Facts:

The case involves Lilia de Jesus-Sevilla as the petitioner and the Collector of Internal Revenue as the respondent. The events leading to the case began in June 1954 when Lilia, a lawyer and businesswoman, was introduced to Jesus Sto. Tomas Cortes, a prominent promoter of sports exhibitions in the Philippines. Cortes proposed the idea of staging bullfight exhibitions in the country, highlighting its potential financial success. Lilia, unable to raise the necessary capital, agreed to provide the working capital for the venture. On August 20, 1954, she granted Cortes a special power of attorney to enter into contracts with the bullfight troupe from Portugal. Subsequently, on August 26, 1954, Cortes signed a bullfight contract with the troupe's representative.

On October 10, 1954, Lilia and Cortes entered into a Contract of Management, designating Cortes as the promoter and Lilia as the general manager. The contract stipulated that Lilia would arrange for a working capita...

Facts:

Introduction and Initial Agreement

• Lilia de Jesus-Sevilla, a lawyer and businesswoman, was introduced to Jesus Sto. Tomas Cortes (Jes Cortes) in June 1954. Jes Cortes proposed the idea of promoting the first bullfight exhibitions in the Philippines, emphasizing its potential financial success. Due to the high capital requirement, Jes Cortes suggested that Sevilla raise the working capital for the venture, to which she agreed.

Legal and Financial Arrangements

• On August 20, 1954, Sevilla granted Jes Cortes a special power of attorney to enter into a contract with representatives of a bullfight troupe from Lisbon, Portugal.
• On August 26, 1954, Jes Cortes signed a bullfight contract with David Rodriguez Barrote, representing the Portuguese Bullfight Troupe.
• On October 10, 1954, Sevilla and Jes Cortes entered into a Contract of Management, designating Sevilla as the general manager and Jes Cortes as the promoter. The contract stipulated that Sevilla would provide working capital up to P100,000 and guarantee repayment of overdrafts.

Operational Involvement

• Sevilla secured contracts with Tabacalera for advertising rights and with Harry Lyons, Inc. for the construction of the bullfight arena.
• Jes Cortes obtained a permit from the Director of Lands to construct the bullfight arena in the Sunken Garden.
• Seven bullfight exhibitions were held between December 31, 1954, and February 6, 1955. Sevilla managed the books of accounts, printed handbills and tickets, sold tickets, and employed personnel for the venture. She also provided a total working capital of P170,000.

Tax Assessment and Dispute

• The Collector of Internal Revenue assessed Sevilla P111,056.84 as amusement tax and surcharge, plus P600 as a compromise penalty for failing to register the books of accounts.
• Sevilla appealed the assessment, arguing that Jes Cortes, not she, was the operator or promoter of the bullfight exhibitions and that she was merely a financier.

Issue:

• (Unlock)

Ruling:

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Ratio:

• The Court distinguished Sevilla's case from Blaquera vs. Aldaba, where the financier was not held liable for amusement tax because their involvement was limited to providing funds as a loan. In contrast, Sevilla's role extended beyond financing; she actively participated in the management and operations of the bullfight exhibitions, including securing contracts, managing finances, and overseeing the events.
• The Management Contract between Sevilla and Jes Cortes did not absolve Sevilla of liability. Instead, it reinforced her active involvement in the venture, as she was designated as the general manager and provided significant financial and operational support.
• The fact that Jes Cortes signed the amusement tax return and income statements as the promoter and operator was deemed inconsequential, as these documents were prepared after Sevilla had already been assessed for the tax. This was seen as an attempt to evade liability rather than a reflection of the actual operational roles.

Conclusion:

The Supreme Court affirmed the decision of the Court of Tax Appeals, holding Lilia de Jesus-Sevilla liable for the amusement tax as the operator or proprietor of the bullfight exhibitions. Costs were imposed against her.