PURIFICACION Y. MANLIGUEZ, ANTONINA Y. LUIS AND BENJAMIN C. YBANEZ, PETITIONERS, VS. THE COURT OF APPEALS, ET AL., RESPONDENTS.

This is an appeal by certiorari from the Decision of the
Court of Appeals,^[1]
dated November 16, 1989, denying due course to and dismissing the petition in
CA-G.R. SP NO. 18017.^[2]

The case at bench finds its roots in the Decision of the
Department of Labor and Employment (Region VII), ordering Inductocast Cebu, a
partnership based in Mandaue City, to pay its former employees a total of
P232,908.00. As a consequence of the
judgment, the labor department’s regional sheriff levied the buildings and improvements
standing on Lot 109, Plan 11-5121-Amd., at Tipolo, Mandaue City. The levied properties (hereinafter referred
to as the “Tipolo properties”) were subsequently sold at public
auction to said employees.

On May 25, 1988, petitioners filed with the RTC of Cebu City, 7th
Judicial Branch, a Complaint^[3] which
sought the lifting of the levy over, and annulment of the sale of, the Tipolo
properties. The Complaint was docketed
as Civil Case No. Ceb-6917, and
raffled to Branch 8 of the trial court. Petitioners therein alleged that: they are the owners of the Lot 109; they entered into a lease agreement
with Inductocast Cebu over Lot 109; the lease contract provided that, except
for machineries and equipment, all improvements introduced in the leased
premises shall automatically be owned by the Lessor (petitioners) upon the
expiration/termination of the contract;^[4] the
lease agreement was terminated by petitioners in November, 1980 due to
non-payment of rentals by Inductocast Cebu;^[5]
thereafter, petitioners took actual possession of and occupied the Tipolo properties. Petitioners likewise alleged in their Complaint that they became aware
of the labor dispute involving Inductocast only after the impugned public
auction sale.^[6]

Atty. Danilo Pilapil, claiming to be the John Doe named in the
Complaint, filed a motion to dismiss on the ground that the trial court had no
jurisdiction over the case. The buyers
of the Tipolo properties, as intervenors, also filed a motion to dismiss on the
same ground. Both motions, which were
opposed by petitioners, were denied.

The intervenors, however, moved for reconsideration of the
denial. In an Order dated April 18,
1989, the trial court granted the motion and dismissed Civil Case No.
Ceb-6917. It held that the civil case
“is actually in the nature of a quashal of the levy and the certificate of
sale, a case arising out of a dispute that was instituted by the previous
employees of Inductocast before the Department of Labor and Employment, Region 7.”^[7] Citing Pucan vs. Bengzon, 155 SCRA
692 (1987), it held it had no jurisdiction
over the case since the levy and sale “are connected with the case within
the exclusive jurisdiction of the Department of Labor and
Employment.”^[8]

Petitioners questioned the dismissal of their Complaint to the
respondent Court of Appeals, through a petition for certiorari and
preliminary injunction.^[9] The
appellate court, in its impugned Decision, denied the petition as it held:

“To Our minds, the issue on what forum the case must be tried
or heard is a settled one. The
Department of Labor is the agency upon which devolves the jurisdiction over
disputes emanating from and in relation with labor controversies to the
exclusion of the regular courts.

“The issue in the case at bar concerns the levy of a property
in pursuance to a writ of execution, arising out of labor disputes. There can be no doubt that jurisdiction
pertains to the Department of Labor.

“xxx        xxx                         xxx

“In the light of the factual antecedents and incidents that
transpired in the hearing of this case at bar, the (trial court) correctly
ruled that indeed the Department of Labor has jurisdiction over the case. Consequently, WE see no abuse of discretion
let alone a grave one, amounting to lack or in excess of its jurisdiction
correctible with a writ of certiorari.

“Indeed, the issue of granting or denying a motion to dismiss
is addressed to the sound discretion of the court, and in the absence of a
capricious and whimsical exercise of power, certiorari will not
lie.”

Thus, this appeal where petitioners contend:

“THE RESPONDENT
APPELLATE COURT ERRED IN HOLDING THAT THE DEPARTMENT OF LABOR HAS JURISDICTION
ON THE SUBJECT MATTER AND NATURE OF THE CASE AS AGAINST THE CIVIL COURT.”

We find merit in the appeal. Firstly, respondent court erred in holding that the trial court does not
have jurisdiction over the case filed by petitioners. It is at once evident that the Civil Case No. Ceb-6917 is not a
labor case. No employer-employee
relationship exists between petitioners and the other parties, and no issue is
involved which may be resolved by reference to the Labor Code, other labor
statutes, or any collective bargaining agreement. Neither can we characterize petitioner’s action before the trial
court as arising out of a labor dispute. It was not brought to reverse or modify the judgment of the Department
of Labor and Employment (DOLE). Neither
did it question the validity of, or pray for, the quashal of the writ of
execution against Inductocast.

What is to be litigated in Civil Case No. Ceb-6917 is the issue
of ownership over the Tipolo properties. Clearly, it is the RTC and not the labor department which can take
cognizance of the case, as provided by B.P. Blg. 129 (“An Act Reorganizing
the Judiciary, Appropriating Funds Therefor, and For Other Purposes”),
thus:

“Sec. 19. Jurisdiction in civil cases. ?- Regional Trial Courts shall
exercise exclusive original jurisdiction:

x x x

(2) In all civil actions which involve the title
to, or possession of real property, or any interest therein, except actions for
forcible entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts;

x x x”

The action taken by petitioners before the RTC asserting their
ownership over the levied properties is mandated by Section 17, Rule 39 of the
Revised Rules of Court. Time and again,
we have held that:

“Under Section 17, Rule 39, a third person who claims property
levied upon on execution may vindicate such claim by action. x x x The right of a person who claims to be
the owner of property levied upon on execution to file a third-party claim with
the sheriff is not exclusive, and he may file an action to vindicate his claim
even if the judgment creditor files an indemnity bond in favor of the sheriff
to answer for any damages that may be suffered by the third-party
claimant. By ‘action,’ as stated in the
Rule, what is meant is a separate and independent action.”^[10]

Secondly, it is incorrect to argue that the trial court cannot take
cognizance of Civil Case No. Ceb-6917 without interfering with the writ of
attachment and writ of execution of a co-equal body. It is settled that the levy and sale of property by virtue of a
writ of attachment is lawful only when the levied property indubitably belongs
to the defendant. If property other
than those of the defendant is attached and sold by the sheriff, he acts beyond
the limits of his and the court’s authority.^[11] In
this regard, we held in the case of Uy,
Jr. vs. Court of Appeals, 191 SCRA 275 (1991) that:

“The main issue in this case is whether or not properties
levied and seized by virtue of a writ of attachment and later by a writ of
execution, were under custodia legis and therefore not subject to
the jurisdiction of another co-equal court where a third party claimant claimed
ownership of the same properties.

“The issue has
long been laid to rest in the case of Manila Herald Publishing Co., Inc. v.
Ramos (88 Phil 94 [1951]) where the Court ruled that while it is true that
property in custody of the law may not be interfered with, without the
permission of the proper court, this rule is confined to cases where the
property belongs to the defendant or one in which the defendant has proprietary
interests. But when the Sheriff, acting
beyond the bounds of his office seizes a stranger’s property, the rule does not
apply and interference with his custody
is not interference with another court’s order of attachment.”

Also, in the more recent case of Santos vs. Bayhon, 199 SCRA 525 (1991), we
stated, viz.:

“The general rule that no court has the power to interfere by
injunction with the judgments or decrees of another court with concurrent or
coordinate jurisdiction possessing equal power to grant injunctive relief,
applies only when no third-party claimant is involved x x x. When a third party, or stranger to the
action, asserts a claim over the property levied upon, the claimant may
vindicate his claim by an independent action in the proper civil court which
may stop the execution of the judgment on property not belonging to the
judgment debtor” (Citations omitted.)

Finally, it must be noted that the Pucan case relied upon
by respondent court is inapplicable to the case at bench which involves a
third-party claim over property levied on execution. In Pucan, we enjoined the Regional Trial Court from acting
on the petition for damages and prohibition against the enforcement of the writ
of execution issued by the NCR director of the then Ministry of Labor and
Employment in a labor case for the following reason:

“A perusal of the petition for damages and prohibition filed
by Saulog Transit, Inc., in the lower court reveals that basically, what was
being questioned was the legality or propriety of the alias writ of execution
dated March 1, 1985, as well as the acts performed by the Ministry officials in
implementing the same. In other words,
the petition was actually in the nature of a motion to quash the writ; and with
respect to the acts of the Ministry officials, a case growing out of a labor dispute,
as the acts complained of, were perpetrated during the execution of a decision
of the then Minister of Labor and Employment. However characterized, jurisdiction over the petition pertains to the
Labor Ministry, now Department and not the regular courts. This conclusion is evident, not only from
the provisions of Article 224(b) of the Labor Code, but also of Article 218, as
amended by Batas Pambansa Blg. 227 in connection with Article 255 of the same
Code.

“xxx        xxx                           xxx

“Apparently, Saulog Transit, Inc. was misled by its own prayer
for actual, moral and exemplary damages. It believed that such additional cause of action could clothe the
petition with the mantle of a regular action cognizable by the regular
courts. It was, of course, mistaken for
the fact remains that the acts complained of are mere incidents of a labor
dispute. Such prayer therefore did not
alter the complexion of the case as one arising from a labor dispute, but was
subsumed by the nature of the main case, over which the regular courts had no
jurisdiction, much less the power to issue a temporary or permanent injunction
or restraining order. xxx”^[12]

In fine, we prohibited the action before
the trial court in Pucan because
it attacked the regularity of the issuance of the alias writ of execution in
the labor case, which is but an incident of the labor dispute. This is not so in the case at bench where
the civil case filed by petitioners does not even collaterally attack the
validity of the DOLE’s writ of attachment. On the contrary, petitioners in Civil Case No. Ceb-6917 pray for the
trial court’s ruling that the DOLE’s judgment could not be validly executed on
the Tipolo properties, which allegedly do not belong to Inductocast.

IN VIEW WHEREOF, the petition for review is GRANTED. The Decision of the Court
of Appeals in CA-G.R. SP No. 18017, dated November 16, 1989, is REVERSED and SET ASIDE. The Regional Trial Court of Cebu
City, Branch 8 is ordered to try Civil Case Ceb-6917 on its merit. No costs.

SO ORDERED.

Padilla, (Acting Chairman), Quiason, and Vitug, JJ., concur.

Narvasa, C.J., and
Regalado, J., on official leave.

^[1]
Through its Special First Division, composed of Associate Justices Bonifacio A.
Cacdac, Jr. (ponente and acting chairman), Cecilio L. Pe, and Jesus M.
Elbinias.

^[2]
Entitled “Purificacion Y. Manliguez, et al. vs. Hon. Bernardo Ll.
Salas, et al. . “

^[3]
Entitled “Purification Y. Manliguez, Antonina Y. Luib and Benjamin C.
Ybanez represented by Taciana c. Ybanez vs. Emilio Lomontad, Celerino
Villahermosa, Register of Deeds of Mandaue City, Mandaue City Assessor and John
Doe.”

^[4]
Complaint, p. 3; Rollo, p.
60.

^[5]
Annex “E”, Complaint; Rollo,
p. 75.

^[6]
Complaint, p. 5; Rollo, p.
62.

^[7]
RTC’s Order, dated April 18, 1989, p. 4; Rollo, p. 84.

^[8]
Ibid..

^[9]
Docketed as CA-G.R. SP No. 18017.

^[10]
Bayer vs. Agana, 63 SCRA 358 (1975); Abiera vs. Court
of Appeals, supra; Lorenzana vs. Cayetano, 78 SCRA 485
(1977); Sampaguita Pictures, Inc. vs. Jalwindor Manufacturers, Inc., supra.

^[11]
See Manila Herald Publishing Co., Inc. vs. Ramos, 88 Phil. 94 (1951); Abiera vs.
Court of Appeals, supra; Sampaguita Pictures, Inc. vs.
Jalwindor Manufacturers, Inc., supra;
Escovilla, Jr. vs. Court of Appeals, 179 SCRA 108
(1989); Uy, Jr. vs. Court of Appeals, 191 SCRA 275 (1991); Santos
vs. Bayhon, 199 SCRA 525 (1991).

^[12]
Pucan vs. Bengzon, 155
SCRA 692, 699-700.