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7/7/2016

G.R.No.86963

TodayisThursday,July07,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
THIRDDIVISION
G.R.No.86963August6,1999
BATONGBUHAYGOLDMINES,INC.,petitioner,
vs.
HONORABLEDIONISIODELASERNAINHISCAPACITYASTHEUNDERSECRETARYOFTHEDEPARTMENT
OF LABOR AND EMPLOYMENT, ELSIE ROSALINDA TY, ANTONIO MENDELEBAR, MA. CONCEPCION Q.
REYES,ANDTHEOTHERCOMPLAINANTS*INCASENO.NCRLSEDCI204787MFTCORPORATIONAND
SALTERHOLDINGSPTY.LTD.,respondents.
RESOLUTION
PURISIMA,J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court with a Prayer for Preliminary
InjunctionandorRestrainingOrderbroughtbyBatongBuhayGoldMines,Inc.(BBGMIforbrevity)toannulthree
orders issued by respondent Undersecretary Dionisio dela Serna of the Department of Labor and Employment,
datedSeptember16,1988,December14,1988andFebruary13,1989,respectively.
TheOrderofSeptember16,1988statedthefactsasfollows:
. . . on 5 February 1987, Elsie Rosalinda B. Ty, Antonia L. Mendelebar, Ma. Concepcion O. Reyes and
1,247 others filed a complaint against Batong Buhay Gold Mines, Inc. for: (1) Nonpayment of their basic
pay and allowances for the period of 6 July 1983 to 5 July 1984, inclusive, under Wage Order No. 2 (2)
Nonpaymentoftheirbasicpayandallowancesfortheperiod16June1984to5October1986,inclusive
underWageOrderNo.5(3)Nonpaymentoftheirsalariesfortheperiod16March1986tothepresent
(4)Nonpaymentoftheir13thmonthpayfor1985,1986and1987(5)Nonpaymentoftheirvacationand
sickleave,andthecompensatoryleavesofminesiteemployeesand(6)Nonpaymentofthesalariesof
employeeswhowereplacedonforcedleavessinceNovember,1985tothepresent,ifthisisnotfeasible,
theaffectedemployeesbeawardedcorrespondingseparationpay.
On9February1987,theRegionalDirectorsetthecaseforhearingon17February1987.
On17February1987,therespondentmovedfortheresettingofthecaseto2March1987.
On27February1987,thecomplainantsfiledaMotionfortheissuanceofaninspectionauthority.
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On 13 July 1987, the Labor Standards and Welfare Officers submitted their report with the following
recommendations:
WHEREFORE,premisesconsideredthiscaseisherebysubmittedwiththerecommendationthatan
Order of Compliance be issued directing respondent Batong Buhay Gold Mines Inc. to pay
complainants' Elsie Rosalina Ty, etal. FOUR MILLION EIGHT HUNDRED EIGHTEEN THOUSAND
SEVENHUNDREDFORTYSIXPESOSANDFORTYCENTAVOS(P4,818,746.40)bywayofunpaid
salaries of workers from March 16, 1987 to present, unpaid and ECOLA differentials under Wage
Order Nos. 2 and 5 unpaid 13th months pay for 1985 and 1986, and unpaid (sic)
vacation/sick/compensatoryleavebenefits.
On31July1987,theRegionalDirector1adoptedtherecommendationoftheLSWOsandissuedanorder
directingtherespondenttopaythecomplainantsthesumofP4,818,746.40representingtheirunpaid13th
month pay for 1985 and 1986, wage and ECOLA differentials under wage order Nos. 2 and 5, unpaid
salariesfrom16March1986topresentandvacation/sickleavebenefitsfor1984,1985and1986.
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On19August1987,thecomplainantsfiledanexpartemotionfortheissuanceofawritofexecutionand
appointmentofspecialsheriff.
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On 21 August 1987, the Regional Director issued an Order directing the respondent to put up a cash or
suretybondotherwiseawritofexecutionwillbeissued.
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AdspoweredbyWajam

When the respondent failed to post a cash/surety bond, and upon motion for the issuance of a writ of
execution by the complainants, the Regional Director, on 14 September 1987 issued a writ of execution
appointingMr.JohnEspiridionC.RamosasSpecialSheriffanddirectinghimtodothefollowing:

