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374 SUPREME COURT REPORTS ANNOTATED

De la Victoria vs. Burgos

*
G.R. No. 111190. June 27, 1995.

LORETO D. DE LA VICTORIA, as City Fiscal of Mandaue

City and in his personal capacity as garnishee, petitioner,
vs. HON. JOSE P. BURGOS, Presiding Judge, RTC, Br.
XVII, Cebu City, and RAUL H. SESBREÑO, respondents.

Judgments; Garnishment; Words and Phrases; Garnishment

is considered as a species of attachment for reaching credits
belonging to the judgment debtor owing to him from a stranger to
the litigation.—Garnishment is considered as a species of
attachment for reaching credits belonging to the judgment debtor
owing to him from a stranger to the litigation. Emphasis is laid on
the phrase “belonging to the judgment debtor” since it is the focal
point in resolving the issues raised.
Same; Same; Same; Administrative Law; Public Officers;
Negotiable Instruments Law; As ordinarily understood, delivery
means the transfer of the possession of the instrument by the
maker or drawer with intent to transfer title to the payee and
recognize him as the holder thereof.—As Assistant City Fiscal, the
source of the salary of Mabanto, Jr., is public funds. He receives
his compensation in the form of checks from the Department of
Justice through petitioner as City Fiscal of Mandaue City and
head of office. Under Sec. 16 of the Negotiable Instruments Law,
every contract on a negotiable instrument is incomplete and
revocable until delivery of the instrument for the purpose of giving
effect thereto. As ordinarily understood, delivery means the
transfer of the possession of the instrument by the maker or
drawer with intent to transfer title to the payee and recognize him
as the holder thereof.
Same; Same; Same; Same; Same; Same; Where checks due a
government employee have not yet been delivered to him, they do
not belong to him and still have the character of public funds.—
According to the trial court, the checks of Mabanto, Jr., were
already released by the Department of Justice duly signed by the
officer concerned through petitioner and upon service of the writ
of garnishment by the sheriff petitioner was under obligation to

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hold them for the judgment creditor. It recognized the role of

petitioner as custodian of the checks. At the same time however it
considered the checks as no longer government

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* FIRST DIVISION.

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VOL. 245, JUNE 27, 1995 375

De la Victoria vs. Burgos

funds and presumed delivered to the payee based on the last

sentence of Sec. 16 of the Negotiable Instruments Law which
states: “And where the instrument is no longer in the possession
of a party whose signature appears thereon, a valid and
intentional delivery by him is presumed.” Yet, the presumption is
not conclusive because the last portion of the provision says “until
the contrary is proved.” However this phrase was deleted by the
trial court for no apparent reason. Proof to the contrary is its own
finding that the checks were in the custody of petitioner.
Inasmuch as said checks had not yet been delivered to Mabanto,
Jr., they did not belong to him and still had the character of
public funds. In Tiro v. Hontanosas we ruled that—The salary
check of a government officer or employee such as a teacher does
not belong to him before it is physically delivered to him. Until
that time the check belongs to the government. Accordingly,
before there is actual delivery of the check, the payee has no
power over it; he cannot assign it without the consent of the
Government.
Same; Same; Same; Same; Same; Same; Checks due a
government employee may not be garnished to satisfy a judgment.
—As a necessary consequence of being public fund, the checks
may not be garnished to satisfy the judgment. The rationale
behind this doctrine is obvious consideration of public policy. The
Court succinctly stated in Commissioner of Public Highways v.
San Diego that—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; Same; It is incumbent upon
the garnishee to inquire into the validity of the notice of
garnishment where he has actual knowledge of the non-entitlement
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of garnisher to the checks in his possession.—In the case at bench,

it was incumbent upon petitioner to inquire into the validity of
the notice of garnishment as he had actual knowledge of the non-
entitlement of private respondent to the checks in question.
Consequently, we find no difficulty concluding that the trial court
exceeded its jurisdiction in issuing the notice of garnishment
concerning the salary checks of Mabanto, Jr., in the possession of
petitioner.

