GR No.

107271

September 10, 2003

City of Caloocan and Norma M. Abracia, petitioners,

Vs.

Hon. Mauro T. Allarde, presiding Judge of Branch 123, RTC of Caloocan City, Alberto A. Castillo, Deputy
Sherrif of Branch 123, RTC of Caloocan City, and Delfina Hernandez Santiago and Philippine National
Bank (PNB), respondents,

Facts:

1. In 1972, Marcial Samson, through Ordinance No. 1749, abolished the Assistant City
Administrator and 17 other positions from the local Government of Caloocan. Then Assistant
City Administrator Delfina Hernandez Santiago, and the 17 affected employees assailed the
legality of the abolition before the then CFI (Court of First Instance) of Caloocan City. CFI then
ordered the abolition illegal and ordered the reinstatement of all dismissed employees and
payment of their back salaries and other emoluments.

2. In 1986, the City Government of Caloocan paid respondent Santiago P75, 083.37 in partial
payment of her back wages, that leaves a balance of P530 761.91. Her co parties were paid in
full.

3. In 1987, the City of Caloocan appropriated funds for her unpaid back salaries, which was
included in Supplemental Budget No. 3 for the fiscal year, however the City refused to release
the money to respondent Santiago, who exerted effort for the execution of the remainder of the
money judgement but met opposition from the City of Caloocan. RTC issued a writ of execution
for the payment of the remainder of respondent’s back salaries and other emoluments.

4. The writ of execution was dismissed by the CA. One of the issues raised and resolved was the
extent to which back salaries and emoluments were due to respondent, which respondent was
only entitled to from 1983-1986. The petition was dismissed.

5. On July 27, 1992, the sheriff levied and sold at public auction some motor vehicles of the
Government for P100,000. The proceeds of the sale were turned over to respondent in partial
satisfaction of her claim, leaving a balance of P439,377.14.

6. In 1992, the City Council of Caloocan passed Ordinance No. 0134. Which included the amount of
P439.377.14 claimed by respondent as back salaries plus interest.
 7. The mayor refused to sign the payment for respondent’s claims, despite being one of the
signatories of the ordinance authorizing such payment. Thus, Judge Allarde ordered the sheriff
to immediately garnish the funds of the City Government corresponding to the claims of
respondent.

8. Petitioner argues that the garnishment of its funds in PNB was invalid since these were public
funds and thus exempt from execution.

Issue:

Whether or not the garnishment of funds in PNB ordered by the RTC is valid?

Ruling:

Held: The garnishment of funds ordered by the RTC is valid

The rule is that all government funds deposited in the PNB, or any other official depository of the
Philippine Government remain government funds and may not be subject to garnishment or levy, in the
absence of a corresponding appropriation as required by law. 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. Otherwise stated, the rule on the immunity of public funds from seizure or garnishment does not
apply where the funds sought to be levied under execution are already allocated by law specifically for
the satisfaction of the money judgement against the government.