FIRST DIVISION
G.R. No. 181387, September 05, 2016
CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., Petitioner, v. UE MONTHLY ASSOCIATES, UEAMI WORKERS UNION NFL AND ALFREDO BASI, Respondent.
D E C I S I O N
SERENO, C.J.:
In this Petition for Review on Certiorari,1 Cameron Granville 3 Asset Management, Inc. (Cameron) assails the Court of Appeals (CA) Decision2 and Resolution3 in CA-G.R. SP No. 88049, which affirmed the levy and sale of certain personal properties allegedly mortgaged to Metropolitan Bank and Trust Company (Metrobank), petitioner's predecessor-in-interest. These properties were sold by the Sheriff of the National Labor Relations Commission (NLRC) after Labor Arbiter Joselito Cruz Villarosa (LA) denied Metrobank's third-party claim on the ground of insufficiency of evidence. Both the NLRC and the CA affirmed this ruling.
After a careful perusal of the records of the case and contending positions of the protagonists, this Office denies all the third-party claims filed by claimants for failure to [establish] proof of their actual ownership of the contested properties owned by respondent UE Automotive Manufacturing, Inc.However, in the interest of justice, the LA directed Metrobank and other third-party claimants to post a bond to defer the execution sale. The bank complied with the Order by posting a surety bond.17 Thereafter, it filed a Notice of Appeal and a Memorandum of Appeal with the NLRC to challenge the ruling of the LA.
At most, what can be easily discerned from the attachment of the third-party claims are all instruments which [have] been long overdue, and belatedly raised now, when the same has been levied by the Sheriff of this Office.
After reviewing the entire records of the case, this Office finds and so holds that there is no more compelling reasons not to proceed with the sale of the levied properties because this will unlawfully [deprive] complainants, the prevailing party, of the fruits of the execution.16chanroblesvirtuallawlibrary
Furthermore, Metrobank failed to incorporate in its Third-party Claim and in its mortgage documents a schedule, enumeration and/or description of the chattels supposedly covered by the same.Metrobank sought reconsideration of the foregoing ruling.24 It asserted that the grounds cited by the NLRC to deny the claim were never raised by the parties.25cralawred The bank also contended that it was deprived of due process because the LA resolved the third-party claim without acting upon its motion to set the case for hearing. This lack of due process allegedly resulted in its inability to adduce the evidence necessary to prove its allegations. In its Motion for Reconsideration, Metrobank declared:ChanRoblesVirtualawlibrary
Besides, Metrobank was not able to prove with any substantial documents that the chattels allegedly covered by the mortgage documents are the very same properties attached and sold at public auction. Indeed, how could it possibly do so, when it could not even incorporate in its mortgage documents the required schedule, enumeration and or description they supposedly cover?
Lastly but most significantly, Metrobank was not able to allege and prove with any substantial evidence that it had already foreclosed the chattels by reason of the default of UEAMI, the mortgagor in the mortgage documents, of its obligations in favor of Metrobank and the other creditors - beneficiaries in such documents. Correspondingly, still bereft of the right to possess such chattels, Metrobank has likewise no right to claim the same by way of a third-party claim.23chanroblesvirtuallawlibrary
If the third-party claim was set for hearing, Metrobank would have adduced evidence to prove:The NLRC denied the motion notwithstanding the documentary evidence submitted by Metrobank. In its Resolution,27 the former maintained that the Secretary's Certificates and other documents presented by Metrobank did not sufficiently prove Miranda's authority to represent the bank or the bank's right to claim the properties. The NLRC likewise noted that all the pieces of evidence Metrobank intended to present before the LA had already been passed upon on appeal; hence, the issue of denial of due process had been rendered moot:ChanRoblesVirtualawlibrary
chanRoblesvirtualLawlibrary
a) The authority of Atty. Ramon S. Miranda to represent Metrobank, as shown by the Secretary's Certificate dated August 2, 2002, machine copy of which is hereto attached as Annex "G"; b) Metropolitan Bank and Trust Company is the successor-in-interest of Philippine banking Corporation c) The genuineness and due execution of the Chattel Mortgage, Amendment of Chattel Mortgage, Mortgage Trust Indenture, Amended Mortgage Trust Indenture and the Second Amended Trust Indenture, with the respective annexes thereto, and that said documents were duly registered with the proper Registry of Deeds. It bears stressing that the Registry of Deeds will not allow registration unless the documentary stamp taxes have been paid. Machine copies of the Chattel Mortgage, Amendment of Chattel Mortgage, Mortgage Trust Indenture, Amended Mortgage Trust Indenture and the Second Amended Trust Indenture are hereto attached as Annexes "H", "I", "J", "K" and "L", respectively. d) The chattels levied upon and sold at public auction by NLRC Sheriff Manolito G. Manuel are included in the list of chattels annexed to the Chattel Mortgage and Amendment to Chattel Mortgage and are properly described therein, Annexes "H" and "I". e) The genuineness and due execution of the Certificate of Sale dated January 12, 1999, showing that the chattels were already foreclosed and sold at public auction by Metrobank, machine copy of which is hereto attached as Annex "M".
