Title
Star Special Watchman and Detective Agency, Inc. vs. Puerto Princesa City
Case
G.R. No. 181792
Decision Date
Apr 21, 2014
Petitioners sought mandamus to enforce a final judgment for unpaid land compensation against Puerto Princesa City, but the Supreme Court denied it, ruling they must first exhaust administrative remedies by refiling with COA under P.D. No. 1445.

Case Summary (G.R. No. L-9637)

Key Dates

Relevant decision date for constitutional basis: April 21, 2014 (Supreme Court decision). RTC decisions and events: RTC-Br. 78 decision dated July 22, 1993; writ of execution issued February 17, 1994; negotiations and partial payments in 1996–1997; petitioners filed Civil Case No. Q-01-45668 on November 27, 2001; RTC-Br. 223 decision in favor of petitioners on November 18, 2003, final and executory January 20, 2004; writ of execution dated February 10, 2005; subsequent motions and COA/administrative correspondence through 2007–2008.

Applicable Law and Authorities

Primary constitutional framework: 1987 Philippine Constitution (decision rendered after 1990). Statutory and administrative authorities cited: Rule 65, Rules of Court (mandamus); Section 305(a) of the Local Government Code (appropriations requirement for payment from local treasuries); Presidential Decree No. 1445 (Government Auditing Code of the Philippines) — Sections 26, 49, 50; Supreme Court Administrative Circular No. 10-00 (October 25, 2000) directing caution in issuing writs of execution against government entities; COA Circular No. 2001-002 implementing the Supreme Court circular; pertinent jurisprudence cited in the decision (Municipality of Makati v. CA, Teresita M. Yujuico v. Atienza, Spouses Ortega v. City of Cebu, Uy Kiao Eng v. Nixon Lee, National Electrification Administration v. Morales, University of the Philippines v. Dizon).

Factual Background — Property and Taking

Petitioners owned two titled parcels in Puerto Princesa, later subdivided into seven lots. Encroachment occurred when the national government established the Western Command (Wescom) and constructed facilities and a road (Wescom Road) across petitioners’ property, specifically affecting Lot 7 (5,942 sq. meters, TCT No. 13680), which was used as a road right-of-way and later developed by the City with residences along it.

RTC-Br. 78 Judgment (July 22, 1993)

In Civil Case No. Q-90-4930, RTC-Br. 78 rendered judgment ordering the City of Puerto Princesa to pay just compensation at P1,500 per square meter for TCT No. 13680 (5,942 sq. meters) with twelve percent interest from March 12, 1990; to pay P2,000 monthly rental from 1986 until full payment; and to cancel and reissue the title after payment. Damages and attorney’s fees were dismissed; costs against defendant. That judgment became final and executory, leading to issuance of a writ of execution dated February 17, 1994.

Settlement Negotiations and Payments (1995–1997)

Following the RTC-Br. 78 judgment, parties negotiated a reduction of the total money judgment from about P16.93 million to P12 million, conditioned on an initial P2 million payment (February 1996) and subsequent monthly payments (initially P1 million, later reduced to P500,000). Respondents appropriated and disbursed a total of P12,000,000 to petitioners from February 6, 1996 to October 23, 1997, as certified by the City Treasurer. Petitioners later contended that the P12 million was not timely paid and that, as of October 31, 2001, an unpaid balance inclusive of interest totaled P10,615,569.63 and rentals amounted to P380,000 plus continuing monthly rentals.

RTC-Br. 223 Collection Suit and Judgment (November 18, 2003)

Petitioners filed Civil Case No. Q-01-45668 before RTC-Br. 223 on November 27, 2001, seeking collection of unpaid just compensation, interest, and rentals pursuant to the RTC-Br. 78 decision. After respondents waived presentation of evidence, RTC-Br. 223 rendered judgment on November 18, 2003 ordering Puerto Princesa City to pay: (1) P10,615,569.63 (the unpaid balance under the July 22, 1993 decision) with twelve percent interest per annum from November 27, 2001; and (2) P380,000 plus monthly rentals of P2,000 from November 2001 until full payment. Petitioners’ claim for attorney’s fees was denied. The decision became final and executory on January 20, 2004; a writ of execution followed (February 10, 2005).

