GR 104269; (November, 1993) (Digest)
G.R. No. 104269 November 11, 1993
DEPARTMENT OF AGRICULTURE, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.
FACTS
The Department of Agriculture (petitioner) entered into contracts with Sultan Security Agency on April 1, 1989, and May 1, 1990, for security services. Several guards from the agency filed a complaint for various monetary claims before the NLRC Regional Arbitration Branch in Cagayan de Oro City against both the Department of Agriculture and Sultan Security Agency. The Executive Labor Arbiter rendered a decision on May 31, 1991, holding the petitioner and the agency jointly and severally liable for the money claims totaling P266,483.91. The decision became final and executory. A writ of execution was issued, and the City Sheriff levied on execution three motor vehicles of the petitioner. The petitioner filed a petition for injunction, prohibition, and mandamus with the NLRC, arguing lack of jurisdiction and invoking state immunity from suit. The NLRC, in a resolution dated November 27, 1991, dismissed the petition for injunction but temporarily suspended the execution for two months, ordering the petitioner to source funds and post a surety bond. The petitioner then filed this certiorari petition, charging the NLRC with grave abuse of discretion.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in refusing to quash the writ of execution against the Department of Agriculture, considering the doctrine of non-suability of the state.
RULING
The Supreme Court GRANTED the petition. The resolution dated November 27, 1991, was REVERSED and SET ASIDE. The writ of execution against the property of the Department of Agriculture was nullified, and the public respondents were permanently enjoined from implementing any writs of execution pursuant to the Labor Arbiter’s decision against the petitioner.
The Court held that the State may not be sued without its consent, a principle enshrined in the Constitution. While consent may be express or implied, not all contracts entered into by the government operate as a waiver of immunity. The distinction lies between acts done in the exercise of sovereign functions (jure imperii) and those performed in a proprietary capacity (jure gestionis). The contract for security services was entered into by the Department of Agriculture in the performance of its governmental functions. Therefore, it did not divest the state of its sovereign immunity. Furthermore, even assuming a waiver of immunity, it extends only to the rendition of a judgment and not to its execution. Government funds and properties are exempt from execution or garnishment, as disbursements must be covered by corresponding appropriations by law, to prevent the paralysis of essential public services. The NLRC thus acted with grave abuse of discretion in not quashing the writ of execution.