HAWAIIAN-PHILIPPINE COMPANY, PETITIONER, VS. THE HONORABLE AUDITOR GENERAL OF THE PHILIPPINES, RESPONDENT.

From 1948 to 1960 petitioner Hawaiian-Philippine Company, in the course
of its business as producer and exporter of centrifugal sugar, made numerous
export shipments thereof from the port of Iloilo without uti­lizing any of the
government wharves for the purpose. Loading was done either at petitioner‘s private wharf or by means of lighters which carried the sugar
directly to the side of the carrying
vessel. In that connection the
Collector of Customs for the port of Iloilo regularly imposed upon and
actually collected from petitioner “wharf- age dues” during the
period in question.

On September 7, 1960 petitioner sent a letter to the Collector of Customs
for the port of Iloilo requesting the
refund of the amounts thus collected, totalling P568,573.48. The request for a refund was based on the
deci­sion of this Court in the case of Commissioner of Customs vs. Superior Gas and Equipment Company
and the Court of Tax Appeals (G. R. No. L-14115, May 25, 1960), involving the interpretation and
application of section 3 of Republic Act No. 1371, which provides:

“SEC. 3. There shall
be levied, collected and paid on all articles imported or brought into the
Philippines, and on products of the Philippines, except coal, x x x and sugar molasses, exported
from the Philippines a charge
of two pesos per gross metric ton as a fee for wharfage; Provided, That in the case of logs, or flitches twelve inches square or
equi­valent cross-sectional area, or over, a charge of sixty centavos per cubic meter shall be collected: Provided, further, That such
wharfage fee shall not be levied on
articles imported or brought into the Philippines which are unloaded on private
wharves.”

We stated in said
case:

“x x x at the time
Republic Act 1371 was approved, the Government had wharves; and the
discussions in the legislature showed the intention not to levy wharfage
fees on merchandise unloaded at places other than Govern­ment wharves or
without making use of pier facilities.

x        x         x

“The proviso exempting from the wharfage fee all imported
merchandise on private wharves
makes this inten­tion all the more evident. In other words, the Congress at last accepted the ordinary concept of
‘wharfage charge’ as the
‘charge for use of wharf by way of rent or compensation’ or the ‘money paid for
landing goods upon or loading them from a wharf’ or the ‘fee or duty paid for
the privilege of using a wharf’; and admitted
that goods not landed via the Government wharves should not pay
wharfage.”

In a communication
dated September 16, 1960 (Annex
“C”) the acting Collector of Customs for the port of Iloilo denied petitioner’s request. Whereupon the Company, on October 3,
1960, filed a formal claim with the Auditor General (Annex “D”),
alleging that the exaction and collection of wharfage fees on its exports which
had been loaded shipside and without using
government wharves were null and void; that claimant paid the fees in the
honest but mistaken belief that they were legal obliga­tions; that such erroneous payment gave rise to the
quasi-contract of solutio indebiti between the claimant and the Government, on the basis
of which a claim for refund could be made to the
Auditor General.

The Auditor General
declined to act for want of authority, alleging that it was the
Collector of Customs to whom the fees had been paid who had exclusive
jurisdiction over said claim for refund, subject to review by the Commissioner of Customs, whose decision
in turn was appeal able to the Court of Tax Appeals. From the ruling of the Auditor General the claimant Company
interposed the present petition for review.

The Company presents two (2) main issues for re­solution, to wit:

“(1)  whether or not the petitioner was liable,
under the provisions of section 14, Tariff Act of 1909, sec­tion 3,
Republic Act No. 1371, and sec­tions 2801 and 2802, Republic Act No. 1937, for the
payment of the alleged ‘wharfage dues’ collected from it by the Collector of
Customs of Iloilo for the period covering the sugarcane crop years (1948 to
1960) on export ship­ments in the course of which petitioner never made use of
government wharfage facilities, and

“(2)  whether or not petitioner has a right to seek
the refund of said wharfage charges under Act No. 3083, Commonwealth Act No.
327, and Articles 2154 and 2155 of the Civil Code of the Philippines governing
the quasi-contract of ‘solutio indebti’.”

To buttress its claim for the return of the amount paid,
petitioner relies on the case of Commissioner of Customs vs. Superior Gas &
Equipment Co., supra, which was decided in the light of Republic Act No.
1371. But such reliance is
misplaced. As observed by this Court in
another case similar to the one under review (Victories Milling Co., Inc. vs.
The Honorable Auditor General of the Philippines, G. R. No. L-17414, November
30, 1962), “the reliance on that case is unjustified because, unlike the
present cases, the issue there related to an importation (not
exportation) of goods arriving in the Philippines in August of 1956, which
issue fell squarely within the last proviso of the law. Hence, the wharfage charges made in
connection with the merchandise imported and unloaded in a private wharf were
ordered refunded pursuant to the express provision of the law exempt­ing such
importation. Any reference to exports
made in the decision in that case is mere obiter.”

