Syllabi/Synopsis

THIRDDIVISION

[G.R.No.86963.August6,1999]

BATONG BUHAY GOLD MINES, INC., petitioner, vs. HONORABLE DIONISIO

DELASERNAINHISCAPACITYASTHEUNDERSECRETARYOFTHE
DEPARTMENT OF LABOR AND EMPLOYMENT, ELSIE ROSALINDA
TY,ANTONIOMENDELEBAR,MA.CONCEPCIONQ.REYES,ANDTHE
OTHER COMPLAINANTS* IN CASE NO. NCRLSEDCI204787 MFT
CORPORATIONANDSALTERHOLDINGSPTY.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
PreliminaryInjunctionandorRestrainingOrderbroughtbyBatongBuhayGoldMines,Inc.(BBGMIfor
brevity)toannulthreeordersissuedbyrespondentUndersecretaryDionisiodelaSernaoftheDepartment
of Labor and Employment, dated September 16, 1988, December 14, 1988 and February 13, 1989,
respectively.
TheOrderofSeptember16,1988statedthefactsasfollows:
"xxxon5February1987,ElsieRosalindaB.Ty,AntoniaL.Mendelebar,Ma.ConcepcionO.Reyesand
1,247othersfiledacomplaintagainstBatongBuhayGoldMines,Inc.for:(1)Nonpaymentoftheir
basicpayandallowancesfortheperiodof6July1983to5July1984,inclusive,underWageOrderNo.
2(2)Nonpaymentoftheirbasicpayandallowancesfortheperiod16June1984to5October1986,
inclusiveunderWageOrderNo.5(3)Nonpaymentoftheirsalariesfortheperiod16March1986tothe
present(4)Nonpaymentoftheir13thmonthpayfor1985,1986and1987(5)Nonpaymentoftheir
vacationandsickleave,andthecompensatoryleavesofminesiteemployeesand(6)Nonpaymentof
thesalariesofemployeeswhowereplacedonforcedleavessinceNovember,1985tothepresent,ifthis
isnotfeasible,theaffectedemployeesbeawardedcorrespondingseparationpay.

On9February1987,theRegionalDirectorsetthecaseforhearingon17February1987.

On17February1987,therespondentmovedfortheresettingofthecaseto2March1987.

On27February1987,thecomplainantsfiledaMotionfortheissuanceofaninspectionauthority.

xxx
On13July1987,theLaborStandardsandWelfareOfficerssubmittedtheirreportwiththefollowing
recommendations:

WHEREFORE,premisesconsidered,thiscaseisherebysubmittedwiththerecommendationthatan
OrderofCompliancebeissueddirectingrespondentBatongBuhayGoldMinesInc.topaycomplainants
ElsieRosalinaTy,etal.FOURMILLIONEIGHTHUNDREDEIGHTEENTHOUSANDSEVEN
HUNDREDFORTYSIXPESOSANDFORTYCENTAVOS(P4,818,746.40)bywayofunpaidsalariesof
workersfromMarch16,1987topresent,unpaidandECOLAdifferentialsunderWageOrderNos.2and
5unpaid13thmonthspayfor1985and1986,andupaid(sic)vacation/sick/compensatoryleavebenefits.

On31July1987,theRegionalDirector[1]adoptedtherecommendationoftheLSWOsandissuedan
orderdirectingtherespondenttopaythecomplainantsthesumofP4,818,746.40representingtheir
unpaid13thmonthpayfor1985and1986,wageandECOLAdifferentialsunderwageorderNos.2and
5,unpaidsalariesfrom16March1986topresentandvacation/sickleavebenefitsfor1984,1985and
1986.

On19August1987,thecomplainantsfiledanexpartemotionfortheissuanceofawritofexecutionand
appointmentofspecialsheriff.

xxx

On21August1987,theRegionalDirectorissuedanOrderdirectingtherespondenttoputupacashor
suretybondotherwiseawritofexecutionwillbeissued.

xxx

Whentherespondentfailedtopostacash/suretybond,anduponmotionfortheissuanceofawritof
executionbythecomplainants,theRegionalDirector,on14September1987issuedawritofexecution
appointingMr.JohnEspiridionC.RamosasSpecialSheriffanddirectinghimtodothefollowing:

YouaretocollecttheabovestatedamountfromtherespondentanddepositthesamewithCashierofthis
Officeforappropriatedispositiontohereincomplainantsunderthesupervisionoftheofficeofthe
Director.Otherwise,youaretoexecutethiswritbyattachingthegoodsandchattelsoftherespondent
notexemptfromexecutionorincaseofinsufficiencythereofagainsttherealorimmovablepropertyof
therespondent.

