Philippine National Railways v. Union de Maquinistas
REITERATIONFacts
The Antecedents: The Philippine National Railways (PNR) was ordered by the Court of Industrial Relations (CIR) to deposit specific amounts totaling P36,983.50. These amounts represented (1) partial computation due to Mr. Juan Mercado for January 1, 1952, to December 31, 1953 (P7,608.66); (2) overtime compensation for motormen for January 1, 1956, to December 31, 1956 (P8,695.68); and (3) overtime compensation for Maquinistas and Fogoneros for five months in 1955 (P20,679.16). Procedural History: PNR filed a motion to defer payment, citing a previous CIR order dated October 22, 1966, which had deferred payment of other obligations due to PNR's poor financial condition. Without ruling on this motion, the CIR issued a writ of execution for the P36,983.50. PNR's subsequent motion to lift the writ and its motion for reconsideration were dismissed. The Petition: PNR filed a petition for certiorari, questioning the CIR's order and writ of execution, primarily on the grounds of the non-suability of government funds and the alleged inconsistency of the October 6, 1969 order with the previous order of October 22, 1966.
Issue(s)
Whether the funds of the Philippine National Railways could be garnished or levied upon on execution. Whether the CIR committed a grave abuse of discretion in issuing the order of October 6, 1969, allegedly contrary to a previous order made three years prior.
Ruling
The petition for certiorari is dismissed for lack of merit.
Ratio Decidendi
On the issue of garnishment and levy upon execution of PNR funds: The Court reiterated its rulings in Philippine National Bank v. Court of Industrial Relations and Philippine National Bank v. Honorable Judge Pabalan, holding that there is no legal bar to the garnishment or execution of funds belonging to a government-owned and controlled corporation like the PNR. The argument of non-suability based on the governmental character of the funds is unavailing because such corporations possess distinct legal personalities, empowering them to sue and be sued, and subjecting them to court processes like any other corporation. This principle is supported by prior jurisprudence, including National Shipyard and Steel Corporation v. Court of Industrial Relations and Manila Hotel Employees Association v. Manila Hotel Company, which established that when the government engages in commercial business through a corporation, it abandons its sovereign capacity and is treated like any other private corporation. On the issue of grave abuse of discretion due to inconsistency with a previous order: The Court found no grave abuse of discretion. A later order can supersede a previous one, especially after a lapse of time and considering altered conditions. The order in question directed PNR to make long overdue payments to its personnel, which were decreed to have reached finality. These amounts, while significant, were considerably smaller than the enormous sums (totaling over P1.8 million) deferred by the 1966 order, which were payable to counsel. The Court emphasized that the later order was in conformity with the social justice and protection to labor norms, and was dictated by a factual appraisal that the Court must leave undisturbed. The CIR's action was a reasonable response to the need for timely payment of employee compensation, contrasting with the massive deferred obligations previously addressed.
Main Doctrine
Funds of a government-owned and controlled corporation are not exempt from garnishment or levy upon execution, as such corporations have distinct legal personalities and can sue and be sued. A later order superseding a previous one is permissible, especially when conditions have changed or when the later order pertains to long overdue payments to personnel, aligning with social justice and labor protection principles.