Title
Caltex , Inc. vs. Customs Arrastre Service
Case
G.R. No. L-26947
Decision Date
Dec 26, 1967
Caltex sued Customs Arrastre Service for lost goods; Supreme Court ruled defendants immune from suit without government consent, citing governmental immunity doctrine.
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Case Digest (G.R. No. L-26947)

Facts:

Parties Involved:

  • Plaintiff-Appellee: Caltex (Philippines) Inc.
  • Defendants-Appellants: Customs Arrastre Service, Bureau of Customs, and/or Republic of the Philippines

Nature of the Case:
Caltex (Philippines) Inc. filed a lawsuit on February 4, 1964, in the City Court of Manila against the defendants to recover P223.77, plus P100.00 as attorney's fees, due to the alleged short delivery or loss of a shipment of goods while in the custody of the defendants as arrastre operators in the port of Manila.

Details of the Shipment:

  • The shipment consisted of 99 packages loaded onto SS "President Garcia" on February 16, 1963, in New York, U.S.A., destined for Caltex's consignment in Manila.
  • The vessel arrived in Manila on March 24, 1963, and discharged the shipment into the custody of the defendants.
  • The specific goods allegedly lost or short-delivered were one vial of special reagent napthalene and one gallon of tygon thinner, valued at P223.77.

Procedural History:

  • The City Court of Manila ruled in favor of Caltex on January 16, 1965, ordering the defendants to pay P223.77 plus interest and P100.00 in attorney's fees.
  • The defendants appealed to the Court of First Instance, which upheld the City Court's decision on May 14, 1966.
  • The defendants then appealed to the Supreme Court, raising the issue of their non-suability without the government's consent.

Issue:

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Ruling:

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Ratio:

The Supreme Court applied the doctrine of governmental immunity from suit, as established in previous cases, including Mobil Philippines Exploration, Inc. v. Customs Arrastre Service (L-23139, December 17, 1966). The Court ruled that:

  • The arrastre operations conducted by the defendants are a necessary incident to the prime governmental function of taxation.
  • Public policy considerations bring such operations within the scope of governmental immunity from suit.
  • Therefore, the government cannot be sued without its consent for damages resulting from its arrastre operations.

The Court emphasized that this principle is consistent with its rulings in other similar cases, such as Insurance Co. of North America v. Republic and Manila Electric Co. v. Republic.


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