CTA Case No. 2478 (Decision)

' C o~� llF. 'PHlLIPP~ ~F8 ~r TAX APPJr'I\L~ OU!:.t 1!\ C. l Y CARLOS SUN, LOLITA OREIIDAIN, AND MARIANO V. AGCAOILI , Petitioners , - versus - C. T. A. CASE NO . 2478 ACTING COt<INISSIONER OF CUSTOMS , Respondent. X- - - - - - - - - - - - - X DE C I S I 0 N This is an appeal from a decision of the Commis - sioner of Customs decreeing the forfeiture of various dollar bills , checks , money orders , with a total value of $132 , 615. 09 and a green- colored suitcase contain- ing the same for violation of Section 2530 (f) , (j) and (m) of Republic Act No . 1937 , otherwise known as the Tariff and Customs Code , in relation to Central Bank Circulars No . 20 and 42 . The following statement of facts of the appealed decision is uncontroverted: The record shows that previous to July 1, 1959 or thereabouts , the National Bureau of Investigation received a reliable inform- ation that subject dollar instruments were to be smuggled out of the country for abroad with one Dolores Benedicto as carrier . Act- ing on such information, National Bureau of Investigation agents led by Agent lo . 97 were forthwith dispatched to the Manila Internat isoanidaluA.si.rpdoortl to prevent t he carting away of lars , and if need be , to effect the seizure thereof and the appre- hension of the culprits . Said ~ffii agents arrived at the Manila International Airport at about 7:50 o ' clock in the morniP~ of July 1, 1959 , and immediately proceeded to the Office of the Deputy Collector of Customs

DJGI:3ION - CTh CaS& ~0 . 2478 2 thereat , informing him that a ' certain lady out going passenger was about to leave for llongkong on the Pan 1 merican plane ' vrhicLl \�ras ar)out to depart at the moment . Ac com- pani ed by an examiner from the Bureau of Customs , the NiH agents proceeded to the examine tion room of the .3alagbag Termi112l and found on top of the examination counter t1vo sui teases , namely , one gray- colored sui tease and one green- colored "t�ri th 1..rhi te linings , 1.rhich \�rere lis ted in the name of Dolores Lenedicto . It ap9ec.1.rs that �.;iss Benedicto was already on boar d the Pan American Airvrays ' plane at the moe1ent , so she was requested to come down to iden- tify the suitcases listed in her name . I��ds s Benedicto , ho\vever , den:Led O\vnership over the green- colored suitcase . Conseauent - ly , Eis s Benedicta ~:ras allm..red to leave - the country and the green- colored suitcase wc. s forthvri th seized . It appears further th.:t t 1vhen the green- colored sui t ease v.ras opened in the 1)resence of several NB I agents , representatives of the Central Bank and those of the :Sureau of Custor:1s , i t \�ras found to conta i n subject U. 3 . dollar instruments . 3ince it appeared that there was no license to export the e.bove mentioned dollar instruments the Collector of Customs instituted seizure ~)roceeding against them for violation of the provisions of dec- tion 2530 ( j ) and (m) of the rariff and :us toms 0ode in relation to :entral ~:lank Circul3r ho . 20 and 42 . 'rhere vib.S no knmvn claimant at the time of seizure so the Collector of Customs posted the reauired notice of hearing for fifteen (15) days in the I3ulletin Board of the 0ustoms house as required by 3ection 2304 of the 'l1ariff and Customs Code . No one appeared and claimed ovme r ship of sa i d comm.odi ties during the hearing of the seizure proceedi ng . Thereafter on the basis of the evidence adduced therein the Collector of Gustoms rendered a decision on September 29 , 1959 decreeing

DECISION - CTA CASE NO . 2478 3 the forfe iture of the aforesaid commodities in favor of the government . Meanwhile , George Chua alias Chavl Yaw Shun, Rosita Chua and Lolita Manio Orendain, the latter being one of petitioners in this case, were charged in Criminal Case No . 5184-P filed before the Court of First Instance of Ri zal for violation of Sec. 3 (b) of Central Bank Circular No . 42 , which prohibits the exportation of foreign exchange without license from the Central Bank. While the case was pending in the Court of First Instance , Central Bank Circular No . 133 was issued on January 21 , 1962 authorizing the importa tion or exportation of foreign exchange without need of a license from the Central Bank. In view of thi s Circular No . 133 , the accused therein filed with the Court of Appeals a s pecial civil action for Certiorari , Prohibition with Preliminary Injunction (CA- G. R. No. 31901 - R) against the Honorable Angel Mojica as C. F. I . Judge of Rizal , Branch VII and Pasay City Fiscal Gregorio Pineda to restrain said respondents therein from proceeding with the trial and prosecuting said criminal case . On April 28, 1963, the Court of Appeals rendered judgment annull-ing the proceedings in the aforesaid Criminal Case No . 5184- P of the Court of First Instance of Rizal and permanently enjoining respondent Judge of the Court of First Instance of Rizal , Branch VII and the Pasay City Fiscal from proceeding with the prosecution and trial thereof ruling that since Central Bank Cir-

