Posados v. Manila, 274 U.S. 410 (1927)

274 U.S.
41
47 S.Ct. 704
274 U.S. 410
71 L.Ed. 1127
POSADOS, Collector of Internal Revenue, et al.

v.
CITY OF MANILA.
No. 363.
Argued April 28, 1927.
Decided May 31, 1927.
Messrs. O. R. McGuire, Pro hac vice, Wm. C. Rigby, and L. H. Hedrick,

all of Washington, D. C., for petitioners.
Messrs. G. B. Guevara, of Pasay Rizal, Philippine Islands, and L. H.
Cake, of Washington, D. C., for respondent.
Mr. Chief Justice TAFT delivered the opinion of the Court.
This was a suit begun by an original petition in the Supreme Court of the
Philippine Islands under section 2947 of the Compiled Acts of the Philippine
Commission, 1907, Praying for an original writ of mandamus directed to Juan
Posados, Jr., collector of internal revenue of the Islands and of Manila, and to
Benjamin F. Wright, insular auditor, requiring the collector to issue warrants
payable to the city of Manila for the share of the internal revenue taxes
collected by him due to the city under the statutory law, and requiring the
auditor to countersign those warrants. In furtherance of the main prayer there
was a prayer for a temporary injunction against the issue and countersigning of
warrants for a part of such receipts in favor of the metropolitan water district.
The metropolitan water district and the insular treasurer were also made
parties. The Supreme Court, after answers and hearing, granted the prayer for
mandamus against the collector and auditor.
The substance of the controversy is this: The city of Manila, under Spain,
owned the waterworks furnishing water to the city for a great many years, and,
since the United States became the sovereign in the Islands, the city, created a
municipal corporation by the present Philippine government (chapter 60, title
10, of the Philippine Administrative Code, No. 2711), was authorized to issue
bonds for $2,000,000 to enlarge and improve them. March 6, 1919, the
Legislature of the Philippine Islands passed a law creating a metropolitan water
district for the city and neighboring territory (Act No. 2832), made it a
corporation governed by directors, and turned over the works to its
management. A dispute has arisen as to whether the city of Manila should pay
to the metropolitan water district compensation for water used by the city
government. The authorities of the city of Manila contend that the city is not
liable, because the waterworks are and have been its property for centuries. The
issue was considered by the metropolitan water district board, and a majority of
the board reached the conclusion that there was no money due from the city for
the water paid. The Governor General has appellate administrative jurisdiction
over the decisions and resolutions of the board-Act 3109-and he took the view
of the minority of the board, and held that the city did owe the metropolitan
district for the water furnished it. The city was not a party to this proceeding. In
accord with the conclusion of the Governor General, the insular auditor
directed the collector of internal revenue to withhold from the city's share of the
internal revenue collections money enough to pay what was due for the water,
and directed the collector to issue his warrant for that amount from the share of
the city in the internal revenue collections in enforcement of the claim of the
metropolitan board for the amount due.
3
Section 3 of the Organic Act of the Philippine Islands, known as the Jones Law
(39 Stat. 545, c. 416; Comp. St. 3810), directs that no money shall be paid out
of the treasury, except in pursuance of an appropriation by law; that all money
collected on any tax levied or assessed for a special purpose shall be treated as a
special fund in the treasury and paid out for such purpose only.
By section 8 of the same act (Comp. St. 3812) the general legislative power,
except as therein otherwise provided, was granted to the Philippine Legislature,
authorized by the act.
The Jones Act describes the duties of the insular auditor as follows:
'Section 24: '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 of the Provinces or municipalities thereof. He

shall perform a like duty with respect to all government branches. * * *
7
'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.' Comp. St. 3817d.
Section 25 of the same act 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, * * *. 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 the 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,' whose decision is
'final and conclusive.' Comp. St. 3817e.
By section 588 of the Administration Act of 1917, as amended by Act No.

3066, adopted after the passage of the Jones Act, it is provided that the insular
auditor shall have the power to authorize and enforce the settlement of accounts
subsisting between the different bureaus or offices of the insular service,
between such bureau or office and any provincial, municipal, or city
government, between provincial governments, between municipal or city
governments, and between any such provincial and municipal or city
governments.
10
The contention on behalf of the insular auditor is that the city of Manila, on the
one hand, and the metropolitan water board, on the other, are branches of the
insular government, and that by virtue of the foregoing statutes he is given
authority to settle accounts between them, and that his decision is final and
conclusive upon such executive branches, with the appeal provided as above
stated. He maintains that this gives him the authority to decide, as between the
metropolitan water board and the city of Manila, whether the city should pay
the water board for the water furnished it, because it is necessarily involved in
the settlement of accounts between the two corporations and branches of the
insular government; that, having decided that the money was due for the water
furnished from the city to the metropolitan board, he is further charged by
section 588 of the Administrative Code with the duty of enforcing that decision
and settlement. He may therefore, he says, direct the collector of internal
revenue to issue a warrant for such share of the city in the internal revenue
collections as may be enough to pay the debt owing from the city to the water
board, and that this is a necessary implication from his power by law to enforce
such settlement.
11
The disposition of the internal revenue receipts is provided by the

