G.R. No.

104269 November 11, 1993 Implied consent, on the other hand, is conceded when the State itself commences
DEPARTMENT OF AGRICULTURE vs. THE NATIONAL LABOR RELATIONS litigation, thus opening itself to a counterclaim or when it enters into a contract. 
COMMISSION, et al. Doctrine of non-suability of the state.
In this situation, the government is deemed to have descended to the level of the other
Facts: contracting party and to have divested itself of its sovereign immunity. This rule, relied
upon by the NLRC and the private respondents, is not, however, without
- The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a qualification. Not all contracts entered into by the government operate as a waiver of
contract for security services to be provided by the latter to the said governmental entity its non-suability; distinction must still be made between one which is executed in the
where guards were deployed by Sultan Agency in the various premises of the petitioner. exercise of its sovereign function and another which is done in its proprietary
- several guards of the Sultan Security Agency filed a complaint for underpayment of wages, capacity.
non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay
and overtime pay, as well as for damages, against the Department of Agriculture and Sultan In the instant case, the Department of Agriculture has not pretended to have assumed
Security Agency. a capacity apart from its being a governmental entity when it entered into the
- Executive Labor Arbiter: petitioner and  jointly and severally liable with Sultan Security
questioned contract; nor that it could have, in fact, performed any act proprietary in
Agency for the payment of money claims, of the complainant security guards. The
petitioner and Sultan Security Agency did not appeal the decision of the Labor Arbiter. character. But, be that as it may, the claims of private respondents, i.e. for underpayment
Thus, the decision became final and executory. of wages, holiday pay, overtime pay and similar other items, arising from the Contract for
- Labor Arbiter issued a writ of execution. 5 commanding the City Sheriff to enforce and Service, clearly constitute money claims.
execute the judgment against the property of the two respondents
- A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of Act No. 3083, aforecited, gives the consent of the State to be "sued upon any moneyed
injunction was filed by the petitioner with the National Labor Relations Commission (NLRC) claim involving liability arising from contract, express or implied, . . . Pursuant, however, to
--- writ issued was effected without the Labor Arbiter having duly acquired jurisdiction over Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1145,
the petitioner, and that, therefore, the decision of the Labor Arbiter was null and void and all the money claim first be brought to the Commission on Audit.
actions pursuant thereto should be deemed equally invalid and of no legal, effect. That the
attachment or seizure of its property would hamper and jeopardize petitioner's governmental We fail to see any substantial conflict or inconsistency between the provisions of C.A. No.
functions to the prejudice of the public good. 327 and the Labor Code with respect to money claims against the State. The Labor code, in
- petitioner charges the NLRC with grave abuse of discretion for refusing to quash the writ of relation to Act No. 3083, provides the legal basis for the State liability but the
execution. More importantly, the petitioner asserts, the NLRC has disregarded the prosecution, enforcement or satisfaction thereof must still be pursued in accordance
cardinal rule on the non-suability of the State. Respondents, on the other hand, argue with the rules and procedures laid down in C.A. No. 327, as amended by P.D. 1445
that the petitioner has impliedly waived its immunity from suit by concluding a
service contract with Sultan Security Agency. When the state gives its consent to be sued, it does thereby necessarily consent to
Issue: whether DA is immuned from suit. unrestrained execution against it. tersely put, when the State waives its immunity, all
Held: yes. Basic postulate enshrined in the constitution that "(t)he State may not be sued it does, in effect, is to give the other party an opportunity to prove, if it can, that the
without its consent. It is based on the very essence of sovereignty. A sovereign is exempt State has a liability. 
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 universal rule that where the State gives its consent to be sued by private parties either
the law on which the right depends.  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 rule, in any case, is not really absolute for it does not say that the state may not be the judgment is rendered, since government funds and properties may not be seized under
sued under any circumstances; "the state may not be sued without its consent;" its clear writs or execution or garnishment to satisfy such judgments, is based on obvious
import then is that the State may at times be sued 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
EXPRESS VS IMPLIED CONSENT 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
Express consent may be made through a general law or a special law.  In this jurisdiction,
the general law waiving the immunity of the state from suit is found in Act No. 3083, where The writ of execution directed against the property of the Department of Agriculture is
the Philippine government "consents and submits to be sued upon any money claims nullified, and the public respondents are hereby enjoined permanently from doing, issuing
involving liability arising from contract, express or implied, which could serve as a and implementing any and all writs of execution issued pursuant to the decision rendered by
basis of civil action between private parties."  the Labor Arbiter against said petitioner.
G.R. No. 101949 December 1, 1994 public (United States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for
the operation of barber shops in Clark Air Base in Angeles City (United States of America v.
THE HOLY SEE, vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Guinto, 182 SCRA 644 [1990]). The operation of the restaurants and other facilities open to
the general public is undoubtedly for profit as a commercial and not a governmental activity.
Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES,
By entering into the employment contract with the cook in the discharge of its proprietary
INC., 
function, the United States government impliedly divested itself of its sovereign immunity
Facts: from suit. governmental capacity that no such waiver may be implied.

