CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners,v. HON. MAURO T.

ALLARDE, Presiding
Judge of Branch 123, RTC of Caloocan City, ALBERTO A.CASTILLO, Deputy Sheriff of Branch 123, RTC of
Caloocan City, and DELFINA HERNANDEZSANTIAGO and PHILIPPINE NATIONAL BANK (PNB),
respondents.

 G.R. No. 107271; September 10, 2003

FACTS: In 1972, Mayor Marcial Samson of Caloocan abolished the position of Assistant
City Administrator and 17 other positions via Ordinance No. 1749. The affected employees
assailed the legality of the abolition. The CFI in 1973 declared abolition illegal and ordered the
reinstatement of all the dismissed employees and the payment of their back-wages and other
emoluments. The City Government appealed the decision but such was dismissed.

In 1986 the City paid Santiago P75, 083.37 as partial payment of her back-wages. The others
were paid in full.

In 1987 the City appropriated funds for her unpaid back salaries but the City refused to release
the money to Santiago. The City of Caloocan argued that Santiago was not entitled to back
wages. On July 27, 1992 Sheriff Castillo levied and sold at public auction one of the motor
vehicles of the City Government for P100,000. The amount was given to Santiago. The City
Government questioned the validity of the motor vehicle; properties of the municipality were
exempt from execution. Judge Allarde denied the motion and directed the sheriff to levy and
schedule at public auction 3 more vehicles. On October 5, 1993 the City Council of Caloocan
passed Ordinance No. 0134 which included the amount of P439,377.14 claimed by Santiago as
back-wages, plus interest. Judge Allarde issued an order to the City Treasurer to release the
check but the City Treasurer can’t do so because the Mayor refuses to sign the check. On May
7, 1993, Judge Allarde ordered the Sheriff to immediately garnish the funds of the City of
Caloocan corresponding to the claim of Santiago. Notice of garnishment was forwarded to the
PNB but the City Treasurer sent an advice letter to PNB that the garnishment was illegal and
that it would hold PNB liable for any damages which may be caused by the withholding the
funds of the city.

ISSUE: Whether or not the funds of City of Caloocan, in PNB, may be garnished (i.e. exempt
from execution), to satisfy Santiago’s claim.

 HELD: Garnishment is considered a species of attachment by means of which the plaintiff

seeks to subject to his claim property of the defendant in the hands of a third person, or money
owed by such third person or garnishee to the defendant. The rule is and has always been that
all government funds deposited in the PNB or any other official depositary of the Philippine
Government by any of its agencies or instrumentalities, whether by general or special deposit,
remain government funds and may not be subject to garnishment or levy, in the absence of a
corresponding appropriation as required by law. Even though the rule as to immunity of a state
from suit is relaxed, the power of the courts ends when the judgment is rendered. Although the
liability of the state has been judicially ascertained, the state is at liberty to determine for itself
whether to pay the judgment or not, and execution cannot issue on a judgment against the
state. Such statutes do not authorize a seizure of state property to satisfy judgments recovered,
and only convey an implication that the legislature will recognize such judgment as final and
make provision for the satisfaction thereof. However, the rule is not absolute and admits of a
well-defined exception, that is, when there is a corresponding appropriation as required by law.

In such a case, the monetary judgment may be legally enforced by judicial processes. Herein,
the City Council of Caloocanalready approved and passed Ordinance No. 0134, Series of 1992,
allocating the amount of P439,377.14 for Santiago’s back-wages plus interest. This case, thus,
fell squarely within the exception. The judgment of the trial court could then be
validly enforced against such funds.