AMERICAN INSURANCE COMPANY, PLAINTIFF-APPELLANT, VS. REPUBLIC OF THE PHILIPPINES AND BUREAU OF CUSTOMS, DEFENDANTS-APPELLEES.

On September 17, 1964, the City Court of Manila or­dered the Republic of the Philippines and the Bureau of
Customs to pay the American Insurance Company^[1]
P3,243.23 with legal interest for the failure of the
Bureau of Customs to deliver to consignee San Miguel Brewery, in whose place
the insurance company had been subrogated, the cargo of one (1) case of steel
transmission chains imported from England and delivered into the custody of the
Bureau of Customs by SS “Demodocus“.  On appeal, the Court of First Instance of
Manila, sustaining the defense of the appellants, dismissed the case on the
ground that the Bureau of Customs has no juridical capacity to sue or be sued
and as regards the Republic of the Philippines,
that it may not be sued without its consent. 
Hence, the American Insurance Company has appealed directly to Us on this point of law.

The
Bureau of Customs, in carrying out the arrastre
service does so only as an
incident to a prime governmental function – that of assessing and collecting
revenues from imported articles and all other tariff and customs duties, fees,
charges, fines and penalties.  Such
operations, therefore, do not render the Republic or its agencies involved, subject to suit without its consent
(Mobil Philippines Exploration v. Customs Arrastre
Service, L-23139, December 17, 1966).

WHEREFORE, the judgment appealed from is hereby af­firmed
without costs.

SO ORDERED.

Concepcion, C.J., Reyes, Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles, and Fernando, JJ., concur.

^[1]
A New Jersey Corporation licensed to do business in the Philippines.