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VOL. 360, JUNE 28, 2001

33

Philippine Veterans Bank Employees Union-­N.U.B.E. vs.
Vega
*

**

G.R. No. 105364. June 28, 2001.

PHILIPPINE VETERANS BANK EMPLOYEES UNION-­
N.U.B.E. and PERFECTO V. FERNANDEZ, petitioners, vs.
HONORABLE BENJAMIN VEGA, Presiding Judge of
Branch 39 of the REGIONAL TRIAL COURT of Manila,
the CENTRAL BANK OF THE PHILIPPINES and THE
LIQUIDATOR OF THE PHILIPPINE VETERANS BANK,
respondents.
Banks and Banking;; Liquidation;; Rehabilitation;; Philippine
Veterans Bank;; A liquidation court may not continue with the
liquidation pro-­
______________
*

This case was transferred to the ponente pursuant to the resolution in AM

No. 00-­9-­03-­SC Re: Creation of Special Committee on Case Backlog dated
February 27, 2001.
**

FIRST DIV ISION.

34

34

SUPREME COURT REPORTS ANNOTATED

Philippine Veterans Bank Employees Union-­N.U.B.E. vs. Vega
ceedings of the Philippine Veterans Bank after Congress has
mandated its rehabilitation and reopening.—Republic Act No. 7169
entitled “An Act To Rehabilitate The Philippine Veterans Bank
http://www.central.com.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False

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; Same. 1992. It is the process of reducing assets to cash.; Same. 35 http://www.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 2/10 . As stated above. 1992 with the respondent judge praying that the liquidation proceedings be immediately terminated in view of the passage of R. in a Resolution dated June 8. 1992. It is the winding up of a corporation so that assets are distributed to those entitled to receive them. Pursuant to said R. 7169. Clearly. the Court.A. 1992 and which was published in the Official Gazette on February 24. 1992. Same. 348 which approved the Rehabilitation Plan submitted by the Rehabilitation Committee. discharging liabilities and dividing surplus or loss. No. On June 3. Meanwhile.com. No. Consequently. 1992.” which was signed into law by President Corazon C. And For Other Purposes. provides in part for the reopening of the Philippine Veterans Bank together with all its branches within the period of three (3) years from the date of the reopening of the head office. respondent judge has been stripped of the authority to issue orders involving acts of liquidation. Providing The Mechanisms Therefor. the Monetary Board issued a Certificate of Authority allowing PVB to reopen. the Monetary Board issued Monetary Board Resolution No.” Explained.7/7/2014 CentralBooks:Reader Created Under Republic Act No. in corporation law. 1992. 7169. Aquino on January 2.; “Liquidation” and “Rehabilitation. PVB filed a Motion to Terminate Liquidation of Philippine Veterans Bank dated March 13. On August 3. the Philippine Veterans Bank opened its doors to the public and started regular banking operations.; Words and Phrases. 3518. On the opposite end of the spectrum is rehabilitation which connotes a reopening or reorganization. connotes a winding up or settling with creditors and debtors.central.A. 7169.; Same.—Liquidation. the Rehabilitation Committee submitted the proposed Rehabilitation Plan of the PVB to the Monetary Board for its approval. The law likewise provides for the creation of a rehabilitation committee in order to facilitate the implementation of the provisions of the same. the liquidator filed A Motion for the Termination of the Liquidation Proceedings of the Philippine Veterans Bank with the respondent judge. Rehabilitation contemplates a continuance of corporate life and activities in an effort to restore and reinstate the corporation to its former position of successful operation and solvency. issued a temporary restraining order in the instant case restraining respondent judge from further proceeding with the liquidation of PVB. On April 10. as well as the subsequent developments has rendered the liquidation court functus officio. Thereafter. the enactment of Republic Act No.

