8De La Victoria vs. Burgos

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

.R. No. 111190 June 27, 1995
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ORETO D. DE LA VICTORIA, as City Fiscal of Mandaueity and in his personal capacity as garnishee,petitioners.

ON. JOSE P. BURGOS, Presiding Judge, RTC, Br. XVIIebu City, and RAUL H. SESBREO,respondents.

ELLOSILLO,J .:AUL H. SESBREO filed a complaint for damages againstssistant City Fiscals Bienvenido N. Mabanto, Jr., and Dario. Rama, Jr., before the Regional Trial Court of Cebu City.fter trial judgment was rendered ordering the defendants toay P11,000.00 to the plaintiff, private respondent herein. Thecision having become final and executory, on motion of th

tter, the trial court ordered its execution. This order wasuestioned by the defendants before the Court of Appeals.owever, on 15 January 1992 a writ of execution was issue

n 4 February 1992 a notice of garnishment was served onetitioner Loreto D. de la Victoria as City Fiscal of Mandaueity where defendant Mabanto, Jr., was then detailed. The

otice directed petitioner not to disburse, transfer, release oonvey to any other person except to the deputy sheriffoncerned the salary checks or other checks, monies, or casue or belonging to Mabanto, Jr., under penalty of law.1On


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arch 1992 private respondent filed a motion before the triaourt for examination of the garnishees.

n 25 May 1992 the petition pending before the Court ofppeals was dismissed. Thus the trial court, finding no moregal obstacle to act on the motion for examination of thearnishees, directed petitioner on 4 November 1992 to subms report showing the amount of the garnished salaries ofabanto, Jr., within fifteen (15) days from receipt2taking int

onsideration the provisions of Sec. 12, pars. (f) and (i), Rule9 of the Rules of Court.

n 24 November 1992 private respondent filed a motion toequire petitioner to explain why he should not be cited inontempt of court for failing to comply with the order of 4ovember 1992.

n the other hand, on 19 January 1993 petitioner moved touash the notice of garnishment claiming that he was not inossession of any money, funds, credit, property or anythingalue belonging to Mabanto, Jr., except his salary and RATAhecks, but that said checks were not yet properties ofabanto, Jr., until delivered to him. He further claimed that,

uch, they were still public funds which could not be subject arnishment.

n 9 March 1993 the trial court denied both motions and


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rdered petitioner to immediately comply with its order of 4ovember 1992.3It opined that the checks of Mabanto, Jr.,ad already been released through petitioner by the

epartment of Justice duly signed by the officer concerned.pon service of the writ of garnishment, petitioner as custodf the checks was under obligation to hold them for thedgment creditor. Petitioner became a virtual party to, or arced intervenor in, the case and the trial court therebycquired jurisdiction to bind him to its orders and processes

ith a view to the complete satisfaction of the judgment.dditionally, there was no sufficient reason for petitioner toold the checks because they were no longer governmentnds and presumably delivered to the payee, conformablyith the last sentence of Sec. 16 of the Negotiable Instrumeaw.

With regard to the contempt charge, the trial court was notorally convinced of petitioner's guilt. For, while hisxplanation suffered from procedural infirmities neverthelesse took pains in enlightening the court by sending a writtenxplanation dated 22 July 1992 requesting for the lifting of thotice of garnishment on the ground that the notice should

ave been sent to the Finance Officer of the Department ofustice. Petitioner insists that he had no authority to segregaportion of the salary of Mabanto, Jr. The explanationowever was not submitted to the trial court for action since


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e stenographic reporter failed to attach it to the record.4n 20 April 1993 the motion for reconsideration was denied

he trial court explained that it was not the duty of thearnishee to inquire or judge for himself whether the issuancf the order of execution, writ of execution and notice ofarnishment was justified. His only duty was to turn over thearnished checks to the trial court which issued the order ofxecution.5etitioner raises the following relevant issues: (1) whether aheck still in the hands of the maker or its duly authorizedepresentative is owned by the payee before physical delive the latter: and, (2) whether the salary check of a governmfficial or employee funded with public funds can be subject arnishment.

etitioner reiterates his position that the salary checks wereot owned by Mabanto, Jr., because they were not yetelivered to him, and that petitioner as garnishee has no legbligation to hold and deliver them to the trial court to bepplied to Mabanto, Jr.'s judgment debt. The thesis ofetitioner is that the salary checks still formed part of publicnds and therefore beyond the reach of garnishmentroceedings.

etitioner has well argued his case.


