STUDY GUIDE

III. PROBLEMS

Explain or state briefly the rule or reason for your answers.

1. X, a partner in a partnership, upon arriving from abroad, demands a formal

accounting of partnership affairs. Has X the right to insist on his demand if the
other partners’ Y and Z refuse?
Answer:

Yes, X has the right to insist because based on 1809, the justification for a formal
accounting even before dissolution of the partnership cannot be doubted.
Article 1809 is where a partner has been assigned abroad for a long period of
time in connection with the partnership business and the partnership books
during such period being in the possession of the other partners. The right of a
partner to demand an accounting without bringing about a dissolution is
necessary corollary to his right to share in the profits.

2. Same partnership. The partnership is engaged in the grocery business.

A. Can X also engage in the same business?
B. Give the reason why X may be prohibited from engaging in a business for
himself?
Answer:

A. No, X cannot be engaged in the same business.

B. Since the relationship of partners is fiduciary and imposes upon them the
obligation of the outmost good faith in their dealings with one another with
respect to partnership in their dealings with one another with respect to
partnership affairs, one partner will not be permitted to retain for himself
alone as against his co- partners benefits from partnership relation. This
principle prevents a partner from availing himself personally of information
obtained by him in the course of the transaction of the partnership business
or by the reason of his connection with the firm regarding the business
secrets and clientele of the firm to its prejudice.

3. Same partnership. X is appointed manager in the articles of partnership. May Y

and Z who represent the controlling interest, revoke the power given to X if the
latter insists on executing a contract for the partnership which X and Y oppose?
Answer:

No, they can’t revoke the power given to X. Because based on Article 1800 the
partner who has been appointed manager in the articles of partnership may
execute all acts of administration despite the opposition of his partners, unless
he should act in bad faith; and his power is irrevocable without just or lawful
cause. The vote of the partners representing the controlling interest shall be
necessary for such revocation of power.
4. Same partnership. The liabilities of the partners are as follows: X- P50,000; Y-
P30,000; and Z- P20, 000.
A. How shall the profits of P15,000 be distributed?
B. Suppose W is an industrial partner. What shall be his share?
Answer:

5. Same partnership. The partners stipulate that Z shall not be liable for losses. Is
the stipulation valid?
Answer: