(SECOND DIVISION) AND ROBERTO S BENEDICTO

the membership due) and so it had to be disposed of in an auction sale.

3. Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S. Benedicto, et al., defendants, is a complaint for reconveyance, reversion, accounting, reconstitution and damages that PCGG filed with the Sandiganbayan against Roberto S. Benedicto. On November 3, 1990, petitioner Republic and private respondent Benedicto entered into a Compromise Agreement, wherein Republic agreed and bound itself to lift the sequestration on the 227 NOGCCI shares, impliedly recognizing that the shares of stock are not ill-gotten.

4. Sandiganbayan came out with the herein first assailed Resolution directing PCGG to deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI] free from all liens and encumbrances, or in default thereof, to pay their value. PCGG failed to comply.

ISSUE: W Sandiganbayan gravely abused its discretion

in holding that the PCGG is at fault for not paying the membership dues on the 227 sequestered NOGCCI shares of stock, a failing which eventually led to the foreclosure sale thereof - NO.

1. PCGG, as a receiver of the sequestered 227 shares, has the function to pay outstanding debts pertaining to the sequestered entity or property. It contends, however, that membership dues owing to a golf club cannot be considered as an outstanding debt.

2. (relevant part) In a last-ditch attempt to escape liability, petitioner Republic, through the PCGG, invokes state immunity from suit. As argued, the order for it to pay the value of the delinquent shares would fix

monetary liability on a government agency, thus necessitating the appropriation of public funds to satisfy the judgment claim. But, as Benedicto correctly countered, the PCGG fails to take stock of one of the exceptions to the state immunity principle, i.e., when the government itself is the suitor, as in Civil Case No. 0034. Where, as here, the State itself is no less the plaintiff in the main case, immunity from suit cannot be effectively invoked. For, as jurisprudence teaches, when the State, through its duly authorized officers, takes the initiative in a suit against a private party, it thereby descends to the level of a private individual and thus opens itself to whatever counterclaims or defenses the latter may have against it. Petitioner Republic‘s act of filing its complaint in Civil Case No. 0034 constitutes a waiver of its immunity from suit. Being itself the plaintiff in that case, petitioner Republic cannot set up its immunity against private respondent Benedicto‘s prayers in the same case.

In fact, by entering into a Compromise Agreement with private respondent Benedicto, petitioner Republic thereby stripped itself of its immunity from suit and placed itself in the same level of its adversary. When the State enters into contract, through its officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, the State may be sued even without its express consent, precisely because by entering into a contract the sovereign descends to the level of the citizen. Its consent to be sued is implied from the very act of entering into such contract, breach

of which on its part gives the corresponding right to the other party to the agreement.

Nature: petition for certiorari to nullify the decision of

NLRC 5th Division

FACTS:

1. Apr 1, 1989 - DAR entered into a contract for security services with Sultan Security Agency. On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for underpayment of wages, etc. against the DAR and Sultan Security Agency.

2. The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner and jointly and severally liable with Sultan Security Agency for the payment of money claims. The decision became final and executory.

3. On 18 July 1991, the Labor Arbiter issued a writ of execution commanding the City Sheriff to enforce and execute the judgment against the property of the two respondents.

4. The City Sheriff levied on execution the motor vehicles of DAR. These units were put under the custody of Zacharias Roa, the property custodian of the petitioner, pending their sale at public auction or the final settlement of the case, whichever would come first. 5. DAR filed a petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction with NLRC CDO, alleging that the writ issued was

effected without the Labor Arbiter having duly acquired jurisdiction over the petitioner, and that, therefore, the decision of the Labor Arbiter was null and void. The petitioner 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.

6. NLRC refused to quash the writ of execution. DAR now filed a petition for certiorari. It argues: (1) that NLRC cannot assume jurisdiction over a money claim against the Department, which, it claims, falls under the exclusive jurisdiction of the Commission on Audit; (2) NLRC has disregarded the cardinal rule on the non- suability of the State.

ISSUE: W DAR waived its immunity from suit by

concluding a service contract with Sultan Security Agency - NO. Petiiton for Certiorari granted.

1. The rule that "the State may not be sued without its consent," is not really 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.

2. The States' consent may be given expressly or impliedly. Express consent may be made through a general law or a special law. Implied consent, on the other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim or when it enters into a contract. In this situation, the government is deemed to have descended to the level of the other contracting party and to have

G.R.NO.104269,NOVEMBER 11,1993