GR 105364; (June, 2001) (Digest)
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
FACTS
The Central Bank filed a Petition for Assistance in the Liquidation of the Philippine Veterans Bank (PVB) with the Regional Trial Court, Branch 39, Manila, docketed as Case No. SP-32311. The petitioners, the PVB Employees Union and its representative, filed claims for unpaid wages and benefits in that liquidation case. On January 2, 1992, Congress enacted Republic Act No. 7169 , mandating the rehabilitation and reopening of PVB. Subsequently, the Monetary Board approved PVB’s Rehabilitation Plan, and the Central Bank issued a certificate of authority allowing PVB to reopen. Despite this legislative mandate for rehabilitation, the respondent judge continued with the liquidation proceedings. The petitioners moved to disqualify the judge and later filed the instant Petition for Prohibition, arguing the liquidation court became functus officio upon the effectivity of R.A. No. 7169 . The Supreme Court issued a Temporary Restraining Order. Motions for Intervention were filed by VOP Security & Detective Agency and by PVB itself, the latter supporting the petition and alleging the judge acted without jurisdiction.
ISSUE
May a liquidation court continue with liquidation proceedings of the Philippine Veterans Bank when Congress had mandated its rehabilitation and reopening?
RULING
No. The petition was granted. The enactment of Republic Act No. 7169 , which provided for the rehabilitation and reopening of PVB, rendered the liquidation court functus officio. The concepts of liquidation (winding up and distribution of assets) and rehabilitation (reorganization and continuance of corporate life) are diametrically opposed and cannot coexist. The law took effect upon its approval on January 2, 1992, as expressly provided in its Section 10. Consequently, the respondent judge was permanently enjoined from further proceeding with the liquidation case (Civil Case No. SP-32311).