Case Digest (G.R. No. 45697)
Facts:
Manila Electric Company v. A. L. Yatco, G.R. No. 45697, November 01, 1939, the Supreme Court En Banc, Moran, J., writing for the Court.The plaintiff-appellant, Manila Electric Company (a Philippine corporation with principal office in Manila), procured insurance in 1935 on certain Philippine real and personal property with two foreign insurers: the City of New York Insurance Company and the United States Guaranty Company. The insurance was placed through plaintiff’s broker in New York City; the foreign insurers were not licensed to do business in the Philippines and had no agents there. Policy sample terms (attached in the agreed statement) provided for examinations, production of books in locations designated by the company, adjustment procedures, and appraiser/umpire selection linked to the situs of the insured property.
Premiums totaling P91,696 were paid by the plaintiff to the insurers in New York. The Collector of Internal Revenue, relying on Section 192 of Act No. 2427, as amended, assessed and levied a one percent tax on those premiums; plaintiff paid under protest and sued to recover the tax after his protest was overruled. The trial court dismissed the complaint. From that judgment the plaintiff appealed to the Supreme Court, contesting the constitutionality and applicability of the second paragraph of Section 192 insofar as it subjected owners who obtain insurance directly from foreign companies to the one percent tax.
The parties and Court framed their arguments against controlling United States Supreme Court precedents, principally Compania General de Tabacos v. Collector of Internal Revenue (275 U.S. 87) and Equitable Life Assurance Society v. Pennsylvania (238 U.S. 143), as well as the due-process authorities of Allgeyer and St. Louis Cotton Compress. The primary factual dispute...(Pro-only)
Issues:
- Is the second paragraph of Section 192 of Act No. 2427, as amended, unconstitutional as applied to premiums paid by a Philippine insured to foreign insurers abroad because the contracts and payments were made outside the Philippines?
- If not, do the facts (Philippine insured, risks located in the Philippines, contract provisions permitting local adjustments and examinations) establish that the foreign insurers subjected themselves to the taxing jurisdiction of the Philippines so...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)