TheSpecialSheriffproceededtoexecutetheappealedOrderon17September1987andseizedthree(3)
unitsofPeterbuilttrucksandthensoldthesamebypublicauction.Variousmaterialsandmotorvehicles
werealsoseizedondifferentdatesandsoldatpublicauctionbysaidsheriff.

xxxxxxxxx

On11December1987,therespondentfinallypostedasupersedeasbondwhichpromptedthisOfficeto
issueanOrderdated26January1988,restrainingthecomplainantsandsheriffRamosfromenforcingthe
writofexecution.xxx[2]

BBGMIappealedtheOrderdatedJuly31,1987ofRegionalDirectorLunaC.Piezastorespondent
UndersecretaryDionisiodelaSerna,contendingthattheRegionalDirectorhadnojurisdictionoverthe
case.
On September 16, 1988, the public respondent issued the first challenged Order upholding the
jurisdiction of the Regional Director and annulling all the auction sales conducted by Special Sheriff
JohnRamos.ThedecretalportionofthesaidOrderruled:

WHEREFORE,theOrderdated31July1987oftheRegionalDirector,NationalCapitalRegion,is
herebyAFFIRMED.Accordingly,thewritofexecutiondated14September1987issuedinconnection
theretoisherebydeclaredVALID.
However,thepublicauctionsalesconductedbyspecialsheriffJohnRamospursuanttothewritof
executiondated14September1987on24September2,20,23,and29October1987areallhereby
declaredNULLANDVOID.Furthermore,thepersonalpropertiessoldandtheproceedsthereofwhich
havebeenturnedovertothecomplainantsthrutheirlegalcounselareherebyorderedreturnedtothe
custodyoftherespondentandthebuyersrespectively.

SOORDERED.[3]

On October 13, 1988, a Motion for Reconsideration of the aforesaid order was presented by the
complainantsinCaseNo.NCRLSEDCI204787butthesamewasdenied.
OnNovember7,1988,aMotionforInterventionwasfiledbyMFTCorporation,invitingattention
to a Deed of Sale executed in its favor by Fidel Bermudez, the highest bidder in the auction sale
conductedonOctober29,1987.
OnDecember2,1988,anotherMotionforInterventionwasfiled,thistimebySalterHoldingsPty.,
Ltd.,claimingthatMFTCorporationassigneditsrightsoverthesubjectpropertiesinfavorofmovantas
evidencedbyaSalesAgreementbetweenMFTCorp.andSalterHoldingsPty.,Ltd.
ThetwoMotionsforInterventionweregrantedinthesecondquestionedorderdatedDecember14,
1988,directingtheexclusionfromannulmentofthepropertiessoldattheOctober29,1987auctionsale
and claimed by the intervenors, including one cluster of junk mining machineries, equipment and
supplies,anddisposingthus:

WHEREFORE,inviewoftheforegoing,themotionsforreconsiderationfiledbyintervenorsMFTand
Salterareherebygranted.Correspondingly,thisOfficesOrderdated16September1988ishereby
modifiedtoexcludefromannulmenttheonelotofjunkminingmachineries,equipmentandsuppliesas
iswhereissoldbySheriffJohnC.Ramosintheauctionsaleof29October1987.

xxxxxxxxx
Motions for Reconsideration were interposed by Batong Buhay Gold Mining, Inc. and the
respondentemployeesbuttonoavail.ThesamewerelikewisedeniedinthethirdassailedOrderdated
February13,1989.
Hence,thepetitionunderscrutiny,ascribinggraveabuseofdiscretionamountingtolackorexcess
ofjurisdictiontothepublicrespondentinissuingthethreeOrdersunderattack.
The questioned Orders aforementioned have given rise to the issues: (1) whether the Regional
DirectorhasjurisdictionoverthecomplaintfiledbytheemployeesofBBGMIand(2)whetherornot
theauctionsalesconductedbythesaidSpecialSheriffarevalid.
Anentthefirstissue,anaffirmativerulingisindicated.TheRegionalDirectorhasjurisdictionover
theBBGMIemployeeswhoarethecomplainantsinCaseNumberNCRLSEDCI204787.
Thesubjectlaborstandardscaseofthepetitionarosefromthevisitorialandenforcementpowersby
theRegionalDirectorofDepartmentofLaborandEmployment(DOLE).Laborstandardsreferstothe
minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of
work,costoflivingallowanceandothermonetaryandwelfarebenefits,includingoccupational,safety
andhealthstandards.[4]LaborstandardscasesaregovernedbyArticle128(b)oftheLaborCode.
The pivot of inquiry here is whether the Regional Director has jurisdiction over subject labor
standardscase.
Ascanbegleanedfromtherecordsonhand,subjectlaborstandardscasewasfiledonFebruary5,
1987atwhichtimeArticle128(b)readasfollows[5]:

Art.128(b)Visitorialandenforcementpowers

(b)TheMinisterofLabororhisdulyauthorizedrepresentativeshallhavethepowertoorderand
administer,afterduenoticeandhearing,compliancewiththelaborstandardsprovisionsofthisCode
basedonthefindingsoflaborregulationofficersorindustrialsafetyengineersmadeinthecourseof
inspection,andtoissuewritsofexecutiontotheappropriateauthorityfortheenforcementoftheirorder,
exceptincaseswheretheemployerconteststhefindingsofthelaborregulationsofficersandraises
issueswhichcannotberesolvedwithoutconsideringevidentiarymattersthatarenotverifiableinthe
ordinarycourseofinspection.

