[CASE DIGEST] HOPEWELL POWER v. COMMISSIONER (CTA Case No. 5310)

FACTS

Hopewell Power, is a corporation organized and existing under Philippine laws, entered into a Mortgage Trust Indenture (MTI) with Hopewell Energy, a company organized under the laws of Hong Kong. The execution of the MTI was done in Hong Kong.

Hopewell Power filed with the BIR a claim for refund of the documentary stamp tax (DST) it paid amounting to P24,864,781.58, on account of the MTI’s execution in Hong Kong.

The Commissioner of Internal Revenue did not act on the request stating that the DST was paid in accordance with Sec. 195 of the Tax Code and, therefore, not refundable.

The CTA held otherwise, ruling that Hopewell should be given a refund of the DST paid.

RULING

The Supreme Court ruled in favor of Hopewell Power.

Inasmuch as the MTI was executed and signed in Hong Kong prior to the effectivity of Republic Act No. 7660, no DST is imposable on the same in the Philippines. This conclusion is also in keeping with one of the inherent limitations of taxation, namely, that it may be exercised only within the territorial jurisdiction of the taxing authority.

The SC reiterated its ruling in Allied Thread Co., Inc. v. City Mayor of Manila, where it held that "the power to levy an excise upon the performance of an act or the engaging in an occupation does not depend upon the domicile of the person subject to the excise, nor upon the physical location of the property and in connection with the act or occupation taxed, but depends upon the place in which the act is performed or occupation engaged in.

Thus, the gauge for taxability x x x does not depend on the location of the office, but attaches upon the place where the respective x x x transaction(s) is perfected and consummated."

[CASE DIGEST] SONGCO v. SELLNER (G.R. No. 11513)

December 4, 1917

 

Ponente: Street, J.

FACTS:

·         George C. Sellner was the owner of a farm at Floridablanca, Pampanga. Right beside his farm was another farm owned by Lamberto Songco. On or about December 1915, both properties had a considerable quantity of sugar cane ready to be cut.

·         The nearest sugar central where sugar canes were milled was located in Dinalupijan. Sellner wanted his harvest to be milled here, but the owners of the sugar central could not accommodate him. The said sugar central, however, was going to mill Songco's cane.

·         Sellner offered to buy Songco's canes. He did so in order to include the canes harvested from his own farm with that of Songco's and have these milled at the aforecited sugar central. Part of the deal was for Songco to grant Sellner a right of way to his farm. 

·         Songco sold his potential harvest to Sellner for P12,000. Songco estimated that the canes from his farm would produce 3,000 piculs of sugar. Sellner agreed to pay in three installments amounting to P4,000 each. 

·         Sellner was able to complete the two installments. However, he refused to pay the third and final installment. This prompted Songco to file an action against Sellner. 

·         As a defense, Sellner denied the allegations and posited that his deal with Songco was marred by fraudulent misrepresentation. It turned out that instead of yielding 3,000 piculs of sugar as estimated, the canes from Songco's farm only yielded 2,017 piculs, gross, and after the toll for milling was deducted the net left to Sellner was very much less. Sellner also said that Songco refused to warrant his estimate. 

·         The lower court ruled in favor of Songco, ordering Sellner to pay the final P400 installment. The court nonetheless dismissed the attachment of some of Sellner's properties because, as proven in court, Sellner was a wealthy man who had no reason to convey away Songco's property. The court also ordered Songco to pay damages to Sellner equivalent to the amount actually paid out by Sellner in procuring the dissolution of the attachment. Hence, the instant petition by Songco..

RULING: 

[CASE DIGEST] ILOILO BROTHERS v. ILOILO CITY (164 SCRA 607)

FACTS 

Iloilo Bottlers, a company engaged in the business of bottling softdrinks under the trade name of Pepsi Cola and 7-Up and selling the same to its customers, closed its plant in Muelle Loney in Iloilo City. It then transferred its bottling operations to its new plant in Barrio Ungca, Municipality of Pavia, Province of Iloilo.

However, even after the transfer of its plant, Iloilo Bottlers was still assessed by the Municipality of Iloilo for payment of municipal license tax in accordance with Ordinance No. 5. Iloilo Bottlers challenged the validity of the assessment, arguing that it was not liable for payment of the said tax because its bottling plant was already outside the jurisdication of the City of Iloilo.

The city instituted this petition before the SC after the CFI had ruled in favor of Iloilo Botters.

RULING

The Supreme Court ruled in favor of the City of Iloilo.

The tax imposed under Ordinance No. 5 is an excise tax. It is a tax on the privilege of distributing, manufacturing or bottling softdrinks. Being an excise tax, it can be levied by the taxing authority only when the acts, privileges or businesses are done or performed within the jurisdiction of said authority.

Specifically, the situs of the act of distributing, bottling or manufacturing softdrinks must be within city limits, before an entity engaged in any of the activities may be taxed in Iloilo City.

In the case at bar, sales were made by Iloilo Bottlers, Inc. in Iloilo City, which means that the company is definitely subject to the tax ordinance.

The lowdown on law school entrance exams in the Philippines: Getting in on the competition for slots in the 'Big 3' of Philippine law schools (part 2 of 4)

The lowdown on law school entrance exams in the Philippines: Getting in on the competition for slots in the 'Big 3' of Philippine law schools (part 2 of 4)

GETTING IN ON THE COMPETITION FOR SLOTS IN THE 'BIG 3' OF PHILIPPINE LAW SCHOOLS (PART 2 OF 4)

Still undecided on which law school to enroll in?

