G.R. No. L-31337. December 20, 1973.
THE DIRECTOR OF THE BUREAU OF PRINTING AND THE EXECUTIVE SECRETARY, petitioners, vs. HON. ALBERTO J. FRANCISCO, as Presiding Judge of Branch IX of the Court of First Instance of Manila, and PACIFICO ADVINCULA, et al., respondents.

FACTS

Respondents, former and incumbent employees of the Bureau of Printing, filed a petition for certiorari and mandamus against petitioners to recover overtime differentials allegedly computed incorrectly on a flat monthly rate instead of their actual salaries. They appended a power of attorney from 114 employees authorizing Pacifico Advincula to prosecute the claim and to deduct 20% of any recovery as his fee. Petitioners, in their answer, contested the suit as one against the State without its consent and argued the claim was administratively settled, noting that the budget for fiscal year 1969-1970 already included an allotment for the payment of these differentials to all bureau employees. They also highlighted that a majority of employees had disclaimed the suit and opposed any deductions.
Pending a hearing on the merits, respondent judge issued three orders. The first, dated October 7, 1969, directed the Bureau Director to deduct and withhold 20% of the overtime differentials due to the named petitioners for attorney’s fees. The second order, dated October 13, 1969, amended the first to apply the 20% deduction to all bureau employees, declaring the case a class suit. The third order, dated November 4, 1969, required the deducted amounts to be deposited with the court.

ISSUE

Whether respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in issuing the three orders directing the deduction and deposit of 20% of the employees’ overtime differentials for attorney’s fees.

RULING

Yes. The Supreme Court granted the writs of certiorari and prohibition, annulling the challenged orders. The fundamental legal principle is that public funds are immune from seizure by attachment, garnishment, or execution. Money appropriated for the payment of government employees’ salaries and benefits, even if owed to them, retains its character as public funds until actually paid. Therefore, such funds cannot be subject to a court order for deduction or withholding to satisfy a contingent claim for attorney’s fees asserted by a private individual against the employees.
The Court emphasized that this prohibition applies with greater force to a mere contingent claim, as the validity of Advincula’s claim for a 20% fee had not been adjudicated. The orders effectively adjudicated this claim prematurely, without a hearing, and on a mistaken assumption of a class suit, especially since many employees had repudiated the authority granted to Advincula. The proper remedy for the claimed attorney’s fees was a separate action against the individual employees after they received their differentials. Consequently, the orders constituted grave abuse of discretion for violating the doctrine of non-suability of the State and the immunity of public funds from judicial processes aimed at their diversion before reaching the intended government creditors.