SECOND DIVISION
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D E C I S I O N
PUNO, J.:
The petition at bar involves the
execution of our Decision dated February 19, 1999 in G.R. No. 124630 which
reinstated the May 17, 1995 Decision of Executive Labor Arbiter Rhett Julius J.
Plagata of the National Labor Relations Commission (NLRC) Regional Arbitration
Branch (RAB) No. 9 of Zamboanga City in NLRC Case No. RAB-09-1-0-0028494, holding
private respondent Cotabato Timberland Company, Inc. (CTCI) liable for
separation pay, indemnity, unpaid wages, wage differentials, night shift
differentials, service incentive leave pay, 13th month pay, cost of litigation
and attorney's fees.
Records
show that upon motion of the petitioners, Executive Labor Arbiter Plagata issued
a Writ of Execution[1]
to enforce his reinstated
On December 13, 1999, private
respondent M&S filed its motion: a) to suspend the execution proceedings;
b) after the suspension, for the Executive Labor Arbiter to conduct a hearing
for the purpose of determining ownership of the subject parcels of land; c)
after the hearing, to confirm the title of private respondent M&S over the
subject parcels of land; and d) to lift the Notice of Levy dated December 6,
1999.[2]
After hearing and after the parties have
filed their respective pleadings, the Executive Labor Arbiter issued an Order
dated
On April 26, 2000, private respondent M&S filed a Memorandum on Appeal[4] with the NLRC pursuant to Section 2, Rule VI of the NLRC Manual on Execution of Judgment (Sheriff’s Manual). Private respondent M&S likewise filed a petition for injunction with an application for a temporary restraining order (TRO) with the NLRC, which application for TRO was granted pending resolution of its appeal.
On
Prescinding
from the foregoing premises, the Executive Labor Arbiter's March 31, 2000 Order
is hereby SET ASIDE and Sheriff Danilo Tejada and all persons acting for and in
his behalf are ordered to desist from enforcing said Order and from proceeding
with the auction sale of subject real properties covered by TCT Nos. T-145,545,
T-145,550, T-145,544, T-145,547 and T-107,201.[5]
The
Temporary Restraining Order issued by this Commission on
SO
ORDERED.[6]
The NLRC held that its power to
execute extends only to properties "unquestionably belonging to the
judgment debtor." The Executive
Labor Arbiter's conclusion that the deeds of sale over the subject properties
were null and void for being simulated was held to be "at best, speculative." It held that good faith is presumed and the
party who alleges bad faith has the burden of proving it. The Labor Arbiter was held to be without
power to determine the issue of ownership over the real properties since the
same are covered by certificates of
It appears that in spite of the TRO,
the execution of the properties proceeded as scheduled on
On
On
(1) The Verification and Certification of Non-Forum
Shopping are signed by counsel and not by the petitioner[s] which is in violation
of the Supreme Court [r]uling in Escorpizo v. University of Baguio (306 SCRA
497);
(2)
Petitioner[s'] counsel, in the Verification as to Material Dates, only
alleged the date of receipt of the
(3) The IBP
Official Receipt Number as well as the date of its issuance to petitioner[s']
counsel are not current, in violation of the SC En Banc Resolution dated
September 26, 2000 in Bar Matter No. 287; and
(4) The petition does not contain a written explanation on the mode of service as required under Section 11, Rule 13 of the 1997 Rules of Civil Procedure.[9]
Petitioners
filed their Motion for Reconsideration on
Hence, this petition for certiorari under Rule 65 of the Rules of Court in which petitioners raise the issue, viz:
[WHETHER]
THE [CA's] QUESTIONED RESOLUTION DATED MARCH 19, 2001, AS AFFIRMED ON JUNE 25,
2001 DISMISSING PETITIONER[S'] SPECIAL CIVIL ACTION FOR CERTIORARI ON GROUNDS
OF TECHNICALITY IS VALID AND TENABLE IN LIGHT OF THE SUBSTANTIVE RIGHTS OF
PETITIONERS AS HELD BY THE SUPREME COURT IN G.R. NO. 124630, DATED
Petitioners contend that their petition for certiorari with
the CA was clearly meritorious and was filed on time. It was allegedly the CA which "chose to
be immovable on the side of technicality," disregarding the overriding
goal of the courts to render justice where justice is due[13]
and "allowing the substantial rights of petitioner[s] to be sacrificed at
the altar of technicalities to the consequent impairment of the sacred
principles of justice."[14] Petitioners contend that their petition for certiorari
with the CA being clearly meritorious, that fraudulent means having been
employed by the private respondents to frustrate the due execution of the
judgment rendered by the Supreme Court, and considering the number of working
men involved who are awaiting the realization of their case, the CA committed
grave abuse of discretion in dismissing the same on grounds of technicality. Petitioners contend that the NLRC disregarded
the fact that the sales of the subject properties were made on
The issues to be resolved in this case are: a) whether the instant case should be given
due course; and b) in the affirmative, whether the petition is meritorious.
