G.R. No. L-44230 November 19, 1984
NATIONAL MINES AND ALLIED WORKERS’ UNION, et al., petitioners, vs. HON. ISIDORO A. VERA, et al., respondents.

FACTS

Petitioner National Mines and Allied Workers’ Union (NAMAWU) obtained a favorable judgment from the National Labor Relations Commission (NLRC) against Philippine Iron Mines, Inc. for monetary awards. To satisfy the judgment, the NLRC issued a writ of execution. As the judgment debtor’s assets in Rizal were insufficient, the NLRC appointed special sheriffs to levy on the company’s properties in Camarines Norte. The sheriffs levied on various properties and scheduled a public auction.
However, prior to the NLRC judgment, the same properties had been foreclosed by private respondents Manila Banking Corporation and Philippine Commercial and Industrial Bank due to a mortgage default by Philippine Iron Mines. A foreclosure sale was conducted, and a Certificate of Sale was issued to the banks. NAMAWU had already filed a separate case to annul this foreclosure. To prevent the sheriffs’ auction, the banks filed Civil Case No. 2749 for injunction against NAMAWU and the sheriffs in the Court of First Instance.

ISSUE

Whether the Court of First Instance has jurisdiction to entertain the injunction suit (Civil Case No. 2749) filed by the banks, or whether such action constitutes an illegal interference with the NLRC’s execution proceedings.

RULING

The Supreme Court ruled that the Court of First Instance properly exercised jurisdiction. The legal logic is that Civil Case No. 2749 does not seek to enjoin the NLRC’s decision or its execution against properties of the judgment debtor, Philippine Iron Mines. Instead, the suit questions the sheriffs’ act of levying upon properties that the banks claim to own by virtue of a prior foreclosure sale. The core issue is the determination of ownership—whether the levied properties still belong to the judgment debtor or have already been validly acquired by the banks.
The Court emphasized that the power of execution extends only over properties unquestionably belonging to the judgment debtor. A third party claiming ownership over levied properties has the right to vindicate its claim in an appropriate action before a court of general jurisdiction. To hold otherwise would sanction deprivation of property without due process. The provision in the Labor Code granting the NLRC exclusive appellate jurisdiction over cases “arising out of” labor disputes does not bar a separate action to determine adverse claims of ownership by non-parties to the labor case. The injunction suit is a permissible recourse under Section 17, Rule 39 of the Rules of Court to protect a third party’s property rights from a wrongful levy.