G.R. No. 79307 - Commissioner of Customs vs. Makasiar

Case Summary (G.R. No. 79307)

Factual Background

On December 7, 1978, the CFI-Manila issued search and seizure warrants in Criminal Case Nos. 8602 and 8603 directed at alleged counterfeiting and trademark offenses and ordering seizure of whisky, bottles, labels, cartons, machinery and related materials. On December 8, 1978, a composite team enforced the warrants at the premises of Hercules Bottling Co., Inc. and seized tanks, cartons and other items purportedly bearing counterfeit Johnnie Walker Black Label Scotch Whisky markings. The seized articles remained under guard at the Hercules premises. On January 2, 1979, the Collector of Customs for the Port of Manila issued a warrant of seizure and detention, identifying the goods as imported contrary to law and initiating seizure and forfeiture proceedings under Sec. 2530(f) of the Tariff and Customs Code in relation to Republic Act No. 3720. By order dated January 29, 1979, the CFI-Manila authorized transfer of the seized articles to the customs warehouse at South Harbor subject to conditions including custody by the Bureau of Customs and safeguarding in custodia legis.

Procedural History Below

Hercules contested the validity of the search and seizure warrants in the Court of Appeals and thereafter in the Supreme Court; the Supreme Court dismissed Hercules' petition by resolution dated November 26, 1986. The City Fiscal of Manila proceeded with preliminary investigations on criminal complaints in which The Distillers Co. Ltd. of England acted as private complainant. Following resumption of the Bureau of Customs forfeiture hearings, private respondent objected to continuation of customs proceedings and, on September 24, 1982, filed a petition for prohibition with preliminary injunction in Civil Case No. 82-12721 before the Regional Trial Court, Branch 35, Manila. The respondent judge issued a temporary restraining order on September 29, 1982 and later a writ of preliminary injunction. On July 20, 1987 the respondent judge declared the warrant of seizure and detention dated January 2, 1979 null and void and ordered the Collector of Customs to refrain from further seizure and forfeiture proceedings until the criminal courts had rendered final judgment. The Commissioner of Customs then filed a petition for review in the Supreme Court.

The Parties' Contentions

The Commissioner of Customs contended that the Bureau of Customs possesses exclusive authority to hear and determine seizure and forfeiture matters under the Tariff and Customs Code and that the Regional Trial Court had no jurisdiction to enjoin or review Customs' seizure proceedings, whether by certiorari, prohibition or mandamus. Petitioner further argued that judicial recourse from Customs' decisions lies in the administrative appellate route culminating in the Court of Tax Appeals and thereafter to this Court by certiorari. The Distillers Co. Ltd. of England conceded that jurisdiction over customs forfeiture generally lay with the Bureau of Customs but maintained that the respondent judge properly enjoined Customs because the goods were already in custodia legis by virtue of the CFI-Manila search warrants and because the injunction sought to preserve evidence and prevent prejudice to the criminal prosecutions rather than to assert ownership.

Issue Presented

Whether the Regional Trial Court, through a petition for prohibition and grant of injunctive relief, may enjoin the Collector of Customs from continuing seizure and forfeiture proceedings over goods earlier seized pursuant to search warrants issued by the CFI-Manila and subsequently entrusted to the custody of the Bureau of Customs.

Ruling of the Supreme Court

The Supreme Court reversed the respondent judge's decision dated July 20, 1987. The Court held that the Regional Trial Court lacked jurisdiction to enjoin the Bureau of Customs from conducting seizure and forfeiture proceedings over the subject goods. The Court allowed the customs proceedings to proceed but directed that a representative quantity of the goods, as agreed between authorized customs officials and the fiscals prosecuting the criminal cases, be set aside and retained in custodia legis as evidence until final judgment in the criminal prosecutions. The remainder of the goods may be disposed of pursuant to the final decision in the customs forfeiture proceedings.

Legal Basis and Reasoning

The Court rested its decision on settled jurisprudence that the Collector of Customs, sitting in seizure and forfeiture proceedings, has exclusive jurisdiction to determine all questions touching the seizure and forfeiture of dutiable goods and that Regional Trial Courts are precluded from assuming cognizance over such matters even by extraordinary writs. The Court cited authority establishing the statutory scheme whereby actions and rulings of the Collector are appealable to the Commissioner of Customs, reviewable exclusively by the Court of Tax Appeals created by Republic Act No. 1125, and thence by proper petition to this Court. The rule is justified by public policy favoring the expeditious and undisturbed enforcement of customs duties, which constitute a substantial source of public revenue. The Court rejected the respondent judge's premise that custodia legis necessarily divested the Collector of jurisdiction; the transfer authorized by the CFI-Manila placed actual possession and control of the goods with the Bureau of Customs and thereby secured the basic operative fact—possession—necessary to institute in rem seizure and forfeiture proceedings under

Case Syllabus (G.R. No. 79307)

Parties and Procedural Posture

Commissioner of Customs filed a petition for certiorari seeking reversal of the respondent judge's decision dated July 20, 1987 in Civil Case No. 82-12821.
The Hon. Ramon P. Makasiar, RTC Judge, Branch 35, Manila was the trial judge whose issuance of injunctive relief is assailed.
The Distillers Co. Ltd. of England intervened as private respondent and was the private complainant in the underlying criminal investigations.
The case reached the Supreme Court by a petition filed on August 11, 1987 and resulted in a decision rendered on August 29, 1989.

Key Factual Allegations

The Court of First Instance of Manila issued search and seizure warrants on December 7, 1978 in Criminal Case Nos. 8602 and 8603 for violations of Republic Act No. 3720 and Article 188 of the Revised Penal Code.
On December 8, 1978 a composite team including the Bureau of Customs effected the warrants and seized large quantities of allegedly counterfeit Johnnie Walker Black Label Whisky and related materials at the premises of Hercules Bottling Co., Inc..
The seized articles remained at the Hercules premises guarded by Bureau of Investigation and Intelligence personnel until January 29, 1979 when the CFI-Manila authorized transfer to the customs warehouse at South Harbor under specified conditions.
The Collector of Customs, upon verification that the goods were imported contrary to law, issued a warrant of seizure and detention on January 2, 1979 in Seizure Identification No. 2-79 and initiated administrative seizure and forfeiture proceedings under the Tariff and Customs Code.

Procedural History

Hercules Bottling Co., Inc. questioned the search warrants in the Court of Appeals and the Supreme Court dismissed Hercules' petition in G.R. No. 55061 by resolution dated November 26, 1986.
The City Fiscal of Manila proceeded with preliminary criminal investigations with The Distillers Co. Ltd. of England as private complainant.
The Distillers Co. Ltd. of England filed a petition for prohibition with preliminary injunction on September 24, 1982 before the RTC, Branch 35, Manila to enjoin the Bureau of Customs from continuing seizure proceedings.
The respondent judge issued a temporary restraining order on September 29, 1982 and subsequently a writ of preliminary injunction, and on July 20, 1987 entered judgment declaring the warrant of seizure and detention null and void and granting prohibition.

Issues Presented

Whether the respondent judge had jurisdiction to enjoin the Collector of Customs from proceeding with seizure and forfeiture proceedings over goods earlier seized under CFI-Manila search warrants.
Whether the issuance of the warrant of seizure and detention by the Collector of Customs and the initiation of customs forfeiture proceedings were void as exceeding jurisdiction because the goods were in custodia legis.

Contentions of the Parties

Petitioner Commissioner of Customs contended that seizure and forfeiture proceedings before the Bureau of Customs are exclusively within the administrative and appellate scheme established