Jao vs. Court of Appeals

Regional trial courts are devoid of jurisdiction to enjoin or otherwise interfere with seizure and forfeiture proceedings conducted by the Bureau of Customs; exclusive competence over such proceedings belongs to the Collector of Customs, with appeals lying to the Commissioner of Customs, the Court of Tax Appeals, and the Court of Appeals. The Supreme Court will not review the Ombudsman’s exercise of discretion in dismissing a criminal complaint, absent a clear showing of grave abuse of discretion.

On August 10, 1990, the Enforcement and Security Service (ESS) of the Bureau of Customs received information that untaxed vehicles and parts were stored in premises along Quirino Avenue, Parañaque and Honduras Street, Makati, owned by a certain Pat Hao. After surveillance, respondent Major Jaime Maglipon recommended the issuance of warrants of seizure and detention. District Collector of Customs Titus Villanueva issued the warrants on August 13, 1990. The subsequent execution of those warrants, including a forced entry and the hauling of articles, prompted petitioners Narciso Jao and Bernardo Empeynado to file a civil action for injunction and damages before the Regional Trial Court of Makati, and criminal charges before the Office of the Ombudsman. The RTC issued a temporary restraining order and later a preliminary injunction ordering the return of seized items and prohibiting further seizure. The Court of Appeals set aside the RTC orders and dismissed the civil case for lack of jurisdiction; the Ombudsman dismissed the criminal complaint for lack of merit. Both rulings were elevated to the Supreme Court via petitions for certiorari.

The Surveillance and Seizure:
On August 10, 1990, the ESS of the Bureau of Customs received intelligence regarding untaxed vehicles and parts stored in premises at Quirino Avenue, Parañaque and Honduras Street, Makati, owned by a certain Pat Hao. Following surveillance, respondent Major Jaime Maglipon recommended the issuance of warrants of seizure and detention. On August 13, 1990, District Collector Titus Villanueva issued the warrants. With the assistance of local police, the customs team searched the premises. At the Makati location, entry was initially barred, but some team members forced their way in and observed articles not listed in the warrant. Amended warrants were issued on August 15, 1990. On August 25, 1990, customs personnel began hauling the articles under the amended warrants.

Civil Action in the Regional Trial Court:
To stop the hauling, petitioners Narciso Jao and Bernardo Empeynado filed a complaint for Injunction and Damages (Civil Case No. 90-2382) before RTC Makati, Branch 56 on August 27, 1990. The trial court issued a Temporary Restraining Order the same day. Respondents moved to dismiss on the ground that the RTC had no jurisdiction over customs seizure and forfeiture proceedings. The RTC denied the motion and, on November 29, 1990, granted a preliminary prohibitory and mandatory injunction conditioned on a one-million-peso bond. The injunction ordered respondents to return seized items, render an accounting, and prohibited further seizure, detention, transport, or sale of petitioners’ property at the two locations, as well as any disturbance of petitioners’ constitutional and proprietary rights. The motion for reconsideration was denied on January 3, 1991.

Criminal Complaint before the Ombudsman:
Petitioners filed criminal charges against respondents and other customs officers and Makati police members before the Office of the Ombudsman for Robbery, Violation of Domicile (Articles 128, 293, and 294, Revised Penal Code) and violation of Republic Act No. 3019. The complaint alleged that on August 11, 1990, respondents posed as Meralco inspectors to enter petitioners’ stockyards and residence to search for smuggled goods without consent, and that later, armed with warrants, they hauled machinery and truck spare parts without issuing proper receipts. Respondents denied liability, asserting the places were warehouses, not dwellings; that the taking was lawful under the warrants; that there was no violence or intent to gain, the purpose being to collect customs duties; and that they did not demand P100,000—rather, petitioners offered P70,000 to delay hauling. After preliminary investigation, the Ombudsman dismissed the case for lack of merit, a resolution petitioners sought to overturn via certiorari.

• RTC Jurisdiction and Prior Release under Amnesty: Petitioners contended that the Collector of Customs could no longer order a second seizure of items that had been previously seized and released after payment of amnesty duties and taxes; thus the RTC could entertain the replevin suit.
• Cessation of Importation: Petitioners argued that the Bureau of Customs had lost jurisdiction to seize the items because the importation had ceased.
• Due Process and Illegal Seizure: Petitioners maintained that the seizure deprived them of property without due process of law, the warrants being invalid and the seizing officer lacking authority.
• Exhaustion of Administrative Remedies: Petitioners asserted that there was no need to exhaust administrative remedies before seeking judicial relief.
• Grave Abuse of Discretion by the Ombudsman: In the second petition, they claimed the Ombudsman ignored incriminatory evidence, that the receipts did not tally with their own records or the Commission on Audit inventory, and that respondents were guilty of robbery and violation of domicile. They prayed that the Ombudsman be directed to file criminal charges.

