HOME INSURANCE COMPANY, PLAINTIFF-APPELLANT, VS. UNITED STATES LINES CO., ET AL., DEFENDANTS-APPELLEES.

Sometime in 1964, SS “Pioneer Moon” arrived in Manila
and discharged unto the custody of the Bureau of Customs, as arrastre operator, two hundred (200) cartons of carbon­ized
adding machine rolls consigned to Burroughs, Limited.  When the cargo was delivered to the
consignee, however, several cartons were damaged.  The consignee claimed the P2,605.64 worth of
damage from the Bureau of Customs, the United Lines Company, owner of the
vessel, and the Home Insurance Company which had insured the cargo.  The latter paid the claim and demanded
reimbursement from either arrastre operator or the
carrier.  When both rejected the claim,
the Home Insurance Company, as subrogee, filed on June 11, 1965 an action against the
Republic of the Philip­pines,
the Bureau of Customs and the United States Lines, in the alternative, for the
recovery of P2,605.64, with interest plus costs.

Both defendants answered. 
The United States Lines disclaimed liability on the ground that the
damage was incurred while the cargo was in the possession of its co-­defendants.  The Republic of the Philippines and the Bu­reau
of Customs, after denial of their motion to dismiss, answered and alleged among others, non-suability and non-compliance
with Act 3083, as amended by Commonwealth Act 327 which requires money claims
to be filed with the Au­ditor General.

On December
7, 1965, the date
set for pre-trial, only the counsel for the plaintiff appeared, who upon being
asked for written authority to compromise, assured the court that though he had
no written authority he had such authority verbally given by the
plaintiff.  On the same day, the court
dismissed the case for failure of the plaintiff to appear at the pre-trial
conference.

Its motion for reconsideration having been denied, plaintiff
appealed to Us, claiming that the lower court erred in dismissing the case for
failure of the plaintiff to appear.

As against the
Republic of the Philippines and the Bureau of Customs, the dismissal must be
sustained in the light of our decision in Mobil Philippines Exploration v.
Customs Arrastre Service and Bureau of Customs,
L-23139, December 17, 1966 and subsequent rulings,* where We
held that on grounds of public policy, the Republic of the Philippines or its
agencies, may not be sued for the performance of arrastre
operations as a function necessarily incidental to the governmental function of
taxation.

As regards the other defendant, Section 1 of Rule 20 of the
Revised Rules of Court, making pre-trial mandatory partly provides:  “x
x x in any action,
after the last pleading has been filed, the court shall direct the parties
and their attorneys to appear before it for a conference” (underscoring supplied).  This is different from Section 1 of Rule 25 of the old Rules of Court which provided that “the
court may in its
discretion direct the attorneys for the parties to
appear before it for a conference….” (underscoring supplied).  Section 2, Rule 20 of the new Rules of Court
says that “a party who fails
to appear at a pre-trial conference may be non-suited or considered as in
default.” This shows the purpose of the Rules to compel the parties to
appear personally before the court to reach, if possible, a compromise.  Accordingly, the
court is given the
discretion to dismiss the case should plaintiff not appear at the pre-trial.

Taking into consideration
said purpose and spirit of the new rules as well as the facts in the present
case, We find no reversible error committed by the court a quo
in dismissing the action for the reason that only plaintiff’s counsel ap­peared
at the pre-trial (and not plaintiff’s official representative also).  True, said counsel asserted that he had
verbal authority to compromise the case. 
The Rules, however, require, for attorneys to compromise the litigation
of their clients, a “special authority” (Section 23, Rule 138, Rules
of Court).  And while the same does not
state that the special authority be in writing, the court has every reason to
expect that, if not in writing, the same be duly established by evidence other
than the self-serving assertion of counsel himself that such authority was
verbally given him.  The court below,
therefore did not act erroneously in pro­ceeding to dismiss the case in spite
of such manifestation of plaintiff’s counsel. 
For, authority to compromise can­not lightly be presumed.  And if, with good reason, the judge is not
satisfied that said authority exists, as in this case, dismissal of the suit
for non-appearance of plaintiff in pre-trial is sanctioned by the Rules.  The dismissal should therefore be sustained in
toto, with respect to all the defendants.

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

SO ORDERED.

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

* North British & Mercantile
Insurance Co., Ltd. v. Isthmian Lines, Inc., L-26237, July 10, 1967;
Insurance Company of North America v. Republic, L-26532, July 10, 1967;
Insurance Company of North America v. Republic, L-24520, July 11, 1967;
Insurance Company of North America v. Republic, L-25662, July 21, 1962;
Manila Electric Company v. Customs Arrastre
Service, L-25515, July 24, 1967; Shell Refining Co. (Phil.) Inc. v.
Manila Port Service, L-24930, July 31, 1967; The American Insurance Company v. Macondray & Co., Inc., L-24031,
August 19, 1967.