Nha v. Heirs of Guivelondo

9/24/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 404
VOL. 404, JUNE 19, 2003 389

National Housing Authority vs. Heirs of Isidro Guivelondo
*
G.R. No. 154411. June 19, 2003.
NATIONAL HOUSING AUTHORITY, petitioner, vs.

HEIRS OF ISIDRO GUIVELONDO, COURT OF
APPEALS, HON. ISAIAS DICDICAN, Presiding Judge,
Regional Trial Court, Branch 11, Cebu City, and PASCUAL
Y. ABORDO, Sheriff, Regional Trial Court, Branch 11,
Cebu City, respondents.
Civil Procedure; Pleadings and Practice; Actions; Eminent

Domain; The right of the plaintiff to dismiss an action with the
consent of the court is universally recognized with certain well-
defined exceptions.—The right of the plaintiff to dismiss an action
with the consent of the court is universally recognized with
certain well-defined exceptions. If the plaintiff discovers that the
action which he commenced was brought for the purpose of
enforcing a right or a benefit, the advisability or necessity of
which he later discovers no longer exists, or that the result of the
action would be different from what he had intended, then he
should be permitted to withdraw his action, subject to the
approval of the court. The plaintiff should not be required to
continue the action, subject to some well-defined exceptions, when
it is not to his advantage to do so. Litigation should be
discouraged and not encouraged. Courts should not require
parties to litigate when they no longer desire to do so. Courts, in
granting permission to dismiss an action, of course, should always
take into consideration the effect which said dismissal would have
upon the rights of the defendant.
_______________
* FIRST DIVISION.
390
390 SUPREME COURT REPORTS ANNOTATED
central.com.ph/sfsreader/session/00000174c0b499ec24aa1141003600fb002c009e/t/?o=False 1/18
Same; Same; Same; Same; The very moment it appears at any

stage of the proceedings that the expropriation is not for a public
use, the action must necessarily fail and should be dismissed.—It
is not denied that the purpose of the plaintiff was to acquire the
land in question for a public use. The fundamental basis then of
all actions brought for the expropriation of lands, under the power
of eminent domain, is public use. That being true, the very
moment that it appears at any stage of the proceedings that the
expropriation is not for a public use, the action must necessarily
fail and should be dismissed, for the reason that the action cannot
be maintained at all except when the expropriation is for some
public use. That must be true even during the pendency of the
appeal of at any other stage of the proceedings. If, for example,
during the trial in the lower court, it should be made to appear to
the satisfaction of the court that the expropriation is not for some
public use, it would be the duty and the obligation of the trial
court to dismiss the action. And even during the pendency of the
appeal, if it should be made to appear to the satisfaction of the
appellate court that the expropriation is not for public use, then it
would become the duty and the obligation of the appellate court to
dismiss it.
Same; Same; Same; Same; Stages; There are two (2) stages in
every action for expropriation.—There are two (2) stages in every
action for expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an order, if
not of dismissal of the action, “of condemnation declaring that the
plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be
determined as of the date of the filing of the complaint.” An order
of dismissal, if this be ordained, would be a final one, of course,
since it finally disposes of the action and leaves nothing more to
be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly
state, in the proceedings before the Trial Court, “no objection to
the exercise of the right of condemnation (or the propriety thereof)
shall be filed or heard.” The second phase of the eminent domain
action is concerned with the determination by the Court of “the
just compensation for the property sought to be taken.” This is
done by the Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation on the
basis of the evidence before, and findings of, the commissioners
would be final, too. It would finally dispose of the second stage of
the suit, and leave nothing more to be done by the Court
regarding the issue. Obviously, one or another of the parties may

believe the order to be erroneous in its appreciation of the
evidence or findings of fact or otherwise. Obviously, too, such a
dissatisfied party may seek a reversal of the order by taking an
appeal therefrom.
391
VOL. 404, JUNE 19, 2003 391
Same; Same; Same; Same; Finality; An order of condemnation

