CTA Case No. 963 (Resolution)

~' .r UtsLI <.... OJI' TH~ PHILl.PPINJlJI COURT OF T.\X APPEALS I J.3.ANI.l.4 MUTU L SECU ITY INSUrl.At.\lCE COR Ol TIO , Petitfoner i - versu s - C. T. � CASE r-Oo 9 63 THE cav� tiS.SIO'.JE Of CUSTOvlS 1 � espondent o X- - - ~ - - ~ ~ ~ - ~ - ~ X E S 0 L U T I 0 1'-J Thi s i s in c onnection with a "Motion to Dismiss" the petition for review filed by re s pondent on Novem- ber 16 , 1960 on the grounds (1) that this Court has no jurisdiction to entertain the petition for review; and {2) that the petitioner has no legal c apac ity to file the petition for review. On Oc tobe r 6, 1959 , there arrived in the Manila International Airport from abroad various artic le s suc h as as s orted buttons , magnetic bands, radio phone- graphs , tran s istors and veils consigned to one Vic tor Venta of 1470 Antonio Rivera , Man ila . These artic les wer e sei zed by the custom s authorities for alleged violation of Central Bank Circular N o ~ 96 in relation to Se ction 2530 (f) of the Tariff and Customs Code of the Philippine so (Exhso A & 1 � P o 11 , CTA re c. ) On November 18 , 1959 , the c on s ignee Victor Venta , , ... a~ princ�it> al p and the Mutual Security In surance Corp- oration , as surety , exe cuted and filed Bond r O o S- 2468 -A in the amount of Five Thou s and One Hundred eventy - Four esos and Se venty- Four Centavos (~5 i 174o74) to se c ure )

R.ESOLUTIQ ... . C.T�� CASE NO. 963 'I - 2- the release of the seized merchandise . (Exhs. C & 3 p. 14, CTA rec . ) One of the conditions of the bond is vin the event that it could be finally decided that the merchandise herein mentioned should be forfeited to the Government , and/or that a fine or surcharge should be imposed , the entire sum of this bond , in the case of forfeiture, or the corresponding amount of the fine or surcharge as the case may be shall be paid in cash to the Bureau of Customs . 11 (Exhs. 3 & C, ~") On April 23, 960, the Bureau of Customs issued a notice of hearing in Seizure Identification No o 5880 to the princ ipal Victor Venta and the herein petitioner Mutual Security In surance CorporationJ which hearing was scheduled on May 3 , 1960o (Exhs. 4 & D, 4-A & 4-B , Po 17 , CTA rec.) On the date set for hearing , the su ppo sed importer and claimant Victor Venta did not appear . here- upon, the said Victor Venta was declared in default and the Appraisers Division (Manila International Airport) presented its evidence (Exhso A & l 1 p. 11, CTA reco)o On September 14, 1960 , a decision was rendered by Pedro Pacis as 11Acting Collector of Customs11 (Exhso A & 1, Ibid.), ordering and decreeing the forfeiture of the seized articles , but as it appears that the importation was released under Mutual Security Insurance Corpo Bond No . S- 2468-A, then the amount of Five Thousand One Hunelred Seventy-Four Pesos and Seventy-Four Centavos (�5,174o74) Philippine currency, representing said bond should be paid in cash to the Bureau of Customs by the principal \

HESOLUTIU'-1 - G. T. � � CASE NO. 963 -3- and surety, jointly and sever~lly , within thirty (30) days from the receipt of the copy of the de c isiono On November 4, 1960, petitioner Mutual Security Insurance Corporation filed its �1. etition for Reviewt1 appealing from the decision of Pedro acis , "Acting Collector of Customs 11 dated September 14 , l960o On November 16 , l960 g respondent filed the instant f'Iv!otion to Dismiss�1 o The issues in this incident are (l) whether or not this Court has jurisdiction to entertain the peti- tion for review; and ( 2) whether or not the petitioner surety corporation has the legal capacity to file the instant petition for review. The pertinent provisions of Sections 2312, -2313, 2314 and 2402 of the Tariff and Customs Code (rlepublic ct I'o. 1937) involved in this incident provide as fol- lows: .,.SEC . 2' 12. Decision or ction oy Col- lector in Protest and ~eizure CQses.- vvhen a protest in proper form is presented in a case where protest is required, the Collect- or shall reexamine the matter thus present- ed , and if the protest is sustained, in whole or in part , he shall enter the appro - priate order , the entry reliquidated if ne- cessary. In seizure cases, the Collector, after a hearing, shall in writing make a declara- tion of forfeiture or fix the amount of the fine or t@ke such other action as may be proper" "~EC . 2313 . . evievJ by Commissioner .- The person aggrieved by the decision or act- ion of the Collector in any matter presented upon protest or by his action in any case of seizure may, within fifteen days after

