1. A decision of the Insular Collector of Customs of the
Philippine Islands ordering that moneys collected and paid under
protest as customs duties be refunded upon the ground that the
property assessed was not dutiable under the tariff is final and
conclusive, unless appealed to the Court of First Instance. P.
272 U. S.
644.
2. The Insular Auditor has no power to reexamine the merits of
such a decision by the Insular Collector, and his duty to
countersign the Insular Collector's warrant for the refund, when in
due form and drawn upon an applicable appropriation, is
ministerial, and enforceable by mandamus. P.
272 U. S.
651.
47 P.I.Rep. 866 affirmed.
Certiorari (271 U.S. 652) to a judgment of the Supreme Court of
the Philippine Islands awarding an original mandamus, at the suit
of Ynchausti & Company, to compel Wright, the Insular Auditor,
to countersign a warrant drawn by the Insular Collector of Customs
in favor of the firm, for a refund of money erroneously collected
as customs duties.
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
This case was begun by a petition filed by Ynchausti & Co.
January 19, 1925, in the Supreme Court of the Philippine Islands,
under § 2947 of the Compiled Acts of the Philippine Commission
1907, for an original
Page 272 U. S. 641
writ of mandamus directed to Ben F. Wright, Insular Auditor, to
require him to countersign a warrant for 159,960 pesos drawn by the
Insular Collector of Customs in favor of Ynchausti & Co. The
Insular Auditor filed an answer, to which the petition demurred on
the ground that the facts stated therein were not sufficient to
constitute a defense. The Supreme Court of the Philippine Islands
sustained the demurrer and ordered that the writ issue as prayed.
This Court granted a certiorari April 26, 1926. 271 U.S. 652.
Ynchausti & Co. were the agents and operator of the
steamship
Venus, a vessel engaged in the coastwise trade
in the Philippine Islands. They sent her to Hong Kong, a crown
colony of Great Britain, there to receive certain heavy repairs and
construction work. When the vessel returned to the Philippines, the
Insular Collector of Customs, who is Collector at Manila, and who
has subordinate Collectors at other ports, assessed a customs duty
of 159,960 pesos on account of the repairs. Ynchausti & Co.
paid the duty, but filed a protest with the Collector on the ground
that the repairs were free from duty under the law. The Collector
deposited the money in the insular Treasury. Upon a hearing of the
protest and an examination of evidence, the Collector reversed his
ruling, rendered a decision sustaining the protest, and ordered a
refund of the money paid under a permanent appropriation for such
purposes. A copy of the Collector's decision was sent to the
secretary of finance and the Insular Auditor. The secretary of
finance did not certify a desire to appeal from the Insular
Collector's decision to the Court of First Instance within 15 days
thereafter, as authorized by law, although the Insular Auditor
urged it. After the time for an appeal had expired, a warrant was
drawn by the Insular Collector in favor of Ynchausti & Co. for
the amount of the duty paid. Upon presentation of the warrant to
the Insular Auditor for his
Page 272 U. S. 642
countersignature, required by the Administrative Code of the
Islands to be attached to every warrant, he withheld it.
By §§ 614, 616, 621 of the Insular Administrative Code of 1917,
revenue funds are not to be withdrawn from the Insular Treasury
except upon warrant. Warrants are to be drawn upon the Insular
Treasury by the chief of the bureau or office having control of the
appropriation or fund against which such warrants are chargeable,
and are to be made payable to the creditor to whom the money is
due. No insular warrant is to be paid by the Treasurer until
countersigned by the Auditor. By § 3920 of the Compiled Laws of the
Philippines of 1907, a permanent appropriation is provided for
refund of duties paid into the Treasury in excess of the final
liquidation and the amount legally due.
The history of the legislation in respect to classification for
duties on repairs of Philippine vessels made in a foreign country
is as follows:
The Philippine Tariff Act of Congress of August 5, 1909, 36
Stat. 130, c. 8, § 8, provided:
"That the rates of duties to be collected on articles, goods,
wares, or merchandise imported into the Philippine Islands, or
going into said islands from the United States or any of its
possessions except as otherwise provided in this act, shall be as
follows: . . ."
