GR L 24383; (August, 1967) (Digest)
G.R. No. L-24383 August 26, 1967
EQUITABLE INSURANCE and CASUALTY CO., INC., plaintiff-appellant, vs. SMITH, BELL and CO., (PHILIPPINES) INC., in its capacity as agents in the Philippines for Klavenese Line, owner/operator of S/S “BONNEVILLE,” and/or THE BUREAU OF CUSTOMS, in its capacity as arrastre operator in the Port of Manila, defendants-appellees.
FACTS
The plaintiff-appellant, Equitable Insurance and Casualty Co., Inc., as subrogee of the consignee Manila Auto Supply Co., Inc., filed an alternative suit to recover the value of undelivered merchandise amounting to P23,420.84. The cargo was imported and carried by S/S “Bonneville,” which arrived at the Port of Manila on June 18, 1963. Unable to ascertain whether the loss occurred while the cargo was in the custody of the carrying vessel or the Bureau of Customs acting as arrastre operator, the plaintiff sued both defendants in the alternative. The Bureau of Customs moved to dismiss the case against it on the ground of non-suability. The lower court issued an order on December 3, 1964, dismissing the case as against the Bureau of Customs, which was upheld upon denial of reconsideration on February 8, 1965, prompting the plaintiff’s appeal.
ISSUE
Whether the Bureau of Customs, in its capacity as arrastre operator, can be sued as a party defendant in court.
RULING
No. The Supreme Court affirmed the lower court’s orders dismissing the case against the Bureau of Customs. The Court held that the Bureau of Customs cannot be a party defendant in a suit because it is neither a natural nor a juridical person nor an entity authorized by law to be sued. As an arm of the Department of Finance, it has no separate personality from the national government. While the arrastre service is a proprietary function, it is a necessary incident to the primary governmental function of assessing and collecting customs duties and revenues. The claim is essentially a money claim against the State, which has not consented to the suit. Statutory provisions waiving state immunity are construed strictly. The proper remedy for such a claim is to lodge it with the Auditor General under the procedure outlined in Commonwealth Act 327. The Court cited a line of jurisprudence establishing the unanimity of this ruling and found no new argument to justify a departure from its previous decisions.