Republic vs. Court of Appeals

G.R. No. 103073. March 13, 2001.

MAIN TOPIC – Credit Card


  • This case is a motion for reconsideration of the decision, dated 14 September 1999, of the Court.
  • See earlier case: Endelo Manufacturing Corporation (Endelo) is a domestic corporation engaged in the manufacture of embroidery and apparel articles for export using imported raw materials. To release said materials from the customs warehouse, Endelo secured embroidery re-export bonds from the Communications Insurance Company, Inc. (CICI), and R & B Surety Company and Insurance Co., Inc. (R & B Surety). However, Endelo’s license to operate was subsequently suspended by the Embroidery and Apparel Control and Inspection Board on the ground of alleged pilferage of the imported materials. The suspension of its license resulted in its failure to re-export the imported materials or the finished goods.As a consequence, the Commissioner of Customs filed a case against  Endelo, CICI and R & B Surety, for the payment of the customs duties and taxes due to the Bureau of Customs.
  • In the present case, R&B Surety and Insurance, respondent, argues that it should not be held liable for the payment of legal interest which would increase its liability beyond the amount of the bond. The trial court required respondent-movant R & B to pay petitioner the total amount of P4,305,017.00, representing taxes and duties due to it in the four causes of actions covering the four embroidery bonds, which was well above the total face value of the bonds in the sum of P3,000,000.00.


  • Whether or not respondent should not be held liable to pay legal interest for more than the face value of the bonds.


  • NO. Respondent claim cannot be sustained since the payment for legal interest is for the incurrence of default and the necessity of judicial collection. However the  duties and taxes due to petitioner should be limited on the amount due (P2,588,568.00) from the time of the filing of the complaint until fully paid plus legal interest.


WHEREFORE, the motion for reconsideration is partially granted by modifying the decision of the Regional Trial Court, dated 13 February 1989, limiting the liability of respondent R & B Surety and Insurance, Inc., for duties and taxes due to petitioner only in the amount of P2,588,568.00 plus legal interest thereon, however, from the filing of the complaint until fully paid. The decision of this Court sought to be reconsidered is thusly modified.