WISE & COMPANY, INC., PLAINTIFF-APPELLEE, VS. CUSTOMS ARRASTRE SERVICE AND/OR BUREAU OF CUSTOMS AND/OR REPUBLIC OF THE PHILIPPINES, DEFENDANTS-APPELLANTS.

This is an arrastre case. On August 13, 1963 the vessel Missouri Maru arrived in
Manila with a shipment of 275 sacks of synthetic resin consigned to Wise &
Company, Inc. The shipment was landed
in good order and delivered to the Customs Arrastre Service. However, when the arrastre operator
delivered it to the consignee, twenty-nine bags were missing.

On April 3, 1965 Wise & Company, Inc. sued the Customs
Arrastre Service, the Bureau of Customs, and the Republic of the Philippines in
the city court of Manila for the recovery of the value of the missing cargo in
the sum of P985.08 plus P200 as attorney’s fees.

The Solicitor General in his answer pleaded several defenses
among which is that the State is immune from suit. After hearing, the city court rendered judgment in favor of Wise
& Company, Inc. It ordered the
defendants to pay soli­darily to the consignee the sum of P985.08 plus fifty
pesos as attorney’ s fees.

The Government appealed to the Court of First Instance. After hearing, the lower court held that the
doctrine of State immunity from suit is not applicable to the Bureau of Customs
as arrastre operator. The defendants
were ordered to pay soli­darily to Wise & Company, Inc. the sum of P989.95
with legal rate of interest from the filing of the complaint, plus P200 as
attorney’ s fees. (Civil Case No.
61863).

From that decision, the government appealed to this Court. Instead of filing a brief, the Solicitor
General submitted a manifestation dated July 28, 1967 wherein he invited
attention to the ruling that “the Bureau of Customs, in operating the
arrastre service, does so as an incident of a prime governmental function and
as such may not be sued” and that “the same holds true with the
Republic of the Philippines” (Manila Electric Co. vs. Customs Arrastre
Service, L-25515, July 24, 1967, 20 SCRA 767).

In view of that ruling, plaintiff-appellee Wise & Company,
Inc. deemed it unnecessary to file any brief.

We hold that the lower court erred in ordering the State or the
Republic of the Philippines, as arrastre operator, to pay the value of the
missing cargo to Wise & Company, Inc. The rule that “the State may not be sued without its consent”
(now found in section 16, Article XV of the Constitution) applies to this case.

The consignee’s remedy is to file a claim with the Com­mission on
Audit as contemplated in Act No. 3083 and Commonwealth Act No. 327 (Gloren,
Inc. vs. Republic, L-26811, July 31, 1970, 34 SCRA 26; Travelers Indemnity
Company vs. Barber Steamship Lines, Inc., L-27019, May 6, 1977).

WHEREFORE, the lower court’s judgment is reversed and set
aside. No costs.

SO ORDERED.

Fernando, (Chairman), Antonio, Muñoz Palma, and Martin, JJ., concur.

Barredo, J., no part.

Concepcion, Jr., J., on leave.