G.R. No. L-21971 September 5, 1975
THE HON. CORNELIO BALMACEDA, in his capacity as Secretary of Commerce & Industry and Chairman, Producers Incentive Board, petitioner-appellant, vs. COROMINAS & COMPANY, INC., respondent-appellee.

FACTS

Respondent Corominas & Company, Inc. was issued Barter Permit No. 1604-Spl. in 1959 under Republic Act No. 1410 (the “No Dollar Import” law), authorizing it to export corn to Japan and import commodities of equivalent value. The permit was subject to the Consolidated Rules and Regulations, which stipulated that non-essential items could not exceed 10% of the total import value. After exporting the corn, the Japanese buyer faced remittance issues and proposed to pay the balance via commodity shipments. The Producers Incentive Board, through a series of letters, confirmed the classification and price quotations for the specific commodities Corominas proposed to import under the permit. Relying on these confirmations, Corominas proceeded with the importation.
However, the Board later refused to issue release certificates, asserting that the shipments exceeded the 10% cap for non-essential commodities. Corominas filed a complaint for mandatory injunction. The Court of First Instance of Manila ruled in favor of Corominas, ordering the issuance of release certificates. The Court of Appeals affirmed this decision. The Secretary of Commerce and Industry appealed to the Supreme Court.

ISSUE

Whether the government, through the Producers Incentive Board, is estopped from denying the legality of the importation after its agents confirmed the commodity classifications, thereby leading Corominas to complete the import transaction.

RULING

The Supreme Court reversed the lower courts’ decisions. The Court held that the doctrine of estoppel does not apply to the government when it is exercising its sovereign or governmental powers. The authority to regulate imports under RA 1410 and its implementing rules is a governmental function aimed at protecting the national economy. The confirmatory letters issued by Board members were merely administrative acts verifying price and classification details; they did not constitute a waiver of the statutory 10% limitation on non-essentials, nor could they amend the law or its implementing regulations. The government cannot be bound by the unauthorized or erroneous acts of its agents that contravene public policy or law. Consequently, Corominas’s importation exceeding the 10% non-essential cap was declared illegal and subject to confiscation. The bond posted by Corominas was ordered forfeited to the extent of the value of the excess non-essential items. The Court emphasized that allowing estoppel in such cases would permit administrative officers to alter legislative policy, which is impermissible.