G.R. No. L-24544 November 15, 1967
HARTFORD FIRE INSURANCE COMPANY, plaintiff-appellant, vs. P.D. MARCHESSINI & CO. (NEW YORK), INC. and/or DELGADO SHIPPING AGENCIES, INC. and/or LITONJUA & CO. INC., REPUBLIC OF THE PHILIPPINES and/or BUREAU OF CUSTOMS and/or CUSTOMS ARRASTRE SERVICE, in their capacity as arrastre operators at the port of Manila, defendants-appellees.

FACTS

P.D. Marchessini & Company, a foreign corporation, owned and operated SS “Eurygenes,” with Delgado Shipping Agencies, Inc. as its Philippine agent. Nineteen bales of drapery remnants were shipped from Charleston, South Carolina, consigned to Maria M. Sarda in Manila. The SS “Eurygenes” docked in Hongkong instead of proceeding to the Philippines, and the cargo was transhipped to Manila on board SS “New Teh Hu,” represented by its agent Litonjua & Co., Inc. SS “New Teh Hu” arrived in Manila on October 3, 1963, but proceeded to Thailand without unloading the cargo. The vessel returned to Manila on October 29, 1963, and discharged the cargo to the custody of the Bureau of Customs, which was then operating the arrastre service. The consignee, Maria M. Sarda, who had insured the shipment with Hartford Fire Insurance Company, did not receive the goods. Hartford Fire Insurance Company paid her P24,715.00 on the insurance and, as subrogee, demanded recovery of said amount from the Bureau of Customs. Upon the Bureau’s refusal to pay, Hartford filed an action in the Court of First Instance of Manila to recover P24,761.50 with legal interest, plus attorney’s fees and costs, alleging negligence either prior to discharge by the shipping defendants or after discharge by the arrastre operator defendants. The Republic of the Philippines, Bureau of Customs, and Customs Arrastre Service moved to dismiss on grounds of non-suability and non-compliance with Act 3083, as amended by Commonwealth Act 327, which required money claims to be filed first with the Auditor General. The trial court dismissed the case as to the Bureau of Customs and Customs Arrastre Service, later reconsidering to include the Republic of the Philippines. Plaintiff’s motion for reconsideration was denied, prompting this appeal.

ISSUE

Whether the trial court correctly dismissed the action against the Republic of the Philippines, the Bureau of Customs, and the Customs Arrastre Service on the grounds of state immunity from suit and non-compliance with the statutory requirement for filing money claims.

RULING

Yes, the dismissal was proper. The Republic of the Philippines, in operating the arrastre service through the Bureau of Customs and the Customs Arrastre Service, does so as a necessary incident of its prime governmental function of taxation. This performance does not amount to a waiver of its immunity from suit. Furthermore, the claim is a money claim which should have been filed in the office of the Auditor General in accordance with Act 3083, as amended by Commonwealth Act 327. The claim, for a fixed amount based on accessible documents, is not unliquidated. Therefore, the order dismissing the action against said defendants is affirmed.