DAVIDE, JR., J., Separate opinion:

Judgments; Garnishment; Administrative Law; Public

Officers; If the salary and RATA checks correspond to a payroll
period and to a month which had already lapsed at the time the
notice of garnishment is served, the garnishment would be valid,
as the checks would then cease

376

376 SUPREME COURT REPORTS ANNOTATED

De la Victoria vs. Burgos

to be property of the Government and would become the property of

the employee.—I respectfully submit that if these salary and
RATA checks corresponded, respectively, to a payroll period and
to a month which had already lapsed at the time the notice of
garnishment was served, the garnishment would be valid, as the
checks would then cease to be property of the Government and
would become property of Mabanto. Upon the expiration of such
period and month, the sums indicated therein were deemed
automatically segregated from the budgetary allocations for the
Department of Justice under the General Appropriations Act.

PETITION for review of a decision of the Regional Trial

Court of Cebu City, Br. 18.

The facts are stated in the opinion of the Court.

BELLOSILLO, J.:

RAUL H. SESBREÑO filed a complaint for damages

against Assistant City Fiscals Bienvenido N. Mabanto, Jr.,
and Dario D. Rama, Jr., before the Regional Trial Court of
Cebu City. After trial judgment was rendered ordering the
defendants to pay P11,000.00 to the plaintiff, private
respondent herein. The decision having become final and
executory, on motion of the latter, the trial court ordered
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its execution. This order was questioned by the defendants

before the Court of Appeals. However, on 15 January 1992
a writ of execution was issued.
On 4 February 1992 a notice of garnishment was served
on petitioner Loreto D. de la Victoria as City Fiscal of
Mandaue City where defendant Mabanto, Jr., was then
detailed. The notice directed petitioner not to disburse,
transfer, release or convey to any other person except to the
deputy sheriff concerned the salary checks or other checks,
monies, or cash 1
due or belonging to Mabanto, Jr., under
penalty of law. On 10 March 1992 private respondent filed
a motion before the trial court for examination of the
garnishees.
On 25 May 1992 the petition pending before the Court of
Appeals was dismissed. Thus the trial court, finding no
more legal obstacle to act on the motion for examination of
the garnish-

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1 Rollo, p. 12.

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VOL. 245, JUNE 27, 1995 377

De la Victoria vs. Burgos

ees, directed petitioner on 4 November 1992 to submit his

report showing the amount of the garnished salaries 2
of
Mabanto, Jr., within fifteen (15) days from receipt taking
into consideration the provisions of Sec. 12, pars. (f) and (i),
Rule 39 of the Rules of Court.
On 24 November 1992 private respondent filed a motion
to require petitioner to explain why he should not be cited
in contempt of court for failing to comply with the order of
4 November 1992.
On the other hand, on 19 January 1993 petitioner moved
to quash the notice of garnishment claiming that he was
not in possession of any money, funds, credit, property or
anything of value belonging to Mabanto, Jr., except his
salary and RATA checks, but that said checks were not yet
properties of Mabanto, Jr., until delivered to him. He
further claimed that, as such, they were still public funds
which could not be subject to garnishment.
On 9 March 1993 the trial court denied both motions
and ordered petitioner to 3immediately comply with its
order of 4 November 1992. It opined that the checks of
Mabanto, Jr., had already been released through petitioner
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by the Department of Justice duly signed by the officer

concerned. Upon service of the writ of garnishment,
petitioner as custodian of the checks was under obligation
to hold them for the judgment creditor. Petitioner became a
virtual party to, or a forced intervenor in, the case and the
trial court thereby acquired jurisdiction to bind him to its
orders and processes with a view to the complete
satisfaction of the judgment. Additionally, there was no
sufficient reason for petitioner to hold the checks because
they were no longer government funds and presumably
delivered to the payee, conformably with the last sentence
of Sec. 16 of the Negotiable Instruments Law.
With regard to the contempt charge, the trial court was
not morally convinced of petitioner’s guilt. For, while his
explanation suffered from procedural infirmities
nevertheless he took pains in enlightening the court by
sending a written explanation dated

_______________

2 Id., p. 18.
3 Id., p. 115.

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378 SUPREME COURT REPORTS ANNOTATED

De la Victoria vs. Burgos

22 July 1992 requesting for the lifting of the notice of

garnishment on the ground that the notice should have
been sent to the Finance Officer of the Department of
Justice. Petitioner insists that he had no authority to
segregate a portion of the salary of Mabanto, Jr.. The
explanation however was not submitted to the trial court
for action since
4
the stenographic reporter failed to attach it
to the record.
On 20 April 1993 the motion for reconsideration was
denied. The trial court explained that it was not the duty of
the garnishee to inquire or judge for himself whether the
issuance of the order of execution, writ of execution and
notice of garnishment was justified. His only duty was to
turn over the garnished checks 5
to the trial court which
issued the order of execution.
Petitioner raises the following relevant issues: (1)
whether a check still in the hands of the maker or its duly
authorized representative is owned by the payee before
physical delivery to the latter; and, (2) whether the salary

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check of a government official or employee funded with

public funds can be subject to garnishment.
Petitioner reiterates his position that the salary checks
were not owned by Mabanto, Jr., because they were not yet
delivered to him, and that petitioner as garnishee has no
legal obligation to hold and deliver them to the trial court
to be applied to Mabanto, Jr.’s judgment debt. The thesis of
petitioner is that the salary checks still formed part of
public funds and therefore beyond the reach of
garnishment proceedings.
Petitioner has well argued his case.
Garnishment is considered as a species of attachment
for reaching credits belonging to the judgment 6
debtor
owing to him from a stranger to the litigation. Emphasis is
laid on the phrase “belonging to the judgment debtor” since
it is the focal point in resolving the issues raised.

_______________

4 Id., p. 114.
5 Id., p. 129.
6 Engineering Construction, Inc. v. National Power Corporation, No. L-
34589, 29 June 1988, 163 SCRA 9; Rizal Commercial Banking
Corporation v. de Castro, No. L-34548, 29 November 1988, 168 SCRA 49;
Sec. 8, Rule 57 of the Rules of Court.

379

VOL. 245, JUNE 27, 1995 379

De la Victoria vs. Burgos

As Assistant City Fiscal, the source of the salary of

Mabanto, Jr., is public funds. He receives his compensation
in the form of checks from the Department of Justice
through petitioner as City Fiscal of Mandaue City and head
of office. Under Sec. 16 of the Negotiable Instruments Law,
every contract on a negotiable instrument is incomplete
and revocable until delivery of the instrument for the
purpose of giving effect thereto. As ordinarily understood,
delivery means the transfer of the possession of the
instrument by the maker or drawer with intent to transfer 7
title to the payee and recognize him as the holder thereof.
According to the trial court, the checks of Mabanto, Jr.,
were already released by the Department of Justice duly
signed by the officer concerned through petitioner and upon
service of the writ of garnishment by the sheriff petitioner
was under obligation to hold them for the judgment
creditor. It recognized the role of petitioner as custodian of
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the checks. At the same time however it considered the

checks as no longer government funds and presumed
delivered to the payee based on the last sentence of Sec. 16
of the Negotiable Instruments Law which states: “And
where the instrument is no longer in the possession of a
party whose signature appears thereon, a valid and
intentional delivery by him is presumed.” Yet, the
presumption is not conclusive because the last portion of
the provision says “until the contrary is proved.” However
this phrase was deleted by the trial court for no apparent
reason. Proof to the contrary is its own finding that the
checks were in the custody of petitioner. Inasmuch as said
checks had not yet been delivered to Mabanto, Jr., they did
not belong to him and still8 had the character of public
funds. In Tiro v. Hontanosas we ruled that—

The salary check of a government officer or employee such as a

teacher does not belong to him before it is physically delivered to
him. Until that time the check belongs to the government.
Accordingly, before there is actual delivery of the check, the payee
has no power over it; he cannot assign it without the consent of
the Government.

_______________

7 Hector S. de Leon, The Law on Negotiable Instruments, 1989 Ed., p.

48; People v. Yabut, Jr., No. L-42902, 29 April 1977, 76 SCRA 624.
8 No. L-32312, 25 November 1983, 125 SCRA 697.

380

380 SUPREME COURT REPORTS ANNOTATED

De la Victoria vs. Burgos

As a necessary consequence of being public fund, the checks

9
may not be garnished to satisfy the judgment. The
rationale behind this doctrine is obvious consideration of
public policy. The Court succinctly
10
stated in Commissioner
of Public Highways v. San Diego that—

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.

