Republic of the
Supreme Court
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NATIONAL ELECTRIFICATION |
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G.R. No. 154200 |
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ADMINISTRATION and its |
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BOARD OF ADMINISTRATORS, |
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Present: |
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Petitioners, |
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YNARES-SANTIAGO,
J., |
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Chairperson, |
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AUSTRIA-MARTINEZ, |
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- versus - |
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CHICO-NAZARIO, and |
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NACHURA, JJ. |
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DANILO MORALES, |
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Promulgated: |
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Respondent. |
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July 24,
2007 |
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D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
The sole issue for resolution in
the Petition for Review on Certiorari[1]
before us is whether the Court of Appeals (CA) committed an error of law
in its July 4, 2002 Decision[2]
in CA-G.R. SP No. 62919 in ordering the implementation of a writ of
execution against the funds of the National Electrification Administration
(NEA).
There being no dispute as to the
facts,[3]
the following findings of the CA are adopted:[4]
Danilo Morales and 105 other employees[5]
(Morales, et al.) of the NEA filed with the Regional Trial Court (RTC),
Branch 88, Quezon City, a class suit[6] against their employer for payment of rice
allowance, meal allowance, medical/dental/optical allowance, children’s
allowance and longevity pay purportedly authorized under Republic Act (R.A.) No.
6758.[7] In its
WHEREFORE, foregoing considered, the petition is hereby GRANTED directing the respondent NEA, its Board of Administrators to forthwith settle the claims of the petitioners and other employees similarly situated and extend to them the benefits and allowances to which they are entitled but which until now they have been deprived of as enumerated under Section 5 of DBM CCC No. 10 and their inclusion in the Provident Funds Membership, retroactive from the date of their appointments up to the present or until their separation from the service.
No costs.
SO ORDERED.[9]
Upon motion
of Morales, et al., the RTC issued a Writ of Execution dated
NOW, THEREFORE, you are hereby directed to cause respondents National Electrification Administration (NEA) and its Board of Administrators with principal office address at 1050 CDC Bldg., Quezon Avenue, Quezon City to forthwith settle the claims of the petitioners and other employees similarly situated and extend to them the benefits and allowances to which they are entitled but which until now they have been deprived of as enumerated under Sec. 5 of DBM CCC No. 10 and you are further directed to cause their inclusion in the Provident Fund Membership, retroactive from the date of their appointments up to the present or until their separation from the service.[11]
Thereafter, a Notice of Garnishment[12]
was issued against the funds of NEA with Development Bank of the Philippines
(DBP) to the extent of P16,581,429.00.
NEA
filed a Motion to Quash Writs of Execution/Garnishment,[13]
claiming that the garnished public funds are exempt from execution under
Section 4[14]
of Presidential Decree (P.D.) No. 1445,[15]
but manifesting that it is willing to pay the claims of Morales, et al.,[16]
only that it has no funds to cover the same, although it already
requested the Department of Budget and Management (DBM) for a supplemental
budget.[17]
In
its Order of May 17, 2000, the RTC denied the Motion to Quash but, at the same
time, held in abeyance the implementation of the Writ of Execution, thus:
WHEREFORE, the motion to quash writs of execution/ garnishment is DENIED but the implementation of the judgment is placed on hold for ninety (90) days reckoned from this day. The respondents are directed to formally inform this Court and the petitioners of the prospect of obtaining funds from Department of Budget and Management within 30 days from receipt and every 30 days thereafter, until the 90 day period has lapsed.
The motion to direct
DBP to release to the petitioners the NEA funds garnished earlier amounting to P16,591.429 is also DENIED.
SO ORDERED.[18] (Emphasis ours)
Morales, et al. filed a
Partial Motion for Reconsideration[19]
but the RTC denied it.[20]
Meanwhile, in a letter dated June 28,
2000, former DBM Secretary Benjamin E. Diokno
informed NEA Administrator Conrado M. Estrella III of the denial of the NEA request for a
supplemental budget on the ground that the claims under R.A. No. 6758 which the
RTC had ordered to be settled cannot be paid because Morales, et al. are
not “incumbents of positions as of July 1, 1989 who are actually receiving and
enjoying such benefits.”[21]
Moreover, in an Indorsement
dated
This Office concurs with the above
view. The court may have exceeded
its jurisdiction when it entertained the petition for the entitlement of the
after-hired employees which had already been passed upon by this Commission in
COA Decision No. 95-074 dated
Thus, employees hired after the
extended date of
PREMISES CONSIDERED, the auditor of NEA should post-audit the disbursement vouchers on the bases of this Commission's decision particularly the above-cited COA Decision No. 94-074 [sic] and existing rules and regulations, as if there is no decision of the court in the subject special civil action for mandamus. At the same time, management should be informed of the intention of this Office to question the validity of the court decision before the Supreme Court through the Office of the Solicitor General.[22] (Emphasis ours)
Parenthetically, the records at hand
do not indicate when Morales, et al. were appointed. Even the
On July 18, 2000, Morales, et al.