Private respondents belabor the fact that petitioners filed their petition for certiorari with the CA: a) with its verification and certification of non-forum shopping signed by counsel instead of the parties; b) without a statement of the date of receipt of the June 6, 2000 NLRC Resolution; c) with their counsel's IBP Official Receipt Number being outdated; and d) without a written explanation on the mode of service as required under Section 11, Rule 13 of the 1997 Rules of Civil Procedure. Private respondents point out that petitioners' motion for reconsideration with the CA was filed twenty-seven (27) days after the last day for filing the same. Private respondent M&S also questions petitioners' resort to a petition for certiorari under Rule 65 of the Rules of Court with this Court. It contends that the proper remedy with this Court from the resolution of the CA is an appeal by certiorari under Rule 45.
We
resolved to give due course to the instant petition in our Resolution dated
Section 5(5), Article VIII of the Constitution gives this
Court the power to "[p]romulgate rules concerning the protection and
enforcement of constitutional rights, pleading, practice and procedure in all
courts." It is within the inherent power of the Court to suspend its own
rules in particular cases in order to do justice.[15] In Kathy-O Enterprises v. NLRC,[16] the
Court found the reason for the 3-day delay in the filing of the appeal
with the NLRC justifiable, having been caused by "inadvertence amounting
to excusable negligence." The Court observed that due to the presence of
an upward stroke, the "5" in "25 January" appeared to be
and could have been mistaken as an "8," thus leading KATHY-O's
counsel to misread "25 January," the date of receipt stamped by his
receiving clerk on the copy of the decision intended for said counsel, as "28
January." We held:
When
proper, no serious impediment bars the allowance of tardy appeals under the
Rules of Court, in recognition of this Court's inherent power to suspend
adjective rules. It is a different matter, however, when the period to appeal
is provided by statute, as in labor cases. For obvious reasons, this Court
cannot ordinarily suspend the statute's operation. x x x Nevertheless, if only
to be able to dispense substantial justice, strict observance of the period to
appeal may not be exacted. Thus, in Firestone
Tire and Rubber Co. of the Philippines v. Lariosa,[17]
an appeal in a labor dispute was given due course despite the lapse of fourteen
(14) days from notice of the decision, due to the fact that the Notice of
Decision received by Lariosa's lawyer advised the parties that the appeal could
be taken to the NLRC within ten (10) "working" days — not calendar
days — from notice of the decision. For the same reason was the appeal in Chong Guan Trading v. NLRC[18]
allowed. While in City Fair Corporation
v. NLRC,[19] we
ruled that the NLRC did not commit grave abuse of discretion when it
entertained an appeal filed one (1) day late considering that the "facts
and circumstances of the case warrant liberality considering the amount and the
issue involved."
