TRAVELERS INDEMNITY COMPANY, PLAINTIFF-APPELLANT, VS. BARBER STEAMSHIP LINES, INC., MACONDRAY & CO., INC., REPUBLIC OF THE PHILIPPINES AND CUSTOMS ARRASTRE SERVICE, DEFENDANTS-A…

The Court of First Instance of Manila in Civil Case No. 62976
found that a cargo of nylon and cotton piece goods was damaged before it was
discharged from the vessel Tagaytay in the port
of Manila in February, 1965.  The damage amounted to $18.50 (equivalent to
fifty pesos).

The lower court ordered defendants Barber Steamship Lines and Macondray & Co., Inc., as agents of the carrying
vessel, to pay fifty pesos to plaintiff Travelers Indemnity Company.  That entity had insured the cargo against all
risks.  It had paid to the consignee,
Royal Undergarment Corporation of the Philippines, Inc., the sum of $807.68,
which was the amount of the loss and damage claimed by the said consignee.  The insurance company was subrogated to the
consignee’s right to claim the damage (Exh. H).

The lower court also
found that the Customs Arrastre Service failed to
deliver to the consignee a part of the said cargo.  The value of the missing cargo was $56.23.

But the lower court did
not order defendants Republic of the Philippines and Customs Arrastre
Service to pay the Travelers Indemnity Company the sum of $56.23.  The court sustained the government’s
contention that the State is exempt from suit. 
The court further observed that the Customs Arrastre
Service, an agency of the Bureau of Customs in the port of Manila, is not a juridical person and that any suit
against it is a suit against the State.

The Travelers Indemnity
Company appealed from the lower court’s decision to this Court “insofar
only as it dismisses the case against defendants Republic of the Philippines and Customs Arrastre
Service”.

Appellant Travelers
Indemnity Company did not confine its brief to that legal issue.  It insisted that the consignee had suffered a
loss in the sum of $807.68 and that the arrastre
operator should pay the sum of $789.18 which is the difference between $807.68
and the sum of $18.50 that was adjudged against the agents of the carrying
vessel.

We hold that appellant
insurance company is precluded from raising in its
third assignment of error the factual issue of whether the liability of the arrastre operator for the missing cargo is $789.18 and not
$56.23, as found by the trial court.

Appellant company is
bound by the fact found by the trial court that the loss occasioned by the shortage
or nondelivery amounts only to $56.23 (Sec. 2, Rule
42, Rules of Court; Millar vs. Nadres, 74 Phil. 307).

As to the question of
the suability of the State (the arrastre operator), which is the legal issue raised in
appellant’s first and second assignments of error, the trial court did not err
in dismissing the company’s action for the recovery of loss or damage amounting
to $789.18.

It is settled that the
Bureau of Customs, acting as part of the machinery of the national government
in the operation of the arrastre service, is immune
from suit under the doctrine of nonsuability of the
State.  The claimant’s remedy to recover
the loss or damage to the goods under the custody of the customs arrastre service is to file a claim with the Commission on
Audit as contemplated in Act No. 3083 and Commonwealth Act No. 327 (Gloren, Inc. vs. Republic, L-26811, July 31, 1970, 34 SCRA
26 and cases cited in Vol. 1, SCRA Quick Index Digest, pp/ 165-7).

WHEREFORE, the trial court’s judgment is
affirmed.  No costs.

SO ORDERED.

Fernando, (Chairman), Antonio, Muñoz
Palma, and Martin, JJ., concur.

Barredo
and Concepcion, Jr., JJ., no part.