Iloilo Bottlers vs City of Iloilo

1. Plaintiff is engaged in the business of bottling softdrinks under the trade name of
Pepsi Cola and 7-up and selling the same to its customers, ith a bottling plant
situated at Barrio !ngca, "unicipality of Pavia, Iloilo, Philippines#
2. $hat defendant enacted an ordinance on %anuary &&, &'() knon as *rdinance
+o# ,, -eries of &'() as amended hich provides:
-ection &# . /ny person, firm or corporation engaged in the distribution,
manufacture or bottling of coca-cola, pepsi cola, tru-orange, seven-up and other soft
drinks ithin the 0urisdiction of the City of Iloilo, shall pay a municipal license ta1 of
ten 2P)#&)3 centavos for every case of tenty-four bottles4 P5*6I787, 9*:8685,
that soft drinks sold to the public at not more than five 2P)#),3 centavos per bottle
shall pay a ta1 of one and one half 2P)#)&,3 2centavos3 per case of tenty four bottles#
3. Plaintiff bought said plant from a previous oner hoever, plaintiff closed said
bottling plant at "uelle ;oney, Iloilo City, and transferred its bottling operations
to its ne plant in Barrio !ngca, "unicipality of Pavia, Province of Iloilo, and
hich is outside the 0urisdiction of the City of Iloilo#
4. Iloilo Bottlers, Inc# disclaims liability on to grounds: First, it contends that since
it is not engaged in the independent business of distributing softdrinks, but that its
activity of selling is merely an incident to, or is a necessary conse<uence of its
main or principal business of bottling, then it is +*$ liable under the city ta1
ordinance# -econd, it claims that only manufacturers or bottlers having their
plants inside the territorial 0urisdiction of the city are covered by the ordinance#
:hether the Iloilo Bottlers, Inc#, hich had its bottling plant in Pavia, Iloilo, but hich
sold softdrinks in Iloilo City, is liable under Iloilo City ta1 *rdinance +o# ,, series of
&'(), as amended, hich imposes a municipal license ta1 on distributors of softdrinks#
=es, It is clear from the ordinance that three types of activities are covered: 2&3
distribution, 2>3 manufacture and 2?3 bottling of softdrinks# / person engaged in any or all
of these activities is sub0ect to the ta1#
$/@/$I*+4 "!+ICIP/; ;IC8+-8 $/@4 I"P*-87 *+ "/+!F/C$!585-
8+A/A87 I+ $98 -8P/5/$8 -8;;I+A *F I$- P5*7!C$-# . It is ell
recogniBed that the right to manufacture implies the right to sellCdistribute the
manufactured products# 9ence, for ta1 purposes, a manufacturer does not necessarily
become engaged in the separate business of selling simply because it sells the products it
manufactures# In certain cases, hoever, a manufacturer may also be considered as
engaged in the separate business of selling its products, in hich case, it could be
sub0ected to municipal license ta1#
In the case at bar, the company distributed its softdrinks by means of a fleet of delivery
trucks hich ent directly to customers in the different places in Iloilo province# -ales
transactions ith customers ere entered into and sales ere perfected and consummated
by route salesmen# $ruck sales ere made independently of transactions in the main
office# $he delivery trucks ere not used solely for the purpose of delivering softdrinks
previously sold at Pavia# $hey served as selling units# $hey ere hat ere called, until
recently, Drolling storesD# $he delivery trucks ere therefore much the same as the stores
and arehouses under the second marketing system Iloilo Bottlers, Inc# thus falls under
the second category above# $hat is, the corporation as engaged in the separate business
of selling or distributing soft-drinks, independently of its business of bottling them#
I7#4 I7#4 I7#4 C*+7I$I*+- F*5 $98 I"P*-I$I*+ *F 8@CI-8 $/@# . $he ta1
imposed under *rdinance +o# , is an e1cise ta1 It is a ta1 on the privilege of distributing,
manufacturing or bottling softdrinks Being an e1cise ta1, it can be levied by the ta1ing
authority only hen the acts, privileges or businesses are done or performed ithin the
0urisdiction of said authority# -pecifically, the situs of the act of distributing, bottling or
manufacturing softdrinks must be ithin city limits, before an entity engaged in any of
the activities may be ta1ed# In the case at bar, sales ere made by Iloilo Bottlers, Inc# in
Iloilo City# $hus, :e have no option but to declare the company liable under the ta1
-mart Communications vs City of 7avao
&# -mart filed a special civil action for declaratory reliefE?F for the ascertainment of its
rights and obligations under the $a1 Code of the City of 7avao, hich imposes a
franchise ta1 on businesses en0oying a franchise ithin the territorial 0urisdiction of
># -mart avers that its telecenter in 7avao City is e1empt from payment of franchise ta1
to the City#
?# 5$C rendered a 7ecision denying the petition#
G# -mart filed an appeal before this Court, but the same as denied in a decision dated
-eptember &(, >))H# 9ence, the instant motion for reconsideration raising the folloing
grounds: 2&3 the Iin lieu of all ta1esJ clause in -martKs franchise, 5epublic /ct +o# 7>'G
25/ 7>'G3, covers local ta1es4 the rule of strict construction against ta1 e1emptions is not
applicable4 2>3 the Iin lieu of all ta1esJ clause is not rendered ineffective by the 81panded
6/$ ;a4 2?3 -ection >? of 5epublic /ct +o# 7'>,EGF 25/ 7'>,3 includes a ta1
