Gonzalo Sy Trading v Central Bank

GONZALO SY, doing business under the name and style of GONZALO SY TRADING, petitioner-appellant, vs. CENTRAL BANK OF THE PHILIPPINES, respondent-appellee (1976; J. Martin; GR No. L-41480) FACTS: Gonzalo Sy Trading (GST) is engaged in the business of importation of fresh fruits. On Sept. 28, 1968, it wrote to the Deputy Governor of the Central Bank (CB) requesting authority to import fresh fruits from Japan on “nodollar” basis in the total amount of US$715,000.00. The Executive Asst. to the Deputy Gov. denied the request, so GST sent another letter to the Monetary Board of the CB requesting for an authority to import on no Letter of Credit basis, or for the issuance of a Special Import Permit for the amount of US$715,000.00 to enable GST to import fresh fruits during the Christmas Season. (NOTE: In GST’s letter, it said that the purpose for the request was so that it could serve its customers better during the Christmas Season for the year 1968.) The Monetary Board issued Resolution No. 2083 approving GST’s request, thus: The Board, by unanimous vote, authorized Gonzalo Sy Trading to import on a no- dollar basis, without letters of credit, fresh fruits from Japan valued at $35000.00, subject to the special time deposit of 100% which shall be held by the bank concerned for a period of 120 days as well as to the normal customs duties and taxes. It is understood that there shall be no commitment on the part of the Central Bank to provide foreign exchange to cover the said importation. GST sent another latter to the then Chairman of the Monetary Board requesting that they be allowed to put up 20% time deposit for 120 days instead of 100%. Such request was denied. GST then made its importations where Prudential Bank acted as the agent for the Central Bank in the issuance of the corresponding release certificates for the entry of goods. By the beginning of June, 1970, the total amount used out of the $350,000.00 Special Import Permit was already $314,142.51, leaving a balance of $35,857.49. As early as Oct. 30, 1969, GST requested for an amendment such that they be allowed to import from other countries other than communist ones. This request was denied by the Deputy Governor stating that the authority granted to them was only for the Christmas Season of 1968, and does not extend to 1969. Two days after or on Nov. 2, 1969, however, the Director of the Foreign Exchange Dept. sent a letter to Prudential Bank allowing the latter to continue issuing release certificates in favor of GST since the grant given to the latter had not yet been exhausted. This, however, was subject to the same terms and conditions provided for by the Central Bank.* (see Ratio) Then, on April 17, 1970, the Assistant to the Governor informed Prudential Bank that the authority granted to GST under MB Resolution No. 2038 was intended only for the Christmas season of 1968 and does not extend through 1969. On May 27, 1970, GST notified the Assistant that the Prudential Bank refused to issue them any release certificate for their importations due to his letter of April 17, 1970. On June 3, 1970, GST sent a follow-up letter to the Assistant reiterating "our request for a reconsideration on the matter and to allow us utilize the balance of our Permit in the amount of $35,857.49." In the same letter, GST advised that "we have shipments coming on June 4th and June 6th respectively which is within the balance of our permit." On June 10, 1970, the Deputy Governor wrote GST that its request cannot be given due course, inviting attention to the basic letter of November 19, 1969, informing it that the Special Import Permit was intended only for the Christmas season of 1968 and does not extend through 1969. Finally in the year 1970, the Collector of Customs issued warrants of seizure and detention against several importations of GST for being violative of Central Bank Circular 239 in relation to Section 2530 (f) of the Tariff and Customs Code. On Sept. 21, 1970, GST instituted before the CFI of Manila a petition for mandamus with damages. Judge Alikpala dismissed the complaint for mandamus with damages and ordered the Collector of Customs to proceed with the seizure proceedings. From this adverse judgment, GST appealed to the CA, but the latter certified the case to the SC as involving only pure questions of law. ISSUE: WON GST’s Special Import Permit had already expired when it made the importations which were seized by the Central Bank RULING: YES, PETITION DENIED. Their permit was only for a limited period  Christmas Season of 1968 and it does not extend up to 1969 and 1970.

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A license or a permit is not a contract between the sovereignty and the licensee, and it is not property in any constitutional sense, hence the non-impairment of contracts doctrine cannot apply.

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A license is in the nature of a special privilege, of a permission or authority to do what is within its terms. It is not absolute, and a license granted by the State is always revocable. The absence of an expiry date does not make the license perpetual.

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The Special Import Permit covers only the Christmas Season of 1968. In the application of GST, it made manifest that the reason for its application was so that it could cope with the demands of its buyers during the Christmas Season of 1968. In effect, it was GST itself which furnished the period for the permit, and should only subsist within such period. The omission of an expiry date in the Special Import Permit affords no legal basis for GST to conclude that the said permit is impressed with continuous validity, i.e., not merely limited to the Christmas season of 1968.

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GST mistakenly asserts that the continuous validity of its Special Import Permit has already been passed upon by this Court in Commissioner of Customs v. Alikpala. What was raised in that case is the question of whether the Collector of Customs for the Port of Manila has observed the rediments of administrative due process in ordering the seizure and sale at public auction of GST's imported goods in particular that arrived in June, 1970, as well as the question of the legality of the Collector's order requiring only cash bond, surety bond not accepted, for the release of the goods. The Court made no ruling on the continuity of GST's Special Import Permit after the Christmas season of 1968.

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The equitable principle of estoppel forbids GST from taking an inconsistent position now and claim that the permit extends beyond the period it itself asked for. Where conduct or representation has induced another to change its position in good faith or the same is such that reasonable man would rely thereon, the consequences of such conduct or representation cannot later on be disowned.

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The doctrine of promissory estoppel was here invoked by GST pointing to the letter issued by the Director of Foreign Exchange.* (see Facts) On the contrary, while the letter advised the agent bank that it may continue issuing release certificates to cover petitioner-appellant's "no-dollar" importations of fresh fruits, it at the same time subjects the issuance of release certificates "to the same terms and conditions imposed by the Monetary board" on the Special Import Permit, one of which is the resolutory term of 1968.

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The SC, held, however, that a promise cannot, by itself, be the basis of estoppel without any justifiable reliance or irreparable detriment to the promisee. The latter element is lacking in this case. The letter referred to specifically mentioned that it was subject to the existing terms imposed by the Monetary Board. Moreover, the Director could not have modified the Special Permit since it was not given the authority to do so, as in fact it was the Monetary Board who issued it and only the latter has the power to modify it.

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Even assuming arguendo, however, that the aforementioned letter really tended to impress that further importations could be made, still the doctrine of estoppel cannot apply, as it does not operate against the Government. The Government is never estopped by the errors of its agents (in this case, the Monetary Board).

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The authority of the CB to regulate "no-dollar" imports, owing to the influence and effect that the same may exert upon the stability of our peso and its international value, emanates from its broad powers to maintain our monetary stability and to preserve the international value of our currency as well as its corollary power to issue such rules and regulations for the effective discharge of its responsibilities and exercise of powers.