NHA v. Heirs of Isidro Guivelondo

NHA v. Heirs of Isidro Guivelondo

G.R. No. 154411.  June 19, 2003

Ynares-Santiago, J.

Issue:

                whether or not the funds and personal properties of NHA can be garnished

Held:

                Yes. The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant’s action “only up to the completion of proceedings anterior to the stage of execution” and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy.  Disbursements of public funds must be covered by the corresponding appropriation as required by law.  The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law.

However, if the funds belong to a public corporation or a government-owned or controlled corporation which is clothed with a personality of its own, separate and distinct from that of the government, then its funds are not exempt from garnishment. This is so because when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation.

Having a juridical personality separate and distinct from the government, the funds of such government-owned and controlled corporations and non-corporate agency, although considered public in character, are not exempt from garnishment. Hence, it is clear that the funds of petitioner NHA are not exempt from garnishment or execution.

Issue:

                whether the funds garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal government’s other statutory obligations, are exempted from execution without the proper appropriation required under the law

Held:

                The funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds of the municipal government. Public funds are not subject to levy and execution, unless otherwise provided for by statute. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution. The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7.

Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor.

Municipality of Makati v. CA

Municipality of Makati v. CA

G.R. Nos. 89898-99 October 1, 1990

Cortes, J.

Facts:

                The action for eminent domain was filed on May 20, 1986. Attached to petitioner’s complaint was a certification that a bank account had been opened with the PNB Buendia Branch under petitioner’s name containing the sum of P417,510.00, made pursuant to the provisions of Pres. Decree No. 42. After due hearing where the parties presented their respective appraisal reports regarding the value of the property, respondent RTC judge rendered a decision fixing the appraised value of the property at P5,291,666.00, and ordering petitioner to pay this amount minus the advanced payment of P338,160.00 which was earlier released to private respondent.

After this decision became final and executory, private respondent moved for the issuance of a writ of execution. This motion was granted by respondent RTC judge. After issuance of the writ of execution, a Notice of Garnishment was served by respondent sheriff Silvino R. Pastrana upon the manager of the PNB Buendia Branch. However, respondent sheriff was informed that a “hold code” was placed on the account of petitioner. As a result of this, private respondent filed a motion praying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision.

Petitioner filed a “Manifestation” informing the court that private respondent was no longer the true and lawful owner of the subject property because a new title over the property had been registered in the name of Philippine Savings Bank, Inc. (PSB) Respondent RTC judge issued an order requiring PSB to make available the documents pertaining to its transactions over the subject property, and the PNB Buendia Branch to reveal the amount in petitioner’s account which was garnished by respondent sheriff. In compliance with this order, PSB filed a manifestation informing the court that it had consolidated its ownership over the property as mortgagee/purchaser at an extrajudicial foreclosure sale held. After several conferences, PSB and private respondent entered into a compromise agreement whereby they agreed to divide between themselves the compensation due from the expropriation proceedings.

Respondent trial judge subsequently issued an order which: (1) approved the compromise agreement; (2) ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45 which corresponds to the balance of the appraised value of the subject property under the RTC decision dated June 4, 1987, from the garnished account of petitioner; and, (3) ordered PSB and private respondent to execute the necessary deed of conveyance over the subject property in favor of petitioner. Petitioner’s motion to lift the garnishment was denied.

Issue:

                whether the funds garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal government’s other statutory obligations, are exempted from execution without the proper appropriation required under the law

Held:

                The funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds of the municipal government. Public funds are not subject to levy and execution, unless otherwise provided for by statute. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution. The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7.

Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor.

PNB v. Pabalan

PNB v. Pabalan

G.R. No. L-33112 June 15, 1978

Fernando, Acting C.J.

Facts:

                The judgment against respondent Philippine Virginia Tobacco Administration had reached the stage of finality. A writ of execution was, therefore, in order. It was accordingly issued on December 17, 1970. There was a notice of garnishment for the full amount mentioned in such writ of execution in the sum of P12,724,66. In view of the objection, however, by petitioner Philippine National Bank on the above ground, coupled with an inquiry as to whether or not respondent Philippine Virginia Tobacco Administration had funds deposited with petitioner’s La Union branch, it was not until January 25, 1971 that the order sought to be set aside in this certiorari proceeding was issued by respondent Judge. Its dispositive portion reads as follows: Conformably with the foregoing, it is now ordered, in accordance with law, that sufficient funds of the Philippine Virginia Tobacco Administration now deposited with the Philippine National Bank, La Union Branch, shall be garnished and delivered to the plaintiff immediately to satisfy the Writ of Execution for one-half of the amount awarded in the decision of November 16, 1970.”

Issue:

                whether PNB can be sued and its funds garnished

Held:

                Yes. If the funds appertained to one of the regular departments or offices in the government, then, certainly, such a provision would be a bar to garnishment. Such is not the case here. Garnishment would lie. The funds of public corporations could properly be made the object of a notice of garnishment.