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SC orders private contractor: Give P16M back  to UPLB

September 17, 2012 7:51pm

The Supreme Court in a recent ruling ordered Stern Builders Corporation to return P16.3 million in garnishment to the University of the Philippines-Los Baños (UPLB), reversing earlier decisions of the Court of Appeals and a Quezon City court.
“Trial judges should not immediately issue writs of execution or garnishment against the Government or any of its subdivisions, agencies, and instrumentalities to enforce money judgments,” according to a summary of the case the SC posted on its website Monday.
“They should bear in mind that the primary jurisdiction to examine, audit, and settle all claims of any sort from the Government or any of its subdivisions, agencies, and instrumentalities pertains to the Commission on Audit (COA) pursuant to Presidential Decree No. 1445 (Government Auditing Code of the Philippines),” the case summary read.
In deciding on the case, Associate Justice Lucas Bersamin reversed the decision of the Court of Appeals that junked a petition by UP Los Baños after the RTC-QC Branch 80 ordered the state university to pay Stern Builders by garnishing P16,370,191.74 of government funds for the construction and renovation of the UPLB College of Arts and Sciences building.
UPLB was liable to Stern Builders originally for P503,462.74 for the construction and renovation of the building.
“Specifically, the UP was held liable to Stern Builders for P503,462.74 representing the third billing, additional accomplished work, and retention money, P5,716,729 in actual damages, P10,000,000 in moral damages, P150,000 and P1,500 per appearance in attorney’s fees and costs of suit,” according to the high tribunal.
“The RTC held the decision to have attained finality and subject to execution as UP’s notice of appeal was filed out of time. The Court thus ordered Stern Builders, et al. to redeposit the P16,370,191.74 within 10 days from receipt of the decision," it added.
UP is a government institution performing the state’s constitutional mandate of promoting quality and accessible education, and all the funds going into its possession, including interest from its bank deposits, constitute a “special trust fund,” the disbursement of which should always be aligned with the UP’s mission and purpose, and should always be subject to auditing by the COA, the SC noted.
 “Hence the funds subject of this action could not be validly made the subject of the RTC’s writ of execution or garnishment. The adverse judgment rendered against the UP in a suit to which it had impliedly consented was not immediately enforceable by execution against the UP because suability of the State did not necessarily means its liability,” the SC ruled.
COA must first adjudicate Stern Builders’ claim before execution should proceed as expressly provided in PD 1445, sec. 26, it said, noting, “It held that Stern Builders, et al. should first seek the approval of the COA of their monetary claim.
“As to the RTC, the [SC] declared that it acted beyond its jurisdiction by authorizing the withdrawal of the garnished funds of the UP such that all its orders and issuances thereon were void and of no legal effect.” — Rouchelle Dinglasan/VS/BM, GMA News
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