INSURANCE COMPANY OF NORTH AMERICA, PLAINTIFF-APPELLANT, VS. REPUBLIC OF THE PHILIPPINES, DEFENDANT-APPELLEE.

In this appeal, the Insurance Company of North America, as insurer of the cargo of
five (5) boxes of road making, machinery parts, four (4) Bundles of tractor parts and one (1) case of
grinding wheel, and as subrogee to the rights of consignee Insular Lumber Company, Manila, prays that the Republic of the
Philippines, as arrastre operator through the Customs Arrastre
Service, be held liable for loss or damage in the amount of P11,355.30 to said
cargo discharged from SS “Turandot” and
delivered to the Arrastre Service, but
of which the four bundles of tractor parts were not delivered to the consignee.

We find, that the Court of First Instance of Manila, upon motion of the defendant, correctly dismissed the case on the ground that
it had no jurisdiction over the
defendant and the subject matter of the suit, because the Republic may not be
sued without its consent and if ever it can be sued, the procedure laid down
under Act 3083 as amended by
Commonwealth Act 327 must be followed.  
It is now settled that the Customs Arrastre Service performs an undertaking that
is an incident of a prime governmental function.   It is part of the governmental machinery
through which the Republic of the Philippines
carries out its several governmental activities.^[1] There, We
also held that the claim must be
coursed through the General Auditing Office under C.A. No. 327.   Consequently, it must be reiterated that
neither the Republic of the Philippines nor the Bureau of Customs nor the
Customs Arrastre Service may be sued.

WHEREFORE, the order of dismissal appealed from is affirmed with costs against the
appellant.

SO ORDERED.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.

^[1]
Mobil Philippines Exploration, Inc. v.
Customs Arrastre Service and Bureau of Customs,
L-23139, Dec. 17, 1966.