Commissioner of Customs v. Unimex Micro-Electronics GmBh

FORMER SIXTH DIVISION [CA-G.R. SP Nos. 75359 and 75366. November 30, 2004.] COMMISSIONER OF CUSTOMS , petitioner , vs . UNIMEX MICRO-ELECTRONICS GmBh , respondent . UNIMEX MICRO-ELECTRONICS GmBh , petitioner , vs. COMMISSIONER OF CUSTOMS , respondent . A M E N D E D D E C I S I O N TRIA TIRONA , J p : This resolves the Motions for Reconsideration filed by Unimex Micro-Electronics (hereafter Unimex), 1 dated 15 September 2004, and Commissioner of Customs (hereinafter Commissioner), dated 22 September 2004, of Our Decision, 2 dated 30 August 2004, dismissing the petition filed by the Commissioner and granting the petition filed by Unimex. We have carefully perused the Commissioner's Motion of Reconsideration and found the arguments therein a mere rehash, if not a repetition, of its arguments in its petition, which We have exhaustively discussed and passed upon in Our Decision. On the other hand, Unimex points out that the U.S. Dollar is not the legal successor or the currency substitute of the defunct German Deutschemark. Unimex calls the attention of this Court that the Euro replaced the Deutschemark on 01 January 1999 as common currency of eleven countries in the European Monetary Union, which included Germany. 3 Considering that the lost goods (hereafter subject shipment) were payable in Deutschemark, Unimex prays that instead of using the U.S. Dollars as the currency for the satisfaction of the Commissioner's obligation, the Euro, which is the predecessor of the now defunct Deutschemark, should be the currency used as payment. Unimex further prays that the six (6%) interest imposed on the monetary award should be reckoned at the time of actual loss of the subject shipment. Unimex claims that based on the SGS Report, 4 the subject shipment acquired technical obsolescence as early as July 1987. As such, Unimex argues that demand, judicial or extra-judicial, was no longer necessary to start the running of the six (6%) percent legal interest, citing Paragraph 3 of Article 1169 of the Civil Code.5 Corollarily, Unimex prays that the twelve (12%) interest should start to run from the time the Court of Tax Appeals' original decision sought to be revived became final and executory or from 20 July 1992. The arguments are well-taken. In importation transactions, payment of imported goods usually involves conversion of currencies. In paying the exporter, the importer normally engages the services of a local bank to coordinate with a foreign bank, where the exporter could withdraw such payment. The importer pays in local currency, which the local bank converts in dollars and sends to the coordinating foreign bank. The coordinating foreign bank, in turn, converts such payment in a currency used in the country of the exporter. With this in mind, the Court of Tax Appeals (hereafter CTA) used dollars as the medium currency in payment of the lost imported goods. However, consistent with this Court's ruling that the Commissioner's foreign currency-incurred obligation did not arise from an import-export transaction but from a quasi-contract, there in no need to convert the value of subject shipment to dollars since the same is payable in Deutschemark. Therefore, the value of the subject shipment should be paid in Deutschemark, the currency acceptable to the exporter. However, considering that said currency has been replaced by Euro, payment should be made in said currency. Consequently, the value of the subject shipment in the amount of DM 1,310,372.00, as determined by the CTA, should be converted into Euro, Deutschemark's legal predecessor. HAEDCT Relevantly, Unimex attached a certification form Hon. Dietmar Wenger, First Secretary of the Embassy of the Federal Republic of Germany in Manila, stating that the official fixed exchange rate of 1 Euro is equivalent to 1.95583 Deutschemark. Using said conversion rate, the value of the subject shipment is equivalent to Euro 669,982.57 (DM 1,310,372.00 1.95583). With respect to Unimex's prayer that the six (6%) percent legal interest be reckoned from the time of actual loss of the shipment, more specifically on 27 June 1988, the date when SGS Far East Limited filed its report on the technical obsolescence of the imported goods, it may be recalled that during the time SGS submitted its report to Unimex, the subject shipment was under custodia legis arising from the Commissioner's seizure of the same. As such, Unimex cannot obligate the Commission to surrender the subject shipment and the Commission was not duty bound to deliver the same, unless otherwise ordered by a competent authority. Furthermore, the mere fact that the subject shipment became technically obsolete does not in any manner prevent the Commission from actually and physically returning the same. Simply stated, upon lawful orders of a competent authority, the Commission can still effect delivery of the subject shipment despite its alleged technical obsolescence. More importantly, the technical obsolescence of the subject shipment is a matter that cannot be taken by mere judicial notice but has to be proven by preponderance of evidence. Be that as it may, a review of the records of this case reveals that on 15 June 1987, Unimex filed with the Collector of Customs a Motion for Intervention and to Lift Judgment by Default, praying for the release of the subject shipment to Unimex as shipper and owner of the same. To be sure, said filing constitutes judicial demand for the return of the subject shipment. Hence, the six (6%) percent legal interest should be reckoned from said date. As to Unimex's prayers that the twelve (12%) percent interest should start to run from the time the CTA's Original Decision became final and executory, We deny the same. It bears to stress that the CTA's Original Decision merely ordered for the release of the subject shipment to Unimex. Nowhere in said Decision did the CTA award any sum of money where the twelve (12%) percent legal interest can be based. It is only when the CTA revived the Original Decision did it award actual damages covering the value of the subject shipment. Hence, consistent with the Supreme Court's ruling on Eastern Shipping Line, Inc. vs. C.A., 6 " when the judgment of the court awarding a sum of money becomes final and executory " Unimex is entitled to 12% per annum from such finality until its satisfaction, this interim period being deemed to be equivalent to a forbearance of credit. WHEREFORE, the Commissioner's Motion for Reconsideration, dated 22 September 2004, is DENIED for lack of merit. Unimex's Motion for Reconsideration, dated 15 September 2004, is hereby GRANTED. The dispositive portion of Our Decision dated 30 August 2004, is RECONSIDERED and accordingly ordered AMENDED to read as follows: WHEREFORE, the appealed Decision, dated 19 September 2002, is hereby AFFIRMED WITH MODIFICATION in that the Bureau of Customs is adjudged liable to Unimex for the value of the subject shipment in the amount of Euro 669,982,565. The Bureau of Customs' liability may be paid in the Philippine currency, computed at the exchange rate prevailing at the time of actual payment with legal interests thereon at the rate prevailing at the time of actual payment with legal interests thereon at the rate of 6% per annum from 15 June 1987 up to the finality of this Decision. In lieu of the 6% interest, the rate if legal interest shall be 12% per annum upon finality of this Decision until the value of the subject shipment is fully paid. HCTaAS SO ORDERED. Reyes and Reyes , Jr ., JJ. , concur. Footnotes 1. Rollo , p. 169. 2. Ibid , p. 156. 3. As per certification issued by Hon. Dietmar Wenger, First Secretary of the Embassy of the Federal Republic of Germany in Manila. 4. Rollo , p. 190. 5. Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extra-judicially demands from them the fulfillment of their obligation. However, the demand by the creditor shall not be necessary in order that the delay may exist: xxx xxx xxx (3) When the demand would be useless, as when the obligor has rendered it beyond his power to perform. 6. Supra , note 31.