Inasmuch as petitioner advances practically the same arguments
raised in the Victorias Milling Co. case we quote from our decision therein:

“Appellant strongly contends that its action is not an
ordinary claim for refund of protested payment of customs charges under
Sections 1370 to 1372 of the Revised Administrative Code; rather it is based on
Section 1, Act 3083 and Sections 1 and 2 of Commonwealth Act 327, in connection
with Articles 2154 and 2155 of the New Civil Code. Ap­pellant’s contention, as we understand it, runs thus: (1) the wharfage fees were paid by mistake in
the construction or application of Republic Act 1371 which presents a doubtful
or difficult question of law (Article 2155 of the New Civil Code); (2) that
since the payment was unduly delivered through mistake and the Government
received it when it had no right to demand it, the obligation to return the
payment arises (Article 2154, id), which obligation constitutes the
quasi-contract of solutio indebiti; (3) that such a claim is a ‘moneyed
claim involving liability arising from con­tract, express or implied, which
could serve as a basis of civil action between private parties’ and therefore
could be prosecuted against the Government pur­suant to section 1 of Act 3083;
and (4) that such a claim involves the settle­ment of accounts or claims cognizable
by and falling under the jurisdiction of the Auditor General whose decision is
appealable to the Supreme Court (Sections 1 and 2, Com. Act 327).”

Then, as in this case, petitioner’s explanation for its failure
to lodge its protest and claim was its alleged belief in good faith that it was
legally liable to pay the wharfage dues. And because it did not thus protest, petitioner now contends that
section 1371 of the Revised Administrative Code (section 2309, Customs Code)
making the protest therein provided as the exclusive remedy in such
cases, is not applicable to the instant controversy, arguing that this section
refers to “any case which is subject to protest.”

The foregoing contention was disposed of as follows:

“Such a reasoning is unconvincing because the law refers to
cases that are protestable, not protested, cases subject to protest, not the object of protest. To adopt the view of petitioner
would be to place the
applicability of sec­tion 1371 at the exclusive determina­tion of those
precisely intended to be bound by it. We therefore hold that the instant case comes within the purview of
sections 1370 and 1371 of the Revised Administrative Code prescribing the
manner of enforcing a claim against the imposition and collection of customs
duties, fees or other money charge under our customs laws. And this procedure
or remedy being exclusive in these matters, the Auditor General has no power to
en­tertain the same even though presented in another form.”

Again it must be noted that while under the last proviso of
section 3 of Republic Act 1371, “wharfage fee shall not be levied
on articles imported or brought
into the Philippines which are unloaded on private wharves,” no similar
exemption was made with respect to goods or articles exported. The exemption was in favor of a number of
articles expressly specified, without regard to whether the loading was done at
private wharves or not.

In 1957 Congress passed Republic Act No. 1937, otherwise known as
the Tariff and Customs Code. Section
2802 thereof provides for the payment of wharfage dues on imports and
exports. Significantly section 2802 is
an almost verbatim copy of section 3 of Republic Act 1371, minus the proviso
exempting from the payment of wharfage dues articles imported or brought into the
Philippines and unloaded at private wharves. In other words, while under section 3 of Republic Act 1371 imported
goods unloaded at private wharves were exempt from the payment of wharfage
fees, this exemption has been eliminated in the Tariff and Customs Code. The change is in keeping with the nature of
wharfage dues, which are assessed against the cargo, not as payment per se
for the actual use of government wharves.

“But when a vessel anchors at the Bay and discharges or
unloads its cargo, wharfage dues are forthwith collected. x x x said dues are assessed against the
cargo. This is clear from the pro­vision
of the law under which the assess­ment is based on the quantity, weight or
measure of the cargo received by the importer and/or discharged by such vessel.

x        x         x

“x x x said cargo, having been unloaded amidst the safety afforded
by the port is chargeable with
wharfage dues. Finally, wharfage dues
partake of the nature of a tax which is collected by the Government to support
its operation in re­lation to customs affairs.” (Procter & Gamble, PMC
vs. Commissioner of Customs, G. R. No. L-22819, April 27, 1967)

In view of the conclusion we have reached that the amounts
paid by petitioner were legally due from it as wharfage dues, we deem it
unnecessary to discuss the other points raised in the petition. The ruling of the Auditor General appealed
from is affirmed, without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Bengzon, Zaldivar,
Sanchez, Castro, Angeles, and Fernando,
JJ., concur.