In the case at bench, if petitioner has bought and sold lands in the ordinary course of
- Petitioner is the Holy See who exercises sovereignty over the Vatican City in
a real estate business, surely the said transaction can be categorized as an act  jure
Rome, Italy, and is represented in the Philippines by the Papal Nuncio; Private
gestionis. However, petitioner has denied that the acquisition and subsequent
respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged
disposal of Lot 5-A were made for profit but claimed that it acquired said property for
in the real estate business.
the site of its mission or the Apostolic Nunciature in the Philippines. Private
- The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr.,
respondent failed to dispute said claim.
acting as agent to the sellers. Later, Licup assigned his rights to the sale to private
respondent. In view of the refusal of the squatters to vacate the lots sold to private
respondent, a dispute arose as to who of the parties has the responsibility of Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The
evicting and clearing the land of squatters. Complicating the relations of the parties donation was made not for commercial purpose, but for the use of petitioner to construct
thereon the official place of residence of the Papal Nuncio. The right of a foreign
was the sale by petitioner of Lot 5-A to Tropicana Properties and Development
sovereign to acquire property, real or personal, in a receiving state, necessary for the
Corporation.
creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna
Issue: whether Holy see is immuned from suit Convention on Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the
Philippine Senate and entered into force in the Philippines on November 15, 1965.
Held: yes. B. Sovereign Immunity
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the civil and administrative jurisdiction of the receiving state over any real action relating
generally accepted principles of International Law. Even without this affirmation, to private immovable property situated in the territory of the receiving state which the
such principles of International Law are deemed incorporated as part of the law of the envoy holds on behalf of the sending state for the purposes of the mission. If this
land as a condition and consequence of our admission in the society of nations immunity is provided for a diplomatic envoy, with all the more reason should
(United States of America v. Guinto, 182 SCRA 644 [1990]). immunity be recognized as regards the sovereign itself, which in this case is the Holy
See.
There are two conflicting concepts of sovereign immunity, each widely held and
firmly established. According to the classical or absolute theory, a sovereign cannot, The decision to transfer the property and the subsequent disposal thereof are
without its consent, be made a respondent in the courts of another sovereign. likewise clothed with a governmental character. Petitioner did not sell Lot
According to the newer or restrictive theory, the immunity of the sovereign is 5-A for profit or gain. It merely wanted to dispose off the same because the squatters
recognized only with regard to public acts or acts  jure imperii of a state, but not with living thereon made it almost impossible for petitioner to use it for the purpose of the
regard to private acts or acts  jure gestionis donation. The fact that squatters have occupied and are still occupying the lot, and
that they stubbornly refuse to leave the premises, has been admitted by private
respondent in its complaint (Rollo, pp. 26, 27).
This Court has considered the following transactions by a foreign state with private parties
as acts jure imperii: (1) the lease by a foreign government of apartment buildings for use of
its military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for G.R. No. 90478 November 21, 1991 REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL
the repair of a wharf at a United States Naval Station (United States of America v. COMMISSION ON GOOD GOVERNMENT), vs. SANDIGANBAYAN, BIENVENIDO R.
Ruiz, supra.); and (3) the change of employment status of base employees (Sanders v. TANTOCO, JR. and DOMINADOR R. SANTIAGO,
Veridiano, 162 SCRA 88 [1988]).

On the other hand, this Court has considered the following transactions by a foreign state
with private parties as acts jure gestionis: (1) the hiring of a cook in the recreation center,
consisting of three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop
at the John Hay Air Station in Baguio City, to cater to American servicemen and the general