Case Summary (G.R. No. L-30671)
Undisputed Factual Background
On July 3, 1961, the Court of First Instance of Cebu confirmed an arbitration award in favor of P. J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation against the Republic. In June 1969, the judge ordered execution of that judgment. Sheriffs then served garnishment notices on banks holding AFP deposits—public funds for pensions, personnel pay, and operations.
Jurisdictional and Discretionary Challenge
The Republic contended that the issuance of an alias writ against AFP funds constituted excess of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction. Since public funds are immune from execution absent explicit consent, any garnishment order against them is null and void.
Sovereign Immunity Under the Constitution
The Court reaffirmed the fundamental principle that the State may not be sued without its consent, inherent in the 1935 Constitution and made explicit in the revised charter (Art. XV, Sec. 16, 1973 Constitution). Sovereignty shields government bodies and their funds from judicial processes unless the legislature authorizes suit and prescribes the extent of liability.
Immunity of Public Funds from Execution
Consistent with established jurisprudence, the Court held that even when the State consents to be sued and a judgment is obtained, execution cannot reach public funds or appropriated moneys. Disbursing officers hold such funds in trust for specific
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Facts of the Case
- On July 3, 1961, Special Proceedings No. 2156-R resulted in a decision confirming an arbitration award of ₱1,712,396.40 in favor of P. J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation, against the Republic of the Philippines.
- On June 24, 1969, Judge Guillermo P. Villasor issued an order declaring the July 3, 1961 decision final and executory, and directed the Sheriffs of Rizal Province, Quezon City, and Manila to execute it.
- On June 26, 1969, an alias writ of execution was issued pursuant to the June 24 order.
- On June 28, 1969, the Provincial Sheriff of Rizal served garnishment notices on several banks to attach “monies due the Armed Forces of the Philippines in the form of deposits” to satisfy the writ. The Philippine Veterans Bank received its garnishment notice on June 30, 1969.
- The deposits targeted by garnishment were public funds appropriated for AFP pensions, pay and allowances of military and civilian personnel, and AFP maintenance and operations, as certified by the AFP Comptroller on July 3, 1969.
Procedural History
- July 7, 1969: The Republic filed a petition for certiorari and prohibition, alleging that Judge Villasor acted with excess of jurisdiction or grave abuse of discretion by issuing an alias writ of execution against public (AFP) funds.
- Respondents, through counsel, admitted the material facts but corrected the total award to ₱2,372,331.40.
- The Republic invoked this Court’s original jurisdiction to nullify the order of June 24, 1969 and the