Emnace vs CA

FACTS:
Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were
partners in a business concern known as Ma. Nelma Fishing Industry. Sometime in
January of 1986, they decided to dissolve their partnership and executed an
agreement of partition and distribution of the partnership properties among them.
Throughout the existence of the partnership, and even after Vicente Tabanao's
untimely demise in 1994, petitioner failed to submit to Tabanao's heirs any statement
of assets and liabilities of the partnership, and to render an accounting of the
partnership's finances. 
Petitioner also reneged on his promise to turn over to Tabanao's heirs the
deceased's 1/3 share in the total assets of the partnership, amounting to
P30,000,000.00, or the sum of P10,000,000.00, despite formal demand for payment
thereof.
Consequently, Tabanao's heirs, respondents herein, filed against petitioner an
action for accounting, payment of shares, division of assets and damages.
Petitioner contends that the trial court should have dismissed the complaint on
the ground of prescription, arguing that respondents' action prescribed four (4) years
after it accrued in 1986. 
ISSUE:
W/N the contention of the petitioner is proper
HELD:
The three (3) final stages of a partnership are: (1) dissolution; (2) winding-up;
and (3) termination. The partnership, although dissolvefd, continues to exist and its
legal personality is retained, at which time it completes the winding up of its affairs,
including the partitioning and distribution of the net partnership assets to the
partners. For as long as the partnership exists, any of the partners may demand an
accounting of the partnership's business. Prescription of the said right starts to
run only upon the dissolution of the partnership when the final accounting is
done.
Contrary to petitioner's protestations that respondents' right to inquire into the
business affairs of the partnership accrued in 1986, prescribing four (4) years
thereafter, prescription had not even begun to run in the absence of a final
accounting. Article 1842 of the Civil Code provides:
The right to an account of his interest shall accrue to any partner, or his
legal representative as against the winding up partners or the surviving
partners or the person or partnership continuing the business, at the
date of dissolution, in the absence of any agreement to the contrary.
 Applied in relation to Articles 1807 and 1809, which also deal with the duty to
account, the above-cited provision states that the right to demand an accounting
accrues at the date of dissolution in the absence of any agreement to the contrary.
When a final accounting is made, it is only then that prescription begins to run. In the
case at bar, no final accounting has been made, and that is precisely what
respondents are seeking in their action before the trial court, since petitioner has
failed or refused to render an accounting of the partnership's business and assets.
Hence, the said action is not barred by prescription.