G.R. No. 208920, July 10, 2019
Jaime Bilan Montealegre and Chamon’te, Inc., Petitioners vs. Spouses Abraham and Remedios De Vera, Respondents

FACTS

Jerson Servandil filed a complaint for illegal dismissal solely against A. De Vera Corporation. The Labor Arbiter ruled in Servandil’s favor. The corporation’s appeal was dismissed for failure to post an appeal bond, and the decision became final. A writ and an alias writ of execution were subsequently issued. The writs commanded the sheriff to proceed against the properties of “A. De Vera Corporation and Abraham De Vera.” Pursuant to the alias writ, a parcel of land registered in the names of respondent spouses Abraham and Remedios De Vera was levied and sold at public auction to the petitioners.
Respondents, discovering that only the corporation was the named party in the labor case, filed an omnibus motion arguing that the levied property was their conjugal property, not an asset of the corporation, and that they were not parties to the judgment. The Labor Arbiter denied their motion. The NLRC affirmed this denial, but the Court of Appeals reversed, quashing the writs of execution. The petitioners elevated the case to the Supreme Court.

ISSUE

Whether the writs of execution could validly be enforced against the personal properties of respondent Abraham De Vera, who was not a party to the labor case, and against the conjugal property of the spouses.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that the writs of execution were issued in excess of jurisdiction and were therefore void. The labor case was filed only against A. De Vera Corporation. The dispositive portion of the Labor Arbiter’s decision ordered relief solely against the corporation. A corporation has a separate juridical personality from its stockholders and officers. Consequently, the judgment could only be executed against the corporate assets.
The Court emphasized that for a writ of execution to hold a corporate officer personally liable for a corporate debt, the decision itself must contain a finding of personal liability, such as for bad faith or gross negligence. No such finding was made against Abraham De Vera in the Labor Arbiter’s decision. The inclusion of his name in the body of the writs, commanding levy against his properties, effectively modified the final judgment and unlawfully sought to enforce it against a non-party. Furthermore, the levied property was conjugal. Even if personal liability against Abraham were established, the conjugal partnership could not be held liable for a corporate obligation unless it was proven that the debt redounded to the benefit of the family. No such proof existed. Thus, the execution against the spouses’ property was invalid.