Ortega v. City of Cebu
REITERATIONFacts
1. The Antecedents: Spouses Ciriaco and Arminda Ortega are the registered owners of a parcel of land in Cebu City. A portion of this land was occupied by squatters, leading the Spouses Ortega to file an ejectment case which they won, with the decision becoming final and executory. Subsequently, the City of Cebu enacted an ordinance to expropriate half of the Spouses Ortega's land for public use, specifically for a socialized housing program, and appropriated funds for this purpose based on a valuation by the City Appraisal Committee. 2. Procedural History: Following the enactment of the ordinance, Cebu City filed an eminent domain case against the Spouses Ortega. The Regional Trial Court (RTC) issued an order of expropriation and later, a revised order fixing the just compensation at P11,000.00 per square meter, totaling P31,416,000.00. Cebu City failed to appeal this decision, and a writ of execution was issued. The RTC subsequently ordered the garnishment of Cebu City's bank account to satisfy the judgment. Cebu City filed multiple motions to stay execution, modify the judgment, and dissolve the garnishment, all of which were denied by the RTC. These denials led to two separate petitions for certiorari filed by Cebu City before the Court of Appeals (CA). 3. The Petition: Both the Spouses Ortega and Cebu City filed petitions for review on certiorari with the Supreme Court, assailing the CA's decision. The Spouses Ortega sought to enforce the RTC's judgment, while Cebu City aimed to withdraw from the expropriation proceedings or have the garnishment declared illegal. The core issues presented to the Supreme Court involved whether Cebu City could withdraw from the expropriation after the order of expropriation had become final, and whether its bank deposits, particularly those appropriated for other purposes or non-existent, could be subject to garnishment to satisfy the judgment for just compensation.
Issue(s)
Whether the CA erred in affirming the RTC’s denial of Cebu City’s Omnibus Motion to Modify Judgment and to be Allowed to Withdraw from the Expropriation Proceedings. Whether the deposit of Cebu City with the Philippine Postal Bank, appropriated for a different purpose by its Sangguniang Panglungsod, can be subject to garnishment as payment for the expropriated lot covered by City Ordinance No. 1519.
Ruling
The Supreme Court denied both petitions, affirming the decision of the Court of Appeals. The Court held that Cebu City could no longer withdraw from the expropriation proceedings as the case had become final and executory. It also ruled that Cebu City's bank deposit, even if appropriated by Ordinance No. 1519, was not specifically designated for the payment of just compensation and was thus exempt from garnishment, especially since the account number cited in the ordinance did not exist with the Philippine Postal Bank.
Ratio Decidendi
On the issue of withdrawal from expropriation proceedings: The Court affirmed the CA's ruling that Cebu City could not withdraw from the expropriation proceedings. Citing Section 4, Rule 67 of the Rules of Court, the Court explained that expropriation proceedings have two stages: the determination of the right to expropriate and the determination of just compensation. An order of expropriation signifies the end of the first stage and cannot be appealed to prevent the determination of just compensation. Since Cebu City failed to appeal the order of expropriation and the subsequent order fixing just compensation, these orders became final and executory. The Court emphasized that after an order of expropriation, the plaintiff cannot dismiss or discontinue the proceeding except on terms deemed just and equitable by the court, and Cebu City's contention that the compensation was too high was a "ridiculous contention" as the determination of just compensation is a judicial prerogative. The Court reiterated that the executive or legislative branches may make initial determinations, but the courts ultimately decide "just-ness" of the compensation. On the issue of garnishment of public funds: The Court upheld the CA's disquisition that while Spouses Ortega's claim was valid, the RTC could not order the City Council to enact an appropriation ordinance. The proper remedy for Spouses Ortega would be to file a mandamus case to compel the Sangguniang Panglungsod to enact the necessary ordinance. The Court reiterated the settled rule that government funds and properties are generally exempt from garnishment to satisfy judgments due to public policy, as disbursements must be covered by corresponding appropriations. The Court noted that Ordinance No. 1519 appropriated ₱3,284,400.00, but the cited account number (101-8918-334) did not exist with the Philippine Postal Bank, as certified by the bank itself. Therefore, the garnishment of Cebu City's bank account was illegal because there was no valid appropriation ordinance for the specific purpose, and the account was not specifically opened or appropriated for the payment of just compensation, making it exempt from garnishment. The Court cited Municipality of Makati v. Court of Appeals to support the principle that levy on public funds under execution may not be validly effected without a corresponding ordinance appropriating the funds.
Main Doctrine
A municipality cannot withdraw from expropriation proceedings after an order of expropriation has been issued and the period to appeal has lapsed, as the proceedings have become final and executory. Furthermore, government funds and properties are generally exempt from garnishment to satisfy judgments due to public policy, and disbursements must be covered by proper appropriation ordinances.