G.R. No. L-23879 November 18, 1967
DOMESTIC INSURANCE COMPANY OF THE PHILIPPINES, plaintiff-appellant, vs. BARBER LINE, MACONDRAY & CO., INC. and/or REPUBLIC OF THE PHILIPPINES, defendants-appellees.

FACTS

The plaintiff, Domestic Insurance Company of the Philippines, as the insurer-subrogee of a cargo consigned to Centennial Commercial Corporation in Manila, filed a suit for money against the defendants. The complaint alleged that the shipment, which included three cartons of shears covered by a bill of lading issued by Barber Line, arrived in Manila aboard the SS Queensville on June 24, 1963. The cargo was discharged into the custody of the arrastre operator. The consignee cleared all shipping documents through the defendants and the Bureau of Customs, but part of the shipment was not delivered, resulting in losses amounting to P8,800.92 due to the alleged negligence of the defendants. The Republic of the Philippines was named as an alternative defendant in its capacity as the operator of the arrastre service through the Bureau of Customs. The lower court dismissed the case against the Republic upon its motion, citing the doctrine of state immunity from suit without its consent.

ISSUE

Whether the Republic of the Philippines, in operating the arrastre service through the Bureau of Customs, may be sued without its consent.

RULING

No. The Supreme Court affirmed the order of dismissal. The Court held that in operating the arrastre service through the Customs Bureau, the Republic of the Philippines performs an incident of the prime governmental function of assessment and collection of revenues, tariff and customs duties, and fees from importations. As such, the state may not be sued without its consent. The Court cited previous similar cases, including Mobil Philippine Exploration v. Customs Arrastre Service, Insurance Co. of North America v. Republic of the Philippines, and Manila Electric Co. v. Customs Arrastre Service, to support this ruling.