PHILIPPINE FIRST INSURANCE COMPANY, INC., PLAINTIFF-APPELLEE, VS. CUSTOMS ARRASTRE SERVICE AND REPUBLIC OF THE PHILIPPINES, DEFENDANTS-APPELLANTS.

On September 1, 1964, the Philippine First Insurance Company,
Inc. (hereafter referred to as Insurance
Company), a subrogee of the Ong
Yet Mua Hardware Co., Inc., filed an action against
the Customs Arrastre Service (hereafter referred to as Customs Arrastre)
and the Republic of the Philippines in
the City Court of Manila for recovery of a total sum of P4,461.14 in three causes of action, the facts of which are as
follows:

First Cause of Action.  – Ong Yet Mua Hardware Co., Inc. imported from Mohwinchkel,
Milano, Italy
three pack­ages containing 300 pieces of water meters worth $3,649.25.  Said importation which was insured against
all risks with the Insurance Company arrived in Manila
on board SS “Main Lloyd” on September
5, 1963 and vas dig complete and
in good order to the Customs Arrastre.  However, deli­very to the consignee was short by 28 pieces of water me­ters.

A provisional claim for the loss was filed with the Customs Arrastre.  Upon
demand, the Insurance Company paid to the consignee tie sum of P1,224.67
representing the va­lue of the short
delivered cargo for which the consignee
assigned to the Insurance Company all its rights of action against the
Customs Arrastre. 
However, despite repeated demands Customs Arrastre
failed to pay the Insurance Com­pany
the aforesaid amount of P1,224.67.

Second Cause of Action.  – Ong Yet Mua Hardware Co., Inc.
was a consignee of 16 packages containing pieces of plane iron, spokeshaves, hammers and screw drivers, va­lued at
$4,560.50, shipped on board SS “Maron” from
Eng­land which
arrived in Manila on September 5,
1963.  The cargo was
discharged to the Customs Arrastre complete and in good order but delivery to the
consignee was short by three cases.

A provisional claim was filed with the Customs Arras­tre.  For the loss, the Insurance Company meanwhile
paid the consignee P3,168.78.  Customs Arrastre however refused to pay to the Insurance Company said sum of P3,168.78 dispite demands.

Third Cause of Action.  –
Tokyo Tsusho Kaisha, Ltd. at Osaka, Japan
shipped on board SS “Tindalo” 150 pack­ages containing round point
shovels worth $2,749.50 to Ong Yet Mua Hardware Co., Inc. 
The shipment which was insured with the Insurance Company against all risks, arrived in Manila
on September 8, 1963 and was discharged to the Customs Arrastre complete and in good order.  As delivery to it was short by two dozen
shovels, the consignee filed a claim for the loss with the Customs Arrastre.  However,
said loss was indemnified by the Insurance Company in the amount of
P67.69.  And as subrogee,
the Insurance Company repeatedly demanded upon the Customs Arrastre to pay the said amount of P67.69 but the
latter failed to comply with the demands of the former.

On February 20, 1965
the City Court of Manila ren­dered judgment dismissing the case for
insufficiency of evidence.

The Insurance Company appealed to the Court of First Instance
which court found for the plaintiff and ordered the Customs Arrastre to pay a total amount
of P4,461.14.  From said judgment defendants Customs Arrastre and the Republic of the Philippines
appealed to this Court interposing the defense of the State’s immunity from
suit.

The defense is meritorious. 
In Equitable Insurance and Casualty Co., Inc. v. Smith, Bell & Co. (Phil.), Inc.,^[1]
We held that –

“x
x x the Bureau of
Customs cannot be a party defendant in
a suit.  Because,
it is neither a natural nor a juridical person nor
an entity authorized by law to be sued.  An arm of the Department of Finance, it has no personality of
its own, apart from the natio­nal
government.  Arrastre
service, it is true, is a proprietary function.  But just the same, it is a necessary incident to
the primary governmental job of assessing and collecting lawful revenues from
imported articles and all other tariff and customs duties, fees, charges,
fines, and penalties.  x x x“

The Republic of the Philippines
can only he sued with its consent.  But We see no indication in this ins­tance that the Republic has
consented to be impleaded as party defendant.  Moreover, the claim herein being one for
money, the remedy of the claimant is to address its demand upon the Auditor
General pursuant to Act 3083 and Commonwealth Act 327.^[2]

WHEREFORE, the judgment appealed from is set aside and a
new one entered dismissing the complaint. 
Without costs.

SO ORDERED.

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

^[1]
G.R. No. L–24383,
August 26, 1967.

^[2]
Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, G.R. No. L-23139, December 17,
1966.