Gloren v. Republic
REITERATIONFacts
The Antecedents: Merchandise identified as "6 Skids Tin Plate Waste Waste" arrived in Manila on December 15, 1962, was discharged without damage, and delivered in good order to the Customs Arrastre Service. The cargo was never delivered to the consignee, Cortan Manufacturing Company, nor its successor, Gloren, Inc., and was admittedly lost while in the possession of the Customs Arrastre Service. Procedural History: The Court of First Instance of Manila rendered a judgment on September 30, 1966, sentencing the Republic of the Philippines to pay Gloren, Inc. P3,570, representing the value of the lost merchandise. The Petition: The Republic of the Philippines appealed the decision, posing the sole issue of the non-suability of the State.
Issue(s)
Whether the State, through the Bureau of Customs performing arrastre service, is immune from suit for lost cargo. Whether the arrastre function, even if proprietary, subjects the Bureau of Customs to suit when performed as an incident to its governmental function.
Ruling
The judgment of the Court of First Instance of Manila is reversed, and the complaint is dismissed. The Republic of the Philippines is not liable for the lost cargo due to sovereign immunity.
Ratio Decidendi
On whether the State, through the Bureau of Customs performing arrastre service, is immune from suit for lost cargo: The Court held that the Bureau of Customs, as a non-corporate government entity performing arrastre service, is immune from suit. This immunity stems from the principle of sovereign immunity, which protects the State from being sued without its consent. The fact that the arrastre service might be considered proprietary in nature does not automatically waive this immunity if it is undertaken as an incident to a governmental function. The Court emphasized that statutory provisions waiving State immunity are strictly construed and will not be lightly inferred. On whether the arrastre function, even if proprietary, subjects the Bureau of Customs to suit when performed as an incident to its governmental function: The Court reiterated the pronouncement in Mobil Philippines Exploration, Inc. vs. Customs Arrastre Service and Bureau of Customs, which has been affirmed in numerous cases. The Bureau of Customs' primary function is governmental: assessing and collecting lawful revenues from imported articles and customs duties. The arrastre service is a necessary incident to this primary function. Therefore, even if the arrastre function could be deemed proprietary, its performance as an incident to the governmental function of the Bureau of Customs does not render the Bureau liable to suit. To hold otherwise would impede the performance of its essential governmental duties, as sovereign immunity granted to the end should not be denied to the necessary means to achieve that end. The Court noted that the statutory authorization for the Bureau of Customs to lease arrastre operations to private parties does not imply authority to sue the Bureau when it conducts such operations itself. The remedy for the plaintiff lies in filing a money claim with the Auditor General under Act 3083 and Commonwealth Act 327.
Main Doctrine
The State, through the Bureau of Customs performing arrastre service as a necessary incident to its primary governmental function of assessing and collecting customs duties, is immune from suit, absent a statutory waiver of such immunity. Claims against the State for lost cargo should be filed with the Auditor General.