Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. L!""#$ %u&ust #' ()*$
P+ILIPPINE TO,%CCO -LUE CURING %ND REDR.ING CORPOR%TION'
petitione/appellee'
0s.
RI1%LINO P%,LO' Di/ecto/ of the ,u/eau of Co22e/ce' /espon3entappellant.
Manuel O. Chan fo/ petitione/appellee.
Office of the Solicito/ Gene/al E3ilbe/to ,a/ot an3 Solicito/ Ca2ilo D. 4uiason fo/
/espon3entappellant.

CONCEPCION 5R.' 5.6
%ppeal f/o2 a 3ecision of the Cou/t of -i/st Instance of Manila' ce/tifie3 to this Cou/t b7
the Cou/t of %ppeals' pu/suant to pa/a&/aph 8 9$: of Section (* of the 5u3icia/7 %ct' as
a2en3e3 b7 Section ! 9$: of Republic %ct No. !8(8' the a2ount in0ol0e3 bein&
P!;')"$'$*).<8.
The /eco/3 3iscloses that b7 Me2o/an3u2 %&/ee2ent 3ate3 -eb/ua/7 !' ()$)' ( the
Philippine Tobacco -lue Cu/in& an3 Re3/7in& Co/po/ation' he/einafte/ /efe//e3 to as the
PT-CRC' a 3o2estic co/po/ation en&a&e3 in flue cu/in& an3 /e3/7in& of tobacco lea0es'
an3 the %&/icultu/al C/e3it an3 Coope/ati0e -inancin& %32inist/ation' %CC-% fo/ sho/t'
a&/ee3 that the PT-CRC =shall /e3/7' pac> an3 >eep in sto/a&e all Vi/&inia leaf tobacco
3eli0e/e3 b7 %CC-% to the CORPOR%TION?S /e3/7in& an3 /epac>in& plant' the sa2e to
be 3one acco/3in& to stan3a/3 p/oce3u/e an3 usa&es of the t/a3e' inclu3in& fu2i&ation of
sto/e3 tobacco to p/e0ent 3a2a&e b7 pests.= %CC-%' in tu/n' a&/ee3 to pa7 the PT-CRC
ei&hteen 9P".(#: Centa0os pe/ >ilo fo/ the /e3/7in& an3 pac>in& of the tobacco an3 a
2onthl7 @a/ehousin& fee of T@o Pesos an3 T@ent7 Centa0os 9P!.!": pe/ ho&shea3. To
&ua/antee the faithful pe/fo/2ance of the a&/ee2ent' an3 to ans@e/ fo/ an7 3a2a&e that
2a7 be suffe/e3 b7 the %CC-% @hile the tobacco is in the plant o/ @a/ehouse of the
co/po/ation' the PT-CRC a&/ee3 to file a bon3 in the a2ount of P!""'""".""' @hich
a2ount =2a7 be inc/ease3 at the option of the %CC-% as the a2ount an3 0alue of the
tobacco 3eli0e/e3 to the plant o/ @a/ehouse of the co/po/ation inc/eases. This a&/ee2ent
shall be in effect fo/ a pe/io3 of th/ee 98: 7ea/s countin& f/o2 Ma/ch (' ()$)' an3
eAten3ible f/o2 7ea/ to 7ea/ the/eafte/' upon 2utual a&/ee2ent of the pa/ties.=
On -eb/ua/7 !<' ()<"' the Di/ecto/ of Co22e/ce' th/ou&h the ,u/eau?s Chief
Co22ission %&ent' /eBui/e3 the PT-CRC to file an a33itional bon3 in the a2ount of
P(('"88'88;.""' late/ inc/ease3 to P(!'$<<'<<*.!!' pu/suant to the p/o0isions of the
Gene/al ,on3e3 Ca/ehouse %ct' since the PT-CRC' upon in0esti&ation' ha3 alle&e3l7
/ecei0e3 fo/ sto/a&e $"'""" ho&shea3s of Vi/&inia leaf tobacco6 0alue3 at P;"'"""'"""
an3 thei/ /eco/3s sho@ that the sai3 co/po/ation is onl7 autho/iDe3 to /ecei0e fo/ sto/a&e
at an7 one ti2e not 2o/e than P!'8""'"""."" @o/th of tobacco' eBui0alent to ;'"""
ho&shea3s. !
