G.R. No. L-25162 October 23, 1967
CHAMPION AUTO SUPPLY, CO., INC., plaintiff-appellant, vs. THE BUREAU OF CUSTOMS, ETC., defendant-appellee.

FACTS

The SS “Siquijor” delivered three cases of U.S. Army Foreign Excess Property-Gears from Yokohama, Japan, to the custody of the Bureau of Customs as the arrastre operator at Manila, for delivery to the consignee, Champion Auto Supply Co., Inc. When the consignee received the three cases on March 24, 1964, they were empty, with the contents valued at P15,499.49. To recover the value of the lost contents plus attorney’s fees, Champion Auto Supply Co., Inc. filed a suit against the Bureau of Customs on October 8, 1964. The Court of First Instance of Manila dismissed the action, ruling that the Bureau of Customs is a mere agency of the Republic of the Philippines without a separate personality, making the suit effectively one against the Republic, which cannot be sued without its consent.

ISSUE

Whether the Bureau of Customs may be sued for claims arising from its arrastre operations.

RULING

No. The Supreme Court affirmed the dismissal of the case. It held that the Bureau of Customs may not be sued for claims arising from its arrastre operation, as such operation is undertaken as an incident of a prime governmental function. The Court cited its precedent in Mobil Philippines Exploration, Inc. v. Customs Arrastre Service and Bureau of Customs. The proper remedy for the fixed money claim was to file it with the Auditor General under Act 3083 and Commonwealth Act 327, not through a direct suit against the State without its consent.