BUENAVENTURA, RAE MARI D.

NATIONAL ELECTRIFICATION ADMINISTRATION (NEA) vs.

DANILO MORALES

FACTS:
Morales and 105 others, employees of NEA, filed a class suit with
the RTC against NEA for payment of rice allowance, meal allowance,
etc. pursuant to RA 6758. RTC favored Morales and ordered a writ of
execution to settle employees’ claims. A notice of garnishment was
issued against the funds of NEA. Willing to comply, NEA however
claimed to have no funds to cover the claim and needed to request for
supplemental budget from DBM. Because of this, NEA filed a Motion
to Quash, which was denied by RTC but was granted an extension.
Meanwhile, COA advised NEA against making further payments
because the employees may not have been hired in the dates
specifically mentioned in RA 6758 that awards them of the benefits and
that RTC had no jurisdiction to order for the settlement under PD 1445.
Morales appealed to the CA, who also ruled in his favor as NEA cannot
take shelter in PD 1445, because as a GOCC, it had the right to be
sued.

ISSUE: Whether or not CA committed an error in ordering the writ of

execution against the funds of NEA

RULING: CA did commit an error in ordering the execution against

NEA’s funds.

First, garnishment is proper only when the judgment to be

enforced is one for payment of a sum of money. RTC merely directs
petitioners to "settle the claims of respondents." Therefore,
garnishment cannot be employed to implement such form of judgment.

In addition, it is undeniable that NEA is a GOCC — a juridical

personality separate and distinct from the government, with capacity to
sue and be sued. As such GOCC, petitioner NEA cannot evade
execution. However, before execution may proceed against it, a claim
for payment of the judgment award must first be filed with the COA.
Under PD 1445, it explicitly mentioned that COA had the 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 GOCCs and their subsidiaries. While
GOCCs are like corporations, which have the right to sue or be sued,
it is still part of the “agencies, subdivisions, etc” which is subject to the
governance of PD 1445. Therefore, execution of the settlement of

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employees’ claims could not have been possible without impleading
DBM.