G.R. No.

L-56866 June 27, 1985

EDEN TAN, petitioner,
vs.
THE COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES, respondents.
Felipe L. Abel for petitioner.

CUEVAS, J.:
Appeal by way of certiorari from the decision dated September 29,
1980 of the then Court of Appeals in CA-G.R. No. 1951 ICR entitled
"People of the Philippines versus Eden Tan" which affirmed in toto the
Circuit Criminal Court's judgment in Criminal Case No. CCC-VII-1500P.C., finding petitioner-appellant guilty of violation of Section 3602 of
the Tariff and Customs Code, as amended.
The facts and circumstances that gave rise to appellant's prosecution
and conviction as summarized by the Honorable Solicitor General in
the People's Brief, 1 runs thus
At about 8:15 in the evening of November 17,
1974, Cathay Pacific Airways Flight No. 903 from
Hongkong landed at the Manila International Airport
(MIA for short). Eden Tan, one of the, passengers
of this flight, appeared to be restless, and as if she
was looking for somebody. When she was
assigned to a particular customs examiner, she
refused to be examined, and she moved around
the examination room of the arrival area of the
airport, as if she was looking for someone. The
chief of the customs agents, after observing her
behavior, assigned her to customs examiner
Macud. (pp. 3, 4, 5, 7, 8 & 9, tsn, September 18,
1975).
While her baggages were being examined by
examiner Macud, she appeared uneasy and
restless. The airport collector of customs
approached her and advised the examiner to make
a thorough examination of her baggages. As the
examiner started the examination of her baggages,
he found a plastic bag (Exh. "B") containing fruits
and underneath, fancy jewelries and stones.
Because of the large quantity of the fancy jewelries
found at the initial examination of her (Eden Tan's)
baggages the collector ordered the customs
examiner to make a thorough search of all her
luggages. The collector also instructed that her
handbag be searched. A search of her handbag
(Exh. "B-1") yielded precious stones sewed along
the lining and at the bottom of the handbag,
Precious stones were also found sewed along the
four corners of a blanket (Exh. "H") belonging to E
den Tan and among her clothings. When these
items were discovered, Eden Tan became
hysterical and she cried saying that those things

were not hers but were only given to her (pp. 11,
12, 13, 14, 15, 16, 21 & 22, tsn, Id.)
The articles found in Eden Tan's possession were
contained in five (5) plastic bags, one (1) carton,
one (1) bed cover (blanket) and a travelling bag.
Before starting with the examination of her
luggages, customs examiner Macud asked Eden
Tan to produce her baggage declaration which the
latter did. The baggage declaration shown to
Macud merely mentions personal effects, and it
contained the signature of Eden Tan. The examiner
asked her if she had anything more to declare.
Eden told the examiner that she had nothing more
to declare except personal effects as stated in her
baggage declaration. The initial examination of
Eden Tan's baggages by examiner Macud yielded
necklaces and pendants concealed among fruits.
All her baggages were brought to the office of
airport customs collector Dario for inventory and
appraisal. (pp. 30, 31, 32, 34, 35, 36, tsn, October
14, 1975)
A thorough examination of the baggages of Eden
Tan yielded cash consisting of dollars, Philippine
pesos and Taiwan money, assorted jewelries,
precious stones, calculator, camera lens, cooking
utensils, clothing and various items, with a total
appraised value of $6,498.20, and an estimated
customs duties, taxes and other charges totalling
P235,530.00 Exhs. "G", "G-2", "G-3", "G-4" and "G5", pp. 218, 21, 220, 221, 222 & 223, record)
Seizure proceedings was instituted in the Bureau of
Customs in connection with the articles brought in
by Eden Tan with the latter as claimant and the
case was heard by Fidel Camaniag Legal Officer of
the MIA Customs House (pp. 3 & 4, tsn, Oct. 23,
1975). Pending the hearing of the seizure
proceedings, Eden Tan filed with the customs
authorities a request for a reappraisal of the seized
articles. The hearing officer of the legal division of
the airport Customs House recommended a
favorable action on the request for re-appraisal.
The Chief Appraiser of the MIA Customs House
disagreed with the recommendation of the legal
division. Because of this agreement, the airport
customs collector referred the matter to the
customs commissioner (pp. 12, 13, 14 & 15,
tsn, Id.).
The commissioner of customs created a committee
to conduct a re-appraisal of the seized articles, and
after the committee had rendered a report of their
re-appraisal, the record of the case together with
the committee's re-appraisal report was returned to
the MIA Legal Division. The report of the reappraisal committee appraising the seized articles
at P47,993.00 was thereafter approved by the
customs authorities (pp. 21, 22, 24, 25, 27, 29, 33,
34 & 35, tsn, Id.) 2

The defense evidence on the other hand as found by the then

Honorable Court of Appeals, runs this wise:
... the evidence for the defense seeks to establish
that the alleged precious stones and assorted
jewelries were nothing but synthetic or limitation
stones called "yag" and fancy jewelry; that upon a
request for re-appraisal by appellant, in the seizure
proceedings in the MIA Customhouse, the reappraisal committee created by the Acting
Commissioner of Customs reported the appraisal
of the seized articles at P47,993.00 (Exh. 10, 10-A,
10-B, 10-C, 10-C-1, 10-C-2 and 10-C-3); that
appellant testified that she accomplished a
baggage declaration presented to her by the
stewardess aboard the plane; that she declared in
her baggage declaration all the baggage (sic)
including one leather bag and bed cover, personal
effects, synthetic stones, fancy jewelries, medicine,
clothing and so forth; that this baggage declaration
was not presented as evidence in court and,
instead the prosecution just manifested in court
that the baggage declaration could not be found;
that the prosecution did not prove first the loss of
the baggage declaration before proving the
contents thereof by secondary evidence through
the recollection of witnesses and that even
admitting that the prosecution has proved the
contents to be such that appellant stated only
"personal effect" in her baggage declaration still the
evidence is unsufficient to sustain the conviction of
appellant beyond reasonable doubt. 3
After trial following a plea of not guilty upon arraignment, accused was
convicted and thereafter sentenced to 12 years imprisonment, to pay a
fine of P10, 000. 00, and to pay costs. Upon Motion for
Reconsideration filed by the petitioners-appellant, however, the penalty
was reduced merely to 4 years imprisonment and fine of P5,000.00.
The articles seized by the customs authorities were ordered forfeited in
favor of the government.
Upon appeal to the then Court of Appeals and as herein earlier stated,
the judgment appealed from was affirmedin toto.
Hence, the instant appeal, petitioner contending that the then Court of
Appeals erred:
1. In not acquitting the petitioner-appellant for failure of the prosecution
not only to present in evidence the baggage declaration in question but
also to prove its alleged loss during the trial of the case;
2. In not finding that the prosecuting fiscal's mere manifestation that he
could not find the baggage declaration among the records handed to
him although said documents was one of the enclosures stated in the
indorsement to the fiscal's office dated November 18, 1974, and his
manifestation "we will prove the loss" (tsn, September 30, 1975, pp. 912), are not the proof of loss or evidence of such loss as required by
Section 4, Rule 130 of the Rules of Court to justify introduction and
admission of secondary evidence of the alleged contents of the
baggage declaration;

3. In not finding that secondary evidence of the alleged contents of the

missing baggage declaration consisting of testimonies of prosecution
witnesses were inadmissible as evidence there being no evidence
presented by the prosecution to prove its alleged loss as required by
Sec. 4, Rule 130 of the Rules of Court;
4. In not finding that there was valid and sufficient oral and true
declaration made by petitioner regarding the synthetic stones and
fancy jewelry on customs inspection after her arrival at the airport in
compliance with memorandum Order No. 40 as amended by
Memorandum Order No. 50 and the customs standard operating
procedure laid down therein (Exhs. 2-A, 2-C, 2-D, 2-E, 2-F, and 2-G,
tsn, November 6, 1975, pp. 2-18, 67-71) allowing and giving incoming
passengers the opportunity to make oral and true declaration of what
they are carrying and bringing into this country;
5. In overlooking, disregarding or interpreting the significance of certain
facts and circumstances of weight and influence appearing in the
record, which if properly considered and correctly interpreted would
probably change the result of this case; and
6. That the decision and resolution of denial of the Court of Appeals in
this case are not in accord with law and the applicable jurisprudence. 4
Petitioner-appellant centers her attack against the judgment of
conviction on the alleged error of the trial court in admitting secondary
evidence of the baggage declaration despite absence of sufficient proof
of its loss. She contends that in such a case as the instant one,
testimonial evidence is inadmissible to prove the contents of the said
baggage declaration, because then it will be in violation of the best
evidence rule as prescribed in Section 2(a) and Section 4 of Rule 130
of the Rules of Court.
It is conceded that petitioner's baggage declaration is the best
evidence of the contents thereof. So much so that if her conviction lies
solely on the said declaration and nothing more, y In there may be
doubt as to her culpability. Hence, her acquittal may be warranted
under the premises. Such however, is not the situation in the case at
bar. The guilt of petitioner-accused has been sufficiently proven by
Enrique Manansala, Ruben Diaz and Tingagun Macud.
Enrique Manansala is a customs police assigned at the Manila
International Airport. Among his duties were to maintain peace and
order within the customs area, investigate violation of the customs and
tariff code, watch for goods illegally brought into the country, watch
flights coming in particularly from Hongkong which are considered
critical, and to conduct surveillance on passengers acting suspiciously.
It was he who at about 8:15 in the evening of November 17, 1974
spotted the herein petitioner-appellant, a passenger of Flight No. 90
from Hongkong. He posted himself near petitioner, actually saw and
examined petitioner's baggage declaration and noticed the entry
therein reading "Personal Effects" only and nothing more, And that
when questioned by customs examiner Macud as to whether she had
anything more to declare, heard petitioner answered "nothing more,
personal effects only". He also witnessed examiner Macud going over
and inspecting petitioner's baggages. He actually saw one of the plastic
bags brought in by the petitioner containing fancy jewelries hidden
among fruits; 5 that he was ordered by Airport Customs Collector to
help in the examination of the petitioner's baggages and together with
examiner Macud, found upon further examination, precious stones
sewed along the four (4) corners of a blanket found in petitioner's

baggage and also other precious stones and jewelries sewed in the
lining of petitioner's handbag.
Tingagun Macud, the examiner assigned to examine petitioner,
declared that he examined petitioner's baggage; that he was shown
petitioner's baggage declaration wherein no entry appears except
"personal effects"; that before he started to examine petitioner's
baggage, he asked petitioner whether she had anything more to
declare and that petitioner's answer was "nothing except personal
effects"; that he then started examining petitioner's baggages thereby
opening one of the plastic bags in the process and found assorted
necklaces and pendants concealed underneath the fruits; 6 that
proceeding further with his examination of petitioner's baggages, he
discovered a bundle of pearl earrings in a plastic wrapper; that when
he continued to examine another baggage of the petitioner, the latter
told him "Huwag mong buksan ito that further examination made by
him of the petitioner's baggage, yielded precious stones sewed along
the four (4) corners of a bed cover blanket; and that thereafter, he
informed Collector Dario of his findings and was later instructed by the
latter to bring all the petitioner's baggages to his room for inventory.
The collective weight of the foregoing testimonies strongly and
convincingly established that petitioner attempted to smuggle into the
country jewelries and other precious stones which she failed to declare
in violation of Section 3602 of the Customs and Tariff Code.
Anent petitioner's baggage declaration, there is no controversy as to its
existence which had been sufficiently established not only by the
prosecution's evidence but likewise by that of the defense'. It was also
clearly shown that said baggage declaration forms part of the various
documents forwarded by the customs authorities to the Fiscal's Office
upon the filing of the case against the petitioner. Unfortunately
however, it can no longer be found among the papers making up the
record of the case.
The said documents together with petitioner's baggage declaration
were handed to and/or turned over to the trial fiscal. The place,
therefore, where the baggage declaration was last known to be would
be the office of the trial fiscal who was the last custodian of said
document. Being a vital evidence in the prosecution of the case, it is
safe to assume. It the fiscal necessarily undertook and conducted a
thorough search for the missing document. And failing to locate it, he
was the only person who could knowledgeably inform the court of its
loss.
The general rule concerning proof of a lost instrument is, that
reasonable scarch shall be made for it in the compliance where it was
last known to have been, and if such search does not discover it. then
inquiry should be made of person most likely to have its custody, or
who have some reasons to know of its whereabouts. No fixed rule as to
the necessary proof to establish loss, or what constitutes reasonable
search, can be formulated. The terms "reasonable search" and "in
good faith," applied to proof of lost instruments, must be construed and
defined under the facts in each particular case; there is no inflexible
definition under which they can be applied to all cases. The sole object
of stich proof is, to raise a reasonable presumption, merely that the
instrument is lost. and this is a preliminary inquiry addressed to the
discretion of the judge. 7
The loss may be shown by any person who knew the fact of its loss, or
by and one who has made, in the judgment of the court, a sufficient

examination of the place or places where the documents or papers of

similar character are kept by the person in whose custody the
document lost was, and has been unable to find it. 8
The loss of the baggage declaration having been duly established
resort to secondary evidence, is warranted under our rules of
evidence 9 which provides:
Section 2. Original Writing must be produced,
exceptions.There can be no evidence of a writing
the contents of which is the subject inquiry, other
than the original writing itself, except in the
following case:
(a) When the original has been lost, destroyed, or
cannot be produced in court.
Section 4. Secondary evidence when original is
lost or destroyed.When the original writing has
been lost or destroyed or cannot be produced in
court, upon proof of its execution and loss or
destruction or unavailability its contents may be
proved by a copy or by a recital of its contents in
some authentic document, or by the recollection of
witnesses.
It is now beyond dispute that petitioner did bring into the country highly
dutiable goods which she hid beneath the linings of her bag and the
corners of the bed cover she was carrying. It is hard to imagine that an
incoming passenger who had all the intentions of declaring a large
quantity of fancy jewelries and stones (3,000 pieces) would undertake
the trouble of painstakinly and meticulously sewing said articles one by
one beneath the linings of her bag and the corners of a blanket only to
tear open the linings and detach the articles one by one for inspection.
Her tenuous explanation that she did it for security reasons is too flimsy
a pretense to be admitted as the Records show that she did not
immediately disclose the hiding places of the stones and pieces told
the examiner that she was not hiding anything. 10 She only talked of the
hidden pieces of jewelries and stones when examiner Macud had
discovered them under the fruits inside a plastic bag; thereby telling the
examiner, "Sir, my fancy jewelries and stones are hidden."
We fully subscribe to the Court of Appeals' pronouncement that:
The mere fact that the prosecution failed to
introduce any copy of the baggage declaration filed
by accused, does not entitle her to an acquittal. It
has been established that accused cleverly hid the
assorted jewelries, appraised at P47,993.00,
beneath the lining of her handbag. It has also been
established thru the testimonies of customs
authorities that accused declared that she was
carrying personal effects only. Although, according
to accused, she actually declared that she was
carrying assorted jewelries, this is doubtful
considering that she would not have hidden the
jewelries cleverly beneath the lining of her handbag
if she had really declared them. 11

WHEREFORE, the instant petition is DISMISSED with costs against

petitioner.

Ma. Irene and Roberto, both surnamed Cancio, in this Court's

Resolution of August 11, 1986.

SO ORDERED.

There is no substantial dispute on the background facts and the

evidentiary aspects Vol the controversy, summarized in said

Makasiar, Concepcion Jr., Abad Santos and Escolin JJ., concur.

Decision as follows:
Aquino, J., concurs in the result.

Footnotes
1 Pages 4, 5, 6 & 7 of Appellee's Brief.
2 Pages 4, 5, 6 & 7 of the People's Brief.
3 Page 8, Decision.
4 Petitioner's Brief, pages 7-9.
5 Pages 9, 10, 15, 16, 17and 19, tsn, September
30, 1975.
6 Pages 29-34, tsn, October 14, 1975.
7 Francisco's Evidence, 1973 Ed., Vol. VII, p. 138,
(Citing Kenniff v. Caulfield (1903) 140 Cal. 34, 73,
p. 803).
8 Paylago v. Jarabe, 22 SCRA 1247, 1255.
9 Rule 130, Sec- 2(a) in relation to Sec. 4.
10 Petitioner's Brief, page 23.
11 aNNEX "A", pages 5-6.
G.R. No. 73882 October 22, 1987
ROSA CANCIO, petitioner,
vs.
HON. COURT OF TAX APPEALS and HON. COMMISSIONER OF
CUSTOMS, respondents.

MELENCIO-HERRERA, J.:
Before us is petitioner's Motion for Reconsideration of this Court's
Resolution of August 11, 1986, which denied for lack of merit her
Petition for Review on certiorari of respondent Court of Tax Appeals'
(CTA) Decision in C.T.A. Case No. 3398.
During the pendency of this case, or on April 23, 1986, petitioner had
passed away and her legal heirs were ordered substituted in her stead
and Jose Cancio, Jr., was appointed guardian ad-litem for the minors

The records show that claimant Mrs. Rosa Cancio

bearing Philippine Passport No. 11797799 while
clearing through the Pre-Boarding (AVSECOM)
Area of MIA with her husband and three (3)
children to board PR 306 for Hongkong in the
morning of June 12, 1981, was apprehended with
One Hundred Two Thousand Nine Hundred Dollars
(US$102,900.00) in cash, six hundred dollars
(US$600.00) in two travelers checks, and one
thousand five hundred (Pl,500.00) Pesos; that such
apprehension was effected only thru an alarm
sounded by the scanner (metal detecting device) of
the AVSECOM men, when Mrs. Cancio who did not
declare her currency had already passed the
Customs inspection area; that subject currencies
were placed and concealed inside the two fairlysized carton boxes for local chocolates, securely
wrapped and taped with tin foil-back paper; and,
that in view of claimant's failure, upon being
required, to present the Central Bank Authority, the
said currencies were accordingly confiscated and a
seizure Receipt No. 013 was issued to her; hence,
this seizure proceedings.
At the hearing of this case, claimant, thru counsel,
presented certified xerox copy of her Bank Book
(Exhibit "I") for foreign currency deposit with the
Philippine Commercial and Industrial Bank under
Account FCDU No. 0265, dollar remittances in
telegraphic transfers from abroad for deposits in
her account from May 13, 1981 to May 21, 1981,
and withdrawal cards (Exhibit "l-A" to "1-E",
inclusive), attesting to the fact that claimant Rosa
Cancio had withdrawn from her FCDU Account a
certain amount of United States currency which
tended to show that claimant herein was a foreign
currency depositor pursuant to the provisions of
Republic Act No. 6426, as implemented by Central
Bank Circular No. 343. And herein claimant
testified that because her foreign currency deposit
could not be withdrawn at one time, she made her
withdrawal on several occasions starting from May
14, 1981 up to May 27, 1981 when she closed her
account preparatory to her departure which was
scheduled in the morning of June 12, 1981 for
Hongkong; that from Hongkong, she and her family
intended to proceed to the United States for
medical treatment of her heart ailment as advised
by her two attending physicians from the UST
Hospital; that the US currency that they were
carrying and confiscated from them on June 12,
1981 was intended principally for such medical
purpose and for other miscellaneous and

necessary expenses, and, that the subject

currencies were concealed and hidden by them
inside the two chocolate boxes solely for security
reasons. 1
By reason of the forfeiture decreed by respondent Commissioner of
Customs of both the foreign and local currencies due to petitioner's
failure to present a Central Bank (CB) authority to bring said currencies
out of the country, petitioner appealed to respondent Court of Tax
Appeals. The latter Court affirmed the forfeiture of the US$102,900.00
in cash, and US$600.00 in travellers' checks for having been in
violation of Central Bank Circulars Nos. 265 and 534, in relation to
Section 2530(f) of the Tariff and Customs Code, as amended. It
reversed, however, the forfeiture of P1,500.00 on the ground that since
petitioner was travelling with her husband and three (3) children, the
said amount did not exceed the P500.00 at that each traveller is
allowed to bring out of the country without a CB permit pursuant to
paragraph 4 of CB Circular No. 383.
Petitioner's unimpugned evidence shows that she was a foreign
currency depositor at the Philippine Commercial and Industrial Bank at
Makati, Metro Manila, and that the subject foreign currency was part of
the total amount of US$116,000.00 she had withdrawn from said bank
from May 14 to 27, 1981 for her travel and medical expenses in the
United States via Hongkong. 2 Admitted, too, is the fact that petitioner
failed to present to the apprehending customs authorities a Central
Bank authority to bring out of the country the said currencies while at
the pre-boarding area of the Manila International Airport on June 12,
1981 on her scheduled flight to Hongkong together with her husband
and three children.
The primordial issue for resolution is whether or not respondent Court
had committed reversible error in upholding the forfeiture of the foreign
currencies in question.
A second look at the facts and the equity of the case, the pertinent
laws, and the CB Circulars involved constrains us to rule in the
affirmative and, accordingly, to grant reconsideration of our Resolution
of August 11, 1986 denying review.
It is true that in so far as the exportation or taking out of foreign
currency from the country is concerned, Central Bank Circular No. 265,
issued on November 20, 1968, particularly paragraph 3 thereof,
mandates:

persons, through the mails, or through international

carriers.
The provisions of this Section shall not apply to
tourists and non-resident temporary visitors who
are taking or sending out of the Philippines their
own foreign exchange brought in by them.
However, peculiar to the present controversy is the fact that, as stated
previously, petitioner is a foreign currency depositor. Relevant and
applicable to her is the following provision of the "Foreign Currency
Deposit Act of the Philip pines" (Republic Act No. 6426, as amended),
which took effect upon its approval on April 4,1972:
SEC. 5. Withdrawability and transferability of
deposits. There shall be no restriction on the
withdrawal by the depositor of his deposit or on the
transferability of the same abroad except those
arising from the contract between the depositor and
the bank.11 (Emphasis Ours).
Under the foregoing provision, the transferability abroad of foreign
currency deposits is unrestricted. Only one exception is provided for
therein, which is, any restriction " from the contract between the
depositor and the bank." Neither is a Central Bank authority required
for the transferability abroad of foreign currency deposits.
Attention is called, however, to the implementing rules and regulations
to said Republic Act 6426, as embodied in CB Circular No. 343 issued
on April 24, 1972, which provides:
SEC. 11. Withdrawability and Liquidity of Deposits.
a. x x x x x x x x x
b. Subject only to the terms of the contract between
the bank and the depositor, the latter shall have
a general license to withdraw his deposit,
notwithstanding any change in policy or
regulations.
xxx xxx xxx
(Emphaisis supplied)

3. No person shall take out or export from the

Philippines foreign currency or any other foreign
exchange except as otherwise authorized by the
Central Bank.
Similarly, Central bank Circular No. 534, issued on July 19, 1976,
reiterates and provides in Sec. 3 thereof as follows:
Sec. 3. Unless specifically authorized by the
Central Bank or allowed under existing
international agreements or Central Bank
regulations, no person shall take or transmit or
attempt to take or transmit foreign exchange, in any
form out of the Philippines only, through other

Respondent Court has taken the position that the foregoing provision
its the right of the depositor to that of withdrawal and withholds from
him the right of transferability abroad. That is not so. Circular-Letter,
dated August 3, 1978, issued by the Central Bank reads in explicit
terms:
TO: ALL BANKS AUTHORIZED TO ACCEPT FOREIGN CURRENCY
DEPOSITS UNDER THE PROVISIONS OF RA 6426, AS AMENDED
AND PRESIDENTIAL DECREE NO. 1035.
Effective immediately, the banks authorized to
accept foreign currency deposits under the
provisions of RA 6426, as amended, and PD 1035
and as implemented by Central Bank Circular 343

and 547, are hereby instructed to advise their

foreign currency depositors who are withdrawing
funds for travel purposes to carry with them the
certificate of withdrawal that the banks shall issue.
The travellers shall present the certifications to the
Customs and Central Bank personnel at the MIA, if
requested.
The banks shall issue a uniform certification, as
follows:

TO WHOM IT MAY CONCERN:

This certifies that
________________________whose signature
appears below has withdrawn today, the amount of
____________in cash (US$ _______________)
and Travellers Check
(US$___________________________) against
his/her foreign currency account maintained with
us.
The funds herein withdrawn are represented to be
used in connection with the depositor's foreign
travel scheduled on or about
____________________197_________.

Indeed, given the underlying objective of the Foreign Currency Deposit

Act, as amended, which is to attract and invite the deposit of foreign
currencies which are acceptable as part of the international reserve in
duly authorized banks in order that they may be put into the stream of
the banking system, it would be to defeat the very purpose of the law to
place undue restrictions on the transferability of such funds. The
countervailing effect would be to discourage prospective foreign
currency depositors to the detriment of the banking system.
In fine, Central Bank Circulars Nos. 265 and 534 requiring prior Central
Bank authority for the taking out of the country of foreign currency
should not be made to encompass foreign currency depositors whose
___________________
rights are expressly defined and guaranteed in a special law, the
Date Foreign Currency Deposit Act (RA 6426, as amended). As a foreign
currency depositor, therefore, petitioner cannot be adjudged to have
violated the aforestated Central Bank Circulars. It follows that neither is
there room for the application of Section 2530(f) of the Tariff and
Customs Code, as amended, which provides for the forfeiture of any
article and other objects, the exportation of which is effected or
attempted contrary to law.
This is not to condone petitioner's failure to declare the foreign
currency she was carrying out of the country but just to stress that the
Foreign Currency Deposit Act grants petitioner the right of
transferability of her funds abroad except that she was not advised by
her bank to secure, and consequently was unable to present, the
necessary certificate of withdrawal from said bank.
ACCORDINGLY, the Decision of respondent Court of Tax Appeals is
hereby SET ASIDE in so far as it upheld the forfeiture by respondent
Commissioner of Customs of the sums of US$102,900.00 in cash, and
US$600.00 in traveller's checks, which amounts should now be
______________________
returned to petitioner's heirs, but AFFIRMED in so far as it reversed the
_____forfeiture by the same official of the sum of P1,500.00. No costs.
(Signature
of Authorized
SO ORDERED.
OfficialYap,
OverPrinted
Name)
Actg. C.J.,
Narvasa, Cruz, Feliciano, Gancayco and Sarmiento,
JJ., concur.

_______________________
(Signature of Depositor)
Footnotes
Please be guided accordingly.
1 CTA Decision, pp. 2-3; Rollo, pp. 33-34.
(SGD.) R.D.RUIZ
2 Ibid., pp. 7-8.
Director
3 Exhibit " I ".
It is a fact that petitioner could not present a certificate of withdrawal at
the Manila International Airport when she was about to depart. As she
had explained, however, she was unaware of this requirement. And if
she had wrapped her dollar currency inside a chocolate box it was for
"security reasons." Besides, as instructed in the Circular-Letter
abovequoted, it is the authorized depository bank which should advise
its depositors to carry with them the certificate of withdrawal. At any
rate, respondent Court has found that petitioner has presented in
evidence her foreign currency bank book 3 and her withdrawal
cards. 4 These may be considered as substantial compliance for
purposes of this case.

4 Exhibits"I-A"to"I-E".
G.R. No. L-27360

February 28, 1968

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.
Office of the Solicitor General for petitioners.
Juan T. David for respondents.
ZALDIVAR, J.:
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 Anti-Smuggling

Center of the Manila Police Department. On December 13, 1966, the

above-named 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. L-24037, 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. . . ." 17 It 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 re-enacted 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. . . .

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.

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. 18 All 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

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.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P.,
Sanchez, Castro, Angeles and Fernando, JJ., concur.1wph1.t
Footnotes

Section 602, pars. a, b, and j, Tariff and Customs Code

Republic Act 1937.

This is a review of the decision of the Court of Tax Appeals disposing

as follows:

Annex B to petition.

Section 1202, Tariff and Customs Code.

Section 1204, Tariff and Customs Code.

WHEREFORE. the subject ten (10) cartons of

articles are hereby released to the carrying airline
for immediate transshipment to the country of
destination under the terms of the contract of
carriage. No costs.

Annex N to petition.

SO ORDERED. 1

Annex H to petition.

The pertinent facts may be summarized thus:

Pascual v. Commissioner of Customs, L-11947, June 30,

1959; Capulong v. Aseron L-22989, May 14, 1960; Capulong
v. Acting Commissioner of Customs, L-22990, May 19, 1960;
Lazaro v. Commissioner of Customs, L-22511, and L-22513,
May 16, 1966.

On September 11, 1982, two (2,) containers loaded with 103 cartons of
merchandise covered by eleven (11) airway bills of several supposedly
Singapore-based consignees arrived at the Manila International Airport
on board Philippine Air Lines (PAL) Flight PR 311 from Hongkong. The
cargoes were consigned to these different entities: K.M.K. Gani
(hereafter referred to as K.M.K.) and Indrapal and Company (hereafter
referred to as INDRAPAL), the private respondents in the petition
before us; and Sin Hong Lee Trading Co., Ltd., AAR TEE Enterprises,
and C. Ratilal all purportedly based in Singapore.

De Joya, et al. v. Lantin, et al., L-24037, April 27, 1967.

This deputation is not disputed by respondents.

10

Pacis, et al. v. Averia, et al., L-22526, November 29, 1966;

Government of the Philippine Islands, et al. v. Gale, et al., 94
Phil., 95.
11

Section 2203 (c), Tariff and Customs Code.

12

Section 2205, Tariff and Customs Code.

13

Section 2211, Tariff and Customs Code.

14

Section 2207, Tariff and Customs Code.

15

Annex A to the petition.

16

Sections 2208, 2210 and 2211, Tariff and Customs Code.

17

Section 2209, Tariff and Customs Code.

18

Records, pp. 26 and 43.

G.R. No. 73722 February 26, 1990

THE COMMISSIONER OF CUSTOMS, petitioner,
vs.
K.M.K. GANI, INDRAPAL & CO., and the HONORABLE COURT OF
TAX APPEALS, respondents.
Armando S. Padilla for private respondent.

SARMIENTO, J.:

While the cargoes were at the Manila International Airport, a "reliable

source" tipped off the Bureau of customs that the said cargoes were
going to be unloaded in Manila. Forthwith, the Bureau's agency on
such matters, the Suspected Cargo and Anti-Narcotics (SCAN),
dispatched an agent to verify the information. Upon arriving at the
airport, the SCAN agent saw an empty PAL van parked directly
alongside the plane's belly from which cargoes were being unloaded.
When the SCAN agent asked the van's driver why he was at the site,
the driver drove away in his vehicle. The SCAN agent then
sequestered the unloaded cargoes.
The seized cargoes consisted of 103 cartons "containing Mogadon and
Mandrax tablets, Sony T.V. sets 1546R/176R kw, Sony Betamax
SL5800, and SL5000, Cassette Stereos with Headphone (ala
walkman), Casio Calculators, Pioneer Car Stereos, Yamaha Watches,
Eyeglass Frames, Sunglasses, Plastic Utility Bags, Perfumes, etc."
These goods were transferred to the International Cargo Terminal
under Warrant of Seizure and Detention and thereafter subjected to
Seizure and Forfeiture proceedings for "technical smuggling."
At the hearing, Atty. Armando S. Padilla entered his appearance for the
consignees K.M.K. and INDRAPAL. The records of the case do not
show any appearance of the consignees in person. Atty. Padilla moved
for the transshipment of the cargoes consigned to his clients. On the
other hand, the Solicitor General avers that K.M.K. and INDRAPAL did
not present any testimonial or documentary evidence. The, collector of
Customs at the then Manila International Airport (MIA), now Ninoy
Aquino International Airport (NAIA), ruled for the forfeiture of all the
cargoes in the said containers (Seizure Identification No. 4993-82,
dated July 14, 1983). Consequently, Atty. Padilla, ostensibly on behalf
of his two clients, K.M.K. and INDRAPAL, appealed the order to the
Commissioner. of Customs. 2
The Commissioner of Customs affirmed the finding of the Collector of
Customs (Customs Case No. 83-85, January, 1984), of the presence of
the intention to import the said goods in violation of the Dangerous

Drugs Act 3and Central Bank Circular No. 808 in relation to the Tariff
and Customs Code. 4
The Commissioner added the following findings of fact: 5
1. There is a direct flight from Hongkong to
Singapore, thus making the transit through Manila
more expensive, tedious, and circuitous.
2. The articles were grossly misdeclared,
considering that Singapore is a free port.
3. The television sets and betamax units seized
were of the American standard which is popularly
used in Manila, and not of the European standard
which is used in Singapore.
4. One of the shippers is a Filipino national with no
business connection with her alleged consignee in
Singapore.
5. The alleged consignee of the prohibited drugs
confiscated has no authority to import Mogadon or
Mandrax.
Upon these findings, the Commissioner concluded that there was an
"intent to unlade" in Manila, thus, an attempt to smuggle goods into the
country.
Taking exception to these findings, Atty. Armando S. Padilla, again as
counsel of the consignees K.M.K. and Indrapal, appealed to the
respondent Court of Tax Appeals (CTA). He argued in the CTA that
K.M.K. and INDRAPAL were "entitled to the release of their cargoes for
transshipment to Singapore so manifested and covered by the Airway
bills as in transit, ... contending that the goods were never intended
importations into the Philippines and the same suffer none of any
affiliating breaches allegedly found attributable to the other shipments
under the Customs and related laws." 6
The CTA reversed the decision of the Commissioner of Customs.
Hence this petition.
The petitioner raises the following errors:
1. THE COURT OF TAX
APPEALS ERRED IN
ENTERTAINING THE
PETITION FOR REVIEW
NOTWITHSTANDING HEREIN
PRIVATE RESPONDENTS'
FAILURE TO ESTABLISH
THEIR PERSONALITY TO
SUE IN A REPRESENTATIVE
CAPACITY.
2. THE COURT OF TAX
APPEALS ERRED IN RULING
THAT THE SUBJECT GOODS
WERE IMPORTATIONS NOT
INTENDED FOR THE

PHILIPPINES BUT FOR

SINGAPORE, THUS, NOT
VIOLATING THE LAW ON
TECHNICAL SMUGGLING
UNDER THE TARIFF AND
CUSTOMS CODE.
The issues before us are therefore: (1) whether or not the private
respondents failed to establish their personality to sue in a
representative capacity, hence making their action dismissable, and (2)
whether or not the subject goods were importations intended for the
Philippines in violation of the Tariff and Customs Code.
We answer both questions in the affirmative.
The law is clear: "No foreign corporation transacting business in the
Philippines without a license, or its successors or assigns, shall be
permitted to maintain or intervene in any action, suit or proceeding in
any court or administrative agency of the Philippines; but such
corporation may be sued or proceeded against before Philippine courts
or administrative tribunals on any valid cause of action recognized
under Philippine laws." 7
However, the Court in a long line of cases has held that a foreign
corporation not engaged in business in the Philippines may not be
denied the right to file an action in the Philippine courts for an isolated
transaction. 8
Therefore, the issue on whether or not a foreign corporation which
does not have a license to engage in business in this country can seek
redress in Philippine courts boils down as to whether it is doing
business or merely entered into an isolated transaction in the
Philippines.
The fact that a foreign corporation is not doing business in the
Philippines must be disclosed if it desires to sue in Philippine courts
under the "isolated transaction rule." Without this disclosure, the court
may choose to deny it the right to sue. 9
In the case at bar, the private respondents K.M.K. and INDRAPAL aver
that they are "suing upon a singular and isolated transaction." But they
failed to prove their legal existence or juridical personality as foreign
corporations. Their unverified petition before the respondent Court of
Tax Appeals merely stated:
1. That petitioner "K.M.K. Gani"
is a single proprietorship doing
business in accordance with
the laws of Singapore with
address at 99 Greenfield Drive,
Singapore, Rep. of Singapore,
while Petitioner INDRAPAL and
COMPANY" is a firm doing
business in accordance with
the laws of Singapore with
office address at 97 High
Street, Singapore 0641,
Republic of Singapore, and
summons as well as other

Court process may be served

to the undersigned lawyer;
2. That the Petitioner's (sic) are
sueing (sic) upon a singular
and isolated transaction. 10
We are cognizant of the fact that under the "isolated transaction rule,"
only foreign corporations and not just any business organization or
entity can avail themselves of the privilege of suing before Philippine
courts even without a license. Counsel Armando S. Padilla stated
before the respondent Court of Tax Appeals that his clients are "suing
upon a singular and isolated transaction." But there is no proof to show
that K.M.K. and INDRAPAL are indeed what they are represented to
be. It has been simply stated by Attorney Padilla that K.M.K. Gani is "a
single proprietorship," while INDRAPAL is "a firm," and both are "doing
business in accordance with the laws of Singapore ... ," with specified
addresses in Singapore. In cases of this nature, these allegations are
not sufficient to clothe a claimant of suspected smuggled goods of
juridical personality and existence. The "isolated transaction rule" refers
only to foreign corporations. Here the petitioners are not foreign
corporations. They do not even pretend to be so. The first paragraph of
their petition before the Court, containing the allegation of their
identities, does not even aver their corporate character. On the
contrary, K.M.K. alleges that it is a "single proprietorship" while
INDRAPAL hides under the vague identification as a "firm," although
both describe themselves with the phrase "doing business in
accordance with the laws of Singapore."
Absent such proof that the private respondents are corporations
(foreign or not), the respondent Court of Tax Appeals should have
barred their invocation of the right to sue within Philippine jurisdiction
under the "isolated transaction rule" since they do not qualify for the
availment of such right.
As we had stated before:
But merely to say that a foreign corporation not
doing business in the Philippines does not need a
license in order to sue in our courts does not
completely resolve the issue in the present case.
The proposition as stated, refers to the right to sue;
the question here refers to pleading and procedure.
It should be noted that insofar as the allegations in
the complaint have a bearing on appellant's
capacity to sue, all that is averred is that they are
both foreign corporations existing under the laws of
the United States. This averment conjures two
alternative possibilities: either they are engaged in
business in the Philippines or they are not so
engaged. If the first, they must have been duly
licensed in order to maintain this suit; if the second,
if (sic) the transaction sued upon is singular and
isolated, no such license is required. In either case,
the qualifying circumstance is an essential part of
the element of plaintiffs capacity to sue and must
be affirmatively pleaded. 11
In this connection, we note also a fatal defect in the pleadings of the
private respondents. There is no allegation as to who is the duly
authorized representative or resident agent in our jurisdiction. All we

have on record are the pleadings filed by Attorney Armando S. Padilla

who represents himself as the counsel for the private respondents.
xxx xxx xxx
It is incumbent on plaintiff to allege sufficient facts
to show that he is concerned with the cause of
action averred, and is the party who has suffered
injury by reason of the acts of defendant; in other
words, it is not enough that he alleges a cause of
action existing in favor of someone, but he must
show that it exists in favor of himself. The burden
should not be placed on defendant to show that
plaintiff is not the aggrieved person and that he has
sustained no damages. It is also necessary for
plaintiff to allege facts showing that the causes of
action alleged accrued to him in the capacity in
which he sues, and for this purpose it is necessary
for someone for one who sues otherwise than in
his individual capacity to allege his authority.
xxx xxx xxx
The plaintiff must show, in his pleading, his right
and interest in the subject matter of the suit; and a
complaint which does not show that plaintiff has the
requisite interest to enable him to maintain his
action should be dismissed for insufficiency ... 12
xxx xxx xxx
The appearance of Atty, Armando S. Padilla as counsel for the two
claimants would not suffice. Generally, a "lawyer is presumed to be
properly authorized to represent any cause in which he appears, and
no written power of attorney is required to authorize him to appear in
court for his client." 13 Nevertheless, although the authority of an
attorney to appear for and on behalf of a party may be assumed, it can
still be questioned or challenged by the adverse party concerned. 14
The presumption established under the provision of Section 21, Rule
138 of the Revised Rules of Court is disputable. 15 The requirement for
the production of authority is essential because the client will be bound
by his acquiescence resulting from his knowledge that he was being
represented by said attorney. 16
The Solicitor General, representing the petitioner-appellant, not only
questions the authority of Atty. Armando S. Padilla to represent the
private respondents but also the latter's capacity to sue:
... While it is alleged that the summons and court
processes may be served to herein private
respondents' counsel who filed the unverified
petition before the Court of Tax Appeals, the
allegation would be insufficient for the purpose of
binding foreign corporations as in the instant case.
To be sure, the admitted absence of special power
of attorney in favor of their counsel, the relationship
with the latter, if at all, is merely that of a lawyerclient relationship and definitely not one of a
principal agent. Such being the case, said counsel

cannot bind nor compromise the interest of private

respondents as it is possible that the latter may
disown the former's representation to avoid civil or
criminal liability. In this respect, the Court cannot
assume jurisdiction over the person of private
respondents, notwithstanding the filing of the
unverified petition in question.
Apart from the foregoing, Section 4, Rule 8,
Revised Rules of Court mandates that facts
showing the capacity of a party to sue or be sued;
or the authority of a party to sue or be sued in a
representative capacity; or the legal existence of an
organized association of person (sic) that is made
a party, must be averred. In like manner, the rule is
settled that in case where the law denies a foreign
corporation to maintain a suit unless it has
previously complied with certain requirements, then
such compliance or exemption therefrom, becomes
a necessary averment in the complaint (Atlantic
Mutual Inc. Co. v. Cebu Stevedoring Co., Inc. 17
SCRA 1037; vide; Sec. 4, Rule 8, Revised Rules of
Court). In the case at bar, apart from merely
alleging that private respondents are foreign
corporation (sic) and that summons may be served
to their counsel, their petition in the Court of Tax
Appeals is bereft of any other factual allegation to
show their capacity to sue or be sued in a
representative capacity in his jurisdiction. 17
The representation and the extent of the authority of Atty. Padilla have
thus been expressly challenged. But he ignored such challenge which
leads us to the only conclusion that he has no authority to appear for
such clients if they exist, which we even doubt. In cases like this, it is
the duty of the government officials concerned to require competent
proof of the representation and authority of any claimant of any goods
coming from abroad and seized by our customs authorities or
otherwise appearing to be illegally imported. This desired
meticulousness, strictness if you may, should extend to their
representatives and counsel. Our government has lost considerable
sums of money due to such dubious claims or claimants.
Apropos the second issue, suffice it to state that we agree with the
findings, already enumerated and discussed at the outset, made by the
Collector of Customs in his decision, dated July 14, 1983, which was
affirmed and amplified by the decision of the Commissioner of
Customs, that those constitute sufficient evidence to support the
conclusion that there was an intention to unlade the seized goods in
the Philippines instead of its supposed destination, Singapore. There is
no need of belaboring them anymore.
WHEREFORE, the petition is GRANTED; the decision of the Court of
Tax Appeals is SET ASIDE, and the decision of the petitioner is hereby
REINSTATED.
No costs.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ.,
concur.

Footnotes
1 Rollo. 59.
2 Rollo, 55.
3 Republic Act No. 6425 (1972) as amended by
Pres. Decree No. 44.
4 Republic Act No. 1937 as amended by Pres.
Decree No. 34.
The pertinent provisions are as follows:
Sec. 2530. Property subject to Forfeiture Under
Tariff and Customs Laws Any vehicle, vessel or
aircraft, cargo, article and other subjects shall,
under the following conditions be subjected to
forfeiture:
xxx xxx xxx
(f) Any article the importation or exportation of
which is effected or attempted contrary to law, or
any articles of prohibited importation or exportation,
and all other articles which, in the opinion of the
collector, have been used, are or were entered to
be used as instruments in the importation or
exportation of the former;
xxx xxx xxx
(i) Any package of imported article which is found
by the examining official to contain any article not
specified in the invoice or entry including all other
packages purportedly containing imported articles
similar to those declared in the invoice or entry to
be contents of the misdeclared package: Provided,
that the Collector is of the opinion that the
misdeclaration was contrary to law;
xxx xxx xxx
(m) Any article sought to be imported or exported:
(l) Without going through a
custom house, whether the act
was consummated, frusteated
or attempted;
xxx xxx xxx
3) On the strength of a false
declaration or affidavit
executed by the owner
importer, exporter or consignee
concerning the importation of
such article;

4) On the strength of a false

invoice or other document
executed by the owner,
importer, exporter or consignee
concerning the importation or
exportation of such article; and
5) Through any other practice
or device contrary to law by
means of which such articles
were entered through a
customhouse to the prejudice
of the government.
5 Rollo, 21-22.
6 Rollo, 55-56.
7 Corporation Code, sec. 133 (formerly sec. 69);
Top-Weld Man. Inc. v. Eced S.A. et al., L-44944,
August 9, 1985, 138 SCRA 118; Far East Int.'l
Import Export Corp. v. Nankai Kogyo Co. Ltd., L13525, November 30, 1962, 6 SCRA 725;
Mentholatum v. Mangaliman, 72 Phil. 524.
8 Bulakhidas v. Navarro, L-49695, April 7, 1986,
142 SCRA 1; Antam Consolidated, Inc. v. C.A., No.
61523, July 31, 1986, 143 SCRA 288: Univ. Rubber
Products Inc. v. C.A., No. L-30266, June 29, 1984,
130 SCRA 104.
9 Atlantic Mutual Insurance Co. v. Cebu
Stevedoring Co., No. L-18961, August 31, 1966, 17
SCRA 1037.
10 Rollo, 39. Petition for Review, CTA Case No.
3831.
11 Atlantic Mutual Insurance Co. v. Cebu
Stevedoring Co., supra, note 9 at 1040.
12 71 C.J.S. 187, Pleading.
13 Section 21, Rule 138, Revised Rules of Court,
cited in Republic vs. Soriano, G.R. 76944,
promulgated on December 20, 1988.
14 Aberca vs. Ver, No. 69866, promulgated on April
15, 1988, 160 SCRA 590.
15 Azotes vs. Blanco, 78 Phil. 739; Garostiaga vs.
Sarte, 68 Phil. 4; Tan Lua vs. O'Brien, 55 Phil. 53.
16 Tan Lua vs. O'Brien, supra.
17 Petition 6-8; Rollo, 11-13.
G.R. Nos. 90660-61 January 21, 1991

UTE PATEROK, petitioner-appellant,

vs.
BUREAU OF CUSTOMS and HON. SALVADOR N.
MISON, respondents-appellees.
Untalan, Trinidad, Razon, Santos & Associate Law Offices for
petitioner-appellant.

SARMIENTO, J.:p
Before us is a special civil action for certiorari filed by Ute Paterok the
petitioner herein, seeking the annulment of the decision 1 rendered by
the public respondent, the Bureau of Customs, through its
Commissioner, the Hon. Salvador N. Mison, approving the order 2 of
forfeiture issued by the District Collector of Customs against the
shipment of one (1) unit of Mercedes Benz of the petitioner in favor of
the government.
The antecedent facts are as follows:
In March 1986, the petitioner shipped from Germany to the Philippines
two (2) containers, one with used household goods and the other with
two (2) used automobiles (one Bourgetti and one Mercedes Benz 450
SLC). The first container was released by the Bureau of Customs and
later on, the Bourgetti car, too. The Mercedes Benz, however,
remained under the custody of the said Bureau.
In December 1987, after earnest efforts to secure the release of the
said Mercedes Benz, the petitioner received a notice 3 of hearing from
the legal officer of the Manila International Container Port, Bureau of
Customs informing the former that seizure proceedings were being
initiated against the said Mercedes Benz for violation of Batas
Pambansa Blg. 73 in relation to Section 2530(F) of the Tariff and
Customs Code of the Philippines (TCCP), as amended, and Central
Bank Circular (CBC) 1069.
While the said case was pending, the petitioner received only on April,
1988, a letter 4 informing her that a decision ordering the forfeiture of
her Mercedes Benz had been rendered on December 16, 1986 by the
District Collector of Customs. The petitioner had not been informed that
a separate seizure case was filed on the same Mercedes Benz in
question before the said District Collector, an office likewise under the
Bureau of Customs.
The petitioner later found out that on November 13, 1986, a Notice of
Hearing set on December 2, 1986, concerning the said Mercedes
Benz, was posted on the bulletin board of the Bureau of Customs at
Port Area, Manila.
The petitioner, thereafter, filed a motion for new trial 5 before the
Collector of Customs, Port of Manila, but the latter, in an order 6 dated
May 30, 1988, denied the same, invoking the failure of the former to
appear in the said hearing despite the posting of the notice on the
bulletin board.
Moreover, the Collector of Customs contended that a reopening of the
case was an exercise in futility considering that the forfeited property, a
Mercedes Benz 450 SLC, had an engine displacement of more than

2800 cubic centimeters and therefore was under the category of

prohibited importation pursuant to B.P. Blg. 73.
Subsequently, the petitioner filed a petition for review 7 with the
Department of Finance, which petition the latter referred to the public
respondent. The petitioner likewise addressed a letter 8 to the Hon.
Cancio Garcia, the Assistant Executive Secretary for Legal Affairs,
Office of the President, Malacaang, requesting the latter's assistance
for a speedy resolution of the said petition.
Finally, the public respondent rendered a decision on September 22,
1989 affirming the previous order of the Collector of Customs for the
Forfeiture of the Mercedes Benz in question in favor of the government.
Hence, this petition for certiorari alleging that:
III-1. THE RESPONDENT-APPELLEE (Bureau of
Customs) ERRED IN THE RULING THAT A
NOTICE OF HEARING POSTED IN [sic] THE
BULLETIN BOARD IS SUFFICIENT NOTICE AND
FAILURE OF PETITIONER-APPELLANT TO
APPEAR CAUSED HER DECLARATION IN
DEFAULT;
III-2. ERRED IN RULING THAT THEIR OFFICE
WAS LEFT WITH NO ALTERNATIVE BUT TO
FORFEIT THE SHIPMENT AS MANDATED BY
BATAS PAMBANSA BLG. 73;
III-3. ERRED IN RULING THAT THE
RESPONDENT OF OFFICE FINDS THE REOPENING OF THE CASE AN EXERCISE IN
FUTILITY AND THAT THERE IS NO POINT IN
DISTURBING THE DECISION DECREEING THE
FORFEITURE OF THE SHIPMENT. 9
As regards the first assignment of error, we agree with the petitioner
that a notice of hearing posted on the bulletin board of the public
respondent in a forfeiture proceeding where the owner of the alleged
prohibited article is known does not constitute sufficient compliance
with proper service of notice and procedural due process.
Time and again, the Court has emphasized the imperative necessity for
administrative agencies to observe the elementary rules of due
process. 10 And no rule is better established under the due process
clause of the Constitution than that which requires notice and
opportunity to be heard before any person can be lawfully deprived of
his rights. 11
In the present case, although there was a notice of hearing posted on
the bulletin board, the said procedure is premised on the ground that
the party or owner of the property in question is unknown. This is clear
from the provisions of the TCCP relied upon by the public respondent,
namely, Sections 2304 and 2306, captioned "Notification of Unknown
Owner and "Proceedings in Case of Property Belonging to Unknown
Parties," respectively, wherein the posting of the notice of hearing on
the bulletin board is specifically allowed.
But in the case at bar, the facts evidently show that the petitioner could
not have been unknown. The petitioner had previous transactions with

the Bureau of Customs and in fact, the latter had earlier released the
first container consisting of household goods and the Bourgetti car to
the former at her address (as stated in the Bill of Lading). Moreover,
there was a similar seizure case 12 that had been instituted by the
Manila International Container Port, docketed as S.I. No. 86-224,
covering the same Mercedes Benz in question and involving the same
owner, the petitioner herein.
If only the public respondents had exercised some reasonable
diligence to ascertain from their own records the identity and address
of the petitioner as the owner and the consignee of the property in
question, the necessary information could have been easily obtained
which would have assured the sending of the notice of hearing properly
and legally. Then, the petitioner would have been afforded the
opportunity to be heard and to present her defense which is the
essence of procedural due process. But the public respondent
regrettably failed to perform such basic duty.
Notwithstanding the procedural infirmity aforementioned, for which the
Court expresses its rebuke, the petition nonetheless can not be
granted.
This brings us to the second and third assignments of error raised by
the petitioner.
Batas Pambansa Blg. 73, a law intended to promote energy
conservation, provides that:
Sec. 3. Towards the same end and to develop a
more dynamic and effective program for the
rational use of energy, the following acts are
hereby prohibited:
(a) The importation, manufacture or assembling of
gasoline-powered passenger motor cars with
engine displacement of over 2,800 cubic
centimeters or Kerbweight exceeding 1,500
kilograms, including accessories.13
The petitioner does not dispute the fact that the motor car in question,
a Mercedes Benz 450 SLC, has an engine displacement of over 2,800
cubic centimeters which clearly falls within the prohibited importation
specified in the law aforequoted and as such, is liable for seizure and
forfeiture by the public respondents.
On the other hand, the petitioner claims that the said prohibition
involves only "direct" and not 'indirect" importation as when both the
shipper and the consignee are one and the same person which is the
case at bar. Be that as it may, the law is clear and when it does not
make any distinction on the term "importation", we likewise must not
distinguish. "Ubi lex non distinguit nec nos distinguiere debemus."
Finally, the petitioner invokes Sec. 2307 of the TCCP, as amended by
Executive Order No. 38, dated August 6, 1986, which provides an
alternative in lieu of the forfeiture of the property in question, that is, the
payment of fine or redemption of the forfeited property. But the last
paragraph of the said section, as amended, categorically states that:
Redemption of forfeited property shall not be
allowed in any case where the importation is

absolutely prohibited or where the surrender of the

property to the person offering to redeem the same
would be contrary to law. (Emphasis ours) 14
Inasmuch as it would be contrary to law, i.e., B.P. Blg. 73, to allow the
petitioner to redeem the Mercedes Benz in question, there is therefore
no alternative, as correctly claimed by the public respondents, but to
forfeit the same.
We can not agree with the proposition that the Collector of Customs is
authorized to release the motor vehicle in question to the petitioner
which, in effect, would absolve the latter from any liability.
In the matter of disposing of contrabands, Section 2609(c) of the Tariff
and Customs Code specifically provides that the prerogative of the
Collector of Customs is not the release of the contraband like the
Mercedes Benz in question but its sale, which presupposes a prior
custody pursuant to forfeiture and seizure proceedings as in the case
at bar.
As thus worded:
Sec. 2609. Disposition of Contraband. Article of
prohibited importation or exportation, known as
contraband, shall, in the absence of special
provision, be dealt with as follows:
xxx xxx xxx
(c) Other contraband of
commercial value and capable
of legitimate use may be sold
under such restrictions as will
insure its use for legitimate
purposes only . . .
There is nothing in the Code that authorizes the Collector to release
the contraband in favor of an importer. The Code, on the other hand, is
clear that the thing may be disposed of by sale alone "under such
restrictions as will insure its use for legitimate purposes." To be sure,
the restrictions to be prescribed by the Collector must coincide with the
purpose underlying Batas Blg. 73, that is, to conserve energy. Hence,
he can not allow its use (after sale), in this case a Mercedes Benz with
an engine displacement of more than 2,800 cubic centimeters, that
would set at naught that purpose. He must make sure that the engine
is changed before it is allowed to ply Philippine soil.
In all cases, forfeiture is a must.
WHEREFORE, the petition for certiorari is DISMISSED. No costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Bidin, Grino-Aquino, Medialdea and Regalado,
JJ., concur.

Separate Opinions

PADILLA, J., dissenting:

I am constrained to dissent from the, as usual, well-written decision of
Mr. Justice Sarmiento. The reasons for my dissent are as follows:
The decision states:
"The petitioner does not dispute the fact that the motor car in question,
a Mercedes Benz 450 SLC, has an engine displacement of over 2,800
cubic centimeters which clearly falls within the prohibited importation
specified in the law aforequoted and as such, is liable for seizure and
forfeiture by the public respondents." (pp. 6-7, decision) The law relied
upon is Section 3(a) of BP 73 which provides:
Sec. 3. Towards the same end and to develop a
more dynamic and effective program for the
rational use of energy, the following acts are
hereby prohibited:
(a) The importation, manufacture or assembling of
gasoline-powered passenger motor cars with
engine displacement of over 2,800 cubic
centimeters or Kerbweight exceeding 1,500
kilograms, including accessories.
But, Sec. 11 of the same BP 73 provides that:
Any person who willfully violates any provision of
Section three hereof or any rule or regulation
promulgated pursuant to the authority granted in
this Act shall, upon conviction, be punished by a
fine of not less than one thousand pesos but not
more than five thousand pesos, or by imprisonment
of not less than one month nor more than one year,
or both, in the discretion of the court: Provided,
That if the violation is committed by a juridical
person, the penalty herein provided shall be
imposed on the official and/or employee thereof
responsible for the violation: Provided, further, That
if the violation is committed by a government
official or employee including those in governmentowned or controlled corporations, he shall, in
addition to the penalty provided above, be subject
to disciplinary administrative proceedings and
penalties: Provided, finally, That any passenger
motor vehiclemanufactured or assembled in
violation of Section 3(a) hereof shall, after proper
proceedings, be confiscated and forfeited in favor
of the Government. (Emphasis supplied.)
It would thus appear that, under the forequoted provisions of Sec. 11 of
BP 73, only passenger motor vehiclesmanufactured or assembled in

violation of Section 3(a) thereof shall be confiscated and forfeited in

favor of the Government.
The Mercedes Benz in the case at bar, having been admittedly
imported, but not manufactured or assembled in violation of Sec. 3(a)
of BP 73, is not, therefore, subject to confiscation and forfeiture in favor
of the Government.
On the other hand, Sec. 2609 of the Tariff and Customs Code provides:
Sec. 2609. Disposition of Contraband. Article of
prohibited importation or exportation, known as
contraband, shall, in the absence of special
provision, be dealt with as follows:
xxx xxx xxx
c. Other contraband of commercial value and
capable of legitimate use may be sold under such
restrictions as will insure its use for legitimate
purposes only; but if the thing is unfit for use or the
Collector is of the opinion that, if sold, it would be
used for unlawful purposes, it shall be destroyed in
such manner as the Collector shall direct.
(Emphasis supplied)
The questioned Mercedes Benz is decidedly of commercial value and
capable of legitimate use, which may be sold under such restrictions as
will insure its use for a legitimate purpose, by changing its engine with
an engine with a displacement of not more than 2,800 cubic
centimeters or the vehicle may be ordered re-exported to Germany.
In short, the petitioner may be criminally prosecuted for the act of
importing the subject motor vehicle but, at the same time, the vehicle
may be released to her subject to such restrictions and conditions as
may be imposed by the Collector of Customs, one of which should be
the changing of the engine of the vehicle with an engine with a
displacement of not more than 2,800 cubic centimeters or that the
vehicle may be ordered re-exported to Germany at the expense of
petitioner-importer.

Sec. 3. Towards the same end and to develop a

more dynamic and effective program for the
rational use of energy, the following acts are
hereby prohibited:
(a) The importation, manufacture or assembling of
gasoline-powered passenger motor cars with
engine displacement of over 2,800 cubic
centimeters or Kerbweight exceeding 1,500
kilograms, including accessories.
But, Sec. 11 of the same BP 73 provides that:
Any person who willfully violates any provision of
Section three hereof or any rule or regulation
promulgated pursuant to the authority granted in
this Act shall, upon conviction, be punished by a
fine of not less than one thousand pesos but not
more than five thousand pesos, or by imprisonment
of not less than one month nor more than one year,
or both, in the discretion of the court: Provided,
That if the violation is committed by a juridical
person, the penalty herein provided shall be
imposed on the official and/or employee thereof
responsible for the violation: Provided, further, That
if the violation is committed by a government
official or employee including those in governmentowned or controlled corporations, he shall, in
addition to the penalty provided above, be subject
to disciplinary administrative proceedings and
penalties: Provided, finally, That any passenger
motor vehiclemanufactured or assembled in
violation of Section 3(a) hereof shall, after proper
proceedings, be confiscated and forfeited in favor
of the Government. (Emphasis supplied.)
It would thus appear that, under the forequoted provisions of Sec. 11 of
BP 73, only passenger motor vehiclesmanufactured or assembled in
violation of Section 3(a) thereof shall be confiscated and forfeited in
favor of the Government.

Separate Opinions

The Mercedes Benz in the case at bar, having been admittedly

imported, but not manufactured or assembled in violation of Sec. 3(a)
of BP 73, is not, therefore, subject to confiscation and forfeiture in favor
of the Government.

PADILLA, J., dissenting:

On the other hand, Sec. 2609 of the Tariff and Customs Code provides:

I am constrained to dissent from the, as usual, well-written decision of

Mr. Justice Sarmiento. The reasons for my dissent are as follows:
The decision states:
"The petitioner does not dispute the fact that the motor car in question,
a Mercedes Benz 450 SLC, has an engine displacement of over 2,800
cubic centimeters which clearly falls within the prohibited importation
specified in the law aforequoted and as such, is liable for seizure and
forfeiture by the public respondents." (pp. 6-7, decision) The law relied
upon is Section 3(a) of BP 73 which provides:

Sec. 2609. Disposition of Contraband. Article of

prohibited importation or exportation, known as
contraband, shall, in the absence of special
provision, be dealt with as follows:
xxx xxx xxx
c. Other contraband of commercial value and
capable of legitimate use may be sold under such
restrictions as will insure its use for legitimate
purposes only; but if the thing is unfit for use or the
Collector is of the opinion that, if sold, it would be

used for unlawful purposes, it shall be destroyed in

such manner as the Collector shall direct.
(Emphasis supplied)

SECRETARY OF FINANCE, AND THE ENERGY REGULATORY

BOARD, RESPONDENTS.
DECISION

The questioned Mercedes Benz is decidedly of commercial value and

capable of legitimate use, which may be sold under such restrictions as
will insure its use for a legitimate purpose, by changing its engine with
an engine with a displacement of not more than 2,800 cubic
centimeters or the vehicle may be ordered re-exported to Germany.
In short, the petitioner may be criminally prosecuted for the act of
importing the subject motor vehicle but, at the same time, the vehicle
may be released to her subject to such restrictions and conditions as
may be imposed by the Collector of Customs, one of which should be
the changing of the engine of the vehicle with an engine with a
displacement of not more than 2,800 cubic centimeters or that the
vehicle may be ordered re-exported to Germany at the expense of
petitioner-importer.
Footnotes
1 Annex "J-1", Rollo, 46.
2 Rollo, 18-19.
3 Id., 16.

FELICIANO, J.:

On 27 November 1990, the President issued Executive Order No. 438

which imposed, in addition to any other duties, taxes and charges
imposed by law on all articles imported into the Philippines, an
additional duty of five percent (5%) ad valorem. This additional duty
was imposed across the board on all imported articles, including crude
oil and other oil products imported into the Philippines. This additional
duty was subsequently increased from five percent (5%) ad valorem to
nine percent (9%) advalorem by the promulgation of Executive Order
No. 443, dated 3 January 1991.
On 24 July 1991, the Department of Finance requested the Tariff
Commission to initiate the process required by the Tariff and Customs
Code for the imposition of a specific levy on crude oil and other
petroleum products, covered by HS Heading Nos. 27.09, 27.10 and
27.11 of Section 104 of the Tariff and Customs Code as amended.
Accordingly, the Tariff Commission, following the procedure set forth in
Section 401 of the Tariff and Customs Code, scheduled a public
hearing to give interested parties an opportunity to be heard and to
present evidence in support of their respective positions.

4 Id., 17.
5 Id., 20-30.
6 Id., 30-31.
7 Id., 32-42.
8 Id., 44-45.
9 Id., 7.
10 Ang Tibay v. Court of Industrial Relations, 69
Phil. 635 (1940); Crespo v. Provincial Board of
Nueva Ecija, 160 SCRA 66 (1988).
11 Cebu Stevedoring Co., Inc. v. Regional Director,
168 SCRA 315 (1988).
12 Rollo, 87.
13 Id., 123.
14 Id., 126.
[G.R. No. 101273, July 03, 1992]
CONGRESSMAN ENRIQUE T. GARCIA (SECOND DISTRICT OF
BATAAN), PETITIONER, VS. THE EXECUTIVE SECRETARY, THE
COMMISSIONER OF CUSTOMS, THE NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY, THE TARIFF COMMISSION, THE

Meantime, Executive Order No. 475 was issued by the President, on

15 August 1991 reducing the rate of additional duty on all imported
articles from nine percent (9%) to five percent (5%) ad valorem, except
in the cases of crude oil and other oil products which continued to be
subject to the additional duty of nine percent (9%) ad valorem.
Upon completion of the public hearings, the Tariff Commission
submitted to the President a "Report on Special Duty on Crude Oil and
Oil Products" dated 16 August 1991, for consideration and appropriate
action. Seven (7) days later, the President issued Executive Order No.
478, dated 23 August 1991, which levied (in addition to the
aforementioned additional duty of nine percent (9%) ad valorem and all
other existingad valorem duties) a special duty of P0.95 per liter or
P151.05 per barrel of imported crude oil and P1.00 per liter of imported
oil products.
In the present Petition for Certiorari, Prohibition and Mandamus,
petitioner assails the validity of Executive Orders Nos. 475 and 478. He
argues that Executive Orders Nos. 475 and 478 are violative of Section
24, Article VI of the 1987 Constitution which provides as follows:
"Section 24. All appropriation, revenue or tariff bills, bills authorizing
increase of the public debt, bills of local application, and private bills
shall originate exclusively in the House of Representatives, but the
Senate may propose or concur with amendments."
He contends that since the Constitution vests the authority to enact
revenue bills in Congress, the President may not assume such power
by issuing Executive Orders Nos. 475 and 478 which are in the nature
of revenue-generating measures.

Petitioner further argues that Executive Orders No. 475 and 478
contravene Section 401 of the Tariff and Customs Code, which Section
authorizes the President, according to petitioner, to increase, reduce or
remove tariff duties or to impose additional dutiesonly when necessary
to protect local industries or products but not for the purpose of raising
additional revenue for the government.
Thus, petitioner questions first the constitutionality and second the
legality of Executive Orders Nos. 475 and 478, and asks us to restrain
the implementation of those Executive Orders. We will examine these
questions in that order.
Before doing so, however, the Court notes that the recent promulgation
of Executive Order No. 517 did not render the instant Petition moot and
academic. Executive Order No. 517 which is dated 30 April 1992
provides as follows:
"Section 1. Lifting of the Additional Duty. -- The additional duty in the
nature of ad valorem imposed on all imported articles prescribed by the
provisions of Executive Order No. 443, as amended, is
hereby lifted;Provided, however, that the selected articles covered by
HS Heading Nos. 27.09 and 27.10 of Section 104 of the Tariff and
Customs Code, as amended, subject of Annex 'A' hereof, shall
continue to be subject to the additional duty of nine (9%)
percent ad valorem."
Under the above quoted provision, crude oil and other oil products
continue to be subject to the additional duty of nine percent
(9%) ad valorem under Executive Order No. 475 and to the special
duty of P0.95 per liter of imported crude oil and P1.00 per liter of
imported oil products under Executive Order No. 478.
Turning first to the question of constitutionality, under Section 24,
Article VI of the Constitution, the enactment of appropriation, revenue
and tariff bills, like all other bills is, of course, within the province of the
Legislative rather than the Executive Department. It does not follow,
however, that therefore Executive Orders Nos. 475 and 478, assuming
they may be characterized as revenue measures, are prohibited to the
President, that they must be enacted instead by the Congress of the
Philippines. Section 28(2) of Article VI of the Constitution provides as
follows:
(2) The Congress may, by law, authorize the President to fix within
specified limits, and subject to such limitations and restrictions as it
may impose, tariff rates, import and export quotas, tonage and
wharfage dues, and other duties or imposts within the framework of the
national development program of the Government." (Underscoring
supplied)
There is thus explicit constitutional permission[1] to Congress to
authorize the President "subject to such limitations and restrictions as
[Congress] may impose" to fix "within specific limits" "tariff rates x x x
and other duties or imposts x x x."
The relevant congressional statute is the Tariff and Customs Code of
the Philippines, and Sections 104 and 401, the pertinent provisions
thereof. These are the provisions which the President explicitly invoked

in promulgating Executive Orders Nos. 475 and 478. Section 104 of the
Tariff and Customs Code provides in relevant part:
"Sec. 104. All tariff sections, chapters, headings and subheadings and
the rates of import duty under Section 104 of Presidential Decree No.
34 and all subsequent amendments issued under Executive Orders
and Presidential Decrees are hereby adopted and form part of this
Code.
There shall be levied, collected, and paid upon all imported articles the
rates of duty indicated in the Section under this section except as
otherwise specifically provided for in this Code: Provided, that, the
maximum rate shall not exceed one hundred per cent ad valorem.
The rates of duty herein provided or subsequently fixed pursuant to
Section Four Hundred One of this Code shall be subject to periodic
investigation by the Tariff Commission and may be revised by the
President upon recommendation of the National Economic and
Development Authority.
xxx

xxx

xxx"

(Underscoring supplied)
Section 401 of the same Code needs to be quoted in full:
"Sec. 401. Flexible Clause. -a. In the interest of national economy, general welfare and/or national
security, and subject to the limitations herein prescribed, the President,
upon recommendation of the National Economic and Development
Authority (hereinafter referred to as NEDA), is hereby empowered:
(1)to increase, reduce or remove existing protective rates of import
duty(including any necessary change in classification). The existing
rates may be increased or decreased but in no case shall the reduced
rate of import duty be lower than the basic rate of ten
(10) per cent advalorem, nor shall the increased rate of import duty be
higher than a maximum of one hundred (100) per cent ad valorem; (2)
to establish import quota or to ban imports of any commodity, as may
be necessary; and (3) to impose an additional duty on all imports not
exceeding ten (10) per cent ad valorem whenever
necessary; Provided, That upon periodic investigations by the Tariff
Commission and recommendation of the NEDA, the President may
cause a gradual reduction of protection levels granted in Section One
hundred and four of this Code, including those subsequently granted
pursuant to this section.
b. Before any recommendation is submitted to the President by the
NEDA pursuant to the provisions of this section, except in the
imposition of an additional duty not exceeding ten (10) per cent ad
valorem, the Commission shall conduct an investigation in the course
of which they shall hold public hearings wherein interested parties shall
be afforded reasonable opportunity to be present, produce evidence
and to be heard. The Commission shall also hear the views and
recommendations of any government office, agency or instrumentality
concerned. The Commission shall submit their findings and
recommendations to the NEDA within thirty (30) days after the
termination of the public hearings.
c. The power of the President to increase or decrease rates of import
duty within the limits fixed in subsection a shall include the authority to
modify the form of duty. In modifying the form of duty, the
corresponding ad valorem or specific equivalents of the duty with

respect to imports from the principal competing foreign country for the
most recent representative period shall be used as bases.
d. The Commissioner of Customs shall regularly furnish the
Commission a copy of all customs import entries as filed in the Bureau
of Customs. The Commission or its duly authorized representatives
shall have access to, and the right to copy all liquidated customs import
entries and other documents appended thereto as finally filed in the
Commission on Audit.
e. The NEDA shall promulgate rules and regulations necessary to carry
out the provisions of this section.
f. Any Order issued by the President pursuant to the provisions of this
section shall take effect thirty (30) days after promulgation, except in
the imposition of additional duty not exceeding ten
(10) per cent advalorem which shall take effect at the discretion of the
President." (Underscoring supplied)
Petitioner, however, seeks to avoid the thrust of the delegated
authorizations found in Sections 104 and 401 of the Tariff and Customs
Code, by contending that the President is authorized to act under the
Tariff and Customs Code only "to protect local industries and
products for the sake of the national economy, general welfare and/or
national security."[2] He goes on to claim that:
"E.O. Nos. 478 and 475 having nothing to do whatsoever with the
protection of local industries and products for the sake of national
economy, general welfare and/or national security. On the contrary,
they work in reverse, especially as to crude oil, an essential product
which we do not have to protect, since we produce only minimal
quantities and have to import the rest of what we need.
These Executive Orders are avowedly solely to enable the
governmentto raise government finances, contrary to Sections 24 and
28 (2) of Article VI of the Constitution, as well as to Section 401 of the
Tariff and Customs Code."[3] (Underscoring in the original)
The Court is not persuaded. In the first place, there is nothing in the
language of either Section 104 or of 401 of the Tariff and Customs
Code that suggest such a sharp and absolute limitation of authority.
The entire contention of petitioner is anchored on just two (2) words,
one found in Section 401 (a)(1): "existing protective rates of import
duty," and the second in the proviso found at the end of Section 401
(a): "protection levels granted in Section 104 of this Code x x x." We
believe that the words "protective" and "protection" are simply not
enough to support the very broad and encompassing limitation which
petitioner seeks to rest on those two (2) words.
In the second place, petitioner's singular theory collides with a very
practical fact of which this Court may take judicial notice -- that the
Bureau of Customs which administers the Tariff and Customs Code, is
one of the two (2) principal traditional generators or producers of
governmental revenue, the other being the Bureau of Internal
Revenue. (There is a third agency, non-traditional in character, that
generates lower but still comparable levels of revenue for the
government -- The Philippine Amusement and Games Corporation
[PAGCOR].)
In the third place, customs duties which are assessed at the prescribed
tariff rates are very much like taxes which are frequently imposed for

both revenue-raising and for regulatory purposes.[4] Thus, it has been

held that "customs duties" is "the name given to taxes on the
importation and exportation of commodities, the tariff or tax assessed
upon merchandise imported from, or exported to, a foreign
country."[5] The levying of customs duties on imported goods may have
in some measure the effect of protecting local industries -- where such
local industries actually exist and are producing comparable goods.
Simultaneously, however, the very same customs duties inevitably
have the effect of producing governmental revenues. Customs duties
like internal revenue taxes are rarely, if ever, designed to achieve one
policy objective only. Most commonly, customs duties, which constitute
taxes in the sense of exactions the proceeds of which become public
funds[6] -- have either or both the generation of revenue and the
regulation of economic or social activity as their moving purposes and
frequently, it is very difficult to say which, in a particular instance, is the
dominant or principal objective. In the instant case, since the
Philippines in fact produces ten (10) to fifteen percent (15%) of the
crude oil consumed here, the imposition of increased tariff rates and a
special duty on imported crude oil and imported oil products may be
seen to have some "protective" impact upon indigenous oil production.
For the effective price of imported crude oil and oil products is
increased. At the same time, it cannot be gainsaid that substantial
revenues for the government are raised by the imposition of such
increased tariff rates or special duty.
In the fourth place, petitioner's concept which he urges us to build into
our constitutional and customs law, is a stiflingly narrow one. Section
401 of the Tariff and Customs Code establishes general standards with
which the exercise of the authority delegated by that provision to the
President must be consistent: that authority must be exercised in "the
interest of national economy, general welfare and/or national security."
Petitioner, however, insists that the "protection of local industries" is
theonly permissible objective that can be secured by the exercise of
that delegated authority, and that therefore "protection of local
industries" is the sum total or the alpha and the omega of "the national
economy, general welfare and/or national security." We find it extremely
difficult to take seriously such a confined and closed view of the
legislative standards and policies summed up in Section 401. We
believe, for instance, that the protection of consumers, who after all
constitute the very great bulk of our population, is at the very least as
important a dimension of "the national economy, general welfare and
national security" as the protection of local industries. And so customs
duties may be reduced or even removed precisely for the purpose of
protecting consumers from the high prices and shoddy quality and
inefficient service that tariff-protected and subsidized local
manufacturers may otherwise impose upon the community.
It seems also important to note that tariff rates are commonly
established and the corresponding customs duties levied and collected
upon articles and goods which are not found at all and not produced in
the Philippines. The Tariff and Customs Code is replete with such
articles and commodities: among the more interesting examples
areivory (Chapter 5, 5.10); castoreum or musk taken from the beaver
(Chapter 5, 5.14);olives (Chapter 7, Notes); truffles or European fungi
growing under the soil on tree roots (Chapter 7, Notes); dates (Chapter
8, 8.01); figs (Chapter 8, 8.03); caviar(Chapter 16,
16.01); aircraft (Chapter 88, 88.01); special diagnostic
instruments andapparatus for human medicine and surgery (Chapter
90, Notes); X-ray generators; X-ray tubes; X-ray screens, etc (Chapter

90, 90.20); etc. In such cases, customs duties may be seen to be

imposed either for revenue purposes purely or perhaps, in certain
cases, to discourage any importation of the items involved. In either
case, it is clear that customs duties are levied and imposed entirely
apart from whether or not there are any competing local industries to
protect.

signifies any tax, tribute or duty, but it is seldom applied to any but the
indirect taxes. An excise duty is an inland impost, levied upon articles
of manufacture or sale, and also upon licenses to pursue certain
trades or to deal in certain commodities." (Underscoring partly in the
original and partly supplied)
[6]

Accordingly, we believe and so hold that Executive Orders Nos. 475

and 478 which may be conceded to be substantially moved by the
desire to generate additional public revenues, are not, for that reason
alone, either constitutionally flawed, or legally infirm under Section 401
of the Tariff and Customs Code. Petitioner has not successfully
overcome the presumptions of constitutionality and legality to which
those Executive Orders are entitled.[7]

Campania General de Tabacos de Filipinas v. City of Manila, et al.,

118 Phil. 380 (1963).
[7]

National Waterworks and Sewerage Authority v. Reyes, 22 SCRA

905 (1968); See also: Victoriano v. Elizalde Rope Workers Union, 59
SCRA 54 (1974); Ermita-Malate Hotel and Motel Operators Association
Inc. v. City Mayor of Manila, 20 SCRA 849 (1967).
[8]

The conclusion we have reached above renders it unnecessary to deal

with petitioner's additional contention that, should Executive Orders
Nos. 475 and 478 be declared unconstitutional and illegal, there should
be a roll back of prices of petroleum products equivalent to the
"resulting excess money not be needed to adequately maintain the
Oil Price Stabilization Fund (OPSF)."[8]
WHEREFORE, premises considered, the Petition for Certiorari,
Prohibition andMandamus is hereby DISMISSED for lack of merit.
Costs against petitioner.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Paras, Padilla, Bidin, Grio-Aquino,
Medialdea, Regalado, Davide, Jr., Romero, Nocon, and Bellosillo,
JJ., concur.

[1]

This provision also existed in substantially identical terms in the 1973

Constitution (Article VIII, Section 17[2]), and the 1935 Constitution
(Article VI, Section 22[2]).
[2]

Petition, p. 11; Rollo, p. 12; underlining in the original.

[3]

Rollo, pp. 13-14.

[4]

Lutz v. Araneta, 98 Phil. 148 (1955); Republic v. Bacolod-Murcia

Milling Co., Inc., et al., 17 SCRA 632 (1966); Progressive Development
Corp. v. Quezon City, 172 SCRA 629 (1989).
[5]

U.S. v. Sischo, 262 Fed. 1001 (1919); Flint v. Stone Tracey

Company, 220 US 107 (1910); Keller-Dorian Corp. v. Commissioner of
Internal Revenue, 153 F 2d 1006 (1946). The close affinity of "customs
duties" and "taxes" was stressed almost a century ago in the following
excerpt from Pollock v. Farmers' Loan and Trust Company (158 US
601; 39 Law Ed. 1108 [1895]):
"Cooley, on Taxation, p. 3, says that the word duty ordinarily
means anindirect tax, imposed on the importation, exportation, or
consumption of goods; having a broader meaning than custom, which
is a duty imposed on imports or exports; that the term impost also

Rollo, pp. 14-16.

[G.R. No. 82586, September 11, 1992]

HON. SALVADOR M. MISON, COMMISSIONER OF CUSTOMS, AND

CARLOS L. RAZO, COLLECTOR OF CUSTOMS OF THE SUBPORT
OF CLARK, PETITIONERS, VS. HON. ELI G. C. NATIVIDAD,
PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH
XLVIII, SAN FERNANDO, PAMPANGA, AND CESAR SONNY
CARLOS/CVC TRADING, RESPONDENTS.
DECISION
DAVIDE, JR., J.:

This is a petition for certiorari and prohibition filed on 6 April 1988 to

annul, for having been issued without jurisdiction or with grave abuse
of discretion, the 26 February 1988 Resolution of respondent Judge -denying petitioners' motion to dismiss Civil Case No. 8109 pending
before Branch 48 of the Regional Trial Court (RTC) of Pampanga and
granting private respondent's motion therein for the issuance of a writ
of preliminary injunction -- and to enjoin respondent Judge from
proceeding further in said case. It resurrects a long-settled issue of the
jurisdiction of the Regional Trial Court over actions involving articles
subject to seizure proceedings under the Tariff and Customs Code.
In the Resolution of 18 April 1988, this Court required the respondents
to comment on the petition and issued a Temporary Restraining Order
restraining the respondent Judge from further proceeding with the
aforementioned Civil Case No. 8109 or from enforcing and/or carrying
out his Resolution of 26 February 1988.[1]
Private respondent subsequently filed his Comment[2] to the petition,
to whichpetitioners filed a Reply.[3] Private respondent then
filed a Rejoinder[4] to the latter.
This Court gave due course to the petition and required the parties to
submit their respective Memoranda.[5] Both manifested that they have
sufficiently expounded on the relevant issues in their previous
pleadings and moved, in effect, that they be allowed to dispense with
the submission of their respective Memoranda, which this Court noted
and granted.
The factual antecedents disclosed in the petition are as follows:

In a sworn letter[6] dated 7 February 1988 and 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 of CVC
Trading, which is owned by a certain Mr. Castro and located at St. Jude
Avenue, St. Jude Village, San Fernando, Pampanga. Martinez
requested for an immediate investigation thereon 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 to the same a Mission Order [7] 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, [8] herein
petitioner Carlos L. Razo. The latter instituted seizure proceedings
against the abovementioned vehicles (Seizure Identification No. CAB01-88), 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, atabout 8:00 a.m. on
12 February 1988, he issued a Warrant of Seizure and Detention.[9]
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 inconnection with
Civil Case No. 8109, entitled "Sonny Carlos, plaintiff, versus Bureau of
Customs and/or Customs Police, defendant," for Damages with Prayer
for Preliminary Injunction and Restraining Order. The plaintiff in the said
case is the private respondent in this petition. The order restrained the
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." [10]
In his Complaint[11] 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[12]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
Opposition/Comment on the Motion to Dismiss [13] 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[14] 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,[15] declaring that:
"We are the legal possesors/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[16] in the said seizure proceedings, the dispositive portion of
which reads:
"WHEREOF, 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
thisCustomhouse, for their information guidance and appropriate
action."
On the same date, the respondent Judge issued a Resolution[17] in Civil
Case No. 8109 denying the motion to dismiss and granting the
application for a writ of preliminary injunction.
The pertinent portions thereof read:
"I. Resolution on the Motion to Dismiss with Prayer to Lift RestrainingO
rder
xxx
A reading of the complaint will show that it was alleged that the
plaintiffis the owner of the subject vehicles. He is in actual and
physicalpossession of the same. Plaintiff enjoys the presumption of
ownership,to (sic) which he has to protect.
xxx
It is to be noted that the subject matter of the complaint is the legal
ownership of the vehicles and damages being asked by plaintiff,
thus,this Court can assume jurisdiction over the case. The mere
allegation of the defendants that the subject vehicles were smuggled
based on 'reliable information' will not divest this Court of jurisdiction.
xxx
In this particular case, there is no showing that plaintiff is an
importerwho imported dutiable goods, in entering the port of Clark Air
Base; imported thru that port. The goods are in
private (sic) place owned byplaintiff, and not in the possession of the
collector of customs.
xxx
The numerous Supreme Court decisions cited by movant in his motion
to dismiss have very remote pertinence at the case at bar. In the cited
cases, dutiable imported goods or articles were seized while on
vessels and/or customs zone (sic), and the alleged owners filed cases
of replevin or recovery of personal properties.
II. Resolution in the Issuance of Writ of Preliminary Injunction
xxx

Having substantiated the said allegations, in his complaint with

Annexes and considering the oral arguments of the parties, it is hereby
ordered and directed that after the plaintiff filed (sic) the bond in the
amount of P100,000.00 as fixed by this Court, all the defendants and
any other persons acting under their command, or for (sic) in their
behalf, to (sic) desist and refrain from guarding the area of the plaintiff
and from seizing or confiscating the vehicles involved in this case
pending termination of this litigation and/or unless a contrary
order is issued by this Court. Thus, the defendants is (sic) hereby
inhibited for the meantime to guard the area or commit trespass of
plaintiffs' premises in any manner restrain (sic) the movement of herein
plaintiff and his representatives or employees, considering that there is
standing (sic) of this Court that pending the termination of this case, the
said vehicles should not be disposed of."
Hence, this petition which We find to be meritorious. It should be
granted.
The court a quo has no jurisdiction over the res subject of the warrant
of seizure and detention. The respondent Judge, therefore, 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. Respondent Judge exercised a power he never had and
encroached upon the exclusive original jurisdiction of 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.
In the 1966 case of Pacis vs. Averia,[18] this Court, speaking through
Mr. Justice J.P. Bengzon, held that:
"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. [Section 2312, R.A. 1937] The Collector's decision is
appealable to the Commissioner of Customs [Section 2313, R.A. 1937]
whose decision is in turn appealable to the Court of Tax Appeals.
[Section 2402, R.A. 1937; Sections 7 and 11, R.A. 1125]. An aggrieved
party may appeal from a judgment of the Court of Tax Appeals directly
to this Court [Section 18, R.A. 1125; Rule 44, Rules of Court]. On the
other hand, Section 44(c) of the 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. 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. 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.
Should Section 44(c) of the Judiciary Act of 1948 give way to the
provisions of the Tariff and Customs Code, or vice versa? In

Ouropinion, in this particular case, 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 [Herman v.
Radio Corporation of the Philippines, 50 Phil. 490; Pampanga Sugar
Mills v. Trinidad, 279 U.S. 211, 73 L. ed. 665]. 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 aproperty 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 device of replevin.
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,
andonly after exhausting administrative remedies in the Bureau of
Customs."
In De Joya vs. Lantin,[19] this Court, speaking again through Mr. Justice
J.P. Bengzon, declared:
"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 proceedings should be followed; the owner of the goods may set
up defenses therein (Pacis vs. Averia, L-22526, Nov. 29, 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 Code
and deprive the Court of Tax Appeals of one of its exclusive appellate
jurisdiction. As this Court has ruled in
Pacis vs. 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."
This rule was subsequently reiterated in Romualdez vs. Arca,[20] De
Joya vs. David,[21] Diosamito vs. Balanque,[22] Lopez vs. Commissioner
of Customs,[23]Ponce Enrile vs. Vinuya,[24] Collector of Customs vs.
Torres,[25] Pacis vs. Geronimo[26] and De la Fuente vs. De Veyra.[27]
The language of the foregoing rule is simple, clear and leaves no doubt
as to the Regional Trial Court's lack of jurisdiction over the res which
has already been made the subject of seizure and forfeiture
proceedings. Frankly, this Court is unable to understand why the

respondent Judge misread the same; perhaps, he simply chose

toignore it. At any rate, such behavior is highly condemnable.
A warrant of seizure and detention having already been issued,
presumably in the regular course of official duty, [28] the
Regional Trial Court of Pampanga was indisputably precluded from
interfering in the said proceedings. That in his complaint in Civil Case
No. 8109 private respondent alleges ownership over several
vehicleswhich 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;[29] if this were not so, the procedure carefully delineated by
law for seizure and forfeiture cases may easily be thwarted and set to
naught[30] 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. 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. 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. In Ponce Enrile
vs. Vinuya,[31] this Court had the occasion to state:
"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. 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 Resolution of respondent Judge of 26 February
1988 in Civil Case No. 8109 before Branch 48 of the Regional Trial
Court of Pampanga, and all proceedings had therein, are NULLIFIED
and SET ASIDE and the said case is hereby ordered DISMISSED.
The temporary restraining order issued by this Court on 18 April 1988
is hereby made permanent.
SO ORDERED.
Bidin and Romero, JJ., concur.
Gutierrez, Jr., J., (Chairman), on official leave.

Melo, J., no part.

[1]

Rollo, 72.

[2]

Id., 81-103; 111-125.

[3]

Id., 188-204.

[4]

Id., 211-215.

[5]

Id., 218.

[6]

Annex "A" of petition; Id., 40.

[7]

Annex "B" of Petition; Rollo, 41.

[26]

56 SCRA 583 [1974].

[27]

120 SCRA 451 [1983].

[28]

Section 3 (m), Rule 131, Rules of Court.

[29]

De la Fuente vs. De Veyra, supra.

[30]

Pacis vs. Geronimo, supra.

[31]

Supra., at page 388-389.

G.R. No. L-62636 April 27, 1984

ACTING COMMISSIONER OF CUSTOMS, petitioner,
vs.
COURT OF TAX APPEALS and CHARLES ANDRULIS, respondents.
The Solicitor General for petitioner.

[8]

Annex "C" and "C-1", Id.; Id., 42-43.

[9]

Annex "D" of Petition; Rollo, 44.

[10]

[11]

Annex "E"' of Petition; Rollo, 45.

Annex "F", Id.; Id., 46.

[12]

Annex "G", Id.; Id., 48-52.

[13]

Annex "I" of Petition; Rollo, 55-58.

[14]

Annex "J", Id.; Id., 59-62.

[15]

Annex "K" of Petition; Rollo, 63.

[16]

Annex "L", Id.; Id., 64-67.

[17]

Annex "M" of Petition; Rollo, 68-71.

[18]

18 SCRA 907, 916-917 [1966].

[19]

19 SCRA 894, 897 [1967].

[20]

21 SCRA 856 [1967].

[21]

21 SCRA 1493 [1967].

[22]

28 SCRA 836 [1969].

[23]

37 SCRA 327 [1971].

[24]

37 SCRA 381 [1971].

[25]

45 SCRA 272 [1972].

Alentajan & Associates for respondents.

MELENCIO-HERRERA, J.:+.wph!1
A proceeding for review on certiorari of the Decision of respondent
Court of Tax Appeals in CTA Case No. 3201, which reversed the
Decision of petitioner, the Acting Commissioner of Customs, decreeing
the forfeiture of various foreign currencies found in the possession of
private respondent (Charles Joseph Andrulis) for violation of Central
Bank Circular No. 534, in relation to section 2530(f) of the Revised
Tariff and Customs Code.
On 20 February 1980, Andrulis representing himself as an American
businessman "on joint ventures with his Filipino counterparts", arrived
in Manila and checked in at the Century Park Sheraton Hotel. Two
days later, or on 22 February 1980, he left the hotel surreptitiously
without paying for his bills in the amount of P2,000.00. Col. Felix
Zerrudo, Chief Security Officer of the Hotel, timely discovered the
scheduled departure of Andrulis on that same day, and immediately
tipped-off the Customs authorities on Andrulis' intention to abscond. At
the Manila International Airport (MIA), the Customs authorities looked
for Andrulis from among the passengers who were already on board
Philippine Airlines Flight No. 501 bound for Singapore. Apprehensive,
Andrulis locked himself inside the airplane's comfort room. In the
course of negotiations for him to come out, he slipped through an
opening bills worth US$300.00. Andrulis finally yielded to the
authorities and surrendered the luggage he was carrying which, when
opened by the authorities, contained various foreign currencies
consisting of US$59,639.00; 53,100 Indonesian Rupiah, and Singapore
$308.00.
A criminal charge was filed before the Office of the City Fiscal, Pasay
City, for violation of CB Circular No. 534 in relation to RA 265, the
Central Bank Charter. On 10 March 1980, the Assistant City Fiscal
dismissed the charge on the rationalization that the Government had
failed to present evidence that the currencies were not brought in by
Andrulis.

Proceedings for the seizure of the foreign currencies were also

commenced at the Customs Office of the MIA in Pasay City, docketed
as Seizure Identification No. 416280.
During the hearing, Andrulis submitted the case for resolution on the
basis of the following documentary evidence:t.hqw

National Treasury and accounted for as Customs

receipts.
Let copies of this Decision be furnished all offices
and parties concerned for their information and
guidance.

1. Sworn Affidavit of Charles Joseph Andrulis,

stating that the foreign exchange in question are
owned by claimant;

The Chief, Auction and Cargo Disposal Division,

this Customhouse, shall inform this Office of the
action taken thereon.

2. Resolution of the City Fiscal of Pasay City in I.S.

No. 80-94112, entitled MIA Customhouse vs.
Charles Joseph Andrulis, dismissing the alleged
charge of violation of Central Bank Circular No.
534, in relation to Central Bank Circular No. 265, to
show that there was no violation as charged. 1

SO ORDERED. 3

For its part, the prosecution submitted the case on the basis of the
following:t.hqw
A. Affidavit of Col. Felix A. Zerrudo (Ret.) Chief
Security Officer of the Century Park SheratonManila Hotel, executed on February 29, 1980;
B. Certification issued by Col. Felix A. Zerrudo
(Ret.) dated February 29, 1980;
C. Certification of Mr. Domingo J. Galicia, Acting
Credit Manager of the Manila Hotel dated February
28, 1980;
D. Letter of Demand dated July 9, 1979 issued by
Robert L. Maniquiz, Credit and Collection Manager
of the Resort Hotels Corporation addressed to Mr.
Charles Andrulis;
E. Sworn statement dated February 22, 1980 of Mr.
Ramonchito Liongson, a Customs Officer, who
apprehended the various foreign currencies herein
subject to seizure." 2
Items "C" and "D" above-listed tended to show that Andrulis had, on
previous occasions, also tried to abscond without payment of his bills
from the Manila Hotel and the Pines Hotel in Baguio.
On 3 June 1980, the Acting District Collector of Customs rendered a
Decision, which found Andrulis to have violated Central Bank Circular
No. 534 in relation to section 2530(f) of the Tariff and Customs Code,
and decreed:t.hqw
WHEREFORE, by authority of law vested in this
Office, it is ordered and decreed that the various
foreign currencies confiscated from herein
claimant, covered by SID No. 4162-80 be, as they
are hereby declared forfeited in favor of the
Government of the Republic of the Philippines, the
same to be turned over to the Central Bank of the
Philippines and exchanged with their equivalent in
Philippine pesos which shall be deposited with the

Andrulis appealed to the Acting Commissioner of Customs, who

affirmed the same.
On 23 January 1981, Andrulis filed a Notice of Appeal and on 16
February 1981, a Petition for Review with the Court of Tax Appeals,
docketed as CTA Case No. 3201. On 30 June 1982, respondent Court
reversed the appealed Decision on the theory that the legal
presumption of ownership has to be accorded the possessor of
theres, who need not be obliged to show or prove it pursuant to Section
5(j) of Rule 131 of the Rules of Court and Article 541 of the Civil Code.
The dispositive portion of the CTA Decision decreed:t.hqw
WHEREFORE, the decision appealed from is
reversed and respondent ordered to effect the
restitution of the forfeited currencies to petitioner.
No pronouncement as to costs.
SO ORDERED. 4
On 10 September 1982, petitioner filed a Motion for Reconsideration
on the principal ground that respondent Court had failed to consider
that claimant Andrulis had the burden of proof to show that the foreign
currencies seized from him were brought into the Philippines by him.
The motion was denied on 2 December 1982. Hence, the instant
Petition for Review on certiorari by the Acting Commissioner of
Customs represented by the Solicitor General.
The pertinent legal provisions provide:t.hqw
Section 3. Unless specifically authorized by the
Central Bank or allowed under existing
international agreements or Central Bank
regulations, no person shall take or attempt to take
or transmit foreign exchanges, in any form, out of
the Philippines, directly, through other persons,
through mails, or through international carriers;
The provisions of this section shall not apply to
tourists and non-resident temporary visitors who
are taking or sending out of the Philippines their
own foreign exchange brought in by them. (CB
Circular No. 534)
Section 2530. Property Subject to Forfeiture Under
Tariff and Customs Law. Any vehicle, vessel or
aircraft, cargo, article and other objects shall, under
the following condition be subject to forfeiture;

xxx xxx xxxt.hqw

(f) Any article the importation
or exportation of which is
effected or attempted contrary
to law, or any article of
prohibited importation or
exportation, and au other
articles which, in the opinion of
the Collector, have been used,
are or were entered to be used
as instruments in the
importation or exportation of
the former. 5 (Emphais
supplied)
In his defense, private respondent seeks refuge behind the exception
in the aforequoted CB Circular No. 534 giving tourists the right to take
out of the Philippines their own foreign exchange brought in by them.
Private respondent also relies heavily on his acquittal in the criminal
charge filed against him for violation of CB Circular No. 534.
The core issue is who has the burden of proof in seizure or forfeiture
proceedings? The applicable law, Section 2535 of the Tariff and
Customs Code, is explicit in this regard.t.hqw
SEC. 2535. Burden of Proof in Seizure and/or
Forfeiture. In all proceedings taken for the
seizure and/or forfeiture of any vehicle, vessel,
aircraft, beast or articles under the provisions of the
tariff and customs laws,the burden of proof shall lie
upon the claimant: Provided, That probable cause
shall be first shown for the institution of such
proceedings and that seizure and/or forfeiture was
made under the circumstances and in the manner
described in the preceding sections of this
Code 6 (Emphais ours).
Upon the facts of the case, the requirement of the law that the
existence of probable cause should first be shown before firing of the
forfeiture proceedings, had been fully met. When Andrulis was
apprehended at the MIA and was found to have in his possession the
various foreign currencies, he could not produce the required Central
Bank authorization allowing him to bring them out of the country. This
constituted prima facie evidence of infringement of the provisions of CB
Circular No. 534 and provided sufficient basis for the seizure 'of the
said foreign exchange. Probable cause having been shown, the burden
of proof was upon Andrulis to establish that he fell within the purview of
the exception prescribed in the second paragraph of the aforequoted
Section 3 of CB Circular No. 534 in that he actually brought into the
country the foreign currencies and was just taking them out. 7This
burden, Andrulis had failed to satisfactorily discharge. The legal
presumption in Section 5(j), Rule 131 of the Rules of Court and Article
541 of the Civil Code, relied upon by respondent Court, are of a
general character and cannot prevail over the specific provisions of the
Tariff and Customs Code.
Aside from Andrulis' suspicious actuations when about to be
apprehended on board the plane, which cast doubt on his alleged bona
fide possession of the foreign currencies, his bare assertion in his
Affidavit, claiming that "he came into the country with the intention of

investing here and of going into joint ventures with local counterparts"
8, has not been corroborated by other convincing evidence. The
observations of the Solicitor General on this point finds relevance:t.
hqw
If it was really his intention to invest, he could have
presented documents to support his assertion. He
could have produced papers required by the
Government of foreigners intending to invest in the
Philippines. He could have presented as witnesses
Filipino businessmen with whom he entered into
joint ventures or at least discussed the prospects
thereof. He could at the least have revealed the
nature of the business he intended to engage in,
the capital requirements thereof, the situs of the
business, the form of the entity he intended to form
to carry on the business, etc. He had done none of
these.
Private respondent implies that the foreign
currencies seized from him were intended to be
invested in business ventures in the Philippines. If
this is so, why was it necessary for him to have
three kinds of currencies: US dollars, Indonesian
Rupiah and Singapore dollars. Besides,
businessmen usually do not personally carry the
cash which they intend to invest. They remit them
through the banks. 9
Andrulis' acquittal in the criminal charge before the City Fiscal's Office
does not operate as res judicata in a seizure or forfeiture proceeding. A
distinction exists between the proceedings before the Fiscal which are
in personam since they are directed against the owner or holder of the
thing, whereas, a forfeiture proceeding is one in rem directed against
the thing itself.t.hqw
There is a split of authority as to whether a former
conviction of a criminal offense based upon the
same facts amounts to a bar. ... The authorities are
by no means agreed, however, that a prior
conviction for a Criminal charge bars an action for
a forfeiture of property. Thus, it has been held that
since the forfeiture proceedings is one in rem under
which the offense is attached primarily to the thing
rather than the offender, the forfeiture proceedings
stands independent of, and wholly unaffected by,
any criminal proceeding in personam and is not
barred by a conviction of the individual under a
criminal charge. 10
In a similar vein, it was also held in C.F. Sharp & Co., Inc. vs.
Commissioner of Customs, 22 SCRA 765 (1968) that the result of
criminal proceedings in a separate case before a different tribunal,
being dependent upon the evidence adduced therein, would not
necessarily influence the judgment in a forfeiture proceeding.
Finally, Andrulis contends that no foreign currency declaration is
required of any incoming or outgoing passenger and that it is not the
intention of the Government to entrap unwary foreigners. True,
Resolution No. 594, dated 14 April 1969, of the Monetary Board,
provides:t.hqw

Henceforth, no currency declaration of any kind

shall be required either from outgoing or incoming
passengers.11
However, tourists are not precluded from submitting proof, other than a
currency declaration, to show the legitimate source of the currency in
their possession. Besides, Resolution No. 594 must be deemed
superseded by Resolution No. 1412, dated 16 July 1976, which
requires that persons taking or transmitting or attempting to take or
transmit foreign exchange out of the Philippines must have
authorization from the Central Bank allowing them to do so.
WHEREFORE, the Decision of respondent Court of Tax Appeals,
promulgated on 30 June 1982, is hereby reversed and set aside, and
the Decision of the Acting Commissioner of Customs, dated 15
December 1980, hereby ordered reinstated. No costs.
SO ORDERED.1wph1.t
Teehankee, (Chairman), Plana, Relova, Gutierrez, Jr. and De la
Fuente, JJ., concur.

Footnotest.hqw
1 pp. 53-54, Rollo.
2 p. 54, Ibid.
3 p. 52, Ibid.
4 p. 65, Ibid.
5 Revised Tariff and Customs Code.
6 Tariff and Customs Code, as amended by P.D.
No. 34.
7 Lee Co Liong Ha vs. Court of Tax Appeals, et al.,
G.R. No. 65235, February 28, 1984.
8 p. 184, Rollo.
9 p. 185, Ibid.
10 23 Am. Jur., p. 618.
11 CB Circular No. 270, 65 O.G. No. 17, p. 4290.
G.R. No. 42204 January 21, 1993
HON. RAMON J. FAROLAN, JR., in his capacity as Commissioner
of Customs, petitioner,
vs.
COURT OF TAX APPEALS and BAGONG BUHAY
TRADING, respondents.

The Solicitor General for petitioner.

Jorge G. Macapagal counsel for respondent.
Aurea Aragon-Casiano for Bagong Buhay Trading.

ROMERO, J.:
This is a petition for review on certiorari which seeks to annul and set
aside the decision of the Court of Tax Appeals dated December 27,
1974 (CTA Case No. 2490) reversing the decision of the Commissioner
of Customs which affirmed the decision of the Collector of Customs. 1
The undisputed facts are as follows:
On January 30, 1972, the vessel S/S "Pacific Hawk" with Registry No.
170 arrived at the Port of Manila carrying, among others, 80 bales of
screen net consigned to Bagong Buhay Trading (Bagong Buhay). Said
importation was declared through a customs broker under Entry No.
8651-72 as 80 bales of screen net of 500 rolls with a gross weight of
12,777 kilograms valued at $3,750.00 and classified under Tariff
Heading No. 39.06-B of the Tariff and Customs Code 2 at 35% ad
valorem. Since the customs examiner found the subject shipment
reflective of the declaration, Bagong Buhay paid the duties and taxes
due in the amount of P11,350.00 which was paid through the Bank of
Asia under Official Receipt No. 042787 dated February 1, 1972.
Thereafter, the customs appraiser made a return of duty.
Acting on the strength of an information that the shipment consisted of
"mosquito net" made of nylon dutiable under Tariff Heading No. 62.02
of the Tariff and Customs Code, the Office of the Collector of Customs
ordered a
re-examination of the shipment. A report on the re-examination
revealed that the shipment consisted of 80 bales of screen net, each
bale containing 20 rolls or a total of 1,600 rolls. 3 Re-appraised, the
shipment was valued at $37,560.00 or $10.15 per yard instead of $.075
per yard as previously declared. Furthermore, the Collector of Customs
determined the subject shipment as made of synthetic (polyethylene)
woven fabric classifiable under Tariff Heading No. 51.04-B at 100% ad
valorem. Thus, Bagong Buhay Trading was assessed P272,600.00 as
duties and taxes due on the shipment in question. 4 Since the shipment
was also misdeclared as to quantity and value, the Collector of
Customs forfeited the subject shipment in favor of the government. 5
Private respondent then appealed the decision of the Collector of
Customs by filing a petition for review with the Commissioner of
Customs. On November 25, 1972 the Commissioner affirmed the
Collector of Customs. 6 Private respondent moved for reconsideration
but the same was denied on January 22, 1973. 7
From the Commissioner of Customs, private respondent elevated his
case before the Court of Tax Appeals. Upon review, the Court of Tax
Appeals reversed the decision of the Commissioner of Customs. It
ruled that the Commissioner erred in imputing fraud upon private
respondent because fraud is never presumed and thus concluded that
the forfeiture of the articles in question was not in accordance with law.
Moreover, the appellate court stated that the imported articles in
question should be classified as "polyethylene plastic" at the rate of

35%ad valorem instead of "synthetic (polyethylene) woven fabric" at

the rate of 100% ad valorem based upon the results conducted by the
Bureau of Customs Laboratory. Consequently, the Court of Tax Appeals
ordered the release of the said article upon payment of the
corresponding duties and taxes. (C.T.A. Case No. 2490). 8
Thereafter, the Commissioner of Customs moved for reconsideration.
On November 19, 1975, the Court of Tax Appeals denied said motion
for reconsideration. 9
On August 20, 1976, private respondent filed a petition asking for the
release of the questioned goods which this Court denied. After several
motions for the early resolution of this case and for the release of
goods and in view of the fact that the goods were being exposed to the
natural elements, we ordered the release of the goods on June 2,
1986. Consequently, on July 26, 1986, private respondent posted a
cash bond of P149,443.36 to secure the release of 64 bales 10 out of
the 80 bales 11 originally delivered on January 30, 1972. Sixteen
bales 12 remain missing.
Private respondent alleges that of the 143,454 yards (64 bales)
released to Bagong Buhay, only 116,950 yards were in good condition
and the 26,504 yards were in bad condition. Consequently, private
respondent demands that the Bureau of Customs be ordered to pay for
damages for the 43,050 yards 13 it actually lost. 14
Hence, this petition, the issues being; a) whether or not the shipment in
question is subject to forfeiture under Section 2530-M subparagraphs
(3), (4) and (5) of the Tariff and Customs Code; b) whether or not the
shipment in question falls under Tariff Heading No. 39.06-B (should be
39.02-B) of the Tariff and Customs Code subject to ad valorem duty of
35% instead of Tariff Heading No. 51.04-B with ad valorem of 100%
and c) whether or not the Collector of Customs may be held liable for
the 43,050 yards actually lost by private respondent.
Section 2530, paragraph m, subparagraphs (3), (4) and (5) states:
Sec. 2530. Property Subject to Forfeiture Under
Tariff and Customs Law. Any vehicle, vessel or
aircraft, cargo, article and other objects shall, under
the following conditions be subjected to forfeiture:
xxx xxx xxx
m. Any article sought to be imported or exported.

importation or exportation of
such article; and.
(5) Through any other practice
or device contrary
to law by means of which such
articles was entered through a
custom-house to the prejudice
of government. (Emphasis
supplied).
Petitioner contends that there has been a misdeclaration as to the
quantity in rolls of the shipment in question, the undisputed fact being
that the said shipment consisted of 1,600 rolls and not 500 rolls as
declared in the import entry. We agree with the contention of the
petitioner. In declaring the weight of its shipment in an import entry,
through its customs broker as 12,777 kilograms when in truth and in
fact the actual weight is 13,600 kilograms, an apparent misdeclaration
as to the weight of the questioned goods was committed by private
respondent. Had it not been for a re-examination and re-appraisal of
the shipment by the Collector of Customs which yielded a difference of
823 kilograms, the government would have lost revenue derived from
customs duties.
Although it is admitted that indeed there was a misdeclaration, such
violation, however, does not warrant forfeiture for such act was not
committed directly by the owner, importer, exporter or consignee as set
forth in Section 2530, paragraph m, subparagraph (3), and/or (4).
In defense of its position denying the commission of misdeclaration,
private respondent contends that its import entry was based solely on
the shipping documents and that it had no knowledge of any flaw in the
said documents at the time the entry was filed. For this reason, private
respondent believes that if there was any discrepancy in the quantity of
the goods as declared and as examined, such discrepancy should not
be attributed to Bagong Buhay. 15
Private respondent's argument is persuasive. Under Section 2530,
paragraph m, subparagraphs (3) and (4), the requisites for forfeiture
are: (1) the wrongful making by the owner, importer, exporter or
consignees of any declaration or affidavit, or the wrongful making or
delivery by the same persons of any invoice, letter or paper all
touching on the importation or exportation of merchandise; and (2) that
such declaration, affidavit, invoice, letter or paper is false. 16

(3) On the strength of

a false declaration or affidavit
or affidavit executed by the
owner, importer, exporter or
consignee concerning the
importation of such article;

In the case at bar, although it cannot be denied that private respondent

caused to be prepared through its customs broker a false import entry
or declaration, it cannot be charged with the wrongful making thereof
because such entry or declaration merely restated faithfully the data
found in the corresponding certificate of origin, 17certificate of manager
of the shipper, 18 the packing lists 19 and the bill of lading 20 which were
all prepared by its
suppliers abroad. If, at all, the wrongful making or falsity of the
documents above-mentioned can only be attributed to Bagong Buhay's
foreign suppliers or shippers.

(4) On the strength of

a false invoice or other
document executed by the
owner, importer, exporter or
consignee concerning the

With regard to the second requirement on falsity, it bears mentioning

that the evidence on record, specifically, the decisions of the Collector
of Customs and the Commissioner of Customs, do not reveal that the
importer or consignee, Bagong Buhay Trading had any knowledge of
any falsity on the subject importation.

xxx xxx xxx

Since private respondent's misdeclaration can be traced directly to its

foreign suppliers, Section 2530, paragraph m, subparagraphs (3) and
(4) cannot find application.
Applying subparagraph (5), fraud must be committed by an
importer/consignee to evade payment of the duties due. 21 We support
the stance of the Court of Tax Appeals that the Commissioner of
Customs failed to show that fraud had been committed by the private
respondent. The fraud contemplated by law must be actual and not
constructive. It must be intentional fraud, consisting of deception
willfully and deliberately done or resorted to in order to induce another
to give up some right. 22 As explained earlier, the import entry was
prepared on the basis of the shipping documents provided by the
foreign supplier or shipper. Hence, Bagong Buhay Trading can be
considered to have acted in good faith when it relied on these
documents.
Proceeding now to the question of the correct classification of the
questioned shipments, petitioner contends that the same falls under
Tariff Heading No. 51.04 being a "synthetic (polyethylene) woven
fabric." On the other hand, private respondent contends that these fall
under Tariff Heading No. 39.06 (should be 39.02), having been found to
be made of polyethylene plastic.
Heading No. 39.02 of the Tariff and Customs Code provides:
39.02 Polymerisation and copolymerisation
products (for example, polyethylene,
polytetrahaloethylene, polyisobutylene,
polystyrene, polyvinyl chloride, polyvinyl acetate,
polyvinyl chloroacetate and other polyvinyl
derivatives, polyacrylic and polymethacrylic
derivatives, coumaroneindene resins).
The principal products included in this heading are:
(1) Polymerization products of ethylene or its
substitution derivatives, particularly the halogen
derivatives.
Examples of these are polyethylene, polytetrafluroethylene and polychlorotrifluro-ethylene. Their
characteristic is that they are translucent, flexible
and light in weight. They are used largely for
insulating electric wire. 23
On the other hand, Tariff Heading No. 51.04 provides:
51.04. Woven fabrics of man-made fibers
(continuous) including woven fabrics of monofil or
strip of heading No. 51.01 or 51.02.
This heading covers woven fabrics (as described in
Part [I] [C] of the General Explanatory Note on
Section XI)made of yarns of continuous man-made
fibers, or of monofil or strip of heading 51.01 and
51.02; it includes a very large variety of dress
fabrics, linings, curtain materials, furnishing fabrics,
tyre fabrics, tent fabrics, parachute fabrics,
etc. 24 (Emphasis supplied)

To correctly classify the subject importation, we need to refer to

chemical analysis submitted before the Court of Tax Appeals. Mr.
Norberto Z. Manuel, an Analytical Chemist of the Bureau of Customs
and an Assistant to the Chief of the Customs Laboratory, testified that a
chemical test was conducted on the sample 25 and "the result is that the
attached sample submitted under Entry No. 8651 was found to be
made wholly of Polyethylene plastic." 26
A similar result conducted by the Adamson University Testing
Laboratories provides as follows:
The submitted sample, being insoluble in 10%
sodium carbonate; hydrochloric acid, glacial acetic
acid, toluene, acetone, formic acid, and nitric acid,
does not belong to the man-made fibers, i.e.,
cellulosic and alginate rayons, poly (vinyl chloride),
polyacrylonitrile, copolymer or polyester silicones
including Dolan, Dralon, Orlin, PAN, Redon,
Courtelle, etc., Tarylene, Dacron; but it is a type of
plastic not possessing, the properties of the manmade fibers. 27 (Emphasis supplied)
Consequently, the Court of Tax Appeals, relying on the laboratory
findings of the Bureau of Customs and Adamson University correctly
classified the questioned shipment as polyethylene plastic taxable
under Tariff Heading No. 39.02 instead of synthetic (polyethylene)
woven fabric under Tariff Heading 51.04, to wit:
While it is true that the finding and conclusion of
the Collector of Customs with respect to
classification of imported articles are presumptively
correct, yet as matters that require laboratory tests
or analysis to arrive at the proper classification, the
opinion of the Collector must yield to the finding of
an expert whose opinion is based on such
laboratory test or analysis unless such laboratory
analysis is shown to be erroneous. And this is
especially so in this case where the test and
analysis were made in the laboratory of the Bureau
of Customs itself. It has not been shown why such
laboratory finding was disregarded. There is no
claim or pretense that an error was committed by
the laboratory technician. Significantly, the said
finding of the Chief, Customs Laboratory finds
support in the "REPORT OF ANALYSIS" submitted
by the Adamson University Testing Laboratories,
dated September 21, 1966. 28
On the third issue, we opine that the Bureau of Customs cannot be
held liable for actual damages that the private respondent sustained
with regard to its goods. Otherwise, to permit private respondent's
claim to prosper would violate the doctrine of sovereign immunity.
Since it demands that the Commissioner of Customs be ordered to pay
for actual damages it sustained, for which ultimately liability will fall on
the government, it is obvious that this case has been converted
technically into a suit against the state. 29
On this point, the political doctrine that "the state may not be sued
without its consent," categorically applies. 30 As an unincorporated
government agency without any separate juridical personality of its
own, the Bureau of Customs enjoys immunity from suit. Along with the

Bureau of Internal Revenue, it is invested with an inherent power of

sovereignty, namely, taxation. As an agency, the Bureau of Customs
performs the governmental function of collecting revenues which is
definitely not a proprietary function. Thus, private respondent's claim
for damages against the Commissioner of Customs must fail.

16 Farm Implement and Machinery Co.

v. Commissioner of Customs, L-22212, August 30,
1968, 24 SCRA 905.

WHEREFORE, the decision of the respondent Court of Tax Appeals is

AFFIRMED. The Collector of Customs is directed to expeditiously recompute the customs duties applying Tariff Heading 39.02 at the rate of
35% ad valorem on the 13,600 kilograms of polyethylene plastic
imported by private respondent.

18 Exhibit "5," p. 239, Customs Records.

17 Exhibit "4," p. 220, Customs Records.

19 Exhibit "6," pp. 217-218, Customs Records.

20 p. 193. Customs Records.

SO ORDERED.

21 Farm Implement and Machinery Co., Id at

Footnote 11.

Gutierrez, Jr., Bidin, Davide, Jr. and Melo, JJ., concur.

22 Aznar v. Court of Tax Appeals, No. L-20569,

August 23, 1974, 58 SCRA 519.
# Footnotes

23 Commentaries on the Revised Tariff and

Customs Code of the Philippines, Vol. II, pp. 11701171, 1984 Revised Edition, Montano A. Tejam.

1 Customs Case No. 72-29 entitled "Republic of

the Philippines versus 80 bales screen net, Entry
No. 8651 (72) ex S/S "Pacific Hawk," Reg. No. 170
marks B.B.T. Manila, Bagong Buhay Trading,
Claimant."

24 Ibid, p. 1351.
25 TSN, p. 96, Hearing of May 11, 1972.

2 Should be Tariff Heading No. 39.02-B.

26 Rollo, p. 251, Exhibit "F," Emphasis supplied.

3 Rollo, pp. 227-228, Exhibits "D" and "D-1."

27 Exhibit "I," p. 223, Records, Rollo, p. 248.

4 Rollo, pp. 229-230.

28 Rollo, pp. 35-36.

5 Rollo, pp. 42-43, Annex C.

29 Syquia v. Almeda Lopez, 84 Phil. 312.

6 Rollo, pp. 48-51, Annex E.

30 Sec. 3, Article XVI, General Provisions, 1987

Constitution.

7 Rollo, pp. 54-55, Annex G.

8 Rollo, pp. 30-37, Annex A.
9 Rollo, pp. 38-41, Annex B.
10 Consisting of 143,454 yards.

G.R. Nos. 48886-88 July 21, 1993

COMMISSIONER OF CUSTOMS, petitioner,
vs.
COURT OF TAX APPEALS and LITONJUA SHIPPING COMPANY
represented by Granexport Corporation as sub-agent, respondent.

11 Consisting of 160,000 yards the total yardage

of the questioned goods.

The Solicitor General for petitioner.

12 Consisting of 16,546 yards.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices

for private respondent.

13 Derived by adding 26,504 yards in bad order

condition plus 16,546 yards missing.
14 Rollo, p. 372.
15 Rollo, p. 143 and Brief for RespondentAppellee, p. 9.

MELO, J.:
This refers to a petition for review of the decision dated July 28, 1978
of the Court of Tax Appeals in C. T. A. Cases No. 2785, 2831 and 2832
which was promulgated prior to the issuance on February 27, 1991, of
Circular No.

1-91 to the effect that appeals from a final order or decision of the
Court of Tax Appeals shall be to the Court of Appeals.
The undisputed facts of the case as established by the evidence and
as found by respondent Court of Tax Appeals, are as follows:
The berthing facilities of Iligan Bay Express Corporation at Kiwalan
were constructed and improved and are operated and maintained
solely by and at the expense of Iligan Express Corporation, a private
corporation.
The MS "Chozan Maru", MS "Samuel S", MS "Ero", MS "Messinia", MS
"Pavel Rybin", MS "Caledonia", and MS "Leonidas" are vessels
engaged in foreign trade and represented in the Philippines by private
respondent Litonjua Shipping Company Granexport Corporation as its
sub-agent.
On various date, berthing facilities of the Iligan Bay Express
Corporation at Kiwalan, Iligan City were used by the above vessels and
were assessed berthing fees by the Collector of Customs which were
paid by private respondent under protest, to wit:
a) June 27, 1973, MS "Chozan Maru" P2,551.00
paid on April 17, 1973;
b) April 27, 1973, MS "Samuel S" P8,000.00
paid on May 9, 1973;
c) May 27, 1973, MS "Ero" P5,000.00 paid on
June 4, 1973;
d) June 2, 1973 MS "Messinia" P5,000.00 paid
on June 11, 1973;
e) March 22-26, 1975, MS "Pavel Rybin"
P4,000.00 paid on April 3, 1975;
f) April 26-May 3, 1975 MS "Caledonia"
P7,000.00 on May 7, 1975; and
g) May 25-June 3, 1975, MS "Caledonia"
P9,000.00 paid on June 7, 1975.
Private respondent filed cases before the Bureau of Customs for refund
of the berthing fees paid under protest. The Collector of Customs of the
City of Iligan denied the protest, prompting private respondent to
appeal to the Commissioner of Customs who, however, affirmed the
decision of the Collector of Customs.
Private respondent then resorted to the Court of Tax Appeals.
Consolidating the protests, the tax court, thereafter rendered a decision
on July 28, 1978, the dispositive portion of which reads as follows:
WHEREFORE, the decisions appealed from are
hereby reversed and respondent Commissioner of
Customs is ordered to refund to petitioner the
amount of P40,551.00. No costs. (p., 51, Rollo)
Hence, the present recourse by the Commissioner of Customs.

The only issue involved in this petition for review is: Whether a vessel
engaged in foreign trade, which berths at a privately owned wharf or
pier, is liable to the payment of the berthing charge under Section 2901
of the Tariff and Customs Code, which, as amended by Presidential
Decree No. 34, reads:
Sec. 2901. Definition. Berthing charge is the
amount assessed against a vessel for mooring or
berthing at a pier, wharf, bulk-head-wharf, river or
channel marginal wharf at any national port in the
Philippines; or for mooring or making fast to a
vessel so berthed, or for coming or mooring within
any slip, channel, basin, river or canal under the
jurisdiction of any national port of the
Philippines:Provided, however, That in the last
instance, the charge shall be fifty (50%) per cent of
rates provided for in cases of piers without cargo
shed in the succeeding sections. The owner, agent,
operator or master of the vessel is liable for this
charge.
Petitioner Commissioner of Customs contends that the government
has the authority to impose and collect berthing fees whether a vessel
berths at a private pier or at a national port. On the other hand, private
respondent argues that the right of the government to impose berthing
fees is limited to national ports only.
The governing law classifying ports into national ports and municipal
ports is Executive Order No. 72, Series of 1936 (O.G. Vol. 35, No. 6,
pp. 65-66). A perusal of said executive order discloses the absence of
the port of Kiwalan in the list of national ports mentioned therein.
Furthermore, Paragraph 1 of Executive Order No. 72 expressly
provides that "the improvement and maintenance of national ports shall
be financed by the Commonwealth Government, and their
administration and operation shall be under the direct supervision and
control of the Insular Collector of Customs." It is undisputed that the
port of Kiwalan was constructed and improved and is operated and
maintained solely by and at the expense of the Iligan Express
Corporation, and not by the National Government of the Republic or
any of its agencies or instrumentalities.
Petitioner insists that Kiwalan is a national port since it is within the
jurisdiction of the collection district and territorial limits of the national
port of Iligan City. The claim is put forward that "Kiwalan simply cannot
claim to be an independent port within a national port without infringing
on the territorial jurisdiction of the Port of Iligan", citing the support
thereof Customs Administrative Order No. 1-76 dated February 23,
1976. However, a reading of said administrative order shows that it was
issued merely for administrative purposes redefining the jurisdictional
limits of each Customs Collection District "based on the approved
staffing pattern." It has nothing to do with the collection of berthing
fees. On this point we quote with approval the following conclusions of
respondent Court of Tax Appeals:
. . . we see no significance therefore in the stand of
respondent, as averred as affirmative and special
defenses of his answers, that it is not necessary to
list Kiwalan as a national port being already an
integral part of the national port of the city of Iligan,
within its territorial limits, jurisdiction or collection

district. Such an assertion, besides being violative

of the legal basis for the classification of ports into
national or municipal under Executive Order No.
72, series of 1936, as implemented by subsequent
Republic Acts and Executive Orders, would make
all ports in the Philippines national ports. A port is
not classified as a national port just because it is
located within the territorial limits or boundaries of a
city or municipality where a national port is
situated, much less within the jurisdiction or
collection district of a national port; otherwise, all
ports in the Philippines would be classified as
national ports without any municipal ports.
xxx xxx xxx
. . . Customs Administrative Order No. 1-72 dated
September 21, 1971, which is entitled as defining
the jurisdictional limits of customs collection
districts, divided the entire Philippines into thirtyfour (34) collection districts. It bears emphasis that
no point or locality in the Philippines is not covered
by a collection district, or does not fall within the
territorial jurisdiction or limits of a collection district,
with a principal port of entry which is always
national port properly, classified and listed as such
by law or executive order. (pp. 47-48, Rollo)
The Bureau of Customs itself in its Customs Memorandum Circular No.
33-73 dated March 29, 1973, does not accord the status of national
port to the port of Kiwalan, nor does the list of national ports appended
thereto include the port of Kiwalan. Moreover, said memorandum
circular indicates the specific law (Public Act, Commonwealth Act,
Republic Act or Executive Order) creating a particular national port.
Petitioner has not cited or brought to our attention, and we have found
none, any law creating Kiwalan Port as a national port or converting it
to one.
It is a settled rule of statutory construction that the express mention of
one person, thing, act, or consequence excludes all others. This rule is
expressed in the familiar maxim expressio unius est exclusio alterius.
Where a statute, by its terms, is expressly limited to certain matters, it
may not, by interpretation or construction, be extended to others. The
rule proceeds from the premise that the legislature would not have
made specified enumerations in a statute had the intention been not to
restrict its meaning and to confine its terms to those expressly
mentioned (Agpalo, Statutory Construction, 2nd Ed., 1990, pp. 160161, and the cases therein cited). The port of Kiwalan not being
included in the list of national ports appended to Customs
Memorandum Circular No. 33-73 nor in Executive Order No. 72, it
follows inevitably as a matter of law and legal principle that this Court
may not properly consider said port as a national port. To do otherwise
would be to legislate on our part and to arrogate into ourselves powers
not conferred on us by the Constitution.
Even the Bureau of Customs in its Customs Memorandum Circular No.
47-73 held
It appearing that Banago Wharf in Bacolod City is
not one of those listed as a national port, the said
part should be considered a municipal, pursuant to

the provisions of Executive Order No. 72 series of

1936. Berthing charges therefore may not be
collected from vessels docking thereat. (p. 3,
Customs Memorandum Circular No. 47-73)
Plainly, therefore, the port of Kiwalan is not a national port. However,
petitioner maintains that regardless of whether or not the port of
Kiwalan is a national port, berthing charges may still be collected by
the Bureau of Customs from vessels berthing at said port, citing the
case of Luzon Stevedoring Corporation vs. Court of Tax Appeals and
Commissioner of Customs (18 SCRA 436 [1966]), where it was held:
Adverting to the terms of the law, it is quite
apparent that the government's right to collect
berthing charges is not planted upon the condition
that the pier be publicly owned. The statute
employs the word pier without more. Nothing
there said speaks of private or public pier. Where
the law does not exact the nature of ownership as
a condition, that condition should not be read into
the law. We are not to indulge in statutory
construction. Because the law is clear. Our plain
duty is to apply the law as it is written. So applying,
we rule that, berthing or mooring charges here
were properly collected. (at pp. 438-439.)
The above ruling, however, is no longer effective and can not apply in
the case at bar for the same was decided before the Tariff and
Customs Code was amended by Presidential Decree No. 34 which
took effect thirty days from October 27, 1972, the date of promulgation.
Section 2901 of the Tariff and Customs Code prior to its amendment
and said section as amended by Presidential Decree No. 34 are
hereunder reproduced with the amendments duly highlighted:
Sec. 2901. Definition Berthing charge is the
amount assessed against a vessel for mooring or
berthing at a pier, wharf, bulkhead-wharf, river or
channel marginal wharf at any port in the
Philippines; or for mooring or making fast to a
vessel so berthed; or for coming or mooring within
any slip, channel, basin, river or canal under the
jurisdiction of any port of the Philippines (old TCC)
Sec. 2901. Definition Berthing charge is the
amount assessed a vessel for mooring or berthing
at a pier, wharf, bulkhead-wharf, river or, channel
marginal wharf AT ANY NATIONAL PORT IN THE
PHILIPPINES; for mooring or making fast to a
vessel so berthed; or for coming or mooring within
any slip, channel, basin, river, or canal under the
jurisdiction of ANY NATIONAL port of the
Philippines;Provided, HOWEVER, THAT IN THE
LAST INSTANCE, THE CHARGE SHALL BE
FIFTY (50%) PER CENT OF RATES PROVIDED
FOR IN CASES OF PIERS WITHOUT CARGO
SHED IN THE SUCCEEDING SECTIONS.
It will thus be seen that the word "national" before the word "port" is
inserted in the amendment. The change in phraseology by amendment
of a provision of law indicates a legislative intent to change the

meaning of the provision from that it originally had (Agpalo, supra, p.

76). The insertion of the word "national" before the word "port" is a
clear indication of the legislative intent to change the meaning of
Section 2901 from what it originally meant, and not a mere surplusage
as contended by petitioner, in the sense that the change "merely
affirms what customs authorities had been observing long before the
law was amended" (p. 18, Petition). It is the duty of this Court to give
meaning to the amendment. It is, therefore, our considered opinion that
under Section 2901 of the Tariff and Customs Code, as amended by
Presidential Decree No. 34, only vessels berthing at national ports are
liable for berthing fees. It is to be stressed that there are differences
between national ports and municipal ports, namely: (1) the
maintenance of municipal ports is borne by the municipality, whereas
that of the national ports is shouldered by the national government;
(2) municipal ports are created by executive order, while national ports
are usually created by legislation; (3) berthing fees are not collected by
the government from vessels berthing at municipal ports, while such
berthing fees are collected by the government from vessels moored a
national ports. The berthing fees imposed upon vessels berthing at
national ports are applied by the national government for the
maintenance and repair of said ports. The national government does
not maintain municipal ports which are solely maintained by the
municipalities or private entities which constructed them, as in the case
at bar. Thus, no berthing charges may be collected from vessels
moored at municipal ports nor may berthing charges be imposed by a
municipal council (Tejam's Commentaries on the Revised Tariff and
Customs Code, p. 2486, citing Circular Letter No. 2981 dated
September 30, 1958 quoting Op. No. 122, s. of 1958 and Op. No. 373,
s. of 1940, Sec. of Justice).
The subject vessels, not having berthed at a national port but at the
Port of Kiwalan, which was constructed, operated, and continues to be
maintained by private respondent Iligan Express Corporation, are not
subject to berthing charges, and petitioner should refund the berthing
fees paid private respondent.
WHEREFORE, the petition is hereby DENIED and the decision of the
Court of Tax Appeals AFFIRMED.
SO ORDERED.
Feliciano, Bidin, Romero and Vitug, JJ., concur.

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.

G.R. Nos. L-31776-78 October 21, 1993

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.
The Solicitor General for petitioner.
Taada, Vivo & Tan for private respondents.
Valentino G. Castro & Associates for CEABA.

QUIASON, J.:

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 quasi-judicial 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.

Customs v. Court of Appeals, supra; U.S. v. Steamship "Rubi.", 32 Phil.

228, 239 [1915]).

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.

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.

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.

SO ORDERED.

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:

G.R. No. 92285 March 28, 1994

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.

Cruz, Grio-Aquino, Davide, Jr. and Bellosillo, JJ., concur.

PROVIDENT TREE FARMS, INC., petitioner,

vs.
HON. DEMETRIO M. BATARIO, JR., Presiding Judge Branch 48,
Regional Trial Court of Manila, COMMISSIONER OF CUSTOMS
and
A. J. INTERNATIONAL CORPORATION, respondents.
Siguion Reyna, Montecillo & Ongsiako for petitioner.
Sumulong, Sumulong, Paras & Abano Law Offices for private
respondent.

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 barge-lighter 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

BELLOSILLO, J.:
PETITIONER PROVIDENT TREE FARMS, INC. (PTFI), is a Philippine
corporation engaged in industrial tree planting. It grows gubas trees in
its plantations in Agusan and Mindoro which it supplies to a local match
manufacturer solely for production of matches. In consonance with the
state policy to encourage qualified persons to engage in industrial tree
plantation, Sec. 36, par. (1), of the Revised Forestry Code 1 confers on
entities like PTFI a set of incentives among which is a qualified ban
against importation of wood and "wood-derivated" products.
On 5 April 1989, private respondent A. J. International Corporation
(AJIC) imported four (4) containers of matches from Indonesia, which
the Bureau of Customs released on 12 April 1989, and two (2) more
containers of matches from Singapore on 19 April 1989. The records
do not disclose when the second shipment was released.
On 25 April 1989, upon request of PTFI, Secretary Fulgencio S.
Factoran, Jr., of the Department of Natural Resources and
Environment issued a certification that "there are enough available
softwood supply in the Philippines for the match industry at reasonable
price." 2

On 5 May 1989, PTFI filed with the Regional Court of Manila a

complaint for injunction and damages with prayer for a temporary
restraining order against respondents Commissioner of Customs and
AJIC to enjoin the latter from importing matches and "wood-derivated"
products, and the Collector of Customs from allowing and releasing the
importations. It was docketed
as Civil Case No. 89-48836 and raffled to respondent Judge Demetrio
M. Batario, Jr. PTFI prays for an order directing the Commissioner of
Customs to impound the subject importations and the AJIC be directed
to pay petitioner P250,000.00 in actual damages, P1,000,000.00 in
exemplary damages, and P50,000.00 as attorney's fees.
On 14 June 1989, AJIC moved to dismiss the complaint alleging that:
(a) The Commissioner of Customs under Sec. 1207 of the Tariff and
Customs Code and not the regular court, has "exclusive jurisdiction to
determine the legality of an importation or ascertain whether the
conditions prescribed by law for an importation have been complied
with . . . . (and over cases of) seizure, detention or release of property
affected . . . . ;" 3 (b) The release of subject importations had rendered
injunction moot and academic; 4 (c) The prayer for damages has no
basis as the questioned acts of the Commissioner are in accordance
with law and no damages may be awarded based on future acts; 5 and,
(d) The complaint for injunction cannot stand it being mainly a
provisional relief and not a principal remedy. 6
PTFI opposed the motion to dismiss. On 28 July 1989, AJIC's motion to
dismiss was denied. However, on 8 February 1990, on motion for
reconsideration by AJIC and despite the opposition of PTFI, the Court
reconsidered its 28 July 1989 order and dismissed the case on the
ground that it had "no jurisdiction to determine what are legal or illegal
importations." 7
In this present recourse, PTFI seeks to set aside the 8 February 1990
order of respondent court and prays for the continuation of the hearing
in Civil Case No. 89-48836. PTFI claims that what was brought before
the trial court was a civil case for injunction, i.e., "restraining the entry
of safety matches into the country . . . for the purpose of securing
compliance with Sec. 36 (l) of the Forestry Code" and for damages, "to
seek redress of its right which has been clearly violated by the
importation of safety matches . . . . (which) is a denial to the petitioner
of the protection and incentive granted it by Section 36 (l) of the
Forestry Code . . . ." 8 PTFI asserts the inapplicability of the procedures
outlined in R.A. No. 1125 relative to incidents before the Court of Tax
Appeals because the instant action is not a protest case where the
aggrieved party is not an importer. It then argues that since it could not
avail of the remedies afforded by the Tariff and Customs Code, resort
to the courts is warranted, citing Commissioner of Customs v. Alikpala. 9

products or wood-derivated products which is to be enforced by the

Bureau of Customs since it has, under the Tariff and Customs Code,
the exclusive original jurisdiction over seizure and forfeiture
cases 13 and, in fact, it is the duty of the Collector of Customs to
exercise jurisdiction over prohibited importations. 14
The enforcement of the importation ban under Sec. 36, par. (l), of the
Revised Forestry Code is within the exclusive realm of the Bureau of
Customs, and direct recourse of petitioner to the Regional Trial Court to
compel the Commissioner of Customs to enforce the ban is devoid of
any legal basis. To allow the regular court to direct the Commissioner
to impound the imported matches, as petitioner would, is clearly an
interference with the exclusive jurisdiction of the Bureau of Customs
over seizure and forfeiture cases. An order of a judge to impound,
seize or forfeit must inevitably be based on his determination and
declaration of the invalidity of the importation, hence, an usurpation of
the prerogative and an encroachment on the jurisdiction of the Bureau
of Customs. In other words, the reliefs directed against the Bureau of
Customs 15 as well as the prayer for injunction against importation of
matches by private respondent AJIC 16 may not be granted without the
court arrogating upon itself the exclusive jurisdiction of the Bureau of
Customs.
The claim of petitioner that no procedure is outlined for the
enforcement of the import ban under the Tariff and Customs Code, if
true, does not at all diminish the jurisdiction of the Bureau of Customs
over the subject matter. The enforcement of statutory rights is not
foreclosed by the absence of a statutory procedure. The Commissioner
of Customs has the power to "promulgate all rules and regulations
necessary to enforce the provisions of this (Tariff and Customs)
Code . . . subject to the approval of the Secretary of
Finance." 17 Moreover, it has been held that ". . . . (w)here the statute
does not require any particular method of procedure to be followed by
an administrative agency, the agency may adopt any reasonable
method to carry out its functions." 18
But over and above the foregoing, PTFI's correspondence with the
Bureau of Customs 19 contesting the legality of match importations may
already take the nature of an administrative proceeding the pendency
of which would preclude the court from interfering with it under the
doctrine of primary jurisdiction. In Presidential Commission on Good
Government v. Pea, 20 we held that

On the formal requirements, we hold that the claim of public

respondent that the petition was filed late has no basis. The records
revealed that PTFI received the assailed order of 8 February 1990 on
20 February 1990, 10hence, it had until 7 March 1990 to file petition for
review on certiorari. On that date, PTFI filed a motion for extension of
fifteen (15) days within which to file the petition. 11 On 19 March 1990,
this Court granted PTFI a thirty (30)-day non-extendible period to file its
petition, 12 thus resetting the new deadline for the petition to 6 April
1990. On that date the petition was filed.

. . . . under the "sense-making and expeditious

doctrine of primary
jurisdiction . . . the courts cannot or will not
determine a controversy involving a question which
is within the jurisdiction of an administrative
tribunal, where the question demands the exercise
of sound administrative discretion requiring the
special knowledge, experience, and services of the
administrative tribunal to determine technical and
intricate matters of fact, and a uniformity of ruling is
essential to comply with the purposes of the
regulatory statute administered (Pambujan Sur
United Mine Workers v. Samar Mining Co., Inc., 94
Phil. 932, 941 [1954].)

Petitioner anchors his complaint on a statutory privilege or incentive

granted under Sec. 36, par. (l), of the Revised Forestry Code. The only
subject of this incentive is a ban against importation of wood, wood

In this era of clogged court dockets, the need for

specialized administrative boards or commissions
with the special knowledge, experience and

capability to hear and determine promptly disputes

on technical matters or essentially factual matters,
subject to judicial review in case of grave abuse of
discretion, has become well nigh
indispensable . . . .
Moreover, however cleverly the complaint may be worded, the ultimate
relief sought by PTFI is to compel the Bureau of Customs to seize and
forfeit the match importations of AJIC. Since the determination to seize
or not to seize is discretionary upon the Bureau of Customs, the same
cannot be subject of mandamus. But this does not preclude recourse to
the courts by way of the extraordinary relief of certiorari under Rule 65
of the Rules of Court if the Bureau of Customs should gravely abuse
the exercise of its jurisdiction. Otherwise stated, the court cannot
compel an agency to do a particular act or to enjoin such act which is
within its prerogative, except when in the exercise of its authority it
gravely abuses or exceeds its jurisdiction. In the case at bench, we
have no occasion to rule on the issue of grave abuse of discretion or
excess of jurisdiction as it is not before us.
The petitioner's claim for damages against AJIC being inextricably
linked with the legality of the importations, must necessarily rise or fall
with the main action to bar the question that "(e)very importation of
matches by said defendant is a denial to plaintiff of the protection and
incentives granted it by Sec. 36 (l) of the Forestry Code," 21merely
indicates its reliance on the illegality of the importations for its prayer
for damages. In other words, if the importations were authorized, there
would be no denial of the plaintiff's protection and incentives under the
Forestry Code. Necessarily, the claim for damages must await the
decision declaring the importations unlawful.
In Rosales v. Court of Appeals, we categorized a similar case for
damages as premature since "(t)he finality of the administrative case
which gives life to petitioners' cause of action has not yet been
reached." 22 The pendency of petitioner's request to the Bureau of
Customs for the implementation of the ban against the importation of
matches under the Forestry Code is impliedly admitted; in fact, it is
apparent from the correspondence of counsel for petitioner that the
Bureau is inclined to sustain the validity of the importations. 23 Hence,
as in Rosales, the order of the trial court granting the dismissal of the
civil case must be upheld.
WHEREFORE, finding no reversible error in the appealed Order of the
Regional Trial Court of Manila in Civil Case No. 89-48836 dated 8
February 1990, the same AFFIRMED and, consequently, the instant
petition for review is DENIED.
Davide, Jr., Quiason and Kapunan, JJ., concur.
Cruz, J., took no part.

#Footnotes
1 Sec. 36, par. (l), of the Revised Forestry Code of
the Philippines, P.D. No. 705, as amended by P.D.
No. 1559 of 11 June 1978 provides: ". . . . No
wood, wood products or wood-derivated products
including pulp, paper and paperboard shall be

imported if the same are available in required

quantities and reasonable prices, as may be
certified by the Department Head, from artificial or
man-made forests, or local processing plants
manufacturing the same . . . ."
2 Annex "B-1", Petition, Rollo, p. 37.
3 Motion to Dismiss, pp. 2-3, Annex "C",
Petition, Rollo, pp. 39-40.
4 Id., p. 6, Rollo, p. 43.
5 Id., pp. 6-7, Rollo, pp. 43-44.
6 Id., p. 7, Rollo, p. 44..
7 Order of 8 February 1990, Annex "A",
Petition Rollo, p. 28-29.
8 Petition, pp. 6-9, Rollo, pp. 19-22.
9 No. L-32542, 26 November 1970, 36 SCRA 208.
10 Motion for Extension of Time to File Petition for
Review on Certiorari, p. 1;
Rollo, p. 2.
11 Id.
12 Rollo, p. 4-A.
13 Sec. 602 (g), of the Tariff and Customs Code
provides: "The general duties, powers and
jurisdiction of the bureau shall include . . . .
Exercise exclusive original jurisdiction over seizure
and forfeiture cases under the tariff and customs
laws."
14 Sec. 1207, of the Tariff and Customs Code
provides: "Where articles are of prohibited
importation or subject to importation only upon
conditions prescribed by law, it shall be the duty of
the Collector to exercise such jurisdiction in respect
thereto as will prevent importation or otherwise
secure compliance with all legal requirements."
15 ". . . . A temporary restraining injunction/writ of
preliminary injunction be issued against . . . .
(d)efendant Commissioner of Customs,
commanding and ordering said defendant from
allowing the importation of matches and other
derivated products, or if such importations have
been made and are in his custody, from releasing
the same, as such importations is prohibited by
law, i. e., Forestry Code, Section 36 . . . . After
hearing, that said injunction be made
permanent . . . . That defendant Commissioner of
Customs be ordered to impound the shipments

complained of . . . . " (Complaint, pp. 5-6, Rollo, pp.

34-35.)
16 ". . . . A temporary restraining injunction/writ of
preliminary injunction be issued against . . . .
(d)efendant A. J. International Corporation,
commanding and/or ordering said defendant to
cease and desist from importing matches and/or
wood derivated products in violation of the Forestry
Code . . . . After hearing, that said injunction be
made permanent . . . ." (Complaint, pp. 5-6, Rollo,
pp. 34-35.)
17 Sec. 608, Tariff and Customs Code.
18 2 Am Jur 2d 340, pp. 155-156, citing Douglas
County v. State Bd. of Equalization and
Assessment, 158 Neb 325, 63 NW 2d 449; State
ex rel. York v. Walla Walla County, 28 Wash 2d
891, 184 P 2d 577, 172 ALR 1001.
19 Annex "A", Memorandum for Private
Respondent, Rollo, p. 138-139. In part the letter of
Siguion Reyna, Montecillo and Ongsiako in behalf
of PTFI to the Bureau of Customs, Collection
District II-B, dated 10 January 1990 reads: "We
refer to your letter December 7, 1989, which is in
reply to our letter of November 4, 1989 requesting
for the implementation of Section 36 (l) of the
Forestry Code., i.e., prohibition on importation of
safety matches. With due respect to the opinion
rendered by your office that ". . . there is no law or
regulation prohibiting the importation of matches,"
we wish to reiterate that Section 36 (l) of the
Forestry Code clearly prohibits the importation of
"wood, wood products or wood derivated products."
. . . . With respect to your opinion that "what is
being protected is the matchwood timber industry,
not the match industry," we wish to emphasize that
the survival of thematch wood timber industry
depends upon the survival of the local match
industry the existence of which is gravely
threatened by the importation of matches . . . . "
20 No. L-77663, 12 April 1988, 158 SCRA 556,
567-568.
21 Par. 10, Complaint, Annex "B," Petition, Rollo, p.
32.
22 No. L-47821, 15 September 1988, 165 SCRA
344, 350.

THE HON. COURT OF APPEALS and THE PEOPLE OF THE

PHILIPPINES, respondents.

PUNO, J.:
This is a petition to review the Decision dated February 28, 1990 and
the Resolution dated November 9, 1993 of respondent Court of
Appeals in CA-G.R. CR No. 06220.
In an information dated October 11, 1985, petitioners Angel O.
Rodriguez, Eulogio O. Rodriguez, Jose O. Rodriguez and Tomas Ngo,
together with Manuel S. Pena and Alfredo Fiesta were charged with a
violation of Section 3602 in relation to Section 3601 of the Tariff and
Customs Code of the Philippines committed as follows:
That on or about September 12, 1983, in the City of
Manila, Philippines, the said accused, conspiring
and confederating together and helping one
another with evident intent to defraud the
Government of the Republic of the Philippines of
the legitimate taxes and duties accruing to it from
merchandise imported into this country, did then
and there wilfully and unlawfully, by means of
fraudulent practice, that is, by presenting a fake
and false Special Permit to Transfer (MICP) No.
01703 with Serial No. 150387 covering a 40-footer
container (BENU-2899509) containing 100% cotton
dyed fabric consigned to Inter-Fashion, Inc.,
attempt and/or made an attempt to make an entry
of said articles in the manner above set forth, they
knowing fully well that the said goods have not
been properly declared and the duties thereon
have not been paid to the corresponding proper
authorities, in violation of said Section 3602 in
relation to Section 3601 of the Tariff and Customs
Code of the Philippines. 1
Accused Manuel S. Pena died before the information was filed in court
while accused Alfredo Fiesta was at large. Only Tomas Ngo and the
brothers Angel, Eulogio and Jose Rodriguez appeared and were tried
before the trial court.
The prosecution established that on September 9, 1983, the vessel S/S
Neptune Agate arrived at the Manila International Port from Hongkong
carrying, among others, one 40-foot container van containing 29,000
kilos consisting of 44,885,015 yards of 100% cotton-dyed fabric. The
fabric had a home consumption value of U.S. $93,809.68 and a
dutiable value of P1,032,047.10 and was consigned to "Philippine InterFashion, Inc., 5th Floor, Vernida I Condominium, Amorsolo St., Legaspi
Village, Makati, Metro Manila," a domestic corporation engaged in the
manufacture of garments for export. 2

23 See note 19.

G.R. No. 115218 September 18, 1995
ANGEL O. RODRIGUEZ, EULOGIO O. RODRIGUEZ, JOSE O.
RODRIGUEZ, and TOMAS NGO, petitioners,
vs.

Meanwhile, one Ernesto M. Ereno, Import-Export Manager of the EME

Customs Brokerage, Inc., filed with the Bureau of Customs Special
Permit to Transfer No. 1703 with Serial No. 150387 3 seeking to
transfer the said container van from the Manila International Container
Port to Customs Bonded Warehouse No. 725 of the Philippine InterFashion, Inc. at Bagong Bayan, Dasmarias, Cavite. The permit

appeared to have been approved and signed by the proper Customs

authorities on the basis of which a gate pass was issued by the
Customs wharfinger for the release of said container. At 5:00 P.M. of
September 12, 1983, the container was loaded on a truck and in
accordance with Customs rules, escorted by Customs guard accused
Alfredo Fiesta, until its receipt at the Customs Bonded Warehouse at
Dasmarias, Cavite. 4 Once outside the Customs zone, the truck did
not proceed to Cavite but went to Quezon City to the White Plains
Subdivision thereat.
The truck entered the said subdivision towards the direction of Interior
56 Queensville Compound, accused Manuel Pena's residence. The
vehicle was maneuvering inside when it hit the perimeter wall at the
other end of the subdivision, causing it to stop. Forthwith, Manuel Pena
informed his son-in-law, Eulogio Rodriguez, who lived in the same
compound, to remove the cargo from the stalled vehicle and transfer
the same to their compound. Eulogio acceded to this request and
finished transferring the cargo after midnight. 5
The following morning, September 13, 1983, Eulogio called his
brothers, Angel and Jose Rodriguez, to help him transport the textile
from White Plains to Paranaque, Metro Manila. They came over and
were able to deliver some eighty (80) rolls of the textile to No. 25 9th
Street, United Paranaque Subdivision, the residence of their copetitioner Tomas Ngo. They made another delivery in the afternoon of
the same day. 6
The next day, September 13, 1983, at around 1:30 P.M., Jose and
Angel were on their way to make a third delivery when they were
intercepted by agents of the Customs Intelligence and Investigation
Division.
Earlier, Colonel Guillermo Parayno, Jr., then Chief of the Customs
Intelligence and Investigation Division, noticed that the container van
consigned to the Philippine Inter-Fashion, Inc., was missing from the
container yard. On inquiry, the President of the said company denied
ordering any shipment from abroad and claimed that they were not
expecting any such cargo. Immediately, Colonel Parayno formed teams
to trace the movement of the container and finally located it at the
White Plains Subdivision in Quezon City.
One team of agents was on its way to the said subdivision when their
attention was called to the delivery van along White Plains Avenue. The
team chased the van and ordered the driver to stop. The van stopped
and the agents found the two petitioners, Angel and Jose Rodriguez,
one driver and one helper. They opened the door of the van and found
it full of textile which, according to the driver and helper, came from the
residence of Manuel Pena at the White Plains Subdivision. They
disclosed that they were taking their cargo to No. 25 9th Street,
Paranaque. 7
The team proceeded to Manuel Pena 's residence where Colonel
Parayno informed Pena that they were going to search his house for
the textile. Pena denied possessing or keeping any textile and invited
Colonel Parayno and his men inside his house. The Customs agents
looked around and found behind Pena's house a structure that
appeared to be a stock room. 8 They opened the room and found
nothing. They noticed another room behind, opened it and found it full
of the same textile as those they saw in the delivery van. 9

Mr. Pena informed the agents that the stock room belonged to Eulogio
who also owned the house behind it. Pena likewise claimed that the
textile belonged to a certain "Rolly" whose truck happened to hit the
subdivision wall near his (Mr. Pena's) house and that the textile was
being stored in his compound until delivery to its final destination at
Paranaque. 10
The next day, September 15, 1983, the Customs agents were armed
with a search warrant and went to Tomas Ngo's residence in
Paranaque. They discovered in his bodega several rolls of the same
textile they found in the delivery van and in Pena's compound. 11
The agents seized all the textile they found in the delivery van, in
Pena's compound and in Tomas Ngo's residence. They conducted an
investigation and discovered that the container van did not belong to
the consignee and that it was released from the container port by virtue
of a Special Permit to Transfer in which all signatures of the approving
Customs personnel, except for one, were forged.
For their defense, the Rodriguez brothers sought to establish the fact
that the textile belonged to one "Rolly" who asked Manuel Pena for
help to transport it after his truck met an accident near Mr. Pena's
residence. Eulogio claimed that Mr. Pena in turn asked him to transfer
the textile from the stalled truck and keep them safe in his servants'
quarters. 12 Rolly returned the following morning and again requested
him, through Manuel Pena, to transport the textile to Paranaque for a
consideration of P4,000.00. Eulogio agreed because his father-in-law
must have wanted him to earn extra money. 13 He however was not
feeling very well, so he called up his brother, Jose, and requested him
to deliver the cargo to Paranaque. 14 Their other brother, Angel,
happened to be in Jose's house and so they proceeded to White Plains
and with some of their helpers loaded some textile into one of Manuel
Pena's delivery vans. They followed Rolly, who was in his car, to the
residence of Tomas Ngo in Paranaque. Tomas Ngo met them and the
cargo was unloaded in his house. The brother and their helpers
returned to White Plains without Rolly and made another delivery in the
afternoon. They were on their way to make a third delivery the following
day when they were intercepted by the Customs agents.
Tomas Ngo, for his defense, claimed that he merely purchased the
textile from Rolly who offered 30,000 yards to him in Divisoria on
September 12, 1983. Rolly allegedly assured him that he got the textile
from an auction sale at the Bureau of Customs and that all customs
duties and taxes thereon had already been paid. 15
The trial court rendered a decision on September 28, 1988 finding the
accused guilty of the crime as charged and sentencing them as follows:
WHEREFORE, the Court finds the accused
Eulogio O. Rodriguez, Angel Rodriguez Jose
Rodriguez and Tomas Ngo guilty beyond
reasonable doubt of a violation of Sections 3601
and 3602 of the Tariff and Customs Code of the
Philippines and accordingly sentences each of
them to pay a fine of P8,000.00 and to suffer
imprisonment for an indeterminate period of eight
(8) years and one (1) day, as minimum, to twelve
(12) years, as maximum, and to pay proportionate
costs, de oficio.

The court dismisses the case as against accused

Manuel S. Pena who had died even before the
filing of the information.
The case as against accused Alfredo Fiesta is
ordered archived until his arrest.
SO ORDERED. 16
On appeal, the decision was affirmed by the Court of Appeals on
February 28, 1990 17 and in a resolution dated November 9, 1993,
denying reconsideration. 18
Hence, this petition where it is contended:
I
THE LOWER COURT ERRED IN CONVICTING
ACCUSED-APPELLANTS EULOGIO O.
RODRIGUEZ, ANGEL O. RODRIGUEZ AND JOSE
O. RODRIGUEZ, BECAUSE THEY WERE
MERELY INNOCENT SUBSTITUTE TRUCKERS
OF THE TEXTILE GOODS.
II
THE LOWER COURT ERRED IN CONVICTING
THE ACCUSED-APPELLANT TOMAS NGO,
BECAUSE HE WAS MERELY AN INNOCENT
PROSPECTIVE BUYER OF THE TEXTILE
GOODS, WHICH PURCHASE DID NOT EVEN
MATERIALIZE.
III
THE LOWER COURT ERRED IN CONVICTING
THE ACCUSED OF THE CRIME CHARGED,
BECAUSE THE ALLEGED FAKE SPECIAL
PERMIT TO TRANSFER APPEARED GENUINE.
Petitioners were charged in the information with a violation of Sections
3601 and 3602 of the Tariff and Customs Code which provide:
Sec. 3601. Unlawful Importation. Any person
who shall fraudulently import or bring into the
Philippines, or assist in so doing, any article,
contrary to law, or shall receive, conceal, buy, sell,
or in any manner facilitate the transportation,
concealment, or sale of such article after
importation, knowing the same to have been
imported contrary to law, shall be guilty of
smuggling and shall be punished with:
1. A fine of not less than fifty pesos nor more than
two hundred pesos and imprisonment of not less
than five days nor more than twenty days, if the
appraised value, to be determined in the manner
prescribed under this Code, including duties and

taxes, of the article unlawfully imported does not

exceed twenty-five pesos;
2. A fine of not less than eight hundred pesos nor
more than five thousand pesos and imprisonment
of not less than six months and one day nor more
than four years, if the appraised value, to be
determined in the manner prescribed under this
Code, including duties and taxes, of the article
unlawfully imported exceeds twenty-five pesos but
does not exceed fifty thousand pesos;
3. A fine of not less than six thousand pesos nor
more than eight thousand pesos and imprisonment
of not less than five years and one day nor more
than eight years, if the appraised value, to be
determined in the manner prescribed under this
Code, including duties and taxes, of the article
unlawfully imported is more than fifty thousand
pesos but does not exceed one hundred fifty
thousand pesos.
4. A fine of not less than eight thousand pesos nor
more than ten thousand pesos and imprisonment
of not less than eight years and one day nor more
than twelve years, if the appraised value, to be
determined in the manner prescribed under this
Code, including duties and taxes, of the article
unlawfully imported exceeds one hundred fifty
thousand pesos.
5. The penalty of prision mayor shall be imposed
when the crime of serious physical injuries shall
have been committed and the penalty of reclusion
perpetua to death shall be imposed when the crime
of homicide shall have been committed by reason
or on the occasion of the unlawful importation.
In applying the above scale of penalties, if the
offender is an alien and the prescribed penalty is
not death, he shall be deported after serving the
sentence without further proceedings for
deportation; if the offender is a government official
or employee, the penalty shall be the maximum as
hereinabove prescribed and the offender shall
suffer an additional penalty of perpetual
disqualification from public office, to vote and to
participate in any public election.
When, upon trial for violation of this section the
defendant is shown to have had possession of the
article in question, possession shall be deemed
sufficient evidence to authorize conviction unless
the defendant shall explain the possession to the
satisfaction of the court: Provided, however, That
payment of the tax due after apprehension shall not
constitute a valid defense in any prosecution under
this section.
Sec. 3602. Various Fraudulent Practices Against
Customs Revenue. Any person who makes or

attempts to make any entry of imported or exported

article by means of any false or fraudulent invoice,
declaration, affidavit, letter, paper or by any means
of any false statement, written or verbal, or by any
means of any false or fraudulent practice
whatsoever, or knowingly effects any entry of
goods, wares or merchandise, at less than the true
weight or measures thereof or upon a classification
as to quality or value, or by the payment of less
than the amount legally due, or knowingly and
wilfully files any false or fraudulent entry or claim
for the payment of drawback or refund of duties
upon the exportation of merchandise; or makes or
files any affidavit, abstract, record, certificate or
other document, with a view to securing the
payment to himself or others of any drawback,
allowance or refund of duties on the exportation of
merchandise, greater than that legally due thereon,
or who shall be guilty of any wilful act or omission,
shall, for each offense be punished in accordance
with the penalties prescribed in the preceding
section. (Emphasis supplied)
Under Section 3601 of the Tariff and Customs Code,
smuggling is committed by any person who: (1) fraudulently
imports or brings into the Philippines or assists in importing
or bringing into the Philippines any article, contrary to law; or
(2) receives, conceals, buys, sells, or in any manner
facilitates the transportation, concealment or sale of such
article after importation, knowing the same to have been
imported contrary to law. Importation begins when the
carrying vessel or aircraft enters the jurisdiction of the
Philippines with intention to unload and is deemed terminated
upon payment of the duties, taxes and other charges due
upon the articles and the legal permit for withdrawal shall
have been granted. If the articles are free of duties, taxes
and other charges, importation is terminated until the articles
shall have legally left the jurisdiction of the customs. 19
After importation, the act of facilitating the transportation, concealment
or sale of the unlawfully imported article must be with the knowledge
that the article was smuggled. However, if upon trial the defendant is
found to have been in possession of such article, this shall be sufficient
to authorize conviction unless the defendant explains his possession to
the satisfaction of the court. 20
Section 3602 of the Code enumerates the various fraudulent practices
against customs revenue such as the entry of imported or exported
articles by means of any false or fraudulent invoice, statement or
practice; the entry of goods at less than the true weight or measure; or
the filing of any false or fraudulent entry for the payment of drawback or
refund of duties. 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. 21
In the instant case, the textile from the Manila International Container
Port was passed through the Customs house and released by means
of the Special Permit to Transfer purportedly accomplished and signed
by the authorized Customs personnel. The permit form was genuine
but all the signatures thereon, except for one, were forged. The trial

court found that the one genuine signature of Deputy Collector of

Customs Juan P. Calabig was affixed on the belief that the permit had
been regularly signed by the other authorized personnel. 22 The
fraudulent entry of the textile makes it fall under Section 3602 of the
Tariff and Customs Code. The receipt, concealment, sale, purchase or
the facilitation thereof after the unlawful importation with the knowledge
that the textile is smuggled becomes punishable under Section 3601 of
the Code.
Petitioners do not dispute the appellate court's finding that the textile
was imported and that it passed through the Customs house under
fraudulent circumstances. 23 They, however, claim that it erred in
convicting them when, by its own finding, petitioners had no actual
participation in the release of said textile and the diversion of the
container van to Quezon City. 24
While it is true that the evidence does not show their participation in the
release of the smuggled cargo, petitioners were actually found to have
been in possession of the textile after its release. Some of the textile
materials were found in Eulogio's stock room and in Tomas
Ngo's bodega and the others in the delivery van where Jose and Angel
were riding. Petitioners have never disputed but in fact admitted their
possession of the textile and as a result of this admission, they are
presumed to have been engaged in smuggling pursuant to the last
paragraph of Section 3601 of the Code. The burden of proof shifted to
them. To rebut this presumption, it is not enough for petitioners to claim
good faith and lack of knowledge of the unlawful source of textile.
Petitioners should have presented evidence to support their claim and
satisfy the court of their non-complicity.
Petitioners failed to sufficiently explain how they came into possession
of the smuggled textile. They ascribe all their acts to Mr. Pena who has
long since died and to Rolly who has since disappeared, if he ever
existed. The testimony of a witness as to what he heard other persons
say about certain facts in dispute is hearsay evidence and cannot be
admitted. 25 Moreover, petitioners' version of their participation is selfserving, strains the imagination and taxes our credulity.
On the contrary, the evidence shows that the truck carrying the
container van with the textile left the container port for Mr. Pena's
residence at White Plains, Quezon City. The truck was allowed to enter
the private subdivision because Mr. Pena was a registered homeowner
and he sought permission for it to go to his house. 26 Clearly, the truck
and its cargo did not just happen to pass through White Plains. The
container was actually intended for delivery at Mr. Pena's compound.
Mr. Pena was said to have been engaged in the trucking
business 27 but he passed on the job transporting the cargo to Eulogio
who in turn passed it on to his brothers Jose and Angel. It is difficult to
comprehend why the Rodriguez brothers went out of their way to help
Rolly whom they never knew when Mr. Pena provided the delivery van
and Rolly himself had some helpers to load and unload the cargo. The
three brothers were businessmen. Eulogio and Angel were engaged in
general merchandise and had their own stores at the Zaragosa
Shopping Center, Zaragosa Street, Tondo, Manila. 28 Eulogio said that
Mr. Pena gave him the job because he wanted him to earn extra
money. This claim he made incredible by the fact that the brothers were
to transport the textile for a fee of P4,000.00. If they needed the extra
money, they never bothered to ask for it or any portion thereof from
Rolly or Mr. Pena. Rolly did not return to White Plains after the first
delivery 29 but Jose and Angel continued to work and even intended to
finish the job without exerting any effort to ensure payment therefor.

Tomas Ngo's claim that he never knew of the textile's illegal origin
cannot likewise be given credence. Tomas Ngo testified that he asked
Rolly if the taxes on the textile had been paid, and that Rolly answered
in the affirmative and in fact assured him that he would present the tax
receipts later. 30 After the first delivery, Rolly said that he needed the
receipts to show the authorities during the delivery. 31 And yet Tomas
Ngo, who was engaged in the buy and sell business of plastic materials
and textile, never bothered to check or glance at these tax
receipts. 32Rolly disappeared without leaving any receipts with Jose
and Angel and neither did the brothers ask for said receipts.

12 TSN of March 9; 1988, pp. 6-7, 9-10.

Indeed, petitioners' claim of good faith and lack of knowledge of the

origin of the textile cannot stand in the light of contrary evidence. As the
lower courts well found, petitioners have miserably failed to rebut the
presumption that they were engaged in smuggling at the time they
were apprehended. Evidence, to be believed, must proceed not only
from the mouth of a credible witness but must be credible in itself as
when it conforms to the common experience and observation of
mankind. 33

17 Rollo, pp., 29-41.

IN VIEW WHEREOF, the petition is DENIED and the Decision dated

February 28, 1990 and the Resolution dated November 9, 1993 of the
Court of Appeals in CA-G.R. CR No. 06220 are hereby affirmed. Costs
against petitioners.

13 Id., p. 8.
14 Id., p. 11.
15 TSN of May 13, 1988, p. 40.
16 Id., p. 270.

18 Rollo, pp., 43-44.

19 Tariff and Customs Code, Section
1202; Llamado v. Commissioner of
Customs, 122 SCRA 118 [1983].
20 Ramos, Jr. v. Pamaran, 60 SCRA 327
[1974].

SO ORDERED.

21 Tariff and Customs Code, Section

1201; IV Tejam, Commentaries on the
Revised Tariff and Customs Code 2230
[1987].

Narvasa, C.J., Regalado, Mendoza and Francisco, JJ., concur.

22 Records, p. 250, Exhibit B.

Footnotes

23 Rollo, p. 156; Reply to Comment, p. 1.

1 Records, p. 1.

24 Rollo, pp. 16-22; Petition, pp. 8-14.

2 Id., pp. 248, 249, Exhibit A.

25 San Sebastian College v. Court of

Appeals, 197 SCRA 138 [1991]; People
v. Tiozon, 198 SCRA 368 [1991].

3 Id., p. 248, Exhibit A.

4 TSN of April 25, 1986, pp. 13-15; TSN
of November 26, 1986, pp. 16-17;
Records, p. 250, Exhibit B.

26 Records, TSN of May 26, 1986, p. 57.

5 TSN of March 9, 1988, p. 10.

28 TSN of March 9, 1988, pp. 3, 40; TSN

of April 13, 1988, p. 4.

6 TSN of March 9, 1988, p. 49; TSN of

April 13, 1988, p. 27; TSN of May 13,
1988, p. 43.
7 TSN of September 15, 1986, pp. 13-14.
8 TSN of May 26, 1986, p. 63.
9 Id., pp. 63-64.
10 TSN of July 28, 1986; pp. 3-4;
Records, pp. 256-257, Exhibit F.
11 TSN of September 15, 1986, pp. 1415.

27 TSN of March 9, 1988, pp. 28-29, 51.

29 TSN of March 9, 1988, p. 36.

30 TSN of May 13, 1988, pp. 40-42.
31 Id., p. 44.
32 Id., pp. 36-37.
33 People v. Jalon, 215 SCRA 680
[1992]; Magat v. People, 201 SCRA 21
[1991]; People v. Marti, 193 SCRA 57
[1991].
G.R. No. 104604 October 6, 1995

NARCISO O. JAO and BERNARDO M. EMPEYNADO, petitioners,

vs.
COURT OF APPEALS; COMMISSIONER OF CUSTOMS;
COLLECTOR OF CUSTOMS, Port of Manila; Col. SINDULFO R.
SEBASTIAN, Director, Enforcement and Security Services, Bureau
of Customs; and Maj. JAIME MAGLIPON, Chief, Operations and
Intelligence Staff, Enforcement and Security Services, Bureau of
Customs, respondents.
G.R. No. 111223 October 6, 1995
NARCISO O. JAO and BERNARDO M. EMPEYNADO, petitioners,
vs.
THE HONORABLE OMBUDSMAN CONRADO M. VASQUEZ, and
SINDULFO SEBASTIAN, JAIME MAGLIPON; JOSE YUCHONGCO;
RICARDO CORONADO; VICTOR BARROS; DENNIS BANTIGUE;
ROY LARA; BENJAMIN SANTOS; RODOLFO GONDA; ADONIS
REJOSO; DANIEL PENAS; NICANOR BONES; ABUNDIO
JUMAMOY; ARTEMIO CASTILLO; ANDRESITO ABAYON; RUBEN
TAGUBA; JAIME JAVIER; HERBERT DOLLANO, all with the
Bureau of Customs; JOVY GUTIERREZ of the Makati police, and
'JOHN DOES', respondents.

ROMERO, J.:
G.R. No. 104604 is a petition for certiorari of the decision 1 of the Court
of Appeals, the dispositive portion of which states:
WHEREFORE, the petition is hereby GRANTED.
The orders issued by the respondent judge dated
November 20, 1990, December 10, 1990, January
3, 1991 and all subsequent orders in the Civil Case
No. 90-2382 of the Regional Trial Court of Makati
are SET ASIDE. Having no jurisdiction over the
case, the respondent judge is hereby enjoined from
proceeding with Civil Case No. 90-2382 and
further, Case No. 90-2382 is hereby DISMISSED.
SO ORDERED.
G.R. No. 111223 is a petition for certiorari of the resolution of the
Ombudsman 2 dismissing the case filed before it by herein petitioner.
The above-docketed cases were consolidated per resolution of the
Court on August 26, 1993, as the facts in both cases were the same.
These facts are the following:
On August 10, 1990, the Office of the Director, Enforcement and
Security Services (ESS), Bureau of Customs, received information
regarding the presence of allegedly untaxed vehicles and parts in the
premises owned by a certain Pat Hao located along Quirino Avenue,
Paranaque and Honduras St., Makati. After conducting a surveillance
of the two places, respondent Major Jaime Maglipon, Chief of
Operations and Intelligence of the ESS, recommended the issuance of
warrants of seizure and detention against the articles stored in the
premises.

On August 13, 1990, District Collector of Customs Titus Villanueva

issued the warrants of seizure and detention.
On the same date, respondent Maglipon coordinated with the local
police substations to assist them in the execution of the respective
warrants of seizure and detention. Thereafter, the team searched the
two premises.
In Makati, they were barred from entering the place, but some
members of the team were able to force themselves inside. They were
able to inspect the premises and noted that some articles were present
which were not included in the list contained in the warrant.. Hence, on
August 15, 1990, amended warrants of seizure and detention were
issued by Villanueva.
On August 25, 1990, customs personnel started hauling the articles
pursuant to the amended warrants. This prompted petitioners Narciso
Jao and Bernardo Empeynado to file a case for Injunction and
Damages, docketed as Civil Case No. 90-2382 with prayer for
Restraining Order and Preliminary Injunction before the Regional Trial
Court of Makati Branch 56 on August 27, 1990 against respondents.
On the same date, the trial court issued a Temporary Restraining
Order.
On September 7, 1990, respondents filed a Motion to Dismiss on the
ground that the Regional Trial Court has no jurisdiction over the subject
matter of the complaint, claiming that it was the Bureau of Customs
that had exclusive jurisdiction over it.
On November 20, 1990, the trial court denied respondents' motion to
dismiss.
On November 29, 1990, petitioners' application for preliminary
prohibitory and mandatory injunction was granted conditioned upon the
filing of a one million peso bond.
The Court also prohibited respondents from seizing, detaining,
transporting and selling at public auction petitioners' vehicles, spare
parts, accessories and other properties located at No. 2663 Honduras
St., San Isidro, Makati and at No. 240 Quirino Avenue, Tambo,
Paranaque, Metro Manila. Respondents were further prohibited from
disturbing petitioners' constitutional and proprietary rights over their
properties located at the aforesaid premises. Lastly, respondents were
ordered to return the seized items and to render an accounting and
inventory thereof.
On December 13, 1990, respondents filed a motion for reconsideration
based on the following grounds:
a) the lower court having no jurisdiction over the
subject matter of the complaint, it has no recourse
but to dismiss the same; and
(b) the lower court had no legal authority to issue
an injunction therein.
On January 3, 1991 the motion for reconsideration was denied.
Respondents then went to the Court of Appeals on the ground that the
judge acted with grave abuse of discretion in denying their motion to
dismiss and in granting petitioners' application for preliminary

injunction. They argued that the Regional Trial Court had no jurisdiction
over seizure and forfeiture proceedings, such jurisdiction being
exclusively vested in the Bureau of Customs.
The Court of Appeals set aside the questioned orders of the trial court
and enjoined it from further proceeding with Civil Case No. 90-2382.
The appellate court also dismissed the said civil case.
On May 2, 1992, petitioners filed a petition with this Court to review the
decision of the Court of Appeals docketed as G.R. No. 104604.
As regards G.R. No. 111223, petitioners filed criminal charges against
respondents, other officers and employees of the Bureau of Customs
and members of the Makati Police before the Office of the Ombudsman
for Robbery, Violation of Domicile and Violation of Republic Act No.
3019, docketed as OMB Case No. 0-90-2027.
Respondent Ombudsman summarized the case before it as follows:
This is an affidavit-complaint filed by the
complainants against the respondents, Officers and
Employees of the Bureau of Customs and
members of the Makati Police allegedly for violation
of Domicile and Robbery defined and penalized
under Articles 128, 293 and 294 of the Revised
Penal Code and for violation of R.A. 3019
committed as follows, to wit:
That on August 11, 1990, after
receiving intelligence
information of the presence of
smuggled goods, some of the
respondents headed by Jaime
Maglipon posed themselves as
Meralco inspectors and entered
complainants' stockyards and
residence located at 2663
Honduras Street, Makati, Metro
Manila and at 240 Quirino
Avenue, Tambo Paranaque for
the purpose of searching
smuggled goods found therein
without the consent of the
owner thereof;
That after the search,
respondents on August 13,
1990 up to August 25, 1990,
this time clothed with a Warrant
of Seizure and Detention, with
the aid of the Makati Police and
several heavily armed men
entered complainants
stockyard located at 2663
Honduras St., Makati, Metro
Manila, and pulled out
therefrom several machineries
and truck spare parts without
issuing the corresponding
receipts to the complainants to
cover all the items taken.

Respondents claimed in their consolidated and

verified comment that they are not liable for
violation of domicile because the places entered
and searched by them appear not to be the
residences of the complainants but only their
warehouses. As proof of this allegation, the
respondents presented the pictures of said
warehouses, which are attached to their comment
as Annexes "6", "6-A" to "6-C" and the Sheriff's
return likewise attached to their verified comments
as Annex "7". According to the respondents, a
charge for violation of domicile may apply only if
the place entered into against the will of the owner
is used exclusively for dwelling. In the case at bar,
the place entered into was used more of a
warehouse than a dwelling place.
Further respondents also claimed not liable for
robbery (sic) because the complainants appear not
to be the owners of the properties taken. Moreover,
the respondents claimed that the taking is lawful
because the same proceeded from a warrant of
Seizures and Detention; there was no violence or
intimidation of person committed and that there
was no intent to gain on the part of the
respondents, the purpose of the seizure of the
subject goods being to collect customs duties and
taxes due the government.
Lastly, the respondents disclaimed liability for a
violation of R.A. 3019 because they deny having
demanded from the complainants the sum of
P100,000.00. Instead according to the
respondents, it was the complainants who offered
them P70,000.00 to delay the hauling of the seized
goods as attested to in the joint affidavit of CPSGT,
Ricardo Coronado and Dennis Bantequi.
A preliminary investigation was conducted and on May 31, 1991,
another hearing was held to give the parties a chance to submit further
evidence to support their respective claims.
On March 15, 1993 respondent Ombudsman issued a Resolution
recommending that the case be dismissed for lack of merit.
On May 17, 1993, petitioners moved for the reconsideration of said
resolution, but the same was denied on July 8, 1993.
Hence, the petition in G.R. No. 111223, which was filed on August 16,
1993.
In G.R. No. 111223, petitioners claim that respondent Ombudsman
gravely abused his discretion in dismissing the case and in denying
petitioners' motion for reconsideration.
They allege that respondent Ombudsman ignored evidence
incriminatory to the raiders; that the receipts did not tally with
petitioners' receipts nor with the Commission on Audit's inventory; that
the respondents are guilty of robbery and of violating petitioners'
constitutional right against violation of domicile. For these reasons,

petitioners pray that the Ombudsman's resolution be reversed and that

the Court direct the Ombudsman to cause the filing of criminal charges
as may be warranted against respondents.

Even if the seizure by the Collector of Customs were illegal, which has
yet to be proven, we have said that such act does not deprive the
Bureau of Customs of jurisdiction thereon.

We find the petition in G.R. No. 111223 devoid of merit.

Respondents 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 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 decisions the law has not
seen fit to do so. 7

The Court, recognizing the investigatory and prosecutory powers

granted by the Constitution to the Office of the Ombudsman and for
reasons of practicality, declared, in an En Banc resolution dated August
30, 1993, issued in G.R. Nos. 103446-47 3 that the Court will not
interfere nor pass upon findings of public respondent Ombudsman to
avoid its being hampered by innumerable petitions assailing the
dismissal of investigatory proceedings conducted by the Office of the
Ombudsman with regard to complaints filed before it, and that it will not
review the exercise of discretion on the part of the fiscals or
prosecuting attorneys each time they decide to file an information in
court or dismiss a complaint by a private complainant. The dismissal by
the Ombudsman of petitioners' complaint, therefore, stands.
We will now discuss G.R. No. 104604.
Petitioners contend: (1) that the Court of Appeals erred in not holding
that the Collector of Customs could no longer order the seizure for the
second time of items previously seized and released after amnesty
payments of duties and taxes; (2) that the Bureau of Customs has lost
jurisdiction to order the seizure of the items because the importation
had ceased; (3) that the seizure of the items deprived the petitioners of
their properties without due process of law; and (4) that there is no
need to exhaust administrative remedies.

The allegations of petitioners regarding the propriety of the seizure

should properly be ventilated before the Collector of Customs. We
have had occasion to declare:
The Collector of Customs when sitting in forfeiture
proceedings constitutes a tribunal expressly vested
by law with jurisdiction to hear and determine the
subject matter of such proceedings without any
interference from the Court of First Instance.
(Auyong Hian v. Court of Tax Appeals, et al., 19
SCRA 10). The Collector of Customs of SualDagupan in Seizure Identification No. 14-F-72
constituted itself as a tribunal to hear and
determine among other things, the question of
whether or not the M/V Lucky Star I was seized
within the territorial waters of the Philippines. If the
private respondents believe that the seizure was
made outside the territorial jurisdiction of the
Philippines, it should raise the same as a defense
before the Collector of Customs and if not satisfied,
follow the correct appellate procedures. A separate
action before the Court of First Instance is not the
remedy.8

We find no merit in petitioners' contentions.

There is no question that Regional Trial Courts are devoid of any
competence to pass upon the validity or regularity of seizure and
forfeiture proceedings conducted by the Bureau of Customs and to
enjoin or otherwise interfere with these proceedings 4 The Collector of
Customs sitting in seizure and forfeiture proceedings hasexclusive
jurisdiction to hear and determine all questions touching on the seizure
and forfeiture of dutiable goods. The Regional Trial Courts are
precluded from assuming cognizance over such matters even through
petitions ofcertiorari, prohibition or mandamus. 5
It is likewise well-settled that the provisions of the Tariff and Customs
Code and that of Republic Act No. 1125, as amended, otherwise known
as "An Act Creating the Court of Tax Appeals," specify the proper fora
and procedure for the ventilation of any legal objections or issues
raised concerning these proceedings. Thus, actions of the Collector of
Customs are appealable to the Commissioner of Customs, whose
decision, in turn, is subject to the exclusive appellate jurisdiction of the
Court of Tax Appeals and from there to the Court of Appeals.
The rule that Regional Trial Courts have no review powers over such
proceedings is anchored upon the policy of placing no unnecessary
hindrance on the government's drive, not only to prevent smuggling
and other frauds upon Customs, but more importantly, to render
effective and efficient the collection of import and export duties due the
State, which enables the government to carry out the functions it has
been instituted to perform. 6

WHEREFORE, the petitions in G.R. No. 104604 and in G.R. No.

111223 are hereby DISMISSED for lack of merit.
SO ORDERED.
Feliciano, Padilla, Regalado, Davide, Jr., Bellosillo, Puno, Vitug,
Kapunan, Mendoza, Francisco and Hermosisima, Jr., JJ., concur.
Narvasa, C.J. and Melo, J., are on leave.
Footnotes

1 G.R. No. 104604, Rollo p. 21, Torres, ponente,

Francisco and Santiago, JJ. concurring.
2 G.R. No. 111223, Rollo, p. 91.
3 Ocampo v. Ombudsman, 225 SCRA 725 (1993).

The basis of the assessments was a memorandum dated January 26,

1971, issued by then Acting Commissioner of Customs which provided
that the duties and taxes in the importation of crude oil shall be based
on the gross actual receipt without deducting the basic sediment and
water (BSW). The full text of the memorandum 1 reads as follows:
The Collector of Customs

4 Commissioner of Customs v. Makasiar, 177

SCRA (1989).
5 General Travel Service v. David, G.R. No. L19259, September 23, 1966, 18 SCRA 59; Pacis v.
Averia, G.R. No. L-22526, November 29, 1966, 18
SCRA 907; De Joya v. Lantin, G.R. No. L-24037,
April 27, 1967, 19 SCRA 893; Ponce Enrile v.
Vinuya, G.R. No. L-29043, January 30, 1971, 37
SCRA 381; Collector of Customs v. Torres, G.R.
No. L-22977, May 31, 1972, 45 SCRA 272; Pacis v.
Geronimo, G.R. No. L-24068, April 23, 1974, 56
SCRA 583; Commissioner of Customs v. Navarro,
G.R. No. L-33146, May 31, 1977, 77 SCRA 264;
Republic v. Bocar, G.R. No. L-35260, September 4,
1979, 93 SCRA 78; De la Fuente v. De Veyra, G.R.
No. L-35385, January 31, 1983, 120 SCRA 451.
6 Commissioner of Customs v. Makasiar, supra.
7 Ponce Enrile v. Venuya, supra.

Port of Ma

Port of Bat

Subport of
Effective February 1, 1971, Customs duties and
taxes on importation of crude oil shall be based on
the gross actual receipts without deducting the
BSW as has been previously done.
In determining the freight, the amount indicated in
the bill of lading or as certified by the ship agent
shall be used as basis. However, if it is found by
the examiner that the actual receipt is more than
the manifested weight, the freight shall be adjusted
accordingly.
Please see to it that all the personnel concerned in
your respective ports are informed of these
instructions.

8 De la Fuente v. de Veyra, supra.

(SGD.) RO
G.R. No. 104781 July 10, 1998

Acting Com
CALTEX (PHILIPPINES), INC., petitioner,
vs.
COURT OF APPEALS and COMMISSIONER OF
CUSTOMS, respondents.

The assessments were timely protested by Caltex before the Collector

of Customs on June 9, 1982, July 21, 1982 and September 8,
1982, 2 respectively, on the ground that the BSW contents should have
been deducted before imposing the assessable ad valorem duties. The
protests were, however, disregarded in a decision dated December 19,
1983.
Caltex then elevated the case to the Commissioner of Customs, who
affirmed the Collector's finding in a decision dated October 23, 1984,
disposing as follows:

ROMERO, J.:
Caltex, a corporation engaged in the oil industry, imported on various
dates in 1982 light/medium mix special oil and heavy crude oil for
which it was assessed the following ad valorem duties by the Collector
of Customs:
1. P97,697.143 for the importation which arrived
on April 10, 1982
2. P119,572.319 for the importation which
arrived on June 7, 1982
3. P60,769.00 for the importation which arrived
on July 9, 1982

WHEREFORE, finding no cogent reason to disturb

the decision of the Collector of Customs, Port of
Batangas, the same is hereby affirmed.
SO ORDERED.
Undaunted, Caltex filed a petition for review with the Court of Tax
Appeals (CTA) raising the same argument. On August 9, 1991, 3 the
CTA ruled in favor of Caltex and reversed the decisions of both the
Collector of Customs and Commissioner of Customs, the dispositive
portion of the decision reads:
WHEREFORE, the petition is GRANTED.
Respondent [Commissioner of Customs] should

and is hereby ordered to refund or credit to

petitioner the following amounts: P212,959.00
under Entry No. 163/82; P759,385.00 under Entry
No. 204/82; P532,732.00 under Entry No. 293/82. 4
Disagreeing with the CTA decision, the Commissioner of Customs filed
a petition for review with the Court of Appeals questioning the decision.
On February 12, 1992, the appellate court set aside the CTA's decision
and reinstated the ruling of the Commissioner of Customs. 5 In
reversing the CTA's decision, the Court of Appeals justified its ruling in
this wise:
The ad valorem duties should thus be based on the
price paid by the importer as shown in the sales
invoice. In this case, apparently the sale invoices
do not indicate a distinct and separate price or
value for the crude oil alone without the basic
sediment and water contents or BSW. This is so
because, as already stated, the BSW naturally
occur in crude oil. In the case at bar, the BSW was
only formed and produced during transit which
should be considered an accession. Therefore, it
should be included in the delivery of crude oil as
part of what was actually purchased by the
importer. (Civil Code, Art. 1166).
In computing the ad valorem duties on the basis of
the sales invoice, (it becomes irrelevant whether
the volume of crude oil increased while in transit by
reason of BSW and other impurities, because the
law mandates that the tax should be based on the
home consumption value which is the price
indicated in the sales invoice or the value of the
importation. (Commissioner of Customs v. Proctor
& Gamble, 169 SCRA 693 [1989]; Commissioner of
Customs v. Court of Tax Appeals, 162 SCRA 730
[1988]; Commissioner of Customs v. Court of Tax
Appeals, supra). Even if BSW contents are
deducted from the actual gross barrels received by
respondent Caltex, the price in the sales invoice
would remain unaltered.
The decretal portion of the decision reads: 6
WHEREFORE, the decision appealed from is
REVERSED and the decision of the Collector of
Customs as affirmed by the Commissioner of
Customs is REINSTATED.
Dismayed by the sudden turn of events, Caltex filed a motion for
reconsideration which was, however, denied by the Court of Appeals in
a resolution dated March 19, 1992. 7 Hence, this petition.
The basic issue for resolution is whether the Basic Sediment and
Water, as impurities, should have been deducted from the gross actual
receipts to determine the proper imposable ad valorem duties.
Before discussing the crux of the petition, a preliminary matter to be
threshed out is Caltex's assertion that the Collector of Customs should
have published the memorandum which increases the imposable

duties for importation of oil, for in the absence of publication, the same
would be violative of due process and Section 3502 8of the Tariff and
Customs Code. 9 At this juncture, it is important to note that the nonpublication of the memorandum was not denied by the Commissioner
of Customs. 10
There is no doubt that issuances by an administrative agency have the
force and effect of law. 11 Corollarily, when the issuances are of
"general applicability," publication is necessary as a requirement of due
process. 12 In this regard, Commonwealth Act No. 638, 13 mandates that
besides legislations and resolutions of public nature of the Congress of
the Philippines, executive and administrative orders and proclamations
which have general applicability must also be published.
It cannot be disputed that the questioned memorandum increases the
imposable duties for the importation of oil, a departure from the
previous practice. To be sure, the increase invariably interferes with the
property rights of oil importers. Hence, the statutory norm of publication
is necessary, not only for effectivity, but also to apprise those affected.
Since the assailed memorandum was never published, it follows the
same cannot be upheld. 14
We, however, are not unmindful of the possible effect of this ruling
upon our country's tax revenue, in light of the fact that the genesis of
instant petition took place some 16 years ago. Likewise, we cannot
close our eyes to the fact that the collections were done in reliance on
the validity of the memorandum. Thus, we are constrained to adopt a
practical and realistic solution for after all, custom duties are taxes on
import and export of goods, hence, it is the lifeblood of the
nation. 15 Undoubtedly, to accept Caltex's belated protestations will
necessarily prejudice the public interest.
In Fernandez v. Cuerva, 16 which explained the effect of a declaration of
invalidity of an assailed legislative or executive act, we declared:
The growing awareness of the role of the judiciary
as the governmental organ which has the final say
on whether or not a legislative or executive
measure is valid leads to a more appreciative
attitude of the emerging concept that a declaration
of nullity may have legal consequences which the
more orthodox view would deny. That for a period
of time such a statute, treaty, executive order, or
ordinance was in "actual existence" appears to be
indisputable. What is more appropriate and logical
then than to consider it as "an operative fact".
In addition to the preceding discussion, a more glaring act which must
be emphasized is that the importations occurred in 1982 or eleven (11)
years after said memorandum was issued, hence, Caltex cannot feign
ignorance as to the existence of such memorandum. Certainly, it is
safe to assume that Caltex, as a regular importer of crude oil, had
knowledge that, from 1971 the procedure for determining the ad
valorem duties on crude oil importation was that the BSW content were
to be included in imposing the duties due. However, from 1971 to 1982,
Caltex made no move to question the validity of the memorandum nor
did it assail the duties being charged on its shipment before the proper
forum. In fact, it would not be unwarranted to conclude that during this
period, Caltex continued importing crude oil under the procedures laid
down by the Memorandum. To compound matters, Caltex offered no
plausible explanation nor justifiable reason for its delay or omission in

taking timely action against the memorandum which was already in

existence for a period of nine years prior to the importations in
question. The time-honored rule anchored on public policy is that relief
will be denied to a litigant whose claim or demand has become "stale,"
or who has acquiesced in the prevailing situation for an unreasonable
length of time, or who has not been vigilant or who has slept on his
rights either by negligence, folly or inattention. 17 Caltex has no one to
blame but itself.
With respect to the decisive issue posed by the instant petition, the
axiomatic rule is that the dutiable value of an imported article subject to
ad valorem is based on its home consumption value or price as freely
offered for sale in wholesale quantities in the ordinary course of trade
in the principal market of the country from where exported on the date
of exportation to the Philippines. The home consumption value is the
price declared in the consular, commercial, trade or sales invoice.
Thus, in the leading case of Commissioner of Customs v. Court of Tax
Appeal,18 we held:
(t)he law is clear and mandatory. The dutiable
value of an imported article subject to an ad
valorem rate of duty is based on its home
consumption value or price as freely offered for
sale in wholesale quantities in the ordinary course
of trade in the principal markets of the country from
where exported on the date of exportation to the
Philippines. That home consumption value or price
is the value or price declared in the consular,
commercial, trade or sales invoice.
The above doctrine has consistently been applied by this Court in
subsequent cases. 19
Consequently, Caltex, in an effort to prove that the BSW contents
should have been omitted in the purchase price, submitted the sales
invoices provided by its seller in Saudi Arabia 20 indicating a net barrel
computation, that is, crude oil without BSW. 21 Paradoxically, the Import
Entry permit declaration it submitted before the Collector of Customs
showed otherwise, that is the BSW contents were not deducted in the
purchase price. 22
Obviously, there is a discrepancy between the sales invoice and the
Import Entry permit submitted by Caltex. Faced with this fact, we must
uphold the latter as more conclusive. In the early case of Murphy,
Morris & Co. v. Collector of Customs, 23 we held that in the absence of
any compelling reason, sworn statements made before customs
officials concerning an importation would render said declarations
conclusive upon the party. Furthermore, under the Tariff and Customs
Code, declarations and statements contained in the Import Entry
Permit are presumed to be true and correct under the penalties of
falsification and perjury. 24 Moreover, descriptions in entries and other
documents are admissions against interest and presumptively
correct. 25
Our conclusion is premised on the fact that sales, commercial or
consular invoices are not conclusive on the government. Our customs
laws should not be at the mercy of importers who may avail of
schemes and other arrangements to lower and reduce the face value
of the articles covered by such invoices. 26 Noteworthy is the fact that:
"If the customs authorities were bound by the invoice value, it is evident
that they would be, to a considerable extent, at the mercy of foreign,

merchants and importers. The purpose of Congress in providing for an

appraiser was to prevent fraud upon the customs, and thus protect the
revenues of the Government." 27
Conformably with the above discussion, a scrutiny of Caltex's Import
Entry declaration covering the importation dated April 10, 1982, stated
that it had paid a total purchase price of $53,055,905, broken down as
follows:

TOTAL BARRELS
(Including BSW)

Arabian Light/Medium

Arabian Heavy

PRICE/BARREL

1,411,310

$32.964

210,537

$31.030

It is important to note that in arriving at the total purchase price, the

barrels representing the BSW were included in the computation. In
other words, the 1,765 barrels of BSW of Arabian light/medium mix
crude oil, as well as the 1,852 barrels of BSW for Arabian heavy, were
declared by Caltex as part of the total purchase price.
If Caltex wanted to prove that, at the outset, the BSW contents were to
be excluded from the original purchase price, then it should have
declared in the Import Entry permit that it had only paid for the Arabian
Light/Medium crude oil the amount of $46,464,241, computed as
follows:
Gross Barrels : 1,411,310
Less : 1,765 (BSW content)
Net Barrels : 1,409,545
Multiplied by : $ 32.964 per
barrel
TOTAL : $ 46,464,241
On the other hand, with respect to the Arabian heavy crude oil, Caltex
should have paid the amount of $6,475,624, computed as follows:
Gross Barrels : 210,537
Less : 1,852 (BSW content)

Net Barrels : 208,685

Multiplied by : $ 31.030 per
barrel
TOTAL : $ 6,475,624
The importation dated June 7, 1982, as reflected in the Import Entry
permit, would reveal that Caltex paid $55,554,053 for Arabian
light/medium crude oil and $8,835,300 for Arabian light crude oil. The
respective BSW contents of both importations were included for the
purpose of determining the total purchase price. 28 Likewise, for the
importation dated July 19, 1982, the basis of the purchase price paid
by petitioner was without any deductions representing the BSW
contents. 29

materials or are made of different components." It

appears that basic sediment and water are not
"components" or "composites" of crude oil. 34
In reversing the above finding, the Court of Appeals ruled that BSW
naturally occurs in crude oil, especially during transit, hence:
Thus, even the value of coverings and packing
materials, which when destroyed upon opening
after arrival of the shipment has no value except
perhaps as scrap, is included in determining the
home consumption value. There is no reason then
why the BSW elements, which naturally occur in
oil, should be deducted from the gross receipt. 35
We sustain the observation of the Court of Appeals.

Considering the foregoing, the Collector of Customs did not err in

imposing a 20% ad valorem duty on Caltex's importations on the basis
of the purchase price in the Import Entry permit instead of the sales
invoices.
Caltex, however, insists that BSW contents, being impurities, are not
subject to ad valorem taxes. 30 To support its contention, Caltex argues
that:
. . ., the BSW is destined to be thrown away as
they are in fact thrown away (TSN, April 14, 1986,
pp. 21 and 22 at the CTA). To petitioner, the thing
of value is the crude oil while BSW has no value
whatsoever. Thus, when it is considered that the
rate of duty is based according to value (ad
valorem as contrasted to "specific" which is
imposed as a fixed sum on each article of a class
without regard to value (Black's Law Dictionary,
Fifth Edition), such a duty cannot attach to BSW,
BSW having no value at all.
It is important to emphasize that Caltex in contending that the BSW, as
impurities, should be deducted from the purchase price, has the burden
of proof to establish the validity of the claimed deduction. 31 A party
challenging an appraiser's finding of value is required to prove not only
that the appraised value is erroneous but also what the proper value
is. 32
Evidently, the issue to be resolved is whether BSW contents are
impurities usually found in crude oil. The resolution of this query is
important since under customs law no deductions are permitted for
impurities except those not usually found in or upon such similar
merchandice. 33
Caltex asserts that these impurities are not an integral part of crude oil.
This position was sustained by the Court of Tax Appeals, thus:
It is clarified under Rule 3(b) that the application of
Section 203 is premised on the condition that
before articles can be classified as forming part of
the essential article, the other article should be a
"composite" part or "component" of the essential
article. This is clear from the phrase "Mixture and
composite articles which consist of different

The principal physical composition of oil are carbon and

hydrogen. 36 However, this is not to detract from the fact that other
fundamental substances are properties of crude oil. One of this
substance is water. As one authority observes:
The presence of water in the rocks is a controlling
factor in the accumulation of oil and gas. Its effect
in driving these substances from the finer to the
coarser pores in the rock has been noticed. 37
Another substance is sand.
Although most of the oil produced in the Salt Creek
field, Wyo., comes from sands, some oil has been
produced in commercial quantities from crevices in
the shale strata that lie above the First Wall Creek
sand. Oil is also produced from fissured shale in a
few fields in California, at Florence, Colo., and in
several small fields in Pennsylvania. 38
As can be gleaned from the foregoing, there seems to be no dispute
that BSW, as impurities, are part of crude oil. In fact, we agree with the
observation of the Court of Appeals that these impurities could have
been formed during the trip from Saudi Arabia to the Philippines.
Because of the paucity of local precedents squarely in point, we find
occasion here to state the rule as enunciated by the United States
Customs
Court 39 that prohibited the deduction for "dirt" or "impurities" other than
those not usually found in or upon the goods, thus:
Appellant conceded that no application for
allowance was made under customs regulations.
Such application must be made within 10 days
after the return of the weight by customs officials,
and compliance is mandatory as a condition
precedent to recovery. The judgment of the
Customs Court sustaining Collector's rejection of
the protest claim was properly rendered in
accordance with established law. Appellant failed to
establish that the dirt and other impurities in the
feathers were of an unusual quantity deemed to be
excessive in crude imported feathers.

Consequently, the Court of Appeals did not err in concluding BSW as

an integral part of crude oil, which must be included in the computation
of the assessable duties.

WHEREFORE, in view of the foregoing, the instant petition is

DISMISSED and the appealed decision of the Court of Appeals dated
February 12, 1992, is AFFIRMED. No costs.

Finally, Caltex avers that it failed to receive a copy of the

Commissioner of Customs petition within the 15-day period to file a
petition for review. Hence, the Court of Appeals erred in not dismissing
the petition outright as provided for in Circular No. 1-91 in relation to
Circular No. 28-91.

SO ORDERED.

Circular No. 1-91 issued on February 27, 1991 and pertinently

provides:
xxx xxx xxx
5. HOW APPEAL TAKEN. Appeal shall be taken
by filing a verified petition for review in six (6)
legible copies, with the Court of Appeals, a copy of
which shall be served on the adverse party and on
the court or agency a quo. Proof of service of the
petition on the adverse party and on the court of
agency a quo shall be attached to the petition.
While Circular 28-91 reads as follows:
A petition filed under Rule 45, or under Rule 65, or
a motion for extension may be denied outright if it
is not clearly legible, or there is no proof of service
on the lower court, tribunal, or office concerned
and on tile adverse party in accordance with
Section 3, 5 and 10 of Rule 13, attached to the
petition or motion for extension when filed.
(Emphasis supplied).
Reviewing the records of the case, while it seems that the petition
for certiorari was indeed not served upon Caltex within the 15-day
reglementary period, the same was, however, furnished the very next
day. Hence, the proximity of the service of petition for review to Caltex
may be pleaded as substantial compliance therewith. Our
pronouncement is not without any precedent. In Gabionza v. Court of
Appeals, 40 we explicitly stated:
It is scarcely necessary to add that Circular No. 2891 must be so interpreted and applied as to
achieve the purposes projected by the Supreme
Court when it promulgated that Circular. Circular
No. 28-91 was designed to serve as an instrument
to promote and facilitate an orderly administration
of justice and should not be interpreted with such
absolute literalness as to subvert its own ultimate
and legitimate objective or the goal of all rules of
procedure which is to achieve substantial justice
as expeditiously as possible.
The fact that the Circular requires that it be strictly
complied with merely underscored its mandatory
nature in that it cannot be dispensed with or its
requirements altogether disregarded, but it does
not thereby interdict substantial compliance with its
provisions under justifiable circumstances.

Narvasa, C.J., Kapunan and Purisima, JJ., concur.

# Footnotes
1 Rollo, p. 125.
2 Commission of Customs Record, pp. 84-89.
3 Rollo, pp. 62-73.
4 Ibid., pp. 62-73.
5 Id., pp. 27-38.
6 Id., pp. 37-38.
7 Id., p. 41.
8 Sec. 3502. Application of Established Ruling or
Decision. A ruling or decision of the
Commissioner of Customs which determines the
construction or application of any provision of law
decreeing forfeiture of imported articles or imposing
customs duties, fines, fees and surcharges and
which changes any existing established appraisal,
interpretation or practice shall not take effect until
after thirty days public notice shall have been given
in the form of a published customs decision. When
such ruling or decision favors the taxpayer it shall
become effective immediately.
9 Reply, Rollo, pp. 185-187.
10 CTA Records, pp. 221-222.
11 Hijo Plantation, Inc. v. Central Bank, 164 SCRA
192 (1988).
12 Taada v. Tuvera, 146 SCRA 446 (1986).
13 An Act to Provide for the Uniform Publication
and Distribution of Official Gazette.
14 Pesigan v. Angeles, 129 SCRA 174 (1984).
15 Commissioner of Internal Revenue v. Court of
Appeals, 234 SCRA 348 (1994).
16 21 SCRA 1095 (1967).
17 Catholic Bishop of Balanga v. Court of Appeals,
264 SCRA 181 (1996); Vda. de Cabrera v. Court of

Appeals, 267 SCRA 339 (1997); Chavez v. BontoPerez, 242 SCRA 73 (1995).

32 Kobe Import Co. v. U.S., 31 CCR 456; Frank P.

Dow v. U.S., 32 CCR 547.

18 161 SCRA 376 (1988).

33 21 Am Jur 2d 87 citing Earnshaw v.

Cadwalder, 145 U.S. 247.

19 Acting Commissioner of Customs v. Cuise's

Company, 214 SCRA 597 (1992); Commissioner of
Customs v. Court of Tax Appeal, 195 SCRA 12
(1991); Commissioner of Customs v. Proctor and
Gamble Mfg. Corp., 169 SCRA 693 (1989).

34 Rollo, p. 67.
35 Rollo, p. 34.
36 Summers, Oil and Gas, 2 ed., 1954, p. 2.

20 Rollo, pp. 93, 97, 101.

21 Rollo, p. 14.

37 Sinder, Oil and Gas in the Mid-Continent Field,

1920, p. 16.

22 CTA Records, Annex "A," "D," "F."

38 Ibid.

23 16 Phil. 35 (1910).

39 York Feather and Down Corp. v. U.S., 26 CCR

231 (1952).

24 Tarriff and Customs Code, Sec, 1301. "Persons

Authorized to Make Import Entry. Imported
articles must be entered in the customhouse at the
port of entry within five (5) days from the date of
discharge of the last package from the vessel
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 the
Collector may grant an extension of not more than
five (5) days: Provided, further, 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 of
perjury that the declarations and statements
contained in the entry are true and
correct: Provided, finally, 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 should
the importation turn out to be unlawful or irregular.
25 Swifts Co. v. U.S., 14 CCR 171.
26 Coca Cola Export Corporation v. Commissioner
of Internal Revenue, 56 SCRA 5 (1974).
27 Lim Quim v. Collector of Customs, 23 Phil. 509
(1912).
28 CTA Record, Annex "D."
29 CTA Record, Annex "F."
30 Rollo, pp. 14-16.
31 Commissioner of Internal Revenue v. Algue,
Inc., 158 SCRA 9 (1987).

40 234 SCRA 192 (1994).

G.R. No. 126634 January 25, 1999
TRANSGLOBE INTERNATIONAL, INC., petitioner,
vs.
COURT OF APPEALS and COMMISSIONER OF
CUSTOMS, respondents.

BELLOSILLO, J.:
On 27 April 1992 a shipment from Hongkong arrived in the Port of
Manila on board the "S/S Sea Dragon." Its Inward Foreign Manifest
indicated that the shipment contained 1,054 pieces of various hand
tools. Acting on information that the shipment violated certain
provisions of the Tariff and Customs Code as amended, agents of the
Economic Intelligence and Investigation Bureau (EIIB) seized the
shipment while in transit to the Trans Orient container yard-container
freight station. An examination thereof yielded significant results
1. The 40 ft. van was made to appear as a
consolidation shipment consisting of 232 packages
with Translink Int'l. Freight Forwarder as shipper
and Transglobe Int'l., Inc. as consignee;
2. There were eight (8) shippers and eight (8)
consignees declared as co-loaders and co-owners
of the contents of the van, when in truth the entire
shipment belongs to only one entity;
3. Not one of the items declared as the contents of
the van, i.e., various hand tools, water cooling
tower g-clamps compressors, bright roping wire
and knitting machine w(as) found in the van.
Instead the van was fully stuffed with textile piece
goods. 1

On those accounts, which were deemed to constitute a violation of

Sec. 2503 in relation to Sec. 2530, pars. (f) and (m), subpars. 3, 4 and
5, of the Tariff and Customs Code, the EIIB recommended seizure of
the entire shipment. On 21 May 1992 District Collector of Customs
Emma M. Rosqueta issued the corresponding warrant of seizure and
detention.
The case was set for hearing on 2 June 1992 but petitioner Transglobe
International, Inc., or its duly authorized representative, failed to appear
despite due notice. Resetting was ordered to 19 June 1992, yet, for the
same reason was further reset to 8 July 1992. Still petitioner or its
representative was unable to appear which thus led to its being
declared in default. The case was then considered submitted for
decision based on existing documents. On 26 August 1992 after finding
that a violation of the cited provisions was indeed committed, District
Collector Rosqueta decreed the forfeiture of the shipment in favor of
the government to be disposed of in accordance with law. 2
Thereafter petitioner filed a petition for redemption of the shipment. On
2 October 1992 Hearing Officer Geoffrey G. Gacula recommended that
the petition be given due course and that petitioner be allowed to effect
the release of the shipment upon
payment of P1,300,132.04 representing its domestic market value.
Hearing Officer Gacula took into consideration the following
Record shows that the shipment consists of good
which are in legal contemplation not prohibited, nor
the release thereof to the claimant contrary to
law . . . . the spirit and intent of Executive Order
No. 38, to increase and accelerate revenue
collection by the government thru redemption of
forfeited cargoes, which would also benefit
importers by giving them the chance to recover
portions of their investment . . . . 3
Chief of the Law Division Buenaventura S. Tenorio concurred in the
recommendation. On the same day, District Collector Rosqueta
recommended approval thereof and forwarded the case to respondent
Commissioner of Customs Gulliermo L. Parayno Jr. through Deputy
Commissioner Licerio C. Evangelista. 4 On 7 October 1992 the latter
likewise recommended favorable action thereon. 5 However respondent
Commissioner Parayno Jr. denied the offer of redemption in his 1st
Indorsement dated 27 November 1992 for these reasons
1. The shipment was made to appear to be an
innocuous consolidation shipment destined for
stripping at an outside CY-CFS 6 in order to conceal
the textile fabrics;
2. The eight (8) co-loaders/consignee of the
shipment are all fictitious;
3. Under Section 3B, CMO 87-92, offers of
redemption shall be denied when the seized
shipment is consigned to a fictitious consignee. 7
Thus respondent Commissioner Parayno Jr. instructed the Auction and
Cargo Disposal Division of the Port of Manila to include the shipment in
the next public auction. 8 On 8 February 1993 reconsideration was

denied. 9Petitioner moved for another reconsideration which was

referred to District Collector Rosqueta for comment. Even after further
review, she maintained her previous recommendation allowing
redemption
1. Since no entry has been filed so far, the
consignee could not be faulted for misdeclaration
under Section 2503 of the Tariff and Customs
Code. While the shipment was misdeclared in the
rider and the manifest, the consignee is innocent of
the facts stated therein as it had no hand in their
preparation or issuance. Law and regulation allow
the amendment of the manifest at any time before
the filing of entry in order to protect the innocent
consignee.
2. Transglobe International, Inc., is a juridical
person duly organized in accordance with the laws
of the Philippines and is qualified as a consignee. It
is not fictitious as evidenced by its Articles of
Incorporation registered with the Securities and
Exchange Commission.
3. The shipment consists of goods which are in
legal contemplation not prohibited, nor the release
thereof to the Claimant contrary to law, and the
redemption offer is well within the purview of
Executive Order No. 38. 10
Nevertheless, reconsideration was again denied on 1 July 1993. 11 On
4 August 1993 the forfeiture of the shipment and denial of the request
for redemption were affirmed by respondent Commissioner Parayno
Jr. 12
In the appeal which was solely concerned with the propriety of
redemption, the Court of Tax Appeals (CTA) expressed a different view.
Relying on Sec. 1 of Executive Order No. 38, as applied in Gazzingan
v. Commissioner of Customs 13 since no fraud was found on the part of
the redemptioner, the CTA directed on 27 June 1995 that petitioner be
allowed to redeem the shipment upon payment of its computed
domestic market value. 14
However respondent Court of Appeals sustained the denial of the
redemption by respondent Commissioner of Customs. On 28 June
1996 it set aside the ruling of the CTA 15 on the ratiocination that
The findings of the Economic Intelligence and
Investigation Bureau: "that the shipment was made
to appear to be an innocuous consolidation
shipment destined for stripping at an outside CYCFS in order to conceal the textile fabrics," and
"that the eight (8) coloaders/consignees were all
fictitious" had not been refuted during the seizure
proceedings by respondent Transglobe
International, Inc. The failure of respondent
Transglobe to refute this fact negates its claim that
no violation of the above cited provisions (Sec.
2503 in relation to Sec. 2530, pars. (f) and (m),
subpars. 3, 4 and 5 of the Tariff and Customs
Code as amended) had been committed. The
findings of the EIIB above referred to remain

unassailed and uncontradicted. Said findings

clearly show badges of fraud . . . The seizure of the
property in question was made upon findings that
the documents covering the said shipment were
forged, thus:
FRAUD the following cases herein enumerated
demonstrate the presence of fraud: 1.a. The use of
forged or spurious documents . . . (Section 1,
CMO-87-92). 16
On 3 September 1996 reconsideration was denied. 17
We now resolve the issue of whether petitioner should be allowed to
redeem the forfeited shipment.
Petitioner asserts that it is not guilty of fraud because, as held
in Farolan Jr. v. Court of Tax Appeals 18 and Aznar v. Court of Tax
Appeals, 19 the fraud referred to is one that is intentional with the sole
object of avoiding payment of taxes. While petitioner admits that it is
the only consignee of the cargo and that the van contains textiles,
contrary to those declared in the manifest and rider, it avers that these
discrepancies do not evince deliberate evasion of taxes or payment of
duties, especially considering that it is a duly registered domestic
corporation, and that it has no knowledge or participation in the
execution of the manifest and the rider thereon.
A violation of Sec. 2503 in relation to Sec. 2530, pars. (f) and (m),
subpars. 3, 4 and 5, of the Tariff and Customs Code as amended was
found by the Bureau of Customs. Section 203 deals with
undervaluation, misclassification and misdeclaration in entry. On the
other hand, Sec. 2530, pars. (f) and (m), subpars. 3, 4 and 5 provides

Sec. 2530. Property Subject to Forfeiture Under

Tariff and Customs Law. Any vehicle, vessel or
aircraft, cargo, article and other objects shall, under
the following conditions be subject to forfeiture . . . .
f. Any article the importation or exportation of which
is effected or attempted contrary to law, or any
article of prohibited importation or exportation, and
all other articles which, in the opinion of the
Collector, have been used, are or were entered to
be used as instruments in the importation or
exportation of the former . . . .
m. Any article sought to be imported or
exported . . . .
(3) On the strength of a false declaration or affidavit
executed by the owner, importer, exporter or
consignee concerning the importation of such
article;
(4) On the strength of a false invoice or other
document executed by the owner, importer,
exporter or consignee concerning the importation
or exportation of such article; and

(5) Through any other practice or device contrary to

law by means of which such article was entered
through a customhouse to the prejudice of the
government.
From the decision of the District Collector of Customs decreeing
forfeiture, petitioner Transglobe International, Inc., filed a petition for
redemption pursuant to Sec. 2307 of the Tariff and Customs Code as
amended by Sec. 1 of E.O. No. 38 20 which states
Sec. 2307. Settlement of Case by Payment of Fine
or Redemption of Forfeited Property. Subject to
approval of the Commissioner, the District Collector
may, while the case is still pending except when
there is fraud, accept the settlement of any seizure
case provided that the owner, importer, exporter, or
consignee or his agent shall offer to pay to the
collector a fine imposed by him upon the property,
or in case of forfeiture, the owner, exporter,
importer or consignee or his agent shall offer to pay
for the domestic market value of the seized article.
The Commissioner may accept the settlement of
any seizure case on appeal in the same manner
(emphasis supplied) . . . Settlement of any seizure
case by payment of the fine or redemption of
forfeited property shall not be allowed in any case
where the importation is absolutely prohibited or
where the release of the property would be
contrary to law.
As a means of settlement, redemption of forfeited property is unavailing
in three (3) instances, namely, when there is fraud, where the
importation is absolutely prohibited, or where the release of the
property would be contrary to law. Respondent Commissioner of
Customs disallowed the redemption on the ground of fraud which
consisted of the following: "The shipment was made to appear to be an
innocuous consolidation shipment destined for stripping at an outside
CY-CFS in order to conceal the textile fabrics; the eight (8) coloaders/consignees of the shipment are all fictitious; and, under Section
3B, CMO 87-92, offers of redemption shall be denied when the seized
shipment is consigned to a fictitious consignee." 21 Respondent court
sustained this ruling which it considered based on undisputed findings
of the EIIB.
We rule that respondent Court of Appeals committed reversible error in
rendering the assailed decision. The findings of respondent
Commissioner of Customs which provided the bases for denying
petitioner's offer of redemption were his own, not of the EIIB, and were
merely stated in his 1st Indorsement with no evidence whatsoever to
substantiate them. These findings prompted petitioner to seek
reconsideration and dispute them with these claims
. . . First . . . . the shipment was not destined for
stripping. It was then being transported to a CYCFS operator where it would be examined by a
customs appraiser who would determine the proper
taxes and duties to be paid on the shipment.
Second . . . . the petitioner is a legitimate
corporation registered with the Securities and
Exchange Commission in accordance with the laws
of the Philippines . . . . 22

On petitioner's second motion for reconsideration, District Collector

Rosqueta was silent on the first claim but upheld the second claim.
According to her, petitioner is a juridical person duly organized in
accordance with the laws of the Philippines and is qualified as a
consignee; it is not fictitious as evidenced by its Articles of
Incorporation registered with the Securities and Exchange
Commission. 23 Despite these, respondent Commissioner of Customs
maintained his denial of the redemption based on his previous
unsubstantiated findings. It is settled that findings of fact of an
administrative agency must be respected so long as they are
supported by substantial evidence 24 or that amount of relevant
evidence which a reasonable mind might accept as adequate to justify
a conclusion. 25 Lacking support, the factual findings of respondent
Commissioner of Customs cannot stand on their own and therefore not
binding on the courts.
In the appeal before the CTA, respondent Commissioner of Customs
contended that the seizure of the shipment was made also upon a
finding that the documents covering it were forged, thus constituting
fraud as defined in Sec. 1, par. 1.a. CMO-87-92. This Section is of the
same tenor as Sec. 2530, pars. (f) and (m), subpars. 3, 4 and 5, which
for emphasis deals with falsities committed by the owner, importer,
exporter or consignee or importation/exportation through any other
practice or device. In Aznar, as reiterated in Farolan, we clarified that
the fraud contemplated by law must be actual and not constructive. It
must be intentional, consisting of deception willfully and deliberately
done or resorted to in order to induce another to give up some right.
The misdeclarations in the manifest and rider cannot be ascribed to
petitioner as consignee since it was not the one that prepared them. As
we said in Farolan, if at all, the wrongful making or falsity of the
documents can only be attributed to the foreign suppliers or
shippers. 26 Moreover, it was not shown in the forfeiture decision that
petitioner had knowledge of any falsity in the shipping documents.
District Collector Rosqueta's comment on petitioner's second motion
for reconsideration is enlightening: "While the shipment was
misdeclared in the rider and the manifest, the consignee is innocent of
the facts stated therein as it had no hand in their preparation or
issuance." 27 We mention in passing that in having thus stated, she in
effect nullified her prior finding that petitioner violated the cited
provisions of the Tariff and Customs Code as amended. Consequently,
we agree with the finding of the CTA that fraud was not committed by
petitioner in the importation of the shipment.
Taking into consideration the circumstances obtaining in the present
case, namely, the absence of fraud, the importation is not absolutely
prohibited and the release of the property would not be contrary to law,
the Court deems it proper to allow the redemption of the forfeited
shipment by petitioner upon payment of its computed domestic market
value. Doing so is definitely in keeping with the two-way intent of E. O.
No. 38, to wit, to expedite the collection of revenues and hasten the
release of cargoes under seizure proceedings to the end that importers
and exporters will benefit in the form of reduction in expenditures and
assurance of return of their investments that have been tied up with
their importations. 28
Finally, one may be tempted to argue that for failure to appear in the
forfeiture proceedings despite due notice, petitioner was in default and
deemed to have admitted its violation of Sec. 2503, in relation to Sec.
2530, pars. (f) and (m), as found by District Collector of Customs
Rosqueta, interpreted by the Court of Appeals as "badges of fraud,"

and, as a consequence, petitioner is now estopped from claiming that

in the proceedings for redemption there was no fraud on its part.
The argument surfs on a wrong premise. Forfeiture of seized goods in
the Bureau of Customs is a proceeding against the goods and not
against the owner. It is in the nature of a proceeding in rem, i.e.,
directed against theres or imported articles and entails a determination
of the legality of their
importation. 29 In this proceeding, it is in legal contemplation the
property itself which commits the violation and is treated as the
offender, without reference whatsoever to the character or conduct of
the owner. 30 The issue here is limited to whether the imported goods
should be forfeited and disposed of in accordance with law for violation
of the Tariff and Customs Code. Hence, the ruling of District Collector
Rosqueta in the forfeiture case, insofar as the aspect of fraud is
concerned, is not conclusive; nor does it preclude petitioner from
invoking absence of fraud in the redemption proceedings. Significantly,
while District Collector Rosqueta decreed the forfeiture of the subject
goods for violation of the Tariff and Customs Code, she nevertheless
recommended the approval of petitioner's offer of redemption, 31 and
categorically acknowledged that as consignee there was no fraud on its
part. 32
WHEREFORE, the petition is GRANTED. The Decision of respondent
Court of Appeals of 28 June 1996 sustaining the denial of the
redemption of the forfeited shipment and the Resolution of 3
September 1996 denying reconsideration are SET ASIDE. The
Decision of the Court of Tax Appeals of 27 June 1995 ordering
respondent Commissioner of Customs to allow petitioner Transglobe
International, Inc., to redeem the forfeited shipment upon payment of
its domestic market value amounting to P1,300,132.04 is
REINSTATED.
SO ORDERED.
Mendoza, Quisumbing and Buena, JJ., concur.
Puno, J., Pls. see Dissent.

Separate Opinions

PUNO, J., dissenting opinion;

The petition at bar seeks to reverse the Decision of the Court of
Appeals in CA-GR SP No. 37866 which, in effect, barred herein
petitioner Transglobe International, Inc. from redeeming its shipment
from Hongkong which was seized by the Bureau of Customs after
finding that the entries in its covering documents were false and
fictitious.

It is respectfully submitted that the petition should be denied as

petitioner failed to show that the Court of Appeals committed a
reversible error in its ruling.
Sec. 2307 of the Tariff and Customs Code provides:
Subject to the approval of the Commissioner, the
District Collector may, while the case is still
pending except when there is fraud, accept the
settlement of any seizure case provided that the
owner, importer, exporter, consignee or his agent
shall offer to pay to the collector a fine imposed by
him upon the property or in case of forfeiture, the
owner, exporter, importer or consignee or his agent
shall offer to pay for the domestic value of the
seized article. The Commissioner may accept the
settlement of any seizure case on appeal in the
same manner.
xxx xxx xxx
Redemption of forfeited property shall not be
allowed in any case where the importation is
absolutely prohibited or where the surrender of the
property to the person offering the same would he
contrary to law.
Under the foregoing provision, redemption is not allowed in
three instances: (1) when there is fraud; (2) when the
importation is absolutely prohibited; and (3) when the
surrender of the property to the person offering the
redemption would be contrary to law.
This case fails under the first instance. Respondent Commissioner of
Customs has shown by clear and convincing evidence the existence of
fraud in connection with the documentation of the seized goods. The
undisputed facts reveal that the documents covering the shipment in
question were falsified. The investigation conducted by the agents of
the Economic Intelligence and Investigation Bureau (EIIB) yielded the
following result:
1. The 40-foot van was made to
appear as consolidation
shipment consisting of 232
packages with Translink
International Freight Forwarder
as shipper and Transglobe
International, Inc. as
consignee;
2. There were eight (8)
shippers and eight (8)
consignees declared as coloaders and co-owners of the
contents of the van, when in
truth the entire shipment
belonged to only one
consignee, petitioner
Transglode International, Inc.

The other consignees were

fictitious.
3. Not one of the items
declared as the contents of the
van, i.e., various hand tools,
water cooling, tower G-clamps
compressors, bright roping wire
and knitting machines was
found in the van. Instead, the
van was fully stuffed with textile
goods.
These were not refuted, and therefore deemed admitted, by
petitioner. The EIIB thus concluded that the shipment was
made to appear to be an innocuous consolidation shipment
destined for stripping at an outside Customs Yard-Customs
Freight Services in order to conceal the textile fabrics. These
falsities constitute fraud as defined in Section 1 of Customs
Memorandum Order No. 87-92, thus:
FRAUD the following cases herein enumerated
demonstrate the presence of fraud:
1.a. the use
of forged or
spurious
documents;
1.b. prima
facie evide
nce of
fraud under
Section
2503 of the
TCCP on
undervaluat
ion,
misclassific
ation, and
misdeclarat
ion in entry;
1.c. the use
of false
machinatio
ns,
misreprese
ntation,
concealme
nt of facts
that
resulted in
loss of
revenues
reaching
levels that
is
unconscion
able and
unbecomin

g of a lawabiding
taxpayer
and citizen;
1.d. other
cases
similarly
situated.
Thus, under the circumstances, petitioner may not be allowed to
redeem the seized goods under Section 2307 of the Tariff and Customs
Code.
I am not impressed by petitioner's pretension that it is innocent of the
use of forged documents. Petitioner has admitted that it is the only
consignee of the smuggled goods. It does not explain who else could
have been responsible for the use of the forged documents. It is far
fetched to assume that the criminal act can be attributed to the foreign
suppliers or shippers for they do not have any motive to commit the
falsification. Petitioner was summoned to shed light on the use of these
forged documents in the seizure proceedings. Petitioner never
appeared to explain.
I appreciate the majority's concern on the need for government to
collect more taxes. But more important than this desideratum is the
need to curb smuggling in our Bureau of Customs. The facts of the
case at bar show an out and out attempt to smuggle highly dutiable
textiles thru the use of forged documents. The use of forged
documents is fraud under any habiliment. These textiles should be
confiscated and sold at public auction. To allow their redemption is to
sanction the circumvention of laws.
IN VIEW WHEREOF, I vote to DENY the petition.

shall offer to pay for the domestic value of the

seized article. The Commissioner may accept the
settlement of any seizure case on appeal in the
same manner.
xxx xxx xxx
Redemption of forfeited property shall not be
allowed in any case where the importation is
absolutely prohibited or where the surrender of the
property to the person offering the same would he
contrary to law.
Under the foregoing provision, redemption is not allowed in
three instances: (1) when there is fraud; (2) when the
importation is absolutely prohibited; and (3) when the
surrender of the property to the person offering the
redemption would be contrary to law.
This case fails under the first instance. Respondent Commissioner of
Customs has shown by clear and convincing evidence the existence of
fraud in connection with the documentation of the seized goods. The
undisputed facts reveal that the documents covering the shipment in
question were falsified. The investigation conducted by the agents of
the Economic Intelligence and Investigation Bureau (EIIB) yielded the
following result:
1. The 40-foot van was made to
appear as consolidation
shipment consisting of 232
packages with Translink
International Freight Forwarder
as shipper and Transglobe
International, Inc. as
consignee;

Separate Opinions
PUNO, J., dissenting opinion;
The petition at bar seeks to reverse the Decision of the Court of
Appeals in CA-GR SP No. 37866 which, in effect, barred herein
petitioner Transglobe International, Inc. from redeeming its shipment
from Hongkong which was seized by the Bureau of Customs after
finding that the entries in its covering documents were false and
fictitious.
It is respectfully submitted that the petition should be denied as
petitioner failed to show that the Court of Appeals committed a
reversible error in its ruling.
Sec. 2307 of the Tariff and Customs Code provides:
Subject to the approval of the Commissioner, the
District Collector may, while the case is still
pending except when there is fraud, accept the
settlement of any seizure case provided that the
owner, importer, exporter, consignee or his agent
shall offer to pay to the collector a fine imposed by
him upon the property or in case of forfeiture, the
owner, exporter, importer or consignee or his agent

2. There were eight (8)

shippers and eight (8)
consignees declared as coloaders and co-owners of the
contents of the van, when in
truth the entire shipment
belonged to only one
consignee, petitioner
Transglode International, Inc.
The other consignees were
fictitious.
3. Not one of the items
declared as the contents of the
van, i.e., various hand tools,
water cooling, tower G-clamps
compressors, bright roping wire
and knitting machines was
found in the van. Instead, the
van was fully stuffed with textile
goods.
These were not refuted, and therefore deemed admitted, by petitioner.
The EIIB thus concluded that the shipment was made to appear to be

an innocuous consolidation shipment destined for stripping at an

outside Customs Yard-Customs Freight Services in order to conceal
the textile fabrics. These falsities constitute fraud as defined in Section
1 of Customs Memorandum Order No. 87-92, thus:
FRAUD the following cases herein enumerated
demonstrate the presence of fraud:
1.a. the use
of forged or
spurious
documents;
1.b. prima
facie evide
nce of
fraud under
Section
2503 of the
TCCP on
undervaluat
ion,
misclassific
ation, and
misdeclarat
ion in entry;
1.c. the use
of false
machinatio
ns,
misreprese
ntation,
concealme
nt of facts
that
resulted in
loss of
revenues
reaching
levels that
is
unconscion
able and
unbecomin
g of a lawabiding
taxpayer
and citizen;
1.d. other
cases
similarly
situated.
Thus, under the circumstances, petitioner may not be allowed to
redeem the seized goods under Section 2307 of the Tariff and Customs
Code.
I am not impressed by petitioner's pretension that it is innocent of the
use of forged documents. Petitioner has admitted that it is the only

consignee of the smuggled goods. It does not explain who else could
have been responsible for the use of the forged documents. It is far
fetched to assume that the criminal act can be attributed to the foreign
suppliers or shippers for they do not have any motive to commit the
falsification. Petitioner was summoned to shed light on the use of these
forged documents in the seizure proceedings. Petitioner never
appeared to explain.
I appreciate the majority's concern on the need for government to
collect more taxes. But more important than this desideratum is the
need to curb smuggling in our Bureau of Customs. The facts of the
case at bar show an out and out attempt to smuggle highly dutiable
textiles thru the use of forged documents. The use of forged
documents is fraud under any habiliment. These textiles should be
confiscated and sold at public auction. To allow their redemption is to
sanction the circumvention of laws.1wphi1.nt
IN VIEW WHEREOF, I vote to DENY the petition.
Footnotes
1 Court of Tax Appeals Records, Vol. I, pp. 147148.
2 Id., p. 149.
3 Id., p. 150.
4 Id., p. 151.
5 Id., p. 152.
6 Container Yard-Container Freight Station.
7 CTA Records, Vol, I, p. 153.
8 Ibid.
9 Id., p. 159.
10 Id., p. 33.
11 Id., p. 163.
12 Id., pp. 38 and 39.
13 CTA Case No. 4428, 15 September 1994.
14 Decision penned by Presiding Judge Ernesto D.
Acosta with the concurrence of Associate Judges
Manuel K. Gruba and Ramon O. de Veyra; CTA
Records, Vol. I, p. 198.
15 Decision penned by Justice Jose C. de la Rama
with the concurrence of Justices Emeterio C. Cui
and Eduardo G. Montenegro; Rollo, pp. 64-65.
16 Id., pp. 62-64.

17 Id., p. 67.

As summarized by the Court of Appeals, the antecedents of the case

are as follows:

18 No. L-42204, 21 January 1993, 217 SCRA 298.

19 No. L-20569, 23 August 1974, 58 SCRA 519.
20 Issued on 8 August 1986.
21 See Note 7.
22 CTA Records, Vol. I, pp. 4-5, 24-25.
23 See Note 10.
24 Rubenecia v. Civil Service Commission, G.R.
No. 115942, 31 May 1996, 244 SCRA 640.
25 Reno Foods, Inc. v. NLRC, G.R. No. 116462, 18
October 1995, 249 SCRA 379.
26 Citing Farm Implement and Machinery Co. v.
Commissioner of Customs, No. L-22212, 30 August
1968, 24 SCRA 905.
27 See Note 10.
28 Spelled out in the Whereas clauses.
29 Vierneza v. Commissioner of Customs, No. L24348, 30 July 1968, 24 SCRA 394.
30 See United State v. Steamship "Rubi", 32 Phil.
228 (1915); Commissioner of Customs v. Pascual,
L-31733, 20 September 1985, 138 SCRA 581.
31 Exh. "D."
32 See Note 10.
G.R. No. 129680 September 1, 1999
CARRARA MARBLE PHILIPPINES, INC., petitioner,
vs.
COMMISSIONER OF CUSTOMS, respondent.

DAVIDE, JR., C.J.:

In this petition for review on certiorari, petitioner urges us to set aside
the decision 1 and resolution 2 of the Court of Appeals in CA-G.R SP
No. 42976 affirming the decision of the Court of Tax Appeals (CTA).
The CTA upheld the legality of the forfeiture proceedings conducted by
the Collector of Customs of articles illegally withdrawn from Customs
custody, and ordered their delivery to the winning bidder in the auction
sale.

On April 10, 1987, the Collector of Customs

conducted a public auction sale of various articles
duly declared abandoned after appropriate
proceedings. Included in the sale was Lot 15
advertised as "15 tons more or less, of marble
processing machine and grinding machine, rusty
and in junk condition," stored at the Mina Amapola
CY-CFS, Taguig, Metro Manila, since 1979. Lot 15
was awarded to Engr. Franklin G. Policarpio as the
highest bidder thereof, after payment of P61,
250.00.
On April 21, 1987, after Engr. Policarpio had taken
delivery of said lot, he wrote the Collector of
Customs informing him that the following items
supposed to be part of Lot 15 were missing: a
Special Circular Saw (for vertical and horizontal
cutting of strips Model Block Tailor BK-1200 with
switch gear and contractor control and
reinforcement main motor) and a Diamond Sawing
Machine (Model TBS 500D, including switch gear
cabinet with contractor for all motors).
The missing machineries were later found installed
in the compound of petitioner Carrara Marble
Philippines, Inc., Lipa City, Batangas, true to the
information furnished by Engr. Policarpio himself.
Consequently, for alleged violations of Section
2536 (non-payment of duties and taxes) and
Section 2530[e] (illegal removal of articles from the
warehouse) of the Tariff and Customs Code (TCC),
the aforesaid machineries were seized (per
Warrant of Seizure and Detention dated May 29,
1991) from the compound of petitioner at Banaybanay, Lipa City.
During the seizure and forfeiture proceedings,
Carrara Marble Philippines, Inc., failed to present
evidence of payment of duties and taxes on the
subject machineries. In its defense, it claimed, that
the machineries were purchased locally from a
certain Jaina Perez as evidenced by two notarized
deeds of absolute sale dated December 20, 1985
(for the trimming machine) and October 28, 1986
(for the high speed blocksaw). Meanwhile, Engr.
Policarpio intervened in said proceedings, claiming
ownership over the subject machineries as the
successful bidder in the public auction sale
conducted by the Bureau of Customs wherein said
machineries were part of Lot 15.
In a letter dated November 14, 1992, petitioner
offered to settle the case in accordance with Article
2307 of the TCC. However, said offer was refused
by the District Collector of Customs on the ground
that said articles were already auctioned off and
awarded to Engr. Policarpio.1wphi1.nt

Thereafter, the Collector of Customs on June 24,

1992, declared the machineries forfeited in favor of
the government. Petitioner appealed from the
Collector of Customs' decision to the
Commissioner of Customs who, on July 2, 1993,
affirmed said decision.
From said Decision of the Commissioner of
Customs, appeal by way of a petition for review
was further taken by herein petitioner Carrara
Marble Philippines, Inc., to the Court of Tax
Appeals. Engr. Franklin Policarpio, as intervenor,
also appealed the same decision of the
Commissioner of Customs to the Tax Court, which
was docketed its CTA Case No. 5057, and entitled
"Engineer Franklin Policarpio vs. The Honorable
Commissioner of Customs and Deputy
Commissioner of Customs Licerio Evangelista. 3
The CTA allowed Mary Ann Luz Puno and other individuals claiming to
be minority stockholders and receivers of petitioner to intervene in the
proceedings. The intervenors' prayer for possession of the machineries
was granted conditioned upon the posting of a cash bond. However,
they submitted the case for decision on 4 March 1996 without posting
the bond.
On 7 May 1996, the CTA dismissed the petition for review filed by
petitioner; affirmed the authority of the Customs Commissioner to seize
the machineries; and ordered the Commissioner to deliver the articles
to Policarpio as the highest bidder in accordance with its decision in
CTA Case No. 5057. 4
The intervenors moved for the reconsideration 5 of the CTA's decision.
On 8 October 1996, the CTA denied 6 the motion for reconsideration.
On appeal, the Court of Appeals sustained the CTA and dismissed the
petition for lack of merit, capitalizing on the contract of sale between
the Bureau of Customs and Policarpio, which allows a refund in case of
loss or short-delivery. In case a refund is made, it is as if duties, taxes
and charges on the articles remained unpaid. Consequently,
importation could not be considered terminated, and the Collector of
Customs was still authorized to seize the articles pursuant to Section
2530(e) of the Tariff and Customs Code (TCC).
The Court of Appeals noted that petitioner's argument that with the
termination of importation the Bureau of Customs lost its jurisdiction
over the res was premised upon Policarpio's ownership of the property.
Such premise conflicted with petitioner's pretension of being a buyer in
good faith and for value, and foreclosed the possibility of a
compromise. The notarized deeds of sale were merely prima
facie evidence of ownership which failed to prove petitioner's claim
over the property. Section 2535 of the TCC laying the burden of proof
on the claimant still applied. The Court of Appeals concluded that the
jurisdiction of the Collector of Customs in forfeiture proceedings
extends to all questions incidental thereto including the authority to
determine the true ownership of forfeited property.
Petitioner then filed on 6 June 1997 a motion for reconsideration 7 of
the decision of the Court of Appeals. That motion was, however, denied
for failure to state the material dates showing that it was filed on time,

as required by Section 1, Rule 9, of the Revised Internal Rules of the

Court of Appeals.
Hence this petition.
Petitioner insists that the purpose of Section 1, Rule 9 of the Revised
Internal Rules of the Court of Appeals requiring motions for
reconsideration to state material dates is to show that they were filed
on time. It had substantially complied with that requirement because its
Compliance 8 dated 28 May 1997 indicated that it received the
challenged decision on 23 May 1997; thus, its filing of the motion for
reconsideration was well within the reglementary period prescribed by
law.
Petitioner likewise contends that the Bureau of Customs had no
jurisdiction over the res because importation had terminated. Forfeiture
as a remedy of the government is authorized under Section 2530 of the
TCC only when and while the articles are in the custody or within the
jurisdiction of customs authorities or in the hands or subject to the
control of the importer. When the articles were awarded to Policarpio
as the winning bidder in the auction sale, taxes, duties and charges
due on them were considered paid; the government was compensated,
and so it no longer stood to suffer damages from the importation.
Furthermore, with the legal permit for withdrawal of the articles having
been granted, the government lost its lien over the property. The
"possibility" of a refund in case of short delivery under the warranty in
Policarpio's deed of sale only extends the definition of importation.
Asserting its "prior right" over the machineries, petitioner also argues
that the Bureau of Customs was without authority to seize the same.
There was no probable cause that would warrant seizure and forfeiture
of the subject articles. Neither was there evidence that the articles were
part of Lot 15. Petitioner acquired the machineries in good faith and for
value, as confirmed by two notarized deeds of sale; and it was
unaware that they were imported. Hence, resort should have been
through judicial process under Article 433 of the Civil Code. Besides,
before forfeiture proceedings can be instituted as provided for in
Section 2530 of the TCC, there must be fraud upon the government.
Fraud cannot be presumed; and without evidence that petitioner
acquired the machineries fraudulently, it must be presumed the owner
of the articles.
Moreover, petitioner maintains that no justifiable reason existed for
denying its offer of a compromise in accordance with Section 2307 of
the TCC. There was no fraud in the importation of the property. Neither
did petitioner's offer signify that it waived previous defenses and
admitted liability.
Finally, petitioner reiterates that the Bureau of Customs had neither
authority to seize the articles to determine their true ownership nor
jurisdiction to decide questions of ownership.
Respondent sees the matter differently. It accuses petitioner of forumshopping and of employing delaying tactics and maneuvers which
hamper the ends of justice. Respondent contends that petitioner's
substantial compliance with Section 1, Rule 9 of the Revised Internal
Rules of the Court of Appeals notwithstanding, the law allows dismissal
of the motion for reconsideration for failure to comply with the material
data rule.

Respondent also insists that the Bureau of Customs had jurisdiction

over the machineries. As held by the CTA and the Court of Appeals, the
loss of the machineries would mean their non-delivery to Policarpio,
thus creating an obligation on the part of the government to refund a
proportionate amount of the purchase price paid by Policarpio.
Fraudulent removal of the machineries from the warehouse under
Customs supervision made Section 2530 of the TCC applicable.
Respondent further points out that petitioner was unable to prove that
the subject items were indeed sold to it by Jaina Perez. The latter and
the notaries public who notarized the alleged deeds of sale were not
presented as witnesses. Besides, said items were stolen; so the
alleged seller had no right to pass on to petitioner as buyer. Likewise,
petitioner's failure to present receipts validating its ownership of the
property was sufficient cause for instituting seizure and forfeiture
proceedings. Pursuant to Section 2535 of the TCC, the burden of proof
was shifted to petitioner, who, however, failed to substantiate its good
faith and lack of knowledge of the importation.
Finally, respondent claims that settlement of seizure cases is not
allowed under Section 2307 of the TCC where the importation is
absolutely prohibited or the release of the property is contrary to law,
which is what obtains in this case. Petitioner's offer of compromise puts
it in estoppel and negates its argument questioning the jurisdiction of
the Bureau of Customs.

custody. 10 Before forfeiture proceedings are instituted the law requires

the presence of probable cause. Once established, the burden of proof
is shifted to the claimant. 11 Under Section 2536 of the TCC, the
Commissioner of Customs, Collector of Customs or any other customs
officer, with prior authorization in writing by the Commissioner, may
demand evidence of payment of duties and taxes on foreign articles
openly offered for sale or kept in storage, and if no such evidence can
be produced, such articles may be seized and subjected to forfeiture
proceedings; provided, however, that during such proceedings the
person or entity from whom such articles were seized shall be given an
opportunity to prove or show the source of such articles and the
payment of duties and taxes thereon.
The findings of fact of the CTA on this matter is informative.
So it remains undisputed that after the auction sale
and before delivery to Mr. Policarpio, as the
winning bidder, the subject articles were carted
away mysteriously from customs custody and
reappeared thereafter in the premises of herein
petitioner. There is no question that before delivery
of these items to Mr. Franklin Policarpio, these
items were under the custody of the Bureau of
Customs and when they were about to be handed
over to Mr. Policarpio, the latter discovered the said
items to be missing. 12

The questions for our resolution are the following:

(1) Was the dismissal of the
petition by the Court of Appeals
under Section 1, Rule 9 of its
Revised Internal Rules of
Procedure correct?
(2) Was the forfeiture of articles
in the possession of a third
party made after the sale at
public auction proper?
(3) Has the importation been
terminated?
(4) Who has the right to retain
possession over the
machineries?
Petitioner cannot find fault with the denial of its motion for
reconsideration. It admitted non-compliance with the requisites of
Section 1, Rule 9 of the Revised Internal Rules of Procedure of the
Court of Appeals, for indeed nothing in the motion indicated that it was
filed on time. Its Compliance anteriorly filed did not cure the defect. It
must be stressed that the rule was designed to save the Court of
Appeals from reviewing the record to determine whether the motion
was indeed filed on time.
And now on the substantive issues.
The Tariff and Customs law subjects to forfeiture any article which is
removed contrary to law from any public or private warehouse under
customs supervision, 9 or released irregularly from Customs

It is settled that the factual findings of the CTA, as affirmed by the Court
of Appeals, are entitled to the highest respect 13 and are well-nigh
conclusive upon this court. 14 Based on the findings of the CTA, the
subject machineries were liable to forfeiture under customs law. Upon
demand for evidence of payment of duties and taxes, petitioner failed
to present receipts. What it presented were two notarized deeds of sale
executed in 1985 and 1986 between petitioner as buyer and Jaina
Perez as seller.
Despite ample opportunity to discharge the burden of proof, petitioner
failed to prove its claim over the machineries. Jaina Perez, the
supposed seller, was subpoenaed to substantiate petitioner's claim; but
she never appeared. The notaries public before whom the deed of sale
were notarized were not presented either. More importantly, there was
no intervening transaction between Perez and the Bureau of Customs
concerning the subject machineries that would have transferred their
ownership to Perez and thereafter to petitioner. That the goods were
allegedly sold to petitioner in 1985 and 1986 while they were still under
Customs custody and prior to the auction sale is legally untenable and
unacceptable.
Contrary to the CTA's rationale for sanctioning the forfeiture,
importation was terminated after Policarpio signed Gate Pass No. 5136
on 10 April 1987 evidencing withdrawal of Lot No. 15 from customs
custody. Importation is deemed terminated upon payment of duties,
taxes and other charges due or secured to be paid upon the articles at
a port of entry, and upon the grant of a legal permit for withdrawal; or in
case said articles are free of duties, taxes and other charges, until they
have legally left the jurisdiction of the customs. 15 The forfeiture of the
subject machineries however, is not dependent on whether or not the
importation was terminated; rather it is premised on the illegal
withdrawal of goods from Customs custody.

Thus, regardless of the termination of importation, Customs authorities

may validly seize goods which, for all intents and purposes, still belong
to the government. This is so because forfeiture takes effect
immediately upon the commission of the offense. The forfeiture of the
subject machineries, therefore, retroactect to the date they were
illegally withdrawn from Customs custody. The government's right to
recover the machineries proceeds from its right as lawful owner and
possessor thereof upon abandonment by Filipinas Marble. Such right
may be asserted no matter into whose hands the property may have
come, and the condemnation when obtained avoids all intermediate
alienations. 16 To sanction petitioner's possession of the property would
be to close our eyes to acts of defraudation practiced upon the
government.
Incidentally, the forfeiture of the subject machineries rests on a different
statutory basis from Policarpio's right to receive the property as winning
bidder in the auction sale. The forfeiture proceedings were based upon
the government's right to recover property illegally withdrawn from its
custody. On the other hand, Policarpio's right stems from the
government's contractual obligation to deliver the machineries to
Policarpio as buyer in good faith at the public auction sale.
Petitioner's contention of being a buyer in good faith and for value with
a prior right over the property is likewise untenable. Petitioner allegedly
derived its right over the property through the deeds of sale executed
by and between it, as buyer, and a certain Jaina Perez, as seller, prior
to the auction sale. The following, however, is worthy to note:
[T]he subject pieces of machinery were part of lot
15 which was sold in an auction sale to satisfy the
unpaid taxes, duties and other charges. Such
machineries were imported but later abandoned by
Filipinas Marble in favor of the government. The
fact that this shipment formed part of lot 15 is
undisputed by both parties to this case. 17
Before such machineries were allegedly sold to petitioner
they formed part of the mass of Customs property stored
inside the Mina Amapola CY-CFS in Taguig. Records of the
Bureau of Customs indicated no transactions concerning the
subject machineries except the abandonment by Filipinas
Marble and the auction sale to Policarpio. Contrary to
petitioner's contention, it is the sale of the subject
machineries to petitioner by Jaina Perez, not the sale to
Policarpio, that is ineffective. The government never dealt
with Jaina Perez; hence Perez, having no right over the
property, had nothing to transfer to petitioner 18 even if
petitioner's alleged acquisition of the property was in good
faith and for value.
Lastly, as opined by the Collector of Customs, compromise could not
be allowed anymore, since the subject machineries had already been
awarded to Policarpio, being the highest bidder in the public auction
sale conducted by the Bureau of Customs.
WHEREFORE, the instant petition is hereby DISMISSED, for lack of
merit, and the challenged decision of the Court of Appeals is
AFFIRMED.1wphi1.nt
SO ORDERED.

Puno, Kapunan, Pardo and Ynares-Santiago, JJ., concur.

Footnotes
1 Rollo, 65-75. Per Alicia Austria-Martinez, J., with Buena, A.,
and Callejo, Sr., R., JJ., concurring.
2 Rollo, 77.
3 Rollo, 65, 67-68.
4 Rollo, 106-119. Per Associate Judge Ramon O. De Vera,
with Associate Judges Ernesto D. Acosta and Manuel K.
Gruba, concurring.
5 Rollo, 208-211.
6 Id., 220.
7 Id., 230-260.
8 Rollo, 228-229.
9 Sec. 2530, par. (e), Tariff and Customs Code (TCC).
10 De Joya v. Lantin, 19 SCRA 893, 897 [1967].
11 Sec. 2535, TCC.
12 CTA Decision; Rollo, 113.
13 Nasiad v. CTA, 61 SCRA 238, 244 [1974]; Commissioner
of Internal Revenue v. Cadwallader Pacific Company, 73
SCRA 59 [1976]; Raymundo v. De Joya, 101 SCRA 495, 498
[1980].
14 Commissioner of Internal Revenue v. PJ Kiener Co. Ltd.,
65 SCRA 142, 153 [1975].
15 Sec. 1202, TCC.
16 21 AM JUR 2d, Customs Duties and Import Regulations
125 (1965).
17 CTA Decision; Rollo 112.
18 See Article, 1459, Civil Code, which provides: "The thing
must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered."

[G.R. No. 129651. October 20, 2000]

FRANK UY and UNIFISH PACKING CORPORATION, petitioners,

vs. BUREAU OF INTERNAL REVENUE and
HON. MERCEDES GOZO-DADOLE, respondents.
DECISION
KAPUNAN, J.:
Petitioners assail the validity of the warrants issued for the
search of the premises of the Unifish Packing Corporation, and pray for
the return of the items seized by virtue thereof.
On 30 September 1993, a certain Rodrigo Abos reported to the
Bureau of Internal Revenue (BIR) that petitioners Unifish Packing
Corporation and Uy Chin Ho aliasFrank Uy were engaged in activities
constituting violations of the National Internal Revenue Code. Abos,
who claimed to be a former employee of Unifish, executed an
Affidavit[1] stating:
1. He has personal knowledge that UNIFISH PACKING
CORPORATION (hereinafter referred to as UNIFISH), a canning
factory located at Hernan Cortes Street, under the active management
of UY CHIN HO alias Frank Uy [,] is selling by the thousands of [sic]
cartons of canned sardines without issuing receipt. This is in violation
of Sections 253 and 263 of the Internal Revenue Code.
2. This grand scale tax fraud is perpetrated through the following
scheme:
(1) Uy Chin Ho a director of UNIFISH buys in
bulk from the company;
(2) Being a director, Uy Chin Ho has a lot of
clout in the distribution of the canned
sardines processed by UNIFISH;
(3) Uy Chin Ho dictates the value of canned
sardines that he orders and buys from
UNIFISH without any receipt of his
purchases;
(4) The moment he has the quantity he
wants, UNIFISH through Uy Chin Ho
delivers to the different supermarkets
such as White Gold, Gaisano, etc.;

is to be used only in the processing of tuna for export and that it is not
to be sold unprocessed as is to local customers.
4. Another fraudulent practice involves the sales of unused cans;
UNIFISH also enjoys tax exemptions in its purchases of tin cans
subject to the condition that these are to be used as containers for its
processed tuna for export. These cans are never intended to be sold
locally to other food processing companies.
5. Prior to 1990, that is from 1980 to 1990, the factory of the UNIFISH
PACKING CORPORATION was then run by the PREMIER
INDUSTRIAL & DEVELOPMENT CORPORATION (hereinafter referred
to as PREMIER) [,] which corporation was being controlled by the
same majority stockholders as those now running and controlling
UNIFISH; [a]t that time, PREMIER was also committing the same
fraudulent acts as what is being perpetrated by UNIFISH at present.
6. The records containing entries of actual volume of production and
sales, of both UNIFISH AND PREMIER, are found in the office of the
corporation at its factory site at H. Cortes Street, Mandaue City. The
particular place or spot where these records [official receipts, sales
invoices, delivery receipts, sales records or sales books, stock cards,
accounting records (such as ledgers, journals, cash receipts books,
and check disbursements books)] are kept and may be found is best
described in the herein attached sketch of the arrangement of the
offices furniture and fixture of the corporation which is made an integral
part hereof and marked as Annex A,
7. He is executing this affidavit to attest under oath the veracity of the
foregoing allegations and he is reserving his right to claim for reward
under the provisions of Republic Act No. 2338.
On 1 October 1993, Nestor N. Labaria, Assistant Chief of the
Special Investigation Branch of the BIR, applied for search warrants
from Branch 28 of the Regional Trial Court of Cebu. The application
sought permission to search the premises of Unifish.
After hearing the depositions of Labaria and Abos, Judge
Mercedes Gozo-Dadole issued the disputed search warrants. The
first[2] is docketed as SEARCH WARRANT NO. 93-10-79
FOR: VIOLATION OF SECTION 253 ("Search Warrant A-1"), and
consists of two pages. A verbatim reproduction of Search Warrant A-1
appears below:
REPUBLIC OF THE PHILIPPINES
REGIONAL TRIAL COURT OF CEBU
7th Judicial Region
Branch 28
Mandaue City

(5) Payments made by these tax evading

establishments are made by checks
drawn payable to cash and delivered to
Uy Chin Ho; These payments are also not
receipted (sic);
(6) Uy Chin Ho will then pay UNIFISH for the
quantity of sardines he had withdrawn
from the corporation;
3. Another fraudulent practice perpetrated by UNIFISH through Uy
Chin Hos direction is the sale of imported oil locally to different
customers. This is a case of smuggling in the sense that UNIFISH,
being an export company registered with the Board of Investments, is
enjoying certain exemptions in their importation of oil as one of the raw
materials in its processing of canned tuna for export. These tax
exemptions are granted by the government on the condition that the oil

THE PEOPLE OF THE PHILIPPINES,

Plaintiff,
- versus - SEARCH WARRANT NO. 93-10-79
FOR: VIOLATION OF SEC. 253
UY CHIN HO alias FRANK UY,
Unifish Packing Corporation
Hernan Cortes St., Cebu City
x-------------------------/

(with sketch)
SEARCH WARRANT
TO ANY PEACE OFFICER:

UY CHIN HO alias FRANK UY, and

Unifish Packing Corporation
Hernan Cortes St., Mandaue City
x-------------------------/
(with sketch)
SEARCH WARRANT

G R E E T I N G S:
It appearing to the satisfaction of the undersigned, after examination
underoath (sic), Nestor N. Labaria, Asst. Chief, Special Investigation
Branch, BIR and witness Rodrigo Abos that there is a (sic) probable
cause to believe that the crime of violation of Section 253 - attempt to
evade or defeat the tax has been committed and there is good and
sufficient reason to believe that Uy Chin Ho c/o Unifish Packing
Corporation, Hernan Cortes St., Mandaue City has in his possession,
care and control, the following:
1. Multiple sets of Books of Accounts; Ledgers,
Journals, Columnar Books, Cash Register
Books, Sales Books or Records; Provisional
& Official Receipts;
2. Production Record Books/Inventory Lists [,] Stock
Cards;
3. Unregistered Delivery Receipts;
4. Unregistered Purchase & Sales Invoices;
5. Sales Records, Job Order;
6. Corporate Financial Records; and
7. Bank Statements/Cancelled Checks
You are hereby commanded to make an immediate search at any time
of day or night of said premises and its immediate vicinity and to
forthwith seize and take possession of the articles above-mentioned
and other properties relative to such violation and bring said properties
to the undersigned to be dealt with as the law directs.
WITNESS MY HAND this 1st day of October, 1993.
(sgd.)
MERCEDES GOZO-DADOLE
Judge
The second warrant[3]is similarly docketed as SEARCH
WARRANT 93-10-79 FOR: VIOLATION OF SEC. 253 ("Search
Warrant A-2"). Search Warrant A-2, reproduced below, is almost
identical in content to Search Warrant A-1, save for the portions
indicated in bold print. It consisted of only one page.
REPUBLIC OF THE PHILIPPINES
REGIONAL TRIAL COURT OF CEBU
7th Judicial Region
Branch 28
Mandaue City
THE PEOPLE OF THE PHILIPPINES,
Plaintiff,
- versus - SEARCH WARRANT NO. 93-10-79
FOR: VIOLATION OF SEC. 253

TO ANY PEACE OFFICER:

G R E E T I N G S:
It appearing to the satisfaction of the undersigned, after examination
underoath [sic], Nestor N. Labaria, Asst. Chief, Special Investigation
Branch, BIR and witness Rodrigo Abos that there is a [sic] probable
cause to believe that the crime of violation of Section 253 - attempt to
evade or defeat the tax has been committed and there is good and
sufficient reason to believe that Uy Chin Ho alias Frank Uy
and Unifish Packing Corporation, Hernan Cortes St., Mandaue City
has in his possession, care and control, the following:
1. Multiple sets of Books of Accounts; Ledgers,
Journals, Columnar Books, Cash Register
Books, Sales Books or Records; Provisional
& Official Receipts;
2. Production Record Books/Inventory Lists [,] Stock
Cards;
3. Unregistered Delivery Receipts;
4. Unregistered Purchase & Sales Invoices;
5. Sales Records, Job Order;
6. Corporate Financial Records; and
7. Bank Statements/Cancelled Checks
You are hereby commanded to make an immediate search at any time
of day or night of said premises and its immediate vicinity and to
forthwith seize and take possession of the articles above-mentioned
and other properties relative to such violation and bring said properties
to the undersigned to be dealt with as the law directs.
WITNESS MY HAND this 1st day of October, 1993.
(sgd.)
MERCEDES GOZO-DADOLE
Judge
Judge Gozo-Dadole issued a third warrant,[4] which was docketed
as SEARCH WARRANT 93-10-80 FOR: VIOLATION OF SEC. 238 in
relation to SEC. 263 (hereinafter, "Search Warrant B"). Except for the
docket number and the designation of the crime in the body of the
warrant (Section 238 in relation to Sec. 263 - non-issuance of sales
invoice and use and possession of unregistered delivery receipts
and/or sales invoices), Search Warrant B is a verbatim reproduction of
Search Warrant A-2.
On the strength of these warrants, agents of the BIR,
accompanied by members of the Philippine National Police, on 2
October 1993, searched the premises of the Unifish Packing

Corporation. They seized, among other things, the records and

documents of petitioner corporation. A return of said search was duly
made by Nestor Labaria with the RTC of Cebu , Branch 28.

is rendered after trial on the merits, an appeal therefrom should be the

next legal step.

