Commissioner of Customs & Collector
of Customs vs Eastern Sea Trading
3 SCRA 351 Political Law Constitutional Law Treaties vs Executive
Agreements
Eastern Sea Trading (EST) was a shipping company which imports from Japan
onion and garlic into the Philippines. In 1956, the Commissioner of Customs
ordered the seizure and forfeiture of the import goods because EST was not able
to comply with Central Bank Circulars 44 and 45. The said circulars were
pursuant to Executive Order 328. On the other hand, EO 328 was the
implementing law of the Trades and Financial Agreements, an executive
agreement, entered into between the Philippines and Japan. The said executive
agreement states, among others, that all import transactions between Japan and
the Philippines should be invoiced in dollar. In this case, the said items imported
by EST from Japan were not invoiced in dollar.
EST questioned the validity of the said EO averring that the executive agreement
that the EO was implementing was never concurred upon by the Senate. The
issue was elevated to the Court of Tax Appeals and the latter ruled in favor of
EST. The Commissioner appealed.
ISSUE: Whether or not the Executive Agreement is subject to the concurrence
by the Senate.
HELD: No, Executive Agreements are not like treaties which are subject to the
concurrence of at least 2/3 of the members of the Senate. Agreements concluded
by the President which fall short of treaties are commonly referred to as
executive agreements and are no less common in our scheme of government
than are the more formal instruments treaties and conventions. They
sometimes take the form of exchanges of notes and at other times that of more
formal documents denominated agreements or protocols.
The point where ordinary correspondence between this and other governments
ends and agreements whether denominated executive agreements or
exchanges of notes or otherwise begin, may sometimes be difficult of ready
ascertainment. It would be useless to undertake to discuss here the large variety
of executive agreements as such, concluded from time to time. Hundreds of
executive agreements, other than those entered into under the tradeagreements act, have been negotiated with foreign governments. . . . It would
seem to be sufficient, in order to show that the trade agreements under the act
of 1934 are not anomalous in character, that they are not treaties, and that they
have abundant precedent in our history, to refer to certain classes of agreements
heretofore entered into by the Executive without the approval of the Senate.
They cover such subjects as the inspection of vessels, navigation dues, income
tax on shipping profits, the admission of civil aircraft, customs matters, and
commercial relations generally, international claims, postal matters, the
registration of trade-marks and copyrights, etc. Some of them were concluded
not by specific congressional authorization but in conformity with policies
declared in acts of Congress with respect to the general subject matter, such as
tariff acts; while still others, particularly those with respect to the settlement of
claims against foreign governments, were concluded independently of any
legislation.