IMMUNITY OF STATE

Q —    A judgment was rendered against the National Electrification Administration to settle the claims of some employees to extend to them the benefits and allowances to which they are entitled to. Upon its becoming final and executory, a motion for execution was filed which was granted. A writ of execution was issued and thereafter, there was garnishment of funds of the NEA to the extent of P16, 581,429.00. There was a motion to quash the writ which was denied, but ordered the suspension of its implementation. Later on, the RTC denied the Motion for an Order to Implement the Writ of Execution. The CA upon petition for certiorari reversed the order ruling that it is subject to court processes like levy or garnishment. Is the ruling correct? Why?

ANS:   No. Without question, NEA is a GOCC, a juridical personality separate and distinct from the government, with capacity to sue, and be sued. (PD 269, Sec. 4). As such, it cannot evade execution; its funds may be garnished or levied upon in satisfaction of a judgment rendered against it. However, before execution may proceed against it, a claim for payment of the judgment award must first be filed with the COA. (Parreño v. COA, G.R. No. 162224, June 7, 2007).

            Under Commonwealth Act No. 327, as amended by Section 26 of P.D. No. 1445, it is the COA which has primary jurisdiction to examine, audit and settle “all debts and claims of any sort” due from or owing the Government or any of its subdivisions, agencies and instrumentalities, including government-owned or controlled corporations and their subsidiaries. With respect to money claims arising from the implementation of R.A. No. 6758, their allowance or disallowance is for COA to decide, subject only to the remedy of appeal by petition for certiorari to the Court.

            The rule is that, the funds of NEA cannot be proceeded upon pursuant to the decision because the decision sought to be satisfied is not a judgment for a specific sum of money susceptible of execution by garnishment; it is a special judgment requiring petitioner to settle the claims of respondents in accordance with existing regulations of the COA. (Rule 39, Sec. 9(c), Rules of Court; NEA v. Morales, G.R. No. 154200, July 24, 2007).