COLLECTOR OF CUSTOMS OF MANILA, PETITIONER, VS. INTERMEDIATE APPELLATE COURT, HEIRS OF BIENVENIDO FERRER AND HEIRS OF EDUARDO BRAVO, RESPONDENTS.

For resolution is the “Urgent Omnibus Petition for Contempt
and Clarification/Declaration of Official Liability of the Collector of Customs
of Manila in G.R. No. 65418” filed by private respondents.

The instant motion originated from a judgment rendered by this
Court in the above-entitled case on June 18, 1985 affirming the decision of the
then Intermediate Appellate Court in AC-G.R. CV No. 61644 which declared the
Collector of Customs of Manila liable to herein private respondents for misdelivery of cargo.

The following facts are stated in the said decision of the Court:

“As background, it should be stated that in the execution
pending appeal in Civil Case No. 42189 of the Manila Court of First Instance,
plaintiffs Bienvenido Ferrer
and Eduardo Bravo garnished on October 31, 1961 33 cases of rayon and synthetic textiles consigned in 1961 to (believe
it or not) defendant Cotabato Palay
& Corn Producers, Inc.  The textiles
were in the custody of the Collector of Customs of Manila.

“The garnished textiles were later transferred on December 19, 1963 to the bonded
warehouse of Chavez, Salinas & Co. by the sheriff who directed the
warehouseman not to release the goods without
his written authorization. 
However, nine days later, or on December 28, 1963, through the use of two delivery permits
with one Jose Santiago as the customs broker of the Cotabato
Palay & Corn Producers, Inc., the textiles were
released purportedly with clearance from the shipping agent and the sheriff.

“Nearly five years later, or on December 3, 1968, after the judgment for P90,000 was
affirmed by the Court of Appeals, Collector Jose Viduya,
totally unaware of the said release and assuming that the textiles were still
in the custody of Chavez, Salinas & Co., sent a letter to the sheriff
requesting for the release thereof.  The warehouseman revealed that the textiles
were no longer in his custody and that they were released five years earlier
with the proper formalities.

“The investigation of the National Bureau of Investigation
disclosed that the note of the sheriff attached to the delivery permits was a forgery.  Persons suspected of the crime were
charged.  No customs employee was involved.

“The garnishers, Bravo and Ferrer, filed on May
19, 1969 in Civil Case No. 42189 a motion to compel the Collector
and the sheriff to pay for the invoice value of the textiles in the sum of $17,504.46.  Judge Villasor
denied the motion.  He held that the
Collector was not liable under section 3511 of the Tariff and Customs
Code.  The forgery of the delivery
permits was a fortuitous event.  The
sheriff was not liable because the textiles were in the custody of the
warehouseman.

“Ferrer and Bravo appealed to the
Court of Appeals which reversed the ruling of Judge Villasor.  The Appellate Court held that because of the
negligence of the customs employee serving as storekeeper in the bonded warehouse the Collector is liable for the misdelivery of the textiles.  The Collector appealed to this Court.”^[1]

In upholding the liability of the Collector of Customs, this
Court said:

“The controlling case is Lung Chea
Kung Kee & Co. vs. Aldanese
and Chua Soco, 45 Phil. 784, where it was ruled:

‘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 ‘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.’

Section 1408 is identical to section 3511
while section 1316 covers delivery of merchandise without production of a bill
of lading.

“WHEREFORE, the judgment of the Appellate Court is
affirmed.  No costs.”^[2]

Petitioner Collector of Customs, through former Solicitor General
Estelito P. Mendoza, filed a motion for
reconsideration^[3]
of the decision based on the following grounds:

“1.  The factual
findings of respondent Court to the effect that the Manila Collector of Customs
is liable for the loss of the garnished goods; that the storekeeper was grossly
negligent in not checking the genuineness of the sheriff’s signature; and that
the bonded warehouse did not
have a facsimile of the sheriff’s signature, should have been reviewed by this
court as an exception to the
general rule that ‘factual findings of the Appellate Court are binding on this
Court’, since those findings are contrary to those of the trial court and the
assailed judgment apparently resulted from misapprehension of facts.  Such a review by this Court would show that the Collector of Customs cannot be
‘exclusively liable for the loss of the goods’ in question.

“2.  The case of Lung Chea Kung Kee & Co. vs. Aldanese and Chua Soco, 45 Phil.
784, cited by this Court, is inapplicable to the case at bar.

