Philippine Veterans Bank Employees v.

Vega
SCRA June 2001
Ponente: Kapunan, J.
*Liquidation- in corporation law, connotes a
winding up or settling with creditors and
debtors. It is the winding up of a corporation
so that assets are distributed to those entitled
to receive them. It is the process of reducing
assets to cash, discharging liabilities, and
dividing surplus or loss.
Facts:
In 1985, the Central Bank of the Philippines
filed a petition for assistance in the
liquidation of the Philippine Veterans Bank
(PVB) in the RTC of Manila Branch 39
where the presiding judge was Prosecutor
Vega, the respondent in this case.
Thereafter, the PVB employees union,
herein petitioner, filed claim for accrued and
unpaid employee wages and benefits.
On January 2, 1992, RA 7169 (An Act to
Rehabilitate the PVB) was signed into law
by Pres. Corazon Aquino and was published
in the Official Gazette on February 24,
1992. )n May 1992, the Central Bank issued
a certificate of authority allowing the PVB
to reopen. Despite the TRO issued by the
Supreme court for the liquidation
proceedings, respondent Judge Vega
continued with the liquidation proceedings
of the bank. It is important to note that RA
7169 provided for its own effectivity date
under Sec. 10 of RA 7169 which states that
This act shall take effect upon its
approval. Thus, the legislature intended to
make the law effective immediately upon its
approval by President Cory Aquino dated
January 2, 1992. However, the law was
published only on February 24, 1992.



I ssue:
WON RA 7169 shall take effect
immediately upon its approval on January 2,
1992.

Held/Ruling:
The Supreme Court upheld that while as a
rule under Art 2 of the New Civil Code,
laws shall take effect after 15 days
following the completion of their
publication either in the Official Gazette or
in a newspaper of general circulation in the
Philippines. In addition, the Philippine
legislature has the authority to provide for
exceptions as indicated in the clause unless
otherwise provided. Clearly, the enactment
of RA 7169, as well as the subsequent
developments has rendered the liquidation
court functus officio. Consequently,
respondent judge has been stripped of the
authority to issue orders involving acts of
liquidation. Publication is indispensable in
the valid effectivity of laws. Although the
law itself provided for its own effectivity
date, the fact that it was published only on
February 24 1992 makes the publication
date the official effectivity date. The ruling
of this court was in favor of the petitioners
herein while the respondent is permanently
enjoined from further liquidation
proceedings.