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Alcantara - Idos v. Court of Appeals

1) The partnership between two partners engaged in the leather tanning business was dissolved after four years, with Partner B to receive PHP 900,000 from liquidated assets. 2) Partner A issued post-dated checks to Partner B, but one check was dishonored when presented. 3) The Supreme Court held that dissolution does not automatically mean termination, as the partners were still in the winding up process of settling their business affairs and collecting outstanding assets, as provided by law.

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Christia Junina Alcantara
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71 views2 pages

Alcantara - Idos v. Court of Appeals

1) The partnership between two partners engaged in the leather tanning business was dissolved after four years, with Partner B to receive PHP 900,000 from liquidated assets. 2) Partner A issued post-dated checks to Partner B, but one check was dishonored when presented. 3) The Supreme Court held that dissolution does not automatically mean termination, as the partners were still in the winding up process of settling their business affairs and collecting outstanding assets, as provided by law.

Uploaded by

Christia Junina Alcantara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ALCANTARA, CHRISTIA JUNINA

Idos v. Court of Appeals


296 SCRA 194 (1998)

AREA OF THE LAW ON SALES COVERED:


Winding up and termination of the partnership are two distinct processes and points in time,
respectively

SALIENT FACTS:
1. Partner A engaged in leather tanning, while Partner B was her supplier and business
partner.
2. They ended up forming a partnership together.
3. Four years after, they decided to terminate their partnership and upon liquidation of the
business receivables of stocks, Partner B would receive 900,000, which Partner A
issued in post-dated checks.
4. Partner A warned Partner B that a check was not sufficiently funded yet,
5. Partner B was able to encash 3 checks, but one was dishonored.
6. Partner B demanded from Partner A but did not pay and instead claimed the check was
only as assurance of his share in the assets of the partnership of stocks not yet sold.
7. Partner A was then found guilty of BP 22.
8. Partner A then further states that because Partner B did not want to continue in the
Partner A’s tannery business and had no use for a share of the stocks, it led to the
issuance of the subject check.

ISSUE:
Does the decision to dissolve the partnership equate to termination of the same?

SUPREME COURT HELD:

Resolution of the Issue:


No, the decision to dissolve their partnership does not automatically mean a
termination but rather, in this case, they were in the winding up of the partnership.

Law Applicable to the Issue and Facts:


Article 1829 of the Civil Code strengthens this as it provides that dissolution does not
mean termination but continues until the winding up of partnership affairs has been
completed.

Application of the Law Cited to the Facts of the Problem:


The parties were still in the process of winding up after dissolution, which rightfully
includes the collecting of assets that were still demandable. The check issued to Partner B
was merely evidence of his share to assure that he would receive his share from the
partnership. With these facts foregoing, the check was not intended to apply on account or for
value but rather, it should be deemed as having been drawn without consideration at the time
of issue.

Doctrine of the Case:


“Winding up” refers to the process of settling business affairs after dissolution, which
includes paying of previous obligations, while “termination” is the point in time after all the
partnership affairs have been wound up.

CRITIQUE AND ANALYSIS:

The case depicts the three stages in the current Partnership module and is able to
delineate each one. It defined and distinguished what dissolution, winding up, and termination
exactly mean. The case exemplified the processes and periods that were provided by law and
then reiterated in this case, which shows how the law protects business interests of partners
upon dissolution. The mere dissolution would not be tantamount to its immediate termination
but would be subject to making sure respective business shares of each partner are
respected before such a termination.

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