In a lette/ 3ate3 Ma/ch (!' ()<"' the PT-CRC' th/ou&h its le&al counsel' info/2e3 the
Di/ecto/ of Co22e/ce that the sai3 co/po/ation @as not en&a&e3 in @a/ehousin& an3
sto/a&e an3' the/efo/e' not subEect to the p/o0isions of the Gene/al ,on3e3 Ca/ehouse
%ct. 8 This contention @as /eEecte3 b7 the Di/ecto/ of Co22e/ce an3 the PT-CRC
appeale3 to the Sec/eta/7 of Co22e/ce an3 In3ust/7. ; On Ma7 (!' ()<"' the Sec/eta/7
of Co22e/ce an3 In3ust/7 sent a lette/ to the PT-CRC /eEectin& its appeal an3 enEoinin&
it to file the bon3 /eBui/e3 b7 the Di/ecto/ of Co22e/ce. $
In the 2eanti2e' the PT-CRC an3 the %CC-% ente/e3 into a ne@ Me2o/an3u2
%&/ee2ent' < 3ate3 Ma7 ()' ()<"' b7 0i/tue of @hich the %CC-% a&/ee3 to 3eli0e/ *$F
of its tobacco to the p/e2ises of the PT-CRC' fo/ the latte/ to /en3e/ an3 pe/fo/2 all the
se/0ices /eBui/e3 fo/ the cu/in& an3 t/eat2ent of sai3 tobacco until the7 a/e /ea37 fo/ the
2anufactu/e of ci&a/ettes at the stipulate3 fee of P!.!" pe/ ho&shea3. %s secu/it7 fo/ the
faithful pe/fo/2ance of the un3e/ta>in&' the PT-CRC shall post an3 2aintain a su/et7
bon3 in the a2ount of P*""'"""."" in fa0o/ of the %CC-%. The Me2o/an3u2
%&/ee2ent ente/e3 into b7 an3 bet@een the pa/ties on -eb/ua/7 !' ()$) * @as eAp/essl7
3ecla/e3 eAtin&uishe3' te/2inate3' 0oi3e3' an3 supe/se3e3 b7 this ne@ Me2o/an3u2
%&/ee2ent.
On 5une (' ()<"' the PT-CRC /ecei0e3 a lette/ f/o2 the Di/ecto/ of Co22e/ce /eBui/in&
it to file an a33itional bon3 of P!;')"$'$*).<8 @ithin t@o 9!: 3a7s f/o2 /eceipt the/eof. #
Che/eupon' the PT-CRC file3 @ith the Cou/t of -i/st Instance of Manila' a petition fo/
p/ohibition @ith a @/it of p/eli2ina/7 inEunction' a&ainst the Di/ecto/ of Co22e/ce'
clai2in& that in /eBui/in& it to file an a33itional bon3' the Di/ecto/ of Co22e/ce acte3
@ith &/a0e abuse of 3isc/etion an3 in 3is/e&a/3 of the la@ an3 his Eu/is3iction' @hich act
@oul3 @o/> inEustice an3 cause i//epa/able inEu/7 to the sai3 co/po/ation.
%fte/ t/ial' Eu3&2ent @as /en3e/e3 9a: 3ecla/in& that the petitione/ PT-CRC =is not
en&a&e3 in the business of @a/ehousin& @ithin the 2eanin& of the Gene/al ,on3e3
Ca/ehouse La@ insofa/ as the %CC-% tobacco co0e/e3 b7 the cont/act of Ma7 ()' ()<"
is conce/ne3' an3 shoul3 not be obli&e3 to file the bon3 3e2an3e3 b7 the /espon3entG 9b:
3ecla/in& the o/3e/ of the Di/ecto/ of Co22e/ce /eBui/in& the petitione/ to file a bon3 of
P!;')"$'$*).<8 null an3 0oi3G an3 9c: 2a>in& the @/it of p/eli2ina/7 inEunction
pe/2anent.= +ence' this appeal.
The focal issue is @hethe/ o/ not the petitione/appellee shoul3 Post an a33itional bon3'
as /eBui/e3 b7 the Di/ecto/ of Co22e/ce' pu/suant to the p/o0isions of sections ; an3 $
of %ct No. 8#)8' as a2en3e3' othe/@ise >no@n as the Gene/al ,on3e3 Ca/ehouse %ct. )
The petitione/appellee clai2s that the cont/act ente/e3 into bet@een the PT-CRC an3 the
%CC-% is one of se/0ices an3' the/efo/e' not @ithin the pu/0ie@ of the Gene/al ,on3e3
Ca/ehouse %ct. The Di/ecto/ of Co22e/ce' upon the othe/ han3' 2aintains that the
petitione/appellee is a @a/ehouse2an an3 shoul3 co2pl7 @ith the p/o0isions of the
Gene/al Ca/ehouse %ct b7 puttin& up an a33itional bon3.
%s state3 in Section ; of the Gene/al ,on3e3 Ca/ehouse %ct' the =bon3 shall be so
con3itione3 as to /espon3 fo/ the 2a/>et 0alue of the /ice actuall7 3eli0e/e3 an3 /ecei0e3
at an7 ti2e the @a/ehouse2an is unable to /etu/n the /ice (" o/ to pa7 its 0alue.= The
2ain intention of the la@2a>e/' in /eBui/in& the 2ille/s to post the necessa/7 bon3' =is to
&i0e p/otection to the o@ne/ of the co22o3it7 a&ainst possible abuses 9an3 @e 2i&ht a33
ne&li&ence: of the pe/son to @ho2 the ph7sical cont/ol of his p/ope/ties is 3eli0e/e3.= ((
In the case at ba/' the %CC-% ha3 insu/e3 its tobacco @ith the GSIS' (! an3 the PT-CRC
ha3 been /eBui/e3 b7 the %CC-% to file a pe/fo/2ance bon3 in the a2ount of
P*""'""".""' @hich a2ount 2a7 be inc/ease3 at the option of the %CC-% as the a2ount
an3 0alue of the tobacco 3eli0e/e3 to the plant o/ @a/ehouse of the petitione/appellee
inc/eases' con3itione3 upon the faithful pe/fo/2ance of the a&/ee2ent an3 to ans@e/ fo/
an7 3a2a&e that 2a7 be suffe/e3 b7 the %CC-% @hile the tobacco is in the plant o/
@a/ehouse of the petitione/appellee. It is the/efo/e e0i3ent that the %CC-% is a2pl7
p/otecte3. It @oul3 be un/easonable an3 opp/essi0e to co2pel the petitione/appellee to
fu/the/ put up a bon3 an3 subEect it to the unnecessa/7 bu/3en of the p/e2iu2 inci3ent to
such bon3.
