TOPIC: Determination of Jurisdiction between labor and Civil Cases

Malayan Insurance Company Inc v Diana Alibudbud

GR No. 209011; 20 April 2016

Facts:
 Alibudbud, employed by Malayan as SVp for Sales Department. As SVP, she was issued a 2004 Honda Civic
Sedan with plate no. XPR 822 under Malayan’s Car Financing Plan on the condition that
1. She must continuously stay and serve Malayan for at least 3 full years from date of availment of Car
Financing Plan and
2. In case of resignation, retirement or termination before the 3-yr period, she shall pay in full 100% share of
Malayan and outstanding balance of cost of vehicle.
 Alibudbud also executed a PN and Deed of Chattel Mortgage in favor of Malayan stating the same
 2005, Alibudbud was dismissed from Malayan due to redundancy. Malayan demanded that she surrender the
possession of car to the company. Alibudbud refused to do so.
 Malayan instituted a complaint for replevin and/or sum of money before RTC of Manila and prayed for seizure of
car or that she be ordered to pay P553k representing principal obligation plus late payment charges
 Alibudbud filed a complaint for illegal dismissal against Malayan before LA
 In Alibudbud’s Compulsory Counterclaim, she alleged that a reasonable depreciation of 20% should be deducted
from vehicle’s book value. She asserted counterclaim for compensatory damages and atty’s fees and prayed for
suspension of proceedings in view of pendency of labor dispute filed.
 Alibudbud filed for a Motion to Suspend Proceedings to reiterate prayer explaining that the resolution of labor
case will determine her rights and obligations as well of Malayan
 RTC: denied motion.
1. Reference shall be made only on PN which determined rights and obligations of parties
2. Cause of action in replevin is rooted from PN
3. Issue in labor dispute is in no way connected with rights and obligations of parties arising from PN
 Alibudbud successively filed motions to suspend proceedings in civil case on the ground that suspension is
necessary since she is seeking reinstatement in labor case which if granted would result in irreconcilable conflict
not contemplated by law
 RTC: denied motions. Issue raised in civil action is completely separable with issue raised in labor case.
 LA: Dismissed complaint of illegal dismissal. Redundancy resulted from a valid re-organization program
undertaken by Malayan.
 RTC: granted complaint for replevin.
 CA: set aside RTC decision because it had no jurisdiction tot ake cognizance over replevin action because of
employer-employee relations between parties which Malayan never denied.
Issues:
W/N RTC had jurisdiction
Held:
Yes. CA decision reversed and set aside.
Ruling:
 Replevin is an action whereby the owner or person entitled to repossession of goods or chattels may recover
those goods or chattels from one who has wrongfully distrained or taken, or who wrongfully detains such goods or
chattels. It is designed to permit one having right to possession to recover property in specie from one who has
wrongfully taken or detained the property.
 The present action involves the parties' relationship as debtor and creditor, not their "employer-employee"
relationship.
o Malayan's demand for Alibudbud to pay the 50% company equity over the car or, to surrender its
possession, is civil in nature. The trial court's ruling also aptly noted the Promissory Note and Deed of
Chattel Mortgage voluntarily signed by Alibudbud to secure her financial obligation to avail of the car
being offered under Malayan's Car Financing Plan. Clearly, the issue in the replevin action is separate
and distinct from the illegal dismissal case.
 The Court further considers it justified for Malayan to refuse to accept her offer to settle her car obligation for not
being in accordance with the Promissory Note and Deed of Chattel Mortgage she executed.
 Even the illegal dismissal case she heavily relied upon in moving for the suspension of the replevin action was
settled in favor of Malayan which was merely found to have validly exercised its management prerogative in order
to improve its company sales.
o The characterization of an employee's services as superfluous or no longer necessary and, therefore,
properly terminable, is an exercise of business judgment on the part of the employer. The wisdom and
soundness of such characterization or decision is not subject to discretionary review provided, of course,
that a violation of law or arbitrary or malicious action is not shown.