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 …

Mison versus Natividad

The Case

This is a petition for certiorari and prohibition brought by the Commissioner of Customs and the Collector of Customs of the Subport of Clark against a presiding judge of the Regional Trial Court of Pampanga. The government asks the Supreme Court to annul, for having been issued without jurisdiction or with grave abuse of discretion, the trial judge's resolution denying the motion to dismiss a civil case for damages and injunction, and granting the private claimant a writ of preliminary injunction over twenty Toyota Lite Ace vans already placed under seizure. The case matters because it resurrects a long-settled question: may a regular trial court interfere, through injunction or replevin, with a seizure and forfeiture proceeding that the Tariff and Customs Code has committed to the exclusive original jurisdiction of the Collector of Customs?

Procedural History

The private respondent, Cesar Sonny Carlos, filed a complaint for damages with a prayer for preliminary injunction and restraining order before the Regional Trial Court of San Fernando, Pampanga, docketed as Civil Case Number 8109. The trial judge, acting as executive judge, issued a temporary restraining order on the very day the customs team attempted to haul the vehicles away. The Bureau of Customs then moved to dismiss on two grounds: lack of jurisdiction over the subject vehicles, and failure to exhaust administrative remedies. The trial judge heard the motion and, on 26 February 1988, issued a resolution denying the motion to dismiss and granting the application for a writ of preliminary injunction upon a bond of 100,000 pesos. From that resolution, the government came directly to the Supreme Court by petition for certiorari and prohibition, filed on 6 April 1988. The Court issued a temporary restraining order on 18 April 1988, required the respondents to comment, gave due course to the petition, and dispensed with memoranda after both sides manifested that their pleadings sufficiently expounded the issues.

Facts

On 7 February 1988, one Butch Martinez wrote a sworn letter to the Commissioner of Customs, reporting the existence of assembled and disassembled knocked-down Toyota Lite Ace vehicles at the compound of CVC Trading in San Fernando, Pampanga, and requesting investigation and prosecution for violation of the customs laws. Acting on that letter, the Acting Director of the National Customs Police formed a team and issued a mission order on 11 February 1988. That same day the team proceeded to the reported site, gave notice to the Philippine Constabulary units, and at around eleven in the evening found a fenced area containing twenty units of fully and partly assembled Toyota Lite Ace vans. The team took possession and control of the vehicles by cordoning off the enclosure.

Two members of the team were then sent to secure a warrant of seizure and detention from the Collector of Customs of the Subport of Clark, the petitioner Carlos Razo. He instituted seizure proceedings for violation of the Tariff and Customs Code in relation to Central Bank regulations, and at about eight in the morning of 12 February 1988 issued the warrant. The owner or claimant refused to receive it, so it was served by substituted service, posted on one of the vehicles near the gate of the stockyard, with an inventory attached to the return. When the team was about to haul the vehicles away at about eleven in the morning, two sheriffs arrived with a temporary restraining order issued that same day by the respondent judge in Civil Case Number 8109, restraining the Bureau of Customs and the Customs Police from seizing or confiscating the vehicles. Physical transfer was deferred, but customs and constabulary elements remained deployed to assert possession and control.

The Collector of Customs set the seizure case for hearing, but the claimant refused the notice and answered by telegram, insisting that the civil court had already assumed jurisdiction. No one appeared for the claimant, so the government presented evidence ex parte. On 26 February 1988, the Collector rendered a decision declaring the twenty vehicles forfeited in favor of the Government. On that same date, the trial judge issued the challenged resolution, holding that the complaint concerned legal ownership and damages, that the plaintiff enjoyed the presumption of ownership, and that the cited Supreme Court decisions were of remote pertinence because there the goods had been seized on vessels or within the customs zone. He denied the motion to dismiss and granted the writ of preliminary injunction.

