PROFESSIONAL VIDEO, INC., vs. money with damages against TESDA.

TESDA
PROVI additionally prayed for the
G.R. No. 155504
issuance of a writ of preliminary
Facts:
attachment/garnishment
against
PROVI is an entity engaged inTESDA. The RTC granted PROVIs
the
sale
of
high
technologyprayer and issued a writ of preliminary
equipment, information technologyattachment against the properties of
products and broadcast devices, TESDA not exempt from execution in
including the supply of plastic cardthe amount of P35,000,000.00.
printing and security facilities. TESDA
TESDA responded on July 24,
is
an
instrumentality
of
the2001
by
filing
a
Motion
to
government established under R.A.)Discharge/Quash
the
Writ
of
No. 7796 and attached to the (DOLE)Attachment, arguing mainly that
to develop and establish a nationalpublic funds cannot be the subject of
system
of
skills
standardization,garnishment.
testing, and certification in the
RTC denied TESDAs motion,
country. To fulfill this mandate, itand
subsequently
ordered
the
sought
to
issue
security-printedmanager of the Land Bank of the
certification
and/or
identificationPhilippines to produce TESDAs bank
polyvinyl (PVC) cards to trainees whostatement for the garnishment of the
have passed the certification process. covered amount. Faced with these
rulings, TESDA filed a Petition for
On December 29, 1999,Certiorari with the CA to question the
TESDA and PROVI signed and executedRTC orders, imputing grave abuse of
their Contract Agreement Project:discretion amounting to lack or excess
PVC ID Card Issuance for theof jurisdiction on the trial court for
provision of goods and services in theissuing
a
writ
of
preliminary
printing and encoding of PVC cards. In attachment against TESDAs public
return, TESDA would pay PROVI the funds.
amount of (P39, 475,000) within
CA set aside the RTCs orders
fifteen (15) days after TESDAsafter finding that: (a) TESDAs funds
acceptance of the contracted goods are public in nature and, therefore,
and services.
exempt from garnishment; and
(b)
TESDA in turn undertook toTESDAs purchase of the PVC cards
pay PROVI thirty percent (30%) of the was a necessary incident of its
total cost of the supplies within thirty governmental function; consequently,
(30) days after receipt and acceptance it ruled that there was no legal basis
of the contracted supplies, with the for the issuance of a writ of
balance payable within thirty (30)preliminary attachment/garnishment.
days after the initial payment. PROVIThe CA subsequently denied PROVIs
further alleged that out of TESDAsmotion for reconsideration; hence, the
liability of P39, 475,000.00, TESDApresent petition.
paid
PROVI
only
P3,739,500.00,
leaving an outstanding balance of Issue:
P35,735,500.00.Despite
the
two
Whether or not the writ of
demand letters that PROVI sent TESDAattachment against TESDA and its
the outstanding balance remainedfunds, to cover PROVIs claim against
unpaid.
TESDA, is valid. The issue involves a
On July 11, 2001, PROVI filedpure question of law and requires us to
with the RTC a complaint for sum of determine whether the CA was correct

in ruling that the RTC gravely abusedlevels, and shall take appropriate
its discretion in issuing a writ ofsteps to make such education
attachment against TESDA.
accessible to all; in order to afford
protection to labor and promote full
Ruling:
employment
and
equality
of
We find, as the CA did, that employment opportunities for all.
the
RTCs
questioned
order
Under these terms, both
involved a gross misreading of theconstitutional and statutory, we do not
law and jurisprudence amountingbelieve that the role and status of
to
action
in
excess
of
itsTESDA can seriously be contested: it is
jurisdiction. Hence, we resolve toan unincorporated instrumentality of
DENY PROVIs petition for lack ofthe government, directly attached to
merit.
the DOLE through the participation of
TESDA is an instrumentality of the the Secretary of Labor as its
government
undertaking Chairman, for the performance of
governmental functions.
governmental functions i.e., the
handling of formal and non-formal
R.A. No. 7796 created theeducation and training, and skills
Technical
Education
and
Skills development. As an unincorporated
Development Authority or TESDA instrumentality operating under a
under the declared policy of the State specific charter, it is equipped with
to provide relevant, accessible, high both express and implied powers, and
quality
and
efficient
technicalall State immunities fully apply to it.
education and skills development in
support of the development of high TESDA, as an agency of the State,
quality Filipino middle-level manpowercannot be sued without its
responsive to and in accordance with consent.
Philippine development goals and
priorities.
TESDA
replaced
and
The rule that a state may not
absorbed the National Manpower and be sued without its consent is
Youth Council, the Bureau of Technicalembodied in Section 3, Article XVI of
and Vocational Education and the the 1987 Constitution and has been an
personnel and functions pertaining to established principle that antedates
technical-vocational education in thethis Constitution. It is as well a
regional offices of the Department of universally recognized principle of
Education, Culture and Sports and the international law that exempts a state
apprenticeship program of the Bureauand its organs from the jurisdiction of
of Local Employment of the DOLE.another state.The principle is based on
Thus, TESDA is an unincorporatedthe very essence of sovereignty, and
instrumentality of the governmenton the practical ground that there can
operating under its own charter.
be no legal right as against the
All
these
measures
areauthority that makes the law on which
undertaken
pursuant
to
thethe right depends. It also rests on
constitutional command that Thereasons of public policy that public
State affirms labor as a primary socialservice would be hindered, and the
economic force, and shall protectpublic endangered, if the sovereign
the rights of workers and promoteauthority could be subjected to law
their welfare; that The State shallsuits at the instance of every citizen
protect and promote the right of alland, consequently, controlled in the
citizens to quality education at alluses and dispositions of the means

