G.R. No. 104269 Case Digest

G.R. No. 104269 November 11, 1993

Department of Agriculture

vs NLRC

Ponente: Vitug

Facts:

The DA and Sultan Security Agency entered into a contract for security services, pursuant to the agreement guards were deployed by Sultan Agency in the various premises of the DA. September 1990, several guards of Sultan Agency filed a complaint for underpayment of wages, non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay and overtime pay, as well as for damages before Regional Arbitration Branch of CDO against the DA and Sultan Security Agency.

The executive labor arbiter rendered that DA and Sultan Agency are jointly and severally liable. Sultan didn't appeal the decision, thus it became final and executory. July 1991, the Labor Arbiter issued a writ of execution commanding the City Sheriff to enforce the judgment against the property of DA and Sultan's property.

DA, filed a petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction was filed by the petitioner with the NLRC CDO, saying that the writ issued was affected without the labor arbiter’s jurisdiction over the petitioner. DA also pointed out that the attachment or seizure of its property would hamper and jeopardize petitioner's governmental functions to the prejudice of the public good.

This petition charges NLRC with grave abuse of discretion for refusing to quash the writ of execution. The NLRC has disregarded the cardinal rule on the non-suability of the State. NLRC argued on the other hand that the DA has impliedly waived its immunity from suit by concluding a service contract with Sultan Agency.

Issue: Whether NLRC committed grave abuse of discretion.

Ruling:

Not all contracts entered into by the government operate as a waiver of its non-suability; distinction must still be made between one which is executed in the exercise of its sovereign function and another which is done in its proprietary capacity.

In the instant case, the Department of Agriculture 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 private respondents, i.e. for underpayment of wages, holiday pay, overtime pay and similar other items, arising from the Contract for Service, clearly constitute money claims. Act No. 3083, aforecited, 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 ("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1145, the money claim first be brought to the Commission on Audit.

We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327 and the Labor Code with respect to money claims against the State. The Labor code, in relation to Act No. 3083, provides the legal basis for the State liability but the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in C.A. No. 327, as amended by P.D. 1445.

Wherefore, the petition is granted.