NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION, REPRESENTED BY LESLIE GUMARANG, PETITIONER, VS. NORTHEASTERN COLLEGE, INC., RESPONDENT.

Northeastern College Teachers and Employees Association versus Northeastern College

The Case

This is a labor case that reached the Supreme Court on a petition for review of a Court of Appeals amended decision. The petitioner is the Northeastern College Teachers and Employees Association, a registered labor organization, joined by its then president Leslie Gumarang. The respondent is Northeastern College, an educational institution in Santiago, Isabela. The dispute began as complaints for unfair labor practice and underpayment of wages, but what the Supreme Court ultimately had to settle was the validity of the execution proceedings that followed a final labor arbiter's award, and in particular whether the school's attempted redemption of properties sold at public auction was legally effective. The case matters because it teaches the rules on redemption of property sold on execution, the separate personality of a labor union from its members, and the finality of judgments.

Procedural History

The complaints were filed with the Regional Arbitration Branch of the National Labor Relations Commission in Tuguegarao, Cagayan, and were consolidated. The labor arbiter rendered a decision in favor of the union, which became final and executory after the school failed to appeal. Execution proceedings followed, including a writ of execution, an alias writ, and two public auction sales of the school's real properties. The school filed a notice of redemption, which the labor arbiter denied in an order dated 22 July 1994, at the same time granting the union's motion for a writ of possession. The school appealed to the National Labor Relations Commission, which did not rule on the appeal. The school then went to the Supreme Court on certiorari and prohibition, and the Court dismissed the petition and later denied reconsideration with finality. The labor arbiter then issued an order dated 28 May 1996 directing conveyance of possession to the union's representatives. The school filed a petition for injunction before the National Labor Relations Commission, which rendered a decision dated 15 September 1997 holding that the redemption was made within the twelve-month period and that the direct payments to teachers could be considered substantial compliance. The union elevated the matter to the Court of Appeals, which first annulled the Commission's decision but later, on reconsideration, reversed itself and affirmed the Commission in full. The union then came to the Supreme Court by petition for review.

Facts

The union and its president filed complaints for unfair labor practice and underpayment of wages against the school. On 13 August 1992, Labor Arbiter Gregorio Calasan rendered a decision ordering the parties to compute the amounts due and directing the school to pay. The school received a copy on 26 August 1992 but did not appeal, so the decision became final on 5 September 1992. The union then moved for enforcement, claiming a total of 2,145,711 pesos and 86 centavos. The school was given time to comment and to submit its own computation, but it repeatedly failed to do so. The labor arbiter treated this failure as confirmation of the union's computation and issued a writ of execution.

The school moved to quash the writ, but the motion was denied, and no appeal or reconsideration was filed. Alias writs of execution followed. On 30 June 1993, a property covered by Transfer Certificate of Title Number 98270 was sold at public auction for 150,000 pesos to Leslie Gumarang and Roger Bautista, acting through their attorney-in-fact Angelo Bautista, who were the only bidders and whose bid was merely credited to the judgment. On 17 September 1993, another property covered by Certificate of Title Number 3973 was sold at public auction for 1,995,711 pesos and 86 centavos to the same purchasers, again the only bidders, with the price merely credited to the award.

On 1 June 1994, the school filed a notice of redemption, claiming it had paid the redemption price directly to the teachers, supported by unsworn receipts. The labor arbiter denied the redemption, ruling that the twelve-month redemption period for the first property had expired on 30 June 1994, that the payments were not made to the purchasers, and that the teachers were not the complainants or the purchasers. The school appealed, but the Commission did not act. The Supreme Court later dismissed the school's certiorari petition and denied reconsideration with finality. The Commission eventually ruled in 1997 that the redemption was timely and that the direct payments to the teachers substantially complied with the redemption requirement. The Court of Appeals, on reconsideration, agreed with the Commission.

Issues

• Whether or not the notice of redemption was filed within the twelve-month redemption period.
• Whether or not the school's direct payments to the teachers may be considered substantial compliance with the redemption requirement.
• Whether or not the order of the labor arbiter denying redemption had already become final and executory.

Applicable Provisions

Section 12, Rule VII of the National Labor Relations Commission Sheriff's Manual provides:

The redemptioner shall pay the amount of his bid plus one percent (1%) per month legal interest thereon, together with the amount of any assessments or taxes which the purchaser may have paid thereon after the purchase, and interest corresponding to such amount at the same rate.

This provision fixes what must be paid, and to whom, for a valid redemption of property sold on execution.

Section 3, Rule IV of the same Manual provides:

All payments of judgment by the judgment debtor shall be made to the Cashier of the Regional Arbitration Branch concerned.

This provision governs how payments on a judgment must be made, and the labor arbiter relied on it in rejecting the school's direct payments.

Ruling

On the first issue, the Court held that the notice of redemption was filed within the twelve-month period. The auction sale took place on 30 June 1993, and the notice of redemption was filed on 1 June 1994, clearly within the reglementary period. The Court agreed with the Commission on this point.

On the second issue, the Court held that the school's direct payments to the teachers could be considered substantial compliance with the redemption requirement. The Court noted that the principal complainant is the union, and that Gumarang and Bautista were officers representing the union, while the teachers who received the payments were members of that same union. The Court found no requirement in the Sheriff's Manual that redemption payments be deposited with the Commission's cashier, and held that in the absence of such a prohibition, payments to the teachers may be treated as substantial compliance.

On the third issue, the Court held that the labor arbiter's order denying redemption had not become final and executory, because the school had seasonably appealed it to the Commission on 8 August 1994, after receiving the order on 30 July 1994. The Court therefore affirmed the Commission's findings.

Doctrine

First, a notice of redemption of property sold on execution must be filed within the twelve-month redemption period counted from the date of the auction sale. Second, the redemption price must be paid to the purchaser or the purchaser's representative, and where the principal complainant is a labor union, payments made to the union's members may be considered substantial compliance with the redemption requirement. Third, there is no requirement in the National Labor Relations Commission Sheriff's Manual that redemption payments be deposited with the Commission's cashier, and the absence of such a prohibition means that direct payments may be valid. Fourth, an order of a labor arbiter that is seasonably appealed does not become final and executory, and the appeal must be resolved before the order can be enforced.

Disposition

The Supreme Court denied the union's petition and affirmed the Court of Appeals amended decision, which had affirmed the National Labor Relations Commission's decision in full.

Remember This

The single line worth memorizing is that a notice of redemption filed within the twelve-month period, with payments made to the members of the complainant union, constitutes substantial compliance with the redemption requirement. Examiners like to use this case to test the rules on redemption of property sold on execution and the separate personality of a labor union from its members.