firm composed of Willy Co and Emmanuel
Benjamin Yu vs. National Labor
Relations Commission (NLRC)
FACTS:
Petitioner Yu was hired as the Assistant General
Manager of Jade Mountain Products Company
Limited primarily responsible for the overall
operations of marble quarrying and export
business of said partnership. He was hired by a
virtue of a Partnership Resolution in 1985 with a
monthly salary of P4,000.00. Initially he received
only half of his stipulated monthly salary and was
promised by the partners that the balance would
be paid upon securing additional operating funds
from abroad. However, in 1988 without his
knowledge the general partners as well as one of
the limited partners sold and transferred their
interest to Willy Co and Emmanuel Zapanta. Thus
the new major partners decided to transfer the
firms main office but opted to continue the
operation of the old partnership under its old firm
name and with all its employees and workers
except for the petitioner. Upon knowing of the
changes in the partnership, petitioner went to the
new main office to meet the new partners and
demand the payment of his unpaid salaries, but the
latter refused to pay him and instead informed him
that since he bought the business from the original
partners, it was for him to decide whether or not
he was responsible for the obligations of the old
partnership including petitioners unpaid salaries.
Hence, petitioner was dismissed from said
partnership.
ISSUES:
1. Whether the partnership which had hired
the petitioner as Asst. General Manager had been
extinguished and replaced by a new partnership
composed of Willy Co and Emmanuel Zapanta.
2. Whether petitioner could assert his rights
under his employment contract as against the new
partnership
HELD:
1. Yes. The legal effect of the changes in the
membership of the partnership was the dissolution
of the old partnership which had hired the
petitioner in 1984 and the emergence of the new
Zapanta in 1988. This is based on the following
provisions:
Art. 1828. The dissolution of partnership is the
change in the relation of the partners caused by
any partner ceasing to be associated in the
carrying on as a distinguished from the winding
up of the business.
Art. 1830. Dissolution is caused:
1. without violation of the agreement
between the partners;
b. by the express will of any partner, who
must act in good faith, when no definite term or
particular undertaking is specified.
2. in contravention of the agreement
between the partners, where the circumstances do
not permit a dissolution under any
other provision of this article, by the express will
of any partner at any time;
However, the legal consequence of dissolution of
a partnership do not automatically result in the
termination of the legal personality of the old
partnership as according to Art. 1829, on
dissolution of the partnership is not terminated,
but continues until the winding up of the
partnership affairs is completed. The new
partnership simply continued the operations of the
old partnership under its old firm name without
winding up the business affairs of the old
partnership.
2. Yes. Under Art. 1840, creditors of the old
partnership are also creditors of the new
partnership which continued the business of
former without liquidation of the partnership
affairs. Thus, creditor of the old Jade Mountain,
such as the petitioner is entitled to enforce his
claim for unpaid salaries, as well as other claims
relating to his employment with the old
partnership against the new Jade Mountain.
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