or dismissal is final.—An order of condemnation or dismissal is
final, resolving the question of whether or not the plaintiff has
properly and legally exercised its power of eminent domain. Once
the first order becomes final and no appeal thereto is taken, the
authority to expropriate and its public use can no longer be
questioned.
Same; Same; Same; Same; Same; A final and executory
decision or order can no longer be disturbed or reopened.—A final
and executory decision or order can no longer be disturbed or
reopened no matter how erroneous it may be. Although judicial
determinations are not infallible, judicial error should be
corrected through appeals, not through repeated suits on the
same claim.
Same; Same; Same; Same; Socialized Housing; Socialized
housing falls within the confines of “public use.”—Housing is a
basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health,
safety, the environment and in sum, the general welfare. The
public character of housing measures does not change because
units in housing projects cannot be occupied by all but only by
those who satisfy prescribed qualifications. A beginning has to be
made, for it is not possible to provide housing for all who need it,
all at once. x x x x x x x x x. In the light of the foregoing, this
Court is satisfied that “socialized housing” falls with the confines
of “public use.” x x x x x x x x x. Provisions on economic
opportunities inextricably linked with low-cost housing, or slum
clearance, relocation and resettlement, or slum improvement
emphasize the public purpose of the project.
Same; Same; Same; Same; It is arbitrary and capricious for a
government agency to go through expropriation proceedings and
then refuse to pay.—It is arbitrary and capricious for a
government agency to initiate expropriation proceedings, seize a
person’s property, allow the judgment of the court to become final
and executory and then refuse to pay on the ground that there are
no appropriations for the property earlier taken and profitably

used. We condemn in the strongest possible terms the cavalier
attitude of government officials who adopt such a despotic and
irresponsible stance.
Same; Same; Same; Same; Garnishment; Disbursements of
public funds must be covered by the corresponding appropriation
as required by law.—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 Courts 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
392
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.
Same; Same; Same; Same; Same; Exception; If the funds
belong to a public corporation or a government-owned and
controlled corporation with a personality of its own, then its funds
are not exempt from garnishment.— If the funds belong to a public
corporation or a government-owned or controlled corporation
which is clothed with a personality of its own, separate and
distinct from that of the government, then its funds are not
exempt from garnishment. This is so because when the
government enters into commercial business, it abandons its
sovereign capacity and is to be treated like any other corporation.
Same; Same; Same; Same; Same; The funds of People’s
Homesite and Housing Corporation are not exempt from
garnishment.—Having a juridical personality separate and
distinct from the government, the funds of such government-
owned and controlled corporations and non-corporate agency,
although considered public in character, are not exempt from
garnishment. This doctrine was applied to suits filed against the
Philippine Virginia Tobacco Administration (PNB vs. Pabalan, et
al., 83 SCRA 695); the National Shipyard & Steel Corporation
(NASSCO vs. CIR, 118 Phil. 782); the Manila Hotel Company
(Manila Hotel Employees Asso. vs. Manila Hotel Co., 73 Phil. 374);
and the People’s Homesite and Housing Corporation (PNB vs.
CIR, 81 SCRA 314).
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.

Legal Department for petitioner.
Serecio Matthew B. Jo for private respondents.
YNARES-SANTIAGO, J.:
On February 23, 1999, petitioner National Housing

Authority filed with the Regional Trial Court of Cebu City,
Branch 11, an Amended Complaint for eminent domain
against Associacion Benevola de Cebu, Engracia Urot and
the Heirs of Isidro Guivelondo, docketed as Civil Case No.
CEB-23386. Petitioner alleged that defendant Associacion
Benevola de Cebu was the claimant/owner of Lot 108-C
located in the Banilad Estate, Cebu City; that defen-
393
VOL. 404, JUNE 19, 2003 393

dant Engracia Urot was the claimant/owner of Lots Nos.

108-F, 108-I, 108-G, 6019-A and 6013-A, all of the Banilad
Estate; that defendant Heirs of Isidro Guivelondo were the
claimants/owners of Cadastral Lot No. 1613-D located at
Carreta, Mabolo, Cebu City; and that the lands are within
a blighted urban center which 1petitioner intends to develop
as a socialized housing project.
On November 12, 1999, the Heirs of Isidro Guivelondo,
respondents herein, filed a Manifestation stating that they
were waiving their objections to petitioner’s power to
expropriate their properties. Hence, the trial court issued
an Order as follows:
“WHEREFORE, the Court hereby declares that the plaintiff has a

