The assignee becomes a partner. partner is knowledge of the partnership provided he still remembers the same.
c. The assignee has a right to interfere in the management of the partnership business. d. Knowledge of partner not acting on the particular matter obtained by him before he
d. The assignee has the right to receive the profits which the assigning partner would became a partner is knowledge of the partnership.
otherwise be entitled to.
26. Which of the following statements is incorrect?
22. Torres is indebted for P5, 000.00 to MACE Trading Company, a partnership managed by a. Partnership creditors are preferred as to partnership assets.
Mendoza to whom Torres also owes P10, 000.00. The two debts which are both demandable are b. Partnership creditors are preferred as to each partner’s separate assets.
unsecured. Torres remits P4, 500.00 to Mendoza in payment of his debt to him. Accordingly, c. A partner’s separate creditors are preferred as to the partner’s separate assets.
Mendoza issues a receipt for his own credit. To which credit should the payment be applied? d. A partner’s separate creditors may attach a partner’s share in the partnership assets.
a. To Mendoza’s credit because the payment made by Torres is intended for his debt to
Mendoza who issues his own receipt. 27. The chance in the relation of the partners caused by any ceasing to be associated in the carrying
b. To both the partnership credit and Mendoza’s credit proportionately at P1, 500.00 and on the business is known as:
P3,000.00 respectively. a. Termination of the partnership.
c. To Mendoza’s credit because its amount is greater than that of the partnership credit. b. Winding up of partnership affairs.
d. To the partnership credit because the managing partner should not prefer his own interest c. Liquidation of the partnership business.
to that of the partnership. d. Dissolution of the partnership.

23. In three of the following wrongful acts of partners, the partnership is solidaryly liable with all the 28. A decree by the court is necessary to dissolve a general partnership based on three of the
partners to third persons. Which one is the exception? following grounds. Which one will not require such decree but will cause the automatic
a. For loss or injury caused to a third person by reason of the wrongful act or omission of a dissolution of the partnership?
partner acting in the ordinary course of business. a. The business of the partnership can only be carried on at a loss.
b. Where a partner acting within the scope of his apparent authority receives money or b. A partner is shown to be of unsound mind.
property of a third person and misapplies it. c. A partner has been guilty of such conduct as trends to affect prejudicially the carrying on the
c. Where the partnership receives money or property of a third person in the ordinary course business.
of business and such money or property is misapplied by a partner while it is in the custody d. A partner is civilly interdicted.
of the partnership.
d. For loss or injury caused to a third person by reason of the use of partnership property by a 29. Three of the following will cause the automatic dissolution of a general partnership. Which one
partner for personal purpose. will not?

a. When any event makes it unlawful for the business of the partnership to be carried on or for a. Money and/or property.
the members to carry it on in partnership. b. Money and/or services.
b. Expulsion of any partner from the business bona fide in accordance with such a power c. Property and/or services.
conferred by the agreement between the partners. d. Services only.
c. A partner becomes in any way incapable of performing his part of the partnership contract.
d. The insolvency of a partner or of the partnership 35. A limited partner shall be liable as general partner in three of the following cases. Which one is
the exception?
30. When is the partnership not bound by the act/s of a partner after dissolution in the following a. When he is a general-limited partner as stated in the certificate.
case? b. When he takes part in the control of the business.
a. Acts necessary to wind up partnership affairs. c. When he participates in the management of the business.
b. Acts to complete transaction begun before dissolution. d. When his surname which appears in the partnership name is also the surname of a general
c. New transaction where the third person is a previous creditor and there was a publication of partner.
the dissolution in a newspaper of general circulation in the place or places where the
business had been carried on but such third person has not read it. 36. Which of the following omissions will make a partnership formed as a limited partnership liable
d. New transactions where the third person is a new creditor and there was publication of the as a general partnership?
dissolution in a newspaper of general circulation in the place or places where the business I. The certificate is not signed and sworn to by all the partners.
had been carried on but such creditor has not read it. II. The certificate is not registered with the Securities and Exchange Commission.
III. The partnership name does not include the word “Limited” or “Ltd” its abbreviation in
31. The partnership is not bound in three of the following acts of a partner after dissolution. the certificate.
However, it is bound in one. Which is it?
a. Where the partner acting is insolvent. a. I and II.
b. When it is unlawful to carry on the business. b. II and III.
c. When the partner has no authority to wind up partnership affairs and the third person is a c. I and III.
previous creditor who had no knowledge of the partner’s lack of authority. d. I, II and III.
d. When a partner has no authority to wind up partnership affairs and the third person is a
new creditors who has not read the publication of the lack of authority of the partner in a 37. A person admitted to all the rights of a limited partner who has died or has assigned his interest
newspaper of general circulation in the place or places where the partnership business is in the partnership is known as:
carried on. a. An ostensible partner.
b. A liquidating partner.
32. What is the order of payment of liabilities of a dissolved general partnership using the code c. A substituted limited partner.
number representing each liability? d. A general-limited partner.
I. Those owing to partners other than for capital or for profits.
II. Those owing to creditors other than partners. 38. If the assignee does not become the partner referred to in the preceding number, his rights do
III. Those owing to partners in respect of capital. not include:
a. The receipt of the assignor’s share of the profits.
a. I, II, III, IV. b. The receipt of the assignor’s other compensation by way of income.
b. II, I, IV, III. c. The return of the assignor’s contribution.
c. II, I, III, IV. d. The inspection of partnership books or account of partnership transactions.
d. I, II, IV, III.
39. What is the order of payment of liabilities of a dissolved limited partnership using the code
33. In a limited partnership where there are 4 partners: number representing each liability?
a. All the partners must be limited partners. I. Those owing to general partners other than for capital or for profits.
b. The number of limited partners must be equal to the number of general partner that is 2:2. II. Those owing to creditors including limited partners, except those to limited partners on
c. The number of limited partners must be greater than the number of general partners that is account of their contributions and general partners.
3:1. III. Those owing to limited partners by way of their share in the profits and other
d. It is enough that there is one limited partner; the rest may all be general partners. compensation by way of income.
IV. Those owing to limited partners in respect to the capital of their contributions.
34. A limited partner may contribute: V. Those owing to general partners in respect of capital.
 VI. Those owing to general partners in respect of profits. P100,000.00. The partnership which is to engage in the trading of garments was named “WOW
Garments Co., Limited” as indicated in the certificate signed and sworn to by the partners
a. I, II, III, IV, V, VI. before a notary public. However, the certificate was not filed with the Securities and Exchange
b. II, I, III, IV, V, VI. Commission.in the meantime, the partners already begun operating the business and
c. II, I, III, IV, VI, V. transacting with third persons.
d. II, III, IV, I, VI, V. a. The partnership entered into by the Wilma, Olga and Wynona is void.
b. The partnership will be considered a general partnership. Accordingly, all partners will be
40. Which of the following will not cause the automatic dissolution of a limited partnership? liable with their separate property after the exhaustion of partnership assets.
a. Death of a general partner. c. The partnership will be considered a limited partnership as indicated in its name. Only
b. Death of a limited partner. Wilma and Olga will be liable with their separate property after the exhaustion of
c. Insolvency of a general partner. partnership assets.
d. Insanity of a general partner. d. Wilma, Olga and Wynona will be considered separately as sole proprietorships with each
one having a capital equivalent to their respective contributions.
41. One of the distinctions between a partnership and a corporation is that a partnership:
a. May be formed by one person. 46. Fernando, Filoteo, Fortunato and Fulgencio are partners in the firm F4 Enterprises which is
b. Is created by operation of law. engaged in the trading of fertilizers Fernando contributed P50, 000.00; Filoteo, P30, 000.00; and
c. Acts through a board of directors. Fortunato, P20, 000.00. Fulgencio is an industrial partner and manages the partnership. Based
d. May exist for an indefinite period. on the foregoing facts, which of the following statements is incorrect?
a. Fernando may engage in the business of trading car spare parts without the consent of the
42. Belinda, Ara, Rica and Klaudia are partners in BARK Enterprises, a pet shop, with Belinda other partners.
contributing P50, 000.00; Ara, P20, 000.00; and Rica, P30, 000.00. Klaudia is an industrial partner b. Filoteo may be validly exempted from losses incurred by the partnership by agreement of
and manages the partnership. Based on the foregoing information, which of the following the partners.
statements is false? c. Fulgencio may not engage in the car repair business without the consent of his co-partners
a. Belinda may engage in the buying and selling of rice without the consent of the other d. Fulgencio is exempt from losses although there is no agreement among the partners.
partners.
b. Klaudia may engage in the buying and selling of rice without the consent of the other 47. Bettina, Erlinda, Amanda, Ursula, Teresa and Yolanda are partners in BEAUTY Enterprises, a
partners. dealer in cosmetics and other beauty products, with contributions of P60,000.00, P50,000.00,
c. Klaudia is not liable for the losses of the partnership. P40,000.00, P30,000.00, P20,000.00, and P10,000.00, respectively. No one was appointed as
d. Klaudia may be held liable by third persons for partnership debts with her separate property. manager in the articles of partnership.
a. Bettina is the manager because he made the biggest investment.
43. Josephine, Ellen, Wilma, Edith and Lydia are partners in JEWEL Company,, Ltd. Josephine, Ellen b. Every act in the ordinary course of the business will have to be decided by the majority
and Wilma are general partners; Edith is a general-limited partner, while Lydia is a limited determined on a per head basis.
partner. Based on the foregoing information, which of the following statements is false? c. Every act in the ordinary course of the business will have to be decided by the controlling
a. Josephine, Ellen and Wilma may be held liable with their separate property after the interest (biggest investment) although the partners owning them do not constitute the
exhaustion of partnership assets. majority.
b. Edith may participate in the management of the partnership. d. All the partners are agents or managers of the partnership and any one of them may
c. Edith may not be held liable with her separate property for partnership debts after the perform acts of administration.
exhaustion of partnership assets.
d. Lydia may not be held liable with her separate property for partnership debts after the 48. Which of the following will not cause the automatic dissolution of a general partnership?
exhaustion of partnership assets. a. Death of a capitalist partner.
b. Insolvency of a capitalist partner.
44. Which of the following will not cause the automatic dissolution of a general partnership? c. Insanity of an industrial partner.
a. Death of a partner. d. Civil interdiction of an industrial partner.
b. Insolvency of a partner.
c. When the partnership business becomes unlawful. 49. PATOK Enterprises, a partnership engaged in the business of renting out video films, is owned by
d. Insanity of a partner. Patricia, Alice, Tina, Olga, and Kaye, with Kaye as the manager. Diana owes PATOK Enterprises
45. Wilma, Olga and Wynona agreed to form a limited partnership with Wilma and Olga as general P6, 000.00 and Olga, P4, 000.00. Both debts are unsecured and are already due. Diana pays Olga
partners contributing P50, 000.00 each, and Wynona as limited partner contributing P4, 000.00 for which Olga issues her own receipt.

a. The payment should be applied to Olga’s credit only. a. Each partnership has a separate juridical personality.
b. The payment should be applied to PATOK’s credit only. b. I and II have separate juridical personality.
c. The payment should be divided proportionately between PATOK and Olga, at P2, 400.00 and c. II and III have separate juridical personality.
P1, 600.00, respectively. d. None of the partnerships has a separate juridical personality.
d. The payment should be divided equally between PATOK and Olga at P2,000.00 each
53. GREAT Company, a partnership engaged in the distribution of generation, is composed of
50. Federico, Alberto, Sofronio and Teodoro are partners in FAST Motorparts Company, a dealer of George, Roland, Edmond, Albert, April, the following transaction were entered into by the
car spare parts. Federico, Alberto and Sofronio invested P500, 000.00, P200, 000.00 and following partners in behalf of the partnership without any authority:
P300,000.00, respectively. Teodoro is an industrial partner who manages the partnership. The I. The sale of generation by Roland to Juan Torres who was not aware that Roland had no
partners have stipulated that Federico shall be exempt from liability to third persons. At the end authority. Juan Torres has paid for the generator which is due for delivery.
of three years, the assets of the partnership have dwindled to P220, 000.00 while its liabilities to II. The purchase of a car by Edmond from intrepid Motors whose owner was not aware of
third persons have a balance of P340, 000.00. How much ultimately will be the share of each Edmond’s lack of authority. The car and the price are due for delivery and payment,
partner after payment to third persons and the settlement among the partners? respectively.
a. P30, 000.00 for each partner.
b. Federico, P60, 000.00; Alberto, P24, 000.00; Sofronio, P36, 000.00; and Teodoro, none. Based on the foregoing, the partnership is bound by:
c. Federico, none; Alberto, P48, 000.00; Sofronio, P72, 000.00; and Teodoro, none.
a. Transaction I only.
d. Federico, none; Alberto, Sofronio and Teodoro, P40, 000.00 each.
b. Transaction II only.
c. Both Transaction I and II.
51. John Solanda and Sons is a partnership composed of three partners, namely: Robert Solanda,
d. Neither Transaction I nor II.
Simon Solanda and Theodore Solanda. The partners are the sons of John Solanda who has
retired from business but who suggested that they include his name in the firm to give them an
54. MARK Company, is a partnership engaged in the trading business, with Marquez, Alconcer,
advantage since he is well-known in the business community.
Ramos, and Kanapi as partners Marquez, Alconcer and Ramos are capitalist partners,
I. John Solanda shall have all the rights of a general partner.
contributing P100,000.00, P60,000.00, and P40,000.00, respectively. Kanapi is an industrial
II. John Solanda shall have all the liabilities of a general partner.
partner. The partners have a stipulation that Marquez shall not be liable for partnership
liabilities. After three years of continued losses, the partnership incurred liabilities of
Based on the foregoing facts: P200,000.00 at which time its assets had dwindled to P140,000.00. after partnership assets have
been separate exhausted, partnership creditors may go after the separate assets of:
a. Both statements are true. a. All the partners.
b. Both statements are false. b. Marquez, Alconcer and Ramos, but not those of Kanapi.
c. Statement I is true; Statement II is false. c. Alconcer, Ramos and Kanapi, but not those of Marquez.
d. Statement I is false; Statement II is true. d. Alconcer and Ramos only.

52. The following partnership contracts were presented to you for evaluation: 55. Sibal, Untalan, Pareno, Eusebio, and Rances are partners in SUPER Enterprises whose business is
I. A partnership engaged in the sale of office supplies with a capital of P100, 000.00 car painting and repairs. All partners are capitalist partners with Sibal as manager. After ive
broken down into cash P30, 000.00; office supplies for sale, P50,000.00 and office years of operations, Rances resigned from the partnership. Although Sibal was aware of the
equipment, P20,000.00. The agreement is in a private instrument. resignation of Rances, he still bought 50 gallons of car paint from Masterpaint owned by
II. A partnership engaged in the lease of office spaces with a capital of P100, 000.00; Marcelo who had been dealing with SUPER for past 5 years, and car spare parts from
building, P20, 000.00. The agreement is in a public instrument attached to which the Supremeparts, owned by Salviejo who was transaction for the first time with SUPER. The
inventory of the land and the building is signed by the partners. The agreement is not dissolution of SUPER was published in the Manila Bulletin but neither Marcelo nor salviejo read
recorded with the Securities and Exchange Commission. it. Neither one knew at the time they transacted with Sibal that partnership had been dissolved.
III. A partnership engaged in the trading of computers whose name is “Lamont Enterprises, a. SUPER is liable to both Masterpaint and Supremeparts.
