Department of Agriculture vs. NLRC G.R. No.

104269, November 11, 1993

Ponante: Vitug, J.
Petitioner: Department of Agriculture
Respondents: THE NATIONAL LABOR RELATIONS COMMISSION, et al.,
Doctrines:

The basic postulate enshrined in the Constitution that the State may not be sued without
its consent reflects 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. A sovereign is
exempt from suit based 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.
The universal rule that where the State gives its consent to be sued by private parties
either by general or special law, it may limit the claimant's action "only up to the
completion of proceedings anterior to the stage of execution" and that the power of the
Courts ends when the judgment is rendered, since government funds and properties may
not be seized under writs or execution or garnishment to satisfy such judgments, is based
on obvious considerations of public policy. Disbursements of public funds must be
covered by the correspondent appropriation as required by law. The functions and public
services rendered by the State cannot be allowed to be paralyzed or disrupted by the
diversion of public funds from their legitimate and specific objects, as appropriated by
law.

Facts:

Petitioner Department of Agriculture (DA) and Sultan Security Agency entered into a
contract for security services to be provided by the latter to the said governmental entity.
Pursuant to their arrangements, guards were deployed by Sultan Security Agency in the
various premises of the DA. Thereafter, several guards filed a complaint for
underpayment of wages, nonpayment of 13th month pay, uniform allowances, night shift
differential pay, holiday pay, and overtime pay, as well as for damages against the DA and
the security agency.
The Labor Arbiter rendered a decision finding the DA jointly and severally liable withthe security agency
for the payment of money claims of the complainant security guards. TheDA and the security agency did
not appeal the decision. Thus, the decision became final andexecutory. The Labor Arbiter issued a writ of
execution to enforce and executethe judgment against the property of the DA and the security agency.
Thereafter, the CitySheriff levied on execution the motor vehicles of the DA.

DA filed a petition for injunction, prohibition and mandamus with prayer for preliminaryinjunction with
NLRC alleging that the writ issued was effected without the Labor Arbiter havingduly acquired
jurisdiction over the petitioner, and therefore, the decision of the Labor Arbiter was null and void. The
NLRC promulgated its assailed resolution.

1) That the enforcementand execution of the judgments against petitioner in NLRC are temporarily suspended for
aperiod of two months.
2) Petitioner is ordered and directed to source for funds within theperiod above-stated and to deposit the sums of
money equivalent to the aggregate amount.
3) Petitioner is likewise directed to put up and post sufficient surety and supersedeasbond equivalent to at least to
fifty (50%) percent of the total monetary award.
4) City Sheriff isordered to immediately release the properties of petitioner.
5) The right of any of the judgment debtors to claim reimbursement against each other for any
payments made.
Issue:

Whether or not the doctrine of non-suability of the State applies in the case.

Held:
In the case, the DA has not pretended to have assumed a capacity apart from its being a
governmental entity when it entered into the questioned contract; nor that it could have, in fact,
performed any act proprietary in character.
But, be that as it may, the claims of the complainant security guards clearly constitute money
claims. Act No. 3083 gives the consent of the State to be sued upon any moneyed claim
involving liability arising from contract, express or implied. Pursuant, however, to
Commonwealth Act 327, as amended by PD 1145, the money claim must first be brought to the
Commission on Audit.
WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is hereby
REVERSED and SET ASIDE. The writ of execution directed against the property of the
Department of Agriculture is nullified, and the public respondents are hereby enjoined
permanently from doing, issuing and implementing any and all writs of execution issued
pursuant to the decision rendered by the Labor Arbiter against said petitioner.