PAT

Midterm Exams
May 8, 2020, 2019
2:00 to 4:00
Prof Bulatao

1. ABC, a foreign entity, and a local company entered into a Contract whereby the latter
agreed to order 10,000 units of the ABC’s phones every month and to resell them in the
Philippines at ABC’s suggested prices with the local manufacturer given the authority to add ten
(10) percent of the said proposed price as its share for every unit sold. At the end of the fiscal
year, all units which were not sold shall be bought back by ABC at the same price they were
ordered. Under their contract, ABC holds the local company free and harmless from any claim
for defects in the units.

Is the agreement one of sale or agency? Explain

2. Romulo sold a large parcel of land in Pangasinan to Herbert for P10 million and the

purchase price is payable in yearly installments over a period of ten (10) years. Under their
agreement, title will remain with Romulo until the purchase price is fully paid. To enable
Herbert to fully pay the purchase price, Romulo executed a separate power of attorney
authorizing and empowering Herbert to cause the subdivision of the land, sell the individual
lots, and deliver to Romulo the proceeds of the sale to be applied to the purchase price until
the same is fully paid. Three (3) years after the transaction, Romulo had a change of heart and
revoked the power of attorney and took over the sale of the subdivision lots himself.

If Herbert protests the revocation, may Romulo validly revoke the power of attorney at will?
Why?

3. In addition to her ordinary commission, Thelma was given by her principal TESSMAR

a  guarantee  commission for which she was to sell two hundred (200) units of desktop
computers to a valued customer, Magic Corp.   Magic Corporation was able to pay only 120
units of the 200 units delivered and failed to pay for the remaining units sold.   Thelma’s
principal, demanded from Thelma payment for the customer’s accountability.  Thelma
protested and denied the claim of TESSMAR contending that her obligation was only to sell
and not to ensure collection for units bought by the customer.

Is Thelma’s objection valid? Why?

May TESSMAR successfully collect from her?  Explain.

4. Val Concepcion had executed a special power of attorney authorizing Thelma

Atienza to secure a loan from any bank which the latter desires and to mortgage his property
covered by the owner’s certificate of title which he delivered to Ms. Atienza.  In securing a loan
from Rural Bank of Bulacan, Ms. Atienza did not disclose that she was acting for Mr. Val
Concepcion in the transaction with said bank. In the event the Ms. Atienza refuses to pay the
loan, is Val Concepcion liable for the bank loan?  

Why or why not?  Justify your answer.

 5. B9 Corp appointed Bernadette as the only agent in selling the lots of its Oats and Bulls
Subdivision. B9 specifically instructed Bernadette that she is not authorized to collect or
receive payments from the purchasers of the lots of the subdivision. Bernadette sold five (5)
lots to Peter and collected the down-payments for said lots. However, Bernadette did not
account and deliver to B9 Corp the said amounts he collected from Peter and misappropriated
the money.

If Bernadette could no longer be found to return the money, who shall bear the loss, B9 Corp or
Peter? Explain your answers with assumptions, if necessary.

6) TRUE OR FALSE

a. Partnership in the buying and selling of cars needs to be registered in order to be valid.

b. Partnership may be registered or named under just one of the partners.

c. Since a partner is a co-owner with his co-partners over a particular partnership

property, they shall be governed by law on partnership.

d. The transferee of the share of the partners in a partnership can never demand for the
books of the partnership.

e. A person admitted as a partner into an existing partnership is liable even beyond his
contribution to satisfy the obligations of the partnership prior to his admission.

7). Gigi, Rey and Rachel are general partners in a merchandising firm. Having contributed
equal amounts to the capital, they also agree on equal distribution of whatever net profit is
realized per fiscal period. After two years of operation, however, Rachel conveys her whole
interest in the partnership to Jojo, without the knowledge, and consent of Gigi and Rey.
(Bonus!)

a. Is the partnership dissolved?

b. What are the rights of Jojo, if any, should he desire to participate in the management of
the partnership and in the distribution of a net profit of Php360,000.00 which was realized after
his purchase of Rachel’s interest?

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

a. Is the dissolution done by Sam and Paris without the consent of Odette or Andy valid?
Explain.

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

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

10). Wally, Xave, Yuhan and Zion organized a general partnership with Wally and Xave as
industrial partners and Yuhan and Zion as capitalist partners. Yuhan contributed Php50,000.00
and Zion contributed Php20,000.00 to the common fund. By a unanimous vote of the partners,
Wally and Xave are appointed managing partners, without any specification of their respective
powers and duties.

Angel applied for the position of Secretary and Bianca applied for the position of
Accountant of the partnership.

The hiring of Angel was decided upon by Wally and Xave, but was opposed by Yuhan
and Zion.

The hiring of Bianca was decided upon by Wally and Zion, but was opposed by Xave and
Yuhan.

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

11. May husband and wife enter into any kind of business partnership? Why?