167.

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and DOROTHY S. ANCHETA, MA. MAGDALENA Y.
ARMARILLE, CONSTANTE A. ANCHETA, CONSTANTE B. BANAYOS, EVELYN BARRIENTOS, JOSE
BENAVIDEZ, LEONARDO BUENAAGUA, BENJAMIN BAROT, ERNESTO S. CANTILLER, EDUARDO
CANDA, ARMANDO CANDA, AIDA DE LUNA, PACIFICO M. DE JESUS, ALFREDO ESTRERA,
AURELIO A. FARINAS, FRANCISCO GREGORIO, DOMELINA GONZALES, JUANA JALANDONI,
MANUEL MALUBAY, FELICIANO OCAMPO, MABEL PADO, GEMINIANO PLETA, ERNESTO S.
SALAMAT, JULIAN TRAQUENA, JUSFIEL SILVERIO, JAMES CRISTALES, FRANCISCO BAMBIO,
JOSE T. MARCELO, JR., SUSAN M. OLIVAR, ERNESTO JULIO, CONSTANTE ANCHETA, JR.,
ENRIQUE NABUA and JAVIER P. MATARO, respondents.
G.R. No. 86932 June 27, 1990

FACTS:
Philippine Smelters Corporation (PSC), obtained a loan in 1983 from the Development
Bank of the Philippines to finance its iron smelting and steel manufacturing business. To secure
said loan, PSC mortgaged to DBP real properties with all the buildings and improvements
thereon and chattels, with its President, Jose T. Marcelo, Jr., as co-obligor. DBP became the
majority stockholder of PSC. Subsequently, it took over the management of PSC. When PSC
failed to pay its obligation with DBP, DBP foreclosed and acquired the mortgaged real estate
and chattels of PSC in the auction sales. Petitioners filed a Petition for Involuntary Insolvency,
with said respondents representing themselves as unpaid employees of said private
respondents, except PISO Bank. Private respondents filed a complaint with the Department of
Labor against PSC for nonpayment of salaries, 13th month pay, incentive leave pay and
separation pay. The NLRC ruled on favor of the employees , holding DBP liable for unpaid wages
of private respondents "not as a majority stockholder of respondent PSC, but as the foreclosing
creditor who possesses the assets of said PSC by virtue of the auction sale.

ISSUE:
WON DBP, as foreclosing creditor, could be held liable for the unpaid wages, 13th month pay,
incentive leave pay and separation pay of the employees of PSC?

HELD:
NO. . The DBP anchors its claim on a mortgage credit. A mortgage directly and
immediately subjects the property upon which it is imposed, whoever the possessor may be, to
the fulfillment of the obligation for whose security it was constituted (Article 2176, Civil Code).
It creates a real right which is enforceable against the whole world. It is a lien on an Identified
immovable property, which a preference is not. A recorded mortgage credit is a special
preferred credit under Article 2242 (5) of the Civil Code on classification of credits. The
preference given by Article 110, when not falling within Article 2241 (6) and Article 2242 (3) of
the Civil Code and not attached to any specific property, is an ordinary preferred credit
although its impact is to move it from second priority to first priority in the order of preference
established by Article 2244 of the Civil Code.