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Philippine Veterans Bank Employees Union-N.U.B.

E
vs
Honorable Benjamin Vega (Presiding Judge of RITC Manila), Central Bank of the
Philippines, Liquidator of the Philippine Veterans Bank

June 28, 2001
Special Civil Action in the Supreme Court. Prohibition.
Kapunan, J.:

Facts:
- 1985, Central Bank filed at RTC a Petition for Assistance in the Liquidation of the
PVB
- The NUBE filed for claims for accrued and unpaid employee wages and benefits.
- Partial payments were made, but due to piecemeal hearings, many remain unpaid.
- March 8, 1991
o Petitioners move to disqualify judge from hearing the case on grounds of bias
and hostility towards Petitioners.
- January 2, 1992
o Congress enacted and President signed RA 7169
An Act to Rehabilitate the PVB Created under RA 3518, providing the
Mechanisms Therefor, and for other purposes.
- February 24
o Published in the OG
- NUBE filed for residual claims for benefits and reinstatement.
- Ma, CB issued a certificate allowing PVB to reopen.
- But Judge continued with the liquidations
- Respondents were set to order the payment and release of employee benefits but
petitioners claims were frozen to their prejudice.
- P. argue that passage of RA 7169, the liquidation court became functus officio, no
longer had authority to continue with the liquidation proceedings.
- March 13
o PVB filed a motion to terminate liquidation
- April 10
o Monetary Board issued MBR which approved the rehabilitation plan
o Issued a certificate allowing PVB to reopen
- June 3
o Liquidator filed a motion for termination of liquidation proceedings
- June 8
o SC issued a TRO.
- June 22
o VOPSDA and its 162 security guards filed a Motion for Intervention that they
be excluded from the operation of TRO.
o They already filed a motion that their backwages and salary differentials be
paid and that on June 5, it was approved.
- August 3
o PVB started operating
- August 18
o Petitioners filed their comment opposing the motion for leave to file
intervention and for exclusion from the operation of the TRO on the ground
that they have no legal interest and that allowing intervention would only
cause delay, and that it was without legal basis and would render moot the
relief sought in the petition.
- September 13
o PVB filed a Petition-in-Intervention, praying for certiorari and prohibition of
the several orders of the judge.
Issue:
1. W/O/N RA 7169 prevails over the liquidation
Held:
- Yes.
o Signed January 2, 1992 by President Cory
o Published in OG: February 24, 1992
Reopening of PVB with all its branches within the period of 3 years
from the date of the reopening of the office.
Creation of rehabilitation committee.
o Enactment of RA 7169 and subsequent developments rendered
Liquidation court functus officio
Judge has been stripped of authority to issue orders
o Rehabilitation and Liquidation is on the opposite spectrums.
Others:
1. Respondents claim that it only became effective 15 days after publication, or March
10, 1992.
a. Legislature intended to make the law effective immediately upon approval.
b. If publication is necessary, then it became legally effective on February 24,
1992.
Notes:
1. Liquidation- Winding up or settling with creditors and distributors. It is the winding
up of a corporation so that assets are distributed to those entitled to receive them.
Process of reducing assets to cash, discharging liabilities, and dividing surplus or loss.

2. Rehabilitation- Continuance of corporate life and activities in an effort to restore and
reinstate the corporation to its former position of successful operation and solvency.

3. Unless otherwise provided refers to date of effectivity, not to requirement of
publication which is indispensable.

4. Law cannot be effective immediately upon approval, or any other date, without its
previous publication.

5. Legislature, in its discretion may shorten or extend the 15 days.

6. Omission of publication would often due process as it denies public knowledge of the
laws that are supposed to govern and be followed.

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