DECISION - CTA CASE NO . 2478 '4 cular No . 20 which requires prior licensing by the Central Bank of foreign exchange tra nsaction and Cen- tral Bank Circular No . 42 which includes securiti es as a foreign exchange transaction needing prior licensing were repealed by Central Bank Circular No . 133 , viola- tions of Central Ba~~ Circular Nos . 20 and 42 can no longer be prosecuted as crimes . On January 24, 1964, petitioner Carlos L. Sun appeared for the first time as claimant of the forfeited bills and negotiable instruments by filing a motion for reconsideration with the Collector of Customs to set aside the latter's decision of September 29 , 1959 on the basis of the decision of the Court of Appeals in CA- G. R. No. 31912- R. Petitioners Lolita Orendain and l'4a.riano V. Agcoile entered their appearance as cla imants also . The Collector of Customs in an order dated June 11 , 1964 denied the motion. This order was appealed to the Commissioner of Customs but the latter denied same . Hence this appeal . Petitioner first urges that the Collector of Customs rendered his decision without due process of law. It is alleged that the notice of seizure wa s made through publica tion although the Collector of Customs could have given personal notice to petitioners since he knew tha t petitioners were charged criminally with the violation of Section 3 (b) of Circular No . 42 of the Central Bank for exportation of securities and foreign exchange in question without the necessary

DECISION - CTA CASE NO . 2478 5 Central Bank license or permit in Criminal Case No . 5184- P of the Court of First Instance of Manila . We find no merit in this pretension. The records reveal that sometime in April 1959 petitioner Carlos L. Sun told Rosita Chua that he wanted to send a suitcase containing gifts for his relatives in Hongkong vrithout informing the latter that the suit- case would contain dollar bills and securities . Rosita Chua referred him to petitioner Lolita Orendain who was then managing a travel agency and who agreed to make the proper arrangement . Dolores Be nedicto , a passenger of a Pan American plane for Hongkong on the morning of July 1, 1959 agreed to bring the suitcase as part of her luggage . When the customs authorities discovered the dollar bills and foreign exchange in the suitcase, Dolores disclaimed ownership of the suitcase . The customs authorities seized the suitcase and its contents and instituted a seizure proceeding thereof . No one appeared to claim the suitcase and its contents . Petitioner Sun 1id not appear as claimant because , as he stated in an affidavit dated January 18 , 1961, of fear to face criminal prosecution. Thus, he was not one of the accused in the crimir~l case aforesaid . He appeared as claimant only on January 27, 196l1-, years after the Collector of Customs had rendered his decision on September 29 , 1959 and only after the Court of Appeals had dismissed said criminal case on the ground that Central Bank Circular Nos . 20 and 42 had been repealed

DECISION - CTA CASE NO . 6T on January 21 , 1962 by Central Bank Circular No . 133 . Petitioner Lolita Orendain on the other hand is admittedly not the 01vner of the suitease and did not even kno\'T the contents of the suitcase . Agcaoile for his part appears to be only counsel of Orendain. Orendain and Agcaoile filed their appearance in the seizure proceed- ing only on February 26, 1964. Under these circumstances it is not at all surprising that the Collector of Customs di d not give petitioners herein personal notice of the seizure proceedings before they entered their appearance in 1964. At any r a te petitioners submitted evidence when the decision of the olle ct or of Customs was on appeal 1vith the Commissioner of Customs . Then again, an appeal to this Court is in the nature of a trial da-n~ and petitioners could have also presented additional evidence had they wanted to . It is significant in this respect that during the hearing of this case their counsel instead manifested that the facts of this case are uncon- troverted and that petitioners submit it on the basis of the pleadings and customs record . Assuming ar~uendo that the Collector of Customs committed an irregularity in not giving petitioners personal notice of the seizure still petitioners were obviously not prejudiced by sameo The rule is that no error or defect in any ruling or order or in anything done or omitted by the Court or by the parties is ground for setting aside or otherwise disturbing a judgment unless substantial justice so

