GR L 25323; (November, 1967) (Digest)
G.R. No. L-25323 November 15, 1967
ROYAL INSURANCE COMPANY, plaintiff-appellee, vs. AMERICAN PIONEER LINE, ET AL., defendants, REPUBLIC OF THE PHILIPPINES, defendant-appellant.
FACTS
The SS “Pioneer Ming” arrived in Manila from New York on December 17, 1962, and discharged thirty-two packages of auto parts consigned to White House Auto Supply into the custody of the Bureau of Customs as arrastre operator. The consignee received only thirty-one packages. Royal Insurance Company, the cargo insurer, paid the consignee for the lost case valued at P732.26 and, as subrogee, filed a suit on December 7, 1963, against American Pioneer Line, United States Line Company, Manila Port Service, Manila Railroad Company, and the Republic of the Philippines as arrastre operator, to recover the amount. The Republic of the Philippines, through the Bureau of Customs and the Customs Arrastre Service, moved to dismiss the case, arguing lack of jurisdiction due to the amount involved and the non-suability of the State. The Court of First Instance denied the motion, holding that it had admiralty jurisdiction, and subsequently ordered the Republic to pay the claim. The Republic appealed, reiterating its immunity from suit.
ISSUE
Whether the Republic of the Philippines, acting through the Bureau of Customs and the Customs Arrastre Service in operating arrastre services, may be sued without its consent for a money claim arising from such operations.
RULING
No. The Supreme Court reversed the lower court’s decision and dismissed the case against the Republic of the Philippines. The Court held that the Republic, in performing its primary function of taxation through the Bureau of Customs, may not be sued without its consent. The arrastre service operated by the Bureau is a necessary incident to this primary governmental function. Even if the arrastre service is proprietary in nature, it does not subject the State to suit due to overriding public policy reasons. Furthermore, the money claim should have been filed with the Auditor General as required by Act No. 3083 , as amended by Commonwealth Act 327, since the claim was for a fixed and determinable amount.