G.R. No. L-25593 November 15, 1967
HOME INSURANCE COMPANY, plaintiff-appellant, vs. UNITED STATES LINES CO., ET AL., defendants-appellees.

FACTS

In 1964, the SS “Pioneer Moon” arrived in Manila and discharged 200 cartons of carbonized adding machine rolls consigned to Burroughs, Limited. The cargo was placed in the custody of the Bureau of Customs as the arrastre operator. Upon delivery to the consignee, several cartons were found damaged. The consignee filed a claim for P2,605.64 against the Bureau of Customs, the United States Lines Company (owner of the vessel), and the Home Insurance Company (the cargo insurer). Home Insurance Company paid the claim and, as subrogee, sought reimbursement from either the arrastre operator or the carrier. Both rejected the claim. Consequently, on June 11, 1965, Home Insurance Company filed an action against the Republic of the Philippines, the Bureau of Customs, and the United States Lines, in the alternative, for recovery of P2,605.64 with interest and costs. The defendants answered: United States Lines disclaimed liability, asserting the damage occurred while the cargo was in the possession of its co-defendants; the Republic and the Bureau of Customs, after their motion to dismiss was denied, answered alleging non-suability and non-compliance with Act 3083, as amended by Commonwealth Act 327, which requires money claims to be filed with the Auditor General. On December 7, 1965, the date set for pre-trial, only the counsel for the plaintiff appeared. When asked for written authority to compromise, counsel assured the court he had verbal authority from the plaintiff. The court dismissed the case that same day for the plaintiff’s failure to appear at the pre-trial conference. Plaintiff’s motion for reconsideration was denied, prompting this appeal.

ISSUE

Whether the lower court erred in dismissing the case for the plaintiff’s failure to appear at the pre-trial conference.

RULING

No, the lower court did not err. The dismissal is affirmed.
1. As to the Republic of the Philippines and the Bureau of Customs, the dismissal is sustained based on the doctrine established in Mobil Philippines Exploration v. Customs Arrastre Service and Bureau of Customs and subsequent rulings, which hold that the Republic or its agencies may not be sued for arrastre operations as these are incidental to the governmental function of taxation.
2. As to the other defendants, Section 1, Rule 20 of the Revised Rules of Court makes pre-trial mandatory, requiring parties and their attorneys to appear. This differs from the old rules which were discretionary. Section 2, Rule 20 allows a party who fails to appear to be non-suited. The purpose is to compel personal appearance to facilitate compromise. The court has discretion to dismiss if the plaintiff does not appear. In this case, only plaintiff’s counsel appeared, not an official representative of the plaintiff. While counsel asserted verbal authority to compromise, Rule 138 requires a “special authority” for attorneys to compromise. Although not required to be in writing, such authority must be established by evidence beyond counsel’s self-serving assertion. The lower court did not err in dismissing the case despite counsel’s manifestation, as authority to compromise cannot be lightly presumed. The dismissal is therefore sustained in its entirety.