e1emption4 and 2G3 the imposition of a local franchise ta1 on -mart ould violate the
constitutional prohibition against impairment of the obligation of contracts#
:*+ -amr Comm is e1empted of the local franchise ta1
+o, In sum, the aforecited 0urisprudence suggests that aside from the national franchise
ta1, the franchisee is still liable to pay the local franchise ta1, unless it is e1pressly and
une<uivocally e1empted from the payment thereof under its legislative franchise# $he Iin
lieu of all ta1esJ clause in a legislative franchise should categorically state that the
e1emption applies to both local and national ta1es4 otherise, the e1emption claimed
should be strictly construed against the ta1payer and liberally in favor of the ta1ing
5epublic /ct +o# 77&(, otherise knon as the I81panded 6/$ ;a,J did not
remove or abolish the payment of local franchise ta1# It merely replaced the national
franchise ta1 that as previously paid by telecommunications franchise holders and in its
stead imposed a ten percent 2&)L3 6/$ in accordance ith -ection &)H of the $a1 Code#
6/$ replaced the national franchise ta1, but it did not prohibit nor abolish the imposition
of local franchise ta1 by cities or municipaties#
$he poer to ta1 by local government units emanates from -ection ,, /rticle @ of the
Constitution hich empoers them to create their on sources of revenues and to levy
ta1es, fees and charges sub0ect to such guidelines and limitations as the Congress may
provide# $he imposition of local franchise ta1 is not inconsistent ith the advent of the
6/$, hich renders functus officio the franchise ta1 paid to the national government#
6/$ inures to the benefit of the national government, hile a local franchise ta1 is a
revenue of the local government unit#
8ricsson $elecommunications vs City of Pasig
&# 8ricsson $elecommunications, Inc# 2petitioner3,as assessed a business ta1 deficiency
based on its gross revenues as reported in its audited financial statements#
># Petitioner filed a Protest claiming that the computation of the local business ta1 should
be based on gross receipts and not on gross revenue#
?# 5espondent denied petitionerKs protest and gave the latter ?) days ithin hich to
appeal the denial# 5espondent assessed deficiency local business ta1es on petitioner
based on the latterKs gross revenue as reported in its financial statements, arguing that
gross receipts is synonymous ith gross earningsCrevenue, hich, in turn, includes
uncollected earnings#
G# Petitioner, hoever, contends that only the portion of the revenues hich ere actually
and constructively received should be considered in determining its ta1 base
:*+ the petitioner is liable for the business ta1 based on gross revenue
+o, Insofar as petitioner is concerned, the applicable provision is subsection 2e3, -ection
&G? of the same Code covering contractors and other independent contractors, to it:
-8C# &G?# $a1 on Business# - $he municipality may impose ta1es on the
folloing businesses:
1 1 1 1
2e3 *n contractors and other independent contractors, in accordance ith the
folloing schedule:
:ith gross receipts for the preceding calendar year in the amount of:
1 1 1
28mphasis supplied3
$he above provision specifically refers to gross receipts hich is defined under -ection
&?& of the ;ocal Aovernment Code, as follos:
1 1 1
2n3 IAross -ales or 5eceiptsJ include the total amount of money or its e<uivalent
representing the contract price, compensation or service fee, including the amount
charged or materials supplied ith the services and the deposits or advance payments
actually or constructively received during the ta1able <uarter for the services performed
or to be performed for another person e1cluding discounts if determinable at the time of
sales, sales return, e1cise ta1, and value-added ta1 26/$
1 1 1 1
$he la is clear# Aross receipts include money or its e<uivalent actually or
constructively received in consideration of services rendered or articles sold, e1changed
or leased, hether actual or constructive#
$here is, therefore, constructive receipt, hen the consideration for the articles sold,
e1changed or leased, or the services rendered has already been placed under the control
of the person ho sold the goods or rendered the services ithout any restriction by the
In petitionerKs case, its audited financial statements reflect income or revenue hich
accrued to it during the ta1able period although not yet actually or constructively
received or paid# $his is because petitioner uses the accrual method of accounting, here
income is reportable hen all the events have occurred that fi1 the ta1payerKs right to
receive the income, and the amount can be determined ith reasonable accuracy4 the
right to receive income, and not the actual receipt, determines hen to include the
amount in gross income#E>,F
$he imposition of local business ta1 based on petitionerKs gross revenue ill
inevitably result in the constitutionally proscribed double ta1ation – taxing of the
same person twice by the same jurisdiction for the same thing[26] –
inasmuch as petitioner’s revenue or income for a taxable year will
definitely include its gross receipts already reported during the
previous year and for which local business tax has already been paid.