Petitioner theorizes that the Regional Director is without jurisdiction over subject case, placing
relianceontherulinginZambalesBaseInc.vs.MinisterofLabor[6]andOreshootMiningCompanyvs.
Arellano.[7]
Respondent Undersecretary Dionision C. Dela Serna, on the other hand, upheld the jurisdiction of
RegionalDirectorLunaC.PiezasbyrelyingonE.O.111,toquote:

Consideringthereforethattherestillexistsanemployeremployeerelationshipbetweenthepartiesthat
thecaseinvolvesviolationsofthelaborstandardprovisionsofthelaborcodethattheissuestherein
couldberesolvedwithoutconsideringevidentiarymattersthatarenotverifiableinthenormalcourseof
inspectionand,ifonlytogivemeaningandnotrendernugatoryandmeaninglessthevisitorialand
enforcementpowersoftheSecretaryofLaborandEmploymentasprovidedbyArticle128(b)ofthe
LaborCode,asamendedbySection2ofExecutiveOrderNo.111whichstates:

Theprovisionsofarticle217ofthiscodetothecontrarynotwithstandingandincaseswherethe
relationshipofemployeremployeestillexists,theMinisterofLaborandEmploymentorhisduly
authorizedrepresentativeshallhavethepowertoorderandadminister,afterduenoticeandhearing,
compliancewiththelaborstandardsprovisionofthisCodebasedonthefindingsofthefindingsoflabor
regulationofficersorindustrialsafetyengineersmadeinthecourseofinspection,andtoissuewritsof
executiontotheappropriateauthorityfortheenforcementoftheirorder,exceptincaseswherethe
employerconteststhefindingsofthelaborregulationsofficersandraisesissueswhichcannotbe
resolvedwithoutconsideringevidentiarymattersthatarenotverifiableintheordinarycourseof
inspection.

Weagreewiththecomplainantsthattheregionalofficeaquohasjurisdictiontohearanddecidethe
instantlaborstandardcase.

xxxxxxxxx[8]
The Court agrees with the public respondent. In the case of Maternity Childrens Hospital vs
Secretary of Labor (174 SCRA 632), the Court in upholding the jurisdiction of the Regional Director
overthecomplaintonunderpaymentofwagesandECOLAsfiledonMay23,1986,bytheemployeesof
MaternityChildrensHospital,held:

ThisisalaborstandardscaseandisgovernedbyArt.128(b)oftheLaborCode,asamendedbyE.O.
111.

xxxxxxxxx

PriortothepromulgationofE.O.111onDecember24,1986,theRegionalDirectorsauthorityover
moneyclaimswasunclear.ThecomplaintinthepresentcasewasfiledonMay23,1986whenE.O.111
wasnotyetineffect.xxxxxx

Webelieve,however,thatevenintheabsenceofE.O.111,RegionalDirectorsalreadyhadenforcement
powersovermoneyclaims,effectiveunderP.D.850,issuedonDecember16,1975,whichtransferred
laborstandardscasesfromthearbitrationsystemtotheenforcementsystem.

Intheaforecitedcase,theCourtinreinforcingitsconclusionthatRegionalDirectorhasjurisdiction
overlaborstandardscases,treatedE.O.111asacurativestatute,rulingasfollows:

E.O.No.111wasissuedonDecember24,1986orthree(3)monthsafterthepromulgationofthe
SecretaryofLaborsdecisionupholdingprivaterespondentssalarydifferentialsandECOLAson
September24,1986.TheamendmentofthevisitorialandenforcementpowersoftheRegionalDirector
(Article128(b))bysaidE.O.111reflectstheintentionenunciatedinPolicyInstructionsNos.6and37to
empowertheRegionalDirectorstoresolveuncontestedmoneyclaimsincaseswhereanemployer
employeerelationshipstillexists.Thisintentionmustbegivenweightandentitledtogreatrespect.As
heldinProgressiveWorkersUnion,etal.vs.F.P.Aguas,etal.G.R.No.5971112,May29,1985,150
SCRA429:

.xxTheinterpretationbyofficersoflawswhichareentrustedtotheiradministrationisentitledtogreat
respect.Weseenoreasontodetractfromthisrudimentaryruleinadministrativelaw,particularlywhen
latereventshaveprovedsaidinterpretationtobeinaccordwiththelegislativeintent.xx

TheproceedingsbeforetheRegionalDirectormust,perforcebeupheldonthebasisofArticle128(b)as
amendedbyE.O.No.111,datedDecember24,1986,thisexecutiveordertobeconsideredinthenature
ofacurativestatutewithretrospectiveapplication.(ProgressiveWorkersUnion,etal.vs.Hon.Aguas,et
al.(Supra)M.Garciavs.JudgeA.Martinez,etal.G.R.No.l47629,may28,1979,90SCRA331).

