GR 23878; (July, 1970) (Digest)
G.R. No. L-23878 July 31, 1970
DOMESTIC INSURANCE COMPANY OF THE PHILIPPINES, plaintiff-appellant, vs. EVERETT SIAM LINE, EVERETT STEAMSHIP CORPORATION, REPUBLIC OF THE PHILIPPINES and/or A. R. REYES & COMPANY, defendants, REPUBLIC OF THE PHILIPPINES, defendant-appellee.
FACTS
The plaintiff-appellant, Domestic Insurance Company of the Philippines, indemnified Weston Hardware & Plumbing, Inc. for the loss of 8 cases of malleable iron pipe fittings valued at P1,246.97 from a larger shipment imported in June 1963. As subrogee, the plaintiff filed a complaint against alternative defendants: Everett Siam Line (operator of the carrying vessel SS Pablo), Everett Steamship Corporation (its Philippine agent), the Republic of the Philippines (as operator of the Customs Arrastre Service which allegedly received the goods), and A.R. Reyes & Company (to whose warehouse a portion of the shipment was allegedly transferred without consent). The Court of First Instance dismissed the complaint against the Republic of the Philippines on the grounds of (1) lack of jurisdiction and (2) non-suability of the State without its consent. The plaintiff appealed this dismissal.
ISSUE
1. Whether the Court of First Instance lacked jurisdiction over the complaint against the Republic of the Philippines.
2. Whether the Republic of the Philippines, in operating the Customs Arrastre Service, may be sued without its consent.
RULING
1. On Jurisdiction: The lower court’s dismissal for lack of jurisdiction was erroneous. The complaint invoked the court’s admiralty jurisdiction by alternatively impleading Everett Siam Line and Everett Steamship Corporation for breach of contract of affreightment. Under the rules on joinder of alternative causes of action, the Court of First Instance retains jurisdiction over all causes if it has jurisdiction over at least one, even if another cause (e.g., a claim under P10,000 against the government) might otherwise fall under a lower court’s exclusive jurisdiction.
2. On Non-Suability of the State: The lower court correctly dismissed the complaint against the Republic of the Philippines. The Customs Arrastre Service, as an arm of the Bureau of Customs, was performing a function incidental to the governmental function of assessing and collecting customs duties. In engaging in such activity, the government did not waive its immunity from suit. The plaintiff’s potential remedy lies under Act 3083 and Commonwealth Act 327.
The Supreme Court affirmed the dismissal of the complaint against the Republic of the Philippines on the ground of state immunity from suit.