G.R. No. L-26287 April 27, 1972
CHAMPION AUTO SUPPLY CO., INC., plaintiff-appellant, vs. BUREAU OF CUSTOMS, in its capacity as operator of the Customs Arrastre Service, defendants-appellees.

FACTS

The plaintiff, Champion Auto Supply Company, Inc., filed a complaint against the Bureau of Customs as operator of the Customs Arrastre Service. It alleged that a shipment of eight bundles of auto parts consigned to it arrived at the Port of Manila aboard the SS “Yakal.” The shipment was discharged complete and in good order into the custody of the defendant’s arrastre service. Due to the alleged negligence of the defendant, three packages were lost and two bundles were short-delivered or pilfered, causing damages totaling P10,094.25. Despite demands, the defendant refused to pay.
The defendant denied the allegations and raised special defenses, including that it cannot be sued without its consent and that the trial court lacked jurisdiction over the money claim against the government, as the requirements under Act No. 3083 (the law governing claims against the state) had not been met. After the plaintiff presented its evidence, the defendant moved for dismissal due to insufficiency of evidence. The trial court granted the motion, finding the plaintiff failed to prove delivery of the shipment in good order to the arrastre service by not presenting cargo or tally sheets.

ISSUE

Whether the Bureau of Customs, operating the Customs Arrastre Service, may be sued without the consent of the state.

RULING

The Supreme Court affirmed the dismissal of the complaint, but on a different and fundamental jurisdictional ground. The Court did not delve into the merits of the evidence or the procedural requirements under Act No. 3083 . Instead, it resolved the appeal based on the doctrine of state immunity from suit. The Court held that the Bureau of Customs, in operating the arrastre service, was performing a governmental function pursuant to an express legislative mandate. As an integral part of the national government’s machinery, it shares the state’s immunity from legal action unless such immunity is expressly waived. The Court cited its precedent in Mobil Philippines Exploration, Inc. vs. Customs Arrastre Service, which established that the Bureau of Customs in this capacity is immune from suit, a ruling reiterated in numerous subsequent cases. Consequently, the trial court lacked jurisdiction over the case against the defendant, rendering the plaintiff’s claim unenforceable without the state’s consent.