CITY OF CALOOCAN V.

ALLARDE
GR No. 107271 (September 10, 2003)
On the Doctrine of State Immunity

City of Caloocan, et. al., petitioner, Judge Alberto A. Castillo, Delfina Hernandez Santiago and
Philippine National Bank, respondent.

FACTS

1. In 1972, Mayor Marcial Samson of Caloocan City, abolished the position of Assistant
City Administrator and 17 other positions (through an Ordinance). Then Asst. City Admin.
Delfina Hernandez Santiago and 17 others were affected. They assailed the legality of the
abolition before the CFI which declare the abolition illegal and ordered the reinstatement of all
the other dismissed employees and the payment of their back salaries and other
emoluments. This decision was affirmed by the CA and the SC.

2. In 1986, the City Govt paid respondent Santiago P 75,083.71 in partial of her back
wages, thereby leaving a balance of P530,761.91. Her co-parties were paid in full.

3. In 1987, the City Govt appropriated funds for her unpaid back salaries. However, the
City Govt refuse to release the money. Respondent, exerted effort and seek relief from RTC.
The RTC issued a writ of execution for the release of the remainder salaries. The petitioner
appealed to CA. The CA dismissed the case and also resolve that the respondent is entitled to
her salaries from 1983 to 1986. The petitioner appealed to SC. The SC dismissed the case.

4. The Sheriff levied and sold in public auction some motor vehicle of the City Govt. The
proceeds, amounting to P100,000.00 where turned over to petitioner.

5. On 1992, the City Council of Caloocan passed an Ordinance No. 0134 which included
the amount of Php 439,377.14 claimed by Respondent Santiago as back salaries, plus interest.

6. However, then Mayor Assistio refused to sign the managers check intended as
payment for Respondents Santiagos claim. The RTC (Judge Allarde) ordered to
immediately garnish the funds of the City Govt (deposited in PNB) corresponding to the
claim of Santiago.

7. The City Govt file a petition to the Supreme Court. Petitioner argues that the
garnishment of its funds in PNB was invalid as inasmuch as these were public funds and thus
exempt from execution.

ISSUE: Whether or not the garnishment of funds ordered by the RTC is valid.

HELD: Yes, the garnishment of funds ordered by the RTC is valid.

As a general rule, all government funds remain government funds may not be subject to
garnishment or levy, in the absence of a corresponding appropriation as required by law.
However, this rule is not absolute and admits of a well-defined definition exception, that is, when
there is a corresponding appropriation as required by law. Thus, the rule on the immunity of
public funds from seizure or garnishment does not apply where the funds sought to be levied
under execution are already allocated by law specifically for the satisfaction of the money
judgement against the government.
 In the instant case, the City Council already passed and approved Ordinance No. 0134
allocating the amount for respondent Santiagos back salaries plus interest. Thus this case fell
squarely within the exception. The ordinance was the corresponding appropriation as required
by law.