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Benjamin Yu v. National Labor Relations Commission & Jade Mountain Products Co. Ltd.

, Willy Co, Rhodora Bendal, Lea Bendal, Chiu Shian Jeng and Chen Ho-Fu G.R. No. 97212 June 30, 1993 Feliciano, J. Facts: Yu ex-Assistant General Manager of the marble quarrying and export business operated by a registered partnership called Jade Mountain Products Co. Ltd. partnership was originally organized with Bendals as general partners and Chin Shian Jeng, Chen Ho-Fu and Yu Chang as limited partners; partnership business consisted of exploiting a marble deposit in Bulacan Yu, as Assistant General Manager, had a monthly salary of 4000. Yu, however, actually received only half of his stipulated salary, since he had accepted the promise of the partners that the balance would be paid when the firm shall have secured additional operating funds from abroad. Yu actually managed the operations and finances of the business; he had overall supervision of the workers at the marble quarry in Bulacan and took charge of the preparation of papers relating to the exportation of the firms products. general partners Bendals sold and transferred their interests in the partnership to Co and Emmanuel Zapanta partnership was constituted solely by Co and Zapanta; it continued to use the old firm name of Jade Mountain Yu dismissed by the new partners Issues: 1. WON the partnership which had hired Yu as Asst. Gen. Manager had been extinguished and replaced by a new partnership composed of Co and Zapanta; 2. if indeed a new partnership had come into existence, WON Yu could nonetheless assert his rights under his employment contract with the old partnership as against the new partnership Held: 1. Yes. Changes in the membership of the partnership resulted in the dissolution of the old partnership which had hired Yu and the emergence of a new partnership composed of Co and Zapanta. Legal bases: Art. 1828. The dissolution of a partnership is the change in the relation 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. 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; No winding up of affairs in this case as contemplated in Art. 1829: on dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed the new partnership simply took over the business enterprise owned by the old partnership, and continued using the old name of Jade Mountain Products Company Limited, without winding up the business affairs of the old partnership, paying off its debts, liquidating and distributing its net assets, and then re-assembling the said assets or most of them and opening a new business enterprise 2. Yes. the new partnership is liable for the debts of the old partnership Legal basis: Art. 1840 (see codal)

Yu is entitled to enforce his claim for unpaid salaries, as well as other claims relating to his employment with the previous partnership, against the new partnership But Yu is not entitled to reinstatement. Reason: new partnership was entitled to appoint and hire a new gen. or asst. gen. manager to run the affairs of the business enterprise take over. An asst. gen. manager belongs to the most senior ranks of management and a new partnership is entitled to appoint a top manager of its own choice and confidence. The non-retention of Yu did not constitute unlawful termination. The new partnership had its own new General Manager, Co, the principal new owner himself. Yus old position thus became superfluous or redundant. Yu is entitled to separation pay at the rate of one months pay for each year of service that he had rendered to the old partnership, a fraction of at least 6 months being considered as a whole year.