G.R. No. L-32542 - Commissioner of Customs vs. Alikpala

Petitioners: The Commissioner of Customs and the Collector of Customs for the Port of Manila.
Respondents: Hon. Federico C. Alikpala, Judge of the Court of First Instance (CFI) of Manila, Branch XXII; Gonzalo Sy (doing business as Gonzalo Sy Trading); Tomas Y. de Leon (doing business as T.Y. de Leon Enterprises).
The petitioners filed a petition for certiorari and prohibition with preliminary injunction to nullify and set aside certain orders of the CFI dated August 26, 1970, in Civil Case No. 80655 involving the seizure and scheduled auction sale of imported fruits by Gonzalo Sy and Tomas Y. de Leon.

The importer respondents brought into the Philippines shipments of fresh fruits (apples, lemons, oranges, grapes).
The Collector of Customs issued several warrants of seizure and detention of these imported fruits on the ground of violation of Central Bank Circulars and Section 2530-F of the Tariff and Customs Code, which concerns prohibited importations and their forfeiture.
The petitioners (importers) were notified of the seizures but were not heard before the Collector scheduled the auction sale of the goods.
The fruits were scheduled for auction on August 10, 1970, but the petitioners sought judicial relief barring the sale and requesting release of the cargo under surety bonds they had submitted.

The petitioners first filed a petition with the Court of Tax Appeals (CTA) seeking a writ of preliminary injunction to restrain the respondents from proceeding with the auction sale.
The CTA denied the petition on August 12, 1970, citing lack of jurisdiction over the subject matter and lack of appealable decision involving the case.
The petitioners then filed a petition for injunction before the CFI of Manila.
On August 26, 1970, the CFI issued an order granting the writ of preliminary injunction enjoining the seizure and sale of the fruits and directing release to the petitioners on the strength of surety bonds filed by them, subject to the Collector’s objections within 24 hours if any.
The orders were premised on the failure to observe due process — specifically, the lack of prior hearing on the seizure and scheduled sale of the perishable goods, and the petitioners’ compliance with bond requirements per Section 2301 of the Tariff and Customs Code.

Gonzalo Sy Trading was authorized in Nov 1968 by Central Bank Monetary Board Resolution No. 2038 to import fresh fruits from Japan on a no-dollar basis up to $350,000. By Nov 1969, $144,306.15 had been used; a request to amend terms to source from other countries was denied.
Despite the denial, the Central Bank’s Director of Foreign Exchange authorized Prudential Bank and Trust Company to continue issuing release certificates for no-dollar imports of fresh fruits by Gonzalo Sy Trading, under the original conditions.
Imports continued until June 1970 reaching $314,142.51 utilized, leaving a balance of $35,857.49, for which permission to use was denied in June 1970.
Tomas Y. de Leon had a history of being allowed to import fruits on no-dollar consignment basis with release certificates historically authorized post shipment arrival.
Applications for no-dollar import permits were filed by de Leon in Nov 1969, with shipments arriving May to July 1970; duties and taxes were paid prior to seizure.
Warrants of seizure and detention were issued by the Collector of Customs on June 16 and subsequently. Auction sale notices were issued by the Collector for August 12, 1970 onward.

The importers filed surety bonds in aggregate amount of P513,865.46 through Communications Insurance Co., Inc. for release of the goods.
The Collector initially accepted bond filings but later demanded cash bond instead, which was refused.
The sufficiency of such surety bonds was challenged due to bonding company’s limited financial capacity and writing capacity.
The CFI dismissed objections to the bondsums on grounds that reinsurance partially covered the bonds.

Does the Court of First Instance have jurisdiction over the subject matter of the petition for injunction filed by the importers?
Is the Court of Tax Appeals the appropriate forum to issue injunction in this case, or does it lack jurisdiction until an appealable decision exists?

Was due process observed by the Collector of Customs before scheduling and proceeding with the auction sale of the imported fruits?
Can the auction sale occur prior to giving the importer owners an opportunity to be heard?

Is a surety bond filed by the importers, through a bonding company with limited financial capacity, sufficient for release of seized goods?
Can the Collector of Customs validly demand a cash bond instead of a surety bond under the Tariff and Customs Code?
Was there grave abuse of discretion by the CFI in allowing release of the fruits under surety bonds rather than cash bonds?

Are the fruits subject to seizure under the Central Bank Circulars and the Tariff and Customs Code, thereby prohibiting their release or sale?