March 2010 - Philippine Supreme Court Resolutions
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[G.R. No. 186020 : March 24, 2010] SAPPHIRE SECURITIES PHILS., INC. AND JEREMIAS A. CRUZABRA V. KEVIN KHOE) AND G.R. NO. 186237 (SAPPHIRE SECURITIES PHILS., INC. V. KEVIN KHOE :
[G.R. No. 186020 : March 24, 2010]
SAPPHIRE SECURITIES PHILS., INC. AND JEREMIAS A. CRUZABRA V. KEVIN KHOE) AND G.R. NO. 186237 (SAPPHIRE SECURITIES PHILS., INC. V. KEVIN KHOE
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 24 March 2010:
G.R. No. 186020* {Sapphire Securities Phils., Inc. and Jeremias A. Cruzabra v. Kevin Khoe) and G.R. No. 186237 (Sapphire Securities Phils., Inc. v. Kevin Khoe).-
This case is about the execution sale of the shares of stock and trading rights of a company to satisfy a claim for unpaid wages against it.
Respondent Kevin Khoe filed a complaint for unpaid wages in the form of commissions against petitioners Sapphire Securities Phils., Inc. (Sapphire) and Jeremias Cruzabra.
In July 1995, Sapphire hired respondent Kevin Khoe, initially as a research analyst but later as trader in securities. Part of his work was to solicit clients for his firm. His compensation package consisted of commissions for what he traded at the Makati and Philippine Stock Exchanges.
But, from September 1996 to February 1997 when Khoe's employment ended, Sapphire failed to pay him his wages-commissions. For this reason, Khoe filed a complaint against petitioners Sapphire and Cruzabra, its managing head, for payment of the same plus interest, damages, and attorney's fees. Khoe presented documents in which Sapphire acknowledged its obligation of P4,824,376.67 to him.[1] He also presented Sapphire's written proposal dated March 21, 1997[2] to settle its obligations to him, adjusted at �4,842,640.23. But Sapphire failed to comply with its undertaking.
On August 29, 2000 the Labor Arbiter rendered a decision, ordering Sapphire to pay Khoe P4,842,640.23 in unpaid wages-commission plus legal interest. Sapphire appealed to the National Labor Relations Commission (NLRC) but the latter dismissed the appeal for its failure to post the required cash bond. Sapphire moved for reconsideration but the NLRC denied it. By the NLRC's computation, Sapphire's judgment debt, inclusive of 12% legal interest, totaled P7,849,010.67, exclusive of execution fees.
The NLRC sheriff went to Sapphire's address of record at 2502-B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, to levy on its personal property and serve the notice of sale of its shares of stocks. But another entity already occupied the place. This notwithstanding, the sheriff served the notice of levy and sale at that address. On January 3, 2006, after two postponements for lack of prospective bidders, the sheriff auctioned off Sapphire's 50,000 Philippine Stock Exchange (PSE) shares of stocks to Khoe, the sole bidder, for P2,500,000.00 at P50.00 per share, leaving a total balance of P5,349,010.67. Sapphire and Cruzabra did not take part in the sale. Thereafter, the sheriff issued a certificate of sale in Khoe's favor.
On May 8, 2006 Sapphire filed with the Labor Arbiter a motion to set aside the sheriffs Certificate of Sale but the Labor Arbiter denied the motion and, moreover, ordered the issuance of an alias writ of execution to enforce the unsatisfied portion of the judgment award. Sapphire appealed the Labor Arbiter's order to the NLRC but the latter denied the appeal on January 8, 2007, prompting Sapphire to file a petition for certiorari with the Court of Appeals (CA) in CA-G.R. SP 98420, assailing the validity of the execution sale.
On July 9, 2007 the CA dismissed the petition on technical grounds, prompting Sapphire to file with this Court a petition for review in G.R. 186237.
