Benjamin Yu v. National Labor Relations Commission & Jade Mountain ProductsCo. Ltd.

, Willy Co, Rhodora Bendal, Lea Bendal, Chiu Shian Jeng and Chen Ho-Fu G.R. No. 97212 June 30, 1993 Feliciano, J. Facts: Yu ex-Assistant General Manager of the marble quarrying and export business operatedby a registered partnership called Jade Mountain Products Co. Ltd. partnership was originally organized with Bendals as general partners and Chin Shian Jeng,Chen Ho-Fu and Yu Chang as limited partners; partnership business consisted of exploitinga marble deposit in Bulacan Yu, as Assistant General Manager, had a monthly salary of 4000. Yu, however, actuallyr e c e i v e d o n l y h a l f o f h i s s t i p u l a t e d s a l a r y , s i n c e h e h a d a c c e p t e d t h e p r o m i s e o f t h e partners that the balance would be paid when the firm shall have secured additionaloperating funds from abroad. Yu actually managed the operations and finances of the business; he had overall supervision of the workers at the marble quarry in Bulacan andtook charge of the preparation of papers relating to the exportation of the firms products. general partners Bendals sold and transferred their interests in the partnership to Co andEmmanuel Zapanta partnership was constituted solely by Co and Zapanta; it continued to use the old firmname of Jade Mountain Yu dismissed by the new partners Issues: 1. WON the p a r t n e r s h i p w h i c h h a d h i r e d Y u a s A s s t . G e n . M a n a g e r h a d b e e n extinguishe d and replaced by a new partnership composed of Co and Zapanta; 2. if indeed anew partnership had come into existence, WON Yu could nonetheless assert his rights underhis employment contract with the old partnership as against the new partnership Held: 1. Yes. Changes in the membership of the partnership resulted in the dissolution of the old partnership which had hired Yu and the emergence of a new partnership composedof Co and Zapanta. Legal bases: Art. 1828. The dissolution of a partnership is the change in t h e r e l a t i o n o f t h e partners caused by any partner ceasing to be a s s o c i a t e d i n t h e c a r r y i n g o n a s distinguished from the winding up of the business. Art. 1830. Dissolution is caused:(1) without violation of the agreement between the partners;(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 donot permit a dissolution under any other provision of this article, by the express will of anypartner at any time; No winding up of affairs in this case as contemplated i n A r t . 1 8 2 9 : o n d i s s o l u t i o n t h e partnership is not terminated, but continues until the winding up of partnership affairs iscompleted the new partnership simply took over the business enterprise own e d b y t h e o l d partnership, and continued using the old name of Jade Mou n t a i n P r o d u c t s C o m p a n y Limited, without winding up the business affairs of the old partnership, paying off its debts,liquidating and distributing its net assets, and then reassembling the said assets or mostof them and opening a new business enterprise 2. Yes. the new partnership is liable for the debts of the old partnership Legal basis: Art. 1840 (see codal) Yu is entitled to enforce his claim for unpaid salaries, as well as other claims relating to hisemployment with the previous partnership, against the new partnership But Yu is not entitled to reinstatement. Reason: new partnership was entitled to appointand hire a new gen. or asst. gen. manager to run the affairs of the business enterprisetake over. An asst. gen. manager belongs to the most senior ranks of management and anew partnership is entitled to appoint a top manager of its own choice and confidence. Thenon-retention of Yu did not constitute unlawful termination. The new partnership had itsown new General Manager, Co, the principal new owner himself. Yus old position thus became superfluous or redundant. Yu is entitled to separation pay at the rate of one months pay for each year of service thathe had rendered to the old partnership, a fraction of at least 6 months being considered asa whole year.

