1.) On January 1, 1980, Nestor leased the fishpond of Mario for a period of three years at a monthly rental of P1,000.00, with an option to purchase the same during the period of the lease for the price of P500,000.00. After the expiration of the three-year period, Mario allowed Nestor to remain in the leased premises at the same rental rate. On June 15, 1983, Nestor tendered the amount of P500,000.00 to Mario and demanded that the latter execute a deed of absolute sale of the fishpond in his favor. Mario refused, on the ground that Nestor no longer had an option to buy the fishpond. Nestor filed an action for specific performance. Will the action prosper or not? Why?
No, the action will not prosper. The implied renewal of the lease on a month-to-month basis did not have the effect of extending the life of the option to purchase which expired at the end of the original lease period. The lessor is correct in refusing to sell on the ground that the option had expired.
2.) TX filed a suit for ejectment against BD for non-payment of condominium rentals amounting to P150,000. During the pendency of the case, BD offered and TX accepted the full amount due as rentals from BD, who then filed a motion to dismiss the ejectment suit on the ground that the action is already extinguished. Is BD’s contention correct? Why or why not? Reason.
BD's contention is not correct. TX can still maintain the suit for ejectment. The acceptance by the lessor of the payment by the lessee of the rentals in arrears even during the pendency of the ejectment case does not constitute a waiver or abandonment of the ejectment case. (Spouses Clutario v. CA, G.R. No. 76656, December 11, 1992)
3.) A vacant lot several blocks from the center of the town was leased by its owner to a young businessman B, for a term of fifteen (15) years renewal upon agreement of the parties. After taking possession of the lot, the lessee built thereon a building of mixed materials and a store. As the years passed, he expanded his business, earning more profits. By the tenth (10th) year of his possession, he was able to build a three (3) – story building worth at least P300,000.00/ Before the end of the term of the lease, B negotiated with the landowner for its renewal, but despite their attempts to do so, they could not agree on the new conditions for the renewal. Upon the expiration of the term of the lease, the landowner asked B to vacate the premises and remove his building and other improvements. B refused unless he was reimbursed for necessary and useful expenses. B claimed that he was a possessor and builder in good faith, with right of retention. This issue is now before the court for resolution in a pending litigation. a) What are the rights of B? b) What are the rights of the landowner?
a) B has the right to remove the building and other improvements unless the landowner decides to retain the building at the time of the termination of the lease and pay the lessee one-half of the value of the improvements at that time. The lessee may remove the building even though the principal thing may suffer damage, but B should not cause any more impairment upon the property leased than is necessary. The claim of B that he ws a possessor and builder in good faith with the right of retention is not tenable. B is not a builder in good faith, because as lessee he does not claim ownership over the property leased.
b) The landowner/lessor may refuse to reimburse ½ of the value of the improvements and require the lessee to remove the improvements. (Art. 1678, Civil Code)
4.) Bartolome constructed a chapel on the land of Eric. What are Batolome’s rights if he were a lessee of the land?
The owner of the land, as lessor, can acquire the improvement by paying for one-half of its value. Should the lessor refuse to reimburse said amount, the lessee may remove the improvement, even though the principal thing may suffer damage thereby (Art. 1678, NCC).
5.) In 1995, Mark leased the rice land of Narding in Nueva Ecija for an annual rental of P1,000.00 per hectare. In 1998, due to the El Niño phenomenon, the rice harvest fell to only 40% of the average harvest for the previous years. Mark asked Narding for a reduction of the rental to P500.00 per hectare for that year but the latter refused. Is Mark legally entitled to such reduction?
No, Mark is not entitled to a reduction. Under Art.1680, the lessee of a rural land is entitled to a reduction of the rent only in case of loss of more than 1/2 of the fruits through extraordinary and unforeseen fortuitous events. While the drought brought about by the "El Niño" phenomenon may be classified as extraordinary, it is not considered as unforeseen.
6.) True or False: An oral partnership is valid.
