Case Summary (G.R. No. L-61744)
Factual Background
In Civil Case No. 604-B, entitled Margarita D. Vda. de Imperio, et al. vs. Municipal Government of San Miguel, Bulacan, et al., the then Court of First Instance of Bulacan rendered judgment on April 28, 1978 in favor of the private plaintiffs. The court ordered partial revocation of a Deed of Donation dated October 27, 1947 insofar as five lots totaling 4,646 square meters were concerned, directed reconveyance to the plaintiffs in specified undivided shares, restored ownership and possession, and awarded P64,440.00 for rentals collected from 1970 through 1975 plus legal interest, attorney's fees of P3,000.00, and costs.
Trial Court Judgment and Appeals
The trial court's judgment became final when the Municipality of San Miguel, Bulacan failed to file the record on appeal and its appeal was dismissed. That dismissal was affirmed by the then Court of Appeals in CA-G.R. No. SP-12118 and by this Court in G.R. No. 59938. Thereafter the plaintiffs moved for issuance of a writ of execution to satisfy the monetary and restorative components of the judgment.
Post-judgment Proceedings and Writ of Execution
On July 27, 1982 the respondent judge issued an order granting the plaintiffs' motion for execution and an alias writ of execution issued the same date. On July 30, 1982 the Municipality of San Miguel, Bulacan filed a motion to quash the writ of execution on the ground that the municipality's funds are public funds exempt from execution. The respondent judge denied the motion to quash by order dated August 23, 1982, leaving the alias writ in full force and effect. On September 13, 1982 the respondent judge ordered Municipal Treasurer Miguel C. Roura and Provincial Treasurer Agustin O. Talavera to comply with the money judgment and directed municipal authorities to desist from interfering with plaintiffs' legal possession. The court gave the defendants ten days to submit written compliance. When the treasurers failed to comply, the respondent judge ordered their arrest, authorizing release only upon compliance.
Petition and Issue Presented
The Municipality of San Miguel, Bulacan petitioned this Court for relief from the respondent judge's orders. The sole legal issue presented was whether the funds of the municipality, as handled by the Provincial Treasurer of Bulacan and the Municipal Treasurer of San Miguel, are public funds exempt from levy and execution and therefore not subject to the writs and orders issued to satisfy the money judgment in Civil Case No. 604-B.
Parties' Contentions
The petitioner maintained that municipal funds are public funds held in trust for the people and are exempt from execution. The petitioner pointed to Presidential Decree No. 477, Section 2 (a), which requires that money be paid out of the treasury only in pursuance of a lawful appropriation, and asserted that no ordinance of the Sangguniang Bayan had been shown to authorize payment to satisfy the judgment. The private plaintiffs proceeded by motion for execution and relied on the finality of the judgment and the respondent judge's authority to issue writs and enforcement orders. The record before this Court contained the respondent judge's orders but did not show any statutory or ordinance appropriation authorizing payment from municipal funds.
Legal Basis and Reasoning
The Court reiterated the settled doctrine that public funds and public property are not subject to levy and execution. The Court cited Municipality of Paoay vs. Manaois, 86 Phil. 629, for the proposition that municipal funds are held in trust for the people and that subjecting them to execution would defeat municipal purposes. The Court cited Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, to the effect that taxes and public revenues in the hands of officers of the law are not subject to execution unless statute so declares. The Court observed that Presidential Decree No. 477, Section 2 (a), establishes the principle that no money shall be paid out of the treasury except pursuant to a lawful appropriation, and that the case record did not demonstrate that the Sangguniang Bayan had enacted an ordinance appropriating funds for payment of the judgment. The Court further noted that the enforcement procedure for money judgments under Section 15, Rule 39 of the New Rules of Court contemplates levy upon property not otherwise exempt from execution and sale of levied property, a procedure not shown to have been followed in this case.
Ruling of the Supreme Court
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Case Syllabus (G.R. No. L-61744)
Parties and Procedural Posture
- Municipality of San Miguel, Bulacan was the petitioner before the Supreme Court seeking relief from execution orders issued by the trial court judge.
- Honorable Oscar C. Fernandez was the respondent in his capacity as Presiding Judge, Branch IV, Baliuag, Bulacan, whose orders were challenged.
- The Provincial Sheriff of Bulacan and the Provincial Treasurer of Bulacan were named respondents insofar as enforcement and compliance were concerned.
- Margarita D. Vda. de Imperio, Adoracion Imperio, Rodolfo Imperio, Conrado Imperio, Ernesto Imperio, Alfredo Imperio, Carlos Imperio, Jr., Juan Imperio, and spouses Marcelo Pineda & Lucila Pongco were the judgment creditors and respondents in the petition for prohibition.
- The petition challenged the issuance and enforcement of a writ of execution and orders directing the municipal and provincial treasurers to pay and submit compliance with a prior money judgment.
Key Factual Allegations
- The Court of First Instance of Bulacan, in Civil Case No. 604-B, rendered judgment on April 28, 1978, ordering partial revocation of a deed of donation and reconveyance of five lots formerly donated to the municipality.
- The April 28, 1978 judgment also ordered restoration of possession, payment of rentals totaling P64,440.00 from 1970 to 1975 with legal interest, and payment of P3,000.00 for attorney's fees.
- The municipality's appeal was dismissed for failure to file the record on appeal and that dismissal was affirmed by the Court of Appeals in CA-G.R. No. SP-12118 and by this Court in G.R. No. 59938.
- Following finality, respondents moved for execution, and the respondent judge issued an order on July 27, 1982, directing issuance of a writ of execution and an alias writ of execution.
- The petitioner filed a Motion to Quash the writ on July 30, 1982, alleging that municipal funds are public funds exempt from execution, which the trial judge denied on August 23, 1982.
- The trial court, by order dated September 13, 1982, directed the Municipal Treasurer of San Miguel and the Provincial Treasurer of Bulacan to comply with the money judgment and threatened arrest for noncompliance.
Procedural History
- The trial court rendered final judgment in favor of the private respondents on April 28, 1978, in Civil Case No. 604-B.
- The petitioner’s appeal was dismissed for failure to prosecute, and dismissal was affirmed in CA-G.R. No. SP-12118 and in G.R. No. 59938.
- The trial court issued writs of execution and compliance orders in July and September 1982, which prompted the present petition for relief in the Supreme Court.
- The Supreme Court entertained the petition and issued the challenged decision setting aside the trial court’s execution and compliance orders.