November 1965 - Philippine Supreme Court Decisions/Resolutions
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G.R. No. L-21217 November 29, 1965 - SERREE INVESTMENT CO. v. COMMISSIONER OF CUSTOMS:
EN BANC
[G.R. No. L-21217. November 29, 1965.]
SERREE INVESTMENT COMPANY, Petitioner, v. COMMISSIONER OF CUSTOMS, Respondent.
San Juan, Africa and Benedicto for Petitioner.
Solicitor General for Respondent.
SYLLABUS
1. CENTRAL BANK; CIRCULARS Nos. 44 & 45; ISSUANCE AUTHORIZED BY REPUBLIC ACT 265. — The power of the Central Bank to issue Circulars Nos. 44 & 45 is now settled since Section 74 of Republic Act No. 265, authorizes the Monetary Board, with the approval of the President of the Philippines, to temporarily suspend or restrict sales of exchange and to subject all transactions in gold and foreign exchange to license during an exchange crisis in order to protect the international reserve and to give the Monetary Board and the government time in which to take constructive measures to combat such crisis.
2. ID.; ID.; CIRCULARS Nos. 44 & 45 ARE MEASURES TO REGULATE THE FLOW OF FOREIGN EXCHANGE. — Circular No. 44, prohibiting the release by the Commissioner of Customs of any item of import without presentation of a release certificate issued by the Central Bank or any authorized agent bank in the form prescribed by the Monetary Board and Circular No. 45, requiring any person or entity who intends to import or receive goods from any foreign country for which no foreign exchange is required or will be required of the banks, to apply for a license from the Monetary Board to authorize such import, are measures taken to check the unregulated flow of foreign exchange from the country (Com. of Custom v. Serree Investment Co., L-12007, May 16, 1960).
3. ID.; ID.; VIOLATIONS; FORFEITURE OF MERCHANDISE. — Merchandise imported in violation of Central Bank Circulars Nos. 44 & 45 is considered merchandise of prohibited importation within the purview of Section 1363(f) of the Revised Administrative Code and as such, it can be validly forfeited in favor of the government.
2. ID.; ID.; CIRCULARS Nos. 44 & 45 ARE MEASURES TO REGULATE THE FLOW OF FOREIGN EXCHANGE. — Circular No. 44, prohibiting the release by the Commissioner of Customs of any item of import without presentation of a release certificate issued by the Central Bank or any authorized agent bank in the form prescribed by the Monetary Board and Circular No. 45, requiring any person or entity who intends to import or receive goods from any foreign country for which no foreign exchange is required or will be required of the banks, to apply for a license from the Monetary Board to authorize such import, are measures taken to check the unregulated flow of foreign exchange from the country (Com. of Custom v. Serree Investment Co., L-12007, May 16, 1960).
3. ID.; ID.; VIOLATIONS; FORFEITURE OF MERCHANDISE. — Merchandise imported in violation of Central Bank Circulars Nos. 44 & 45 is considered merchandise of prohibited importation within the purview of Section 1363(f) of the Revised Administrative Code and as such, it can be validly forfeited in favor of the government.
D E C I S I O N
BAUTISTA ANGELO, J.:
Petitioner is the consignee of 3,000 crates of onions which arrived at the Port of Manila on June 26,1954 on board the steamship "Nikobar." Said shipment was immediately seized and became the subject of forfeiture proceedings by the Collector of Customs for the Port of Manila or the ground that it was in violation of Executive Order No. 329, dated June 22, 1950, and of Central Bank Circulars Nos. 44 and 45, in relation to Section 1363(f) of the Revised Administrative Code. Eventually, that shipment was ordered forfeited in favor of the government by said official in a decision rendered on February 15, 1956, from which petitioner appealed to the Commissioner of Customs.
Petitioner, in the meantime, was allowed to redeem the merchandise under protest upon payment of its redemption value in the amount of P72,836.30, but, on March 15, 1960, the Commissioner of Customs sustained the ruling of the Collector of Customs, whose decision was affirmed by the Court of Tax Appeals on March 19, 1963, ordering definitely the forfeiture of the shipment for having been imported without any Central Bank release certificate in violation of Central Bank Circulars Nos. 44 and 45.
Petitioner interposed the present petition for review.
Petitioner disputes the authority of the Central Bank to issue the aforesaid circulars mainly on the ground that the same purport to regulate the importation of merchandise which does not require the purchase of foreign exchange in violation of the power and authority conferred upon it by its Charter (Republic Act 265).