With regard to the petitioners reliance on the cases of Zambales Base, Inc. vs. Minister of Labor
(supra)andOreshootMiningCompanyvs.Arellano,(supra),thisismisplaced.InthecaseofZambales
Base,Inc.,thecourthasalreadyruledthat:

xxx,inviewofthepromulgationofExecutiveOrderNo.111,ZambalesBaseMetalsvs.Ministerof
Laborisnolongergoodlaw.(Emphasissupplied)ExecutiveOrderNo.111isinthecharacterofa
curativelaw,thatistosay,itwasintendedtoremedyadefectthat,intheopinionoftheLegislature(the
incumbentChiefExecutiveinthiscase,intheexerciseofherlawmakingpowersundertheFreedom
Constitution)hadattachedtotheprovisionundertheamendment.

xxxxxxxxx[9]
The case of Oreshoot Mining Corporation, on the other hand, involved money claims of illegally
dismissed employees. As the employeremployee relationship has already ceased and reinstatement is
sought, jurisdiction necessarily falls under the Labor Arbiter. Petitioner should not have used this to
support its theory as this petition involves labor standards cases and not monetary claims of illegally
dismissedemployees.
TheCourtwouldhaveruleddifferentlyhadthepetitionershownthatsubjectlaborstandardscaseis
withinthepurviewoftheexceptionclauseinArticle128(b)oftheLaborCode.Saidprovisionrequires
theconcurrenceofthefollowingelementsinordertodivesttheRegionalDirectororhisrepresentatives
of jurisdiction, to wit: (a) that the petitioner (employer) contests the findings of the labor regulations
officer and raises issues thereon (b) that in order to resolve such issues, there is a need to examine
evidentiarymattersand(c)thatsuchmattersarenotverifiableinthenormalcourseofinspection.[10]
 Nowhereintherecordsdoesitappearthatthepetitionerallegedanyoftheaforestatedgrounds.In
fact,initsMotionforReconsiderationoftheOrderoftheRegionalDirectordatedAugust20,1987,the
groundswhichpetitionerraisedwerethefollowing:

1.ThisHonorableOfficehasnojurisdictiontohearthiscaseanditsOrderof31October1987is
thereforenullandvoid

2.BatongBuhayGoldMines,Inc.iserroneouslyimpleadedasthesolepartyrespondent,thecomplaint
shouldhavebeendirectedalsoagainsttheAssetPrivatizationTrust.

IntheotherpleadingsfiledbypetitionerinNCRLSEDC1204787,suchastheUrgentOmnibus
MotiontodeclarevoidtheWritofExecutionforlackofjurisdictionandtheOppositionsitfiledonthe
MotionsforInterventionquestioningthelegalpersonalityoftheintervenors,questionsastotheamounts
complained of by the employees 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
clauseunderArticle128(b)oftheLaborCodewhichwouldtakethecaseoutofthejurisdictionofthe
RegionalDirectorandbringitbeforetheLaborArbiter.
The only instance when there was a semblance of raising the aforestated grounds, was when they
filedanAppealMemorandumdatedJanuary14,1988,beforetherespondentundersecretary.Inthesaid
Appeal Memorandum, petitioner comes up with the defense that the Regional Director was without
jurisdiction, as employeremployee relationship was absent, since petitioner had ceased doing business
since1985.
RecordsindicatethattheLaborStandardsandWelfareOfficers,pursuanttoComplaintInspection
AuthorityNo.CI204787,werenotallowedtolookintorecords,vouchersandotherrelateddocuments.
The officers of the petitioner alleged that the company is presently under receivership of the
Development Bank of the Philippines.[11] In lieu of this, the Regional Director had ordered that a
summaryinvestigationbeconducted.[12]Despitepropernotices,thepetitionerrefusedtoappearbefore
the Regional Director. To give it another chance, an order to file its position paper was issued to
substantiateitsdefenses.Notwithstandingalltheseopportunitiestobeheard,petitionerchosenottoavail
ofsuch.
AsheldinthecaseofM.RamirezIndustriesvs.Sec.ofLaborandEmployment,(266SCRA111):

xxxUnderArt.128(a)oftheLaborCode,theSecretaryofLabororhisdulyauthorizedrepresentatives,
suchastheRegionalDirectors,hasvisitorialpowerswhichauthorizehimtoinspecttherecordsnd
premisesofanemployeratanytimeofthedayornightwheneverworkisbeingundertakentherein,to
questionanyemployeeandinvestigateanyfact,conditionormatter,andtodetermineviolationsoflabor
laws,wageordersorrulesandregulations.Iftheemployerrefusestoattendtheinspectionor
conferenceortosubmitanyrecord,suchaspayrollsanddailytimerecords,hewillbedeemedtohave
waivedhisrighttopresentevidence.(emphasissupplied)

Petitioners refusal to allow the Labor Standards and Welfare Officers to conduct inspection in the
premisesoftheirheadofficeinMakatiandthefailuretofiletheirpositionpaperisequivalenttoawaiver
ofitsrighttocontesttheclaimsoftheemployees.ThisCourthadoccasiontoholdthereisnoviolationof
dueprocesswheretheRegionalDirectormerelyrequiredthesubmissionofpositionpapersandresolved
thecasesummarilythereafter.[13]Furthermore,theissuanceofthecomplianceorderwaswellwithinthe
jurisdictionoftheRegionalDirector,asSection14oftheRulesontheDispositionofLaborStandards
Casesprovides:

Section14.FailuretoAppearWheretheemployerorthecomplainantfailsorrefusestoappearduring
theinvestigation,despitepropernotice,fortwo(2)consecutivehearingswithoutjustifiablereasons,the
hearingofficermayrecommendtotheRegionalDirectortheissuanceofacomplianceorderbased
ontheevidenceathandoranorderofdismissalofthecomplaintasthecasemaybe.(Emphasis
supplied)

