Case 29

http://www.lawphil.net/judjuris/juri1998/may1998/gr_123938_1998.html

G.R. No. 123938 May 21, 1998

LABOR CONGRESS OF THE PHILIPPINES (LCP) for and in behalf of its members,
ANA MARIE OCAMPO, MARY INTAL, ANNABEL CARESO, MARLENE MELQIADES,
IRENE JACINTO, NANCY GARCIA, et. al, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS, its
Proprietor/President & Manager, MR. GONZALO KEHYENG and MRS. EVELYN
KEHYENG, respondents.

Facts

Issues

Provisions

Decision
Case 31
http://www.lawphil.net/judjuris/juri1990/jun1990/gr_81415_1990.html

G.R. No. 81415 June 6, 1990

A.N. BOLINAO, JR., JUAN A. AGSALON, JR., ZOSIMO L. CARREON AND REYNOLD
P. DANNUG, petitioners,
vs.
HON. MANUEL S. PADOLINA, PHELPS DODGE (PHILS.) INC., BANK OF AMERICA,
AND DEPUTY SHERIFF CARLOS G. MAOG, respondents.

Facts

Issues

Whether the petitioners enjoy preferential right or claim over the funds of
SMC as provided for under the provisions of Article 110 of the new labor
code?
Provisions

PROVISION: Art. 110 of the labor code and its implementing rules

Decision

It is only an extra-judicial foreclosure that was being articulated as when DBP extra-
judicially foreclosed the assets of Sabena Mining Corporation. Conversely, to hold
that Article 110 is also applicable in extra-judicial proceedings would be putting the
worker in a better position than the State which could only assert its own prior
preference in case of ajudicial proceeding.
Case 33
http://www.lawphil.net/judjuris/juri1989/nov1989/gr_79351_1989.html

G.R. No. 79351 November 28, 1989

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,

vs.
THE HON. SECRETARY OF LABOR, CRESENCIA DIFONTORUM, ET AL., respondents

Facts

Private respondents won a case for illegal dismissal, unfair labor practice,
illegal deductions from salaries and violation of the minimum wage law
against Riverside Mills Corporation. Consequently, a writ of execution was
issued, on October 22, 1985 , against the goods and chattel of RMC. Said
assets however had already been foreclosed by petitioner Development Bank
of the Philippines (DBP) through an extra-judicial proceedings as early as
1983. Private respondents, in a motion, moved for the delivery of RMC
properties in possession of DBP, relying on the provisions of Article 110 of the
Labor Code giving them first preference over the mortgaged properties of
RMC for the satisfaction of the judgment rendered in their favor. Which
motion was granted. On appeal, the decision was affirmed.

Issues

Whether or not Article 110 of the Labor Code finds application on the instant
case. Article 110 provides that in case of bankruptcy or liquidation of an
employer's business, his workers enjoy first preference as regards wages due
them for services rendered during the period prior to the bankruptcy or
liquidation.

Provisions

Article 110 of the Labor Code and Section 10, Rule VIII, Book III of the Omnibus Rules
Implementing the Labor Code provide the following:

Article 110. WORKER PREFERENCE IN CASE OF BANKRUPTCY.—In the event

of bankruptcy or liquidation of an employer's business, his workers shall
enjoy first preference as regards wages due them for services rendered
during the period prior to the bankruptcy or liquidation, any provision of
law to the contrary notwithstanding. Unpaid wages shall be paid in full
before other creditors may establish any claim to a share in the assets of
the employer [Emphasis supplied].

Section 10. PAYMENT OF WAGES IN CASE OF BANKRUPTCY.— Unpaid wages

earned by the employees before the declaration of bankruptcy or judicial
liquidation of the employer's business shall be given first preference and
shall be paid in full before other creditors may establish any claim to a
share in the assets of the employer.
Decision

The Supreme Court held that Article 110 cannot be applied in the instant case
because the important requisite that employer's business must be bankrupt is
lacking. The Supreme Court ruled that in the Philippine jurisdiction, bankruptcy,
insolvency and general judicial liquidation proceedings are the only means to
establish that a business is bankrupt or insolvent. Absent of such judicial
declaration, the business cannot be considered bankrupt for the purpose of applying
the provisions of Article 110.
Case 34
http://www.lawphil.net/judjuris/juri1987/may1987/gr_l_56568_1987.html

G.R. No. L-56568 May 20, 1987

REPUBLIC OF THE PHILIPPINES, represented by the Bureau of Customs and

the Bureau of Internal Revenue, petitioner,
vs.
HONORABLE E.L. PERALTA, PRESIDING JUDGE OF THE COURT OF FIRST
INSTANCE OF MANILA, BRANCH XVII, QUALITY TABACCO CORPORATION,
FRANCISCO, FEDERACION OBRERO DE LA INDUSTRIA TABAQUERA Y OTROS
TRABAJADORES DE FILIPINAS (FOITAF) USTC EMPLOYEES ASSOCIATION
WORKERS UNION-PTGWO, respondents.

Wherewithal
Facts

Issues

Provisions

Decision