Case Name Commissioner of Customs v.

Eastern Sea Trading

Topic Powers and Functions of the President — Foreign Affairs

Case No., Date G.R. No. L-14279 — October 31, 1961

Ponente J. Concepcion

RELEVANT FACTS
● The case is a petition for review of a judgement of the Court of Tax appeals which reversed the
decision of the Commissioner of Customs.
● Eastern Sea Trading (EST) was the consignee of shipments of onion and garlic from Japan and
Hong Kong which arrived at the Port of Manila in 1954.
● The shipments had no certificate for release required by Central Bank Circular No. 44 and 45. As
such, the goods were seized and subjected to forfeiture proceedings for alleged violations of Sec
1363 (f) of the Revised Administrative Code.
● Sept 4, 1956 — Collector of Customs Manila rendered a decision declaring said goods forfeited
to the Government. Moreover, the goods were in the meantime released to the consignees on
surety bonds in compliance with the orders of CFI Manila. With this, the decision directs the
bonds to be paid by the consignees (Eastern Sea Trading as principal, Alto Surety and Insurance
Co., Inc., as surety) jointly and severally to the Bureau of Customs within 30 days of notice.
● EST filed an appeal but the Decision was affirmed by the Commissioner of Customs.
● The Court of Tax Appeals reversed the decision of the Commissioner of Customs and ordered that
the bonds be cancelled and withdrawn. EST then sought a review of such decision.
○ EST’s arguments:
■ Central Bank has no authority to regulate transactions not involving foreign
exchange.
■ The shipments are in the nature of “no-dollar” imports and so they do not involve
foreign exchange.
■ The seizure and forfeiture of the goods imported from Japan cannot be justified
under EO 328 because of the following:
● EO 328 seeks to implement an executive agreement extending the
effectivity of our Trade and Financial Agreements with Japan. However,
the executive agreement is of dubious validity.
 ● There is no governmental agency authorized to issue the import license
required by the EO.

RATIO DECIDENDI

Issue Ratio
W/N the Central Bank YES.
has the authority to
regulate no-dollar - The authority of the Central Bank and the validity of the Circular Nos. 44
imports 
 and 45 have been repeatedly upheld by the Court. (Pascual v. Comm. of
Customs, Acting Comm. of Customs v. Leuterio, Comm. of Customs v.
Pascual, etc.)
- To maintain our monetary stability and to preserve the international value
of our currency, the broad powers of the Central Bank under its charter
authorizing the bank to issue such rules and regulations as it may consider
necessary for the effective discharge of their responsibilities connote the
authority to regulate no-dollar imports.

W/N the executive - YES.

agreement sought to be - The legality of the executive agreement with Japan sought to be
implemented by EO implemented by EO 328 is being questioned because the Senate had not
328 is legal concurred in the making of the agreement.
- Senate concurrence is required only in the making of treaties pursuant to
Sec 10 (7) Art VII. The same is not required for executive agreements.
- The right of the Executive to enter into binding agreements without the
necessity of Congressional approval has been confirmed by long usage.
W/N there is no - NO.
governmental agency - Lower court: it would be unreasonable to require from EST an import
authorized to issue the license when the Import Control Commission (ICC) was no longer in
import license required existence. Hence, the court believed that no agency is authorized to issue
by the EO. the licenses.
- This Court disagrees with the lower court. The authority to issue licenses
was not vested exclusively upon the ICC.
- EO 328 provided for export or import licenses “from the Central Bank of
the Philippines or the Import Control Commission”
- Upon the abolition of the Commission, the duty had to be discharged by
the Monetary Board and the Central Bank.

Treaty Executive Agreement

Requires Senate concurrence Does not require Senate concurrence
International agreement involving political International agreement embodying
issues or changes of national policy adjustments of detail carrying out well-
established national policies and traditions
International arrangement of a permanent International arrangement of a more or less
character temporary nature

RULING
WHEREFORE, the decision appealed from is hereby reversed and another one shall be entered affirming that of
the Commissioner of Customs, with costs against respondent-appellee, Eastern Sea Trading.