In the same case, the Court likewise explained that the underlying purpose behind the principle that the perfection of an appeal within the statutory or reglementary period is not only mandatory, but jurisdictional, and failure to do so renders the questioned decision final and executory is to prevent needless delay -- a circumstance which would allow the employer to wear out the efforts and meager resources of the worker to the point that the latter is constrained to settle for less than what is due him.[20]
In the case at bar, applying the Rules strictly would
result in the pernicious delay sought to be avoided. At stake is the protection of the rights of
almost a hundred employees to the satisfaction of a judgment that has become
final and executory in a decision rendered by us more than seven (7) years ago.
A scheme to thwart the execution of our final and executory decision is extant
in the records. Moreover, barring the
instant petition on technical grounds would leave the workers without recourse
since the subject real properties were levied due to the insufficiency of
judgment debtor CTCI's money and personal properties to satisfy the decision
sought to be executed.
Petitioners' resort to a petition for certiorari under Rule
65 is proper considering that petitioners are assailing the resolutions of the
CA dismissing their petition outright. Ordinarily,
the proper recourse of an aggrieved party from a decision of the CA is a
petition for review on certiorari under Rule 45 of the Rules of Court. However,
if the error alleged is one of jurisdiction, or the act complained of was
perpetrated by a court with grave abuse of discretion amounting to lack or
excess of jurisdiction, the proper remedy available to the aggrieved party is a
petition for certiorari under Rule 65 of the said Rules.[21]
Be that as it may, in view of the pendency of
this case for more than a decade and the delay in its execution for more than
seven (7) years, we shall treat the instant case as an appeal under Rule 45 and
resolve the petition on the merits considering that the entire records of the
case have been elevated to us.
Private respondents contend that Executive Labor Arbiter Plagata had no authority to determine the issue of ownership of the subject properties in the case at bar. Private respondent M&S contends that Article 217 of the Labor Code which sets out the jurisdiction of the Labor Arbiter does not confer him the jurisdiction to resolve actions which involve title to, or possession of, real property, or any interest therein. The original and exclusive jurisdiction over this class of cases is allegedly with the regional trial courts under Section 19(2) of Batas Pambansa Blg. 129. Both private respondents further contend that the subject properties in the name of private respondent M&S could not be validly levied upon by Sheriff Tejada as it (private respondent M&S) was never a party to the labor dispute between the judgment debtor CTCI and petitioners.
We find the petition partly meritorious.
The power of the sheriff to rule on the issue of ownership
is settled. The Sheriff’s Manual was
promulgated pursuant to the provision of Article 218(a) of the Labor Code, as
amended, in relation to Section 4, Rule VIII of the New Rules of Procedure of
the NLRC. The Sheriff’s Manual
recognizes a situation wherein the real properties to be levied may not be
registered in the name of the party against which the levy is being
issued. Section 3(b), Rule 5 of the Sheriff’s
Manual states:
Levy on real property. -- Real property or any
interest therein may be levied in the following manner: x x x
(b)
Real property, or growing crops thereon or any interest therein, belonging to the party against whom levy is
issued, and held by any other person or standing on the records of the register
of deeds in the name of any other person, by filing with the register of
deeds a copy of the decision, order or award, together with a description of
the property, and a notice that such real property, and any interest therein on
said property, held by or standing, in the name of such other person, naming him
are levied by leaving with the occupant of the property, if any, and with such
other persons, or his agents, if found within the province or city or at the
residence of either, if within the province or city a copy of such decision,
order or award, description and notice.
Rule VI of the Sheriff’s Manual also provides for the procedure in case
of a third-party claim or "a claim whereby a person, not a party to the
case, asserts title to or right to the possession of the property levied
upon."[22] It outlines the following procedure:
Section 2.
Proceedings.-- If property levied
upon be claimed by any person other than the losing party or his agent, such
person shall make an affidavit of his title thereto or right to the possession
thereof, stating the grounds of such right or title and shall file the same
with the sheriff and copies thereof served upon the Labor Arbiter or proper
officer issuing the writ shall conduct a hearing with due notice to all parties
concerned and resolve the validity of the claim within ten (10) working days
from receipt thereof and his decision is appealable to the Commission within
ten (10) working days from notice, and the Commission shall resolve the appeal
within the same period.