lawful right to expropriate the properties of the defendants who
are heirs of Isidro Guivelondo.
The appointment of commissioners who would ascertain and
report to the Court the just compensation for said properties will
be done as soon as the parties shall have submitted to the Court
the names of persons desired by them to be appointed as such
commissioners.
2
2
SO ORDERED.”
Thereafter, the trial court appointed three Commissioners

to ascertain the correct and just compensation of the
properties of respondents. On April 17, 2000, the
Commissioners submitted their report wherein they
recommended that the just compensation of the subject3
properties be fixed at P11,200.00 per square meter. On
August 7, 2000, the trial court rendered Partial Judgment
adopting the recommendation of the Commissioners and
fixing the just compensation of the lands of respondent
Heirs of Isidro Guivelondo at P11,200.00 per square meter,
to wit:
“WHEREFORE, in view of the foregoing premises, judgment is

hereby rendered by the Court in this case fixing the just
compensation for the lands of the defendants who are the heirs of
Isidro Guivelondo, more particularly Lots Nos. 1, 2, 3, 4, 5, 6, 7, 8,
9, 10, 11, 12, 13, 15, 16, 19, 20, 6016-F, 6016-H, 6016-E and 6016-
D of Csd-10219, which were sought to be expropriated by the
plaintiff at P11,200.00 per square meter and ordering the plaintiff
to pay to the said defendants the just compensation for the said
lands computed at P11,200.00 per square meter.
_______________
1 Rollo, pp. 72-78.

2 Id., at p. 79.
3 Id., at pp. 80-89.
394

4
IT IS SO ORDERED.”
Petitioner NHA filed two motions for reconsideration dated

August 30, 2000 and August 31, 2000, assailing the
inclusion of Lots 12, 13 and 19 as well as the amount of just
compensation, respectively. Respondent Heirs also filed a
motion for reconsideration of the Partial Judgment. On
October 11, 2000, the trial court issued an Omnibus Order
denying the motion for reconsideration of respondent Heirs
and the August 31, 2000 motion of petitioner, on the
ground that the fixing of the just compensation had
adequate basis and support. On the other hand, the trial
court granted petitioner’s August 30, 2000 motion for
reconsideration on the ground that the Commissioner’s
Report did not include Lots 12, 13 and 19 within its

coverage. Thus:
“WHEREFORE, in view of the foregoing premises, the Court

hereby denies the motion of the heirs of Isidro Guivelondo (with
the exception of Carlota Mercado and Juanita Suemith) for
reconsideration of the partial judgment rendered in this case on
August 7, 2000 and plaintiffs motion for reconsideration of said
judgment, dated August 31, 2000.
However, the Court hereby grants the plaintiff ’s motion for
reconsideration of said judgment, dated August 30, 2000.
Accordingly, the judgment rendered in this case on August 7,
2000 is hereby set aside insofar as it has fixed just compensations
for Lots Nos. 12, 13 and 19 of Csd-10219 because the fixing of said
just compensations5appears to lack adequate basis.
SO ORDERED.”
Petitioner filed with the Court of Appeals a petition for6

certiorari, which was docketed as CA-G.R. SP No. 61746.
Meanwhile, on October 31, 2000, the trial court issued an
Entry of Judgment over the Partial Judgment dated
August 7, 2000 as7 modified by the Omnibus Order dated
October 11, 2000. Subsequently, respondent Heirs filed a
Motion for Execution, which was granted on November 22,
2000.
On January 31, 2001, the Court of Appeals dismissed
the petition for certiorari on the ground that the Partial
Judgment and
_______________
4 Id., at pp. 90-92; penned by Judge Isaias P. Dicdican.

5 CA Rollo, pp. 75-76.
6 Id., at pp. 77-91.
7 Id., at p. 92.
395
VOL. 404, JUNE 19, 2003 395

Omnibus Order became final 8and executory when

petitioner failed to appeal the same.
Petitioner’s Motion for Reconsideration and Urgent Ex-
Parte Motion for a Clarificatory Ruling
9
were denied in a
Resolution dated March 18, 2001. A petition for review
was filed by petitioner with this Court, which was docketed
as G.R. No. 147527. However, the same was denied in a
Minute Resolution dated May 9, 2001 for failure to show 10

