Philippine National Bank v. Court of Industrial Relations
REITERATIONFacts
The Antecedents: Petitioner Philippine National Bank (PNB) was sought to be garnished by respondent Gabriel V. Manansala, counsel for the prevailing party in Case No. 2810-V of the Court of Industrial Relations (CIR). The funds to be garnished were those of the People's Homesite and Housing Corporation (PHHC) deposited with PNB. Procedural History: A writ of execution had been issued in favor of Manansala. PNB filed a motion to quash the notice of garnishment, arguing that the PHHC funds might be public in character and that the deputy sheriff who served the writ was not legally authorized. The CIR denied the motion to quash. The Petition: PNB filed a petition for certiorari, assailing the CIR's order denying its motion to quash, alleging grave abuse of discretion. PNB contended that the authorization of the deputy sheriff was contrary to law and that the funds were public in character.
Issue(s)
Whether the order of the Court of Industrial Relations denying petitioner's motion to quash a notice of garnishment constitutes a grave abuse of discretion. Whether the funds of the People's Homesite and Housing Corporation deposited with petitioner are public in character and thus exempt from garnishment. Whether the appointment of respondent Gilbert P. Lorenzo as authorized deputy sheriff to serve the writ of execution was contrary to law.
Ruling
The petition for certiorari is dismissed. The order denying the motion to quash is affirmed.
Ratio Decidendi
On the issue of whether the order constitutes grave abuse of discretion: The Court found that the petition lacked merit. While the authorization of the deputy sheriff might be open to objection, the more fundamental ground raised by petitioner—that the funds were public in character—was not persuasive. The People's Homesite and Housing Corporation (PHHC) possessed a juridical existence, enabling it to sue and be sued, similar to other government-owned and controlled corporations. Therefore, its funds were not automatically exempt from garnishment. On the issue of whether PHHC funds are public and exempt from garnishment: The Court reiterated the doctrine established in National Shipyard and Steel Corporation v. Court of Industrial Relations and Manila Hotel Employees Association v. Manila Hotel Company. Government-owned and controlled corporations, despite being government entities, have distinct juridical personalities separate from the government itself. By engaging in business, they divest themselves of their sovereign character and are subject to the same rules as private corporations, including being sued and having their funds garnished. The assertion that PHHC funds were "public in character" was insufficient to grant exemption. On the issue of the deputy sheriff's authority: The Court noted that Republic Act No. 4201 had amended the Court of Industrial Relations Act, making the Clerk of Court the ex-officio sheriff. Therefore, the Clerk of Court had the authority to issue writs of execution and notices of garnishment nationwide. Even if there were a procedural defect in the appointment of a special deputy sheriff, the Court emphasized that the equities favored the private respondent due to the prolonged inability to execute the judgment. To delay execution further on a technicality would be to carry it to an absurd length, especially when the judgment had become final and executory.
Main Doctrine
Funds of a government-owned and controlled corporation with a distinct juridical personality are not exempt from garnishment, and the denial of a motion to quash such garnishment, even if based on a potentially flawed procedural ground, does not constitute grave abuse of discretion if the substantive issue is resolved correctly.