Commissioner of Customs v. Navarro, G.R.

No. L-33146 (77 SCRA 264)

Concept: Doctrine of Prior Resort
FACTS: The Commissioner of Customs and the
Collector of Customs in their exhaustive and
scholarly petition for certiorari, filed on
February 11, 1971, was on the jurisdictional
issue. It sought to nullify and set aside order of
respondent Judge Pedro C. Navarro dated
January 4, 1971, issuing a writ of preliminary
injunction as prayed for by private respondents
Juanito S. Flores and Asiatic Incorporated the
importers of 1,350 cartons of fresh fruits,
restraining petitioners from proceeding with the
auction sale of such perishable goods. Classified
as non-essential consumer commodities, they
were banned by Central Bank Circulars Nos.
289, 294 and 295 as prohibited importation or
importation contrary to law and thus made
subject to forfeiture proceedings by petitioner
Collector of Customs pursuant to the relevant
sections of the Tariff and Customs Code.

In a detailed and specific fashion,

petitioners pointed out how violative was the
assumption of jurisdiction by respondent Judge
over an incident of a pending seizure and
forfeiture proceeding which, as held in a number
of decisions, was a matter falling within the
exclusive competence of the customs authorities.
The persuasive character of the petition is thus
evident, resulting in this Court issuing on
February 15, 1971 a resolution requiring
respondents to file an answer and at the same
time issuing a writ of preliminary injunction as
prayed for by petitioners to prevent the
challenged order of respondent Judge from
being implemented. Instead of preparing an
answer, they just submitted a manifestation
stating that "after an intensive and serious study
of the merit of the case, the respondents have
decided to abandon its interest in the case.
ISSUE: W/ON Custom has Jurisdiction

HELD: Yes. risdiction of the customs

authorities is exclusive was made clear in Pacis
v. Averia, decided in 1966. This Court, speaking
through Justice J. P. Bengzon, realistically
observed: "This original jurisdiction of the Court
of First Instance, when exercised in an action for
recovery of personal property which is a subject
of a forfeiture proceeding in the Bureau of
Customs, tends to encroach upon, and to render
futile, the jurisdiction of the Collector of
Customs
in
seizure
and
forfeiture
proceedings." The court "should yield to the
jurisdiction of the Collector of Customs."
The controlling principle was set forth anew
in Ponce Enrile v. Vinuya, decided in 1971.
Thus: "The prevailing doctrine is that the
exclusive jurisdiction in seizure and forfeiture
cases vested in the Collector of Customs
precludes a court of first instance from assuming
cognizance over such a matter.
Pacis v Pamaran 56 SCRA 16 (1974)
Power of Acting Commissioner of Customs to
issue a warrant of seizure and detention
FACTS: Respondent Ricardo Santos is the
owner of a Mercury automobile, model 1957,
brought into the country without payment of
customs duty and taxes because its original
owner, Donald James Hatch, was tax-exempt.
Santos later on paid P311.00 for customs duty
and
taxes.
On July 22, 1964, Acting Collector of Customs
Pedro Pacis was informed by the General Affairs
Administration of the Department of National
Defense that the automobile was a hot car. By
virtue thereof, Pacis, through his subordinates,
looked into the records of his office and found
that although the amount of P311.00 was already
paid for customs duty, the amount collectible on
the said car should be P2,500.00, more or less.
Based on such discrepancy, he instituted seizure
proceedings and issued a warrant of seizure and
detention. The automobile was also taken by the
Department of National Defense agents and
brought to the General Affairs Administration

for

compound.

In answer, Santos filed a criminal complaint

against Pacis for usurpation of judicial functions
with the City Fiscal of Manila, Manuel Pamaran,
alleging that Pacis did not have authority to
issue such warrant of seizure and detention.
ISSUE: W/N petitioner, in the discharge of his
official function, lay himself open to a criminal
prosecution for usurpation of judicial functions
HELD: It is undeniable that petitioner, as Acting
Collector of Customs for the Port of Manila, had
the requisite authority for the issuance of the
contested warrant of seizure and detention for
the automobile owned by respondent Ricardo
Santos. What was done by him certainly could
not be the basis of a prosecution for the
usurpation of judicial functions. The remedy of
prohibition lies.
EUFEMIA
EVANGELISTA,
MANUELA
EVANGELISTA,
and
FRANCISCA
EVANGELISTA
,petitioners,
THE COLLECTOR OF INTERNAL REVENUE
and THE COURT OFTAX APPEALS,
respondents.
G.R. No. L-9996, October 15, 1957
FACTS: Petitioners borrowed sum of money
from their father and together with their own
personal funds they used said money to buy
several real properties. They then appointed their
brother (Simeon) as manager of the said real
properties with powers and authority to sell,
lease or rent out said properties to third persons.
They realized rental income from the said
properties for the period 1945-1949.On
September 24, 1954 respondent Collector of
Internal Revenue demanded the payment of
income tax on corporations, real estate dealer's
fixed tax and corporation residence tax for the
years 1945-1949. The letter of demand and
corresponding assessments were delivered to
petitioners on December 3, 1954, whereupon
they instituted the present case in the Court of
Tax Appeals, with a prayer that "the decision of
the respondent contained in his letter of demand
dated September 24, 1954" be reversed, and that
they be absolved from the payment of the taxes

