Commissioner of Customs v.

Eastern Sea Trading

Ponente: Concepcion, J.

Topic: Executive Branch – Foreign Affairs

SUMMARY

Eastern Sea Trading’s shipments were seized by the government as per the direction of the
Commissioner of Customs. After seeking relief from the Court of Tax Appeals, they questioned the
implementing authority, EO 328, of the circulars which they supposedly breached. They questioned the
EO as a treaty which had no senate concurrence. The Court ruled that the EO is actually an executive
agreement which needs no concurrence.

FACTS:

 Eastern Sea Trading was the consignee of several shipments of onion and garlic
o Arrived at the Port of Manila from Aug. 25-Sept. 7, 1954
o Came from Japan and Hong Kong
 None of the shipments had certificate required by Central Bank (CB) Circular Nos. 44 and 45 for
the release
 The goods imported were seized and subjected to forfeiture proceedings for violating Sec.
1363(f) of Revised Administrative Code in relation to the CB circulars
 Collector of Customs of Manila rendered a decision on Sept. 4, 1956
o Declared said goods are forfeited to the government
 On appeal taken by the consignee, the decision was affirmed by the Commissioner of Customs
on December 27, 1956
 However, the Court of Tax Appeals reversed the decision of the Commissioner after the
consignee also sought review
o CTA believed that the CB has no authority to regulate transactions not involving
foreign exchange because the shipments are of “no-dollar imports” therefore do not
involve foreign exchange
o The seizure cannot be justified under EO No. 328 because it seeks to implement an
executive agreement, extending the effectivity of our Trade and Financial Agreements
with Japan, which it believed to be dubious in validity
 EO 328 provides that no commodity may be exported to or imported from
Occupied Japan without an export or import license from the CB or the Import
Control Administration
 Basically, it is the implementing law of the Trades and Financial Agreements
entered into by Japan and the Philippines
o CTA also entertained doubts on the legality of the executive agreement by EO 328
because “the senate did not concur in the making of the agreement” which is provided
for in Art VII Sec 10(7) of the 1935 Constitution
ISSUES

WON EO 328 is invalid because it was not concurred by the senate?

 Held – NO
 EO 328 is an executive agreement, not a treaty and only the latter requires senate concurrence
 The right of Executive to enter into binding agreements without necessity of senate concurrence
has been confirmed by long usage. The validity sought has never been seriously questioned by
courts
 Francis B. Sayre in The Constitutionality of Trade Agreement Acts (no need to copy everything)
o Agreements concluded by the President which fall short of treaties are commonly
referred to as executive agreements and are no less common in our scheme of
government than are the more formal instruments — treaties and conventions. They
sometimes take the form of exchanges of notes and at other times that of more formal
documents denominated "agreements" time or "protocols". The point where ordinary
correspondence between this and other governments ends and agreements — whether
denominated executive agreements or exchanges of notes or otherwise — begin, may
sometimes be difficult of ready ascertainment. It would be useless to undertake to
discuss here the large variety of executive agreements as such, concluded from time to
time. Hundreds of executive agreements, other than those entered into under the
trade-agreements act, have been negotiated with foreign governments. . . . It would
seem to be sufficient, in order to show that the trade agreements under the act of 1934
are not anomalous in character, that they are not treaties, and that they have abundant
precedent in our history, to refer to certain classes of agreements heretofore entered
into by the Executive without the approval of the Senate. They cover such subjects as
the inspection of vessels, navigation dues, income tax on shipping profits, the admission
of civil aircraft, customs matters, and commercial relations generally, international
claims, postal matters, the registration of trademarks and copyrights, etcetera. Some of
them were concluded not by specific congressional authorization but in conformity with
policies declared in acts of Congress with respect to the general subject matter, such as
tariff acts; while still others, particularly those with respect of the settlement of claims
against foreign governments, were concluded independently of any legislation."
 The validity of the executive agreement is patent
o Parity Rights provided for in the Ordinance Appended to Constitution were the subject
of an executive agreement made likewise without senate concurrence

WON the respondent-appellee is required to have an import license despite the Import Control
Commission being no longer in existence

 Held – YES
 The authority to issue the licenses was not vested exclusively upon the Import Control
Commission or Administration (ICA)
 EO 328 provided for export or import licenses from the CB or the ICA or ICC
 Upon the abolition of ICC, the duty to provide means and ways for the accomplishment of the
objectives had merely to be discharged by the Monetary Board and Central Bank
DISPOSITIVE

 Court affirms the decision of the Commissioner of Customs

 Costs against respondents, Eastern Sea Trading