ANTECEDENT: Acomplaint was filed byEmilyRose Ko LimChao againstthe MunicipalityofHagonoy,

Bulacanwithregardstothecollectionofasummoneyanddamages.

The complaint alleged that a contract was entered into by Lim Chao andtheMunicipalityforthe
deliveryofmotorvehicles, whichsupposedly wereneeded tocarryoutcertaindevelopmentalundertakings
in the municipality.LimChaothen deliveredtotheMunicipalityofHagonoy 21motorvehiclesamountingto
P5,820,000.00. However, despite having made several deliveries, the Municipality allegedly didnotheed
LimChaos claimforpayment. Thus,shefiledacomplaint for1fullpaymentofthesaidamount,withinterest
anddamages andprayed fortheissuance ofa writ of preliminaryattachment against theMunicipality.The
trial court issued the Writ of Preliminary Attachment directing the sheriff "to attach the estate, real and
personalproperties"oftheMunicipality.

In response to the complaint, the petitioners filed for a motion to dismiss on the groundthatthe
claim onwhich the actionhad been brought wasunenforceableunderthestatuteoffrauds,thus,therewas
no contractthat themunicipalityhasenteredintowith the respondent.Also,Petitioners filedfor (1)Motionto
Dissolve the 2 Writ of Preliminary Attachments, (a) invoking immunity of the state from suit, (b)
unenforceabilityofthecontract,(c)andfailuretosubstantiatetheallegationoffraud.

Respondent, counters that, she has amply discussed the basis for the issuance of the writ of
preliminary attachmentinheraffidavitandthat petitioner'sclaimofimmunityfromsuitisnegatedby Section
22 of the Local GovernmentCode,whichvests municipal corporationswiththepower to sue andbesued.
Further, she contends that the arguments offeredbypetitioners against the writofpreliminary attachment
clearly touch onmatters thatwhenruleduponinthehearingforthe motion todischarge,wouldamountto a
trialofthecaseonthemerits.

ISSUE: W/N there is a valid reason to deny petitioners motion to discharge the writ of preliminary
attachmentagainsttheMunicipalityofHagonoy.

HELD:No.The universalrulethatwheretheStategivesits3 consent tobesuedbyprivatepartieseitherby

general orspecial law, it may limitclaimant's actiononly uptothecompletionofproceedings anterior tothe

stageofexecution andthatthepoweroftheCourtsends whenthejudgmentis rendered,since government
1

Asofthefilingofthecomplaint,thetotalobligationofpetitionerhadalreadytotaledP10,026,060.13
exclusiveofpenaltiesanddamages.Thus,respondentprayedforfullpaymentofthesaidamount,with
interestatnotlessthan2%permonth,plusP500,000.00asdamagesforbusinesslosses,P500,000.00as
exemplarydamages,attorneysfeesofP100,000.00andthecostsofthesuit.
2
aprovisionalremedyissueduponorderofthecourtwhereanactionispendingtobelevieduponthe
propertyorpropertiesofthedefendant.
3
Section3,ArticleXVIoftheConstitutionisthatthestateanditspoliticalsubdivisionsmaynotbesued
withouttheirconsent.

fundsand properties maynotbe seizedunder writsofexecution orgarnishment tosatisfysuchjudgments,

is basedon obvious considerationsofpublicpolicy. Disbursements of public fundsmustbecoveredbythe
corresponding appropriations as required bylaw. The functions and public servicesrenderedby theState
cannot be allowed to be paralyzed or disrupted by the diversion of publicfundsfromtheir legitimateand
specificobjects.

With this in mind, the Court holds that the writ of preliminary attachmentmustbe dissolved and,
indeed,itmustnothavebeenissuedintheveryfirstplace.