The %CC-% is no@ 3efunct an3 its functions ha0e been ta>en o0e/ b7 the %&/icultu/al
C/e3it %32inist/ation. This cont/o0e/s7 in0ol0es the >eepin& of tobacco' ha/0este3 in
()$)' fo/ cu/in& an3 a&ein& b7 the petitione/appellee' @hich @as cont/acte3 2o/e than
fifteen 9($: 7ea/s a&o. Citnesses fo/ the liti&ants testifie3 that the a&ein& p/ocess ta>es
f/o2 (# to !; 2onths befo/e the tobacco is sol3 to the ci&a/ette 2anufactu/e/s. -o/ su/e'
the co22o3it7 >ept in the p/e2ises of the petitione/appellee fo/ cu/in& an3 a&ein& ha0e
al/ea37 been @ith3/a@n an3 3ispose3 of b7 the %CC-%' in @hich case the filin& of an
a33itional bon3 b7 the petitione/appellee ceases to be cont/o0e/sial.
UPON T+E -OREGOING' the appeal shoul3 be' as it is he/eb7' DISMISSED' @ithout
costs.
SO ORDERED.
Ma>alintal' C.5.' ,a//e3o' %Buino an3 Ma/tin' 55.' concu/.

-ootnotes
( EAhibit 8.
! EAhibit (.
8 %nneA C of the petition.
; %nneA E of the petition.
$ Pa/a&/aph (! of the Petition.
< EAhibit D.
* EAhibit 8.
# %nneA - of the petition.
) =Sec. ;. %n7 pe/son appl7in& fo/ a license to en&a&e in the business of /ecei0in& /ice
fo/ sto/a&e shall set fo/th in the application the place o/ places @he/e the business an3 the
@a/ehouse a/e to be establishe3 o/ locate3 an3 the 2aAi2u2 Buantit7 of /ice to be
/ecei0e3. The application shall be acco2panie3 b7 a cash bon3 o/ bon3 secu/e3 b7 /eal
estate o/ si&ne3 b7 a 3ul7 autho/iDe3 bon3in& co2pan7' the a2ount of @hich shall be
fiAe3 b7 the Di/ecto/ of Co22e/ce an3 In3ust/7 at not less than thi/t7th/ee an3 onethi/3
pe/ cent of the 2a/>et 0alue of the 2aAi2u2 Buantit7 of /ice to be /ecei0e. Sai3 bon3
shall be so con3itione3 as to /espon3 fo/ the 2a/>et 0alue of the /ice actuall7 3eli0e/e3
an3 /ecei0e3 at an7 ti2e the @a/ehouse2an is unable to /etu/n the /ice o/ the pa7 its
0alue. The bon3 shall be app/o0e3 b7 the Di/ecto/ of Co22e/ce an3 In3ust/7 befo/e a
license shall issue' an3 it shall be the 3ut7 of sai3 Di/ecto/' befo/e issuin& a license un3e/
this %ct' to satisf7 hi2self conce/nin& the sufficienc7 of such bon3' an3 to 3ete/2ine
@hethe/ the @a/ehouse fo/ @hich such license is applie3 fo/ is suitable fo/ the p/ope/
sto/a&e of /ice.
=Sec. $. Chene0e/ the Di/ecto/ of the ,u/eau of Co22e/ce an3 In3ust/7 shall 3ete/2ine
that a bon3 app/o0e3 b7 hi2' is' o/ fo/ an7 cause' has beco2e insufficient' he 2a7 /eBui/e
an a33itional bon3 o/ bon3s to be &i0en b7 the @a/ehouse2an conce/ne3' confo/2in&
@ith the /eBui/e2ents of the p/ece3in& section an3 unless the sa2e be &i0en @ithin the
ti2e fiAe3 b7 a @/itten 3e2an3 the/efo/ the license of such @a/ehouse2an 2a7 be
suspen3e3 o/ /e0o>e3.
(" /eplace3 b7 the te/2 =co22o3it7= b7 Republic %ct No. !;*.
(( V3a. 3e Li2Euco 0s. Di/ecto/ of Co22e/ce' G.R. No. L(*<;"' No0. !)' ()<$G ($
SCR% 8!<.
(! p. 8#' tsn' Session of 5ul7 )' ()<".