Ltd.” It has a total capital of P500, 000.00 broken down into P100, 000.00 cash and b. SUPER is liable to Masterpaint only.
computers worth P400, 000.00, contributed by both general and limited partners. The c. SUPER is liable to Supremeparts only.
agreement was subscribed and sworn to by all the partners before a notary public but d. SUPER is not liable to both Masterpaint and Supremeparts.
not recorded with the Securities and Exchange Commission.
56. TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has for
Based on the foregoing: its partners and their respective contributions the following: Tomas, P10,000.00; Ramon,
 P20,000.00; Ignacio, P30,000.00; Urbano; P40,000.00; Marcos, P100,000.00; Pablo, P200,000.00; a. The payment of P4, 500.00 will be applied proportionately to the two credits: to the
and Hilario, P300,000.00. No one was appointed as manager of the partnership. In the course of partnership credit at P2, 475.00, to Donna’s credit P2, 025.00. This is so because Donna
the operation of the partnership, Tomas proposed to buy car spare parts from Dominion Motors, should not place her interest before that of DEAR Company.
but his proposal was opposed by Ramon. A voting among the partners took place and Ignacio, b. The payment of P4, 500.00 will be applied entirely to Donna’s credit.
Urbano and Marcos sided with Tomas, while Pablo and Hilario sided with Ramon. c. The payment will be applied in partial payment of the partnership credit of P5, 500.00;
a. The group of Tomas , Ignacio, Urbano and Marcos will prevail because they constitute the hence, there will be a balance of P1, 000.00.
majority, d. Tricia, Donna and DEAR Company will have to agree as to which credit the payment shall
b. The group of Ramon, Pablo and Hilario will prevail because they own the controlling interest. apply.
c. None will prevail because no one was appointed as manager of the partnership.
d. The partners will have to appoint a manager in order to resolve the conflict. 61. Which of the following statements concerning the name of a partnership is false?
a. The partnership name may include the name of only one of the partners.
57. Refer to No. 56. Assuming that when the voting took place, Marcos abstained, Ignacio and b. The partnership name may include the names of two or more, but not all of the partners.
Urbano sided with Tomas, while Pablo and Hilario sided with Ramon. c. The partnership name may include the names of all the partners.
a. None will prevail because the voting was equal. d. The partnership cannot adopt a name which does not include the name of at least one of
b. The group of Ramon, Pablo and Hilario will prevail because they own the controlling interest. the partners.
c. None will prevail because no one was appointed as manager of the partnership.
d. The partners will have to appoint a manager in order to resolve the conflict. 62. Ornussa, the owner of a vacant lot, leased the same to Florida under an agreement that the
rental shall be paid by Florida at the rate of 10% of the annual net income of the flower business
58. Refer to No. 56. Assume the same facts except that in the articles of partnership, Tomas, Ramon, that she would put up on the lot. A private agreement was signed by the parties. In the first year
Ignacio, Urbano and Marcos were appointed managers. In the course of the operation of the of operation, Ornussa received from Florida the amount of P20, 000.00 representing 10% of the
partnership, Tomas proposed to buy car spare parts from Dominion Motors, but his proposal net income of the flower shop business.
was opposed by Ramon. A voting among the managing partnerships took place and Ignacio and a. Ornussa is a partner of Florida by her mere receipt of the share of the net profits of the
Urbano sided with Tomas, while Marcos sided with sided with Ramon. flower business of Florida.
a. The group of Tomas, Ignacio and Urbano will prevail because they constitute the majority of b. The relationship of Ornussa and Florida is only that of a lessor and lessee.
the managing partners. c. Ornussa and Florida have a dual contract: partnership and lease.
b. The group of Ramon and Marcos will prevail because they own the controlling interest d. Ornussa and Florida are not partners; neither are they lessor and lessee because their
among the managing partners. agreement was not in a public instrument.
c. The conflict will have to be referred to Pablo and Hilario because they represent the
controlling interest among all the partners. 63. LIFE Company, a partnership engaged in the water distribution business, is composed of
d. The partners will have to agree that all of them must be managers in order to resolve the partners Larredo, Ingles, Filler and Encanto. One day, Larredo was driving the firm’s delivery
conflict. truck beyond the speed limit in order to serve its customers, when he rammed into and caused
extensive damage on the parked car of Tertullo.
