YU v.

NLRC

- Ben Yu, former Asst. GM of the marble quarrying and export business, operated by a
registered partnership Jade Mountain Products Co. Ltd
- organized June 28, 1984 Bendals as general partners and 3 limited partners citizens of Taiwan
- hired by virtue of Partnership Resol in 1985, to receive 4K monthly allowance but received only
half
- promised to be paid when firm secured addtl operating funds from abroad
- managed operations and finances, over-all supervision of the workers at marble quarry in
Bulacan, preparation of paper re: exportation of products
- 1988, w/o knowledge, partners, except for 2 limited partners, sold and transferred interest to
Willy Co and Emmanuel Zapanta (82%)
- same name, changed office from Makati to Mandaluyong
- having learned, reported to Mandaluyong, first time to meet Co
- up to him to decide whether or not responsible for obligations of old partnership including Yu’s
salaries
- not allowed to work, unpaid salaries remained unpaid
- complaint LA, illegal dismissal, recovery of unpaid salary plus damages (Nov 1984-Oct 1988)
- denied by Co of being hired by new partnership
- LA in favor, NLRC dismissed
NLRC: no illegal dismissal as no law requiring new partnership to absorb the employees of
old P; claim for unpaid wages – assert to original partners though impleaded, not been served
w/ summons before LA

ISSUE: w/n Yu can assert his claim from the old partnership to the new one

w/n new partnership liable to unpaid salary of Yu

HELD: Yes.
- old P did not undertake the process of dissolution and winding up, not terminated
- new P just continued the business, simply took over the business
- not only retiring/withdrawing partners liable for the debts of the preceding partnership – 3rd
party creditor
- Art. 1840 – creditors of old Jade Mountain are also creditors of the new which continued
the business of old P w/o liquidation of the P affairs
- 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

NO UNLAWFUL TERMINATION – new P entitled to appoint new Asst. GM

- Will be redundant as Co takes place, the principal new owner himself
- BUT entitled to separation pay at the rate of one month’s pay for each year of service
that he had rendered to the old partnership, a fraction of at least six (6) months being
considered as a whole year.

Treatment of Yu of no notification and refusal to honor his claim for unpaid salary –
arbitrary and in bad faith
- Calls for indemnity for moral damages
- Old P benefited from his services
- Work constituted value-added as he ran the whole marble quarrying and exportation