THIRD
DIVISION
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HON. EXECUTIVE SECRETARY, COMMISSIONER
OF CUSTOMS, and the DISTRICT COLLECTOR OF CUSTOMS OF THE
Petitioners, - versus
- NORTHEAST FREIGHT FORWARDERS, INC., Respondent. |
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G.R. No. 179516 Present: QUISUMBING,* J., YNARES-SANTIAGO, Chairperson, CARPIO,** CHICO-NAZARIO,
and PERALTA,
JJ. Promulgated: March 17, 2009 |
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CHICO-NAZARIO, J.:
Before
this Court is a Petition for Review under Rule 45 of the Rules of Court
assailing the Decision[1]
dated
The
antecedent facts of the case are as follows:
On
4 April 2005, President Gloria Macapagal-Arroyo issued Executive Order No. 418,
entitled, “Modifying the Tariff Nomenclature and Rates of Import Duty on Used
Motor Vehicles under Section 104[4] of
the Tariff and Customs Code of 1978 (Presidential Decree No. 1464, as
amended).” Executive Order No. 418
imposed additional specific duty in the amount of P500,000.00 for used motor vehicles imported into the
country. Relevant provisions of
Executive Order No. 418 are hereunder reproduced:
SECTION 1. The articles specifically listed in Annex “A” hereof, as classified under Section 104 of the Tariff and Customs Code of 1978, as amended, shall be subject to the rates of import duty indicated opposite each articles except for trucks, buses and special purpose vehicles.
SEC. 2. In addition to the regular rates of import
duty, the articles specifically listed in Annex “A” hereof, as classified under
Section 104 of the Tariff and Customs Code of 1978, as amended, shall be
subject to additional specific duty of P500,000.00.
Following
the effectivity of Executive Order No. 418, seven enterprises at the Subic Bay
Freeport Zone (formerly Subic Naval Base area), namely: Unitrans Subic Ventures Corp., Akram Subic
Bay Trading Corp., Chifil Subic International Trading, Lucky Dale Subic
International, Inc., Phil-Pan Subic Ventures, Inc., Sunlift Subic International
Corporation, and JJB Century International Ventures Corp. (collectively
referred to as the Subic enterprises), filed before the RTC of Olongapo City a
Petition for declaratory relief[5]
challenging the constitutionality and legality of Executive Order No. 418 on
the ground that it violates their property rights and impairs the obligation of
contracts. The Petition, docketed as
Civil Case No. 179-0-05, was raffled to Branch 74 of the RTC,
On
To
avail itself of the effects and benefits of the writ of preliminary injunction
issued pursuant to the RTC Order dated 12 August 2005, respondent filed its
Motion for Leave to Intervene and Admit Petition in Intervention in Civil Case
No. 179-0-05.[7] Respondent claimed in its Motion that it
would also be adversely affected by the implementation of Executive Order No.
418 since it is engaged in the importation or trade of all types of motor
vehicles inside the Subic Bay Freeport Zone.
In
its Opposition[8] to the
Motion for Leave to Intervene, petitioners argued that respondent does not have
any interest to assail Executive Order No. 418 because the latter’s Certificate
of Registration and Tax Exemption would disclose that it was prohibited from
importing or trading used motor vehicles.
In
an Order dated
Section 1, Rule 19 of the 1997 Rules of Civil Procedure outlines the qualifications of persons who may intervene. The would-be intervenor must show that it has a legal interest on the matter in litigation or in the success of either of the parties or an interest against both as it would be adversely affected by a distribution or disposition of the property in custody of the court or an officer thereof.
After a careful evaluation of the
allegations in the petition in intervention and the various documentary
evidence presented, marked and offered (Exhibits “A to G,” inclusive of all
sub-markings) in support of its motion with attached petition in intervention,
the Court finds and so holds that the [herein respondent] was able to show to
the satisfaction of the Court that it has sufficient legal interest on the
matter in litigation because it is in the business of importing motor vehicles
inside the Subic Bay Freeport Zone as evidenced by its Certificate of
Registration (Exhibit “A”) and the accreditations issued by the Land
Transportation Office as importer (Exhibit “B”) and dealer (Exhibit “C”). As such, [respondent] stands to be
substantially and adversely affected by the implementation of Executive Order
No. 418 considering that the principal activity of the company was the
importation of used motor vehicles that comprised 98% of its income (Exhibits
“G, G-1 and G-2”). Furthermore, the
intervention of the [respondent] will not unduly delay or prejudice the rights
of the original parties and although its rights may be protected in a separate proceedings,
it is better and more prudent to just include the [respondent] in the instant
action if only to avoid multiplicity of suits.
Finally, the Court takes judicial notice of the decision of the Supreme
Court as reported in the different newspapers of
The RTC thus decreed:
WHEREFORE, foregoing considered, the subject motion is hereby GRANTED and the attached Petition in Intervention is admitted. The [herein respondent] Northeast Freight Forwarders Inc. is now considered a party-petitioner and [herein petitioners] are given fifteen (15) days from receipt hereof to file their Answer to the Petition in Intervention.[9]
Petitioners
filed with the Court of Appeals a Petition for Certiorari, docketed as CA-G.R. SP No. 94646, averring that the RTC
committed grave abuse of discretion in issuing its
The established rule is that the
constitutionality of law can be challenged by one who will sustain a direct
injury as a result of its enforcement.
We find that said rule is established in so far as [herein respondent]
is concerned. Executive Order No. 418 as
noted above expressly imposes additional specific duty in the amount of P500,000.00
for each used motor vehicle imported into the country. A careful perusal of the certificate of
registration and tax exemption, specifically Article 1 thereof, of
[respondent], Northeast Freight Forwarders, Inc., would show that [respondent],
Northeast Freight Forwarders, Inc., is
authorized to import or export all types of motor vehicles, excluding used
motor vehicle in accordance with E.O. No. 156.
Thus, we find that herein private respondent is authorized to import or
trade used motor vehicle, but not those used motor vehicle in accordance with
E.O. No. 156. What E.O. No. 156
prohibits is the importation of used motor vehicles into the Philippine
territory outside the secured fenced-in former Subic Naval Base area. Used motor vehicles that come into the
Philippine territory via the secured fenced-in former Subic Naval Base area may
be stored, used or traded therein, or exported out of the Philippine
territory. Thus, used motor vehicles
imported and/or traded by [respondent] via
the secured fenced-in former Subic Naval Base area would therefore be
subjected to the additional specific duty in the amount of P500,000.00
imposed by E.O. No. 418. Undoubtedly,
[respondent] has the legal interest to assail the validity of E.O. No. 418
because [respondent] would definitely suffer a direct injury from the
implementation of E.O. No. 418. The
intervention, therefore, of [respondent] in Civil Case No. 179-0-05 is proper.
Based on the foregoing consideration, therefore, the Court finds no grave abuse of discretion attending the RTC’s ruling, the same being supported by the attendant circumstances and applicable law.
The fallo of the Decision of the appellate court reads:
WHEREFORE, premises considered, the instant petition for certiorari is hereby DISMISSED for lack of merit.[10]
The
Motion for Reconsideration[11]
of petitioners was denied[12]
by the Court of Appeals in its Resolution dated
Hence, the
instant Petition assigning the following lone error:
THE COURT OF APPEALS
GRAVELY ERRED IN AFFIRMING THE ORDER OF THE
Section
1, Rule 19 of the 1997 Rules of Civil Procedure, as amended, provides for the
parameters in which a person, not originally a party to the case, may
intervene:
SECTION 1. Who may intervene. — A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.
Intervention is
not a matter of absolute right but may be permitted by the court when the
applicant shows facts which satisfy the requirements of the statute authorizing
intervention. Under our Rules of Court,
what qualifies a person to intervene is his possession of a legal interest in
the matter in litigation or in the success of either of the parties, or an
interest against both; or when he is so situated as to be adversely affected by
a distribution or other disposition of property in the custody of the court or
an officer thereof. As regards the legal
interest as qualifying factor, this Court has ruled that such interest must be
of a direct and immediate character so that the intervenor will either gain or
lose by the direct legal operation of the judgment. The interest must be actual and material, a
concern which is more than mere curiosity, or academic or sentimental desire;
it must not be indirect and contingent, indirect and remote, conjectural,
consequential or collateral. However,
notwithstanding the presence of a legal interest, permission to intervene is
subject to the sound discretion of the court, the exercise of which is limited
by considering “whether or not the intervention will unduly delay or prejudice
the adjudication of the rights of the original parties and whether or not the
intervenor's rights may be fully protected in a separate proceeding."[14]
To allow
intervention, (a) it must be shown that the movant has legal interest in the
matter in litigation, or is otherwise qualified; and (b) consideration must be
given as to whether the adjudication of the rights of the original parties may
be delayed or prejudiced, or whether the intervenor's rights may be protected
in a separate proceeding or not. Both
requirements must concur, as the first is not more important than the second.[15]
The
allowance or disallowance of a motion to intervene is addressed to the sound
discretion of the court. The permissive
term of the rules shows the intention to give to the court the full measure of
discretion in permitting or disallowing intervention.[16]
Guided by
the foregoing rules and jurisprudence, this Court agrees in the finding of the
Court of Appeals that the RTC did not commit grave abuse of discretion in
granting the Motion for
Leave to Intervene and Admit the Petition in Intervention of
respondent.[17]
According
to Certificate of Registration No. 2002-0030 dated
ARTICLE 1. The Company shall be classified as a Subic Bay Freeport Enterprise, as such term is defined under Section 3, Paragraph G of the Implementing Rules, for the purpose of engaging in the business of international freight and cargo forwarding, break bulk agents, customs brokerage, warehousing, storing, import/export, packaging, crating of merchandise, goods, wares and commodities in SBF; transshipment, assembling, trading, distributing, marketing at wholesale insofar as maybe permitted by law, goods and general merchandise of every kind and description including but not limited to, food products or commodities, all types of motor vehicles (excluding used motor vehicle in accordance [with] E.O. 156) including but not limited to trucks, buses, light/heavy industrial/agricultural/construction machineries and equipment, parts and accessories, branch new motorcycles, accessories and parts, generators, and the like, bicycles and parts, watercrafts and equipment, electronics/computer/telecommunications products, parts and accessories, textiles and other liberalized products as related thereto from Building No. 8474, Argonaut Highway, Subic Gate, Subic Bay Freeport Zone. (Emphases supplied.)
Petitioners
base their argument on the fact that respondent has no legal interest to
intervene in Civil Case No. 179-0-05, as the latter’s Certificate of
Registration states that respondent is allowed to transship, assemble, trade,
distribute, and market by wholesale “all types of motor vehicles (excluding
used motor vehicles in accordance with Executive Order No. 156).” By virtue of this phrase, petitioners assert
that respondent is prohibited from importing and trading used motor vehicles.
And since Executive Order No. 418, being challenged in Civil Case No. 179-0-05,
imposes additional specific duty on imported used motor vehicles, which
respondent is not permitted to import or trade, then respondent had no legal
interest to intervene in said case.
The
interpretation by petitioners of the Certificate of Registration of respondent
is myopic. Petitioners completely ignore
the fact that the phrase “excluding used motor vehicles” is qualified by the
words “in accordance with Executive Order No. 156.” Hence, the extent of the prohibition on
trading used motor vehicles imposed upon respondent could only be determined in
relation to Executive Order No. 156.
Executive Order No. 156, entitled,
“Providing for a Comprehensive Industrial Policy and Directions for the Motor
Vehicle Development Program and Its Implementing Guidelines,” was issued by
President Gloria Macapagal-Arroyo on
3.1 The
importation into the country, inclusive
of the
3.1.1 A vehicle that is owned and for the personal use of a returning resident or immigrant and covered by an authority to import issued under the No-dollar Importation Program. Such vehicles cannot be resold for at least three (3) years;
3.1.2 A vehicle for the use of an official of the Diplomatic Corps and authorized to be imported by the Department of Foreign Affairs.
3.1.3 Trucks excluding pick-up trucks;
1. with GVW of 2.5-6.0 tons covered by an authority to import issued by the DTI.
2. with GVW above 6.0 tons.
3.1.4 Buses:
1. with GVW of 6-12 tons covered by an authority to import issued by DTI;
2. with GVW above 12 tons.
3.1.5 Special purpose vehicles:
1. fire trucks
2. ambulances
3. funeral hearses/coaches
4. crane lorries
5. tractor heads or truck tractors
6. boom trucks
7. tanker trucks
8. tank lorries with high pressure spray gun
9. reefers or refrigerated trucks
10. mobile drilling derricks
11. transit/concrete mixers
12. mobile radiological units
13. wreckers or tow trucks
14. concrete pump trucks
15. aerial/bucket flat-form trucks
16. street sweepers
17. vacuum trucks
18. garbage compactors
19. self loader trucks
20. man lift trucks
21. lighting trucks
22. trucks mounted with special purpose equipment
23.
all other types of vehicles designed
for a specific use. (Emphasis ours.)
When the
constitutionality of Executive Order No. 156 was challenged by importers and
traders of used cars in the Subic Bay Freeport Zone, the Court
ruled in Executive Secretary v. Southwing Heavy Industries, Inc.[19] in this
wise:
In
sum, the Court finds that Article 2,
Section 3.1 of Executive Order No. 156 is void insofar as it is made applicable
to the presently secured fenced-in former Subic Naval Base area as stated
in Section 1.1 of Executive Order No. 97-A.
Pursuant to the separability clause of Executive Order No. 156, Section
3.1 is declared valid insofar as it applies to the customs territory or the
Philippine territory outside the presently secured fenced-in former Subic Naval
Base area as stated in Section 1.1 of Executive Order No. 97-A. Hence, used motor vehicles that come into
the Philippine territory via the secured fenced-in former Subic Naval Base area
may be stored, used or traded therein, or exported out of the Philippine
territory, but they cannot be imported into the Philippine territory outside of
the secured fenced-in former Subic Naval Base area. (Emphases supplied.)
Based on
Southwing, Executive Order No. 156 can only prohibit importation of used
motor vehicles into the customs territory or the Philippine territory outside
the secured and fenced-in Subic Bay Freeport Zone. The prohibition, however, does not cover the
importation of used motor vehicles into the Subic Bay Freeport Zone, for as
long as they are stored, used, and traded within the Zone or exported to other
countries. In other words, used motor
vehicles may be imported into the Subic Bay Freeport Zone on the condition that
they shall not be brought out of the Zone into the customs territory.[20]
The
prohibition on trading used motor vehicles imposed upon respondent in its
Certificate of Registration should be interpreted in the light of the
foregoing. In accordance with Executive
Order No. 156, respondent may import into and trade used motor vehicles within
the Subic Bay Freeport Zone, but it cannot bring the same into customs
territory. Being engaged in the
importation and trading of used motor vehicles, even in this limited sense,
respondent has legal interest, actual and material, in the subject matter of Civil Case No. 179-0-05: the legality
and constitutionality of Executive Order No. 418, which imposes the additional
specific duty of P500,000.00 on the importation of used motor vehicles.
Significantly,
the Certificate of Registration of respondent is similar to the Certificates of
Registration of some of the
The
Certificate of Registration of Unitrans Subic Ventures Corp. dated
ARTICLE I The Company shall be classified as a Subic Bay Freeport Enterprise, as such term is defined under Section 3, Paragraph G of the Implementing Rules, for the purpose of engaging in the business of import/export, marketing, selling, warehousing, transshipment and trading of general merchandise including industrial, heavy equipment, agricultural machinery, all terrain vehicles (ATV), light/heavy trucks, automotive spare parts, brand new motorcycles and other liberalized items, excluding used cars unless those for use within the Freeport and those for transshipment, subject to all applicable laws, executive orders, and such rules and regulations as may be imposed by the Authority from Vacant Lot (beside Enron), Causeway Extension, Subic Bay Freeport Zone.[21] (Emphasis ours.)
The
Certificate of Registration dated
ARTICLE I The Company shall be classified as a Subic Bay Freeport Enterprise, as such term is defined under Section 3, Paragraph G of the Implementing Rules, for the purpose of engaging in the business of trading of trucks, construction/heavy equipment and all types of motor vehicles except second hand motor vehicles in accordance with E.O. 156; importation/exportation and warehousing of general merchandise including but not limited to food products or commodities, garment and textiles, electronic and computer products, plastic products, metal/steel products and scraps, motor vehicle parts and accessories, agricultural products and agricultural inputs, fisheries products and its inputs, industrial machineries and its inputs, marine equipments and its inputs and petroleum products and its inputs, shipper consolidation door to door operation and forwarding from Building No. 54-A, Innovative Street, SBIP Phase I, Subic Bay Freeport Zone.[22] (Emphasis ours.)
Evidently,
respondent is similarly situated as the
Since
petitioners focus on the argument that respondent may not intervene in Civil
Case No. 179-0-05 on the ground that it has no legal interest therein,
petitioners do not allege or present any evidence that the adjudication of the rights of the
original parties to Civil Case No. 179-0-05 shall be delayed or prejudiced with
the intervention of respondent, or that the rights of respondent may be
protected in a separate proceeding.
Hence, the Court finds no basis for saying that the rights of the original
parties to Civil Case No. 179-0-05 shall be delayed or prejudiced by the
intervention of respondent. The
intervention of respondent in Civil Case No. 179-0-05 even appears to this
Court to be more beneficial and convenient for petitioners, because they would
only have to defend the constitutionality of Executive Order No. 418 in one
case and forum. Finally, given the
closely related, if not exactly similar, causes of action of respondent and the
Subic enterprises against petitioners, the admission of the Petition for
Intervention of respondent in Civil Case No. 179-0-05 would avoid multiplicity
of suits and clogging of the dockets of the courts.[23]
Therefore, like
the Court of Appeals, this Court finds no improvident exercise of discretion by
the RTC when it allowed the intervention of the respondent in Civil Case No.
179-0-05.
Wherefore, premises considered, the Petition
is Denied for lack of
merit, and the Decision dated
SO
ORDERED.
|
|
MINITA V. CHICO-NAZARIO Associate
Justice |
LEONARDO A. QUISUMBING
Associate Justice
Associate Justice
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief
Justice
* Associate Justice Leonardo A.
Quisumbing was designated to sit as additional member replacing Associate
Justice Antonio Eduardo B. Nachura, per raffle dated
** Per Special Order No.
568, dated
[1] Penned by Associate Justice Rodrigo V. Cosico with Associate Justices Lucas P. Bersamin and Estela M. Perlas-Bernabe, concurring; rollo, pp. 34-38.
[2] Rollo, p. 39.
[3]
[4] SEC.
104. Rates of Import Duty.
All
Tariff Sections, Chapters, headings and subheadings and the rates of import
duty under Section 104 of Presidential Decree No. 34 and all subsequent
amendment issues under Executive Orders and Presidential Decrees are hereby
adopted and form part of this Code.
There
shall be levied, collected, and paid upon all imported articles the rates of
duty indicated in the Section under this section except as otherwise specifically provided for
in this Code: Provided, that, the
maximum rate shall not exceed one hundred per
cent ad valorem.
The
rates of duty herein provided or subsequently fixed pursuant to Section four
hundred one of this Code shall be subject to periodic investigation by the
Tariff Commission and may be revised by the President upon recommendation of
the National Economic and Development Authority.
The
rates of duty herein provided shall apply to all products whether imported
directly or indirectly of all foreign countries, which do not discriminate
against Philippine export products. An
additional 100% across-the-board duty shall be levied on the products of any
foreign country which discriminates against Philippine export products.
[5] Records, Vol. I, pp. 1-3.
[6] Rollo, p. 51.
[7]
[8]
[9]
[10]
[11] CA rollo, p. 117.
[12]
[13] Rollo, p. 162.
[14] Gibson v. Revilla, 180 Phil. 645, 657
(1979).
[15] Saw v. Court of Appeals, G.R. No. 90580,
[16] Heirs
of Geronimo Restrivera v. De Guzman, G.R. No.146540,
[17] Nieto,
Jr. v. Court of Appeals, G.R. No. 166984,
[18] Rollo, p. 71.
[19] G.R. No.164171,
[20] Republic Act No. 7227 or the Bases
Conversion and Development Act defines
[21] CA rollo, p. 71.
[22]
[23] Spouses
De Vera v. Hon. Agloro, G.R. No. 155673,