Meantime, on April 4, 2007 the Labor Arbiter issued a second alias writ of execution to collect the unsatisfied balance of the judgment debt. On April 16, 2007 the sheriff served on PSE a notice of levy on execution upon Sapphire's PSE trading rights. On April 23, 2007 the sheriff conducted another execution sale, again without Sapphire's participation. Khoe, acting through Nezpercez Trading Corporation (Nezpercez) to whom he gave a special power of attorney, won the bid being the sole bidder. Subsequently, the sheriff issued a certificate of sale in the name of Nezpercez.
On May 29, 2007 Sapphire filed with the Labor Arbiter a motion to set aside the sheriffs Certificate of Sale but the same was denied. Sapphire appealed the ruling to the NLRC but it denied the same on May 30, 2008. Sapphire filed a motion for reconsideration but the NLRC likewise denied it. Sapphire then filed a petition for certiorari before the CA in CA-G.R. SP 105418.
On November 28, 2008 the CA denied Sapphire's appeal. It also denied Sapphire's motion for reconsideration on January 22, 2009, hence, Sapphire filed a petition for review with this Court in G.R. 186020.
The Court caused the consolidation of the two cases before it: G.R. 186020 and 186237.
Petitioners present the following issues:
1. Whether or not the CA erred in ruling that the levy and execution sale of petitioner Sapphire's PSE trading rights could not be held in abeyance notwithstanding the pendency of Sapphire's petition for certiorari that assailed the propriety of the sheriff proceeding with the levy and sale of the PSE shares of stocks.
2. Whether or not the assailed levies and execution sales of Sapphire's PSE trading rights and its 50,000 PSE shares of stocks were proper and valid.
One. Sapphire claims that the levy and sale of its trading rights should not have proceeded after it filed a petition for certiorari contesting the previous execution sale of its shares of stocks. Sapphire invokes judicial courtesy which requires a lower court to suspend the proceedings before it in the main case upon the filing of a petition for certiorari questioning its action or order. This Court does not agree.
The 2005 NLRC Rules of Procedure now provides that, unless a restraining order is issued, a petition for certiorari shall not stay the execution of the assailed decision.[3] Here, no such restraining order was prayed for, let alone issued.
Besides, the principle of judicial courtesy has already been abandoned for unnecessarily stalling the regular course of proceedings. Section 7, Rule 65 of the Rules of Court, as amended, directs the lower court or tribunal to proceed with the principal case within 10 days from the filing by a party of a petition for certiorari with the higher court, absent the issuance of a temporary restraining order or a writ of preliminary injunction against it. In fact, the undue failure of the lower court to proceed with the principal case is a ground for imposing an administrative charge on the presiding judge.[4] The lower court or tribunal which is the object of the petition for certiorari can no longer use judicial courtesy as an excuse for suspending the proceeding in the principal case.[5]
Sapphire of course points out that, with the sale of its trading rights, any decision the appellate court might issue in the case would already be moot. This is erroneous. As the CA said, Sapphire would not have been without remedy had it won its appeal. It could seek restitution or reparation under Section 5, Rule 39 of the Rules of Court.
Two. Sapphire contends that the levies and sales of its trading rights and shares of stocks are void because the sheriff gave it no proper notice of the execution sale. Sapphire points out that, since its new office or the residence of its managing head was not known to the sheriff at the time of service of the notice, he should have instead served the same at the office or residence of Sapphire's counsel.[6]
But as the CA correctly said, the rules of court apply to labor cases only in a suppletory manner in the absence of any applicable provision in the NLRC Rules. Here, the NLRC Manual on Execution of Judgment specifically provides that a written notice of sale at public auction shall be given to the losing party,[7] not to his counsel Here, Sapphire is the losing party. The sheriff served copies of the assailed notices at Sapphire's address of record at 2502-B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City.
Sapphire of course fervently claims that it was no longer holding office at such address when the notices were served. It knew execution was forthcoming after the NLRC denied its appeal but, rather than inform the NLRC or the CA of its change of address as good faith dictated, Sapphire fended off this duty, insisting without basis that the notices to it should have been sent to counsel.