59. Refer to No. 58. Supposing that when the voting among the managing partners took place, a. Only Larredo can be held liable for damages by Tertullo.
Ignacio sided with Tomas, Urbano abstained, while Marcos sided with Ramon. b. LIFE Company and Larredo are solidarily liable for damages to Tertullo.
a. None will prevail because the voting was equal. c. LIFE Company and four partners are solidarily liable for damages to Terullo.
b. The group of Ramon and Marcos will prevail because they own the controlling interest d. LIFE Company and the four partners are jointly liable for damages to Tertullo.
among the managing partners.
c. The conflict will have to be referred to Pablo and Hilario because they represent the 64. A person admitted as a partner into an existing partnership shall be liable up to the extent of his
controlling interest among all the partners. separate assets for what obligations?
d. The conflict will have to be referred to an arbiter for its resolution. a. Obligations of the partnership existing at the time of his admission only if there was a
stipulation.
60. Donna, Emma, Alma and Rona are partners in DEAR Company with Donna as manager. Tricia b. Obligations of the partnership incurred after his admission only if there was a stipulation.
owes DEAR Company P5, 500.00 and Donna, in Donna’s personal capacity, P4,500.00 Tricia’s c. Obligations of the partnership incurred before and after his admission even if there was no
debt to Donna is secured by a pledge of her diamond ring. Both debts are already due. Tricia stipulation.
pays P4, 500.00 to Donna and tells her that the same is in payment of her debt to Donna. Donna, d. Obligations of the partnership incurred before his admission if there was a stipulation, and
thus, issues her personal receipt. those incurred after his admission even if there was no stipulation.
65. PARAGON Enterprises, a partnership engaged in the garments manufacturing business is
composed of partners Pacis, Ramas and Gonzales. During the year, PARAGON bought a

computerized embroidering machine amounting to P300,000.00 from Tadena with the following 69. Barranda wrote Salvador a letter wherein he placed an order for a laptop computer worth
stipulation: down payment of P50,000.00; balance to be paid in amount equal to 20% of the P80,000.00. In writing the letter, Barranda used stationery which had for its letterhead
monthly net profits of PARAGON until the full amout is paid. “Barranda and Bermudez, Real Estate Agents.” Bermudez is not really a partner of Barranda but
a. Tadena is an actual partner of Pacis, Ramas and Gonzales during the time that he receives a they agreed to use the said letterhead to give a sembiance of bigness by making it appear that
share of the profits of PARAGON as payment of the purchase price of the machine. the two of them are partners. Salvador delivered the laptop computer but Barranda defaulted in
b. Tadena is only a partner by estoppel of Pacis, Ramas and Gonzales during the time that he his payment of its price. Against whom may Salvador proceed?
receives a share of the profits of PARAGON as payment of the purchase price of the machine. a. Barranda only since Bermudez is not his partner.
c. Tadena is not a partner of Pacis, Ramas and Gonzales whether before or after he has b. Barranda only since the purchase of the laptop computer is his personal transaction.
received the full payment of the purchase price of the machine from PARAGON. c. Barranda and Bermudez since they are partners in so far as Salvador is concerned.
d. Tadena is only a nominal partner of Pacis, Ramas and Gonzales during the time that he d. “Barranda and Bermudez, Real Estate Brokers,” only since an actual partnership was created
receives a share of the profits of PARAGON as payment of the purchase price of the machine. between Barranda and Bermudez and it has a personality separate and distinct from the
two.
66. MAGIC Company is a partnership composed of Martha, Agnes, Glenda, Irene and Candice, with
Martha as manager who is authorized to collect the credits of the partnership. Theresa owes 70. Daoang and Depante have been partners for more than 5 years in the purified water business.
Martha P4, 000.00 which is due on December 10. She also owes MAGIC Company P6, 000.00 At the start of the sixth year, Daoang assigned his interest in the partnership to Trinidad, but
which is due on December 20. On December 15, Theresa tendered payment in the amount of P4, Depante objected on the ground that he did not want Trinidad to be his partner.
