Atty. Antonio S. Valero

August 5, 1997 Atty. Antonio S. Valero 200 A. Bonifacio St. Cebu City S i r : This refers to your previous letters inquiring on the status of ARV Resources Company registered on April 11, 1985 to exist for 25 years composed of nine partners six of whom are already dead , and whether it can continue to exist with three remaining partners. LibLex The Civil Code provides: "ARTICLE 1830. Dissolution is caused . . . . 5.) By death of any partner . " (Emphasis provided) Therefore, as a general rule death of a partner dissolves, by operation of Law, the partnership of which the deceased person was a partner in the absence of any stipulation in the articles of partnership for the continuance of the partnership relations upon the death of any one of the partners. However, the Civil Code, in defining the term "dissolution" insofar as it refers to partnership, provides as follows: "ARTICLE 1828. The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguish from the winding up of the business ." (Emphasis supplied) Thus the Commission on several occasions, had opined that the term "dissolution" as used in the Civil Code simply means the point in time when all the partners cease to carry on the business together and should not be understood as necessarily including the winding up and termination of the partnership. While the death of a partner technically dissolved the partnership relationship among the partners in the sense that the connection of the deceased partner with the partnership is terminated, the business entity may still be continued by the surviving partners. The continuance of the business is allowable under Article 1785 of the Civil Code which provides: "ARTICLE 1785. When a partnership for a fixed term or a particular undertaking is continued after the termination of such term or particular undertaking without any express agreement , the rights and duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will . A continuation of the business by the partners or such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is prima facie evidence of a continuation of the partnership ." (Emphasis supplied) Thus, if there is a strong indication that the remaining partners of the dissolved partnership intended for all legal intents and purpose to continue the partnership business even after the death of a partner(s), there is continuity of personality of the partnership as there exists a "partnership at will . For record purposes, the remaining partners may file an amended articles of partnership with the Commission accompanied by any evidence or proof indicating that after the death of the three partners, there was no settlement or liquidation of the partnership affairs. Please be advised accordingly. Very truly yours, (SGD.) SONIA M. BALLO Corporate & Legal Dept. Director