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.