Philippine Rock Industries, Inc. V. Board of Liquidators, G.. No.

84992,
December 15, 1989

FACTS:
Petitioner, Philippine Rock Industries, Inc. (PHILROCK) filed in the Regional Trial Court of
Manila, a complaint against the Board of Liquidators as liquidator of the defunct Reparations
Commission (REPACOM), and prayed among others: that the defective rock pulverizing machinery
which it purchased from REPACOM be replaced with a new one, or to refund its value at 31% of its
contract price; and for actual damages for losses incurred, unrealized profits, exemplary damages, and
attorney's fees plus expenses and costs of the suit. Thereafter, the RTC rendered a decision in favor of
PHILROCK where petitioner filed an urgent Motion for Execution Pending Appeal. Solicitor
General, on behalf of the State, filed a notice of appeal and an opposition to the motion on the ground
that the funds sought to be garnished by PHILROCK are public funds, hence, exempt from attachment
and execution. Nevertheless, the RTC judge issued a Writ of Execution, an order of Garnishment
served to Philippine National Bank against the funds of REPACOM in the account of the Board of
Liquidators to satisfy judgment in favor of PHILOCK. The Board filed a petition for certiorari and
prohibition in the Court of Appeals where it set aside the RT's order of execution. PHILROCK filed
this petition for review and contended that the proceeds from the disposal of the assets of REPACOM
are funds appropriated by law.

ISSUE:
Whether the funds of REPACOM in the account of the Board of Liquidators, a government
agency, in the PB may be garnished to satisfy a money judgment in favor of PHILROCK?

HELD:
No. The Board is a government agency under the direct supervision of the President of the
Republic created by EO 372. Pursuant to PDs 629 and 635-A, it is tasked with the specific duty of
administering the assets and paying the liabilities of the defunct REPACOM and not created for profit
or to engage in business. Although the sale of the rock pulverizing plant is proprietary in nature, it
was merely incidental to the performance of the Board's primary governmental function of settling the
affairs of REPACOM. Hence, its funds in the PB are public funds exempt from garnishment.
Furthermore, being an unincorporated government agency, it possesses no juridical personality, and
suit directed against it, is a suit against its principal, the State. The state enjoys immunity from suit
except when it conducts business thru a government- owned and controlled corporation or a non-
corporate agency set up primarily for a business purpose. Contention of PHILROCK is not tenable,
for an executive order is not an appropriation law which must only emanate from the legislature, not
from the Chief Executive.