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 firm’s 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 firm composed of Willy Co and Emmanuel 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.

Zuellig Freight and Cargo Systems v NLRC: (2013)

- San Miguel brought a complaint for unfair labor practice, illegal dismissal, non-payment of salaries and moral damages
against formerly Zeta Brokerage Corporation (Zeta) now Zuelig Freight and Cargo Systems (Zuellig), alleging that he had
been a checker/customs rep of Zeta since Dec 1985 + in Jan 9194, he and other EEs of Zeta were informed of ceasing
operations that affected all EEs who would be separted _ was informed of termination effective March 1994 _ reluctantly
accepted separation pay subject standing offer to be hired to former position + April 1994, summarily terminated w/o
valid cause and due process
o San Miguel contends that amendments of articles of incorporation of Zeta were for purpose of changing
corporate name, broadening primary functions, and increasing capital stock, but NOT that Zeta had been
dissolved
o Zeta argues that San Miguel’s termination had been for cause authorized by Labor Code + non-acceptance was
not irregular + had complied with requirements or terminatin due to cessation of business operations + no
obligation to employ San Miguel in exercise of valid management prerogative + all EEs had been given
sufficient time to make their decision whether to accept its offer of employment or not, but he had not
responded + due to failure to meet deadline, offer had expired + had been hired on temporary basis + picking
other EE over San Miguel was not arbitrary but due to seniority considerations
- LA: San Miguel had been illegally dismissed
o Mere change of business name and primary purpose andupgrade of stocks of corp
o Zuellig and Zeta are legally the same person and entity (as admitted by Zuellig’s counsel in letter ot VAT Dept
of BIR)
o Termination of San Miguel’s services due to alleged cessation of business operations is deemed illegal
o Ordered Zuellig to pay San Miguel backwages
- NLRC affirmed LA
- CA: affirmed NLRC
o Closure of business ops not validly made
 Certificate of filing of amended articles of incorporation show zuellig is former zeta
 Certificate of filing of amended by-laws = show the same
 Amendment of articles of incorp merely changed corporate name, broadned primary purpose,
increased authorized capital stocks
 Reqirements in Art 283, Labor Code, were not satisfied = good faith not established by mere
registration with SEC of amended articles of incorporation
 Fact of verbally informing EEs of the termination and requirement to sign employment contract to
ensure smooth operations of new company is irrelevant – no valid closure o business operations
means San Miguel’s dismissal on alleged authorized cause of cessation of business pursuant to Art
283 was utterly illegal
- Issue: WON cessation fo business by Zeta was a bona fide closure to be regarded as valid ground for termination of
employment of San Miguel under Art 283. NO.
o Art 283: Valid grounds for termination: installation of labor-saving devices, redundancy, retrenchment ot
prevent losses, or closing or cessation of operation of establishment or undertaking unless cosing is for
purpose of circumnveting provisions of title
 Amendments of the articles of incorporation of Zeta to change corporate name to Zuellig Freight did
not produce the idssolution of Zeta as a corporation
 Corporation Code defined and delineated the diff modes of dissolving a corporation, and
amendment of articles of incorporation was not one of such modes
  Effect of change of name (Ph First Insurance Inc v Hartigan): no more the creation of a
corporation than the change of the name of a natural person is begetting of a natural person
– change of NAME is NOT a change of BEING
 Consequences of change of name (PC Javier and Sons v CA): A change in the corporate name does
not make a new corporation, whether effected by a special act or under a general law. It has no
effect on the identity of the corporation, or on its property, rights, or liabilities. The Corporation,
upon change in its name, is in no sense a new corporation, nor the successor of the original
corporation. It is the same corporation with a diff name, and its character is in no respect changed.
o DOCTRINE: the mere change in the corporate name is not considered under the law as the creation of a new
corporation; hence, the renamed corporation remains liable for the illegal dismissal of its employee separated
under that guise.
o AS APPLIED:
 Zeta and Zuelling remained the same corp
 Change of name did not give Zuellig license to terminate EEs of Zeta
 NOT similar to situation where buying business of another company means purchasing company
has no obigation to rehire terminated EEs
 Zuellig despite new name was mere continuation of Zeta’s corporate being + still held obligation to
honor all of Zeta’s obligatons, one of which was to respect San Migeul’s security of tenure
o CA also rightfully upheld NLRC”s affirmance of grant of attorney’s fees – San Miguelw was compelled to litigate
to protect his interest.
- HELD: decision appealed from AFFIRMED.