EN BANC

[G.R. No. L-25916. April 30, 1970.]

GAUDENCIO A. BEGOSA, Plaintiff-Appellee, v. CHAIRMAN, PHILIPPINE
VETERANS ADMINISTRATION; and MEMBERS OF THE BOARD OF
ADMINISTRATORS, PHILIPPINE VETERANS ADMINISTRATION,
Defendants-Appellants.
Jose V . Rosales for Plaintiff-Appellee.
Solicitor General, for Defendants-Appellants.

FACTS:
Plaintiff sought the aid of the judiciary to obtain the benefits to which he
believed he was entitled under the Veterans Bill of Rights.
He filed his claim for disability pension on March 4, 1995 but was erroneously
disapproved on June 21, 1955 due to his dishonorable discharge from the
army.
The Board of Administrators of Philippine Veterans Administration (PVA)
finally approved his claim on September 2, 1964, entitling him with a pension
of P30 a month, to take effect on October 5 of that year.
Believing that his pension should have taken effect back in 1955 when his
claim was disapproved, and that he is entitled to a higher pension of P50
(RA No. 1362 amending Section 9 of RA No. 65) as a permanently
incapacitated person, which was increased to P100 a month when RP
1362 was amended by RA No. 1920 on June 22, 1957, Begosa filed a
case against PVA in the Court of First Instance.
The Court of First Instance ruled in favor plaintiff. On the other hand,
defendants claim that the plaintiff has not exhausted all
administrative remedies before resorting to court action and that the
plaintiffs claim is in reality a suit against t h e G o v e r n m e n t w h i c h
cannot be entertained by this Court for lack of jurisdiction
because the Government has not given its consent.
ISSUE/S:

Whether or not the Supreme Court would entertain the suit against Philippine
Veterans Administration or if the doctrine of non-suability may appropriately
be invoked.
HELD/RULING:
The decision of the then Judge Edilberto Soriano of the Court of First Instance
of Manila promulgated on January 22, 1966, is affirmed.
RATIONALE:
Where a litigation may have adverse consequences on the public treasury,
whether in the disbursements of funds or loss of property, the public official
proceeded against not being liable in his personal capacity, then the
doctrine of non-suitability may appropriately be invoked.
However, it has no application where the suit against such a functionary had
to b e i n s t i t u t e d b e c a u s e o f h i s f a i l u re t o c o m p l y w i t h t h e d u t y
i m p o s e d b y statue appropriating public funds for the benefit of plaintiff.
Also, where there is a stipulation of facts, the question before the lower
court being s o l e l y o n e o f l a w a n d o n t h e f a c e o f t h e d e c i s i o n ,
t h e a c t u a t i o n o f a p p e l l a n t s b e i n g patently illegal, the doctrine of
exhaustion of administrative remedies certainly does not come into play.

G.R. Nos. 89898-99 October 1, 1990

MUNICIPALITY OF MAKATI, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE
GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL
FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R.
PASTRANA, respondents.
Defante & Elegado for petitioner.
Roberto B. Lugue for private respondent Admiral Finance Creditors'
Consortium, Inc.
RESOLUTION

FACTS:
Petitioner Municipality of Makati expropriated a portion of land owned by
private respondents, Admiral Finance Creditors Consortium, Inc. in 1986, In
lieu of an expropriation proceeding filed in court, petitioner Municipality of
Makati opened a bank account with the PNB Buendia Branch under
petitioner's name containing the sum of P417,510.00, pursuant to the
provisions of Pres. Decree No. 42. RTC Makati determined the cost of the said
land to be P5,291,666.00 minus the advanced payment of P338,160.00. It
issued the corresponding writ of execution accompanied with a writ of
garnishment of funds of the petitioner which was deposited in PNB. After this
decision became final and executory, a writ of execution was issued and a
Notice of Garnishment was served by respondent sheriff upon the manager
of the PNB Buendia Branch. However, respondent sheriff was informed that a
"hold code" was placed on the account of petitioner. Private respondent then
filed a motion praying for the court to order the bank to deliver to the sheriff
the unpaid balance, while petitioner also filed a motion to lift the
garnishment.
While these motions are pending, however, a Manifestation was filed,
informing the court that private respondent was no longer the owner of the
subject property and that ownership to this has been transferred to

Philippine Savings Bank, Inc. A compromise agreement was made

between private respondent and Philippine Savings Bank, Inc., which was
then approved by the court.
The court further ordered PNB Buendia Branch to immediately release to PSB
the sum of P4,953,506.45 which corresponds to the balance of the appraised
value of the subject property, from the garnished account of petitioner but
the bank failed to comply as it was still waiting for proper authorization from
the PNB head office enabling it to make a disbursement for the amount so
ordered.
As the case was in the Supreme Court, petitioner raised for the first time that
it had two accounts with PNB Buendia Branch: one was made exclusively for
the expropriation of the subject property, and the other is for statutory
obligations and other purposes of the municipal government.
ISSUE/S:
Whether or not the funds of the Municipality of Makati are exempt from
garnishment and levy upon execution.
HELD/RULING:
The Court Resolved to ORDER petitioner Municipality of Makati to
immediately pay Philippine Savings Bank, Inc. and private respondent the
amount of P4,953,506.45.
Petitioner is hereby required to submit to this Court a report of its compliance
with the foregoing order within a non-extendible period of SIXTY (60) DAYS
from the date of receipt of the resolution
The order of respondent RTC judge dated December 21, 1988, which was
rendered in Civil Case No. 13699, is SET ASIDE and the temporary restraining
order issued by the Court on November 20, 1989 is MADE PERMANENT.
RATIONALE:
It is well-settled is the rule that public funds are not subject to levy and
execution, unless otherwise provided for by statute.

More particularly, the properties of a municipality, whether real or personal,

which are necessary for public use cannot be attached and sold at execution
sale to satisfy a money judgment against the municipality.
Municipal revenues are derived from taxes, licenses and market fees, and
which are intended primarily and exclusively for the purpose of financing the
governmental activities and functions of the municipality, are exempt from
execution.
Absent a showing that the municipal council of Makati has passed an
ordinance appropriating from its public funds an amount corresponding to
the balance due under the RTC decision dated June 4, 1987, less the sum of
P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under
execution may be validly effected on the public funds of petitioner deposited
in Account No. S/A 263-530850-7.
However, this court orders petitioner to pay for the said land which has been
in their use already. This Court will not condone petitioner's blatant refusal to
settle its legal obligation arising from expropriation of land they are already
enjoying. The State's power of eminent domain should be exercised within
the bounds of fair play and justice.