IRMA IDOS, petitioner, vs.

COURT OF APPEALS and PEOPLE OF THE PHILIPPINES,

respondents, GR No. 110782, September 25, 1998, Quisimbing, J.

The best evidence of the existence of the partnership, which was not yet terminated (though in
winding up stage) were the unsold goods and uncollected receivables.

FACTS:
Petitioner Irma Idos (Idos) was engaged in the business of leather tanning. In 1985, private
complainant Eddie Alarilla joined Idos, forming a partnership business. However, the partnership
did not last long as it was dissolved one year after. Upon liquidation, the business had P1,800,000
receivables and stocks. Alarilla’s share was P900,000 for which Idos issued four checks.
Alarilla was able to encash the first three checks but failed to encash the last check. After
failure to comply with the formal demand of Aralilla to Idos, the former filed an information for
violation of BP 22 against the latter. Idos defense stated that the checks were only given as
assurance of his share in the assets of the partnership and that it was not supposed to be deposited
until the stocks had been sold.
RTC ruled the Idos was guilty of the crime charged which the Court of Appeals affirmed,
hence, this petition.

ISSUE:
Whether or not Idos is guilty of violation BP 22. (NO)
Whether or not the partnership is dissolved. (NO)

RULING:
1. NO. The subject check was to be funded from receivables to be collected and goods to
be sold by the partnership, and only when such collection and the sale were realized.
Petitioner issued the subject check to evidence only the complainant’s share or interest
in the partnership, or at best, to show her commitment that when receivables are
collected and goods are sold, she would give to private complainant the net amount due
him representing his interest in the partnership.
Since petitioner issued these four checks without actual knowledge of the insufficiency
of funds, she could not be held liable under BP 22 when one not honored right away.
2. NO. Even if the parties agreed to dissolve the partnership, such agreement did not
automatically put an end to the partnership, since they still had to sell the goods on
hand and collect the receivables from debtors. In short, they were still in the process of
winding up, or the process of settling business affairs after dissolution, when he check
in question was issued.

Upon dissolution, the partnership is not terminated, but continues until the winding up
of partnership affairs is completed. The best evidence of the existence of the partnership
which was not yet terminated were the unsold goods and uncollected receivables, which
were present in this case.