� SuLUTIOi~ - C. T� � � C SE NOo 963 -4- notification in writing b the Collector of his action or dec ision , give written notice to the Collector of his desire to have the matter reviewed oy the Commissionero There - upon the Collector shall forthwith transmit all the re cords of the proceedings to the Commissioner , who s hall approve g modify or r everse the action or dec i s ion of the Col- lecto� and take such steps and ma1 e such orders as may oe necess~ry to give effect to his dec isionc �1.5ECo 2402., � eview by Court of Tax � P - peals .- The party agg ieved by a ruling of the Commissioner in any matter Drought oe - fore him upon protest or by his action or ruling in any case of seizure m~y appeal to the Court of Tax � ppeals , in the manner and within the period prescribed by laws and regulations , the action or ruling of tne Commissioner sh411ll oe final ~nd c onc lu - sive." Sec tions 7 and 11 of li.epublic Act rw., 1125 , whic h are the jurisdictional provision s relied upon by the respondent read a s follows~ 11 SE o 7 Jurisdiction.- The Court of Tax Appeals shall exerc ise exc lusive appel - l~te jurisdiction to review by appeal , as herein provided- (2) De c isions of the Commissioner of Customs in cases involving liability for cu stoms duties , fees or other money charges; seizure, detention or release of property affected; fin s , forfeitures or other penal- ties imposed in relation thereof; or other matters arising under the Cu stoms Law or other law or part of law administered by the Bureau of Customs;u 11 SEC .. lL Who may appeal; effe ct of ap- peal o- ny person 1 a ss oc iation or corpora - tion adversely affected by a decision or ruling of the Collect or of Cu stoms or any provinc ial or city Board of Ass essment Ap- peals may file in appeal in the Court of Tax P.ppeals within thirty days after the re- ceipt of such decision or ruling. � The inconsistenc y , in Section s 7 and 11 of Re - public c t Uoo 1125 , as regards who s e de c i s ion , the )o

RESOLUTIQ'-J - C. T. A. CASE NO., 963 - 5- Commi ss i oner of Cu stoms or the Collector of Cu stoms, should be appealed to thi s Court has been resolved by us to be that of the former , whic h resolution was sustained by the Supreme Court in the c ases of ~u fino Lopez & �ons 1 Inc . vs . Court of Tax Appeals (G. � . No . L- 9274 , February l , 1957) and Sampaguita hoe and Slipper Fac tory vs . Commissioner of Customs , et al. {G. R. No. L- 10285 � January 14, 1958) o The above - quoted provi s ions of the Tariff and Customs Code clearly outline the preliminary admi- nistrative steps an aggrieved party should take be - fore bringing his case to this Court. In seizure c ases , the person aggrieved by the decision of for - feiture gives , within 15 days after notification of such de c ision, a written notice to the Collector of his de s ire to have the matter reviewed by the Commis- sion~r of Customs~ Then the latter official renders a de c ision thereon either approving , modifying or rever s ing the action or de c ision of his Collector. fter these step s have been taken , the party ag - grieved by the adverse ruling of the Commissioner of Customs may appeal the dec ision to the Court of Tax ppeals (Section 2402, supra) p pursuant to Sec � tions 7 and 11 of Republic Act i o. 1125 .