In denying petitioner’s motion for reconsideration, the trial

court expressed the additional ratiocination that it was not
the duty of the garnishee to inquire or judge for himself
whether the issuance of the order of execution, the writ of
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execution, and the notice of garnishment was justified,

citing our ruling in Philippine
11
Commercial Industrial Bank
v. Court of Appeals. Our precise ruling in that case was
that “[I]t is not incumbent upon the garnishee to inquire or
to judge for itself whether or not the order for the advance
execution of a judgment is valid.” But that is invoking only
the general rule. We have also established therein the
compelling reasons, as exceptions thereto, which were not
taken into account by the trial court, e.g., a defect on the
face of the writ or actual knowledge by the garnishee of
lack of entitlement on the part of the garnisher. It is worth
to note that the ruling referred to the validity of advance
execution of judgments, but a careful scrutiny of that case
and similar cases reveals that it was applicable to a notice
of garnishment as well. In the case at bench, it was
incumbent upon petitioner to inquire into the validity of
the notice of garnishment as he had actual knowledge of
the non-entitlement of private respondent to the checks in
question. Consequently, we find no difficulty concluding
that the trial court exceeded its jurisdiction in issuing the
notice of garnishment concerning the salary checks of
Mabanto,

_______________

9 Republic v. Palacio, No. L-20322, 29 May 1968, 23 SCRA 899; Director

of the Bureau of Commerce and Industry v. Concepcion, 43 Phil. 384
(1922); Traders Royal Bank v. IAC, G.R. No. 68514, 17 December 1990,
192 SCRA 305.
10 No. L-30098, 18 February 1970, 31 SCRA 616.
11 G.R. No. 84526, 28 January 1991, 193 SCRA 452.

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De la Victoria vs. Burgos

Jr., in the possession of petitioner.

WHEREFORE, the petition is GRANTED. The orders of
9 March 1993 and 20 April 1993 of the Regional Trial
Court of Cebu City, Br. 17, subject of the petition are SET
ASIDE. The notice of garnishment served on petitioner
dated 3 February 1992 is ordered DISCHARGED.
SO ORDERED.

     Quiason and Kapunan, JJ., concur.

     Padilla, (J., Chairman), I join Mr. Justice Davide,
Jr. in his separate opinion.
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     Davide, Jr., J., Please see separate opinion.

SEPARATE OPINION

DAVIDE, JR., J.:

This Court may take judicial notice of the fact that checks
for salaries of employees of various Departments all over
the country are prepared in Manila not at the end of the
payroll period, but days before it to ensure that they reach
the employees concerned not later than the end of the
payroll period. As to the employees in the provinces or
cities, the checks are sent through the heads of the
corresponding offices of the Departments. Thus, in the case
of Prosecutors and Assistant Prosecutors of the
Department of Justice, the checks are sent through the
Provincial Prosecutors or City Prosecutors, as the case may
be, who shall then deliver the checks to the payees.
Involved in the instant case are the salary and RATA
checks of then Assistant City Fiscal Bienvenido Mabanto,
Jr., who was detailed in the Office of the City Fiscal (now
Prosecutor) of Mandaue City. Conformably with the
aforesaid practice, these checks were sent to Mabanto thru
the petitioner who was then the City Fiscal of Mandaue
City.
The ponencia failed to indicate the payroll period
covered by the salary check and the month to which the
RATA check corresponds.
I respectfully submit that if these salary and RATA
checks corresponded, respectively, to a payroll period and
to a month

382

382 SUPREME COURT REPORTS ANNOTATED

De la Victoria vs. Burgos

which had already lapsed at the time the notice of

garnishment was served, the garnishment would be valid,
as the checks would then cease to be property of the
Government and would become property of Mabanto. Upon
the expiration of such period and month, the sums
indicated therein were deemed automatically segregated
from the budgetary allocations for the Department of
Justice under the General Appropriations Act.