On 8 February 1995, the BIR filed against petitioners a case

before the Department of Justice. The records, however, do not reveal
the nature of this case.

xxx

On 31 March 1995, petitioners filed motions to quash the subject

search warrants with Branch 28 of the Cebu RTC.
The RTC, however, denied petitioners' motions to quash as well
as their subsequent motion for reconsideration, prompting petitioners to
file a petition for certiorariwith the Court of Appeals (CA). The CA
dismissed their petition, holding that petitioners failed to comply with
Section 2(a), Rule 6 of the Revised Internal Rules of the Court of
Appeals (RIRCA), which states:
a. What Should be Filed. - The petition shall be filed in seven (7) legible
copies and a copy thereof shall be served on each of the respondents,
and must be accompanied by a certified true copy of the decision or
order complained of and true copies of the pleadings and other
pertinent documents and papers. (As amended by S.Ct. Res., dated
November 24, 1992).
The CA found that petitioners did not submit certified true copies of (1)
the Motions to Quash, (2) the Motion for Reconsideration, and (3) the
Affidavit of Rodrigo Abos.
The CA also held that certiorari was not the proper remedy to
question the resolution denying the motion to quash.
In this case now before us, the available remedies to the petitioners,
assuming that the Department of Justice will eventually file the case,
are: a petition for reinvestigation; the right to post bail; a Motion to
Quash the Information; and in case of denial, an appeal, after judgment
on the merits, or after the case shall have been tried. This brings us to
the case of Lai vs. Intermediate 220SCRA 149 and the
pronouncement, thus:
Criminal Procedure: Certiorari: Certiorari should not be allowed where
petitioner has other remedies available. -- Anent the remedy resorted to
by petitioners (referring to the petition for certiorari) from the Regional
Trial Court of Negros Oriental presided by Judge Diez, the same
should not have been granted. Petitioners were not without plain,
speedy and adequate remedies in the ordinary course of law against
Judge Lomeda's order for their arrest. These remedies are as
enumerated by respondent appellate court in its decision: "1. they can
post bail for their provisional release; 2. They can ask the Provincial
Fiscal for a reinvestigation of the charge against them. If unsatisfied
with the fiscal's resolution they can ask for a review by the Minister of
Justice; (Sec. 1(), RA 5180 as amended by P.D.
911); 3. if their petition for review does not prosper, they can file a moti
on to quash the information in the trial court. (Rule 117, Rules of
Court). 4. If the motion is denied, they can appeal the judgment of the c
ourt after the case shall have been tried on the merits.
x x x Where motion to quash is denied, remedy is not certiorari, but to
go to trial.-- Moreover, in the case of Acharon vs. Purisima, this Court
held
that when a motion to quash a criminal case isdenied, the remedy is no
t certiorari but to go to trial without prejudice to reiterating the special d
efenses involved in said Motion. In the event that an adverse decision

In this case now before Us, there is no pretention [sic] that the Court
issued the Search Warrants without jurisdiction. On the contrary, it had
jurisdiction. The argument therefore that the Court committed an error
in not describing the persons or things to be searched; that the Search
Warrants did not describe with particularity the things to be
seized/taken; the absence of probable cause; and for having allegedly
condoned the discriminating manner in which the properties were
taken, to us, are merely errors in the Court's finding, certainly not
correctible by certiorari, but instead thru an appeal. [5]
In any event, the CA ruled, no grave abuse of discretion
amounting to lack of jurisdiction was committed by the RTC in the
issuance of the warrants.
As petitioners' motion for reconsideration proved futile,
petitioners filed the instant petition for review.
Petitioners claim that they did submit to the CA certified true
copies of the pleadings and documents listed above along with their
Petition, as well as in their Motion for Reconsideration. An examination
of the CA Rollo, however, reveals that petitioners first submitted the
same in their Reply, after respondents, in their Comment, pointed out
petitioners failure to attach them to the Petition.
Nevertheless, the CA should not have dismissed the petition on
this ground although, to its credit, it did touch upon the merits of the
case. First, it appears that the case could have been decided without
these pleadings and documents. Second, even if the CA deemed them
essential to the resolution of the case, it could have asked for the
records from the RTC. Third, in a similar case,[6] we held that the
submission of a document together with the motion for reconsideration
constitutes substantial compliance with Section 3, Rule 46 of the Rules
of Court, requiring the submission of a certified true copy of material
portions of the record as are referred to [in the petition], and other
documents relevant or pertinent thereto along with the petition. So
should it be in this case, especially considering that it involves an
alleged violation of a constitutionally guaranteed right. The rules of
procedure are not to be applied in a very rigid, technical sense; rules of
procedure are used only to help secure substantial justice. If a
technical and rigid enforcement of the rules is made, their aim could be
defeated.[7]
The CA likewise erred in holding that petitioners cannot avail
of certiorari to question the resolution denying their motions to quash
the subject search warrants. We note that the case of Lai vs.
Intermediate, cited by the appellate court as authority for its ruling
does not appear in 220 SCRA 149. The excerpt of the syllabus
quoted by the court, as observed by petitioners, [8] appears to have
been taken from the case of Yap vs. Intermediate Appellate Court, 220
SCRA 245 (1993). Yap, however, is inapplicable since that case
involved a motion to quash a complaint for qualified theft, not a motion
to quash a search warrant.
The applicable case is Marcelo vs. De Guzman,[9] where we held
that the issuing judges disregard of the requirements for the issuance
of a search warrant constitutes grave abuse of discretion, which may
be remedied by certiorari:

Expressly announced in Section 1, Rule 65 of the Rules of Court is the

general rule that certiorari is available where a tribunal or officer
exercising judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion and there is no appeal,
nor any plain, speedy, and adequate remedy in the ordinary course of
law.
In the light of the findings of the lower court, herein above quoted, it is
indisputable that Judge de Guzman gravely abused his discretion in
issuing the said search warrant. Indeed, he acted whimsically and
capriciously when he ignored the explicit mandate of Section 3, Rule
126 of the Rules of Court that a search warrant shall not issue but
upon probable cause in connection with one specific offense to be
determined by the municipal or city judge after examination under oath
or affirmation of the complainant and the witnesses he may produce,
and particularly describing the place to be searched and the persons or
things to be seized; and that no search warrant shall issue for more
than one specific offense.
The utter disregard by Judge de Guzman of the requirements laid
down by the said rule renders the warrant in question absolutely null
and void. It has been held that where the order complained of is a
patent nullity, a petition for certiorari and mandamus may properly be
entertained despite the existence of the remedy of appeal.
Moreover, an appeal from the order of Judge de Guzman would neither
be an adequate nor speedy remedy to relieve appellee of the injurious
effects of the warrant. The seizure of her personal property had
resulted in the total paralization of the articles and documents which
had been improperly seized. Where the remedy of appeal cannot afford
an adequate and expeditious relief, certiorari can be allowed as a
mode of redress to prevent irreparable damage and injury to a party.
This Court had occasion to reiterate the above pronouncement
in Silva vs. Presiding Judge, RTC of Negros Oriental, Br. XXXIII,
[10]
which also involved a special civil action for certiorari:[11]
Thus, in issuing a search warrant, the judge must strictly comply with
the constitutional requirement that he must determine the existence of
probable cause by examining the applicant and his witnesses in the
form of searching questions and answers. His failure to comply with
this requirement constitutes grave abuse of discretion. As declared
in Marcelo vs. De Guzman, G.R. No. L-29077, June 29, 1982, 114
SCRA 657, the capricious disregard by the judge in not complying with
the requirements before issuance of search warrants constitutes grave
abuse of discretion.
In this case, petitioners alleged in their petition before the CA that
the issuing judge violated the pertinent provisions of the Constitution
and the Rules of Court in issuing the disputed search warrants, which,
if true, would have constituted grave abuse of discretion. Petitioners
also alleged that the enforcers of the warrants seized almost all the
records and documents of the corporation thus resulting in the
paralysis of its business. Appeal, therefore, would not be an adequate
remedy that would afford petitioners expeditious relief.
We now proceed to the merits of the case.
Section 2, Article III of the Constitution guarantees the right of the
people against unreasonable searches and seizures:

The right of the people to be secure in their persons, houses, papers,

and effects against unreasonable searches and seizures of whatever
nature and for any purpose shall be inviolable, and no search warrant
or warrant of arrest shall issue except upon probable cause to be
determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or
things to be seized.
In relation to the above provision, Rule 126 of the Rules of Court
provides:
SEC. 3. Requisite for issuing search warrant. - A search warrant shall
not issue but upon probable cause in connection with one specific
offense to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched and the
things to be seized.
SEC. 4. Examination of complainant; record. - The judge must, before
issuing the warrant, personally examine in the form of searching
questions and answers, in writing and under oath the complainant and
any witnesses he may produce on facts personally known to them and
attach to the record their sworn statements together with any affidavits
submitted.
A search warrant must conform strictly to the requirements of the
foregoing constitutional and statutory provisions. These requirements,
in outline form, are:
(1) the warrant must be issued upon probable cause;
(2) the probable cause must be determined by the judge
himself and not by the applicant or any other person;
(3) in the determination of probable cause, the judge must
examine, under oath or affirmation, the complainant
and such witnesses as the latter may produce; and
(4) the warrant issued must particularly describe the place
to be searched and persons or things to be seized. [12]
The absence of any of these requisites will cause the downright
nullification of the search warrants. [13] The proceedings upon search
warrants must be absolutely legal, for there is not a description of
process known to the law, the execution of which is more distressing to
the citizen. Perhaps there is none which excites such intense feeling in
consequence of its humiliating and degrading effect. The warrants will
always be construed strictly without, however, going the full length of
requiring technical accuracy. No presumptions of regularity are to be
invoked in aid of the process when an officer undertakes to justify
under it.[14]
Petitioners contend that there are several defects in the subject
warrants that command their nullification. They point out
inconsistencies in the description of the place to be searched in Search
Warrant A-1, as well as inconsistencies in the names of the persons
against whom Search Warrants A-1 and A-2 were issued. That two
search warrants (Search Warrants A-1 and A-2) were issued for the
same crime, for the same place, at a single occasion is cited as
another irregularity. Petitioners also dispute the existence of probable
cause that would justify the issuance of the warrants. Finally, they claim
that the things to be seized were not described with particularity.These

defects, according to petitioners, render the objects seized

inadmissible in evidence.[15]

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Petitioners observe that the caption of Search Warrant A-1

indicates the address of Uy Chin Ho alias Frank Uy as Hernan Cortes
St., Cebu City while the body of the same warrant states the address
as Hernan Cortes St., Mandaue City. Parenthetically, Search
Warrants A-2 and B consistently state the address of petitioner as
Hernan Cortes St., Mandaue City.

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The Constitution requires, for the validity of a search warrant, that

there be a particular description of the place to be searched and the
persons of things to be seized. [16] The rule is that a description of a
place to be searched is sufficient if the officer with the warrant can, with
reasonable effort, ascertain and identify the place intended [17]and
distinguish it from other places in the community. [18] Any designation or
description known to the locality that points out the place to the
exclusion of all others, and on inquiry leads the officers unerringly to it,
satisfies the constitutional requirement.[19] Thus, in Castro vs. Pabalan,
[20]
where the search warrant mistakenly identified the residence of the
petitioners therein as Barrio Padasil instead of the adjoining
Barrio Maria Cristina, this Court "admitted that the deficiency in the
writ is not of sufficient gravity to call for its invalidation."
In this case, it was not shown that a street similarly named
Hernan Cortes could be found in Cebu City. Nor was it established that
the enforcing officers had any difficulty in locating the premises of
petitioner corporation. That Search Warrant A-1, therefore,
inconsistently identified the city where the premises to be searched is
not a defect that would spell the warrants invalidation in this case.
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Since, in the case at bar, the warrant was issued not for search of
the persons owning or occupying the premises, but only a search of the
premises occupied by them, the search could not be declared unlawful
or in violation of the constitutional rights of the owner or occupants of
the premises, because of inconsistencies in stating their names. [23]

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Petitioners also find fault in the description of the names of the

persons in Search Warrants A-1 and A-2. Search Warrant A-1 was
issued solely against Uy Chin Ho alias Frank Uy. Search Warrant A2, on the other hand, was directed against UY CHIN HO alias FRANK
UY, and Unifish Packing Corporation.
These discrepancies are hardly relevant.
In Miller v. Sigler,[21] it was held that the Fourth Amendment of the
United States Constitution, from which Section 2, Article III of our own
Constitution is historically derived, does not require the warrant to
name the person who occupies the described premises. Where the
search warrant is issued for the search of specifically described
premises only and not for the search of a person, the failure to name
the owner or occupant of such property in the affidavit and search
warrant does not invalidate the warrant; and where the name of the
owner of the premises sought to be searched is incorrectly inserted in
the search warrant, it is not a fatal defect if the legal description of the
premises to be searched is otherwise correct so that no discretion is
left to the officer making the search as to the place to be searched. [22]

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that an offense has been committed and that the objects sought in
connection with the offense are in the place sought to be searched. [24]

In any event, Search Warrant A-1 should be deemed superseded

by Search Warrant A-2.

In the determination of probable cause, the Constitution and the

Rules of Court require an examination of the witnesses under
oath. The examination must be probing and exhaustive, not merely
routine or pro forma. The examining magistrate must not simply rehash
the contents of the affidavit but must make his own inquiry on the intent
and justification of the application.[25] Asking of leading questions to the
deponent in an application for search warrant, and conducting of
examination in a general manner, would not satisfy the requirements
for issuance of a valid search warrant.[26]

Two warrants, Search Warrants A-1 and A-2, were actually

issued by the trial court for the same crime (violation of SEC. 253 of
the National Internal Revenue Code). It appears, however, that Search
Warrant A-2 was issued merely to correct the inconsistencies in the
address in Search Warrant A-1, as well as to include Unifish Packing
Corporation as a party against whom the warrant was issued. Search
Warrant A-2 was evidently an attempt by the issuing judge to be more
precise in the names of the persons against whom the warrant was
issued and in the description of the place to be searched. Indeed, it
would be absurd for the judge to issue on a single occasion two
warrants authorizing the search of a single place for a single
offense. Inasmuch as the apparent intent in issuing Search Warrant A-2
was to supersede Search Warrant A-1, the latter should be deemed
revoked by the former.
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Petitioners claim there was no probable cause for Judge GozoDadole to issue the subject search warrants.
Probable cause is defined as such facts and circumstances
which would lead a reasonably discreet and prudent man to believe

The witnesses, in turn, must testify under oath to facts of their

own personal knowledge. The oath required must refer to the truth of
the facts within the personal knowledge of the petitioner or his
witnesses, because the purpose thereof is to convince the committing
magistrate, not the individual making the affidavit and seeking the
issuance of the warrant, of the existence of probable cause. [27] Search
warrants are not issued on loose, vague or doubtful basis of fact, nor
on mere suspicion or belief.[28]
It may be recalled that before issuing the warrants, the judge
deposed two witnesses, namely, Nestor Labaria of the BIR, and
Rodrigo Abos, who claimed to be an old employee of
Unifish. Petitioners claim that the testimonies of Labaria and Abos are
hearsay. We agree with this contention, but only as to the testimony of
Labaria, who stated during the examination:
Q. Do you know of a certain Uy Chin Ho alias Frank Uy?
A. No.
Q. Do you know his establishment known as Unifish Packing
Corporation?
A. I have only heard of that thru the affidavit of our informer, Mr.
Abos.
Q. Why are you applying for search warrant in the premises of
Unifish Packing Corporation?
A. Because of that information we received that they are using only
delivery receipts instead of the legal sales invoices. It is
highly indicative of fraud.
Q. From where did you get that information?
A. From our informer, the former employee of that establishment.[29]
The above portion of the transcript shows that Labarias
knowledge of the alleged illegal activities of petitioners was acquired
not through his own perception but was merely supplied by
Abos. Therefore, the deposition of Labaria, which is based on hearsay,
standing alone, cannot justify the issuance of the search warrants. [30]
The application for the warrants, however, is not based solely on
Labarias deposition but is supported by that of Abos, whose
knowledge of petitioners alleged illegal practices was apparently
obtained during his employment with Unifish. In his deposition, Abos
detailed the schemes employed by Frank Uy and Unifish to evade the
payment of taxes, and described the place where the documents
supposedly evidencing these schemes were located:
Q Do you know Frank Uy?
A Yes.

Q Why do you know him?

A Because I were (sic) an employee of his from 1980 until August
of 1993.
Q Where is this Unifish Packing Corporation located?
A Hernan Cortes St.
Q What is it being engaged of?
A It is engaged in canning of fish.
Q You have executed an affidavit here to the effect that it seems
that in his business dealings that he is actually doing
something that perpetrated tax evasion. Is that correct?
A Yes.
Q How is it done?
A As an officer, he is an active member of the corporation who is at
the same time making his authority as appointing himself as
the distributor of the company's products. He sells these
products thru supermarkets in Visayas and Mindanao, in fact,
the whole Philippines. He makes it appear that it is the
company which is selling when actually it is him selling the
goods and he does not issue any invoices.

A He sells the goods to the supermarkets afterwhich the company,

Unifish will deliver to his customers, then his customers will
pay directly to him and in turn, he pays to the company.
Q And these transactions, were they reflected in their books of
account or ledger or whatever?
A It is written but it is supposed to be a secret transaction. It is not
for the public, not for the BIR but it is only for the purpose of
keeping the transactions between the company and him. It is
not made to be shown to the BIR.
Q In that books of account, is it reflected that they have made
some deliveries to certain supermarkets?
A Yes.
Q For the consumption of the BIR what are the papers that they
show?
A It is the private accounting firm that prepares everything.
Q Based on what?
A Based on some fictitious records just as they wish to declare.

Q Since he does not issue any invoices, how is it done?

Q In your affidavit you stated that there are sales invoices, official
receipts, delivery receipts, sales records, etc. These
documents are records that you have stated, in your affidavit,
which are only for the consumption of the company?

A Thru delivery receipts.

A Yes, not for the BIR.

Q Is the delivery receipt official?

Q Where are they kept now?

A No. It is unregistered.

A They are kept on the table which I have drawn in the sketch. This
is the bird's eyeview (sic) of the whole office. When you enter
thru the door this Gina Tan is the one recording all the
confidential transactions of the company. In this table you
can find all the ledgers and notebooks.

Q For how long has this been going on?

A As far as I know, it is still in 1986 since we started producing the
sardines.
Q When was the last time that you observed that that is what he is
doing?
A August, 1993, last month.
Q How did you happen to know about this last month?
A Because he delivered to certain supermarkets and the payments
of that supermarket did not go directly to the company. It
went to him and he is the one who paid the company for the
goods that he sold.
Q Can you tell this Court the name of that certain supermarkets?
A White Gold and Gaisano.
Q How did you know this fact?
A As a manager of the company I have access to all the records of
that company for the last three years. I was the Operating
Chief.
Q Until now?
A No. I was separated already.
Q When?
A August, 1993.
Q How does he do this manipulation?

Q This sketch is a blow-up of this portion, Exh. "A"?

A Yes. Exh. "B" is the blow-up of Exh. "A" inside the office.
In this blow-up there are four personnel plus one new
personnel. Gina Tan collects all the records from this girl and
this girl makes the statements. This first girl delivers the
receipts. The second girl prepares the bill of lading. The third
girl keeps the inventory of all the stocks.
This sketch here is the bodega where the records are kept. The
records from these people are stored in this place which is
marked as "C".
Q So what you want to impress on that now is that only current
records are kept by Gina because according to you the whole
records are already placed in the bodega?
A Yes.
Q But how can you enter the bodega?
A Here, from the main entrance there is a door which will lead to
this part here. If you go straight there is a bodega there and
there is also a guard from this exit right after opening the
door.
Q The problem is that, when actually in August have you seen the
current records kept by Gina?

A I cannot exactly recall but I have the xerox copies of the records.

Q Will that fact be shown in any listed articles in the application for
search warrant since according to you, you have seen this
manipulation reflected on the books of account kept by
Gina? Are you sure that these documents are still there?

Q Where are they now?

A They are in my possession (witness handling [sic] to the Court a
bunch of records).
Q The transactions that are reflected in these xerox copies that you
have given me, especially this one which seems to be pages
of a ledger, they show that these are for the months of
January, February, March, April and May. Are these
transactions reflected in these xerox copies which appear in
the ledger being shown to the BIR?
A As far as I know, it did not appear.
Q What about this one which says Columnar Book Cash Receipt
for the month of January, what does it show?
A It shows that Frank Uy is the one purchasing from the company
and these are his customers.
Q Do these entries appear in the columnar books which are the
basis for the report to the BIR?
A As far as I know, it does not reflect.
Q What are these xerox copies of checks?
A I think we cannot trace it up. These ones are the memos
received by Unifish for payment of sardines. This is the
statement of the company given to Uy Chin Ho for collection.
Q It is also stated in your affidavit that the company imported soya
oil. How is it done?
A The company imports soya oil to be used as a component in the
processing of canned tuna for export. The company enjoys
certain BOI privilege and so it is tax free. As far as I know,
they profit more to dispose the product locally. Whatever
excess of this soya oil are sold to another company.
Q Is that fact reflected in the xerox copies?
A No. I have the actual delivery receipt.
Q In other words, the company imports soya oil supposedly to be
used as a raw material but instead they are selling it locally?
A Yes. ([W]itness showing DR No. 3053 dated November 13,
1991.) This delivery receipt was the delivery receipt to
Celebes Canning Corp. of the 90 grams soya oil.
Q In other words, this soya oil should have to be used by Unifish
but instead they are seeling (sic) it?
A Yes, at a profit.
Q You also said that there is tax evasion in the selling of
cans. What do you mean by this?
A There is another privileged [sic] by the BOI for a special price
given to packaging materials. When you export the product
there is a 50% price difference. Now, taking that advantage
of that exemption, they sold it to certain company here, again
to Virginia Farms.
Q Do you have proof to that effect?
A No, but we can get it there.

A Yes. I have received information.

COURT: Alright.[31]
Abos stated that, as former Operating Chief of Unifish, he had
access to the company records, and even showed the issuing judge
photocopies thereof. Thus, we reject the contention that this witness
did not have personal knowledge of the facts to which he testified. The
contents of the deposition clearly demonstrate otherwise.
The deposition also shows that, contrary to petitioners
submission, the inquiries made by the judge were far from leading or
being a rehash of the witness affidavit.We find such inquiries to be
sufficiently probing.
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records; checks and check stubs; records of bank deposits and

withdrawals; and records of foreign remittances, covering the years
1966 to 1970.

o
f

The description does not meet the requirement in Art. III, Sec. 1, of the
Constitution, and of Sec. 3, Rule 126 of the Revised Rules of Court,
that the warrant should particularly describe the things to be seized.

t
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Petitioners note the similarities in the description of the things to
be seized in the subject warrants and those in Stonehill vs. Diokno,
[32]
Bache & Co. (Phil.), Inc. vs. Ruiz,[33] and Asian Surety & Insurance
Co., Inc. vs. Herrera.[34]
In Stonehill, the effects to be searched and seized were
described as:
Books of accounts, financial records, vouchers, journals
correspondence, receipts, ledgers, portfolios, credit journals,
typewriters, and other documents and/or papers showing all business
transactions including disbursement receipts, balance sheets and
related profit and loss statements.
This Court found that the foregoing description failed to conform
to the requirements set forth by the Constitution since:
x x x the warrants authorized the search for and seizure of records
pertaining to all business transactions of petitioners herein, regardless
of whether the transactions were legal or illegal. The warrants
sanctioned the seizure of all records of the petitioners and the
aforementioned corporations, whatever their nature, thus openly
contravening the explicit command of our Bill of Rights - that the things
to be seized be particularly described - as well as tending to defeat its
major object: the elimination of general warrants.
In Bache & Co., this Court struck down a warrant containing a
similar description as those in Stonehill:
The documents, papers, and effects sought to be seized are described
in Search Warrant No. 2-M-70 in this manner:
Unregistered and private books of accounts (ledgers, journals,
columnars, receipts and disbursements books, customers' ledgers);
receipts for payments received; certificates of stocks and securities;
contracts, promissory notes and deeds of sale; telex and coded
messages; business communications; accounting and business

xxx
In Uy Kheytin, et al. vs. Villareal, etc., et al., 42 Phil. 886, 896, this
Court had occasion to explain the purpose of the requirement that the
warrant should particularly describe the place to be searched and the
things to be seized, to wit:
x x x Both the Jones Law (sec. 3) and General Orders No. 68 (sec. 97)
specifically require that a search warrant should particularly
describe the place to be searched and the things to be seized. The
evident purpose and intent of this requirement is to limit the things to
be seized to those, and only those, particularly described in the search
warrant - to leave the officers of the law with no discretion regarding
what articles they shall seize, to the end that unreasonable searches
and seizures may not be made, - that abuses may not be
committed. That is the correct interpretation of this constitutional
provision borne out by the American authorities.
The purpose as thus explained could, surely and effectively, be
defeated under the search warrant issued in this case.
A search warrant may be said to particularly describe the things to be
seized when the description therein is as specific as the circumstances
will ordinarily allow (People vs. Rubio, 57 Phil, 384); or when the
description expresses a conclusion of fact - not of law - by which the
warrant officer may be guided in making the search and seizure (idem.,
dissent of Abad Santos, J.,); or when the things described are limited to
those which bear direct relation to the offense for which the warrant is
being issued (Sec. 2, Rule 126, Revised Rules of Court). The herein
search warrant does not conform to any of the foregoing tests. If the
articles desired to be seized have any direct relation to an offense
committed, the applicant must necessarily have some evidence, other
than those articles, to prove the said offense; and the articles subject of
search and seizure should come in handy merely to strengthen such
evidence. In this event, the description contained in the herein disputed
warrant should have mentioned, at least, the dates, amounts, persons,
and other pertinent data regarding the receipts of payments,
certificates of stocks and securities, contracts, promissory notes, deeds
of sale, messages and communications, checks, bank deposits and
withdrawals, records of foreign remittances, among others, enumerated
in the warrant.
In Asian Surety & Insurance Co., Inc. vs. Herrera, the description
of the things to be seized, i.e., Fire Registers, Loss, Bordereau,
Adjusters' Report, including subrogation receipts and proof of loss,
Loss Registers, Book of Accounts including cash receipts and
disbursements and general ledger, etc. was held to be an omnibus
description and, therefore, invalid:
x x x Because of this all embracing description which includes all
conceivable records of petitioner corporation, which if seized x x x,
could paralyze its business, petitioner in several motions filed for early

resolution of this case, manifested that the seizure of TWO carloads of

their papers has paralyzed their business to the grave prejudice of not
only the company, its workers, agents, employees but also of its
numerous insured and beneficiaries of bonds issued by it, including the
government itself, and of the general public. And correlating the same
to the charges for which the warrant was issued, We have before Us
the infamous general warrants of old.
In the case at bar, the things to be seized were described in the
following manner:
1. Multiple sets of Books of Accounts; Ledgers, Journals,
Columnar Books, Cash Register Books, Sales Books
or Records; Provisional & Official Receipts;
2. Production Record Books/Inventory Lists [,] Stock Cards;
3. Unregistered Delivery Receipts;
4. Unregistered Purchase & Sales Invoices;
5. Sales Records, Job Order;
6. Corporate Financial Records; and

warrant. In United States v. Cook,[38] the United States Court of Appeals

(Fifth Circuit) made the following pronouncement:
x x x. The leading decision is Aday v. Superior Court, 53 Cal.2d 789,
362 P.2d 47, 13 Cal.Rptr. 415 (1961). In Aday, a warrant was issued
authorizing the seizure of two particularly described books and myriad
other generally described items. On appeal, the California Supreme
Court held that only the books were particularly described in the
warrant and lawfully seized.The court acknowledged that the warrant
was flawed, but rather than suppress everything seized, the court
chose to sever the defective portions of the warrant and suppress only
those items that were not particularly described.
Although the warrant was defective x x x it does not follow that it was
invalid as a whole. Such a conclusion would mean that the seizure of
certain articles, even though proper if viewed separately, must be
condemned merely because the warrant was defective with respect to
other articles. The invalid portions of the warrant are severable from
the authorization relating to the named books x x x. The search for and
seizure of these books, if otherwise valid, were not rendered illegal by
the defects concerning other articles.

7. Bank Statements/Cancelled Checks

We agree that most of the items listed in the warrants fail to meet
the test of particularity, especially since witness Abos had furnished the
judge photocopies of the documents sought to be seized. The issuing
judge could have formed a more specific description of these
documents from said photocopies instead of merely employing a
generic description thereof. The use of a generic term or a general
description in a warrant is acceptable only when a more specific
description of the things to be seized is unavailable. The failure to
employ the specificity available will invalidate a general description in a
warrant.[35] The use by the issuing judge of the terms multiple sets of
books of accounts, ledgers, journals, columnar books, cash register
books, sales books or records, provisional & official receipts,
production record books/inventory lists, stock cards, sales records,
job
order,
corporate
financial
records,
and
bank
statements/cancelled checks is therefore unacceptable considering
the circumstances of this case.
As regards the terms unregistered delivery receipts and
unregistered purchase & sales invoices, however, we hold
otherwise. The Solicitor General correctly argues that the serial
markings of these documents need not be specified as it is not possible
to do so precisely because they are unregistered. [36] Where, by the
nature of the goods to be seized, their description must be rather
general, it is not required that a technical description be given, as this
would mean that no warrant could issue.Taking into consideration the
nature of the articles so described, it is clear that no other more
adequate and detailed description could have been given, particularly
because it is difficult to give a particular description of the contents
thereof.[37] Although it appears that photocopies of these unregistered
documents were among those handed by Abos to the issuing judge, it
would be impractical to require the latter to specify each and every
receipt and invoice, and the contents thereof, to the minutest detail.
The general description of most of the documents listed in the
warrants does not render the entire warrant void. Insofar as the
warrants authorize the search and seizure of unregistered delivery
receipts and unregistered purchase and sales invoices, the warrants
remain valid. The search warrant is severable, and those items not
particularly described may be cut off without destroying the whole

xxx
x x x We agree with the reasoning of the Supreme Court of California
and the majority of state courts that have considered this question and
hold that in the usual case the district judge should sever the infirm
portion of the search warrant as passes constitutional muster. See
United States v. Giresi, 488 F.Supp. 445, 459-60 (D.N.J.1980). Items
that were not described with the requisite particularity in the warrant
should be suppressed, but suppression of all of the fruits of the search
is hardly consistent with the purposes underlying
exclusion. Suppression of only the items improperly described prohibits
the Government from profiting from its own wrong and removes the
court from considering illegally obtained evidence. Moreover,
suppression of only those items that were not particularly described
serves as an effective deterrent to those in the Government who would
be tempted to secure a warrant without the necessary description. As
the leading commentator has observed, it would be harsh medicine
indeed if a warrant which was issued on probable cause and which did
particularly describe certain items were to be invalidated in toto merely
because the affiant and the magistrate erred in seeking and permitting
a search for other items as well. 2 W. LaFave, Search and Seizure: A
Treatise on the Fourth Amendment 4.6(f) (1978).
Accordingly, the items not particularly described in the warrants ought
to be returned to petitioners.
Petitioners allege that the following articles, though not listed in
the warrants, were also taken by the enforcing officers:
1. One (1) composition notebook containing Chinese characters,
2. Two (2) pages writing with Chinese characters,
3. Two (2) pages Chinese character writing,
4. Two (2) packs of chemicals,
5. One (1) bound gate pass,

6. Surety Agreement.[39]
In addition, the searching party also seized items belonging to the
Premier Industrial and Development Corporation (PIDC), which shares
an office with petitioner Unifish.
The things belonging to petitioner not specifically mentioned in
the warrants, like those not particularly described, must be ordered
returned to petitioners. In order to comply with the constitutional
provisions regulating the issuance of search warrants, the property to
be seized under a warrant must be particularly described therein and
no other property can be taken thereunder. [40] In Tambasen vs. People,
[41]
it was held:
Moreover, by their seizure of articles not described in the search
warrant, the police acted beyond the parameters of their authority
under the search warrant. Section 2, Article III of the 1987 Constitution
requires that a search warrant should particularly describe the things to
be seized. The evident purpose and intent of the requirement is to limit
the things to be seized to those, and only those, particularly described
in the search warrant, to leave the officers of the law with no discretion
regarding what articles they should seize, to the end that unreasonable
searches and seizures may not be made and that abuses may not be
committed (Corro v. Lising, 137 SCRA 541, 547 [1985]); Bache & Co.
[Phil.], Inc. v. Ruiz, 37 SCRA 823 [1971]; Uy Kheytin v. Villareal, 42
Phil. 886 [1920]). The same constitutional provision is also aimed at
preventing violations of security in person and property and unlawful
invasions of the sanctity of the home, and giving remedy against such
usurpations when attempted (People v. Damaso, 212 SCRA 547 [1992]
citing Alvero v. Dizon, 76 Phil. 637, 646 [1946]).
Clearly then, the money which was not indicated in the search warrant,
had been illegally seized from petitioner. The fact that the members of
the police team were doing their task of pursuing subversives is not a
valid excuse for the illegal seizure. The presumption juris tantum of
regularity in the performance of official duty cannot by itself prevail
against the constitutionally protected right of an individual (People v.
Cruz, 231 SCRA 759 [1994]; People v. Veloso, 48 Phil. 169, 176
[1925]). Although public welfare is the foundation of the power to
search and seize, such power must be exercised and the law enforced
without transgressing the constitutional rights of the citizens (People v.
Damaso, supra, citing Rodriguez v. Evangelista, 65 Phil. 230, 235
[1937]).As the Court aptly puts it in Bagahilog v. Fernandez, 198 SCRA
614 (1991), [z]eal in the pursuit of criminals cannot ennoble the use of
arbitrary methods that the Constitution itself abhors.
The seizure of the items not specified in the warrants cannot be
justified by the directive in the penultimate paragraph thereof to "seize
and take possession of other properties relative to such violation,"
which in no way can be characterized as a particular description of the
things to be seized.
As regards the articles supposedly belonging to PIDC, we cannot
order their return in the present proceedings. The legality of a seizure
can be contested only by the party whose rights have been impaired
thereby, and the objection to an unlawful search and seizure is purely
personal and cannot be availed of by third parties. [42]
WHEREFORE, the Resolutions of respondent Court of Appeals
dated 27 June 1996 and 14 May 1987, affirming the Order of the
Regional Trial Court dated 17 July 1995, are hereby AFFIRMED insofar
as said Resolutions upheld the validity of the subject Search Warrants

authorizing the seizure of the unregistered delivery receipts and

unregistered purchase and sales invoices, but REVERSED with
respect to the rest of the articles subject of said warrants. The
respondent Bureau of Internal Revenue is hereby ordered to return to
petitioners all items seized from the subject premises and belonging to
petitioners, except the unregistered delivery receipts and unregistered
purchase and sales invoices.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and YnaresSantiago, JJ., concur.

[1]

Rollo, p. 264.

[2]

Id., at 80-81.

[3]

Id., at 82.

[4]

Id., at 83.

[5]

Id., at 71-72, 78. Underscoring in the original.

[6]

Balagtas Multi-Purpose Cooperative, Inc. and Aurelio Santiago vs.

Court of Appeals, National Labor Relations Commission and Josefina
Herrero, G.R. No. 138520, September 16, 1999.
[7]

Id., citing Director of Lands vs. The Hon. Court of Appeals, 303 SCRA
495 (1999).
[8]

At note 25, p. 29 of the Petition. (Rollo, p. 55).

[9]

114 SCRA 657 (1982), cited in the Petition at p. 27. (Rollo, p. 53).

[10]

203 SCRA 140 (1991).

[11]

See also the following cases, which the Court took cognizance of,
and resolved, without regard to the question of whether the special civil
action (not an appeal) employed was the appropriate
remedy: Benjamin V. Kho and Elizabeth Alindogan vs. Hon. Roberto L.
Makalintal and National Bureau of Investigation, 306 SCRA 70 (1999),
and Castro vs. Pabalan, 70 SCRA 477 (1976) (certiorari);
Alvarez vs. Court of First Instance of Tayabas, 64 Phil. 33 (1937)
(mandamus); Corro vs. Lising, 137 SCRA 541 (1985)
(certiorari and mandamus); Tambasen vs. People, 246 SCRA 184
(1995) and Paper Industries Corporation of the Philippines, et
al. vs. Judge Maximiniano C. Asuncion, et al., 307 SCRA 253 (1999)
(certiorari and prohibition); Uy Kheytin vs. Villareal, 42 Phil. 886 (1920)
(injunction and prohibition), Nolasco vs. Pao, 139 SCRA 541 (1985)
(certiorari, mandamus and prohibition); Stonehill vs. Diokno, 20 SCRA
383 (1967), Bache & Co.(Phil.), Inc. vs. Ruiz, 37 SCRA 823 (1971),
Burgos, Sr. vs. Chief of Staff, AFP, 133 SCRA 800 (1984), and Oca vs.
Marquez, 14 SCRA 735 (1965) (certiorari, prohibition, mandamus and
injunction). See also Asian Surety & Insurance Co., Inc. vs. Herrera, 54
SCRA 312 (1973), which involved a petition to quash and annul a
search warrant.
[12]

Republic vs. Sandiganbayan, 255 SCRA 438 (1996).

[13]

Id.

[14]

People vs. Veloso, 48 Phil. 169 (1925).

[15]

See Section 3 (2), Article III, Constitution in relation to Section 2,

Article III, Constitution.

[16]

Castro vs. Pabalan, supra.

[29]

TSN, October 1, 1993, p. 2. Rollo, p. 85. Underscoring supplied.

[17]

Prudente vs. Dayrit, 180 SCRA 69 (1989).

[30]

See Quintero vs. National Bureau of Investigation, supra.

[31]

Rollo, pp. 86-94.

[32]

Supra.

[33]

Supra.

[34]

Supra.

[35]

United States v. Cook, 657 F.2d 730 (1981).

[36]

Rollo, p. 155.

[37]

Alvarez vs. Court of First Instance of Tayabas, supra.

[38]

Supra.

[39]

Rollo, p. 44.

[40]

Uy Kheytin vs. Villareal, supra.

[41]

Supra.

[18]

Ex Parte Flores, 452 S.W.2d 443 (1970), citing Rhodes v. State, 134
Tex.Cr.R. 553, 116 S.W.2d 395.
[19]

Joyner v. City of Lakeland, Fla., 90 So.2d 118, citing Bonner v. State,

Fla., 80 So.2d 683.
[20]

Supra.

[21]

353 F.2d 424 (1965).

[22]

Williams v. State, 240 P.2d 1132 (1952), quoting Cook v. State, 75

Okl.Cr. 402, 132 P.2d 349.
[23]

See Bell v. State, 423 S.W.2d 482 (1968).

[24]

191

Pendon vs. Court of Appeals,

Prudente vs. Dayrit, supra.

SCRA

429

(1990);

[25]

Pendon vs. Court of Appeals, supra.

[26]

Prudente vs. Dayrit, supra.

[27]

Alvarez vs. Court of First Instance of Tayabas, supra.

[28]

Quintero vs. National Bureau of Investigation, 162 SCRA 467 (1988).

[42]

Stonehill vs. Diokno, supra; Nasiad vs. Court of Tax Appeals, 61

SCRA 238 (1974); Lim vs. Ponce de Leon, 66 SCRA 299 (1975).