G.R. No. 156882; October 31, 2008
ASSOCIATED LABOR UNIONS (ALU) and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU (DWUEU-ALU), Petitioners, vs. COURT OF APPEALS, THE ROMAN CATHOLIC ARCHBISHOP OF PALO, LEYTE, and DIVINE WORD UNIVERSITY OF TACLOBAN, Respondents.

FACTS

1. Petitioners, Associated Labor Unions and Divine Word University Employees Union-ALU (the Union), prevailed in a labor case (G.R. No. 91915) against Divine Word University of Tacloban (DWUT), resulting in a monetary award of over a hundred million pesos for unpaid benefits, which by 1994 amounted to approximately PhP 200 million.
2. The Roman Catholic Archbishop of Palo, Leyte (RCAP), a corporation sole, sold 13 parcels of land to the Societas Verbum Dei (SVD) or the Society of the Divine Word via a Deed of Sale dated October 1, 1958. The deed contained conditions, including that the lands be used for educational purposes (specifically for St. Paul’s College, later renamed Divine Word College and then DWUT) and a reversionary clause stating the properties shall be turned over to RCAP if circumstances force the abandonment of educational and religious work by SVD. The deed was not notarized, and these conditions were not annotated on the transfer certificates of title (TCTs) subsequently issued to SVD.
3. Due to labor unrest, DWUT (run by SVD) and the Union engaged in protracted litigation, culminating in a final and executory decision on February 11, 1994.
4. On April 27, 1995, RCAP filed a petition (Cadastral Case No. 95-04-08) before the Regional Trial Court (RTC) seeking an order to direct the Registry of Deeds to annotate the conditions and reversionary interest from the 1958 Deed of Sale on the SVD’s TCTs.
5. On May 9, 1995, DWUT notified the Union members of its decision to close the university effective June 15, 1995.
6. On July 7, 1995, the National Conciliation and Mediation Board ordered DWUT to pay the Union members PhP 163,089,337.57 as partial satisfaction of the final judgment.
7. The Union filed a complaint (NLRC Case No. RCB-VIII-7-0299-95) against DWUT and RCAP for Unfair Labor Practice, Illegal Dismissal, and Damages, alleging RCAP was solidarily liable for the monetary award.
8. On August 3, 1995, the Union filed a Motion to Intervene in the cadastral case, asserting a legal interest and a judgment lien over the subject properties based on the final labor judgment and claiming preferential rights under Article 110 of the Labor Code.
9. On March 8, 1996, the RTC dismissed RCAP’s petition, citing lack of jurisdiction due to the Union’s alleged judgment lien, forum shopping by RCAP due to the pending NLRC case, and mootness of the motion to intervene.
10. On June 7, 1996, the RTC denied RCAP’s motion for reconsideration, adding the ground of laches, noting RCAP took 37 years to seek judicial annotation.
11. On February 24, 1997, the RCAP, DWUT, and the Union entered into a Memorandum of Agreement (MOA) wherein the Union agreed to withdraw the NLRC case, DWUT agreed to pay PhP 100 million as final settlement (partly via dacion en pago of other properties), and DWUT would recognize the Union as bargaining agent. This led to the re-opening of DWUT.
12. On April 29, 2002, the Court of Appeals (CA) reversed the RTC orders, granted RCAP’s petition for annotation, and held that the Union was not a proper party on appeal as its motion to intervene was not resolved and it did not appeal the RTC order.
13. The CA held laches did not apply because the annotation would not prejudice any party, as SVD (through DWUT) did not object. The CA also noted the RTC had jurisdiction over the cadastral case.
14. The Union’s motion for reconsideration was denied by the CA on January 20, 2003. The Union then elevated the case to the Supreme Court via petition for review.

ISSUE

Whether the Court of Appeals erred in reversing the RTC and ordering the annotation of the conditions and reversionary interest from the 1958 Deed of Sale on the TCTs of the subject properties, despite the Union’s claim of a judgment lien and preferential right under Article 110 of the Labor Code.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision and Resolution.
1. On the Union’s Legal Standing and Judgment Lien: The Court held that the Union’s claim of a judgment lien and preferential right under Article 110 of the Labor Code was unfounded. Article 110 applies only in cases of bankruptcy or liquidation of the employer’s business. There was no evidence that DWUT was undergoing bankruptcy or liquidation proceedings. The closure of DWUT was temporary, as it reopened after the 1997 MOA. Furthermore, the Union’s monetary claims were settled via the MOA, wherein they accepted a sum and other properties in dacion en pago. Thus, the Union had no remaining legal interest or lien over the specific properties subject of the cadastral case.
2. On the Annotation of the Deed Conditions: The Court upheld the CA’s order for annotation. The 1958 Deed of Sale was valid between the parties (RCAP and SVD) even if not notarized. The SVD, as the registered owner (through DWUT), did not oppose the annotation. The annotation merely records the existing restrictions and reversionary right agreed upon by the original parties and does not alter ownership. The Court found no inequity or prejudice in allowing the annotation after 37 years, as the party primarily affected (SVD/DWUT) acquiesced.
3. On Laches: The Court agreed with the CA that laches did not bar RCAP’s action. Laches requires prejudice to the defendant due to the plaintiff’s delay. Here, SVD/DWUT did not claim prejudice from the annotation. The purpose of the annotation is to give notice to third parties, and the delay did not adversely affect the rights of the registered owner who consented to it.
4. On Jurisdiction and Forum Shopping: The Court affirmed that the RTC had jurisdiction over the cadastral case for annotation under Presidential Decree No. 1529. The issue of forum shopping was irrelevant as the NLRC case (where RCAP was impleaded) was withdrawn per the 1997 MOA.
DISPOSITIVE PORTION:
WHEREFORE, we DENY this petition and AFFIRM IN TOTO the April 29, 2002 Decision and January 20, 2003 Resolution of the CA in CA-G.R. CV No. 56482, with costs against petitioners. SO ORDERED.