BENJAMIN YU VS.

NATIONAL LABOR RELATIONS COMMISSION & JADE

MOUNTAIN PRODUCTS COMPANY LIMITED, WILLY CO, RHODORA D. BENDAL,
LEA BENDAL, CHIU SHIAN JENG & CHEN HO-FU
GR No. L – 24193, June 28, 1968

FACTS: Lea Bendal and Rhodora Bendal are general partners and Jeng, Chen Ho-Fu and Yu
Chang as limited partners. They operated a registered partnership in the name of Jade Mountain
engaged in the business of quarrying and exporting marble. 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, all the said partners 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. The Labor Arbiter approved his claim. However, the NLRC reversed
the decision holding that a new partnership was indeed formed and that due to the new
partnership, Jade Mountain was not obliged to retain Yu, and that the latter should seek payment
from the old partners.

ISSUE: Was the old partnership dissolved? May Yu recover his unpaid salary from the new
partners and be reinstated in the new partnership?

RULING: No, the old partnership was not dissolved. The debt Jade Mountain owed to Yu was
still unpaid. Thus, the legal personality of the old partnership is not terminated. The business of
the old partnership was simply continued by the new partners, without the old partnership
undergoing procedures relating to the dissolution and winding up of its business affairs. When it
comes to the salary, Yu can still recover his unpaid salary from the new partners but he cannot be
reinstated in the new partnership. As a result, Yu may claim it to the new Jade Mountain and also
to the old creditors