hus! respondent committed a palpable error when it assessed
petitioner’s local business tax based on its gross revenue as reported
in its audited financial statements! as "ection #$% of the &ocal
'overnment (ode and "ection 22)e* of the +asig ,evenue (ode clearly
provide that the tax should be computed based on gross receipts.
/ngeles City vs /ngeles 8lectric
&# /8C as granted a legislative franchise under 5epublic /ct +o# 25/3 G)7' to
construct, maintain and operate an electric light, heat, and poer system for the purpose
of generating and distributing electric light, heat and poer for sale in /ngeles City,
># ;ocal Aovernment Code 2;AC3 of &''& as passed into la, conferring upon
provinces and cities the poer, among others, to impose ta1 on businesses en0oying
franchise#EGF In accordance ith the ;AC, the -angguniang Panlungsod of /ngeles City
enacted $a1 *rdinance , otherise knon as the 5evised 5evenue Code of /ngeles City
?# City $reasurer issued a +otice of /ssessmentE7F to /8C for payment of business ta1,
license fee and other charges for the period &''? to >))G in the total amount of
G# /8C appealed the denial of its protest to the 5$C of /ngeles City via a Petition for
7eclaratory 5elief
,# the City $reasurer levied on the real properties of /8C#E&&F / +otice of /uction
-aleE&>F as published and posted announcing that a public auction of the levied
properties of /8C
(# 5$C issued a $emporary 5estraining *rder 2$5*3 folloed by an *rderE&7Fgranting
the issuance of a :rit of Preliminary In0unction#
:*+ 5$C gravely abused its discretion in issuing the rit of preliminary in0unction
en0oining /ngeles City and its City $reasurer from levying, selling, and disposing the
properties of /8C#
/ principle deeply embedded in our 0urisprudence is that ta1es being the lifeblood of the
government should be collected promptly,E>(F ithout unnecessary hindranceE>7F or
delay#E>HF In line ith this principle, the +ational Internal 5evenue Code of &''7
2+I5C3 e1pressly provides that no court shall have the authority to grant an in0unction to
restrain the collection of any national internal revenue ta1, fee or charge imposed by the
code#E>'F /n e1ception to this rule obtains only hen in the opinion of the Court of $a1
/ppeals 2C$/3 the collection thereof may 0eopardiBe the interest of the government
andCor the ta1payer#E?)F
$he situation, hoever, is different in the case of the collection of local ta1es as there is
no e1press provision in the ;AC prohibiting courts from issuing an in0unction to restrain
local governments from collecting ta1es#
/s a rule, the issuance of a preliminary in0unction rests entirely ithin the discretion of
the court taking cogniBance of the case and ill not be interfered ith, e1cept here there
is grave abuse of discretion committed by the court#E?(F For grave abuse of discretion to
prosper as a ground for certiorari, it must be demonstrated that the loer court or tribunal
has e1ercised its poer in an arbitrary and despotic manner, by reason of passion or
personal hostility, and it must be patent and gross as ould amount to an evasion or to a
unilateral refusal to perform the duty en0oined or to act in contemplation of la#E?7F In
other ords, mere abuse of discretion is not enough#
Auided by the foregoing, e find no grave abuse of discretion on the part of the 5$C in
issuing the rit of in0unction# Petitioner, ho has the burden to prove grave abuse of
discretion,E?'F failed to sho that the 5$C acted arbitrarily and capriciously in granting
the in0unction# +either as petitioner able to prove that the in0unction as issued ithout
any factual or legal 0ustification# In assailing the in0unction, petitioner primarily relied on
the prohibition on the issuance of a rit of in0unction to restrain the collection of ta1es#
But as e have already said, there is no such prohibition in the case of local ta1es#
5ecords also sho that before issuing the in0unction, the 5$C conducted a hearing here
both parties ere given the opportunity to present their arguments# 7uring the hearing,
/8C as able to sho that it had a clear and unmistakable legal right over the properties
