SWITZERLAND GENERAL INSURANCE COMPANY, LTD., PLAINTIFF-APPELLANT, VS. REPUBLIC OF THE PHILIPPINES, DEFENDANT-APPELLEE.

There cannot be the slightest doubt that the appealed order of dismissal
of the lower court dated December 28,
1966 on the ground that defendant-appellee Republic
of the Philippines
cannot be sued without its consent is free from the taint of any legal
infirmity.  The lower court had no other
alternative after our decision, promulgated eleven
days earlier in Mobil Philippines Exploration, Inc. v. Customs Arrastre Service^[1]
reiterated such a principle in the most unqualified terms.  This appeal is thus devoid of any prospect of
success.

The facts, according to the brief of plaintiff-appellant
Switzerland General Insurance, follow: “On or about May 29, 1964, the
ocean vessel SS ‘Pioneer Mart’ discharged and delivered to defendant-appellee Republic of the Philippines, through its
subsidiary Customs Arrastre Service being then the
operator of the arrastre service at the Port of
Manila, cargo consisting of Seven (7) Drums and Four (4) Bags Raw Materials for
Paint Manufacture which was shipped by Diethelm and
Keller (U.S.A.), Limited of New York, U.S.A., consigned to the order of Ed. A.
Keller & Co., Ltd. of Manila, and covered by American Pioneer Line Bill of
Lading No. 44, dated April 24, 1964.  The
cargo has an invoice of US$721.62 and insured with plaintiff against loss and,
damage.”^[2]
It was then alleged in such brief that defendant-appellee Republic
of the Philippines
delivered the aforesaid cargo to its consignee, which sustained losses or
damages in the amount of P834.26.^[3]
As plaintiff-appellant paid such amount to the consignee, it was subrogated to
its rights.  Notwithstanding demands made
however, defendant-appellee refused to pay.  There was a suit filed in the City Court of
Manila, with plaintiff-appellant obtaining a favorable judgment.  On appeal, however, to the Court of First
Instance of Manila, the case was dismissed. 
As above noted, such an outcome was predictable.  Deference to our Mobil decision called for
such a judgment.

The doctrine of non-suability recognized in this jurisdiction
even prior to the effectivity of the Constitution^[4]
is a logical corollary of the positivist concept of law which to paraphrase
Holmes negates the assertion of any legal right as against the state, in itself
the source of the law on which such a right may be predicated.^[5] Nor is this all.  Even
if such a principle does give rise to problems considering the vastly expanded
role of government enabling it to engage in business pursuits to promote the
general welfare, it is not obeisance to the analytical school of thought alone
that calls for its continued applicability. Why it must continue to be so, even
if the matter be viewed sociologically, set forth in Providence Washington
Insurance Co. v. Republic^[6]
thus: “Nonetheless, a continued adherence to the doctrine of non-suability
is not to be deplored for as against the inconvenience that may be caused
private parties, the loss of governmental efficiency and the obstacle to the
performance of its multifarious functions are far greater if, such a
fundamental principle were abandoned and the avail­ability of judicial remedy
were not thus restricted.  With the well
known propensity on the part of our people to go to court, at the least
provocation, the loss of time and energy required to defend against law suits,
in the absence of such a basic principle that constitutes such an effective
obstacle, could very well be imagined. “

Nor is injustice thereby caused private parties.  They could still proceed to seek collection
of their money claims by pursuing the statutory remedy of having the
Auditor-General pass upon them subject to appeal to judicial tribunals for
final adjudication.^[7]  We could thus correctly conclude as we did in
the cited Providence Washington Insurance decision:  “Thus the doctrine of non-suability of
the government without its consent, as it has operated in practice, hardly lends
itself to the charge that it could be the fruitful parent of in­justice
considering the vast and ever-widening scope of state activities at present
being undertaken.  Whatever difficulties
for private claimants may still exist, is, from an
objective appraisal of all factors, minimal. 
In the balancing of interests, so unavoidable in the determination of
what principles must prevail if government is to satisfy the public weal, the
verdict must be, as it has been these so Many years, for its continuing recognition
as a fundamental postulate of constitutional law.”

WHEREFORE, the order of dismissal of the lower court,
dated December 28, 1966
and the order denying the motion for reconsideration, dated February 4, 1967, are affirmed.  With costs against plaintiff-appellant.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Teehankee, and Villamor, JJ., concur.

Barredo, J., no part.

^[1] L-23139, 18 SCRA 1120. 
Firemen’s Fund Insurance Co. v. United States Line Co., L-26533, Jan. 30, 1970
is the fortieth case that relied on the Mobil doctrine.

^[2] Brief for the plaintiff-appellant, p. 2.

^[3] Ibid., p. 3.

^[4] Cf. Merrit v. Government of the
Philippine Islands, 34 Phil. 311 (1916) and Campania
General de Tabacos v. Government of the
Philippine Islands, 45 Phil. 663 (1924).

^[5] Cf. Kawananakoa v. Polyblank, 205 US 349 (1907).

^[6] L-26386, September 30, 1969, 29 SCRA
598.

^[7]
Act No. 3083 (1923) and Commonwealth Act No. 327 (1938).