G.R. No. L-20831 August 31, 1968
CALTEX (PHILIPPINES), INC., SHELL COMPANY OF THE PHILIPPINES, LTD., STANDARD VACUUM OIL CO., petitioners, LAMBERTO SANGUILLOSA, claimant-appellee, vs. LUIS U. GO, assignee-appellant.

FACTS

Lamberto Sanguillosa filed a claim with Regional Office No. 3 of the Department of Labor at Manila on June 11, 1957, against his former employer, Lopez and Ledesma Transportation Co., Inc., for vacation and sick leave, underpayment of wages, and overtime compensation. The company filed an answer and later an action for prohibition to question the constitutionality of Reorganization Plan No. 20-A and the jurisdiction of the Regional Office, which was dismissed by the Court of First Instance of Iloilo. No appeal was taken from this dismissal. The Hearing Officer of Regional Office No. 3 rendered a decision on August 5, 1958, ordering the company to pay Sanguillosa. The company appealed to the Labor Standards Commission. During the pendency of this appeal, insolvency proceedings against the company were commenced on August 9, 1958. The Insolvency Court allowed the appeal to continue and substituted the assignee, Luis U. Go, for the company. The Labor Standards Commission dismissed the company’s appeal on March 24, 1959. Sanguillosa then filed his verified claim with the insolvency court on April 13, 1959, praying for its allowance as a preferential claim based on the final judgment. The assignee and creditors Caltex and Shell opposed. The Insolvency Court issued an order on October 6, 1959, approving the claim as final and executory and declaring it a preferred claim. The assignee appealed.

ISSUE

1. Whether the Hearing Officer of Regional Office No. 3 had jurisdiction to try and decide the claim.
2. Whether the claim had become final and executory.
3. Whether the claim should be considered a preferred claim under the Insolvency Law and the Civil Code.

RULING

1. The assignee is estopped from assailing the constitutionality of the powers granted to the Regional Office, as the company had previously raised the same issue in a separate action (Civil Case No. 4753) which was dismissed and became final. The contention that the Regional Office lacked jurisdiction because Sanguillosa was not a resident of Manila is without merit, as the evidence showed he was a resident of Manila at the time of filing, and any error regarding venue is not a reversible error at that stage.
2. The decision of Regional Office No. 3 became final and executory after the company’s appeal to the Labor Standards Commission was dismissed and motions for reconsideration were denied.
3. The claim for vacation and sick leave, underpayment of wages, and overtime compensation is a preferred claim. It falls under Section 50(b) of the Insolvency Law or under paragraphs 2 or 14(b) of Article 2244 of the New Civil Code. The difference in language between the Insolvency Law (“immediately preceding”) and the Civil Code (“for one year preceding”) indicates a legislative intent in the Civil Code to broaden the preference to services rendered during any year prior to the commencement of insolvency, not necessarily the immediate year. The claim also qualifies under paragraph 14 of Article 2244, as a final award from a quasi-judicial body (like the Labor Regional Office) can be the basis for a preferred claim, similar to a final award from commissioners of appraisal recognized in jurisprudence. The order of the Insolvency Court is affirmed.