DECISION - c �rA CASE NO . 2lt78 7 require (Sec . 5, Rule 51, Rules of Court) . It is also urged that since the dollar bills and checks in question were the subject of Criminal Case Io . 518lt pending in the Court of First Instance of Rizal, said Court assumed jurisdiction over the subject matter therein to the exclusion of the Bureau of Customs . In answer to this position suffice it to quote the following language of the Supreme Court in the case of Francisco Pascual vs . Commissioner of Customs , l;. SORA 1020; Petitioner has lost sight" of the fact that his act of ' importing contrary to law' entails two penalties - one penalty for violation of Central Bank Circular No . l;.l;. as prescribed by Section 3lt of Republic Act No . 265 directed principally against the person of the offender and which may be had in a criminal prosecution involving an action in personam and the other penalty of forfeiture imposed by Section 1363 (f) of the Revised Administrative Code directed primarily against the goods rather than the offender and which may be had in auc.sti.on24o, in rem (see Origet vs. U. S. 125t 2lt6- 2lt7 ; 31 L. Ed . 7lt3 , 746- 7lt7J . The t~ ~enalties bein~ distinct and di!!erent , ~for!eiture may be ~nforced a~ainst the ~oods by proceedin~s in rem inaepeodeotly of the criminal ~rosecut1on a~aiost tna offender (Oriiet ys . U,S . supra> . The im- ;pos it1on of one does not trrecl.ude tne i m;pos 1- t1on o! the other, for it is a well- establ1shed rule that !otfa1ture proceedings stand i~ ~ent of aQd ate wholly Unaffected by any ~inal :procee.din~ in ;personam (23 Am . Jur . � For while punishment for the crime and forfeitur e of the goods might be (uco. sin. - cident, they are not necessarily so vs . 25 pdgs . of Panama Hats~ 231 u. s. 358, 368 , 58 L. Ed . 267 , 269) . ~hus , while it is true that the Bureau of Customs is not authorized to impose the penalty prescribed by section 3lt of Republic Act No . 265 for violation of Central Bank Circular Noo lt4,

DECISION CTA CASE NO . 2478 r8 there is nothing to preclude the Bureau of Customs from imposing the penalty of forfeiture of the goods or merchandise the importation of which ha s been effected or attempted contrary to law in accordance with section 1363 (f) of the Revised Administra - tive Code . (Underscoring Ours) Lastly, it is urged that the crime of illegal exportation of foreign securities no longer exists with the repeal of Central Bank Circulars No. 20 a nd 42 by Central Bank Circular No . 133 and the commodities in question cannot now be confiscated. This legal question ~s no longer of first impression in this jurisdiction. 1. Finally, the petitioner argues that in view of the repeal of Circulars 20 and 42 by Circular 133, the possession and ex- portation of dollars , without prior license from the Central Bank , is no longer prohibit- ed . While this may be true in the context of present- day foreign exchange transactions , we nevertheless must recognize the dual character of proceedings that could be insti- tuted for violation of Central Bank circulars 20 and 42 , during the time that these were in force ,. under the authority of Republic Act 265 (Central Bank Act) . The petitioner loses sight of the fact that his attempt to export the checks , money orders and dollar bills in question, in violation of the aforementioned provisions of the Revised Administrative Code and Cen- tral Bank circulars , entailed two penalties: (a) a penalty for violation of Circular 42, prescribed by Section 8 of Circular 20 in relation to Section 34 of Republic Act 265, directed principally against the person of the offender and which may be imposed in a criminal prosecution (an action in personam) , and (b) a penalty of forfeiture imposed by Section 1363(f) of the Revised Administrative Code directed primarily against the merchandise rather than the offender (an action in rem) . In the case at bar, the repeal of Cir- culars 20 and 42 by Circular 133 did not have the effect of abating the forfeiture case

DECISION - CTA CASE O. 2478 9 instituted against the petitioner, for the simple reason that the forfeiture proceed- ings undertaken here are civil - not crimi- nal - in nature . In this sense, therefore , the repeal cannot be given retroactive effect and cannot infuse the attribute of l ega lity into the petitioner's attempt to export the checks , money orders and dollar bills in question. (Bastida vs . Acting Comm . of Customs, 35 SCRA 448) The repeal of Circular 20 and 42 took effect only on January 21, 1962 and did not abate the forfeiture case which is not a criminal case. WHEREFORE the decision appealed from is hereby affirmed with costs against petitioners . SO ORDERED. Quezon City, February 24, 1975. h 'i L--� RAMON L. AVANCEfA Associate Judge viE CONCUR: ~~~ RO:V.tAN Mo Ul'lALI Pre 'ding Judge .tW! � �. r s�rA :IScLAtvO4R?. VA'LL'V~ AREZ7 .� Associate Judge .