• Exclusive Jurisdiction of the Bureau of Customs: Respondent customs officials argued that the Regional Trial Court had no jurisdiction over seizure and forfeiture proceedings, exclusive competence being vested in the Bureau of Customs; thus, the RTC could neither entertain the injunction suit nor issue the restraining order and injunction.
• Non-liability for Criminal Charges (Ombudsman case): Respondents countered that the places searched were warehouses, not residences, negating violation of domicile; that the taking was lawful, based on warrants of seizure and detention, with no violence or intent to gain; and that no demand for P100,000 was made—instead, petitioners offered P70,000 to delay hauling. They disclaimed any violation of R.A. 3019.

• RTC Jurisdiction: Whether the Regional Trial Court had jurisdiction to enjoin and interfere with seizure and forfeiture proceedings conducted by the Bureau of Customs.
• Effect of Prior Amnesty and Cessation of Importation: Whether the Collector of Customs lost jurisdiction or the power to order seizure because the items had been previously seized and released under amnesty, or because importation had ceased.
• Due Process and Validity of Seizure: Whether the seizure deprived petitioners of property without due process of law, entitling them to judicial intervention.
• Exhaustion of Administrative Remedies: Whether the suit in the RTC was proper despite non-exhaustion of administrative remedies before the Bureau of Customs and the Court of Tax Appeals.
• Reviewability of Ombudsman’s Dismissal: Whether the Ombudsman gravely abused his discretion in dismissing the criminal complaint for robbery, violation of domicile, and violation of R.A. 3019.

• RTC Jurisdiction: The Regional Trial Court is devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings or to enjoin them. The Collector of Customs, when sitting in seizure and forfeiture proceedings, has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. RTCs cannot assume cognizance over such matters even through petitions for certiorari, prohibition, or mandamus. The proper forum is an appeal from the Collector to the Commissioner of Customs, then to the Court of Tax Appeals under Republic Act No. 1125, as amended, and from there to the Court of Appeals.
• Effect of Prior Amnesty and Cessation of Importation: Even assuming the seizure were illegal—a matter yet to be proven—such illegality does not deprive the Bureau of Customs of jurisdiction. The distinction between the existence of the power and the regularity of the proceeding is decisive; the Bureau’s exclusive authority remains regardless of any alleged taint of illegality. The propriety of the seizure, including defenses such as prior amnesty or cessation of importation, must be ventilated before the Collector of Customs.
• Due Process and Validity of Seizure: The allegation that the seizure was invalid or unauthorized does not confer jurisdiction on the RTC. The Collector constitutes a tribunal expressly vested by law with jurisdiction over the subject matter; any claim of illegality must be raised as a defense in the forfeiture proceeding itself and, if necessary, pursued through the correct appellate route. A separate civil action is not the remedy.
• Exhaustion of Administrative Remedies: Petitioners’ recourse was to seek relief within the administrative framework: the Collector, the Commissioner, the Court of Tax Appeals, and subsequently the Court of Appeals. The filing of an injunction suit in the RTC bypassed the prescribed administrative and judicial mechanism; thus, the RTC properly lacked jurisdiction and the civil case was correctly dismissed.
• Reviewability of Ombudsman’s Dismissal: The Ombudsman’s dismissal of the criminal complaint was not tainted with grave abuse of discretion. Recognizing the Constitution’s grant of investigatory and prosecutory powers to the Ombudsman, the Court will not interfere with or review the Ombudsman’s findings or the exercise of discretion in dismissing a complaint, absent a clear showing of arbitrariness, to avoid hampering the Ombudsman with innumerable petitions. The dismissal therefore stands.

• Exclusive Jurisdiction of the Bureau of Customs in Seizure and Forfeiture Proceedings — The Collector of Customs, when sitting in forfeiture proceedings, constitutes a tribunal with exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. Regional trial courts are precluded from assuming cognizance over such matters even through petitions for certiorari, prohibition, or mandamus. The proper appeal route is: Collector of Customs → Commissioner of Customs → Court of Tax Appeals (under R.A. No. 1125) → Court of Appeals. The policy underpinning this exclusivity is to prevent unnecessary hindrance to the government’s drive against smuggling and to ensure effective collection of import and export duties.

