Case Digest (G.R. No. 82763-64)
Facts:
Development Bank of the Philippines v. National Labor Relations Commission, G.R. Nos. 82763-64, March 19, 1990, the Supreme Court En Banc, Melencio-Herrera, J., writing for the Court.The respondents below were former employees of Lirag Textile Mills, Inc. (LIRAG) represented by the bargaining agent Labor Alliance for National Development (LAND); the petitioner was Development Bank of the Philippines (DBP) as mortgagee of LIRAG's remaining assets. In 1981–1982 LIRAG laid off about 180 employees and ceased operations. Complaints for illegal dismissal and monetary claims were filed before the NLRC (consolidated as NLRC Cases Nos. NCR-3-2581-82 and 2-2090-82). The Labor Arbiter rendered a decision on 30 July 1982 ordering payments to the complainants, which the NLRC (Third Division) affirmed on 28 March 1983; that judgment became final and executory.
A writ of execution issued on 15 April 1983, but on the same day DBP extrajudicially foreclosed its mortgage on LIRAG property and, as sole bidder, acquired the foreclosed properties for P31,346,462.90 (the bid credited against LIRAG’s debt). Because the foreclosure left the writ of execution unsatisfied, LAND moved for a writ of garnishment on DBP’s foreclosure proceeds. After impleading DBP (Labor Arbiter Sevilla ordered impleadment on 30 May 1985), the Labor Arbiter granted the writ of garnishment and on 12 February 1986 directed DBP to remit P6,292,380.00 from the foreclosure proceeds to satisfy the NLRC judgment. DBP filed reconsideration which was denied, and appealed to the NLRC; on 25 March 1988 the NLRC (First Division) affirmed the order and dismissed DBP’s appeal.
In the interim, by Proclamation Nos. 50 and 50-A, the Asset Privatization Trust (APT) succeeded to DBP’s foreclosed LIRAG assets on 3 February 1987 and was later deemed impleaded in the petition. LAND and APT executed a partial compromise (P750,000 ex gratia) in December 1987, which LAND’s national officers later opposed...(Subscriber-Only)
Issues:
- Did the NLRC gravely abuse its discretion in ordering DBP to remit P6,292,380.00 from the proceeds of the foreclosure sale to satisfy the NLRC judgment (i.e., was the writ of garnishment properly issued against foreclosure proceeds)?
- Does the amended Article 110 of the Labor Code (by Republic Act No. 6715) and the corresponding implementing rule permit enforcement of workers’ first preference over other creditors, including mortgagees, absent a formal declaration of bankruptcy or judicial liquidation; and if so, may such amendment be app...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
- (Subscriber-Only)