TRUE. Partnership is a consensual contract hence, it is valid even though not in writing.
7.) A, B, and C entered into a partnership to operate a restaurant business. When the restaurant had gone past break-even stage and started to garner considerable profits, C died. A and B continued the business without dissolving the partnership. They in fact opened a branch of the restaurant, incurring obligations in the process. Creditors started demanding for the payment of their obligations. A. Who are liable for the settlement of the partnership’sobligations? Explain? B. What are the creditors’ recourse/s? Explain.
A. The two remaining partners, A and B, are liable. When any partner dies and the business is continued without any settlement of accounts as between him or his estate, the surviving partners are held liable for continuing the business provided that A and B had knowledge or notice of the death of C (Art. 1841, 1785, par 2, and Art 1833).
B. Creditors can file the appropriate actions, for instance, an action for collection of sum of money against the “partnership at will” and if there are no sufficient funds, the creditors may go after the private properties of A and B (Art 1816). Creditors may also sue the estate of C. The estate is not excused from the liabilities of the partnership even if C is dead already but only up to the time that he remained a partner (Art. 1829, 1835, par 2; Testate Estate of Mota v. Serra, G.R. No. L-22825, February 14, 1925). However, the liability of C’s individual properties shall be subject to the prior payment of his separate debts. (Art. 1835, par 3)
8.) Joe and Rudy formed a partnership to operate a car repair shop in Quezon City. Joe provided the capital while Rudy contributed his labor and industry. On one side of their shop, Joe opened and operated a coffee shop, while on the other side, Rudy put up a car accessories store. May they engage in such separate businesses? Why?
Joe, the capitalist partner, may engage in the restaurant business because it is not the same kind of business the partnership is engaged in. On the other hand, Rudy may not engage in any other business unless their partnership expressly permits him to do so because as an industrial partner he has to devote his full time to the business of the partnership. (Art. 1789)
9.) W, X, Y and Z organized a general partnership with W and X as industrial partners and Y and Z as capitalist partners. Y contributed P50,000.00 and Z contributed P20,000.00 to the common fund. By a unanimous vote of the partners, W and X were appointed managing partners, without any specification of their respective powers and duties. A applied for the position of Secretary and B applied for the position of Accountant of the partnership. The hiring of A was decided upon by W and X, but was opposed by Y and Z. The hiring of B was decided upon by W and Z, but was opposed by X and Y. Who of the applicants should be hired by the partnership? Explain and give your reasons.
A should be hired as Secretary. The decision for the hiring of A prevails because it is an act of administration which can be performed by the duly appointed managing partners, W and X.
B cannot be hired, because in case of a tie in the decision of the managing partners, the deadlock must be decided by the partners owning the controlling interest. In this case, the opposition of X and Y prevails because Y owns the controlling interest. (Art. 1801, Civil Code)
10.) Pauline, Patricia and Priscilla formed a business partnership for the purpose of engaging in neon advertising for a term of five (5) years. Pauline subsequently assigned to Philip her interest in the partnership. When Patricia and Priscilla learned of the assignment, they decided to dissolve the partnership before the expiration of its term as they had an unproductive business relationship with Philip in the past. On the other hand, unaware of the move of Patricia and Priscilla but sensing their negative reaction to his acquisition of Pauline's interest, Philip simultaneously petitioned for the dissolution of the partnership. 1. Is the dissolution done by Patricia and Priscilla without the consent of Pauline or Philip valid? Explain. 2. Does Philip have any right to petition for the dissolution of the partnership before the expiration of its specified term? Explain.
Under 1830 (1) (c), the dissolution by Patricia and Priscilla is valid and did not violate the contract of partnership even though Pauline and Philip did not consent thereto. The consent of Pauline is not necessary because she had already assigned her interest to Philip. The consent of Philip is not also necessary because the assignment to him of Pauline's interest did not make him a partner, under Art. 1813.
No, Philip has no right to petition for dissolution because he does not have the standing of a (Art.1813)