G.R. No. 75305 September 26, 1989
MICHAEL PEÑALOSA, ET AL. and SAMAHANG DIWANG MANGGAGAWA SA RMC-FFW CHAPTER and its MEMBERS, petitioners, vs. HON. CANDIDO P. VILLANUEVA and DEVELOPMENT BANK OF THE PHILIPPINES, respondents.

FACTS

This case involves the intertwined claims of former employees of Riverside Mills Corporation (RMC) and the Development Bank of the Philippines (DBP). The employees, petitioners herein, secured final and executory labor judgments for separation pay and other monetary benefits against RMC. To satisfy these awards, the sheriff levied upon RMC’s properties. However, DBP had already extra-judicially foreclosed on the same RMC properties in 1983 and, in June 1985, obtained a writ of possession from the Regional Trial Court (RTC) of Pasig. This writ prevented the sheriff’s auction sale. The employees then filed a petition with the National Labor Relations Commission (NLRC) asserting a first-preference lien over the levied properties, superior to DBP’s claim.
Simultaneously, DBP filed a separate civil case (Civil Case No. 10945) for injunction and damages before the RTC of Makati against the employees and the sheriffs. DBP sought to enjoin the enforcement of the NLRC writ of execution and to recover properties allegedly taken from the RMC compound. The employees moved to dismiss this civil case, arguing it involved a labor dispute over which the labor arbiter had exclusive jurisdiction. The RTC denied the motion to dismiss, prompting the employees to file the instant petition for certiorari, prohibition, and mandamus.

ISSUE

The primary issue is whether the Regional Trial Court acted without or in excess of jurisdiction in taking cognizance of DBP’s civil case for injunction, which seeks to restrain the enforcement of a final labor judgment.

RULING

The Supreme Court dismissed the petition, upholding the RTC’s jurisdiction over Civil Case No. 10945. The Court’s ruling is anchored on two key legal principles. First, the substantive claim of first preference by the employees had already been definitively resolved in a related case, Development Bank of the Philippines vs. Hon. Labor Arbiter Ariel Santos, et al. (G.R. Nos. 78261-62), where the Court ruled that the employees’ claims did not enjoy absolute priority over DBP’s mortgage lien. This prior decision foreclosed the core issue raised by the petitioners.
Second, and central to this petition, the Court clarified that DBP’s civil action for injunction did not “involve” or “grow out of” a labor dispute between the employees and their employer, RMC, to which DBP was not a party. Instead, the civil case presented a distinct justiciable controversy between DBP, as a third-party claimant asserting ownership over the levied properties, and the employees and sheriffs who were executing against those same assets. This is a proper subject of a separate civil action under Section 17, Rule 39 of the Rules of Court, which allows a third person claiming property levied upon on execution to vindicate his claim through an independent action. The prohibition against injunctions in labor disputes under Article 254 of the Labor Code was therefore inapplicable. The RTC acted within its jurisdiction in hearing DBP’s claim to determine whether the execution could proceed against properties it alleged to own, not those of the judgment debtor, RMC.