Factoran, Jr. vs. Court of Appeals

Property lawfully confiscated by the DENR Secretary pursuant to Sec. 68-A of P.D. 705 is in custodia legis and cannot be the subject of a writ of replevin. The Court held that because the taking was authorized by law, the detention was not wrongful, and replevin will not lie to recover property in official custody under legal process. Furthermore, the administrative authority to confiscate under Sec. 68-A is distinct and independent of criminal confiscation under Sec. 68, and the procedural requirements of Sec. 80 apply solely to the latter.

Marikina police officers intercepted a six-wheeler truck carrying 4,000 board feet of narra lumber along Marcos Highway and apprehended the driver, private respondent Jesus Sy. DENR investigation revealed discrepancies between the cargo (narra lumber) and the accompanying documents (which declared narra flitches and listed different plate numbers and consignees), violating Bureau of Forestry Development Circular No. 10 and Sec. 68 of P.D. No. 705. The DENR issued a temporary seizure order, and the Secretary subsequently ordered the confiscation of both the lumber and the truck. Private respondents did not appeal this order to the Office of the President but instead filed a replevin suit in the Regional Trial Court to recover the properties and enjoin a scheduled public auction.

• Interception and Seizure: On August 9, 1988, Marikina police intercepted a six-wheeler truck carrying 4,000 board feet of narra lumber. The driver, private respondent Jesus Sy, and the truck were brought to the DENR PIC/SAID Office.
• Documentary Discrepancies: Petitioner Atty. Robles discovered discrepancies: (1) documents declared narra flitches, but the cargo was lumber; (2) plate numbers on documents did not match the truck; (3) a Certificate of Timber Origin was presented instead of the required Certificate of Lumber Origin; and (4) the log sale agreement named a different consignee. These violated BFD Circular No. 10 and Sec. 68 of P.D. 705.
• Confiscation Order: A temporary seizure order was issued. On January 20, 1989, petitioner Secretary Factoran issued an order confiscating the lumber and truck. Private respondents did not appeal this order to the Office of the President, resulting in the government's forfeiture of the properties, which were advertised for public auction.
• Replevin Suit: On March 17, 1989, private respondents filed a complaint for replevin and injunction in the RTC to recover the properties and enjoin the auction. The RTC issued a TRO and, on March 20, 1989, granted the writ of replevin upon private respondents' posting of a P180,000 bond.
• Defiance and Contempt: The RTC issued a writ of seizure on March 22, 1989. Petitioners refused to comply, offering instead to post a counterbond, which the trial court refused. Private respondents moved to declare petitioners in contempt.

• Petitioners maintained that confiscated lumber cannot be the subject of replevin.
• Petitioners argued that they are not compelled to criminally prosecute private respondents but may opt only to confiscate the lumber.
• Petitioners contended that the writ of replevin was issued in contravention of P.D. No. 605.

• Respondents countered that the trial court had jurisdiction over the replevin suit and that issuance of the writ was mandatory under the Rules of Court.
• Respondents argued that the DENR lacked authority to keep the property indefinitely without notice and hearing, claiming no formal investigation was conducted and the confiscation order was invalid.
• Respondents insisted that the properties were not in custodia legis and could be replevied.

• Procedural Issues:
  • Whether the doctrine of exhaustion of administrative remedies bars the replevin suit.
  • Whether petitioners may be held in indirect contempt for disobeying the trial court's writ of seizure.
• Substantive Issues:
  • Whether property confiscated by the DENR Secretary under Sec. 68-A of P.D. 705 may be the subject of a writ of replevin.
  • Whether the administrative authority to confiscate under Sec. 68-A of P.D. 705 is distinct from criminal confiscation under Sec. 68.
  • Whether Sec. 80 of P.D. 705, requiring delivery of seized forest products to the fiscal within six hours, applies to administrative confiscations under Sec. 68-A.
  • Whether private respondents were denied due process in the administrative confiscation proceedings.

