G.R. No. L-26994 – 141 Phil. 209 – Political Law – Constitutional Law – State Immunity from Suit – Government Functions
In 1965, the Customs Arrastre Service lost packages belonging to Caltex Philippines, Inc. As a result, Caltex sued the Customs Arrastre Service and its head agency the Bureau of Customs. The CAR and the BOC raised the defense of non-suability but the trial court ruled in favor of Caltex.
ISSUE: Whether or not the CAR and the BOC may be sued.
HELD: No. Though it may appear that the CAR is performing commercial / proprietary functions, it is in fact performing a governmental function. The CAR, as an agency attached to the BOC, is tasked to handle cargos but such task is incidental to BOC’s function of assessing and collecting lawful revenues from imported articles and all other tariff and customs duties, fees, charges, fines and penalties. The BOC needs the CAR to perform such function.
The BOC is under the Department of Finance which has no separate personality from the national government. The rule is, the government cannot be sued; the State, in the performance of its governmental functions cannot be sued as a matter of policy. 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.