Aside from the foregoing, Metrobank was prevented from presenting evidence to prove that the levy made by NLRC Sheriff Manuel over the chattels belonging to/owned by Metrobank was null and void.26 (Emphases in the original)
Thirdly, Metrobank has not, up to now, shown with substantial evidence that the properties allegedly covered by the mortgage documents are the very same chattels levied and sold at public auction by Sheriff Manolito G. Manuel. Although it resubmitted, in its Motion for Reconsideration, copies of its mortgage documents, such documents are nevertheless merely photocopies, not originals or certified true copies, and therefore probatively valueless for being unauthenticated. Besides, they do not show similarity between the aforementioned two (2) sets of chattels.28chanrobleslawThe denial of its Motion for Reconsideration prompted Metrobank to elevate the matter to the CA via a Petition for Certiorari under Rule 65 of the Rules of Civil Procedure. It argued that the NLRC committed grave abuse of discretion in (a) disregarding the fact that the third-party claim of petitioner was denied by the LA without the benefit of a hearing;30 and (b) resolving matters that had not been raised as issues by the parties.31chanrobleslaw
x x x x
Our sight is not lost of the feet that Metrobank asserts in its reconsideration motion that it was deprived of due process because its Third-party Claim was resolved without its motion to set such claim for hearing (incorporated in its Reply to Comment to Third-party Claim dated October 3, 2002) having been passed upon, resulting in its failure to submit all its shreds (sic) of documentary evidence in support of its claim.
x x x x
[T]his claim of due process deprivation is now academically moot, since all the documentary proofs of Metrobank have already been passed upon by the Labor Arbiters below in the rendition of their Orders and by Us in the rendition of Our Resolutions including this Resolution.29chanroblesvirtuallawlibrary
Petitioner anchored its claim on the provision of Section 2, Rule VI of the NLRC Manual on the Execution of Judgment, promulgated on February 24, 1993, which reads, to wit:ChanRoblesVirtualawlibraryThe CA also rejected the argument of Metrobank that the latter's mortgage lien was a specially preferred credit that was entitled to precedence over the labor claim of respondents.37chanrobleslawThe foregoing provision was, however, superseded by Section 9, Rule VIII of the Rules of Procedure of the National Labor Relation Commission, as amended by Resolution No. 01-02, Series of 2002, which provides, viz.:ChanRoblesVirtualawlibraryxxx Upon receipt of the third-party claim, all proceedings with respect to the execution of the property subject of the third-party claim shall automatically be suspended and the Commission or Labor Arbiter who issued the writ shall conduct a hearing with due notice to all parties concerned and resolve the validity of the claim within ten (10) working days from receipt thereof. Where the decision is rendered by the Labor Arbiter, it is appealable to the Commission within ten (10) working days from notice. The Commission shall resolve the appeal within the same period." (Emphasis and underlining supplied)x x x xSection 9. RESOLUTION OF THIRD-PARTY CLAIM. - Should a third-party claim be filed during execution of the judgment award, the third-party claimant shall execute an affidavit stating his title to property or possession thereof with supporting evidence and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ. Upon receipt of the third-party claim, all proceedings, with respect to the execution of the property subject of the third-party claim, shall automatically be suspended. The Labor Arbiter who issued the writ may require the third-party claimant to adduce additional evidence in support of his third-party claim and to post a cash or surety bond equivalent to the amount of his claim, as provided for in Section 6, Rule VI, without prejudice to the posting by the prevailing party of a supersedeas bond in an amount equivalent to that posted by the third-party claimant, and resolve the propriety of such claim within ten (10) working days from submission of the claim for resolution. (Emphasis and underlining supplied)The aforesaid provision of the NLRC Rules of procedure precludes the necessity of conducting a hearing where, at the time of execution of its judgment, the labor arbiter is confronted with the issue involving the resolution of a third-party claim. Pursuant to the foregoing, it is sufficient if the labor arbiter receives the third-party claimant's affidavit stating his title to property or possession thereof with supporting evidence, and if necessary, the labor arbiter who issued the writ may require the third-party claimant to adduce additional evidence in support of his third-party claim. From thence, the labor arbiter is required to resolve the propriety of such claim within ten (10) working days from submission of the claim for resolution. It is thus clear that the labor arbiter is no longer required to conduct a hearing on the third-party claim for as long as the third-party claimant is allowed to submit his affidavit stating his claim of ownership or possession thereof with supporting evidence and, if necessary, given the opportunity to adduce additional evidence.
