Title
Atkins, Kroll and Co., Inc. vs. Posadas, Jr.
Case
G.R. No. 24484
Decision Date
Nov 28, 1925
Plaintiff contested double taxation on copra exports; Supreme Court ruled tax paid by agent sufficed, barring additional levy on plaintiff for same consignment.
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Case Digest (G.R. No. 24484)

Facts:

  1. Parties Involved:

    • Plaintiff: Atkins, Kroll & Co., Inc., a domestic corporation with its principal office in Zamboanga.
    • Defendant: Juan Posadas, Jr., the Collector of Internal Revenue.
  2. Transaction Details:

    • Prior to July 1924, Atkins, Kroll & Co. engaged Macleod & Co., Inc., a commission merchant, to purchase copra for the plaintiff at Davao using funds provided by the plaintiff.
    • Macleod & Co. was tasked with exporting the copra from the Philippines, consigned to the plaintiff’s representatives in the United States.
  3. Tax Payment Dispute:

    • During July, August, and September 1924, Macleod & Co. purchased copra worth P67,805.80 using the plaintiff’s funds and exported it.
    • Macleod & Co. declared and paid a 1.5% tax on the gross value of the copra to the defendant (Collector of Internal Revenue).
    • Despite this payment, the defendant demanded an additional 1.5% tax from the plaintiff, amounting to P1,017.09, claiming it was due for the consignment of copra abroad.
    • The plaintiff paid the tax under protest on October 20, 1924, and sought a refund, which the defendant denied.
  4. Agreed Statement of Facts:

    • The copra was shipped by Macleod & Co. from Davao on two steamships, with bills of lading endorsed in blank and delivered to the plaintiff for transmission to its representatives abroad.
    • Macleod & Co. paid the 1.5% tax on the copra, but the tax receipt did not specify whether it was for consignment or sale.
    • The plaintiff paid the same tax under protest, and the defendant refused to refund the amount.
  5. Lower Court Decision:

    • The lower court ruled in favor of the defendant, holding that both Macleod & Co. and the plaintiff were liable for the tax.

Issue:

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Ruling:

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Ratio:

  1. Agency Relationship:

    • Macleod & Co. acted as the plaintiff’s agent in purchasing and consigning the copra. The copra was purchased for and on account of the plaintiff, and all expenses, including the tax, were charged to the plaintiff.
  2. Single Consignment:

    • The copra was consigned abroad only once, and the tax paid by Macleod & Co. covered this consignment. There was no separate sale or consignment by the plaintiff.
  3. Double Taxation Prohibited:

    • The government cannot levy and collect the same tax from two different persons for a single consignment abroad. This would amount to double taxation, which is not permitted under the law.
  4. Statutory Interpretation:

    • Section 1 of Act No. 3065 imposes a tax on goods sold, bartered, exchanged, or consigned abroad. Since the copra was not sold or exchanged but merely consigned abroad, the tax was properly paid by Macleod & Co. on behalf of the plaintiff.
  5. Overruling Precedent:

    • The Court distinguished the case from Gil Hermanos vs. Hord and Munoz & Co. vs. Hord, which involved sales within the Philippines. The present case involved a consignment abroad, and the tax could only be collected once.

Conclusion:

The Supreme Court held that the plaintiff was not liable for the additional tax, as the tax had already been paid by its agent, Macleod & Co., for the same consignment. The judgment of the lower court was reversed, and the plaintiff was granted relief as prayed for in its complaint.


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