YouaretocollecttheabovestatedamountfromtherespondentanddepositthesamewithCashier
ofthisOfficeforappropriatedispositiontohereincomplainantsunderthesupervisionoftheofficeof
the Director. Otherwise, you are to execute this writ by attaching the goods and chattels of the
respondent not exempt from execution or in case of insufficiency thereof against the real or
immovablepropertyoftherespondent.
TheSpecialSheriffproceededtoexecutetheappealedOrderon17September1987andseizedthree(3)
units of Peterbuilt trucks and then sold the same by public auction. Various materials and motor vehicles
werealsoseizedondifferentdatesandsoldatpublicauctionbysaidsheriff.
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On 11 December 1987, the respondent finally posted a supersedeas bond which prompted this Office to
issueanOrderdated26January1988,restrainingthecomplainantsandsheriffRamosfromenforcingthe
writofexecution....2
BBGMI appealed the Order dated July 31, 1987 of Regional Director Luna C. Piezas to respondent
UndersecretaryDionisiodelaSerna,contendingthattheRegionalDirectorhadnojurisdictionoverthecase.
OnSeptember16,1988,thepublicrespondentissuedthefirstchallengedOrderupholdingthejurisdictionofthe
Regional Director and annulling all the auction sales conducted by Special Sheriff John Ramos. The decretal
portionofthesaidOrderruled:
WHEREFORE,theOrderdated31July1987oftheRegionalDirector,NationalCapitalRegion,ishereby
AFFIRMED. Accordingly, the writ of execution dated 14 September 1987 issued in connection thereto is
herebydeclaredVALID.
However, the public auction sales conducted by special sheriff John Ramos pursuant to the writ of
execution dated 14 September 1987 on 24 September 2, 20, 23 and 29 October 1987 are all hereby
declaredNULLANDVOID.Furthermore,thepersonalpropertiessoldandtheproceedsthereofwhichhave
beenturnedovertothecomplainantsthrutheirlegalcounselareherebyorderedreturnedtothecustodyof
therespondentandthebuyersrespectively.
SOORDERED.3
OnOctober13,1988,aMotionforReconsiderationoftheaforesaidorderwaspresentedbythecomplainantsin
CaseNo.NCRLSEDCI204787butthesamewasdenied.
OnNovember7,1988,aMotionforInterventionwasfiledbyMFTCorporation,invitingattentiontoaDeedofSale
executedinitsfavorbyFidelBermudez,thehighestbidderintheauctionsaleconductedonOctober29,1987.
OnDecember2,1988,anotherMotionforInterventionwasfiled,thistimebySalterHoldingsPty.,Ltd.,claiming
thatMFTCorporationassigneditsrightsoverthesubjectpropertiesinfavorofmovantasevidencedbyaSales
AgreementbetweenMFTCorp.andSalterHoldingsPty.,Ltd.
The two Motions for intervention were granted in the second questioned order dated December 14, 1988,
directingtheexclusionfromannulmentofthepropertiessoldattheOctober29,1987auctionsaleandclaimedby
theintervenors,includingoneclusterofjunkminingmachineries,equipmentandsupplies,anddisposingthus:
WHEREFORE,inviewoftheforegoing,themotionsforreconsiderationfiledbyintervenorsMFTandSalter
are hereby granted. Correspondingly, this Office's Order dated 16 September 1988 is hereby modified to
exclude from annulment "the one lot of junk mining machineries, equipment and supplies asiswhereis"
soldbySheriffJohnC.Ramosintheauctionsaleof29October1987.
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xxxxxxxxx
MotionsforReconsiderationwereinterposedbyBatongBuhayGoldMining,Inc.andtherespondentemployees
buttonoavail.ThesamewerelikewisedeniedinthethirdassailedOrderdatedFebruary13,1989.
Hence,thepetitionunderscrutiny,ascribinggraveabuseofdiscretionamountingtolackorexcessofjurisdiction
tothepublicrespondentinissuingthethreeOrdersunderattack.
The questioned Orders aforementioned have given rise to the issues: (1) whether the Regional Director has
jurisdiction over the complaint filed by the employees of BBGMI and (2) whether or not the auction sales
AdspoweredbyWajam
conductedbythesaidSpecialSheriffarevalid.

Anent the first issue, an affirmative ruling is indicated. The Regional Director has jurisdiction over the BBGMI
employeeswhoarethecomplainantsinCaseNumberNCRLSEDCI204787.
ThesubjectlaborstandardscaseofthepetitionarosefromthevisitorialandenforcementpowersbytheRegional
DirectorofDepartmentofLaborandEmployment(DOLE).Laborstandardsreferstotheminimumrequirements
prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and
other monetary and welfare benefits, including occupational, safety and health standards.4 Labor standards
casesaregovernedbyArticle128(b)oftheLaborCode.
ThepivotofinquiryhereiswhethertheRegionalDirectorhasjurisdictionoversubjectlaborstandardscase.
As can be gleaned from the records on hand, subject labor standards case was filed on February 5, 1987 at
whichtimeArticle128(b)readasfollows5:
Art.128(b)Visitorialandenforcementpowers
(b) The Minister of Labor or his duly authorized representative shall have the power to order and
administer,afterduenoticeandhearing,compliancewiththelaborstandardsprovisionsofthisCode
basedonthefindingsoflaborregulationofficersorindustrialsafetyengineersmadeinthecourseof
inspection, and to issue writs of execution to the appropriate authority for the enforcement of their
order,exceptincaseswheretheemployerconteststhefindingsofthelaborregulationsofficersand
raisesissueswhichcannotberesolvedwithoutconsideringevidentiarymattersthatarenotverifiable
intheordinarycourseofinspection.
Petitioner theorizes that the Regional Director is without jurisdiction over subject case, placing reliance on the
rulinginZambalesBaseInc.vs.MinisterofLabor6andOreshootMiningCompanyvs.Arellano.7
Respondent Undersecretary Dionisio C. Dela Serna, on the other hand, upheld the jurisdiction of Regional
DirectorLunaC.PiezasbyrelyingonE.O.111,toquote:
Consideringthereforethattherestillexistsanemployeremployeerelationshipbetweenthepartiesthatthe
caseinvolvesviolationsofthelaborstandardprovisionsofthelaborcodethattheissuesthereincouldbe
resolvedwithoutconsideringevidentiarymattersthatarenotverifiableinthenormalcourseofinspection
and, if only to give meaning and not render nugatory and meaningless the visitorial and enforcement
powers of the Secretary of Labor and Employment as provided by Article 128(b) of the Labor Code, as
amendedbySection2ofExecutiveOrderNo.111whichstates:
The provisions of article 217 of this code to the contrary notwithstanding and in cases where the
relationship of employeremployee still exists, the Minister of Labor and Employment or his duly
authorizedrepresentativeshallhavethepowertoorderandadminister,afterduenoticeandhearing,
compliance with the labor standards provision of this Code based on the findings of the findings of
laborregulationofficersorindustrialsafetyengineersmadeinthecourseofinspection,andtoissue
writs of execution to the appropriate authority for the enforcement of their order, except in cases
where the employer contests the findings of the labor regulations officers and raises issues which
cannot be resolved without considering evidentiary matters that are not verifiable in the ordinary
courseofinspection.
Weagreewiththecomplainantsthattheregionalofficeaquohasjurisdictiontohearanddecidetheinstant
laborstandardcase.
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TheCourtagreeswiththepublicrespondent.InthecaseofMaternityChildren'sHospitalvs.SecretaryofLabor
(174 SCRA 632), the Court in upholding the jurisdiction of the Regional Director over the complaint on
underpaymentofwagesandECOLAsfiledonMay23,1986,bytheemployeesofMaternityChildren'sHospital,
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held:
ThisisalaborstandardscaseandisgovernedbyArt.128(b)oftheLaborCode,asamendedbyE.O.111.
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PriortothepromulgationofE.O.111onDecember24,1986,theRegionalDirector'sauthorityovermoney
claimswasunclear.ThecomplaintinthepresentcasewasfiledonMay23,1986whenE.O.111wasnot
yetineffect....
AdspoweredbyWajam

