MUNICIPALITY OF MAKATI VS CA

G.R. Nos. 89898-99 October 1, 1990

FACTS:
Petitioner Municipality of Makati expropriated a portion of land owned by private
respondents, Admiral Finance Creditors Consortium, Inc. After proceedings, the RTC of
Makati determined the cost of the said land which the petitioner must pay to the private
respondents amounting to P5,291,666.00 minus the advanced payment of P338,160.00.
It issued the corresponding writ of execution accompanied with a writ of garnishment of
funds of the petitioner which was deposited in PNB. However, such order was opposed
by petitioner through a motion for reconsideration, contending that its funds at the PNB
could neither be garnished nor levied upon execution, for to do so would result in the
disbursement of public funds without the proper appropriation required under the law,
citing the case of Republic of the Philippines v. Palacio. The RTC dismissed such motion,
which was appealed to the Court of Appeals; the latter affirmed said dismissal and
petitioner now filed this petition for review.

ISSUE:
Whether or not funds of the Municipality of Makati are exempt from garnishment
and levy upon execution.

HELD:
YES. It is petitioner's main contention that the orders of respondent RTC judge
involved the net amount of P4,965,506.45, wherein the funds garnished by respondent
sheriff are in excess of P99,743.94, which are public fund and thereby are exempted from
execution without the proper appropriation required under the law. There is merit in this
contention. In this jurisdiction, well-settled is the rule that public funds are not subject to
levy and execution, unless otherwise provided for by statute. Municipal revenues derived
from taxes, licenses and market fees, and which are intended primarily and exclusively
for the purpose of financing the governmental activities and functions of the municipality,
are exempt from execution. Absent a showing that the municipal council of Makati has
passed an ordinance appropriating the said amount from its public funds deposited in
their PNB account, no levy under execution may be validly effected. However, this court
orders petitioner to pay for the said land which has been in their use already. This Court
will not condone petitioner's blatant refusal to settle its legal obligation arising from
expropriation of land they are already enjoying. The State's power of eminent domain
should be exercised within the bounds of fair play and justice.