G.R. No. 75305 – 258 Phil. 575 – 177 SCRA 778 – Labor Law – Labor Standards – Wages – Primacy of Workers Lien; When Not Applicable
In March 1985, Michael Peñalosa et al won a labor case against the Riverside Mills Corporation (RMC). They were awarded damages and other benefits amounting to more than P85 million in total. Subsequently, a writ of execution was issued against RMC. RMC was not able to pay hence, Peñalosa et al caused the levying of the RMC properties. However, said RMC properties were already in the possession of the Development Bank of the Philippines (DBP), and in fact were already leasing the said properties to another company.
Peñalosa et al et al invoked that since what they have is a workers lien, they have primacy over the claims of DBP – this was agreed to by the labor arbiter. DBP then filed a civil case for damages against Peñalosa et al with the RTC of Makati presided over by Judge Candido Villanueva. Judge Villanueva then granted the injunction case filed by DBP.
ISSUE: Whether or not Peñalosa et al have preference over the claim of DBP.
HELD: No. As a rule, workers lien have primacy or preference over other claims. However, in this case, the said principle is not applicable because it appears that DBP already acquired the said RMC properties in 1983 through a foreclosure proceeding. That being, RMC was no longer the owner of the said properties when Peñalosa et al won the labor case. Thus, it was not even proper for the labor arbiter to have the said RMC properties levied.
