THE ACTING COLLECTOR OF CUSTOMS OF THE PORT OF MANILA, PETITIONER, VS. HON. HERMOGENES CALUAG, AS JUDGE OF THE COURT OF FIRST INSTANCE OF RIZAL, BRANCH IV, SITTING AT QUEZON CIT…

Acting Collector of Customs versus Caluag

The Case

This is a special civil action of certiorari and prohibition brought before the Supreme Court by the Acting Collector of Customs of the Port of Manila against Judge Hermogenes Caluag of the Court of First Instance of Rizal, sitting at Quezon City, and against Concepcion S. Calalang. The Collector asks the Court to stop the trial court from proceeding in a case that reviewed the Collector's warrant of seizure and detention over a tax-exempt imported car that had passed into private hands. The case matters because it draws the boundary line between the jurisdiction of the ordinary courts and the exclusive appellate jurisdiction of the Court of Tax Appeals over the actuations of customs authorities in seizure and detention cases.

Procedural History

Concepcion S. Calalang first obtained a preliminary mandatory injunction from the Court of First Instance of Rizal at Quezon City in a separate suit to compel the Motor Vehicles Office to issue a registration certificate and plates in her favor. After the car was seized by agents of the National Bureau of Investigation on the strength of the Collector's warrant, she filed a petition for certiorari, mandamus and prohibition, with preliminary mandatory injunction, against the Acting Collector of Customs and others, to review his actuations and to recover the car. The Collector opposed the prayer for injunction and moved to dismiss for lack of jurisdiction. After a preliminary hearing, the trial court denied the motion to dismiss and granted the preliminary mandatory injunction. Asserting the trial court's lack of jurisdiction, the Acting Collector of Customs came directly to the Supreme Court by a petition for certiorari and prohibition with preliminary injunction. The Supreme Court issued a preliminary injunction restraining enforcement of the trial court's writ and further proceedings in the case below.

Facts

Robert A. Gibson, an American military personnel assigned in the Philippines, purchased a Chevrolet two-door station wagon in the United States in March 1956 for 2,700 dollars. The car was landed in Manila on September 11, 1956, and the next day Gibson registered it in his name with the Motor Vehicles Office in Quezon City. The certificate of registration stated that it was exempt from registration fees because United States military authorities had certified that the car was owned by Gibson and used in connection with his duties, and a special plate number was issued. The registration was renewed the following year.

On September 11, 1957, Gibson informed the Chief of the Motor Vehicles Office in writing that the car was no longer used officially and asked to be allowed to pay registration fees and to be issued private plates. Stamped on that letter was the notation that the car was subject to duties and taxes when sold or transferred in the Philippines to non-exempt persons. The car then passed through a series of transfers, from Bonifacio Alinsod to Silverio Espiritu, to Maximo Calalang, to Felisa San Jose, and finally, on March 19, 1963, to Concepcion S. Calalang, the spouse of former purchaser Maximo Calalang.

When the last sale was presented for registration, the Motor Vehicles Office refused, because the car was in the master list of hot cars, meaning motor vehicles brought into the country by tax-exempt persons and later transferred to non-tax-exempt persons without payment of import taxes. Registration was allowed only after the trial court issued a preliminary mandatory injunction. On July 22, 1964, the Chief of the Registration Division of the Land Transportation Commission certified to the Collector of Customs that the car had been originally imported tax-free by Gibson and was registered in the name of Concepcion S. Calalang. Finding that the advanced sales or compensating taxes had not been paid, the Acting Collector issued a warrant of seizure and detention. Calalang refused to surrender the car, so the warrant was referred to the National Bureau of Investigation, whose agents seized the car from her house on August 13, 1964.

Issues

• Whether or not the Court of First Instance of Rizal had jurisdiction to entertain the petition to review the issuance and execution of the warrant of seizure and detention by the customs authorities.
• Whether or not the absence of a prior decision of the Commissioner of Customs made the exclusive appellate jurisdiction of the Court of Tax Appeals inapplicable.
• Whether or not certiorari and prohibition were proper remedies in light of the administrative remedies available to the respondent.

