AMERICAN INSURANCE COMPANY, PLAINTIFF-APPELLANT, VS. REPUBLIC OF THE PHILIPPINES AND BUREAU OF CUSTOMS, DEFENDANTS-APPELLEES.

Sometime in May of 1963, the
Bureau of Customs received from SS “Turandot” a
cargo of cartons of oven heaters from New York, consigned to San Miguel Corporation.   Subsequently, the Bureau of Customs failed
to deliver 1 carton of 2 pieces of oven heaters worth P690.30.

As insurers of the cargo, American
Insurance Co. paid the consignee
P690.30.

On October 6, 1964,
American Insurance Co. filed a complaint
for the recovery of P690.30 against the Repu­blic and the Bureau of Customs
in the City Court of Manila.  On February 18, 1965, answer was filed, denying liability and
alleging immunity from suit.

On May 22, 1965
the City Court ordered the defendants to pay jointly and severally to the
plaintiff P690.00 with legal interest from October 6, 1964 plus P100 attorney’s fees.

Defendants appealed to the Court of First Instance.

On October 27, 1965, the date set for pre-trial, only
plaintiff’s counsel appeared.   When
the court asked from counsel of plaintiff the latter’s authority to compromise,
the counsel could not present such
authority.   Whereupon,
the Court of First Instance dismissed the complaint for failure of plaintiff
to appear.

Plaintiff appealed to
Us, after denial of its motion for
reconsideration, assailing the order of dismissal
as erroneous.

Section 1 of Rule
20 of the new Rules of Court re­quires
that during the pre-trial, the parties and their attorneys shall appear
before the court to consider, among other things, the possibility of an
amicable settlement.   Section 2 of the
same rule provides that a party who
fails to appear may be non-suited or considered in default.  It is clear that the judge has the discretion
whether or not to declare a party non-suited.  
However, the point is not
for us now to resolve, it being rendered moot and academic in the light of this Court’s decision
in Mobil Philippines Exploration, Inc. v. Customs Arrastre
Service and Bureau of Customs, L-23139, December 17, 1966 where it was held
that the Bureau of Customs, as part of the governmental ma­chinery, operates
the arrastre service as an incident of the prime
governmental function of taxation and as such is immune from suit.   The same is true of the Republic of
the Philippines in regard to said operation.

WHEREFORE, the appealed order of dismissal is hereby affirmed.   No costs.

SO ORDERED.

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