Title
Alliance Sales Co., Inc. vs. Court of Appeals
Case
G.R. No. L-47694
Decision Date
Oct 23, 1980
Petitioner contested storage fees for cargo transferred to a bonded warehouse under the "flexible transfer system." SC ruled free storage period began after discharge completion, exempting petitioner from fees.
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Case Digest (G.R. No. L-47694)

Facts:

Importation and Discharge of Cargo

  • In October 1963, Alliance Sales Co., Inc. (petitioner) ordered 300 drums of solid caustic soda from Dow Chemical International, Inc. in San Francisco, California.
  • The cargo was unloaded at the Port of Manila from the SS Philippine Jose Abad Santos on November 28, 1963, and discharge was completed on December 10, 1963.

Transfer to Bonded Warehouse

  • On November 30, 1963, the cargo was transferred from the Bureau of Customs sheds to a bonded warehouse owned by Rafael Sumadchat in Pasig, Rizal, under the "flexible transfer system."
  • The petitioner paid P918.03 to the Bureau of Customs for hauling services without protest.

Delivery Demand and Refusal

  • On December 14, 1963, after paying duties and taxes, the Bureau of Customs issued a delivery permit.
  • On December 16, 1963, the petitioner demanded delivery of the cargo from Sumadchat, but he refused unless the petitioner paid P2,516.16 as storage fees and other charges.
  • The petitioner refused to pay, leading to a dispute.

Legal Proceedings

  • On January 8, 1964, the petitioner filed a replevin case against Sumadchat in the Court of First Instance of Rizal, seeking damages.
  • The court granted the writ of replevin, but the cargo was only delivered to the petitioner on May 11-12, 1964.
  • Sumadchat filed a counterclaim for storage fees and a third-party complaint against the Collector of Customs.

Lower Court and Court of Appeals Decisions

  • The trial court dismissed the complaint and third-party complaint, ordering the petitioner to pay Sumadchat P2,516.16 as of December 16, 1963, plus daily storage fees until May 11, 1964.
  • The Court of Appeals modified the decision, holding that the petitioner was liable for storage fees from December 6, 1963, but eliminated the P2,516.16 charge and attorney's fees.

Issue:

  1. Whether the "flexible transfer system" of cargoes to bonded warehouses is lawful and enforceable without the importer's consent.
  2. Whether the six-working-day free storage period should be computed from the date of actual discharge (November 28, 1963) or the completion of discharge of all cargoes (December 10, 1963).
  3. Whether the petitioner is liable for storage fees and other charges claimed by Sumadchat.
  4. Whether the petitioner is entitled to damages for Sumadchat's refusal to deliver the cargo.

Ruling:

  • The Supreme Court reversed the decisions of the trial court and the Court of Appeals.
  • The Court held that the six-working-day free storage period should be computed from December 10, 1963 (the completion of discharge of all cargoes), not November 28, 1963.
  • The petitioner is not liable for storage fees from December 18, 1963, onwards, as the free storage period had expired by then.
  • The Court found no basis for the petitioner to pay storage fees or other charges to Sumadchat.
  • The petitioner's claim for damages was not addressed, as it raised factual issues beyond the scope of the appeal.

Ratio:

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