required for the proper administration engaged in business, and there is

of the government.
nothing in the records to show that its
The proscribed suit that thepurchase of the PVC cards from PROVI
state immunity principle covers takes is for a business purpose. While TESDA
on various forms, namely: a suitadmits that it will charge the trainees
against the Republic by name; a suit with a fee for the PVC cards, it claims
against
an
unincorporatedthat this fee is only to recover their
government agency; a suit against a costs and is not intended for profit.
government agency covered by a
We agree with TESDA. As the
charter with respect to the agencysappellate court found, the PVC cards
performance
of
governmentalpurchased by TESDA from PROVI are
functions; and a suit that on its face is meant to properly identify the trainees
against a government officer, butwho passed TESDAs National Skills
where the ultimate liability will fall onCertification Program the program
the government. In the present case,that immediately serves TESDAs
the writ of attachment was issuedmandated function of developing and
against a government agency covered establishing a national system of skills
by its own charter. As discussedstandardization,
testing,
and
above, TESDA performs governmentalcertification in the country.
functions, and the issuance of
That TESDA sells the PVC
certifications is a task within itscards to its trainees for a fee does not
function
of
developing
andcharacterize
the
transaction
as
establishing a system of skillsindustrial or business; the sale,
standardization,
testing,
andexpressly authorized by the TESDA
certification in the country. From theAct, cannot be considered separately
perspective of this function, the core from TESDAs general governmental
reason for the existence of statefunctions, as they are undertaken in
immunity applies i.e., the publicthe discharge of these functions.
policy reason that the performance of
governmental function cannot beTESDAs funds are public in
hindered or delayed by suits, nor can character, hence exempt from
these suits control the use andattachment or garnishment.
disposition of the means for the
performance
of
governmental
Even assuming that TESDA
functions.
entered into a proprietary contract
PROVI argues that TESDA canwith PROVI and thereby gave its
be sued because it has effectivelyimplied consent to be sued, TESDAs
waived its immunity when it enteredfunds are still public in nature and,
into a contract with PROVI for a thus, cannot be the valid subject of a
commercial purpose. According towrit of garnishment or attachment.
PROVI, since the purpose of itsUnder Section 33 of the TESDA Act,
contract with TESDA is to provide the
TESDA
budget
for
the
identification PVC cards with security implementation of the Act shall be
seal, which TESDA will thereafter sell included in the annual General
to TESDA trainees, TESDA thereby Appropriation Act; hence, TESDA
engages in commercial transactionsfunds, being sourced from the
not incidental to its governmentalTreasury, are moneys belonging to the
functions.
government,
or
any
of
its
TESDAs response to thisdepartments, in the hands of public
position is to point out that it is notofficials. We specifically spoke of the

limits in dealing with this fund in properties may not be seized under
Republic v. Villasor when we said:
writs of execution or garnishment to
This fundamental postulatesatisfy such judgments, is based on
underlying the 1935 Constitution isobvious considerations of public policy.
now made explicit in the revisedDisbursements of public funds
charter. It
is therein
expresslymust
be
covered
by
the
provided, The State may not be sued corresponding appropriation as
without its consent. A corollary, bothrequired by law. The functions and
dictated by logic and sound sense, public services rendered by the
from such a basic concept, is that State cannot be allowed to be
public funds cannot be the object paralyzed or disrupted by the
of garnishment proceedings evendiversion of public funds from
if the consent to be sued hadtheir
legitimate
and
specific
been previously granted and theobjects, as appropriated by law.
state liability adjudged. Thus in the
For all these reasons, we
recent case of Commissioner of Public support
the
appellate
courts
Highways vs. San Diego, such a well-conclusion that no valid ground exists
settled doctrine was restated in the to support the grant of the writ of
opinion of Justice Teehankee:
attachment against TESDA. The CAs
The universal rule that whereannulment and setting aside of the
the State gives its consent to be suedOrders of the RTC were therefore fully
by private parties either by general or in order.
special law, it may limit claimant's
WHEREFORE,
premises
action 'only up to the completion ofconsidered, we hereby DENY the
proceedings anterior to the stage ofpetition filed by petitioner Professional
execution' and that the power of the Video, Inc., and AFFIRM the Court of
Courts ends when the judgment isAppeals Decision.
rendered, since government funds and