Bastida v. Acting Commissioner of Customs
REITERATIONFacts
The Antecedents: On November 2, 1956, a customs examiner inspected cargoes for shipment, including a package from petitioner Manuel Bastida declared to contain two Minifons (wire recorders) for a priest in Rome. Inside the boxes containing the Minifons, the examiner discovered concealed checks, money orders, and traveler's checks totaling $13,780, and in the other box, money orders totaling $3,149.50 and US dollar bills amounting to P630. The Customs authorities seized these items, alleging violation of Section 1363(f) and (m) of the Revised Administrative Code and Central Bank Circular 20 as implemented by Circular 42, for the unlicensed exportation of foreign exchange. Procedural History: The Collector of Customs decreed the forfeiture of the Minifons and the currency. Petitioner appealed to the Commissioner of Customs. Subsequently, the Acting Commissioner of Customs affirmed the forfeiture decision. Petitioner then appealed to the Court of Tax Appeals (CTA), arguing that checks are not "merchandise" and that the forfeiture became academic due to the repeal of Central Bank Circulars 20 and 42 by Circular 133. The CTA affirmed the decision of the Acting Commissioner of Customs. The Petition: Petitioner seeks review of the CTA's decision, raising issues regarding the classification of checks, money orders, and dollar bills as "merchandise," violation of Central Bank Circulars 20 and 42, and the effect of the repeal of these circulars on the forfeiture proceedings.
Issue(s)
Whether the checks, money orders, and US dollar bills are "merchandise" within the purview of Section 1363 of the Revised Administrative Code. Whether the petitioner violated Central Bank Circular 20 as implemented by Circular 42. Whether the seized items are still subject to forfeiture in view of the repeal of Central Bank Circulars 20 and 42 by Circular 133.
Ruling
The Supreme Court affirmed the decision of the Court of Tax Appeals, upholding the forfeiture of the seized checks, money orders, and US dollar bills in favor of the Government.
Ratio Decidendi
On the issue of whether the checks, money orders, and US dollar bills are "merchandise" within the purview of Section 1363 of the Revised Administrative Code: The Court held that these items fall within the definition of "merchandise." Citing Commissioner of Customs vs. Capistrano, the Court reiterated that US dollars, having ceased to be legal tender in the Philippines, are considered "merchandise." Regarding checks and money orders, the Court noted their nature as negotiable instruments, which are akin to money and can be bought and sold like commodities. The broad definition of "merchandise" in Section 1419 of the Revised Administrative Code, encompassing "in general anything that may be made the subject of importation or exportation," further supports their inclusion. Therefore, the checks, money orders, and dollar bills are properly considered "merchandise" subject to forfeiture. On the issue of whether the petitioner violated Central Bank Circular 20 as implemented by Circular 42: The Court found that the petitioner's attempt to export the checks, money orders, and dollar bills without the requisite prior license from the Central Bank constituted a violation. The Tax Court's reasoning, which the Supreme Court adopted, stated that these items directly involved foreign exchange, the flow of which the Central Bank is empowered to regulate to protect the international reserve. The fact that they were not legal tender was deemed immaterial, as they represented and substituted for currency. Thus, the unlicensed exportation was an indubitable violation. On the issue of whether the seized items are still subject to forfeiture in view of the repeal of Central Bank Circulars 20 and 42 by Circular 133: The Court ruled that the repeal of the circulars did not abate the forfeiture proceedings. The Court distinguished between criminal and civil penalties. While the repeal might affect criminal prosecutions, forfeiture proceedings, being actions in rem (directed against the property itself), are not abated by the repeal of the penalizing circulars. The Court emphasized that the forfeiture case was instituted under Section 1363 of the Revised Administrative Code, and the repeal of Central Bank circulars did not retroactively legitimize the illegal act of attempting to export foreign exchange without a license. Furthermore, the Court pointed to Section 1363(m), sub-paragraphs 3 and 4, which decree forfeiture upon the wrongful making of a false declaration or delivery of a false invoice or paper in connection with importation or exportation. The record showed petitioner made a false declaration by omitting the currency from his export license application. The Minifons, though covered by a license, were also subject to forfeiture as they were used as a means to facilitate the illegal export of the currency.
Main Doctrine
Checks, money orders, and US dollar bills are considered "merchandise" within the purview of Section 1363 of the Revised Administrative Code, making them subject to forfeiture for violations of customs and Central Bank regulations, even if the relevant Central Bank circulars are later repealed, as forfeiture proceedings are actions in rem and not abated by such repeal.