EASTERN METROPOLITAN BUS CORP., RUBEN TY AND GEORGE UY, PETITIONERS, VS. HON. EDILBERTO PANGAN, AND ABE ESTRADA, IN THEIR CAPA­CITIES AS LABOR ARBITER AND DEPUTY SHERIFF, RESPEC…

This petition for Certiorari and Prohibition with Prayer
for a Writ of Preliminary Injunction and/or Temporary Restraining Order was
filed on September 4, 1990 by the petitioners to annul the writ of execution
issued by Labor Arbiter Edilberto Pangan pursuant to his decision dated June
11, 1990 in “Katipunan ng Mga Manggagawang Pilipino (KAMAPI) vs. Eastern
Metropolitan Bus Corporation (EMBC), Ruben Ty and George Uy” (NLRC-NCR
Case No. 4-1617-86), ordering EMBC to pay emergency cost of living allowance
(COLA), 13th month pay and service incentive leave pay to twenty (20)
employees, ordering the Chief of the NLRC’s Research and Information Unit,
Ricardo Atienza, to compute the amount due each of the 20 claimants and to
submit a report. Without giving EMBC an
opportunity to be heard on the matter, the Chief of the NLRC’s Research and
Information Unit computed the amount due the 20 claimants to be
P284,221.00. That computation did not
take into consideration the payment made in the meantime by EMBC to 15 of the
20 plaintiffs who executed releases and quitclaims and signed vouchers as proof
of payment.

Based on Atienza’s computation, a writ of execution was issued by
Labor Arbiter Pangan. Its
implementation was entrusted by him to NLRC Sheriff Abe Estrada who immediately
levied on four (4) EMBC buses and scheduled the sale thereof on August 27,
1990. The notice of sale was received
by EMBC’s counsel on August 23, 1990. The next day, August 24, 1990, despite heavy floods in Metro Manila,
EMBC filed an “Urgent Motion to Quash/Recall Writ of Execution and for
Recomputation.” Labor Arbiter Pangan ignored the motion to quash and
directed Estrada to proceed with the
auction sale. The four (4) buses were
sold for a total price of P150,000 only to Evaristo Doroin as the supposed
highest bidder at the sale. On August
29, 1990, Pangan issued an Order approving the auction sale and directing EMBC to
allow Estrada to remove the four
(4) buses so they could be delivered to Doroin.

Upon receipt of the Order on August 31, 1990, EMBC petitioned the
NLRC to issue a writ of Injunction and prayed for a Temporary Restraining Order
(Annex E of Petition) to stop Estrada and Pangan from withdrawing the four (4)
buses from EMBC’s premises in Pasig, Rizal
until the motion to quash was resolved. It turned out, however, that on the same day that EMBC received a copy
of Pangan’s Order dated August 29, 1990, that Order had already been carried
out by Estrada. The buses were
delivered to Evaristo Doroin, the supposed highest bidder at the auction sale.

On September 4, 1990, EMBC filed a petition for certiorari
and prohibition in this Court, praying that the writ of execution issued by
Pangan be annulled and that a recomputation be made showing the amount EMBC has
already paid, and the balance still due under the decision; and that a writ of
preliminary mandatory injunction be immediately issued, ordering Doroin and
Estrada to return the four (4) passenger buses to EMBC and enjoining them from
vandalizing the same.

On September 12, 1990, the Court issued a Temporary Restraining
Order and a Writ of Preliminary Mandatory Injunction restraining the
respondents “from doing any act that would vandalize the four (4) units of
buses x x x subject of the levy and sale on August 27, 1990 conducted in NLRC
NCR Case No. 4-16-17-86 and all the aforementioned respondents
herein are ordered to return the
aforementioned buses (Buses Nos. 705, 712, 726 and 724) x x x to the possession,
custody and effective control of the herein petitioners [EMBC]” (p. 77, Rollo) upon the latter’s
filing a bond in the amount of P300,000 issued by a surety company of
indubitable solvency and reputation.

Doroin filed a “Comment and/or Opposition and Urgent Motion
to Dissolve and Lift Temporary Restraining Order and Preliminary Mandatory
Injunction.” He alleged that he was the highest bidder at the auction of
the buses; that they “are unserviceable in dilapidated conditions
(sic);” and that they had “already been disposed of and likewise
appropriated to third persons.” He prayed that the petition be denied for
lack of merit. (pp. 105-108, Rollo.)

