Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1924 > March 1924 Decisions > G.R. No. 21362 March 6, 1924 - LUNG CHEA KUNG KEE & CO. v. VICENTE ALDANESE

045 Phil 784:




PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

[G.R. No. 21362. March 6, 1924. ]

LUNG CHEA KUNG KEE & CO., Plaintiff-Appellant, v. VICENTE ALDANESE, Acting Collector of Customs, and CHUA SOCO, Defendants. VICENTE ALDANESE, Appellee.

Ross, Lawrence & Selph for Appellant.

Attorney-General Villa-Real for Appellee.

SYLLABUS


WHEN COLLECTOR OF CUSTOMS IS OFFICIALLY LIABLE. — Under the provisions of sections 1316 and 1408 of the Administrative Code, the Collector of Customs is officially liable for "a misdelivery of merchandise" where it was delivered by a subordinate employee without the surrender of a bill of lading or the exacting of a bond, even though such delivery was made without the knowledge, consent, or approval of the Collector.

STATEMENT

The plaintiff is a partnership, with its principal office and place of business in Shanghai. The defendant, Vicente Aldanese, at all of the times alleged, was and is now the acting Insular Collector of Customs.

In April, 1921, the plaintiff consigned to itself at Manila 12,500 sacks of flour, for which a bill of lading was issued to it by the steamship company. The flour arrived about April 6, 1921, and by a subordinate employee of the Collector was wrongfully delivered to the defendant, Chua Soco, without the surrender of the bill of lading or the execution of a bond. The plaintiff seeks to recover P47,816.32 from the Collector of Customs, the value of the flour.

As a defense, he alleges that the flour arrived, manifested as follows: "Order Lung Chea Kung Kee & Co. — notify a clerk of the Marine Division of the Manila Customhouse, wrongfully and erroneously and without the knowledge, consent, or authority of his superior, issued a permit for the delivery of the flour to one Timoteo Tienzo, a licensed customs broker, upon his application as agent of Chua Soco, and that it was delivered without requiring the production of the bill of lading or the filing of a bond; that the defendant never authorized the delivery. It is then alleged, upon information and belief, that the plaintiff knew of the delivery of the flour to Chua Soco, and that it took no timely steps to notify the defendant of such misdelivery.

Upon such issues, the case was tried upon the following "agreed statement of facts:"

"I. The plaintiff, Lung Chea Kung Kee & Co., is a regularly constituted copartnership having its principal place of business at Shanghai, China; the defendant, Vicente Aldanese, is and was at all times herein mentioned the regularly appointed, qualified and acting Insular Collector of Customs of the Philippine Islands and ex officio Collector of Customs of the port of Manila; the defendant, Chua Soco, has absconded from the Philippine Islands and his whereabouts are now unknown.

"II. During the month of April, 1921, the plaintiff consigned to itself at Manila, Philippine Islands, 12,500 sacks of flour of which it was the legal owner and a bill of lading for the said flour was issued to plaintiff’s order by the Pacific Mail Steamship Co., a copy of which bill of lading is hereto attached and made a part hereof, and said flour was shipped to Manila on the S. S. Venezuela; the said flour arrived at Manila on or about April 6, 1921, manifested as follows: ’Order Lung Chea Kung Kee & Co. — notify Chua Soco; on April 7, 1921, one Cresenciano Baza, a duly appointed and qualified acting clerk in the Marine Division of the office of the Collector of Customs of Manila, wrongfully and erroneously and without the knowledge, consent, or authorization of the defendant Vicente Aldanese, issued a permit for the delivery of the said 12,500 sacks of flour to one Timoteo Tienzo, a licensed customs broker, upon the application of the latter as agent for the aforementioned Chua Soco, the said Cresenciano Baza having permitted the delivery of the said flour to Timoteo Tienzo without the surrender of the bill of lading or the filing of a bond for its production in an amount sufficient to cover the value of the said 12,500 sacks of flour as required by law and the Customs regulations.

