G.R. No. L-26632 May 29, 1970
CALTEX (PHILIPPINES), INC., plaintiff-appellant, vs. CUSTOMS ARRASTRE SERVICE, ET AL., defendants-appellees.

FACTS

Plaintiff-appellant Caltex (Philippines), Inc. filed a complaint against the Customs Arrastre Service, the Bureau of Customs, and the Republic of the Philippines for lost or undelivered cargo valued at P9,859.49, of which Caltex was the consignee. The lower court dismissed the complaint on March 9, 1966, based on the doctrine of non-suability of the government without its consent. Caltex appealed the dismissal order.

ISSUE

Whether the action against the Customs Arrastre Service, the Bureau of Customs, and the Republic of the Philippines for lost or undelivered cargo is barred by the doctrine of governmental immunity from suit without its consent.

RULING

The Supreme Court affirmed the order of dismissal. The doctrine of non-suability of the government without its consent, a fundamental postulate of constitutional law, bars such an action. The Court cited its prior decision in Mobil Philippines Exploration, Inc. v. Customs Arrastre Service (Dec. 17, 1966), which held that the government’s immunity from suit precludes claims of this nature. The Court emphasized that this doctrine is grounded in both logical and practical considerations, as it prevents the government from being frequently haled into court, which would impede its functions. While the government engages in varied activities, remedies for money claims arising from contract are available through statutory procedures, such as filing claims with the Auditor General. The Court concluded that the doctrine, as applied, does not result in injustice, given the existing legal avenues for redress. Costs were imposed on plaintiff-appellant.