We believe, however, that even in the absence of E.O. 111, Regional Directors already had enforcement
powers over money claims, effective under P.D. 850, issued on December 16, 1975, which transferred
laborstandardscasesfromthearbitrationsystemtotheenforcementsystem.

In the aforecited case, the Court in reinforcing its conclusion that Regional Director has jurisdiction over labor
standardscases,treatedE.O.111asacurativestatute,rulingasfollows:
E.O.No.111wasissuedonDecember24,1986orthree(3)monthsafterthepromulgationoftheSecretary
of Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24,
1986.TheamendmentofthevisitorialandenforcementpowersoftheRegionalDirector(Article128(b))by
saidE.O.111reflectstheintentionenunciatedinPolicyInstructionsNos.6and37toempowertheRegional
Directors to resolve uncontested money claims in cases where an employeremployee relationship still
exists. This intention must be given weight and entitled to great respect. As held in Progressive Worker's
Union,etal.vs.F.P.Aguas,etal.G.R.No.5971112,May29,1985,150SCRA429:
. . . The interpretation by officers of laws which are entrusted to their administration is entitled to
great respect. We see no reason to detract from this rudimentary rule in administrative law,
particularly when later events have proved said interpretation to be in accord with the legislative
intent...
The proceedings before the Regional Director must, perforce be upheld on the basis of Article 128(b) as
amendedbyE.O.No.111,datedDecember24,1986,thisexecutiveorder"tobeconsideredinthenature
ofacurativestatutewithretrospectiveapplication."(ProgressiveWorkers'Union,etal.vs.Hon.Aguas,et
al.(Supra)M.Garciavs.JudgeA.Martinez,etal.G.R.No.I47629,may28,1979,90SCRA331).
With regard to the petitioner's reliance on the cases of ZambalesBase, Inc. vs. Minister of Labor (supra) and
OreshootMiningCompanyvs.Arellano,(supra),thisismisplaced.InthecaseofZambalesBase,Inc.,thecourt
hasalreadyruledthat:
...,inviewofthepromulgationofExecutiveOrderNo.111,ZambalesBaseMetalsvs.MinisterofLaboris
nolongergoodlaw.(Emphasissupplied)ExecutiveOrderNo.111isinthecharacterofacurativelaw,that
is to say, it was intended to remedy a defect that, in the opinion of the Legislature (the incumbent Chief
Executive in this case, in the exercise of her lawmaking powers under the Freedom Constitution) had
attachedtotheprovisionundertheamendment.
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The case of Oreshoot Mining Corporation, on the other hand, involved money claims of illegally dismissed
employees.Astheemployeremployeerelationshiphasalreadyceasedandreinstatementissought,jurisdiction
necessarilyfallsundertheLaborArbiter.Petitionershouldnothaveusedthistosupportitstheoryasthispetition
involveslaborstandardscasesandnotmonetaryclaimsofillegallydismissedemployees.
The Court would have ruled differently had the petitioner shown that subject labor standards case is within the
purviewoftheexceptionclauseinArticle128(b)oftheLaborCode.Saidprovisionrequirestheconcurrenceof
thefollowingelementsinordertodivesttheRegionalDirectororhisrepresentativesofjurisdiction,towit:(a)that
thepetitioner(employer)conteststhefindingsofthelaborregulationsofficerandraisesissuesthereon(b)thatin
ordertoresolvesuchissues,thereisaneedtoexamineevidentiarymattersand(c)thatsuchmattersarenot
verifiableinthenormalcourseofinspection.10
Nowhere in the records does it appear that the petitioner alleged any of the aforestated grounds. In fact, in its
Motion for Reconsideration of the Order of the Regional Director dated August 20, 1987, the grounds which
petitionerraisedwerethefollowing:
1.ThisHonorableOfficehasnojurisdictiontohearthiscaseanditsOrderof31October1987istherefore
nullandvoid
2. Batong Buhay Gold Mines, Inc. is erroneously impleaded as the sole party respondent, the complaint
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shouldhavebeendirectedalsoagainsttheAssetPrivatizationTrust.
In the other pleadings filed by petitioner in NCRLSEDC1204787, such as the Urgent Omnibus Motion to
declarevoidtheWritofExecutionforlackofjurisdictionandtheOppositionsitfiledontheMotionsforIntervention
questioningthelegalpersonalityoftheintervenors,questionsastotheamountscomplainedofbytheemployees
or absence of violation of labor standards laws were never raised. Raising lack of jurisdiction in a Motion to
Dismiss is not the contest contemplated by the exception clause under Article 128(b) of the Labor Code which
wouldtakethecaseoutofthejurisdictionoftheRegionalDirectorandbringitbeforetheLaborArbiter.
Theonlyinstancewhentherewasasemblanceofraisingtheaforestatedgrounds,waswhentheyfiledanAppeal
AdspoweredbyWajam
MemorandumdatedJanuary14,1988,beforetherespondentundersecretary.InthesaidAppealMemorandum,
petitioner comes up with the defense that the Regional Director was without jurisdiction, as employeremployee
relationshipwasabsent,sincepetitionerhadceaseddoingbusinesssince1985.