"III. The said bill of lading covering the 12,500 sacks of flour and issued as aforesaid to the order of the plaintiff Lung Chea Kung Kee & Co. was by the latter indorsed in blank and attached to a draft for Shanghai taels 31,000, covering the value of said flour, drawn by the plaintiff on the said Chua Soco in favor of the Shanghai Commercial & Savings Bank under date of April 1, 1921, and payable at 60 days’ sight; the said draft, which is attached hereto and made a part hereof, was indorsed by the payee to the order of the China Banking Corporation at Manila and, together with the said bill of lading and other shipping documents, was forwarded to the China Banking Corporation at Manila for collection; the said draft and bill of lading arrived at Manila at the same time as the 12,500 sacks of flour; the draft was presented for acceptance to Chua Soco, the drawee, who, on April 14, 1921, wrote his acceptance thereon as follows:jgc:chanrobles.com.ph

"‘Accepted April 14, 1921.

"‘Due June 13, 1921.

"‘Chua Soco.’

"The said draft was dishonored by nonpayment on June 13, 1921.

"IV. Defendant Chua Soco has no known assets available to plaintiff and has been declared an insolvent by this court; the plaintiff did not authorize the defendant to deliver said flour to Chua Soco or any other person without the production of the said bill of lading and has never received said flour or any part thereof and has no means of recovering said flour or the value thereof from said Chua Soco.

"V. The value of said flour at the time of its wrongful delivery by the said Cresenciano Baza to said Chua Soco was the sum of Shanghai taels 31,000, equivalent to P47,816.32, Philippine currency; no part of said amount has been paid to plaintiff.

"VI. On or about June 3, 1921, the plaintiff’s agent in Manila, the China Banking Corporation, which was still in possession of the said bill of lading, first learned that said flour had been delivered to Chua Soco without the filing of a bond for the production of said bill of lading and on June 7, 1921, presented the bill of lading to defendant Vicente Aldanese, demanding the delivery of said flour or the payment of the value thereof, but the defendant Vicente Aldanese has not delivered the said flour to plaintiff or paid plaintiff the value thereof, the said sum of Shanghai taels 31,000 or any part thereof, and said defendant Vicente Aldanese has refused and still refuses to deliver said flour to plaintiff or pay the value thereof or any part of the same, alleging that the said flour was wrongfully delivered without his consent by said Cresenciano Baza to the said Chua Soco or agent as hereinbefore stated.

"VII. The defendant Vicente Aldanese did not authorize said Cresenciano Baza to make delivery of the aforesaid flour to Chua Soco or Timoteo Tienzo or to any other person without the surrender of the proper bill of lading or the execution of a sufficient bond as required by law and Customs regulations.

"VIII. By reason of the wrongful delivery of said flour by said Cresencio Baza and by reason of the nonpayment of said draft by the said Chua Soco, plaintiff has been and is damaged in the sum of Shanghai taels 31,000.

"IX. On or about June 10, 1921, the defendant Vicente Aldanese, in order to protect himself against contingent claims on account of the wrongful delivery of said flour to Chua Soco and Timoteo Tienzo, instituted regular proceedings against the latter by filing a complaint in the Court of First Instance of the City of Manila entitled ’El Gobierno Insular y Administrator Insular de Aduanas, demandantes, contra Timoteo Tienzo y Chua Soco, demandados, civil case No. 20110’ alleging that the value of said flour was P47,816.32, duty and customs charges P3,105.18, and that he, the defendant herein, Vicente Aldanese, had suffered damages in the sum of P50,921.50, which case is now pending trial in this court."cralaw virtua1aw library

Upon such facts the lower court rendered judgment for the defendant, from which the plaintiff appeals, assigning the following errors:jgc:chanrobles.com.ph

"1. The court erred in sustaining the defendant’s demurrer to plaintiff’s original complaint.

"2. The court erred in rendering judgment for he defendant and said judgment is not supported by the findings of the court or the evidence.