Itbearsstressingthatthispetitioninvolvesalaborstandardscaseanditisinkeepingwiththelaw
thattheworkerneednotlitigatetogetwhatlegallybelongstohim,forthewholeenforcementmachinery
oftheDepartmentofLaborexiststoinsureitsexpeditiousdeliverytohimfreeofcharge.[14]
Thus, their claim of closure for business, among other things, are factual issues which cannot be
brought here for the first time. As petitioner refused to participate in the proceedings below where it
couldhaveventilatedtheappropriatedefenses,todosointhispetitionisunavailing.Thereasonforthis
isthatfactualissuesarenotpropersubjectsofaspecialcivilactionforcertioraritotheSupremeCourt.
[15]

Itisthereforeabundantlyclearthatatthetimeofthefilingoftheclaimsofpetitionersemployees,
theRegionalDirectorwasalreadyexercisingvisitorialandenforcementpowers.
Regional Directors visitorial and enforcement powers under Art. 128 (b) has undergone series of
amendmentswhichtheCourtfeelstobeworthmentioning.
Confusion was engendered by the promulgation of the decision in the case of Servandos Inc. vs.
Secretary of Labor and Employment and the Regional Director, Region VI, Department of Labor and
Employment.[16] Inthesaidcase,theRegionalDirectortookcognizanceofthelaborstandardscasesof
theemployeesofServandosInc.,butthisCourtheldthat:

InthecaseofBriadAgroDevelopmentCorporationvs.DelaCernaandCamusEngineeringCorp.vs.
Sec.OflaborapplyingE.O.111theCourtrecognizedtheconcurrentjurisdictionoftheSecretaryof
labor(orRegionalDirectors)andthelaborArbiterstopassonemployeesmoneyclaims,includingthose
caseswhichthelaborArbitershadpreviouslyexercisedjurisdiction.However,inasubsequent
modificatoryresolutionintheBriadAgroCase,dated9November1989,theCourtmodifieditsoriginal
decisioninviewoftheenactmentofRA6715,andupheldthepoweroftheRegionalDirectorsto
adjudicatemoneyclaimssubjecttotheconditionssetforthinSection2ofsaidlaw(RA6715).

ThepowerthenoftheRegionalDirector(underthepresentstateoflaw)toadjudicateemployeesmoney
claimsissubjecttotheconcurrenceofalltherequisitesprovidedunderSec.2ofRA6715,towit:

(a)theclaimisrepresentedbyanemployerorpersonemployedindomesticorhouseholdservice,or
househelper
(b)theclaimarisesfromemployeremployeerelationship
(c)theclaimantdoesnotseekreinstatementand
(d)theaggregatemoneyclaimofeachemployeeorhousehelperdoesnotexceedP5,000.

xxxxxxxxx[17]
TheServandoruling,ineffect,expandedthejurisdictionallimitationprovidedforbyRA6715asto
include labor standards cases under Article 128 (b) and no longer limited to ordinary monetary claims
underArticle129.
Infact,intheMotionforReconsideration[18]presentedbytheprivaterespondentsintheServando
case, the court applied more squarely the P5,000 limit to the visitorial and enforcement power of the
RegionalDirector,towit:
ToconstruethevisitorialpoweroftheSecretaryofLabortoorderandenforcecompliancewithlabor
lawsasincludingthepowertohearanddecidecasesinvolvingemployeesclaimsforwages,arisingfrom
employeremployeerelations,eveniftheamountofsaidclaimsexceedP5,000foreachemployee,
would,inourconsideredopinion,emasculateandrendermeaningless,ifnotuseless,theprovisionsof
Art.217(a)and(6)andArticle129oftheLaborCodewhich,asabovepointedout,conferexclusive
jurisdictionontheLaborArbitertohearanddecidesuchemployeesclaims,regardlessofamount,can
beheardanddeterminedbytheSecretaryofLaborunderhisvisitorialpower.Thisdoesnot,however,
appeartobethelegislativeintent.

ButprevailinglawandjurisprudencerenderedtheServandorulinginapplicable.Intherecentcaseof
FranciscoGuico,Jr.versusTheHonorableSecretaryofLabor&EmploymentLeonardoA.Quisumbing,
GR # 131750, promulgated on November 16, 1998, this Court upheld the jurisdiction of the Regional
DirectornotwithstandingthefactthattheamountsawardedexceededP5,000.
RepublicAct7730,thelawgoverningthevisitorialandenforcementpowersoftheLaborSecretary
andhisrepresentativesreads:

Article128(b)NotwithstandingtheprovisionsofArticles129and217ofthisCodetothecontrary,
andincaseswheretherelationshipofemployeremployeestillexists,theSecretaryofLaborand
Employmentorhisdulyauthorizedrepresentativesshallhavethepowertoissuecomplianceordersto
giveeffecttothelaborstandardsprovisionsofthisCodeandotherlaborlegislationbasedonthefindings
oflaboremploymentandenforcementofficersorindustrialsafetyengineersmadeinthecourseof
inspection.TheSecretaryorhisdulyauthorizedrepresentativeshallissuewritsofexecutiontothe
appropriateauthorityfortheenforcementoftheirorders,exceptincaseswheretheemployerconteststhe
findingsofthelaboremploymentandenforcementofficerandraisesissuessupportedbydocumentary
proofswhichwerenotconsideredinthecourseofinspection.

