G.R. No.

L-23139 December 17, 1966

MOBIL PHILIPPINES EXPLORAION, IN!., plaintiff-appellant,
vs.
!"SOMS ARRASRE SER#I!E $%& B"REA" o' !"SOMS, defendants-appellees.
Alejandro Basin, Jr. and Associates for plaintiff-appellant.
Felipe T. Cuison for defendants-appellees.
BENG(ON, ).P., J.:
Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville" sometime in November
of 19!, consi"ned to #obil $hilippines %&ploration, 'nc., #anila. (he shipment arrived at the $ort of
#anila on )pril 1*, 19+, and was dischar"ed to the custody of the ,ustoms )rrastre Service, the
unit of the -ureau of ,ustoms then handlin" arrastre operations therein. (he ,ustoms )rrastre
Service later delivered to the bro.er of the consi"nee three cases only of the shipment.
/n )pril 0, 190 #obil $hilippines %&ploration, 'nc., filed suit in the ,ourt of First 'nstance of #anila
a"ainst the ,ustoms )rrastre Service and the -ureau of ,ustoms to recover the value of the
undelivered case in the amount of $11,09+.+2 plus other dama"es.
/n )pril !*, 190 the defendants filed a motion to dismiss the complaint on the "round that not
bein" persons under the law, defendants cannot be sued.
)fter plaintiff opposed the motion, the court, on )pril !3, 190, dismissed the complaint on the
"round that neither the ,ustoms )rrastre Service nor the -ureau of ,ustoms is suable. $laintiff
appealed to 4s from the order of dismissal.
5aised, therefore, in this appeal is the purely le"al 6uestion of the defendants7 suability under the
facts stated.
)ppellant contends that not all "overnment entities are immune from suit8 that defendant -ureau of
,ustoms as operator of the arrastre service at the $ort of #anila, is dischar"in" proprietary functions
and as such, can be sued by private individuals.
(he 5ules of ,ourt, in Section 1, 5ule +, provide9
S%,('/N 1. Who may be parties.:/nly natural or ;uridical persons or entities authori<ed by
law may be parties in a civil action.
)ccordin"ly, a defendant in a civil suit must be =1> a natural person8 =!> a ;uridical person or =+> an
entity authori<ed by law to be sued. Neither the -ureau of ,ustoms nor =a fortiori> its function unit,
the ,ustoms )rrastre Service, is a person. (hey are merely parts of the machinery of ?overnment.
(he -ureau of ,ustoms is a bureau under the @epartment of Finance =Sec. 11, 5evised
)dministrative ,ode>8 and as stated, the ,ustoms )rrastre Service is a unit of the -ureau of ,ustom,
set up under ,ustoms )dministrative /rder No. 1-! of November 9, 19! =)nne& ")" to #otion to
@ismiss, pp. 1+-13, 5ecord an )ppeal>. 't follows that the defendants herein cannot he sued under
the first two abovementioned cate"ories of natural or ;uridical persons.
Nonetheless it is ur"ed that by authori<in" the -ureau of ,ustoms to en"a"e in arrastre service, the
law therebyimpliedly authorizes it to be sued as arrastre operator, for the reason that the nature of
this function =arrastre service> is proprietary, not "overnmental. (hus, insofar as arrastre operation is
concerned, appellant would put defendants under the third cate"ory of "entities authori<ed by law" to
be sued. Stated differently, it is ar"ued that while there is no law e&pressly authori<in" the -ureau of
,ustoms to sue or be sued, still its capacity to be sued is implied from its very power to render
arrastre service at the $ort of #anila, which it is alle"ed, amounts to the transaction of a private
business.
(he statutory provision on arrastre service is found in Section 1!1+ of 5epublic )ct 19+2 =(ariff and
,ustoms ,ode, effective Aune 1, 1932>, and it states9
S%,. 1!1+. ecei!in", #andlin", Custody and $eli!ery of Articles.:(he -ureau of ,ustoms
shall have e&clusive supervision and control over the receivin", handlin", custody and
delivery of articles on the wharves and piers at all ports of entry and in the e&ercise of its
functions it is hereby authori<ed to ac6uire, ta.e over, operate and superintend such plants
and facilities as may be necessary for the receivin", handlin", custody and delivery of
articles, and the convenience and comfort of passen"ers and the handlin" of ba""a"e8 as
well as to ac6uire fire protection e6uipment for use in the piers9 %ro!ided, (hat whenever in
his ;ud"ment the receivin", handlin", custody and delivery of articles can be carried on by
private parties with "reater efficiency, the ,ommissioner may, after public biddin" and
sub;ect to the approval of the department head, contract with any private party for the service
of receivin", handlin", custody and delivery of articles, and in such event, the contract may
include the sale or lease of "overnment-owned e6uipment and facilities used in such service.
