Associated Labor Unions v. Roman Catholic Archbishop of Palo
REITERATIONFacts
The Antecedents: Petitioners ALU and DWUEU-ALU represented union members who prevailed in a labor case against Divine Word University of Tacloban (DWUT), resulting in DWUT owing over a hundred million pesos for unpaid benefits. The Roman Catholic Archbishop of Palo, Leyte (RCAP) sold 13 parcels of land to Societas Verbum Dei (SVD) via a Deed of Sale dated October 1, 1958, with conditions for educational use and a reversionary right to RCAP under specific circumstances. These conditions were not annotated on the transfer certificates of title (TCTs) issued to SVD. DWUT, run by SVD, faced labor unrest and a protracted legal battle with petitioners, leading to its closure and termination of employees. DWUT's liability to petitioners amounted to approximately PhP 200 million. Procedural History: On April 27, 1995, RCAP filed a petition before the RTC for the annotation of the Deed of Sale's conditions and reversionary interest on the SVD's titles. DWUT subsequently issued notices of closure and termination to its employees. The Union filed a complaint against DWUT, its Board of Trustees, and RCAP for Unfair Labor Practice, Illegal Dismissal, and Damages, alleging the sale was incomplete due to the conditions and reversionary right, and that RCAP was solidarily liable. Petitioners intervened in the cadastral case, asserting a judgment lien based on the February 11, 1994 decision in G.R. No. 91915 and preferential rights under the Labor Code and Civil Code. The RTC dismissed RCAP's petition, citing lack of jurisdiction, forum shopping, and mootness. The RTC denied RCAP's motion for reconsideration, despite concurring with RCAP's arguments, on the ground of laches, noting RCAP's 37-year delay. RCAP appealed to the Court of Appeals (CA). Meanwhile, RCAP, DWUT, and the Union entered into a Memorandum of Agreement (MOA) for a PhP 100 million settlement, with DWUT agreeing to pay PhP 15 million upfront and PhP 85 million via dacion en pago, which included properties other than the subject lands. The CA reversed the RTC orders, granting RCAP's petition for annotation, holding that the Union lacked legal personality to intervene as its motion was deemed moot by the RTC and not seasonably appealed. The CA also disagreed with the RTC's application of laches, finding no prejudice to any party. The CA denied the Union's motion for reconsideration. The Petition: Petitioners (ALU and DWUEU-ALU) filed a Petition for Review on Certiorari, arguing that the CA erred in allowing the annotation, asserting that laches should have been applied due to the potential prejudice to DWUT and petitioners in satisfying their monetary claims. They also argued that the CA committed grave abuse of discretion in disregarding their appellee's brief and questioning their personality to participate in the case.
Issue(s)
Whether the Court of Appeals erred in allowing the annotation of encumbrance on certain titles to show restrictions on use and reversionary interests therein. Whether the Court of Appeals committed grave abuse of discretion in considering the appellee's brief of petitioners as a mere scrap of paper and assailing the personality of the petitioners in the instant case.
Ruling
The petition is DENIED. The April 29, 2002 Decision and January 20, 2003 Resolution of the Court of Appeals in CA-G.R. CV No. 56482 are AFFIRMED IN TOTO.
Ratio Decidendi
On the issue of the annotation of encumbrances and the validity of the Deed of Sale: The Supreme Court held that laches was inapplicable. The Court reiterated the elements of laches, emphasizing the fourth element: injury or prejudice to the defendant. In this case, no prejudice could befall the Union because no judgment lien had legally attached to the subject properties, as there was no levy on execution. Furthermore, the Union had judicially admitted the existence and validity of the Deed of Sale with its conditions and reversionary right in its complaint before the NLRC, thereby invoking the very right they now sought to resist annotating. The SVD, the registered owner, did not oppose the annotation, and there was no showing that DWUT lacked other assets to satisfy its obligations. The Court also noted that the MOA between the parties did not include the subject properties in the settlement, indicating they were not the sole recourse for DWUT's liabilities. The Court affirmed the validity of the October 1, 1958 Deed of Sale, noting that its validity was evident from the cancellation of RCAP's titles and the issuance of new TCTs in the name of SVD. The fact that the deed was not notarized was immaterial for its validity between the parties, as a deed of sale need not be in a public document for such purpose. With the SVD's judicial acquiescence to the annotation, the Court found the annotation to be in order. On the issue of the Union's legal personality to intervene, the existence of a judgment lien, and preference of credits: The Supreme Court affirmed the Court of Appeals' finding that the Union lacked legal personality to intervene. The RTC's March 8, 1996 Order dismissed the cadastral case, rendering the Union's motion for intervention moot. The Union failed to question these RTC orders within the reglementary period, which consequently lapsed into finality. Therefore, the Union could not be considered a proper party to the proceedings, and the CA did not commit grave abuse of discretion in disregarding their brief and ruling on their lack of personality. The Court clarified that a judgment lien does not automatically attach to all properties of a debtor without a levy on execution. Article 110 of the Labor Code and Articles 2242, 2243, and 2244 of the Civil Code on preference of credits apply only in cases of bankruptcy, insolvency, or liquidation proceedings, none of which were present here. Therefore, the Union could not assert preferential rights over the subject properties based on these provisions.
Main Doctrine
The Court of Appeals did not err in allowing the annotation of encumbrances on certain titles to show restrictions on use and reversionary interests therein, as the principle of laches was not applicable due to the absence of prejudice to any party and the clear admission of the Deed of Sale's validity by the petitioners. Furthermore, the petitioners failed to establish a valid judgment lien over the subject properties.