Zamboanga Barter Traders v. Plagata
REITERATIONFacts
The Antecedents: This case originated from a labor dispute where Teopisto Mendoza filed a complaint for illegal dismissal against Zamboanga Barter Traders Kilusang Bayan, Inc. (ZBTKBI) in 1981. The Executive Labor Arbiter ruled in favor of Mendoza, ordering ZBTKBI to reinstate him and pay backwages. ZBTKBI appealed this decision, but their appeal was dismissed by the National Labor Relations Commission (NLRC), making the decision final and executory in 1984. Efforts to execute the judgment through sheriff's writs in 1984 and 1989 were unsuccessful, with the sheriff reporting threats and non-cooperation from ZBTKBI's president. Procedural History: Following the unsuccessful attempts to execute the judgment, Mendoza filed a motion for a second alias writ of execution in 1989. This writ was issued in 1990, leading to the levy and subsequent public auction of a parcel of land, along with its improvements, in which ZBTKBI had an interest. Mendoza was the highest bidder. When Mendoza could not take possession of the property, he filed a petition for a writ of possession in 2000, which was granted by the Executive Labor Arbiter. ZBTKBI challenged these orders and the subsequent writ of possession through a petition for certiorari and prohibition before the Court of Appeals. The Court of Appeals dismissed ZBTKBI's petition, affirming the validity of the execution sale and the writ of possession. The Petition: Zamboanga Barter Traders Kilusang Bayan, Inc. (ZBTKBI) filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to annul the decision of the Court of Appeals and the second alias writ of execution, as well as the subsequent levy, sale, and writ of possession. ZBTKBI argued that the levy was made without notice to the Republic of the Philippines, which they claimed was the owner of the property, rendering subsequent proceedings void. They also contended that the execution sale was void due to an over-levy and a scandalously low bid price, and that the judgment could no longer be executed by mere motion after five years. The petition further questioned the Court of Appeals' ruling that the donated property had reverted to ZBTKBI.
Issue(s)
Whether the Court of Appeals erred in not passing upon the issue of the nullity of the levy, it having been made without prior notice to the Republic. Whether the Court of Appeals erred in not declaring that all the proceedings subsequent to the invalid levy, such as the auction, the certificate of sale and the issuance of the writ of possession, are void ab initio. Whether the Court of Appeals erred in not declaring the execution sale of the subject lot as void ab initio considering that the sheriff committed grave abuse of discretion in causing an over-levy on a P100 million property for a judgment for sum of money in the amount of P96,433.53. Whether the Court of Appeals erred in not passing upon the issue that the judgment a quo may no longer be executed by mere motion under Section 6, Rule 39 of the Rules of Court. Whether the Court of Appeals erred in concluding that the donated property has already reverted to the petitioner Kilusan.
Ruling
The petition is DENIED. The decision of the Court of Appeals dated 20 November 2000 is AFFIRMED.
Ratio Decidendi
On the issue of notice to the Republic: The Court reiterated that since the land had reverted to ZBTKBI prior to the levy, the Republic was no longer the owner and thus did not need to be notified. The argument that the Republic was deprived of due process was dismissed because it was no longer the owner of the property in question. The Court noted that while the land reverted, the Republic retained ownership of the P5 million building and improvements, which it could sell, with ZBTKBI having the first option to purchase. On the validity of the levy, execution sale, and subsequent proceedings: The Court found no grave abuse of discretion on the part of the sheriff in levying the subject property. While Section 15, Rule 39 of the Rules of Court requires levying only on property amply sufficient to satisfy the judgment, the sheriff's actions were justified by ZBTKBI's non-cooperation and defiance. After two previous unsatisfied writs, the sheriff levied on the property that was available. The Court also held that the inadequacy of the auction sale price (P96,443.53 for a property allegedly worth P100 million) did not invalidate the sale because ZBTKBI had the right of redemption. The Court reiterated that when there is a right to redeem, inadequacy of price is of no moment, as it makes redemption easier. ZBTKBI's failure to redeem was attributed to its own officers' negligence and lack of diligence, not to any fault of Mendoza or the sheriff. Therefore, the levy, sale, and subsequent issuance of the writ of possession were valid. On the alleged over-levy and scandalously low price: The Court found no merit in the claim of over-levy or scandalously low price. The sheriff's actions were necessitated by ZBTKBI's non-compliance. The inadequacy of the price was rendered immaterial by the existence of the right of redemption, which ZBTKBI failed to exercise. The Court emphasized that the low price would have facilitated redemption, and ZBTKBI's failure to do so was due to its own internal issues and lack of diligence, not a defect in the sale itself. On the execution of judgment by motion after five years: The Court ruled that the second alias writ of execution, issued upon a motion filed on December 18, 1989, beyond the five-year period from the January 18, 1984 finality of the NLRC decision, was valid. The Court cited Section 6, Rule 39 of the Rules of Court, which allows execution by motion within five years and by independent action thereafter. However, it reiterated its rulings in Lancita v. Magbanua and Republic v. Court of Appeals that the five-year period can be extended if the delay is caused by the judgment debtor's actions or is for their benefit. The Court found that the non-satisfaction of the first two writs of execution was due to the threats and non-cooperation of ZBTKBI's president, Atty. Hasan G. Alam. These actions clearly delayed the execution and benefited ZBTKBI by postponing the satisfaction of the judgment. Therefore, the five-year period was deemed interrupted, and Mendoza's motion was considered timely for equitable reasons. On the ownership and reversion of the donated property: The Court affirmed the Court of Appeals' finding that the donated land had reverted to ZBTKBI. Condition No. 4 of the Deed of Donation stipulated that the land would revert to the donor if barter trading was phased out for more than one year. Since Memorandum Circular No. 1 phased out barter trade in Zamboanga City effective October 1, 1988, the condition for reversion was met. Therefore, ZBTKBI became the owner of the land without need for further formality. Consequently, the Republic was no longer the owner of the land at the time of the levy and sale, and thus, no notice to the Republic was necessary, negating the claim of deprivation of due process. The Court clarified that the reversion applied only to the land, not to the P5 million building and improvements constructed by the Republic, which ZBTKBI had the first option to purchase.
Main Doctrine
The five-year period for execution by motion under Section 6, Rule 39 of the Rules of Court is interrupted by delays occasioned by the judgment debtor's actions, even if the motion for execution is filed beyond the five-year period, provided such delay was not caused by the judgment creditor and was for the benefit of the judgment debtor. Furthermore, the automatic reversion clause in a deed of donation, which is not contrary to law, morals, good customs, public order, or public policy, is valid and binding, leading to the reversion of the property to the donor without need for further formality upon the occurrence of the stipulated condition.