MANUEL S.

ENVERGA UNIVERSITY FOUNDATION Student ID Number

College of Law
1st Semester

AGENCY, TRUSTS AND PARTNERSHIPS

Atty. Jose Maria B. Duhaylongsod

FINAL1 EXAMINATION

Persistence in the face of adversity

prevents defeat.
- G.L. Goodwin

GENERAL INSTRUCTIONS: Write your STUDENT ID NUMBER ONLY

on the upper righthand corner. DO NOT WRITE YOUR NAME. Good
luck!

I. CASE ANALYSIS AND PROBLEM SOLVING: PLEASE LIMIT

YOUR ANSWERS WITHIN ONE (1) PAGE PER NUMBER. ANY ANSWER
BEYOND THE ALLOCATED AREA WILL NOT BE READ AND WILL RECEIVE NO
GRADE. DO NOT REPEAT THE QUESTION. A MERE “YES” OR “NO” WILL NOT
BE GIVEN ANY CREDIT. DO NOT ASSUME OR INVENT FACTS, WHICH ARE NOT
GIVEN IN THE PROBLEM. YOUR ANSWERS MUST BE BOTH CONCISE AND
COMPREHENSIVE AT THE SAME TIME. FEEL FREE TO USE THE PROVISIONS OF
LAW AS WELL AS THE ASSIGNED CASES TO ELABORATE. LASTLY, REMEMBER
“ALAC” WHEN ANSWERING. [SCORES ARE EITHER 1 OR 0.5]

QUESTIONS

1. Given the events as narrated in the Affidavit, what is the

status of the contract of partnership?

2. Assume that the assignment of economic interests by Troy

and Jesus were valid, what would legal effects of such transactions
be?

3. Given the circumstances of the sale of the property by

John Frazer, what are the legal effects of such transaction and what
remedies available to the FIRM if any?

4. Suppose that the FIRM earned Net Income of Php200M

for the year ended 2018, how much should each partner receive as
his/her share?

5. Suppose it was proven that Jian was at fault with regard to

the 30 November 2018 incident and is being sued for Php10M in
damages, should the FIRM and/or partners be liable? If so, for how
much?

6. What would be the legal effects and consequences of

Jian’s letter of withdrawal upon the FIRM?

7. Assume that there was actually no Income for the year

ended 2017, how should the liquidation statement of the FIRM look
like if cash amounted to Php350M, Non-cash Asset (NCA) were valued
at Php700M, Liabilities stood at Php700M, and total capital
contributed was Php350M? NOTE: The NCA were sold for Php200M.

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REPUBLIC OF THE PHILIPPINES)

LUCENA CITY ) S.S.
PROVINCE OF QUEZON )

AFFIDAVIT

I, JIAN, of legal age, Filipino, single, residing at 22C Rosalia Village,

St. Martin St., Tandang Sora Avenue, Lucena City, Province of Quezon, after
being duly sworn in accordance with law, hereby depose and state:

1. I am one of the partners of FINDING NHORY AND

COMPANY, an unregistered partnership set up exclusively for the purpose
of operating a fishpond located in Lucena City, nestled within a piece of land
registered in the name of John Frazer with TCT No. 123456.

2. Formation of the partnership transpired in this manner:

a. At the turn of the year 2017, as I was arriving in school, I

saw Kayie, Nhory and Tin (collectively the “THREE”) overly excited,
prompting me to inquire as to what the matter was; they told me
about a business venture they were about to embark on. It was for the
operation of a fish pond. I was ecstatic, as this was also one of the
things I wanted to try. Thereafter, I made it a point that I kept myself
apprised of developments in their venture. Though I was not always
present, I was welcome to attend the THREE’s discussions on relevant
matters. It seemed like the arrangement had become the THREE+ME.
b. On 10 January 2018, Tin narrated to me that as agreed
upon, the business to be undertaken via a limited partnership named
FINDING NHORY AND COMPANY (the “FIRM”). And as a rule, the
capital contributions of the partners were to be in accordance with
the Civil Code, except if there was any agreement to the contrary.
Also, she said that should there be dissolution of the partnership, for
any cause whatsoever, all partners agreed to liquidate immediately.
Before she went to the room, she mentioned that Troy, another
member of the class, provided seed money in the amount of Php50M
to the partnership as he wanted a piece of the action as well, provided
that he be given a preference in profit distribution.
c. On 12 January 2018, as I was walking up the stairs of the
school, I encountered Kayie who has just finished speaking with
someone on the phone. She was noticeably in a good mood. She could
not contain her emotions as she was telling me that, business was a
go! I was dumb-founded because of the lack of context. Apparently,
the THREE were having difficulties with financing, when Jesus (or Jess
as he was commonly known) stepped in with another contribution. He
was gracious enough to lend Php50M which was payable only when
the business conditions became profitable. It seems that he indeed
was, true to his name, a savior.
d. On 19 January 2018, I went fish pond to see it for myself.
On site, I was met by Nhory who took a break from overseeing the
operations. She told me that the profit -sharing arrangement was
determined entirely by another partner, Chris, who apparently
structured it in this way: the Managing partner was to be given a 10%
bonus computed after bonus and after tax; all creditor partners were
entitled to preference in the form of a salary of Php1M; the remainder
was to be shared equally by all partners. She also conveyed to me that
it was agreed by the partners that the necessary partnership papers
and other documentary requirements were to be executed later when
the business overcomes its birth pains and stabilizes. I nodded as I
saw nothing wrong with the said arrangement.
e. Every Friday and Saturday for the next few months, I
voluntarily went to the site just to see what was going on. As such, my

