Jiao vs.

National Labor Relations Commission

G.R. No. 182331. April 18, 2012

TOPIC: Acquisition of Assets/ Merger

FACTS:
The petitioners were regular employees of the Philippine Banking
Corporation (Philbank), each with at least ten years of service in the company.
Pursuant to its Memorandum dated August 28, 1970, Philbank established a
Gratuity Pay Plan (Old Plan) for its employees. Philbank merged with Global
Business Bank, Inc. (Globalbank), with the former as the surviving corporation
and the latter as the absorbed corporation, but the bank operated under the
name Global Business Bank, Inc. As a result of the merger, complainants
respective positions became redundant. A Special Separation Program (SSP)
was implemented and the petitioners were granted a separation package. As
their positions were included in the redundancy declaration, the petitioners
availed of the SSP, signed acceptance letters and executed quitclaims. In August
2002, respondent Metropolitan Bank and Trust Company (Metrobank) acquired
the assets and liabilities of Global bank through a Deed of Assignment of
Assets and Assumption of Liabilities. Subsequently, the petitioners filed separate
complaints for non-payment of separation pay with prayer for damages and
attorneys fees before the National Labor Relations Commission (NLRC). The
petitioners insist that Metrobank is liable because it is the parent company of
Global bank and that majority of the latters board of directors are also members
of the formers board of directors.
ISSUE:
Can Metrobank be held liable for the claims of petitioners?
HELD:
No, considering that the petitioners have already waived their right to file
an action for any of their claims in relation to their employment with Global bank,
the question of whether Metrobank can be held liable for these claims is now
academic. However, in order to put to rest any doubt in the petitioners minds as
to Metrobanks liabilities, we shall proceed to discuss this issue.
We hold that Metrobank cannot be held liable for the petitioners claims.
As a rule, a corporation that purchases the assets of another will not be liable for
the debts of the selling corporation, provided the former acted in good faith and
paid adequate consideration for such assets, except when any of the following
circumstances is present: (1) where the purchaser expressly or impliedly agrees
to assume the debts; (2) where the transaction amounts to a consolidation or

merger of the corporations; (3) where the purchasing corporation is merely a

continuation of the selling corporation; and (4) where the selling
corporation fraudulently enters into the transaction to escape liability for those
debts.