• Distinction Between Existence of Power and Regularity of Proceeding — Even if the seizure be illegal or the warrant invalid, such irregularity does not divest the Bureau of Customs of its exclusive jurisdiction. The governmental agency concerned is vested with exclusive authority; while grave abuse of discretion may in certain circumstances oust it of jurisdiction, it does not correspondingly vest competence in a court of first instance. Allegations of illegality must be raised as a defense in the forfeiture proceeding itself, not in a separate civil action.

• Non-Interference with the Ombudsman’s Prosecutorial Discretion — Pursuant to the Ombudsman’s constitutionally granted investigatory and prosecutory powers, the Supreme Court will not ordinarily interfere with or pass upon the Ombudsman’s findings in dismissing a criminal complaint. To do otherwise would hamper the Ombudsman with innumerable petitions assailing the dismissal of investigatory proceedings. Only a clear showing of grave abuse of discretion will justify judicial intervention.

• “The Collector of Customs sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. The Regional Trial Courts are precluded from assuming cognizance over such matters even through petitions of certiorari, prohibition or mandamus.”

• “Even if the seizure by the Collector of Customs were illegal, which has yet to be proven, we have said that such act does not deprive the Bureau of Customs of jurisdiction thereon. … This is to lose sight of the distinction between the existence of the power and the regularity of the proceeding taken under it. The governmental agency concerned, the Bureau of Customs, is vested with exclusive authority. Even if it be assumed that in the exercise of such exclusive competence a taint of illegality may be correctly imputed, the most that can be said is that under certain circumstances the grave abuse of discretion conferred may oust it of such jurisdiction. It does not mean however that correspondingly a court of first instance is vested with competence when clearly in the light of the decisions the law has not seen fit to do so.”

• “The Court … will not interfere nor pass upon findings of public respondent Ombudsman to avoid its being hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, and … it will not review the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decide to file an information in court or dismiss a complaint by a private complainant.”

• Commissioner of Customs v. Makasiar, 177 SCRA (1989) — Followed as controlling. Held that Regional Trial Courts are devoid of competence to pass upon the validity or regularity of seizure and forfeiture proceedings or to enjoin them.
• Ponce Enrile v. Vinuya, 37 SCRA 381 (1971) — Followed for the distinction between existence of power and regularity of proceeding; even an illegal seizure does not confer jurisdiction on a court of first instance.
• De la Fuente v. De Veyra, 120 SCRA 451 (1983) — Followed for the rule that a separate action before a court of first instance is not the remedy; the proper forum is the Collector of Customs.
• Ocampo v. Ombudsman, 225 SCRA 725 (1993) — Applied as the basis for declining to review the Ombudsman’s dismissal of a criminal complaint, recognizing the policy of non-interference.
• General Travel Service v. David, 18 SCRA 59 (1966); Pacis v. Averia, 18 SCRA 907 (1966); De Joya v. Lantin, 19 SCRA 893 (1967); Collector of Customs v. Torres, 45 SCRA 272 (1972); Pacis v. Geronimo, 56 SCRA 583 (1974); Commissioner of Customs v. Navarro, 77 SCRA 264 (1977); Republic v. Bocar, 93 SCRA 78 (1979) — All cited to reinforce the settled rule that RTCs cannot take cognizance of matters falling within the exclusive jurisdiction of the Bureau of Customs.

• Tariff and Customs Code — The Code vests exclusive jurisdiction over seizure and forfeiture proceedings in the Collector of Customs. The decision invokes the procedural framework for appeals from the Collector to the Commissioner and onward to the Court of Tax Appeals.
• Republic Act No. 1125, as amended (“An Act Creating the Court of Tax Appeals”) — Confers on the Court of Tax Appeals exclusive appellate jurisdiction over decisions of the Commissioner of Customs, establishing the proper judicial forum for challenges to seizure and forfeiture rulings, thereby precluding direct resort to regional trial courts.
• Constitution (Article XI, provisions on the Office of the Ombudsman) — The Court relied on the Ombudsman’s constitutionally granted investigatory and prosecutorial powers as justification for the policy of non-interference with the Ombudsman’s dismissal of complaints.

Feliciano, Padilla, Regalado, Davide, Jr., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Francisco, and Hermosisima, Jr., JJ., concur.
Narvasa, C.J. and Melo, J., on leave.

None.