G.R. No. 156882 - Associated Labor Unions vs. Court of Appeals

Case Summary (G.R. No. 156882)

Factual Background

The RCAP, a corporation sole, sold thirteen parcels of land to the Societas Verbum Dei (SVD) by deed dated October 1, 1958. The sale included express conditions and restrictions that the properties be used for educational purposes and that certain lands and improvements then or later used by St. Paul’s College be turned over to the RCAP in case the SVD abandoned its educational and religious work, with conversion terms to be determined by the Apostolic Nunciature or the Apostolic See.

Title Transfers and Omitted Annotations

Although the deed of sale was not notarized, the SVD secured Transfer Certificates of Title in its name for the subject lots. The deed’s conditions, restrictions, and the RCAP’s reversionary interest were not annotated on the new titles issued to the SVD.

Labor Judgment and Monetary Liability

A series of labor disputes culminated in G.R. No. 91915, in which judgment in favor of the Union was rendered. After finality, DWUT’s liability to petitioners aggregated to approximately PhP 200 million. The National Conciliation and Mediation Board ordered on July 7, 1995 that DWUT pay PhP 163,089,337.57 to the Union members as partial satisfaction of the resolution.

RCAP’s Cadastral Petition and Union Intervention

On April 27, 1995, the RCAP filed a cadastral petition in RTC Branch 8, Tacloban City, docketed Cadastral Case No. 95-04-08, seeking an order directing the Register of Deeds to register the October 1, 1958 deed and to annotate on the SVD titles the deed’s conditions, restrictions, and the RCAP’s reversionary interest. On August 3, 1995, petitioners moved to intervene in the cadastral case, asserting a judgment lien and claiming preference under Art. 110, Labor Code and Arts. 2242–2244, Civil Code.

Closure of DWUT and Labor Proceedings

DWUT gave notice of closure effective June 16, 1995 and treated employees as dismissed effective June 15, 1995. The Union filed a complaint before Regional Arbitration Branch No. VIII, docketed NLRC Case No. RCB-VIII-7-0299-95, alleging unfair labor practice, illegal dismissal, and damages against DWUT, its Board of Trustees, and the RCAP, and asserting that the RCAP remained solidarily liable due to the deed’s conditions and reversionary clause.

RTC Rulings and Grounds for Dismissal

The RTC issued an order dated March 8, 1996 dismissing the cadastral petition for lack of jurisdiction to annotate encumbrances and deeming the matter moot. The RTC found that petitioners’ asserted judgment lien implicated forum shopping under SC Circular No. 04-94 because NLRC proceedings were pending. The RTC denied RCAP’s motion for reconsideration on June 7, 1996, declining to disturb the dismissal on the ground of laches, noting a 37-year delay by RCAP to assert rights under the deed.

Appeal to the Court of Appeals

RCAP appealed to the Court of Appeals in CA-G.R. CV No. 56482. While the appeal was pending, the parties executed a Memorandum of Agreement dated February 24, 1997 by which DWUT agreed to pay the Union PhP 100 million as full settlement, with PhP 15 million upfront and the remainder by dacion en pago covering other identified properties.

Court of Appeals Decision

By decision dated April 29, 2002, the CA reversed the RTC orders and granted RCAP’s petition for annotation of encumbrances on the SVD titles to show the restrictions and reversionary interest. The CA held that the RTC had not resolved the Union’s motion to intervene, which became final by non-appeal, and therefore treated the Union as lacking personality to participate. The CA rejected laches as a bar, reasoning that no prejudice would inure to any party because the SVD did not oppose annotation.

Issues Presented in the Supreme Court

The petition raised two principal issues: whether the CA erred in allowing annotation of encumbrances to record the RCAP’s restrictions and reversionary interest; and whether the CA gravely abused its discretion in treating the appellees’ brief of petitioners as a mere scrap of paper and in assailing the petitioners’ personality in the case.

Petitioners’ Contentions

Petitioners contended that laches barred RCAP’s claim because RCAP waited 37 years to act and the annotation would be prejudicial and inequitable by placing the subject properties beyond the reach of execution for DWUT’s adjudicated liabilities. Petitioners asserted that the annotation would delay or frustrate satisfaction of their judgment and that the CA improperly disregarded the Union’s standing and improperly treated its appellees’ brief.

RCAP’s Contentions

RCAP countered that petitioners failed to show prejudice from annotation because DWUT and SVD, the parties who could be prejudiced, did not oppose annotation. RCAP argued that petitioners had not shown that SVD had no other assets and that the MOA contemplated settlement without using the subject properties. RCAP maintained that a judgment lien had not attached because no levy on execution occurred. RCAP also defended the CA’s resolution of the Union’s personality as proper exercise of appellate discretion.