Jurisprudential declarations are rich to the effect that the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side. A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy.36 (Citations omitted; emphases in the original)
SECTION 1. Proceedings. SHOULD A THIRD-PARTY CLAIM BE FILED DURING EXECUTION OF THE JUDGMENT AWARD, THE THIRD-PARTY CLAIMANT shall EXECUTE an affidavit STATING his title TO PROPERTY or possession thereof WITH SUPPORTING EVIDENCE and shall file the same with the sheriff and copies thereof served upon the Commission or Labor Arbiter who issued the writ and upon the prevailing party. Upon receipt of the third-party claim, all proceedings, with respect to the execution of the property subject of the third-party claim, shall automatically be suspended. The Commission or Labor Arbiter who issued the writ MAY REQUIRE THE THIRD-PARTY CLAIMANT TO ADDUCE ADDITIONAL EVIDENCE IN SUPPORT OF HIS THIRD-PARTY CLAIM AND TO POST A CASH OR SURETY BOND EQUIVALENT TO THE AMOUNT OF HIS CLAIM AS PROVIDED FOR IN SECTION 6, RULE VI, OF THE NLRC RULES OF PROCEDURE, WITHOUT PREJUDICE TO THE POSTING BY THE PREVAILING PARTY OF A SUPERSEDEAS BOND IN AN AMOUNT EQUIVALENT TO THAT POSTED BY THE THIRD-PARTY CLAIMANT. The PROPRIETY of the THIRD-PARTY claim SHALL BE RESOLVED within ten (10) working days from SUBMISSION OF THE CLAIM FOR RESOLUTION. The decision OF the Labor Arbiter is appealable to the Commission within ten (10) working days from notice AND the Commission shall resolve the appeal within the same period.It is settled that revisions to procedural rules are applicable to pending and unresolved disputes, so long as no injustice results from the retroactive application.46 In this case, the third-party claim was still pending before the LA at the time the 2002 Manual on Execution of Judgment took effect. Hence, Metrobank was obliged to comply with the new requirement as soon as it took effect. Notably, this fact distinguishes the instant case from Jang Lim v. CA,47 which was cited by petitioner to prove the applicability of Rule VI of the 1993 Manual to this case. We note, however, that the third-party claim in Jang Lim was filed in 1999 and decided by the LA in 200048 before the amendment of the 1993 Manual; hence, the revised rules were not applied to that case.
Endnotes:
1Rollo, pp. 10-35.
2 Dated 1 October 2007; penned by Associate Justice Arcangelita M. Romilla-Lontok and concurred in by Associate Justices Romeo F. Barza and Mariano C. Del Castillo (now an Associate Justice of this Court); id. at 37-44.
3 Dated 21 January 2008; id. at 46-47.
4 See Sheriff's Return dated 30 January 2003; id. at 278-284.
5 Id. at 279.
6 The illegal dismissal case was docketed as NLRC Case No. 00-02-01195-2000/01607-2000 and entitled "UE Automotive Workers Union NFL, Alfredo B. Basi, Union President v. UE Automotive Manufacturing, Inc., and/or Mr. George Co Lim."
7Rollo, pp. 197-198.
8 Id. at 153-177.
9 Id. at 178-182.
10 Id. at 183-187.
11See Comment to Third-party Claim dated 20 September 2002; id. at 208-212.
12 Id.
13 Id. at 213-217.
14 Id. at 216.
15 Penned by Executive Labor Arbiter Joselito Cruz Villarosa; id. at 223-232.
16Rollo, p. 231.