Applicable Provisions

Section 7 of Republic Act Number 1125, as quoted in the decision through the Millarez ruling, provides:

Republic Act No. 1125, section 7, effective June 16, 1954 gave the Court of Tax Appeals exclusive appellate jurisdiction to review on appeal, decisions of the Commissioner of Customs, involving 'seizure, detention or release of property affected x x x or other matters arising under the Customs Law or other law administered by the Bureau of Customs'.

This provision is the source of the exclusive appellate jurisdiction that ousted the trial court, and it necessarily covers all questions affecting the legality or illegality of a seizure.

Ruling

On the first issue, the Court held that the petition was meritorious. The suit filed with the respondent Judge was, in substance, one to review and nullify what the customs authorities had already done, namely the issuance of the warrant of seizure and detention and its execution by the National Bureau of Investigation agents. Statute and jurisprudence are very clear that it is the Court of Tax Appeals, and not the Court of First Instance, that has jurisdiction to review such actuations. The Court quoted its ruling in Millarez versus Amparo:

In our opinion this provision necessarily has taken away the power of the Manila court of first instance to 'review' decisions of the Customs authorities, 'in any case of seizure' - as in this case - under section 1383 et seq. of the Revised Administrative Code.

The Court added that the provisions of the Revenue Code levying the advanced sales tax or compensating tax are being implemented by the customs authorities and hence are part of customs law. Calalang undoubtedly has the right to question the legality of the seizure, but she must go to the Court of Tax Appeals. Since the Court of First Instance had no jurisdiction in the first place, it could not validly issue the ancillary writ of preliminary mandatory injunction.

On the second issue, the Court rejected the argument that Section 7 of Republic Act Number 1125 did not apply because there was no decision yet of the Commissioner of Customs to appeal from. The Court held that such absence only showed that the party affected did not exhaust administrative remedies. Where administrative remedies are available, including an appeal to the Commissioner of Customs, certiorari would not be proper.

On the third issue, the Court noted that additional remedies were immediately available to the respondent: to secure the release of the seized car upon filing a sufficient bond with the Customs Collector, or to file a protest with the Customs Collector. All these available remedies weighed heavily against the propriety of certiorari, which can issue only in the absence of any other plain, speedy and adequate remedy in the ordinary course of law.

Doctrine

The Court of Tax Appeals has exclusive appellate jurisdiction to review, on appeal, decisions of the Commissioner of Customs involving the seizure, detention or release of property affected, fines, forfeitures or other penalties imposed in relation thereto, and other matters arising under the Customs Law or other law administered by the Bureau of Customs. The ordinary courts of first instance have no jurisdiction to review the actuations of customs authorities in seizure cases, and this jurisdiction necessarily includes all questions affecting the legality or illegality of a seizure. The absence of a prior decision of the Commissioner of Customs does not open the door to certiorari; it merely shows that the party did not exhaust administrative remedies. Certiorari and mandamus are not available where relief by appeal is provided, and a court without jurisdiction cannot validly issue an ancillary writ of preliminary mandatory injunction.

Disposition

The petition was granted; the Court of First Instance of Rizal was declared without jurisdiction in the case before it, its orders and preliminary injunction writ were annulled, the preliminary injunction issued by the Supreme Court was made permanent, and costs were taxed against respondent Calalang.

Remember This

Memorize this line: it is the Court of Tax Appeals, not the Court of First Instance, that has exclusive appellate jurisdiction to review customs seizure and detention cases, and the lack of a decision of the Commissioner of Customs only means administrative remedies were not exhausted. Examiners use this case to test jurisdiction over customs seizure cases and the rule that certiorari will not lie where appeal and other plain, speedy and adequate remedies are available.