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arnishment is considered as a species of attachment foreaching credits belonging to the judgment debtor owing to hom a stranger to the litigation.6Emphasis is laid on thehrase "belonging to the judgment debtor" since it is the focaoint in resolving the issues raised.

s Assistant City Fiscal, the source of the salary of Mabantor., is public funds. He receives his compensation in the formf checks from the Department of Justice through petitioner

ity Fiscal of Mandaue City and head of office. Under Sec. 1f the Negotiable Instruments Law, every contract on aegotiable instrument is incomplete and revocablentildeliveryof the instrument for the purpose of giving effecereto. As ordinarily understood, delivery means the transfef the possession of the instrument by the maker orrawerwith intent to transfer title to the payee and recognizeim as the holder thereof.7ccording to the trial court, the checks of Mabanto, Jr., wereready released by the Department of Justice duly signed be officer concerned through petitioner and upon service ofe writ of garnishment by the sheriff petitioner was under

bligation to hold them for the judgment creditor. It recognizee role of petitioner ascustodianof the checks. At the sameme however it considered the checks as no longerovernment funds and presumed delivered to the payee basn the last sentence of Sec. 16 of the Negotiable Instrument


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aw which states: "And where the instrument is no longer ine possession of a party whose signature appears thereon,

alid and intentional delivery by him is presumed." Yet, the

resumption is not conclusive because the last portion of therovision says "until the contrary is proved." However thishrase wasdeletedby the trial court for no apparent reasonroof to the contrary is its own finding that the checks were e custody of petitioner. Inasmuch as said checks had not yeen delivered to Mabanto, Jr., theydid not belong to himaill had the character of public funds. InTiroHontanosas8we ruled that

The salary check of a government officer oremployee such as a teacher does not belong tohim before it is physically delivered to him. Untilthat time the check belongs to the government.Accordingly, before there is actual delivery of thecheck, the payee has no power over it; he cannoassign it without the consent of the Government.

s a necessary consequence of being public fund, the checay not be garnished to satisfy the judgment.9The rationaleehind this doctrine is obvious consideration of public policyhe Court succinctly stated inCommissioner of Publicighways v. San Diego10that

The functions and public services rendered by th


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State cannot be allowed to be paralyzed ordisrupted by the diversion of public funds from thlegitimate and specific objects, as appropriated b

law.

denying petitioner's motion for reconsideration, the trial coxpressed the additional ratiocination that it was not the dutye garnishee to inquire or judge for himself whether thesuance of the order of execution, the writ of execution, and

e notice of garnishment was justified, citing our rulingPhilippine Commercial Industrial Bank v. Court ofppeals.11Our precise ruling in that case was that "[I]t is nocumbent upon the garnishee to inquire or to judge for itselfhether or not the order for the advance execution of adgment is valid." But that is invoking only the general rule.

We have also established therein the compelling reasons, axceptions thereto, which were not taken into account by theal court, e.g., a defect on the face of the writ or actual

nowledge by the garnishee of lack of entitlement on the paf the garnisher. It is worth to note that the ruling referred toe validity of advance execution of judgments, but a careful

crutiny of that case and similar cases reveals that it waspplicable to a notice of garnishment as well. In the case atench, it was incumbent upon petitioner to inquire into thealidity of the notice of garnishment as he had actualnowledge of the non-entitlement of private respondent to th


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hecks in question. Consequently, we find no difficultyoncluding that the trial court exceeded its jurisdiction insuing the notice of garnishment concerning the salary chec

f Mabanto, Jr., in the possession of petitioner.

