Case Digest (G.R. No. 27771)
Facts:
Philippine Button Corporation v. Juan Posadas, Jr., G.R. No. 27771, February 24, 1928, the Supreme Court En Banc, Villa-Real, J., writing for the Court. The plaintiff-appellant, Philippine Button Corporation, a New York corporation licensed to do business in the Philippine Islands, sued defendant-appellee Juan Posadas, Jr., Collector of Internal Revenue, seeking reimbursement of P14,400.10 paid under protest as internal revenue tax on button shipments sent from its Manila branch to its New York head office. The complaint alleged that the company was not a "merchant" within the meaning of the law and that the shipments were not consignments subject to the percentage tax.The parties entered a detailed stipulation of facts showing that the corporation established operations in Manila in August 1922, purchased raw trocha shells locally, converted them into finished buttons in a Manila factory employing several hundred Filipino workers, and shipped most manufactured buttons to its New York office for sale while selling about 4% locally. The stipulation also recited that the Collector, invoking Section 1459 of the Administrative Code (1917) and later Act No. 3065 as amended by Act No. 3183, assessed and collected taxes (one percent initially, then one and one-half percent) on gross value of goods consigned abroad and that the corporation paid the assessed amounts under protest for various quarters from 1922 through the first quarter of 1925.
The Court of First Instance of Manila ruled for the defendant, absolving the Collector from the complaint. The plaintiff appealed the judgment to the Supreme Court. During the trial-level proceedings the defendant was permitted to file a second amended answer adding defenses after the stipulation was filed but before the case was submitted; the parties had reserved the right to present further evidence, which plaintiff later did. The Supreme Court reviewed both the procedural question about the allowance of the second amended answer and the substantive ques...(Pro-only)
Issues:
- Did the trial court abuse its discretion in admitting the defendant's second amended answer adding new defenses after the parties filed a stipulation of facts but before submission and trial?
- Is the plaintiff-appellant a "merchant" within the meaning of Section 1459 of the Administrative Code of 1917 (and thus subject to the consignment/percentage tax), and therefore liable for the taxes collected under Section 1459 and under Ac...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)