FIRST DIVISION

[G.R. No. 153882. January 29, 2007.]

LINGKOD MANGGAGAWA SA RUBBERWORLD, ADIDAS-ANGLO, its

o cers and members as represented by SONIA ESPERANZA ,
petitioners, vs . RUBBERWORLD (PHILS.) INC. and ANTONIO YANG,
LAYA MANANGHAYA SALGADO & CO., CPA's (In its capacity as
liquidator of Rubberworld (Phils., Inc.) , respondents.

DECISION

GARCIA , J : p

Assailed and sought to be set aside in this petition for review under Rule 45 of the
Rules of Court is the Decision 1 dated January 18, 2002 of the Court of Appeals (CA) in CA-
G.R. SP No. 53356, as reiterated in its Resolution 2 of June 5, 2002, denying the petitioners'
motion for reconsideration. The assailed CA decision annulled and set aside an earlier
decision of the Labor Arbiter, as well as the resolution/order and writ of execution issued
by the National Labor Relations Commission (NLRC) in a labor dispute between the
petitioners and the respondents over which a suspension order had been issued by the
Securities and Exchange Commission (SEC).
Petitioner Lingkod Manggagawa sa Rubberworld, Adidas-Anglo is a legitimate labor
union whose members were employees of the principal respondent, Rubberworld
Philippines, Inc. (Rubberworld, for short), a domestic corporation engaged in the
manufacture of footwear, bags and garments.
The facts:
On August 26, 1994, Rubberworld led with the Department of Labor and
Employment (DOLE) a Notice of Temporary Partial Shutdown due to severe nancial crisis,
therein announcing the formal actual company shutdown to take effect on September 26,
1994. A copy of said notice was served on the recognized labor union of Rubberworld,
t h e Bisig Pagkakaisa-NAFLU, the union with which the corporation had a collective
bargaining agreement.
On September 1, 1994, Bisig Pagkakaisa-NAFLU staged a strike. It set up a picket
line in front of the premises of Rubberworld and even welded its gate. As a result,
Rubberworld's premises closed prematurely even before the date set for the start of its
temporary partial shutdown.
On September 9, 1994, herein petitioner union, the Lingkod Manggagawa Sa
Rubberworld, Adidas-Anglo (Lingkod, for brevity), represented by its President, Sonia
Esperanza, led a complaint against Rubberworld and its Vice Chairperson, Mr. Antonio
Yang, for unfair labor practice (ULP), illegal shutdown, and non-payment of salaries and
separation pay. In its complaint, docketed as NLRC-NCR-Case No. 00-09-06637
(hereinafter referred to as ULP Case, for brevity), petitioner union alleged that it had led a
petition for certi cation election during the freedom period, which petition was granted by
the DOLE Regional Director. In the same complaint, petitioner union claimed that the strike
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 staged by Bisig Pagkakaisa-NAFLU was company-instigated/supported. The said
complaint was referred to Labor Arbiter Ernesto Dinopol for appropriate action.
On November 22, 1994, while the aforementioned complaint was pending with
Labor Arbiter Dinopol, Rubberworld led with the SEC a Petition for Declaration of a State
of Suspension of Payments with Proposed Rehabilitation Plan. The petition, docketed as
SEC Case No. 11-94-4920, was granted by the SEC in its Ord er 3 dated December 28,
1994 , to wit:
Accordingly, with the creation of the Management Committee, all actions
for claims against Rubberworld Philippines, Inc. pending before any court,
tribunal, o ce, board, body, Commission or sheriff are hereby deemed
SUSPENDED.
Consequently, all pending incidents for preliminary injunctions, writ of
attachments, foreclosures and the like are hereby rendered moot and academic.

SO ORDERED.

Notwithstanding the SEC's aforementioned suspension order and despite

Rubberworld's submission on January 10, 1995 of a Motion to Suspend Proceedings, 4
Labor Arbiter Dinopol went ahead with the ULP case and rendered his decision 5 thereon
on August 16, 1995, saying in part, thus:
. . . [I]t is crystal clear that the SEC Order notwithstanding, Labor Arbiters
and the National Labor Relations Commission should not abdicate the
jurisdiction which Article 217 of the Labor Code has conferred upon them subject
to the condition that awards, if any, should be presented to the Management
Committee for processing and payment,

and disposing as follows:

WHEREFORE, decision is hereby rendered:

1) denying respondents motion to suspend proceedings;

2) declaring respondent Rubberworld Phils., Inc. to have committed

unfair labor practice;

3) declaring the temporary shutdown to have been o cially ended as

of March 26, 1995;

4) ordering respondent Rubberworld Phils., Inc. to reinstate

complainant-Union's members who indicate their intention to be so
reinstated within one month from the receipt of this decision by
complainants' counsel;

5) ordering respondent Rubberworld Phils., Inc. to pay the members of

the complainant-Union their backwages computed from April 26,
1995 and separation pay if reinstatement is no longer possible plus
10% of the total award of attorney's.

For purposes of quantifying the backwages and separation pay, and

identifying the recipients thereof, Mr. Ricardo Atienza of the Research and
Information Unit of this Commission is hereby directed to proceed to the o ce of
the respondent Rubberworld whose responsible o cers are ordered to allow Mr.
Atienza or his representative access to such records as may be necessary and
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 render a report thereon within 30 days from his receipt of this Decision.

For purposes of any appeal, the appeal bond is tentatively set at

P500,000.00.

SO ORDERED.

On September 21, 1995, Rubberworld went on appeal to the NLRC, posting therefor
a temporary appeal bond in the amount of P500,000.00 as tentatively xed by the Labor
Arbiter. Meanwhile, on October 10, 1995, Ricardo Atienza of the NLRC's Research and
Information Unit submitted his report on the computation of the monetary awards, as
ordered by the Labor Arbiter. He came out with the total amount of Twenty Seven Million
Five Hundred Six Thousand and Two Hundred Fifty-Five Pesos and 70/100
(P27,506,255.70). Despite Rubberworld's vigorous opposition, the First Division of the
NLRC, in its O r d er 6 of January 22, 1996 , required the corporation to post an appeal
bond in an amount equivalent to Mr. Atienza's computation, with a warning that failure to
do so shall result in the dismissal of its appeal for non-perfection, thus:
Accordingly, respondents-appellants are hereby directed to upgrade or
complete their Appeal Bond in the amount equivalent to Twenty Seven Million
Five Hundred Six Thousand Two Hundred Fifty-Five Pesos and 70/100
(P27,506,255.70) pursuant to the award as computed by Ricardo O. Atienza
within ten (10) days from receipt of this Order.

Failure of the respondents-appellants to comply with this directive will give

this Commission no choice but to dismiss their appeal for non-perfection thereof.

Its motion for reconsideration of the same Order having been denied by the NLRC in
its Resolution 7 of March 29, 1996, Rubberworld directly went to this Court on a Petition for
Certiorari, 8 interposing the sole issue of whether or not the NLRC acted without or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction in requiring the corporation to post the upgraded appeal bond of
P27,506,255.70 based on the computation of Mr. Atienza.
Meanwhile, on account of Rubberworld's failure to upgrade or complete its appeal
bond as indicated in the NLRC's January 22, 1996 Order, the Commission, in a decision 9
dated June 28, 1996, did dismiss Rubberworld's appeal. Owing to this development,
Rubberworld led with the Court a Supplemental Petition for Certiorari, 1 0 therein
incorporating its challenge to the said dismissal order of the NLRC, contending that the
labor tribunal acted without or in excess of jurisdiction.
On April 22, 1998, the SEC issued an Order 1 1 declaring Rubberworld as dissolved
and lifting its earlier suspension order, to wit:
Finding that the continuance in business [of Rubberworld] would neither be
feasible/pro table nor work to the best of interest of the stockholders, parties-
litigants, creditors, or the general public, . . . Rubberworld Philippines, Inc. is hereby
DISSOLVED under Section 6(d) of P.D. 902-A. Accordingly, the suspension Order
is LIFTED .

The Laya Mananghaya Salgado & Co., CPA's is hereby appointed as

liquidator to effect the dissolution of the petitioner.

SO ORDERED.

On August 18, 1995, a writ of execution 1 2 was issued by the NLRC in favor of the
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 petitioner union with a copy thereof served on the respondent corporation. Faced with this
dilemma, Rubberworld led with the Court an Urgent Omnibus Motion to declare null and
void the execution/garnishment made pursuant to the same writ. The motion, however,
was denied by the Court in its Resolution of November 18, 1998.
On February 8, 1999, Rubberworld led with the Court a Motion to Admit its
Amended Petition for Certiorari 1 3 and its Supplement, 1 4 alleging therein that pursuant to
the SEC Order dated December 28, 1994, supra, the proceedings before the Labor Arbiter
should have been suspended. Hence, since the Labor Arbiter disregarded the SEC's
suspension order, the subsequent proceedings before it were null and void.
Consistent with its ruling in St. Martin Funeral Homes v. NLRC , 1 5 the Court, in its
Resolution of February 29, 1999, referred Rubberworld's amended petition for certiorari
and its supplement to the CA for appropriate action, whereat it was docketed as CA- G.R.
SP No. 53356.
For its part, the CA, in its Resolution 1 6 of May 11, 2000, over the vehement
opposition of the petitioner union, resolved to admit Rubberworld's aforementioned
amended petition and the supplement thereto "in the interest of justice."
Eventually, in the herein assailed Decision 1 7 dated January 18, 2002, the CA granted
Rubberworld's petition in CA-G.R. SP. No. 53356 on the nding that the Labor Arbiter had
indeed committed grave abuse of discretion when it proceeded with the ULP case despite
the SEC's suspension order of December 28, 1994, and accordingly declared the
proceedings before it, including the subsequent orders by the NLRC dismissing
Rubberworld's appeal and the writ of execution, null and void.
With their motion for reconsideration having been denied in the CA in its Resolution
18 of June 5, 2002, petitioners are now with the Court via the instant recourse, raising the
following issues:
1) Whether the CA had committed grave abuse of discretion amounting to
lack of jurisdiction or an excess in the exercise thereof when it gave due
course to the petition led by Rubberworld (Phils.), Inc. and annulled and
set aside the decisions rendered by the labor arbiter a quo and the NLRC,
when the said decisions had become nal and executory warranting the
outright dismissal of the aforesaid petition;
2) Whether the CA had committed grave abuse of discretion and reversible
error when it applied Section 5(d) and Section 6 (c) of P.D. No. 902-A, as
amended, to the case at bar;

3) Whether the CA had committed reversible error when it adopted and

applied the rulings in the cases of Rubberworld (Phils.), Inc., or Julie Yap
Ong v. NLRC, Marilyn F. Arellano, et al. 1 9 and Rubberworld (Phils.), Inc.
and Julie Y. Ong v. NLRC, Aquino Magsalin, et al. 2 0 to the case at bar.
We DENY .
It is the petitioners' submission that the decision of the Labor Arbiter, the
a rmatory decision of the NLRC and the latter's dismissal of Rubberworld's appeal, as
well the writ of execution subsequently issued, can no longer be annulled and set aside, the
same having all become nal and executory. Additionally, petitioners argue that no appeal
from the decision of the Labor Arbiter was ever perfected due to Rubberworld's failure to
upgrade or post additional bond as ordered by the NLRC. Hence, they submit that the CA
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 acted in grave abuse of discretion in even giving due course to Rubberworld's petition in
CA-G.R. SP No. 53356, let alone rendering a decision thereon annulling and setting aside
the proceedings before the Labor Arbiter and the NLRC's dismissal of Rubberworld's
appeal and the writ of execution issued following the dismissal of said appeal.
The Court disagrees.
While posting an appeal bond is indeed a requirement for the perfection of an
appeal from the decision of the Labor Arbiter to the NLRC, Rubberworld's failure to
upgrade its appeal bond cannot bar, in this particular instance, the review by the CA of the
lower court proceedings.
Given the factual milieu obtaining in this case, it cannot be said that the decision of
the Labor Arbiter, or the decision/dismissal order and writ of execution issued by the
NLRC, could ever attain nal and executory status. The Labor Arbiter completely
disregarded and violated Section 6 (c) of Presidential Decree 902-A, as amended, which
categorically mandates the suspension of all actions for claims against a corporation
placed under a management committee by the SEC. Thus, the proceedings before the
Labor Arbiter and the order and writ subsequently issued by the NLRC are all null and void
for having been undertaken or issued in violation of the SEC suspension Order dated
December 28, 1994. As such, the Labor Arbiter's decision, including the dismissal by the
NLRC of Rubberworld's appeal, could not have achieved a final and executory status.
Acts executed against the provisions of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity. 2 1 The Labor Arbiter's decision in this
case is void ab initio, and therefore, non-existent. 2 2 A void judgment is in effect no
judgment at all. No rights are divested by it nor obtained from it. Being worthless in itself,
all proceedings upon which the judgment is founded are equally worthless. It neither binds
nor bars anyone. All acts performed under it and all claims owing out of it are void. 2 3 In
other words, a void judgment is regarded as a nullity, and the situation is the same as it
would be if there were no judgment. It accordingly leaves the party-litigants in the same
position they were in before the trial. 2 4
In fact, it is immaterial whether an appeal from the Labor Arbiter's decision was
perfected or not, since a judgment void ab initio is non-existent and cannot acquire nality.
2 5 The judgment is vulnerable to attack even when no appeal has been taken. Hence, such
judgment does not become nal in the sense of depriving a party of his right to question
its validity. 2 6 Hence, no grave abuse of discretion attended the CA's taking cognizance of
the petition in CA-G.R. SP No. 53356 .
Besides, the Labor Arbiter, by simultaneously ruling in his decision of August 16,
1995 on both the merits of the ULP case and the motion of Rubberworld to suspend the
proceedings thereon, effectively required the respondent corporation to post a surety
bond before the same respondent could have questioned the arbiter's action in not
suspending the proceedings before him.
A bond is only mandatory from an appeal of the decision itself on the merits of the
laborers' money claims to ensure payment thereof. Had the Labor Arbiter taken heed of
Rubberworld's motion to suspend proceedings when that motion was led, and ruled upon
it separately, no bond would have been required for a review of his resolution thereon. As it
were, the Labor Arbiter chose to continue to decide the main case, then to incorporate in
his decision the denial of Rubberworld's motion to suspend proceedings, thereby
effectively requiring a bond on a question which would not have ordinarily required one.
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 We shall now address the more substantial issue in this case, namely, the
applicability of the provisions of Section 5 (d) and Section 6 (c) of P.D. No. 902-A, as
amended, reorganizing the SEC, vesting it with additional powers and placing it under the
Office of the President, which respectively read:
Section 5. In addition to the regulatory adjudicative functions of the
Securities and Exchange Commission over corporations, partnerships and other
forms of associations registered with it as expressly granted under existing laws
and decrees, it shall have original and exclusive jurisdiction to hear and decide
cases involving:
xxx xxx xxx
d) Petitions of corporations, partnerships or associations to be
declared in the state of suspension of payments in cases where the corporation,
partnership or association possesses su cient property to cover all its debts but
foresees the impossibility of meeting them when they respectively fall due or in
cases where the corporation, partnership or association has no su cient assets
to cover its liabilities, but is under the management of a rehabilitation receiver or
management committee created pursuant to this Decree.
Section 6. In order to effectively exercise such jurisdiction, the
Commission shall possess the following powers:
xxx xxx xxx
c) To appoint one or more receivers of the property, real or personal,
which is the subject of the action pending before the Commission in accordance
with the pertinent provisions of the Rules of Court in such other cases whenever
necessary in order to preserve the rights of the parties-litigants and/or protect the
interest of the investing public and creditors: . . . Provided, nally , That upon
appointment of a management committee, the rehabilitation receiver,
board or body, pursuant to this Decree, all actions for claims against
corporations, partnerships, or associations under management or
receivership pending before any court, tribunal, board or body shall be
suspended accordingly . [Emphasis supplied]

