DIGEST/CHARLES GILAGA/ STAR SPECIAL WATCHMAN AND DETECTIVE AGENCY, INC., CELSO A. FERNANDEZ and MANUEL V. FERNANDEZ, Petitioners, vs. PUERTO PRINCESA CITY, MAYOR EDWARD HAGEDORN and CITY COUNCIL OF PUERTO PRINCESA CITY, Respondents.

STAR SPECIAL WATCHMAN AND DETECTIVE AGENCY, INC., CELSO A. FERNANDEZ and MANUEL V. FERNANDEZ, Petitioners,
vs.
PUERTO PRINCESA CITY, MAYOR EDWARD HAGEDORN and CITY COUNCIL OF PUERTO PRINCESA CITY, Respondents.

G.R. No. 181792               April 21, 2014 

Facts:

Star Special Watchman and Detective Agency, Inc., Celso A. Fernandez and Manuel V. Fernandez (petitioners) were the owners of two (2) parcels of land located in Puerto Princesa City. One was covered by Transfer Certificate of Title (TCT) No. 7827 consisting of 5,261 square meters and the other by TCT No. 7828 with an area of more or less 130,094 square meters. On June 3, 1989, the two (2) parcels of land were subdivided into seven (7) lots.

Lot 7 and covered by TCT No. 13680 was one of the properties which was taken for the build-up of the Western Command Headquarters. Petitioners’ property was used as a road right-of-way leading to the military camp. Soon after, the City of Puerto Princesa decided to develop the road because local residents started to build their houses alongside it.

In view of the encroachment, petitioners filed an action for Payment of Just Compensation (Civil Case No. Q-90-4930) against Puerto Princesa City, Mayor Edward Hagedorn and the City Council of Puerto Princesa City (respondents) before the RTC, Branch 78, Quezon City (RTC-Br. 78), praying that the court render judgment ordering respondents to pay petitioners for the fair market value of their land and a monthly rental fee until fully paid.The RTC rendered a decision in favor of petitioners.

After the RTC decision became final and executory, a writ of execution was issued which directed respondents to satisfy the money judgment contained in the said decision.

Petitioner Celso A. Fernandez and respondents’ legal counsel, Atty. Agustin Rocamora (Atty. Rocamora), met and agreed to reduce the money judgment, subject to the condition that respondents would pay the amount of ₱2 million in February 1996 and, thereafter, ₱1 million monthly until fully paid.

Celso Fernandez wrote a letter informing respondents that after petitioners received the amount of ₱2 million from them in February 1996, there were no more payments received for the months of March, April and May 1996.

Petitioners filed a complaint before the RTC-Br. 223 against respondents for collection of unpaid just compensation, including interests and rentals, in accordance with the RTC-Br. 78. The RTC rendered its decision in favor of petitioners. The RTC-Br. 223 granted petitioners’ motion for execution and issued a writ of execution.

Subsequently, petitioners filed two (2) motions both asking the RTC-Br. 223 1] to order the Land Bank of the Philippines to deliver the garnished account of respondents; and/or 2] to order respondents to appropriate funds for the payment of the money judgment rendered against them and in favor of petitioners. The RTC denied both motions on the ground that pursuant to Section 305(a) of the Local Government Code, government funds could not be subjected to execution and levy, or to garnishment for that matter, unless there was a corresponding appropriation law or ordinance.

Petitioners filed a motion to declare respondents in indirect contempt of court for their failure to comply with the November 18, 2003 RTC-Br. 223 decision despite the issuance of a writ of execution against them. Motion again was denied by the RTC on the same grounds.

Petitioners wrote a letter to the Commission On Audit (COA) requesting that it order respondents to pay petitioners the amount adjudged in the November 18, 2003 decision of the RTC-Br. 223.  The COA, through its Legal and Adjudication Office-Local, wrote a letter to petitioner Celso Fernandez informing him that it could not act upon his request to order respondents to pay petitioners the amount adjudged in the November 18, 2003 decision because it had no jurisdiction over the matter as the case was already in the execution stage.

Petitioners filed similar complaints against respondents before the Office of the Deputy Ombudsman for Luzon and to the Office of the Undersecretary of the Department of Interior and Local Government praying that respondents pay the subject money judgment and that they be suspended from office for their refusal to comply with the money judgment.

Hence a petition for Mandamus under Rule 65 of the 1997 Rules of Court.

ISSUE:

WHETHER OR NOT THE REMEDY OF MANDAMUS IS PROPER TO COMPEL HEREIN RESPONDENTS TO COMPLY WITH DECISION OF THE RTC OF QUEZON CITY, BRANCH 223 AND PAY HEREIN PETITIONERS OF THE JUDGMENT DEBT STATED THEREIN, PLUS THE INTERESTS UNTIL FULLY PAID.

HELD:

                The Court ruled that a claimant may resort to the remedy of mandamus to compel an LGU to enact the necessary ordinance and approve the corresponding disbursement in order to satisfy the judgment award. In Municipality of Makati v. The Honorable Court of Appeals:

In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. 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.

Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor.

It has been held, however, that a resort to the remedy of mandamus is improper if the standard modes of procedure and forms of remedy are still available and capable of affording relief. The equitable nature of a writ of mandamus was discussed in the case of Uy Kiao Eng vs. Nixon Lee:

An important principle followed in the issuance of the writ is that there should be no plain, speedy and adequate remedy in the ordinary course of law other than the remedy of mandamus being invoked. In other words, mandamus can be issued only in cases where the usual modes of procedure and forms of remedy are powerless to afford relief. Although classified as a legal remedy, mandamus is equitable in its nature and its issuance is generally controlled by equitable principles. Indeed, the grant of the writ of mandamus lies in the sound discretion of the court.

Considering that a writ of execution was already issued by RTC-Br. 223, the remedy of petitioners is to follow up their claim with the COA. Petitioners rightfully did so, but the COA erred in not acting on the claim.

Petitioners did file their Formal Money Claim with the COA, but the latter, through its Legal and Adjudicating Office-Local, wrote a letter, dated July 17, 2007, stating that it could not act upon petitioners’ request because it would encroach upon the prerogatives of the RTC and the case was already in the execution stage. The COA was of the position that it had no proper legal standing and jurisdiction anymore.

It is the opinion of this Court that COA should have acted on the formal request of petitioners.

Considering that the COA still retained its primary jurisdiction to adjudicate money claim, petitioners should have filed a petition for certiorari with this Court pursuant to Section 50 of P.D. No. 1445. Hence, the COA's refusal to act did not leave the petitioners without any remedy at all.