that the Court of Appeals committed a reversible error.
Petitioner filed a Motion for Reconsideration which
11
was
however denied with finality on August 20, 2001.
Prior to the aforesaid denial of the Motion for
Reconsideration, petitioner, on July 16, 2001, filed with the
trial court a Motion to Dismiss Civil Case No. CEB-23386,
complaint for eminent domain, alleging that the
implementation of its socialized housing project was
rendered impossible by the unconscionable value of the
land sought to be expropriated,
12
which the intended
beneficiaries can not afford. The Motion was denied on
September 17, 2001, on the ground that the Partial
Judgment had already become final and executory and
there was no just and 13equitable reason to warrant the
dismissal of the case. Petitioner filed a Motion for
Reconsideration, which
14
was denied in an Order dated
November 20, 2001.
Petitioner thus filed a petition for certiorari with the
Court of Appeals, which was docketed as CA-G.R. SP No.
68670, praying for the annulment of the Order of the trial
court denying its 15
Motion to Dismiss and its Motion for
Reconsideration.
On February 5, 2002, the Court of Appeals summarily
dismissed the petition. Immediately thereafter, respondent
Sheriff Pascual Y. Abordo of the Regional Trial Court of
Cebu City, Branch 11, served
_______________
8 Id., pp. 97-105; penned by Associate Justice Romeo C. Callejo, Sr.

(now a member of this Court), concurred in by Associate Justices Renato
C. Dacudao and Josefina Guevara-Salonga.
9 Id., Annex “N”.
10 Id., at pp. 106-107.
11 Id., at pp. 120-121.
12 Id., at pp. 116-119.
13 Id., at pp. 21-22.
14 Id., at pp. 23-24.
15 Id., at pp. 3-20.
396

on petitioner a Notice of Levy pursuant to the Writ of

Execution issued by the trial court to enforce the Partial
Judgment of August16
7, 2000 and the Omnibus Order of
October 11, 2000.
On February 18, 2002, the Court of Appeals set aside 17
the dismissal of the petition and reinstated the same.
Thereafter, a temporary restraining order was issued 18
enjoining respondent sheriff to preserve the status quo.
On May 27, 2002, respondent sheriff served on the
Landbank of the Philippines a Notice of Third
Garnishment against19
the deposits, moneys and interests of
petitioner therein. Subsequently, respondent 20sheriff levied
on funds and personal properties of petitioner.
On July 16, 2002, the Court of Appeals rendered21 the
assailed decision dismissing the petition for certiorari.
Hence, petitioner filed this petition for review, raising
the following issues:
1) WHETHER OR NOT THE STATE CAN BE

COMPELLED AND COERCED BY THE COURTS
TO EXERCISE OR CONTINUE WITH THE
EXERCISE OF ITS INHERENT POWER OF
EMINENT DOMAIN;
2) WHETHER OR NOT JUDGMENT HAS BECOME
FINAL AND EXECUTORY AND IF ESTOPPEL
OR LACHES APPLIES TO GOVERNMENT;
3) WHETHER OR NOT WRITS OF EXECUTION
AND GARNISHMENT MAY BE ISSUED
AGAINST THE STATE IN AN EXPROPRIATION
WHEREIN THE EXERCISE OF THE POWER OF
EMINENT DOMAIN WILL NOT SERVE PUBLIC
USE OR PURPOSE (APPLICATION OF
SUPREME COURT 22 ADMINISTRATIVE
CIRCULAR NO. 10-2000).
_______________
16 Rollo, pp. 134-135.

17 Id., at pp. 136-137.
18 Id., at pp. 138-139.
19 Id., at p. 140.
20 Id., at pp. 152-153.
21 Id., at pp. 48-58; penned by Associate Justice Remedios A. Salazar-
Fernando; concurred in by Associate Justices Romeo J. Callejo, Sr. and
Danilo B. Pine.
22 Id., at p. 13.
397
VOL. 404, JUNE 19, 2003 397

Respondent Heirs of Isidro Guivelondo filed their

Comment, arguing as follows:
AS EARLIER UPHELD BY THE HONORABLE COURT, THE

JUDGMENT OF THE TRIAL COURT IS ALREADY FINAL AND
EXECUTORY, HENCE, COULD NO LONGER BE DISTURBED
NOR SET ASIDE
II
THE FUNDS AND ASSETS OF THE PETITIONER ARE NOT

EXEMPT FROM LEVY AND GARNISHMENT
III
THE ISSUES RAISED IN THIS SECOND PETITION FOR

REVIEW
23
WERE ALREADY RESOLVED BY THE HONORABLE
COURT
24
In the early case of City of Manila v. Ruymann, the Court
was confronted with the question: May the petitioner, in an
action for expropriation, after he has been placed in
possession of the property and before the termination of the
action, dismiss the petition? It resolved the issue in the
affirmative and held:
The right of the plaintiff to dismiss an action with the consent of

the court is universally recognized with certain well-defined
exceptions. If the plaintiff discovers that the action which he
commenced was brought for the purpose of enforcing a right or a
benefit, the advisability or necessity of which he later discovers no
longer exists, or that the result of the action would be different
from what he had intended, then he should be permitted to
withdraw his action, subject to the approval of the court. The
plaintiff should not be required to continue the action, subject to
some well-defined exceptions, when it is not to his advantage to
do so. Litigation should be discouraged and not encouraged.
Courts should not require parties to litigate when they no longer
desire to do so. Courts, in granting permission to dismiss an
action, of course, should always take into consideration the effect
which said 25
dismissal would have upon the rights of the
defendant.
_______________
23 Id., at p. 541.
24 37 Phil. 421 (1918).
25 Id., at pp. 424-425.
398

Subsequently,
26
in Metropolitan Water District v. De Los
Angeles, the Court had occasion to apply the above-quoted
ruling when the petitioner, during the pendency of the
expropriation case, resolved that the land sought to be
condemned was no longer necessary in the maintenance
and operation of its system of waterworks. It was held:
It is not denied that the purpose of the plaintiff was to acquire the
land in question for a public use. The fundamental basis then of
all actions brought for the expropriation of lands, under the power
of eminent domain, is public use. That being true, the very
moment that it appears at any stage of the proceedings that the
expropriation is not for a public use, the action must necessarily
fail and should be dismissed, for the reason that the action cannot
be maintained at all except when the expropriation is for some
public use. That must be true even during the pendency of the
appeal of at any other stage of the proceedings. If, for example,
during the trial in the lower court, it should be made to appear to
the satisfaction of the court that the expropriation is not for some
public use, it would be the duty and the obligation of the trial
court to dismiss the action. And even during the pendency of the
appeal, if it should be made to appear to the satisfaction of the
appellate court that the expropriation is not for public use, then it
would become
27
the duty and the obligation of the appellate court to
dismiss it.
Notably, the foregoing cases refer to the dismissal of an

action for eminent domain at the instance of the plaintiff
during the pendency of the case. The rule is different where
the case had been decided and the judgment had already
become final and executory.
Expropriation proceedings consists of two stages: first,
condemnation of the property after it is determined that its
acquisition will be for a public purpose or public use and,
second, the determination of just compensation to be paid
for the taking of private property to be made by the court 28
with the assistance of not more than three commissioners.
Thus:
There are two (2) stages in every action for expropriation. The
first is concerned with the determination of the authority of the
plaintiff to exercise the power of eminent domain and the
propriety of its exercise in the context of the facts involved in the
suit. It ends with an order, if not of
_______________
26 55 Phil. 776 (1931).

27 Id., at p. 782.
28 City of Manila v. Serrano, 411 Phil. 754; 359 SCRA 231 (2001).
399
VOL. 404, JUNE 19, 2003 399

dismissal of the action, “of condemnation declaring that the

plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the
determined as of the date of the filing of the complaint.” An order
of dismissal, if this be ordained, would be a final one, of course,
since it finally disposes of the action and leaves nothing more to
be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly
state, in the proceedings before the Trial Court, “no objection to
the exercise of the right of condemnation (or the propriety thereof)
shall be filed or heard.”
The second phase of the eminent domain action is concerned
with the determination by the Court of “the just compensation for
the property sought to be taken.” This is done by the Court with
the assistance of not more than three (3) commissioners. The
order fixing the just compensation on the basis of the evidence
before, and findings of, the commissioners would be final, too. It
would finally dispose of the second stage of the suit, and leave
nothing more to be done by the Court regarding the issue.
Obviously, one or another of the parties may believe the order to
be erroneous in its appreciation of the evidence or findings of fact
or otherwise. Obviously, too, such a dissatisfied party
29
may seek a
reversal of the order by taking an appeal therefrom.
The outcome of the first phase of expropriation

proceedings, which is either an order of expropriation or an
order of dismissal, is final since it finally disposes of the
case. On the other hand, the second phase ends with an
order fixing the amount of just
30
compensation. Both orders,
being final, are appealable. An order of condemnation or
dismissal is final, resolving the question of whether or not
the plaintiff has properly

31
and legally exercised its power of
eminent domain. Once the first order becomes final and
no appeal thereto is taken, the authority to32 expropriate and
its public use can no longer be questioned.
The above rule is based on Rule 67, Section 4 of the 1997
Rules of Civil Procedure, which provides:
_______________
29 Municipality of Biñan v. Garcia, G.R. No. 69260, 22 December 1989,

180 SCRA 576.
30 Estate of Salud Jimenez v. Philippine Export Processing Zone, G.R.
No. 137285, 16 January 2001, 349 SCRA 240, 253.
31 Heirs of Alberto Suguitan v. City of Mandaluyong, 384 Phil. 676, 692;
328 SCRA 137 (2000).
32 Estate of Salud Jimenez v. Philippine Export Processing Zone, supra,
at 257.
400

Order of expropriation.—If the objections to and the defenses

against the right of the plaintiff to expropriate the property are
overruled, or when no party appears to defend as required by this
Rule, the court may issue an order of expropriation declaring that
the plaintiff has a lawful right to take the property sought to be
expropriated, for the public use or purpose described in the
determined as of the date of the taking of the property or the
filing of the complaint, whichever came first.
A final order sustaining the right to expropriate the property
may be appealed by any party aggrieved thereby. Such appeal,
however, shall not prevent the court from determining the just
compensation to be paid.
After the rendition of such an order, the plaintiff shall not be
permitted to dismiss or discontinue the proceeding except on such
terms as the court deems just and equitable. (italics ours)
In the case at bar, petitioner did not appeal the Order of

the trial court dated December 10, 1999, which declared
that it has a lawful right to expropriate the properties of
respondent Heirs of Isidro Guivelondo. Hence, the Order
became final and may33 no longer be subject to review or
reversal in any court. A final and executory decision or
order can no longer be disturbed or reopened no matter
how erroneous it may be. Although judicial determinations
are not infallible, judicial error should be corrected through

34
appeals, not through repeated suits on the same claim.
Petitioner anchors its arguments on the last paragraph
of the above-quoted Rule 67, Section 4. In essence, it
contends that there are just and equitable grounds to allow
dismissal or discontinuance of the expropriation
proceedings. More specifically, petitioner alleges that the
intended public use was rendered nugatory by the
unreasonable just compensation fixed by the court, which is
beyond the means of the intended beneficiaries of the
socialized housing project. The argument is tenuous.
Socialized housing has been recognized as public use for
purposes of exercising the power of eminent domain.
Housing is a basic human need. Shortage in housing is a matter of

state concern since it directly and significantly affects public
health, safety, the
_______________
33 Padillo v. Court of Appeals, G.R. No. 119707, 29 November 2001, 371 SCRA
27.
34 Manila Electric Company v. Philippine Consumers Foundation, Inc., G.R. No.
101783, 23 January 2002, 374 SCRA 262.
401
VOL. 404, JUNE 19, 2003 401

environment and in sum, the general welfare. The public

character of housing measures does not change because units in
housing projects cannot be occupied by all but only by those who
satisfy prescribed qualifications. A beginning has to be made, for
it is not possible to provide housing for all who need it, all at once.
x x x x x x x x x.
In the light of the foregoing, this Court is satisfied that
“socialized housing” falls with the confines of “public use.” x x x x
x x x x x. Provisions on economic opportunities inextricably linked
with low-cost housing, or slum clearance, relocation and
resettlement, 35or slum improvement emphasize the public purpose
of the project.
The public purpose of the socialized housing project is not

in any way diminished by the amount of just compensation
that the court has fixed. The need to provide decent
housing to the urban poor dwellers in the locality was not
lost by the mere fact that the land cost more than
petitioner had expected. It is worthy to note that petitioner
pursued its petition for certiorari with the Court of Appeals

assailing the amount of just compensation and its petition
for review with this Court which eloquently indicates that
there still exists a public use for the housing project. It was
only after its appeal and petitions for review were
dismissed that petitioner made a complete turn-around and
decided it did not want the property anymore.
Respondent landowners had already been prejudiced by
the expropriation case. Petitioner cannot be permitted to
institute condemnation proceedings against respondents
only to abandon it later when it finds the amount of just
compensation unacceptable. Indeed, our 36
reprobation in the
case of Cosculluela v. Court of Appeals is apropos:
It is arbitrary and capricious for a government agency to initiate

expropriation proceedings, seize a person’s property, allow the
judgment of the court to become final and executory and then
refuse to pay on the ground that there are no appropriations for
the property earlier taken and profitably used. We condemn in the
strongest possible terms the cavalier attitude of government
officials who adopt such a despotic and irresponsible stance.
_______________
35 Sumulong v. Guerrero, G.R. No. L-48685, 30 September 1987, 154

SCRA 461, 468-469.
36 G.R. No. L-77765, 15 August 1988, 164 SCRA 393, 401.
402

In order to resolve the issue of the propriety of the

garnishment against petitioner’s funds and personal
properties, there is a need to first determine its true
character as a government entity. Generally, funds and
properties of the government cannot be the object of
garnishment proceedings even if the consent to be sued had
37
been previously granted and the state liability adjudged.
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
Courts 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 38their legitimate and specific objects, as
appropriated by law.
However, if the funds belong to a public corporation or a

government-owned or controlled corporation which is
clothed with a personality of its own, separate and distinct
from that of the government,
39
then its funds are not exempt
from garnishment. This is so because when the
government enters into commercial business, it abandons
its sovereign40 capacity and is to be treated like any other
corporation.
In the case of petitioner NHA, the matter of whether its
funds and properties are exempt from garnishment has
already been resolved squarely against its predecessor, the
People’s Homesite and Housing Corporation (PHHC), to
wit:
The plea for setting aside the notice of garnishment was premised
on the funds of the People’s Homesite and Housing Corporation
deposited with petitioner being “public in character.” There was
not even a categori-
_______________
37 Republic v. Villasor, G.R. No. L-30671, 28 November 1973, 54 SCRA 83, 87;
Republic v. Palacio, 132 Phil. 369; 23 SCRA 899 (1968).
38 Commissioner of Public Highways v. San Diego, G.R. No. L-30098, 18
February 1970, 31 SCRA 616, at 625.
39 Philippine National Bank v. Pabalan, G.R. No. L-33112, 15 June 1978, 83
SCRA 595, 598.
40 Rizal Commercial Banking Corporation v. De Castro, G.R. No. L-34548, 29
November 1988, 168 SCRA 49, 60.
403
VOL. 404, JUNE 19, 2003 403

cal assertion to that effect. It is only the possibility of its being

“public in character.” The tone was thus irresolute, the approach
diffident. The premise that the funds could be spoken of as public
in character may be accepted in the sense that the People’s
Homesite and Housing Corporation was a government-owned
entity. It does
41
not follow though that they were exempt from
garnishment.
This was reiterated in the subsequent case42 of Philippine

Rock Industries, Inc. v. Board of Liquidators:
Having a juridical personality separate and distinct from the

government, the funds of such government-owned and controlled
corporations and non-corporate agency, although considered
public in character, are not exempt from garnishment. This
doctrine was applied to suits filed against the Philippine Virginia
Tobacco Administration (PNB vs. Pabalan, et al., 83 SCRA 695);
the National Shipyard & Steel Corporation (NASSCO vs. CIR,
118 Phil. 782); the Manila Hotel Company (Manila Hotel
Employees Asso. vs. Manila Hotel Co., 73 Phil. 374); and the
People’s Homesite and Housing Corporation (PNB vs. CIR,
81 SCRA 314). [emphasis ours]
Hence, it is clear that the funds of petitioner NHA are not

exempt from garnishment or execution. Petitioner’s prayer
for injunctive relief to restrain respondent Sheriff Pascual
Abordo from enforcing the Notice of Levy and Garnishment
against its funds and properties must, therefore, be denied.
WHEREFORE, in view of the foregoing, the instant
petition for review is DENIED. The decision of the Court of
Appeals in CA-G.R. SP No. 68670, affirming the trial
court’s Order denying petitioner’s Motion to Dismiss the
expropriation proceedings in Civil Case No. CEB-23386, is
AFFIRMED. Petitioner’s prayer for injunctive relief
against the levy and garnishment of its funds and personal
properties is DENIED. The Temporary Restraining Order
dated January 22, 2003 is LIFTED.
SO ORDERED.
Davide, Jr. (C.J., Chairman), Vitug, Carpio and