As correctly ruled by the CA, the issue of applicability in labor cases of the
aforequoted provisions of PD 902-A, as amended, had already been resolved by this Court
in its earlier decisions in Rubberworld (Phils.), Inc., or Julie Yap Ong v. NLRC, Marilyn F.
Arellano, et al. 2 7 and Rubberworld (Phils.), Inc. and Julie Y. Ong v. NLRC, Aquino, Magsalin,
et al., 2 8 supra.
In the rst Rubberworld case, the Court upheld the applicability of PD 902-A to labor
cases pursuant to Section 5 (d) and Section 6 (c) thereof, with the following
pronouncements:
It is plain from the foregoing provisions of the law that "upon the
appointment [by the SEC] of a management committee or a rehabilitation
receiver," all actions for claims against the corporation pending before any court,
tribunal or board shall ipso jure be suspended. The justi cation for the automatic
stay of all pending actions for claims "is to enable the management committee or
the rehabilitation receiver to effectively exercise its/his powers free from any
judicial or extra-judicial interference that might unduly hinder or prevent the
rescue of the debtor company. To allow such other actions to continue would
only add to the burden of the management committee or rehabilitation receiver,
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 whose time, effort and resources would be wasted in defending claims against
the corporation instead of being directed toward its restructuring and
rehabilitation." 2 9
xxx xxx xxx
. . . The law is clear: upon the creation of a management
committee or the appointment of a rehabilitation receiver, all claims for
actions "shall be suspended accordingly." No exception in favor of
labor claims is mentioned in the law. Since the law makes no
distinction or exemptions, neither should this Court. Ubi lex non
distinguit nec nos distinguere debemos . Allowing labor cases to proceed
clearly defeats the purpose of the automatic stay and severely encumbers the
management committee's time and resources. The said committee would need to
defend against these suits, to the detriment of its primary and urgent duty to work
towards rehabilitating the corporation and making it viable again. To rule
otherwise would open the oodgates to other similarly situated claimants and
forestall if not defeat the rescue efforts. Besides, even if the NLRC awards the
claims of private respondents, its ruling could not be enforced as long as the
petitioner is under the management committee. 3 0
I n Chua v. National Labor Relations Commission , we ruled that labor
claims cannot proceed independently of a bankruptcy liquidation proceeding,
since these claims "would spawn needless controversy, delays, and confusion." 3 1
With more reason, allowing labor claims to continue in spite of a SEC suspension
order in a rehabilitation case would merely lead to such results.
xxx xxx xxx
Article 217 of the Labor Code should be construed not in isolation but in
harmony with PD 902-A, according to the basic rule in statutory construction that
implied repeals are not favored. 3 2 Indeed, it is axiomatic that each and every
statute must be construed in a way that would avoid con ict with existing laws.
True, the NLRC has the power to hear and decide labor disputes, but
such authority is deemed suspended when PD 902-A is put into effect
by the Securities and Exchange Commission . [Emphasis supplied]

The second Rubberworld case reiterates the above pronouncements of the Court:
Presidential Decree No. 902-A is clear that "all actions for claims against
corporations, partnerships or associations under management or receivership
pending before any court, tribunal, board or body shall be suspended
accordingly." The law did not make any exception in favor of labor claims.
xxx xxx xxx

Thus, when NLRC proceeded to decide the case despite the SEC
suspension order, the NLRC acted without or in excess of its jurisdiction
to hear and decide cases. As a consequence, any resolution, decision or
order that it rendered or issued without jurisdiction is a nullity .
[Emphasis supplied]