filed a Motion for an Order to Implement Writ of Execution, pointing out that
the reason cited in the May 17, 2000 RTC Order for suspension of the
implementation of the writ of execution no longer exists given that DBM already
denied NEA’s request for funding.[24]
They also filed a Petition to Cite NEA Board of Administrators Mario Tiaoqui, Victoria Batungbacal,
Federico Puno and Remedios Macalingcag in Contempt of Court[25]
for allegedly withholding appropriations to cover their claims.
Acting first on the petition for
contempt, the RTC issued a Resolution dated
The court is aware of
its order dated
“In
order to prevent possible circumvention of the rules and procedures of the
Commission on Audit, judges are hereby enjoined to observe utmost caution,
prudence and judiciousness in the issuance of writs of execution to satisfy
money judgments against government agencies and local government units.
Judges
should bear in mind that in Commissioner of Public Highways v. San Diego
(31 SCRA 617, 625 [1970], this Court explicitly stated:
“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 the
power of the court ends when the judgment is rendered, since 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.
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.”
Moreover,
it is settled jurisprudence that upon determination of State liability, the
prosecution, enforcement or satisfaction thereof must still be pursued in
accordance with the rules and procedures laid down in P.D. No. 1445, otherwise
known as the Government Auditing Code of the Philippines (Department of
Agriculture v. NLRC, 227 SCRA 693, 701-02 [1993] citing Republic v. Villasor, 54 SCRA 84 [1973]). All money claims against
the Government must “first be filed with the Commission on Audit which must act
upon it within sixty days. Rejection of the claim will authorize the claimant
to elevate the matter to the Supreme Court on certiorari and in effect sue the
State thereby (P.D. 1445, Sections 49-50).”
WHEREFORE, foregoing considered, petition to cite respondents in contempt of court is premature, hence the same is hereby DENIED.
SO ORDERED.[26] (Emphasis ours)
Subsequently, the RTC issued an Order
dated
Upon a Petition for Certiorari[27]
filed by Morales, et al., the CA rendered the
WHEREFORE,
the petition is hereby GRANTED. The Order dated
Accordingly, the respondent judge is directed to implement the Writ of Execution relative thereto.
SO ORDERED..[28]
The
CA held that NEA can no longer take shelter under the provisions of P.D. No.
1445 and SC Administrative Circular No. 10-2000 because it is a
government-owned or controlled corporation (GOCC) created under P.D. No. 269,
effective
NEA
and its Board of Directors (petitioners) immediately filed herein petition for
review. It is their contention that the
CA erred in directing implementation of the writ of execution on two grounds:
first, execution is premature as Morales, et al. (respondents) have yet
to file their judgment claim with the COA in accordance with P.D. No. 1445 and
SC Administrative Circular No. 10-2000;[32]
and second, execution is not feasible without DBM as an indispensable
party to the petition for certiorari for it is said department which can
certify that funds are available to cover the
judgment claim.[33]
The
petition is meritorious.
Indeed,
respondents cannot proceed against the funds of petitioners because the
December 16, 1999 RTC Decision sought to be satisfied is not a judgment for a
specific sum of money susceptible of execution by garnishment; it is a special
judgment requiring petitioners to settle the claims of respondents in accordance with existing regulations of
the COA.
In
its plain text, the December 16, 1999 RTC Decision merely directs petitioners
to “settle the claims of [respondents] and other employees similarly situated.”[34] It does not require petitioners to pay a
certain sum of money to respondents. The
judgment is only for the performance of an act other than the payment of money,
implementation of which is governed by Section 11, Rule 39 of the Rules of
Court, which provides:
Section 11. Execution of special judgments. - When a judgment
requires the performance of any act other than those mentioned in the two
preceding sections, a certified copy of the judgment shall be attached to the
writ of execution and shall be served by the officer upon the party against
whom the same is rendered, or upon any other person required thereby, or by
law, to obey the same, and such party or person may be punished for contempt if
he disobeys such judgment.
