DOMESTIC INSURANCE COMPANY OF THE PHILIPPINES, PLAINTIFF-APPELLANT, VS. EVERETT SIAM LINE, EVERETT STEAMSHIP CORPORATION, REPUBLIC OF THE PHILIPPINES AND/OR A. R. REYES & COMPAN…

Out of a total consignment of 191 cases of malleable iron pipe fittings imported from Osaka, Japan
by the Weston Hardware & Plumbing, Inc. sometime in June, 1963, 8 cases valued at P1,246.97 reportedly
remained undelivered and were considered lost in the course of their
importation into the Philippines.  The
plaintiff Domestic Insurance Company of the Philippines which had indemnified
the owner for the loss and, therefore, was subrogated to the latter’s rights, could not, however, definitively determine
at which stage of the importation the loss occurred and which party to hold
responsible therefor. 
Finally, the plaintiff lodged a complaint against several alternative
defendants, to wit:  the Everett Siam Line,
operator of the SS Pablo which carried the goods; the Everett
Steamship Corporation, Philippine
agent of the Everett Siam Line; the Republic of the Philippines, as operator of the Customs Arrastre
Service which had allegedly received
the goods discharged from the SS Pablo; and the A.R. Reyes &
Company to whose bonded warehouse an undefined portion of the subject
importation is claimed to have been subsequently transferred without the
owner’s consent.

The present appeal is
from the dismissal by the court a quo of the complaint insofar as it
affects the defendant Republic
of the Philippines
on the
grounds of 1) lack of jurisdiction and 2) non-suability of the State without
its consent.  These involve pure
questions of law.

1.       On the matter of lack
of jurisdiction, the lower court reasoned that since the complaint against the
Government is one founded upon a breach of the contract of deposit and involves
an amount not exceeding P10,000, the same is exclusively cognizable by the city
or municipal court.

This is obviously erroneous. 
The court a quo overlooks the fact that the complaint also
impleads, in the alternative, the Everett Siam Line
and its Philippine agent, the Everett Steamship Corporation, upon a breach of their contract of affreightment, thus, properly
invoking the court’s admiralty jurisdiction.^[1]
The rule is now settled that in the joinder of two
causes of action, in the alternative, under section 5 of Rule 2 of the Rules of
Court, the fact that one of the causes of action is within the exclusive
jurisdiction of the city or municipal court, will not deprive the Court of
First Instance of its jurisdiction over both, if the latter has jurisdiction
over one of the causes of action.^[2]

2. As regards, however, the non-suability of the State without its
consent in its operation Of the Customs Arrastre Service,
the lower court correctly dismissed the complaint insofar as the Republic of
the Philippines
is concerned.  We have repeatedly held
that the then Customs Arrastre Service, as an arm of
the Bureau of Customs, was performing services purely incidental to the
governmental function of assessing and collecting customs duties, and, in
engaging in such necessary incidental activity, the Government did not thereby
shed its immunity from suit.^[3]

The plaintiff’s remedy, if any, may be found in the provisions of
Act 3083 and Commonwealth Act 327.

A third ground relied upon by the lower court in dismissing the
case against the Republic of the Philippines, although assailed by the
plaintiff, need not be resolved in view
of the result we have just reached.

ACCORDINGLY, the judgment, dismissing the complaint in so
far as the Republic of the Philippines
is concerned, is affirmed.  No
pronouncement as to costs.

Concepcion, C.J., Reyes, Dizon, Makalintal, Zaldivar, Fernando, Teehankee, Barredo, and Villamor, JJ., concur.

^[1]
Sec. 44(d) of the Judiciary Act of 1948, as amended.

^[2]
Firemen’s Insurance Co. vs. Manila
Port Service, L-22810, August 31, 1967, 20 SCRA 1273.

^[3]
This uniform ruling, which was announced in Mobil Philippines Exploration, Inc. vs.
Customs Arrastre Service, L-23139, December 17, 1966, 18 SCRA 1120, has
been subsequently affirmed in no less than 40 cases.