Cebu United Enterprises v. Gallofin
REITERATIONFacts
The Antecedents: Cebu United Enterprise (plaintiff-appellee) instituted a suit for mandatory injunction against Jose Gallofin, Collector of Customs, Cebu Port (defendant-appellant), to compel the release of two imported shipments of 7,834 bales of over issue newspapers. The importation was made under Import Control Commission License No. 1225, valid on a no-dollar remittance basis up to $118,000.00. The plaintiff posted a P60,000.00 bond, and the goods were released after the advance sales tax was paid. Procedural History: The defendant refused to release the goods, contending that although the bills of lading were dated December 17, 1953 (one day before the license expired), the vessels carrying the merchandise departed on January 12 and January 16, 1954, respectively. He argued that under Central Bank regulations, shipments must have left the port of origin within the license validity period. The Court of First Instance ruled in favor of the plaintiff, making the preliminary mandatory injunction permanent. The defendant appealed to the Court of Appeals, which certified the case to the Supreme Court due to the purely legal question involved. The Petition: The defendant-appellant appealed the decision of the lower court, which held that the validity of the import license should be counted up to the date the bills of lading were issued (December 17, 1953), not the date the vessels departed.
Issue(s)
Whether the "date of shipment" for the purpose of an import license refers to the date the goods are placed on board the vessel (evidenced by the bill of lading) or the date the vessel departs from the port of origin. Whether the Central Bank regulations requiring goods to have "left the port of origin" within the license validity period are applicable to the import license in question.
Ruling
The Supreme Court affirmed the decision of the lower court, dismissing the appeal. The Court ruled that the date of shipment is the date the goods are placed on board the vessel, as evidenced by the bill of lading, and that the Central Bank regulations were not applicable to the license in question.
Ratio Decidendi
On the "date of shipment" for import license validity: The Court held that the legal connotation of "shipped" in the context of the import license refers to the date the goods are placed on board the vessel. This is typically evidenced by the issuance of the bill of lading, which presupposes delivery of the cargo to the carrier for immediate shipment. The Court cited its ruling in U.S. Tobacco Corporation vs. Rufino Luna, et al., stating that the date of importation is the date of shipment. It further reasoned that it is outside the shipper's control to fix vessel departure dates, and once goods are on board and a bill of lading is issued, they are considered in transit in contemplation of law. The bills of lading in this case were dated December 17, 1953, which was within the license's validity period. On the applicability of Central Bank regulations: The Court found the defendant's reliance on Central Bank regulations, which required shipments to have "left the port of origin" within the license validity period, to be unmaintainable. These regulations came into effect on July 1, 1953, after the plaintiff's license was issued. Therefore, they could not be read into the terms of the existing license. Furthermore, the defendant had expressly admitted in his answer that the date on the bills of lading (December 17, 1953) was one day before the expiration of the import license's validity, and his sole contention below was the legal meaning of "shipped."
Main Doctrine
The date of shipment, for the purpose of determining the validity of an import license, is the date the goods are placed on board the vessel, as evidenced by the bill of lading, not necessarily the date the vessel departs from the port of origin.