"3. The court erred in not finding that there was a misdelivery of the merchandise.

"4. The court erred in denying plaintiff’s motion for a new trial."


D E C I S I O N


JOHNS, J. :


The question presented involves the construction of sections 1316 and 1408 of the Administrative Code, which are as follows:jgc:chanrobles.com.ph

"SEC. 1316. Delivery of merchandise without production of bill of lading. — When a collector of customs delivers merchandise without the surrender of the proper bill of lading, he may protect himself from any liability to the rightful holder to the bill by requiring the person to whom delivery is made to execute a sufficient bond in an amount greater than the invoice, or manifest, or in the absence of both, greater than the appraised value of the merchandise. Such bond shall run to the Government of the Philippine Islands, for the benefit of whom it may concern, and shall be conditioned for the production of the proper bill of lading or for the satisfaction of any damages occasioned to its lawful holder by reason of wrongful delivery."cralaw virtua1aw library

"SEC. 1408. Collector of customs not liable in respect of rulings in customs cases. — No collector or other officer of customs shall be in any way personally liable for or on account of any official ruling or decision as to which the person claiming to be aggrieved has the right to obtain either an administrative or judicial review under the provisions of this chapter; and except for a misdelivery of merchandise, a collector of customs shall not, in the absence of his own abuse of authority, be liable to any person for a loss occasioned either by his own official act or the act of his subordinates."cralaw virtua1aw library

Although section 1316 has been amended, it was in force, as above quoted, at the time the cause of action accrued. It provides that when a collector of customs delivers merchandise without the surrender of the proper bill of lading, he may protect himself from liability by requiring a sufficient bond in the name of the Government for the use and benefit of whom it may concern. It is admitted that no bond was given or required, and that the flour in question was delivered to Chua Soco without the surrender of the bill of lading.

The Collector of Customs contends that, inasmuch as the flour was delivered by a subordinate employee, without his knowledge, consent or approval, he is not liable, and that the remedy, if any, of the plaintiff is against the subordinate employee. That involves the construction of section 1408 above quoted. It specifically provides that no collector or other officer of customs shall in any way be personally liable for or on account of any official ruling or decision for which an aggrieved claimant has the right of an administrative or judicial review. It then says:jgc:chanrobles.com.ph

"And except for a misdelivery of merchandise, a collector of customs shall not, in the absence of his own abuse of authority, be liable to any person for a loss occasioned either by his own official act or the act of his subordinates." It provides that in the absence of his own abuse of authority, a collector of customs shall not be liable "to any person for a loss occasioned either by his own official act or the act of his subordinates." In other words, the section specifically provides that a collector shall not be personally liable for any official ruling, and that in the absence of his own abuse of authority, he shall not be liable "to any person for a loss occasioned either by his own official act or the act of his subordinates." But it will be noted that an exception for such liability is made "for a misdelivery of merchandise." The reason for the exception is very apparent. Section 1408 specifically defines his powers and duties as to merchandise evidence by a bill of lading, and that he may protect himself in the delivery of merchandise by requiring a good and sufficient bond for delivery without a bill of lading. The exception in section 1408 is "for a misdelivery of merchandise," and it is admitted that there was a misdelivery in the instant case.

The Administrative Code specifically defines the powers, duties, and liabilities of a collector of customs.

At the time of the misdelivery, the flour was in his official custody, and, legally speaking, it was under his personal control and supervision. Under the stipulated facts, no one had a right to take or remove the flour without the surrender of the bill of lading, except upon the giving of a good and sufficient bond, and the flour was taken from the official custody of the Collector of Customs without the surrender of the bill of lading or the giving of a bond.

The fact that section 1408 specifies and defines the cases in which the "Collector of customs is not liable," and specifically makes and exception "for a misdelivery of merchandise," clearly implies that the Collector of Customs, as such, is liable for a misdelivery of merchandise.

