EMNACE /// TABANAO /// DIVINA-GRACIA = PARTNERS (FISHING)

Divina Gracia withdrew---

1986----They decided to dissolve the partnership

Partition and distrib of partnership properties

5 fishing boats

6 vehicles

2 parcels of land

TABANAO died

During the existence of the pship and even after tabanao’s death, EMNACE FAILED TO RENDER
ACCT, submit statement of assets and liab of the pship

EMNACE also did not turn over TABANAO’s share of 1/3 Amounting to P10M to the heirs

HEIRS of TAB: filed an action for acct,

payment of shares and

division of assets and damages

Pet. Emnace moved for the dismissal on the ground of PRESCRIPTION of the action

ISSUE: w/n action for acct has prescribed

SC: NO

Finally, petitioner contends that the trial court should have dismissed the complaint on the ground of prescription,
arguing that respondents' action prescribed four (4) years after it accrued in 1986 (WHEN DECIDED TO DISSOLVE).
The trial court and the Court of Appeals gave scant consideration to petitioner's hollow arguments, and rightly so.

The three (3) final stages of a partnership are:

(1) dissolution;

(2) winding-up; and

(3) termination.36 

The partnership, although dissolved, continues to exist and its legal personality is retained, at which time it completes the
winding up of its affairs,

including the partitioning and distribution of the net partnership assets to the partners. 37 
 For as long as the partnership exists, any of the partners may demand an accounting of the
partnership's business.

Prescription of the said right starts to run only upon the dissolution of the
partnership when the final accounting is done.38

Contrary to petitioner's protestations that respondents' right to inquire into the business affairs of the partnership accrued in 1986,
prescribing four (4) years thereafter, prescription had not even begun to run in the absence of a final
accounting. Article 1842 of the Civil Code provides:

The right to an account of his interest shall accrue to any partner, or his legal representative as against the winding up
partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the
absence of any agreement to the contrary.

Applied in relation to Articles 1807 and 1809, which also deal with the duty to account, the above-cited provision states
that the right to demand an accounting accrues at the date of dissolution in the absence of any agreement
to the contrary.

When a final accounting is made, it is only then that prescription begins to run.

In the case at bar, no final accounting has been made, and that is precisely what respondents are seeking in their
action before the trial court,

since petitioner has failed or refused to render an accounting of the partnership's business and assets.

Hence, the said action is not barred by prescription .

GR No. L-42115 March 30, 1935

TEC BI & COMPANY, INC., Plaintiff-appellant,
vs.
THE COLLECTOR OF INTERNAL REVENUE, defendant-appellant.

Facts:
A regular collective commercial society called "Tec Bi y Compañia" was organized in this city of Manila, of which

the late Yu Hiang Co was one of the collective partners and whose society was duly registered in the Mercantile
Registry.

Partner Yu Hiang Co. having died during the social period, in accordance with the terms of paragraph XVII of the
aforementioned corporate deed, which says:

"XVII. In the event that a partner dies in China or in another territory that is not included within the
jurisdiction of the Philippine Islands, his legal heirs must, within one month after the deceased partner's death, write
a letter to the Society stating that its deceased, partner of this Society has died and authorizing any of his heirs to
succeed him in the rights and actions of the deceased. "

And the company having been duly notified of this fact, it recognized Yu Yiong as the successor of the
late Yu Hiang Co in the aforementioned company called Tec Bi y Compañia.

On November 1, 1921, Yu Yiong transferred to his brother Tee Huan alias Yu Siong a stake in the sum of P9,011.23 in the relict
capital of his late father in the Yu Yiong company and Company. The company was reorganized under the collective name of Yu
Yiong and Company, whose deed was registered on November 12, 1920, and it is recorded in said deed that after the partner
Yu Hiang Co. was replaced by his heir Yu Yiong.

Partners of Yu Yiong and Company in a public deed granted before the public notary and

recognized and admitted Tee Huan alias Yu Siong the brother of Yu Yiong and

the so-called Heng Shiu Nian alias Ang Shiu Lian as partners of the company Yu Yiong and Company.

Ang Shiu Lian was absent from the Philippine Islands and was therefore unable to sign the document. However, Ang Shiu Lian
executed a separate document agreeing to the deed.

The Collector of Internal Revenue :argued that the

association Yu Yiong and Company ceased to be a registered general copartnership during the years 1921 to 1927
inclusive for the purposes of the income tax law because the copartnership failed to register until July 11, 1927.

