G.R. Nos. 89898-99 October 1, 1990
Facts: Petitioner
Municipality of Makati expropriated a portion of land owned by private
respondents, Admiral Finance Creditors Consortium, Inc. After proceedings, the
RTC of Makati determined the cost of the said land which the petitioner must
pay to the private respondents amounting to P5,291,666.00 minus the advanced
payment of P338,160.00. It issued the corresponding writ of execution
accompanied with a writ of garnishment of funds of the petitioner which was
deposited in PNB. However, such order was opposed by petitioner through a
motion for reconsideration, contending that its funds at the PNB could neither
be garnished nor levied upon execution, for to do so would result in the
disbursement of public funds without the proper appropriation required under the
law, citing the case of Republic of the Philippines v. Palacio.The RTC
dismissed such motion, which was appealed to the Court of Appeals; the latter
affirmed said dismissal and petitioner now filed this petition for review.
Issue: Whether or
not funds of the Municipality of Makati are exempt from garnishment and levy
upon execution.
Held: It is petitioner's main contention that the orders
of respondent RTC judge involved the net amount of P4,965,506.45, wherein the
funds garnished by respondent sheriff are in excess of P99,743.94, which are
public fund and thereby are exempted from execution without the proper
appropriation required under the law. There is merit in this contention. In
this jurisdiction, well-settled is the rule that public funds are not subject
to levy and execution, unless otherwise provided for by statute. 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. Absent
a showing that the municipal council of Makati has passed an ordinance
appropriating the said amount from its public funds deposited in their PNB
account, no levy under execution may be validly effected. However, this court
orders petitioner to pay for the said land which has been in their use already.
This Court will not condone petitioner's blatant refusal to settle its legal
obligation arising from expropriation of land they are already enjoying. The
State's power of eminent domain should be exercised within the bounds of fair
play and justice.
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