FIREMEN’S INSURANCE COMPANY, PLAINTIFF-APPELLANT, VS. REPUBLIC OF THE PHILIPPINES AND/OR BUREAU OF CUSTOMS AND/OR CUSTOMS ARRASTRE SERVICE; IN THEIR CAPACITY AS ARRASTRE OPERATO…

A shipment from New York
of ninety seven (97) cartons
yarn of continuous acetate filamen tow was discharged by the carrier SS “Eurygenes” into the
custody of the Bureau of Customs which was then operating the Customs Arrastre Service. 
However, only 76 cartons were delivered to the ultimate consignee, the Synthetic Textile Manufacturers’
Company Inc.  The 21 cartons loss, worth
P11,700.04 was paid by the Firemen’s Insurance Company
as insurer of the cargo against loss or damage. 
Having failed as subrogee to
the consignee to recover from the Bureau of Customs, the Firemen’s Insurance Company
on September 7, 1965 filed before
the Court of First Instance of
Manila an action against the
Republic of the Philippines, the Bureau of Customs and the Customs Arrastre
Service for the recovery of P11,700.04 with legal interest plus P2,500.00 attorney’s fees and
costs.

The defendants moved to
dismiss the complaint on the ground that the court had no jurisdiction over the
defendants because the Republic of the Philippines itself may not be sued without its consent and
also because the Bureau of Customs as
well as the Customs Arrastre Service, being mere
governmental agencies, do not have juridical personalities to sue or be sued.  Also alleged was the fact that being a money
claim, the same could have been filed before the Auditor General according to
Act 3083, as amended by Commonwealth Act 327.

Over the objections of the plaintiff, the Court of First Instance
of Manila, finding the motion to be meritorious, dismissed the case.

After denial of its motion for reconsideration, the plaintiff
appealed from the order of dismissal.

The appeal cannot prosper. 
It is now settled that the Bureau of Customs and the Customs Arrastre Service are mere agencies of the Republic of the
Philippines thru it performs the prime governmental function of taxation.  A necessary incident to such a function is
the arrastre service which though deemed proprietary
in nature, does not subject the defendants to suit; otherwise, they would be
hampered in the performance of a prime governmental
function.  The Republic of the Philippines,
or its aforesaid agencies, therefore, are not subject
to suit without its consent, for said arrastre
operations.  The present claim for money
should instead have been filed before the office of the Auditor General in
accordance with the procedure set forth in Act 3083, as amended by Commonwealth
Act 327.  Since the instant claim is for
a fixed amount based on papers and documents within easy reach of accounting
officers, the same differs from unliquidated claims
outside the Auditor General’s power to consider (Insurance Company of North
America v. Republic, L-27517, September 15, 1967).

WHEREFORE, the order of dismissal appealed from is
affirmed, without costs.

SO
ORDERED.

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