Powers and Jurisdiction of Customs

G.R. No. L-49162

July 28, 1987

JANICE MARIE JAO, represented by her mother and guardian ad litem, ARLENE S.
SALGADO, petitioner,
vs. THE HONORABLE COURT OF APPEALS and PERICO V. JAO, respondents.

Appeal by certiorari from the decision * of the Court of Appeals in CA-G.R. No. 51078-R, dated
29 August 1978, which dismissed petitioner"s action for recognition and support against
private respondent, and from the respondent Court"s resolution, dated 11 October 1978,
denying petitioner"s motion for reconsideration of said decision.

On 28 October 1968, petitioner Janice Marie Jao, then a minor, represented by her mother
and guardian-ad-litemArlene Salgado, filed a case for recognition and support with the
Juvenile and Domestic Relations Court against private respondent Perico V. Jao. The latter
denied paternity so the parties agreed to a blood grouping test which was in due course
conducted by the National Bureau of Investigation (NBI) upon order of the trial court. The
result of the blood grouping test, held 21 January 1969, indicated that Janice could not have
been the possible offspring of Perico V. Jao and Arlene S. Salgado. 1

The trial court initially found the result of the tests legally conclusive but upon plaintiff"s
(herein petitioner"s) second motion for reconsideration, it ordered a trial on the merits, after
which, Janice was declared the child of Jao, thus entitling her to his monthly support.

Jao appealed to the Court of Appeals, questioning the trial court"s failure to appreciate the
result of the blood grouping tests. As there was no showing whatsoever that there was any
irregularity or mistake in the conduct of the tests, Jao argued that the result of the tests
should have been conclusive and indisputable evidence of his non-paternity.

The Court of Appeals upheld Jao"s contentions and reversed the trial court"s decision. In its
decision, the Court of Appeals held:

From the evidence of the contending parties, it appears undisputed that JAO was
introduced to ARLENE at the Saddle and Sirloin, Bay Side Club, by Melvin Yabut. After
this meeting, JAO dated and courted ARLENE. Not long thereafter, they had their first
sexual intercourse and subsequently, they lived together as husband and wife. ...

It further appears undisputed that in April 1968, JAO accompanied ARLENE to the
Marian General Hospital for medical check-up and her confinement was with JAO"s
consent. JAO paid the rentals where they lived, the salaries of the maids, and other
household expenses. ...

The record discloses that ARLENE gave birth to JANICE on August 16, 1968, after
completing 36 weeks of pregnancy, which indicates that ARLENE must have
conceived JANICE on or about the first week of December, 1967. "Thus, one issue to
be resolved in this appeal is whether on or about that time, JAO and ARLENE had
sexual intercourse and were already living with one another as husband and wife.

In this connection, ARLENE contends that she first met JAO sometime in the third or
fourth week of November, 1967 at the Saddle and Sirloin, Bayside Club; that after
several dates, she had carnal knowledge with him at her house at 30 Long beach,
Merville, Paranaque. Rizal in the evening of November 30, 1967, and that he started
to live with her at her dwelling after December 16, 1967, the date they finished their
cruise to Mindoro Island.

On the other hand, JAO, albeit admitting that he met ARLENE at the Saddle and
Sirloin, Bayside Club, however, maintains that this was on December 14, 1967
because the day following, he and his guests: ARLENE, Melvin Yabut, Didi Crescini
and Charlie Litonjua went to Mindoro by boat. He dated ARLENE four times in January,
1968. He remembered he had carnal knowledge of her for the first time on January
18, 1968, because that was a week after his birthday and it was only in May, 1968
that he started cohabiting with her at the Excelsior Apartments on Roxas Boulevard.

These conflicting versions of the parties emphasize, in resolving the paternity of

JANICE, the role of the blood grouping tests conducted by the NBI and which resulted
in the negative finding that in a union with ARLENE, JAO could not be the father of
JANICE.

We cannot sustain the conclusion of the trial court that the NBI is not in a position to
determine with mathematical precision the issue of parentage by blood grouping test,
considering the rulings of this Court ... where the blood grouping tests of the NBI
were admitted; especially where, in the latter case, it was Dr. Lorenzo Sunico who
conducted the test and it appears that in the present case, the same Dr. Sunico
approved the findings and report. ... In Co Tao vs. Court of Appeals, 101 Phil. 188, the
Supreme Court had given weight to the findings of the NBI in its blood grouping test.
Thus, it cannot be gainsaid that the competency of the NBI to conduct blood grouping
tests has been recognized as early as the 1950"s.

The views of the Court on blood grouping tests may be stated as follows:

Paternity Science has demonstrated that by the analysis of blood samples

of the mother, the child, and the alleged father, it can be established
conclusively that the man is not the father of the child. But group blood
testing cannot show that a man is the father of a particular child, but at least
can show only a possibility that he is. Statutes in many states, and courts in
others, have recognized the value and the limitations of such tests. Some of
the decisions have recognized the conclusive presumption of non-paternity
where the results of the test, made in the prescribed manner, show the
impossibility of the alleged paternity. This is one of the few cases in which the
judgment of the Court may scientifically be completely accurate, and
intolerable results avoided, such as have occurred where the finding is
allowed to turn on oral testimony conflicting with the results of the test.

The findings of such blood tests are not admissible to prove the fact of
paternity as they show only a possibility that the alleged father or any one of
many others with the same blood type may have been the father of the child.
But the Uniform Act recognizes that the tests may have some probative value
to establish paternity where the blood type and the combination in the child is
shown to be rare, in which case the judge is given discretion to let it in (I Jones
on Evidence, 5th Ed., pp. 193-194).

In one specific biological trait, viz, blood groups, scientific opinion is now in
accord in accepting the fact that there is a causative relation between the trait
of the progenitor and the trait of the progeny. In other words, the blood
composition of a child may be some evidence as to the child"s paternity. But
thus far this trait (in the present state of scientific discovery as generally
accepted) can be used onlynegatively i.e. to evidence that a particular man F

is not the father of a particular child C. (I Wigmore on Evidence 3rd Ed., pp.
610-611).

In a last ditch effort to bar the admissibility and competency of the blood test, JANICE
claims that probative value was given to blood tests only in cases where they tended
to establish paternity; and that there has been no case where the blood test was
invoked to establish non-paternity, thereby implying that blood tests have probative
value only when the result is a possible affirmative and not when in the negative.
This contention is fallacious and must be rejected. To sustain her contention, in effect,
would be recognizing only the possible affirmative finding but not the blood grouping
test itself for if the result were negative, the test is regarded worthless. Indeed, this is
illogical. .... As an admitted test, it is admissible in subsequent similar proceedings
whether the result be in the negative or in the affirmative. ...
The Court of Appeals also found other facts that ran contrary to petitioner"s contention that
JAO"s actions before and after JANICE was born were tantamount to recognition. Said the
respondent appellate court:

On the contrary, after JANICE was born, JAO did not recognize her as his own. In fact,
he filed a petition that his name as father of JANICE in the latter"s certificate of live
birth be deleted, evidencing his repudiation, rather than recognition. The mere acts
of JAO in cohabiting with ARLENE, the attention given to her during her pregnancy
and the financial assistance extended to her cannot overcome the result of the blood
grouping test. These acts of JAO cannot be evaluated as recognizing the unborn
JANICE as his own as the possession of such status cannot be founded on conjectures
and presumptions, especially so that, We have earlier said, JAO refused to
acknowledge JANICE after the latter"s birth.
JAO cannot be compelled to recognize JANICE based on paragraph 2 of Article 283 in
relation to Article 289 of the New Civil Code which provides: "When the child is in
continuous possession of status of a child of the alleged father by the direct acts of
the latter.
Nor can there be compulsory recognition under paragraphs 3 or 4 of said article
which states:

(3) When the child was conceived during the time when the mother cohabited
with the supposed father;

(4) When the child has in his favor any evidence or proof that the defendant is
his father.

As aptly appreciated by the court below, JANICE could have been conceived from
November 20, 1967 to December 4, 1967. Indeed, ARLENE claims that her first
sexual intercourse with JAO was on November 30, 1967 while the latter avers it was
one week after January 18, 1968. However, to satisfy paragraph 3 as above-quoted,
JANICE must have been conceived when ARLENE and JAO started to cohabit with one
another. Since ARLENE herself testified that their cohabitation started only after
December 16, 1967, then it cannot be gainsaid that JANICE was not conceived during
this cohabitation. Hence, no recognition will lie. Necessarily, recognition cannot be
had under paragraph 4 as JANICE has no other evidence or proof of her alleged
paternity.

Apart from these, there is the claim of JAO that, at the critical time of conception,
ARLENE had carnal knowledge with two other men: "Oying" Fernandez and Melvin
Yabut, which was not even rebutted; and considering that it was Melvin Yabut, who
introduced ARLENE to JAO at the Bayside Club. Moreover, the testimony of ARLENE is
not wholly reliable. When the trial court said that "the Court is further convinced of
plaintiff"s cause by ARLENE"s manner of testifying in a most straight-forward and
candid manner," the fact that ARLENE was admittedly a movie actress may have
been overlooked so that not even the trial court could detect, by her acts, whether
she was lying or not.

WHEREFORE, the judgment appealed from is hereby set aside and a new one entered
dismissing plaintiff-appellee"s complaint. Without pronouncement as to costs. SO
ORDERED.

The petitioner now brings before this Court the issue of admissibility and conclusiveness of
the result of blood grouping tests to prove non-paternity.

In this jurisdiction, the result of blood tests, among other evidence, to, affirm paternity was
dealt with in Co Tao v. Court of Appeals,2 an action for declaration of filiation, support and
damages. In said case, the NBI expert"s report of the blood tests stated that "from their
blood groups and types, the defendant Co Tao is a possible father of the child." From this
statement the defendant contended that the child must have been the child of another man.
The Court noted: "For obvious reasons, the NBI expert cannot give assurance that the
appellant was the father of the child; he can only give his opinion that he is a "possible

father." This possibility, coupled with the other facts and circumstances brought out during
the trial, tends to definitely establish that appellant Co Tao is the father of the child
Manuel."3

Where the issue is admissibility and conclusiveness of blood grouping tests to disprove
paternity, rulings have been much more definite in their conclusions. For the past three
decades, the use of blood typing in cases of disputed parentage has already become an
important legal procedure. There is now almost universal scientific agreement that blood
grouping tests are conclusive as to non-paternity, although inconclusive as to paternity
that is, the fact that the blood type of the child is a possible product of the mother and
alleged father does not conclusively prove that the child is born by such parents; but, if the
blood type of the child is not the possible blood type when the blood of the mother and that
of the alleged father are crossmatched, then the child cannotpossibly be that of the alleged
father.4

In jurisdictions like the United States, the admissibility of blood tests results to prove nonpaternity has already been passed upon in several cases. In Gilpin v. Gilpin5 the positive
results of blood tests excluding paternity, in a case in which it was shown that proper
safeguards were drawn around the testing procedures, were recognized as final on the
question of paternity. In Cuneo v. Cuneo6 evidence of non-paternity consisting of the result of
blood grouping tests was admitted despite a finding that the alleged father had cohabited
with the mother within the period of gestation. The Court said that the competent medical
testimony was overwhelmingly in favor of the plaintiff, and to reject such testimony would
be tantamount to rejecting scientific fact. Courts, it was stated, should apply the results of
science when competently obtained in aid of situations presented, since to reject said result
was to deny progress.7 This ruling was also echoed in Clark v. Rysedorph,8 a filiation
proceeding where an uncontradicted blood grouping test evidence, excluding paternity, was
held conclusive.9 Legislation expressly recognizing the use of blood tests is also in force in
several states.10 Tolentino,11 affirms this rule on blood tests as proof of non-paternity, thus

Medical science has shown that there are four types of blood in man which can be
transmitted through heredity. Although the presence of the same type of blood in two
persons does not indicate that one was begotten by the other, yet the fact that they
are of different types will indicate the impossibility of one being the child of the other.
Thus, when the supposed father and the alleged child are not in the same blood
group, they cannot be father and child by consanguinity. The Courts of Europe today
regard a blood test exclusion as an unanswerable and indisputable proof of nonpaternity. 12

Moreover,

The cohabitation between the mother and the supposed father cannot be a ground
for compulsory recognition if such cohabitation could not have produced the
conception of the child. This would be the case, for instance, if the cohabitation took
place outside of the period of conception of the child. Likewise, if it can be proved by
blood tests that the child and the supposed father belong to different blood groups,
the cohabitation by itself cannot be a ground for recognition. 13

Petitioner has attempted to discredit the result of the blood grouping tests in the instant
case by impugning the qualifications of the NBI personnel who performed the tests and the
conduct of the tests themselves. Her allegations, in this regard, appear to be without merit.
The NBI"s forensic chemist who conducted the tests is also a serologist, and has had
extensive practice in this area for several years. The blood tests were conducted six (6)
times using two (2) scientifically recognized blood grouping systems, the MN Test and the
ABO System,14 under witness and supervision.15

Even the allegation that Janice was too young at five months to have been a proper subject
for accurate blood tests must fall, since nearly two years after the first blood test, she,
represented by her mother, declined to undergo the same blood test to prove or disprove
their allegations, even as Jao was willing to undergo such a test again. 16

Accordingly, the Court affirms the decision of the Court of Appeals and holds that the result
of the blood grouping tests involved in the case at bar, are admissible and conclusive on the
non-paternity of respondent Jao vis-a-vis petitioner Janice. No evidence has been presented
showing any defect in the testing methods employed or failure to provide adequate
safeguards for the proper conduct of the tests. The result of such tests is to be accepted
therefore as accurately reflecting a scientific fact.
In view of the findings of fact made by the Court of Appeals, as heretofore quoted, which are
binding on this Court, we do not find it necessary to further pass upon the issue of
recognition raised by petitioner.

WHEREFORE, the instant petition for review is hereby denied. Without pronouncement as to
costs.

SO ORDERED.

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HONORABLE JUAN L. BOCAR, Presiding Judge of Branch XVI, Court of First
Instance of Manila, and CESAR URBINO, JOSE GIGANTE and SERAPION
CLAUDIO, respondents.

Before Us is a special civil action seeking the annulment of the respondent Court of First
Instance of Manila (now the Regional Trial Court) dated July 7, 1967 in Criminal Case No.
85798 for theft entitled "People of the Philippines vs. Cesar S. Urbino, Jose Gigante and
Serapion Claudio" dismissing said case, thus:

Upon a summary investigation of this case the Court is of the opinion that the
same is more civil than criminal. The issue is who is the owner of the logs.
Both parties claim ownership and both claim that they can prove ownership.
During the summary investigation the accused acknowledged to have taken
the logs from the compound in the pier in good faith, without any intention to
steal them from anybody.
In view thereof, the Court orders the case dismissed, cost de oficio and the
cancellation of the bond filed by the accused.

SO ORDERED (p. 18, rec.).

On March 28, 1967, the assistant fiscal for Manila filed before the respondent Court the
following information:

The undersigned accuses CESAR S. URBINO, JOSE GIGANTE and SERAPION

CLAUDIO of the crime of theft, committed as follows:

That on or about October 1, 1965, in the City of Manila, Philippines, the said
accused, conspiring and confederating together with three others whose true
names, Identities and whereabouts are still unknown, and helping one
another, did then and there willfully, unlawfully and feloniously, with intent of
gain and without the knowledge and consent of the owner thereof, take, steal
and carry away the following property, to wit.

Six (6) pieces of dao Veneer 1 Grade Exportable round logs, valued at
-P7,104.62 all valued at P7,104.62 belonging to one JUAN B. BAEZ, JR. to the
damage and prejudice of the said owner in the aforesaid sum of P7,104.62,
Philippine currency.

Contrary to law.
CARLOS
GALMAN
CRUZ
Assistant Fiscal

(p.,10, rec.).

On May 3, 1967, the three accused, upon arraignment, pleaded "not guilty" (p. 2. rec).
Proceedings were had on July 7, 1967. On said date, the respondent Judge conducted a
"summary investigation" directing questions to the complainant as well as to the accused. At
the end of the "investigation," the respondent
Judge issued the order under review.
On July 12, 1967, the City Fiscal's Office received a copy of the lower court's order dated July
7, 1967.

On July 18. 1967, the private prosecutors in the case filed a "motion for reconsideration" (pp.
3 & 19-27, rec.); and on August 8, 1967, the city Fiscal's Office joined the private prosecutors
in their motion for reconsideration (pp. 3 & 28, rec.).

On August 9, 1967, respondent Court issued an order denying the motion for reconsideration
(pp. 29-30, rec.). A copy of said order was received by the City Fiscal's Office on August 11,
1967
The question is: Whether or not respondent Court committed grave abuse of discretion
amounting to lack of jurisdiction in issuing the order dated July 7, 1967.

WE find for petitioner.

It is not disputed that the Office of the City Fiscal of Manila had conducted a preliminary
investigation on the complaint of Juan B. Baez, Jr., and that as a result thereof an
information was filed before respondent Court for theft against the three accused. On May 3,
1967, the three accused were arraigned, and all three pleaded "not guilty" of the charge.
The propriety and validity of both the information and the arraignment are not contested.
The issues having been joined, the case was ready for trial on the merits.
The subsequent proceedings. however, was marred with irregularities.

It is evident from the brief transcript of the proceedings held on July 7, 1967 that the parties
were not placed under oath before they answered the queries of the respondent Judge (pp.
11-17, rec.). Verily, no evidence in law had as yet been entered into the records of the case
before respondent Court. respondent Court's issuance of the questioned dismissal order was
arbitrary, whimsical and capricious, a veritable abuse of discretion which this Court cannot
permit.

Moreover, it is clear from the same transcript that the prosecution never had a chance to
introduce and offer its evidence formally in accordance with the Rules of Court (pp. 11-17,
rec.). Verily, the prosecution was denied due process.

Where the prosecution is deprived of a fair opportunity to prosecute and prove its case, its
right to due process is thereby violated (Uy vs. Genato, L-37399, 57 SCRA 123 [May 29,
1974]; Serino vs. Zosa, L-33116, 40 SCRA 433 [Aug. 31, 1971]; People vs. Gomez, L-22345,
20 SCRA 293 [May 29, 1967]; People vs. Balisacan, L-26376, 17 SCRA 11 19 [Aug. 31,
1966]).

