View full case

STAR SPECIAL WATCHMAN v. PUERTO PRINCESA CITY

FACTS:

Petitioners, who are owners of two parcels of land in Puerto Princesa City, filed an action for Payment of Just Compensation against the City of Puerto Princesa and other respondents. The court ordered the City of Puerto Princesa to pay petitioners certain amounts as just compensation and monthly rental fees. After the decision became final and executory, a writ of execution was issued. Petitioners later requested respondents to enact a continuing resolution for monthly payments until the full amount was paid.

The petitioners filed a complaint before the Regional Trial Court (RTC) against the respondents for collection of unpaid just compensation. The petitioners alleged that they were owed a balance of P10,615,569.63 inclusive of interests, as well as unpaid rentals. The RTC rendered a decision in favor of the petitioners, which became final and executory. The RTC granted the petitioners' motion for execution and issued a writ of execution. However, the petitioners filed motions asking the RTC to order the Land Bank of the Philippines to deliver the garnished account of the respondents or to order the respondents to appropriate funds for the payment of the money judgment. The RTC denied these motions, stating that government funds could not be subjected to execution, levy, or garnishment without a corresponding appropriation law or ordinance. The RTC directed the respondents to comply with its decision and pay the petitioners.

The petitioners filed a petition for mandamus to compel the respondents to comply with the RTC's decision and pay the petitioners the judgment debt, plus interests until fully paid. They argue that the respondents have unlawfully neglected to perform their duty to comply with the final and executory decision and pay the judgment debt. They also argue that the delay in the payment of just compensation has prejudiced their rights.

On the other hand, the respondents argue that they have fully settled and paid the amount of just compensation claimed by the petitioners as evidenced by vouchers and checks duly acknowledged by the petitioners. They claim that their obligation has been extinguished. Furthermore, they contend that a petition for mandamus is not the proper remedy to compel them to comply with the RTC's decision and that it is not a duty imposed by law. They assert that there is a proper procedure to enforce the said decision, as provided by Supreme Court Administrative Circular No. 10-2000 and COA Circular No. 2001-002. They also argue that the funds and property owned by the City Government for public purposes are not subject to execution. The respondents further allege that the petitioners have engaged in forum shopping by seeking similar remedies before different fora.

ISSUES:

  1. Whether the remedy of mandamus is available to compel a local government unit (LGU) to enact the necessary ordinance and approve the disbursement of funds to satisfy a final money judgment rendered against it.

  2. Whether mandamus is a proper recourse when there are other standard modes of procedure and forms of remedy available.

  3. Whether the writ of mandamus can be used to enforce contractual obligations.

  4. Whether mandamus can be issued when there is a plain, speedy, and adequate remedy in the ordinary course of law.

  5. Whether government properties are subject to levy and execution to satisfy money judgments.

  6. Whether or not the Commission on Audit (COA) has the authority and power to settle debts and claims owed by the Government or any of its subdivisions, agencies, and instrumentalities, even after a court's decision has become final and executory.

  7. Whether or not the COA erred in refusing to act on the formal money claim filed by the petitioners.

  8. Whether the Court of Appeals erred in reversing the decision of the Regional Trial Court (RTC) and directing immediate implementation of the writ of execution through garnishment of the funds of petitioners.

  9. Whether the RTC acted beyond its jurisdiction in authorizing the withdrawal of the garnished funds of the respondent.

RULING:

  1. The claimant may resort to the remedy of mandamus to compel an LGU to enact the necessary ordinance and approve the corresponding disbursement in order to satisfy the judgment award. This is applicable when the LGU fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it. The doctrine was established in previous cases, such as Municipality of Makati v. The Honorable Court of Appeals and Teresita M. Yujuico v. Hon. Jose L. Atienza.