WHEREFORE, the petition is GRANTED. The orders of 9arch 1993 and 20 April 1993 of the Regional Trial Court ofebu City, Br. 17, subject of the petition are SET ASIDE. Thotice of garnishment served on petitioner dated 3 February

992 is ordered DISCHARGED.O ORDERED.

uiason and Kapunan, JJ., concur.

Separate Opinions

AVIDE, JR.,J .,concurring and dissenting:his Court may take judicial notice of the fact that checks foalaries of employees of various Departments all over theountry are prepared in Manila not at the end of the payroll


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eriod, but days before it to ensure that they reach themployees concerned not later than the end of the payrolleriod. As to the employees in the provinces or cities, the

hecks are sent through the heads of the corresponding officf the Departments. Thus, in the case of Prosecutors andssistant Prosecutors of the Department of Justice, the checre sent through the Provincial Prosecutors or Cityrosecutors, as the case may be, who shall then deliver thehecks to the payees.

volved in the instant case are the salary and RATA checksen Assistant City Fiscal Bienvenido Mabanto, Jr., who wasetailed in the Office of the City Fiscal (now Prosecutor) ofandaue City. Conformably with the aforesaid practice, thes

hecks were sent to Mabanto thru the petitioner who was the City Fiscal of Mandaue City.

he ponencia failed to indicate the payroll period covered bye salary check and the month to which the RATA check

orresponds.

respectfully submit that if these salary and RATA checksorresponded, respectively, to a payroll period and to a monhich had already lapsed at the time the notice of garnishmeas served, the garnishment would be valid, as the checksould then cease to be property of the Government and wouecome property of Mabanto. Upon the expiration of such


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eriod and month, the sums indicated therein were deemedutomatically segregated from the budgetary allocations for epartment of Justice under the General Appropriations Act

must be recalled that the public policy against execution,ttachment, or garnishment is directed to public funds.

hus, in the case ofDirector of the Bureau of Commerce anndustry vs.Concepcion1where the core issue was whetherot the salary due from the Government to a public officer o

mployee can, by garnishment, be seized before being paidm and appropriated to the payment of his judgment debts,is Court held:

A rule, which has never been seriously questioneis that money in the hands of public officers,

although it may be due government employees, not liable to the creditors of these employees in tprocess of garnishment. One reason is, that theState, by virtue of its sovereignty, may not be suein its own courts except by express authorizationthe Legislature, and to subject its officers togarnishment would be to permit indirectly what isprohibited directly.Another reason is that moneysought to be garnished, as long as they remain inthe hands of the disbursing officer of theGovernment, belong to the latter, although the


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defendant in garnishment may be entitled to aspecific portion thereof. And still another reasonwhich covers both of the foregoing is that every

consideration of public policy forbids it.

The United States Supreme Court, in the leadingcase of Buchanan vs. Alexander ([1846], 4 How.19), in speaking of the right of creditors of seameby process of attachment, to divert the public

money from its legitimate and appropriate objectsaid:

To state such a principle is to refute it. Nogovernment can sanction it. At all times itwould be found embarrassing, and undersome circumstances it might be fatal to th

public service. . . .So long as moneyremains in the hands of a disbursing officit is as much the money of the UnitedStates, as if it had not been drawn from thtreasury.Until paid over by the agent of thgovernment to the person entitled to it, th

fund cannot, in any legal sense, beconsidered a part of his effects." (See,further, 12 R.C.L., p. 841; Keene vs. Smi[1904], 44 Ore., 525; Wild vs. Ferguson[1871], 23 La. Ann., 752; Bank of


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Tennessee vs. Dibrell [1855], 3 Sneed[Tenn.], 379). (emphasis supplied)

he authorities cited in theponenciaare inapplicable.arnished or levied on therein were public funds, to wit: (a) ump irrigation trust fund deposited with the Philippineational Bank (PNB) in the account of the Irrigation Servicenit inRepublic vs. Palacio;2(b) the deposits of the Nationaedia Production Center inTraders Royal Bank vs.