The cardinal precept is that where there is a violation of basic constitutional rights, courts
are ousted of their jurisdiction. Thus, the violation of the State's right to due process raises a
serious jurisdictional issue (Gumabon vs. Director of the Bureau of Prisons, L-30026, 37 SCRA
420 [Jan. 30, 1971]) which cannot be glossed over or disregarded at will. Where the denial of
the fundamental right of due process is apparent, a decision rendered in disregard of that
right is void for lack of jurisdiction (Aducayen vs. Flores, L- 30370, [May 25, 1973] 51 SCRA
78; Shell Co. vs. Enage, L- 30111-12, 49 SCRA 416 [Feb. 27, 1973]). Any judgment or
decision rendered notwithstanding such violation may be regarded as a "lawless thing, which

can be treated as an outlaw and slain at sight, or ignored wherever it exhibits its head"
(Aducayen vs. Flores, supra).

Respondent Judge's dismissal order dated July 7, 1967 being null and void for lack of
jurisdiction, the same does not constitute a proper basis for a claim of double jeopardy
(Serino vs. Zosa, supra).

The constitutional guarantee is that "no person shall be twice put in jeopardy of punishment
for the same offense" (Sec. 22, Art. IV, 1973 Constitution). Section 9, Rule 117 of the Rules
of Court (substantially reproduced as Section 7, Rule 117 in the 1985 Rules on Criminal
Procedure, made effective on January 1, 1985) clarifies the guarantee as follows:

Former conviction or acquittal or former jeopardy.-When a defendant shall

have been convicted or acquitted, or the case against him dismissed or
otherwise terminated without the express consent of the defendant, by a
court of competent jurisdiction, upon a valid complaint or information or other
formal charge sufficient in form and substance to sustain a conviction, and
after the defendant had pleaded to the charge, the conviction or acquittal of
the defendant or the dismissal of the case shall be a bar to another
prosecution for the offense charged, or for any attempt to commit the same or
frustration thereof, or for any offense which necessarily includes or is
necessarily included in the offense charged in the former complaint or
information.

Thus, apparently, to raise the defense of double jeopardy, three requisites must be present:
(1) a first jeopardy must have attached prior to the second; (2) the first jeopardy must have
been validly terminated; and (3) the second jeopardy must be for the same offense as that
in the first.

Legal jeopardy attaches only (a) upon a valid indictment, (b) before a competent court, (c)
after arraignment, (d) a valid plea having been entered; and (e) the case was dismissed or
otherwise terminated without the express consent of the accused (People vs. Ylagan, 58 Phil.
851). The lower court was not competent as it was ousted of its jurisdiction when it violated
the right of the prosecution to due process.

In effect, the first jeopardy was never terminated, and the remand of the criminal case for
further hearing and/or trial before the lower courts amounts merely to a continuation of the
first jeopardy, and does not expose the accused to a second jeopardy.

In People vs. Gomez, et al., supra, We said:

. . . The dismissal was therefore purely capricious. It amounted to grave of

discretion tantamount to excess of jurisdiction. Such a dismissal order,
made sua sponte, for no proper reason at all, is void for being issued without
authority. And being void, it cannot terminate the proceedings. The same
jeopardy that attached continues, the cause not having been terminated,
thereby rendering the defense of double jeopardy without merit (People vs.
Cabero, 61 Phil. 121, 125).
A purely capricious dismissal of an information, as herein involved, moveover,
deprives the State of fair opportunity to prosecute and convict. It denies the
prosecution its day in court. Accordingly, it is a dismissal without due process
and, therefore, null and void. A dismissal invalid for lack of a fundamental
prerequisite, such as due process, will not constitute a proper basis for the
claim of double jeopardy" (People vs. Balisacan, L-26376, August 31, 1966,
Tilghman vs. Mago [Fla.] 82 So. 2d 136; McCleary vs. Hudspeth, 124 F. 2d.
445).

WHEREFORE, THE ORDER OF RESPONDENT JUDGE DATED JULY 7, 1967 IN CRIMINAL CASE
NO. 85798 DISMISSING SAID CASE IS HEREBY SET ASIDE AS NULL AND VOID. CRIMINAL CASE
NO. 85798 IS REMANDED TO THE COURT A QUO FOR TRIAL ON THE MERITS. NO COST.

SO ORDERED.

FELIClDAD VIERNEZA, petitioner, vs. THE COMMISSIONER OF

CUSTOMS, respondent.

An appeal from the decision of the Court of Tax Appeals (C.T.A. Case No. 762) sustaining a
decision of respondent Commissioner of Customs forfeiting, in favor of the Government, 760
cartons of Chesterfield and Camel cigarettes with blue seals but without internal revenue
strip stamps.

Reproduced below are the undisputed findings of facts in the decision appealed
from: 1wph1.t

At about 2:00 a.m. on September 16, 1957 the M/V "Legaspi" a coastwise vessel
coming from Jolo docked at the port of Cebu on her way to Manila. Acting upon a
confidential telegraphic report from an informer in Jolo that the said vessel was
carrying a substantial quantity of smuggled foreign cigarettes, the Customs
authorities of the port of Cebu conducted a search of the vessel which eventually led
to the discovery of eight cases containing SIX HUNDRED FIFTY (650) CARTONS of
Chesterfield cigarettes and ONE HUNDRED TEN (110) CARTONS of Camel cigarettes
without the required Internal Revenue strip stamps. Upon investigation it was also
discovered that the subject merchandise was covered by Bill of Lading No. 24-A
(Exhibit B) with "personal belongings" as its declaration and correspondingly entered
into the manifest of the vessel likewise with "personal belongings" as the noted
description, and with Sultan Pula of Jolo as the consignor and a certain Carlos Valdez
as the consignee in Manila. Upon further investigation, however, it was found that a
woman passenger was accompanying the subject merchandise appearing later to be
Mrs. Felicidad Vierneza, the present claimant, who all the while holds the bill of
lading. It should be noted that when Mrs. Vierneza was questioned during the course
of the search she disclaimed under oath (Exhibit H) ownership of the merchandise.

Believing that there is a strong evidence of violations of Customs laws, the Collector
of Customs of Cebu seized the merchandise and instituted the forfeiture proceedings
for violation of Section 2530 (f), (g) and (m-4) of the Tariff and Customs Code of the
Philippines and Section 174 of the Internal Revenue Code. After complying with the
procedural requirement, of the law, the Collector of Customs of Cebu conducted a
hearing of the case ... (and) on February 5, 1958, ... rendered his decision forfeiting
the subject merchandise in favor of the Government ... (pp. 42-43, Customs records.)

The claimant of the merchandise, petitioner herein, appealed in due time from the
decision of the Collector of Customs of Cebu to the Commissioner of Customs who
affirmed the decision of the Collector, with the modification that the forfeiture was
sustained, among others, under paragraph (m-1) of Section 2530 of the Tariff and
Customs Code instead of under paragraph (m-4) of the same section. ...

Elevated to the Court of Tax Appeals, the decision of respondent Commissioner of Customs
was affirmed, the court "(f)inding that the Collector of Customs of Cebu had jurisdiction to
order the seizure and forfeiture of said cigarettes and that the forfeiture of the same is in
accordance with Section 2530 (f) of the Tariff and Customs Code". Thus, petitioner, who
claimed to have merely purchased the cigarettes in the open market in Jolo, now turns to us
for relief, advancing the following assignment of errors:

1. The Court of Tax Appeals erred in affirming the decision of the respondent finding
that the Collector of Customs for the port of Cebu acted with jurisdiction in instituting
seizure proceedings against the merchandise herein involved.

2. The Court of Tax Appeals erred in affirming the decision of the respondent finding
that the merchandise involved are liable to the penalty of forfeiture (under Section
2530 (f) of the Tariff and Customs Code).
3. The Court of Tax Appeals erred in not finding that the merchandise involved which
were seized and libeled for alleged violation of particular provisions of law can not be
legally forfeited for violation of any other provision of law.

All three assigned errors are untenable.

1. Petitioner argues that the Collector of Customs of Jolo, who has "jurisdiction over all
matters arising from the enforcement of tariff and customs laws within his collection
district", as provided for in Section 703 of the Tariff and Customs Code, is exclusively
authorized to proceed against the cigarettes in question inasmuch as the smuggling was
allegedly perpetrated in his collection district. Hence, petitioner concludes that the seizure
and forfeiture thereof by the Collector of Customs of Cebu is irregular and illegal for lack of
jurisdiction.

We do not agree. First, because Section 703, on which petitioner's conclusion is premised, is
legally non-existent, the same having been vetoed by the President. 1 Secondly, the Tariff and
Customs Code clearly empowers the Bureau of Customs to prevent and suppress smuggling
and other frauds upon the Customs [Sec. 602 (b)] over all seas within the jurisdiction of the
Philippines and over all coasts, ports, airports, harbors, bays, rivers and inland waters
navigable from the sea and, in case of "hot pursuit", even beyond the maritime zone (Sec.
603). For the due enforcement of this function, a Collector, among others, is authorized to

search and seize (Sec. 2203), at any place within the jurisdiction of the said Bureau (Sec.
2204, sec. par.), any vessel, aircraft, cargo, article, animal or other movable property when
the same is subject to forfeiture or liable for any fine imposed under customs and tariff laws
(Sec. 2205). It is of no moment where the introduction of the property subject to forfeiture
took place. For, to our mind, "(i)t is the right of an officer of the customs to seize goods
which are suspected to have been introduced into the country in violation of the revenue
laws not only in his own district, but also in any other district than his own". [Taylor vs. U.S.,
44 U.S. (3 How.) 197, 11 L. ed. 559]. Any other construction of the Tariff and Customs Code,
such as the one proposed by petitioner, would virtually place the Collector of Customs in a
straitjacket and render inutile his police power of search and seizure, thereby frustrating
effective enforcement of the measures provided in the Code to prevent and suppress
smuggling and other frauds upon the Customs. This we can not sanction by subscribing to
petitioner's conclusion. The Code, as a revenue law, is to be construed to carry out the
intention of Congress in enacting it and as would most effectually accomplish its objects (15
Am. Jur. 304).

Petitioner also attacks the jurisdiction of the Collector of Customs of Cebu on the ground that
the forfeiture of the cigarettes is not in accordance with Section 2531 of the Code, as the
same were, at the time of seizure, no longer in the custody and control of the Bureau of
Customs nor in the hands, or subject to control, of the importer, original owner, consignee,
agent or person with knowledge that the same were imported contrary to law.
Again, we disagree. The forfeiture is effected precisely in accordance with Section 2531
afore-cited, which plainly provides "that forfeiture shall be effected when and while the
article is in the custody or within the jurisdiction of the customs authority ... or in the hands
or subject to the control of ... some person who shall receive, conceal, buy, sell or transport
the same ... with knowledge that the article was imported ... contrary to law" (Emphasis
supplied). There can be no question that the cigarettes involved were seized and forfeited at
the port of Cebu which is within the jurisdiction of the Bureau of Customs and, as will be
shown later, while the cigarettes were subject to the control of petitioner, who bought,
concealed, and transported the same aboard the M/V "Legaspi" with knowledge that they
were imported contrary to law. Besides, it is a settled jurisprudence that forfeiture
proceedings are in the nature of proceedings in rem wherein the jurisdiction to proceed
against the res is vested in the court of the district where the same is found or seized (25
C.J.S. 572). Therefore, the Collector of Customs of Cebu, who has the authority under the
Tariff and Customs Code to institute forfeiture proceedings, lawfully assumed jurisdiction to
forfeit, in favor of the Government, the smuggled cigarettes found and seized within his
collection district.

2. Petitioner next argues that the cigarettes in question are not merchandise of prohibited
importation inasmuch as she had purchased the same in the open market in Jolo; which goes
to show that she is not the importer, original owner, consignee, agent or person who
effected the importation thereof; and that in the absence of evidence that she bought the
same with knowledge that they were imported contrary to law in accordance with Section

2531, as the lack of internal revenue stamps is not evidence of illegal importation much less
her knowledge thereof, the said cigarettes are not subject to forfeiture under Section 2530
(f) of the Code.

This is not the first time that this question has been posed before us. In the case of Gigare
vs. Commissioner of Customs (G.R. No. L-21376, August 29, 1966, 17 S.C.R.A. 1001), we
disposed of the same by holding that "(s)ince, admittedly, the internal revenue tax on the
cigarettes indispute has not been paid, it is clear that said cigarettes fall within the category
of "merchandise of prohibited importation," the importation of which is contrary to law and
may justify its forfeiture, as provided in Sections 1363 (f) and 1364 of the Revised
Administrative Code," which correspond to Sections 2530 (f) and 2531, respectively, of the
Tariff and Customs Code. "Moreover, the blue seals affixed on said commodities prove
satisfactorily that they are foreign products. Again, the importation thereof into the
Philippines is attested by the presence of said products within our jurisdiction" (Ibid.) And
concerning petitioner's knowledge of these facts, the following disquisition by the Court of
Tax Appeals, lengthily quoted in the Gigare case, finds significant application in the case at
bar:

Were the cigarettes in question illegally imported into the Philippines? We are of the
opinion that, the Commissioner of Customs should be sustained in his finding that the
cigarettes in question were imported illegally. The absence of Philippine internal
revenue strip stamps on cigarettes indicates that they are either manufactured
clandestinely within the Philippines or imported illegally into the country. In the case
at bar, concomitant circumstances militate against the clandestine manufacture
within the Philippines of the cigarettes. The affixture of blue seals on the packs of the
cigarettes, the wrappers, the purchase of the cigarettes in the open market of Jolo, a
place where American and other foreign made cigarettes are, of common knowledge,
frequently smuggled from Borneo ... and the failure of petitioner to show that the
cigarettes in question were locally manufactured rule out the possibility that the
cigarettes in question were manufactured in the Philippines. Consequently, we are
constrained to conclude that these cigarettes were foreign (American) made. They
were merchandise of prohibited importation, the importation of which was contrary to
law, and should be forfeited under Section 1363 (f) of the Revised Administrative
Code.

xxx

xxx

xxx

The fact that petitioner is merely a buyer of the cigarettes in the open market of Jolo
does not render the cigarrettes immune from the penalty of forfeiture. This is so
because forfeiture proceedings are instituted against the res (cigarettes) ... and, by

express provision of Section 1364 of the Revised Administrative Code, the forfeiture
shall occur while the merchandise is in the hands or subject to control of some person
who shall receive, conceal, buy, sell, or transport the same with knowledge that the
merchandise was imported contrary to law. Petitioner cannot but be charged with the
knowledge that the cigarettes in question were imported contrary to law, for if it were
otherwise, why were these cigarettes concealed on board the vessel ... ? Why did she
deny ownership over said cigarettes? For what plausible reason was she afraid of
detention? What impelled her to believe that she would be detained by the customs
authorities? To uphold the claim of petitioner and forego the forfeiture would be
giving a chance to accessories after the fact of smugglers of foreign cigarettes to ply
their trade with impunity and with sanction of the courts. What the executive
department could not curb, that is rampant smuggling of foreign cigarettes, the
courts should not tolerate ...

3. Petitioner finally contends that the decision of the Commissioner of Customs libeling and
forfeiting the cigarettes involved in the present case for violation of Section 2530 (m-1) of
the Tariff and Customs Code is unconstitutional, in view of the fact that she was allegedly
not afforded an opportunity to defend the cigarettes against such charge, said section not
being one of the original grounds cited by the Collector of Customs of Cebu in forfeiting the
same.

The contention has no merit. Certainly, the appellate power of the Commissioner of Customs
to review seizure and protest cases is not limited to a review of the issues raised on appeal.
He may affirm, modify or reverse the decision of the Collector (Section 2313) on other
questions provided that his findings and conclusions are, as in the case at bar, supported by
evidence. It is of no consequence whatsoever what were the original grounds of the seizure
and forfeiture if, in point of fact, the goods are by law subject to forfeiture [Wood vs. U.S., 16
Pet. (U.S.) 342, 10 L. ed. 987]. As there is evidence on record showing that the cigarettes in
question were imported and introduced into the country without passing through a customs
house, the same may be forfeited under said Section 2530 (m-1) of the Code,
notwithstanding that it is not one of the original charges. As we held in Que Po Lay vs.
Central Bank, et al. (104 Phil. 853), what counts is not the designation of the particular
section of the law that has been violated but the description of the violation in the seizure
report.2

WHEREFORE, the decision appealed from is hereby affirmed, with costs against petitioner.

HON. JUAN PONCE ENRILE, Commissioner of Customs and LT. GENERAL

PELAGIO A. CRUZ, (Ret.) Chairman, Anti-Smuggling Action Center
(ASAC), petitioners, vs. ANDRES M. VINUYA and HON. WALFRIDO DE LOS
ANGELES, presiding judge of Branch IV, Court of First Instance of Rizal
(sitting at Quezon City), respondents.

The crucial question presented in this certiorari and prohibition proceeding, petitioners being
the then Commissioner of Customs, the Honorable Juan Ponce Enrile as well as the Chairman
of the Anti-Smuggling Action Center (ASAC), General Pelagio A. Cruz, is whether Judge
Walfrido de los Angeles is vested with jurisdiction to entertain a complaint for replevin filed
by the other respondent, Andres M. Vinuya, for the recovery of a Cadillac car, subject of a
seizure and forfeiture proceeding. Ever since Pacis v. Averia1 the answer has not been in
doubt. The matter of seizure and forfeiture is the exclusive concern of the Collector of
Customs, a court of first instance lacking power in the premises. Nonetheless, the plea that
in this particular case respondent Judge acted within the limits of his authority is predicated
on the alleged illegality of the seizure which, in the opinion of respondents, did not confer
jurisdiction on the Collector of Customs. Such a contention which loses sight of the vital
distinction between the existence of authority and the mode of its exercise does not suffice
to call for a different ruling. We reiterate the principle of the exclusive jurisdiction of the
Collector of Customs in seizure and forfeiture proceedings. We grant the petition.

