LUZON STEVEDORING CORPORATION, PETITIONER-APPELLANT, VS. COURT OF TAX APPEALS AND COMMISSIONER OF CUSTOMS, RESPONDENTS-APPELLEES.

Luzon Stevedoring versus Court of Tax Appeals and Commissioner of Customs

The Case

This is a petition brought by Luzon Stevedoring Corporation against the Court of Tax Appeals and the Commissioner of Customs, questioning the government's right to collect berthing or mooring charges from its tugboats and barges that moored at a privately owned pier. The case matters because it settles a question every customs practitioner must know: whether the government may exact berthing charges only when the pier is publicly owned, or whether the charge attaches regardless of who owns the pier. It also teaches the strictness of the written-protest requirement as a condition for refund of customs collections.

Procedural History

Luzon Stevedoring filed a written protest with the customs collector for the port of Batangas against the collection of the berthing charges. That protest was dismissed. The company then elevated the matter to the Commissioner of Customs, and the Commissioner likewise denied it. From that denial, Luzon Stevedoring sought review before the Court of Tax Appeals, which voted to dismiss the petition for review, with costs. From that dismissal, the company appealed to the Supreme Court, and the Supreme Court affirmed the judgment under review.

Facts

Luzon Stevedoring Corporation was a domestic corporation engaged in the lighterage business. It hauled bunker fuel, gasoline, and other petroleum products for the Caltex Refinery in Bauan, Batangas. For this purpose, it used tugboats and barges, and these vessels moored at the privately owned Caltex pier in Bauan. That pier sits within the port of Batangas, which is a national port.

From August 1957 to July 1959, the government collected from the company the total sum of 9,506 pesos and 92 centavos as berthing or mooring charges. Of this total, the berthing fees paid for barges from August 1957 to June 30, 1959 amounted to 7,837 pesos and 72 centavos.

On August 4, 1959, the customs collector for the port of Batangas received the company's written protest against the collection. The company also claimed that it had made a verbal protest with the local customs collector as early as August 1957, and that the official entertained it by agreeing to take the matter up with the Commissioner of Customs. That allegation of verbal protest was denied in the answer to the petition for review.

Issues

• Whether or not the government may collect berthing or mooring charges from vessels mooring at a privately owned pier.
• Whether or not the Commissioner of Customs is estopped from requiring a written protest as a condition precedent to refund, on account of an alleged verbal protest.
• Whether or not the berthing charges paid before the filing of the written protest, and those paid thereafter, are refundable.

Applicable Provisions

Section 2901 of the Tariff and Customs Code defines the berthing charge and fixes who is liable for it:

Section 2901. Definition. - Berthing charge is the amount assessed against a vessel for mooring or berthing at a pier, wharf, bulkhead-wharf, river or channel marginal wharf at any port in the Philippines; or for mooring or making fast to a vessel so berthed; or for coming or mooring within any slip, channel, basin river or canal under the jurisdiction of any port of the Philippines. The owner, agent, operator or master of the vessel is liable for this charge.

This is the controlling statute, and it speaks of a pier without qualifying whether it is public or private, which is the very point the Court resolves.

Section 2308 of the Tariff and Customs Code requires that a written protest be filed within thirty days after payment:

By Section 2308 of the Tariff and Customs Code, such written protest must be filed within thirty days after payment.

This provision governs whether the company's protest was timely and effective to preserve its claim for refund.

Section 2309 of the Tariff and Customs Code makes the collector's action final when no timely protest is filed:

Otherwise, by the next succeeding provision, Section 2309, the action of the Collector shall be final and conclusive against him.

This provision bars any recovery for payments that were not covered by a timely written protest.

Ruling

On the first issue, the Court held that the government's right to collect berthing charges does not depend on the pier being publicly owned. The statute employs the word pier without more, and nothing in it speaks of a private or public pier. Where the law does not exact the nature of ownership as a condition, that condition should not be read into the law. The Court refused to indulge in statutory construction because the law is clear, and its plain duty was to apply the law as written. Applying it, the Court ruled that the berthing or mooring charges were properly collected.

The Court also looked at the philosophy behind the charge. A vessel which comes within any slip, channel, basin, river, or canal under the jurisdiction of any port in the Philippines is subject to the charge, and it is unnecessary that the vessel be moored to a pier or to a berthed vessel. The reason is that port facilities afford benefits to the vessels mentioned in the statute, and the maintenance and development of the port, and the purchase, conditioning, and replacement of its equipment, are the concern of the government. The company's vessels enjoyed the benefits of that governmental undertaking, and so the company should contribute thereto.

On the second issue, the Court held that the Commissioner of Customs was not estopped from requiring a written protest. The alleged verbal protest was denied in the answer, and the situation presented would not create estoppel. Besides, the government is not bound by the mistakes of its agents. The requirement that the protest be in writing must serve a purpose, one of which is that a verbal protest breeds uncertainty, because human memory suffers from frailty. The verbal protest was therefore unavailing.

On the third issue, the Court held that the protest, insofar as it referred to payments of berthing charges for tugboats and barges prior to July 5, 1959, could not be considered, because the written protest was lodged only on August 4, 1959. As to the charges made from July 5, 1959 to July 20, 1959 for tugboats alone, these were not refundable either, because the law enjoins their collection.

Doctrine

The government's right to collect berthing or mooring charges under Section 2901 of the Tariff and Customs Code is not conditioned on the pier being publicly owned. The statute uses the word pier without qualification, and a condition not exacted by the law should not be read into it. Where the law is clear, the plain duty is to apply it as written, without indulging in statutory construction.

The charge rests on the benefits that port facilities afford to vessels, and the maintenance and development of the port are the concern of the government. A vessel that comes within any slip, channel, basin, river, or canal under the jurisdiction of any port in the Philippines is subject to the charge, even without mooring to a pier or to a berthed vessel.

A written protest under Section 2308 of the Tariff and Customs Code must be filed within thirty days after payment; otherwise, under Section 2309, the action of the collector is final and conclusive. A verbal protest will not avail, because it breeds uncertainty, and the government is not bound by the mistakes of its agents.

Disposition

The Supreme Court affirmed the judgment under review, with costs against Luzon Stevedoring Corporation.

Remember This

The one line worth memorizing is that berthing charges attach to a pier without regard to ownership, because the law says pier without more. Examiners use this case to test the plain-meaning rule in statutory construction and the strict written-protest requirement for refunds of customs collections.