However,
should the prevailing party put up an indemnity bond in a sum not less than the
value of the property levied, the execution shall proceed. In case of disagreement as to such value, the
same shall be determined by the Commission or Labor Arbiter who issued the
writ.
Section
3. Resolution of the Third Party Claim,
Effect.-- In the event the third party
claim is declared to be valid, the sheriff shall immediately release the
property to the third party claimant, his agent or representative and the levy
on execution shall immediately be lifted or discharged. However, should the third party claim be
found to be without factual or legal basis, the sheriff must proceed with the
execution of the property levied upon as if no third party claim had been filed.
Thus, in Tanongan v.
Samson,[23] we upheld the dismissal by the Labor Arbiter of
a third-party claim over a motor tanker that was levied to satisfy the final
and executory decision of the NLRC making employer CAYCO and its owner Olizon
liable. We held:
The Labor
Code grants the National Labor Relations Commission (NLRC) sufficient authority
and power to execute final judgments and awards. Thus, a third-party claim of ownership on a
levied property should not necessarily prevent execution, particularly where --
as in the present case -- the surrounding circumstances point to a fraudulent
claim. In fact, the disputed contract of
sale here is not merely rescissible; it is simulated or fictitious and, hence,
void ab initio.
In Tanongan, we found that the third-party claimant was a buyer in bad
faith as: a) the sale of the levied
tanker was made only 5 days after the writ of execution was issued by the labor
arbiter; b) there is a presumption under Article 1387 of the Civil Code that
alienations by onerous title are presumed to be fraudulent when done by persons
against whom some judgment has been rendered or some writ of attachment issued
in any instance; and c) the third-party claimant's apparent failure to inquire
whether Olizon had other unsettled obligations and encumbrances that could burden
the subject property in light of the principle that "[a]ny person engaged
in business would be wary of buying from a company that is closing shop,
because it may be dissipating its assets to defraud its creditors."
Similarly, in De Belen v. Collector of Customs and Sheriff of Manila,[24]
we held:
A simulated transfer of property made without
consideration and with intent to hinder, delay, or defraud the creditors of the
grantor constitutes no obstacle to the levy of legal process of any sort directed
against the grantor. In such case no
independent action to rescind or annul the transfer is necessary. A simulated contract lacks some of the
elements necessary to make any contract whatever and may be treated as
non-existent for all purposes.
In the case at bar, five (5) out of the six (6) subject
lots were registered in the name of
private respondent M&S pursuant to absolute deeds of sale dated March 23,
1999 executed between private respondent CTCI, as seller, and private
respondent M&S, as buyer. These five
lots are covered by TCT Nos.
T-145,544, T-145,547, T-145,545, T-145,546, and T-145,550. With respect to these five lots, we
hold that the levy made by the sheriff was proper.
The Executive Labor Arbiter's finding that the subject
deeds of absolute sale were simulated and fictitious is supported by the evidence
on record, viz:
The simulation and fictitiousness of the sales in question
from CTCI to M&S showing fraud to defeat the rights/awards of the
complainants, is manifested by the following circumstances:
1.
CTCI’s titles to the lands in question were under TCTs T-115,222,
T-126,661, T-119,032, T-110,125 and T-119,331, aside from T-107,201.
As annotated therein, the sales thereof from CTCI to M&S were all made on 23 March
1999, or merely about a month after the Supreme Court rendered its decision
in “Jang Lim, et al. vs. Cotabato Timberland Company, Inc., et al.,” G.R. No.
124630, on 19 February 1999 (which decision is now the subject of execution
proceedings in this case). The undue haste by which CTCI sold its said
properties to M&S after the rendition of the aforementioned decision,
strongly engender doubt as to the [genuineness] of such sales from the former
to the latter.
2.