From the petition filed on May 28, 1968, it would appear that upon the application of the
ASAC on February 9, 1968, the then Collector of Customs of the Port of Manila issued a
warrant of seizure and detention against the Cadillac car involved in this case, the ownerclaimant being a certain Rodolfo Ceadoza, as the taxes and duties had not been
paid.lwph1.t The warrant was served and enforced on April 2, 1968 prior to the filing of
a complaint for replevin with respondent Judge. The circumstances indicative of the alleged
failure to pay such taxes and duties on the CadiIlac car are set forth in the petition thus: "(a)
In securing the registration of said car, Rodolfo Ceadoza predecessor-in-interest of
respondent Andres M. Vinuya, used Informal Entry No. 1563652 dated May 9, 1967 and
Certificate of Payment No. 10868 in the amount of P1,305.00, both of the Bureau of
Customs, but upon checking the records of the Land Transportation Commission, it was
found that said informal entry and certificate of payment corresponded to a 1961 Fiat
600, and not to the Cadillac car in dispute; (b) The person who paid the said taxes and
duties is one Pablo Cruz, Jr., who does not appear to be one of the predecessors-in-interest of
respondent Vinuya; (c) As shown by Annex B hereof, when the Cadillac car was seized and
detained by ASAC agents, its plate license was No. H-37264 (67) Rizal, and not Plate No.
35905 (67) Rizal, which was its plate number when it was allegedly registered; (d) On
February 14, 1968, a certain Jess O. Tuazon, General Manager of the Lee Sabre Car
Exchange, Manila, executed an affidavit ..., to the effect that Rodolfo Ceadoza had left the
said car in his possession for the purpose of selling the same and that the affiant had
obligated himself to 'waive my (his) rights to sell the above-mentioned car not until the
proper taxes due to the government has been satisfactorily paid'; (e) On February 15, 1968,

said Jess Tuazon, who then had possession of the said Cadillac car, through his lawyer,
Thomas S. Cortez, executed a promissory note ..., obligating himself to pay the
corresponding taxes and duties."2

It was moreover shown in the petition that the owner, Rodolfo Ceadoza, had sold such car
to one Francisco Dee from whom respondent Vinuya acquired the same. 3 Under claim that
he was aggrieved by such seizure and detention of the car in question, respondent Vinuya
filed a complaint for replevin in the sala of respondent Judge. 4 After filing a bond of
P60,000.00 an ex-parte order was issued on April 19, 1967 by respondent Judge directing a
special sheriff to take possession of the Cadillac car in question. 5 On the very same day
respondent Judge likewise gave due course to the complaint for replevin and required
petitioners to file their answer. 6
There was, on the part of petitioners, a motion to dismiss as well as to lift the ex-parte order.
In seeking such dismissal, the attention of respondent Judge was invited to the fact that
forfeiture proceedings had already been instituted before the Collector of Customs who has
the sole jurisdiction to determine questions affecting the disposition of property under
seizure as well as the absence of a cause of action. 7 There was an opposition by respondent
Vinuya filed on May 7, 1968 and a denial thereof in an order of respondent Judge on the
ground that such motion to dismiss "is without merit." The matter was thus taken to this
Court.

In our resolution of June 4, 1968, respondents were required to answer; at the same time a
preliminary injunction was issued. In the answer filed on July 11, 1968, there was an
admission that on February 9, 1968, the Collector of Customs of the Port of Manila issued a
warrant of seizure and detention against the Cadillac car, but there was a denial that the
registration covering the car was illegally secured as respondent Vinuya relied on what
appeared to be a public document valid and regular on its face. They base their defense in
the illegality of the seizure as the warrant on which it is based is invalid and the seizing
officer was devoid of authority; respondents' principal contention thus is the assertion that
an illegal seizure cannot confer jurisdiction on the Collector of Customs.
From a study of the records of the case as well as the applicable law, the conclusion reached
by us, as mentioned at the outset, is that the petition should be granted.

1. The prevailing doctrine is that the exclusive jurisdiction in seizure and forfeiture cases
vested in the Collector of Customs precludes a court of first instance from assuming
cognizance over such a matter. This has been so, as noted, since Pacis v.
Averia.8 In an opinion penned by Justice J. P. Bengzon, there was a statement of the legal
provisions that call for application. Thus: "The Tariff and Customs Code, in Section 2530
thereof, lists the kinds of property subject to forfeiture. At the same time, in Part 2 of Title VI
thereof, it provides for the procedure in seizure and forfeiture cases and vests in the

Collector of Customs the authority to hear and decide said cases. The Collector's decision is
appealable to the Commissioner of Customs whose decision is in turn appealable to the
Court of Tax Appeals. An aggrieved party may appeal from a judgment of the Court of Tax
Appeals directly to this Court. On the other hand, Section 44(c) of the Judiciary Act of 1948
lodges in the Court of First Instance original jurisdiction in all cases in which the value of the
property in controversy amounts to more than ten thousand pesos. This original jurisdiction
of the Court of First Instance, when exercised in an action for recovery of personal property
which is a subject of a forfeiture proceeding in the Bureau of Customs, tends to encroach
upon, and to render futile, the jurisdiction of the Collector of Customs in seizure and
forfeiture proceedings. This is precisely what took place in this case.lwph1.t The seizure
and forfeiture proceedings against the M/B 'Bukang Liwayway' before the Collector of
Customs of Manila, was stifled by the issuance of a writ of replevin by the Court of First
Instance of Cavite."9
The crucial question whether Section 44 (c) of the Judicial Act should give way to the
provisions of the Tariff and Customs Code was answered in the affirmative, the opinion
clearly stating that "the Court of First Instance should yield to the jurisdiction of the Collector
of Customs. The jurisdiction of the Collector of Customs is provided for in Republic Act 1937
which took effect on July 1, 1957, much later than the Judiciary Act of 1948. It is axiomatic
that a later law prevails over a prior statute. Moreover, on grounds of public policy, it is more
reasonable to conclude that the legislators intended to divest the Court of First Instance of
the prerogative to replevin a property which is a subject of a seizure and forfeiture
proceedings for violation of the Tariff and Customs Code. Otherwise, actions for forfeiture of
property for violation of Customs laws could easily be undermined by the simple devise of
replevin." 10 This excerpt from the opinion is likewise relevant: "Furthermore, Section 2303 of
the Tariff and Customs Code requires the Collector of Customs to give to the owner of the
property sought to be forfeited written notice of the seizure and to give him the opportunity
to be heard in his defense. This provision clearly indicates the intention of the law to confine
in the Bureau of Customs the determination of all questions affecting the disposal of
property proceeded against in a seizure and forfeiture case. The judicial recourse of the
property owner is not in the Court of First Instance but in the Court of Tax Appeals, and only
after exhausting administrative remedies in the Bureau of Customs." 11

The principle was reiterated in an opinion of the present Chief Justice in De Joya
v. David. 12 Thus: "As regards the merits of this case, it is obvious that the Court of First
Instance of Manila had no jurisdiction over the subject-matter of Civil Case No. 56533
thereof, and that neither had the Court of Appeals jurisdiction over the appeal taken from
the decision of said trial Court. Indeed, in said Case No. 56533 David sought to obtain
possession of the goods which were the object of seizure proceedings before the Collector of
Customs. We have already held that such action is beyond the jurisdiction of courts of first
instance." 13

Papa v. Mago 14 likewise deserves to be cited. The opinion of Justice Zaldivar for the Court
emphatically asserted the doctrine anew in the following language: "It is the settled rule,

therefore, that the Bureau of Customs acquires exclusive jurisdiction over imported goods,
for the purposes of enforcement of the customs laws, from the moment the goods are
actually in its possession or control, even if no warrant of seizure or detention had previously
been issued by the Collector of Customs in connection with seizure and forfeiture
proceedings. In the present case, the Bureau of Customs actually seized the goods in
question on November 4, 1966, and so from that date the Bureau of Customs acquired
jurisdiction over the goods for the purposes of the enforcement of the tariff and customs
laws, to the exclusion of the regular courts. Much less than would the Court of First Instance
of Manila has jurisdiction over the goods in question after the Collector of Customs had
issued the warrant of seizure and detention on January 12, 1967. And so, it cannot be said,
as respondents contend, that the issuance of said warrant was only an attempt to divest the
respondent Judge of jurisdiction over the subject matter of the case. The court presided by
respondent Judge did not acquire jurisdiction over the goods in question when the petition
for mandamus was filed before it, and so there was no need of divesting it of jurisdiction. Not
having acquired jurisdiction over the goods, it follows that the Court of First Instance of
Manila had no jurisdiction to issue the questioned order of March 7, 1967 releasing said
goods." 15

2. Respondents, however, notwithstanding the compelling force of the above doctrines,

would assert that respondent Judge could entertain the replevin suit as the seizure is illegal,
allegedly because the warrant issued is invalid and the seizing officer likewise was devoid of
authority. This is to lose sight of the distinction, as earlier made mention of, between the
existence of the power and the regularity of the proceeding taken under it. The
governmental agency concerned, the Bureau of Customs, is vested with exclusive authority.
Even if it be assumed that in the exercise of such exclusive competence a taint of illegality
may be correctly imputed, the most that can be said is that under certain circumstances the
grave abuse of discretion conferred may oust it of such jurisdiction. It does not mean
however that correspondingly a court of first instance is vested with competence when
clearly in the light of the above decisions the law has not seen fit to do so. lwph1.t The
proceeding before the Collector of Customs is not final. An appeal lies to the Commissioner
of Customs and thereafter to the Court of Tax Appeals. It may even reach this Court through
the appropriate petition for review. The proper ventilation of the legal issues raised is thus
indicated. Certainly a court of first instance is not therein included. It is devoid of jurisdiction.
WHEREFORE, the writ of certiorari prayed for is granted, respondent Judge being clearly
without jurisdiction. As a result whereof, the orders complained of are set aside and declared
to be without any force or effect. The writ of prohibition is likewise granted restraining
respondent Judge from otherwise proceeding and continuing in any manner whatsoever in
said Civil Case No. Q-12025 pending in his sala which he is required to dismiss. The writ of
preliminary injunction issued by this Court is made permanent.

HON. RICARDO G. PAPA, as Chief of Police of Manila; HON. JUAN PONCE

ENRILE, as Commissioner of Customs; PEDRO PACIS, as Collector of

Customs of the Port of Manila; and MARTIN ALAGAO, as Patrolman of the

Manila Police Department, petitioners, vs. REMEDIOS MAGO and HILARION
U. JARENCIO, as Presiding Judge of Branch 23, Court of First Instance of
Manila, respondents.

This is an original action for prohibition and certiorari, with preliminary injunction filed by
Ricardo Papa, Chief of Police of Manila; Juan once Enrile, Commissioner of Customs; Pedro
Pacis, Collector of Customs of the Port of Manila; and Martin Alagao, a patrolman of the
Manila Police Department, against Remedios Mago and Hon. Hilarion Jarencio, Presiding
Judge of Branch 23 of the Court of First Instance of Manila, praying for the annulment of the
order issued by respondent Judge in Civil Case No. 67496 of the Court of First Instance of
Manila under date of March 7, 1967, which authorized the release under bond of certain
goods which were seized and held by petitioners in connection with the enforcement of the
Tariff and Customs Code, but which were claimed by respondent Remedios Mago, and to
prohibit respondent Judge from further proceeding in any manner whatsoever in said Civil
Case No. 67496. Pending the determination of this case this Court issued a writ of
preliminary injunction restraining the respondent Judge from executing, enforcing and/or
implementing the questioned order in Civil Case No. 67496 and from proceeding with said
case.

Petitioner Martin Alagao, head of the counter-intelligence unit of the Manila Police
Department, acting upon a reliable information received on November 3, 1966 to the effect
that a certain shipment of personal effects, allegedly misdeclared and undervalued, would
be released the following day from the customs zone of the port of Manila and loaded on two
trucks, and upon orders of petitioner Ricardo Papa, Chief of Police of Manila and a duly
deputized agent of the Bureau of Customs, conducted surveillance at gate No. 1 of the
customs zone. When the trucks left gate No. 1 at about 4:30 in the afternoon of November 4,
1966, elements of the counter-intelligence unit went after the trucks and intercepted them
at the Agrifina Circle, Ermita, Manila. The load of the two trucks consisting of nine bales of
goods, and the two trucks, were seized on instructions of the Chief of Police. Upon
investigation, a person claimed ownership of the goods and showed to the policemen a
"Statement and Receipts of Duties Collected in Informal Entry No. 147-5501", issued by the
Bureau of Customs in the name of a certain Bienvenido Naguit.

Claiming to have been prejudiced by the seizure and detention of the two trucks and their
cargo, Remedios Mago and Valentin B. Lanopa filed with the Court of First Instance of Manila
a petition "for mandamus with restraining order or preliminary injunction, docketed as Civil
Case No. 67496, alleging, among others, that Remedios Mago was the owner of the goods
seized, having purchased them from the Sta. Monica Grocery in San Fernando, Pampanga;
that she hired the trucks owned by Valentin Lanopa to transport, the goods from said place
to her residence at 1657 Laon Laan St., Sampaloc, Manila; that the goods were seized by

members of the Manila Police Department without search warrant issued by a competent
court; that anila Chief of Police Ricardo Papa denied the request of counsel for Remedios
Mago that the bales be not opened and the goods contained therein be not examined; that
then Customs Commissioner Jacinto Gavino had illegally assigned appraisers to examine the
goods because the goods were no longer under the control and supervision of the
Commissioner of Customs; that the goods, even assuming them to have been misdeclared
and, undervalued, were not subject to seizure under Section 2531 of the Tariff and Customs
Code because Remedios Mago had bought them from another person without knowledge
that they were imported illegally; that the bales had not yet been opened, although Chief of
Police Papa had arranged with the Commissioner of Customs regarding the disposition of the
goods, and that unless restrained their constitutional rights would be violated and they
would truly suffer irreparable injury. Hence, Remedios Mago and Valentin Lanopa prayed for
the issuance of a restraining order, ex parte, enjoining the above-named police and customs
authorities, or their agents, from opening the bales and examining the goods, and a writ
of mandamus for the return of the goods and the trucks, as well as a judgment for actual,
moral and exemplary damages in their favor.

On November 10, 1966, respondent Judge Hilarion Jarencio issued an order ex

parte restraining the respondents in Civil Case No. 67496 now petitioners in the instant
case before this Court from opening the nine bales in question, and at the same time set
the hearing of the petition for preliminary injunction on November 16, 1966. However, when
the restraining order was received by herein petitioners, some bales had already been
opened by the examiners of the Bureau of Customs in the presence of officials of the Manila
Police Department, an assistant city fiscal and a representative of herein respondent
Remedios Mago.

Under date of November 15, 1966, Remedios Mago filed an amended petition in Civil Case
No. 67496, including as party defendants Collector of Customs Pedro Pacis of the Port of
Manila and Lt. Martin Alagao of the Manila Police Department. Herein petitioners (defendants
below) filed, on November 24, 1966, their "Answer with Opposition to the Issuance of a Writ
of Preliminary Injunction", denying the alleged illegality of the seizure and detention of the
goods and the trucks and of their other actuations, and alleging special and affirmative
defenses, to wit: that the Court of First Instance of Manila had no jurisdiction to try the case;
that the case fell within the exclusive jurisdiction of the Court of Tax Appeals; that, assuming
that the court had jurisdiction over the case, the petition stated no cause of action in view of
the failure of Remedios Mago to exhaust the administrative remedies provided for in the
Tariff and Customs Code; that the Bureau of Customs had not lost jurisdiction over the goods
because the full duties and charges thereon had not been paid; that the members of the
Manila Police Department had the power to make the seizure; that the seizure was not
unreasonable; and the persons deputized under Section 2203 (c) of the Tariff and Customs
Code could effect search, seizures and arrests in inland places in connection with the
enforcement of the said Code. In opposing the issuance of the writ of preliminary injunction,
herein petitioners averred in the court below that the writ could not be granted for the
reason that Remedios Mago was not entitled to the main reliefs she prayed for; that the

release of the goods, which were subject to seizure proceedings under the Tariff and
Customs Code, would deprive the Bureau of Customs of the authority to forfeit them; and
that Remedios Mago and Valentin Lanopa would not suffer irreparable injury. Herein
petitioners prayed the court below for the lifting of the restraining order, for the denial of the
issuance of the writ of preliminary injunction, and for the dismissal of the case.

At the hearing on December 9, 1966, the lower Court, with the conformity of the parties,
ordered that an inventory of the goods be made by its clerk of court in the presence of the
representatives of the claimant of the goods, the Bureau of Customs, and the AntiSmuggling Center of the Manila Police Department. On December 13, 1966, the abovenamed persons filed a "Compliance" itemizing the contents of the nine bales.

Herein respondent Remedios Mago, on December 23, 1966, filed an ex parte motion to
release the goods, alleging that since the inventory of the goods seized did not show any
article of prohibited importation, the same should be released as per agreement of the
patties upon her posting of the appropriate bond that may be determined by the court.
Herein petitioners filed their opposition to the motion, alleging that the court had no
jurisdiction to order the release of the goods in view of the fact that the court had no
jurisdiction over the case, and that most of the goods, as shown in the inventory, were not
declared and were, therefore, subject to forfeiture. A supplemental opposition was filed by
herein petitioners on January 19, 1967, alleging that on January 12, 1967 seizure
proceedings against the goods had been instituted by the Collector of Customs of the Port of
Manila, and the determination of all questions affecting the disposal of property proceeded
against in seizure and forfeiture proceedings should thereby be left to the Collector of
Customs. On January 30, 1967, herein petitioners filed a manifestation that the estimated
duties, taxes and other charges due on the goods amounted to P95,772.00. On February 2,
1967, herein respondent Remedios Mago filed an urgent manifestation and reiteration of the
motion for the release under bond of the goods.

On March 7, 1967, the respondent Judge issued an order releasing the goods to herein
respondent Remedios Mago upon her filing of a bond in the amount of P40,000.00, and on
March 13, 1967, said respondent filed the corresponding bond.

On March 13, 1967, herein petitioner Ricardo Papa, on his own behalf, filed a motion for
reconsideration of the order of the court releasing the goods under bond, upon the ground
that the Manila Police Department had been directed by the Collector of Customs of the Port
of Manila to hold the goods pending termination of the seizure proceedings.