Sapphire complains of the gross inadequacy of the bid prices that the sheriff accepted for its shares of stocks and trading rights. But as it admits, the inadequacy of the price was not itself a ground for setting aside an execution sale where such sale was regularly carried out in other respects.[8] So far, the only irregularity Sapphire imputes to the execution sales is the alleged want of proper notice to it, a matter already disposed of above.
The other so-called irregularities in the conduct of the auction sales of Sapphire's shares of stock and trading rights are not substantial and merit no discussion.
Sapphire assails the arrangement between Khoe and Nezpercez which bought Sapphire's trading rights on his behalf but caused the certificate of sale to be issued in Nezpercez's name. But there is nothing illegal about such arrangement. No law prohibits the buyer at public auction from assigning his right as purchaser to another. Nor is there any prohibition against the levying on Sapphire's PSE shares of stock. The Securities and Exchange Commission directive, which Sapphire cites in its petition, merely ordered Sapphire to sell part of its investment and surrender the proceeds for safekeeping for future claimants. It did not preclude the NLRC from going after Sapphire's assets to satisfy a valid judgment against it.
Lastly, the Court finds no compelling reason to set aside the computation of the judgment award as provided in the writs of execution.
WHEREFORE, the Court DENIES the petition for lack of merit and AFFIRMS the Decision of the Court of Appeals in CA-G.R. SP 105418 dated November 28, 2008 and its Resolution dated January 22, 2009, as well as its Resolutions in CA-G.R. SP 98420 dated July 9, 2007 and February 4, 2009. Del Castillo, J., no part, for having penned the assailed CA decision and resolution in G.R. No. 186020.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Arturo D. Brion, Lucas P. Bersamin (designated additional member per Raffle dated 19 October 2009), Roberto A. Abad and Jose P. Perez, Members, Second Division, this 24th day of March, 2010.
G.R. No. 186020* {Sapphire Securities Phils., Inc. and Jeremias A. Cruzabra v. Kevin Khoe) and G.R. No. 186237 (Sapphire Securities Phils., Inc. v. Kevin Khoe).-
This case is about the execution sale of the shares of stock and trading rights of a company to satisfy a claim for unpaid wages against it.
The Facts and the Case
Respondent Kevin Khoe filed a complaint for unpaid wages in the form of commissions against petitioners Sapphire Securities Phils., Inc. (Sapphire) and Jeremias Cruzabra.
In July 1995, Sapphire hired respondent Kevin Khoe, initially as a research analyst but later as trader in securities. Part of his work was to solicit clients for his firm. His compensation package consisted of commissions for what he traded at the Makati and Philippine Stock Exchanges.
But, from September 1996 to February 1997 when Khoe's employment ended, Sapphire failed to pay him his wages-commissions. For this reason, Khoe filed a complaint against petitioners Sapphire and Cruzabra, its managing head, for payment of the same plus interest, damages, and attorney's fees. Khoe presented documents in which Sapphire acknowledged its obligation of P4,824,376.67 to him.[1] He also presented Sapphire's written proposal dated March 21, 1997[2] to settle its obligations to him, adjusted at �4,842,640.23. But Sapphire failed to comply with its undertaking.
On August 29, 2000 the Labor Arbiter rendered a decision, ordering Sapphire to pay Khoe P4,842,640.23 in unpaid wages-commission plus legal interest. Sapphire appealed to the National Labor Relations Commission (NLRC) but the latter dismissed the appeal for its failure to post the required cash bond. Sapphire moved for reconsideration but the NLRC denied it. By the NLRC's computation, Sapphire's judgment debt, inclusive of 12% legal interest, totaled P7,849,010.67, exclusive of execution fees.
