G.R. No. 105364 - Philippine Veterans Bank Employees Union vs. Vega

In 1985, the Central Bank of the Philippines filed a Petition for Assistance in the Liquidation of the Philippine Veterans Bank (PVB) with the Regional Trial Court of Manila, docketed as Case No. SP-32311.
Subsequently, the Philippine Veterans Bank Employees Union-N.U.B.E., represented by Perfecto V. Fernandez, filed claims for accrued and unpaid employee wages and benefits before the same court.
Partial payment of employee claims was made after prolonged proceedings, though many benefits remained unpaid.

On March 8, 1991, petitioners moved to disqualify the respondent judge from presiding over the case on grounds of bias and hostility.
The legislative intervention came on January 2, 1992, when Congress enacted Republic Act No. 7169, mandating the rehabilitation and reopening of PVB.
Following the enactment, petitioners filed additional claims with labor tribunals, seeking both the payment of benefits and reinstatement upon the bank’s reopening.

In spite of RA No. 7169’s clear directive for rehabilitation, the respondent judge continued the liquidation proceedings of PVB.
Petitioners were alarmed to discover that respondents were poised to issue orders for the payment and release of employee benefits, thereby freezing and prejudicing petitioners’ residual claims.
This led to the filing of a Petition for Prohibition, along with a Petition for Preliminary Injunction and an application for an Ex Parte Temporary Restraining Order (TRO).

On June 8, 1992, the Supreme Court issued a TRO enjoining the trial court from further engaging in the liquidation process of PVB.
On June 22, 1992, VOP Security & Detective Agency along with its 162 security guards filed a Motion for Intervention, arguing that they had pending wage claims based on relevant wage orders and asserting errors in the computation of benefits.
Petitioners opposed the motion for intervention, contending that the intervenors had no legal interest in the subject matter and that their participation would only lead to delays.

On September 3, 1992, PVB itself petitioned for intervention, asserting that the respondent judge exceeded his jurisdiction by issuing orders that were inconsistent with the rehabilitation mandate of RA No. 7169.
RA No. 7169, titled “An Act To Rehabilitate The Philippine Veterans Bank,” provided for the reopening of PVB within three years and established a rehabilitation committee to facilitate this process.
The Rehabilitation Committee later submitted a proposed Rehabilitation Plan to the Monetary Board, which approved the plan and issued a Certificate of Authority, allowing PVB to reopen.

In light of the rehabilitative measures, the liquidation court became functus officio, as its authority to wind up the bank was effectively nullified by the legislative mandate.
A Motion to Terminate the Liquidation Proceedings was filed on March 13, 1992 and subsequently on June 3, 1992 by the liquidator.
On August 3, 1992, the Philippine Veterans Bank reopened its doors to the public, marking its return to regular banking operations.

Whether a liquidation court may continue with the liquidation proceedings of PVB despite the enactment of Republic Act No. 7169, which mandates the bank’s rehabilitation and reopening.
Whether the continued liquidation proceedings prejudices the rights of the petitioners, particularly their claims for employee wages and benefits.

The legal implications of RA No. 7169 becoming effective immediately upon approval, as provided under Section 10 of the Act.
The consequences of allowing the liquidation proceedings to continue in the face of a new statutory framework favoring rehabilitation.