Case Digest: Hong Kong & Shanghai Banking Corp v. Spouses Bienvenido & Broqueza
G.R. No. 178610: November 15, 2010
HONGKONG AND SHANGHAI BANKING CORP., LTD. STAFF RETIREMENT PLAN, (now HSBC Retirement Trust Fund, Inc.),Petitioner, v. SPOUSES BIENVENIDO AND EDITHA BROQUEZA, Respondents.
Carpio, J.
FACTS:
Broqueza (Respondents) are employees of HSBC and are also part of the retirement trust fund (Petitioner). Respondents obtained loans from HSBC to be automatically deducted from their salaries. However, there was a labor dispute between the employees and HSBC which led to their dismissal. The employees filed a case of illegal dismissal, but HSBC already issued demands upon Respondents which led to their delinquency.
There was a collection case filed in the MeTC by Petitioner, which it won. Termination from employment resulted in the loss of continued benefits under their retirement plans.Thus, the loans secured by their future retirement benefits to which they are no longer entitled are reduced to unsecured and pure civil obligations.As unsecured and pure obligations, the loans are immediately demandable.
Respondents appealed to the RTC, but it upheld the decision of the lower court. On appeal to the CA, it held in favour of Respondents, stating that complaints for recovery of sum of money against Respondents are premature as the loan obligations have not yet matured.Thus, no cause of action accrued in favor of Petitioner.
Petitioner thus appeals to the Supreme Court.
ISSUES:
A. Whether or not the CA erred in ruling that the claim was premature.
HELD: Petition is meritorious.
LABOR LAW: Retirement Benefits
First Issue:
In their Answer, the spouses Broqueza admitted that prior to Editha Broquezas dismissal from HSBC in December 1993, she "religiously paid the loan amortizations, which HSBC collected through payroll check-off."A definite amount is paid to HSBCL-SRP on a specific date. Editha Broqueza authorized HSBCL-SRP to make deductions from her payroll until her loans are fully paid.Editha Broqueza, however, defaulted in her monthly loan payment due to her dismissal.Despite the spouses Broquezas protestations, the payroll deduction is merely a convenient mode of payment and not the sole source of payment for the loans.HSBCL-SRP never agreed that the loans will be paid only through salary deductions.Neither did HSBCL-SRP agree that if Editha Broqueza ceases to be an employee of HSBC, her obligation to pay the loans will be suspended.HSBCL-SRP can immediately demand payment of the loans at anytime because the obligation to pay has no period.Moreover, the spouses Broqueza have already incurred in default in paying the monthly installments.
The enforcement of a loan agreement involves "debtor-creditor relations founded on contract and does not in any way concern employee relations.As such it should be enforcedthrough a separate civil action in the regular courts and not before the Labor Arbiter."
Petition is GRANTED. The decisions of MeTC and RTC are affirmed.
HONGKONG AND SHANGHAI BANKING CORP., LTD. STAFF RETIREMENT PLAN, (now HSBC Retirement Trust Fund, Inc.),Petitioner, v. SPOUSES BIENVENIDO AND EDITHA BROQUEZA, Respondents.
Carpio, J.
FACTS:
Broqueza (Respondents) are employees of HSBC and are also part of the retirement trust fund (Petitioner). Respondents obtained loans from HSBC to be automatically deducted from their salaries. However, there was a labor dispute between the employees and HSBC which led to their dismissal. The employees filed a case of illegal dismissal, but HSBC already issued demands upon Respondents which led to their delinquency.
There was a collection case filed in the MeTC by Petitioner, which it won. Termination from employment resulted in the loss of continued benefits under their retirement plans.Thus, the loans secured by their future retirement benefits to which they are no longer entitled are reduced to unsecured and pure civil obligations.As unsecured and pure obligations, the loans are immediately demandable.
Respondents appealed to the RTC, but it upheld the decision of the lower court. On appeal to the CA, it held in favour of Respondents, stating that complaints for recovery of sum of money against Respondents are premature as the loan obligations have not yet matured.Thus, no cause of action accrued in favor of Petitioner.
Petitioner thus appeals to the Supreme Court.
ISSUES:
A. Whether or not the CA erred in ruling that the claim was premature.
HELD: Petition is meritorious.
LABOR LAW: Retirement Benefits
First Issue:
In their Answer, the spouses Broqueza admitted that prior to Editha Broquezas dismissal from HSBC in December 1993, she "religiously paid the loan amortizations, which HSBC collected through payroll check-off."A definite amount is paid to HSBCL-SRP on a specific date. Editha Broqueza authorized HSBCL-SRP to make deductions from her payroll until her loans are fully paid.Editha Broqueza, however, defaulted in her monthly loan payment due to her dismissal.Despite the spouses Broquezas protestations, the payroll deduction is merely a convenient mode of payment and not the sole source of payment for the loans.HSBCL-SRP never agreed that the loans will be paid only through salary deductions.Neither did HSBCL-SRP agree that if Editha Broqueza ceases to be an employee of HSBC, her obligation to pay the loans will be suspended.HSBCL-SRP can immediately demand payment of the loans at anytime because the obligation to pay has no period.Moreover, the spouses Broqueza have already incurred in default in paying the monthly installments.
The enforcement of a loan agreement involves "debtor-creditor relations founded on contract and does not in any way concern employee relations.As such it should be enforcedthrough a separate civil action in the regular courts and not before the Labor Arbiter."
Petition is GRANTED. The decisions of MeTC and RTC are affirmed.