“3.  Assuming arguendo that Article (sic) 3511 of the Tariff and
Customs Code of 1957 is applicable, the Collector of Customs can only be
officially liable, not personally liable.”

On July 22, 1985,
this Court denied with finality said motion for reconsideration and ordered
that entry of judgment be made.^[4]
Consequently, on August 5, 1985,
entry of judgment was made declaring the decision of this Court dated June 18, 1985 final and executory as of said date.^[5]

Thereafter, a second motion for reconsideration,^[6]
invoking virtually the same grounds relied upon in the first motion, was filed
but was subsequently denied in a resolution dated October 16, 1985.^[7]

Notably, in contending that the Collector of Customs of Manila
cannot be held personally liable for the loss of the goods, the Solicitor
General had averred in both motions for reconsideration that:

“In any event, the
Collector of Customs cannot be personally
liable for the loss of the goods.

The goods involved consist of textile with an invoice value of
$17,504.46 in 1961, or P70,017.84 at the then rate of P4.00 to a dollar.  On the assumption that the Collector of
Customs is liable at all for this value of the goods that were misdelivered, he could not be personally liable therefor, but only officially liable.  Even this Court explicitly stated that the
Collector of Customs ‘is officially
liable for a misdelivery of merchandise’ either by
himself or his subordinates.”^[8]

which contention, we repeat, was twice
rejected by this Court.

Consequently, judgment having become final, private respondents
moved for and were issued a writ of execution which was served upon Collector
of Customs Guillermo Orbos who claimed that liability
thereunder is official in nature.  However, the Office of the Manila District Collector of Customs
insisted that the money judgment is a personal liability of former Collector
Jose T. Viduya. 
The official stand of the Office of the Collector of Customs was mainly
based on the legal opinion of the Law Division, Bureau of Customs, Port of
Manila, as contained in an office memorandum dated July 25, 1986, and the
official opinion of Customs Commissioner Wigberto E. Tañada, contained in his 2nd Indorsement
dated August 1, 1986 addressed to the Manila District Collector of Customs.^[9]

As stated at the outset, private respondents filed the instant
omnibus motion seeking the clarification of the collector’s liability, said
respondents opining that the same should be declared official in nature.  They likewise charged in their motion that Isauro C. Garcia, Chief of the Legal and Intelligence
Division, Bureau of Customs, Manila, had committed contempt of court for having allegedly prepared the official
opinion of Customs Commissioner Tañada which declared
that the liability of petitioner collector is personal, thereby constituting an
unlawful interference with the decision of this Court allegedly finding
said collector officially liable.

On the other hand, then Solicitor General Sedfrey
A. Ordoñez, in his comment,^[10]
claims that former Collector of Customs Jose T. Viduya
is personally liable; and that being a personal liability of the above-named
former collector, who had long retired from government service, the same cannot
be assumed or inherited by the present incumbent District Collector of Customs
Guillermo Orbos.

1. The Office of the Solicitor General does not appear to have
been consistent in its stand on the nature of the collector’s liability.  In the two motions for reconsideration filed
by former Solicitor General Mendoza, as
hereinbefore quoted, it is contended that the collector’s liability is official and not personal.

As earlier stated, these two motions were denied by this
Court.  Thereafter, in the comment of
Solicitor General Ordoñez on the omnibus motion of herein private
respondents, it is asserted that said liability is personal.

If we are to follow, as
we must, the inevitable implications of the repeated denials of the two
motions for reconsideration filed by Solicitor General Mendoza, considering
that it was squarely claimed and presented therein for resolution that the collector is not personally but
officially liable, then the irresistible conclusion is that the Court in denying the same decided that, under the factual situation involved,
the collector is personally liable.  That
this was its intendment is not without support.

2.  The case of Lung Chea Kung Kee
& Co. vs. Aldanese, et
al.,^[11]
which was the basis of the Court’s decision in the case at bar actually
involved an interpretation of Section 1408 of the Administrative Code, now
Section 3511 of the Tariff and Customs Code, which provided:

“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.”

Interpreting said provision of law in said case, the Court
explained:

“x x x 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:

‘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.’
x x x” (Underscoring
supplied).

It can, therefore, be safely deduced that in said case this Court
really intended to hold that the
collector’s liability was personal in
character.  It bears mention that what
was quoted in the decision of this Court in the case at bar was merely the
syllabus in the report of said Lung case thus giving rise to the seeming
ambiguity, now subject of the present dispute between the parties, which,
however, had shortly thereafter been clarified by the Court.

