Definition Art 1828 The dissolution of the partnership is the change in the relation of the partners caused by any

ion of the partners caused by any partner ceasing to be associated in the carrying
on as distinguished from the winding up of the business.

Art 1829 On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.

Causes Art 1830 1(w/o violation of the Dissolution is cause:

agreement; voluntary
(result is when caused by will of
automatic one or more or all of
the partners; 1. Without violation of the agreement between partners:
dissolution
of the dissolution effected
a. By the termination of the definite term or particular undertaking specified in the agreement.
partnership extrajudicially)
) (partnership may be constituted for a fixed term or it may have for its object a specific undertaking. After expiration, partnership is
automatically dissolved w/o the partners extending the said term or continuing the undertaking)
2 (w/o violation of the
agreement; voluntary
when caused by will of b. By the express will of any partner, who must act in good faith, when no definite term or particular undertaking is specified.
one or more or all of
the partners; (may be dissolved at any time by any partner without breach of contract provided the partners act in good faith; partners has the same power
dissolution effected and right to terminate the partnership; bad faith, dissolution is wrongful)
extrajudicially)

c. By the express will of all the partners who have not assigned their interests or suffered them to be charged for their separate
3 to 7 (involuntarily
debts, either before or after the termination of any specified term or particular undertaking.
when brought about
independently of the (must be unanimous. Majority alone cannot dissolve the partnership w/o breach of contract)
will of the partners or
by operation of the
law; dissolution
effected extrajudicially) d. By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement
between the partners.

(expulsion has the effect of decreasing the number of the partners; the expulsion must be in good faith, expulsion in bad faith may occur to
8(involuntarily when
claim damages)
brought about
independently of the
will of the partners or
by operation of the 2. In contravention of it unlawful the agreement between partners, where the circumstances do not permit a dissolution under any
law; dissolution other provision of this article, by the express will of any partner at any time.
effected judicially)
a. Dissolution may be for any cause or reason.

b. Power of dissolution always exist.

(doctrine of delectus personae, allows a partner to have a power but not necessarily right to dissolve a partnership even though other partners
wanted to continue)

c. Legal effects of dissolution.

(withdrawing partner is liable for damages for unjustified dissolution but in no case can he be compelled to remain in the partnership)

3. By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in
partnership.

(supervening event)

4. When a specific thing, which a partner had promised to contribute to the partnership, perishes before the delivery; in any case by the
loss of the thing, when the partner who contributed it having reserved the ownership thereof, has only transferred to the
partnership the use or enjoyment of the same; but the partnership shall not be dissolved by the loss of the thing when it occurs after
the partnership has acquired the ownership thereof.

(loss of specific thing:

a. Loss before the delivery-partnership is dissolved; failure of a partner to fulfil his part of the obligation.

b. Loss after the delivery- partnership is not dissolved; partnership assumes the loss of the thing and may contribute additional capital to save the
 tenure.

c. Loss where only use or enjoyment contributed-dissolves the partnership; partners bears the loss; considered default with respect to
contribution.

5. By the death of any partner.

(death affects dissolution. Surviving partner has no authority to continue the business except so far as necessary)

6. By the insolvency of any partner or of the partnership.

(a. insolvent partner has no authority to act for the partnership, not the other partners act for him. B. insolvency of the partnership amounts to
dissolution)

7. By the civil interdiction of any partner.

8. By the decree of court under the following article. (Art. 1700 & Art. 1701a)

Application Art 1831 On application by or for a partner, the court shall decree a dissolution whenever:

1. A partner has been declared insane in any judicial proceeding or is shown to be of unsound mind.

2. A partner becomes in any other way incapable of performing his part of the partnership.

3. A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business.

4. A partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself in matters
relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him.

5. The business of the partnership can only be carried on at a loss. (business is unprofitable)

6. Other circumstances render a dissolution equitable. (ex. Abandonment of the business, fraud in the management, refusal w/o justifiable
cause)

On the application of the purchaser of a partner’s interest under Article 1813 or 1814.

1. After the termination of the specific term or particular undertaking.

2. At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued.

Effect Art 1832 Gen. rule = every Except so far as may be necessary to wind up partnership affairs or to complete transactions begun but not then finished, dissolution
partner is considered
 the agent of the terminates all authority of any partner to act for the partnership;
partnership with
authority to bind the (Qualifications 1 & 2)
partnership; upon
dissolution,
1. With respect to the partners
partnership ceases to
a. When the dissolution is not by the act, insolvency or death of a partner.
be a going concern and
the power of b. When the dissolution is such by act, insolvency or death of a partner, in cases where Article 1833 so requires.
representation is
confined. 2. With respect to persons not partners (third persons), as declared in Article 1834.