17 Compliance dated 20 January 2003; id. at 233-234.
18 Rule VI, Section 2 of the NLRC Manual on Execution of Judgment, states:ChanRoblesVirtualawlibrarySECTION 2. Proceedings. — If property levied upon be claimed by any person other than the losing party or his agent, such person shall make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and upon the prevailing party. Upon receipt of the third-party claim, all proceedings with respect to the execution of the property subject of the third-party claim shall automatically be suspended and the Labor Arbiter or proper officer issuing the writ shall conduct a hearing with due notice to all parties concerned and resolve the validity of the claim within ten (10) working days from receipt thereof and his decision is appealable to the Commission within ten (10) working days from notice, and the Commission shall resolve the appeal within same period.19 Dated 27 January 2003; rollo, pp. 285-286.
However, should the prevailing party put an indemnity bond in a sum not less than the value of the property levied, the execution shall proceed. In case of disagreement as to such value, the same shall be determined by the Commission or Labor Arbiter who issued the writ.
20 Penned by Commissioner Tito F. Genilo and concurred in by Commissioner Ernesto C. Verceles; Presiding Commissioner Lourdes C. Javier took no part; Id. at 355-365.
21 Id. at 359.
22 Id. at 359-360.
23 Id. at 361.
24 Motion for Reconsideration dated 9 June 2004; id. at 366-375.
25cralawred Id. at 371.
26 Id. at 371-373.
27 Penned by Commissioner Tito F. Genilo and concurred in by Commissioner Ernesto C. Vei Presiding Commissioner Lourdes C. Javier took no part. Id. at 385-400.
28 Id. at 395-396.
29 Id.
30 Id. at 409-414.
31 Id. at 414-417.
32 Id. at 459-463.
33 Resolution dated 10 July 2007; id at 442-443.
34 Id. at 37-44
35 Id. at 40-42.
36 Id.
37 Id. at 43.
38 Resolution dated 21 January 2008; id. at 46-47.
39Lim v. Court of Appeals, 537 Phil. 255 (2006).
40Rollo, p. 468.
41See Resolution dated 19 January 2011, id. at 469.
42See note 18.
43 NLRC Revised Rules of Procedure, Rule VIII, Section 9, states:ChanRoblesVirtualawlibrarySECTION 9. RESOLUTION OF THIRD-PARTY CLAIM. - Should a third-party claim be filed during execution of the judgment award, the third-party claimant shall execute an affidavit stating his title to property or possession thereof with supporting evidence and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter of proper officer issuing the writ. Upon receipt of the third-party claim, all proceedings, with respect to the execution of the property subject of the third-party claim, shall automatically be suspended. The Labor Arbiter who issued the writ may require the third-party claimant to adduce additional evidence in support of his third-party claim and to post a cash or surety bond equivalent to the amount of his claim, as provided for in Section 6, Rule VI, without prejudice to the posting by the prevailing party of a supersedeas bond in an amount equivalent to that posted by the third-party claimant, and resolve the propriety of such claim within ten (10) working days from submission of the claim for resolution.44 Id. at 40-42.
45 NLRC Resolution No. 02-02 (Series of 2002), Amending Certain Provisions of the NLRC Manual on Execution of Judgment (Sheriff's Manual), 3 July 2002.
46 See Medina Investigation & Security Corp. v. Court of Appeals, 407 Phil. 273 (2001).
47 537 Phil. 255 (2006).
48 Id. at 260.
49Rollo, pp. 197-198.
50 Resolution No. 02-02, Series of 2002, amending certain provisions of the NLRC Manual on Execution of Judgment (Sheriff's Manual) was promulgated on July 3, 2002 by the Commission en bane, Cagayan de Oro City. It took effect on 16 September 2002.
51Rollo, pp. 213-217.
52Sime Darby Employees Association v. National Labor Relations Commission, 539 Phil. 258 (2006).
53Damasco v. National Labor Relations Commission, 400 Phil. 568 (2000)
54NEECO II v. National Labor Relations Commission, 499 Phil. 777 (2005).
55Rollo, pp. 372-373.
56See Annex E of the Petition for Review; rollo, p. 196.
57See Bacos v. Arcega, 566 Phil. 59 (2008); Also see NLRC Manual on Execution of Judgment, Rule VI, Section 1.