GR L 24520; (July, 1967) (Digest)
G.R. No. L-24520 July 11, 1967
INSURANCE COMPANY OF NORTH AMERICA, plaintiff-appellant, vs. REPUBLIC OF THE PHILIPPINES and/or BUREAU OF CUSTOMS and/or CUSTOMS ARRASTRE SERVICE, defendants-appellees.
FACTS
Six cases of hand tools and ten cases of portable electric tools, consigned to Dayton Price & Co., Ltd., were discharged from the vessel SS “Turandot” on May 20, 1963, and delivered to the Customs Arrastre Service of the Bureau of Customs, which was then handling arrastre operations in the Port of Manila. The Customs Arrastre Service failed to deliver the entire shipment to the consignee. For the loss of tools valued at P3,261.21, the consignee filed a claim with its insurer, the Insurance Company of North America, which paid the claim. As subrogee to the consignee’s rights, the Insurance Company of North America filed a suit on July 20, 1964, before the City Court of Manila for the same amount, plus attorney’s fees and costs, against the Republic of the Philippines and/or the Bureau of Customs and/or the Customs Arrastre Service. After the City Court decided in favor of the plaintiff, the defendants appealed to the Court of First Instance, alleging immunity from suit and stating that any recovery should be pursued by filing a claim with the Auditor General under Act No. 3083 as amended by Commonwealth Act No. 327 . The Court of First Instance sustained this contention and issued an order on March 3, 1965, dismissing the complaint on the grounds that the defendant agencies of the Philippine Government have no juridical capacity to be sued and that the Philippine Government may only entertain a money claim upon compliance with the provisions of Act No. 3083 as amended by Commonwealth Act No. 327 . The plaintiff appealed this order directly to the Supreme Court.
ISSUE
Whether the Bureau of Customs/Customs Arrastre Service, as an agency of the Philippine Government performing arrastre service, is immune from suit, and whether a money claim against it must be filed with the Auditor General under Commonwealth Act No. 327 .
RULING
The Supreme Court affirmed the order of dismissal. Citing its precedent in Mobil Phil. Exploration, Inc. v. Customs Arrastre Service (L-23139, December 17, 1966), the Court ruled that the Bureau of Customs, acting as part of the governmental machinery in its operation of the arrastre service as an incident of a prime governmental function, is immune from suit. The Court further held that the claim involving money should have been filed with the Auditor General under Commonwealth Act No. 327 . No costs were awarded.