"Per. 200. Boats, launches, lighters, and other water craft, set
up or knocked down, imported into the Philippine Islands, and cost
of repairs made in foreign countries to vessels, or to parts
thereof, documented for the Philippine coastwise trade or plying
exclusively in Philippine waters and for which repairs adequate
facilities are afforded in the Philippine Islands, fifty percentum
ad valorem: "
"Provided, that, upon proof satisfactory to the Collector of
Customs that adequate facilities are not afforded
Page 272 U. S. 643
in the Philippine Islands for such repairs, the same shall be
subject to the provisions of paragraph three hundred and
forth-eight of this Act."
Paragraph 348 is part of § 11 of the same act, and declares that
certain imports shall be free of duty upon the importation thereof
into the Philippine Islands. One is described as follows:
"Repairs to vessels documented in the Philippine Islands or
regularly plying in Philippine waters, made in foreign countries,
upon proof satisfactory to the Collector of Customs that adequate
facilities for such repairs are not afforded in the Philippine
Islands."
This Tariff Act was amended by the Philippine Legislature under
the authority of the Act of Congress of August 29, 1916, 39 Stat.
545, c. 416, usually called the Jones Act, by § 10 of which it is
provided:
"That while this Act provides that the Philippine government
shall have the authority to enact a tariff law the trade relations
between the islands and the United States shall continue to be
governed exclusively by laws of the Congress of the United States:
Provided, that tariff acts or acts amendatory to the
tariff of the Philippine Islands shall not become law until they
shall receive the approval of the President of the United
States."
Acting under this authority, the Philippine Legislature passed
an amendment to the Tariff Act, entitled No. 2872, which was
approved by the President of the United States on November 24,
1919. That Act amended § 200, already quoted, by continuing the
duty on repairs at 50 percentum until December 31, 1924, and then
reducing the rate to 25 percent thereafter, and changed the proviso
as follows:
"
Provided, that, upon proof satisfactory to the
Collector of Customs that adequate facilities are not afforded in
the Philippine Islands for such repairs, so that the work cannot be
done there reasonably, economically, and
Page 272 U. S. 644
within a reasonable time, in the judgment of said Collector,
such repairs shall be subject to the provisions of paragraph three
hundred and forty-eight of this Act."
The question here presented is whether the Philippine Auditor
may consider and reverse the ruling of the Insular Collector in
respect to the refund of the duties paid on these repairs, or
whether the ruling of the Insular Collector under the circumstances
is final, and the necessary countersigning of the warrant drawn by
the Insular Collector is merely a ministerial duty, subjecting the
Auditor to mandamus.
The Act of Congress of August 29, 1916, to provide a more
autonomous government for the Philippines, known as the Jones Act
(39 Stat. 545, c. 416, § 24), describes the present powers and
duties of the Insular Auditor in part as follows:
"That there shall be appointed by the President an Auditor, who
shall examine, audit, and settle all accounts pertaining to the
revenues and receipts from whatever source of the Philippine
government and of the provincial and municipal governments of the
Philippines, including trust funds and funds derived from bond
issues, and audit, in accordance with law and administrative
regulations, all expenditures of funds or property pertaining to or
held in trust by the government or the provinces or municipalities
thereof. He shall perform a like duty with respect to all
government branches."
"He shall keep the general accounts of the government and
preserve the vouchers pertaining thereto."
"It shall be the duty of the Auditor to bring to the attention
of the proper administrative officer expenditures of funds or
property which, in his opinion, are irregular, unnecessary,
excessive, or extravagant. . . ."
"The administrative jurisdiction of the Auditor over accounts,
whether of funds or property, and all vouchers and records
pertaining thereto, shall be exclusive. With
Page 272 U. S. 645
the approval of the Governor General, he shall from time to time
make and promulgate general or special rules and regulations not
inconsistent with law covering the method of accounting for public
funds and property, and funds and property held in trust by the
government or any of its branches. . . ."