Garnishment
cannot be employed to implement such form of judgment. Under Section 9 of Rule
39, to wit:
Section 9. Execution of judgments for money, how
enforced. -
x x
x x
(c) Garnishment of debts
and credits. - The officer may levy on debts due the judgment obligor and
other credits, including bank deposits, financial interests, royalties,
commissions and other personal property not capable of manual delivery in the
possession or control of third parties. Levy shall be made by serving notice
upon the person owing such debts or having in his possession or control such
credits to which the judgment obligor is entitled. The garnishment shall cover
only such amount as will satisfy the judgment and all lawful fees.
Garnishment is proper only when the
judgment to be enforced is
one for payment of a sum of money.
The
RTC exceeded the scope of its judgment when, in its February 22, 2000 Writ of
Execution, it directed petitioners to “extend to [respondents] the benefits and
allowances to which they are entitled but which until now they have been
deprived of as enumerated under Sec. 5 of DBM CCC No. 10 and x x x to cause their inclusion in the
Provident Fund Membership.”[35]
Worse, it countenanced the issuance of a notice of garnishment against the
funds of petitioners with DBP to the extent of
P16,581,429.00 even when no such amount was awarded in its
December 16, 1999 Decision.
However, in its subsequent Orders dated
That
is only right.
Without
question, petitioner NEA is a GOCC[36]
-- a juridical personality separate and distinct from the government, with
capacity to sue and be sued.[37] As such GOCC, petitioner NEA cannot evade
execution; its funds may be garnished or levied upon in satisfaction of a
judgment rendered against it.[38] However, before execution may proceed against
it, a claim for payment of the judgment award must first be filed with the COA.[39]
Under
Commonwealth Act No. 327,[40]
as amended by Section 26 of P.D. No. 1445, it is the COA which has primary
jurisdiction to examine, audit and settle
“all debts and claims of any sort” due from or owing the Government or any of
its subdivisions, agencies and instrumentalities, including government-owned or
controlled corporations and their subsidiaries.[41] With
respect to money claims arising from the implementation of R.A. No. 6758, their
allowance or disallowance is for COA to decide, subject only to the remedy of
appeal by petition for certiorari to this Court.[42]
All
told, the RTC acted prudently in halting implementation of the writ of
execution to allow the parties recourse to the processes of the COA. It may be
that the tenor of the March 23, 2000 Indorsement
issued by COA already spells doom for respondents’ claims; but it is not for
this Court to preempt the action of the COA on the post-audit to be conducted
by it per its Indorsement dated March 23, 2000.
In
fine, it was grave error for the CA to reverse the RTC and direct immediate
implementation of the writ of execution through garnishment of the funds of
petitioners,
WHEREFORE,
the petition is GRANTED. The July
4, 2002 Decision of the Court of Appeals is REVERSED and SET ASIDE.
The Resolution dated
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
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MINITA V. CHICO-NAZARIO Associate Justice |
ANTONIO EDUARDO B. NACHURA Associate Justice |
ATTESTATION
I attest that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S.
PUNO
Chief Justice
[1] Under Rule 45 of the Rules of Court; rollo, p. 7.
[2] Penned by Associate Justice Eliezer R. De Los Santos with the concurrence of Associate Justices Hilarion L. Aquino and Danilo B. Pine, id. at 18-23.
[3] Petition, id. at 9.
[4] CA Decision, id. at 18-21.
[5] The records merely state that
they were appointed after
[6] Docketed as Special Civil Action No. Q-99-38275.
[7] Compensation
and Classification Act of 1989, effective
[8] CA rollo, p. 23.
[9]
[10]
[11]
[12] There is no copy of this notice in the records.
[13] CA rollo, p. 29.