The NLRC sheriff went to Sapphire's address of record at 2502-B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, to levy on its personal property and serve the notice of sale of its shares of stocks. But another entity already occupied the place. This notwithstanding, the sheriff served the notice of levy and sale at that address. On January 3, 2006, after two postponements for lack of prospective bidders, the sheriff auctioned off Sapphire's 50,000 Philippine Stock Exchange (PSE) shares of stocks to Khoe, the sole bidder, for P2,500,000.00 at P50.00 per share, leaving a total balance of P5,349,010.67. Sapphire and Cruzabra did not take part in the sale. Thereafter, the sheriff issued a certificate of sale in Khoe's favor.
On May 8, 2006 Sapphire filed with the Labor Arbiter a motion to set aside the sheriffs Certificate of Sale but the Labor Arbiter denied the motion and, moreover, ordered the issuance of an alias writ of execution to enforce the unsatisfied portion of the judgment award. Sapphire appealed the Labor Arbiter's order to the NLRC but the latter denied the appeal on January 8, 2007, prompting Sapphire to file a petition for certiorari with the Court of Appeals (CA) in CA-G.R. SP 98420, assailing the validity of the execution sale.
On July 9, 2007 the CA dismissed the petition on technical grounds, prompting Sapphire to file with this Court a petition for review in G.R. 186237.
Meantime, on April 4, 2007 the Labor Arbiter issued a second alias writ of execution to collect the unsatisfied balance of the judgment debt. On April 16, 2007 the sheriff served on PSE a notice of levy on execution upon Sapphire's PSE trading rights. On April 23, 2007 the sheriff conducted another execution sale, again without Sapphire's participation. Khoe, acting through Nezpercez Trading Corporation (Nezpercez) to whom he gave a special power of attorney, won the bid being the sole bidder. Subsequently, the sheriff issued a certificate of sale in the name of Nezpercez.
On May 29, 2007 Sapphire filed with the Labor Arbiter a motion to set aside the sheriffs Certificate of Sale but the same was denied. Sapphire appealed the ruling to the NLRC but it denied the same on May 30, 2008. Sapphire filed a motion for reconsideration but the NLRC likewise denied it. Sapphire then filed a petition for certiorari before the CA in CA-G.R. SP 105418.
On November 28, 2008 the CA denied Sapphire's appeal. It also denied Sapphire's motion for reconsideration on January 22, 2009, hence, Sapphire filed a petition for review with this Court in G.R. 186020.
The Court caused the consolidation of the two cases before it: G.R. 186020 and 186237.
The Issues Presented
Petitioners present the following issues:
1. Whether or not the CA erred in ruling that the levy and execution sale of petitioner Sapphire's PSE trading rights could not be held in abeyance notwithstanding the pendency of Sapphire's petition for certiorari that assailed the propriety of the sheriff proceeding with the levy and sale of the PSE shares of stocks.
2. Whether or not the assailed levies and execution sales of Sapphire's PSE trading rights and its 50,000 PSE shares of stocks were proper and valid.
The Rulings of the Court
One. Sapphire claims that the levy and sale of its trading rights should not have proceeded after it filed a petition for certiorari contesting the previous execution sale of its shares of stocks. Sapphire invokes judicial courtesy which requires a lower court to suspend the proceedings before it in the main case upon the filing of a petition for certiorari questioning its action or order. This Court does not agree.
The 2005 NLRC Rules of Procedure now provides that, unless a restraining order is issued, a petition for certiorari shall not stay the execution of the assailed decision.[3] Here, no such restraining order was prayed for, let alone issued.
Besides, the principle of judicial courtesy has already been abandoned for unnecessarily stalling the regular course of proceedings. Section 7, Rule 65 of the Rules of Court, as amended, directs the lower court or tribunal to proceed with the principal case within 10 days from the filing by a party of a petition for certiorari with the higher court, absent the issuance of a temporary restraining order or a writ of preliminary injunction against it. In fact, the undue failure of the lower court to proceed with the principal case is a ground for imposing an administrative charge on the presiding judge.[4] The lower court or tribunal which is the object of the petition for certiorari can no longer use judicial courtesy as an excuse for suspending the proceeding in the principal case.[5]
Sapphire of course points out that, with the sale of its trading rights, any decision the appellate court might issue in the case would already be moot. This is erroneous. As the CA said, Sapphire would not have been without remedy had it won its appeal. It could seek restitution or reparation under Section 5, Rule 39 of the Rules of Court.