Without waiting for the court's action on the motion for reconsideration, and alleging that
they had no plain, speedy and adequate remedy in the ordinary course of law, herein
petitioners filed the present action for prohibition and certiorari with preliminary injunction
before this Court. In their petition petitioners alleged, among others, that the respondent
Judge acted without jurisdiction in ordering the release to respondent Remedios Mago of the
disputed goods, for the following reasons: (1) the Court of First Instance of Manila, presided
by respondent Judge, had no jurisdiction over the case; (2) respondent Remedios Mago had
no cause of action in Civil Case No. 67496 of the Court of First Instance of Manila due to her
failure to exhaust all administrative remedies before invoking judicial intervention; (3) the
Government was not estopped by the negligent and/or illegal acts of its agent in not
collecting the correct taxes; and (4) the bond fixed by respondent Judge for the release of
the goods was grossly insufficient.

In due time, the respondents filed their answer to the petition for prohibition
and certiorari in this case. In their answer, respondents alleged, among others: (1) that it
was within the jurisdiction of the lower court presided by respondent Judge to hear and
decide Civil Case No. 67496 and to issue the questioned order of March 7, 1967, because
said Civil Case No. 67496 was instituted long before seizure, and identification proceedings
against the nine bales of goods in question were instituted by the Collector of Customs; (2)
that petitioners could no longer go after the goods in question after the corresponding duties
and taxes had been paid and said goods had left the customs premises and were no longer
within the control of the Bureau of Customs; (3) that respondent Remedios Mago was
purchaser in good faith of the goods in question so that those goods can not be the subject
of seizure and forfeiture proceedings; (4) that the seizure of the goods was affected by
members of the Manila Police Department at a place outside control of jurisdiction of the
Bureau of Customs and affected without any search warrant or a warrant of seizure and
detention; (5) that the warrant of seizure and detention subsequently issued by the Collector
of Customs is illegal and unconstitutional, it not being issued by a judge; (6) that the seizing
officers have no authority to seize the goods in question because they are not articles of
prohibited importation; (7) that petitioners are estopped to institute the present action
because they had agreed before the respondent Judge that they would not interpose any
objection to the release of the goods under bond to answer for whatever duties and taxes
the said goods may still be liable; and (8) that the bond for the release of the goods was
sufficient.

The principal issue in the instant case is whether or not, the respondent Judge had acted
with jurisdiction in issuing the order of March 7, 1967 releasing the goods in question.

The Bureau of Customs has the duties, powers and jurisdiction, among others, (1) to assess
and collect all lawful revenues from imported articles, and all other dues, fees, charges, fines
and penalties, accruing under the tariff and customs laws; (2) to prevent and suppress
smuggling and other frauds upon the customs; and (3) to enforce tariff and customs

laws. 1 The goods in question were imported from Hongkong, as shown in the "Statement
and Receipts of Duties Collected on Informal Entry". 2 As long as the importation has not
been terminated the imported goods remain under the jurisdiction of the Bureau of customs.
Importation is deemed terminated only upon the payment of the duties, taxes and other
charges upon the articles, or secured to be paid, at the port of entry and the legal permit for
withdrawal shall have been granted. 3 The payment of the duties, taxes, fees and other
charges must be in full. 4

The record shows, by comparing the articles and duties stated in the aforesaid "Statement
and Receipts of Duties Collected on Informal Entry" with the manifestation of the Office of
the Solicitor General 5 wherein it is stated that the estimated duties, taxes and other charges
on the goods subject of this case amounted to P95,772.00 as evidenced by the report of the
appraiser of the Bureau of Customs, that the duties, taxes and other charges had not been
paid in full. Furthermore, a comparison of the goods on which duties had been assessed, as
shown in the "Statement and Receipts of Duties Collected on Informal Entry" and the
"compliance" itemizing the articles found in the bales upon examination and
inventory, 6 shows that the quantity of the goods was underdeclared, presumably to avoid
the payment of duties thereon. For example, Annex B (the statement and receipts of duties
collected) states that there were 40 pieces of ladies' sweaters, whereas Annex H (the
inventory contained in the "compliance") states that in bale No. 1 alone there were 42
dozens and 1 piece of ladies' sweaters of assorted colors; in Annex B, only 100 pieces of
watch bands were assessed, but in Annex H, there were in bale No. 2, 209 dozens and 5
pieces of men's metal watch bands (white) and 120 dozens of men's metal watch band (gold
color), and in bale No. 7, 320 dozens of men's metal watch bands (gold color); in Annex B,
20 dozens only of men's handkerchief were declared, but in Annex H it appears that there
were 224 dozens of said goods in bale No. 2, 120 dozens in bale No. 6, 380 dozens in bale
No. 7, 220 dozens in bale No. 8, and another 200 dozens in bale No. 9. The articles
contained in the nine bales in question, were, therefore, subject to forfeiture under Section
2530, pars. e and m, (1), (3), (4), and (5) of the Tariff and Customs Code. And this Court has
held that merchandise, the importation of which is effected contrary to law, is subject to
forfeiture, 7 and that goods released contrary to law are subject to seizure and forfeiture. 8

Even if it be granted, arguendo, that after the goods in question had been brought out of the
customs area the Bureau of Customs had lost jurisdiction over the same, nevertheless, when
said goods were intercepted at the Agrifina Circle on November 4, 1966 by members of the
Manila Police Department, acting under directions and orders of their Chief, Ricardo C. Papa,
who had been formally deputized by the Commissioner of Customs, 9 the Bureau of Customs
had regained jurisdiction and custody of the goods. Section 1206 of the Tariff and Customs
Code imposes upon the Collector of Customs the duty to hold possession of all imported
articles upon which duties, taxes, and other charges have not been paid or secured to be
paid, and to dispose of the same according to law. The goods in question, therefore, were
under the custody and at the disposal of the Bureau of Customs at the time the petition
for mandamus, docketed as Civil Case No. 67496, was filed in the Court of First Instance of
Manila on November 9, 1966. The Court of First Instance of Manila, therefore, could not

exercise jurisdiction over said goods even if the warrant of seizure and detention of the
goods for the purposes of the seizure and forfeiture proceedings had not yet been issued by
the Collector of Customs.

The ruling in the case of "Alberto de Joya, et al. v. Hon. Gregorio Lantin, et al.," G.R. No. L24037, decided by this Court on April 27, 1967, is squarely applicable to the instant case. In
the De Joya case, it appears that Francindy Commercial of Manila bought from Ernerose
Commercial of Cebu City 90 bales of assorted textiles and rags, valued at P117,731.00,
which had been imported and entered thru the port of Cebu. Ernerose Commercial shipped
the goods to Manila on board an inter-island vessel. When the goods where about to leave
the customs premises in Manila, on October 6, 1964, the customs authorities held them for
further verification, and upon examination the goods were found to be different from the
declaration in the cargo manifest of the carrying vessel. Francindy Commercial subsequently
demanded from the customs authorities the release of the goods, asserting that it is a
purchaser in good faith of those goods; that a local purchaser was involved so the Bureau of
Customs had no right to examine the goods; and that the goods came from a coastwise port.
On October 26, 1964, Francindy Commercial filed in the Court of First Instance of Manila a
petition for mandamus against the Commissioner of Customs and the Collector of Customs
of the port of Manila to compel said customs authorities to release the goods.

Francindy Commercial alleged in its petition for mandamus that the Bureau of Customs had
no jurisdiction over the goods because the same were not imported to the port of Manila;
that it was not liable for duties and taxes because the transaction was not an original
importation; that the goods were not in the hands of the importer nor subject to importer's
control, nor were the goods imported contrary to law with its (Francindy Commercial's)
knowledge; and that the importation had been terminated. On November 12, 1964, the
Collector of Customs of Manila issued a warrant of seizure and identification against the
goods. On December 3, 1964, the Commissioner of Customs and the Collector of Customs,
as respondents in the mandamus case, filed a motion to dismiss the petition on the grounds
of lack of jurisdiction, lack of cause of action, and in view of the pending seizure and
forfeiture proceedings. The Court of First Instance held resolution on the motion to dismiss in
abeyance pending decision on the merits. On December 14, 1964, the Court of First Instance
of Manila issued a preventive and mandatory injunction, on prayer by Francindy Commercial,
upon a bond of P20,000.00. The Commissioner of Customs and the Collector of Customs
sought the lifting of the preliminary and mandatory injunction, and the resolution of their
motion to dismiss. The Court of First Instance of Manila, however, on January 12, 1965,
ordered them to comply with the preliminary and mandatory injunction, upon the filing by
Francindy Commercial of an additional bond of P50,000.00. Said customs authorities
thereupon filed with this Court, on January 14, 1965, a petition for certiorari and prohibition
with preliminary injunction. In resolving the question raised in that case, this Court held:

This petition raises two related issues: first, has the Customs bureau jurisdiction to
seize the goods and institute forfeiture proceedings against them? and (2) has the
Court of First Instance jurisdiction to entertain the petition for mandamus to compel
the Customs authorities to release the goods?

Francindy Commercial contends that since the petition in the Court of first Instance
was filed (on October 26, 1964) ahead of the issuance of the Customs warrant of
seizure and forfeiture (on November 12, 1964),the Customs bureau should yield the
jurisdiction of the said court.

The record shows, however, that the goods in question were actually seized on
October 6, 1964, i.e., before Francindy Commercial sued in court. The purpose of the
seizure by the Customs bureau was to verify whether or not Custom duties and taxes
were paid for their importation. Hence, on December 23, 1964, Customs released 22
bales thereof, for the same were found to have been released regularly from the
Cebu Port (Petition Annex "L"). As to goods imported illegally or released irregularly
from Customs custody, these are subject to seizure under Section 2530 m. of the
Tariff and Customs Code (RA 1957).

The Bureau of Customs has jurisdiction and power, among others to collect revenues
from imported articles, fines and penalties and suppress smuggling and other frauds
on customs; and to enforce tariff and customs laws (Sec. 602, Republic Act 1957).

The goods in question are imported articles entered at the Port of Cebu. Should they
be found to have been released irregularly from Customs custody in Cebu City, they
are subject to seizure and forfeiture, the proceedings for which comes within the
jurisdiction of the Bureau of Customs pursuant to Republic Act 1937.

Said proceeding should be followed; the owner of the goods may set up defenses
therein (Pacis v. Averia, L-22526, Nov. 20, 1966.) From the decision of the
Commissioner of Customs appeal lies to the Court of Tax Appeals, as provided in Sec.
2402 of Republic Act 1937 and Sec. 11 of Republic Act, 1125. To permit recourse to
the Court of First Instance in cases of seizure of imported goods would in effect
render ineffective the power of the Customs authorities under the Tariff and Customs
Code and deprive the Court of Tax Appeals of one of its exclusive appellate
jurisdictions. As this Court has ruled in Pacis v. Averia,supra, Republic Acts 1937 and
1125 vest jurisdiction over seizure and forfeiture proceedings exclusively upon the
Bureau of Customs and the Court of Tax Appeals. Such law being special in nature,

while the Judiciary Act defining the jurisdiction of Courts of First Instance is a general
legislation, not to mention that the former are later enactments, the Court of First
Instance should yield to the jurisdiction of the Customs authorities.

It is the settled rule, therefore, that the Bureau of Customs acquires exclusive jurisdiction
over imported goods, for the purposes of enforcement of the customs laws, from the
moment the goods are actually in its possession or control, even if no warrant of seizure or
detention had previously been issued by the Collector of Customs in connection with seizure
and forfeiture proceedings. In the present case, the Bureau of Customs actually seized the
goods in question on November 4, 1966, and so from that date the Bureau of Customs
acquired jurisdiction over the goods for the purposes of the enforcement of the tariff and
customs laws, to the exclusion of the regular courts. Much less then would the Court of First
Instance of Manila have jurisdiction over the goods in question after the Collector of Customs
had issued the warrant of seizure and detention on January 12, 1967. 10 And so, it cannot be
said, as respondents contend, that the issuance of said warrant was only an attempt to
divest the respondent Judge of jurisdiction over the subject matter of the case. The court
presided by respondent Judge did not acquire jurisdiction over the goods in question when
the petition for mandamus was filed before it, and so there was no need of divesting it of
jurisdiction. Not having acquired jurisdiction over the goods, it follows that the Court of First
Instance of Manila had no jurisdiction to issue the questioned order of March 7, 1967
releasing said goods.

Respondents also aver that petitioner Martin Alagao, an officer of the Manila Police
Department, could not seize the goods in question without a search warrant. This contention
cannot be sustained. The Chief of the Manila Police Department, Ricardo G. Papa, having
been deputized in writing by the Commissioner of Customs, could, for the purposes of the
enforcement of the customs and tariff laws, effect searches, seizures, and arrests, 11 and it
was his duty to make seizure, among others, of any cargo, articles or other movable
property when the same may be subject to forfeiture or liable for any fine imposed under
customs and tariff laws. 12 He could lawfully open and examine any box, trunk, envelope or
other container wherever found when he had reasonable cause to suspect the presence
therein of dutiable articles introduced into the Philippines contrary to law; and likewise to
stop, search and examine any vehicle, beast or person reasonably suspected of holding or
conveying such article as aforesaid. 13 It cannot be doubted, therefore, that petitioner
Ricardo G. Papa, Chief of Police of Manila, could lawfully effect the search and seizure of the
goods in question. The Tariff and Customs Code authorizes him to demand assistance of any
police officer to effect said search and seizure, and the latter has the legal duty to render
said assistance. 14 This was what happened precisely in the case of Lt. Martin Alagao who,
with his unit, made the search and seizure of the two trucks loaded with the nine bales of
goods in question at the Agrifina Circle. He was given authority by the Chief of Police to
make the interception of the cargo. 15

Petitioner Martin Alagao and his companion policemen had authority to effect the seizure
without any search warrant issued by a competent court. The Tariff and Customs Code does
not require said warrant in the instant case. The Code authorizes persons having police
authority under Section 2203 of the Tariff and Customs Code to enter, pass through or
search any land, inclosure, warehouse, store or building, not being a dwelling house; and
also to inspect, search and examine any vessel or aircraft and any trunk, package, or
envelope or any person on board, or to stop and search and examine any vehicle, beast or
person suspected of holding or conveying any dutiable or prohibited article introduced into
the Philippines contrary to law, without mentioning the need of a search warrant in said
cases. 16 But in the search of a dwelling house, the Code provides that said "dwelling house
may be entered and searched only upon warrant issued by a judge or justice of the peace. . .
." 17It is our considered view, therefor, that except in the case of the search of a dwelling
house, persons exercising police authority under the customs law may effect search and
seizure without a search warrant in the enforcement of customs laws.

Our conclusion finds support in the case of Carroll v. United States, 39 A.L.R., 790, 799,
wherein the court, considering a legal provision similar to Section 2211 of the Philippine
Tariff and Customs Code, said as follows:

Thus contemporaneously with the adoption of the 4th Amendment, we find in the
first Congress, and in the following second and fourth Congresses, a difference made
as to the necessity for a search warrant between goods subject to forfeiture, when
concealed in a dwelling house of similar place, and like goods in course of
transportation and concealed in a movable vessel, where readily they could be put
out of reach of a search warrant. . . .

Again, by the 2d section of the Act of March 3, 1815 (3 Stat. at L.231, 232, chap.
94), it was made lawful for customs officers not only to board and search vessels
within their own and adjoining districts, but also to stop, search and examine any
vehicle, beast or person on which or whom they should suspect there was
merchandise which was subject to duty, or had been introduced into the United
States in any manner contrary to law, whether by the person in charge of the vehicle
or beast or otherwise, and if they should find any goods, wares, or merchandise
thereon, which they had probably cause to believe had been so unlawfully brought
into the country, to seize and secure the same, and the vehicle or beast as well, for
trial and forfeiture. This Act was renewed April 27, 1816 (3 Sta. at L. 315, chap. 100),
for a year and expired. The Act of February 28, 1865, revived 2 of the Act of 1815,
above described, chap. 67, 13 Stat. at L. 441. The substance of this section was reenacted in the 3d section of the Act of July 18, 1866, chap. 201, 14 Stat. at L. 178,
and was thereafter embodied in the Revised Statutes as 3061, Comp. Stat. 5763,
2 Fed. Stat. Anno. 2d ed. p. 1161. Neither 3061 nor any of its earlier counterparts
has ever been attacked as unconstitutional. Indeed, that section was referred to and

treated as operative by this court in Von Cotzhausen v. Nazro, 107 U.S. 215, 219, 27
L. ed. 540, 541, 2 Sup. Ct. Rep. 503. . . .

In the instant case, we note that petitioner Martin Alagao and his companion policemen did
not have to make any search before they seized the two trucks and their cargo. In their
original petition, and amended petition, in the court below Remedios Mago and Valentin
Lanopa did not even allege that there was a search. 18All that they complained of was,

That while the trucks were on their way, they were intercepted without any search
warrant near the Agrifina Circle and taken to the Manila Police Department, where
they were detained.

But even if there was a search, there is still authority to the effect that no search warrant
would be needed under the circumstances obtaining in the instant case. Thus, it has been
held that:

The guaranty of freedom from unreasonable searches and seizures is construed as

recognizing a necessary difference between a search of a dwelling house or other
structure in respect of which a search warrant may readily be obtained and a search
of a ship, motorboat, wagon, or automobile for contraband goods, where it is not
practicable to secure a warrant because the vehicle can be quickly moved out of the
locality or jurisdiction in which the warrant must be sought. (47 Am. Jur., pp. 513-514,
citing Carroll v. United States, 267 U.S. 132, 69 L. ed., 543, 45 S. Ct., 280, 39 A.L.R.,
790; People v. Case, 320 Mich., 379, 190 N.W., 389, 27 A.L.R., 686.)

In the case of People v. Case (320 Mich., 379, 190 N.W., 389, 27 A.L.R., 686), the question
raised by defendant's counsel was whether an automobile truck or an automobile could be
searched without search warrant or other process and the goods therein seized used
afterwards as evidence in a trial for violation of the prohibition laws of the State. Same
counsel contended the negative, urging the constitutional provision forbidding unreasonable
searches and seizures. The Court said:

. . . Neither our state nor the Federal Constitution directly prohibits search and
seizure without a warrant, as is sometimes asserted. Only "unreasonable" search and
seizure is forbidden. . . .

. . . The question whether a seizure or a search is unreasonable in the language of

the Constitution is a judicial and not a legislative question; but in determining
whether a seizure is or is not unreasonable, all of the circumstances under which it is
made must be looked to.