Issue: Whether or not the admission of Yu Siong, Heng Shiu Nian and Uy Quioco as additional partners in the firm under the
circumstances mentioned, have the effect of dissolving the duly registered general partnership of Yu Yiong
and Company and of creating a new unregistered copartnership

Held:
No. The admission of Y.S., H. Sh. N. and U. Q. as additional partners in the firm under the circumstances mentioned in the
decision did not have the effect of dissolving the duly registered general partnership of Y. Y. & Co. and of creating a new
unregistered copartnership for the interval between February 21, 1924, and July 11, 1927.

1849- --- --- Failure to amend does not equate to dissolution

First, there is no provision in the Code of Commerce that such a conversion should take place.

Second, there is no provision in the Code of Commerce that

the registration of the transfers in the Mercantile Register on July 11, 1927, should have the effect of reviving or
recreating the alleged extinct registered general copartnership of Yu Yiong and Company.

Third, articles 24 and 25 of the Code of Commerce, construed together, plainly contemplate the continued existence of the
association in the manner and form in which it appears in the Mercantile Register regardless of the unregistered changes
therein. Article 25 specifically provides in its last paragraph the consequences of the omission to register
the resolutions or acts of a mercantile association which modify or alter the conditions of the recorded articles of association;
that is to say, any changes not so registered are binding between the members of the association but shall not prejudice third
persons, who, on the other hand, may avail themselves thereof insofar as it may be advantageous to them.
INVOLUNTARY INSOLVENCY OF CAMPOS RUEDA & CO., S. en C., appellee,
vs. PACIFIC COMMERCIAL CO., ASIATIC PETROLEUM CO., and INTERNATIONAL BANKING CORPORATION,
petitioners-appellants. (Campos Rueda & Co. v. Pacific Commercial Co., G.R. No. 18703, [August 28, 1922],
44 PHIL 916-920)

Facts:

Campos Rueda & Co. (LTD pship)

filed an application for a judicial decree adjudging itself insolvent . Campos Rueda & Co.
is

indebted to the appellants in various sums amounting to not less than P1,000 which were not paid more
than thirty days prior to the date of the filing by the petitioners of the application for involuntary insolvency.

RTC denied the petition on the ground that it was not proven, nor alleged, that the members of the aforesaid
firm were insolvent at the time the application was filed; and

that as said partners are personally and solidarily liable for the consequences of the transactions of the
partnership, it cannot be adjudged insolvent so long as the partners are not alleged and proven to be insolvent.

Issue: Whether or not Campos Rueda & Co. may be held insolvent although its members are not insolvent

Held:

Yes. the limited partnership of Campos Rueda & Co. failed to pay its obligations with three creditors for a period of
more than thirty days, which failure constitutes, under the Insolvency Law, one of the acts of bankrupt upon which an
adjudication of involuntary insolvency can be predicated, this partnership must suffer the consequences of such a
failure, and must be adjudged insolvent.

A limited partnership duly organized in accordance with law has a personality distinct from that of its members; and

if it commits an act of bankruptcy, such as that of failing for more than thirty days to pay debts amounting to P1,000 or
more, it may be adjudged insolvent on the petition of three of its creditors although its members may not be insolvent.

GR No. 19892 September 6, 1923

TECK SEING AND CO., LTD., Petitioner-appellee.
SANTIAGO JO CHUNG, ET AL., Partners,
vs.
PACIFIC COMMERCIAL COMPANY, ET AL., Creditors-appellants.

Facts:

Santiago Jo Chung Cang ------- Go Tayco ------- Yap Gueco ----- Lim Yogsing ------- Jo Ybec

constituted and formed a limited commercial company called "Teck Seing & Co., Ltd." duration of the
company will be six years. That after the term of six years , and it is the shareholders' convenience to continue the
business of this company, said term will be extended for an equal number of years, without the need for the granting
of further deeds, the present one remaining in force until the term arranged by all shareholders. The object of the
company will be the purchase and sale of merchandise in general.

Teck Seing & Co. Ltd. Filed an application to be adjudged an insolvent.

The contention of the creditors and appellants is that the partnership contract established a general
partnership. However, petitioners contended that they are only a limited partnership.

Issue: Whether or not Teck Seing & Co., Ltd is a limited partnership

Held:

No. The mercantile establishment which

operated under the name of Teck Seing & Co., Ltd., and

which was constituted by the document set forth in the decision,

is not a corporation, nor a cuenta en participacion (joint account association), nor a sociedad anonima, nor a
sociedad en comandita (limited partnership), nor a de facto commercial association, but is a general
partnership.

To establish a limited partnership there must be,

at least, one general partner and the name of the least one of the general partners must appear in the firm name.

But neither of these requirements have been fulfilled.

The general rule is, that those who seek to avail themselves of the protection of laws permitting the creation of limited
partnerships must show a substantially full compliance with such laws. A limited partnership that has not complied
with the law of its creation is not considered a limited partnership at all, but a general partnership in which all the
members are liable.