ntermediate Appellate Court;3

and (c) the deposits of theureau of Public Highways with the PNB under a currentccount, which may be expended only for their legitimatebject as authorized by the corresponding legislativeppropriation inCommissioner of Public Highways vs. Diegoeither isTiro vs. Hontanosas5squarely in point. The saidase involved the validity of Circular No. 21, series of 1969,sued by the Director of Public Schools which directed that

henceforth no cashier or disbursing officer shall pay tottorneys-in-fact or other persons who may be authorizednder a power of attorney or other forms of authority to collee salary of an employee, except when the persons so

esignated and authorized is an immediate member of themily of the employee concerned, and in all other casesxcept upon proper authorization of the Assistant Executiveecretary for Legal and Administrative Matters, with the

ecommendation of the Financial Assistant." Private


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espondent Zafra Financing Enterprise, which had extendedans to public school teachers in Cebu City and obtained froe latterpromissory notes and special powers of attorneyuthorizing it to take and collect their salary checks from theivision Officein Cebu City of the Bureau of Public Schoolsought,inter alia, to nullify the Circular. It is clear that theachers had in fact assigned to or waived in favor of Zafraeir future salaries which were still public funds. Thatssignment or waiver was contrary to public policy.

would therefore vote to grant the petition only if the salary aATA checks garnished corresponds to an unexpired payroeriod and RATA month, respectively.

adilla, J., concurs.

eparate Opinions

AVIDE, JR.,J .,concurring and dissenting:his Court may take judicial notice of the fact that checks foalaries of employees of various Departments all over the

ountry are prepared in Manila not at the end of the payrolleriod, but days before it to ensure that they reach themployees concerned not later than the end of the payrolleriod. As to the employees in the provinces or cities, the


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hecks are sent through the heads of the corresponding officf the Departments. Thus, in the case of Prosecutors andssistant Prosecutors of the Department of Justice, the chec

re sent through the Provincial Prosecutors or Cityrosecutors, as the case may be, who shall then deliver thehecks to the payees.

volved in the instant case are the salary and RATA checksen Assistant City Fiscal Bienvenido Mabanto, Jr., who was

etailed in the Office of the City Fiscal (now Prosecutor) ofandaue City. Conformably with the aforesaid practice, theshecks were sent to Mabanto thru the petitioner who was the City Fiscal of Mandaue City.

he ponencia failed to indicate the payroll period covered bye salary check and the month to which the RATA check

orresponds.respectfully submit that if these salary and RATA checksorresponded, respectively, to a payroll period and to a monhich had already lapsed at the time the notice of garnishmeas served, the garnishment would be valid, as the checksould then cease to be property of the Government and wouecome property of Mabanto. Upon the expiration of sucheriod and month, the sums indicated therein were deemedutomatically segregated from the budgetary allocations for epartment of Justice under the General Appropriations Act


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must be recalled that the public policy against execution,ttachment, or garnishment is directed to public funds.

hus, in the case ofDirector of the Bureau of Commerce anndustry vs.Concepcion1where the core issue was whetherot the salary due from the Government to a public officer omployee can, by garnishment, be seized before being paidm and appropriated to the payment of his judgment debts,is Court held:

A rule, which has never been seriously questioneis that money in the hands of public officers,although it may be due government employees, not liable to the creditors of these employees in tprocess of garnishment. One reason is, that theState, by virtue of its sovereignty, may not be sue

in its own courts except by express authorizationthe Legislature, and to subject its officers togarnishment would be to permit indirectly what isprohibited directly.Another reason is that moneysought to be garnished, as long as they remain inthe hands of the disbursing officer of the

Government, belong to the latter, although thedefendant in garnishment may be entitled to aspecific portion thereof. And still another reasonwhich covers both of the foregoing is that everyconsideration of public policy forbids it.


