POWERS AND FUNCTIONS OF THE PRESIDENT,
44 and 45 for the release thereof, the
FOREIGN AFFAIRS
G.R. No. L-14279
COMMISSIONER OF CUSTOMS VS. EASTERN SEA
TRADING
CONCEPCION, J.
This case involves the Customs Commissioner disputing the
CTA reversal of Commission’s earlier decision regarding the
forfeiture and release on bonds of shipments confiscated from
respondent Eastern Sea Trading. The Court rules in favor of
the Commission stating the validity of EO 328 pursuant to an
executive agreement entered into with Japan. The Court also
stressed on the authority of the Central Bank and its laws in
managing imports entering the country.
IMPORTANT PEOPLE
Petitioners: Commissioner of Customs and Collector of
Customs
Respondent: Eastern Sea Trading
FACTS
1. Respondent Eastern Sea Trading, the consignee of
several shipments of onion and garlic, was at the Port
of Manila from August 25 to September 7, 1954
 Carried shipment from Japan and Hong Kong
 Because none of the shipments had the
certificate required by Central Bank Circulars
Nos.
goods were seized and subjected to forfeiture
proceedings for alleged violations of section
1363(f) of the Revised Administrative Code
2. The Collector of Customs of Manila rendered a
decision on September 4, 1956
 Declared said goods forfeited to the Government
(but are released to the consignees in the
meantime on surety bonds → Alto Surety &
Insurance Co., Inc.)
 Done in compliance with orders of CFI Manila,
directing that the amounts of bonds to be paid,
by said principal and surety, jointly and
severally, to the Bureau of Customs, within thirty
(30) days from notice
3. Consignee appealed but decision was affirmed by the
Commissioner of Customs on December 27, 1956
4. Subsequently, the consignee sought a review of the
decision of said two (2) officers by the Court of Tax
Appeals → reversed the decision of the Commissioner
of Customs and ordered that the aforementioned bonds
be cancelled and withdrawn
5. This present petition is filed by the Commissioner of
Customs for review of the decision of the Court of Tax
Appeals.
6. Premises considered by CTA decision:
 Central Bank has no authority to regulate
transactions not involving foreign exchange
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  the shipments in question are in the nature of
"no-dollar" imports therefore they do not involve
foreign exchange
 insofar as a 1) Central Bank license and 2) a
certificate authorizing the importation or release
of the goods are required by Central Bank
Circulars Nos. 44 and 45, the latter are null and
void
 the seizure and forfeiture of the goods imported
from Japan cannot be justified under Executive
Order No. 328 because:
 it seeks to implement an executive
agreement extending the effectivity of our
Trades and Financial Agreements with
Japan → believed to be of dubious
validity (bec. It is an Exec. Agreement w/o
Senate concurrence)
 there is no governmental agency
authorized to issue the import license
required by the aforementioned executive
order
ISSUE with HOLDING
W/N Trades and Financial Agreements with Japan, an
executive agreement, should be considered in reversing the
CTA decision and consequently ordering the release of the
forfeited goods on the basis of surety bonds (vs. being
released unconditionally/for free kasi daw null and void yung
agreement and yung provisions) – YES
Court:
1. Authority of the Central Bank to regulate no-dollar
imports and the validity of the aforementioned Circulars
Nos. 44, and 45 have already been passed upon and
repeatedly upheld by this Court
 broad powers of the Central Bank to maintain
monetary stability and to preserve the
international value of our currency
 under section 2 of Republic Act No. 265,
in relation to section 14 of said Act —
authorizing the bank to issue such
rules and regulations as it may
consider necessary for the effective
discharge of the responsibilities and
the exercise of the powers assigned to
the Monetary Board and to the Central
Bank —
 provisions connote the authority to
regulate no-dollar imports, owing to the
influence and effect that the same may
and do have upon the stability of our peso
and its international value
2. Court of Tax Appeals entertained doubts on the legality
of the executive agreement sought to be implemented
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 by Executive Order No. 328 because Senate had not
concurred in the making of said executive agreement
 Concurrence required by our fundamental law in
the making of "treaties" (Art. VII, Sec. 10(7),
1935 Const.; Art XVIII, Sec. 4, 1987 Const.)
 Executive agreements are distinct from
treaties; they may be validly entered into without
such concurrence.
 Treaties are formal documents which
require ratification with the approval of
two thirds of the Senate; usually involve
political issues/changes of national policy
and international arrangements of a
permanent character
 Executive agreements become binding
through executive action without the need
of a vote by the Senate or by Congress;
embody adjustments of detail carrying out
well-established national policies and
traditions and those involving
arrangements of a more or less
temporary nature
3. Executive Agreements in foreign affairs:
 Right of the Executive to enter into binding
agreements without the necessity of subsequent
Congressional approval has been confirmed by
long usage
 earliest days of our history → executive
agreements covering such subjects as
commercial and consular relations, most-
favored-nation rights, patent rights,
trademark and copyright protection,
postal and navigation arrangements and
the settlement of claims; validity of these
has never been seriously questioned by
our courts
 Agreements with respect to the registration of
trade-marks have been concluded by the
Executive with various countries under the Act of
Congress of March 3, 1881. Pres. McKinley has
entered into 10 EA’spursuant to the McKinley
Tariff Act of 1890, and 9 under the Dingley Tariff
Act 1897;
 larger number of agreements provide for
most-favored-nation treatment in customs
and related matters have been entered
into since the passage of the Tariff Act of
1922
 United States Supreme Court has expressly
recognized the validity and constitutionality of
executive agreements entered into without
Senate approval.
 Francis B. Sayre, in "The Constitutionality of
Trade Agreement Acts":
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 “Agreements concluded by the President which import license when the Import Control Commission
fall short of treaties are commonly referred to as was no longer in existence → therefore no agency
executive agreements and are no less common in
authorized to issue the aforementioned license.
our scheme of government than are the more
formal instruments — treaties and conventions.  Wrong because authority to issue the
They sometimes take the form of exchanges of aforementioned licenses was not vested
notes and at other times that of more formal exclusively upon the Import Control Commission
documents denominated "agreements" time or or Administration. Executive Order No. 328
"protocols"…Hundreds of executive agreements,
provided for export or import licenses "from the
other than those entered into under the trade-
agreements act, have been negotiated with Central Bank of the Philippines or the Import
foreign governments. . . . It would seem to be Control Administration" or Commission.
sufficient, in order to show that the trade  Upon the abolition of said Commission, the duty
agreements under the act of 1934 are not had merely to be discharged directly by the
anomalous in character, that they are not treaties,
Monetary Board and the Central Bank.
and that they have abundant precedent in our
history, to refer to certain classes of agreements
heretofore entered into by the Executive without DISPOSITIVE PORTION
the approval of the Senate. They cover such WHEREFORE, the decision appealed from is hereby
subjects as the inspection of vessels, navigation reversed and another one shall be entered affirming
dues, income tax on shipping profits, the
that of the Commissioner of Customs, with cost against
admission of civil aircraft, customs matters, and
commercial relations generally, international respondents defendant-appellee, Eastern Sea Trading.
claims, postal matters, the registration of It is so ordered.
trademarks and copyrights, etcetera. Some of
them were concluded…in conformity with policies DOCTRINE
declared in acts of Congress with respect to the
*See discussion on treaties vs. executive agreements
general subject matter, such as tariff acts; while
still others, particularly those with respect of the in #2 of holdings
settlement of claims against foreign governments,
were concluded independently of any legislation.”
4. CTA was wrong in saying that it would be
unreasonable to require from respondent-appellee an