; Same.E.—Assuming for the sake of argument that publication is necessary for the effectivity of R.—This Act shall take effect upon its approval. 10.U.—While as a rule. The facts are stated in the opinion of the Court. Prohibition. such that both cannot be undertaken at the same time. Augusto del Rosario for and in his own behalf.A. as indicated in the clause “unless otherwise provided. Same.; Effectivity of Statutes. vs.; Assuming that publication is necessary for the effectivity of Republic Act No. Carpio.; Republic Act No. Section 10 of R.; Same. then it became legally effective on February 24. 360.; Same. such that both cannot be undertaken at the same time. said law became effective on said date. 7169. No. 7169 was signed into law by the President on 2 January 1992 and became effective on said date.” In the case at bar. 1992. Hence. laws take effect after fifteen (15) days following the completion of their publication in the Official Gazette or in a newspaper of general circulation in the Philippines. http://www. 1992. and not on March 10. It is undisputed that R. Aquino on January 2. Effectivity. the legislature has the authority to provide for exceptions. Statutes. Fernandez for petitioner.com. 7169.; Same.—It is crystal clear that the concept of liquidation is diametrically opposed or contrary to the concept of rehabilitation. 7169.B. the date when the same was published in the Official Gazette.; The concept of liquidation is diametrically opposed or contrary to the concept of rehabilitation.central.A.; Republic Act No. 1992. Villaraza & Cruz for petitioner-­in-­ Intervention.7/7/2014 CentralBooks:Reader VOL. as erroneously claimed by respondents Central Bank and Liquidator. 7169 provides: Sec. Therefore. said law becomes effective on the date of its approval. SPECIAL CIVIL ACTION in the Supreme Court.A. No.; Same. Perfecto V. To allow the liquidation proceedings to continue would seriously hinder the rehabilitation of the subject bank. it is clear that the legislature intended to make the law effective immediately upon its approval. 2001 35 Philippine Veterans Bank Employees Union-­N. the date when the same was published in the Official Gazette. then it became legally effective on 24 February 1992.; Where the statute provides for effectivity upon its approval.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 3/10 . JUNE 28. 7169 was signed into law by President Corazon C. Vega Same. No.

for brevity) filed with Branch 39 of the Regional Trial Court of Manila a Petition for Assistance in the Liquidation of the Philippine Veterans Bank. SP-­32311. J. On January 2. Thereafter. many remain unpaid.central. filed claims for accrued and unpaid employee wages and 1 benefits with said court in SP-­32311. the Congress enacted Republic Act No.: May a liquidation court continue with liquidation proceedings of the Philippine Veterans Bank (PVB) when Congress had mandated its rehabilitation and reopening? This is the sole issue raised in the instant Petition for Prohibition with Petition for Preliminary Injunction and application for Ex Parte Temporary Restraining Order.E. Salmani for respondents.B. http://www. due to the 2 piecemeal hearings on the benefits. However. partial payment of the sums due to the employees were made..B. herein petitioner. 1991.U. 1992. 2 Ibid. for intervenor VOPSDA. Vega KAPUNAN. Jr. the Philippine Veterans Bank Employees Union-­N. On March 8.com. Tavera.E. The antecedent facts of the case are as follows: Sometime in 1985. 7169 providing for the rehabilitation of the Philippine 4 Veterans Bank. 5. Fernandez. p. Emma G.7/7/2014 CentralBooks:Reader Bonifacio A. petitioners filed with the labor tribunals their residual claims for benefits and for reinstatement upon 5 reopening of the bank. 3 Id. petitioners moved to disqualify the respondent judge from hearing the above case on grounds of 3 bias and hostility towards petitioners. represented by petitioner Perfecto V.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 4/10 . the Central Bank of the Philippines (Central Bank. 36 36 SUPREME COURT REPORTS ANNOTATED Philippine Veterans Bank Employees Union-­N. Thereafter.U. vs. After lengthy proceedings. the same docketed as Case No. ________________ 1 Rollo.

