PHILIPPINE VETERANS BANK V. COURT OF APPEALS, 317 SCRA 510 (1999) FACTS:
In 1983, Phil Veterans Bank (PVB) was placed under receivership by BSP by virtue of a resolution issued by the Monetary Board. Petitioner bank was subsequently placed under liquidation in 1985. 1.
Consequently, the bank’s employees including private respondent
Molina were terminated from work and given their respective separation pay and other benefits. 2.
To assist in the liquidation, Molina and other former employees of PVB were rehired. 3.
Molina filed an action against petitioner bank’s liquidation team
arguing that he was entitled an increase in his salary by virtue of Work Order 1 (P17 increase in the daily wage in 1990) and Work Order 2 (P12 increase in 1991) 4.
Petitioner bank argued that when it was placed under liquidation, it lost its juridical personality, as such it could no longer enter into contracts or transact business, since all its assets and liabilities
were turned over to the Central Bank. Since Molina’s complaint
pertained to acts committed during the liquidation, the substitution of PVB as party-respondent was erroneous
WON the bank is liable to pay Molina’s claims
Yes. When a bank is declared insolvent and placed under receivership, the Monetary Board determines whether to proceed with the liquidation or reorganization of the financially distressed bank. A receiver takes control and possession of the assets of the bank for the benefit of its creditors and concurrently represents the bank. On the other hand, a liquidator assumes the role of the receiver upon the determination by the Monetary Board that the bank can no longer
resume business. The liquidator’s task is to dispose all of the assets of
the bank and effect partial payments of its obligations in accordance with their legal priority. In both receivership and liquidation proceedings, the bank retains its juridical personality despite the closure of its business; in fact, the bank may be even sued. Its corporate existence is assumed by the receiver or liquidator. The latter, however,
acts not only for the benefit of the bank, but for the bank’s creditors as
well. CAB: PVB was initially closed and put under receivership and liquidation. Upon its rehabilitation, petitioner assumed the rights and obligations of
the receiver and liquidator. This includes Molina’s claim for unpaid
wages. It must be borne in mind that all the acts of the receiver and
liquidator pertain to the petitioner, having assumed petitioner’s
corporate existence. Petitioner cannot disclaim liability by arguing that the non-
payment of Molina’s wages was committed by the liquidators
during the liquidation period.