PHILIPPINE NATIONAL BANK vs HON.

JUDGE JAVIER PABALAN

GR No. L-33112, June 15, 1978

Facts:

 The reliance of petitioner Philippine National Bank in this certiorari and prohibition
proceeding against respondent Judge Javier Pabalan (Court of First Instance – La Union)
who issued a writ of execution, followed thereafter by a notice of garnishment of the funds
of respondent Philippine Virginia Tobacco Administration, deposited with it, is on the
fundamental constitutional law doctrine of non-suability of a state, it being alleged that such
funds are public in character.

 A judgment was rendered against Philippine Virginia Tobacco Administration (PVTA). Judge
Javier Pabalan issued a writ of execution followed thereafter by a notice of garnishment of
the funds of respondent PVTA which were deposited with the Philippine National Bank
(PNB). PNB objected on the constitutional law doctrine of non-suability of a state. It alleged
that such funds are public in character.

Issue:
Was the contention of PNB correct?
Ruling:
NO. It is to be admitted that under the present Constitution, what was formerly implicit as a
fundamental doctrine in constitutional law has been set forth in express terms: ―The State may not
be sued without its consent. If the funds appertained to one of the regular departments or offices in
the government, then, certainly such a provision would lie a bar to garnishment. Such is not the
case here. Garnishment would lie. The Supreme Court, in a case brought by the same petitioner
precisely invoking such doctrine, left no doubt that the funds of a public corporation could
properly be made the object of a notice of garnishment.
It is well settled that when the government enters into commercial business, its abandons
its sovereign capacity and is to be treated like any other corporation.