to be levied and that it ould sustain serious damage if these properties, hich are vital
to its operations, ould be sold at public auction# /s e see it then, the rit of in0unction
as properly issued#
-an %uan vs Castro
&# 5omulo 7# -an %uan 2petitioner3, registered oner of real properties in 5ancho 8state
I, Concepcion II, "arikina City 5ealty Corporation 2-/5C3 ith the consent of his ife
conveyed by 7eed of /ssignment the properties to the -aints and /ngels 5ealty
Corporation, in e1change for >,H,G?G shares of stock therein ith a total par value of
># 5espondentKs representative thereafter ent to the *ffice of the "arikina City
$reasurer to pay the transfer ta1 based on the consideration stated in the 7eed of
/ssignment#EGF 5icardo ;# Castro 2respondent3, the City $reasurer, informed him,
hoever, that the ta1 due is based on the fair market value of the property#
?# Petitioner in riting protested the basis of the ta1 due and thus filed before the
5egional $rial Court 25$C3 of "arikina City a PetitionE7F for mandamus and damages
against respondent in his capacity as "arikina City $reasurer praying that respondent be
compelled to Iperform a ministerial duty, that is, to accept the payment of transfer ta1
based on the actual consideration of the transferCassignment#
G# 5$C dismissed the petition# 9ence, the present Petition for 5evie on Certiorari,E&>F
petitioner faulting the 5$C ith having committed serious errors of la in dismissing the
petition for mandamus ith damages#E&?F
:*+ condition that Ithere is no other plain, speedy and ade<uate remedy in the ordinary
course of la for the petitioner
+o# In the case at bar, the condition that Ithere is no other plain, speedy and ade<uate
remedy in the ordinary course of laJ is absent#
/ ta1payer ho disagrees ith a ta1 assessment made by a local treasurer may file a
ritten protest

$hat petitioner protested in riting against the assessment of ta1 due and the basis thereof
is on record as in fact it as on that account that respondent sent him the above-<uoted
%uly &,, >)), letter hich operated as a denial of petitionerKs ritten protest#
Petitioner should thus have, folloing the earlier above-<uoted -ection &', of the ;ocal
Aovernment Code, either appealed the assessment before the court of competent
0urisdictionE&,F or paid the ta1 and then sought a refund#E&(F
Petitioner did not observe any of these remedies available to him, hoever# 9e instead
opted to file a petition for mandamus to compel respondent to accept payment of transfer
ta1 as computed by him#
"andamus lies only to compel an officer to perform a ministerial duty 2one hich is so
clear and specific as to leave no room for the e1ercise of discretion in its performance3
but not a discretionary function 2one hich by its nature re<uires the e1ercise of
0udgment3#E&7F 5espondentKs argument that IEmFandamus cannot lie to compel the City
$reasurer to accept as full compliance a ta1 payment hich in his reasoning and
assessment is deficient and incorrectJ is thus persuasive#

8nrile vs 6inuya
5. $he Collector of Customs of the Port of "anila issued a arrant of seiBure and
detention against the Cadillac car, the oner-claimant being 5odolfo CeMadoBa,
as the ta1es and duties had not been paid#
6. In securing the registration of said car 5odolfo CeMadoBa predecessor-in-
interest of respondent /ndres "# 6inuya, used Informal 8ntry but upon
checking the records of the ;and $ransportation Commission, it as found
that said informal entry and certificate of payment corresponded to a 1961
Fiat 600, and not to the Cadillac car in dispute;
7. hen the Cadillac car as seiBed and detained by /-/C agents, its plate
license as +o# 9-?7>(G 2(73 5iBal, and not Plate +o# ?,'), 2(73 5iBal,
hich as its plate number hen it as allegedly registered4
8. $he arrant as served prior to the filing of a complaint for replevin by the
respondent ith the respondent %udge#
9. It as moreover shon in the petition that the oner, 5odolfo CeMadoBa, had sold
such car to one Francisco 7ee from hom respondent 6inuya ac<uired the same ?
