.R. No. L-20085 August 8, 1975
PHILIPPINE TOBACCO FLUE CURING AND REDRYING CORPORATION, petitioner-appellee,
vs.
RIZALINO PABLO, Director of the Bureau of Commerce, respondent-appellant.
FACTS: The Philippine Tobacco Flue Curing and Redrying Corporation, hereinafter referred to as the PTFCRC, and the Agricultural Credit and Cooperative Financing Administration, ACCFA for short, agreed that the PTFCRC "shall redry, pack and keep in storage all Virginia leaf tobacco delivered by ACCFA to the CORPORATION'S redrying and repacking plant, the same to be done according to standard procedure and usages of the trade, including fumigation of stored tobacco to prevent damage by pests."
ACCFA, in turn, agreed to pay the PTFCRC eighteen (P0.18) Centavos per kilo for the redrying and packing of the tobacco and a monthly warehousing fee of Two Pesos and Twenty Centavos (P2.20) per hogshead. To guarantee the faithful performance of the agreement, and to answer for any damage that may be suffered by the ACCFA while the tobacco is in the plant or warehouse of the corporation, the PTFCRC agreed to file a bond in the amount of P200,000.00, which amount "may be increased at the option of the ACCFA as the amount and value of the tobacco delivered to the plant or warehouse of the corporation increases.
On February 26, 1960, the Director of Commerce, through the Bureau's Chief Commission Agent, required the PTFCRC to file an additional bond in the amount of P11,033,334.00, later increased to P12,566,667.22, pursuant to the provisions of the General Bonded Warehouse Act, since the PTFCRC, upon investigation, had allegedly received for storage 50,000 hogsheads of Virginia leaf tobacco: valued at P40,000,000 and their records show that the said corporation is only authorized to receive for storage at any one time not more than P2,300,000.00 worth of tobacco, equivalent to 4,000 hogsheads.
ISSUE: WON the petitioner-appellee should Post an additional bond, as required by the Director of Commerce
HELD: PTFCRC should NOT post an additional bond, as required by the Director of Commerce.
ACCFA had insured its tobacco with the GSIS, 12 and the PTFCRC had been required by the ACCFA to file a performance bond in the amount of P700,000.00, which amount may be increased at the option of the ACCFA as the amount and value of the tobacco delivered to the plant or warehouse of the petitioner-appellee increases, conditioned upon the faithful performance of the agreement and to answer for any damage that may be suffered by the ACCFA while the tobacco is in the plant or warehouse of the petitioner-appellee. It is therefore evident that the ACCFA is amply protected. It would be unreasonable and oppressive to compel the petitioner-appellee to further put up a bond and subject it to the unnecessary burden of the premium incident to such bond.
The ACCFA is now defunct and its functions have been taken over by the Agricultural Credit Administration. This controversy involves the keeping of tobacco, harvested in 1959, for curing and ageing by the petitioner-appellee, which was contracted more than fifteen (15) years ago.
For sure, the commodity kept in the premises of the petitioner-appellee for curing and ageing have already been withdrawn and disposed of by the ACCFA, in which case the filing of an additional bond by the petitioner-appellee ceases to be controversial.
UPON THE FOREGOING, the appeal should be, as it is hereby, DISMISSED, without costs.
