G.R. No.

154200
NATIONAL ELECTRIFICATION ADMINISTRATION vs DANILO MORALES
July 24, 2007
FACTS:
Danilo Morales and 105 other employees of the NEA filed with the RTC,
Branch 88, Quezon City, a class suit against their employer for payment of rice
allowance, meal allowance, medical/ dental /optical allowance, children
allowance and longevity pay purportedly authorized under RA No. 6758. The RTC
granted the petition. Upon Motion, the RTC issued a Writ of Execution and a
Notice of Garnishment was issued against the funds of NEA with DBP amounting
to P16,581,429.00. NEA filed a Motion to Quash Writs of Execution/Garnishment,
claiming that the garnished public funds are exempt from execution under
Section 4 of PD No. 1445, but manifesting that it is willing to pay the claims only
that it has no funds to cover the same, although it already requested the
Department of Budget and Management (DBM) for a supplemental budget. RTC
denied the Motion to Quash but held in abeyance the implementation of the Writ
of Execution. Morales, et al. filed a Partial Motion for Reconsideration but the RTC
denied it.
In a letter dated June 28, 2000, former DBM Secretary Benjamin E. Diokno
informed NEA of the denial of its request for a supplemental budget on the
ground that the claims under R.A. No. 6758 which the RTC had ordered to be
settled cannot be paid because Morales, et al. are not incumbents of positions as
of July 1, 1989 who are actually receiving and enjoying such benefits. Moreover,
in an Indorsement dated March 23, 2000, the COA advised NEA against making
further payments in settlement of the claims of Morales, et al.. Apparently, COA
had already passed upon claims similar to those of Morales, et al. in its earlier
Decision dated January 25, 1995. Records do not indicate when Morales, et al.
were appointed. Even the December 16, 1999 RTC Decision is vague for it merely
states that they were appointed after June 30, 1989, which could mean that they
were appointed either before the cut-off date of October 31, 1989 or after. Thus,
there is not enough basis for this Court to determine that the foregoing COA
Decision No. 95-074 adversely affects Morales, et al.
Morales, et al. filed a Motion to Implement the Writ of Execution, pointing
out that the reason cited in the May 17, 2000 RTC Order for suspension of the
implementation of the writ of execution no longer exists given that DBM already
denied NEAs request for funding. The same was denied. The RTC issued an Order
dated January 8, 2001, denying the Motion for an Order to Implement Writ of
Execution. A Petition for Certiorari was filed before the CA which was granted,
directing the Implementation of the Writ of Execution. CA held that, being a
GOCC, petitioner NEA may be subjected to court processes just like any other
corporation; specifically, its properties may be proceeded against by way of
garnishment or levy. Thus, this petition for review.
ISSUE:
Whether the Court of Appeals (CA) committed an error of law in ordering
the implementation of a writ of execution against the funds of the National
Electrification Administration (NEA).
RULING:
Meritorious. Respondents cannot proceed against the funds of petitioners
because the RTC 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 petitioners to settle the claims of respondents in accordance with

existing regulations of the COA.
In its plain text, the RTC Decision merely directs petitioners to settle the claims of
[respondents] and other employees similarly situated. It does not require
petitioners to pay a certain sum of money to respondents. The judgment is only
for the performance of an act other than the payment of money, implementation
of which is governed by Section 11, Rule 39 of the Rules of Court, which
provides:
Section 11. Execution of special judgments. - When a judgment requires the
performance of any act other than those mentioned in the two preceding
sections, a certified copy of the judgment shall be attached to the writ of
execution and shall be served by the officer upon the party against whom the
same is rendered, or upon any other person required thereby, or by law, to obey
the same, and such party or person may be punished for contempt if he disobeys
such judgment.
Garnishment cannot be employed to implement such form of judgment. Under
Section 9 of Rule 39, to wit:
Section 9. Execution of judgments for money, how enforced. xxxx
(c) Garnishment of debts and credits. - The officer may levy on debts due the
judgment obligor and other credits, including bank deposits, financial interests,
royalties, commissions and other personal property not capable of manual
delivery in the possession or control of third parties. Levy shall be made by
serving notice upon the person owing such debts or having in his possession or
control such credits to which the judgment obligor is entitled. The garnishment
shall cover only such amount as will satisfy the judgment and all lawful fees.
Garnishment is proper only when the judgment to be enforced is one for
payment of a sum of money.
Petitioner NEA is a GOCC -- a juridical personality separate and distinct from the
government, with capacity to sue and be sued. As such, NEA 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.
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 this Court.
All told, the RTC acted prudently in halting implementation of the writ of
execution to allow the parties recourse to the processes of the COA. It may be
that the tenor of the Indorsement issued by COA already spells doom for
respondents claims; but it is not for this Court to pre-empt the action of the COA
on the post-audit to be conducted by it.

WHEREFORE, the petition is GRANTED. The July 4, 2002 Decision of the Court of
Appeals is REVERSED and SET ASIDE. The Resolution dated December 11,
2000 and Order dated January 8, 2001 of the Regional Trial Court, Branch
88,Quezon City in Special Civil Action No. Q-99-38275 are REINSTATED.

RUBY MAE B. SIGUAN