Art 1833 Uniform Partnership Where the dissolution is caused by the act, death or insolvency of a partner, each partner is liable to his co-partners for his share of any
Act liability created by any partner acting for the partnership had not been dissolved unless:
1.Knowledge of a fact 1. The dissolution being by act of any partner, acting for the partnership had knowledge of the dissolution.
2.Notice of a fact (to protect the remaining partner or partners who might continue to act for the partnership as a going concern, not having actual knowledge of the
dissolution)
a. states the fact to
such person
2. The dissolution being by the death or insolvency of a partner, the partner acting for the partnership had knowledge or notice of the
b. delivers through a death or insolvency.
mail or other means of
(Discards the fiction that everybody is presumed to have knowledge of death or insolvency)
communication

Art 1834 Notice of dissolution to After dissolution, a partner can bind the partnership, except as provided in the third paragraph of this article:
creditors:
(enumerates cases when a partner continues to bind the partnership even after the dissolution)
1.As to persons who
extended credit to
partnership prior to
1. By an act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution.
dissolution.

2.As to person who 2. By any transaction which would bind the partnership if dissolution had not taken place, provided the other party to the transaction.
had known of
a. Had extended the credit to the partnership prior to dissolution had no knowledge or notice of the dissolution.
partnership’s existence

3.Where acting partner

b. Though he had not so extended credit, had nevertheless known of the partnership prior to dissolution, and, having no knowledge
has no authority to or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general circulation in the place (or in
 wind up partnership each place if more than one) at which the partnership was regularly carried on.
affairs
The liability of a partner under the 1 st paragraph, no.2, shall be satisfied out of the partnership assets alone when such partner had been prior
4.Where acting partner to dissolution: (Dormant partner need not give notice.)
has become insolvent.
1. Unknown as a partner to the third person with whom the contract is made.

2. So far unknown and inactive in partnership affairs that the business reputation of the partnership could not be said to have been in
any degree due to his connection with it.

The partnership is in no case bound by any act of a partner after dissolution: (cases where partners cannot bind themselves after dissolution)

1. Where the partnership is dissolved because it is unlawful to carry on the business, unless the act is appropriate for winding up
partnership affairs.

2. Where the partner has become insolvent

3. Where the partner had no authority to wind up partnership affairs; except by transaction with one who-

a. Had extended credit to the partnership prior to dissolution and had no knowledge or notice of his want of authority.

b. Had not extended credit to the partnership prior to dissolution, and, having no knowledge or notice of his want of authority has
not been advertised in the manner provided for advertising the fact of dissolution in the 1 st paragraph, no. 2(b).

Nothing in this article shall affect the liability under Article 1825 of any person who after dissolution represents himself or consents to
another representing him as a partner in a partnership engaged in carrying on the business.

Art 1835 (Effect of dissolution The dissolution of the partnership does not itself discharge the existing liability of any partner. (A partner may be relieved from all existing
on partner’s existing liabilities upon dissolution)
liability)

A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between himself, the
partnership creditor and the person or partnership continuing the business, and such agreement may be inferred from the course of dealing
between the creditor having knowledge of the dissolution and the person or partnership continuing the business.
 (Liability of estate of The individual property of a deceased partner shall be liable for all obligations of the partnership incurred while he was a partner, but subject
deceased partner) to the prior payment of his separate debts. (The individual property of a deceased partner shall be liable for all obligations of the partnership incurred
while he was a partner.)

Winding Art 1836 Manner of Winding Up Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving
up partner, not insolvent, has the right to wind up the partnership affairs, provided, however, that any partner, his legal representative or his
1.Judicially
assignee, upon cause shown, may obtain winding up by the court.
(the process
2.Extrajudicially
of settling
the
business or (Persons authorized to wind up:
partnership
1.The partners designated by the agreement.
affairs after
the 2.all partners who have not wrongfully dissolved the partnership
dissolution)
3.legal representative of the surviving partner)

Art 1837 When dissolution is caused in any way, except in contravention of the partnership agreement, each partner, as against his co-partners and all
persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property
applied to discharge its liabilities, and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution
is caused by expulsion of a partner, bona fide under the partnership agreement and if the expelled partner is discharged from all partnership
liabilities, either by payment or agreement under the second paragraph of Article 1835, he shall receive in cash only the net amount due from
him the partnership.
When dissolution is caused in contravention of the partnership agreement, the rights of the partners shall be as follows:

1. Each partner who has not caused dissolution wrongfully shall have:

a. All the rights specified in the first paragraph of the article

b. The right, as against each partner who has caused the dissolution wrongfully, to damages for breach of agreement.

2. The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name either by
themselves or jointly with others, may do so, during the agreed term of the partnership and for that purpose may possess the
partnership property, provided they secure the payment by bond approved by the court, or pay to any partner who has caused the
dissolution wrongfully, the value of his interest in the partnership at the dissolution, less any damages recoverable under the second
paragraph, No. 1 (b) of this article, and in like manner indemnify him against all pre-sent or future partnership liabilities.

3. A partner who has caused the dissolution wrongfully shall have:

a. If the business is not continued under the provisions of the 2 nd paragraph, No.2 all the rights of a partner under the 1 st paragraph
subject to liability for damages in the second paragraph No.1 of this article.

b. If the business is continued under the second paragraph no.2, of this article, the right as against his co-partners and all claiming
through them in respect of their interests in the partnership, to have the value of his interest in the partnership, less any damage
caused to his co-partners by the dissolution, ascertained and paid to him in cash, or the payment secured by a bond approved by
the court, and to be released from all existing liabilities of the partnership; but in ascertaining the value of the partner’s interest
the value of the goodwill of the business shall not be considered.