!nder claim that he as aggrieved by such seiBure and detention of the car in
<uestion, respondent 6inuya filed a complaint for replevin in the sala of
respondent %udge G
10. /fter filing a bond of P(),)))#)) an e1-parte order as issued by respondent
%udge directing a special sheriff to take possession of the Cadillac car in <uestion#
, *n the very same day respondent %udge likeise gave due course to the
complaint for replevin and re<uired petitioners to file their anser#
11. Petitioners filed a motion to dismiss, the attention of respondent %udge as
invited to the fact that forfeiture proceedings had already been instituted before
the Collector of Customs ho has the sole 0urisdiction to determine <uestions
affecting the disposition of property under seiBure as ell as the absence of a
cause of action#
:hether CFI 0udge is vested ith 0urisdiction to entertain a complaint for replevin filed
by the other respondent or the recovery of a Cadillac car, sub0ect of a seiBure and
forfeiture proceeding
$he prevailing doctrine is that the e1clusive 0urisdiction in seiBure and forfeiture cases
vested in the Collector of Customs precludes a court of first instance from assuming
cogniBance over such a matter#
$he CollectorNs decision is appealable to the Commissioner of Customs hose decision is
in turn appealable to the Court of $a1 /ppeals# /n aggrieved party may appeal from a
0udgment of the Court of $a1 /ppeals directly to this Court# *n the other hand, -ection
GG 2c3 of the %udiciary /ct of &'GH lodges in the Court of First Instance original
0urisdiction in all cases in hich the value of the property in controversy amounts to more
than ten thousand pesos# $his original 0urisdiction of the Court of First Instance, hen
e1ercised in an action for recovery of personal property hich is a sub0ect of a forfeiture
proceeding in the Bureau of Customs, tends to encroach upon, and to render futile, the
0urisdiction of the Collector of Customs in seiBure and forfeiture proceedings# $his is
precisely hat took place in this case# $he seiBure and forfeiture proceedings against the
"CB NBukang ;iayayN before the Collector of Customs of "anila, as stifled by the
issuance of a rit of replevin by the Court of First Instance of Cavite#D
*therise, actions for forfeiture of property for violation of Customs las could easily be
undermined by the sample devise of replevin#D &) $his e1cerpt from the opinion is
likeise relevant: DFurthermore, -ection >?)? of the $ariff and Customs Code re<uires
the Collector of Customs to give to the oner of the property sought to be forfeited
ritten notice of the seiBure and to give him the opportunity to be heard in his defense#
$his provision clearly indicates the intention of the la to confine in the Bureau of
Customs the determination of all <uestions affecting the disposal of property proceeded
against in a seiBure and forfeiture case# $he 0udicial recourse of the property oner is not
in the Court of First Instance but in the Court of $a1 /ppeals, and only after e1hausting
administrative remedies in the Bureau of Customs#D
Papa vs "ago
12. Aoods undervalued ere seiBed by the Bureau of Customs belonging to the
respondent "ago#
13. Claiming to have been pre0udiced by the seiBure and detention of the to trucks
and their cargo, 5emedios "ago and 6alentin B# ;anopa filed ith the Court of
First Instance of "anila a petition Dfor mandamus ith restraining order or
preliminary in0unction alleging, among others, that 5emedios "ago as the
oner of the goods seiBed, having purchased them from the -ta# "onica Arocery
in -an Fernando, Pampanga4 that the goods ere seiBed by members of the
"anila Police 7epartment ithout search arrant issued by a competent court4
that "anila Chief of Police 5icardo Papa denied the re<uest of counsel for
5emedios "ago that the bales be not opened4 that then Customs Commissioner
%acinto Aavino had illegally assigned appraisers to e1amine the goods because the
goods ere no longer under the control and supervision of the Commissioner of
14. 9ence 5emedios "ago and 6alentin ;anopa prayed for the issuance of a
restraining order, police and customs authorities, or their agents, from opening the
bales and e1amining the goods, and a rit of mandamus for the return of the
goods and the trucks#
15. 5espondent %udge 9ilarion %arencio issued an order restraining petitioners from
opening the nine bales in <uestion#
16. 9erein petitioners filed *pposition to the Issuance of a :rit of Preliminary
In0unctionD, denying the alleged illegality of the seiBure and detention of the
goods and the trucks and of their other actuations, and alleging that the Court of
First Instance of "anila had no 0urisdiction to try the case4 that the Bureau of
Customs had not lost 0urisdiction over the goods because the full duties and
charges thereon had not been paid4 that the members of the "anila Police
7epartment had the poer to make the seiBure4 and that the persons deputiBed
under -ection >>)? 2c3 of the $ariff and Customs Code could effect searches,
seiBures and arrests in inland places in connection ith the enforcement of the
said Code#
:*+ the Bureau of Customs has 0urisdiction over the case
=es, C!-$*"- B!58/!4 P*:85- /+7 7!$I8- *F B!58/! *F C!-$*"-# .
