Question

1. In 2002, Hammer and Wallace entered into a partnership for the purpose of raising hogs. The two men agree to share equally all costs, labor, losses, and profits. The business was started on land owned initially by Hammer parents but later acquired by Hammer and his wife. No rent was ever requested or paid for use of the land. Partnership funds were used to bulldoze and clear the land, to repair and build fences, and to seed and fertilize the land. In 2006, at a cost of $3,500, a machine shed was built on the land. In 2008, a Cargill unit was built on the land at a cost of $8,000. When the partnership dissolved in 2012, Wallace paid Hammer $7,500 for the “removable†assets; however, the two had no agreement regarding the distribution of the barn and the Cargill unit. Is Wallace entitled to one-half of the value of the two buildings? Explain.

2. Paula and Mike jointly own shares of stock of a corporation, have a joint bank account, and have purchased and own as tenants in common a piece of real estate. They share equally the dividends paid on the stock, the interest on the bank account, and the rent from the real estate. Without Paula's knowledge, Mike makes a trip to inspect the real estate and on his way runs over Wilbur. Wilbur sues Paula and Mike for his personal injuries, joining Paula as defendant on the theory that Paula was Mike's partner. Is Paula a partner of Mike?

3.Oppson was the agent authorized to sell stock of the AAA Company at $10 per share and was authorized in case of sale to fill in the blanks in the certificates with the name of the purchaser, the number of shares, and the date of sale. He sold 100 shares to Barnes, and without the knowledge or consent of the company and without reporting to the company, he indorsed the back of the certificate as follows: It is hereby agreed that AAA Company shall, at the end of three years after the date, repurchase the stock at $13 per share on thirty days' notice. AAA Company, by Oppson. After three years, demand was made on AAA Company to repurchase. The company refused the demand and repudiated the agreement on the ground that the agent had no authority to make the agreement for repurchase.

Answer 1

Answer 1:

Yes, Wallace entitled to one half of the value of the two buildings with depreciation rate, because the buildings were made with the partnership fund. So once the partnership was dissolved, the asset and fund need to be divided equally between the two partners, as per their partnership contract. The only thing which was not covered in the partnership was land rent. Sicxe land rent was not discussed and not given for the time period; the other assets and property could be equally divided between the two partners. Hence Wallace is entitled for one half of the value of the two buildings with the depreciation rate as these two buildings have been used for time period. So depreciation will be applicable for this settlement.