Ponente: J. Brion
FACTS
In 1974, Grand Textile, a local manufacturing corporation, imported from different countries various articles such as dyestuffs, spare parts for textile machinery, polyester filament yarn, textile auxiliary chemicals, trans open type reciprocating compressor, and trevira filament.
Upon arrival in Manila, these goods were transferred to Customs Bonded Warehouse No. 462. As computed by the Bureau of Customs, the customs duties, internal revenue taxes, and other charges due on the importations amounted to P2,363,147.00. To secure the payment of these obligations pursuant to the Tariff and Customs Code, Intra-Strata and PhilHome (the sureties) each issued general warehousing bonds (surety bonds) in favor of the Bureau of Customs.
Without payment of the taxes, customs duties, and charges due and for purposes of domestic consumption, Grand Textile withdrew the imported items from storage. The Bureau of Customs demanded payment of the amounts due from Grand Textile as importer, and from Intra-Strata and PhilHome as sureties. All three failed to pay. The government responded on January 14, 1983 by filing a collection suit against the parties with the RTC of Manila.
RTC: Grand Textile (as importer) and the petitioners Intra-Strata and PhilHome (as sureties) are jointly and severally liable for the taxes, duties, and charges due on the imported articles.
CA: Affirmed RTC ruling in toto.
In their petition before the SC, Intra-Strata and PhilHome presented two arguments:
(a) Since Grand Textile took out the items from the Customs warehouse without notifying the two sureties, then the latter are released from any liability thereof; and
(b) they should be released from any liability because it was the fault and negligence of the Customs employees which allowed Grand Textile to withdraw the imported items even if the company has not yet paid the taxes, duties, and charges due.
RULING
Petition denied. RTC and CA ruling affirmed.
Is Grand Textile obligated to notify the surety companies of its default or intent to withdraw the items without paying the taxes due? – NO.
Otherwise, this will defeat the entire concept of suretyship. Why else would the law require a surety when such surety would be bound only if the withdrawal would be regular due to the payment of the required duties, taxes, and other charges?
Upon the issuance and acceptance of the bonds, the surety companies did NOT become direct parties to the bonded transaction. The two original relationships persist: (a) the underlying principal relationship between the creditor (government) and the debtor (importer), and (b) the accessory surety relationship whereby the surety binds itself, for a consideration paid by the debtor, to be jointly and solidarily liable to the creditor for the debtor’s default.
The surety does not, by reason of the surety agreement, earn the right to intervene in the principal creditor-debtor relationship; its role becomes alive only upon the debtor’s default, at which time it can be directly held liable by the creditor for payment as a solidary obligor.
A surety contract is made principally for the benefit of the creditor-obligee and this is ensured by the solidary nature of the sureties’ undertaking. Under these terms, the surety is not entitled as a rule to a separate notice of default, nor to the benefit of excussion, and may be sued separately or together with the principal debtor.
Is the government estopped by the errors committed by its employees? – NO.
The government is not bound by the errors committed by its agents. Estoppel does not lie against the government or any of its agencies arising from unauthorized or illegal acts of public officers. This is particularly true in the collection of legitimate taxes due where the collection has to be made whether or not there is error, complicity, or plain neglect on the part of the collecting agents.
The government cannot and must not be estopped particularly in matters involving taxes, for taxes are the lifeblood of the nation.