Spare our conjugal property!

Dil, an employee of ADV Corp., filed a complaint for illegal dismissal against the latter before the National Labor Relations Commission.

The Labor Arbiter rendered a decision against ADV Corp. finding it guilty of illegal dismissal and holding it liable to Dil for backwages, separation pay and unpaid salary. The decision became final and executory after the appellate courts upheld the propriety of the decision of the Labor Arbiter.

Consequently, a Writ of Execution was issued commanding the sheriff to proceed against the movable and immovable properties of the corporation and respondent Dil to collect the amounts representing complainant’s backwages, separation pay, plus unpaid salary from July 1, 1998 to Sept. 27, 1998. Moreover, in the event the sheriff failed to collect sufficient amount in cash, he was further commanded to proceed against the movable and immovable properties of the respondents not exempt from the execution, and all proceeds must be deposited to the NLRC Cashier of this Commission.

Since the original writ was returned unsatisfied, Dil moved for the issuance of an alias writ of execution which, in fine, reiterated the instructions stated in the original writ.

Pursuant to the alias writ, a parcel of land (property) registered in the name of Sps. Abe and Remy Devera was levied upon and sold to Jim Bimon and Chate Inc. at a public auction on May 16, 2008. As no redemption was made during the period provided by law, Jim and Chate Inc. filed an omnibus motion seeking the issuance of a final deed of sale, cancellation of title in the name of Abe and Remy, and the issuance of a new title in their names.

It was during this time that ADV Corp. realized that only the corporation was impleaded as party-respondent in Dil’s complaint for illegal dismissal.

Thus, ADV and Abe filed a verified counter-manifestation with omnibus motion stating that the property sold at auction does not belong to the judgment debtor, ADV Corp. but to spouses Abe and Remy, who were not impleaded as party-respondents in the case for illegal dismissal. They likewise claimed that the property was conjugal and there was no showing that an advantage or benefit accrued to their conjugal partnership.

Q: What is inherent feature of a writ of execution?

A: As a general rule, a writ of execution must strictly conform to every particular of the judgment to be executed. It should not vary the terms of the judgment it seeks to enforce, nor may it go beyond the terms of the judgment sought to be executed, otherwise, if it is in excess of or beyond the original judgment or award, the execution is void.

Q: What is the extent of the power of the courts in executing judgments it rendered?

A: The power of the courts in executing judgments extends only to properties unquestionably belonging to the judgment debtor and liability may even be incurred by the sheriff for levying properties not belonging to the judgment debtor.

Q: Was the writ of execution in the above recited case null and void?

A: Yes. It is undisputed that the final and executory Labor Arbiter Decision adjudged ADV Corp. guilty of illegal dismissal and ordered it to pay Dil separation pay and backwages. It did not mention the liability of Abe and his wife, Remy. Nevertheless, the writ of execution and the alias writ of execution that were issued were directed against the movable and immovable properties of both the ADV Corp. and Abe. Clearly, the writs of execution here exceeded the terms of the final and executory judgment of the Labor Arbiter.

Q: What is the effect of the levy and the sale of the land to Jimmy Bimon and Chate Inc. given that the writ of execution is null and void?

A: A court may validly set aside the levy and sale of the subject property pursuant to said writs and the order which directed the issuance of a Final Deed of Sale in favor of auction purchasers, for being the offshoot of a void execution.

Q: Given that Abe is corporate officer of ADV Corporation can he be held liable if the latter can no longer satisfy the judgment debt?

A: Article 212(e) of the Labor Code, by itself, does not make a corporate officer personally liable for the debts of the corporation. It emphasized that the governing law on personal liability of directors or officers for debts of the corporation is still Section 31 of the Corporation Code. Thus, the doctrine of piercing the corporate veil applies only in three basic areas, namely: 1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud or defend a crime; or 3) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. In the absence of malice, bad faith or a specific provision of law making a corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities.

(Source: Montealegre vs. Sps De Vera, G.R. No. 208920, July 10, 2019)