Purificacion Y. Manliguez, Antonina Y. Luis and Benjamin C. Ybanez, petitioners, vs. The Court of Appeals, et al., respondents.
FACTS
Petitioners filed a Complaint in the RTC of Cebu City (Civil Case No. Ceb-6917) seeking to lift a levy and annul a sale of properties (buildings and improvements on Lot 109 in Tipolo, Mandaue City, referred to as the “Tipolo properties”). The properties were levied and sold at public auction by the DOLE regional sheriff to satisfy a labor judgment against Inductocast Cebu, a partnership. Petitioners alleged they are the owners of Lot 109; they leased it to Inductocast Cebu under a contract stating that upon termination, all improvements (except machineries) would automatically belong to the lessors (petitioners); the lease was terminated in November 1980 for non-payment of rentals; and petitioners thereafter took possession. They claimed they only became aware of the labor dispute and auction sale afterward. The trial court initially denied motions to dismiss but later granted reconsideration and dismissed the case, holding it arose from a labor dispute and thus fell under the exclusive jurisdiction of the DOLE. The Court of Appeals affirmed the dismissal, ruling the issue concerned levy pursuant to a writ of execution arising from labor disputes, over which the DOLE has jurisdiction.
ISSUE
Whether the Regional Trial Court has jurisdiction over Civil Case No. Ceb-6917, which involves a claim of ownership by third parties (petitioners) over properties levied and sold to satisfy a labor judgment against a different entity (Inductocast Cebu).
RULING
Yes. The Supreme Court reversed the Court of Appeals and ordered the RTC to try the case on its merits. The Court held that Civil Case No. Ceb-6917 is not a labor case as there is no employer-employee relationship between the parties, and no issue resolvable under labor laws. The action is essentially one to determine ownership of the levied properties, which falls under the exclusive original jurisdiction of the RTC in civil actions involving title to or possession of real property under B.P. Blg. 129, Section 19(2). The Court ruled that a third person claiming ownership of property levied on execution may vindicate that claim by a separate and independent action in the proper civil court, as provided by Section 17, Rule 39 of the Revised Rules of Court. The general rule against interference with property in custodia legis does not apply when the sheriff seizes property of a stranger to the action. The case of Pucan vs. Bengzon was distinguished, as it involved a direct attack on the propriety of a labor writ of execution, whereas here, petitioners do not question the labor judgment or writ but assert that the levied properties belong to them, not the judgment debtor.
