G.R. No. 175417 - General Mariano Alvarez Services Cooperative, Inc. vs. National Housing Authority

On May 9, 1979, the Director of the Bureau of Public Works (BPW) turned over a completed water works system in San Gabriel, Carmona, Cavite (now General Mariano Alvarez, Cavite) to the National Housing Authority (NHA).
Per the requirement that the water system be eventually turned over to a cooperative water company, the NHA, by a Memorandum of Agreement dated July 17, 1979, transferred the system to San Gabriel Water Services Cooperative (SAGAWESECO), which later became General Mariano Alvarez Services Cooperative, Inc. (GEMASCO).

In 1983, GEMASCO experienced internal conflicts with two competing Boards of Directors (the Gabumpa group and the Catangay group) both administering its affairs simultaneously.
Owing to the instability and continuing conflict, the NHA temporarily intervened by taking over the management of the water system through its Interim Water Services Management on September 18, 1986.
On March 16, 1988, the Gabumpa group resumed management, though the internal conflict persisted.

On January 10, 1992, the NHA executed a Deed of Transfer and Acceptance with the General Mariano Alvarez Water District (GMAWD), thereby transferring the operations and management of the water system from GEMASCO to GMAWD.
The water system transferred included six artesian deep wells with pumping facilities, five water tanks, pipe mainlines, and the distribution network.

On February 17, 1992, GEMASCO filed a Complaint for Damages with a Prayer for Preliminary Injunction and Temporary Restraining Order (TRO) before the Quezon City Regional Trial Court (RTC), challenging the validity of the Deed of Transfer and Acceptance between the NHA and GMAWD.
On June 15, 1999, the RTC upheld the validity of the contested Deed, a decision later affirmed by the Court of Appeals in CA-G.R. CV No. 64237.
GEMASCO subsequently filed a petition for review under Rule 45 before the Supreme Court (G.R. No. 175417), contesting the lower courts’ decisions.

On September 27, 1999, a separate labor case for illegal dismissal was filed against GEMASCO.
On January 31, 2001, the Labor Arbiter ruled that the complainants were illegally dismissed and ordered GEMASCO to pay separation pay and backwages; this ruling was affirmed by higher labor authorities and eventually by the courts.
The Labor Arbiter issued a Writ of Execution on August 17, 2007, leading the sheriff to issue a Notice of Garnishment and a Notice of Sale/Levy on Execution regarding GEMASCO’s properties, including three water tanks.

GEMASCO, facing the execution of its properties due to the labor case, filed a petition before the Court requesting that the water tanks be excluded from the auction pending resolution of G.R. No. 175417.
GMAWD joined the petition, arguing that the sale of the water tanks would prejudice its rights given the consistently upheld ownership over the water system.
The Court of Appeals (CA) dismissed GEMASCO’s petition, and motions for reconsideration were denied, leading GMAWD to file its petition on review via G.R. No. 198923.

The issues in the consolidated petitions revolve around two interrelated matters: (a) the validity of the Deed of Transfer and Acceptance between the NHA and GMAWD, and (b) the propriety of the issuance of the Writ of Execution and subsequent sale/attachment of the water tanks pending final resolution of ownership disputes.
The water works system, including the water tanks, is dedicated to public use and is considered property of public dominion, which carries implications on its encumbrance and disposability under law.
The decision under review involves both administrative actions by the NHA in transferring management and judicial decisions concerning relief from execution in connection with the labor case.

Whether the transfer of management and operations of the water system from GEMASCO to GMAWD through the Deed of Transfer and Acceptance by the NHA was legally valid.
Whether GEMASCO, failing to properly manage the system, forfeited any rights to contest the transfer.

Whether the issuance of the Labor Arbiter’s Writ of Execution, along with its Notice of Garnishment and the Notice of Sale/Levy on Execution, should have been allowed to proceed amid the uncertainties regarding the water tanks’ ownership.
Whether such executions prejudiced GMAWD’s rights, considering that the water works system is for public use and under public dominion.

Whether the three water tanks and related facilities forming part of the water system, being essential to public service, should be exempt from levy, auction, or any form of execution due to their status as property of public dominion.