Case Digest (G.R. No. 256393)
Case Digest (G.R. No. 256393)
Facts:
Nueva Ecija II Electric Coop., Inc. (NEECO Area II) v. Wilfredo S. Palma, G.R. No. 256393 [Formerly UDK-16873], November 13, 2023, Supreme Court Second Division, Lopez, M., J., writing for the Court. The decision was concurred in the judgment by Leonen, SAJ. (Chairperson), Lazaro-Javier, J., and Kho, Jr., J.In 1992 the National Electrification Administration (NEA) dissolved Nueva Ecija Electric Cooperative III (NEECO III) and acquired its assets by way of dacion en pago; NEA later established NEECO II to operate in the area formerly served by NEECO III. The National Electrification Commission granted NEECO II a permanent expansion franchise on November 24, 2004, and on April 4, 2006 NEA sold NEECO III’s assets to NEECO II under a Deed of Conditional Sale for PHP300 million, payable in 300 monthly installments over 25 years.
In October 2013 the NLRC's Office of the Labor Arbiter and the sheriff issued Notices of Levy and Sale against the capital assets formerly belonging to NEECO III to satisfy labor awards totaling about PHP83 million in several illegal dismissal cases; Wilfredo S. Palma was among the judgment creditors. Because the assets subject to levy were in the possession of NEECO II under the conditional sale, NEECO II filed a Petition for Declaratory Relief in the Regional Trial Court (RTC), impleading NEA, the Office of the Labor Arbiter, the Office of the Sheriff of the NLRC, and the labor judgment creditors, and sought declarations that it was an innocent purchaser for value, that the assets were insulated from attachment, and that its payments had become public funds; it also sought injunctive relief to enjoin the levy and sale.
The RTC (Branch 48/46, San Fernando, Pampanga) issued a Writ of Preliminary Injunction on November 4, 2013. Respondent judgment creditors moved to dismiss on grounds of lack of jurisdiction and forum shopping; the RTC denied the motion in an Order dated July 11, 2016, reasoning that the petition involved construction of the Deed of Conditional Sale and would not annul or modify the labor arbiter's decision. After denial of reconsideration, Palma filed a petition for certiorari with the Court of Appeals (CA) arguing grave abuse of discretion.
The CA in CA-G.R. SP No. 151134 (Decision dated June 30, 2020) granted Palma’s petition, set aside the RTC’s July 11, 2016 Order, and directed dismissal of Special Civil Case No. 100, holding that NEECO II’s petition presented factual disputes beyond the proper scope of declaratory relief and effectively sought to interdict the NLRC’s execution proceedings. The CA denied NEECO II’s motion for reconsideration. NEECO II then filed the present Petition for Review on Certiorari under Rule 45 to the Supreme Court, which resulted in the November 13, 2023 decision by the Second Division.
Issues:
- Was the RTC authorized to issue injunctive relief and otherwise entertain NEECO II’s Petition for Declaratory Relief to enjoin the execution proceedings of the labor arbiter and the NLRC?
- Did NEECO II’s Petition for Declaratory Relief properly raise only questions of construction or validity of the Deed of Conditional Sale, or did it present factual disputes unsuitable for declaratory relief?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)