G.R. No. L-27149. March 14, 1979.
KURT NILSEN, DAGPIN LUNOGREN, HELGE HELGSESEN, and MACONDRAY & COMPANY, INC., petitioners, vs. COMMISSIONER OF CUSTOMS, respondent.

FACTS

On July 10, 1962, customs agents discovered 108 cartons of assorted cigarettes inside the cabins of petitioners Kurt Nilsen, Dagpin Lunogren, and Helge Helgsesen, who were crew members of the foreign vessel S/S “FERNSIDE” during a search in the Port of Manila. The cigarettes were not listed in the vessel’s cargo manifest. Consequently, seizure proceedings were initiated under the Tariff and Customs Code, leading to the forfeiture of the cigarettes by the Acting Collector of Customs. This decision was affirmed by the respondent Commissioner of Customs.
The petitioners, including the vessel’s agent Macondray & Company, Inc., appealed to the Court of Tax Appeals. They argued that the cigarettes were part of the vessel’s sea stores, which are not required to be included in the cargo manifest but only in a separate list of ship’s stores. They contended that, as such, the items were not subject to forfeiture under the relevant customs provisions.

ISSUE

Whether the seized cigarettes are subject to forfeiture for violation of Section 2530(g) of the Tariff and Customs Code, in relation to Section 1005, for being unmanifested articles found on a vessel.

RULING

The Supreme Court affirmed the decision of the Court of Tax Appeals, ruling that the cigarettes were properly forfeited. The legal logic is clear. Under Section 1005, every vessel from a foreign port must have a complete manifest of all cargo. Section 2530(g) subjects any unmanifested article found on a vessel to forfeiture. The Court rejected the petitioners’ claim that the cigarettes constituted sea stores. Sea stores are provisions for the vessel’s use during the voyage and are kept in the ship’s common storage, such as a slope chest, and are listed separately. The seized cigarettes were found concealed in the private cabins of crew members, not in the common storage, and were not included in any list of sea stores. The quantities found—far exceeding reasonable personal use—and the manner of concealment supported the inference that they were unmanifested commercial cargo, not legitimate sea stores. The Court emphasized that “cargo” broadly includes all goods on board except those used for vessel management or properly declared sea stores and passenger baggage. Since the cigarettes were not manifested as cargo, listed as sea stores, or declared as passenger or crew baggage, they were correctly deemed unmanifested cargo subject to forfeiture. The Court also upheld the factual findings of the Court of Tax Appeals as binding, reviewing only questions of law. No arbitrariness was found in the proceedings.