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G.R. No. L-4315            November 21, 1908
KUENZLE & STREIFF vs. COLLECTOR OF CUSTOMS -->

EN BANC

G.R. No. L-4315            November 21, 1908

KUENZLE & STREIFF,Plaintiffs-Appellants, vs. THE COLLECTOR OF CUSTOMS,Defendant-Appellee.

Hartigan, Rohde and Gutierrez, for appellants.
Attorney-General Araneta, for appellee.

JOHNSON, J.:

In the month of April, 1906, the plaintiff imported into the Philippine Islands certain cotton goods, upon which the Collector of Customs imposed a duty under paragraph (c) of article 177 of the tariff laws applicable to the Philippine Islands, ¹ and in addition thereto a surtax of 30 per cent under paragraph (g) of said article. Against this ruling of the Collector of Customs the plaintiffs entered a protest, and appealed from the decision of the Collector to the Court of First Instance of the city of Manila. After hearing the evidence, the said Court of First Instance affirmed the ruling of the Collector of Customs, from which decision the plaintiffs appealed to this court.chanroblesvirtualawlibrary chanrobles virtual law library

The customs authorities classified the importation under paragraph (c) of article 117 of the Customs Tariff Schedule as "textiles, plain and without figures, stamped or printed, not measuring over one hundred centimeters in width, weighing 8 kilograms or more per one hundred square meters, and from 26 to 38 threads per weight," and assessed the importation at 18 cents per kilo, plus a surtax of 30 per cent. The plaintiffs contend that the surtax of 30 per cent, under paragraph (g) of said article, was illegally imposed. Article 117 read as follows ² :

117. Textiles, plain and without figures, napped or not, weighing ten kilos or more per one hundred square meters, unbleached, or dyed; and chanrobles virtual law library

Textiles, plain and without figures, stamped or printed, napped or not, measuring not over sixty-five centimeters in width, weighing eight kilos or more per one hundred square meters; and chanrobles virtual law library

Textiles, plain and without figures, not stamped or printed, whatever be their width, weighing eight kilos or more per one hundred square meters, having - chanrobles virtual law library

(a) Up to eighteen threads, N.W., ten cents; chanrobles virtual law library

(b) From nineteen to thirty-one threads, N.W., kilo, fourteen cents.chanroblesvirtualawlibrary chanrobles virtual law library

(c) From thirty-two to thirty-four threads, N.W., kilo, eighteen cents.chanroblesvirtualawlibrary chanrobles virtual law library

(d) From thirty-five to thirty-eight threads, N.W., kilo, twenty-four cents.chanroblesvirtualawlibrary chanrobles virtual law library

(e) From thirty-nine to forty-four threads, N.W., kilo, twenty-eight cents.chanroblesvirtualawlibrary chanrobles virtual law library

(f) Forty-five threads or more, N.W., kilo, thirty-two cents.chanroblesvirtualawlibrary chanrobles virtual law library

(g) The same textiles, stamped, printed, or manufactured with the dyed yarns, dutiable as the textile, with a surtax of thirty per centum.chanroblesvirtualawlibrary chanrobles virtual law library

[ NOTE. - Textiles woven with a colored yarn on the selvage or with a colored selvage stripe not exceeding two millimeters in width shall not be considered as manufactured with dyed yarns.]

The Collector of Customs held, in effect, that the last paragraph (g), imposing a surtax upon textiles stamped, printed or manufactured with dyed yarn, clearly refers to all descriptions which precede it and therefore all textiles, when printed, stamped or manufactured with dyed yarns should be subjected to a surtax of 30 per cent. The Collector further held that this interpretation of said article had been followed since November 12, 1901, and that the law in the meantime had been amended twice, without the Legislature having made any change in that portion of said article.chanroblesvirtualawlibrary chanrobles virtual law library

It is a rule well established in the interpretation of customs laws that, where there has been a long acquiescence in a regulation by which the rights of parties for years have been determined and adjusted, such interpretation should be followed in the absence of the most cogent and persuasive reasons to the contrary. (Robertson vs. Downing, 127 U.S., 607; U.S. vs. Healey, 160 U.S., 136; Merritt vs. Cameron, 137 U.S., 542.)chanrobles virtual law library

The only error assigned by the appellants is that "the lower court erred in approving the imposition of the duty (surtax) made by the Collector" and argue that the last paragraph (g) of said article 117 does not apply to the goods mentioned in paragraph 3 of said article. Said paragraph 3 (unnumbered) relates to textiles, plain and without figures, not stamped or printed. It is clear that the last paragraph (g), does not apply to the textiles mentioned in said paragraph 3, because paragraph (g) only refers to textiles stamped, printed, etc. Whenever textiles are stamped, printed, etc., they do not come under the description given in said paragraph 3, and, therefore, paragraph (g), because it refers only to textiles stamped, printed, etc., has no application to said paragraph 3.chanroblesvirtualawlibrary chanrobles virtual law library

Paragraph 1, 2, and 3 of article 117 enumerate the textiles upon which duty is imposed. Paragraph (a) to (f) fix the duty upon those textiles, under the conditions mentioned in said paragraphs (a) to (f). Paragraph (g) imposes a surtax upon all the textiles mentioned under article 117 when said textiles are in the condition mentioned in said paragraph (g). Paragraph (g) might be read "These same textiles mentioned above, when they are stamped, printed, etc., are subject to a surtax of 30 per cent." chanrobles virtual law library

Our conclusion is, therefore, that the textiles in controversy being stamped, printed, etc., are subject to a surtax of 30 per cent, and that the judgment of the lower court should be affirmed, with costs. So ordered.chanroblesvirtualawlibrary chanrobles virtual law library

Arellano, C.J., Torres, Mapa, and Tracey, JJ., concur.
Carson and Willard, JJ., dissent.

Endnotes:

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1 Act of Congress of March 3, 1905, par. 117 (c) (4 Pub. Laws, 174).

2 Act of Congress of February 26, 1906, par. 117 (5 Pub. Laws, 435).