The power of the Central Bank to issue said circulars is now settled it having been the subject of a long line of decisions. Thus, in the latest case decided by this Court which involves the same parties and the same issue, this Court said:jgc:chanrobles.com.ph
"The objections of the petitioner, in his assignment of errors, and the authority of the Commissioner of Customs to forfeit the merchandise in question were disposed of in a similar case involving the same petitioner herein. In Commissioner of Customs v. Serree Investment Company, L-12007, 16 May 1960, this Court, citing the case of Pascual v. Commissioner of Customs, L-10797, 30 June 1959, stated:chanrob1es virtual 1aw library
`. . . Even granting that the importations in question do not require an immediate sale of foreign exchange, their importation into the Philippines from another country will ultimately require the sale of such exchange. The currency of one country is not legal tender in another. To pay for imports, traders have to avail themselves of foreign exchange, which is the conversion of an amount of money or currency of one country into an equivalent amount of money or currency of another. Every import of goods or merchandise requires an immediate or future demand for foreign exchange.
`Section 74, Republic Act No. 265, authorizes the Monetary Board, with the approval of the President, to temporarily suspend or restrict sales of exchange and to subject all transactions in gold and foreign exchange to license during an exchange crisis in order to protect the international reserve and to give the Monetary Board and the Government time in which to take constructive measures to combat such a crisis. Circular No. 44, prohibiting the release by the Commissioner of Customs of any item of import without the presentation of a release certificate issued by the Central Bank or any authorized agent bank in the form prescribed by the Monetary Board, and Circular No. 45, requiring "any person or entity who intends to import or receive goods from any foreign country for which no foreign exchange is required or will be required of the banks, to apply for a license from the Monetary Board to authorize such import", are measures taken to check the unregulated flow of foreign exchange from the country and are within the power of the Monetary Board.
`Appellant’s contention is that Congress has not authorized the Central Bank to issue regulations governing imports that do not require the sale of foreign exchange, because according to him, it would not have enacted into law Republic Act No. 1410. The contention assumes that the importations did not require the sale of foreign exchange, a fact which he failed to establish.
`Appellant contends that assuming that the importations in question require the sale of foreign exchange in violation of Circular No. 44, yet they may not be forfeited under the said Circular because it does not expressly provide for the penalty of forfeiture. . . Section 1363 (f) of the Revised Administrative Code provides:jgc:chanrobles.com.ph
"Vessels, cargo, merchandise, and other subjects and things shall, under the conditions hereinbelow specified, be subject to forfeiture:chanrob1es virtual 1aw library
"(f) Any merchandise of prohibited importation or exportation, the importation or exportation of which is effected or attempted contrary to law, and all other merchandise which, in the opinion of the collector, have been used, are or were intended to be used as instrument in the importation or exportation of the former."cralaw virtua1aw library
`. . . But since the importations in question were made without the necessary import license issued by the Monetary Board pursuant to Circular No. 45 and the release certificate issued by the Central Bank or its authorized agent bank in the prescribed form pursuant to Circular No. 44, they fall within the class of "merchandise of prohibited importation" or merchandise "the importation . . . of which is effected . . . contrary to law" that the Commissioner of Customs may seize and order forfeited.’ (Serree Investment Company v. Commissioner of Customs, L-19564, November 28, 1964) 1
There is also no merit in the claim that the merchandise in question cannot be legally forfeited under Section 1363 (f) of the Revised Administrative Code, for the reason that, as said merchandise was imported in violation of Central Bank Circulars Nos. 44 and 45, the same is considered as "merchandise of prohibited importation" within the purview of said section. As such it can be validly forfeited in favor of the government. 2
WHEREFORE, the decision appealed from is affirmed. Costs against petitioner.
Bengzon, C.J., Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.
Petitioner, in the meantime, was allowed to redeem the merchandise under protest upon payment of its redemption value in the amount of P72,836.30, but, on March 15, 1960, the Commissioner of Customs sustained the ruling of the Collector of Customs, whose decision was affirmed by the Court of Tax Appeals on March 19, 1963, ordering definitely the forfeiture of the shipment for having been imported without any Central Bank release certificate in violation of Central Bank Circulars Nos. 44 and 45.
Petitioner interposed the present petition for review.