On October 1, 1990, EMBC filed an “Urgent Motion to Cite
Respondents (Pangan, Estrada and Doroin) in Contempt” because they had
ignored this Court’s Order for the return of the buses (pp. 109-113, Rollo).

The Solicitor General submitted a “Manifestation in Lieu of
Comment” dated November 5, 1990 (pp. 123-124, Rollo) in which he made the
following observations concerning the illegal actuations of Labor Arbiter
Pangan and Sheriff Estrada:

“1)     x x x the
Solicitor General, after an agonizing review of the record, cannot find himself
to conclude that there was no grave abuse of discretion committed by public
respondents. The abuse is more than
grave, as shown by:

“First, there is the failure of the Labor Arbiter to
hear the Urgent Motion to Quash/Recall Writ of Execution and for Recomputation,
especially in the light of petitioners’ manifestation to him that
‘majority of the complainants (union members)
have received their salaries and benefits
IN FULL from the respondents (petitioners)’
(p. 498, rec.). Respondent Labor
Arbiter, in the interest of justice and fair play, should have ascertained the
truth of petitioners’ aforesaid manifestation, and if petitioners’ submission
were true, to have deducted from the award the total amount already received by
the complainants-union members. Assuming, even without admitting, that 14 out of 20
complainants have indeed received the amounts as shown by the vouchers attached
to the petition, the total amount allegedly paid petitioners is P115,188.00. This amount, if deducted from the award of
P284,221.00 as computed, would have left only some P169,033.00 as balance to be
satisfied by petitioners.

“Second, respondent Labor Arbiter failed to give
petitioners a chance to pay the award, either as computed or as a
remaining balance, before levying on their personal property, the four (4)
units of buses. The Writ of Execution
dated August 10, 1990
incorporating the computation of the award was furnished petitioners (not
to petitioners’ counsel on record) only on
August 15, 1990 (p. 533, rec.). On
the same day, levy was made on the four (4) units of buses. (pp. 130-132, Rollo.)

2)      There was grave abuse
of discretion on the part of Sheriff Estrada in “approving the very low
bid price of P150,000.00 for the four (4) units of buses.” He claims that
the units were dilapidated being belied by the photographs of the buses, and it
being more credible to assume that each bus was worth P200,000.00
“considering the prevailing price of buses at present which runs to
millions per one brand new unit.” (pp. 132-133, Rollo.)

The Solicitor General closed his
Manifestation with the observation that “to date, there is no showing that
the High Writ of Preliminary Mandatory Injunction issued by this
x x x Court x x x has been
complied with x x x,” and
pointedly inquired: “Whatever
happened to the buses?” (p. 133, Rollo.)

In his “Comment and/or Opposition to the Urgent Motion to
Cite Respondents in Contempt,” Sheriff Estrada alleged that he “only
acted in compliance with a lawful Order/Writ of Execution” (p. 142, Rollo)
issued by Pangan; that he had “not received any copy of the Restraining
Order/Injunction” (p. 143, Rollo); that Doroin’s bid of P150,000 for the
four (4) buses was accepted by him because “the subject vehicles x x x were dilapidated and some are
without tires and batteries making it (sic) unserviceable” (p. 144,
Rollo); that he took possession
of the buses “with the help of three (3) wreckers provided for (sic) by
the said bidder” (p. 144, Rollo); that he received the Preliminary
Mandatory Injunction and Temporary Restraining Order issued by this Court only
“on September 14, 1990, exactly fourteen (14) days after the concluded
sale” (p. 145, Rollo); and that hence, he is “no longer in a position
to deliver and/or turn over” (p. 145, Rollo) the buses to the petitioner EMBC.

Similar argument was advanced by Doroin in his “Comment
and/or Objection on (sic) the Motion to Cite Respondents for Contempt.” He
alleged that the possession of the buses had long been transferred to him; that
they “were already scraped (sic) to particles and disposed of and appropriated
to several metal dealers;” and that, hence, it is no longer
“physically and legally possible [to] restore the four (4) bus
units to the petitioners.” (p. 148, Rollo.)

The Court set the contempt motion for hearing on March 8, 1991 at
10:30 A.M. The Solicitor General asked
to be excused.

The facts disclosed at the hearings thereafter conducted are
hereunder summarized:

In contrast to the occurrences prior to the sheriff’s taking
possession of the four (4) buses levied on, their delivery to Doroin, and the
deposit of the bid price with the Cashier of the Labor Department on September
3, 1990, the events subsequently transpiring are largely undisputed, and it is
possible to reconstruct them with reasonable accuracy on the basis of the
testimony of the several disinterested and impartial witnesses summoned by this
Court.

After Doroin had obtained possession of the four EMBC buses, he had
them brought to the one-hectare compound of Dario Tobia, doing business under
the name and style of Lepanto Construction at Tandang Sora, Quezon City. It was Doroin’s associate, Rodolfo (Boy)
Lubguban, who arranged to have the buses parked in that place until Doroin
could finally dispose of them. Lubguban
was acquainted with Tobia and asked him to allow the buses to be placed in the
latter’s property for a short
while. Tobia agreed. Doroin and Lubguban then had the four (4)
buses brought to the premises of the
Lepanto Construction. (pp. 2-9,
tsn, May 24, 1991.)

Federico Patio
– Re: Buses No.
712 and 724

Sometime in September, 1990, former NLRC Sheriff Juanito Atienza,
then earning a living as “junk scrap agent,” (not yet reinstated) was asked by another dealer in scrap iron,
Bert Noriega, if he knew of buses for sale on execution as he had a buyer who
was interested in buying second-hand buses. The buyer was Federico Patio, the owner of a transportation line called
Golden Highway. Atienza went to see his
friend, Sheriff Abe Estrada who directed him to Evaristo Doroin. Atienza thus met Doroin who confirmed that
he indeed had buses for sale. Atienza
then brought Patio and Noriega to the Lepanto Construction compound at Tandang
Sora. There Patio saw Doroin and
Lubguban, and four (4) buses which all bore markings of EMBC. After being assured by Atienza that there would be no problem with the buses,
Patio and Noriega selected two (2) of them for each of which Patio agreed to
pay a price of P100,000. It was the
understanding between Patio and Doroin that the engines of both buses would be
replaced. The buses purchased by Patio
bore the numbers, 712 and 724 (pp. 33-49, tsn, March 15, 1991; pp. 42-49, tsn,
April 26, 1991).

In September or October, 1990, the two (2) buses (Nos. 712 and 724)
were brought by Federico Patio to the repair and vehicle body building shop of
Reynaldo Gamboa at 1059 Kilometer 19, Quirino Highway. The vehicles were driven to that place by a
brother of Doroin and a certain Villarama.

The engines of both trucks were removed in the presence of Rodolfo
Lubguban and Doroin. Gamboa had the roof and rusted parts
of one of the buses removed, retaining the original sides. Both buses (Nos. 712, 724) were still in
Gamboa’s shop as of March 8, 1991 (pp. 5-15, 25, tsn, March 15, 1991).

On March 8, 1991 (the first day of the contempt hearing), at about
2:00 o’clock in the afternoon, “men of Doroin,” according to Gamboa,
came to his shop and tried to remove the engine from one of the EMBC
buses. One of the men was Boy Lubguban,
sent there by Doroin. Boy Lubguban and the other were, however,
stopped by a certain Atty. Chua, EMBC’s counsel, who arrived at about that
time. The officers of this Court then
took custody of both buses (Nos. 712 and 724).

Romeo Velarde
– Re: Bus No.
705

Sometime in the last week of January, 1991, Romeo Velarde of San Jose
del Monte, Bulacan, having some money to invest, decided to buy a passenger
bus. He went to Sapang Palay and told
some friends there that he was in the market for one.

Two or three days later, a certain Leo came to him and told him
that he knew someone selling second-hand passenger buses. So, he went with Leo to the house of the
latter’s uncle, Tito Lagana. There, he
met Evaristo Doroin. Doroin brought him
to the Lepanto Construction compound at Tandang Sora where he saw two (2) EMBC
buses. Velarde agreed to buy one of
them, which was numbered 705, for P145,000.

Because Bus No. 705 had no license plate, and the registration
papers were not then available, Doroin told Velarde he would deliver the bus to
him at night together with all the papers. The bus was driven to Velarde’s residence at about 9:30 o’clock in the evening of February 5, 1991. Doroin gave Velarde a deed of sale for said
Bus No. 705 in his favor, signed by Rodolfo Lubguban together with the
certificate of sale executed by Sheriff Abe Estrada and other papers. Although the price agreed upon was P145,000,
the consideration set forth in the deed was only P140,000, because P5,000 was
given to Tito Lagana, as broker’s commission. The sum of P140,000 in cash was given by Velarde to Doroin in Lubguban’s
presence (pp. 5-18, tsn, April 26, 1991).

On March 15, 1991, officers of the Court also took Bus No. 705 from
Romeo Velarde, Road 3, Minuyan, San Jose del Monte, Bulacan.

Roel Egonia
– Re: Bus No.
726

The last EMBC bus, numbered 726, was sold by Doroin to Roel
Egonia. Egonia is the owner of two
buses being operated under the so-called “kabit” system by the SPS
Transportation, owned and registered under the name of Saturnino Dizon.

Desiring to acquire another bus, Egonia went to Doroin. Doroin told him to pick up the bus from the
Lepanto Construction compound, and they would talk about the terms later.

Egonia drove the EMBC bus (No. 726) to his residence on February 7,
1991. On February 10, 1991, he brought
the bus to Rufino Napat, a mechanic, for repairs.

In the first week of March, 1991, Doroin told Egonia not to proceed
with the repair of Bus No. 726 as the Sheriff might get the bus.

At about the same time, Doroin and Lubguban also told Velarde a
case had come up about the bus (No. 705); that somebody had squealed to the
EMBC that the vehicles sold at the execution sale had not been cut up as
earlier reported but were still intact. They suggested that Velarde hide the vehicle and have its markings
changed so as to alter its appearance.

On March 18, 1991, officers of the Court confiscated Bus No. 726
from Rufino Napat (2670 cor.
Honduras and Batangas Sts., Bo. San Isidro, Makati, M.M.). Napat surrendered the bus after he called up
Egonia and the latter told him to do so.

All these seizures of the buses were effected pursuant to Orders of
this Court, founded on information supplied by EMBC.

Velarde has filed a third-party claim to Bus No. 726. (p. 208, Rollo.)

The petition for certiorari and prohibition. –

In light of the above facts, the Court is constrained to grant
the petition for certiorari and prohibition for it is palpably clear
that respondent Labor Arbiter Pangan gravely abused his discretion: (1) in ignoring the petitioners’ timely
motion to quash the writ of execution and (2) in directing NLRC Sheriff Estrada
to proceed with the public sale of the four (4) EMBC buses.

All of Pangan’s excuses for not acting on the motion to quash the
writ of execution were false. He
alleged that the quitclaims and releases supporting EMBC’s motion to quash the
writ of execution did not show: (1) the
amounts paid to each claimant, (2) nor the names of the claimants, (3) nor were
they under oath.

After examining the same documents during the hearing of the contempt motion, Pangan
shamefacedly admitted that the names of the claimants and the amounts paid to
them do appear in the quitclaims and releases which they signed (pp. 81-82, 88,
tsn, March 15, 1991) and some of the quitclaims were in fact under oath (pp.
83, 105, tsn, March 15, 1991).

Since EMBC asked
for a recomputation of the balance due on the judgment because it had already
paid 15 out of 20 claimants, in fairness to EMBC, Pangan should have suspended
the implementation of the writ of execution, ordered a hearing on the motion to
quash and recomputed the amounts due the remaining five (5) unpaid claimants.

The sale of the buses, despite EMBC’s motion to quash the writ of
execution and proofs of payment of a major portion of the judgment, was null
and void for it violated Section 20, Rule 39 of the Rules of Court, as well as
Section 2, Rule VII of the Manual of Instructions for NLRC Sheriffs, which
respectively provide:

“Sec. 20. No sale
if judgment and costs paid. – At
any time before the sale of property on execution the judgment debtor may
prevent the sale by paying the amount required by the execution and the costs
that have been incurred therein.” (Rule 39, Rules of Court.)

“Sec. 2. No sale if judgment and costs paid. – At any time before the sale of property on
execution, the losing party may prevent the sale by paying the amount required
by the execution and the costs that have been incurred therein.” (Rule
VII, Manual of Instructions for NLRC Sheriffs.)

There is no merit in Pangan’s argument that he did not have to
act on the motion to quash the writ of execution because: (1) there was no temporary restraining order
(TRO) from the Supreme Court nor the NLRC; and (2) EMBC did not
“personally follow-up” its aforesaid motion (pp. 94, 99, tsn, March
15, 1991).

Both the Rules of Court and the Manual of Instructions for NLRC
Sheriffs provide that the sale should not proceed if the judgment has been
paid, hence, no TRO was necessary to make Pangan suspend the execution
sale. Furthermore, Rule VIII, Section
3, paragraph 3 of the Rules of the NLRC provides:

“In situations not covered by Section 16, Rule V, but where
further computation of the judgment amount is necessary, no execution shall
issue until after the computation shall have been approved by the Labor Arbiter,
after the parties shall have been duly notified and heard thereon.”

Pangan’s ambiguous requirement that a “personal
follow-up” should be made by EMBC on its motion to quash the writ of execution is completely devoid of
any legal basis. It is arbitrary,
capricious, and suspicious.

Another reason for the nullity of the sheriff’s sale of the buses
is that there was in fact no public bidding or auction. Reynaldo Segui, the chief security guard in
the EMBC compound where the auction sale was to be held, testified that on
August 27, 1990, the date of the alleged auction, no “subasta” or
auction was conducted by Estrada in the premises (p. 60, tsn of M. Cruz, May
31, 1991). Estrada arrived at 1:30 p.m.
that day, accompanied by Eufrosino Cesar and another companion (not
Doroin). They only took some pictures
of the four (4) buses and left after 15 minutes (p. 53, Ibid). The falsity of Estrada’s minutes of the
alleged “auction” sale, stating that there were two other bidders
named Salvador Nacaya of 28 Commodore Street, Holy Spirit, Quezon City, and
Nemesio Rodriguez of 4th Street, BF Homes, Quezon City, was exposed when the
process servers of this Court tried to serve subpoenas on them. The process servers reported that no such
persons live in the given addresses (pp. 3-4, Ibid). Estrada’s explanation that the supposed
bidders may have given him fictitious addresses is unacceptable, for if they
were legitimate bidders, they would not have given fictitious names and
addresses to the sheriff conducting the sale. On the other hand, Sheriff Estrada had reason to invent the names and
addresses of fictitious bidders since he wanted to conceal the fact that there
had been no bona fide auction sale of the four (4) buses.

The absence of an auction sale on August 27, 1990 is also
confirmed by the fact that Doroin did not pay his “bid” of P150,000
on the date of the supposed auction.

Sheriff Estrada delivered the four (4) buses to Doroin on August
30, 1990 without Doroin having paid for them. Doroin allegedly paid to Estrada the bid price of P150,000 on August 31,
1990 only (p. 544, NLRC Rollo) i.e., four (4) days after the alleged auction
sale. Estrada thereby violated Sections
7 and 8 of the “Manual of Instructions for Sheriffs” which
specifically provide that the delivery of the auctioned property shall be made when
the purchaser pays the purchase price:

“Section 7. Conveyance
to purchaser of personal property capable
of manual delivery. – When the purchaser of any personal property, capable of manual
delivery, pays the purchase price, the sheriff making the sale shall
deliver the property to the purchaser and, if desired, execute and deliver to him a certificate of sale. The sale conveys to the purchaser all the rights which the losing party
had in such property on the day of its levy.

“Section 8. Conveyance
to purchaser of personal property not
capable of manual delivery. – When the purchaser of any personal
property, not capable of manual
delivery, pays the purchase price, the sheriff making the sale shall
execute and deliver to the purchaser a
certificate of sale. Such
certificate conveys to the purchaser all the rights which the losing party had
in such property on the day of its levy.” (Underscoring ours.)

The fervid efforts of Pangan and Estrada to speedily consummate
the “auction” of the buses lend validity to the petitioners’ theory
that they had a proprietary interest in the buses and that Doroin was a mere
recruit to play the role of “highest bidder” and “disposer” of the
four (4) buses the proceeds of which were to be divided among them. The buses were “sold” to Doroin
for a scandalously low price, so that the profits they would derive from the
resale of the same would be bigger. Doroin, whose declared assets and income as a junk dealer did not exceed
P20,000 and P24,000 per annum, respectively, alleged that the money he used to
pay for the buses was “borrowed” by him from L. Acuario
Marketing. But that was denied by
Acuario’s treasurer, Zusima Mendoza. Where did he get the bid money of P150,000? It is a riddle wrapped in a mystery within an enigma.

In view of the nullity of the “auction sale” of the
EMBC Buses Nos. 712, 724, 726 and 705 to Doroin, the Court orders the
cancellation of the sale and the return of the buses to the petitioner, Eastern
Metropolitan Bus Company.

The Motion for
Contempt. –

The “Urgent Motion to Cite Respondents (Pangan, Estrada and
Doroin) in Contempt” (p. 109, Rollo) for disobedience of the Court’s order
to return the four (4) EMBC buses to the petitioners, is well taken.

As borne out at the hearing of the motion, Doroin was lying in
his teeth when he declared that he could not return them because they had
“already been disposed of and x x x appropriated to third persons”
(Comment and/or Opposition etc., p. 106, Rollo) and that they “were
already scraped (sic) to particles and disposed of and appropriated to several
metal junk dealers” (Comment and/or Objection to Contempt Motion, p. 148,
Rollo). He had the temerity to repeat
that falsehood under oath when he
testified before this Court on March 15, 1991 (pp. 70-77, 81, tsn, March 15,
1991). He deliberately perjured himself
to mislead the Court and impede the implementation of its order for the return
of the buses to EMBC.

Under further questioning, he crumpled up and admitted that the
buses had not been “scraped” but were in fact hidden in the yard of
the Lepanto Construction and/or Dario Tobia in Tandang Sora, Quezon City, and
that he had sold them to three (3) different buyers, namely: Buses Nos. 712 and 724 to Federico Patio for
P100,000 each; Bus No. 705 to Romeo Velarde for P145,000; and Bus No. 726 to
Roel Egonia with whom he had not yet agreed on the price (pp. 111-114, 119, Ibid).

Even after the contempt proceedings had commenced, Doroin
incorrigibly made last minute attempts to
steal the engines of the two (2) buses in Gamboa’s premises, and advised
Lubguban to hide the others, in defiance of the Court’s order to return them to
EMBC.

Labor Arbiter Pangan and Sheriff Abe Estrada received the Court’s
writ of preliminary mandatory
injunction dated September 12, 1990 ordering “all the aforesaid
respondents to return the aforementioned buses (Buses Nos. 705, 712, 726 and
724 with Plate Nos. NVR 724, NVR 731, NVR 721 and NVR 724, respectively) to the
possession, custody and effective control of herein petitioners” (p. 77,
Rollo.).

Estrada repaired to Doroin’s place in Caloocan City, but
allegedly found only one bus intact. He
consulted with Pangan about what they should do with the Court’s preliminary
mandatory injunction, but Pangan shrugged it off saying, “Ano ang magagawa
natin?” (What can we do?) (p. 44, tsn, March 8, 1991). They did not advise, much less require,
Doroin to surrender the bus in his possession. Neither did they report to the Court that one bus was in Doroin’s shop.

Pangan admitted that he and Estrada “did not do anything
anymore” about the Court’s order because they believed it was “more
directed” to Doroin. Of course,
that was sheer pretense on their part for
they were fully aware that the Court’s order was addressed to “all the
respondents.” (pp. 4-6, tsn, May 31, 1991.)

By concealing the buses instead of returning them to EMBC as
ordered by the Court, and boldly misrepresenting to the Court that the four (4)
buses had all been cut up into scrap metal and sold to junk dealers, Doroin
acted not only with total disregard for the truth but with contumacy toward
this Court.

By concealing from this Court the fact that one of the buses was
still in Doroin’s possession, Labor Arbiter Pangan and Sheriff Estrada conspired
and cooperated with Doroin to impede the implementation of this Court’s order
for the return of the buses to EMBC. We, therefore, find all three (3)
respondents guilty of contempt of this Court.

Sections 3 and 6, Rule 71 of the Rules of Court provide:

“Section 3. Indirect
contempts to be punished after charge and hearing. – After charge in writing has been filed,
and an opportunity given to the accused to be heard by himself or counsel, a
person guilty of any of the following acts may be punished for contempt:

“(a)    Misbehavior of an
officer of a court in the performance of his
official duties or in his official transactions;

“(b)    Disobedience of
or resistance to a lawful writ, process,
order, judgment or command of a court,
or injunction granted by a court or judge, including the act of a person who, after being
dispossessed or ejected from any real property by the judgment or process of
any court of competent jurisdiction, enters or attempts or induces another to
enter into or upon such real property, for the purpose of executing acts of
ownership or possession, or in any manner disturbs the possession given to the
person adjudged to be entitled thereto;

“(c)    Any abuse of or any
unlawful interference with the process or proceedings of a court not constituting direct contempt under section 1 of this rule;

“(d)    Any improper
conduct tending, directly or indirectly, to
impede, obstruct, or degrade the administration
of justice;

“(e)    Assuming to be an
attorney or an officer of a court, and acting as such without authority;

“(f)     Failure to obey a
subpoena duly served;

“(g)    The rescue, or
attempted rescue, of a person or property in the custody of an officer by
virtue of an order or process of
a court held by him.

“But nothing in this section shall be so construed as to
prevent the court from issuing process to bring the accused party into court,
or from holding him in custody pending such proceedings.”

“Section 6. Punishment
if found guilty. – If the accused
is thereupon adjudged guilty of contempt committed against a superior court or
judge, he may be fined not exceeding one thousand pesos or imprisoned not more
than six (6) months, or both; if adjudged guilty of contempt committed against
an inferior court or judge, he may be fined not exceeding one hundred pesos or
imprisoned not more than one (1) month, or both, and if the contempt consists
in the violation of an injunction, he may also be ordered to make complete
restitution to the party injured by such violation.”

Disobedience of the Court’s order to produce a person without a
valid excuse for failing to do so, constitutes contempt of court for which the
respondent may be either imprisoned or fined (Villavicencio vs. Lukban,
39 Phil. 778).

In Nava vs. Teodoro, et al., G.R. No.
L-10074, April 13, 1959, the giving of false information to the Court was held
to constitute constructive, or indirect, contempt of court.

The failure to do something ordered done by the Court is indirect
contempt of court (Southern Broadcasting Network vs. Davao Light & Power,
Co., Inc., 98 SCRA 782; Nazareno vs. Barnes, 136 SCRA 57; Angeles vs. Castro,
136 SCRA 453).

The respondents herein defied and flouted the authority of this
court by ignoring the writ of preliminary mandatory injunction which we issued, thinking perhaps that they
could do so with impunity. Lawyers and
litigants should be put on notice that this Court will not allow its orders to
be taken lightly by any party, much less by its own subordinate officers such
as lawyers, like Labor Arbiter Pangan, and Sheriffs, like respondent Abe
Estrada. It will not permit its orders
to be mocked for it would thereby be remiss in its own duty to guard and
preserve the majesty of the courts. As
we ruled in Pacis vs. Averia, et al., 124 Phil. 1541,
1543:

“The Court can not tolerate evasion of
its commands by any omission, negligence, artifice or contrivance of any kind,
nor would it countenance any disregard of its authority. It is essential to the effective administration
of justice that the processes of the courts be obeyed. Upon no one else does this obligation of
obedience rest with more binding force than a judicial officer such as
respondent Sheriff.”

The record shows that the rush sale of the four buses to Doroin
was the result of collusion between Labor Arbiter Pangan and his sheriff, Abe
Estrada. Pangan ignored EMBC’s motion
to quash the writ of execution and gave Estrada the green light to proceed with
the sale. He ordered the delivery of
the four buses to Doroin even before the latter had paid the bid price of
P150,000. Estrada first deposited the
bid money with Pangan, before taking it to the NLRC Cashier. Pangan did not heed this Court’s order to
return the buses to EMBC (“ano ang magagawa natin?”) even when
Estrada informed him that one bus was still intact in Doroin’s shop. He thereby encouraged Estrada to likewise
disregard the Court’s order. During the
hearing in this Court, Labor Arbiter Pangan had ample opportunity to purge
himself of the contempt charge and justify his conduct in the case but he
failed to do so.