The automobile is a swift and powerful vehicle of recent development, which has
multiplied by quantity production and taken possession of our highways in battalions
until the slower, animal-drawn vehicles, with their easily noted individuality, are rare.
Constructed as covered vehicles to standard form in immense quantities, and with a
capacity for speed rivaling express trains, they furnish for successful commission of
crime a disguising means of silent approach and swift escape unknown in the history
of the world before their advent. The question of their police control and reasonable
search on highways or other public places is a serious question far deeper and
broader than their use in so-called "bootleging" or "rum running," which is itself is no
small matter. While a possession in the sense of private ownership, they are but a
vehicle constructed for travel and transportation on highways. Their active use is not
in homes or on private premises, the privacy of which the law especially guards from
search and seizure without process. The baffling extent to which they are successfully
utilized to facilitate commission of crime of all degrees, from those against morality,
chastity, and decency, to robbery, rape, burglary, and murder, is a matter of common
knowledge. Upon that problem a condition, and not a theory, confronts proper
administration of our criminal laws. Whether search of and seizure from an
automobile upon a highway or other public place without a search warrant is
unreasonable is in its final analysis to be determined as a judicial question in view of
all the circumstances under which it is made.

Having declared that the seizure by the members of the Manila Police Department of the
goods in question was in accordance with law and by that seizure the Bureau of Customs
had acquired jurisdiction over the goods for the purpose of the enforcement of the customs
and tariff laws, to the exclusion of the Court of First Instance of Manila, We have thus
resolved the principal and decisive issue in the present case. We do not consider it
necessary, for the purposes of this decision, to discuss the incidental issues raised by the
parties in their pleadings.

WHEREFORE, judgment is hereby rendered, as follows:

(a) Granting the writ of certiorari and prohibition prayed for by petitioners;

(b) Declaring null and void, for having been issued without jurisdiction, the order of
respondent Judge Hilarion U. Jarencio, dated March 7, 1967, in Civil Code No. 67496 of the
Court of First Instance of Manila;

(c) Declaring permanent the preliminary injunction issued by this Court on March
31, 1967 restraining respondent Judge from executing, enforcing and/or implementing his
order of March 7, 1967 in Civil Case No. 67496 of the Court of First Instance of Manila, and
from proceeding in any manner in said case;

(d) Ordering the dismissal of Civil Case No. 67496 of the Court of First Instance of
Manila; and1wph1.t
(e) Ordering the private respondent, Remedios Mago, to pay the costs.

It is so ordered.

COMMISSIONER OF CUSTOMS vs. THE

COURT

OF

APPEALS

These Petitions for Certiorari and Prohibition, with Prayers for a Writ of Preliminary
Injunction and/or Temporary Restraining Order, are the culmination of several court cases
wherein several resolutions and decisions are sought to be annulled. Petitioner
Commissioner of Customs specifically assails the following:
A)

Decision of the Regional Trial Court (RTC) of Manila dated February 18,
1991 in Civil Case No. 89-51451;

B)

Order of the RTC of Kalookan dated May 28, 1991 in Special Civil Case No.
C-234;

C)

Resolution of the Court of Appeals (CA) dated March 6, 1992 in CA-G.R. SP

No. 24669;

D)

Resolution of the CA dated August 6, 1992 in CA-G.R. SP No. 28387;

E)

Resolution of the CA dated November 10, 1992 in CA-G.R. SP No. 29317;

F)

Resolution of the CA dated May 31, 1993 in CA-G.R. No. CV-32746; and

G)

Decision of the CA dated July 19, 1993 in the consolidated petitions of CAG.R. SP Nos. 24669, 28387 and 29317.

Petitioner also seeks to prohibit the CA and the RTC of Kalookan[1] from further acting
in CA-G.R. CV No. 32746 and Civil Case No. 234, respectively.
The whole controversy revolves around a vessel and its cargo. On January 7, 1989,
the vessel M/V Star Ace, coming from Singapore laden with cargo, entered the Port of San
Fernando, La Union (SFLU) for needed repairs. The vessel and the cargo had an appraised
value, at that time, of more or less Two Hundred Million Pesos (P200,000,000). When the
Bureau of Customs later became suspicious that the vessels real purpose in docking was to
smuggle its cargo into the country, seizure proceedings were instituted under S.I. Nos. 02-89
and 03-89 and, subsequently, two Warrants of Seizure and Detention were issued for the
vessel and its cargo.
Respondent Cesar S. Urbino, Sr., does not own the vessel or any of its cargo but
claimed a preferred maritime lien under a Salvage Agreement dated June 8, 1989. To
protect his claim, Urbinoinitially filed two motions in the seizure and detention cases: a
Motion to Dismiss and a Motion to Lift Warrant of Seizure and Detention. [2] Apparently not
content with his administrative remedies, Urbinosought relief with the regular courts by filing
a case for Prohibition, Mandamus and Damages before the RTC of SFLU [3] on July 26, 1989,
seeking to restrain the District Collector of Customs from interfering with his salvage
operation. The case was docketed as Civil Case No. 89-4267. On January 31, 1991 the RTC
of SFLU dismissed the case for lack of jurisdiction because of the pending seizure and
detention cases. Urbino then elevated the matter to the CA where it was docketed as CAG.R. CV No. 32746. The Commissioner of Customs, in response, filed a Motion to Suspend
Proceedings, advising the CA that it intends to question the jurisdiction of the CA before this
Court. The motion was denied on May 31, 1993. Hence, in this petition the Commissioner of
Customs assails the Resolution F recited above and seeks to prohibit the CA from
continuing to hear the case.
On January 9, 1990, while Civil Case No. 89-4267 was pending, Urbino filed another
case for Certiorari and Mandamus with the RTC of Manila, presided by
Judge Arsenio M. Gonong,[4] this time to enforce his maritime lien. Impleaded as defendants
were the Commissioner of Customs, the District Collector of Customs, the owners of the
vessel
and
cargo, Vlason Enterprises, Singkong Trading
Company, Banco do
Brazil, Dusit International Company Incorporated, Thai-Nam Enterprises Limited, Thai-United
Trading Company Incorporated and Omega Sea Transport Company, and the vessel M/V
Star Ace. This case was docketed as Civil Case No. 89-51451. The Office of the Solicitor
General filed a Motion to Dismiss on the ground that a similar case was pending with the RTC
of SFLU. The Motion to Dismiss was granted on July 2, 1990, but only insofar as the
Commissioner of Customs and the District Collector were concerned. The RTC of Manila
proceeded to hear the case against the other parties and received evidence ex parte. The
RTC of Manila later rendered a decision on February 18, 1991 finding in favor
of Urbino (assailed Decision A recited above).
Thereafter, on March 13, 1991, a writ of execution was issued by the RTC of
Manila. RespondentCamangon was appointed as Special Sheriff to execute the decision and
he issued a notice of levy and sale against the vessel and its cargo. The Commissioner of
Customs, upon learning of the notice of levy and sale, filed with the RTC of Manila a motion
to recall the writ, but before it could be acted upon,Camangon had auctioned off the vessel
and the cargo to Urbino for One Hundred and Twenty Million Pesos (P120,000,000). The
following day, Judge Gonong issued an order commanding Sheriff Camangonto cease and
desist from implementing the writ. Despite the order, Camangon issued a Certificate of Sale
in favor of Urbino. A week later, Judge Gonong issued another order recalling the writ of

execution. Both cease and desist and recall orders of Judge Gonong were elevated
by Urbino to the CA on April 12, 1991 where it was docketed as CA-G.R. SP No. 24669.
On April 26, 1991, the CA issued a Temporary Restraining Order (TRO) enjoining the RTC of
Manila from enforcing its cease and desist and recall orders. The TRO was eventually
substituted by a writ of preliminary injunction. A motion to lift the injunction was filed by the
Commissioner of Customs but it was denied. Hence, in this petition the Commissioner of
Customs assails Resolution C recited above.
On May 8, 1991, Urbino attempted to enforce the RTC of Manilas decision and the
Certificate of Sale against the Bureau of Customs by filing a third case, a Petition for
Certiorari, Prohibition and Mandamus with the RTC of Kaloocan.[5] The case was docketed as
Civil Case No. 234. On May 28, 1991, the RTC of Kaloocan ordered the issuance of a writ of
preliminary injunction to enjoin the Philippine Ports Authority and the Bureau of Customs
from interfering with the relocation of the vessel and its cargo by Urbino (assailed Order B
recited above).
Meanwhile, on June 5, 1992, Camangon filed his Sheriffs Return with the Clerk of
Court. On June 26, 1992, the Executive Judge for the RTC of Manila, Judge Bernardo P. Pardo,
[6]
having been informed of the circumstances of the sale, issued an order nullifying the
report and all proceedings taken in connection therewith. With this order Urbino filed his
fourth case with the CA on July 15, 1992, a Petition for Certiorari, Prohibition and Mandamus
against Judge Pardo. This became CA-G.R. SP No. 28387. The CA issued a Resolution
on August 6, 1992 granting the TRO against the Executive Judge to enjoin the
implementation of his June 26, 1992 Order. Hence, in this petition the Commissioner of
Customs assails Resolution D recited above.
Going back to the seizure and detention proceedings, the decision of the District
Collector of Customs was to forfeit the vessel and cargo in favor of the Government. This
decision was affirmed by the Commissioner of Customs. Three appeals were then filed with
the Court of Tax Appeals (CTA) by different parties, excluding Urbino, who claimed an
interest in the vessel and cargo. These three cases were docketed as CTA Case No. 4492,
CTA Case No. 4494 and CTA Case No. 4500. Urbino filed his own case, CTA Case No. 4497,
but it was dismissed for want of capacity to sue. He, however, was allowed to intervene in
CTA Case No. 4500. On October 5, 1992, the CTA issued an order authorizing the
Commissioner of Customs to assign customs police and guards around the vessel and to
conduct an inventory of the cargo. In response, on November 3, 1992, Urbino filed a fifth
Petition for Certiorari and Prohibition with the CA to assail the order as well as the
jurisdiction of the Presiding Judge and Associate Judges of the CTA in the three cases. That
case was docketed as CA G.R. SP No. 29317. OnNovember 10, 1992, the CA issued a
Resolution reminding the parties that the vessel is under the control of the appellate court in
CA-G.R. SP No. 24669 (assailed Resolution E recited above).
CA-G.R. SP Nos. 24669, 28387 and 29317 were later consolidated and the CA issued
a joint Decision in July 19, 1993 nullifying and setting aside: 1) the Order recalling the writ of
execution by Judge Gonong of the the RTC of Manila; 2) the Order of Executive
Judge Pardo of the RTC of Manila nullifying the Sheriffs Report and all proceedings
connected therewith; and 3) the October 19, 1993 Order of the CTA, on the ground of lack of
jurisdiction. Hence, in these petitions, which have been consolidated, the Commissioner of
Customs assails Decision G recited above.
For purposes of deciding these petitions, the assailed Decisions and Resolutions will
be divided into three groups:
1.

The Resolution of the CA dated May 31, 1993 in CA-G.R. No. CV-32746
with the additional prayer to enjoin the CA from deciding the said case.

2.

The Order of the RTC of Kalookan dated May 28, 1991 in Special Civil
Case No. C-234 with the additional prayer to enjoin the RTC of Kalookan from
proceeding with said case.

3.

The Decision of the RTC of Manila dated February 18, 1991 in Civil Case
No. 89-51451, the Resolutions of the CA dated March 6, 1992, August 6, 1992,
November 10, 1992 and the Decision of the CA dated July 19, 1993 in the
consolidated petitions CA-G.R. SP Nos. 24669, 28387 and 29317.

First Group
The Commissioner of Customs seeks to nullify the Resolution of the CA dated May 31,
1993denying the Motion to Suspend Proceedings and to prohibit the CA from further
proceeding in CA-G.R. No. CV-32746 for lack of jurisdiction. This issue can be easily disposed
of as it appears that the petition has become moot and academic, with the CA having
terminated CA-G.R. No. CV-32746 by rendering its Decision on May 13, 2002 upholding the
dismissal of the case by the RTC of SFLU for lack of jurisdiction, a finding that sustains the
position of the Commissioner of Customs. This decision became final and entry of judgment
was made on June 14, 2002.[7]
Second Group
The Court now proceeds to consider the Order granting an injunction dated May 28,
1991 in Civil Case No. C-234 issued by the RTC of Kalookan. The Commissioner of Customs
seeks its nullification and to prohibit the RTC of Kalookan from further proceeding with the
case.
The RTC of Kalookan issued the Order against the Philippine Ports Authority and
Bureau of Customs solely on the basis of Urbinos alleged ownership over the vessel by
virtue of his certificate of sale. By this the RTC of Kalookan committed a serious and
reversible error in interfering with the jurisdiction of customs authorities and should have
dismissed the petition outright. In Mison v.Natividad,[8] this Court held that the exclusive
jurisdiction of the Collector of Customs cannot be interfered with by regular courts even
upon allegations of ownership.
To summarize the facts in that case, a warrant of seizure and detention was issued
against
therein
plaintiff
over
a
number
of
vehicles found in his residence for violation of customs laws. Plaintiff then filed a complaint
before the RTC of Pampanga alleging that he is the registered owner of certain vehicles
which the Bureau of Customs are threatening to seize and praying that the latter be
enjoined from doing so. The RTC ofPampanga issued a TRO and eventually, thereafter,
substituted it with a writ of preliminary injunction. This Court found that the proceedings
conducted by the trial court were null and void as it had no jurisdiction over the res subject
of the warrant of seizure and detention, holding that:
A warrant of seizure and detention having already been issued,
presumably in the regular course of official duty, the Regional Trial Court
of Pampanga was indisputably precluded from interfering in said proceedings.
That in his complaint in Civil Case No. 8109 private respondent alleges
ownership over several vehicles which are legally registered in his name,
having paid all the taxes and corresponding licenses incident thereto, neither
divests the Collector of Customs of such jurisdiction nor confers upon said trial
court regular jurisdiction over the case. Ownership of goods or the legality of
its acquisition can be raised as defenses in a seizure proceeding; if this were

not so, the procedure carefully delineated by law for seizure and forfeiture
cases may easily be thwarted and set to naught by scheming parties. Even
the illegality of the warrant of seizure and detention cannot justify the trial
courts interference with the Collectors jurisdiction. In the first place, there is
a distinction between the existence of the Collectors power to issue it and the
regularity of the proceeding taken under such power. In the second place,
even if there be such an irregularity in the latter, the Regional Trial Court does
not have the competence to review, modify or reverse whatever conclusions
may result therefrom x x x.
The facts in this case are like those in that case. Urbino claimed to be the owner of
the vessel and he sought to restrain the PPA and the Bureau of Customs from interfering
with
his
rights
as
owner. His
remedy, therefore, was not with the RTC but with the CTA where the seizure and detention
cases are now pending and where he was already allowed to intervene.
Moreover, this Court, on numerous occasions, cautioned judges in their issuance of
temporary restraining orders and writs of preliminary injunction against the Collector of
Customs based on the principle enunciated in Mison v. Natividad and has issued
Administrative Circular No. 7-99 to carry out this policy. [9] This Court again reminds all
concerned that the rule is clear: the Collector of Customs has exclusive jurisdiction over
seizure and forfeiture proceedings and trial courts are precluded from assuming cognizance
over such matters even through petitions for certiorari, prohibition or mandamus.
Third Group
The Decision of the RTC of Manila dated February 18, 1991 has the following
dispositive portion:
WHEREFORE, IN VIEW OF THE FOREGOING, based on the allegations,
prayer and evidence adduced, both testimonial and documentary, the Court is
convinced,
that,
indeed,
defendants/respondents
are
liable
to
plaintiff/petitioner in the amount prayed for in the petition for which [it]
renders judgment as follows:
1.
Respondent M/V Star Ace, represented by Capt.
Nahum Rada, Relief Captain of the vessel and Omega Sea Transport Company,
Inc., represented by Frank Cadacio is ordered to refrain from alienating or
transfer[r]ing the vessel M/V Star Ace to any third parties;
2.

Singko Trading Company to pay the following:

a.

Taxes due the Government;

b.

Salvage fees on the vessel in the amount of

$1,000,000.00 based on the Lloyds Standard Form of
Salvage Agreement;

c.

Preservation, securing and guarding fees on the

vessel in the amount of $225,000.00;

d.

Salaries of the crew from August 16, 1989 to

December, in the amount of $43,000.00 and unpaid
salaries from January 1990 up to the present;

e.

Attorneys fees in the amount of P656,000.00;

3.
Vlazon Enterprises
of P3,000,000.00 for damages;

to

4.
Banco do Brazil to
$300,000.00 in damages; and finally,

pay

5.

pay

plaintiff

plaintiff

in

in
the

the

amount

amount

of

Costs of suit.

SO ORDERED.
On the other hand, the CA Resolutions are similar orders for the issuance of a writ of
preliminary injunction to enjoin Judge Gonong and Judge Pardo from enforcing their recall
and nullification orders and the CTA from exercising jurisdiction over the case, to preserve
the status quo pending resolution of the three petitions.
Finally, the Decision of the CA dated July 19, 1993 disposed of all three petitions in
favor ofUrbino, and has the following dispositive portion:
ACCORDINGLY, in view of the foregoing disquisitions, all the three (3)
consolidated petitions for certiorari are hereby GRANTED.
THE assailed Order of respondent Judge Arsenio Gonong of the
Regional Trial Court of Manila, Branch 8, dated, April 5, 1991, in the first
assailed petition for certiorari (CA-G.R. SP No. 24669); the assailed Order of
Judge Bernardo Pardo, Executive Judge of the Regional Trial Court of Manila,
Branch 8, dated July 6, 1992, in the second petition for certiorari (CAG.R. SP No. 28387); and Finally, the assailed order or Resolution en banc of
the respondent Court of Tax Appeals[,] Judges Ernesto Acosta, Ramon
de Veyra and Manuel Gruba, under date of October 5, 1992, in the third
petition for certiorari (CA-G.R. SP No. 29317) are all hereby NULLIFIED and SET
ASIDE thereby giving way to the entire decision dated February 18, 1991 of
the respondent Regional Trial Court of Manila, Branch 8, in Civil Case No. 8951451 which remains valid,final and executory, if not yet wholly executed.
THE writ of preliminary injunction heretofore issued by this Court on
March 6, 1992 and reiterated on July 22, 1992 and this date against the
named respondents specified in the dispositive portion of the judgment of the
respondent Regional Trial Court of Manila, Branch 8, in the first petition for
certiorari, which remains valid, existing and enforceable, is hereby MADE
PERMANENT without prejudice (1) to the petitioners remaining unpaid
obligations to herein party-intervenor in accordance with the Compromise
Agreement or in connection with the decision of the respondent lower court in
CA-G.R. SP No. 24669 and (2) to the government, in relation to the
forthcoming decision of the respondent Court of Tax Appeals on the amount of
taxes, charges, assessments or obligations that are due, as totally secured
and fully guaranteed payment by petitioners bond, subject to relevant rulings
of the Department of Finance and other prevailing laws and jurisprudence.
We make no pronouncement as to costs.
SO ORDERED.