RESOLUTIOl - C. T. A. CAE ~O o 963 - 6- The petitioner has not appealed the de c i s ion of the 11 c ting Colle c tor of Customs" to the Commissioner of Customso There is no evidence on record that the dec ision (Exhs . A & 1) appealed from is the decision of the Commissioner of Gustoms ~ as alleged by peti- tioner in its petition for reviewo On the contrary~ the evidence disc losc~ that this is an appeal from the de - c ision of the "lcting Colle ctor of Customs" {Exhso A & 1) and not of the Commissioner of Customs. pparently , this is the result of petitioner 's failure to ~xhaust the administrative remedies outlined by law before bringing this case to the Court o The exhaustion of administrative r .emedLes i s an old principle and a sound rule . It provides for a policy of orderly procedure which favors a preliminary administra- tive sifting process , and serves to prevent attempts to swamp the courts by a resort to them in the first instance . {Sampaguita hoe and Slipper Factory vs. Commissioner of Cu st oms , et alo , supra.) On the basis of petitioner ' s failure to exhaust administrative remedies , it is proper for this Court to dismiss the appeal . (Silver Swan Manu- fa c turing Co o, Inco vs . -The Commissioner of Customs , CoT.Ao Case r�o. 744, June 29 , 1960. ) This is an appeal from the decision of the Collector of Customs , and under the law , partic ularly, the Cus toms Law and Republic Act No . 1125 , the Court of Tax Appeals has no jurisdiction to review by appeal . decisions of the

RESOLUTION - C. ToA. CASE NOo 963 - 7- Collector of Customs .. (Rufino Lopez & Sons , Inc .. vs .. Court of Tax Appeals J supra; see a so Sugar Producers' Cooperative Marketing Assoc iation, Inc .. vs .. Commis- sioner of Customs , C. T.Ao Cases Nos . 858 & 859) , Re- solution of October 27 , 1960 1 and cases cited there- in. ) Having disposed of the first issue adversely against petitioner , we find it unnecessary to consider the second ground of respondent ' s motion to dismiss, it having been rendered academic . But for the satis- fa ction of the petitioner and for its guidance , we wish to state that we had an occasion to rule on the ques- tion of whether or not a petitionerp as surety of an importer , has the legal capacity to file an appeal with this Court . v1 e s aid: "Ve cannot subscribe to the theory that the petitioner is ' adversely affected 9 by the decision of respondent in Seizure Iden- tification Case l o. 2428 . In interpreting the above cited provision of law, we have stated that it refers only to those 'per- sons, associations or corporations whose pro- prietary or pecuniary interests are adversely affected by a decisionv of the officials therein mentioned. (See cting Collector of Customs vs . Commissioner of Customs, c. T�� Case No. 17 , January 22, 1955, affirmed in G. Ro ~ Oo L-8811, Oct. 31, 1957j Hough Vo �orth Adams Ll9077 196 Ma ss . 2<:JO. 82 ., E.. 46, cited in 74, Lrl 1221.) It cannot be stated that by virtue of its undertaking of suretyship whereby it has agreed to be jointly and solidarily liable with ~anuel Santos to respondent in the amount of ~1,785 . 05, petitioner will actually suffer pe cuniarily and fall within the contemplation of the phrase 'adversely affected ' in Section ll of depublic . ct \Oo ll25 o It is true that the nature of the obligation contracted by petitioner with itanuel Santos would enable

J.i.ESOLUTION - o. 963 C.To � CASE - 8- respondent to go against the petitioner to the exc usion of Manuel antos, pur- suant to Artie e 1216 of the New Civil Code. Nevertheless, it cannot be said that by this procedure petitioner would be adversely affected pecuniarily, be- cause it still retains the right to be reimburse ' by its principal Manu 1 Santos (Arto 2117, ew Civil Code). uFrom the foregoing , it is obvious that petitioner does not fa l within the purview of Section 11 of Republic ct Oo 1125 and p1 accoi ns equent ly , does no t have th e lega l ca ty to in st i t ute t he i nsta nt etition for review before this Court.., u Philippines International Surety Co., Inc. vs, Commissioner of Customs 1 C.To o ~~o. 745, esolution , January 12, ~~=~-underscoring supplied.) HE FORE, the petition for review should be, as it is hereoy dismissed, with costs against peti- tioner. SO ORDERED . anila , February 15 , 1961. PresIidJl.NinOg� NAJuBdLge m ca cuR: RQ Nl. UIAALI Associate Judge