RecordsindicatethattheLaborStandardsandWelfareOfficers,pursuanttoComplaintInspectionAuthorityNo.
CI204787, were not allowed to look into records, vouchers and other related documents. The officers of the
petitionerallegedthatthecompanyispresentlyunderreceivershipoftheDevelopmentBankofthePhilippines.11
In lieu of this, the Regional Director had ordered that a summary investigation be conducted.12Despite proper
notices,thepetitionerrefusedtoappearbeforetheRegionalDirector.Togiveitanotherchance,anordertofile
its position paper was issued to substantiate its defenses. Notwithstanding all these opportunities to be heard,
petitionerchosenottoavailofsuch.
AsheldinthecaseofM.RamirezIndustriesvs.Sec.ofLaborandEmployment,(266SCRA111):
. . . Under Art. 128(a) of the Labor Code, the Secretary of Labor of his duly authorized representatives,
such as the Regional Directors, has visitorial powers which authorize him to inspect the records and
premises of an employer at any time of the day or night whenever work is being undertaken therein, to
question any employee and investigate any fact, condition or matter, and to determine violations of labor
laws,wageordersorrulesandregulations.Iftheemployerrefusestoattendtheinspectionorconference
ortosubmitanyrecord,suchaspayrollsanddailytimerecords,hewillbedeemedtohavewaivedhisright
topresentevidence.(emphasissupplied)
Petitioner's refusal to allow the Labor Standards and Welfare Officers to conduct inspection in the premises of
theirheadofficeinMakatiandthefailuretofiletheirpositionpaperisequivalenttoawaiverofitsrighttocontest
the claims of the employees. This Court had occasion to hold there is no violation of due process where the
Regional Director merely required the submission of position papers and resolved the case summarily
thereafter.13 Furthermore, the issuance of the compliance order was well within the jurisdiction of the Regional
Director,asSection14oftheRulesontheDispositionofLaborStandardsCasesprovides:
Sec.14.FailuretoAppearWheretheemployerorthecomplainantfailsorrefusestoappearduringthe
investigation,despitepropernotice,fortwo(2)consecutivehearingswithoutjustifiablereasons,thehearing
officermayrecommendtotheRegionalDirectortheissuanceofacomplianceorderbasedontheevidence
athandoranorderofdismissalofthecomplaintasthecasemaybe.(Emphasissupplied)
It bears stressing that this petition involves a labor standards case and it is in keeping with the law that "the
worker need not litigate to get what legally belongs to him, for the whole enforcement machinery of the
DepartmentofLaborexiststoinsureitsexpeditiousdeliverytohimfreeofcharge."14
Thus,theirclaimofclosureforbusiness,amongotherthings,arefactualissueswhichcannotbebroughtherefor
the first time. As petitioner refused to participate in the proceedings below where it could have ventilated the
appropriate defenses, to do so in this petition is unavailing. The reason for this is that factual issues are not
propersubjectsofaspecialcivilactionforcertioraritotheSupremeCourt.15
Itisthereforeabundantlyclearthatatthetimeofthefilingoftheclaimsofpetitioner'semployees,theRegional
Directorwasalreadyexercisingvisitorialandenforcementpowers.
Regional Director's visitorial and enforcement powers under Art. 128 (b) has undergone series of amendments
whichtheCourtfeelstobeworthmentioning.
Confusion was engendered by the promulgation of the decision in the case of Servando'sInc. vs. Secretary of
Labor and Employment and the Regional Director,Region VI, Department of Labor and Employment.16 In the
said case, the Regional Director took cognizance of the labor standards cases of the employees of Servando's
Inc.,butthisCourtheldthat:
InthecaseofBriadAgroDevelopmentCorporationvs.DelaCernaandCamusEngineeringCorp.vs.Sec.
Oflabor applying E.O. 111 the Court recognized the concurrent jurisdiction of the Secretary of labor (or
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Regional Directors) and the labor Arbiters to pass on employees money claims, including those cases
which the labor Arbiters had previously exercised jurisdiction. However, in a subsequent modificatory
resolutionintheBriadAgroCase,dated9November1989,theCourtmodifieditsoriginaldecisioninview
oftheenactmentofRA6715,andupheldthepoweroftheRegionalDirectorstoadjudicatemoneyclaims
subjecttotheconditionssetforthinSection2ofsaidlaw(RA6715).
ThepowerthenoftheRegionalDirector(underthepresentstateoflaw)toadjudicateemployeesmoney
claimsissubjecttotheconcurrenceofalltherequisitesprovidedunderSec.2ofRA6715,towit:
(a)theclaimisrepresentedbyanemployerorpersonemployedindomesticorhouseholdservice,or
AdspoweredbyWajam
househelper

