G.R. No. L-3648




Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-3648 September 5, 1907 LUTZ & CO., plaintiffs-appellants, vs. THE COLLECTOR OF CUSTOMS, defendant-appellee. Kinney, Odlin & Lawrence for appellant. Hartford Beaumont for appellee. WILLARD, J.: On June 1, 1905, the appellants, Lutz & Co., imported from France a shipment of silk and cotton textiles, which shipment left France in March, 1905. They declared the value of the goods at 0.55 of a franc per meter, less 20 per cent and 12 per cent, or at about 0.43 of a franc. The customs officers appraised the value of the goods at 0.55 of a franc, less 2 per cent, or about 0.54 of a franc. From the decision of the Collector sustaining this appraisal Lutz & Co. appealed to the Court of First Instance. On the 14th of July, 1905, Lutz & Co. made another importation of the same kind of goods, which left France about June 1. They declared this entry at 0.57 of a franc pr meters, less 20 pr cent and 2 pr cent, or about 0.44 of a franc. The customs officers appraised the goods at 0.57 of a franc, less 2 pr cent, and from the decision of the Collector confirming the appraisal the appellants appealed to the Court of First Instance and the case was tried in the court and the appraisal of the Collector sustained. From the decision of the court Lutz & Co. have appealed to this court. Section 177 of Act No. 355 provides as follows: Whenever imported mechandise is subject to an ad valorem ate of duty, or to a duty placed upon or regulated in any manner by the value thereof, then duty shall be assessed upon the actual market value or wholesale price of such merchandise as bought and sold in usual wholesale quantities at the time of exportation to the Philippine Islands in the principal markets of the country from whence imported, and in the condition in which such merchandise is there bought and sold for exportation to the Philippine Islands . . . . It thus appears that the only question in the case is, What was the market value of the first shipment when it left France in March 1905, and of the second shipment when it left France about June 1? Upon this point the appellant in their brief say that — There is in the record not one word of evidence to show the value of such goods in France in March and June, 1905, except this testimony of Mr. Dessauer. This witness was the only produced by the appellants. While in his direct examination he testified that the appellants paid for the goods the amounts for which they declared them in the customs, yet on cross-examination it appeared that he had on August 10, 1906, been in the employ of the appellants one year and four months; that is, he had been in their employ since April 5, 1905. Both of the shipments were ordered by the appellants before that time., It also appeared from this testimony that his duties with the appellants was the performance of their custom-house work; that his testimony in regard to prices was derived from the books of the company; that he could not tell by an examination of the samples their comparative value; and that he knew nothing personally about such value. The evidence presented on the part of the Collector was that of the officers engaged in the appraisal of such merchandise. They testified that the average price of the merchandise was about 0.55 of a franc a meter; that it ran as low as 0.535 of a franc a meter, but that was the average price to the merchants who were buying in the quantities was 0.55 of a franc per meter. It appears, however, that their information was derived from the records of importation of these articles by other and from invoices, confidential invoices and private invoices. The principal objection of the appellants is that the documents introduced in evidence in support of the testimony of the Collector's witnesses related to the importation made in 1903, 1904, and 1905, and that those relating to importations in 1903 and 1904 could have no tendency whatever to prove the value of the articles in 1905. In our opinion the testimony of the appellants and the Collector is one of the same character. The only knowledge that the witnesses on either side had was the knowledge which they derived from the examination of property relating to importations. That of the appellant's witnesses was limited to importations made by his own house; that of the witness of the Collector to imporations made by several different commercial houses. We do not considered that there is any competent evidence in the case to show the actual price paid by Lutz & Co. for his merchandise. Any information which the witness Dessauer had he derived from examination of the books. His duties was limited to work in the custom-house. No one of the appellants was called as a witness to testify as to the acts of price paid for this property. While it is true that most of the importations made by other firms relate to years prior to 1905, yet there is act of importation No. 40911, the invoice of which is dated February 13, 1905, which was within the month probably of the time the first shipment left France. That invoices shows that the value of the goods was 0.68 of a franc less 20 per cent. If we assume that evidence of this character is competent — that is, evidence furnished by invoices of the same goods imported at about the same time — was then have as to the first shipment an invoice presented by the appellants and one presented by the Collector. It becomes important, therefore, to know where the burden of proof rests in cases of this character. Section 286 of said Act No. 355¹ provides that the decision of the Collector of Customs at a subport of entry as to the rate and amount of duties shall be final and conclusive unless the owner give notice in writing to the Collector of Customs of his objection thereto. It also provides that the decision of the Insular Collector upon such protests shall be final and conclusive unless an appeal is taken into the Court of Customs Appeals. The Court of Customs Appeals having been abolished, the appeal now goes to the Court of First Instance. When such an appeal comes on for hearing in that court, we apprehend that if the parties appear and neither one introduces any evidence, the judgment of that court would necessarily be one affirming the decision of the Collector. In other words, there is a presumption upon such an appeal that the decision of the Collector is correct, and the burden is on the appellant to show the contrary. In the case of Arthur vs. Unkart (96 U.S., 118) the court said at page 121: When an appeal is taken from his decision, the decision of the Collector ceases to be conclusive and the same is true of the decision of the Secretary of Treasury. These officers are, however, selected by law for the express purpose of deciding these questions. They are appointed and required to pronounce a judgment in each case, and the conduct, management and operation of the revenue system to require that their decisions should carry with them the presumption of correctness. This rule is not only wise and prudent but is in the accordance with the general principle of law than an officer acting in the discharge of his duty upon the subject over which jurisdiction is given him is assumed to have acted rightly. It is true that in that case the question related to the classification of merchandise and not to its value, but an examination of the laws in force in the United States and the decision of the Supreme Court thereon will show that upon the question of value of imported merchandise, the decision of the collector is not only presumed to be correct but it is made final in the absence of fraud. In the case of Muser vs. Magone (155 U.S., 240) the court said at page 246: The conclusiveness of the valuation of imported merchandise made by the designated officials in the absence of fraud is too thoroughly to admit of further discussion. While the Customs Administrative Act, above cited, in force in these Islands does not seem to give the decision of the Collector such conclusive effect, yet it can not be doubted that there is the same presumption in regard to correctness f his ruling upon the question of value as there is the correctness of his ruling upon the question of classification. We do not think that the appellants in the court below introduced sufficient evidence to overthrow this presumption, and the judgment of the court below is accordingly affirmed, with the costs of this instance against the appellant. So ordered. Arellano, C.J., Torres, Johnson, and Tracey, JJ., concur. Footnotes ¹ Pub. Laws, 853. The Lawphil Project - Arellano Law Foundation