xxxxxxxxx(emphasissupplied)
Thepresentlaw,RA7730,canbeconsideredacurativestatutetoreinforcetheconclusionthatthe
RegionalDirectorhasjurisdictionoverthepresentlaborstandardscase.
Wellsettled is the rule that jurisdiction over the subject matter is determined by the law in force
whentheactionwascommenced,unlessasubsequentstatuteprovidesforitsretroactiveapplication,as
whenitisacurativelegislation.[19]
Curative statutes are intended to supply defects, abridge superfluities in existing laws and curb
certainevils.Theyareintendedtoenablepersonstocarryintoeffectthatwhichtheyhavedesignedand
intended, but has failed of expected legal consequence by reason of some statutory disability or
irregularity in their own action. They make valid that which, before the enactment of the statute, was
invalid.[20]
Inarrivingatthisconclusion,thecaseofBriadAgroDevelopmentvs.DelaCerna[21]comestothe
fore.Inthesaidcase,RA6715washeldtobeacurativestatute.There,theCourtruledthatRA6715is
deemedacurativestatuteandshouldbeappliedtopendingcases.TherationaleoftherulingoftheCourt
was that prior to RA 6715, Article 217 as amended by E.O. 111, created a scenario where the Labor
Arbiter and the Regional Director of DOLE had overlapping jurisdiction over money claims. Such a
situation was viewed as a defect in the law so that when RA 6715 was passed, it was treated or
interpreted by the Court as a rectification of the infirmity of the law, and therefore curative in nature,
withretroactiveapplication.
Parenthetically,thesamerationaleappliesintreatingRA7730asacurativestatute.Explicit in its
title[22] is the legislative intent to rectify the error brought about by this Courts ruling that RA 6715
covers even labor standards cases where the amounts to be awarded by the Regional Director exceed
P5,000asprovidedforunderRA6715.CongressionalrecordsrelativetoRepublicAct7730revealthat,
this bill seeks to do away with the jurisdictional limitations imposed thru said ruling (referring to
Servando) and to finally settle any lingering doubts on the visitorial and enforcement powers of the
SecretaryofLaborandEmployment.[23]
Alltheforegoingstudiedlyconsidered,theineluctableconclusionisthattheapplicationofRA7730
tothecaseunderconsiderationisproper.
Thus,itisdecisivelyclearthatthepublicrespondentdidnotactwithgraveabuseofdiscretionin
issuingtheOrderdatedSeptember16,1988.
The second issue for resolution is the validity of the auction sales conducted by Special Sheriff
Ramos.It bears stressing that the writ of execution issued by the Regional Director led to the several
auctionsalesconductedonSeptember24,1987,October2,1987,October23,1987,October29,1987
andOctober30,1987.
InthefirstOrderofpublicrespondent,thefive(5)auctionsalesweredeclarednullandvoid.Asthe
publicrespondentputit,thescandalouslylowpriceforwhichthepersonalpropertiesoftherespondent
were sold leads us to no other recourse but to invalidate the auction sales conducted by the special
sheriff.[24]
IntheSeptember16,1988Order[25]ofpublicrespondent,thepersonalpropertiesandcorresponding
pricesforwhichtheyweresoldwereasfollows:

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) unit 1978 Model peterbuilt truck with Engine No. 6A410319, Chassis No. 139163P Truck
No.4notrunningcondition.

ProceedsofSale............P178,000.00

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)Lotofscrap
ironsimpoundedinsidetheBatongBuhayCompound,Calanan,KalingaApayao.
5.One(1)unitpanelIsuzuwithEngineNo.821POF200207,PlateNo.PBV386.

ProceedsofSale....P228,750.00

PersonalPropertiesSoldonOctober23,1987:

1.One (1) Unit Toyota Land Cruiser, with Engine No. BO4466340, Chassis No. 81400500227, Plate
No.BAT353,burned,damagenotrunningcondition,typeofbodyjeepmotornotvisible.
 2.Two(2)unitspeterbuilts,damaged,burnedmotorNos.(notvisible)andChassisNos.notvisible.
3.One(1)UnitLayland,burned,damagedandMotorNo.notvisible.
4.Two(units)aircompressor,burned,damagedandone(1)generator.
5.One(1)UnitLoaderMichigan50,damagedandburned,and
6.One(1)rockcrasher,damaged,burned,scrapironjunk.

ProceedsofSale...........P98,000.00

PropertiessoldonOctober29,1987:

1.One(1)lotofscrapconstructionmaterials
2.One(1)lotofscrapminingmachineriesequipmentsandsupplies.
3.One(1)lotofjunkmachineries,equipmentsandsupplies.

