GR 27389; (March, 1970) (Digest)
G.R. No. L-27389 March 30, 1970
SWITZERLAND GENERAL INSURANCE COMPANY, LTD., plaintiff-appellant, vs. REPUBLIC OF THE PHILIPPINES, defendant-appellee.
FACTS
The plaintiff-appellant, Switzerland General Insurance Company, Ltd., insured a shipment of raw materials for paint manufacture consigned to Ed. A. Keller & Co., Ltd. of Manila. The cargo was discharged at the Port of Manila and delivered to the defendant-appellee, Republic of the Philippines, through its subsidiary, the Customs Arrastre Service. Upon delivery to the consignee, the cargo sustained losses or damages amounting to P834.26, which the plaintiff-appellant paid. As subrogee to the consignee’s rights, the plaintiff-appellant demanded payment from the Republic, which refused. The plaintiff-appellant filed a suit in the City Court of Manila and obtained a favorable judgment. However, on appeal to the Court of First Instance of Manila, the case was dismissed on the ground that the Republic cannot be sued without its consent. The lower court’s dismissal was based on the Supreme Court’s decision in Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, which reiterated the doctrine of non-suability of the state.
ISSUE
Whether the Republic of the Philippines, operating through the Customs Arrastre Service, may be sued without its consent for claims arising from arrastre operations.
RULING
No. The Supreme Court affirmed the order of dismissal of the lower court. The doctrine of non-suability of the state without its consent is a fundamental postulate of constitutional law. The state, as the source of law, cannot be sued without its consent. This principle is necessary to prevent loss of governmental efficiency and avoid obstacles to the performance of its multifarious functions. While this may cause inconvenience to private parties, they are not without recourse, as they may seek collection of money claims through the statutory remedy of having the Auditor General pass upon them, subject to appeal to judicial tribunals for final adjudication. The appealed order was consistent with the prevailing jurisprudence, particularly the Mobil decision, and was therefore free from legal infirmity. The orders dated December 28, 1966 (dismissal) and February 4, 1967 (denial of reconsideration) were affirmed. Costs were imposed against the plaintiff-appellant.