Mobil Philippines Exploration, Inc. vs Customs Arrastre Service

G.R. No. L-23139 – 125 Phil. 270 – 18 SCRA 1120 – Political Law – Constitutional Law – State Immunity from Suit – Suit against unincorporated entities

Remedial Law – Civil Procedure – Parties to a Suit

In 1962, four parcels of drill parts imported by Mobil Philippines Exploration, Inc. were shipped to the port of Manila. The parcels were processed by the Customs Arrastre Service (CAS) but only three were delivered to Mobil. Mobil then sued CAS for the value of the lost parcel.

ISSUE: Whether or not CAS is immune from suit.

HELD: Yes. The CAS is under the Bureau of Customs (BOC). The CAS has no personality. The BOC is part of the Department of Finance (DOF), 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. To this function, arrastre service is a necessary incident. 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.

Further, the Rules of Court provide as to who may be parties to a suit and they are: either natural or juridical persons. The CAS is neither a natural nor a juridical person.

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