Hidalgo, Carlos Emmanuel S

YU V NLRC

Facts:

Benjamin Yu was formerly the Assistant General Manager of the export business operated by a
registered partnership with the firm name of "Jade Mountain” with Lea Bendal and Rhodora Bendal as
general partners and Chin Shian Jeng, Chen Ho-Fu and Yu Chang, all citizens of the Republic of China
(Taiwan), as limited partners. He received only half of his monthly 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. Without the knowledge of Benjamin Yu, the general partners Lea Bendal
and Rhodora Bendal sold and transferred their interests in the partnership to private respondent Willy
Co and to one Emmanuel Zapanta and continued the firm name “Jade Mountain”. having learned of the
transfer of the firm's main office from Makati to Mandaluyong, petitioner Benjamin Yu reported to the
Mandaluyong office for work and there met private respondent Willy Co for the first time. Petitioner
was informed by Willy Co that the latter had bought the business from the original partners and that it
was for him to decide whether or not he was responsible for the obligations of the old partnership,
including petitioner's unpaid salaries. Petitioner was in fact not allowed to work anymore in the Jade
Mountain business enterprise. His unpaid salaries remained unpaid. Yu filed a complaint for illegal
dismissal and recovery of unpaid salaries 

Issue:

W/N Yu could assert his rights under his employment contract as against the new partnership.

Rule:

Under Article 1840, creditors of the old Jade Mountain are also creditors of the new Jade Mountain
which continued the business of the old one without liquidation of the partnership affairs. Indeed, a
creditor of the old Jade Mountain, like petitioner Benjamin Yu in respect of his claim for unpaid wages, is
entitled to priority vis-a-vis  any claim of any retired or previous partner insofar as such retired partner's
interest in the dissolved partnership is concerned. It is not necessary for the Court to determine under
which one or mare of the above six (6) paragraphs, the case at bar would fall, if only because the facts
on record are not detailed with sufficient precision to permit such determination. It is, however, clear to
the Court that under Article 1840 above, Benjamin 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 Jade
Mountain.
 United States v Clarin

Facts:

Tarug gave 172 pesos for the business, thereafter, Pedro Tarug, Eusebio Clarin, and Carlos de Guzman
partnered for a mango business and obtained P203 from the business, but did not comply with the
terms of the contract by delivering to Larin his half of the profits; neither did they render him any
account of the capital. Larin charged them with the crime of estafa, but the provincial fiscal filed an
information only against Eusebio Clarin in which he accused him of appropriating to himself not only the
P172 but also the share of the profits that belonged to Larin, amounting to P15.50.

Issue:

W/N the charge of estafa will prosper

Rule:

The P172 having been received by the partnership, the business commenced and profits accrued, the
action that lies with the partner who furnished the capital for the recovery of his money is not a criminal
action for estafa, but a civil one arising from the partnership contract for a liquidation of the partnership
and a levy on its assets if there should be any.

Estafa does not include money received for a partnership; otherwise the result would be that, if the
partnership, instead of obtaining profits, suffered losses, as it could not be held liable civilly for the share
of the capitalist partner who reserved the ownership of the money brought in by him, it would have to
answer to the charge of estafa, for which it would be sufficient to argue that the partnership had
received the money under obligation to return it.
 Vargas & Co. v Chan

Facts:

Vargas & Co. is a merchantile association, thereafter, an action was begun by Chan Hang Chiu against
the plaintiff in this case to recover a sum of money. The sheriff served the same on Vargas & Co. by
delivering to Jose Macapinlac the managing agent of said Vargas & Co. The court rendered judgment
against Vargas & Co. for the sum of 372.28. Thereafter execution was duly issued and the property of
Vargas & Co. levied on for the payment thereof.

Vargas Co. claims that it being a partnership, it is necessary, in bringing an action against it, to serve the
summons on all of the partners, delivering to each one of them personally a copy thereof; and that the
summons in this case having been served on the managing agent of the company only, the service was
of no effect as against the company and the members thereof and the judgment entered by virtue of
such a service was void.

Issue:

WN summons should be served to all partners

Rule:

No, it has been the universal practice in the Philippine Islands since American occupation, and was the
practice prior to that time, to treat companies of the class to which the plaintiff belongs as legal or
juridicial entities and to permit them to sue and be sued in the name of the company, the summons
being served solely on the managing agent or other official of the company specified by the section of
the Code of Civil Procedure referred to. The plaintiff brings this action in the company name and not in
the name of the members of the firm. Actions against companies of the class to which plaintiff belongs
are brought, according to the uninterrupted practice, against such companies in their company names
and not against the individual partners constituting the firm.