GR 154200; (July, 2007) (Digest)
G.R. No. 154200; July 24, 2007
NATIONAL ELECTRIFICATION ADMINISTRATION and its BOARD OF ADMINISTRATORS, Petitioners, vs. DANILO MORALES, Respondent.
FACTS
Respondent Danilo Morales and other NEA employees filed a class suit for payment of various allowances under R.A. No. 6758. The Regional Trial Court (RTC) granted the petition and issued a writ of execution. Subsequently, a notice of garnishment was issued against NEA’s funds with the Development Bank of the Philippines. NEA moved to quash the writs, invoking Section 41 of P.D. No. 1445 (the Government Auditing Code), which exempts public funds from execution, while manifesting its willingness to pay pending a supplemental budget request from the Department of Budget and Management (DBM).
The RTC denied the motion to quash but held the execution in abeyance for 90 days. The DBM later denied NEA’s request for a supplemental budget. Furthermore, the Commission on Audit (COA) issued an indorsement advising NEA against payment, citing its prior Decision No. 95-074, which had ruled on the entitlement to such benefits, and opining that the RTC had no jurisdiction over the money claims as COA possesses exclusive jurisdiction.
ISSUE
Whether the Court of Appeals erred in ordering the implementation of a writ of execution against the funds of the National Electrification Administration.
RULING
The Supreme Court ruled in favor of the petitioners and set aside the CA decision. The Court held that the garnishment of NEA’s public funds was improper. The legal logic rests on the doctrine of sovereign immunity from suit, extended to government agencies performing governmental functions, and the specific statutory exemption under Section 41 of P.D. No. 1445, which states that “no money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority.”
More critically, the Court emphasized the exclusive jurisdiction of the Commission on Audit over money claims against government agencies and instrumentalities. Under the Constitution and prevailing jurisprudence, the COA has the primary power to adjudicate all money claims due from or owing to any government agency. The RTC, therefore, lacked jurisdiction to entertain the original action for the payment of allowances. Since the judgment rendered by a court without jurisdiction is void, the writ of execution and garnishment derived from that void judgment are likewise void and unenforceable. The proper remedy for the respondents was to appeal the COA’s decision to the Supreme Court via a petition for certiorari under Rule 64, not to institute a separate action in the RTC.