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Benjamin Yu vs National Labor

Relations Commission
224 SCRA 75 (1993)
Feliciano
Facts:
Jade Mountain Products Company Ltd.,
is a registered limited partnership
composed of Lea Bandal and Rhodora
Bendal as general partners and Chiu
shian Jeng, Chen Ho-Fu and Yu Chang,
citizens of the Republic of China,
Taiwan as limited partners.
The
business
consisted
of
exploiting
marble deposits from the land of Sps.
Ricardo and Guillerma Cruz. Petitioner
Benjamin Yu was the Asst General
Manager of the Partnership.
He
managed the operations and finances
of the business.
He had overall
supervision of the workers at the
marble quarry. He had a salary of
4000Php a month however he actually
only received half of the said salary
rate since he accepted the promise of
the partners that the balance would be
paid when the firm shall have secured
additional
operating
funds
from
abroad.
Sometime in 1988, without the
knowledge of petitioner Yu, general
partner Rhodora and Lea Bendal sold
and transferred their interest to Willy
Co and Emmanuel Zapanta. Limited
partner MR. Chang also sold and
transferred his interest to Willy Co.
This transaction made Willy Co and
Emmanuel Zapanta acquired the great
bulk of the partnership. However, the
two retained the name of the
partnership Jade mountain.
Benjamin only met Willy Co and
acquired knowledge about the old
ownership when he went to the

companys office in Mandaluyong,


Metropolitan, Manila (Office is prev in
Makati).
Having learned about
All
the
employees
from
the
partnership continued working except
for Benjamin YU since Willy Co decided
to run the company by himself. He was
let go with his salary unpaid.
December 21 1988, Yu filed a
complaint for illegal dismissal and
recovery of unpaid salaries accruing
from Nov 1984 to Oct 1988, moral,
exemplary damages and attorneys
fee. The new Jade Mountain denied
petitioners charges contending in the
main the Yu was never hired as an
employee by the present and new
partnership.
Labor Arbiter rendered a decision
holding that the petioner had been
illegally dismissed. NLRC reversed the
decision contending that ther is no law
requiring the new partnership to
absorb the employess of the old
partnership. NLRC also held that the
unpaid wages should be asserted
against the original member of the
partnership.
Petition for certiorari.
Contention of the petitioner: A
partnership has a juridical personality
separate and distinct from that of each
of its member. Such personality
subsist notwithstanding the change of
the partners. Thus his employment
contract is not affected by the
changes
in
the
companys
membership.
Issue:

1.
WON the old partnership was
extinguished and is replace by a new
partnership
2. WON YU can assail his right under
his employment contract to the new
partnership.
Held:
Art 1828
Art 1830
The acquisition of the 82% of the
partnership interest by Willy Co and
Emmanuel Zapanta coupled by the
retirement and withdrawal of the old
partners constitute a new partnership.
However this occurrence of events
does not automatically result in a
termnation of the legal partnership.
Art 1829 of the civil code states that:
On the dissolution the partnership
is not terminated but continues
until the winding up of the
partnership affairs is completed.
In the case at bar, Jade Mountain did
not undergo procedures relating to the
dissoulution and winding up of the
business affairs. In other words, the
new partnership simply took over an
continued the business enterprise
owned by the preceding partnership.

Thus, the new partnership are liable


for the debts of the preceding
partnership.
Art 1840
The liability of the 3rd person becoming
a partner in the partnership continuing
the business, under this article, to the
creditors of the dissolved partnership
shall
be
satisfied
out
of
the
partnership property only, unless there
is a atipulation to the contrary. Yu is
entitled to enforce his rights to the
new partnership.
However,
with
regard
to
his
employment, the new partnership is
entitled to appoint a top manager of
its own choice. The termination of is
just or authorized cause. Yu is still
entitled to a separation pay at the rate
of one months pay for each year of
service.
The treatment accorded to Yu by the
new partnership including the refusal
to honor his unpaid salary is a bad
faith treatment which entitles YU to
moral damages.
Attorneys fee awarded. Cost at
respondent
**END

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