[14] Section 4. Fundamental
principles. Financial transactions and operations of any
government agency shall be governed by the fundamental principles set forth
hereunder, to wit:1. No money shall be paid out of any
public treasury of depository except in pursuance of an appropriation law or
other specific statutory authority; 2. Government funds or property shall be
spent or used solely for public purposes; 3. Trust funds shall be available and
may be spent only for the specific purpose for which the trust was created or
the funds received; 4. Fiscal responsibility shall, to the greatest extent, be
shared by all those exercising authority over the financial affairs,
transactions, and operations of the government agency; 5. Disbursements or
disposition of government funds or property shall invariably bear the approval
of the proper officials; 6. Claims against government funds shall be supported
with complete documentation; 7. All laws and regulations applicable to
financial transactions shall be faithfully adhered to; 8. Generally accepted
principles and practices of accounting as well as of sound management and
fiscal administration shall be observed, provided that they do not contravene
existing laws and regulations.
[15] Ordaining and Instituting a Government Auditing
Code of the
[16] Motion to Quash, CA rollo, p. 29.
[17]
[18]
[19]
[20]
[21]
[22]
[23] Supra note 5.
[24]
[25]
[26]
[27]
[28] Rollo, p. 23.
[29]
[30] G.R. No. L-32667,
[31] Rollo, pp. 22-23.
[32]
[33]
[34] CA rollo, p. 26.
[35]
[36] National Irrigation Administration v. Enciso, G.R. No. 142571, May 5, 2006, 489 SCRA 570, 575; National Electrification Administration v. Commission On Audit, 427 Phil. 464, 476 (2002).
[37] Section 4, P.D. No. 269 partly reads:
Section 4. NEA Authorities, Powers and Directives. The NEA is hereby authorized, empowered and directed to promote, encourage and assist public service entities, particularly cooperatives, to the end of achieving the objective of making service available throughout the nation on an area coverage basis as rapidly as possible; and for such purpose it is hereby, without limiting the generality of the foregoing and in addition to other authorizations, powers and directives established by this Decree, specifically authorized, empowered and directed: (a) To have a continuous succession under its corporate name until otherwise provided by law; (b) To prescribe and thereafter to amend and repeal its by-laws not inconsistent with this Decree; (c) To adopt and use a seal and alter it at its pleasure; (d) To sue and to be sued in any court: Provided, That NEA shall, unless it consents otherwise, be immune to suits for acts ex delicti; (e) To make contract of every name and nature and to execute all instruments necessary or convenient for the carrying on of its business.
[38]
Sison v. Florendo, A.M. OCA IPI No. 04-1901-P,
[39] Parreño v. Commission on Audit, G.R. No. 162224, June 07, 2007, citing Department of Agriculture v. National Labor Relations Commission, G.R. No. 104269, November 11, 1993, 227 SCRA 693, 701.
[40] An Act Fixing the Time Within Which the Auditor General Shall Render his Decisions and Prescribing the Manner of Appeal Therefrom.
[41] As implemented under Section 1, Rule II of the
1997 COA Rules of Proceduire, thus:
Section 1. General jurisdiction. - The
Commission on Audit shall have the power, authority, and duty to examine, audit
and settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property, owned or held in trust by, or
pertaining to the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned and controlled corporations with
original charters, and on a post-audit basis: (a) constitutional bodies,
commissions and offices that have been granted fiscal autonomy under the Constitution;
(b) autonomous state colleges and universities; (c) other government-owned or
controlled corporations and their subsidiaries; and (d) such non-governmental
entities receiving subsidy or equity directly or indirectly, from or through
the government, which are required by law or the granting institution to submit
to such audit as a condition of subsidy or equity. However, where the internal
control system of the audited agencies is inadequate, the Commission may adopt
such measures, including temporary or special pre-audit, as are necessary and
appropriate to correct the deficiencies. It shall keep the general accounts of
the Government, and for such period as may be provided by law, preserve the
vouchers and other supporting papers pertaining thereto.
x x x x
Specifically,
such jurisdiction shall extend over but not limited to the following cases and
matters involving: x x
x Money claims due from or owing to any government
agency x x x.
[42]
National Electrification
Administration v. Commission on Audit, supra note 36; Philippine
National Bank v. Palma, G.R. No. 157279, August 9, 2005, 466 SCRA 307; Public
Estates Authority v. Commission on Audit, G.R. No. 156537, January 24,
2007; Philippine Ports Authority v. Commission on Audit, G.R. No. 100773,
October 16, 1992, 214 SCRA 653; Manila International Airport Authority v.
Commission on Audit, G.R. No. 104217, December 5, 1994, 238 SCRA 714.