G.R. No. L-18440 October 25, 1967
HAWAIIAN-PHILIPPINE COMPANY, petitioner, vs. THE HONORABLE AUDITOR GENERAL OF THE PHILIPPINES, respondent.

FACTS

From 1948 to 1960, petitioner Hawaiian-Philippine Company, a centrifugal sugar producer and exporter, made numerous export shipments from the port of Iloilo without using any government wharves. Loading was done either at its private wharf or directly shipside. The Collector of Customs for Iloilo regularly imposed and collected “wharfage dues” from the petitioner during this period. On September 7, 1960, petitioner requested a refund of these collected amounts, totaling P568,573.48, from the Collector of Customs, citing the Supreme Court’s decision in Commissioner of Customs vs. Superior Gas and Equipment Company, which interpreted Republic Act No. 1371 . The acting Collector of Customs denied the request on September 16, 1960. Subsequently, on October 3, 1960, petitioner filed a formal claim with the Auditor General, arguing the exaction was null and void, the payment was made under a mistaken belief of legality, and this gave rise to a quasi-contract of solutio indebiti, entitling it to a refund. The Auditor General declined to act, stating the Collector of Customs had exclusive jurisdiction over such refund claims. Petitioner then filed this petition for review.

ISSUE

1. Whether the petitioner was liable for the payment of the “wharfage dues” collected by the Collector of Customs of Iloilo for the period 1948 to 1960 on export shipments where no government wharfage facilities were used.
2. Whether the petitioner has a right to seek a refund of the wharfage charges under Act No. 3083 , Commonwealth Act No. 327 , and Articles 2154 and 2155 of the Civil Code governing solutio indebiti.

RULING

1. Yes, the petitioner was liable for the wharfage dues. The Court distinguished the cited case of Commissioner of Customs vs. Superior Gas & Equipment Co., as it involved an importation unloaded on a private wharf, which was expressly exempted under the last proviso of Section 3 of Republic Act No. 1371 . No similar exemption existed for exports. The Court, referencing its prior decision in Victoria Milling Co., Inc. vs. The Honorable Auditor General, held that the wharfage dues were legally due. Furthermore, the Court noted that Republic Act No. 1937 (Tariff and Customs Code), which took effect in 1957, eliminated the exemption for imports unloaded on private wharves that existed under the prior law. The nature of wharfage dues was clarified as a charge assessed against the cargo itself, akin to a tax for the government’s customs operations, and not merely a fee for the actual use of a wharf.
2. No, the petitioner has no right to seek a refund on the basis of solutio indebiti. The Court held that the exclusive remedy for challenging the imposition and collection of customs duties, fees, or charges is the protest procedure outlined in Sections 1370 and 1371 of the Revised Administrative Code (Section 2309 of the Customs Code). Since the petitioner did not file a protest at the time of payment, it could not later pursue a claim for refund through a different avenue, such as a claim with the Auditor General based on quasi-contract. The Auditor General correctly declined jurisdiction. The amounts paid were determined to be legally due, precluding any obligation to return them under the principle of solutio indebiti. The ruling of the Auditor General was affirmed.