"The decisions of the Auditor shall be final and conclusive upon
the executive branches of the government, except that appeal
therefrom may be taken by the party aggrieved or the head of the
department concerned within one year in the manner hereinafter
prescribed. The Auditor shall, except as hereinafter provided, have
like authority as that conferred by law upon the several Auditors
of the United States and the Comptroller of the United States
Treasury, and is authorized to communicate directly with any person
having claims before him for settlement, or with any department,
officer, or person having official relations with his office. . .
."
In the administration of his duty, he is authorized to summon
witnesses, administer oaths, and to take evidence and enforce the
attendance of witnesses.
Section 25 provides:
"That any person aggrieved by the action or decision of the
Auditor in the settlement of his account or claim may, within one
year, take an appeal in writing to the Governor General, which
appeal shall specifically set forth the particular action of the
Auditor to which exception is taken, with the reason and
authorities relied on for reversing such decision."
"If the Governor General shall confirm the action of the
Auditor, he shall so indorse the appeal and transmit it to the
Auditor, and the action shall thereupon be final and conclusive.
Should the Governor General fail to sustain the action of the
Auditor, he shall forthwith transmit his grounds of disapproval to
the Secretary of War, together with the appeal and the papers
necessary to a
Page 272 U. S. 646
proper understanding of the matter. The decision of the
Secretary of War in such case shall be final and conclusive."
The argument is that, as the subject matter here is a claim
against the Insular Treasury, it is necessarily exclusively within
the broad powers of the Auditor to pass on it, and that his duty to
countersign the warrant for it includes this discretion, which can
only be reviewed by the Governor General and the Secretary of War.
There is no doubt that, from the beginning of the civil government
in the Philippines, established by the President as
commander-in-chief, in 1901, it was his intention to give to the
Secretary of War the means of supervising the disbursements of the
funds in the Philippine Treasury and the allowance of claims upon
them through the Insular Auditor, who was to be appointed by the
Secretary of War. Presidential Order Feb. 23, 1901, Act. No. 90,
Public Laws Enacted by the Philippine Commission, Vol. 1, p. 160.
There was substituted by the Philippine Commission for Act No. 90,
the Accounting Act, No. 1402, in 1905 (
op. cit. Vol. 5, p.
58), and the new Accounting Act, No. 1792, in 1907 (
op.
cit. Vol. 6, p. 475). Then followed the Administrative Act of
1916, by the Philippine Legislature, which created a board of
audits, with the Auditor at its head, and this was repeated in the
Administrative Code of 1917, c. 26, enacted after the passage of
the Jones Act. The scope of duties of the Auditor as conferred in
Act No. 90 is substantially the same as in the acts which have
followed it. It was said in all these acts, including the Jones
Act, that the Insular Auditor should have the same authority as the
several auditors of the United States and the Comptroller of the
Treasury.
Parallel with this legislation, however, was the Customs
Administrative Act of 1902, No. 355, Public Laws Enacted by the
Philippine Commission, Vol. 1, p. 788, which organized the bureau
of customs on February 6, 1902,
Page 272 U. S. 647
very shortly before the passage by Congress of an act
temporarily to provide revenue for the Philippine Islands, March 8,
1902 (32 Stat. 54, c. 140), confirming the Tariff Act passed by the
Commission in September, 1901, No. 230, Public Laws Enacted by
Philippine Commission, Vol. 1, p. 581. By that Act, and by all
subsequent amending acts on the subject, Collectors of customs were
given the duty of liquidating the duties, of determining abatements
for manifest clerical error, and for loss or damage of goods, and
of promptly granting refunds as allowances or abatements, and those
claims thus allowed by the Collectors were to be certified to the
Auditor of the Islands, with their recommendations and with all
necessary papers and documents. This was provided evidently to
permit prompt correction of clerical and other obvious errors by
the Collector. The Auditor was directed to audit the same and draw
the warrant for the refund so forwarded in settlement therefor, if
found correct. The foregoing is embodied in existing law in the
Administrative Act of 1917, and it may be that, in such a case, by
reason of the language used, the Insular Auditor is given
discretion to withhold his approval of a refund thus granted by the
Collector. We do not find it necessary to decide that question, and
only mention it in order to make clear the question before us and
what we are deciding.
What we are here dealing with is not clerical or other obvious
errors in collections, but controversies over the classification of
articles for duty under the Tariff Act and the determination of the
duties to be assessed upon such articles by the Collector,
accompanied and contested by a filed protest of the importer. In
such a case, a different system has been provided from the
beginning in 1902. By §§ 286, 287, 288, and 289 of the Customs
Administrative Act of 1902, provision was made for the
classification
Page 272 U. S. 648
of the imports and the fixing of duties by the Collector and
their collection, a protest by a taxpayer who objected, an appeal
on that protest to the Insular Collector, an appeal from his
decision by the defeated taxpayer to a court created by the Act,
called a Court of Customs Appeals, which conclusively decided the
question. This law also provided that, if the decision of the
Insular Collector was adverse to the government, the Secretary of
Finance and Justice, the head of the department, might within a
certain time initiate an appeal to the Court of Customs Appeals.
Thereafter, the personnel of the Court of Customs Appeals was
changed in Act No. 864, September 2, 1903, Public Laws Enacted by
the Philippine Commission, Vol. 9, p. 3, and an appeal given, upon
the disagreement between the Judges of the Court of Customs
Appeals, to the Supreme Court.
By Act No. 1405, adopted by the Commission October 13, 1905,
Public Laws, Vol. 5, p. 75, the Court of Customs Appeals was
abolished and its duties were transferred to the Court of First
Instance, with an appeal to the Supreme Court, and these changes
were all embodied in the compilation of the statutes made in 1907,
and have been continued since in the Administrative Acts of 1916
and 1917. No change in the administration of the Bureau of Customs
or the Bureau of Audits was made by the Philippine Tariff Act of
Congress of August 5, 1909, 36 Stat. 130, c. 8, which supplanted
the Tariff Act of the Philippine Commission of 1902.
The present procedure fixed by Philippine law for raising the
question of the legality of classification for duty on importations
and of the collection of such duties is to be found in the
Administrative Code of the Islands of 1917, already cited, made
necessary by the passage of the Jones Act.
The relevant §§ of the Code follow:
"Section 1383. The party aggrieved by the decision of the
Insular Collector in any matter brought before him
Page 272 U. S. 649
upon protest or by his action or decision in any case of seizure
may procure the cause to be removed for review into the Court of
First Instance sitting in the City of Manila, in the manner and
within the period hereinafter prescribed."
"Unless the proper party in interest shall procure the cause to
be thus removed into court for review, the action or decision of
the Insular Collector shall be final and conclusive against
him."
"Section 1384. The removal of a cause into court may be had at
the instance of the protesting party, or in case of seizure at the
instance of the owner or agent of the seized property. If the
decision of the Insular Collector is adverse to the government, the
cause may also be removed in the manner hereinafter specified, by
order of the department head."
"Section 1386. Upon making any decision which may be removed
upon the order of the department head, the Insular Collector shall
immediately transmit a copy of such decision to him and also to the
Insular Auditor, and if within fifteen days thereafter the
department head shall certify that in his opinion the decision
ought to be revised by the Court of First Instance in the City of
Manila, it shall be the duty of the Insular Collector, upon
notification thereof, to transmit the original record to said court
in the same manner as upon removal by a party other than the
government."
This history shows that, since the beginning of civil government
in the Philippines, the policy of the Island government has been to
take out of the jurisdiction of the Auditor contested claims for
refund of duties based on protest, and involving a reexamination of
the action of the local Collectors of customs by the Insular
Collector in assessing such duties. The decisions of the Insular
Collector with respect to refunds of this class were
administratively final, but appeals from his conclusions,
Page 272 U. S. 650
if duly taken, became the subject of judicial examination at
first by the Court of Customs Appeals, and afterwards by the Court
of First Instance of the proper jurisdiction, and by the Supreme
Court.
It is thus quite clear that the provision of the Jones Act, and
of acts which preceded it, for review of the decisions of
administrative officers by the Insular Auditor, from which appeals
could be taken to the Governor General of the Islands, and thence
to the Secretary of War, was not intended to include decisions upon
protested classification of duties under the Tariff Act.
The unchanged policy as to such decisions is that appeal from
the Insular Collector's action should be left to the taxpayer, on
the one hand, and to the head of finance department, on the other,
and, if taken, should be considered by the courts, and that,
failing such appeal, the action of the Insular Collector should be
final. It would be incongruous to provide for appeal to the courts
at the instance of either the importer or the head of the
department, and, in the absence of such appeal by either, to have a
review by the Auditor. It would delay decision of the legality of
the classification for a year. It would create two tribunals of
appeals in respect to classification, which might cause
embarrassing and confusing conflict.
It has not been directly argued, but there has been an
intimation in the argument for the petitioner that greater weight
is to be attached to the congressional acts, including the Jones
Act, in defining the duties of the Auditor, than to the provisions
of the Customs Administrative Act of 1902, and of the
Administrative Acts of 1916 and 1917, fixing the duties of the
Insular Collector in classification of duties and appeals to the
courts, which were acts only of the Philippine Commission or the
Philippine Legislature without specific congressional approval. If
there were a conflict between the two, of course, the congressional
legislation must control. But conflict is not to be presumed
Page 272 U. S. 651
because, first, under the letter of the President in
establishing the Philippine Commissions of date April 7, 1900,
Public Acts Enacted by the Philippine Commission, Vol. 1, p. lxiii;
second, under the Act of Congress of July 1, 1902, 32 Stat. 691, c.
1369, confirming the prior legislative action of the Philippine
Commission, and vesting future legislative power in the Commission
and in a subsequent legislature therein provided for; and, third,
under the Jones Act, 39 Stat. 545, c. 416, changing somewhat the
form of the Philippine government, all general legislative power
was vested in the Island Legislature, with some exceptions, of
which none included the administrative provisions for collecting
the customs revenue. Of course, all such legislation was subject to
annulment by Congress, but, although the legislative provisions for
action by the Insular Collector of Customs and the courts in
respect to classification of imports and collection of duties were
established in 1902, and continue until today, they have never been
disturbed, and have evidently never been thought by Congress to be
in conflict with the powers of the Auditor.
In view of this legislative history, it is not difficult to
reach a conclusion and to define what the function of the Auditor
of the Islands in such a case as this is. To take money out of the
Treasury on appropriation, a warrant has to be drawn by the head of
the bureau having the payment of the claim in charge, and the
warrant must be countersigned by the Insular Auditor before it is
paid; but, where the Insular Auditor is not vested with
administrative discretion to pass upon the merits of the claim for
which the warrant is drawn, his only function is to determine
whether the warrant is drawn by the proper officer upon the
decision of the proper tribunal, and is applicable to an existing
appropriation, and, having been satisfied as to these
preliminaries, his duty is merely ministerial. In this case, having
ascertained that
Page 272 U. S. 652
the Insular Collector has rendered an opinion that was final by
reason of a failure of either party to appeal to the court
therefrom, it is his duty to countersign the warrant, and such a
duty may be controlled by mandamus.
Kendall v.
United States, 12 Pet. 524;
Work v. United
States ex rel. McAlester-Edwards Coal Co., 262 U.
S. 200;
Work v. United States ex rel. Mosier,
261 U. S. 352.
We may add that such a conclusion is quite in keeping with the
functions of the Auditors of the Treasury and the Comptroller of
the Treasury of the United States, a comparison which is constantly
used in the Philippine statutes. Neither the Auditors nor the
Comptroller of the Treasury of the United States is vested with
authority to decide questions of classification of duties under
tariff acts. Those are considered and disposed of, first by the
Collectors of customs, then by appeal after written notice to a
Board of General Appraisers, and then by a review by the Court of
Customs Appeals. Act June 10, 1890, 26 Stat. 131, 136, c. 407, §
12; Act May 27, 1908, 35 Stat. 403, 406, c. 205, § 3; Act Aug. 5,
1909, 36 Stat. 11, 98, c. 6, § 28; Act Sept. 21, 1922, 42 Stat.
858, 970, c. 356, Tit. IV, § 515. Under certain limitations, a
further review may be had in this Court. Act Aug. 22, 1914, 38
Stat. 703, c. 267.
The judgment of the Philippine Supreme Court is
Affirmed.