ProceedsofSale............P1,699,999.99

PersonalPropertiesSoldonOctober20,1987*

1.One(1)lotofscrapconstructionmaterials
2.One(1)lotofscrapminingmachineries,equipmentsandsupplies

ProceedsofSale...........P2,185,000.00

TotalProceedsSale....P4,389,749.99

tosatisfythejudgmentawardintheamountofP4,818,746.00.

Asageneralrule,findingsoffactandconclusionoflawarrivedatbyquasijudicialagenciesarenot
tobedisturbedabsentanyshowingofgraveabuseofdiscretiontaintingthesame.Butinthecaseunder
scrutiny, there was grave abuse of discretion when the public respondent, without any evidentiary
support,adjudgedsuchpricesasscandalouslylow.Hemerelyreliedontheselfservingassertionbythe
petitioner that the value of the auctioned properties was more than the price bid. Obviously, this
ratiocinationdidnotsufficetosetasidetheauctionsales.
The presumption of regularity in the performance of official function is applicable here.
Conformably, any party alleging irregularity vitiating auction sales must come forward with clear and
convincingproof.
Furthermore,itisawellsettledprinciplethat:

Mereinadequacyofpriceisnot,ofitselfsufficientgroundtosetasideanexecutionsalewherethesaleis
regular,properandlegalinotherrespects,thepartiesstandonanequalfooting,thereareno
confidentialrelationbetweenthem,thereisnoelementoffraud,unfairness,oroppression,andthereis
nomisconduct,accident,mistakeorsurpriseconnectedwith,andtendingtocause,theinadequacy.[26]

Consequently, in declaring the nullity of the subject auction sales on the ground of inadequacy of
price, the public respondent acted with grave abuse of discretion amounting to lack or excess of
jurisdiction.
 But,thisisnottodeclarethequestionedauctionsalesasvalid.Thesamearenullandvoidsinceon
thepropertiesofpetitionerinvolvedwasconstitutedamortgagebetweenpetitionerandtheDevelopment
BankofthePhilippines,asshownbythe:
(a)DeedofMortgagedatedDecember28,1973
(b)JointMortgage(AmendingDeedofMortgage)datedAugust25,1975
(c)AmendmenttoJointMortgagedatedOctober18,1976.
(d)ConfirmationofMortgagedatedMarch27,1979and

(e)AdditionalJointFirstMortgagedatedMarch31,1981.[27]
TheaforementioneddocumentswereexecutedbetweenthepetitionerandDevelopmentBankofthe
Philippines (DBP) even prior to the filing of the complaint of petitioners employees. The properties
having been mortgaged to DBP, the applicable law is Section 14 of Executive Order No. 81, dated 3
December 1986, otherwise known as the The 1986 Revised Charter of the Development Bank of the
Philippines,whichexemptsthepropertiesofpetitionermortgagedtoDBPfromattachmentorexecution
sales.Section14ofE.O.81,reads:

Sec.14.ExemptionfromAttachment.Theprovisionsofanylawtothecontrarynotwithstanding,
securitiesonloansand/orotheraccommodationsgrantedbytheBankoritspredecessorininterestshall
notbesubjecttoattachment,executionoranyothercourtprocess,norshalltheybeincludedinthe
propertyofinsolventpersonsorinstitutions,unlessalldebtsandobligationsoftheBankorits
predecessorininterest,penalties,collectionofexpenses,andothercharges,subjecttotheprovisionsof
paragraph(e)ofSec.9ofthisCharter.

Infact,aletterdatedJanuary31,1990ofJoseC.Sison,AssociateExecutiveTrusteeoftheAsset
PrivatizationTrust,totheOfficeoftheClerkofCourtoftheSupremeCourt,certifiedthatthepetitioner
iscoveredbyProclamationNo.50issuedonDecember8,1986byPresidentCorazonC.Aquino.
Quotedhereunderarethepertinentportionsofthesaidletter:[28]

RE:BBGMIvs.Hon.delaSerna,GRNo.86963

SupremeCourtCertiorari

SIR:

xxxxxxxxx

xxxalltheassets(realandpersonal/chattel)ofBatongBuhayGoldMines,Inc.(BBGMI)havebeen
transferredandentrustedtotheAssetPrivatizationTrust(APT)byvirtueofProclamationNo.50dated
December8,1986ofherExcellency,PresidentCorazonC.Aquino.AllthesaidassetsofBBGMIare
coveredbyrealandchattelmortgagesexecutedinfavorofthePhilippineNationalBank(PNB),the
DevelopmentBankofthePhilippines(DBP)andtheNationalInvestmentandDevelopmentCorporation
(NIDC).

xxxxxxxxx

Section14,ExecutiveOrderNo.81:

xxxxxxxxx
 Pursuanttotheabovequotedprovisionoflaw,youareherebywarnedthatalltheassets(realand
personal/chattel)ofBBGMIareexemptedfromwritsofexecution,attachment,oranyotherlienor
courtprocesses.TheGovernment,throughAPT,shallinitiateanyadministrativemeasuresand
remediesagainstyouforanyviolationofthevestedrightsofPNB,DBPandAPT.

xxxxxxxxx

(sgd)

JOSEC.SISON

TheexemptionreferredtointheaforecitedletterisoneofthecircumstancescontemplatedbyRule
39oftheRevisedRulesofCourt,towit:

