[ G.R. No. L-26811, July 31, 1970 ]
GLOREN, INC., DOING BUSINESS AS CORTAN MANUFACTURING COMPANY, PLAINTIFF-APPELLEE, VS. REPUBLIC OF THE PHILIPPINES, DEFENDANT-APPELLANT.
D E C I S I O N
On December 15, 1962 merchandise identified as "6 Skids Tin Plate Waste Waste" arrived in Manila on board the S.S. President Wilson, was discharged without damage, and delivered in good order to the Customs Arrastre Service. This cargo was never delivered to the consignee, the Cortan Manufacturing Company, nor to its successor, the plaintiff Gloren, Inc. The cargo was admittedly lost while in the possession of the Customs Arrastre Service. The judgment of the Court of First Instance of Manila rendered on September 30, 1966, on suit by the Gloren, Inc. sentenced the Republic of the Philippines to pay to the plaintiff P3,570 which sum represents the value of the lost merchandise.
The sole issue posed is one of law - non-suability of the State. The pronouncements in Mobil Philippines Exploration, vs. Customs Arrastre Service and Bureau of Customs which were subsequently affirmed and re-affirmed in no less than thirty cases, are controlling 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 suitable. 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.
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"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 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.
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"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.
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"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. ... 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 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.
ACCORDINGLY, the judgment a quo is reversed, and the complaint is hereby dismissed. No pronouncement as to costs.Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, and Villamor, JJ., concur.
Barredo, J., did not take part.
 L-23139, December 17, 1966, 18 SCRA 1120.