DEPARTMENT OF BUDGET AND MANAGEMENTvs.MANILA’S FINEST RETIREES ASSOCIATION, INC. G.R. No. 169466, May 9, 2007, 523 SCRA 90
Facts:
The University of the Philippines (UP) entered into a General Construction Agreement with respondent Stern Builders Corporation (Stern Builders) for the construction and renovation of the buildings in the campus of the UP in Los Bas. They already paid the first and second billing but the third billing worth P273,729.47 was not paid due to its disallowance by the Commission on Audit (COA). Thus, this prompt Stern Builders to sue UP to collect the unpaid balance.
The RTC rendered judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter to pay plaintiff, jointly and severally ordering UP to pay Stern Builders. Then, UP filed its motion for reconsideration.
Stern Builders and dela Cruz opposed the notice of appeal on the ground of its filing being belated, and moved for the execution of the decision. The UP countered that the notice of appeal was filed within the reglementary period. The RTC denied the motion.
The denial of the said motion was served upon Atty. Felimon Nolasco (Atty.Nolasco) of the UPLB Legal Office on May 17, 2002. Notably, Atty. Nolasco was not the counsel of record of the UP but the OLS inDiliman, Quezon City. Thereafter, the UP filed a notice of appeal on June 3, 2002.
However, the RTC denied due course to the notice of appeal for having been filed out of time. On October 4, 2002, upon motion of Stern Builders, the RTC issued the writ of execution. On appeal, both the CA and the High Court denied UPs petition. The denial became final and executory.
Hence, Stern Builders filed in the RTC its motion for execution despite their previous motion having already been granted and despite the writ of execution having already issued.
On June 11, 2003, the RTC granted another motion for execution filed on May 9, 2003 (although the RTC had already issued the writ of execution on October 4, 2002). Consequently, the sheriff served notices of garnishment to the UPs depositary banks and the RTC ordered the release of the funds. Aggrieved, UP elevated the matter to the CA. The CA sustained the RTC. Hence, this petition.
Issues:
WHETHER THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISMISSING THE PETITION, ALLOWING IN EFFECT THE GARNISHMENT OF UP FUNDS
WHETHER THE COURT OF APPEALS COMMITTED GRAVE ERROR IN ALLOWING GARNISHMENT OF A STATE UNIVERSITY’S FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF THE CONSTITUTION.
Ruling:
1.
The Court ruled that UP’s funds, being government funds, are not subject to garnishment.Despite its establishment as a body corporate,64 the UP remains to be a "chartered institution" performing a legitimate government function. It is an institution of higher learning, not a corporation established for profit and declaring any dividends.
In enacting Republic Act No. 9500 (The University of the Philippines Charter of 2008), Congress has declared the UP as the national university "dedicated to the search for truth and knowledge as well as the development of future leaders Presidential Decree No. 1445 defines a "trust fund" as a fund that officially comes in the possession of an agency of the government or of a public officer as trustee, agent or administrator, or that is received for the fulfillment of some obligation.
A trust fund may be utilized only for the "specific purpose for which the trust was created or the funds received."The funds of the UP are government funds that are public in character. They include the income accruing from the use of real property ceded to the UP that may be spent only for the attainment of its institutional objectives. marked distinction exists between suability of the State and its liability.
As the Court succinctly stated in Municipality of San Fernando, La Union v. Firme: A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable.
The CA and the RTC thereby unjustifiably ignored the legal restriction imposed on the trust funds of the Government and its agencies and instrumentalities to be used exclusively to fulfill the purposes for which the trusts were created or for which the funds were received except upon express authorization by Congress or by the head of a government agency in control of the funds, and subject to pertinent budgetary laws, rules and regulations.
Indeed, an appropriation by Congress was required before the judgment that rendered the UP liable for moral and actual damages (including attorney’s fees) would be satisfied considering that such monetary liabilities were not covered by the "appropriations earmarked for the said project."
The Constitution strictly mandated that "(n)o money shall be paid out of the Treasury except in pursuance of an appropriation made by law."
2.
On the other hand, the period of appeal did not start without effective service of decision upon counsel of record; the Fresh-period rule announced in Neypes v. Court of Appeals can be given retroactive application. The UP next pleads that the Court gives due course to its petition for review in the name of equity in order to reverse or modify the adverse judgment against it despite its finality.
At stake in the UP’s plea for equity was the return of the amount of the llegally garnished from its trust funds. Obstructing the plea is the finality of the judgment based on the supposed tardiness of UP’s appeal, which the RTC declared on September 26, 2002.
The CA upheld the declaration of finality and the Court itself denied the UP’s petition for review.The denial became final on November 12, 2004. It is true that a decision that has attained finality becomes immutable and unalterable, and cannot be modified in any respect,even if the modification is meant to correct erroneous conclusions of fact and law, and whether the modification is made by the court that rendered it or by this Court as the highest court of the land.
The doctrine of immutability of a final judgment has not been absolute, and has admitted several exceptions, among them: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries that cause no prejudice to any party; (c) void judgments; and (d) whenever circumstances transpire after the finality of the decision that render its execution unjust and inequitable. We rule that the UP’s plea for equity warrants the Court’s exercise of the exceptional power to disregard the declaration of finality of the judgment of the RTC for being in clear violation of the UP’s right to due process.
Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB Legal Office was invalid and ineffectual because he was admittedly not the counsel of record of the UP. The rule is that it is on the counsel and not the client that the service should be made That counsel was the OLS in Diliman, Quezon City, which was served with the denial only on May 31, 2002.
As such, the running of the remaining period of six days resumed only on June 1, 2002,94 rendering the filing of the UP’s notice of appeal on June 3, 2002 timely and well within the remaining days of the UP’s period to appeal. Verily, the service of the denial of the motion for reconsideration could only be validly made upon the OLS in Diliman, and no other. The fact that Atty. Nolasco was in the employ of the UP at the UPLB Legal Office did not render the service upon him effective.
Secondly, even assuming that the service upon Atty. Nolasco was valid and effective, such that the remaining period for the UP to take a timely appeal would end by May 23, 2002, it would still not be correct to find that the judgment of the RTC became final and immutable thereafter due to the notice of appeal being filed too late on June 3, 2002.
In so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the rule contained in the second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that the filing of a motion for reconsideration interrupted the running of the period for filing the appeal; and that the period resumed upon notice of the denial of the motion for reconsideration. For that reason, the CA and the RTC might not be taken to task for strictly adhering to the rule then prevailing.
The retroactive application of the fresh-period rule, a procedural law that aims "to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution," is impervious to any serious challenge. This is because there are no vested rights in rules of procedure.
To deny the benefit of the fresh-period rule to the UP would amount to injustice and absurdity – injustice, because the judgment in question was issued on November 28, 2001 as compared to the judgment in Neypes that was rendered in 1998; absurdity, because parties receiving notices of judgment and final orders issued in the year 1998 would enjoy the benefit of the fresh-period rule but the later rulings of the lower courts like that herein would not. Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the denial, the UP’s filing on June 3, 2002 of the notice of appeal was not tardy within the context of the fresh-period rule.
For the UP, the fresh period of 15-days counted from service of the denial of the motion for reconsideration would end on June 1, 2002, which was a Saturday. Hence, the UP had until the next working day, or June 3, 2002, a Monday, within which to appeal, conformably with Section 1 of Rule 22, Rules of Court, which holds that: "If the last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day."
No comments:
Post a Comment