CITY OF CALOOCAN and NORMA M. ABRACIA,petitioners,v.

HON. MAURO T. ALLARDE, Presiding Judge of Branch 123, RTC of Caloocan City, ALBERTO A.CASTILLO, Deputy
Sheriff of Branch 123, RTC of Caloocan City, and DELFINA HERNANDEZSANTIAGO and PHILIPPINE NATIONAL BANK
(PNB)respondents.
G.R. No. 107271; September 10, 2003
CORONA,J.:
FACTS:
In 1972, Mayor Marcial Samson of Caloocan abolished the position of Assistant City Administrator and 17 other
positions via Ordinance No. 1749. The affected employees assailed thelegality of the abolition. The CFI
in 1973 declared abolition illegal and ordered the reinstatement of all the dismissed employees and the payment of
their back-wages and other emoluments. The City Government appealed the decision but such was dismissed.
In 1986 the City paid Santiago P75,083.37 as partial payment of her back-wages. The others were paid in full.
In 1987 the City appropriated funds for her unpaid back salaries (supplemental budget #3) but the City refused to
release the money to Santiago. The City of Caloocan argued that Santiago was not entitled to back wages. On July
27, 1992 Sheriff Castillo levied and sold at public auction one of the motor vehicles of the City Government for
P100,000.The amount was given to Santiago. The City Government questioned the validity of the motor vehicle;
properties of the municipality were exempt from execution. Judge Allarde denied the motion and directed the sheriff
to levy and schedule at public auction 3 more vehicles. On October 5, 1993 the City Council of Caloocan passed
Ordinance No. 0134 which included the amount of P439,377.14 claimed by Santiago asback-wages, plus interest.
Judge Allarde issued an order to the City Treasurer to release the check but the City Treasurer cant do so because
the Mayor refuses to sign the check. On May 7, 1993. Judge Allarde ordered the Sheriff to immediately garnish the
funds of the City Government of Caloocan corresponding to the claim of Santiago. Notice of garnishment was
forwarded to the PNB but the City Treasurer sent an advice letter to PNB that the garnishment was illegal and that it
would hold PNB liable for any damages which may be caused by the withholding the funds of the city.
ISSUE: Whether or not the funds of City of Caloocan, in PNB, may be garnished (i.e. exempt from execution), to
satisfy Santiagos claim.
HELD:
Garnishment is considered a specie of attachment by means of which the plaintiff seeks to subjectto his claim
property of the defendant in the hands of a third person, or money owed by such third personor garnishee to the
defendant. The rule is and has always been that all government funds deposited inthe PNB or any other official
depositary of the Philippine Government by any of its agencies or instrumentalities, whether by general or special
deposit, remain government funds and may not be subject to garnishment or levy, in the absence of a
corresponding appropriation as required by law. Even though the rule as to immunity of a state from suit is relaxed,
the power of the courts ends when the judgment is rendered. Although the liability of the state has been judicially
ascertained, the state is at liberty to determine for itself whether to pay the judgment or not, and execution cannot
issue on a judgment against the state. Such statutes do not authorize a seizure of state property to satisfy
judgments recovered, and only convey an implication that the legislature will recognize such judgment as final and
make provision for the satisfaction thereof. However, the rule is not absolute and admits of a well-defined
exception, that is, when there is a corresponding appropriation as required by law.
In such a case, the monetary judgment may be legally enforced by judicial processes. Herein, the City Council of
Caloocan already approved and passed Ordinance No. 0134, Series of 1992, allocating the amount of
P439,377.14for Santiagos back-wages plus interest. This case, thus, fell squarely within the exception. The
judgment of the trial court could then be validly enforced against such funds.