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
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 , a s A s s i s t a n t G e n e r a l M a n a g e r , h a d a m
o n t h l y s a l a r y o f 4 0 0 0 . Yu , h o w e v e r , a c t u a l
ly receivedonly half of his stipulated sa
lary, sincehe had accepted the promise of
t h e pa r t ne r s th a t th e ba l a nc e w oul d be pa i d w
he n t he f i r m s ha l l ha ve s e c ur e d a ddi t i ona l
o p e r a t i n g f u n d s f r o m a b r o a d . Yu a c t u a l l y m
an ag ed t h e o p er at i o n s an d fi n a n c e s o f t h e
business; he had overall supervision of the workers at the

BUSORG CASE DIGESTS

Atty. Charlie Mendoza

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 p a r t n e r s h i p
w a s c ons t i t ut e d s ol e l y by C o a nd Za p a n t a
; 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.

Legalbases:
A r t . 1 8 2 8 . T h e d i s s o l u t i o n o f ap a r t n e r s h i p
h a n g e
i nt h e r e l a t i o n o f t h e
partners
caused
by
any
partner
ceasing
to
be
associated
in
the
c a r r y i n g o n a s 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;

i s

t h e

No winding up of affairs in this case as

contemplated in Art 1829: on dissolution
t h e partnership is not terminated, but continues until the winding up of partnership affairs is
completed t h e n e w p a r t n e r s h i p
simply
took over thebusines
s
enterprise
owned
by
t h e o l d partnership, and continu
ed using theold
name
of
Jade Mountain
Produc
tsCompany
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)