G.R. No. 181792 April 21, 2014
STAR SPECIAL WATCHMAN AND DETECTIVE AGENCY, INC., CELSO A. FERNANDEZ and MANUEL V. FERNANDEZ, Petitioners, vs. PUERTO PRINCESA CITY, MAYOR EDWARD HAGEDORN and CITY COUNCIL OF PUERTO PRINCESA CITY, Respondents.

FACTS

Petitioners owned land in Puerto Princesa City. The national government, in establishing the Western Command military camp, encroached on their property, specifically Lot 7, using it as a road right-of-way (“Wescom Road”). The City later developed this road. Petitioners filed an action for just compensation. On July 22, 1993, the RTC-Branch 78, Quezon City, rendered a decision ordering respondent Puerto Princesa City to pay petitioners ₱1,500 per square meter for the 5,942 sqm land, with 12% interest from March 12, 1990, and ₱2,000 monthly rental from 1986 until full payment. After this decision became final, a writ of execution was issued. The parties later negotiated, reducing the total judgment from ₱16,930,892.97 to ₱12,000,000, payable in installments. A certification from the City Treasurer showed respondents disbursed a total of ₱12,000,000 to petitioners from February 1996 to October 1997. Nevertheless, petitioners filed another complaint (Civil Case No. Q-01-45668) before the RTC-Branch 223, Quezon City, for collection of unpaid just compensation, interests, and rentals per the 1993 decision. On November 18, 2003, the RTC-Branch 223 rendered a decision ordering respondents to pay petitioners ₱10,615,569.63 (representing unpaid balance with 12% interest from November 27, 2001) and ₱380,000 plus ₱2,000 monthly rentals from November 2001 until full payment. This decision became final. Petitioners moved for execution. The RTC-Branch 223 issued a writ but later denied petitioners’ subsequent motions to garnish respondents’ bank account or compel appropriation of funds, citing Section 305(a) of the Local Government Code (that no money shall be paid out of the local treasury except pursuant to an appropriation ordinance or law) and Supreme Court Administrative Circular No. 10-00 enjoining caution in executing money judgments against government agencies. Petitioners’ motion to declare respondents in indirect contempt was also denied. Petitioners then wrote to the Commission on Audit (COA) requesting it to order respondents to pay. The COA, through letters dated July 7, 2007 and March 28, 2008, declined, stating it had no jurisdiction as the case was already in the execution stage. Petitioners also complained to the Office of the Ombudsman and the Department of Interior and Local Government. Hence, petitioners filed this Petition for Mandamus to compel respondents to enforce, implement, or pay the judgment award.

ISSUE

Whether a writ of mandamus may be issued to compel the respondents, a local government unit and its officials, to appropriate funds and pay a final and executory money judgment rendered against them.

RULING

No. The petition for mandamus is denied. Petitioners are enjoined to refile their claim with the Commission on Audit pursuant to P.D. No. 1445. The Supreme Court held that mandamus does not lie to compel the performance of a discretionary duty, such as the enactment of an appropriation ordinance by a local legislative body. The Court reiterated the doctrine that government funds are not subject to execution or garnishment unless there is a corresponding appropriation law or ordinance. The duty of a local government unit to pay a judgment debt is subject to the availability of funds and the proper appropriation by its Sanggunian. The proper remedy for the enforcement of a money judgment against a local government unit is not mandamus but a claim filed with the Commission on Audit, which has primary jurisdiction to adjudicate money claims against government agencies and local government units. The COA’s refusal to act on petitioners’ claim, based on its view that the case was in the execution stage, did not leave petitioners without remedy; they should have filed a petition for certiorari with the Supreme Court pursuant to Section 50 of P.D. No. 1445.