FIREMAN’S FUND INSURANCE COMPANY, PLAINTIFF-APPELLEE, VS. MAERSK LINE FAR EAST SER­VICE THROUGH ITS AGENT CIA GENERAL DE TABACOS, ET AL., DEFENDANTS, CUSTOMS ARRASTRE SERVICE, D…

The plaintiff Fireman’s Fund Insurance Company, as sub­rogee of the consignee American Asiatic Distributors,
Inc., filed an action in the Court of First Instance of Manila against the
alter­native defendants Maersk Line Far East Service
(thru its agent Cia General de Tabacos) and/ or Customs Arrastre
Service and/or Bureau of Customs and/ or Republic of the Philippines, for the
re­covery of the sum of P5,755.22 representing the value of seven packages of
pipe fittings which were allegedly lost while in the ab­solute control, custody
and safekeeping of either the Maersk Line Far East
Service or the Customs Arrastre Service, and which
the latter failed to deliver to the consignee, plus legal interest, attor­ney’s
fees and costs.  On September 27, 1966 the court a quo
rendered judgment for the plaintiff and against the Customs Arrastre
Service, but dismissed the case “with respect to defendant Maersk Line Far East Service.”

The present appeal interposed by the Customs Arrastre
Service poses only one issue of law – non-suability of the State.  Parenthetically, although this appeal was
interposed by the Customs Arrastre Service, we
consider it as an appeal of the Republic of the Philippines because the former
is merely a unit of the Bu­reau of Customs (a bureau under the Department of
Finance), with no personality of its own apart from the National Government.^[1]

Both parties failed to file their respective briefs the ap­pellant,
due to some supervening circumstances (that is, the chief of the legal division
of the Customs Arrastre Service filed the printed
record on appeal without coursing the same through the Of­fice of the Solicitor
General; the notice to prepare the appellant’s brief was sent to the Customs Arrastre Service; the special attor­ney of the Office of
the Solicitor General connected with the Cus­toms Arrastre
Service resigned and the preparation of the brief was not endorsed to the
Office of the Solicitor General; and neither was the matter referred to the
latter office when the legal division of the Customs Arrastre
Service was abolished in 1967), and the appellee, due
to some unexplained reason.

Nevertheless, we are of the view that the absence of briefs
should not deter us from deciding this appeal. 
Indeed, in a case on all fours with the one at bar, this Court proceeded
to render deci­sion “without awaiting the briefs of the parties, in order
to save them and, this Court needless expense of time, money and effort.”^[2]

We now come to the resolution of the sole legal issue.

The precedent-setting ruling first enunciated in Mobil
Philippines Exploration, Inc. vs. Customs Arrastre
Service and Bureau of Customs,^[3]
which was subsequently affirmed and reaffirmed in at least twenty cases, the
latest of which is Domestic Insurance Company of the Philippines vs.
Republic of the Philippines and/ or Bureau of Customs,^[4]
still controls in the case at bar.  We
quote from Mobil:

“The fact that a non-corporate government entity performs a
function proprietary in nature does not necessarily result in its being suable.  If said
non-governmental function is undertaken as an incident to its governmental
function, there is no waiver thereby of the sovereign immunity from suit
extended to such government entity.

*        *           *

“The Bureau of Customs, to repeat, is part of the Department of
Finance (sec. 81, Rev. Adm. Code), with no personality of its own apart from,
that of the national government.  Its
primary function is governmental, that of assessing and collecting the lawful
revenues from imported articles and all other tariff and customs duties, fees,
charges, fines and penalties (Sec. 602, R.A. 1937).  To this function, ar­rastre
service is a necessary incident.

*        *           *

“Clearly, therefore, although said arrastre
function may be deemed proprietary, it is a neces­sary incident of the primary
and governmental func­tion of the Bureau of Customs, so that engaging in the
same does not necessarily render said Bureau liable to suit.  For otherwise, it could not perform its
governmental function without necessarily exposing itself to suit.  Sovereign immunity, granted as to the end,
should not be denied as to the necessary means to that end.

*        *           *

“It must be remembered that statutory pro­visions waiving
State immunity from suit are strict­ly construed and that waiver of immunity,
being in derogation of sovereignty, will not be lightly inferred.  x x x From the provision authorizing the Bureau of Customs to
lease arrastre operations to private par­ties, We see
no authority to sue the said Bureau in the instances where it undertakes to
conduct said ope­ration itself.  The
Bureau of Customs, acting as part of the machinery of the national government
in the operation of the arrastre service, pursuant to
express legislative mandate and as a necessary incident of its prime
governmental function, is immune from suit, there being no statute to the
contrary.”

The remedy of the plaintiff may be found in the provisions of Act
3083 and Commonwealth Act 327 which (a) permit the pre­sentation of money
claims, such as the one here sued on by the plaintiff, to the Auditor General
for adjudication, (b) set forth the requisites to be fulfilled, and (c) outline
the procedure to be followed.^[5]

ACCORDINGLY, the judgment a quo is reversed,
and the complaint is hereby dismissed. 
No pronouncement as to costs.

Concepcion, C.J., Reyes, JBL, Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Capistrano, Teehankee, and Barredo, JJ., concur.

^[1]
Mobil, Philippines Exploration, Inc. vs. Customs Arrastre
Ser­vice and Bureau of Customs, L-23139, December 17, 1966, 18 SCRA 1120.

^[2]
Domestic Insurance Company of the Philippines
vs. American Pioneer Line, et al., L-28651, February 27, 1968, 22 SCRA 831.

^[3] See
note 1.

^[4]
L-29362, Sept. 27, 1968, 25
SCRA 231.

^[5] See
note 4.