Banco Filipino v. Lazaro
REITERATIONFacts
The Antecedents: Miguelito M. Lazaro (Lazaro) was employed by Banco Filipino Savings and Mortgage Bank (Banco Filipino) from February 1, 1968. He was reemployed on April 16, 1992, after the bank's closure was declared illegal and it reopened in June 1992. Lazaro retired on December 1, 1995, as assistant vice-president, receiving retirement benefits for 20 years and 7 months of service based on a P38,000 monthly salary. Procedural History: Lazaro demanded a higher retirement pay, claiming 27 years and 10 months of service and a base salary of P50,000. He also claimed attorney's fees from foreclosures and profit shares from 1984 to 1995. The Labor Arbiter (LA) and National Labor Relations Commission (NLRC) denied his claims. The Court of Appeals (CA) modified the LA's decision, granting him seven years of retirement differential pay for the liquidation period but denying his claims for salary increase basis, attorney's fees, and profit shares. The CA dismissed his profit share claim based on vouchers and checks showing full payment. The Petition: Both Banco Filipino and Lazaro filed petitions for review. Banco Filipino assailed the CA's grant of retirement pay differential for the liquidation period. Lazaro reiterated his claims for a higher salary base, rounding off his service to 28 years, attorney's fees, and profit shares for 1985-1993. He also raised a one-day salary differential claim and sought moral and exemplary damages, attorney's fees, and expenses of suit for the first time before the CA.
Issue(s)
Whether the CA erred in granting retirement pay differentials to Lazaro by including the liquidation period and in calculating the final salary base and rounding off service. Whether the CA erred in dismissing Lazaro's claims for attorney's fees and profit shares. Whether the CA erred in not addressing Lazaro's claims for a one-day salary differential and damages (moral, exemplary, attorney's fees, expenses of suit).
Ruling
The Supreme Court affirmed the Court of Appeals' Decision and Resolution. It ruled that the liquidation period should be included in the computation of retirement pay, denied claims for attorney's fees and profit shares, and dismissed the claims for one-day salary differential and damages.
Ratio Decidendi
On the grant of retirement pay differentials and salary base/rounding off: The Court held that banks under liquidation retain their legal personality and that work performed during this period benefits the bank and must be credited for retirement pay. The Court distinguished Banco Filipino Staff Association v. Banco Filipino Savings and Mortgage Bank. The CA did not err in crediting the liquidation period. The Court upheld the factual determination that Lazaro's final salary was P38,000. Regarding rounding off service, Article 287 of the Labor Code applies only in the absence of a retirement plan. The Rules of the Banco Filipino Retirement Fund govern, providing for prorated credit and higher benefits, binding Lazaro. On attorney's fees and profit shares: The Court found no legal basis for additional attorney's fees, as foreclosure proceedings were part of Lazaro's official duties. For profit shares, the Court deferred to the CA's factual finding of full payment, citing vouchers and checks, and noted Lazaro failed to prove profit generation during the bank's closure. On the one-day salary differential and damages: The claim for a one-day salary differential was dismissed as it was raised for the first time on appeal. Claims for moral and exemplary damages were denied for lack of clear and convincing evidence of bad faith or malice. Attorney's fees were also denied, as Banco Filipino had a prima facie legitimate defense for its refusal to credit the liquidation period and pay additional attorney's fees without basis.
Main Doctrine
A bank under liquidation retains its legal personality, and work performed by an employee during this period, such as collecting debts, benefits the bank and must be credited for retirement pay computation. Claims raised for the first time on appeal are dismissed on grounds of due process. Awards for moral and exemplary damages require clear and convincing proof of bad faith, and attorney's fees are generally not awarded unless litigation was necessitated by an unjustified act or omission.