The power to punish for contempt is inherent in all courts and
essential to the preservation of order in judicial proceedings and to the
enforcement of their mandates, indeed, to their self-preservation (Chanco vs.
Madrillejos, 9 Phil. 256, 361-362; Weigall vs. Shuster, 11 Phil. 340, 345;
Angel Jose Realty Corp. vs. Galao, et al., 76 Phil. 201, 204-205; II Moran,
Comments on the Rules of Court, 1957 Ed., pp. 127-128 cited in Villacorta vs.
Palma, CA-G.R. No. 29208-R, November 15, 1961).

Punishment for contempt of court is necessary to vindicate the
dignity and honor of the Court and to impress on all – lawyers, litigants and
court employees alike – the serious consequences of disobedience, disrespect or
willful evasion of its orders, judgments, and processes (Contado vs. Tan, 160
SCRA 404).

If courts were powerless to compel obedience to their judgments,
orders and processes, and to control, in furtherance of justice, the conduct of
their ministerial officers (Sec. 5, subpars. c and d, Rule 135, Rules of
Court), they would be inutile and cannot survive.

A heavier sanction is called for when a lawyer acts in contempt
of the very Court to which he owes his membership in the legal profession and
his license to practice it. As we held
in Zaldivar vs. Gonzalez, 166 SCRA 316:

“Any act of a lawyer which visibly tends to obstruct, pervert,
or impede and degrade the administration of justice constitutes both
professional misconduct calling for the exercise of disciplinary action against
him, and contumacious conduct warranting application of the contempt power.

“The power to punish for contempt of court does not exhaust
the scope of disciplinary authority of the Court over lawyers.

“The Supreme Court, as regulator and guardian of the legal
profession, has plenary disciplinary authority over attorneys.”

Labor Arbiter Pangan violated his duties to this Court as a
lawyer to observe and maintain the respect due the court (Canon 11, Code of
Professional Responsibility), to act with candor, fairness and good faith to
the court (Canon 10), to avoid dishonest or deceitful conduct (Rule 1.01, Canon
1), not to do any falsehood nor consent to the doing of any in Court, and not
to mislead, or allow the Court to be misled by any artifice (Rule 10.01, Canon
10). His conduct calls for
administrative as well as penal sanctions from this Court.

WHEREFORE, the Court finds the respondents, Labor Arbiter
Edilberto Pangan, Sheriff Abe Estrada and Evaristo Doroin guilty of contempt of
this Court. Each of them is hereby
sentenced to pay a fine of one thousand (P1,000) pesos, payable to the cashier
of this Court within fifteen (15) days from notice of this decision. Estrada and Doroin are further sentenced to
suffer imprisonment for a period of six (6) months in the City Jail of the City
of Manila (Section 6, Rule 71 of the Rules of Court). The Warden of the
Manila City Jail is ordered to submit a verified report to this Court upon the completion of the respondent’s
service of their sentence.

The City Prosecutor of Manila is ordered to file a criminal
charge of perjury against Evaristo Doroin for having given false testimony
(that the four buses had been “scraped,” “chopped up” and
“disposed to other persons”) under oath, in facie curiae
during the hearing of the contempt petition in this Court.

With respect to respondent Sheriff Abe Estrada, the National
Labor Relations Commission is directed to take appropriate administrative
action against him.

For serious misconduct as a member of the Bar, Labor Arbiter
Edilberto Pangan is hereby suspended from the practice of law for a period of
one (1) year and ordered to pay
a fine of P20,000 to the Cashier of the Court within fifteen (15) days from
notice of this decision.

The Court grants the petition for certiorari and
prohibition and hereby annuls and sets aside the writ of execution, the
“auction sale,” and the award of EMBC Buses Nos. 705, 712, 724 and
726 to Evaristo Doroin in NLRC NCR Case No. 4-1617-86. The return of the possession of said buses to
the petitioner is hereby confirmed, and the NLRC is ordered to recompute the
balance due to unpaid claimants, if any, under the decision in NLRC NCR Case
No. 4-1617-86.

Romeo Velarde’s third-party claim against Doroin should be filed
in the proper trial court.

Costs against the respondents.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado, Davide, Jr.,
Romero, and Nocon, JJ., concur.

Bellosillo, J., on leave.