7169.central. 1992. petitioners.A. petitioners learned that respondents were set to order the payment and release of employee benefits upon motion of another lawyer. the Central Bank 6issued a certificate of authority allowing the PVB to reopen. 1992. dated June 8. JUNE 28. while petitioners’ claims have been frozen to their prejudice. NCR-­02 and NCR-­02-­A.. VOP Security & Detective Agency (VOPSDA) and its 162 security guards filed a Motion for Intervention with prayer that they be excluded from the operation of the Temporary Restraining Order issued by the Court. In a Resolution. in an Order dated June 5.B. in SP-­No. 2001 37 Philippine Veterans Bank Employees Union-­N. the instant petition. On June 22. at 6.; and. 1992.com. NCR-­01 and NCR-­01-­Ad and Wage Orders No.R. dated July 6. No. respondent judge continued with the liquidation proceedings of the bank. Moreover. the Supreme Court resolved to issue a Temporary Restraining Order enjoining the trial court from further proceeding with the case. and no longer had the authority to continue with liquidation proceedings. Vega Sometime in May 1992.U. On August 18. They alleged that they had filed a motion before Branch 39 of the RTC of Manila. that said court. 6727. 1992. 360. praying that said court order PVB to pay their backwages and salary differentials by authority of R. 37 VOL. on the grounds that the movants have no legal http://www. Wage Orders No. Despite the legislative mandate for rehabilitation and reopening of PVB.A. Said intervenors likewise manifested that there was an error in the computation of the monetary benefits due them. Petitioners argue that with the passage of R. pursuant to the Resolution of this Court.E.7/7/2014 CentralBooks:Reader 4 Id.O. filed their Comment opposing the Motion for Leave to File Intervention and for exclusion from the operation of the T. 1992. 32311. Hence. approved therein movants’ case and directed the bank liquidator or PVB itself to pay the backwages and differentials in accordance with the computation incorporated in the order. 5 Id.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 5/10 . the liquidation court became functus officio. vs.

is without legal basis and would render moot the relief sought in the petition.; _______________ 6 Id.com.E. Providing The Mechanisms Therefor.A.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 6/10 .A. 7169 entitled “An Act To Rehabilitate The Philippine Veterans Bank Created Under Republic Act No.7/7/2014 CentralBooks:Reader interest in the subject matter of the pending action. No. PVB further alleges that respondent judge clearly acted in excess of or without jurisdiction when he issued the questioned orders. Vega and that the motion to exclude the movants from the T. No. PVB filed a Motion to Terminate Liquidation of Philippine Veterans Bank dated March 13.central. 1992. We find for the petitioners. 7169. 1992 with the respondent judge praying that the liquidation proceedings be immediately terminated in view of the passage of R. Pursuant to said R.” which was signed into law by President Corazon C. Republic Act No. http://www. 38 38 SUPREME COURT REPORTS ANNOTATED Philippine Veterans Bank Employees Union-­N. provides in part for the reopening of the Philippine Veterans Bank together with all its branches within the period of three7 (3) years from the date of the reopening of the head office.R. vs. And For Other Purposes. 3518. the PVB filed a Petition-­in-­ Intervention praying for the issuance of the writs of certiorari and prohibition under Rule 65 of the Rules of Court in connection with the issuance by respondent judge of several orders involving acts of liquidation of PVB even after the effectivity of R. On September 3.B.; that allowing intervention would only cause delay in the proceedings. the Rehabilitation Committee submitted the proposed Rehabilitation Plan of the PVB to the Monetary Board for its approval.A. The law likewise provides for the creation of a rehabilitation committee in order to 8 facilitate the implementation of the provisions of the same. Meanwhile. Aquino on January 2.U. 1992. No. 7169.O. 1992 and which was published in the Official Gazette on February 24.

ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 7/10 . 7169.com. the Philippine Veterans Bank opened its doors to the public and started regular banking operations. ibid. Consequently. the Monetary Board issued a Certificate of Authority allowing PVB to reopen. On April 10. Liquidation. in corporation law. issued a temporary restraining order in the instant case restraining respondent judge from further proceeding with the liquidation of PVB. Vega On June 3. 2001 39 Philippine Veterans Bank Employees Union-­N. 7. ____________ 7 Sec. As stated above. Clearly. It is the process of reducing assets to cash. 1992.7/7/2014 CentralBooks:Reader 7169. Official Gazette. JUNE 28. On the opposite end of the spectrum is rehabilitation which connotes a reopening or reorganization. 39 VOL. discharging liabilities and dividing surplus or loss. p.E. On August 3. vs. the enactment of Republic Act No. 5. 360. 963. the liquidator filed A Motion for the Termination of the Liquidation Proceedings of the Philippine Veterans Bank with the respondent judge. 1992. respondent judge has been stripped of the authority to issue orders involving acts of liquidation. connotes a winding up or settling with creditors and 9 debtors. Rehabilitation contemplates a continuance of corporate life and activities in an effort to restore and reinstate the corporation to its former position of successful operation and http://www. 1992. 348 which approved the Rehabilitation Plan submitted by the Rehabilitation Committee. the Monetary Board issued Monetary Board Resolution No.central.U.B. 7169. 1992. Republic Act No. It is the winding up of a corporation so that assets are distributed to those entitled to receive them. 1992. in a Resolution dated June 8. as well as the subsequent developments has rendered the liquidation court functus officio. Thereafter. 8 Sec. the Court. February 24.

