FERNANDO MENDOZA PETITIONER AND APPELLEE, VS. EDILBERTO Y. DAVID, ET AL., RESPONDENTS AND APPELLANTS.

On May 28, 1954, an importation of 1,000 crates of onions arrived at
the port of Manila for which no entry was filed by the importer.
Because of such failure the Collector of Customs advertised the
merchandise for sale at public auction under the authority of Section
1395(c) of the Revised Administrative Code. Having been
notified of the sale because of a previous shipment he claimed from the
customs office, one Fernando Mendoza wrote a letter to the Collector of
Customs reclaiming the merchandise on the strength of Section 1324 of
the Revised Administrative Code. The request was denied on the ground
that Mendoza failed to comply with the requirements of the law, and his
appeal to the Secretary of Finance having failed, he filed on July 28,
1954 in the Court of First Instance of Manila a petition for mandamus
with preliminary injunction seeking to restrain the Collector of
Customs from selling the onions at public auction and to compel him to
make immediate delivery thereof to petitioner.

Meanwhile the
Collector ordered the seizure of the shipment because of certain
violation of customs laws committed by Mendoza thus changing the action
taken thereon from sale to forfeiture. Accordingly, seizure Case No.
1731 was instituted at the customs court.

After a hearing
was had on the petition for preliminary injunction, the court on August
12, 1954 issued an order granting the same upon the filing by
petitioner of a bond in, the amount of P5,000.00. The writ contains two
parts: (1) it restrains respondents from selling the onions at public
auction, and (2) it orders respondents to make immediate delivery of
said onions to petitioner. Respondents filed a motion praying that the
bond be increased, but when the customs authorities discovered that out
of the 1,000 crates of onions only 96 were found to be in good
condition, the court denied the motion.

On August 21, 1954,
petitioner sought immediate compliance with the writ, but when he found
that the remaining 96 crates of onions were greatly deteriorated, he
gave formal notice to the Collector that he was abandoning them
pursuant to Section 1321 of the Revised Administrative Code.
Subsequently, he filed a motion to dismiss, which was granted on
October 5, 1954.Three days thereafter respondents moved for
reconsideration praying that the bond be declared forfeited for the
protection of the government. This motion was denied, the court stating
that it had no authority to order the forfeiture of the bond because
that is a positive relief that should have been availed of before
dismissal by filing a counterclaim for damages. On December 10, 1954,
respondents filed a motion for reconsideration and for leave to present
evidence on their counterclaim if allowed. Again this motion was denied
because “it appears that the order of dismissal was served on
respondents’ counsel on October 12, 1954; he filed a motion for
reconsideration on October 27, 1954; he received the order denying the
motion for reconsideration on December 4, 1954; and he filed the
present motion on December 20, 1954, so that discounting the period
during which the first motion for reconsideration was pending, more
than 30 days had passed before he filed the 2nd motion for
reconsideration and for counterclaim, so that the order of dismissal
had already become final.” And on March 12, 1955, respondents filed a
petition for relief alleging that an error was committed in the
computation of the period for filing their motion for reconsideration,
but the court denied the motion arguing that while it committed an
involuntary error in the computation of the period it however believed
that with or without the injunction granted to petitioner the
government could still collect the revenues due from him. Hence this
appeal.

In denying appellants’ petition to set aside its
order of dismissal in order that they may set up a counterclaim for the
revenues due the government and secure the forfeiture of the injunction
bond filed by appellee the trial court stated that there could be no
room for liability under the bond because, as appellants themselves
admit, instead of securing the release of the onions by enforcing the
writ of injunction, appellee abandoned them to respondents for having
discovered that the remaining portion of the merchandise was already
greatly deteriorated, and that there was no room for disturbing the
dismissal already ordered to permit respondents to present their
counterclaim it appearing that their motion for reconsideration was
filed out of time thereby causing said order to become final.

Appellants now argue that the above finding is untenable not only
because the trial court had admitted that it committed an involuntary
error in computing the period within which their motion for
reconsideration could be filed which should have paved the way for the
granting of their motion for relief, but also because it entertained an
erroneous view of the nature of the writ of injunction it issued on the
matter. They argue that its restraining order precluded the customs
officials from collecting the charges that should be paid by the
importer out of the proceeds of the sale of the imported merchandise
under Section 1797 of the Revised Administrative Code.

There
is no merit in this contention. It appears that because of the
importer’s failure to make an entry of the importation of the
merchandise in question the Collector of Customs advertised the
merchandise for sale at public auction under the authority of Section
1395 (c) of the Revised Administrative Code. The importer tried
to reclaim the merchandise, which was denied, and his appeal to the
Secretary of Finance having failed, he filed a petition for mandamus
with preliminary injunction to restrain the Collector from selling the
merchandise and to compel its delivery to him. Meanwhile, however, the
Collector ordered the seizure of the merchandise thus changing the
action taken from sale to forfeiture. Then the court granted the
petition for preliminary injunction upon the filing of a bond of
P5,000.00. But when days later appellee sought the enforcement of the
writ and found that the remaining 96 crates of onions were already
greatly deteriorated he gave notice to the Collector that he was
abandoning them pursuant to Section 1321 of the Revised Administrative
Code. In view of such abandonment the case was dismissed.

It
would, therefore, appear that notwithstanding the issuance of the writ
of injunction the merchandise never left the possession of the
Collector of Customs. Since its arrival on May 28, 1954 to August 21,
1954, when the court ordered immediate compliance with said writ, it
remained under the exclusive custody of said official, or his
representatives. In other words, the purpose of the injunction has
never been attained, and so there is nothing for which the injunction
bond could be made liable.

It is true that because of the
issuance of the writ of injunction the proceedings regarding forfeiture
had been temporarily stayed, but this is of no consequence considering
that in case of forfeiture only the merchandise forfeited stands
responsible for the payment of the customs liability. In other words
the injunction bond answers for the release of the merchandise the
former merely taking the place of the latter, and if the release is not
effected there is no valid reason for forfeiting the bond. In this
respect, we find correct the finding of the trial court.

There is no point in the claim that said bond responds not merely for
the release of the merchandise but for the payment of all the charges
that the importer may be found answerable under Section 1397 of the
Revised Administrative Code. In the first place, such general liability
does not appear in the bond, and, in the second, the liability of an
importer is limited to the value of the imported merchandise. This can
clearly be inferred from an examination of the provisions of Sections
1395, 1397 and 1398 of the Revised Administrative Code. Thus, Section
1395 provides that the property in customs custody may be sold at
public auction if no entry thereof is made within the period prescribed
therein. Section 1397 regulates the disposition of the proceeds of the
sale, but it says nothing that if the same are insufficient the
importer should be liable for the deficiency. And while Section 1398
provides that the Surplus of the proceeds of the sale after deducting
all the charges shall be paid to the importer, with regard to forfeited
goods it expressly decrees that no part of the shall he returned.
The clear implication is that in case of forfeiture the maximum penalty
imposable on seized merchandise is the forfeiture itself.

When, therefore, the trial court ordered the dismissal of the case with
the consequent setting aside of the writ of injunction because appellee
sought to abandon the merchandise to respondents, the logical result
was that the Collector was left free to continue with the seizure
proceeding with a view to the final disposition of the merchandise.
Hence, the trial court was correct in stating that said dismissal did
not preclude the government from collecting whatever charges it may
find due from appellee relative to the importation in question.

Wherefore, the orders appealed from are affirmed, without pronouncement as to costs.

Bengzon, Acting C. J., Padilla, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, and Dizon JJ., concur.