in question. CTA denied their petition and

subsequent MR and New Trials were denied.
Hence this petition.
ISSUE: Whether or not petitioners have formed
a partnership and consequently, are subject to
the tax on corporations provided for in section
24 of Commonwealth Act. No. 466, otherwise
known as the National Internal Revenue Code,
as well as to the residence tax for corporations
and the real estate dealers fixed tax.
HELD: YES. The essential elements of a
partnership are two, namely: (a)
an agreement to contribute money, property
or industry to a common fund
; and (b)
intent to divide the profits among the
contracting parties
. The first element is undoubtedly present in the
case at bar, for, admittedly, petitioners have
agreed to, and did, contribute money and
property to a common fund. Upon consideration
of all the facts and circumstances surrounding
the case, we are fully satisfied that their purpose
was to engage in real estate transactions for
monetary gain and then divide the same among
themselves, because of the following
observations, among others: (1) Said common
fund was not something they found already in
existence; (2)They invested the same, not
merely in one transaction, but in a series of
transactions; (3) The aforesaid lots were not
devoted to residential purposes, or to other
personal uses, of petitioners herein. Although,
taken singly, they might not suffice to establish
the intent necessary to constitute a partnership,
the collective effect of these circumstances is
such as to leave no room for doubt on the
existence of said intent in petitioners herein. For
purposes of the tax on corporations, our National
Internal Revenue Code, includes these
partnerships

with the exception only of duly registered

general co partnerships

within the purview of the term "corporation." It

is, therefore, clear to our mind that petitioners
herein constitute a partnership, insofar as said
Code is concerned and are subject to the income
tax for corporations.

R.V. Marzan Freight, Inc. vs. CA

G.R. No. 128064, March 4, 2004
o

Jurisdiction of the regular courts vis-avis jurisdiction of the BOC in abandonment

proceedings
FACTS: Petitioner RV Marzan Freight, Inc.,
owned and operated a customs-bonded
warehouse, which, along with the goods stored
therein, was covered by a Philfire insurance
policy. On April 12, 1989, raw materials
consigned to private respondent Shielas
Manufacturing, Inc., arrived in the Philippines
from Keelung, Taiwan. The Bureau of Customs
treated the raw materials as subject to ordinary
import taxes and were not immediately released
to
Shielas
Manufacturing.
Later, the District Collector of Customs initiated
abandonment proceedings over the cargo and
notice was posted. No separate notice was
however sent to Shielas Manufacturing because
its address was unknown. After the aforestated
proceedings achieved finality but before
inventory and sale at public auction, part of the
warehouse containing the shipment was burned.
Philfire paid to Marzan the amount of
P12,000,000, for which the latter was issued a
receipt.
Shielas Manufacturing is now demanding
payment of the value of the goods from Marzan,
who, however, rejected the demand. Thus, on
Dec. 26, 1991, or after the lapse of more than 2
years from the arrival of the cargo in the
Philippines, Shielas Manufacturing filed a
complaint for damages with the RTC of Pasig
City
against
Marzan.
The lower court ruled in favor of Shielas
Manufacturing.
ISSUE: W/N the trial court had jurisdiction to
review and declare ineffective the declaration of
the District Collector of Customs in the
abandonment proceedings that the subject
shipment was abandoned cargo and that,
thenceforth, the government ipso facto became
the owner thereof

HELD: The
contention

Supreme Court
of

upheld the
Marzan.

Irrefragably, the RTC had jurisdiction over the

nature of the private respondents action, which
was one for the collection of the value of the
cargo gutted by fire, while under the custody and
control of the petitioner preparatory to its sale at
public
auction
by
the
BOC.
The jurisdiction of the court or other tribunal is
determined by the relevant allegations of the
complaint and the character of the relief sought,
irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the
claims accorded therein. The jurisdiction of the
trial court does not depend upon the defenses in
the answer or in a motion to dismiss.
However, the Supreme Court also held that the
trial court was incompetent to pass upon and
nullify (1) the seizure of the cargo in the
abandonment proceedings, and (2) the
declaration made by the District Collector of
Customs that the cargo was abandoned and ipso
facto
owned
by
the
government.
It, likewise, had no jurisdiction to resolve the
issue of whether or not the private respondent
was the owner of the cargo before it was gutted
by fire. The trial court should have rendered
judgment dismissing the complaint, without
prejudice to the right of the private respondent to
ventilate the issue before the Commissioner of
Customs
and/or
the
CTA.
The District Collector of Customs did not lose
jurisdiction over the abandonment proceedings.
The loss of the cargo did not extinguish his
incipient jurisdiction in the said proceedings, nor
render functus officio her declaration that the
subject shipment had been abandoned.