Two. Sapphire contends that the levies and sales of its trading rights and shares of stocks are void because the sheriff gave it no proper notice of the execution sale. Sapphire points out that, since its new office or the residence of its managing head was not known to the sheriff at the time of service of the notice, he should have instead served the same at the office or residence of Sapphire's counsel.[6]
But as the CA correctly said, the rules of court apply to labor cases only in a suppletory manner in the absence of any applicable provision in the NLRC Rules. Here, the NLRC Manual on Execution of Judgment specifically provides that a written notice of sale at public auction shall be given to the losing party,[7] not to his counsel Here, Sapphire is the losing party. The sheriff served copies of the assailed notices at Sapphire's address of record at 2502-B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City.
Sapphire of course fervently claims that it was no longer holding office at such address when the notices were served. It knew execution was forthcoming after the NLRC denied its appeal but, rather than inform the NLRC or the CA of its change of address as good faith dictated, Sapphire fended off this duty, insisting without basis that the notices to it should have been sent to counsel.
Sapphire complains of the gross inadequacy of the bid prices that the sheriff accepted for its shares of stocks and trading rights. But as it admits, the inadequacy of the price was not itself a ground for setting aside an execution sale where such sale was regularly carried out in other respects.[8] So far, the only irregularity Sapphire imputes to the execution sales is the alleged want of proper notice to it, a matter already disposed of above.
The other so-called irregularities in the conduct of the auction sales of Sapphire's shares of stock and trading rights are not substantial and merit no discussion.
Sapphire assails the arrangement between Khoe and Nezpercez which bought Sapphire's trading rights on his behalf but caused the certificate of sale to be issued in Nezpercez's name. But there is nothing illegal about such arrangement. No law prohibits the buyer at public auction from assigning his right as purchaser to another. Nor is there any prohibition against the levying on Sapphire's PSE shares of stock. The Securities and Exchange Commission directive, which Sapphire cites in its petition, merely ordered Sapphire to sell part of its investment and surrender the proceeds for safekeeping for future claimants. It did not preclude the NLRC from going after Sapphire's assets to satisfy a valid judgment against it.
Lastly, the Court finds no compelling reason to set aside the computation of the judgment award as provided in the writs of execution.
WHEREFORE, the Court DENIES the petition for lack of merit and AFFIRMS the Decision of the Court of Appeals in CA-G.R. SP 105418 dated November 28, 2008 and its Resolution dated January 22, 2009, as well as its Resolutions in CA-G.R. SP 98420 dated July 9, 2007 and February 4, 2009. Del Castillo, J., no part, for having penned the assailed CA decision and resolution in G.R. No. 186020.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Arturo D. Brion, Lucas P. Bersamin (designated additional member per Raffle dated 19 October 2009), Roberto A. Abad and Jose P. Perez, Members, Second Division, this 24th day of March, 2010.
Very truly yours,
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
* J. Del Castillo, no part. J. Bersamin, additional member, per raffle dated October 19, 2009.
[1] Rollo (G.R. 186020), p. 276.
[2] Id.
[3] 2005 Revised Rules of Procedure of the National Labor Relations Commission, Rule XI, Section 10.
[4] A.M. No. 07-7-12-SC, December 27, 2007.
[5] Civil Procedure {A Restatement for the Bar), Willard B. Riano, 2009, p. 632.
[6] Section 15(d), Rule 39 and Section 6, Rule 13 of the 1997 Revised Rules of Court.
[7] NLRC Manual on Execution of Judgment, Rule VII, Section l(d), 2002.
[8] Batong Buhay Gold Mines, Inc. v. Dela Sema, 370 Phil. 872, 897 (1999), citing Vicente Francisco, The Revised Rules of Court in the Philippines, p. 755.