The top three law schools in the Philippines by reputation, quality of their alumni, and passing rate in the Bar exams are the College of Law of the University of the Philippines in Quezon City, the Ateneo School of Law in Makati, and the College of Law of the San Beda University in Manila. Each year these schools manage to attract graduates from all over the Philippines. As such, competition for slots in any of these schools is intense.

Among the three, the biggest crowd-drawer is the UP College of Law. By chance, it also happens to have the lowest admission rate. Every year thousands of applicants troop to UP Law's testing centers in UP Diliman, Cebu, and Davao for the annual Law Aptitude Exam or LAE. Of this number, only a handful are privileged enough to be chosen -- around 200 or so to comprise the next academic year's freshman batch. The rest? Well, there's always next year. Or other law schools, for that matter.

Of course one can argue about the quality of UP Law's alumni. Over the years, the institution has produced presidents, justices of the Supreme Court, countless legislators, public officials, and leading figures in the private sector. But at the same time, it's difficult not to take notice of the fact that many graduates of UP Law have not turned out so well in the conduct of their profession, with some of them ending up as corrupt leaders and others as characters of dubious reputation.

Still, the allure and grandeur of the unique UP brand of education beckons for many of the country's best minds, more so when the cost of UP education is put side by side with the tuition in other universities. At UP Law, the maximum cost per unit is P1,500, which is dirt-cheap when you think about it. This can even get lower depending on a student's bracket in the infamous STS system of the university.

Not to be outdone, of course, is the Ateneo School of Law in Rockwell, Makati. Entry to this university is just as tough, given the Jesuit-run school's reputation as a breeding ground for some of tomorrow's best lawyers. Ateneo graduates consistently top the annual Bar exams, which goes to show that its students have higher chances of acing, if not actually topping, what is generally considered as the world's toughest licensure exam for future lawyers.

Compared to other law schools, however, the Ateneo brand of education certainly does not come cheap. Perhaps the one word to describe it would be "prohibitive." As such, the claim that it is a learning institution dominated by students hailing from upper crust families is not exactly without basis, although to be fair, there are also a number of students from not so well-to-do families thriving on account of scholarships and financial aids.

Another force to be reckoned with in the field of legal education in the Philippines is the College of Law of the San Beda College (now University) in Manila. This school is known for its rigid indoctrination of codal provisions down to the tiniest detail. No wonder then that similar to UP Law and Ateneo, San Beda has one of the highest passing rates in the Bar.

There are of course a number of other state-run and private law schools in the Philippines. Together, however, the three schools mentioned above are often called the Big Three, precisely because they are on top of every prospective law student's choices.

[Next in the series: Prepping up your mind for the big day]

[CASE DIGEST] HEIRS OF IGNACIO v. HOME BANKERS SAVINGS & TRUST CO. (G.R. No. 177783)

January 23, 2013

Ponente: Villarama, Jr., J.

FACTS:

·         In August 1981, Judge Fausto C. Ignacio mortgaged two parcels of land in Cabuyao, Laguna to Home Savings Bank and Trust Company ("the bank"), the predecessor of respondent Home Bankers Savings and Trust Company, as security for the P500,000.00 loan extended to him by said bank. 

·         When Ignacio defaulted in the payment of his loan obligation, the bank proceeded to foreclose the real estate mortgage. At the foreclosure sale held in 1983, the bank was the highest bidder. Consequently, the Certificate of Sale issued to the bank was registered with the Registry of Deeds of Calamba, Laguna. With the failure of Ignacio to redeem the foreclosed properties within one year from such registration, title to the properties were consolidated in favor of the bank. 

·         Despite the lapse of the redemption period and consolidation of titles in the name of the bank, Ignacio offered to repurchase the properties. While the bank considered petitioner's offer to repurchase, there was no repurchase contract executed save for a letter dated March 22, 1984, where it was agreed that the total selling price shall be P950,000 in 3 equal installments after making a P150,000 deposit. The letter did not contain the signature of any of the bank's officers.

·         In the meantime, the bank subdivided the parcels of land into lots, some of which were sold to individual buyers. 

·         In 1989, Ignacio expressed his willingness to pay the amount of P600,000.00 in full, as balance of the repurchase price, and requested the bank to release to him the remaining parcels of land. The bank turned down his request, prompting Ignacio to cause the annotation of an adverse claim on the titles of the subject lots. 

·         Thereafter, Ignacio filed an action for specific performance and damages against the bank. Some of the buyers of the lots filed a motion for intervention to assert their status as innocent purchasers for value who had no notice or knowledge of the claim or interest of Ignacio when they bought the properties already registered in the name of the bank. 

·         The trial court ruled in favor of Ignacio and ordered the bank to, among others, execute the appropriate Deed of Reconveyance of the two (2) properties in favor of  Ignacio after he had paid in full the amount of P600,000.00 as balance of the repurchase price.

·         CA reversed the trial court's ruling. The CA held that by modifying the terms of the offer contained in the March 22, 1984, letter of the bank, Ignacio effectively rejected the original offer with his counter-offer. There was also no written conformity by any of the bank's officers to the amended conditions for repurchase which were unilaterally inserted by Ignacio. Consequently, no contract of repurchase was perfected and the bank acted well within its rights when it sold the subject properties. Hence, the instant petition.

RULING: