Mison vs. Natividad

The Collector of Customs has exclusive original jurisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with the exercise thereof or stifle or put it to naught. The Regional Trial Court is precluded from interfering in seizure proceedings once a warrant of seizure and detention has been issued, and allegations of ownership or even the illegality of the warrant cannot justify judicial interference with the Collector's jurisdiction.

The case involves the jurisdiction of the Regional Trial Court over actions involving articles subject to seizure proceedings under the Tariff and Customs Code. The Tariff and Customs Code, in Section 2530 thereof, lists the kinds of property subject to forfeiture, and in Part 2 of Title VI thereof, provides for the procedure in seizure and forfeiture cases, vesting 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, and an aggrieved party may appeal from a judgment of the Court of Tax Appeals directly to the Supreme Court.

In a sworn letter dated 7 February 1988 addressed to the Commissioner of Customs, one Butch Martinez informed the former of the existence of both "assembled and disassembled" knocked-down vehicles, particularly Toyota Lite Aces, at the compound CVC Trading, owned by a certain Mr. Castro and located at St. Jude Avenue, St. Jude Village, San Fernando, Pampanga. Martinez requested an immediate investigation and prosecution for the violation of customs laws. On the basis thereof, Gen. Benjamin C. Cruz, Acting Director of the National Customs Police, formed a team composed of National Customs Police (NCP) and Customs Intelligence and Investigation Division (CIID) members, issuing the same a Mission Order on 11 February 1988. The team proceeded to San Fernando, Pampanga on the same day, giving due notice of their presence to the PC Region III Command and the PC-INP Station at San Fernando, Pampanga.

Upon arrival at the place pinpointed by Mr. Martinez at around 11:00 p.m., the team found a fenced area containing twenty (20) units of fully and partly assembled Toyota Lite Ace vans. It immediately took possession and control of the motor vehicles by cordoning off the enclosure. Thereafter, at about 11:30 p.m., two (2) members of the team were designated to secure a warrant of seizure and detention from the Collector of Customs of the Subport of Clark, petitioner Carlos L. Razo. The latter instituted seizure proceedings against the vehicles (Seizure Identification No. CAB-01-88), entitled "Republic of the Philippines versus Twenty (20) units Toyota Lite-Ace, CVC Trading St. Jude Ave., Dolores Homesite, San Fernando, Pampanga, OWNER/CLAIMANT," for the violation of "Section 2530 (f) and (1)-1 & 5" of the Tariff and Customs Code, in relation to Central Bank regulations. Accordingly, at about 8:00 a.m. on 12 February 1988, he issued a Warrant of Seizure and Detention. Since receipt of the warrant was refused by the owner/claimant or any of his representatives, the same was served by substituted service through the posting of a copy thereof on one of the subject motor vehicles found near the gate of the stockyard. An inventory of the vehicles was conducted and a copy thereof was attached to the return of the warrant made to the issuing authority.

At about 11:00 a.m. on 12 February 1988, when the team was about to haul the motor vehicles away, two (2) Regional Trial Court sheriffs arrived with a temporary restraining order issued on that date by the respondent Judge, as Executive Judge of the Regional Trial Court of San Fernando, Pampanga; the order was issued in connection with Civil Case No. 8109, entitled "Sonny Carlos, plaintiff, versus Bureau of Customs and/or Customs Police from seizing or confiscating the vehicles until further ordered, and directed the defendants to attend the raffle of the case on 26 February 1988 at 9:00 o'clock in the morning and show cause why a writ of preliminary injunction should not be issued against them. It further required plaintiff to submit within twenty four (24) hours from that date the list of vehicles in question and "not to dispose any (sic) of them pending further order of the court." In his Complaint in the above-entitled case, private respondent alleges that he is the owner of several vehicles which are legally registered in his name and that he has paid all the taxes and "corresponding licenses" therefor; he further avers that elements of the defendant Bureau of Customs and/or Customs Police have surrounded his residence threatening to take possession of the vehicles. He finally prays that the latter be enjoined from doing so and that they be ordered to pay damages in the sum of P50,000.00.

By virtue of the restraining order, the physical transfer of the vehicles was deferred, however, elements of the National Customs Police and the PC Regional Command remained deployed in the area to assert possession and control over the seized motor vehicles by the Bureau of Customs. On 16 February 1988, lawyers of the Bureau of Customs filed a Motion to Dismiss Civil Case No. 8109 alleging therein (a) the lack of jurisdiction of the Regional Trial Court over the subject vehicles in view of the exclusive jurisdiction of the Collector of Customs over seizure and forfeiture cases, and (b) the failure of the plaintiff to exhaust administrative remedies. On 17 February 1988, the private respondent filed an Oppositions/Comment on the Motion to Dismiss alleging, among others, that the Warrant of Seizure and Detention did not comply with the requirements for a valid search warrant under the Constitution, and that taxes for the vehicles have been paid to the Bureau of Internal Revenue (BIR). The Motion to Dismiss was heard on 19 February 1988 by the respondent Judge, to whose branch the case was raffled off. After said hearing, the private respondent's motion and application for preliminary injunction were deemed submitted for resolution.

On 22 February 1988, private respondent filed an Amended Complaint changing his name from "Sonny Carlos" to "CESAR SONNY CARLOS" and naming as defendants, in place of the "BUREAU OF CUSTOMS AND/OR CUSTOMS POLICE," "ATTY. CARLOS L. RAZO, in his capacity as Collector of Customs; LOUIE ROMERO, BILLY BIBIT, their authorized deputies and JOHN DOES." In this Amended Complaint, private respondent assails the subject warrant for being patently "illegal and fatally defective" and void of any virtue; reiterates his willingness to post a bond "in an amount the Court may fix conditioned upon the damages that the defendants may suffer as a consequence of the issuance of the injunction;" and asks for P500,000.00 as actual damages, P100,000.00 as exemplary and corrective damages, P50,000.00 as moral damages and P50,000.00 as attorney's fees. In the meantime, the hearing of Seizure Identification No. CAB-01-88 was set for 18 and 19 February 1988, per Notice of Hearing dated 15 February 1988 and issued by petitioner Collector of Customs. Since the owner/claimant CVC Trading refused to accept a copy of the said notice, a follow-up notice of hearing was transmitted to it thru a telegram; the latter replied also by telegram, declaring that: "We are the legal possessors/owners (sic) of the vehicles in our compound there can be no forfeiture since a case has been lodged before the civil courts hearing on Feb. 19, 1988 the courts have assumed jurisdiction to your exclusion. Moreover elementary due process requires service of documents complaint. There can be no service of summon's (sic) or notice of hearing thru telegrams." At the hearing on 18 February 1988, Attys. Napoleon Gatmaitan and Conrado Unlayao, CIID, Bureau of Customs, appeared for the Government. No appearance was entered for the owner/claimant. Thus, the Government was allowed to present evidence ex-parte.

On 26 February 1988, petitioner Collector of Customs rendered a Decision in the said seizure proceedings, the dispositive portion of which reads: "WHEREFORE, by authority of law vested in the undersigned, it is hereby ordered that the Twenty (20) Units Toyota Lite Ace covered by this seizure case be, as they are hereby, declared forfeited in favor of the Government to be disposed of in the manner provided for by law. Let copies of this Decision be furnished all parties and office (sic) concerned, with a copy thereof posted in the Bulletin Board of this Customhouse, for their information guidance and appropriate action." On the same date, the respondent Judge issued a Resolution in Civil Case No. 8109 denying the motion to dismiss and granting the application for a writ of preliminary injunction. The respondent Judge reasoned that the plaintiff is the owner of the subject vehicles, in actual and physical possession of the same, and enjoys the presumption of ownership; that the subject matter of the complaint is the legal ownership of the vehicles and damages being asked by plaintiff, thus, the Court can assume jurisdiction over the case; that the mere allegation of the defendants that the subject vehicles were smuggled based on 'reliable information' will not divest the Court of jurisdiction; that there is no showing that plaintiff is an importer who imported dutiable goods, in entering the port of Clark Air Base, imported thru that port; and that the goods are in private place owned by plaintiff, and not in the possession of the collector of customs.

• Lack of Jurisdiction of the Regional Trial Court: Petitioners argued that the Regional Trial Court lacked jurisdiction over the subject vehicles in view of the exclusive jurisdiction of the Collector of Customs over seizure and forfeiture cases under the Tariff and Customs Code.
• Failure to Exhaust Administrative Remedies: Petitioners argued that the private respondent failed to exhaust administrative remedies before resorting to judicial action.
• Encroachment upon Exclusive Jurisdiction: Petitioners maintained that the respondent Judge acted arbitrarily and despotically in issuing the temporary restraining order, granting the writ of preliminary injunction, and denying the motion to dismiss, thereby removing the res from the control of the Collector of Customs and depriving him of his exclusive original jurisdiction over the controversy.

• Validity of the Warrant: Private respondent argued that the Warrant of Seizure and Detention did not comply with the requirements for a valid search warrant under the Constitution.
• Payment of Taxes: Private respondent alleged that taxes for the vehicles have been paid to the Bureau of Internal Revenue (BIR).
• Ownership and Possession: Private respondent alleged that he is the owner of several vehicles which are legally registered in his name and that he has paid all the taxes and "corresponding licenses" therefor, and that elements of the defendant Bureau of Customs and/or Customs Police have surrounded his residence threatening to take possession of the vehicles.
• Illegality of the Warrant: In his Amended Complaint, private respondent assailed the subject warrant for being patently "illegal and fatally defective" and void of any virtue.

• Jurisdiction over the Res: Whether the Regional Trial Court has jurisdiction over the res subject of the warrant of seizure and detention issued by the Collector of Customs.
• Interference with Exclusive Jurisdiction: Whether the respondent Judge acted without jurisdiction or with grave abuse of discretion in denying the motion to dismiss and granting the writ of preliminary injunction, thereby interfering with the exclusive original jurisdiction of the Collector of Customs over seizure and forfeiture proceedings.

• Jurisdiction over the Res: No. The Regional Trial Court lacked jurisdiction over the res subject of the warrant of seizure and detention. By express provision of law, amply supported by well-settled jurisprudence, the Collector of Customs has exclusive jurisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with his exercise thereof or stifle or put it to naught.
• Interference with Exclusive Jurisdiction: Yes. The respondent Judge acted arbitrarily and despotically in issuing the temporary restraining order, granting the writ of preliminary injunction, and denying the motion to dismiss, thereby removing the res from the control of the Collector of Customs and depriving him of his exclusive original jurisdiction over the controversy. The respondent Judge exercised a power he never had and encroached upon the exclusive original jurisdiction of the Collector of Customs.

• Jurisdiction over the Res: The Court cited the 1966 case of Pacis vs. Averia, which held that the Tariff and Customs Code, in Section 2530 thereof, lists the kinds of property subject to forfeiture, and in Part 2 of Title VI thereof, 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 the Supreme Court. The Court reasoned that the 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. The Court further cited De Joya vs. Lantin, which declared that Republic Acts 1937 and 1125 vest jurisdiction over seizure and forfeiture proceedings exclusively upon the Bureau of Customs and the Court of Tax Appeals, and being special in nature and later enactments, the Court of First Instance should yield to the jurisdiction of the Customs authorities. The Court noted that this rule was subsequently reiterated in Romualdez vs. Arca, De Joya vs. David, Diosamito vs. Balanque, Lopez vs. Commissioner of Customs, Ponce Enrile vs. Vinuya, Collector of Customs vs. Torres, Pacis vs. Geronimo, and De la Fuente vs. De Veyra. The Court found 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 the said proceedings.
• Interference with Exclusive Jurisdiction: The Court held that private respondent's allegations of 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 the 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 court's interference with the Collector's jurisdiction. The Court distinguished between the existence of the Collector's power to issue the warrant and the regularity of the proceeding taken under such power. 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. Citing Ponce Enrile vs. Vinuya, the Court stated that 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, and it may even reach the Supreme Court through the appropriate petition for review. The proper ventilation of the legal issues raised is thus indicated, and a court of first instance is not therein included.

• Exclusive Jurisdiction of the Collector of Customs over Seizure and Forfeiture Proceedings — The Collector of Customs has exclusive original jurisdiction over seizure and forfeiture proceedings under the Tariff and Customs Code. Regular courts cannot interfere with the exercise thereof or stifle or put it to naught. The Court applied this doctrine in nullifying the respondent Judge's resolution, holding that the Regional Trial Court was precluded from interfering in the seizure proceedings once a warrant of seizure and detention had been issued.
• Distinction between Existence of Power and Regularity of Proceeding — There is a distinction between the existence of the Collector's power to issue a warrant of seizure and detention and the regularity of the proceeding taken under such power. Even if there be an irregularity in the latter, the Regional Trial Court does not have the competence to review, modify or reverse whatever conclusions may result therefrom. The Court applied this doctrine in rejecting private respondent's argument that the warrant was illegal and fatally defective.
• Later Special Law Prevails over Earlier General Law — Republic Act 1937 (Tariff and Customs Code), which took effect on July 1, 1957, is a later law than the Judiciary Act of 1948, and being special in nature, the Court of First Instance should yield to the jurisdiction of the Customs authorities. The Court applied this principle in resolving the conflict between the jurisdiction of the regular courts and the Collector of Customs.

• "By express provision of law, amply supported by well-settled jurisprudence, the Collector of Customs has exclusive jurisdiction over seizure and forfeiture proceedings and regular courts cannot interfere with his exercise thereof or stifle or put it to naught." — This passage states the core ratio decidendi of the case, establishing the exclusive jurisdiction of the Collector of Customs over seizure and forfeiture proceedings.
• "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." — This passage explains why allegations of ownership do not divest the Collector of Customs of jurisdiction, as such defenses can be raised in the seizure proceeding itself.
• "Even the illegality of the warrant of seizure and detention cannot justify the trial court's interference with the Collector's jurisdiction. In the first place, there is a distinction between the existence of the Collector's power to issue it and the regularity of the proceeding taken under such power." — This passage articulates the distinction between the existence of power and the regularity of the proceeding, which is central to the Court's reasoning.
• "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." — This passage, quoted from Ponce Enrile v. Vinuya, outlines the proper appellate remedy for parties aggrieved by seizure proceedings, excluding the regular courts from the process.

• Pacis vs. Averia, 18 SCRA 907 (1966) — Controlling precedent that established the exclusive jurisdiction of the Collector of Customs over seizure and forfeiture proceedings, holding that the Court of First Instance should yield to the jurisdiction of the Collector of Customs.
• De Joya vs. Lantin, 19 SCRA 894 (1967) — Followed, reiterating that Republic Acts 1937 and 1125 vest jurisdiction over seizure and forfeiture proceedings exclusively upon the Bureau of Customs and the Court of Tax Appeals, and that the Court of First Instance should yield to the jurisdiction of the Customs authorities.
• Ponce Enrile vs. Vinuya, 37 SCRA 381 (1971) — Followed, articulating the distinction between the existence of the Collector's power and the regularity of the proceeding taken under such power, and holding that a court of first instance is devoid of jurisdiction over seizure proceedings.
• Romualdez vs. Arca, 21 SCRA 856 (1967) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.
• De Joya vs. David, 21 SCRA 1493 (1967) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.
• Diosamito vs. Balanque, 28 SCRA 836 (1969) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.
• Lopez vs. Commissioner of Customs, 37 SCRA 327 (1971) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.
• Collector of Customs vs. Torres, 45 SCRA 272 (1972) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.
• Pacis vs. Geronimo, 56 SCRA 583 (1974) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.
• De la Fuente vs. De Veyra, 120 SCRA 451 (1983) — Cited as subsequent reiteration of the rule on exclusive jurisdiction of the Collector of Customs.

• Section 2530, Tariff and Customs Code (R.A. 1937) — Lists the kinds of property subject to forfeiture. The Court applied this provision in determining that the subject vehicles were properly the subject of seizure and forfeiture proceedings.
• Section 2312, Tariff and Customs Code (R.A. 1937) — Provides that the Collector's decision is appealable to the Commissioner of Customs. The Court cited this provision in outlining the proper appellate remedy for parties aggrieved by seizure proceedings.
• Section 2313, Tariff and Customs Code (R.A. 1937) — Provides that the Commissioner's decision is appealable to the Court of Tax Appeals. The Court cited this provision in outlining the proper appellate remedy.
• Section 2402, R.A. 1937 — Provides for appeal from the decision of the Commissioner of Customs to the Court of Tax Appeals. The Court cited this provision in Pacis vs. Averia and De Joya vs. Lantin.
• Sections 7 and 11, R.A. 1125 — Provides for the appellate jurisdiction of the Court of Tax Appeals over customs cases. The Court cited these provisions in outlining the proper appellate remedy.
• Section 18, R.A. 1125 — Provides for appeal from a judgment of the Court of Tax Appeals directly to the Supreme Court. The Court cited this provision in outlining the proper appellate remedy.
• Section 44(c), Judiciary Act of 1948 (as amended by R.A. 3828) — 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. The Court discussed this provision in Pacis vs. Averia in resolving the conflict between the jurisdiction of the regular courts and the Collector of Customs.
• Section 2303, 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. The Court cited this provision in Pacis vs. Averia to show 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.
• Section 3(m), Rule 131, Rules of Court — Provides for the presumption of regularity in the performance of official duty. The Court applied this provision in presuming that the warrant of seizure and detention was issued in the regular course of official duty.

Bidin, J., and Romero, J., concurred. Gutierrez, Jr., J., was on leave. Melo, J., took no part.