'n Associated Wor&ers 'nion, et al. !s. Bureau of Customs, et al., L-!1+92, resolution of )u"ust ,
19+, this ,ourt indeed held "that the fore"oin" statutory provisions authori<in" the "rant by contract
to any private party of the ri"ht to render said arrastre services necessarily imply that the same is
deemed by ,on"ress to be proprietary or non-"overnmental function." (he issue in said case,
however, was whether laborers en"a"ed in arrastre service fall under the concept of employees in
the ?overnment employed in "o!ernmental functions for purposes of the prohibition in Section 11,
5epublic )ct 123 to the effect that "employees in the ?overnment . . . shall not stri.e," but "may
belon" to any labor or"ani<ation which does not impose the obli"ation to stri.e or to ;oin in stri.e,"
which prohibition "shall apply only to employees employed in "overnmental functions of the
?overnment . . . .
(hus, the rulin" therein was that the ,ourt of 'ndustrial 5elations had ;urisdiction over the sub;ect
matter of the case, but not that the -ureau of ,ustoms can be sued. Said issue of suability was not
resolved, the resolution statin" only that "the issue on the personality or lac. of personality of the
-ureau of ,ustoms to be sued does not affect the ;urisdiction of the lower court over the sub;ect
matter of the case, aside from the fact that amendment may be made in the pleadin"s by the
inclusion as respondents of the public officers deemed responsible, for the unfair labor practice acts
char"ed by petitionin" 4nions".
Now, the fact that a non-corporate "overnment entity performs a function proprietary in nature does
not necessarily result in its bein" suable. 'f said non-"overnmental function is underta.en as an
incident to its "overnmental function, there is no waiver thereby of the soverei"n immunity from suit
e&tended to such "overnment entity. (his is the doctrine reco"ni<ed in Bureau of %rintin", et al. !s.
Bureau of %rintin" (mployees Association, et al., L-13231, Aanuary !1, 1919
(he -ureau of $rintin" is an office of the ?overnment created by the )dministrative ,ode of
191 =)ct No. !32>. )s such instrumentality of the ?overnment, it operates under the direct
supervision of the %&ecutive Secretary, /ffice of the $resident, and is "char"ed with the
e&ecution of all printin" and bindin", includin" wor. incidental to those processes, re6uired
by the National ?overnment and such other wor. of the same character as said -ureau may,
by law or by order of the =Secretary of Finance> %&ecutive Secretary, be authori<ed to
underta.e . . . ." =Sec. 100, 5ev. )dm. ,ode.> 't has no corporate e&istence, and its
appropriations are provided for in the ?eneral )ppropriations )ct. @esi"ned to meet the
printin" needs of the ?overnment, it is primarily a service bureau and, obviously, not
en"a"ed in business or occupation for pecuniary profit.
&&& &&& &&&
. . . ,learly, while the -ureau of $rintin" is allowed to underta.e private printin" ;obs, it
cannot be pretended that it is thereby an industrial or business concern. (he additional wor.
it e&ecutes for private parties is merely incidental to its function, and althou"h such wor. may
be deemed proprietary in character, there is no showin" that the employees performin" said
proprietary function are separate and distinct from those emoloyed in its "eneral
"overnmental functions.
&&& &&& &&&
'ndeed, as an office of the ?overnment, without any corporate or ;uridical personality, the
-ureau of $rintin" cannot be sued =Sec. 1, 5ule +, 5ules of ,ourt.> )ny suit, action or
proceedin" a"ainst it, if it were to produce any effect, would actually be a suit, action or
proceedin" a"ainst the ?overnment itself, and the rule is settled that the ?overnment cannot
be sued without its consent, much less over its ob;ection. =See #etran vs. $aredes, 03 /ff.
?a<. !1+38 )n"at 5iver 'rri"ation System, et al. vs. )n"at 5iver Bor.ers 4nion, et al., ?.5.