(b)theclaimarisesfromemployeremployeerelationship
(c)theclaimantdoesnotseekreinstatementand
(d)theaggregatemoneyclaimofeachemployeeorhousehelperdoesnotexceedP5,000.
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TheServandoruling,ineffect,expandedthejurisdictionallimitationprovidedforbyRA6715astoincludelabor
standardscasesunderArticle128(b)andnolongerlimitedtoordinarymonetaryclaimsunderArticle129.
Infact,intheMotionforReconsideration18presentedbytheprivaterespondentsintheServandocase,thecourt
appliedmoresquarelytheP5,000limittothevisitorialandenforcementpoweroftheRegionalDirector,towit:
ToconstruethevisitorialpoweroftheSecretaryofLabortoorderandenforcecompliancewithlaborlaws
as including the power to hear and decide cases involving employee's claims for wages, arising from
employeremployeerelations,eveniftheamountofsaidclaimsexceedP5,000foreachemployee,would,
inourconsideredopinion,emasculateandrendermeaningless,ifnotuseless,theprovisionsofArt.217(a)
and(6)andArticle129oftheLaborCodewhich,asabovepointedout,conferexclusivejurisdictiononthe
Labor Arbiter to hear and decide such employees' claims, regardless of amount, can be heard and
determined by the Secretary of Labor his visitorial power. This does not, however, appear to be the
legislativeintent.
ButprevailinglawandjurisprudencerenderedtheServandorulinginapplicable.IntherecentcaseofFrancisco
Guico, Jr. versus The Honorable Secretary of Labor & Employment Leonardo A. Quisumbing, GR # 131750,
promulgated on November 16, 1998, this Court upheld the jurisdiction of the Regional Director notwithstanding
thefactthattheamountsawardedexceededP5,000.
Republic Act 7730, the law governing the visitorial and enforcement powers of the Labor Secretary and his
representativesreads:
Art. 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in
caseswheretherelationshipofemployeremployeestillexists,theSecretaryofLaborandEmploymentor
his duly authorized representatives shall have the power to issue compliance orders to give effect to the
labor standards provisions of this Code and other labor legislation based on the findings of labor
employmentandenforcementofficersorindustrialsafetyengineersmadeinthecourseofinspection.The
Secretaryorhisdulyauthorizedrepresentativeshallissuewritsofexecutiontotheappropriateauthorityfor
the enforcement of their orders, except in cases where the employer contests the findings of the labor
employmentandenforcementofficerandraisesissuessupportedbydocumentaryproofswhichwerenot
consideredinthecourseofinspection.
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The present law, RA 7730, can be considered a curative statute to reinforce the conclusion that the Regional
Directorhasjurisdictionoverthepresentlaborstandardscase.
Wellsettledistherulethatjurisdictionoverthesubjectmatterisdeterminedbythelawinforcewhentheaction
was commenced, unless a subsequent statute provides for its retroactive application, as when it is a curative
legislation.19
Curativestatutesareintendedtosupplydefects,abridgesuperfluitiesinexistinglawsandcurbcertainevils.They
areintendedtoenablepersonstocarryintoeffectthatwhichtheyhavedesignedandintended,buthasfailedof
expectedlegalconsequencebyreasonofsomestatutorydisabilityorirregularityintheirownaction.Theymake
validthatwhich,beforetheenactmentofthestatute,wasinvalid.20
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Inarrivingatthisconclusion,thecaseofBriad Agro Development vs. De La Cerna21comes to the fore. In the


saidcase,RA6115washeldtobeacurativestatute.There,theCourtruledthatRA6715isdeemedacurative
statuteandshouldbeappliedtopendingcases.TherationaleoftherulingoftheCourtwasthatpriortoRA6715,
Article 217 as amended by E.O. 111, created a scenario where the Labor Arbiter and the Regional Director of
DOLEhadoverlappingjurisdictionovermoneyclaims.Suchasituationwasviewedasadefectinthelawsothat
whenRA6715waspassed,itwastreatedorinterpretedbytheCourtasarectificationoftheinfirmityofthelaw,
andthereforecurativeinnature,withretroactiveapplication.
Parenthetically, the same rationale applies in treating RA 7730 as a curative statute. Explicit in its title22 is the
AdspoweredbyWajam
legislativeintenttorectifytheerrorbroughtaboutbythisCourt'srulingthatRA6715coversevenlaborstandards

