GR 108544; (May, 1995) (Digest)
G.R. No. 108544. May 31, 1995.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, represented by the ASSET PRIVATIZATION TRUST, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, (Fifth Division), NLRC SHERIFFS FULGENCIO LAVAREZ and RAYMUNDO ROTANTE, JR., DEPUTY SHERIFF JUAN GONZAGA and ZOILO L. ANDIN, respondents.
FACTS
The United Lumber and General Workers of the Philippines (ULGWP) obtained a final judgment for monetary claims against Marinduque Mining and Industrial Corporation (MMIC). To satisfy the judgment, the NLRC Sheriff levied on various machineries and equipment. The Asset Privatization Trust (APT), representing the Republic, filed a third-party claim asserting ownership over the levied properties by virtue of Proclamation No. 50 and a Deed of Transfer, arguing they were assets transferred to the national government. The Labor Arbiter initially suspended the auction sale.
During the hearing on the third-party claim, APT’s counsel admitted under cross-examination that the Deed of Transfer covered only MMIC’s loans, equity, and interest, not its specific chattels or equipment, as the corporation had not been foreclosed. Subsequently, ULGWP posted an indemnity bond. The Labor Arbiter then denied APT’s claim and allowed the execution to proceed, leading to an auction sale where the properties were sold to Zoilo Andin. The NLRC affirmed this decision, prompting the government to file this certiorari petition.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the denial of APT’s third-party claim and allowing the execution sale to proceed.
RULING
The Supreme Court dismissed the petition, finding no grave abuse of discretion. The legal logic centers on the nature of a third-party claim and the evidence presented. A third-party claimant bears the burden of proving a superior right of ownership or possession over the levied properties. Here, APT’s own evidence and the judicial admission of its counsel during the hearing were fatal to its claim. The admission clarified that the Deed of Transfer did not convey the specific chattels levied but only financial interests. Consequently, APT failed to substantiate its assertion of ownership.
The Court further ruled that the posting of a sufficient indemnity bond by the judgment creditor (ULGWP) allowed the execution to lawfully proceed under the NLRC’s rules, shielding the sheriff from liability. While the sheriff levied on properties with a total value exceeding the judgment debt, the Court, applying equity, limited the turnover to the judgment creditor to properties not exceeding the judgment amount of P60 million. The NLRC’s resolutions were based on the evidence and applicable rules, and its actions did not amount to a capricious or whimsical exercise of judgment.