INSURANCE COMPANY OF NORTH AMERICA, PLAINTIFF-APPELLANT, VS. WARNER, BARNES & CO., LTD., REPUBLIC OF THE PHILIPPINES AND/OR BUREAU OF CUSTOMS AND/OR CUSTOMS ARRASTRE SERVICE, DE…

The present appeal was taken by plaintiff Insurance Company of North
America from the order of the Court of First Instance of Manila of
December 7, 1964,
dismissing the complaint for lack of jurisdiction over the defendants (Republic
of the Philippines,
the Bureau of Customs and the Customs Arrastre
Service) and over the subject-matter of the suit.

The facts are not disputed. 
On or about September 23, 1963 Ford Motor Co., Ltd., London, shipped a
quantity of merchandise on board the SS “Saikyo Maru“, consigned to the order of Security Bank and
Trust Company, Manila, with arrival notice to Manila Trading and Supply
Company, Manila.  The shipment consisted
of auto parts, bodies, chassis, frames and other parts for trucks, covered by
Bill of Lading No. 46 and insured with the plaintiff.  The vessel arrived at the port
of Manila on or about November 2, 1963 and allegedly
discharged the shipment into the custody of the Bureau of Customs as arrastre operator. 
The goods were then delivered to the consignee in damaged condition.

Claims were filed both with the Bureau of Customs and with the
insurer, on the strength of which the latter paid to the consignee the amount
of P2,243.92. 
Then as subrogee of the rights of the
consignee the plaintiff sued, as alternative defendants, Warner, Barnes &
Co., Ltd., operator of SS “Saikyo Maru” and the Republic of the Philippines and/or
Bureau of Custom and/or Customs Arrastre
Service.  The defendants other than
Warner, Barnes & Co., Ltd. moved for the dismissal of the complaint on the
ground that the court had no jurisdiction over them and over the subject matter
of the suit.  The trial court granted the
motion as aforesaid, holding that the Bureau of Customs, being an agency of the
government, cannot be sued without its consent and that the amount of the claim
was below the limit cognizable by the Court of First Instance.

1. On the first ground the order of dismissal is correct.  A long line of decisions has affirmed the
non-suability of the Bureau of Customs in a case like the present.  Thus in Equitable Insurance & Casualty
Co., Inc. vs. Smith, Bell & Co., (PHILIPPINES) Inc., G. R. No. L-24383, August 26, 1967, we held:

“By all means, the question thus raised is not untrodden ground.  We
have heretofore declared that the Bureau of Customs cannot be a party defendant
in a suit.  Because, it
is neither a natural nor a juridical person nor an entity authorized by law to
be sued.  An arm of the Department
of Finance, it has no personality of its own, apart from the national
government.  Arrastre
service, it is true, is a proprietary function. 
But just the same, it is a necessary incident to the primary
governmental job of assessing and collecting lawful duties, fees, charges,
fines, and penalties.  Thus, regardless
of the merits of plaintiff’s case, obvious reasons of public policy dictate
that the present action should not be allowed standing in court – it is a claim
for money against the State itself.  And
the State has not consented to the suit.

Statutory provisions waiving State immunity are construed in
strictissimi juris.  For, waiver of immunity is in derogation of
sovereignty.  And, this claim should have
been lodged with the Auditor General, upon the procedure delineated in
Commonwealth Act 327.

So it is that we have ruled, upon situations parallel to the
present, that action against the Bureau of Customs must be dismissed.  There is by now impressive unanimity of
jurisprudence on this point (Mobil Philippines Exploration, Inc. vs. Customs Arrastre Service L-23139, December 17, 1966; North British
& Mercantile Insurance Co., Ltd. vs. Isthmian Lines, Inc., L-26237, July
10, 1967; Insurance Company of North America vs. Republic, L-26532, July 10,
1967; Insurance Company of North America vs. Republic, L-24520, July 11, 1967;
Insurance Company of North America vs. Republic, L-25662, July 21, 1967; Manila
Electric Company vs. Customs Arrastre Service,
L-25515, July 24, 1967; Shell Refining Co. (Phil.) Inc. vs. Manila Port Service,
L-24930, July 31, 1967; The American Insurance Company vs. Macondray
& Co., Inc., L-24031, August 19, 1967). 
No new argument has been advanced which would give cause or reason for
us to override our previous deci­sions. 
We do not now propose to depart from the ruling therein expressed.”

Many other similar decisions have since then been promulgated.

2.  On the question of the
lower court’s jurisdiction over the subject matter of the suit the appeal must
be sustained.  The cause of action
against Warner, Barnes & Co. Ltd. as operator of the carrying vessel is one
of admiralty and hence is within the jurisdiction of the Court of First
Instance.  Although the claim against the
Bureau of Customs as arrastre operator is an ordinary
civil suit which would be outside such jurisdiction by virtue of the amount
involved, the two may be joined in one action alone.  In Rizal
Surety and Insurance Company vs. Manila Railroad Company, et al., G. R. No.
L-20875, April 30, 1966, we said;

“At the time the complaint was filed, plaintiff did not know
at what precise stage of the series of transactions the loss complained of
occurred.  If the loss took place in
transit, C.F. Sharp & Co., Inc. would be liable therefor;
but if the loss occurred after the goods were loaded and discharged from the
carrying vessel, the Manila Port Service would bear such loss.  Hence, the joinder
of causes of action and parties defendants in the alternative which is
permitted by Section 5 of Rule 2 of the Rules of Court, quoted hereunder:

“SEC. 5. Joinder
of causes of action.- Subject to rules regarding
jurisdiction, venue and joinder of parties, a party
may in one pleading state, in the alternative or otherwise, as many causes of
action as he may have against an opposing party (a) if the said causes of
action arise out of the, same contract, transaction or relation between the
parties, or (b) if the causes of action are for demands for money, or are of
the same nature and character.’

‘In the cases falling under clause (b) the jurisdic­tion shall be
determined by the aggregate amount of the demands, if for money, or by their
nature and character, if otherwise.’

“And since one of the causes of action
is cognizable by the Court of First Instance the suit should be filed, as was
correctly done by the plaintiff, in said court, notwithstanding that the other
cause of action -if standing alone – would fall within the jurisdiction of the
municipal court, by reason of the amount of the demand.  (Sapico vs. Manila
Oceanic Lines, L-18776, January 30, 1964) In International Harvester Co. of the
Philippines v. Judge Aragon, (supra, note 1.) where a similar action was filed
with the municipal court, we held that the municipal lacked jurisdiction over
the case inasmuch as one of the alternative causes of action, against the
shipping firm, was an action in admiralty, cognizable by Court of First
Instance.” (See also Hanover Insurance Company vs. Manila Port Service and
Manila Railroad Company, G. R. No. L-20976, January 23, 1967.)

In any event, since the action was properly dismissed with
respect to the defendants Republic of the Philippines and the Bureau of Customs
as operator of the arrastre service, the same may
proceed as against the other defendant. 
The case is therefore remanded for further proceeding only insofar as
Warner Barnes Co., Ltd. is concerned.  No
pronouncement as to costs.

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