Mr. Elmor P. Juridico

August 18, 1983 Mr. Elmor P. Juridico OIC, Licensing & Regulation Office Philippine Overseas Employment Administration C.J. Valdez Bldg., 1130 Perez St. Paco, Metro Manila Sir : This has reference to your letter dated July 20, 1983 regarding the deed of assignment of partnership interest executed by Siony D. Prioreschi in favor of Brigido V. Sibug in the partnership of SP International Services Company. Relative thereto, you want to know whether or not the above-named partnership can be deemed dissolved by virtue of Article 1828 of the New Civil Code, quoted hereunder, or the purchaser of the partnership interest has to apply for a decree of dissolution from the court under Art. 1831 of the said Code. "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 distinguished from the winding up of the business." The Commission, in reply to a similar query, opined that the term "dissolution" as used in our 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 the termination of the partnership. Thus, it has been held and as indicated hereinabove, the sale of the interest of a partner to a third person dissolves the partnership. But the dissolution in such case in only in the sense that his connection with the partnership is terminated, that is, there is only a technical dissolution. ( SEC opinion dated June 29, 1960 ). It cited the following American authorities: "Any change in the membership or personnel of a partnership, either by the retirement of a partner or by the admission of new members into the partnership, produces, technically, an immediate dissolution of the existing partnership relation and the formation of a new one, although common business usage speaks of the admission of a partner to a firm and regards the firm as subsisting so long as the course of its business is not materially interrupted . . ." (40 Am. Jur. par. 197, p. 267). Based on the foregoing, the Commission considers subject partnership merely technically dissolved. However, in view of the fact that upon assignment of partnership interest of Siony D. Prioreschi to Brigido V. Sibug, Jr. on May 8, 1983, the articles of partnership was simultaneously amended to substitute the latter as the new partner of Mr. Ingrid Sibug, there is a continuation of said partnership. With the above reply to your first query, we need not answer your other query. Very truly yours, (SGD.) GONZALO T. SANTOS, JR. Associate Commissioner