Parties:
Petitioners - Jesus Sy, Jaime Sy, Estate Of Jose Sy,
Estate Of Vicente Sy, Heir Of Marciano Sy Represented By Justina Vda. De Sy And
Willie Sy
Respondents - The Court Of Appeals, Intestate Estate
Of Sy Yong Hu, Sec. Hearing Officer Felipe Tongco, Securities And Exchange
Commission
Nature: PETITIONS for review on certiorari of a decision of
the Court of Appeals.
Summary: Sy Yong Hu
& Sons is a partnership between Sy Yong Hu and his sons. Their shares as
reflected in the Amended articles of partnership are as follows: Sy Yong Hu (31k), Jose Sy (205k), Jayme Sy
(112k), Marciano Sy (143k), Willie Sy (85k), Vicente Sy (85k), and Jesus Sy
(88k), with Jose Sy as managing partner. The partnership was registered with
SEC on March 29, 1962. In 1978, 1979, & 1987, Partners Sy Yong Hu and Jose
Sy, Vicent Sy, &Marciano Sy died respectively. At present, the partnership
has valuable assets in the business district of Bacolod.
In Sept 1977, during the lifetime of all the partners,
Keng Sian brought an action against the partnership claiming she is entitled of
½ of the properties and the fruits bec she was the common law wife of Sy Yong
Hu which the latter denied.
During the pendency of the case, Marciano Sy filed a
petition for declaratory relief against Vicente, Jesus, and Jayme, praying he
be appointed partner to replace the deceased Jose. In an answer, Vicente,
Jesus, Jayme, who claimed to represent the majority interest sought the
dissolution of partnership and appointed Vicente as managing partner.
The Hearing Officer, in a decision (Sison Decision)
dismissed the petition, and dissolved the partnership. The Sison Decision was
affirmed by the SEC En Banc. In the meantime the Regional Trial Court appointed
one Alex Ferrer as Special Administrator. Thereafter, Alex Ferrer moved to
intervene in the proceedings in for the partition and distribution of the of
the partnership assets on behalf of the respondent intestate estate but was
denied. The Intestate Estate appealed to the SEC en banc. In its decision, the
SEC en banc reiterated that the Abello decision, which upheld the order of
dissolution of the partnership, had long become final and executory. No further
appeal was taken from said decision. During the continuation of SEC Case, the
parties brought to the attention of the Hearing Officer the fact of existence
of a Civil Case pending before the RTC. They also agreed that during the
pendency of said case, there would be no disposition of partnership assets.
Hearing Officer Tongco in an order placed the partnership under a receivership
committee. Petitioners appealed to the SEC en banc. In an order (Lopez Order),
the SEC en banc affirmed the Tongco order. Then they filed a special civil
action for certiorari with the Court of Appeals. The appellate court granted
the petition and remanded the case for further execution of the Decisions,
ordering partition and distribution of partnership properties. On motion for
reconsideration by private respondents, the Court of Appeals reversed its
earlier decision and remanded the case to the SEC for the formation of a
receivership committee as envisioned in the Tongco Order. Hence the present
petition.
ISSUE:
What is there is a difference between winding up and dissolution
HELD: Petitioners fail to recognize the basic distinctions
underlying the principles of dissolution, winding up and partition or
distribution. The dissolution of a partnership is the change in the relation of
the parties caused by any partner ceasing to be associated in the carrying on,
as might be distinguished from the winding up, of its business. Upon its
dissolution, the partnership continues and its legal personality is retained
until the complete winding up of its business culminating in its termination.
The dissolution of the partnership did not mean that the juridical entity was
immediately terminated and that the distribution of the assets to its partners
should perfunctorily follow. On the contrary, the dissolution simply effected a
change in the relationship among the partners. The partnership, although
dissolved, continues to exist until its termination, at which time the winding
up of its affairs should have been completed and the net partnership assets are
partitioned and distributed to the partners. It ruled that although the Abello
Decision was, indeed, final and executory, it did not pose any obstacle to the
hearing officer to issue orders not inconsistent therewith because from the
time a dissolution is ordered until the actual termination of the partnership.
SAME SAME
Partnerships;
Dissolutions; Words and Phrases; Dissolution of a partnership is the change in
the relation of the parties caused by any
partner ceasing to be associated in the carrying on, as might be distinguished
from the winding up, of its business.—The contentions are untenable.
Petitioners fail to recognize the basic distinctions underlying the principles
of dissolution, winding up and partition or distribution. The dissolution of a
partnership is the change in the relation of the parties caused by any partner
ceasing to be associated in the carrying on, as might be distinguished from the
winding up, of its business. Upon its dissolution, the partnership continues
and its legal personality is retained until the complete winding up of its
business culminating in its termination.
Same; Same;
The partnership, although dissolved, continues to exist until its termination,
at which time the winding up of its affairs
should have been completed and the net partnership assets are partitioned and
distributed to the partners.—The dissolution of the partnership did not mean
that the juridical entity was immediately
terminated and that the distribution of the assets to
its partners should perfunctorily follow. On the contrary, the dissolution
simply effected a change in the relationship among the partners. The
partnership, although dissolved, continues to exist until its termination, at
which time the winding up of its affairs should have been completed and the net
partnership assets are partitioned and distributed to the partners.
Same; Same;
Securities and Exchange Commission; Jurisdiction; From the time a dissolution
is ordered until the actual termination
of the partnership, the Securities and Exchange Commission retains jurisdiction
to adjudicate all incidents relative thereto; Like the appointment of a manager
in charge of the winding up of the affairs of the partnership, the appointment
of a receiver during the pendency of the dissolution is interlocutory in
nature, well within the jurisdiction of the Securities and Exchange
Commission.—The error, therefore, ascribed to the Court of Appeals is devoid of
any sustainable basis. The Abello Decision though, indeed, final and executory,
did not pose any obstacle to the Hearing Officer to issue orders not
inconsistent therewith. From the time a dissolution is ordered until the actual
termination of the partnership, the SEC retained jurisdiction to adjudicate all
incidents relative thereto. Thus, the disputed order placing the partnership
under a receivership committee cannot be said to have varied the final order of
dissolution. Neither did it suspend the dissolution of the partnership. If at
all, it only suspended the partition and distribution of the partnership assets
pending disposition of Civil Case No. 903 on the basis of the agreement by the
parties and under the circumstances of the case. It bears stressing that, like the
appointment of a manager in charge of the winding up of the affairs of the
partnership, said appointment of a receiver during the pendency of the
dissolution is interlocutory in nature, well within the jurisdiction of the
SEC.
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