caseswheretheamountstobeawardedbytheRegionalDirectorexceedP5,000asprovidedforunderRA6715.
CongressionalrecordsrelativetoRepublicAct7730revealthat,"thisbillseekstodoawaywiththejurisdictional
limitations imposed thru said ruling (referring to Servando) and to finally settle any lingering doubts on the
visitorialandenforcementpowersoftheSecretaryofLaborandEmployment."23
All the foregoing studiedly considered, the ineluctable conclusion is that the application of RA 7730 to the case
underconsiderationisproper.
Thus, it is decisively clear that the public respondent did not act with grave abuse of discretion in issuing the
OrderdatedSeptember16,1988.
ThesecondissueforresolutionisthevalidityoftheauctionsalesconductedbySpecialSheriffRamos.Itbears
stressingthatthewritofexecutionissuedbytheRegionalDirectorledtotheseveralauctionsalesconductedon
September24,1987,October2,1987,October23,1987,October29,1987andOctober30,1987.
In the first Order of public respondent, the five (5) auction sales were declared null and void. As the public
respondentputit,"thescandalouslylowpriceforwhichthepersonalpropertiesoftherespondentweresoldleads
ustonootherrecoursebuttoinvalidatetheauctionsalesconductedbythespecialsheriff."24
In the September 16, 1988 Order25 of public respondent, the personal properties and corresponding prices for
whichtheyweresoldwereasfollows:
PersonalpropertiessoldonSeptember24,1987:
1. One (1) unit peterbuilt truck Model 1978 with Engine No. 6A410265, Chassis No. 139155P not
runningcondition.
2.One(1)unit1978ModelpeterbuilttruckwithEngineNo.64678040,ChassisNo.6A410235,truck
withEngineNo.(Truck4)notrunningcondition.
3.One(1)unit1978ModelpeterbuilttruckwithEngineNo.6A410319,ChassisNo.139163PTruck
No.4notrunningcondition.
ProceedsofSaleP178,000.00
PersonalPropertiesSoldonOctober2,1987
1.One(1)unitpeterbuilttruckmodel1978,withEngineNo.6A410347,ChassisNo.1391539P.
2.One(1)unitpeterbuilttruckModel1978withEngineNo.6A410325,ChassisNo.139149.
3.One(1)unitpayloader(caterpillarwithEngineNo.(notvisible)966.
4.One(1)unitForkliftone(1)unitcrowlercrane,EngineNo.(notvisible)andone(1)Lotofscarp
ironsimpoundedinsidetheBatongBuhayCompound,Calanan,KalingaApayao.
5.One(1)unitpanelIsuzuwithEngineNo.821POF200207,PlateNo.PBV386.
ProceedsofSaleP228,750.00
PersonalPropertiesSoldonOctober23,1987:
1.One(1)UnitToyotaLandCruiser,withEngineNo.BO4466340,ChassisNo.81400500227Plate
No.BAT353,burned,damagenotrunningcondition,typeofbodyjeepmotornotvisible.
2.Two(2)unitspeterbuilts,damaged,burnedmotorNos.(notvisible)andChassisNos.notvisible.
3.One(1)UnitLayland,burned,damagedandMotorNo.notvisible.
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4.Two(units)aircompressor,burned,damagedandone(1)generator.
5.One(1)UnitLoaderMichigan50,damagedandburned,and
6.One(1)rockcrasher,damaged,burned,scrapironjunk.
ProceedsofSaleP98,000.00
PropertiessoldonOctober29,1987

