G.R. No. 27761 - Philippine Sugar Centrals Agency vs. Insular Collector of Customs

The plaintiff, acting at all times as representative and attorney-in-fact of the Ma-ao Sugar Central Co., entered into transactions relating to the exportation of sugar.
In May 1926, the plaintiff shipped 5,124,416 gross kilos of centrifugal sugar, consigned for export to the United States, aboard the steamship Hannover.

The sugar was loaded at Pulupandan, Occidental Negros.
The loading took place at a wharf built, owned, and maintained solely by the Ma-ao Sugar Central Company.
Although the wharf was located on a foreshore public land, it was leased exclusively to the company by the Government of the Philippine Islands.

The defendant, acting through the collector of customs for the Iloilo collection district, assessed wharfage dues at P2 per thousand gross kilos.
The total amount levied on the sugar shipment was P10,248.84.
The plaintiff paid the assessed duty under protest.
The protest was subsequently overruled by the collector of customs.

It was stipulated and agreed that Pulupandan was, at the time of the shipment and subsequently, a declared port of entry of the Philippine Islands pursuant to Act No. 3106.
The trial court (Court of First Instance of Manila) rendered judgment in favor of the plaintiff for P10,248.84, ordering the return of the collected dues without costs.
On appeal, the defendant raised several assignments of error including:

The contention that the lower court erred in determining that the plaintiff need not pay duty as a charge for wharfage because the wharf used was privately owned.
The error of ordering the return of the money instead of dismissing the complaint with costs.
The error of not granting a new trial.

The legal basis for the wharfage duty stems from a series of enactments, beginning with the Customs Tariff of 1901, which imposed a duty of seventy-five cents per gross ton of 1,000 kilos as a charge for both wharfage and harbor dues.
This provision was reenacted in 1905 with similar language and later, in the Tariff Act of 1909, the duty was increased to $1 per gross ton and the phrase “and for harbor dues” was omitted.
Historical data reveal that the government, even when it did not own or operate any wharf, continuously collected the wharfage tax from 1901 forward.
Subsequent government actions included the construction of piers and wharves using revenues derived from such taxes.

The majority opinion cited the long-standing administrative and judicial construction, asserting that the duty subject “as a charge for wharfage” was valid even if imposed on goods loaded from a privately owned wharf.
In dissent, Justice Johnson argued that by applying definitions of wharfage as a charge for the use of a wharf (which is normally imposed by the owner of the wharf), it was improper to allow the collection of such a duty from the owner of the wharf on his own merchandise.
The dissent underscored historical practices and definitions which would traditionally preclude charging for services rendered by one’s own facilities.

Whether the Government of the Philippine Islands can legally collect a duty “as a charge for wharfage” on articles exported through its ports of entry when the goods were loaded from a privately owned wharf.
Whether the statutory language should be read strictly based on its definitions and historical usage.

Whether the government’s practice of levying the charge, despite not owning or operating the wharf at the time of the enactment of the original law, is entitled to deference based on its long-standing practice.
Whether the revenues collected under this system are appropriately treated as a trust fund for the acquisition and construction of government wharves and related improvements.

Whether the lower court erred by ordering a refund of the wharfage duty instead of dismissing the complaint with costs.
Whether the lower court’s decision not to grant a new trial was in error.