The Court rules in favor of the Commissioner of Customs.

First of all, the Court finds the decision of the RTC of Manila, in so far as it relates to
the vessel M/V Star Ace, to be void as jurisdiction was never acquired over the vessel. [10] In
filing the case,Urbino had impleaded the vessel as a defendant to enforce his
alleged maritime lien. This meant that he brought an action in rem under the Code of
Commerce under which the vessel may be attached and sold. [11] However, the basic
operative fact for the institution and perfection of proceedings in rem is the actual or
constructive possession of the res by the tribunal empowered by law to conduct the
proceedings.[12] This means that to acquire jurisdiction over the vessel, as a defendant, the
trial court must have obtained either actual or constructive possession over it. Neither was
accomplished by the RTC of Manila.
In his comment to the petition, Urbino plainly stated that petitioner has actual[sic]
physical custody not only of the goods and/or cargo but the subject vessel, M/V Star Ace, as
well.[13] This is clearly an admission that the RTC of Manila did not have jurisdiction over
the res. While Urbinocontends that the Commissioner of Customs custody was illegal, such
fact, even if true, does not deprive the Commissioner of Customs of jurisdiction thereon. This
is a question that ought to be resolved in the seizure and forfeiture cases, which are now
pending with the CTA, and not by the regular courts as a collateral matter to enforce his lien.
By simply filing a case in rem against the vessel, despite its being in the custody of customs
officials, Urbino has circumvented the rule that regular trial courts are devoid of any
competence to pass upon the validity or regularity of seizure and forfeiture proceedings
conducted in the Bureau of Customs, on his mere assertion that the administrative
proceedings were a nullity.[14]
On the other hand, the Bureau of Customs had acquired jurisdiction over
the res ahead and to the exclusion of the RTC of Manila. The forfeiture proceedings
conducted by the Bureau of Customs are in the nature of proceedings in rem[15] and
jurisdiction was obtained from the moment the vessel entered the SFLU port. Moreover,
there is no question that forfeiture proceedings were instituted and the vessel was seized
even before the filing of the RTC of Manila case.
The Court is aware that Urbino seeks to enforce a maritime lien and, because of its
nature, it is equivalent to an attachment from the time of its existence. [16] Nevertheless,
despite his liens constructive attachment, Urbino still cannot claim an advantage as his lien
only came about after the warrant of seizure and detention was issued and implemented.
The Salvage Agreement, upon whichUrbino based his lien, was entered into on June 8, 1989.
The warrants of seizure and detention, on the other hand, were issued on January 19 and 20,
1989. And to remove further doubts that the forfeiture case takes precedence over the RTC
of Manila case, it should be noted that forfeiture retroacts to the date of the commission of
the offense, in this case the day the vessel entered the country. [17] A maritime lien, in
contrast, relates back to the period when it first attached, [18] in this case the earliest
retroactive date can only be the date of the Salvage Agreement. Thus, when the vessel and
its cargo are ordered forfeited, the effect will retroact to the moment the vessel entered
Philippine waters.
Accordingly, the RTC of Manila decision never attained finality as to the defendant
vessel, inasmuch as no jurisdiction was acquired over it, and the decision cannot be binding
and the writ of execution issued in connection therewith is null and void.
Moreover, even assuming that execution can be made against the vessel and its
cargo, as goods and chattels to satisfy the liabilities of the other defendants who have an
interest therein, the RTC of Manila may not execute its decision against them while, as found

by this Court, these are under the proper and lawful custody of the Bureau of Customs.
[19]
This is especially true when, in case of finality of the order of forfeiture, the execution
cannot anymore cover the vessel and cargo as ownership of the Government will retroact to
the date of entry of the vessel into Philippine waters.
As regards the jurisdiction of the CTA, the CA was clearly in error when it issued an
injunction against it from deciding the forfeiture case on the basis that it interfered with the
subject of ownership over the vessel which was, according to the CA, beyond the jurisdiction
of the CTA. Firstly, the execution of the Decision against the vessel and cargo, as aforesaid,
was a nullity and therefore the sale of the vessel was invalid. Without a valid certificate of
sale, there can be no claim of ownership whichUrbino can present against the Government.
Secondly, as previously stated, allegations of ownership neither divest the Collector of
Customs of such jurisdiction nor confer upon the trial court jurisdiction over the case.
Ownership of goods or the legality of its acquisition can be raised as defenses in a seizure
proceeding.[20] The actions of the Collectors of Customs are appealable to the Commissioner
of Customs, whose decision, in turn, is subject to the exclusive appellate jurisdiction of the
CTA.[21]Clearly, issues of ownership over goods in the custody of custom officials are within
the power of the CTA to determine.
WHEREFORE, the consolidated petitions are GRANTED. The Decision of the Regional
Trial Court of Manila dated February 18, 1991 in Civil Case No. 89-51451, insofar as it affects
the vessel M/V Star Ace, the Order of the Regional Trial Court of Kalookan dated May 28,
1991 in Special Civil Case No. C-234, the Resolution of the Court of Appeals dated March 6,
1992 in CA-G.R. SP No. 24669, the Resolution of the Court of Appeals dated August 6, 1992
in CA-G.R. SP No. 28387, the Resolution of the Court of Appeals dated November 10, 1992 in
CA-G.R. SP No. 29317 and the Decision of the Court of Appeals dated July 19, 1993 in the
consolidated petitions in CA-G.R. SP Nos. 24669, 28387 and 29317 are all SET ASIDE. The
Regional Trial Court of Kalookan is enjoined from further acting in Special Civil Case No. C234. The Order of respondent Judge Arsenio M. Gonong dated April 5, 1991 and the Order of
then Judge Bernardo P. Pardo dated June 26, 1992 are REINSTATED. The Court of Tax
Appeals is ordered to proceed with CTA Case No. 4492, CTA Case No. 4494 and CTA Case No.
4500. No pronouncement as to costs.
SO ORDERED.

When Importation Begins and Terminated

CHEVRON PHILIPPINES, INC., vs. COMMISSIONER OF THE BUREAU OF
CUSTOMS,
This is a petition for review on certiorari [1] of the decision[2] and resolution[3] of the
Court of Tax Appeals (CTA) en banc dated March 1, 2007 and July 5, 2007, respectively, in
CTA EB Nos. 121 and 122 which reversed the decision of the CTA First Division dated April 5,
2005 in CTA Case No. 6358.
Petitioner Chevron Philippines, Inc.[4] is engaged in the business of importing,
distributing and marketing of petroleum products in the Philippines. In 1996,
the importations subject of this case arrived and were covered by eight bills of lading,
summarized as follows:
PRODUCT

ARRIVAL
DATE

VESSEL

66,229,960 liters
Nan Hai Crude Oil
6,990,712 liters
Reformate
16,651,177 liters
FCCU Feed Stock

3/8/1996
3/18/1996
3/21/1996

Ex MT
Bona Spray
Ex MT
Orient Tiger
Ex MT
Probo Boaning

236,317,862 liters
Oman/Dubai
Crude Oil

3/26/1996

Ex MT
Violet

51,878,114 liters
Arab Crude Oil

4/10/1996

Ex MT
Crown Jewel[5]

The shipments were unloaded from the carrying vessels onto petitioners oil tanks
over a period of three days from the date of their arrival. Subsequently, the import entry
declarations (IEDs) were filed and 90% of the total customs duties were paid. The import
entry and internal revenue declarations (IEIRDs) of the shipments were thereafter filed on
the following dates:
ENTRY
NO.
606-96
604-96
605-96
600-96
601-96
602-96
603-96
818-96

PRODUCT
66,229,960 liters
Nan Hai Crude Oil
6,990,712 liters
Reformate
16,651,177 liters
FCCU Feed Stock
236,317,862 liters
Oman/Dubai Crude Oil
51,878,114 liters
Arab Crude Oil

ARRIVAL
DATE
3/8/1996

IED

IEIRD

3/12/1996

5/10/1996

3/18/1996

3/26/1996

5/10/1996

3/21/1996

3/26/1996

5/10/1996

3/26/1996

3/28/1996

5/10/1996

4/10/1996

4/10/1996

6/21/1996

The importations were appraised at a duty rate of 3% as provided under RA 8180 [6] and
petitioner paid the import duties amounting to P316,499,021.[7] Prior to the effectivity of RA
8180 on April 16, 1996, the rate of duty on imported crude oil was 10%.
Three years later, then Finance Secretary Edgardo Espiritu received a letter (with
annexes) dated June 10, 1999 from a certain Alfonso A. Orioste denouncing the deliberate
concealment, manipulation and scheme employed by petitioner and Pilipinas Shell in the
importation of crude oil, thereby resulting in huge losses of revenue for the
government. This letter was endorsed to the Bureau of Customs (BOC) for investigation on
July 19, 1999.[8]
On January 28, 2000, petitioner received a subpoena duces tecum/ad
testificandum from Conrado M. Unlayao, Chief of the Investigation and Prosecution Division,
Customs Intelligence and Investigation Service (IPD-CIIS) of the BOC, to submit pertinent
documents in connection with the subject shipments pursuant to the investigation he was
conducting thereon. It appeared, however, that the Legal Division of the BOC was also

carrying out a separate investigation. Atty. Roberto Madrid (of the latter office) had gone to
petitioners Batangas Refinery and requested the submission of information and documents
on the same shipments. This prompted petitioner to seek the creation of a unified team to
exclusively handle the investigation.[9]
On August 1, 2000, petitioner received from the District Collector of Customs of the
Port of Batangas (District Collector) a demand letter requiring the immediate settlement of
the amount of P73,535,830 representing the difference between the 10% and 3% tariff rates
on the shipments. In response, petitioner wrote the District Collector to inform him of the
pending request for the creation of a unified team with the exclusive authority to investigate
the matter. Furthermore, petitioner objected to the demand for payment of customs duties
using the 10% duty rate and reiterated its position that the 3% tariff rate should instead be
applied. It likewise raised the defense of prescription against the assessment pursuant to
Section 1603 of the Tariff and Customs Code (TCC). Thus, it prayed that the assessment for
deficiency customs duties be cancelled and the notice of demand be withdrawn. [10]
In a letter petitioner received on October 12, 2000, respondent Commissioner of the
BOC[11] stated that it was the IPD-CIIS which was authorized to handle the investigation, to
the exclusion of the Legal Division and the District Collector. [12]
The IPD-CIIS, through Special Investigator II Domingo B. Almeda and Special
Investigator III Nemesio C. Magno, Jr., issued a finding dated February 2, 2001 that the
import entries were filed beyond the 30-day non-extendible period prescribed under Section
1301 of the TCC. They concluded that the importations were already considered abandoned
in favor of the government. They also found that fraud was committed by petitioner in
collusion with the former District Collector. [13]
Thereafter, respondent[14] wrote petitioner on October 29, 2001 informing it of the
findings of irregularity in the filing and acceptance of the import entries beyond the period
required by customs law and in the release of the shipments after the same had already
been deemed abandoned in favor of the government. Petitioner was ordered to pay the
amount of P1,180,170,769.21 representing the total dutiable value of the importations. [15]
This prompted petitioner to file a petition for review in the CTA First Division on
November 28, 2001, asking for the reversal of the decision of respondent. [16]
In a decision promulgated on April 5, 2005, the CTA First Division ruled that
respondent was correct when he affirmed the findings of the IPD-CIIS on the existence of
fraud. Therefore, prescription was not applicable. Ironically, however, it also held that
petitioner did not abandon the shipments. The shipments should be subject to the 10% rate
prevailing at the time of their withdrawal from the custody of the BOC pursuant to Sections
204, 205 and 1408 of the TCC. Petitioner was therefore liable for deficiency customs duties
in the amount of P105,899,569.05.[17]
Petitioner sought reconsideration of the April 5, 2005 decision while respondent
likewise filed his motion for partial reconsideration. Both motions were denied in a
resolution dated September 9, 2005.[18]
After both respondent and petitioner had filed their petitions for review with the
CTA en banc, docketed as CTA EB No. 121 and CTA EB No. 122, respectively, the petitions
were consolidated.
In a decision dated March 1, 2007, the CTA en banc held that it was the filing of the
IEIRDs that constituted entry under the TCC. Since these were filed beyond the 30-day
period, they were not seasonably entered in accordance with Section 1301 in relation to

Section 205 of the TCC. Consequently, they were deemed abandoned under Sections 1801
and 1802 of the TCC. It also ruled that the notice required under Customs Memorandum
Order No. 15-94 (CMO 15-94) was not necessary in view of petitioners actual knowledge of
the arrival of the shipments. It likewise agreed with the CTA Divisions finding that petitioner
committed fraud when it failed to file the IEIRD within the 30-day period with the intent to
evade the higher rate. Thus, petitioner was ordered to pay respondent the total dutiable
value of the oil shipments amounting toP893,781,768.21.[19]
Hence this petition.
There are three issues for our resolution:
1.
whether entry under Section 1301 in relation to Section 1801 of the
TCC refers to the IED or the IEIRD;
2.
whether fraud was perpetrated by petitioner and
3.
whether the importations can be considered abandoned under Section
1801.
ENTRY IN SECTIONS 1301 AND 1801 OF THE
TCC REFERS TO BOTH THE IED AND IEIRD
Under Section 1301 of the TCC, imported articles must be entered within a nonextendible period of 30 days from the date of discharge of the last package from a
vessel. Otherwise, the BOC will deem the imported goods impliedly abandoned under
Section 1801. Thus:
Section 1301. Persons Authorized to Make Import Entry. - Imported
articles must be entered in the customhouse at the port of entry
within thirty (30) days, which shall not be extendible from date of
discharge of the last package from the vessel or aircraft either (a) by
the importer, being holder of the bill of lading, (b) by a duly licensed customs
broker acting under authority from a holder of the bill or (c) by a person duly
empowered to act as agent or attorney-in-fact for each holder: Provided, That
where the entry is filed by a party other than the importer, said importer shall
himself be required to declare under oath and under the penalties of
falsification or perjury that the declarations and statements contained in the
entry are true and correct: Provided, further, That such statements under
oath shall constitute prima facie evidence of knowledge and consent of the
importer of violation against applicable provisions of this Code when the
importation is found to be unlawful. (Emphasis supplied)
Section 1801. Abandonment, Kinds and Effect of. - An imported article
is deemed abandoned under any of the following circumstances:
xxx

xxx

xxx

b. When the owner, importer, consignee or interested party after due

notice, fails to file an entry within thirty (30) days, which shall not be
extendible, from the date of discharge of the last package from the
vessel or aircraft, or having filed such entry, fails to claim his importation
within fifteen (15) days, which shall not likewise be extendible, from the date
of posting of the notice to claim such importation. (Emphasis supplied)

Petitioner argues that the IED is an entry contemplated by these sections. According
to it, the congressional deliberations on RA 7651 which amended the TCC to provide a nonextendible 30-day period show the legislative intent to expedite the procedure for declaring
importations as abandoned. Filing an entry serves as notice to the BOC of the importers
willingness to complete the importation and to pay the proper taxes, duties and fees.
Conversely, the non-filing of the entry within the period connotes the importers disinterest
and enables the BOC to consider the goods as abandoned. Since the IED is a BOC form that
serves as basis for payment of advance duties on importation as required under PD 1853,
[20]
it suffices as an entry under Sections 1301 and 1801 of the TCC. [21]
We disagree.
The term entry in customs law has a triple meaning. It means (1) the documents
filed at the customs house; (2) the submission and acceptance of the documents and (3) the
procedure of passing goods through the customs house.[22]
The IED serves as basis for the payment of advance duties on importations whereas
the IEIRD evidences the final payment of duties and taxes. The question is: was the filing of
the IED sufficient to constitute entry under the TCC?
The law itself, in Section 205, defines the meaning of the technical term entered as
used in the TCC:
Section 205. Entry, or Withdrawal from Warehouse, for Consumption.
- Imported articles shall be deemed entered in the Philippines for
consumption when the specified entry form is properly filed and
accepted,together with any related documents regained by the provisions of
this Code and/or regulations to be filed with such form at the time of entry, at
the port or station by the customs official designated to receive such entry
papers and any duties, taxes, fees and/or other lawful charges required to be
paid at the time of making such entry have been paid or secured to be paid
with the customs official designated to receive such monies, provided that the
article has previously arrived within the limits of the port of entry.
xxx
(Emphasis supplied)

xxx

xxx

Clearly, the operative act that constitutes entry of the imported articles at the port
of entry is the filing and acceptance of the specified entry form together with the other
documents required by law and regulations. There is no dispute that the specified entry
form refers to the IEIRD. Section 205 defines the precise moment when the imported
articles are deemed entered.
Moreover, in the old case of Go Ho Lim v. The Insular Collector of Customs,[23] we
ruled that the word entry refers to the regular consumption entry (which, in our current
terminology, is the IEIRD) and not the provisional entry (the IED):
It is disputed by the parties whether the application for the special
permit. Exhibit A, containing the misdeclared weight of the 800 cases of eggs,
comes within the meaning of the word "entry" used in section 1290 of the
Revised Administrative Code, or said word "entry" means only the "original
entry and importer's declaration." The court below reversed the decision of
the Insular Collector of Customs on the ground that the provisions of section
1290 of the Revised Administrative Code refer to the regular consumption
entry and not to a provisional declaration made in an application for a

