G.R. No. L-25784 October 23, 1967
FIREMEN’S INSURANCE COMPANY, plaintiff-appellant, vs. REPUBLIC OF THE PHILIPPINES and/or BUREAU OF CUSTOMS and/or CUSTOMS ARRASTRE SERVICE, in their capacity as arrastre operators at the port of Manila, defendants-appellees.

FACTS

A shipment of ninety-seven cartons of yarn was discharged into the custody of the Bureau of Customs, operating the Customs Arrastre Service. Only seventy-six cartons were delivered to the consignee, Synthetic Textile Manufacturers’ Company, Inc. The insurer, Firemen’s Insurance Company, paid the consignee for the twenty-one lost cartons worth P11,700.04. As subrogee, the insurer filed an action in the Court of First Instance of Manila to recover this amount from the Republic of the Philippines, the Bureau of Customs, and the Customs Arrastre Service. The defendants moved to dismiss on the grounds that the state cannot be sued without its consent, the agencies lack juridical personality, and the money claim should have been filed with the Auditor General under Act 3083, as amended. The trial court granted the motion to dismiss.

ISSUE

Whether the Court of First Instance has jurisdiction over the defendants (Republic of the Philippines, Bureau of Customs, Customs Arrastre Service) for a money claim arising from arrastre operations.

RULING

No. The order of dismissal is affirmed. The Bureau of Customs and the Customs Arrastre Service are mere agencies of the Republic performing the governmental function of taxation, with arrastre service as a necessary incident. The Republic and its agencies cannot be sued without consent for such operations. The proper remedy for the fixed money claim, based on readily available documents, is to file it with the Office of the Auditor General pursuant to Act 3083, as amended by Commonwealth Act 327.