G.R. No. L-27948 and L-28001-11 July 31, 1969
LA PERLA CIGAR & CIGARETTE FACTORY, ASSANDAS, BATAAN CIGAR & CIGARETTE FACTORY, LA SUERTE CIGAR & CIGARETTE FACTORY, LA PERLA CIGAR & CIGARETTE MFG. CO., LA DICHA LA PAZ Y BUEN VIAJE, PHILIPPINE AMERICAN CIGAR & CIGARETTE MFG. CO., PIONEER TOBACCO CORPORATION, STANDARD CIGARETTE MFG. CO., OLGA FREIGHT & CONSTRUCTION SERVICE, INTERNATIONAL TOBACCO CO., INC., PIONEER TOBACCO CO., INC., petitioners, vs. ELEUTERIO CAPAPAS, as Commissioner of Customs and PEDRO PACIS, as Acting Collector of Customs, respondents.

FACTS

The petitioners, various cigar and cigarette factories and companies, filed protests with then Collector of Customs Isidro C. Ang-angco against the collection of (1) the 25% ordinary customs duty on imported United States articles under the Laurel-Langley Agreement, and (2) the incremental duty of 30% imposed under Executive Order No. 150 of President Magsaysay. They contended they were liable only under Section 12 of the Tariff Act of 1909 as amended. Collector Ang-angco, in a decision dated October 15, 1959, sustained the petitioners’ stand, disregarding both the Laurel-Langley Agreement and Executive Order No. 150, and declared Commonwealth Act No. 733 (which implemented the Bell Trade Agreement) unconstitutional for embracing more than one subject. He ruled that the applicable law was Section 12 of the Tariff Act of 1909, as amended, until the implementation of the Laurel-Langley Agreement by Republic Act No. 1937 on July 1, 1957. Petitioners were notified of this decision on February 12, 1960. Subsequently, Acting Collector of Customs Pedro Pacis, upon assuming office, issued an order on March 7, 1960, declaring his predecessor’s decision null and void and granted the government’s consolidated motion for reconsideration. The petitioners’ motion for immediate execution of the Ang-angco decision was denied. Respondent Commissioner of Customs Eleuterio Capapas upheld respondent Pacis. The Court of Tax Appeals similarly dismissed the petitioners’ appeals, leading to this petition for review.

ISSUE

Whether the then Collector of Customs Ang-angco acted correctly in refusing to collect the duties imposed by the Laurel-Langley Agreement and Executive Order No. 150, and whether his decision was executory and binding upon his successor.

RULING

The Supreme Court sustained the decision of the Court of Tax Appeals. It held that Collector Ang-angco had no authority to refuse to collect the duties mandated by the Laurel-Langley Agreement and Executive Order No. 150. His obligation was to faithfully execute existing laws, executive agreements, and executive orders. The Court emphasized the constitutional duty of the President, and by extension all subordinate executive officials, to take care that the laws be faithfully executed. Therefore, Ang-angco’s decision, which was a flagrant omission to apply controlling legal provisions, was null and void. Acting Collector Pacis was not bound by his predecessor’s erroneous ruling and correctly remedied the omission. The Court further ruled that the Ang-angco decision was not executory as it was subject to appeal and reconsideration. The decision of the Court of Tax Appeals dismissing all appeals was affirmed.