G.R. No. L-15509. March 31, 1962.
Sebastian Sarmiento, et al., petitioners-appellees, vs. Hon. Eleuterio Capapas, as Commissioner of Customs, et al., respondents-appellants, Gregorio Gamulo, et al., intervenors-appellees.

FACTS

Petitioners, tobacco growers, sought to nullify Barter Permit No. BT-1380 (SP) issued to the Philippine Tobacco Flue-Curing and Redrying Corporation (PTFRC) for importing Virginia leaf tobacco. They alleged the permit violated Republic Acts Nos. 1194 and 1410, as there was a domestic surplus of such tobacco, making the importation unnecessary and illegal. The original petition was for prohibition with injunction to prevent customs officials from releasing the shipments. However, petitioners amended their pleading to convert the action into one for declaratory relief, seeking a judicial declaration on the permit’s validity and the applicability of the cited laws.
Respondents, including the Commissioner of Customs and PTFRC officials, opposed the action. They argued that declaratory relief was improper because a breach of the law had already occurred upon the permit’s issuance and the subsequent importations. They also contended that the issues had become moot, as the permit had expired, the imported tobacco had been released to the consignee, and had been used in manufacturing during the pendency of the case.

ISSUE

Whether the action for declaratory relief was proper under the circumstances.

RULING

The Supreme Court ruled that the action for declaratory relief was improper and dismissed the petition. The Court explained that an action for declaratory relief is intended to secure an authoritative statement of the parties’ rights before any breach or violation occurs, to guide future conduct and prevent litigation. It is not a remedy for adjudicating past or present breaches of law or contract. In this case, the alleged violation—the issuance of the barter permit and the importations under it—had already transpired before the suit was filed. The proper remedy would have been an ordinary action, such as for injunction or forfeiture, not a declaratory judgment.
The Court further held that allowing declaratory relief after a breach would violate the rule against multiplicity of suits. A judgment in such a declaratory action would not preclude a subsequent separate action for the actual confiscation of the goods for violating the law, leading to two cases instead of one resolving all issues. The trial court’s decision, which not only declared the permit invalid but also ordered the forfeiture of the importations, confirmed this procedural misstep, as the forfeiture order exceeded the scope of a declaratory judgment. Finally, the Court noted the case had become moot and academic. The barter permit had long expired, all shipments had been delivered and consumed in manufacturing, and no preliminary injunction was issued to preserve the status quo. A declaratory judgment would thus serve no practical purpose. The appealed decision was set aside.