Case Digest (G.R. No. L-12156)
Case Digest (G.R. No. L-12156)
Facts:
Manila Trading and Supply Co. v. City of Manila, G.R. No. L-12156, April 29, 1959, the Supreme Court En Banc, Bautista Angelo, J., writing for the Court. The plaintiff-appellee is Manila Trading and Supply Co., a domestic corporation operating an assembly plant and related offices and warehouses in the Port Area, Manila; the defendants-appellants are the City of Manila and city officials responsible for assessment and collection of municipal taxes.On December 5, 1950 the Municipal Board of Manila adopted Ordinance No. 3420, imposing a quarterly municipal tax on wholesale dealers in general merchandise measured by quarterly sales; on May 4, 1954 Ordinance No. 3634 amended Ordinance No. 3420 to include wholesale dealers of automobiles and other motor vehicles. Pursuant to Section 8 of Ordinance No. 3420, the City Treasurer, with the Mayor’s approval, promulgated implementing regulations on May 31, 1954.
On March 17, 1955 the City Treasurer demanded payment from Manila Trading under the amended ordinance. The company protested on March 22, 1955, contending it was a manufacturer (an assembler of knock-down parts) and not a wholesale dealer; the protest was denied and the company paid the assessed tax. Manila Trading filed suit in the Court of First Instance of Manila for recovery of the tax; during trial it amended the complaint to limit recovery to P121,983.47, the amount allegedly collected as wholesale taxes on motor vehicles it assembled during the assessed quarters. The Court of First Instance rendered judgment for plaintiff ordering refund of P121,983.47 with legal interest and costs. Defendants appealed to the Supreme Court.
Factual findings below described plaintiff’s facilities (four adjacent blocks with distinct buildings for assembly, warehousing, offices and service), its importation of major automobile components in completely knock-down condition, the assembly steps (welding, metal finishing, riveting, engine assembly, painting, testing), use of significant machinery and labor, and its commercial practice of assembling vehicles only upon receipt of orders rather than producing stock for wholesale display or sale at a separate store or showroom.
The Municipal Board relied on Section 18(o) of the Revised Charter of the City (Republic Act No. 409) as authority to tax “dealers in general merchandise, including importers and indentors,” while plaintiff relied on judicial distinctions between dealers and manufacturers and on the definition of “manufacturer” in the National Internal Revenue Code (Sec. 194(x)). The trial court concluded plaintiff was a manufacturer and granted recovery; the City appealed to the Supreme Court.
Issues:
- Is Manila Trading and Supply Co. a wholesale dealer in motor vehicles subject to the municipal tax under Ordinance No. 3420, as amended, or is it a manufacturer outside the ordinance’s scope?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)