"Y" Transit Co., Inc. v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Yujuico Transit Co., Inc. mortgaged ten buses to the Development Bank of the Philippines (DBP) for a loan. Subsequently, the Board of Directors authorized its President, Jesus Yujuico, to enter into a dacion en pago arrangement with DBP, transferring the Saint Martin Technical Institute in settlement of obligations, including Yujuico Transit Co., Inc.'s. DBP released the mortgages on the buses, and Yujuico Transit Co., Inc. transferred ownership of the mortgaged properties, including the buses, to Jesus Yujuico. Meanwhile, the Yujuico Transit Employees Union filed complaints for Unfair Labor Practice and violations of various Presidential Decrees. On May 21, 1980, Jesus Yujuico sold the subject buses to petitioner "Y" Transit Co., Inc. On July 23, 1981, the Labor Arbiter dismissed the unfair labor practice complaint but held Yujuico Transit Co., Inc. liable for P142,790.49 under the Presidential Decrees. A writ of execution was issued, and subsequently, an alias writ of execution led to the levy of the ten buses. "Y" Transit Co., Inc. filed Affidavits of Third Party Claim. Procedural History: Private respondents opposed the third-party claim, arguing the transfers lacked BOT approval as required by the Public Service Act and that the buses were still registered in the name of Yujuico Transit Co., Inc. The Labor Arbiter found "Y" Transit Co., Inc. had valid title, that the BOT had implicitly approved the transfer, and that registration is not the operative act of ownership transfer. The Third-Party Claim was granted, ordering the release of the buses. On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter's decision, finding the transfer lacked BOT approval, reinstating the levy, and ordering the auction of properties. The Petition: "Y" Transit Co., Inc. filed a special civil action for certiorari with the Supreme Court, assailing the NLRC decision for allegedly committing palpable legal error and grave abuse of discretion amounting to lack of jurisdiction by holding that there was no valid transfer of ownership despite the preponderance of evidence and existing jurisprudence supporting the transfer's validity. Petitioner also filed a motion to cite the Labor Arbiter for contempt for refusing to release the vehicles despite a TRO. The Court denied the contempt motion and ordered the payment of storage costs and sheriff's fees.
Issue(s)
Whether the public respondent NLRC committed grave abuse of discretion in reinstating the levy on the buses allegedly transferred to a third party, petitioner "Y" Transit Co., Inc. Whether the transfer of ownership of the buses from Yujuico Transit Co., Inc. to Jesus Yujuico, and subsequently to "Y" Transit Co., Inc., was valid despite the lack of prior approval from the Board of Transportation (BOT) as required by the Public Service Act; and whether the buses, still registered in the name of Yujuico Transit Co., Inc. at the time of the levy, could be subject to execution to satisfy the judgment against Yujuico Transit Co., Inc. On the contempt charge and storage fees.
Ruling
The petition is dismissed. The NLRC did not commit grave abuse of discretion in reinstating the levy on the buses. The motion to cite the Labor Arbiter for contempt is denied, and petitioner is ordered to pay storage costs and sheriff's fees. The decision is immediately executory.
Ratio Decidendi
On the validity of the reinstatement of the levy: The Court ruled in the negative, holding that the NLRC did not commit grave abuse of discretion. The established facts before the NLRC were that the transfers of ownership from Yujuico Transit Co., Inc. to Jesus Yujuico, and from Jesus Yujuico to "Y" Transit Co., Inc., lacked the prior approval of the Board of Transportation (BOT) as required by Section 20 of the Public Service Act. These transfers also occurred during the pendency of the labor case, and the buses remained registered in the name of Yujuico Transit Co., Inc. until the time of execution. The Court reiterated the ruling in Montoya v. Ignacio, which held that the approval of the Public Service Commission (now BOT) is required for the sale or lease of a franchise or any privilege pertaining thereto to protect public interest. While a transfer might be valid and binding between the parties, it is not effective against the public and the Commission without the requisite approval. Therefore, as far as the BOT and third parties were concerned, Yujuico Transit Co., Inc. still owned the properties, and Jesus Yujuico, and subsequently "Y" Transit Co., Inc., merely held them as agents of the former. Consequently, "Y" Transit Co., Inc. could not prevent the levy of the buses to satisfy the money judgment against Yujuico Transit Co., Inc., as the registered owner remained liable to third parties. The Court clarified that this does not deprive the transferee of the right to recover damages from the registered owner if a valid contract existed between them, but such recovery would be a separate action. On the validity of the transfer of ownership, the buses being subject to execution: The Court ruled that the transfers of ownership from Yujuico Transit Co., Inc. to Jesus Yujuico, and from Jesus Yujuico to "Y" Transit Co., Inc., lacked the prior approval of the Board of Transportation (BOT) as required by Section 20 of the Public Service Act. These transfers also occurred during the pendency of the labor case, and the buses remained registered in the name of Yujuico Transit Co., Inc. until the time of execution. Therefore, as far as the BOT and third parties were concerned, Yujuico Transit Co., Inc. still owned the properties, and Jesus Yujuico, and subsequently "Y" Transit Co., Inc., merely held them as agents of the former. Consequently, "Y" Transit Co., Inc. could not prevent the levy of the buses to satisfy the money judgment against Yujuico Transit Co., Inc., as the registered owner remained liable to third parties. On the contempt charge and storage fees: The Court denied the motion to cite the Labor Arbiter for contempt, finding that the order to levy upon the properties was issued before the Supreme Court issued its temporary restraining order (TRO). Regarding storage fees, the Court found no error in requiring petitioner to pay them, as storage costs are imposed in accordance with Rule IX of the NLRC Manual of Instructions for Sheriffs, which mandates that levied property be stored in a secured place and that storage fees shall be shouldered by the losing party or third-party claimant.
Main Doctrine
Transfers of property by public utilities require prior approval from the Board of Transportation (BOT) to be binding against third parties and the public; otherwise, the registered owner remains liable for obligations to third parties, and the transferee cannot assert ownership against a levy to satisfy such obligations.