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It must be recalled that the public policy against

execution, attachment, or garnishment is directed to public
funds.
Thus, in the case of Director1 of the Bureau of Commerce
and Industry vs. Concepcion, where the core issue was
whether or not the salary due from the Government to a
public officer or employee can, by garnishment, be seized
before being paid to him and appropriated to the payment
of his judgment debts, this Court held:

A rule, which has never been seriously questioned, is that money

in the hands of public officers, although it may be due government
employees, is not liable to the creditors of these employees in the
process of garnishment. One reason is, that the State, by virtue of
its sovereignty, may not be sued in its own courts except by
express authorization by the Legislature, and to subject its
officers to garnishment would be to permit indirectly what is
prohibited directly. Another reason is that moneys sought to be
garnished, as long as they remain in the hands of the disbursing
officer of the Government, belong to the latter, although the
defendant in garnishment may be entitled to a specific portion
thereof. And still another reason which covers both of the foregoing
is that every consideration of public policy forbids it.
The United States Supreme Court, in the leading case of
Buchanan vs. Alexander ([1846], 4 How., 19), in speaking of the
right of creditors of seamen, by process of attachment, to divert
the public money from its legitimate and appropriate object, said:

“To state such a principle is to refute it. No government can sanction it.
At all times it would be found embarrassing, and under some
circumstances it might be fatal to the public service. *** So long as
money remains in the hands of a disbursing officer, it is as much the
money of the United States, as if it had not been drawn from the treasury.
Until paid over by the agent of the government to the person entitled to it,
the fund cannot, in any

_______________

1 43 Phil. 384 [1922].

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VOL. 245, JUNE 27, 1995 383

De la Victoria vs. Burgos

legal sense, be considered a part of his effects.” (See, further, 12 R.C.L., p.

841; Keene vs. Smith [1904], 44 Ore., 525; Wild vs. Ferguson [1871], 23
La. Ann., 752; Bank of Tennessee vs. Dibrell [1855], 3 Sneed [Tenn.],
379). (emphasis supplied)

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The authorities cited in the ponencia are inapplicable.

Garnished or levied on therein were public funds, to wit: (a)
the pump irrigation trust fund deposited with the
Philippine National Bank (PNB) in the account 2
of the
Irrigation Service Unit in Republic vs. Palacio; (b) the
deposits of the National Media Production Center 3
in
Traders Royal Bank vs. Intermediate Appellate Court; and
(c) the deposits of the Bureau of Public Highways with the
PNB under a current account, which may be expended only
for their legitimate object as authorized by the
corresponding legislative appropriation
4
in Commissioner of
Public Highways vs. Diego. 5
Neither is Tiro vs. Hontanosas squarely in point. The
said case involved the validity of Circular No. 21, series of
1969, issued by the Director of Public Schools which
directed that “henceforth no cashier or disbursing officer
shall pay to attorneys-in-fact or other persons who may be
authorized under a power of attorney or other forms of
authority to collect the salary of an employee, except when
the persons so designated and authorized is an immediate
member of the family of the employee concerned, and in all
other cases except upon proper authorization of the
Assistant Executive Secretary for Legal and
Administrative Matters, with the recommendation of the
Financial Assistant.” Private respondent Zafra Financing
Enterprise, which had extended loans to public school
teachers in Cebu City and obtained from the latter
promissory notes and special powers of attorney authorizing
it to take and collect their salary checks from the Division
Office in Cebu City of the Bureau of Public Schools, sought,
inter alia, to nullify the Circular. It is clear that the
teachers had in fact assigned to or waived in favor of Zafra

_______________

2 23 SCRA 899 [1968].

3 192 SCRA 305 [1990].
4 31 SCRA 616 [1970].
5 125 SCRA 697 [1983].

384

384 SUPREME COURT REPORTS ANNOTATED

Greenhills Airconditioning and Services, Inc. vs. National
Labor Relations Commission

their future salaries which were still public funds. That

assignment or waiver was contrary to public policy.
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I would therefore vote to grant the petition only if the

salary and RATA checks garnished corresponds to an
unexpired payroll period and RATA month, respectively.
Petition granted.

Notes.—In legal contemplation, garnishment is a forced

novation by the substitution of creditors. The judgment
debtor, who is the original creditor of the garnishee is,
through service of the writ of garnishment, substituted by
the judgment creditor who thereby becomes creditor of the
garnishee. (Perla Compania de Seguros, Inc. vs. Ramolete,
203 SCRA 487 [1991])
The delivery of checks in payment of an obligation does
not constitute payment unless they are cashed or their
value is impaired through the fault of the creditor.
(Development Bank of Rizal vs. Sima Wei, 219 SCRA 736
[1993])

———o0o———

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