000.00 to Martha in payment of her debt to the latter. Martha issued her own receipt a. Trinidad automatically became a partner of Depante when Daoang conveyed his interest to
acknowledging the payment. him.
a. The payment will be applied proportionately to the credits of MAGIC and Martha in the b. Daoang and Depante continue to be partners despite Daoang’s conveyance of his interest to
amount of P1, 600.00 and P2, 400.00, respectively. Trinidad.
b. The payment will be applied in its entirety to Martha’s credit. c. The partnership between Daoang and Depante was automatically dissolved when Daoang
c. The payment will be applied in its entirety to MAGIC’s credit. conveyed his interest to Trinidad.
d. The payment will be applied equally to the two debts of Theresa. d. The conveyance by Daoang of his interest in the partnership to Trinidad entitled the latter to
inspect the books, and participate in the management of the partnership.
67. Aseron, the managing partner of ACE Company, was driving the delivery truck of the firm when
he rammed it into an electric post resulting in damages to the vehicle amounting to P50, 000.00. 71. Palacios, Atienza, Tablante, Elamparo, Robledo, Ocampo and Sajenes are partners in PATEROS
To make up for accident, Aseron worked long hours for the firm and was able to increase its Poultry Farms Palacios, Atienza and Tablante have been appointed as managers of the firm with
sales from P5, 000,000.00 to P15, 000,000.00. the stipulation that none shall act without the consent of the other two. On the date of the
a. Aseron will no longer be liable for damages to ACE because he was able to generate unusual scheduled delivery of 500 kilos of frozen dressed chickens ordered by Caintacky Restaurant,
revenues for the firm through his extraordinary efforts. heavy rains caused a power failure and made transport difficult due to landslides. A local
b. Aseron will still be liable to the firm for damages but the amount will still be liable to the resident offered to purchase the dressed chickens (which were already thawing) at 80% of the
firm or damages but the amount will be equitably reduced since he was able to generate contract price. However, only Palacios and Atienza were around to decide as Tablante, who was
unusual profits for the firm through his extraordinary efforts. on business trip for the firm, could not be contacted due to poor communication signals.
c. Aseron’s obligation to the firm for damages will be extinguished by compensation since ACE a. Palacios and Atienza cannot decide by themselves because the managing partners must act
is also liable to him for the extraordinary efforts he exerted to increase its sales. with unanimity.
d. Aseron and ACE will share equally in the damages of P50, 000.00. b. Palacios and Atienza may decide by themselves since any further delay would result in more
losses to the firm.
68. Trevor owes P3, 000.00 to CHAMP Company, a partnership composed of Charles, Harry, Albert, c. Palacios and Atienza can decide by themselves since they constitute the majority mong the
Mark and Prince, with Mark as the manager who is authorized to collect all credits of the firm. managing partners, which is the required vote not withstanding a stipulation that one
He also owes Charles the amount of P6, 000.00. Both debts are already due. Trevor gives cannot act without the consent of the other managers.
P3, 000.00 to Charles in payment of his debt to the latter. Charles thus issues his own receipt. d. The absence of Tablante cannot be alleged since there was a stipulation that none of the
a. Payment will be applied proportionately to the two credits at P1, 000.00 FOR Charles’ credit managing partners shall act without the consent of the others.
and P2, 000.00 for CHAMP’s credit.
b. Payment will be applied equally to the two credits. 72. Querubin, Roces and Solis are partners in a law firm. Querubin was appointed as judge of the
c. Payment will be applied in its entirety to Charles’ credit. Regional Trial Court. Such appointment:
d. Payment will be applied in its entirety to CHAMP’s credit. a. Suspends the participation of Querubin in the management of the Firm without causing the
dissolution of the partnership.
 b. Prohibits the inclusion of the name of Querubin in the firm name without dissolving the d. No, because the assignment by Manalo of his share in the firm diminished his interest in the
partnership. partnership.
c. Results in the dissolution of the partnership.
d. Merely requires the disclosure of Querubin’s appointment to the court without dissolving 77. A partner is a co-owner with his partners of specific partnership property. Such co-ownership:
the partnership. a. Allows a partner to assign his right in such property.
b. Allows a partner to use such property for partnership purposes.
