Insurance Company of North America v. Republic of the Philippines

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-25477            October 23, 1967

INSURANCE COMPANY OF NORTH AMERICA,plaintiff-appellant,
vs.
REPUBLIC OF THE PHILIPPINES,defendant-appellee.

Quasha, Asperilla & Associates for plaintiff-appellant.
Office of the Solicitor General for defendant-appellee.

BENGZON, J.P.,J.:

In this Appeal, the Insurance Company of North America, as insurer of the cargo of five (5) boxes of road making machinery parts, four (4) bundles of tractor parts and one (1) case of grinding wheel, and as subrogee to the rights of consignee Insular Lumber Company, Manila, prays that the Republic of the Philippines, as arrastre operator through the Customs Arrastre Service, be held liable for loss or damage in the amount of P11,355.30 to said cargo discharged from SS "Turandot" and delivered to the Arrastre Service, but of which the four bundles of tractor parts were not delivered to the consignee.

We find that the Court of First Instance of Manila, upon motion of the defendant, correctly dismised the case on the ground that it had no jurisdiction over the defendant and the subject matter of suit, because the Republic may not be sued without its consent and if ever it can be sued, the procedure laid down under Act 3083 as amended by Commonwealth Act 327 must be followed. It is now settled that the Customs Arrastre Service performs an undertaking that is an incident of a prime governmental function. It is part of the governmental machinery through which the Republic of the Philippines carries out its several governmental activities.¹There, We also held that the claim must be coursed through the General Auditing Office under Commonwealth Act No. 327. Consequently, it must be reiterated that neither the Republic of the Philippines nor the Bureau of Customs nor the Customs Arrastre Service may be sued.

WHEREFORE, the order of dismissal appealed from is affirmed with costs against the appellant. So ordered.

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

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