National Home Mortgage Finance Corporation v. Abayari
REITERATIONFacts
The Antecedents: Petitioner, the National Home Mortgage Finance Corporation (NHMFC), a government-owned and controlled corporation, employed respondents, who claimed to have been hired after June 30, 1989. The dispute centers on the entitlement of these employees to certain allowances and benefits (meal, rice, medical, dental, optical, children's allowances, and longevity pay) which were allegedly enjoyed by other NHMFC employees. The core of the issue lies in the interpretation of Section 12 of Republic Act No. 6758, the Compensation and Position Classification Act of 1989, and its implementing rules, specifically Corporate Compensation Circular No. 10 issued by the Department of Budget and Management (DBM). Procedural History: Respondents initiated a petition for mandamus with the Regional Trial Court (RTC) of Makati City, Branch 138, seeking payment of the aforementioned allowances. The RTC ruled in favor of the respondents, ordering NHMFC to pay the benefits retroactively. NHMFC appealed to the Court of Appeals (CA), which affirmed the RTC's decision. After the CA decision became final, respondents moved for execution. However, a Compromise Agreement was executed between the parties, with NHMFC agreeing to comply with the decision in installments. Subsequently, the DBM issued a letter disallowing the payment of certain allowances, including those awarded to respondents, citing the 2002 NHMFC Corporate Operating Budget. NHMFC then curtailed the grant of these benefits, prompting respondents to file a second motion for execution. The RTC granted this motion and issued a writ of execution and garnishment. NHMFC filed a petition for certiorari with the CA, assailing the RTC's orders. The CA dismissed the petition, finding no grave abuse of discretion by the RTC. The Petition: NHMFC filed this petition for review under Rule 45 of the Rules of Court, assailing the CA's decision that dismissed its petition for certiorari. NHMFC argues that the DBM's disallowance constituted a supervening event making execution inequitable and impossible, and that the trial court erred in disregarding the DBM's authority. It also contends that its funds, as a government-owned entity, cannot be garnished without proper appropriation. Respondents counter that the DBM's letter should not interfere with a final and executory judgment and that garnishment is permissible against NHMFC due to its separate juridical personality. The Supreme Court, however, found that the matter of allowing or disallowing money claims against NHMFC falls under the primary jurisdiction of the Commission on Audit (COA), and thus, the respondents' claim should have been filed with the COA first. The Court also noted that the trial court's judgment, being a special judgment in a mandamus case, was not executable by garnishment and that the amount sought to be garnished was not specified in the original decision.
Issue(s)
Whether the DBM's issuance constitutes a supervening event that would prevent the execution of the final judgment. Whether the trial court committed grave abuse of discretion in ordering the execution of the judgment by garnishment. Whether government funds of a government-owned and controlled corporation can be garnished without prior filing of a claim with the Commission on Audit (COA).
Ruling
The petition is GRANTED IN PART. The Writ of Execution dated February 16, 2004 is SET ASIDE. The RTC is DIRECTED to issue a writ of execution in accordance with Section 11, Rule 39, of the Rules of Court.
Ratio Decidendi
On the DBM's issuance as a supervening event: The Court found no compelling reason to rule on the merits of the DBM's issuance or its sufficiency to prevent execution, as the primary procedural defect of improper garnishment and the requirement of COA filing rendered the execution premature. The Court noted that it found nothing in the records to support the respondents' claim that they were incumbents as of July 1, 1989, the date provided in Section 12 of R.A. No. 6758, except their bare contention that they were hired after June 30, 1989. Therefore, any discussion on the DBM's issuance would be a futile exercise given the procedural infirmities. On the propriety of garnishment for a special judgment: The Court held that a writ of mandamus, being a special civil action, results in a special judgment that requires the performance of an act other than the payment of money. Section 11, Rule 39 of the Rules of Court governs the execution of such special judgments, which involves serving a certified copy of the judgment upon the party against whom it is rendered. Garnishment, as provided in Section 9, Rule 39, is applicable only to judgments for the payment of a sum of money. Therefore, the trial court committed a blatant error in ordering the garnishment of NHMFC's funds to satisfy the judgment, as the judgment in a mandamus case is not primarily for a specific sum of money. The amount of ₱4,806,530.00 was not even specified in the original decision being implemented. On the necessity of filing claims with the Commission on Audit (COA): Even assuming, for the sake of argument, that execution by garnishment could proceed, the Court stressed that NHMFC, as a government-owned or controlled corporation, has a charter of its own and a juridical personality separate from the government. However, for execution to ensue against its funds, a claim for the payment of the judgment award must first be filed with the Commission on Audit (COA). Commonwealth Act No. 327, as amended by P.D. No. 1445, vests the COA with the power to examine, audit, and settle all accounts pertaining to government revenues and expenditures, including money claims due from or owing to any government agency. Thus, the matter of allowing or disallowing a money claim against NHMFC falls within the primary power of the COA to decide. Respondents' claim, though validated by the trial court's final decision, must first be submitted to the COA before execution could proceed.
Main Doctrine
A writ of execution for a special judgment, such as that rendered in a special civil action for mandamus, cannot be enforced by garnishment. Furthermore, money claims against government-owned or controlled corporations must first be filed with the Commission on Audit (COA) before execution can proceed.