Supreme Court Ruling

The Supreme Court denied the petition and affirmed the CA Decision of April 29, 2002 and the CA Resolution of January 20, 2003, with costs against petitioners. The Court held that the Union had not acquired legal personality to intervene because the RTC did not grant its motion to intervene and the RTC orders dismissing the case became final for lack of timely challenge by the Union.

Legal Basis for the Court’s Decision on Personality

The Court explained that the RTC’s March 8, 1996 Order declared the motion for intervention moot and did not permit intervention thereafter. The Union failed to appeal those RTC orders within the reglementary period. Consequently, the Union lacked the legal personality to participate in the cadastral proceedings, and the CA did not commit grave abuse in treating the Union’s appellees’ brief as without force.

Legal Basis for the Court’s Decision on Judgment Lien and Preference

The Court held that no judgment lien had attached to the subject properties because there was no showing that a levy on execution was made against those properties. The Court interpreted Art. 110, Labor Code and Arts. 2242–2244, Civil Code, as applying to bankruptcy, liquidation, and insolvency contexts respectively. Because there was nei

Case Syllabus (G.R. No. 156882)

Parties and Procedural Posture

Associated Labor Unions (ALU) and Divine Word University Employees Union-ALU (DWUEU-ALU) sued to protect their monetary judgment and intervened in cadastral proceedings concerning properties where Divine Word University of Tacloban (DWUT) stood.
The Roman Catholic Archbishop of Palo, Leyte (RCAP) filed a cadastral petition to annotate encumbrances, restrictions, and a reversionary interest on titles issued in the name of Societas Verbum Dei (SVD).
The case reached the Supreme Court by a petition for review under Rule 45, Rules of Court from a Court of Appeals decision reversing the Regional Trial Court and ordering annotation.
The Supreme Court denied the petition and affirmed the Court of Appeals decision in toto with costs against petitioners.

Key Facts

RCAP executed a Deed of Sale on October 1, 1958 conveying thirteen parcels to SVD subject to conditions restricting use for educational purposes and providing a reversionary interest to RCAP upon abandonment.
The Deed of Sale was not notarized but new Transfer Certificates of Title were issued in SVD's name without annotation of the deed conditions or the reversionary right.
DWUT occupied the sold parcels and evolved from St. Paul’s College into a university administered by SVD.
In G.R. No. 91915, the Union members prevailed and DWUT became liable for substantial monetary benefits, creating adjudicated claims totaling approximately PhP 200 million.
RCAP filed Cadastral Case No. 95-04-08 in April 1995 seeking judicial annotation of the Deed of Sale on the corresponding titles.
The Union filed an unfair labor practice and illegal dismissal complaint before the Regional Arbitration Branch and attempted to intervene in the cadastral case.
The parties executed a Memorandum of Agreement on February 24, 1997 that provided for a PhP 100 million final settlement by DWUT, including a dacion en pago over certain properties.

Deed and Restrictions

The Deed of Sale expressly required SVD to use the properties for educational purposes and to return properties to the Roman Catholic Bishop of Palo in specified circumstances.
The Deed provided that conversion of property rights upon abandonment would be determined by the Apostolic Nunciature in Manila and/or the Apostolic See in Rome.
Four of the conveyed lots were not titled at the time of sale and the original Deed carried conditions and a reversionary clause that were not annotated on subsequently issued TCTs.

Procedural History

The Court rendered its decision in G.R. No. 91915 on September 11, 1992, and the decision became final and executory following denial of motions in January and February 1994.
RCAP filed the cadastral petition on April 27, 1995, and the Union filed a motion to intervene on August 3, 1995.
The RTC dismissed the cadastral petition by Order dated March 8, 1996, and denied reconsideration on June 7, 1996 on the ground of laches.
RCAP appealed to the Court of Appeals in CA-G.R. CV No. 56482.
The Court of Appeals reversed the RTC on April 29, 2002 and ordered annotation of encumbrances on the relevant TCTs.
The Court of Appeals denied the Union’s motion for reconsideration on January 20, 2003, and the Union and ALU sought review before the Supreme Court by Rule 45 petition.

Issues Presented

Whether the Court of Appeals erred in granting annotation of encumbrances on certain titles to show restrictions on use and a reversionary interest.
Whether the Court of Appeals committed grave abuse of discretion in treating the appellees' brief of petitioners as a mere scrap of paper and in assailing the legal personality of the petitione