University of the Philippines College of Law

JEAF, 2-D

Topic DUE PROCESS: NOTICE AND HEARING - WHEN REQUIRED

Case No. G.R. No. L-19180 / October 31, 1963
Case Name NATIONAL DEVELOPMENT COMPANY vs. THE COLLECTOR OF CUSTOMS OF MANILA
Ponente BAUTISTA ANGELO, j.

RELEVANT FACTS

 The National Development Company (NDC) is engaged in shipping business under the name of “Philippine National
Lines.” It is the owner of steamship “S.S. Doña Nati” whose local agent in Manila is A.V. Rocha.
 On August 4, 1960, the Collector of Customs sent a notice to C.F. Sharp & Company (as alleged operator of the
vessel) informing it that said vessel was apprehended because it was found that it carried an unmanifested cargo
consisting of 1 RCA Victor TV Set 21” in violation of Sec. 2521 of the Tariff and Customs Code.
o Inserted in the notice is a note saying that the TV was being carried away by Dr. Basilio de Leon y Mendez,
official doctor of the vessel, who readily admitted ownership of the same.
o C.F. Sharp was given 48 hours to show cause why no administrative fine should be imposed upon it.
 C.F. Sharp, not being the agent or operator of the vessel, referred the notice to Rocha, the actual agent operator
thereof.
 Rocha answered the notice stating the the TV set was not a cargo of the vessel; hence, it’s not required by law to
be manifested. Rocha stated further: “If this explanation is not sufficient, we request that this case be set for
investigation and hearing in order to enable the vessel…to present evidence in its defense.”
 Without conducting any investigation or hearing, the Collector of Customs replied stating that:
o The TV set was a cargo on board the vessel
o He does not find Rocha’s explanation satisfactory enough to exempt the vessel from liability for violating
Sec. 2521 of the Tariff and Customs Code
o A fine of P5,000 is imposed on the vessel
o It must pay within 48 hours; otherwise he will deny clearance to said vessel will issue a warrant of seizure
and detention
 NDC and Rocha filed the instant special civil action of certiorari with preliminary injunction before the CFI of
Manila alleging that the Collector of Customs committed GAD in imposing the fine without the benefit of an
investigation or hearing as requested.
 CFI issued ex parte the writ prayed for upon filing of a bond worth P5,000.
 Respondent’s arguments:
1. CFI has no jurisdiction to act on matters arising from violations of the Customs Law, but the CTA
2. Assuming that it has, petitioners have not exhausted all available administrative remedies – should have
appealed to the Commissioner of Customs
3. The requirements of administrative due process have been complied with when the written notice given by
respondent to Rocha clearly specified the nature of the violation and that the defense set up by Rocha
constitute merely a legal issue which doesn’t require further investigation
4. The investigation conducted by customs authorities showed that the TV set was unloaded by the ship’s doctor
without going thru the custom house as required by law and was not declared in the ship’s manifest or in the
crew declaration list
 CFI ruled in favor of Rocha and set aside respondent’s ruling, saying that it appears to be unjust and arbitrary
because the party affected has not been accorded the investigation it requested.
 Respondent appealed to SC.

Issue
W/N the Collector of Customs
committed GAD when it
imposed the fine on the vessel
without first conducting an
investigation or hearing?
W/N the CFI has jurisdiction
over the case?
W/N petitioners brought this
action prematurely and failed to
exhaust all administrative
remedies?
WHEREFORE, the decision appealed from is affirmed. No costs.
University of the Philippines College of Law
JEAF, 2-D
ISSUE AND RATIO DECIDENDI
Ratio
YES.
1. SC said that it really appears that Rocha was not given an opportunity to
prove that the TV set is not a cargo that needs to be manifested as required
by Sec. 2521 of the Tariff and Customs Code.
2. Under said section, personal effects of the members of the crew need not be
manifested.
3. The fact the the TV set was claimed by the customs authorities not to be
within the exception does not automatically make the vessel liable. It is still
necessary that the vessel, its owner or operator, be given a chance to show
otherwise. This is precisely what Rocha requested in his letter. Not only was
he denied this chance, but respondent immediately imposed the fine upon
the vessel. This is a denial of the elementary rule of due process.
4. SC said that it’s true that proceedings before the Collector of Customs with
regard to violation of any customs law or regulation are not judicial in
character, but merely administrative, where the rules of procedure are
generally disregarded. But even in the administrative proceedings due
process should be observed because that is a right enshrined in our
Constitution. The right to due process is not merely statutory. It is a
constitutional right.
5. Indeed, the Constitution provides that “No person shall be deprived of life,
liberty or property without due process of law,” which clause epitomize the
principle of justice which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial. This principle applies with
equal force to administrative proceedings.
6. The Court cited the case of Ang Tibay vs. CIR and reiterated the 7 cardinal
primary rights which must be respected even in administrative proceedings.
YES.
1. The Court said that the issue in this case is not about the correctness of the
imposition of the fine by the Collector of Customs but whether or not he
acted properly in imposing such fine without first giving the operator an
opportunity to be heard.
2. Such is within the CFI’s jurisdiction. The action taken against him is in
accordance with Rule 67 of the Rules of Court.
The Court said that this may be true, but it considered appealing to the Commissioner
of Customs not a plain, speedy or adequate remedy in the ordinary course of law as
would prevent petitioners from taking the present action, for it is undisputed that
respondent has acted in utter disregard of the principle of due process.
RULING