Sec.13.Propertyexemptfromexecution.Exceptasotherwiseexpresslyprovidedbylaw,the
followingproperties,andnoother,shallbeexemptfromexecution:

xxxxxxxxx

(m)Propertiesspeciallyexemptedbylaw.

xxxxxxxxx
PrivaterespondentscontendthatevenifsubjectpropertiesweremortgagedtoDBP(nowunderAsset
PrivatizationTrust),Article110[29]oftheLaborCode,asamendedbyRA6715,appliesjustthesame.
According to them, the said provision of law grants preference to money claims of workers over and
above all credits of the petitioner. This contention is untenable. In the case of DBP vs. NLRC,[30] the
Supreme Court held that the workers preference regarding wages and other monetary claims under
Article110oftheLaborCode,asamended,contemplatesbankruptcyorliquidationproceedingsofthe
employersbusiness.Whatismore,itdoesnotdisregardthepreferentiallienofmortgageesconsideredas
preferred credits under the provisions of the New Civil Code on the classification, concurrence and
preferenceofcredits.
We now come to the issue with respect to the second Order, dated December 14, 1988, which
declaredasvalidtheauctionsaleconductedonOctober29,1987bySpecialSheriffJohnRamos.Public
respondent had no authority to validate the said auction sale on the ground that the intervenors, MFT
Corporation and Salter Holdings Pty., Ltd., as purchasers for value, acquired legal title over subject
properties.
It is well to remember that the said properties were transferred to the intervenors, when Fidel
Bermudez,thehighestbidderattheauctionsale,soldthepropertiestoMFTCorporationwhich,inturn,
soldthesamepropertiestoSalterHoldingsPty.,Ltd.Publicrespondentopinedthatthecontractofsale
betweentheintervenorsandthehighestbiddershouldberespectedasthesesalestookplaceduringthe
interregnumaftertheauctionsalewasconductedonOctober29,1987andbeforetheissuanceofthefirst
disputedOrderdeclaringalltheauctionsalesnullandvoid.
Onthisissue,theCourtrulesotherwise.
Asregardspersonalproperties,thegeneralruleisthattitle,likeastream,cannotrisehigherthanits
source.[31] Consequently, a seller without title cannot transfer a title better than what he holds. MFT
Corporation and Salter Holdings Pty., Ltd. trace their title from Fidel Bermudez, who was the highest
bidderofavoidauctionsaleoverpropertiesexemptfromexecution.Suchbeingthecase,thesubsequent
salemadebyhim(FidelBermudez)isincapableofvestingtitleorownershipinthevendee.
 The Order dated December 14, 1988, declaring the October 29, 1987 auction sale as valid, was
issuedwithgraveabuseofdiscretionamountingtolackorexcessofjurisdiction.
WHEREFORE,thepetitionisherebyGRANTED,insofarastheOrderdatedDecember14,1988
of Undersecretary Dionisio dela Serna is concerned, which Order is SET ASIDE. The Order of
September 16, 1988, upholding the jurisdiction of the Regional Director, is AFFIRMED. No
pronouncementastocosts.
SOORDERED.
Melo,(Chairman),Vitug,Panganiban,andGonzagaReyes,JJ.,concur.

*Attachment"Q",Rollo,pp.175191.
*ThiswastypographicalerrorasadmittedbythepublicrespondentandshouldhavereadOct.30,1987.Ascanbeseenfrom
therecords,therewasnoauctionsaleconductedbytheSpecialSheriffdatedOct.20,1987.

[1]Rollo,p.67,pennedbyRegionalDirectorLunaC.Piezas.

[2]Rollo,pp.192198.AttachmentR.OrderofUsecDionisiodelaSernadatedSeptember16,1988.

[3]Rollo,p.203.

[4]Section7,Rule1,RulesontheDispositionofLaborStandardsCasesintheRegionalOffice,datedSeptember16,1987.

[5]PD850asamendedbyPD1691,latterbecameeffectiveMay1,1980.

[6]146SCRA51.

[7]156SCRA498.

[8]Rollo,pp.199200.

[9]BriadAgroDevelopmentCorporationvs.DionisiodelaSerna,174SCRA524.

[10]SSKPartsCorporationvs.Camas,181SCRA675.

[11]Rollo,page65.

[12] Section11.Hearing.Wherenoproofofcomplianceissubmittedbytheemployerafterseven(7)calendardaysfrom
receipt of the inspection results, the Regional Director shall summon the employer and the complainants to a summary
investigation.Inregularroutineinspectioncaseshowever,suchinvestigationshallbeconductedwherenocompletefield
investigationcanbemadeforreasonsattributabletothefaultoftheemployerorhisrepresentatives,suchasthosebutnot
limited to instances when the field inspectors are denied access to the premises, employment records, or workers of the
employer.(RulesontheDispositionofLaborStandardsCases)
[13]Villadolidvs.Inciong,121SCRA205.

[14]MOLEPolicyInstructionsNo.7.

[15]PhilippineLongDistanceCompanyvs.NLRC,190SCRA717.

[16]184SCRA664

[17]184SCRA664198SCRA156.
[18]198SCRA156.

[19]