CALTEX (PHILIPPINES) INC., PLAINTIFF-APPELLEE, VS. CUSTOMS ARRASTRE SERVICE AND/OR BUREAU OF CUSTOMS AND/OR REPUBLIC OF THE PHILIPPINES, DEFENDANTS-APPELLANTS.

Plaintiff Caltex (Philippines) Inc.,
filed suit on February 4, 1964
in the City Court of Manila against de­fendants Customs Arrastre
Service and/or Bureau of Cus­toms and/or Republic of the Philippines, to
recover the amount of P223.77, plus P100.00 as attorney’s fees, due to alleged
short delivery or loss, in the hands of defen­dants as arrastre
operator in the port of Manila, of a shipment of goods.

The shipment was part of 99
packages taken on board SS “President Garcia” on February 16, 1963, in New
York, U.S.A.,
to plaintiff’s consignment at Manila.  The carry­ing vessel arrived in Manila
on March 24, 1963 and
dis­charged the aforesaid shipment into the custody of defen­dants as arrastre operator. 
The specific goods allegedly short delivered or lost in the course of
defendants’ arrastre operations consist of one vial
special reagent napthalene and one gallon tygon thinner worth, as afore-stated, P223.77.

Defendants answered the complaint and raised
as a special defense their non-suability upon the facts stated in the pleading.

Rendering judgment on January
16, 1965, the City Court ordered defendants, jointly and severally,
to pay P223.77, plus interest at legal rate from demand, and P100.00 attorney’s
fees.

Appealing to the Court of First Instance, defendants again
lost.  In its decision of May 14, 1966, said court ordered
defendants, jointly and severally, to pay P223.72 plus interest at the legal
rate from the demand.

Defendants appealed to Us on the point
of law:  Are defendants suable without their consent in this case?  Ap­pellants filed their brief on November 28, 1967.  Appellee, on
December 4, 1967, filed a manifestation and motion sub­mitting the case for
decision without appellee’s brief, in view of the
ruling of this Court in Mobil
Philippines Ex­ploration, Inc. v. Customs Arrastre
Service, L-23139,
December 17, 1966, holding that the government is not subject to suit in court
without its consent for damages resulting from its arrastre
operations, for the reason that said ope­rations are a necessary incident to
the prime governmental function of taxation, so that public policy
considerations bring them within the scope of the doctrine of government
immunity from suit.

Accordingly, We have granted the
aforesaid motion of appellee.  Applying herein the ruling in the Mobil Philip­pines Exploration case, supra, as well as the
subsequent cases mentioned in appellants’ brief along similar lines,* We find that the
court a quo erred in not sustaining defendants’
special defense of non-suability.

WHEREFORE, the appealed judgment is hereby reversed
and the plaintiff’s complaint is dismissed for reason of non-suability herein
of defendants-appellants.  No costs.

SO ORDERED.

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

Fernando, J., did not take
part.

* Insurance Co. of North America v.
Republic, L-26532, July 10, 1967; Insurance Co. of North America v.
Republic, L-24520, July 11, 1967; Insurance Co. of North America v.
Republic, L-25663, July 21,
1967; Manila Electric Co. v. Republic, L-25515, July 24, 1967;
The Ame­rican Insurance Co. v. Republic, L-24031, Aug. 19, 1957;
Insurance Co. of North America v. Republic, L-­27515, Sept. 5, 1967;
Insurance Co. of North America v. Republic, L-27517, Sept. 15, 1967.