It will be noted that the section recites: "Either by his own official act or the act of his subordinates." But no such exception is made "for a misdelivery of merchandise." In other words, under section 1408, as to the things therein named and specified, the Collector of Customs is not liable for his official acts, either for himself or his subordinates. The statute having specified the things for which the Collector of Customs is not liable for his own official acts or those of his subordinates, and having specifically excluded "a misdelivery of merchandise" from such nonliability, under every rule of statutory construction, the Collector of Customs is officially liable for "a misdelivery of merchandise," either by himself or his subordinates.

The defendant cites and relies upon the case of Robertson v. Sichel (127 U. S., 507), where it is held:jgc:chanrobles.com.ph

"1. The government is not responsible for the misfeasances or wrongs, or negligence or omissions of duty, of the subordinate officers or agents employed in the public service.

"2. A public officer is not responsible for the misfeasances or positive wrongs, or for the nonfeasances or negligences or omissions of duty, of the subagent or servants or other persons, properly employed by or under him, in the discharge of his official duties.

"3. A collector of customs is not personally responsible for the negligence of his subordinates in the custom house department; in order to charge him in such case, he must have been guilty of personal neglect, misfeasance or wrong."cralaw virtua1aw library

Apparently, the case sustains his contention. There the trunk of a minor girl was detained by the officers for inspection, to determine whether or not it contained any dutiable articles, and during its detention the trunk was destroyed by fire without the fault or negligence of the Collector of Customs, or his subordinates. The decision was based upon those facts.

The Attorney-General has not cited any case, and we apprehend that no decision of any reputable court of last resort will ever be found, holding that under the statute here in question a collector of customs is not officially liable for the acts of his subordinates "for a misdelivery of merchandise."cralaw virtua1aw library

Every decision is founded upon its own facts, and there is a marked legal distinction between the liability of a Collector of Customs for the burning of a trunk, which is in his official custody, and the wrongful delivery of merchandise, in violation of the express terms of the statute.

If the Collector of Customs is not officially liable for the wrongful delivery of merchandise by one of his subordinates, in legal effect, a shipper would be without any protection whatever. In actual practice a very large percentage of the deliveries of merchandise are made by subordinates of the Collector of Customs, and the amount of such deliveries during a current year involves millions of pesos. In such cases, it is a matter of common knowledge that the redness of the shipper against a subordinate only would be of no value, and would throw the door wide open to all kinds of fraud. It was for such reason that in section 1408 the Legislature, in specifying the matters for which the Collector of Customs is not legally bound, wisely made an exception "for a misdelivery of merchandise." The purpose of the exception is to make the Collector of Customs officially liable in such cases and for the wrongful acts of his subordinates "for a misdelivery of merchandise."cralaw virtua1aw library

It is but fair to say, and the record in the instant case shows, that the wrongful delivery was made by a subordinate and without the knowledge, consent, or approval or the Collector of Customs.

It follows that the judgment of the lower court is reversed, and one will be entered here in favor of the plaintiff and against Vicente Aldanese, as Collector of Customs, for the sum of P47,816.32, without costs. So ordered.

Araullo, C.J., Johnson Street, Avanceña, Ostrand, and Romualdez, JJ., concur.

Separate Opinions


MALCOLM, J., dissenting:chanrob1es virtual 1aw library

The correct decision of this case hinges upon the resolution of the following question: Is the Collector of Customs liable for the value of merchandise which, without his knowledge, authorization, or consent, has been wrongfully delivered by an employee in his office to a person mentioned in the manifest? The majority, proceeding from one point of view, answer in the affirmative while the writer, although standing alone, resolutely finds in the negative.