/mong others, the Bureau of Customs has the duties, poers and the 0urisdiction to
assess and collect all laful revenues from imported articles and all other dues, fees,
charges, fines and penalties accruing under the tariff and customs las4 to prevent and
suppress smuggling and other frauds upon the customs4 and to enforce tariff and customs
># I7#4 %!5I-7IC$I*+4 C!-$*"- B!58/! 9/- %!5I-7IC$I*+ *685
I"P*5$87 A**7-4 DI"P*5$/$I*+D, "8/+I+A *F# . :here the goods in
<uestion ere imported from 9ongkong as shon in the statement and receipts of duties
collected on informal entry and here the importation has not been terminated, the
imported goods remain under the 0urisdiction of the Bureau of Customs# Importation is
terminated only upon the payment of duties, ta1es and other charges upon the articles, or
secured to be paid, at the port of entry and the legal permit for ithdraal shall have been
granted# Payment of the duties, ta1es, fees and other charges must be in full#
?# I74 I74 B!58/! *F C!-$*"-, +*$ $98 C*!5$ *F FI5-$ I+-$/+C8,
9/- %!5I-7IC$I*+ *685 $98 C/-8 :9858 A**7- /58 !+785 C!-$*7=
*F -/I7 B!58/!, 868+ IF +* :/55/+$ *F -8IO!58 /+7 78$8+$I*+ I-
=8$ I--!87 *+ A**7-# . -ince the goods ere under the custody and at the
disposal of the Bureau of Customs hen the petition for mandamus as filed in the Court
of First Instance, the latter could not e1ercise 0urisdiction over said goods even if the
arrant of seiBure and detention of goods for purposes of seiBure and forfeiture
proceedings had not yet been issued by the Collector# It is settled that the Bureau of
Customs ac<uires e1clusive 0urisdiction over imported goods for purposes of enforcing
the Customs las, from the moment the goods are actually in possession and control of
said Bureau even in the absence on any arrant of seiBure or detention#
G# I7#4 I7#4 -8IO!58 *F A**7- B= "P7, 78P!$IO87 B= B!58/! *F
C!-$*"- A/68 $98 ;/$$85 8@C;!-I68 %!5I-7IC$I*+ *685 C/-84
I--!/+C8 *F :/55/+$ *F -8IO!58 B= C!-$*"- B!58/! /F$85 FI;;I+A
*F "/+7/"!- -!I$ I+ CFI, 7I7 +*$ 7I68-$ $98 ;/$$85 *F
%!5I-7IC$I*+ I$ 7I7 +*$ /CP!I58# . :here the Bureau of Customs, through the
"anila Police 7epartment acting under petitioner police chief Papa ho as formally
deputiBed by the Commissioner of Customs seiBed the goods on +ovember G, &'((, the
Bureau from that date ac<uired 0urisdiction over the goods to the e1clusion of the regular
courts# $he issuance of the arrant of seiBure and detention by the Customs Collector
after the filing of the mandamus suit in the regular court, did not deprive the latter of its
0urisdiction hich it never ac<uired in the first place, as the Bureau of Customs had
already previously ac<uired 0urisdiction on the case to the e1clusion of regular courts for
purposes of enforcement of customs and tariff las#
,# I7#4 I7#4 A**7-, 868+ IF B5*!A9$ *!$ *F C!-$*"- /58/, -$I;;
F/;; :I$9I+ %!5I-7IC$I*+ *F B!58/! *F C!-$*"-4 %!5I-7IC$I*+ *F
C!-$*"- B!58/! I- 58A/I+87# . 8ven if it be conceded, arguendo, that after
the goods have been brought out of the customs area, the Bureau of Customs lost
0urisdiction over the same, still hen said goods ere intercepted at the /grifina Circle
by members of the "P7 acting under directions and orders of petitioner Papa ho had
been formally deputiBed by the Commissioner of Customs, such 0urisdiction as regained
by the Bureau of Customs# -ec# &>)( of the $ariff and Customs Code imposes upon the
Collector of Customs the duty to hold possession of all imported articles upon hich
duties, ta1es and other charges have not been paid or secured to be paid and to dispose of
the same according to la#
(# I7#4 I"P*5$/$I*+- "/78 C*+$5/5= $* ;/: /58 -!B%8C$ $*
F*5F8I$!58# . :here from the record, the duties, ta1es and other charges on the
imported articles have not been paid in full, such articles are sub0ect to forfeiture under
-ection >,?) pars# e and m, 2&3, 2G3 and 2,3 of the $ariff and Customs Code4 for ell
settled is the rule that merchandise imported contrary to la is sub0ect to forfeiture and
goods released contrary to la are likeise sub0ect to seiBure and forfeiture#
7# I7#4 I7#4 -8/5C9 :/55/+$4 ;/:F!; -8/5C9 :I$9*!$ -8/5C9
:/55/+$ C/+ B8 8FF8C$87# . $he $ariff and Customs Code does not re<uire a
search arrant for purposes of enforcing customs and tariff las# !nder -ec# >>)?