AdspoweredbyWajam

1.One(1)lotofscrapconstructionmaterials.
2.One(1)lotofscrapminingmachineriesequipmentsandsupplies.
3.One(1)lotofjunkmachineries,equipmentsandsupplies.
ProceedsofSaleP1,699,999.99
PersonalPropertiesSoldonOctober20,1987*
1.One(1)lotofscrapconstructionmaterials.
2.One(1)lotofscrapminingmachineries,equipmentsandsupplies.
ProceedsofSaleP2,185,000.00
TotalProceedsSaleP4,389,749.99
tosatisfythejudgmentawardintheamountofP4,818,746.00.
As a general rule, findings of fact and conclusion of law arrived at by quasijudicial agencies are not to be
disturbedabsentanyshowingofgraveabuseofdiscretiontaintingthesame.Butinthecaseunderscrutiny,there
wasgraveabuseofdiscretionwhenthepublicrespondent,withoutanyevidentiarysupport,adjudgedsuchprices
as "scandalously low". He merely relied on the selfserving assertion by the petitioner that the value of the
auctioned properties was more than the price bid. Obviously, this ratiocination did not suffice to set aside the
auctionsales.
The presumption of regularity in the performance of official function is applicable here. Conformably, any party
allegingirregularityvitiatingauctionsalesmustcomeforwardwithclearandconvincingproof.
Furthermore,itisawellsettledprinciplethat:
Mereinadequacyofpriceisnot,ofitselfsufficientgroundtosetasideanexecutionsalewherethesaleis
regular,properandlegalinotherrespects,thepartiesstandonanequalfooting,therearenoconfidential
relationbetweenthem,thereisnoelementoffraud,unfairness,oroppression,andthereisnomisconduct,
accident,mistakeorsurpriseconnectedwith,andtendingtocause,theinadequacy.26
Consequently,indeclaringthenullityofthesubjectauctionsalesonthegroundofinadequacyofprice,thepublic
respondentactedwithgraveabuseofdiscretionamountingtolackorexcessofjurisdiction.
But, this is not to declare the questioned auction sales as valid. The same are null and void since on the
propertiesofpetitionerinvolvedwasconstitutedamortgagebetweenpetitionerandtheDevelopmentBankofthe
Philippines,asshownbythe:
(a)DeedofMortgagedatedDecember28,1973
(b)JointMortgage(AmendingDeedofMortgage)datedAugust25,1975
(c)AmendmenttoJointMortgagedatedOctober18,1976.
(d)ConfirmationofMortgagedatedMarch27,1979and
(e)AdditionalJointFirstMortgagedatedMarch31,1981.27
TheaforementioneddocumentswereexecutedbetweenthepetitionerandDevelopmentBankofthePhilippines
(DBP)evenpriortothefilingofthecomplaintofpetitioner'semployees.Thepropertieshavingbeenmortgagedto
DBP,theapplicablelawisSection14ofExecutiveOrderNo.81,dated3December1986,otherwiseknownasthe
"The 1986 Revised Charter of the Development Bank of the Philippines," which exempts the properties of
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petitionermortgagedtoDBPfromattachmentorexecutionsales.Section14ofE.O.81,reads:
Sec.14.ExemptionfromAttachment.Theprovisionsofanylawtothecontrarynotwithstanding,securities
on loans and/or other accommodations granted by the Bank or its predecessorininterest shall not be
subject to attachment, execution or any other court process, nor shall they be included in the property of
insolventpersonsorinstitutions,unlessalldebtsandobligationsoftheBankoritspredecessorininterest,
penalties,collectionofexpenses,andothercharges,subjecttotheprovisionsofparagraphs(e)ofSec.9
ofthisCharter.
Infact,aletterdatedJanuary31,1990ofJoseC.Sison,AssociateExecutiveTrusteeoftheAssetPrivatization
AdspoweredbyWajam
Trust, to the Office of the Clerk of Court of the Supreme Court, certified that the petitioner is covered by
ProclamationNo.50issuedonDecember8,1986byPresidentCorazonC.Aquino.

Quotedhereunderarethepertinentportionsofthesaidletter:28
RE:BBGMIvs.Hon.delaSerna,GRNo.86963
SupremeCourtCertiorari
SIR:
xxxxxxxxx
...alltheassets(realandpersonal/chattel)ofBatongBuhayGoldMines,Inc.(BBGMI)havebeen
transferred and entrusted to the Asset Privatization Trust (APT) by virtue of Proclamation No. 50
dated December 8, 1986 of her Excellency, President Corazon C. Aquino. All the said assets of
BBGMIarecoveredbyrealandchattelmortgagesexecutedinfavorofthePhilippineNationalBank
("PNB"), the Development Bank of the Philippines ("DBP") and the National Investment and
DevelopmentCorporation("NIDC").
xxxxxxxxx
Sec.14,ExecutiveOrderNo.81:
xxxxxxxxx
Pursuanttotheabovequotedprovisionoflaw,youareherebywarnedthatalltheassets(realand
personal/chattel) of BBGMI are exempted from writs of execution, attachment, or any other lien or
court processes. The Government, through APT, shall initiate any administrative measures and
remediesagainstyouforanyviolationofthevestedrightsofPNB,DBPandAPT.
xxxxxxxxx
(sgd).
JOSEC.SISON
The exemption referred to in the aforecited letter is one of the circumstances contemplated by Rule 39 of the
RevisedRulesofCourt,towit:
Sec.13.Propertyexemptfromexecution.Exceptasotherwiseexpresslyprovidedbylaw,thefollowing
properties,andnoother,shallbeexemptfromexecution:
xxxxxxxxx
(m)Propertiesspeciallyexemptedbylaw.
xxxxxxxxx
Private respondents contend that even if subject properties were mortgaged to DBP (now under Asset
PrivatizationTrust),Article11029oftheLaborCode,asamendedbyRA6715,appliesjustthesame.Accordingto
them, the said provision of law grants preference to money claims of workers over and above all credits of the
petitioner.Thiscontentionisuntenable.InthecaseofDBPvs.NLRC,30theSupremeCourtheldthattheworkers
preference regarding wages and other monetary claims under Article 110 of the Labor Code, as amended,
contemplates bankruptcy or liquidation proceedings of the employer's business. What is more, it does not
disregardthepreferentiallienofmortgageesconsideredaspreferredcreditsundertheprovisionsoftheNewCivil
Codeontheclassification,concurrenceandpreferenceofcredits.
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WenowcometotheissuewithrespecttothesecondOrder,datedDecember14,1988,whichdeclaredasvalid
the auction sale conducted on October 29, 1987 by Special Sheriff John Ramos. Public respondent had no
authority to validate the said auction sale on the ground that the intervenors, MFT Corporation and Salter
HoldingsPty.,Ltd.,aspurchasersforvalue,acquiredlegaltitleoversubjectproperties.
It is well to remember that the said properties were transferred to the intervenors, when Fidel Bermudez, the
highestbidderattheauctionsale,soldthepropertiestoMFTCorporationwhich,inturn,soldthesameproperties
to Salter Holdings Pty., Ltd. Public respondent opined that the contract of sale between the intervenors and the
highestbiddershouldberespectedasthesesalestookplaceduringtheinterregnumaftertheauctionsalewas
AdspoweredbyWajam
conductedonOctober29,1987andbeforetheissuanceofthefirstdisputedOrderdeclaringalltheauctionsales
nullandvoid.

