Case Digest (G.R. No. 74004)
Case Digest (G.R. No. 74004)
Facts:
Philippine Tobacco Flue Curing and Redrying Corporation v. Rizalino Pablo, G.R. No. L-20085, August 08, 1975, Supreme Court Second Division, Makalintal, C.J., writing for the Court. The petitioner, Philippine Tobacco Flue Curing and Redrying Corporation (PTFCRC), is a domestic corporation engaged in flue curing and redrying of tobacco leaves; the respondent is Rizalino Pablo, Director of the Bureau of Commerce (sometimes referred to as Director of Commerce). The controversy arises from the Director's demand that PTFCRC file an additional bond under the General Bonded Warehouse Act (Act No. 3893, as amended).By a Memorandum Agreement dated February 2, 1959, PTFCRC agreed to redry, pack and keep in storage Virginia leaf tobacco delivered by the Agricultural Credit and Cooperative Financing Administration (ACCFA), at stipulated fees; PTFCRC agreed to file a bond of P200,000 (with an option for ACCFA to increase it) to guarantee faithful performance. Upon investigation, the Director of Commerce concluded that PTFCRC had received for storage a much larger quantity/value of tobacco than its license authorized and required an additional bond of initially P11,033,334.00 (later increased to P12,566,667.22) under the General Bonded Warehouse Act.
PTFCRC protested by letter (March 12, 1960) asserting it was not engaged in warehousing and was thus not subject to Act No. 3893; the Director rejected the protest and the Secretary of Commerce and Industry denied PTFCRC's appeal (May 12, 1960). Meanwhile the parties executed a new Memorandum Agreement dated May 19, 1960, under which ACCFA would deliver 75% of its tobacco to PTFCRC for curing and treatment for specified fees, and PTFCRC agreed to post a performance surety bond of P700,000 in favor of ACCFA; the May 19 instrument expressly superseded the February 2, 1959 agreement.
On June 1, 1960, the Director again required PTFCRC to file an additional bond in the amount of P24,905,579.63. PTFCRC filed a petition for prohibition with a writ of preliminary injunction in the Court of First Instance of Manila, alleging grave abuse of discretion by the Director in demanding the additional bond. After trial the CFI rendered judgment (a) declaring PTFCRC not engaged in the business of warehousing insofar as the ACCFA tobacco under the May 19, 1960 agreement was concerned, (b) declaring the Director's order requiring the P24,905,579.63 bond null and void, and (c) making the writ of preliminary injunction permanent. The matter was presented to the Supreme Court by certification from the Court of Appeals pursuant to paragraph 3(5) of Section 17 of the Judiciary Act, as amended (Republic Act No. 2313), the amount involved being P24,905,579.63.
Issues:
- Did the Director of Commerce act with grave abuse of discretion in requiring PTFCRC to post an additional bond under Act No. 3893?
- Was PTFCRC engaged in the business of warehousing within the meaning of the General Bonded Warehouse Act (Act No. 3893) with respect to the ACCFA tobacco such that the bond requirement applied?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)