INSURANCE COMPANY OF NORTH AMERICA, PLAINTIFF-APPELLANT, VS. REPUBLIC OF THE PHILIPPINES AND/OR BUREAU OF CUSTOMS AND/OR CUSTOMS ARRASTRE SER­VICE, DEFENDANTS-APPELLEES.

Six cases of hand tools, ten cases of portable elec­tric tools,
consigned to the order of shipper Dayton Price & Co., Ltd., were discharged
on May 20, 1963 from the
vessel SS “Turandot” and delivered to the
Customs Arrastre Service, Bureau of Customs, then
handling arras­tre operations in the Port
of Manila.

Not all of the shipment were delivered
by the Cus­toms Arrastre Service to the
consignee.  For the loss of tools valued
at P3,261.21, the consignee filed a claim with its
insurer.  Insurance Co. of North
America, the insurer, paid the claim.

As subrogee to the consignee, said
insurance compa­ny, on July 20, 1964,
filed before the City Court of Ma­nila a suit for the same amount, plus
attorney’s fees and costs, against the Republic of the Philippines
and/or Bureau of Customs and/or Customs Arrastre
Service.  After said court decided for
the plaintiff, defendants appealed to the Court of First Instance, alleging
immunity from suit and stating that recovery, if at all due, should be thru the
filing of a claim with the Auditor General under Act No. 3083 as amended by
Com. Act No. 327.

Sustaining this contention, on March 3, 1965, the Court of First
Instance issued an order dismissing the complaint on the ground that defendants
agencies of the Philippine Government have no juridical capacity to be sued;
and that the Philippine Government may only enter­tain a money claim upon
compliance with the provisions of Act No. 3083 as amended by Com. Act No. 327.

Appeal from said order direct to Us was
thus taken by plaintiff.

In Mobil Phil. Exploration, Inc. v. Customs Arras­tre
Service, L-23139, December 17, 1966, this Court squarely ruled on the point
raised herein and held that the Bureau of Customs, acting as part of the
governmental machinery in its operation of the arrastre
service as an incident of a prime governmental function, is immune from
suit.  And we there pointed out that the
claim involving money should have been filed with the Auditor General un­der
Com. Act No. 327.

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

SO ORDERED.

Reyes, JBL, Makalintal, Zaldivar, Sanchez, Ruiz Castro, Angeles, and Fernando, JJ., concur.

Concepcion, C.J., and Dizon, J., on official leave.