Yu v.
NLRC Testate Estate of Mota vs Serra
June 30, 1993
Facts:
Benjamin Yu used to be the Assistant General Manager
of Jade Mountain, a partnership engaged in marble
quarrying and export business. The majority of the
founding partners sold their interests in said
partnership to Willy Co and Emmanuel Zapanta
without Yus knowledge. Said new partnership
continued operating under the same name and
continued the businesss operations. However, it
transferred its main office from Makati to
Mandaluyong. Said new partnership did not anymore
availed of the services of Yu. Thus, he filed a
complaint for illegal dismissal, recovery of unpaid
wages and damages.
Issue:
Whether the partnership which had hired petitioner Yu
as Assistant General Manager had been extinguished
and replaced by a new partnership composed of Willy
Co and Emmanuel Zapanta.
Ruling:
NO. The legal effect of the changes in the membership
of the partnership was the dissolution of the old
partnership which had hired petitioner in 1984 and the
emergence of a new firm composed of Willy Co and
Emmanuel Zapanta in 1987.
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
(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;
The legal personality of the expiring partnership
persists for the limited purpose of winding up and
closing of the affairs of the partnership. In the case at
bar, it is important to underscore the fact that the
business of the old partnership was simply continued
by the new partners, without the old partnership
undergoing the procedures relating to dissolution and
winding up of its business affairs. In other words, the
new partnership simply took over the business
enterprise owned by the preceding 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.
February 14, 1925
Facts:
On February 1, 1919, Serra, the owner of Palma
Central, entered into a contract of partnership with
Mota et al, owners of San Isidro Central, for the
construction of a railroad line. In said agreement, they
agreed that the expenses will be borne by both parties
equally although the expenses will be initially for the
account of Mota el al. Subsequently however, Serra
sold Palma Central to Whitaker and Conception, the
latter expressing awareness of above contract and
willingness to subrogate themselves into the
obligations therefor. Thereafter, conception and
Whitaker also bought from Mota et al of the railroad
line and they agreed that the partnership Palma and
San Isidro, formed between Mota and Serra, should be
dissolved upon the execution of the contract. Serra
being unable to pay his obligation in the contract of
partnership (1/2 of the expenses), Mota et al filed an
action for collection. Serra, as defense, contented that
at the termination of partnership between them, the
obligation therein has also been extinguished.
Issue:
Whether or not Serra is still liable to the partnership.
Ruling:
A partnership cannot be considered as extinguished
until all the obligations pertaining to it are fulfilled.
The dissolution of a firm does not relieve any of its
members from liability for existing obligations,
although it does save them from new obligations to
which they have not expressly or impliedly assented,
and any of them may be discharged from old
obligations by novation or other form of release. It is
often said that a partnership continues, even after
dissolution, for the purpose of winding up its
affairs. The dissolution of a partnership must not be
understood in the absolute and strict sense so that at
the termination of the object for which it was created
the partnership is extinguished, pending the winding
up of some incidents and obligations of the
partnership, but in such case, the partnership will be
reputed as existing until the juridical relations arising
out of the contract are dissolved.
Bearneza vs Dequilla
43 Phil 237
Facts:
In the year 1903, Balbino Dequilla and Perpetua
Bearneza formed a partnership for the purpose of
exploiting a fish pond. Perpetua obligating herself to
contribute to the payment of the expenses of the
business, which obligation she made good, and both
agreeing to divide the profits between themselves,
which they had been doing until the death of the said Ruling:
Perpetua in the year 1912.
It is well settled that when a member of a mercantile
The deceased left a will in one of the clauses of which partnership dies, the duty of liquidating its affairs
she appointed Domingo Bearneza, the herein plaintiff, devolves upon the surviving member, or members, of
as her heir to succeed to all her rights and interests in the firm, not upon the legal representatives of the
the fish pond in question. Demand having been made deceased partner.
upon Balbino Dequilla by Domingo Bearneza for the
delivery of the part of the fish pond belonging to his
decedent, Perpetua, and delivery having been refused, Di na makaya.
Domingo Bearneza brought this action to recover said
part of the fish pond and one-half of the profits Hahahahhahah
received by the defendant from the fish pond from the
year 1913 to 1919, as damages. Kamo nalang tiwas ples ug
The lower court rendered a decision in favor of the
plaintiff entitling him to one half of the fish pond.
may time.
Issue:

Whether the plaintiff has any right to maintain an

action for the recovery of one-half of the said fish
pond.

Ruling:

When, in the organization of a partnership, none of

the mercantile forms has been adopted and, therefore,
the provisions of the Code of Commerce are not
applicable to it, said partnership is dissolved by the
death of any of the members, as provided in
subsection 3 of article 1700 of the Civil Code, unless
there is a stipulation to the contrary, pursuant to the
provisions of article 1704 of the same Code.

After the dissolution of a partnership by the death of

one of its members, its legal status is that of a
partnership in liquidation, and the only rights and
interests transmitted to the legal successor or
successors of the said deceased are those resulting in
his favor from such liquidation.

Lota vs Tolentino
90 Phil 829

Facts:

Issue:

Whether or not, after the death of the defendant

Benigno Tolentino on November 22, 1939, plaintiff's
action for accounting and liquidation of the partnership
formed in l918 between Urbano Lota and Benigno
Tolentino, of which the latter was the industrial and
managing partner, may be continued against the heirs
of Benigno Tolentino.