• Procedural:
  • The doctrine of exhaustion of administrative remedies applies, as courts should not entertain suits until available administrative remedies are exhausted. However, because petitioners failed to file a motion to dismiss on this ground in the trial court, the defense was deemed waived.
  • Petitioners cannot be held in indirect contempt. Indirect contempt presupposes a valid court order. Because the trial court issued the writ of replevin in grave abuse of discretion, the order was invalid, and disobedience thereto cannot constitute contempt.
• Substantive:
  • Property lawfully confiscated by the DENR Secretary under Sec. 68-A of P.D. 705 is in custodia legis and cannot be replevied. The taking was authorized by law; thus, the detention was not wrongful, which is a requisite for replevin under Sec. 2(b), Rule 60. Replevin will not lie to recover property in official custody under legal process, as it would interfere with the function of the law under which the property was taken.
  • The administrative authority to confiscate under Sec. 68-A is distinct and independent of criminal confiscation under Sec. 68. Sec. 68-A was added to supplant the inadequacies of criminal enforcement and provide an administrative remedy. If confiscation could only be done through the court under Sec. 68, Sec. 68-A would be purposeless.
  • Sec. 80 of P.D. 705 applies only to criminal prosecutions under Sec. 68, not to administrative confiscations under Sec. 68-A. The title of Sec. 80 ("Arrest; Institution of Criminal Actions") and its historical co-existence with Sec. 68 prior to the addition of Sec. 68-A prove this intendment. Requiring delivery to the fiscal in administrative confiscations would render Sec. 68-A nugatory.
  • Private respondents were not denied due process. By their own admission, respondent Sy was investigated by the DENR and given an opportunity to explain the documentary deficiencies. Due process in administrative proceedings does not always require a trial-type hearing; it is satisfied when parties are afforded a fair and reasonable opportunity to explain their side or seek reconsideration.

• Custodia Legis — Property lawfully taken by virtue of legal process is deemed to be in the official custody of the law. The Court applied this doctrine to hold that once the DENR Secretary issued a valid confiscation order under Sec. 68-A of P.D. 705, the property was in custodia legis and beyond the reach of a writ of replevin, as allowing replevin would interfere with the administrative process.
• Doctrine of Exhaustion of Administrative Remedies — Courts should not entertain suits unless available administrative remedies have first been resorted to and proper authorities given an opportunity to correct alleged errors. The Court noted this doctrine applies to DENR confiscation orders, which are appealable to the Office of the President under Sec. 8 of P.D. 705, but held it was waived because petitioners failed to raise it in a motion to dismiss.
• Doctrine of Primary Jurisdiction — Courts cannot arrogate unto themselves the authority to resolve a controversy initially lodged with an administrative body of special competence. The Court relied on this to emphasize that the trial court's assumption of the replevin suit encroached upon the DENR's domain, although the procedural waiver prevented its direct application to dismiss the case.
• Distinctness of Administrative Confiscation and Criminal Prosecution under P.D. 705 — The administrative authority of the Department Head to order confiscation under Sec. 68-A is separate and distinct from the confiscation of forest products by the court in a criminal action under Sec. 68. The Court applied this to clarify that the DENR may pursue administrative confiscation independently of criminal charges, and the procedural rules of criminal actions (like Sec. 80) do not bind administrative confiscation.

• "Property lawfully taken by virtue of legal process is deemed to be in custodia legis. When a thing is in official custody of a judicial or executive officer in pursuance of his execution of a legal writ, replevin will not lie to recover it. Otherwise, there would be interference with the possession before the function of law had been performed as to the process under which the property was taken."
• "Sec. 68-A was added precisely to supplant the inadequacies and supplement criminal enforcement of forestry laws. . . . If as private respondents insist, the power of confiscation cannot be exercised except only through the court under Section 68, then Section 68-A would have no purpose at all."

• Paat v. Court of Appeals, 266 SCRA 167 (1997) — Followed. The Court relied on Paat to hold that the DENR's enforcement of forestry laws falls within its primary jurisdiction, that Sec. 68-A is an administrative remedy distinct from criminal proceedings, and that Sec. 80 applies only to Sec. 68 criminal actions.
• Chua v. Court of Appeals, 222 SCRA 85 (1993) — Followed. Cited for the doctrine that property lawfully taken by legal process is in custodia legis and replevin will not lie to recover it.

• Section 68-A, Presidential Decree No. 705 (Revised Forestry Code), as amended by Executive Order No. 277 — Authorizes the Department Head or duly authorized representative to order the confiscation of illegally cut/possessed forest products and conveyances used in the offense. The Court applied this to validate the DENR Secretary's confiscation order, placing the property in custodia legis.
• Section 68, Presidential Decree No. 705 — Penalizes cutting/gathering/collecting timber without license and authorizes court-ordered confiscation in criminal actions. The Court distinguished this from Sec. 68-A, holding that Sec. 68-A provides an independent administrative remedy.
• Section 80, Presidential Decree No. 705 — Requires arresting officers to deliver seized forest products and offenders to the appropriate official within six hours. The Court held this applies exclusively to criminal prosecutions under Sec. 68, not administrative confiscations under Sec. 68-A.
• Section 2, Rule 60 of the Revised Rules of Court — Enumerates the requisites for issuing a writ of replevin, including that the property is wrongfully detained and has not been taken for a tax or fine or placed under custodia legis. The Court applied this to rule that the affidavit failed to satisfy the requirements because the property was lawfully confiscated and in custodia legis.

Bellosillo, Mendoza, Quisumbing, and Buena.