Can the Trial Court Pass Upon
the Validity of Abandonment Proceedings by the BoC?NO. And this is the
story.
On 12 April 1989, raw mate-rials consigned to Ela's Manufac-turing,
Inc. arrived in the Philippines from Keelung, Taiwan. The BOC treated the raw
materials as subject to ordinary import taxes and were not immediately released
to the consignee. Moreover, the consignee failed to file the requisite import
entry as well as claim the cargo.
The cargo was subsequently taken to
the customs bonded warehouse of Maran Freight, Inc. on 24 July 1989 for stripping
and safekeeping.
Then the District Collector of Customs initiated "abandonment
proceedings" over the said cargo. On 29 September 1989, he issued a Notice
to Ela's Manufacturing, Inc. giving it 15 days from notice thereof to file the
import entry. Otherwise, the subject cargo would be deemed abandoned and sold
at public auction.
On 7 November 1989, the Chief of the Law Division
of the BOC issued a memorandum informing the Chief for Auction and Cargo Disposal
Division that the declaration of abandonment in the aforestated proceedings had
already become final and executory as of 30 October 1989 and that the subject
cargo should be inventoried and sold at public auction.
However, before
the inventory and sale at public auction of the goods could be accomplished, part
of the customs bonded warehouse owned and operated by Maran Freight, Inc. was
gutted by fire on 26 July 1990. The shipment of Ela's Manufacturing was also burned
and destroyed.
On 19 March 1991, Ela's Manufacturing, Inc., through counsel,
sent a letter to Maran Freight, Inc. demanding the payment of the value of goods
destroyed by the fire. Maran Freight, Inc. rejected the demand.
On 26 December
1991, or after more than two years from arrival of the cargo in the Philippines,
Ela's Manufacturing, Inc. filed a complaint for damages against Maran Freight,
Inc. with the Regional Trial Court of Pasig.
After trial, the court rendered
judgment finding Maran Freight, Inc. liable for the value of the goods. According
to the trial court, the BOC's subsequent declaration that the subject shipment
was "abandoned cargo" was ineffective for lack of notice to the consignee.
Therefore, it cannot be said that the consignee impliedly abandoned the cargo
and lost its ownership over the same in favor of the government.
The
Court of Appeals affirmed the decision of the trial court. And Maran Freight,
Inc. elevated the case to the Supreme Court, which ruled:
"x
x x The trial court was incompetent to pass upon and nullify (1) the seizure of
the cargo in the abandonment proceedings and (2) the declaration made by the District
Collector of Customs that the cargo was abandoned and ipso facto owned by the
government.
x x x .The trial court should have rendered judgment dismissing
the complaint, without prejudice to the right of the private respondent (Ela's
Manufacturing, Inc.) to ventilate the issue before the Commissioner of Customs
and/or the Court of Tax Appeals as provided for in the Tariff and Customs Code.
The District Collector of Customs did not lose jurisdiction over the
abandonment proceedings. The loss of the cargo did not extinguish his incipient
jurisdiction in the said proceedings, nor render functus officio his declaration
that the subject shipment had been abandoned."
Let us always bear
in mind that the resolution as to the validity of "abandonment proceedings"
is within the exclusive competence of the District Collector of Customs, the Commissioner
of Customs and within the appellate jurisdiction of the Court of Appeals and not
with the trial court.
For questions or comments, email the author at
jtb@pac-atlantic.com. Back
to Top Foreigners
in Top Posts at International Airfreight Forwarding Companies
CAN a foreigner occupy the top position in an international airfreight forwarding
company?
No. And this is the story.
Rosal Cargo Corporation
(RCC) is a stock corporation duly organized and existing under and by virtue of
Philippine laws engaged in international airfreight forwarding. Seventy percent
(70%) of its equity is owned by Filipinos and thirty percent (30%) is owned by
foreigners. Its President is a foreigner while the other officers are all Filipinos.
On the day that its permit to operate was to expire, it applied for renewal
for another five (5) years with the Civil Aeronautics Board (CAB). It alleged
that its President was a Japanese national.
The Air Carrier Accounts
System and Field Audit Division of the CAB recommended the granting of the renewal
of the permit to operate of RCC provided that the position of President is transferred
to a Filipino national.