Administrative Act in the following sections:
12
'Sec. 490. Disposition of Internal Revenue in General.-Internal revenue

collected under the laws of the Philippine Islands and not applied as
hereinabove provided or otherwise specially disposed by the law shall accrue to
the Insular Treasury and shall be available for the general purposes of the
Government, with the exception of the amounts set apart by way of allotment
under the next succeeding section.
13
'Sec. 491. Allotments of Internal Revenue for Special Purposes.-Of the internal
revenue accruing to the Insular Treasury under the preceding section there shall
be set apart ten per centum as a provincial allotment, ten per centum as a road
and bridge allotment, and twenty per centum as a municipal allotment; but the
amounts allotted to said several purposes during any year shall not be greater
than the amount allotted for the same purposes during the fiscal year nineteen
hundred and nine.
14
'Sec. 492. Appointments and Use of Provincial Allotment.-The provincial

allotment shall be apportioned to the treasuries of the several respective
provinces and shall there accrue to their general funds, respectively. * * *
15
'Sec. 494. Apportionment and Use of Municipal Allotment.-The municipal

allotment shall be for the benefit of the inhabitants of the Islands in the purview
of their community requirements, being available for municipal or other use as
hereinbelow provided.
16
'Sec. 495. The city of Manila shall receive the shares which it would receive if
it were both a municipality and a regularly organized province, and for the
purposes hereof shall be deemed to be both one and the other. * * *
17
'Sec. 497. Warrants for Quarterly Payment of Allotments.-The payment of the

internal revenue allotments shall be made from the insular treasury quarterly,
upon warrants drawn by the collector of internal revenue.'
18
It is apparent from reading the foregoing sections that they are directions by
18
It is apparent from reading the foregoing sections that they are directions by
statutory law as to the distribution of the collections made by the internal
revenue collector, and that the share to be paid to the city of Manila is fixed
thereby, and the exact figure can be ascertained mathematically. This requires
no exercise of discretion, judicial or otherwise, after the total amount of the
internal revenue receipts are known, and in this case there is no dispute as to
that amount. It becomes the ministerial duty of the internal revenue collector to
draw his warrant for the share of the city thus fixed by statute. It becomes the
duty of the insular auditor, when such a warrant of the internal revenue
collector is presented to him, after ascertaining that the amount for which it is
drawn is in accord with the directions of the statute, to countersign the same.
Kendall v. United States, 12 Pet. 524, 9 L. Ed. 1181; Wright v. Ynchausti, 272
U. S. 640, 651, 652, 47 S. Ct. 229, 71 L. Ed. 454.
19
No matter what the power of the auditor may prove to be with reference to the
settlement of accounts as between the city of Manila and the metropolitan water
board, or what his power with reference to enforcing the settlement so reached
by him, nothing in the laws of the Islands is disclosed to us which enables the
auditor in the enforcement of such settlements to dispense with or to suspend
the operation of positive law in reference to the course which shall be followed
in the disposition by the internal revenue collector of the receipts from internal
revenue collections which he is directed by the statute to pay to the city. His
duty is clearly set forth, and he has nothing to do but to comply with it, having
ascertained exactly what the share of the city is under the foregoing provisions.
20
When this share comes to the city under the warrant to be drawn in its favor by
the collector, the question of what shall thereafter be done in respect to it is not
a matter that we are called upon to consider. Whether the issue between the
metropolitan water board and the city of Manila, in the absence of agreement,
is one that must then be decided by a suit in court brought by the metropolitan
water board against the city, asking for a judgment for the water paid, or
whether the issue is to be determined by the insular auditor in his asserted
power of settling and enforcing accounts between the two branches of the
government, are issues not before us. The only question here is what should be
done with the share of the collections made by the internal revenue collector
under the sections of the Administrative Code already quoted. By section 2442
of the Laws of the Philippines relating to the City of Manila, there is a
provision for a permanent continuing appropriation during the time the city
remains the capital of the islands from any funds in the insular treasury, not
otherwise appropriated, equal to 30 per cent. of the expenses of the city
government within certain other limitations and the insular auditor is to
ascertain the amount thus appropriated and transfer it to the city. How far this
would involve quasi judicial or administrative discretion not to be controlled by
mandamus, it is not necessary for us to consider or decide; because this case

relates only to internal revenue receipts and their distribution in respect of
which the provisions of law are specific and mandatory as we have seen. The
conclusion of the Supreme Court of the Philippines in directing a mandamus to
issue against the internal revenue collector and the insular auditor was in
accordance with the statutory law of the Philippines and was right.
21
A majority of the Supreme Court of the Philippines reached this conclusion.

That court further expressed an opinion as to the relation of the city of the
insular auditor and his functions which was not necessary, it seems to us, to
decide this case. We desire therefore to limit our opinion to the mere question
whether the city's share of the internal revenue collections must be paid to the
city by the collector.
22
The judgment of the Supreme Court of the Philippines is
23
Affirmed.

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274 U.S.

POSADOS, Collector of Internal Revenue, et al.

Messrs. O. R. McGuire, Pro hac vice, Wm. C. Rigby, and L. H. Hedrick,

held in trust by the government of the Provinces or municipalities thereof. He

By section 588 of the Administration Act of 1917, as amended by Act No.

The disposition of the internal revenue receipts is provided by the

'Sec. 490. Disposition of Internal Revenue in General.-Internal revenue

'Sec. 492. Appointments and Use of Provincial Allotment.-The provincial

'Sec. 494. Apportionment and Use of Municipal Allotment.-The municipal

'Sec. 497. Warrants for Quarterly Payment of Allotments.-The payment of the

mandamus, it is not necessary for us to consider or decide; because this case

A majority of the Supreme Court of the Philippines reached this conclusion.

The judgment of the Supreme Court of the Philippines is

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