ALBERTO DE JOYA, AS COMMISSIONER OF CUSTOMS AND MATIAS ANTOLIN, AS COLLECTOR OF CUSTOMS FOR THE NORTH HARBOR, PETITIONERS, VS. HON. GREGORIO T. LANTIN, AS PRESIDING JUDGE, BRANC…

De Joya versus Lantin

The Case

This is a petition for certiorari and prohibition filed by the Commissioner of Customs and the Collector of Customs for the North Harbor against Judge Gregorio T. Lantin of the Court of First Instance of Manila and against Francindy Commercial, a local buyer of imported textiles. The Customs officials ask the Supreme Court to stop the trial court from enforcing a mandatory injunction that would compel them to release goods they had seized for verification and for possible forfeiture. The case matters because it draws the boundary between two jurisdictions: the exclusive power of the Bureau of Customs over seizure and forfeiture of imported articles, on one hand, and the general jurisdiction of the Courts of First Instance over ordinary actions, on the other. It teaches when a court must yield to an administrative body of special competence.

Procedural History

Francindy Commercial filed a petition for mandamus in the Court of First Instance of Manila to compel the Customs authorities to release the goods. The Customs officials moved to dismiss on grounds of lack of jurisdiction, lack of cause of action, and the pendency of seizure and forfeiture proceedings. The trial court held the motion in abeyance pending decision on the merits, then granted a preventive and mandatory injunction upon a bond of 20,000 pesos, and later ordered compliance upon the filing of an additional bond of 50,000 pesos. The Customs officials then filed with the Supreme Court a petition for certiorari and prohibition with preliminary injunction. The Supreme Court gave due course to the petition and issued a preliminary injunction without bond, enjoining the trial court from enforcing its injunction and from taking cognizance of the mandamus petition. After the issues were joined and the case submitted for decision, Francindy Commercial moved to dissolve the preliminary injunction, and the Court deferred action on that motion until the case was resolved on the merits.

Facts

Francindy Commercial, a Manila firm, purchased from Ernerose Commercial of Cebu City 90 bales of assorted textiles and rags valued at 117,731 pesos. Those bales had been imported and entered through the Port of Cebu. Ernerose Commercial shipped the merchandise from Cebu City to Manila in two lots: 50 bales declared as rayon rags aboard one vessel, arriving at the North Harbor on October 5, 1964, and 40 bales declared as rayon rags aboard another vessel, arriving on October 6, 1964.

When the goods were about to leave the Customs premises, Customs authorities held them for further verification. Upon examination, the goods were found to be different from the declaration in the cargo manifest of the carrying vessels. Francindy Commercial demanded release of the goods on several dates in October 1964, asserting that it was a purchaser in good faith, that a local purchase was involved so that the Bureau of Customs had no right to examine the goods, and that the goods came from a coastwise port.

Francindy Commercial then filed its mandamus petition on October 26, 1964. The North Harbor Customs Collector made a report of seizure on November 9, 1964, and on November 12, 1964 the Manila Customs Collector issued a warrant of seizure and detention. The record shows that the goods had actually been seized on October 6, 1964, before Francindy Commercial sued in court. The purpose of the seizure was to verify whether Customs duties and taxes had been paid. On December 23, 1964, Customs released 22 bales because they were found to have been released regularly from the Port of Cebu.

Issues

• Whether or not the Bureau of Customs has jurisdiction to seize the goods and institute forfeiture proceedings against them.
• Whether or not the Court of First Instance has jurisdiction to entertain the petition for mandamus to compel the Customs authorities to release the goods.

Applicable Provisions

Section 2530, paragraph m, of the Tariff and Customs Code, Republic Act 1957, provides:

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).

This is the provision the Court cites as the source of the power to seize goods released irregularly from Customs custody, which is the situation of the goods in this case.

Section 602 of Republic Act 1957 provides:

The Bureau of Customs has jurisdiction and power, among others, to collect revenues from imported articles, fines and penalties accruing under tariff and customs laws; to prevent and suppress smuggling and other frauds on customs; and to enforce tariff and customs laws (Sec. 602, Republic Act 1957).

This defines the administrative competence of the Bureau of Customs and anchors its authority to act on the imported articles before any court interferes.

Section 2402 of Republic Act 1937 and Section 11 of Republic Act 1125 provide:

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.

These provisions establish the exclusive appellate route from the Commissioner of Customs to the Court of Tax Appeals, which would be bypassed by a mandamus suit in the Court of First Instance.

Ruling

On the first issue, the Court held that the Bureau of Customs has jurisdiction to seize the goods and institute forfeiture proceedings. The goods 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, and the proceedings for that purpose come within the jurisdiction of the Bureau of Customs pursuant to Republic Act 1937. The Court rejected the argument that the Customs warrant came after the court petition, because the record shows the goods were actually seized on October 6, 1964, before Francindy Commercial sued. The seizure was for the purpose of verifying whether duties and taxes were paid, and the subsequent release of 22 bales confirmed that the inquiry was a legitimate one.

On the second issue, the Court held that the Court of First Instance had no jurisdiction to entertain the mandamus petition. The seizure and forfeiture proceedings should be followed, and the owner of the goods may set up its defenses therein. From the decision of the Commissioner of Customs, appeal lies to the Court of Tax Appeals. 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 jurisdictions. The Court stressed that the special laws, Republic Acts 1937 and 1125, vest jurisdiction over seizure and forfeiture proceedings exclusively upon the Bureau of Customs and the Court of Tax Appeals. Being special in nature, while the Judiciary Act defining the jurisdiction of Courts of First Instance is general legislation, and the special laws being later enactments, the Court of First Instance should yield to the jurisdiction of the Customs authorities.

Doctrine

Jurisdiction over seizure and forfeiture proceedings for imported articles released irregularly from Customs custody is vested exclusively in the Bureau of Customs, with appeal to the Court of Tax Appeals. A party may not bypass this administrative route by filing a mandamus petition in the Court of First Instance to compel release of the goods. The owner's remedy is to set up its defenses in the seizure and forfeiture proceedings and, if adverse, to appeal to the Court of Tax Appeals. The rule rests on the special and later statutes, Republic Act 1937 and Republic Act 1125, which prevail over the general Judiciary Act. The doctrine is tied to Section 2530, paragraph m, which makes such goods subject to seizure, to Section 602, which grants the Bureau its enforcement powers, and to Section 2402 and Section 11, which fix the exclusive appellate path.

Disposition

The Supreme Court granted the petition, dismissed for lack of jurisdiction the mandamus petition filed by Francindy Commercial in the Court of First Instance of Manila, and made permanent the preliminary injunction it had issued against the respondents, without costs.

Remember This

Memorize this line: seizure and forfeiture of imported goods belong exclusively to the Bureau of Customs, with appeal to the Court of Tax Appeals, and no Court of First Instance may interfere by mandamus. Examiners use this case to test the hierarchy of special and general jurisdiction, and to ask whether a local buyer of imported goods may go straight to court instead of defending in the Customs seizure proceedings.