DEPARTMENT OF AGRICULTURE (DA) vs.

THE NATIONAL LABOR RELATIONS

COMMISSION (NLRC), et al
G.R. No. 104269. November 11, 1993

FACTS:

The Department of Agriculture (DA) entered a contract with Sultan Security Agency (SSA) for
the latter to provide security services to the former. Several guards of the Sultan Security Agency filed a
complaint for underpayment of salary, non-payment of benefits and allowances and damages before
Regional Arbitration Branch X of Cagayan de Oro City against DA and SSA. The Executive Labor
Arbiter rendered a decision finding the DA jointly and severally liable with SSA for the payment of
money claims of the complainant security guards. Since DA and SSA did not appeal to the said decision,
it became final and executory. Thus, the Labor Arbiter issued a writ of execution against the property of
the two.

A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of
injunction was filed by the DA with the NLRC on the ground that that the writ issued was effected
without the Labor Arbiter having duly acquired jurisdiction over DA and that the attachment or seizure of
its property would hamper and jeopardize DA's governmental functions to the prejudice of the public
good but NLRC dismissed the petition. Due to the above case, DA came to the court to file petition for
certiorari and claimed that the NLRC has disregarded the cardinal rule on the non-suability of the State.
NLRC contended that the DA has impliedly waived its immunity from suit by concluding a service
contract with Sultan Security Agency.

ISSUE:
Whether or not DA is covered by the principle of the non-suability of the State.

RULING:
No, the DA is not covered by the principle of the non-suability of the State. The Supreme Court,
speaking through Justice Vitug, ruled that the basic postulate enshrined in the constitution that "the State
may not be sued without its consent," reflected nothing less than a recognition of the sovereign character
of the State and an express affirmation of the unwritten rule effectively insulating it from the jurisdiction
of courts. It is based on the very essence of sovereignty and as has been aptly observed, by Justice
Holmes, a sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on
the logical and practical ground that there can be no legal right as against the authority that makes the law
on which the right depends. True, that the doctrine, not too infrequently, is derisively called "the royal
prerogative of dishonesty" because it granted the state the prerogative to defeat any legitimate claim
against it by simply invoking its non-suability. The rule, in any case, is not absolute for it does not say
that the state may not be sued under any circumstances. On the contrary, as correctly phrased, the doctrine
only conveys, "the state may not be sued without its consent;" its clear import then is that the State may at
times be sued. The Supreme Court clarified that there are two kinds of consent: (1) express consent,
which may be made either through a general law or a special law; and (2) implied consent, which is
conceded when the State either commences litigation or enters a contract. But entering a contract does not
automatically mean the State can be sued. Once again, the Court clarified that contracts or agreements
that constitute sovereign and governmental acts (jure imperii) cannot be the subject of any lawsuit, while
private, commercial, and proprietary acts (jure gestionisis) can be made the subject of litigation.

In the instant case, express consent was provided for by Act No. 3083, which provided that "the
Philippine government consents and submits to be sued upon any money claims involving liability arising
from contract, express or implied, which could serve as a basis of civil action between private parties" and
money claims against the Government should be filed before the Commission on Audit. At the same time,
it is inarguable that DA's contract with Sultan Security Agency was clearly a proprietary act, which
essentially means that DA cannot invoke the principle of the non-suability of the State.