Subsequently, the CAB promulgated a resolution
directing RCC to transfer its top position to a Filipino national.
Otherwise,
its authority will be revoked. RCC sought a reconsideration but the same was denied
by the CAB.
RCC elevated the case to the Court of Appeals. But the Court
of Appeals (CA) held that the CAB did not err in ordering RCC to transfer its
top position to a Filipino national. The motion for reconsideration of RCC was
likewise denied by the CA.
RCC brought the case to the Supreme Court
(SC). But pending the resolution of the case, RCC informed the SC that the CAB
had already renewed its authority to operate as an international airfreight forwarder
for another five (5) years.
Thus, the SC ruled:
"Clearly,
the instant petition has become moot and academic. This is evident from the fact
that the permit to operate as an international airfreight forwarder the respondent
Board (CAB) sought to withhold from the petitioner (RCC) for failing to meet the
constitutional Filipinization requirement had already lapsed in 1995. Also, with
the current renewal of the petitioner's authority to operate, it is to be assumed
that it has finally decided to comply with the citizenship requirement mandated
by the constitution for its line of business. x x x."
Thus, let
us always bear in mind that a foreign national cannot occupy the top position
of an entity engaged in international airfreight forwarding business as the same
is a public utility enterprise restricted by the Constitution.
For questions
of comments, email the author at jtb@pac-atlantic.com.ph. Back
to Top What is the
Liability of the Containership Operator? SOMETIME in 1991,
SL Services, Inc. and Polar Lines, Inc. entered into a contract/agreement entitled,
"Co-operation in the Pacific". Under the said contract, both parties
agreed to purchase, share and exchange needed space for cargo in their respective
containerships. And under the said contract, they could be, depending on the occasion,
either as principal carrier (with negotiable bill of lading or other contract
of carriage with respect to cargo) or a containership operator (owner, operator
or charterer of containership on which the cargo is carried).
During the lifetime of the contract, Flor International, Inc. delivered to Polar
Lines, Inc. various cargoes with Oakland, California as port of discharge and
San Francisco as place of delivery. Polar Lines, Inc. issued the corresponding
bill of lading to Flor International, Inc. But pursuant to the contract, Polar
Lines, Inc. loaded the subject cargoes on a vessel owned by SL Services, Inc.
And under this arrangement, Polar Lines, Inc. was the principal carrier while
SL Services, Inc. was the containership operator. The delivery
of the cargoes was delayed. And the consignee refused to pay for the cargo. So,
Flor International, Inc. filed a case against Polar Lines, Inc. for reimbursement
of the value of the cargoes and other charges. In its answer
to the complaint of Flor International, Inc., Polar Lines, Inc. alleged that whatever
damages sustained by Flor International, Inc. were caused by SL Services, Inc.
as the owner of the vessel which actually transported the subject cargoes. And
it filed a third-party complaint against SL Services, Inc.
SL Services, Inc. filed a motion to dismiss the third-party complaint on the ground
of arbitration. It was denied by the trial court. SL Services,
Inc. elevated the case to the Court of Appeals. But the Court of Appeals dismissed
its petition for certiorari. SL Services, Inc. had no other
choice but to go to the Supreme Court, which ruled: "For
respondent Court of Appeals to say that the terms of the contract do not require
arbitration as a condition precedent to judicial action is erroneous. x
x x it is clear that arbitration is the mode provided
by which respondent (Polar Lines, Inc.) as Principal Carrier can seek damages
and/or indemnity from petitioner (SL Services, Inc.), as Containership Operator.
As the Principal Carrier with which Flor International, Inc. dealth with, respondent
can and should be held accountable by the shipper. Pursuant to Clause 16.3 of
the Agreement, respondent when faced with such a suit "shall use all reasonable
endeavors to defend" itself or "settle such suits for as low a figure
as reasonably possible". In turn, it can seek damages and/or indemnity from
petitioner as Containership Operator for whatever final judgment may be adjudged
against it under the Complaint of Flor International, Inc. x x x"
Let us always bear in mind that the Principal Carrier can seek damages and/or
indemnity from the Containership Operator as may be provided for in their Agreement.
For questions or comments, email the author at jtb@pac-atlantic.com.ph.
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