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Jun 19, 2008

G.R. No. 128064, March 4, 2004

  • Jurisdiction of the regular courts vis-a-vis jurisdiction of the BOC in abandonment proceedings


Petitioner RV Marzan Freight, Inc., owned and operated a customs-bonded warehouse, which, along with the goods stored therein, was covered by a Philfire insurance policy. On April 12, 1989, raw materials consigned to private respondent Shiela’s Manufacturing, Inc., arrived in the Philippines from Keelung, Taiwan. The Bureau of Customs treated the raw materials as subject to ordinary import taxes and were not immediately released to Shiela’s Manufacturing.

Later, the District Collector of Customs initiated abandonment proceedings over the cargo and notice was posted. No separate notice was however sent to Shiela’s Manufacturing because its address was unknown. After the aforestated proceedings achieved finality but before inventory and sale at public auction, part of the warehouse containing the shipment was burned. Philfire paid to Marzan the amount of P12,000,000, for which the latter was issued a receipt.

Shiela’s Manufacturing is now demanding payment of the value of the goods from Marzan, who, however, rejected the demand. Thus, on Dec. 26, 1991, or after the lapse of more than 2 years from the arrival of the cargo in the Philippines, Shiela’s Manufacturing filed a complaint for damages with the RTC of Pasig City against Marzan.

The lower court ruled in favor of Shiela’s Manufacturing.


  • W/N the trial court had jurisdiction to review and declare ineffective the declaration of the District Collector of Customs in the abandonment proceedings that the subject shipment was abandoned cargo and that, thenceforth, the government ipso facto became the owner thereof


The Supreme Court upheld the contention of Marzan.

Irrefragably, the RTC had jurisdiction over the nature of the private respondent’s action, which was one for the collection of the value of the cargo gutted by fire, while under the custody and control of the petitioner preparatory to its sale at public auction by the BOC.

The jurisdiction of the court or other tribunal is determined by the relevant allegations of the complaint and the character of the relief sought, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims accorded therein. The jurisdiction of the trial court does not depend upon the defenses in the answer or in a motion to dismiss.

However, the Supreme Court also held that the trial court was incompetent to pass upon and nullify (1) the seizure of the cargo in the abandonment proceedings, and (2) the declaration made by the District Collector of Customs that the cargo was abandoned and ipso facto owned by the government.

It, likewise, had no jurisdiction to resolve the issue of whether or not the private respondent was the owner of the cargo before it was gutted by fire. The trial court should have rendered judgment dismissing the complaint, without prejudice to the right of the private respondent to ventilate the issue before the Commissioner of Customs and/or the CTA.

The District Collector of Customs did not lose jurisdiction over the abandonment proceedings. The loss of the cargo did not extinguish his incipient jurisdiction in the said proceedings, nor render functus officio her declaration that the subject shipment had been abandoned.


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