Nos. L-1*90+-00, @ecember !1, 1932.>
(he situation here is not materially different. (he -ureau of ,ustoms, to repeat, is part of the
@epartment of Finance =Sec. 11, 5ev. )dm. ,ode>, with no personality of its own apart from that of
the national "overnment. 'ts primary function is "overnmental, that of assessin" and collectin" lawful
revenues from imported articles and all other tariff and customs duties, fees, char"es, fines and
penalties =Sec. *!, 5.). 19+2>. (o this function, arrastre service is a necessary incident. For
practical reasons said revenues and customs duties can not be assessed and collected by simply
receivin" the importer7s or ship a"ent7s or consi"nee7s declaration of merchandise bein" imported
and imposin" the duty provided in the (ariff law. ,ustoms authorities and officers must see to it that
the declaration tallies with the merchandise actually landed. )nd this chec.in" up re6uires that the
landed merchandise be hauled from the ship7s side to a suitable place in the customs premises to
enable said customs officers to ma.e it, that is, it re6uires arrastre operations.
1
,learly, therefore, althou"h said arrastre function may be deemed proprietary, it is a necessary
incident of the primary and "overnmental function of the -ureau of ,ustoms, so that en"a"in" in the
same does not necessarily render said -ureau liable to suit. For otherwise, it could not perform its
"overnmental function without necessarily e&posin" itself to suit. Soverei"n immunity, "ranted as to
the end, should not be denied as to the necessary means to that end.
)nd herein lies the distinction between the present case and that of )ational Airports Corporation !s.
Teodoro, 91 $hil. !*+, on which appellant would rely. For there, the ,ivil )eronautics )dministration
was found have for its prime reason for e&istence not a "overnmental but a proprietary function, so
that to it the latter was not a mere incidental function9
)mon" the "eneral powers of the ,ivil )eronautics )dministration are, under Section +, to
e&ecute contracts of any .ind, to purchase property, and to "rant concessions ri"hts, and
under Section 0, to char"e landin" fees, royalties on sales to aircraft of aviation "asoline,
accessories and supplies, and rentals for the use of any property under its mana"ement.
(hese provisions confer upon the ,ivil )eronautics )dministration, in our opinion, the power
to sue and be sued. (he power to sue and be sued is implied from the power to transact
private business. . . .
&&& &&& &&&
(he ,ivil )eronautics )dministration comes under the cate"ory of a private entity. )lthou"h
not a body corporate it was created, li.e the National )irports ,orporation, not to maintain a
necessary function of "overnment, but to run what is essentially a business, even if revenues
be not its prime ob;ective but rather the promotion of travel and the convenience of the
travellin" public. . . .
5e"ardless of the merits of the claim a"ainst it, the State, for obvious reasons of public policy,
cannot be sued without its consent. $laintiff should have filed its present claim to the ?eneral
)uditin" /ffice, it bein" for money under the provisions of ,ommonwealth )ct +!2, which state the
conditions under which money claims a"ainst the ?overnment may be filed.
't must be remembered that statutory provisions waivin" State immunity from suit are strictly
construed and that waiver of immunity, bein" in dero"ation of soverei"nty, will not be li"htly inferred.
=09 )m. Aur., States, (erritories and @ependencies, Sec. 9, p. +108 $etty vs. (ennessee-#issouri
-rid"e ,om., +39 4.S. !23, + L. %d. 1*0, 29 S. ,t. 213>. From the provision authori<in" the -ureau
of ,ustoms to lease arrastre operations to private parties, Be see no authority to sue the said
-ureau in the instances where it underta.es to conduct said operation itself. (he -ureau of
,ustoms, actin" as part of the machinery of the national "overnment in the operation of the arrastre
service, pursuant to e&press le"islative mandate and as a necessary incident of its prime
"overnmental function, is immune from suit, there bein" no statute to the contrary.
BC%5%F/5%, the order of dismissal appealed from is hereby affirmed, with costs a"ainst appellant.
So ordered.
Concepcion, C.J., 5eyes, A.-.L., -arrera, @i<on, 5e"ala, Daldivar and Sanche<, AA., concur.
*a&alintal, J., concurs in the result.
Castro, J., reserves his vote.
*oo+%o+e,
1
)ssociated Bor.ers 4nion ,ase, supra.