Petitioner disputes the authority of the Central Bank to issue the aforesaid circulars mainly on the ground that the same purport to regulate the importation of merchandise which does not require the purchase of foreign exchange in violation of the power and authority conferred upon it by its Charter (Republic Act 265).
The power of the Central Bank to issue said circulars is now settled it having been the subject of a long line of decisions. Thus, in the latest case decided by this Court which involves the same parties and the same issue, this Court said:jgc:chanrobles.com.ph
"The objections of the petitioner, in his assignment of errors, and the authority of the Commissioner of Customs to forfeit the merchandise in question were disposed of in a similar case involving the same petitioner herein. In Commissioner of Customs v. Serree Investment Company, L-12007, 16 May 1960, this Court, citing the case of Pascual v. Commissioner of Customs, L-10797, 30 June 1959, stated:chanrob1es virtual 1aw library
`. . . Even granting that the importations in question do not require an immediate sale of foreign exchange, their importation into the Philippines from another country will ultimately require the sale of such exchange. The currency of one country is not legal tender in another. To pay for imports, traders have to avail themselves of foreign exchange, which is the conversion of an amount of money or currency of one country into an equivalent amount of money or currency of another. Every import of goods or merchandise requires an immediate or future demand for foreign exchange.
`Section 74, Republic Act No. 265, authorizes the Monetary Board, with the approval of the President, to temporarily suspend or restrict sales of exchange and to subject all transactions in gold and foreign exchange to license during an exchange crisis in order to protect the international reserve and to give the Monetary Board and the Government time in which to take constructive measures to combat such a crisis. Circular No. 44, prohibiting the release by the Commissioner of Customs of any item of import without the presentation of a release certificate issued by the Central Bank or any authorized agent bank in the form prescribed by the Monetary Board, and Circular No. 45, requiring "any person or entity who intends to import or receive goods from any foreign country for which no foreign exchange is required or will be required of the banks, to apply for a license from the Monetary Board to authorize such import", are measures taken to check the unregulated flow of foreign exchange from the country and are within the power of the Monetary Board.
`Appellant’s contention is that Congress has not authorized the Central Bank to issue regulations governing imports that do not require the sale of foreign exchange, because according to him, it would not have enacted into law Republic Act No. 1410. The contention assumes that the importations did not require the sale of foreign exchange, a fact which he failed to establish.
`Appellant contends that assuming that the importations in question require the sale of foreign exchange in violation of Circular No. 44, yet they may not be forfeited under the said Circular because it does not expressly provide for the penalty of forfeiture. . . Section 1363 (f) of the Revised Administrative Code provides:jgc:chanrobles.com.ph
"Vessels, cargo, merchandise, and other subjects and things shall, under the conditions hereinbelow specified, be subject to forfeiture:chanrob1es virtual 1aw library
x x x
"(f) Any merchandise of prohibited importation or exportation, the importation or exportation of which is effected or attempted contrary to law, and all other merchandise which, in the opinion of the collector, have been used, are or were intended to be used as instrument in the importation or exportation of the former."cralaw virtua1aw library
`. . . But since the importations in question were made without the necessary import license issued by the Monetary Board pursuant to Circular No. 45 and the release certificate issued by the Central Bank or its authorized agent bank in the prescribed form pursuant to Circular No. 44, they fall within the class of "merchandise of prohibited importation" or merchandise "the importation . . . of which is effected . . . contrary to law" that the Commissioner of Customs may seize and order forfeited.’ (Serree Investment Company v. Commissioner of Customs, L-19564, November 28, 1964) 1
There is also no merit in the claim that the merchandise in question cannot be legally forfeited under Section 1363 (f) of the Revised Administrative Code, for the reason that, as said merchandise was imported in violation of Central Bank Circulars Nos. 44 and 45, the same is considered as "merchandise of prohibited importation" within the purview of said section. As such it can be validly forfeited in favor of the government. 2
WHEREFORE, the decision appealed from is affirmed. Costs against petitioner.
Bengzon, C.J., Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.
Endnotes:
1. See also Commissioner v. Eastern See Trading, L-14279, October 31, 1961; Commissioner v. Nepomuceno, L-11126, March 31, 1962; Commissioner v. Santos, L-11911, March 30, 1962; Serree Investment Co. v. Commissioner of Customs, L-20847-9, June 22, 1965.
2. Venancio Tonk Tek v. Commissioner of Customs, L-11947, June 30, 1959; People v. Que Po Lay, 50 O. G., No. 10, p. 4800.