It is stipulated by the parties that the flour "arrived at Manila on or about April 6, 1921, manifested as follows: ’Order Lung Chea Kung Kee & Co. — notify Chua Soco; on April 7, 1921, one Cresenciano Baza, a duly appointed and qualified acting clerk in the Marine Division of the office of the Collector of Customs of Manila, wrongfully and erroneously and with the knowledge, consent, or authorization of the defendant Vicente Aldanese, issued a permit for the delivery of the said 12,500 sacks of flour to one Timoteo Tienzo, a licensed customs broker, upon the application of the latter as agent for the aforementioned Chua Soco, the said Cresenciano Baza having permitted the delivery of the said flour to Timoteo Tienzo without the surrender of the bill of lading or the filing of a bond for its production in an amount sufficient to cover the value of the said 12,500 sacks of flour as required by the law and the Customs regulations." It is consequently a fair inference that while the flour in question was consigned by the plaintiff to itself at Manila, yet it was intended for Chua Soco since the bill of lading was worded as follows: "Order Lung Chea Kung Kee & Co. — notify Chua Soco," and since, as further appears from the agreed statement of facts, the plaintiff endeavored to collect on the draft accepted by Chua Soco. The mere nonpayment of the said draft does not necessarily avoid the sale so made and does not relieve Chua Soco from responsibility. (Warner, Barnes & Co. v. Inza [1922], 43 Phil., 505.)

But the majority decision is planted squarely on the provisions of section 1408 of the Administrative Code. The trouble is that a literal meaning is given to the clause "except for a misdelivery of merchandise" without taking into consideration the prior law in the Philippines and without giving effect to the general rule of public officers.

Said section 1408 is derived from section 25 of Act No. 355 as amended by Act No. 1520. The law last mentioned is specific when, in a sentence separate and apart, it states that "No collector shall be personally liable for the laches of his subordinates." But unfortunately this specific and clear statement was so mingled with other provisions in the process of codification as to give rise to the instant uncertainty.

Even, however, under the present status of the law, what the statute means is that where a collector has authorized the delivery of merchandise, he may be liable for losses if, by mistake or otherwise, the merchandise is delivered to the wrong person. This construction gains force when it is recalled that pursuant to section 1316 of the Administrative Code, the collector id given the means whereby he may protect himself against liability by requiring the filing of a bond. But how could the collector avail himself of such protection if the merchandise was delivered without his knowledge, consent, or authorization, as is the case here?

It is a general rule of Public officers that a public officer is not liable for the acts or omissions of his subordinates employed by him or working under his direction, if they be considered servants of the Government, unless such officer directs the act complained of to be done, or personally cooperates in the negligence from which the injury results, if he exercises reasonable care in the selection of the subordinates or employees, The reason for the rule is obvious. The Government itself is not responsible for the misfeasances, or wrongs, or negligences, or omissions of duty of its officers, so why, should an officer, acting for the Government, be responsible where what is done by the subordinate is without his knowledge, consent, or authorization? As stated by the United States Supreme Court, "Competent persons could not be found to fill positions of the kind (speaking of collectors), if they knew they would be held liable for all the torts and wrongs committed by a large body subordinates, in the discharge of duties which it would be utterly impossible for the superior officer to discharge in person." (Robertson v. Sichel [1887], 127 U.S., 507)

The general of public officers find support in every direction. Professor Mechem in his authoritative work on Public Officers, states:jgc:chanrobles.com.ph

"It is well settled as a general rule that public officers of the government, in the performance of their public functions, are not liable to third persons, either for the misfeasances or positive wrongs, or for the nonfeasances, negligences, or omissions of duty of their official subordinates.

"This immunity rests upon obvious considerations of public policy, the necessities of the public service and the perplexities and embarrassments of a contrary doctrine."cralaw virtua1aw library

(Section 789.)

"So a collector of customs is not personally liable for a tort committed by his subordinates, there being no evidence to connect the collector personally with the wrong, or that the subordinates were not competent or were not properly selected for their positions." (Section 793.)

Ruling Case Law, under the topic "Liability for Subordinates," states:jgc:chanrobles.com.ph

"Public officers and agents of the government are not liable for the acts or defaults, negligence or omissions of subordinate officials in the public service, whether appointed by them or not, unless they direct the act complained of to be done, or personally co-operate in the negligence from which the injury results." (22 R. C. L., p. 487.)