The aforesaid Lung Chea Kung
Kee & Co. case was decided
on March 6, 1924.  Then, on September 25, 1924, the case of The American
Express Co., Inc. vs. Natividad^[12]
was promulgated wherein that decision in Lung was discussed and
clarified as follows:

“A second type of cases is disclosed by our decision in Lung Chea Kung Kee & Co. vs. Aldanese
and Chua Soco ([1924], 45 Phil., 784). 
There, the merchandise was wrongfully delivered without surrender of the
bill of lading or the execution of a bond. 
The plaintiff accordingly sought to recover the value of the merchandise
from the collector of customs solely, and in this he was successful.  While it has not escaped
our notice that throughout the decision
the modifying word ‘officially‘ is used,
to denominate the liability of the
collector of customs, yet the judgment ultimately rendered was ‘in
favor of the plaintiff and against Vicente Aldanese, as collector of customs‘
(the last clause being undoubtedly merely
descriptive of the personality of the
defendant).  At least in the later
case of Lung Chea Kung Kee
& Co. vs. Wright (R.G. No. 22512), the Insular
Collector of Customs was not permitted to satisfy
the judgment by drawing on Government
funds.” (Underscoring supplied).

It is apparent, therefore, that the law involved, as well as the existing jurisprudence
thereon, intended to hold the collector personally liable in case of a misdelivery of goods. 
And, it is indubitable that the aforesaid cases and the doctrinal rules
therein were before this Court and were necessarily taken into account in the
judgment rendered in the present case.

Our application of the aforesaid pronouncements in American   Express cannot be amendatory of or
repugnant to the decision of the Court in the present case, for the reason that
the interpretation given to the pertinent law in American Express
is an integral clarificatory part of the ruling laid down in the preceding
Lung case.  Hence, when this Court
adopted the doctrine in Lung, it necessarily incorporated therein the
ruling in American Express as a component consideration since, to
repeat, it was necessarily aware of such subsequent decision.

Furthermore, it must not be overlooked that we are here
particularly concerned with the ascertainment of the intendment and
rationalization of the judgment of the Court in this case in the statutory and
jurisprudential ambience in which it was rendered, and not to review or modify
said judgment which was already entered
on June 18, 1985.  Much less should we rule upon what the law or the decision in this case should have
been.  If, as has been suggested, Section
3511 of the Tariff and Customs Code is already irrelevant to present
conditions, that is a matter to be addressed to
the legislature.

3. In Lung Chea Kung
Kee & Co.
vs. Wright,^[13]
we gave the following rationale for holding said Collector of Customs personally
liable in case there is a misdelivery of goods:

“x x x
There is no judgment against the Government. 
In common with other governments, the government of the Philippine
Islands is not liable for damages for the negligent acts of its regular
officials and employees in the performance of their ordinary functions.  (Merritt vs. Government of the Philippine Islands,
34 Phil., 311).  The fund against which the warrant in this case is drawn is
not the property of the Collector of Customs; it is a public fund and in
the absence of specific statutory provision to the contrary, can only be used for the satisfaction of
obligations of the Government.  x x x“

WHEREFORE, former Collector of Customs Jose T. Viduya
is hereby DECLARED
personally liable to herein private respondents for the amount stated in
the writ of execution issued by the trial court.  The motion to cite for contempt is DENIED.

SO ORDERED.

Melencio-Herrera, (Chairman), Paras, Padilla, and Sarmiento, JJ., concur.

^[1] Rollo, 94-96.

^[2] Ibid., 97.

^[3] Ibid., 98-109.

^[4] Ibid.,
119.

^[5] Ibid.,
120.

^[6] Ibid.,
128-141.

^[7] Ibid.,
144.

^[8] Ibid.,
108-109; 140-141.

^[9] Ibid.,
185-186, 188.

^[10] Ibid., 196-221.

^[11] 45 Phil. 784 (1924).

^[12] 46 Phil. 207 (1924).  The decision in Lung Chea
Kung Kee & Co. vs. Aldanese, et al. was penned by Johns,
J., with Araullo, C.J., Johnson,
Street, Avanceña, Ostrand,
and Romualdez, JJ., concurring and Malcolm, J., dissenting.  The ponente
in The American Express Co., Inc. vs. Natividad
was Malcolm, J., with whom concurred Johnson, Street, Avanceña, Villamor, Ostrand, and Romualdez, JJ.

^[13]
46 Phil. 44, 47 (1924).