Yu v.

NLRC
G.R. No. 97212 | June 30, 1993

Issue:
WON The partnetship was terminated. NO.
WON Yu may still claim for recovery of unpaid salaries. YES.

Facts:
Lea Bendal and Rhodora Bendal (as general partners), and Jeng, Chen Ho-Fu and Yu Chang as limited partners,
operated a registered partnership in the name of Jade Mountain engaged in the business of quarrying and
exporting marble.

Benjamin Yu was the Assistant General Manager who had a monthly salary of P4, 000.00 – with only half of his
salary being paid so far. After some time, Bendal et.al. sold their shares to Co and Zapanta.

Unfortunately, Yu remained to be unpaid and was not retained by Co and Zapanta. Thus, he approached the
two to be reinstated and to be paid salary. However, the two averred that they were not obliged to either
reinstate nor pay Yu since a new partnership was formed. Thus, Yu filed for illegal dismissal and recovery of
unpaid salaries.

Held:
No, the old partnership was not dissolved. The Court held that Art. 1828 provides that a partnership may be
dissolved by a change in partners in relation to the rules of Art. 1830. However, Art. 1828 provides that the legal
personality of the expiring partnership persists for the limited purpose of winding up and closing of the affairs
of the partnership – such as the payment of its debts, liquidation, and distribution of the new assets, and the
assets being reassembled to open a new business enterprise. In this case, the debt Jade Mountain owed to Yu
was still unpaid.

Yes, Yu may still claim for Unpaid Wages

What is important for present purposes is that, under the above described situation, not only the retiring partners
(Rhodora Bendal, et al.) but also  the new partnership itself which continued the business  of the old, dissolved, one, are
liable for the debts of the preceding partnership

Art. 1840. In the following cases creditors of the dissolved partnership are also  creditors of the person or partnership
continuing the business:
(1) When any new partner is admitted into an existing partnership, or when any partner retires and assigns (or
the representative of the deceased partner assigns) his rights in partnership property to two or more of the
partners, or to one or more of the partners and one or more third persons, if the business is continued without
liquidation of the partnership affairs;
Under Art. 1840, the Creditors of the Old Jade Mountain, are also creditors of the New Jade Mountain, which
continued the old business without liquidation of the partnership affairs. Benjamin YuR, as a creditor of the old
Jade Mountain, with respect of his claim for unpaid wages is entitled to priority regarding any claim from both
the old and the new partners