Corpus Juris, under the subject "Customs Duties, Liability for Acts of Subordinates," states:jgc:chanrobles.com.ph

"A collector is liable for illegal exaction by his deputies in the performance of their official duties under him, provided the actions of the deputies were within the lawful scope, either actual or apparent, of the authority of the collector’s office, but he is not liable for their negligence or default unless he had knowledge of their incompetency at the time of their employment, or had failed to discharge them after having received such knowledge; in other words, unless there is some personal negligence of the collector himself shown, and the loss occurred by reason of such negligence.

x       x       x


"His responsibility for the delivery of imported merchandise to the consignee was met by delivering goods to one who, according to the ship’s manifest and the invoice, was the consignee, and who had paid the duty, and the collector was not liable to a transferee of the bill of lading, consignee for the price of the goods, which he refused to pay on presentation." (17 C. J., 605, 606.)

The United States Supreme Court gave authoritative and well considered consideration to the point now at issue in the case of Robertson v. Sichel, supra. (Parenthetically it may be remarked that the distinction is now endeavored to be drawn between the decision of the superior court and the instant situation by mention of the fact that the Robertson v. Sichel case pertains to the loss of a trunk while the instant case pertains to the loss of flour, a distinction which is more refined than real, for the principle remains the same.) The United States Supreme Court held that the head of a department, or other superior functionary, "is not in a different position" than the Government. "A public officer or agent is not responsible for the misfeasances or positive wrongs, or for the nonfeasances, or negligences, or omissions of duty, of the subagents or servants or other persons properly employed by or under him, in the discharge of his official duties." Approval is given in the decision to the case of Brissac v. Lawrence (2 Blatchford, 121). To quote:jgc:chanrobles.com.ph

"To defendant was the collector of the port of New York. Imported goods belonging to the plaintiff had been deposited in a custom-house warehouse, and were either lost or mislaid there, or were delivered to some person not entitled to them. At the trial it was sought to show carelessness on the part of the defendant, as the head of the custom-house department, in the manner in which the books of the warehouse were kept, and also that the bookkeeper was a person of intemperate habits and unfit for the situation. On the other hand it was proved that the books were kept in conformity with the mode usually adopted at the time for keeping books of that kind; that the intemperate book-keeper had been discharged; and that, during a period of nineteen months, out of two hundred thousand packages of goods which had been received at the warehouse in question, only two packages had been lost. Mr. Justice Nelson, in charging the jury, submitted to them the question whether the collector had been guilty of personal negligence in respect to the goods. In the course of the charge, the court said: ’The collector is not personally responsible for the negligence of his subordinates in the custom-house department, and, therefore, he is not responsible for the negligence of persons employed in the warehouse department. . . . In order to charge the defendant with the loss, it is necessary that the plaintiffs should satisfy you, by affirmative and reasonable testimony, that the collector was personally guilty of negligence in the discharge of his duty, either by misdeed or by omission. . . . This is a suit against the collector, who did not have charge of the goods; and, in order to render him liable, you must find him to have been guilty of personal neglect, misfeasance, or wrong. . . . In view of the fact that the collector of New York has charge of all the business from which two-thirds of the entire revenue of the United States is collected, and has thousands of subordinates, and upon the evidence that only one package out of every one hundred thousand which passed through the hands of those subordinates has been lost, it is strange that this case has been so urgently pressed, with the idea that, upon any principle of equity, much less of law, there could be any liability on the part of the collector." (See further 12 Am. & Eng. Ann. Cases, 185; Rubens v. Robertson [1889], 38 Fed., 86; Derobert v. Stranahan [1903], 126 Fed., 581; District of Columbia v. Petty [1912], 220 U. S., 593.)

Regretting, therefore, that duty compels me to dissent, I am of the opinion that under the facts, the law, and the authorities, the Collector of Customs is not liable for the value of merchandise which, without his knowledge, authorization, or consent, has been wrongfully delivered by an employee in his office to a person mentioned in the manifest.




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