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familiarity grew with the many aspects of the business, including the
staff, suppliers and even the clients.
f. Sometime in June 2017, in one of my on-site visits, RJ, a
trusted friend of the THREE, introduced me to a certain person
named Sec. I was told that, upon the former’s recommendation, the
latter was now the the general manager of the business. This event
created a sense of accomplishment in me, as it indicated that the
venture was actually doing well enough for the partners to become
less hands-on.

3. Sometime in September 2018, I saw the THREE in school

looking more serious than usual. I approached them and asked what was
going on. Apparently, due to loss on interest, Troy and Jesus had assigned
their entire economic interests in the FIRM to Randy. Furthermore, they
have just received information that the piece of land covered by TCT No.
123456 was sold by John Frazer to Grem and Time (friends of mine) without
the FIRM’s knowledge (I heard, it was again sold thereafter to Hannah and
Patrick jointly). At that time, I did not see what the problem was, but
reserved my comments for a future time, hopefully when the tensions have
eased.

4. On 30 November 2017, I was on my routine visits to the site

when I noticed a bit of a commotion. Apparently, Sec (the general manager)
had an altercation with one of the staff members, Kevin, over a shot of
Emperador Light. It was said that Sec tried to slam the bottle unto the head
of Kevin but was successfully blocked. Fearing retaliation, Sec left
immediately. I was relieved that nobody was seriously injured, however
given the circumstances, I asked Kevin to call it a night. On the other hand,
the Emperador was now ours.

5. On the same date, deep into my drinking session, another staff

member, Jay, passed the phone to me. On the other line was Brenda, General
Manager of La Pomme Verger (pronounced La Poem Vergie) Corporation
(owned primarily by good friends of mine, Apple and Lala) who angrily
followed up on the truck load of fish that was supposed to have been
delivered hours ago. As most of the staff already left, I told Jay to help me
load the fish unto the truck. Thereafter, I shook off the inebriation, and drove
the La Pomme.

6. Once there, I waived at Randy, the head of security and

logistics, and signaled that he open the gate. I then tried to enter, rear side
first, to make it easier to unload the goods. I even saw the other owners,
Grem and Tine, who were obviously in a very undesirable mood. Thus, I tried
to get the work done as quickly as possible. On my first try, the truck was
not angled properly so I had to drive forward in order to get the angle right.
The second try was no better than the first. At this moment I realized that
the task was not as easy as it seemed, especially for a first time truck driver
like myself. I could even hear Grem and Tine’s voices, though indistinct,
were presumably not saying anything good about me. After a few more tries,
I was become increasingly frustrated, and my feet were getting heavier on
the pedals. I was determined to make this the last one, so I steered to the
right and stepped on the gas when Manny came out of nowhere!!! He was
killed instantly.

7. I was brought in for questioning of course. After hours of

negotiations, criminal charges were settled on the premise that all civil
indemnities were to be paid after proper proceedings were taken.

8. I was so distraught by the turn of events, that on 05 December

2018, I wrote a letter to the THREE, indicating my intent to withdraw from

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the partnership. Despite proper service however, I have yet to receive a

reply to date.

9. I am executing this Affidavit to attest to the truth of the

foregoing statements.

AFFIANT FURTHER SAYETH NAUGHT.

IN WITNESS WHEREOF, I have hereunto set my hand this 10

December 2018, in Quezon City.

Original Sgd.
____________________
Jian
Affiant

SUBSCRIBED AND SWORN to before me, this 10 December 2018,

affiant exhibiting to me his competent evidence of identity containing
thereon, affiant’s photograph and signature.

ORIGINAL Sgd.
ATTY. ERA
NOTARY PUBLIC

Doc. No. 05;

Page No. 10;
Book No. 01;
Series of 2018.

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