special permit, as the one filed by the appellee, to remove the cases of eggs
from the customhouse.
This court is of the opinion that certainly the application, Exhibit A,
cannot be considered as a final regular entry of the weight of the 800 cases of
eggs imported by the appellee, taking into account the fact that said
application sought the delivery of said 800 cases of eggs "from the pier after
examination," and the special permit granted, Exhibit E, provided for "delivery
to be made after examination by the appraiser." All the foregoing, together
with the circumstance that the appellee had to file the regular consumption
entry which he bound himself to do, as shown by the application, Exhibit A,
logically lead to the conclusion that the declaration of the weight of the 800
cases of eggs made in said application, is merely a provisional entry, and as it
is subject to verification by the customhouse examiner, it cannot be
considered fraudulent for the purpose of imposing a surcharge of customs
duties upon the importer.[24] (Emphasis supplied)
The congressional deliberations on House Bill No. 4502 which was enacted as RA
7651[25] amending the TCC lay down the policy considerations for the non-extendible 30-day
period for the filing of the import entry in Section 1301:
MR. JAVIER (E.).
xxx

xxx

xxx

Under Sections 1210[26] and 1301 of the [TCC], Mr. Speaker, import
entries for imported articles must be filed within five days from the date of
discharge of the last package from the vessel. The five-day period, however,
Mr. Speaker, is subject to an indefinite extension at the discretion of the
collector of customs, which more often than not stretches to more than
three months, thus resulting in considerable delay in the payment of
duties and taxes.
This bill, Mr. Speaker, seeks to amend Sections 1210 and 1301 by
extending the five-day period to thirty days, which will no longer be
extendible, within which import entries must be filed for imported
articles. Moreover, to give the importer reasonable time, the bill prescribes a
period of fifteen days which may not be extended within which to claim his
importation from the time he filed the import entry. Failure to file an import
entry or to claim the imported articles within the period prescribed under the
proposed measure, such imported articles will be treated as abandoned and
declared as ipso facto the property of the government to be sold at public
auction.
Under this new procedure, Mr. Speaker, importers will be
constrained under the threat of having their importation declared as
abandoned and forfeited in favor of the government to file import entries
and claim their importation as early as possible thus accelerating
the collection of duties and taxes. But providing for a non-extendible
period of 30 days within which to file an import entry, an appeal of fifteen
days within which to claim the imported article, the bill has removed the
discretion of the collector of Customs to extend such period thus minimizing
opportunity for graft. Moreover, Mr. Speaker, with these non-extendible
periods coupled with the threat of declaration of abandonment of imported
articles, both the [BOC] and the importer are under pressure to work for the

early release of cargo, thus decongesting all ports of entry and facilitating
the release of goods and thereby promoting trade and commerce.
Finally, Mr. Speaker, the speedy release of imported cargo coupled
with the sanctions of declaration of abandonment and forfeiture will minimize
the pilferage of imported cargo at the ports of entry. [27] (Emphasis supplied)
The filing of the IEIRDs has several important purposes: to ascertain the value of the
imported articles, collect the correct and final amount of customs duties and avoid
smuggling of goods into the country.[28]Petitioners interpretation would have an absurd
implication: the 30-day period applies only to the IED while no deadline is specified for the
submission of the IEIRD. Strong issues of public policy militate against petitioners
interpretation. It is the IEIRD which accompanies the final payment of duties and
taxes. These duties and taxes must be paid in full before the BOC can allow the release of
the imported articles from its custody.
Taxes are the lifeblood of the nation. Tariff and customs duties are taxes constituting
a significant portion of the public revenue which enables the government to carry out the
functions it has been ordained to perform for the welfare of its constituents. [29] Hence, their
prompt and certain availability is an imperative need [30] and they must be collected without
unnecessary hindrance.[31] Clearly, and perhaps for that reason alone, the submission of the
IEIRD cannot be left to the exclusive discretion or whim of the importer.
We hold, therefore, that under the relevant provisions of the TCC, [32] both the IED and
IEIRD should be filed within 30 days from the date of discharge of the last package from the
vessel or aircraft. As a result, the position of petitioner, that the import entry to be filed
within the 30-day period refers to the IED and not the IEIRD, has no legal basis.
THE EXISTENCE OF FRAUD
WAS ESTABLISHED
Petitioner also denies the commission of fraud. It maintains that it had no
predetermined and deliberate intention not to comply with the 30-day period in order to
evade the payment of the 10% rate of duty. Its sole reason for the delayed filing of IEIRDs
was allegedly due to the late arrival of the original copies of the bills of lading and
commercial invoices which its suppliers could send only after the latter computed the
average monthly price of crude oil based on worldwide trading. It claims that the BOC
required these original documents to be attached to the IEIRD.
Petitioners arguments lack merit.
Fraud, in its general sense, is deemed to comprise anything calculated to deceive,
including all acts, omissions, and concealment involving a breach of legal or equitable duty,
trust or confidence justly reposed, resulting in the damage to another, or by which an undue
and unconscionable advantage is taken of another. [33] It is a question of fact and the
circumstances constituting it must be alleged and proved in the court below. [34] The finding
of the lower court as to the existence or non-existence of fraud is final and cannot be
reviewed here unless clearly shown to be erroneous. [35] In this case, fraud was established
by the IPD-CIIS of the BOC. Both the CTA First Division and en banc agreed completely with
this finding.
The evidence showed that petitioner bided its time to file the IEIRD so as to avail of a
lower rate of duty. (At or about the time these developments were taking place, the bill
lowering the duty on these oil products from 10% to 3% was already under intense

discussion in Congress.) There was a calculated and preconceived course of action adopted
by petitioner purposely to evade the payment of the correct customs duties then
prevailing. This was done in collusion with the former District Collector, who allowed the
acceptance of the late IEIRDs and the collection of duties using the 3% declared rate. A
clear indication of petitioners deliberate intention to defraud the government was its nondisclosure of discrepancies on the duties declared in the IEDs (10%) and IEIRDs (3%)
covering the shipments.[36]
It was not by sheer coincidence that, by the time petitioner filed its IEIRDs way
beyond the mandated period, the rate of duty had already been reduced from 10% to
3%. Both the CTA Division and en banc found the explanation of petitioner (for its delay in
filing) untruthful. The bills of lading and corresponding invoices covering the shipments
were accomplished immediately after loading onto the vessels. [37] Notably, the
memorandum of a district collector cited by petitioner as basis for its assertion that original
copies were required by the BOC was dated October 30, 2002.[38] There is no showing that
in 1996, the time pertinent in this case, this was in fact a requirement.
More importantly, the absence of supporting documents should not have prevented
petitioner from complying with the mandatory and non-extendible period, specially since the
consequences of delayed filing were extremely serious. In addition, these supporting
documents were not conclusive on the government. [39] If this kind of excuse were to be
accepted, then the collection of customs duties would be at the mercy of importers.
Hence, due to the presence of fraud, the prescriptive period of the finality of
liquidation under Section 1603 was inapplicable:
Section 1603. Finality of Liquidation. When articles have been
entered and passed free of duty or final adjustments of duties made, with
subsequent delivery, such entry and passage free of duty or settlements of
duties will, after the expiration of one (1) year, from the date of the final
payment of duties, in the absence of fraud or protest or compliance audit
pursuant to the provisions of this Code, be final and conclusive upon all
parties, unless the liquidation of the import entry was merely tentative. [40]
THE IMPORTATIONS WERE ABANDONED
IN FAVOR OF THE GOVERNMENT
The law is clear and explicit. It gives a non-extendible period of 30 days for the
importer to file the entry which we have already ruled pertains to both the IED and
IEIRD. Thus under Section 1801 in relation to Section 1301, when the importer fails to file
the entry within the said period, he shall be deemed to have renounced all his interests and
property rights to the importations and these shall be considered impliedly abandoned in
favor of the government:
Section 1801. Abandonment, Kinds and Effect of. xxx

xxx

xxx

Any person who abandons an article or who fails to claim his

importation as provided for in the preceding paragraph shall be deemed to
have renounced all his interests and property rights therein.
According to petitioner, the shipments should not be considered impliedly abandoned
because none of its overt acts (filing of the IEDs and paying advance duties) revealed any
intention to abandon the importations.[41]

Unfortunately for petitioner, it was the law itself which considered the importation
abandoned when it failed to file the IEIRDs within the allotted time. Before it was amended,
Section 1801 was worded as follows:
Sec. 1801.
Abandonment, Kinds and Effect of. Abandonment is
express when it is made direct to the Collector by the interested party in
writing and it is implied when, from the action or omission of the
interested party, an intention to abandon can be clearly inferred. The
failure of any interested party to file the import entry within fifteen days or
any extension thereof from the discharge of the vessel or aircraft, shall be
implied abandonment. An implied abandonment shall not be effective until the
article is declared by the Collector to have been abandoned after notice
thereof is given to the interested party as in seizure cases.
Any person who abandons an imported article renounces all his
interests and property rights therein.[42]
After it was amended by RA 7651, there was an indubitable shift in language as to
what could be considered implied abandonment:
Section 1801. Abandonment, Kinds and Effect of. - An imported article
is deemed abandoned under any of the following circumstances:
a. When the owner, importer, consignee of the imported article expressly
signifies in writing to the Collector of Customs his intention to abandon; or
b. When the owner, importer, consignee or interested party after due
notice, fails to file an entry within thirty (30) days, which shall not be
extendible, from the date of discharge of the last package from the
vessel or aircraft xxxx
From the wording of the amendment, RA 7651 no longer requires that there be other
acts or omissions where an intent to abandon can be inferred. It is enough that the importer
fails to file the required import entries within the reglementary period. The lawmakers could
have easily retained the words used in the old law (with respect to the intention to abandon)
but opted to omit them.[43] It would be error on our part to continue applying the old law
despite the clear changes introduced by the amendment.
NOTICE WAS NOT NECESSARY UNDER
THE CIRCUMSTANCES OF THIS CASE
Petitioner also avers that the importations could not be deemed impliedly abandoned
because respondent did not give it any notice as required by Section 1801 of the TCC:
Sec. 1801. Abandonment, Kinds and Effect of. - An imported article is
deemed abandoned under any of the following circumstances:
xxx

xxx

xxx

b. When the owner, importer, consignee or interested party after due

notice, fails to file an entry within thirty (30) days, which shall not be
extendible, from the date of discharge of the last package from the vessel or
aircraft xxx (Emphasis supplied)

Furthermore, it claims that notice and abandonment proceedings were required

under the BOCs guidelines on abandonment (CMO 15-94):
SUBJECT: REVISED GUIDELINES ON ABANDONMENT
xxx
B.

xxx

xxx

ADMINISTRATIVE PROVISIONS
xxx

xxx

xxx

B.2 Implied abandonment occurs when:

B.2.1 The owner, importer, consignee, interested party or his authorized
broker/representative, after due notice, fails to file an entry within a nonextendible period of thirty (30) days from the date of discharge of last
package from the carrying vessel or aircraft.
xxx

xxx

xxx

Due notice to the consignee/importer/owner/interested party shall be

by means of posting of a notice to file entry at the Bulletin Board
seven (7) days prior to the lapse of the thirty (30) day period by the
Entry Processing Division listing the consignees who/which have not filed the
required import entries as of the date of the posting of the notice and
notifying them of the arrival of their shipment, the name of the carrying
vessel/aircraft, Voy. No. Reg. No. and the respective B/L No./AWB No., with a
warning, as shown by the attached form, entitled: URGENT NOTICE TO FILE
ENTRY which is attached hereto as Annex A and made an integral part of this
Order.
xxx
C.

xxx

xxx

OPERATIONAL PROVISIONS
xxx
C.2

xxx

xxx

On Implied Abandonment:
C.2.1 When no entry is filed
C.2.1.1

Within twenty-four (24) hours after

the completion of the boarding
formalities, the Boarding Inspector must
submit the manifests to the Bay Service
or similar office so that the Entry
Processing Division copy may be put to
use by said office as soon as possible.

C..2.1.2

Within twenty-four (24) hours after

the completion of the unloading of
the
vessel/aircraft,
the
Inspector
assigned in the vessel/aircraft, shall issue
acertification addressed to the Collector
of Customs (Attention: Chief, Entry

Processing Division), copy furnished Chief,

Data Monitoring Unit, specifically stating
the time and date of discharge of the last
package from the vessel/aircraft assigned
to him. Said certificate must be encoded
by Data Monitoring Unit in the Manifest
Clearance System.
C.2.1.3

Twenty-three (23) days after the

discharge of the last package from the
carrying vessel/aircraft, the Chief, Data
Monitoring Unit shall cause the printing of
the URGENT NOTICE TO FILE ENTRY in
accordance with the attached form, Annex
A hereof, sign the URGENT NOTICE
and cause its posting continuously for
seven (7) days at the Bulletin Board
for the purpose until the lapse of the
thirty (30) day period.

C.2.1.4

The
Chief,
Data
Monitoring
Unit,
shall submit a weekly report to the
Collector of Customs with a listing by
vessel, Registry Number of shipments/
importations which shall be deemed
abandoned for failure to file entry within
the
prescribed
period
and with
certification that per records available,
the thirty (30) day period within which to
file the entry therefore has lapsed without
the consignee/importer filing the entry
and that the proper posting of notice as
required has been complied with.
xxx

C.2.1.5

xxx

xxx

Upon receipt of the report, the Collector of

Customs shall issue an order to the Chief,
Auction
and
Cargo
Disposal
Division, to dispose
of
the
shipmentenumerated
in
the
report
prepared by the Chief, Data Monitoring
Unit on the ground that those are
abandoned and ipso facto deemed the
property of the Government to be
disposed of as provided by law.
xxx xxx xxx[44] (Emphasis
supplied)

We disagree.
Under the peculiar facts and circumstances of this case, due notice was not
necessary. The shipments arrived in 1996. The IEDs and IEIRDs were also filed in
1996. However, respondent discovered the fraud which attended the importations and their

subsequent release from the BOCs custody only in 1999. Obviously, the situation here was
not an ordinary case of abandonment wherein the importer merely decided not to claim its
importations. Fraud was established against petitioner; it colluded with the former District
Collector. Because of this, the scheme was concealed from respondent. The government
was unable to protect itself until the plot was uncovered. The government cannot be
crippled by the malfeasance of its officials and employees. Consequently, it was impossible
for respondent to comply with the requirements under the rules.
By the time respondent learned of the anomaly, the entries had already been
belatedly filed and the oil importations released and presumably used or sold. It was a fait
accompli. Under such circumstances, it would have been against all logic to require
respondent to still post an urgent notice to file entry before declaring the shipments
abandoned.
The minutes of the deliberations in the House of Representatives Committee on Ways
and Means on the proposed amendment to Section 1801 of the TCC show that the phrase
after due notice was intended for owners, consignees, importers of the shipments who live
in rural areas or distant places far from the port where the shipments are discharged, who
are unfamiliar with customs procedures and need the help and advice of people on how to
file an entry:

xxx

xxx

xxx

MR. FERIA. 1801, your Honor. The question that was raised here in the
last hearing was whether notice is required to be sent to the importer. And, it
has been brought forward that we can dispense with the notice to the
importer because the shipping companies are notifying the importers on the
arrival of their shipment. And, so that notice is sufficient to . . . sufficient for
the claimant or importer to know that the shipments have already
arrived.
Second, your Honor, the legitimate businessmen always have . . . they
have their agents with the shipping companies, and so they should know the
arrival of their shipment.
xxx

xxx

xxx

HON. QUIMPO. Okay. Comparing the two, Mr. Chairman, I cannot help
but notice that in the substitution now there is a failure to provide the phrase
AFTER NOTICE THEREOF IS GIVEN TO THE INTERESTED PARTY, which was in
the original. Now in the second, in the substitution, it has been deleted. I was
first wondering whether this would be necessary in order to provide for due
process. Im thinking of certain cases, Mr. Chairman, where the owner might
not have known. This is now on implied abandonment not the express
abandonment.
xxx

xxx

xxx

HON. QUIMPO. Because Im thinking, Mr. Chairman. Im thinking of

certain situations where the importer even though, you know, in the normal
course of business sometimes they fail to keep up the date or something
to that effect.
THE CHAIRMAN. Sometimes their cargoes get lost.

