Municipality of Makati vs.

Court of Appeals
G.R. Nos. 89898-99 October 1, 1990; Cortes, J.

Facts:
Petitioner Municipality of Makati expropriated a portion of land owned by
private respondents, Admiral Finance Creditors Consortium, Inc. in !"#, In lieu
of an expropriation proceedin$ %led in court, petitioner Municipality of Makati
opened a bank account wit& t&e P'( (uendia (ranc& under petitioner)s name
containin$ t&e sum of P*+,,-.--, pursuant to t&e provisions of Pres. .ecree
'o. */. 01C Makati determined t&e cost of t&e said land to be P,,/!,###.--
minus t&e advanced payment of P22",#-.--. It issued t&e correspondin$ writ of
execution accompanied wit& a writ of $arnis&ment of funds of t&e petitioner
w&ic& was deposited in P'(. After t&is decision became %nal and executory, a
writ of execution was issued and a 'otice of 3arnis&ment was served by
respondent s&eri4 upon t&e mana$er of t&e P'( (uendia (ranc&. 5owever,
respondent s&eri4 was informed t&at a 6&old code6 was placed on t&e account of
petitioner. Private respondent t&en %led a motion prayin$ for t&e court to order
t&e bank to deliver to t&e s&eri4 t&e unpaid balance, w&ile petitioner also %led a
motion to lift t&e $arnis&ment.
7&ile t&ese motions are pendin$, &owever, a 8Manifestation9 was %led,
informin$ t&e court t&at private respondent was no lon$er t&e owner of t&e
sub:ect property and t&at owners&ip to t&is &as been transferred to P&ilippine
;avin$s (ank, Inc. A compromise agreement was made between private
respondent and P&ilippine ;avin$s (ank, Inc., w&ic& was t&en approved by t&e
court.
1&e court furt&er ordered P'( (uendia (ranc& to immediately release to
P;( t&e sum of P*,!,2,,-#.*, w&ic& corresponds to t&e balance of t&e appraised
value of t&e sub:ect property, from t&e $arnis&ed account of petitioner but t&e
bank failed to comply as it was still waitin$ for proper aut&ori<ation from t&e
P'( &ead o=ce enablin$ it to make a disbursement for t&e amount so ordered.
As t&e case was in t&e ;upreme Court, petitioner raised for t&e %rst time
t&at it &ad two accounts wit& P'( (uendia (ranc&> one was made exclusively for
t&e expropriation of t&e sub:ect property, and t&e ot&er is for statutory
obli$ations and ot&er purposes of t&e municipal $overnment

Issue:
7?' t&e balance of t&e appraised value of t&e sub:ect property may be
levied upon t&e second account of petitioner municipality@


Held:
It is wellAsettled is t&e rule t&at public funds are not sub:ect to levy and
execution, unless ot&erwise provided for by statute.
More particularly, t&e properties of a municipality, w&et&er real or
personal, w&ic& are necessary for public use cannot be attac&ed and sold
at execution sale to satisfy a money :ud$ment a$ainst t&e municipality.
Municipal revenues are derived from taxes, licenses and market fees, and
w&ic& are intended primarily and exclusively for t&e purpose of %nancin$
t&e $overnmental activities and functions of t&e municipality, are exempt
from execution.
Absent a s&owin$ t&at t&e municipal council of Makati &as passed an
ordinance appropriatin$ from its public funds an amount correspondin$ to
t&e balance due under t&e 01C decision dated Bune *, !"+, less t&e sum
of P!!,+*2.!* deposited in Account 'o. ;CA /#,A,2+,*A2, no levy under
execution may be validly e4ected on t&e public funds of petitioner
deposited in Account 'o. ;CA /#2A,2-",-A+.
1&e court &ereby orders petitioner Municipality of Makati to immediately pay
P&ilippine ;avin$s (ank, Inc. and private respondent t&e amount of
P*,!,2,,-#.*,. Petitioner is &ereby reDuired to submit to t&is Court a report of its
compliance wit& t&e fore$oin$ order wit&in a nonAextendible period of ;IE1F G#-H
.AF; from t&e date of receipt of t&is resolution.