The Supreme Court, in Star Special Watchman and Detective Agency, Inc. v. Puerto Princesa City, addressed whether mandamus is the proper remedy to compel a local government unit (LGU) to comply with a court decision ordering payment of a judgment debt. While recognizing the LGU’s obligation to honor final judgments, the Court clarified that the Commission on Audit (COA) has primary jurisdiction over money claims against the government. This ruling underscores the importance of exhausting administrative remedies before seeking judicial intervention to enforce judgments against government entities.

From Land Dispute to Legal Gridlock: Can Courts Force Cities to Pay Up?

The case originated from a land dispute between Star Special Watchman and Detective Agency, Inc. (Star Special) and the City of Puerto Princesa. Star Special owned land that was partially used for the “Wescom Road,” prompting them to seek just compensation. They initially won a favorable judgment in 1993, which became final. However, disputes arose over the full satisfaction of this judgment, leading to further litigation and a subsequent court decision in 2003 ordering the city to pay an outstanding balance. When the city failed to fully comply, Star Special sought a writ of mandamus to compel payment, leading to the Supreme Court.

The petitioners argued that mandamus was appropriate because the city had a ministerial duty to comply with the final court decision. They cited precedents where mandamus was used to compel LGUs to enact necessary ordinances and disburse funds to satisfy judgment awards. The respondents, on the other hand, contended that they had already settled the debt and that mandamus was not the proper remedy. They also invoked Supreme Court Administrative Circular No. 10-2000, which outlines the procedure for enforcing money judgments against government entities, emphasizing the primary jurisdiction of the COA.

The Supreme Court acknowledged the petitioners’ frustration, noting their repeated attempts to enforce their claim through various channels. It also recognized precedents where mandamus had been sanctioned to compel LGUs to satisfy final judgments. However, the Court emphasized that mandamus is an equitable remedy that should not be used when other adequate remedies are available. Furthermore, it reiterated that **public funds are generally not subject to levy and execution** unless specifically provided by statute.

The Court then delved into the crucial aspect of administrative remedies, particularly concerning money judgments against the government. Citing Supreme Court Administrative Circular 10-2000 and COA Circular No. 2001-002, the Court underscored that the prosecution, enforcement, or satisfaction of state liability must adhere to the rules and procedures outlined in Presidential Decree (P.D.) No. 1445, also known as the Government Auditing Code of the Philippines. This means that all money claims against the government must first be filed with the Commission on Audit (COA), which is mandated to act upon them within sixty days.

The court quoted Commissioner of Public Highways v. San Diego, stating:

“The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant’s action ‘only up to the completion of proceedings anterior to the stage of execution’ and that the power of the Court ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. 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.”

Building on this principle, the Court emphasized the COA’s primary jurisdiction to examine, audit, and settle all debts and claims due from or owing to the government, including its subdivisions, agencies, and instrumentalities. This jurisdiction extends even to cases where a court decision has already become final and executory. As such, the Court found that Star Special should have pursued their claim with the COA, and the COA erred in refusing to act on the claim.

The Court cited National Electrification Administration v. Morales:

“Without question, petitioner 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; its funds may be garnished or levied upon in satisfaction of a judgment rendered against it. However, before execution may proceed against it, a claim for payment of the judgment award must first be filed with the COA.”

Furthermore, the Court noted that Star Special had the option to file a petition for certiorari with the Supreme Court if they were aggrieved by the COA’s refusal to act, as provided under Section 50 of P.D. No. 1445. Because the petitioners had another available remedy, mandamus was not the appropriate course of action.

FAQs

What was the key issue in this case?	The key issue was whether a writ of mandamus could compel a local government unit to comply with a court decision ordering the payment of a judgment debt. The court examined the availability of other remedies and the primary jurisdiction of the Commission on Audit.
What is a writ of mandamus?	A writ of mandamus is a court order compelling a government official or entity to perform a ministerial duty required by law. It is generally used when there is no other adequate remedy available to the petitioner.
Why did the Supreme Court deny the petition for mandamus?	The Court denied the petition because Star Special had another adequate remedy: to pursue their claim with the Commission on Audit (COA). The COA has primary jurisdiction over money claims against the government.
What is the role of the Commission on Audit (COA) in this case?	The COA has the primary jurisdiction to examine, audit, and settle all debts and claims of any sort due from or owing to the government or any of its subdivisions, agencies, and instrumentalities. This includes money judgments against government entities.
What should Star Special have done differently?	Star Special should have pursued their claim with the COA after the Regional Trial Court issued the writ of execution. If the COA refused to act, they should have filed a petition for certiorari with the Supreme Court.
Are government funds subject to levy and execution?	Generally, no. Public funds are not subject to levy and execution unless specifically provided by statute. This is to prevent the disruption of essential government functions and services.
What is the significance of Supreme Court Administrative Circular No. 10-2000?	This circular enjoins judges to exercise utmost caution, prudence, and judiciousness in issuing writs of execution to satisfy money judgments against government agencies and local government units. It emphasizes the need to comply with the rules and procedures of the COA.
What does P.D. No. 1445, the Government Auditing Code of the Philippines, say about money claims?	It states that all money claims against the Government must first be filed with the Commission on Audit (COA), which must act upon it within sixty days. Rejection of the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari.

In conclusion, the Supreme Court’s decision in Star Special Watchman and Detective Agency, Inc. v. Puerto Princesa City clarifies the proper procedure for enforcing money judgments against local government units. While mandamus may be a potential remedy, claimants must first exhaust administrative remedies by pursuing their claims with the Commission on Audit. This ruling reinforces the principle of government immunity from execution and the importance of adhering to established auditing procedures.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Star Special Watchman and Detective Agency, Inc. v. Puerto Princesa City, G.R. No. 181792, April 21, 2014