ADMINISTRATIVE
CIRCULAR NO. 10-2000TO
: ALL JUDGES OF LOWER COURTS
SUBJECT
: EXERCISE OF UTMOST CAUTION, PRUDENCE AND JUDICIOUSNESS IN THE
ISSUANCE
OF WRITS OF EXECUTION TO SATISFY MONEY JUDGMENTS AGAINST GOVERNMENT
AGENCIES
AND LOCAL GOVERNMENT UNITS.
In
order to prevent possible circumvention of the rules and procedures of
the Commission on Audit, judges are hereby enjoined to observe utmost
caution,
prudence and judiciousness in the issuance of writs of execution to
satisfy
money judgments against government agencies and local government
units.
Judges
should bear in mind that in Commissioner of Public Highways v .San
Diego
(31 SCRA 617, 625 [1970]), this Court explicitly stated:
"The
universal rule that where the State gives its consent to be sued by
private
parties either by general or special law, it may limit claimant's action
'only up to the completion of proceedings anterior to the stage of
execution'
and that the power of the Court ends when the judgment is rendered,
since
government funds and properties may not be seized under writs of
execution
or garnishment to satisfy such judgments, is based on obvious
considerations
of public policy. Disbursements of public funds must be covered by the
corresponding appropriation as required by law. The functions and
public
services rendered by the State cannot be allowed to be paralyzed or
disrupted
by the diversion of public funds from their legitimate and specific
objects,
as appropriated by law. Moreover,
it is settled jurisprudence that upon determination of State liability,
the prosecution, enforcement or satisfaction thereof must still be
pursued
in accordance with the rules and procedures laid down in P. D. No.
1445,
otherwise known as the Government Auditing Code of the Philippines
(Department
of Agriculture v. NLRC, 227 SCRA 693, 701-02 [1993] citing Republic vs.
Villasor, 54 SCRA 84 [1973]). All money claims against the
Government
must first be filed with the Commission on Audit which must act upon it
within sixty days. Rejection of the claim will authorize the claimant
to
elevate the matter to the Supreme Court on certiorari and, in effect,
sue
the State thereby (P. D. 1445, Sections 49-50).
However,
notwithstanding the rule that government properties are not subject to
levy and execution unless otherwise provided for by statute (Republic
v. Palacio, 23 SCRA 899 [1968]; Commissioner of Public Highways v. San
Diego, supra) or municipal ordinance (Municipality of
Makati
v. Court of Appeals, 190 SCRA 206 [1990]), the Court has, in
various
instances, distinguised between government funds and properties for
public
use and those not held for public use. Thus, in Viuda de Tan
Toco
v. Muncipal Council of Iloilo (49 Phil 52 [1926]), the Court ruled
that "[w]here property of a municipal or other public corporation
is
sought to be subjected to execution to satisfy judgments recovered
against
such corporation, the question as to whether such property is leviable
or not is to be determined by the usage and purposes for which it is
held."
The following can be culled from Viuda de Tan Toco v.
Municipal
Council of Iloilo:
1.
Properties held for public uses - and generally everything held for
governmental
purposes - are not subject to levy and sale under execution against
such
corporation. The same rule applies to funds in the hands of a public
officer
and taxes due to a municipal corporation.
2.
Where a municipal corporation owns in its proprietary capacity, as
distinguished
from its public or governmental capacity, property not used or used for
a public purpose but for quasi-private purposes, it is the general rule
that such property may be seized and sold under execution against the
corporation.
3. Property
held for public purposes is not subject to execution merely because it
is temporarily used for private purposes. If the public use is wholly
abandoned,
such property becomes subject to execution.
This
Administrative Circular shall take effect immediately and the Court
Administrator
shall see to it that it is faithfully implemented.
Issued
this 25th day of October, 2000 in the City of Manila.
[Sgd.]
HILARIO
G. DAVIDEChief
Justice
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