AGENCY & PARTNERSHIP | B2015CASES ROJAS V. MAGLANA December 10, 1990Paras, C.J.Raeses, Roberto Miguel SUMMARY: Maglana and Rojas executed their articles of co-partnershipcalled EDE. It had an indefinite term, was registered with the SEC, and had aTimer License. Later, Agustin Pahamitang became an industrial partner andanother articles of co-partnership was executed. The term of the second co-partnership was fixed to 30 years. After some time, the three executed aconditional sale of interest in the partnership where Magalana and Rojas shallpurchase the interest, share, and participation of Pahamotang. It was agreedthat, after payment of such including the loan secured by Pahamotang, thetwo shall become owners of all equipment contributed by Pahamotang. Thetwo continued the partnership without any written agreement orreconstitution of the articles of partnership. Subsequently, Rojas entered intoa contarct with CMS Estate. Maglana reminded him of his contribution to thecapital investments and his duties to the

partnership. Rojas said he would not be able to comply. Maglana told Rojas that the latter is only entitled to 20% of the profits, which was the sharing from 1957-1959 without dispute. Rojastook funds from the partnership which was more than his share. Maglananotified Rojas that he had dissolved the partnership. Rojas filed an actionagainst Magallana. The CFI ruled that the partnership of the two afterPahamotang left was one de facto and at will. The SC said that it was not,considering that the first partnership was never dissolved. With regard to theissue of unilateral dissolution, the SC held that Maglana had the power to doso. DOCTRINE: Under Article 1830, par. 2 of the Civil Code, even if there is aspecified term, one partner can cause its dissolution by expresslywithdrawing even before the expiration of the period, with or without justifiable cause. Of course, if the cause is not justified or no cause was given,the withdrawing partner is liable for damages but in no case can he becompelled to remain in the firm. With his withdrawal, the number of members is decreased, hence, the dissolution. And in whatever way he mayview the situation, the conclusion is inevitable that Rojas and Maglana shallbe guided in the liquidation of the partnership by the provisions of its dulyregistered Articles of Co-Partnership; that is, all profits and losses of thepartnership shall be divided "share and share alike" between the partners. FACTS: Maglana and Rojas executed their Articles of Co-partnership called Eastcoast Development Enterpises (EDE) which had an indefinite term of existence and was registered with the SEC and had a Timber License. One of the EDEs purposes was to apply or secure timber and/or private forest lands andto operate, develop and promote such forests rights and concessions. Maglanashall manage the business affairs while Rojas shall be the loggingsuperintendent. All profits and losses shall be divided share and share alikebetween them.Later on, the two availed the services of Agustin Pahamotang as industrialpartner and executed another articles of co-partnership with the latter. Thepurpose of this second partnership was to hold and secure renewal of timberlicense and the term of which was fixed to 30 years.Still later on, the three executed a conditional sale of interest in the partnershipwherein Maglana and Rojas shall purchase the interest, share and participationin the partnership of Pahamotang. It was also agreed that after payment of suchincluding amount of loan secured by Pahamotang in favor of the partnership,the two shall become owners of all equipment contributed by Pahamotang.After this, the two continued the partnership without any written agreement orreconstitution of their articles of partnership.Subsequently, Rojas entered into a management contract with CMS Estate Inc.Maglana wrote him regarding his contribution to the capital investments aswell as his duties as logging superintendent. Rojas replied that he will not beable to comply with both. Maglana then told Rojas that the latters share will just be 20% of the net profits. Such was the sharing from 1957 to 1959 without complaint or dispute. Rojas took funds from the partnership more than hiscontribution. Maglana notified Rojas that he dissolved the partnership. Rojasfiled an action against Maglana for the recovery of properties and accounting of the partnership and damages. CFI RULING: 1. The partnership of Maglana and Rojas after Pahamotang retired is oneof de facto and at will; the sharing of profits and losses is on the basisof actual contributions;2.

there is no evidence these properties were acquired by thepartnership funds thus it should not belong to it;3. neither is entitled to damages; the letter of Maglana in effect dissolvedthe partnership;4. sale of forest concession is valid and binding and should be considered as Maglanas contribution; 5. Rojas must pay or turn over to the partnership the profits he receivedfrom CMS and pay his personal account to the partnership