Petitioners argue, however, that the doctrines laid down in the two aforecited cases
cannot be made to apply to the instant controversy because the SEC order therein only
mandates that all pending cases against Rubberworld Philippines, Inc. should be deemed
suspended. Petitioners contend that the decision of the Labor Arbiter in the present case,
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 as well the order of dismissal and writ of execution issued by NLRC, have become nal and
executory by reason of Rubberworld's failure to perfect its appeal by not upgrading or
completing the required cash or surety bond as ordained by the NLRC. Petitioners thus
conclude that the doctrine of stare decisis cannot apply to the instant case.
Petitioners are in error.
It is incontrovertible that the denial of Rubberworld's motion to suspend
proceedings in the principal case was incorporated in the decision of the Labor Arbiter.
Obviously, then, the Labor Arbiter's decision of August 16, 1995 was rendered at a time
when Lingkod's complaint against Rubberworld in NLRC-NCR-Case No. 00-09-06637-94
ought to have been suspended.
In short, at the time the SEC issued its suspension Order of December 28, 1994, the
proceedings before the Labor Arbiter were still very much pending. As such, no nal and
executory decision could have validly emanated therefrom. Like the CA, we do not see any
reason why the doctrine of stare decisis will not apply to this case.
For being well-grounded in fact and law, the assailed CA decision and resolution in
CA-G.R. SP No. 53356 cannot be said to have been tainted with grave abuse of discretion
or issued in excess or want of jurisdiction. We find no reason to overturn such rulings.
WHEREFORE, the instant petition is DENIED and the assailed decision and resolution
of the CA are AFFIRMED.
Costs against the petitioner.
SO ORDERED.
Puno, C.J., Sandoval-Gutierrez, Corona and Azcuna, JJ., concur.

Footnotes

1. Penned by Associate Justice Rebecca De Guia-Salvador, with Associate Justices

Eugenio S. Labitoria (now ret.) and Teodoro P. Regino (now ret.), concurring; Rollo, pp.
98-106.
2. Id. at 108-112.
3. Id. at 186-190.
4. Id. at 141-144.
5. Id. at 146-157.
6. Id. at 239-242.
7. Id. at 244-249.
8. Id. at 255-270.
9. Id. at 251-254.
10. Id. at 275-283.
11. Id. at 202.

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 12. Id. at 158-164.
13. Rollo, pp. 319-357.
14. Id. at 357-388.
15. G.R. No. 130866, September 16, 1998, 295 SCRA 494.
16. Rollo, pp. 390-391.
17. Supra note 1.
18. Supra note 2.
19. G.R. No. 126773, April 14, 1999, 305 SCRA 721.

20. G.R. No. 128003, July 26, 2000, 336 SCRA 433.
21. Article 5, The Civil Code; Buyco v. Philippine National Bank, 112 Phil. 588.
22. Barde v. Posiquit, G.R. No. L-29445, August 15, 1988, 164 SCRA 304.
23. Comia v. Nicolas, G.R. No. L-26079, September 30, 1969, 29 SCRA 492 citing Chavez v.
Court of Appeals, 24 SCRA 663, 685 and Gomez v. Concepcion, 47 Phil 717, 712. CTDEHA

24. Metropolitan Waterworks & Sewerage System v. Sison, G.R. No. L-40309, August 31,
1983, 124 SCRA 394, 404 citing 31 Am. Jur., 91-92.
25. Supra note 18.
26. David v. Aquilizan, G.R. No. L-49360, December 14, 1979, 94 SCRA 707, 714 citing Hatib
Abbain v. Tongham Chua, et al., G.R. No. L-24241, February 26, 1968, 22 SCRA 748, 754.
27. Supra note 19.
28. Supra note 20.
29. Id. citing BF Homes, Incorporated v. Court of Appeals, G.R. No. 76879, October 3, 1990,
190 SCRA 262, 269, per Cruz, J.

30. Id. citing BF Homes, Incorporated v. Court of Appeals, supra, p. 268.

31. Ibid., p. 576.
32. See Ching v. Land Bank of the Philippines, G.R. No. 73123, September 2, 1991, 201
SCRA 190, 202, per Fernan, C.J. See also Governor Pablo P. Garcia, et al. v. Hon. Jose P.
Burgos, et al., G.R. No. 124130, pp. 28-29, June 29, 1998, 291 SCRA 546; citing Frivaldo
v. Commission on Elections, 257 SCRA 727, 743-744, June 28, 1996.

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