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The United States Supreme Court, in the leadingcase of Buchanan vs. Alexander ([1846], 4 How.19), in speaking of the right of creditors of seame

by process of attachment, to divert the publicmoney from its legitimate and appropriate objectsaid:

To state such a principle is to refute it. Nogovernment can sanction it. At all times it

would be found embarrassing, and undersome circumstances it might be fatal to thpublic service. . . .So long as moneyremains in the hands of a disbursing officit is as much the money of the UnitedStates, as if it had not been drawn from thtreasury.Until paid over by the agent of thgovernment to the person entitled to it, thfund cannot, in any legal sense, beconsidered a part of his effects." (See,further, 12 R.C.L., p. 841; Keene vs. Smi[1904], 44 Ore., 525; Wild vs. Ferguson[1871], 23 La. Ann., 752; Bank of

Tennessee vs. Dibrell [1855], 3 Sneed[Tenn.], 379). (emphasis supplied)

he authorities cited in theponenciaare inapplicable.arnished or levied on therein were public funds, to wit: (a)


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ump irrigation trust fund deposited with the Philippineational Bank (PNB) in the account of the Irrigation Servicenit inRepublic vs. Palacio;2(b) the deposits of the Nationaedia Production Center inTraders Royal Bank vs.

ntermediate Appellate Court;3and (c) the deposits of theureau of Public Highways with the PNB under a currentccount, which may be expended only for their legitimatebject as authorized by the corresponding legislativeppropriation inCommissioner of Public Highways vs. Diegoeither isTiro vs. Hontanosas5squarely in point. The saidase involved the validity of Circular No. 21, series of 1969,sued by the Director of Public Schools which directed that

henceforth no cashier or disbursing officer shall pay tottorneys-in-fact or other persons who may be authorizednder a power of attorney or other forms of authority to collee salary of an employee, except when the persons soesignated and authorized is an immediate member of themily of the employee concerned, and in all other casesxcept upon proper authorization of the Assistant Executiveecretary for Legal and Administrative Matters, with the

ecommendation of the Financial Assistant." Privateespondent Zafra Financing Enterprise, which had extendedans to public school teachers in Cebu City and obtained froe latterpromissory notes and special powers of attorneyuthorizing it to take and collect their salary checks from the


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ivision Officein Cebu City of the Bureau of Public Schoolsought,inter alia, to nullify the Circular. It is clear that theachers had in fact assigned to or waived in favor of Zafra

eir future salaries which were still public funds. Thatssignment or waiver was contrary to public policy.

would therefore vote to grant the petition only if the salary aATA checks garnished corresponds to an unexpired payroeriod and RATA month, respectively.

adilla, J., concurs.

ootnotes

1 Rollo, p. 12.

2 Id., p. 18.

3 Id., p. 115.

4 Id., p. 114.

5 Id., p. 129.

6 Engineering Construction, Inc. v. National Pow

Corporation, No. L-34589, 29 June 1988, 163SCRA 9; Rizal Commercial Banking Corporationde Castro, No. L-34548, 29 November 1988, 168SCRA 49; Sec. 8, Rule 57 of the Rules of Court.


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7 Hector S. de Leon, The Law on NegotiableInstruments, 1989 Ed., p. 48; People v. Yabut, JrNo. L-42902, 29 April 1977, 76 SCRA 624.

8 No. L-32312, 25 November 1983, 125 SCRA697.

9 Republic v. Palacio, No. L-20322, 29 May 196823 SCRA 899; Director of the Bureau of Commeand Industry v. Concepcion, 43 Phil. 384 (1922);

Traders Royal Bank v. IAC, G.R. No. 68514, 17December 1990, 192 SCRA 305.

10 No. L-30098, 18 February 1970, 31 SCRA 61

11 G.R. No. 84526, 28 January 1991, 193 SCRA452.

DAVIDE, JR.,J., concurring and dissenting:1 43 Phil. 384 [1922].

2 23 SCRA 899 [1968].

3 192 SCRA 305 [1990].

4 31 SCRA 616 [1970].

5 125 SCRA 697 [1983].

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