Execution vs. gov't bodies; claims must first be filed with COA. - G.R. No. 185918

G.R. No. 185918

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This Court finds that the CA correctly applied the NEA case.  Like NEA, UP is a juridical personality separate and distinct from the government and has the capacity to sue and be sued.  Thus, also like NEA, it cannot evade execution, and its funds may be subject to garnishment or levy. However, before execution may be had, a claim for payment of the judgment award must first be filed with the COA.  Under Commonwealth Act No. 327,[22] as amended by Section 26 of P.D. No. 1445,[23] it is the COA which has primary jurisdiction to examine, audit and settle “all debts and claims of any sort” due from or owing the Government or any of its subdivisions, agencies and instrumentalities, including government-owned or controlled corporations and their subsidiaries.  With respect to money claims arising from the implementation of Republic Act No. 6758,[24]their allowance or disallowance is for COA to decide, subject only to the remedy of appeal by petition for certiorari to this Court.[25]

We cannot subscribe to Lockheed’s argument that NEA is not similarly situated with UP because the COA’s jurisdiction over the latter is only on post-audit basis.  A reading of the pertinent Commonwealth Act provision clearly shows that it does not make any distinction as to which of the government subdivisions, agencies and instrumentalities, including government-owned or controlled corporations and their subsidiaries whose debts should be filed before the COA.

As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing that can be done since the funds of UP had already been garnished, since the garnishment was erroneously carried out and did not go through the proper procedure (the filing of a claim with the COA), UP is entitled to reimbursement of the garnished funds plus interest of 6% per annum, to be computed from the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before the CA which occurred right after the withdrawal of the garnished funds from PNB.

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