Republic vs. Villasor

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents.

54 SCRA 84
November 28, 1973

FACTS:

A decision was rendered in a Special Proceeding against the Republic of the Philippines thereby confirming the arbitration award of P1,712,396.40 in favor of respondent corporation. After the decision became final and executory, respondent judge issued an order directing the sheriff to execute the said decision, and the corresponding alias writ of execution was thus issued.

Hence the sheriff served notices of garnishment with several banks especially the monies due to the AFP in the form of deposits sufficient to cover the amount mentioned in the writ. PNB and Philippine Veterans Bank received such notice. As certified by the AFP Comptroller, these funds of the AFP with the said banks are public funds for the pensions, pay, and allowances of its military and civilian personnel.

The petitioner, in this certiorari and prohibition proceedings, challenges the validity of the Order issued by Judge Villasor declaring the decision final and executory and subsequently issuing an alias writ of execution directed against the funds of the AFP in pursuance thereof.

ISSUE:

May the writs of execution and notices of garnishment be sued against public funds?

HELD:

NO. Although the State may give its consent to be sued by private parties, there is corollary that public funds cannot be the object of garnishment proceedings even if the consent to be sued has been previously granted and the state‘s liability has been adjudged.

Thus in the case of Commission of Public Highways vs. San Diego, such a well settled doctrine was restated in the opinion of Justice Teehankee. 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 the government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgment, is based on obvious considerations of public policy. Disbursement of public funds must be covered by the corresponding appropriations as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by diversion of public funds from their legitimate and specific object is appropriated by law.