Title: Mobil Philippines Exploration vs Customs Arrastre Service No.

27

Citation: G.R.No.L-23139December17, 1966 18 SCRA 1120

Nature of the action:

Facts:
SometimeduringthemonthofNovember1962,four cases of rotary drill parts were shipped
from abroad on S.S. ''Leoville'' consigned to Mobil Philippines Exploration, Inc., Manila. It was
discharged to the custody of the Customs Arrastre Service, the unit of the Bureau of Customs
then handling arrastre operations. The Customs Arrastre Service later delivered to the broker of
the consignee three cases only. Petitioner then filed a suit in the Court of First Instance of
Manila against the Customs to recover the value of undelivered case plus other damages
thereof. The respondents filed a motion to dismiss on the ground that not being persons under
the law, they cannot be sued.

Issue:
Whether or not the defendants can invoke state immunity.

Ruling: YES.

Ratio Decidendi:
If an agency's function is deemed proprietary, if such is a necessary incident of the primary and
government function of such agency, such agency is not suable. If an agency performs a non-
governmental function and is undertaken as an incident to its governmental function, there is
no waiver thereby of the state immunity from suit extended to such government entity. The
Bureau of Customs is part of the Department of Finance with no personality of its own apart
from that of the national government. Its primary function is governmental, such as assessing
and collecting lawful revenues from imported articles and all other tariff and custom duties,
fees, charges, fines and penalties. To this function, arrastre service is a necessary incident.