Facts:

The case of The Asiatic Petroleum Company (Ltd.) vs. The Insular Collector of Internal Revenue concerns a dispute over tax obligations. The plaintiff-appellant, The Asiatic Petroleum Company, was compelled by the defendant-appellant, the Insular Collector of Internal Revenue, to pay internal revenue tax on mineral oils, specifically kerosene and gasoline, which the company had sold but not yet delivered before January 1, 1915. The tax requirement stemmed from section 17 (paragraph 72a) of Act No. 2432, which took effect on that date. The company paid this tax under protest, claiming it was illegal as the law exempted them from paying taxes on oils "disposed of to consumers or persons other than manufacturers or wholesale dealers" before the enforcement of the Act. The Asiatic Petroleum Company argued that they had made valid sales of these oils prior to January 1, 1915, even though delivery had yet to occur, which should excuse them from tax obligations. T

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Facts:

Background of the Case

• The case involves the Asiatic Petroleum Company (Ltd.) as plaintiff and appellant and the Insular Collector of Internal Revenue as defendant and appellee.
• The dispute centers on the imposition of an internal revenue tax on mineral oils—composed of kerosene and gasoline—under Section 17 (paragraph 72a) of Act No. 2432.

Statutory Context and Tax Obligation

• Section 17 of Act No. 2432 stipulates that no tax shall be collected on articles which, before the taking effect of the Act on January 1, 1915, have been disposed of to consumers or persons other than manufacturers or wholesale dealers.
• The law was intended to provide relief from the tax for those goods that were already “disposed of” in a commercial sense by the effective date of the Act.

Actions Taken and Dispute on Delivery

• The defendant, under threat of penalty, compelled the plaintiff to pay the tax on all mineral oils on hand as of January 1, 1915, regardless of whether they had been sold or delivered.
• The plaintiff paid the disputed tax under protest, arguing that the mineral oils that had been sold (albeit not delivered) before the effective date constituted a “disposal” and thus should be exempt from taxation.

The Central Factual Dispute

• The plaintiff contended that a valid and legal sale completed before January 1, 1915—even if delivery had not occurred—meant that the oils were “disposed of” to consumers or persons other than manufacturers or wholesale dealers.
• No issue was raised regarding oils that were both sold and delivered before the stipulated date; the dispute focused solely on oil sales that lacked subsequent delivery.

Issue:

Interpretation of “Disposed of”

• The primary issue is whether the phrase “disposed of” in Section 17 of Act No. 2432 should be interpreted as requiring both sale and delivery of the mineral oils, or if a sale agreement alone suffices.
• The determination hinges on the common usage of the term among merchants, as opposed to a technical or new interpretation imposed by the law.

Tax Liability Based on the Timing of Disposal

• Whether the plaintiff’s sale (without delivery) made prior to January 1, 1915, qualifies as a “disposal” and consequently exempts him from paying the internal revenue tax.
• The issue further involves whether current commercial customs should influence the interpretation of the statutory term.

Legislative Intent

• Whether the Legislature intended the phrase “disposed of” to adopt its commercial meaning, which would align with the common practice among merchants, or a more strict interpretation requiring physical delivery.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)