Peñalosa v. Villanueva
REITERATIONFacts
1. The Antecedents: The underlying dispute involves claims by former employees of Riverside Mills Corporation (RMC) for separation pay, wage increases, and other benefits. These claims arose from labor arbiters' decisions that became final and executory, leading to writs of execution for substantial amounts. The Development Bank of the Philippines (DBP) had previously extra-judicially foreclosed on RMC's properties in 1983 and obtained a writ of possession in 1985, subsequently leasing these properties to third-party corporations. This created a conflict over the preferential right to RMC's assets, with the employees seeking to satisfy their judgments and DBP asserting ownership based on its foreclosure. 2. Procedural History: Labor Arbiter Manuel Caday awarded benefits in November 1984, and Labor Arbiter Teodorico Dogelio awarded further benefits in March 1985, leading to a writ of execution and levy on RMC's properties. DBP obtained a writ of possession in June 1985, preventing the auction of these properties. The employees filed an incidental petition with the NLRC asserting preference, which was initially granted by Dogelio but later set aside by the NLRC, remanding the case. A separate complaint for separation pay and damages was filed in April 1986, consolidated with the pending case before Labor Arbiter Ariel Santos. Santos issued a decision on March 31, 1987, declaring the employees' first preference and directing DBP to pay the monetary claims. DBP appealed this decision to the Supreme Court (G.R. No. 78261-62), which annulled Santos' decision, stating that a declaration of bankruptcy or judicial liquidation was necessary for such preference. Meanwhile, DBP filed a separate civil case (Civil Case No. 10945) for injunction and damages, seeking to enjoin the execution against its properties and to be declared the rightful owner. The RTC denied the motion to dismiss and granted preliminary injunctions. The petitioners also filed a case seeking nullification of the lease agreement. 3. The Petition: This original action for certiorari, prohibition, and mandamus was filed by Michael Peñalosa, et al., and the Samahang Diwang Manggagawa sa RMC-FFW Chapter, et al., challenging the jurisdiction of the RTC in Civil Case No. 10945. The petitioners argued that the RTC judge acted without or in excess of jurisdiction by denying their motion to dismiss and granting injunctions, as the NLRC had already taken jurisdiction over the subject matter involving the same properties and causes of action. They contended that allowing both actions to proceed would result in a splitting of the cause of action. However, the Supreme Court noted that a prior related decision (G.R. No. 78261-62) had already annulled the labor arbiter's decision regarding the employees' preferential claim, and that DBP had obtained a writ of possession for the properties in 1985. The Court found that the RTC had jurisdiction to entertain DBP's claim of ownership over the levied properties, as a third-party claim for injunctive relief against a levy on property not belonging to the judgment debtor is permissible under the Rules of Court, even if it involves property subject to a labor dispute from the perspective of the judgment debtor.
Issue(s)
Whether the Regional Trial Court (RTC) acted without jurisdiction, in excess of jurisdiction, and with grave abuse of discretion in entertaining Civil Case No. 10945 and issuing the questioned writs of preliminary injunction, considering the NLRC's prior assumption of jurisdiction. Whether the NLRC should continue to exercise jurisdiction over the subject matter involving preferential right and/or lawful ownership over RMC properties, and the effect of the prior Supreme Court decision in G.R. Nos. 78261-62 on the issue of preferential right.
Ruling
The petition is DISMISSED. The RTC did not act without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion in entertaining Civil Case No. 10945 and issuing the questioned writs of preliminary injunction. The issue of preferential right claimed by petitioners has been foreclosed by a prior Supreme Court decision (G.R. No. 78261-62), and the proceedings in Civil Case No. 10945 are within the jurisdiction of the respondent judge.
Ratio Decidendi
On the issue of jurisdiction and the RTC's authority to issue injunctions: The Court held that the RTC did not act without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion. The petitioners' contention that the NLRC's prior assumption of jurisdiction precluded the RTC from acting was rejected. The Court reiterated the established rule that a third person claiming property levied upon on execution may vindicate such claim by action, and an interlocutory order, such as an injunction, upon a claim and prima facie showing of ownership by the claimant, cannot be considered interference with the powers or processes of the court that rendered the judgment. This is because property belonging to a stranger is not subject to levy. The Court cited Section 17 of Rule 39 of the Rules of Court, which allows a third-party claimant to vindicate their claim by action. Therefore, the RTC could validly issue the temporary restraining order and preliminary injunctions based on DBP's claim of ownership over the properties levied upon. While it is true that injunctions in labor disputes are generally prohibited, this prohibition does not apply when the writ of execution is sought to be enforced upon property of a stranger to the labor dispute. In such cases, a separate action for injunctive relief against the levy may be maintained in court. The Court clarified that Civil Case No. 10945 did not involve or grow out of a labor dispute concerning DBP, as DBP was a third party claiming ownership of the levied properties. The case did not put in issue the validity of the NLRC proceedings or decision, but rather whether the NLRC's decision and writ of execution should be satisfied against properties claimed by DBP, not the judgment debtor RMC. This recourse is allowed under Section 17, Rule 39 of the Rules of Court. The Court found the situation analogous to a previous case where a similar claim by a third party was allowed. On the issue of the NLRC's continued jurisdiction and the effect of the prior Supreme Court decision: The Court noted that a prior decision in G.R. Nos. 78261-62 had already annulled and set aside the Labor Arbiter's decision of March 31, 1987, finding that the labor arbiter committed grave abuse of discretion in ruling that the employees could enforce their preference over DBP's claims without a declaration of bankruptcy or judicial liquidation of RMC. This prior decision foreclosed any further legal basis or necessity to decide the issue of preferential right claimed by the petitioners over the property of Riverside Mills Corporation in NLRC-NCR Case No. 7-2577-84. Consequently, the present petition, which raised the same jurisdictional question based on the NLRC's supposed exclusive jurisdiction, could not prosper.
Main Doctrine
A separate action for injunctive relief against a levy on execution may be maintained in court by a third party claiming ownership of the levied property, even if the levy arose from a labor dispute, as such action does not involve or grow out of the labor dispute concerning the third party.