HON. QUIMPO. So just to, you know . . . anyway, this is only a notice
to be sent to them that they have a cargo there.
xxx

xxx

xxx

MR. PARAYNO. Your Honor, I think as a general rule, five days

[extendible] to another five days is a good enough period of time. But we
cannot discount that there are some consignees of shipments located
in rural areas or distant from urban centers where the ports are
located to come to the [BOC] and to ask for help particularly if a ship
consignment is made to an individual who is uninitiated with customs
procedures. He will probably have the problem of coming over to the
urban centers, seek the advice of people on how to file entry. And
therefore, the five day extendible to another five days might really
be a tight period for some. But the majority of our importers are
knowledgeable of procedures. And in fact, it is in their interest to file the
entry even before the arrival of the shipment. Thats why we have a
procedure in the bureau whereby importers can file their entries even before
the shipment arrives in the country.[45] (Emphasis supplied)
xxx

xxx

xxx

Petitioner, a regular, large-scale and multinational importer of oil and oil products, fell
under the category of a knowledgeable importer which was familiar with the governing rules
and procedures in the release of importations.
Furthermore, notice to petitioner was unnecessary because it was fully aware that its
shipments had in fact arrived in the Port of Batangas. The oil shipments were discharged
from the carriers docked in its private pier or wharf, into its shore tanks. From then on,
petitioner had actual physical possession of its oil importations. It was thus incumbent upon
it to know its obligation to file the IEIRD within the 30-day period prescribed by law. As a
matter of fact, importers such as petitioner can, under existing rules and regulations, file in
advance an import entry even before the arrival of the shipment to expedite the release of
the same. However, it deliberately chose not to comply with its obligation under Section
1301.
The purpose of posting an urgent notice to file entry pursuant to Section B.2.1 of
CMO 15-94 is only to notify the importer of the arrival of its shipment and the details of
said shipment. Since it already had knowledge of such, notice was superfluous. Besides,
the entries had already been filed, albeit belatedly. It would have been oppressive to the
government to demand a literal implementation of this notice requirement.
AN
ABANDONED
ARTICLE
SHALL IPSO FACTO BE
DEEMED
THE
PROPERTY OF THE GOVERNMENT
Section 1802 of the TCC provides:
Sec. 1802. Abandonment of Imported Articles. - An abandoned
article
shall ipso
facto be
deemed
the
property
of
the
Government and shall be disposed of in accordance with the provisions of
this Code. (Emphasis supplied)
The term ipso facto is defined as by the very act itself or by mere act. Probably
a closer translation of the Latin term would be by the fact itself. [46] Thus, there was no

need for any affirmative act on the part of the government with respect to the abandoned
imported articles since the law itself provides that the abandoned articles shall ipso facto be
deemed the property of the government. Ownership over the abandoned importation was
transferred to the government by operation of law under Section 1802 of the TCC, as
amended by RA 7651.
A historical review of the pertinent provisions of the TCC dispels any view that is
contrary to the automatic transfer of ownership of the abandoned articles to the government
by the mere fact of an importers failure to file the required entries within the mandated
period.
Under the former Administrative Code, Act 2711, [47] Section 1323 of Article XV thereof
provides:
Sec. 1323.
When implied abandonment takes effect Notice An
implied abandonment shall not take effect until after the property shall be
declared by the collector to have been abandoned and notice to the party in
interest as in seizure cases.
Thereafter, RA 1937[48] was enacted. Section 1801 thereof provides:
Sec. 1801.
Abandonment, Kinds and Effect of. Abandonment is
express when it is made direct to the Collector by the interested party in
writing and it is implied when, from the action or omission of the interested
party, an intention to abandon can be clearly inferred. The failure of any
interested party to file the import entry within fifteen days or any extension
thereof from the discharge of the vessel or aircraft, shall be implied
abandonment. An implied abandonment shall not be effective until the article
is declared by the Collector to have been abandoned after notice thereof is
given to the interested party as in seizure cases.
Any person who abandons an imported article renounces all his
interests and property rights therein.
PD 1464[49] did not amend the provisions of the TCC on abandonment. The latest
amendment was introduced by Section 1802 of RA 7651 which provides:
Sec. 1802.
Abandonment of Imported Articles. An abandoned
article shall ipso facto be deemed the property of the Government and shall
be disposed of in accordance with the provisions of this Code.
The amendatory law, RA 7651, deleted the requirement that there must be a
declaration by the Collector of Customs that the goods have been abandoned by the
importers and that the latter shall be given notice of said declaration before any
abandonment of the articles becomes effective.
No doubt, by using the term ipso facto in Section 1802 as amended by RA 7651,
the legislature removed the need for abandonment proceedings and for a declaration that
the imported articles have been abandoned before ownership thereof can be transferred to
the government.[50]
Petitioner claims it is arbitrary, harsh and confiscatory to deprive importers of their
property rights just because of their failure to timely file the IEIRD. In effect, petitioner is
challenging the constitutionality of Sections 1801 and 1802 by contending that said

provisions are violative of substantive and procedural due process. We disallow this
collateral attack on a presumably valid law:
We have ruled time and again that the constitutionality or validity of
laws, orders, or such other rules with the force of law cannot be attacked
collaterally. There is a legal presumption of validity of these laws and rules.
Unless a law or rule is annulled in a direct proceeding, the legal presumption
of its validity stands.[51]
Besides,
[a] law is deemed valid unless declared null and void by a competent
court; more so when the issue has not been duly pleaded in the trial court.
The question of constitutionality must be raised at the earliest
opportunity. xxx The settled rule is that courts will not anticipate a question
of constitutional law in advance of the necessity of deciding it. [52]
Be that as it may, the intent of Congress was unequivocal. Our policy makers wanted
to do away with lengthy proceedings before an importation can be considered abandoned:
xxx
xxx
xxx
MR. PARAYNO. Thank you, Mr. Chairman. The proposed amendment to
Section 1801 on the abandonment, kinds and effects. This aimed to facilitate,
Mr. Chairman, the process by which this activity is being acted upon at the
moment. The intention, Mr. Chairman, is for the Customs Administration to be
able to maximize the revenue that can be derived from abandoned goods, and
the problem that we are encountering at the moment is that we have to go
through a lengthy process similar to a seizure proceedings to be able to finally
declare the cargo, the abandoned cargo forfeited in favor of the government
and therefore, may be disposed of pursuant to law. And that therefore, the
proposed amendment particularly on the implied abandonment as
framed here will do away with the lengthy process of seizure
proceedings and therefore, enable us to dispose of the shipments through
public auction and other modes of disposal as early as possible.
THE CHAIRMAN. In other words, Commissioner, therell be no need
for a seizure in the case of abandonment because under the
proposed bill its considered to be government property.[53]
xxx

xxx

xxx

CONCLUSION
Petitioners failure to file the required entries within a non-extendible period of thirty
days from date of discharge of the last package from the carrying vessel constituted implied
abandonment of its oil importations. This means that from the precise moment that the nonextendible thirty-day period lapsed, the abandoned shipments were deemed (that is, they
became) the property of the government. Therefore, when petitioner withdrew the oil
shipments for consumption, it appropriated for itself properties which already belonged to
the government. Accordingly, it became liable for the total dutiable value of the shipments
of imported crude oil amounting to P1,210,280,789.21 reduced by the total amount of duties
paid amounting to P316,499,021.00 thereby leaving a balance of P893,781,768.21.

By the very nature of its functions, the CTA is a highly specialized court specifically
created for the purpose of reviewing tax and customs cases. It is dedicated exclusively to
the study and consideration of revenue-related problems and has necessarily developed an
expertise on the subject. Thus, as a general rule, its findings and conclusions are accorded
great respect and are generally upheld by this Court, unless there is a clear showing of a
reversible error or an improvident exercise of authority. There is no such showing here.
WHEREFORE, the petition is hereby DENIED. Petitioner Chevron Philippines, Inc.
is ORDERED to pay the amount of EIGHT HUNDRED NINETY THREE MILLION SEVEN
HUNDRED EIGHTY ONE THOUSAND SEVEN HUNDRED SIXTY EIGHT PESOS AND TWENTY-ONE
CENTAVOS (P893,781,768.21) plus six percent (6%) legal interest per annum accruing from
the date of promulgation of this decision until its finality. Upon finality of this decision, the
sum so awarded shall bear interest at the rate of twelve percent (12%) per annum until its
full satisfaction.
Costs against petitioner.
SO ORDERED.

Importation in violation of the TCCP

THE COMMISSIONER OF CUSTOMS, petitioner, vs. MANILA STAR FERRY, INC., UNITED
NAVIGATION & TRANSPORT CORPORATION, CEABA SHIPPING AGENCY, INC., and
THE COURT' OF TAX APPEALS, respondents.
This is a petition for review under Rule 44 of the Revised Rules of Court filed by the
Commissioner of Customs to set aside the consolidated Decision dated September 30, 1969
of the Court of Tax Appeals in C.T.A. Cases Nos. 1836, 1837 and 1839, modifying his decision
by ordering only the payment of a fine, in lieu of the forfeiture of private respondents
vessels used in the smuggling of foreign-made cigarettes and other goods.
Private respondents Manila Star Ferry, Inc. and the United Navigation & Transport
Corporation are domestic corporations engaged in the lighterage business and are the
owners and operators, respectively, of the tugboat Orestes and the barge-lighter UN-L-106.
Private respondent Ceaba Shipping Agency, Inc. (Ceaba) is the local shipping agent of the
Chiat Lee Navigation Trading Co. of Hongkong, the registered owner and operator of the S/S
Argo, an ocean-going vessel.
On June 12, 1966, the S/S Argo, the Orestes and the UN-L-106, as well as two wooden
bancas of unknown ownership, were apprehended for smuggling by a patrol boat of the
Philippine Navy along the Explosives Anchorage Area of Manila Bay. the patrol boat caught
the crew of the S/S Argo in the act of unloading foreign-made goods onto the UN-L-106,
which was towed by the Orestes and escorted by the two wooden bancas. The goods of 330
cases of foreign-made cigarettes, assorted ladies' wear, clothing material and plastic bags,
all of which were not manifested and declared by the vessel for discharge in Manila. No
proper notice of arrival of the S/S Argo was given to the local customs authorities.
Thereafter, seizure and forfeiture proceedings were separately instituted before the Collector
of Customs for the Port of Manila against the S/S Argo (Seizure Identification Case No.

10009, Manila) and its cargo (S.I. No. 10009-C, Manila), the Orestes (S.I. No. 10009-A,
Manila), the UN-L-106 (S.I. No. 1009-B, Manila) and the two bancas (S.I. No. 10009-D,
Manila), charging them with violations of Section 2530 (a), (b) and (c) of the Tariff and
Customs Code. Criminal charges were likewise filed against the officers and crew of said
vessels and watercraft.
In the seizure and forfeiture proceedings, the Collector of Customs rendered a consolidated
decision dated December 27, 1966, declaring the forfeiture of said vessels and watercraft in
favor of the Philippine government by virtue of Section 2530 (a) and (b) of the Tariff and
Customs Code.
All respondents therein, except the owner of the two wooden bancas, separately appealed
the consolidated decision of the Collector of Customs for the Port of Manila to the
Commissioner of Customs. In his Decision dated February 1, 1967, the Acting Commissioner
of Customs found the Collector's decision to be in order and affirmed the same accordingly.
The same respondents separately elevated the matter to the Court of Tax Appeals (C.T.A.
Cases Nos. 1836, 1837 and 1839), which in a consolidated decision dated September 30,
1989, substantially modified the decision of the Commissioner of Customs, stating thus:
IN VIEW OF THE FOREGOING, the Manila Star Ferry, Inc., petitioner in C.T.A.
Case No. 1836, and the United Navigation & Transport Corporation, petitioner
in C.T.A. Case No. 1837, are each hereby ordered to pay a fine of five
thousand pesos (P5,000.00) and Ceaba Shipping Agency, Inc., petitioner in
C.T.A. Case No. 1839, a fine of ten thousand pesos (P10,000.00), within thirty
days from the date this decision becomes final (Rollo, p., 100).
It is this decision of the Court of Tax Appeals that is being questioned by the Commissioner
of Customs before this Court.
On February 7, 1978, petitioner filed a Motion to Allow Sale of the Vessel (S/S Argo),
informing this Court that the said vessel was deteriorating and depreciating in value, and
was congesting the Cavite Naval Base where it was berthed. Petitioner prayed that it be
allowed to sell the S/S Argo at the best possible price. The Court granted petitioner's motion.
An Urgent Motion for Modification was filed by respondent Ceaba, praying that it, instead of
petitioner, be allowed to sell the S/S Argo through a negotiated sale and not a public sale. In
a resolution dated May 12, 1978, this Court granted respondent Ceaba's motion, ordering it,
however, to first pay the fine of P10,000.00 stated in the decision of the Commissioner of
Customs and then "deposit the proceeds of the sale with a reputable commercial bank in an
interest bearing account in trust for whosoever will prevail in the cases at bar" (Rollo, p.
317). A manager's check in the amount of P10,000.00 was made payable to the
Commissioner of Customs and was delivered y the respondent Ceaba to the Cashier of the
Supreme Court. In the Resolution of July 9, 1978, this payment was accepted, subject to the
Court's decision in the case (Rollo, p. 327). The S/S Argo was sold, with this Court's approval,
for P125,000.00 to one Severino Caperlac. The proceeds were subjected to the charging lien
of respondent Ceaba's attorneys in the amount of P315,000.00 (Rollo, p. 402).

The petition for review posits the theory that the subject vessels and watercraft were
engaged in smuggling, and that the S/S Argo should be forfeited under Section 2530 (a),
while the barge UN-L-106 and tugboat Orestes should be forfeited under Section 2530 (c) of
the Tariff and Customs Code.
Section 2530 (a) and (c) of said law reads as follows:
Sec. 2530. Property Subject to Forfeiture under Tariff and Customs Laws.
Any vessel or aircraft, cargo, articles and other objects shall, under the
following conditions, be subject to forfeiture:
(a) Any vessel or aircraft, including cargo, which shall, be used unlawfully in
the importation or exportation of articles into or from any Philippine port or
place except a port of entry; and any vessel which, being of less than thirty
tons capacity shall be used in the importation of articles into any Philippine
port or place except into a port of the Sulu sea where importation in such
vessel may be authorized by the Commissioner, with the approval of the
department head.
xxx xxx xxx
(c) Any vessel or aircraft into which shall be transferred cargo unladen
contrary to law prior to the arrival of the importing vessel or aircraft at her
port of destination.
The penalty of forfeiture is imposed on any vessel, engaged in smuggling if the conditions
enumerated in Section 2530 (a) are compresent.
These conditions are:
(1) The vessel is "used unlawfully in the importation or exportation of articles into or from"
the Philippines;
(2) The articles are imported or exported into or from "any Philippine port or place, except a
port of entry;" or
(3) If the vessel has a capacity of less than 30 tons and is "used in the importation of articles
into any Philippine Port or place other than a port of the Sulu Sea, where importation in such
vessel may be authorized by the Commissioner, with the approval of the department head."
There is no question that the vessel S/S Argo was apprehended while unloading goods of
foreign origin onto the barge UN-L-106 and the tugboat Orestes, without the necessary
papers showing that the goods were entered lawfully though a port of entry and that taxes
and duties on said goods had been paid. The claim that the S/S Argo made an emergency
call at the Port of Manila for replacement of crew members and had to stop at the Explosives
Anchorage Area because it was carrying nitric acid, a dangerous cargo, cannot be upheld,
much less given credence by this Court. The facts found by the Court of Tax Appeals are in
consonance with the findings of the Collector of Customs, and the Commissioner of Customs.

Absent a showing of any irregularity, or arbitrariness, the findings of fact of quasijudicial and administrative bodies are entitled to great weight:, and are conclusive and
binding on this Court. (Feeder International Line, Pte., Ltd. v. Court of Appeals, 197 SCRA 842
[1991]; Jaculina v. National Police Commission, 200 SCRA 489 [1991]). Moreover, the
Collector of Customs in S.I. No. 10009-C, Manila, ordered on July 28, 1966 the forfeiture of
the subject cargo after finding that they were, in truth and in fact, smuggled articles (Rollo,
p. 7). Respondent Ceaba did not appeal from said order and the same has become final.
In its decision, the Court of Tax Appeals held that while the S/S Argo was caught unloading
smuggled goods in Manila Bay, the said vessel and the goods cannot be forfeited in favor of
the government because the Port of Manila is a port of entry (R.A. 1937, Sec. 701).
The Commissioner of Customs argues that the phrase "except a port of entry" should mean
"except a port of destination," and inasmuch as there is no showing that the Port of Manila
was the port of destination of the S/S Argo, its forfeiture was in order.
We disagree.
Section 2530(a) in unmistakable terms provides that a vessel engaged in smuggling "in a
port of entry" cannot be forfeited. This is the clear and plain meaning of the law. It is not
within the province of the Court to inquire into the wisdom of the law, for indeed, we are
bound by the words of the statute. Neither can we put words in the mouths of the lawmaker.
A verba legis non est recedendum.
It must be noted that the Revised Administrative Code of 1917 from which the Tariff and
Customs Code is based, contained in Section 1363(a) thereof almost exactly the same
provision in Section 2530(a) of the Tariff and Customs Code, including the phrase "except a
port of entry." If the lawmakers intended the term "port of entry" to mean "port of
destination," they could have expressed facilely such intention when they adopted the Tariff
and Customs Code in 1957. Instead on amending the law, Congress reenacted verbatim the
provision of Section 1363(a) of the Revised Administrative Code of 1917. Congress, in the
very same Article 2530 of the Tariff and Customs Code, used the term "port of destination" in
subsections (c) and (d) thereof. This is a clear indication that Congress is aware of the
distinction between the two wordings.
It was only in 1972, after this case was instituted, when the questioned exception ("except a
port of entry") in Section 2530(a) of the Tariff and Customs Code was deleted by P.D. No. 74.
Nevertheless, although the vessel cannot be forfeited, it is subject to a fine of not more than
P10,000.00 for failure to supply the requisite manifest for the unloaded cargo under Section
2521 of Code, which reads as follows:
Sec. 2521. Failure to Supply Requisite Manifests. If any vessel or aircraft
enters or departs from a port of entry without submitting the proper manifest
to the customs authorities, or shall enter or depart conveying unmanifested
cargo other than as stated in the next preceding section hereof, such vessel or
aircraft shall be fined in a sum not exceeding ten thousand pesos.

xxx xxx xxx

The barge-lighter UN-L-106 and the tugboat Orestes, on the other hand, are subject to
forfeiture under paragraph (c) of Section 2530 of the Tariff and Customs Code. The bargelighter and tugboat fall under the term "vessel" which includes every sort of boat, craft or
other artificial contrivance used, or capable of being used, as a means of transportation on
water (R.A. No. 1937, Section 3514). Said section 2530 (c) prescribes the forfeiture of' any
vessel or aircraft into which shall be transferred cargo unladen contrary to law before the
arrival of the vessel or aircraft at her port of destination Manila was not the port of
destination, much less a port of call of the S/S Argo, the importing vessel. The S/S Argo left
Hongkong and was bound for Jesselton, North Borneo, Djakarta and Surabaja, Indonesia; and
yet it stopped at the Port of Manila to unload the smuggled goods onto the UN-L-106 and the
Orestes.
Forfeiture proceedings are proceedings in rem (Commissioner of Customs v. Court of Tax
Appeals, 138 SCRA 581 [1985] citing Vierneza v. Commissioner of Customs, 24 SCRA 394
[1968]) and are directed against the res. It is no defense that the owner of the vessel sought
to be forfeited had no actual knowledge that his property was used illegally. The absence or
lack of actual knowledge of such use is a defense personal to the owner himself which
cannot in any way absolve the vessel from the liability of forfeiture Commissioner of
Customs v. Court of Appeals,supra; U.S. v. Steamship "Rubi.", 32 Phil. 228, 239 [1915]).
WHEREFORE, the consolidated Decision dated September 30, 1969 of respondent Court of
Tax Appeals in C.T.A. Cases Nos. 1836, I837 and 1839 is MODIFIED as follows: (1) that the
S/S Argo through respondent Ceaba Shipping Agency, Inc. is ordered to pay a fine of
P10,000.00, to be satisfied from the deposit of the same amount by respondent Ceaba to the
Cashier of this Court per Resolution of July 9, 1978; (2) that the Cashier of this Court is
ordered to release the said amount for payment to the Commissioner of Customs, within
thirty (30) days from the date this decision becomes final; and 3) the tugboat Orestes and
the barge-lighter UN-L-106 of respondents Manila Star Ferry, Inc. and the United Navigation
& Transport. Corporation respectively, are ordered forfeited in favor of the Philippine
Government.
SO ORDERED.