Case Digest (G.R. No. 45697) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Manila Electric Company v. Yatco, G.R. No. 45697, decided on November 1, 1939, the Manila Electric Company (hereafter “plaintiff” or “appellant”), a Philippine corporation with its principal office in Manila, procured insurance in 1935 through its New York broker with the City of New York Insurance Company and the United States Guaranty Company, both foreign insurers not licensed or represented in the Philippine Islands. The policies covered real and personal properties located in Manila and provided for loss adjustment and payment in the Philippines, including examination under oath of the insured and appointment of appraisers or umpires by a court in the state where the property was situated. Premiums totaling ₱91,696 were paid in New York. Under Section 192 of Act No. 2427, as amended, the Collector of Internal Revenue, A. L. Yatco (defendant and appellee), assessed a one-percent tax on those premiums, which the appellant paid under protest. The trial court dismissed the c Case Digest (G.R. No. 45697) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Case citation and parties
- 69 Phil. 89, G.R. No. 45697, November 1, 1939
- Plaintiff-Appellant: Manila Electric Company; Defendant-Appellee: A.L. Yatco, Collector of Internal Revenue
- Insurance contracts and premiums
- In 1935, Manila Electric Company (MEC) insured real and personal properties in the Philippines with City of New York Insurance Company and United States Guaranty Company—foreign corporations not licensed in the Philippines and having no local agents.
- Policies contained provisions for loss adjustment in the Philippines (examination under oath, production of books, appointment of appraisers via a Philippine court); premiums totaling ₱91,696 were paid in New York through a broker.
- Tax assessment and procedural history
- Under Section 192 of Act No. 2427 (as amended), the Collector assessed a 1% tax on premiums paid to foreign insurers; MEC paid the tax under protest.
- MEC’s protest was overruled; it sued to recover the tax, the trial court dismissed the complaint, and MEC appealed.
Issues:
- Constitutionality of Section 192’s second paragraph
- Does imposing a 1% tax on premiums paid to unlicensed foreign insurers for policies covering Philippine property violate the due process clause by taxing extraterritorial contracts?
- Is the provision rendered unconstitutional by U.S. Supreme Court precedent in Compania General de Tabacos v. Collector (275 U.S. 87)?
- Jurisdictional nexus for taxation
- Do the contractual provisions requiring performance—examination, proof of loss, appraisal—in the Philippines establish a sufficient nexus to uphold the tax?
- Does the lack of a local license or agent bar the imposition of the tax on premiums paid abroad?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)