M&S had last been in business
in Zamboanga City on 21 January 1992, and it is thus incomprehensible why it
would buy CTCI’s lands at the snap of one’s fingers, so to speak, so soon after
the rendition by the Supreme Court of its decision in G.R. No. 124630 on 19
February 1999, and after having been
apparently out of business for seven (7) years (Complainants’ Supplemental
Opposition to M&S Co. Inc.’s Motion and Supplemental Rejoinder, Annexes F
to F-5, with sub-markings; Sheriff’s Notice of Levy). This, too, stirs up grave doubt as to the
veracity of the sales of land to M&S from CTCI.
To the mind of the undersigned, the
sales in question were made in fraud of the complainants, to thwart enforcement
of CTCI’s obligations to them, not to mention that such sales are simulated or
fictitious. Consequently, said sales are
null and void, more so, as the same are contrary to public policy.[25]
In reversing the ruling of the Executive Labor Arbiter, the
NLRC erroneously held that the Executive Labor Arbiter had no power to rule on the
issue of ownership over the real properties.
It likewise
held that good faith is presumed and the findings of the Executive Labor
Arbiter were "speculative," without going through the evidence cited
by the latter. Notably, both the NLRC and private respondents conveniently left
out the detail that the sales took place a month after the promulgation of this
Court's decision in the main case (G.R. No. 124630). This omission is not of little
significance. Under Article 1387 of the
New Civil Code, alienations by onerous title are “presumed fraudulent when made
by persons against whom some judgment has been rendered in any instance or some
writ of attachment has been issued. The
decision or attachment need not refer to the property alienated, and need not
have been obtained by the party seeking the rescission.” The effect of this presumption is to shift
the burden to private respondents to prove that the sales were not fraudulently
made. The records do not show that private
respondents were able to discharge this burden.
As to the remaining lot covered by TCT No. T-107,201, we agree with the
NLRC that the same cannot be a proper subject of execution in this case. It appears that the basis for the levy on
this property is the Executive Labor Arbiter Plagata's finding that private
respondent M&S is a mere alter ego of CTCI, to wit:
On the other hand, that M&S is a
mere alter ego of CTCI, and that their corporate identities, with respect to
complainants’ employments, were so intertwined and meshed together, is brought
out by the following circumstances:
1.
The stockholders of both CTCI and M&S are practically the same, as
can be easily gleaned from their respective articles of incorporation. Those of M&S are Dacon Corporation,
Cristina Gotianun, Ma. Edwina Laperal, Rebecca Lock, Jesus Ferrer, Jorge
Consunji, Victor Consunji, Ruperto Consunji, Isidro Consunji, and Antonio
Bernas (ibid., Annex D-1); while those of CTCI are among those named above –
Isidro Consunji, Victor Consunji, Jorge Consunji, Edwina Laperal, and Antonio
Bernas (ibid., Annex E).
xxx xxx xxx
2.
Then, the directors and officers of both companies are practically the
same. The president of both in any event
is Isidro Consunji, while they have the same treasurer in the person of Ma.
Edwina Laperal (ibid.). Victor Consunji is
also an officer of both CTCI an M&S (ibid.).
The other officers of M&S are Jesus
Ferrer and Antonio Bernas; they are not named as officers of CTCI. On the other hand, Mario Irabagon, named as
secretary of CTCI, is not an officer of M&S (ibid.).
3.
Nevertheless, it is significant that Antonio Bernas represented himself
as a director of CTCI when he entered into the Surety Bond contract with
Prudential Guarantee and Assurance, Inc. at the time CTCI appealed this case to
the Commission's Fifth Division on
In themselves, the foregoing
circumstances do not justify piercing the veil of corporate fiction. At this point, the most that can be said
about CTCI and M&S is that they are sister companies, having as they do
practically the same stockholders, directors and officers.
