Sy Yong Hu and Sons et al v.

CA

FACTS:
y Yong Hu & Sons is a partnership of Sy Yung Hu and his six (6) sons. The partnership has valuable assets such as
tracts of land planted with sugar cane and commercial lots in the business district of Bacolod City. Sometime in
September 1977, a certain Keng Sian brought an action before the then Court of First Instance of Negros Occidental,
docketed as Civil Case No. 13388, against the partnership for accounting of all the partnership properties and for the
delivery or reconveyance of her one-half (1/2) share in the properties and in the fruits thereof. Keng Sian averred
that she is the common-law wife of Sy Yung Hu and that the latter and his children connived to deprive her of her
share in the properties by diverting it to the partnership. During the pendency of said civil case, partner Marciano Sy
filed a petition for declaratory relief against his co-partners, praying that he be appointed managing partner to
replace Jose Sy who just died. The Hearing Officer, in a decision (Sison Decision) dismissed the petition, and dissolved
the partnership.

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,