G.R. NO. 171182; AUGUST 23 2012

FACTS: The University of the Philippines (UP) signed a General Construction Agreement (GCA) with respondent Stern Builders Corporation (Stern Builders) for the construction and refurbishment of structures on the UP’s Los Bas campus. UP was able to pay both its first and second bills. However, the third invoice of P273,729.47 was not paid since it was denied by the Commission on Audit (COA). As a result, Stern Builders filed a lawsuit against the UP to recover the outstanding amount.

The RTC issued its ruling on November 28, 2001, ordering UP to compensate Stern Builders. The UP then filed a request for reconsideration on January 16, 2002. The motion was refused by the RTC. The rejection of the aforementioned motion was served on Atty. On May 17, 2002, Felimon Nolasco (Atty.Nolasco) of the UPLB Legal Office. Specifically, Atty. Nolasco was the OLS at Diliman, Quezon City, not the UP’s counsel of record.

Following that, on June 3, 2002, the UP filed a notice of appeal. The RTC, however, refused due process to the notice of appeal since it was submitted out of time. The RTC issued the writ of execution on October 4, 2002, on the request of Stern Builders.

Both the CA and the High Court dismissed UP’s plea on appeal. The refusal became final and binding. As a result, Stern Builders filed a move for execution in the RTC, despite the fact that their earlier motion had already been approved and the writ of execution had already been issued. The RTC granted another request for execution filed on May 9, 2003 on June 11, 2003. (although the RTC had already issued the writ of execution on October 4, 2002). As a result, the sheriff issued garnishment orders on the UPs depositary banks, and the RTC ordered the cash to be released.

UP was aggrieved and took the case to the CA. The RTC was upheld by the CA. As a result, this petition.


  1. W/N UP’s funds were validly garnished?
  2. W/N UP’s appeal dated June 3, 2002, filed late?
  1. NO. Because UP’s funds are government monies, they are not susceptible to garnishment. (Suability vs. responsibility of the State; garnishment of public monies). The Constitution stated unequivocally that “no money shall be paid out of the Treasury unless in accordance of an appropriation authorized by legislation.” The execution of the monetary judgment against the UP was under the main competence of the COA. It made no difference that the claim against the UP had previously been approved by a final and executory judgement.
  2. NO. The term of appeal did not begin until the decision was effectively served on counsel of record. The denial of the motion for reconsideration was served on Atty. Nolasco of the UPLB Legal Office was invalid and ineffective since he was not the UP’s lawyer of record. The denial of the motion for reconsideration could only be lawfully served on the OLS at Diliman, and no other. It is established that if a party has appeared through counsel, service must be made on such counsel.