Background

The case arose from an arbitration award against the Republic of the Philippines. When the respondents sought to execute the judgment, they obtained an order from Judge Villasor declaring the decision final and executory. This led to the issuance of an alias writ of execution and notices of garnishment against funds of the Armed Forces of the Philippines. The Republic then filed this petition to challenge the validity of the order and execution.

Arguments of the Petitioners

• 1. Respondent Judge acted in excess of jurisdiction or with grave abuse of discretion in granting the issuance of an alias writ of execution against the properties of the Armed Forces of the Philippines.
• 2. The funds targeted for garnishment are public funds duly appropriated for specific purposes and thus cannot be subject to execution.

Arguments of the Respondents

• 1. The respondents admitted the facts as presented by the petitioner, with the only qualification being the total amount of the award.

Issues

• 1. Whether the respondent Judge exceeded his jurisdiction or committed grave abuse of discretion in issuing the order declaring the decision final and executory and the subsequent alias writ of execution.
• 2. Whether public funds of the Armed Forces of the Philippines can be subject to garnishment to satisfy a judgment against the government.

Ruling

• 1. The Supreme Court granted the writs of certiorari and prohibition, nullifying and setting aside both the order of June 24, 1969, declaring the decision executory, and the alias writ of execution issued thereunder.

Rationale

• 1. The state, as a sovereign, is immune from suit unless it gives its consent.
• 2. Even if the state consents to be sued and liability is adjudged, public funds cannot be the object of garnishment proceedings.
• 3. Disbursements of public funds must be covered by corresponding appropriations as required by law.
• 4. The functions and public services of the State cannot be disrupted by the diversion of public funds from their legitimate and specific objects.

Doctrines

• 1. The state, as a sovereign, is immune from suit unless it gives its consent.
• 2. Even if the state consents to be sued and liability is adjudged, public funds cannot be the object of garnishment proceedings.
• 3. Disbursements of public funds must be covered by corresponding appropriations as required by law.
• 4. The functions and public services of the State cannot be disrupted by the diversion of public funds from their legitimate and specific objects.

Key Excerpts

• 1. "A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends." - Holmes
• 2. "The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law."

Precedents Cited

• 1. Providence Washington Insurance Co. v. Republic of the Philippines (1969): Cited to support the continued adherence to the doctrine of non-suability of the state.
• 2. Commissioner of Public Highways v. San Diego (1970): Used to reaffirm that government funds and properties may not be seized under writs of execution or garnishment to satisfy judgments.
• 3. Director of Commerce and Industry v. Concepcion (1922): Applied to show that even salaries of government employees cannot be garnished.

Statutory and Constitutional Provisions

• 1. Article XV, Section 16 of the 1973 Constitution: "The State may not be sued without its consent."