Saturday, June 07, 2008 City questions assets lock-up By Linette C. Ramos Sun.Star Staff Reporter With Katrina A. Balmaceda
A COMMERCIAL bank proceeded to freeze P20 million of the Cebu City Government’s deposits yesterday, as City Hall officials studied legal remedies to protect the taxpayers’ money.
Banco de Oro (BDO) Juan Luna Ave. Branch officers wrote Mayor Tomas Osmeña last Thursday afternoon, notifying city officials that the bank has set aside some P20 million as ordered by the court sheriff.
City Councilor Jose Daluz III explained that the amount has not been turned over to the court yet as payment for the expropriated property of the Palicte family.
In effect, however, the amount may not be accessed and used by any City Hall office or supplier who may have been issued check payments for a service or project.
City Hall lawyer Joseph Bernaldez said yesterday that BDO’s move to freeze the City’s assets even before it informed the city officials of their receipt of the garnishment order is “highly irregular.”
SC ruling
As a matter of procedure, Bernaldez said that BDO should have first informed the City of the garnishment order. It may only freeze the City’s assets five days after the City receives the bank notice, with or without a reply from the City, he said.
Sun.Star Cebu talked to BDO branch manager Tim Olarte but he declined to be interviewed.
Also yesterday, the City of Cebu filed a motion in court to stop four banks from freezing P20.6 million worth of its assets as ordered by the court.
In a motion prepared by City Attorneys Rodolfo Golez and Bernaldez, the City invoked a Supreme Court (SC) administrative circular that says government funds and properties may not be seized through writs of execution or garnishment.
The City also cited Presidential Decree 1445, which states that the public treasury may be used as payment only in pursuance of an appropriation law.
“It is incumbent upon the local chief executive to safeguard and protect the funds of the city,” the motion read.
Not over yet
But in separate interviews, Daluz and City Treasurer Tessie Camarillo said the garnishment process has not been consummated yet.
Although the amount has been set aside, the banks have not turned over the funds to the court, they said.
“BDO wrote us a letter, which we received yesterday. From what I understand, the tenor of the letter is that they already garnished P20 million plus without giving us any notice before that and to me, that’s very irregular.
Gidiretso lang ug (They swiftly decided to) garnish without waiting at least five days. Not only is it highly irregular, it also shows no respect for a valued client,” Bernaldez told Sun.Star Cebu.
BDO is one of the four depository banks that were given an order for garnishment of funds by Regional Trial Court (RTC) Branch 9 Sheriff IV Antonio Bellones.
Last Thursday, City Hall also received a notice from the Development Bank of the Philippines. It has yet to hear from the Philippine Veterans Bank and the Philippine Postal Bank.
Daluz, chairman of the City Council committee on budget and finance, argued that the court cannot just take control of the City’s assets because public funds should not be subject to garnishment.
“We have to question the substance of the court decision. We should not be resigned to paying this amount. As a legal remedy, we can file (for) an annulment of judgment so the court can open the case again,” the councilor said.
Time-consuming
He admitted, though, that doing so would be a long legal process, which will not be easy on the part of the City.
Daluz said the City Attorney’s Office is studying his recommendation, as well as other options to protect the City’s funds.
As an immediate remedy, the City will file next week a petition for certiorari with a prayer for injunction, alleging that the court sheriff committed grave abuse of discretion when it issued the garnishment order.
In the petition for annulment of judgment, Daluz said the City will point out the grave abuse of discretion of the court’s appraisal committee when it pegged the Palicte property at P4,500 per square meter, when the City had proposed to buy it at P2,800 per square meter.
The City is negotiating to immediately pay the balance of the lot amounting to P14 million, provided the Palictes waive P6.1 million in interest and legal fees.
Last year, the City offered to pay the P20.1 million balance and interest for a period of three years, but the Palicte heirs rejected the offer.
Interest
Instead, they said that they are willing to accept a down payment of P10 million, with the balance to be paid in full within three months.
“Right now, we are negotiating for them to waive the interest. If they don’t accept, we will file for an annulment of judgment. It will not be an easy legal battle but it will buy us time. We could have appealed this case before but our legal office erred, and were not able to do so,” said Daluz, a lawyer.
In an open letter, Patricia Palicte-Perez, daughter of the lot owner, said her family will just wait for the court to resolve the matter.
They lamented that every year, they are prompt in paying taxes for their properties in Barangay Capitol Site while the City has made them wait for six years already for payment of their mother’s lot.
The City expropriated the property for an on-site relocation project, and it is now occupied by some 180 informal settlers.
Rights
“Now, it’s the City’s turn to pay the taxpayer, and what does it tell us to do? ‘Drop the interest and we will pay the balance’... Government says a lot about the rights of the squatters, what about the rights of my poor mother? Drop the interest? Please, tell that to the court,” she said.
“I guess the waiting does not matter anymore, we have waited for six years to fight this battle in court against the powerful might. Surely there are other remedies, maybe not today, not tomorrow. Maybe when humane leaders take hold of the city. But one thing is sure, the 12 percent interest on the principal will continue to pile up,” Palicte-Perez continued.
The Palicte property, a 5,295-square-meter-lot worth P23,782,500, was expropriated by the City in 2001 to be used for socialized housing beneficiaries.
The City asserted, however, that its motion to defer enforcement of garnishment “is not in any way intended to delay the proceedings of the case.”
Garnishment is a court order to withhold all or part of a company or entity’s money, in order to turn over the garnished amount to a person or organization that won a lawsuit against the former.