Execution Attempts and RTC Orders Denying Garnishment

Petitioners filed multiple motions in the RTC-Br. 223 seeking garnishment of respondents’ bank accounts and orders compelling appropriation of funds. The court denied these motions (orders dated October 27, 2005; September 6, 2006; June 5, 2007), reasoning that under Section 305(a) of the Local Government Code, government funds cannot be paid out except pursuant to an appropriation ordinance or law, and thus public funds generally are not subject to levy, execution or garnishment. The court acknowledged petitioners’ entitlement to full compensation but emphasized the statutory and jurisprudential restrictions on executing against government funds.

Petitioners’ Administrative Claims and COA Correspondence

Petitioners filed a formal money claim with the Commission on Audit (COA) on July 13, 2007, seeking an order directing respondents to appropriate funds to satisfy the RTC-Br. 223 judgment; by that time petitioners calculated their claim to have increased substantially due to accumulated interest. COA, through its Legal and Adjudication Office-Local, declined to act on the ground that the matter was already at the execution stage and that COA lacked jurisdiction to intervene. COA reiterated this position in correspondence dated March 28, 2008. Respondents urged COA to reconsider; COA maintained its stance.

Remedies Sought and Procedural Posture

Having exhausted several administrative and judicial avenues (motions for execution, COA claim, complaints to the Ombudsman and DILG), petitioners filed a petition for mandamus under Rule 65 of the Rules of Court to compel the City and its officials to appropriate funds and satisfy the final judgment rendered by RTC-Br. 223, including interest until fully paid.

Issue Presented

Whether mandamus is the proper remedy to compel respondents (the City, Mayor, and City Council) to comply with the RTC-Br. 223 November 18, 2003 decision and to appropriate and pay the judgment debt plus interest until fully paid.

Petitioners’ Contentions

Petitioners argued that once the November 18, 2003 decision became final and executory, their right to payment was clear, definite and ministerial; respondents had a legal duty to comply. Mandamus is appropriate to compel the performance of a ministerial duty imposed by law or to enforce a public right when a government body fails to perform such duty. Delay in payment prejudiced petitioners and caused the judgment to balloon due to interest; respondents’ refusal harmed public interest by increasing liability.

Respondents’ Contentions

Respondents maintained they had fully settled the negotiated P12,000,000 as evidenced by vouchers, checks and an official certification. They argued mandamus was improper because the RTC-Br. 223 decision did not create a duty enforceable by mandamus in the manner sought; mandamus is not designed to enforce purely private contractual obligations. Further, respondents invoked Supreme Court Administrative Circular No. 10-00 and COA Circular No. 2001-002: money claims against the government must be processed under P.D. No. 1445; the COA has primary jurisdiction to audit, decide and settle such claims and must act within statutory periods before execution against governmental funds may proceed. They stressed that public funds can be subject to execution only with an appropriation ordinance or when funds are held in the government’s proprietary capacity.

Court’s Analysis — Availability and Limits of Mandamus

The Court recognized the equitable and prerogative nature of mandamus: it may compel the performance of a public duty when the right is clear and there is no plain, speedy and adequate remedy at law. Jurisprudence supports mandamus to compel an LGU to enact an appropriation ordinance and disburse municipal funds where an LGU unjustifiably refuses to satisfy a final money judgment (Municipality of Makati; Teresita M. Yujuico; Spouses Ortega). However, mandamus is inappropriate where administrative or statutory procedures remain available and capable of providing relief, and it cannot be used to enforce purely private contractual rights.

Court’s Analysis — COA’s Primary Jurisdiction Under P.D. No. 1445

The Court emphasized that P.D. No. 1445 grants COA the authority to examine, audit and settle all debts and claims of any sort due from or owing to the Government or its subdivisions (Section 26), and sets procedural avenues and timelines (Sections 49–50). Supreme Court Administrative Circular No. 10-00 and COA Circular No. 2001-002 further require judges to exercise caution in issuing writs of execution against government a

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