thereof, persons having police authority may enter, pass through or search any land,
inclosure, arehouse, store or building not being a delling house and also, to inspect,
search and e1amine any vehicle or aircraft and any trunk, package, bo1 or envelope or
any person on board or stop and search and e1amine any vehicle, beast or person
suspected of holding or conveying any dutiable or prohibited article introduced into the
Philippines contrary to la, ithout mentioning the need of a search arrant in said
cases# 81cept in the search of a delling house, therefore, persons e1ercising police
authority under the customs la may effect search and seiBure ithout search arrant in
the enforcement of customs las#
Commissioner of Customs vs -tar Ferry
17. Private respondents "anila -tar Ferry, Inc# and the !nited +avigation Q
$ransport Corporation are domestic corporations engaged in the lighterage
business and are the oners and operators, respectively, of the tugboat *restes
and the barge-lighter !+-;-&)(s#
18. Private respondent Ceaba -hipping /gency, Inc# 2Ceaba3 is the local shipping
agent of the Chiat ;ee +avigation $rading Co# of 9ongkong, the registered oner
and operator of the -C- /rgo, an ocean-going vessel
19. *n %une &>, &'((, the -C- /rgo, the *restes and the !+-;-&)(, as ell as to
ooden bancas of unknon onership, ere apprehended for smuggling by a
patrol boat of the Philippine +avy along the 81plosives /nchorage /rea of
"anila Bay# $he patrol boat caught the cre of the -C- /rgo in the act of
unloading foreign-made goods onto the !+-;-&)(, hich as toed by the
*restes and escorted by the to ooden bancas#
20. $hereafter, seiBure and forfeiture proceedings ere separately instituted before the
Collector of Customs for the Port of "anila against the -C- /rgo and its cargo
21. $he respondents appealed to the C$/ and C$/ ordered the respondents to pay a
22. It is this decision of the Court of $a1 /ppeals that is being <uestioned by the
Commissioner of Customs before this Court contending that the vessel can be
:*+ vessels and atercraft engaged in smuggling 2-C- /rgo3 should be forfeited under
-ection >,?) 2a3, hile the barge !+-;-&() and tugboat *restes should be forfeited
under -ection >,?)2c3 of the $ariff and Customs Code#
+o, 2because the vessels ere in the port of entry hich is e1cepted from forfeiture3
$/@/$I*+4 $/5IFF /+7 C!-$*"- C*784 F*5F8I$!58 *F 68--8;
8+A/A87 I+ -"!AA;I+A4 C*+7I$I*+- F*5 $98 I"P*-I$I*+ $9858*F# .
$he penalty of forfeiture is imposed on any vessel, engaged in smuggling if the
conditions enumerated in -ection >,?) of the $ariff and Customs Code 2a3 are
compresent# $hese conditions are: 2&3 $he vessel is Dused unlafully in the importation
or e1portation of articles into or fromD the Philippines4 2>3 $he articles are imported or
e1ported into or from Dany Philippine port or place, except a port of entry;" or 2?3 If the
vessel has a capacity of less than ?) tons and is Dused in the importation of articles into
any Philippine port or place other than a port of the -ulu -ea, here importation in such
vessel may be authoriBed by the Commissioner, ith the approval of the department
># I7#4 I7#4 I7#4 I7#4 -/$I-FI87 I+ C/-8 /$ B/5# . $here is no <uestion that
the vessel -C- /rgo as apprehended hile unloading goods of foreign origin onto the
barge !+-;-&)( and the tugboat *restes, ithout the necessary papers shoing that the
goods ere entered lafully through a port of entry and that ta1es and duties on said
goods had been paid# $he claim that the -C- /rgo made an emergency call at the Port of
"anila for replacement of cre members and had to stop at the 81plosives /nchorage
/rea because it as carrying nitric acid, a dangerous cargo, cannot be upheld much less
given credence by this Court# $he facts found by the Court of $a1 /ppeals are in
consonance ith the findings of the Collector of Customs, and the Commissioner of