But where in the course of complainants'
employments, both companies acted as if they were the employers of the former,
or where the officers of one acted for or in behalf of the other company, then,
there is ample reason to lift the veil of corporate fiction, or look behind it,
to determine the owners thereof and those to be held liable for obligations due
to third parties, such as the herein complainants. That the identities, operations, and officers
of CTCI and M&S were so intertwined or so meshed together as to make each
company indistinguishable from the other-- or, in other words, practically
merge the personalities of both companies into one-- is shown by the following
documents attached to complainants' Admission of Additional Evidence, dated 06
March 2000:
1.
Annex K- a certification in the stationery of M&S, dated 12 February
1991, that Teddy Arabi, the alleged contractor-employer of the complainants
herein who were held to be workers of CTCI, was connected with M&S, too, as
a contractor of M&S for fuel hauling and supply;
2.
Annex K-1- a document entitled "Proposed Rates Quotation for the
Below Activities" dated 07 September 1989, submitted by the same Teddy
Arabi to M&S, and which was approved by Victor Consunji for M&S as its
president, the same Victor Consunji who is named as operations and general
manager of CTCI;
3.
Annex K-2- a memorandum dated 25 October 1994, addressed to the same
Teddy Arabi by CTCI's Administative Manager, showing that the former was
treated by CTCI as its contractor, too[;]
4.
Annexes K-3, K-4 and K-5-
personnel requisition forms of M&S, showing that the same Teddy
Arabi was its contractor for various personnel needs in its sawmill operations.
All these show that the complainants,
through Teddy Arabi, were employed by CTCI and/or M&S, at the whim and
pleasure of said companies. It is only
therefore fair and proper to hold any or both of them- CTCI and M&S- liable
for the employment-based claims of the complainants in this case. To reiterate, M&S is a mere alter ego of
CTCI with respect to such claims.
We do not find these pieces of
evidence sufficient to justify piercing the corporate veil of private
respondent M&S.
Our
Petitioners are regular workers of private respondent
[CTCI] who were initially hired to perform milling and pilling [sic] works
[sic] at EX-ARANETA by M&S Company, a sister company of CTCI.
Thereafter,
EX-ARANETA was closed and the sawmill operation of M&S Company was
transferred to private respondent TIMEX SAWMILL, a subsidiary of respondent
CTCI where Melchor Borbon is the Administrative Manager. The transfer was done sometime in July 1989.[26]
While the Executive Labor Arbiter cited certain pieces of
documentary evidence showing that Teddy Arabi also subcontracted for private
respondent M&S, it was not proven that the latter utilized the same people (petitioners)
to do the work for private respondent M&S.
As indeed, there was no factual finding in the main case that petitioners
worked for private respondent M&S.
They were merely found to have "continued working as
workers/laborers at TIMEX SAWMILL and were working under the full control and
supervision of CTCI's personnel as [c]heckers, [y]ard [m]asters, [c]lerk[s],
[a]uditors, [f]lormen (sic) and [s]upervisors."[27]
It is noteworthy that the parcel of land covered by TCT No.
T-107,201 has been registered in the name of private respondent M&S since
IN VIEW WHEREOF,
the petition is PARTIALLY GRANTED. The March 19 and
SO ORDERED.
REYNATO S. PUNO
Associate Justice
WE CONCUR:
Associate Justice
RENATO C. CORONA ADOLFO
S. AZCUNA
Associate Justice Associate Justice
CANCIO C. GARCIA
Associate Justice
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of the Constitution
and the Division Chairperson’s Attestation, I certify that the conclusions in
the above decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief
Justice
[1] Original Records, Vol. 3, pp.
136-139.
[2] Original Records, Vol. 2, pp.
899-909.
[3] Rollo, pp. 48-55.
[4] Original Records, Vol. 3, pp.
2-12.
[5] Note that the dispositive portion
did not include TCT No. T-145-546 but the same was stated in the body of the
Resolution.
[6] Rollo, p. 62.
[7]
[8] CA Rollo, pp. 2-10.
[9] Rollo, pp. 24-25.
[10]
[11]
[12]
[13] Citing
Jose v. CA, No. L-38581,