Azcuna, JJ., concur.
Petition denied, assailed judgment affirmed.
_______________
41 Philippine National Bank v. CIR, G.R. No. L-32667, 31 January

1978, 81 SCRA 314, 318.
42 G.R. No. 84992, 15 December 1989, 180 SCRA 171.
404

Firmalo vs. Quierrez
Note.—Upon compliance with the requirements for

expropriation, issuance of writ of possession becomes
ministerial. (City of Manila vs. Serrano, 359 SCRA 231

[2001])
——o0o——
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9/24/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 404

VOL. 404, JUNE 19, 2003 389

NATIONAL HOUSING AUTHORITY, petitioner, vs.

Civil Procedure; Pleadings and Practice; Actions; Eminent

390 SUPREME COURT REPORTS ANNOTATED

National Housing Authority vs. Heirs of Isidro Guivelondo

Same; Same; Same; Same; The very moment it appears at any

regarding the issue. Obviously, one or another of the parties may

VOL. 404, JUNE 19, 2003 391

National Housing Authority vs. Heirs of Isidro Guivelondo

Same; Same; Same; Same; Finality; An order of condemnation

no appropriations for the property earlier taken and profitably

392 SUPREME COURT REPORTS ANNOTATED

National Housing Authority vs. Heirs of Isidro Guivelondo

obvious considerations of public policy. Disbursements of public

PETITION for review on certiorari of a decision of the

The facts are stated in the opinion of the Court.

On February 23, 1999, petitioner National Housing

VOL. 404, JUNE 19, 2003 393

dant Engracia Urot was the claimant/owner of Lots Nos.

“WHEREFORE, the Court hereby declares that the plaintiff has a

Thereafter, the trial court appointed three Commissioners

“WHEREFORE, in view of the foregoing premises, judgment is

1 Rollo, pp. 72-78.

394 SUPREME COURT REPORTS ANNOTATED

Petitioner NHA filed two motions for reconsideration dated

Report did not include Lots 12, 13 and 19 within its

“WHEREFORE, in view of the foregoing premises, the Court

Petitioner filed with the Court of Appeals a petition for6

4 Id., at pp. 90-92; penned by Judge Isaias P. Dicdican.

VOL. 404, JUNE 19, 2003 395

Omnibus Order became final 8and executory when

Minute Resolution dated May 9, 2001 for failure to show 10

8 Id., pp. 97-105; penned by Associate Justice Romeo C. Callejo, Sr.

396 SUPREME COURT REPORTS ANNOTATED

on petitioner a Notice of Levy pursuant to the Writ of

1) WHETHER OR NOT THE STATE CAN BE

16 Rollo, pp. 134-135.

VOL. 404, JUNE 19, 2003 397

Respondent Heirs of Isidro Guivelondo filed their

AS EARLIER UPHELD BY THE HONORABLE COURT, THE

THE FUNDS AND ASSETS OF THE PETITIONER ARE NOT

THE ISSUES RAISED IN THIS SECOND PETITION FOR

The right of the plaintiff to dismiss an action with the consent of

398 SUPREME COURT REPORTS ANNOTATED

Notably, the foregoing cases refer to the dismissal of an

26 55 Phil. 776 (1931).

VOL. 404, JUNE 19, 2003 399

dismissal of the action, “of condemnation declaring that the

The outcome of the first phase of expropriation

the plaintiff has properly

29 Municipality of Biñan v. Garcia, G.R. No. 69260, 22 December 1989,

400 SUPREME COURT REPORTS ANNOTATED

Order of expropriation.—If the objections to and the defenses

In the case at bar, petitioner did not appeal the Order of

are not infallible, judicial error should be corrected through

Housing is a basic human need. Shortage in housing is a matter of