Caloocan City v. Allarde, GR No. 107721 (2003)

ISSUE:  Is Judge Allarde correct in ordering the garnishment of City funds to satisfy the judgment in favor of Santiago? 

FACTS:  The City Mayor, through an ordinance, abolished the position of Assistant City Administrator and 17 other positions from the plantilla of the local government of Caloocan. Later, all dismissed employees were paid their back wages except respondent Santiago who was only partially paid. When the City Council of Caloocan enacted appropriation Ordinance No. 0134, Series of 1992 which included the amount of P439,377.14 claimed by Santiago, Judge Allarde issued an order for the City of Caloocan to deliver to the RTC a manager’s check for the satisfaction of the judgment. When the City Mayor refused to sign the check intended for Santiago’s payment, Judge Allarde ordered the Sheriff to garnish the funds of the City of Caloocan. The order was questioned by the City contending their public funds are beyond the reach of garnishment. 

DECISION:  Yes, Judge Allarde's action were proper. 

RATIO DECIDENDI:  The rule is and has always been that all government funds may not be subject to garnishment or levy, in the absence of a corresponding appropriation as required by law. However, the rule admits a qualification, that is, when there is a corresponding appropriation as required by law. In other words, the rule on the immunity of public funds from seizure or garnishment does not apply where the funds sought to be levied under execution are already allocated by law specifically for the satisfaction of the money judgment against the government. In such a case, the monetary judgment may be legally enforced by judicial processes. Here, the amount was allocated for the back-pay obligation. Hence, The judgment of the trial court could then be validly enforced against such funds.