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    Banco Filipino V NLRC Case Digest

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    Zirk Tan
    The Supreme Court ruled that unpaid wages of employees are not absolutely preferred credits that can be paid ahead of other creditors outside of the liquidation proceeding. While labor claims are preferred under the Labor Code, they do not have priority over other specially preferred credits under the Civil Code, such as tax claims. Therefore, an employee's claims for unpaid wages against a bank under receivership must be submitted to the liquidators for processing and paid according to the order of priority after other specially preferred credits are satisfied from the bank's assets.

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    Banco Filipino V NLRC Case Digest

    Uploaded by

    Zirk Tan
    87 views1 page
    The Supreme Court ruled that unpaid wages of employees are not absolutely preferred credits that can be paid ahead of other creditors outside of the liquidation proceeding. While labor claims are preferred under the Labor Code, they do not have priority over other specially preferred credits under the Civil Code, such as tax claims. Therefore, an employee's claims for unpaid wages against a bank under receivership must be submitted to the liquidators for processing and paid according to the order of priority after other specially preferred credits are satisfied from the bank's assets.

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    Banco Filipino v NLRC Case Digest

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    Banco Filipino v NLRC Case Digest

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    The Supreme Court ruled that unpaid wages of employees are not absolutely preferred credits that can be paid ahead of other creditors outside of the liquidation proceeding. While labor claims are preferred under the Labor Code, they do not have priority over other specially preferred credits under the Civil Code, such as tax claims. Therefore, an employee's claims for unpaid wages against a bank under receivership must be submitted to the liquidators for processing and paid according to the order of priority after other specially preferred credits are satisfied from the bank's assets.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    87 views1 page

    Banco Filipino V NLRC Case Digest

    Uploaded by

    Zirk Tan
    The Supreme Court ruled that unpaid wages of employees are not absolutely preferred credits that can be paid ahead of other creditors outside of the liquidation proceeding. While labor claims are preferred under the Labor Code, they do not have priority over other specially preferred credits under the Civil Code, such as tax claims. Therefore, an employee's claims for unpaid wages against a bank under receivership must be submitted to the liquidators for processing and paid according to the order of priority after other specially preferred credits are satisfied from the bank's assets.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Banco Filipino v NLRC

    Facts:

    BANCO FILIPINO SAVINGS AND MORTGAGE BANK was placed under receivership
    and was later ordered to be liquidated by the Monetary Board of the Central Bank.

    FORTUNATO M. DIZON. Jr., who was then the Executive Vice President and Chief Operating
    Officer of the bank received a letter from the Central Bank that all management authority in the
    bank had been assumed by the Central Bank appointed liquidators and that his employment is
    being terminated.

    Mr. Dizon filed with the liquidator a request for the payment to him of the cash equivalent of his
    vacation and sick leave credits and unused reimbursable allowance.

    He was not paid by the liquidator because Dizon's claim should be treated as a claim of a
    creditor and therefore be processed pursuant to the liquidation plan as approved by the
    Monetary Board.

    So, Dizon filed a complaint with the labor arbiter against the bank for recovery of unpaid salary,
    the cash equivalent of his accumulated vacation and sick leaves, termination pay under Article
    283 of the Labor Code and moral damages and attorney's fees.

    Issue:
    Whether unpaid wages of employees are preferred credits

    Ruling:

    In Republic v. Peralta the SC pointed out that the Article 110 of the Labor Code did not
    upgrade the worker's claim as absolutely preferred credit.

    The provision did not alter Articles 2241 and 2242 of the Civil Code that creditors with
    liens over a certain property are still given special preference over the proceeds of that property.

    And it is only after these specially preferred credits are satisfied may the ordinary
    preferred credits under Article 2244 of the Civil Code be paid according to their order of priority.

    Therefore not being an absolutely preferred credit, as taxes are under Articles 2241 (1)
    and 2242 (1), Dizon's claims cannot be paid ahead of other credits and outside of the liquidation
    proceeding because the "free property" or the property left after the creditors mentioned in
    Articles 2241 and 2242 are paid has not yet been determined

    Thus, Dizon's adjudicated claims should be submitted to the liquidators for processing. If
    it is later determined that Banco Filipino's liquidation is improper then the NLRC'S decision may
    be executed under normal procedure. If the contrary is proven, however, and the bank's
    liquidation should proceed, Dizon's established claims should be treated as an ordinary
    preferred credit enjoying first preference under Art. 2244 of the Civil Code.

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