Customs# /bsent a shoing of any irregularity or arbitrariness, the findings of fact of
<uasi-0udicial and administrative bodies are entitled to great eight and are conclusive
and binding on this Court# 2Feeder International ;ine, Pte#, ;td# v# Court of /ppeals, &'7
-C5/ HG> E&''&F4 %aculina v# +ational Police Commission, >)) -C5/ GH' E&''&F3#
"oreover, the Collector of Customs in -#I# +o# &)))'-C, "anila, ordered on %uly >H,
&'(( the forfeiture of the sub0ect cargo after finding that they ere, in truth and in fact,
smuggled article# 5espondent Ceaba did not appeal from said order and the same has
become final#
?# I7#4 I7#4 I7#4 I7#4 DPORT OF !TR"" #$ #! %CPT&O!; CO!$TR'()
* $ection +,-0.a/ un0ista1a2le ter0s pro3ides that a 3essel en4a4ed in s0u44lin4
"in a port of entry" cannot 2e forfeited) This is the clear and plain 0eanin4 of the
la5) &t is not 5ithin the pro3ince of the Court to in6uire into the 5isdo0 of the la5,
for indeed, 5e are 2ound 2y the 5ords of the statute) !either can 5e put 5ords in
the 0ouths of the la50a1ers) # 3er2a le4is non est recedendu0) &t 0ust 2e noted
that the Re3ised #d0inistrati3e Code of 1917 fro0 5hich the Tariff and Custo0s
Code is 2ased, contained in $ection 1-6-.a/ thereof al0ost exactly the sa0e
pro3ision in $ection +,-0.a/ of the Tariff and Custo0s Code, includin4 the phrase
"except a port of entry)" &f the la50a1ers intended the ter0 "port of entry" to
0ean "port of destination," they could ha3e expressed facilely such intention 5hen
they adopted the Tariff and Custo0s Code in 19,7) &nstead of a0endin4 the la5,
Con4ress reenacted 3er2ati0 the pro3ision of $ection 1-6-.a/ of the Re3ised
#d0inistrati3e Code of 1917) Con4ress, in the 3ery sa0e #rticle +,-0 of the Tariff
and Custo0s Code, used the ter0 "port of destination" in su2sections .c/ and .d/
thereof) This is a clear indication that Con4ress is a5are of the distinction 2et5een
the t5o 5ordin4s)
G# I7#4 I7#4 I7#4 I7#4 I7#4 F/I;!58 $* -!PP;= 58P!I-I$8 "/+IF8-$4
-!B%8C$ $* FI+8# . /lthough the vessel cannot be forfeited, it is sub0ect to a fine of
not more than P&),)))#)) for failure to supply the re<uisite manifest for the unloaded
cargo under -ection >,>& of Code#
,# I7#4 I7#4 I7#4 D68--8;D4 C*685/A8# . $he barge-lighter !+-;-&)( and the
tugboat *restes, on the other hand, are sub0ect to forfeiture under paragraph 2c3 of
-ection >,?) of the $ariff and Customs Code# $he barge-lighter and tugboat fall under
the term DvesselD hich includes every sort of boat, craft or other artificial contrivance
used, or capable of being used, as a means of transportation on ater 25#/# +o# &'?7,
-ec# ?,&G3# -aid -ection >,?)2c3 prescribes the forfeiture of any vessel or aircraft into
hich shall be transferred cargo unladen contrary to la before the arrival of the vessel or
aircraft at her port of destination# "anila as not the port of destination, much less a port
of call of the -C- /rgo, the importing vessel# $he -C- /rgo left 9ongkong and as bound
for %esselton, +orth Borneo, 70akarta and -uraba0a, Indonesia4 and yet it stopped at the
Port of "anila to unload the smuggled goods into the !+-;-&)( and the *restes#
(# I7#4 I7#4 I7#4 P5*C887I+A- $9858I+ /58 P5*C887I+A- I+ 58" /+7
/58 7I58C$87 /A/I+-$ $98 58-# . Forfeiture proceedings are proceedings in
rem 2Commissioner of Customs v# Court of $a1 /ppeals, &?H -C5/ ,H& E&'H,F3 citing
6ierneBa v# Commissioner of Customs, >G -C5/ ?'G E&'(HF3 and are directed against the
res# It is no defense that the oner of the vessel sought to be forfeited had no actual
knoledge that his property as used illegally# $he absence or lack of actual knoledge
of such use is a defense personal to the oner himself hich cannot in any ay absolve
the vessel from the liability of forfeiture 2Commissioner of Customs v# Court of /ppeals,
supra4 !#-# v# -teamship D5ubiD, ?> Phil# >>H, >?' E&'&,F3#