73. Braganza, Ortiz and Nevado want to form a partnership with Braganza contributing P500,000.00; c. Entitles the spouse, children and other relatives of the partner to claim support from such
Ortiz, office equipment; and Nevado, his services. If the three were to form a limited partnership, property.
who among them will be the limited partner/s? d. Gives the private creditors of a partner to attach his right in such property.
a. Either Braganza or Ortiz or both of them.
b. Either Ortiz or Nevado or both of them 78. CLEAN Laundry Service Comapany is a partnership composed of Carpio, Legaspi, Encinas, Alzate
c. Either Braganza or Nevado or both of them. and Noval. Without the knowledge of the other partners, Carpio used a coat brought to the
d. All the three must be limited partners. shop by a customer for dry-cleaning in a party he attended. The coat was accidentally stained
with food sauce during the said party. Who will be liable to the customer for damages?
74. Refer to the preceding number. Assume that the three decide to form a general partnership. As a. Carpio only since he used the coat without the knowledge of the other partners.
a result, which of the following is incorrect? b. CLEAN Laundry Services Company and Carpio solidarily.
a. Any of the three may be appointed as manager. c. CLEAN Laundry Services Company and all the partners jointly.
b. All of them may be appointed as managers. d. CLEAN Laundry Services Company and all the partners solidarily.
c. Only Nevado may be appointed as manager because he only contributes his services.
d. Any two of them may be appointed as managers. 79. A limited partner is prohibited on account of his claim against the partnership from performing
the following acts, except:
75. CROWN Enterprises is composed of partners Chuck who contributed P50, 000.00; Rainier, a. To receive or hold as collateral security any partnership property.
P20,000.00, Oscar, P40, 000.00; Waldorf, P10, 000.00; and Nelson, P5, 000.00. No one was b. To receive from a general partner or the partnership any payment, conveyance or release
appointed as manager. Two proposed contracts were voted upon by the partners during a from liability, if partnership assets are not sufficient to discharge partnership liabilities to
meeting which took places as follows: outside creditors.
c. Transact business with the partnership.
Contract I – Voting for approval of the contract were Chuck and Rainier, voting for rejection d. None of the foregoing.
were Oscar, Waldorf and Nelson.
80. Lazarte, a limited partner in Bellevue Company, Ltd., received the amount of P100, 000.00
Contract II – Voting for approval were Chuck and Rainier, voting for rejection were Oscar and
representing his contribution which was being returned on the date stipulated in the certificate.
Waldorf, Nelson abstained.
Partnership records, however, showed that the firm had liabilities of P220, 000.00 which arose
Which of the foregoing contracts are considered approved? before Lazarte received the return of his contribution, and assets of only P90, 000.00 after such
return of contribution.
a. Both contracts. a. Lazarte is bound to bring back to the partnership the amount of P100, 000.00 plus interest
b. Neither of two contracts. thereon.
c. Contracts I only. b. Lazarte is bound to give the partnership P220, 000.00 plus interest thereon.
d. Contracts II only. c. Lazarte is bound to give the partnership P130, 000.00 plus interest.
d. Lazarte is not bound to return to the partnership any amount because he received the reurn
76. MACK’s Restaurant is a partnership composed of Manalo, Alferez Cancio and Kilayco, with of his contribution pursuant to a contractual stipulation.
Manalo as the manager whose contribution is 80% of the firm’s capital. Manalo made Ongpauco
his associate by assigning one-half of his share in the firm to the latter. Did Ongpauco become a
partner in the firm?
a. Yes, because Manalo is the manager.
b. No, because the other partners must give their consrnt in order that Ongpauco may be
admitted to the partnership.
c. Yes, because the assignment by Manalo of his share in the firm did not affect his ownership
of the controlling interest.