Onthisissue,theCourtrulesotherwise.
Asregardspersonalproperties,thegeneralruleisthattitle,likeastream,cannotrisehigherthanitssource.31
Consequently,asellerwithouttitlecannottransferatitlebetterthanwhatheholds.MFTCorporationandSalter
HoldingsPty.,Ltd.tracetheirtitlefromFidelBermudez,whowasthehighestbidderofavoidauctionsaleover
propertiesexemptfromexecution.Suchbeingthecase,thesubsequentsalemadebyhim(FidelBermudez)is
incapableofvestingtitleorownershipinthevendee.
TheOrderdatedDecember14,1988,declaringtheOctober29,1987auctionsaleasvalid,wasissuedwithgrave
abuseofdiscretionamountingtolackorexcessofjurisdiction.
WHEREFORE, the petition is hereby GRANTED, insofar as the Order dated December 14, 1988 of
UndersecretaryDionisiodelaSernaisconcerned,whichOrderisSETASIDE.TheOrderofSeptember16,1988,
upholdingthejurisdictionoftheRegionalDirector,isAFFIRMED.Nopronouncementastocosts.
1 w p h i1 .n t

SOORDERED.
Melo,Vitug,PanganibanandGonzagaReyes,JJ.,concur.

Footnotes

*Attachment"Q"Rollo,p.175191.
1Rollo,p.67,pennedbyRegionalDirectorLunaC.Piezas.
2Rollo,pp.192198.Attachment"R".OrderofUsecDionisiodelaSernadatedSeptember16,1988.
3Rollo,p.203.
4Sec.7,Rule1,RulesontheDispositionofLaborStandardsCasesintheRegionalOffice,dated

September16,1987.
5PD850asamendedbyPD1691,latterbecameeffectiveMay1,1980.
6146SCRA51.
7156SCRA498.
8Rollo,pp.199200.
9BriadAgroDevelopmentCorporationvs.DionisiodelaSerna,174SCRA524.
10SSKPartsCorporationvs.Camas,181SCRA675.
11Rollo,page65.
12Sec.11.Hearing.Wherenoproofofcomplianceissubmittedbytheemployerafterseven(7)calendar

days from receipt of the inspection results, the Regional Director shall summon the employer and the
complainants to a summary investigation. In regular routine inspection cases however, such investigation
shallbeconductedwherenocompletefieldinvestigationcanbemadeforreasonsattributabletothefault
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oftheemployerorhisrepresentatives,suchasthosebutnotlimitedtoinstanceswhenthefieldinspectors
are denied access to the premises, employment records, or workers of the employer. (Rules on the
DispositionofLaborStandardsCases)
13Villadolidvs.Inciong,121SCRA205.
14MOLEPolicyInstructionsNo.7.
15PhilippineLongDistanceCompanyvs.NLRC,190SCRA717.
AdspoweredbyWajam
16184SCRA664.

17184SCRA664198SCRA156.
18198SCRA156.
19AtlasFertilizerCorporationvs.Navarro,April30,1987.
20Agpalo,Ruben.StatutoryConstruction.CitingthecasesofDelCastillovs.SEC,96Phil119Santosvs.

Duata,14SCRA1041DBPvs.CA,96SCRA342.
21179SCRA270.
22Entitled"ANACTFURTHERSTRENGTHENINGTHEVISITORIALANDENFORCEMENTPOWERSOF

THE SECRETARY OF LABOR AND EMPLOYMENT, AMENDING FOR THE PURPOSE ARTICLE 128 OF
PD 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES", approved
bythePresidentonJune2,1994.
23TherecordsoftheHouseofRepresentativesshowedthatCongressmanAlbertoS.VelosoandEriberto

V.LoretosponsoredRA7730.
24Rollo,p.203.
25Rollo,pp.200202.
*ThiswasatypographicalerrorasadmittedbythepublicrespondentandshouldhavereadOct.30,1987.

Ascanbeseenfromtherecords,therewasnoauctionsaleconductedbytheSpecialSheriffdatedOct.20,
1987.
26Francisco,TheRevisedRulesofCourtinthePhilippines,supra,page755.
27Rollo,pp.478508.
28Rollo,pp.451452.
29 Art. 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 their wages and other monetary
claims,anyprovisionsoflawtothecontrarynotwithstanding.Suchunpaidwagesandmonetaryclaimsshall
bepaidinfullbeforeclaimsofgovernmentandothercreditorsmaybepaid.
30183SCRA328.
31 Tolentino, Arturo M. CIVIL CODE OF THE PHILIPPINES, Vol. V, page 65, citing National Bank vs.

Wisconsin,C.R.Co.,44Minn,224,48N.W.342,9L.R.A.,20Am.St.Rep566.
TheLawphilProjectArellanoLawFoundation

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