Issues

• Whether or not the Regional Trial Court has jurisdiction over the twenty vehicles that are the subject of a pending seizure and forfeiture proceeding before the Collector of Customs.
• Whether or not the alleged ownership of the vehicles by the private respondent, and the alleged illegality or defectiveness of the warrant of seizure and detention, justify the trial court's interference with the Collector's jurisdiction.
• Whether or not the respondent judge acted with grave abuse of discretion in denying the motion to dismiss and in granting the writ of preliminary injunction.

Applicable Provisions

The decision anchors its ruling on the Tariff and Customs Code, Republic Act Number 1937, and on the settled reading of its provisions in Pacis versus Averia. The Court quotes that precedent on the structure of the remedy:

The Collector's decision is appealable to the Commissioner of Customs whose decision is in turn appealable to the Court of Tax Appeals.

This chain of review shows that the judicial recourse of a property owner lies with the Court of Tax Appeals after exhausting administrative remedies, not with the trial court.

The Court also quotes the same precedent on the notice requirement of the Code:

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.

That requirement confirms the legislative intent to confine within the Bureau of Customs the determination of all questions affecting property proceeded against in a seizure and forfeiture case.

Finally, the Court quotes Ponce Enrile versus Vinuya on the limits of judicial intervention:

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.

This passage draws the line between the existence of the Collector's power and the regularity of its exercise, and it forecloses the trial court's assumption of competence.

Ruling

On the first issue, the Court ruled that the trial court has no jurisdiction over the res subject of the warrant of seizure and detention. By express provision of law, amply supported by well-settled jurisprudence, the Collector of Customs has exclusive original jurisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with its exercise or stifle it. The Court traced the rule through Pacis versus Averia and De Joya versus Lantin, and through a long line of subsequent cases, and held that the Regional Trial Court of Pampanga was indisputably precluded from interfering once the warrant had been issued, presumably in the regular course of official duty.

On the second issue, the Court held that neither the allegation of ownership, with registration and payment of taxes and licenses, nor the alleged illegality of the warrant, divests the Collector of jurisdiction or confers jurisdiction on the trial court. Ownership and the legality of acquisition may be raised as defenses in the seizure proceeding itself; otherwise the procedure carefully delineated by law could easily be thwarted by scheming parties. As to the warrant, the Court drew the distinction between the existence of the Collector's power to issue it and the regularity of the proceeding taken under that power. Even if an irregularity existed, the trial court has no competence to review, modify, or reverse the conclusions drawn from it; the remedy is administrative appeal and then review by the Court of Tax Appeals.

On the third issue, the Court held that the respondent judge acted arbitrarily and despotically in issuing the temporary restraining order, granting the writ of preliminary injunction, and denying the motion to dismiss, thereby removing the res from the control of the Collector and depriving him of his exclusive original jurisdiction. The Court found the governing rule simple, clear, and leaving no doubt, and condemned the judge's failure to heed it.

Doctrine

The Collector of Customs has exclusive original jurisdiction over seizure and forfeiture proceedings under the Tariff and Customs Code, and regular courts cannot interfere with, stifle, or render futile that jurisdiction by injunction, replevin, or an action for damages. The property owner's remedy is to set up ownership and the illegality of the seizure as defenses in the seizure proceeding, then appeal the Collector's decision to the Commissioner of Customs, then to the Court of Tax Appeals, and ultimately to the Supreme Court. A defect in the warrant of seizure and detention goes to the regularity of the proceeding, not to the existence of the Collector's power, and the Regional Trial Court has no competence to review it. The jurisdiction of the Collector rests on a special and later law, which prevails over the general jurisdiction conferred on trial courts.

Disposition

The petition was granted; the resolution of the respondent judge and all proceedings in Civil Case Number 8109 were nullified and set aside, the case was ordered dismissed, and the temporary restraining order issued by the Supreme Court was made permanent.

Remember This

Memorize the line that the Collector of Customs has exclusive original jurisdiction over seizure and forfeiture proceedings, and that regular courts cannot interfere with its exercise. Examiners use this case to test the jurisdiction of trial courts over goods subject to customs seizure, the exhaustion of administrative remedies, and the distinction between the existence of the Collector's power and the regularity of its exercise.