It is undisputed that R. Superior Court in and for Santa Clara County. While as a rule. Section 10 of R. To allow the liquidation proceedings to continue would seriously hinder the rehabilitation of the subject bank.B. Anent the claim of respondents Central Bank and Liquidator of PVB that R. 1992 or fifteen (15) days after its publication in the Official Gazette. No. among others. it is clear that the legislature intended to make the law effective immediately upon its approval. 288.central. the legislature has the authority to provide for exceptions. the Court is of the view that both contentions are bereft of merit. as indicated in the clause “unless otherwise provided. No. 7169 became effective only on March 10.A. Therefore. Hence. 1992.—This Act shall take effect upon its approval. 7169 provides: Sec. vs. 10 Ruby Industrial Corporation vs. et al. laws take effect after fifteen (15) days following the completion of their publication in the Official Gazette or in a newspaper of general circulation in the Philippines.com. 43 P. 7169 was signed into law by President Corazon C. such that both cannot be undertaken at the same time. No. 40 40 SUPREME COURT REPORTS ANNOTATED Philippine Veterans Bank Employees Union-­N. Vega ity of said law is conditioned on the approval of a rehabilitation plan by the Monetary Board. said law became effective on said date. 10. Court of Appeals.; and. Effectivity. It is crystal clear that the concept of liquidation is diametrically opposed or contrary to the concept of rehabilitation.E. Aquino on January 2.7/7/2014 CentralBooks:Reader 10 solvency.U. http://www.2d 286.2d 632. 284 SCRA 445 (1998). 2 Cal.A.A. the contention of intervenors VOP Security.” In the case at bar. that the effectiv-­ _____________ 9 Wilson vs.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 8/10 .

without its previous publica-­ 41 VOL. Pardo and Ynares-­Santiago. Chairman). Petition granted. 2001 41 People vs. Publication is indispensable in every case.. Pardua tion. 146 SCRA 446 [1986]) Whenever a distressed corporation asks SEC for rehabilitation and suspension of payments. SP-­32311. 360. WHEREFORE. which cannot in any event be omitted.—The clause “unless it is otherwise provided” refers to the date of effectivity and not to the requirement of publication itself.central. in view of the foregoing. Tuvera. and not on March 10. Labor http://www. Jr. SO ORDERED. as erroneously claimed by respondents Central Bank and Liquidator. (C. (Tañada vs. JJ. JUNE 28. concur. Puno.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 9/10 . No. 229 SCRA 223 [1994]) The Department of Labor and Employment. 7169.J. (Bank of the Philippine Islands vs. Notes. or on any other date. It is not correct to say that under the disputed clause publication may be dispensed with altogether. Respondent Judge is hereby PERMANENTLY ENJOINED from further proceeding with Civil Case No.A. Davide. then it became legally effective on February 24. the instant petition is hereby GIVEN DUE COURSE and GRANTED.. SP-­32311. The reason is that such omission would offend due process insofar as it would deny the public knowledge of the laws that are supposed to govern it. 1992. but the legislature may in its discretion provide that the usual fifteen-­day period be shortened or extended. preferred creditors may no longer assert such preference but shall stand on equal footing with other creditors.7/7/2014 CentralBooks:Reader Assuming for the sake of argument that publication is necessary for the effectivity of R. the date when the same was published in the Official Gazette. This clause does not mean that the legislature may make the law effective immediately upon approval.com. 1992. Respondent Judge enjoined from further proceeding with Civil Case No. Court of Appeals.

vs.  Inc.7/7/2014 CentralBooks:Reader Arbiters and the National Labor Relations Commission may not legally act on the labor claims of employees after the Securities and Exchange Commission has issued an order suspending all actions against a company under rehabilitation by a management committee created by the SEC.  All  rights  reserved. (Rubberworld [Phils.ph/sfsreader/session/00000147101057d17012c154000a0082004500cc/t/?o=False 10/10 . 336 SCRA 433 [2000]) ——o0o—— ©  Copyright  2014  Central  Book  Supply.central.].com. Inc. http://www. National Labor Relations Commission.