  2. Mandamus is a proper remedy when a money judgment is rendered in favor of a property owner against an LGU. However, the writ of mandamus will not issue to compel an official to do anything that is not his duty to do or to give the applicant anything to which he is not entitled by law. It also will not be granted when there is a substantial dispute or doubt regarding the right being enforced.

  3. The writ of mandamus cannot be used to enforce contractual obligations.

  4. Mandamus can only be issued when there is no plain, speedy, and adequate remedy in the ordinary course of law.

  5. Government properties are generally not subject to levy and execution unless they are held for quasi-private purposes.

  6. Yes, the COA has the authority and power to settle debts and claims owed by the Government or any of its subdivisions, agencies, and instrumentalities, even after a court's decision has become final and executory. This authority is provided under Sections 26, 49, and 50 of P.D. No. 1445, also known as the Government Auditing Code of the Philippines. The COA retains its primary jurisdiction to adjudicate a claim even after the issuance of a writ of execution.

  7. Yes, the COA erred in refusing to act on the formal money claim filed by the petitioners. The COA should have exercised its authority and power to settle debts and claims and should have taken cognizance of the money claim. The COA's refusal to act encroached upon the prerogatives of the RTC and the fact that the case was already in the execution stage does not remove the COA's legal standing and jurisdiction.

  8. The Court held that the Court of Appeals erred in reversing the decision of the RTC. The settlement of the monetary claim against the petitioners was within the primary jurisdiction of the Commission on Audit (COA), as provided in Section 26 of Presidential Decree No. 1445. The COA's post-audit was still necessary despite the final and executory decision of the RTC validating the claim. Therefore, the implementation of the writ of execution through garnishment of the funds of the petitioners was premature.

  9. The RTC acted beyond its jurisdiction in authorizing the withdrawal of the garnished funds of the respondent. The RTC should have exercised utmost caution, prudence, and judiciousness in dealing with the motions for execution and garnishment. By authorizing the withdrawal of the garnished funds, the RTC exceeded its authority and all its orders and issuances in that regard were void and of no legal effect.

PRINCIPLES:

  • Public funds are not subject to levy and execution, unless otherwise provided for by statute.

  • Municipal properties necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality.

  • Municipal revenues derived from taxes, licenses, and market fees, intended for financing the governmental activities and functions of the municipality, are exempt from execution.

  • Mandamus is a remedy available to a property owner when a money judgment is rendered in its favor and against an LGU.

  • Mandamus is a proper recourse for citizens seeking to enforce a public right and to compel the performance of a public duty, especially when the public right involved is mandated by the Constitution.

  • The writ of mandamus will not be issued to compel an official to do anything that is not his duty to do or to give the applicant anything to which he is not entitled by law.

  • Mandamus cannot be used to enforce purely private contract rights.

  • Mandamus can only be issued when there is no other plain, speedy, and adequate remedy in the ordinary course of law.

  • Government properties are generally not subject to levy and execution unless they are held for quasi-private purposes.

  • Property held for public purposes is not subject to execution merely because it is temporarily used for private purposes. If the public use is wholly abandoned, such property becomes subject to execution.

  • The COA has the authority and power to settle debts and claims owed by the Government or any of its subdivisions, agencies, and instrumentalities, including government-owned or controlled corporations and their subsidiaries. This authority can still be exercised even if a court's decision has already become final and executory. The COA retains its primary jurisdiction to adjudicate a claim even after the issuance of a writ of execution.

  • The authority and powers of the Commission on Audit (COA) extend to all matters relating to auditing procedures, systems, and controls, as well as the audit and settlement of accounts and debts of the government or any of its subdivisions, agencies, and instrumentalities.

  • The settlement of a monetary claim against a government entity is subject to the primary jurisdiction of the COA, even if a final and executory decision already validated the claim.

  • The Regional Trial Court (RTC) should exercise utmost caution, prudence, and judiciousness in dealing with motions for execution and garnishment against a government entity, and should not authorize the withdrawal of garnished funds without the proper approval of the COA.