Background

The case revolves around NEA employees seeking payment of various allowances they believed they were entitled to under R.A. No. 6758. After winning in the RTC, they sought to execute the judgment through garnishment of NEA's funds. NEA resisted, citing laws protecting government funds from execution. The case then went through various stages of appeal and review, ultimately reaching the Supreme Court.

Facts

• 1. Danilo Morales and 105 other NEA employees filed a class suit against NEA for payment of various allowances under Republic Act No. 6758.
• 2. The RTC ruled in favor of the employees, ordering NEA to settle their claims.
• 3. A writ of execution was issued, followed by a notice of garnishment against NEA's funds.
• 4. NEA filed a motion to quash, claiming the funds were exempt from execution.
• 5. The RTC denied the motion but held implementation in abeyance.
• 6. The Department of Budget and Management (DBM) denied NEA's request for a supplemental budget.
• 7. The Commission on Audit (COA) advised against making payments to settle the claims.

Arguments of the Petitioners

• 1. Execution is premature as respondents have yet to file their judgment claim with the COA in accordance with P.D. No. 1445 and SC Administrative Circular No. 10-2000.
• 2. Execution is not feasible without DBM as an indispensable party to the petition for certiorari, as it is the department that can certify fund availability.

Arguments of the Respondents

• 1. The writ of execution should be implemented as the reason for its suspension (awaiting DBM's decision on funding) no longer exists.
• 2. NEA, as a government-owned or controlled corporation (GOCC), can be subjected to court processes just like any other corporation.

Issues

• 1. Whether the Court of Appeals erred in directing the implementation of the writ of execution against NEA's funds.
• 2. Whether NEA, as a GOCC, can evade execution of the judgment.

Ruling

• 1. The CA erred in directing immediate implementation of the writ of execution through garnishment of NEA's funds.
• 2. The original RTC decision was not a judgment for a specific sum of money, but rather a special judgment requiring NEA to settle claims in accordance with existing COA regulations.
• 3. Before execution can proceed against a GOCC like NEA, a claim for payment of the judgment award must first be filed with the COA.
• 4. The COA has primary jurisdiction to examine, audit, and settle all debts and claims due from or owing to the Government or any of its subdivisions, agencies, and instrumentalities, including GOCCs.

Doctrines

• 1. Primary jurisdiction of COA: The COA has the primary authority to examine, audit, and settle all claims against government agencies, including GOCCs.
• 2. Execution against government funds: While GOCCs are not exempt from execution, claims must first be filed with the COA before execution can proceed.
• 3. Nature of judgments and appropriate execution: Special judgments requiring performance of acts other than payment of money are not subject to execution by garnishment.

Precedents Cited

• 1. Philippine National Bank v. Court of Industrial Relations (1978): Cited to support the principle that GOCCs may be subject to court processes, including garnishment or levy of their properties.
• 2. Department of Agriculture v. NLRC (1993): Cited to establish that claims against government agencies must first be filed with the COA before execution can proceed.