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

On May 10, 1963,
two (2) boxes of truck spare parts were discharged in good order condition by
the SS “Gran­ville” into the custody of the Bureau of Customs, the
then operator of the arrastre service.  Of the two boxes, only one was delivered by
the Bureau of Customs to the consignee. 
The Insurance Company of North America, as
insurer of the cargo, paid the consignee P3,634.16,
for the loss of one box.  As subrogee of the consignee, the Insurance Company of North
America filed before the City Court of Manila a complaint against
the Republic of the Philippines
and the Bureau of Customs for the recovery of the amount paid by it.  Recovery was granted.  Upon appeal, the Court of First Instance of
Manila reversed the city court and dismissed the complaint for the reason that
the suit is really one against the Republic of the Philippines which may not be
sued without its consent, be­cause the Bureau of Customs is but a mere agency
of the Republic and has no capacity to sue or be sued.

Insisting on the suability of the Republic of the Philippines,
as arrastre operator through the Bureau of Customs,
the Insurance Company of North America appealed to Us.

We have settled this matter squarely before.  The Bureau of Customs is part of the
governmental machinery and operated the arrastre
service as an incident of a prime governmental function.  As such, it is immune from suit.* With this consideration, We find it superfluous to discuss
the other matters advanced by the appellant.

WHEREFORE, the decision appealed from is affirmed.  No costs.

SO ORDERED.

Reyes, JBL, Makalintal, Zaldivar, Sanchez, Ruiz Castro, Angeles, and Fernando, JJ., concur.

Concepcion, C.J., and Dizon, J., on official leave.