Customs Commissioner v. AGFHA (G.R. No. 187425; March 28, 2011)


FACTS: On December 12, 1993, a shipment containing bales of textile grey cloth arrived at the Manila International Container Port (MICP).The Customs Commissioner (Commissioner), however, held the subject shipment because its owner/consignee was allegedly fictitious.AGFHA intervened and alleged that it was the owner and actual consignee of the subject shipment. Eventually, this dispute reached the SC, which ended with a Writ of Execution ordering the immediate release of the subject shipment to AGFHA. Asked to explain its consistent failure to execute the writ, the Commissioner explained, inter alia, that despite diligent efforts to obtain the necessary information and considering the length of time that had elapsed since the subject shipment arrived at the Bureau of Customs, the Chief of the Auction and Cargo Disposal Division of the MICP could not determine the status, whereabouts and disposition of said shipment.Acting on a complaint by AGFHA, the CTA-Second Division adjudged the Commissioner liable to AGFHA, ordering the Bureau of Customs to pay AGFHA the value of the lost shipment in the amount of US$160,348.08),subject however, to the payment of the prescribed taxes and duties, at the time of the importation, and that the Bureau of Customs liability may be paid in Philippine Currency, computed at the exchange rate prevailing at the time of actual payment. The CTA En Banc and the CA affirmed.

The Commissioner basically argues that the exchange rate on the amount of payment should be computed not on the time of payment, but on its acquisition cost at the time of importation; and that this case has been transformed into a suit against the State because the satisfaction of AGFHAs claim will have to be taken from the national coffers.

ISSUES: [1] Is AGFHA entitled to recover the value of the lost shipment based only on its acquisition cost at the time of importation?

[2] Has the suit been converted into a suit against the State?

HELD: In the case of C.F. Sharp and Co., Inc. v. Northwest Airlines, Inc.the Court ruled that the rate of exchange for the conversion in the peso equivalent should be the prevailing rate at the time of payment. Likewise, in the case of Republic of the Philippines represented by the Commissioner of Customs v. UNIMEX Micro-Electronics GmBH, which involved the seizure and detention of a shipment of computer game items which disappeared while in the custody of the Bureau of Customs, the Court upheld the decision of the CA holding that petitioner's liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment. The Court therefore agrees with the CAs ruling.

On the issue regarding the state immunity doctrine, the Commissioner cannot escape liability for the lost shipment of goods. This was clearly discussed in the UNIMEX Micro-Electronics GmBH decision, where the Court wrote: "the Court cannot turn a blind eye to BOC's ineptitude and gross negligence in the safekeeping of respondent's goods.The situation does not allow us to reject respondent's claim on the mere invocation of the doctrine of state immunity. Succinctly, the doctrine must be fairly observed and the State should not avail itself of this prerogative to take undue advantage of parties that may have legitimate claims against it." DENIED.

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