BEHN, MEYER & CO., H. MIJ., PLAINTIFF AND APPELLEE, VS. THE COLLECTOR OF INTERNAL REVENUE, DEFENDANT AND APPELLANT.

This is an appeal taken by the defendant Collector of Internal Revenue
from the judgment rendered by the Court of First Instance of Manila,
the dispositive part of which reads as follows:

“Wherefore,
judgment is rendered in favor of the plaintiff sentencing the defendant
to refund to said plaintiff the sum of twenty-eight thousand
ninety-four pesos and twelve centavos (P28,094.12), plus the legal
interest thereon from November 21, 1930, until fully paid, with the
costs. So ordered.”

In support of his
appeal, the appellant assigns six alleged errors as committed by the
trial court in its decision, which we shall discuss in the course of
this decision.

The pertinent facts necessary for the
solution of the questions raised in this appeal are stated in the
decision appealed from as follows:

“Upon
commencement of the hearing of this case, both parties agreed on their
respective personalities as alleged in paragraphs I and II of the
complaint and on the correctness of the facts relative to the alleged
payment under protest of the two sums of twenty-seven thousand
twenty-three pesos and twenty-eight centavos (P27,023.28) and one
thousand seventy pesos and eighty-four centavos (P1,070.84), or a total
of twenty-eight thousand ninety-four pesos and twelve centavos
(P28,094.12), made by the plaintiff to the defendant, as stated in
paragraph 6 of the complaint. They likewise agreed that Exhibit A
contains a correct statement of all the different transactions which
gave rise to the collection by the defendant of taxes paid by the
plaintiff under protest, which collection gave rise to the filing of
the complaint herein.

“Upon the evidence presented and in
view of the facts admitted by both parties, the court finds that the
plaintiff is a foreign corporation duly registered and authorized to do
business in the Philippines, with its principal office in the City of
Manila.

“During the year 1926 and from January to
September, 1927, the merchants named in Exhibit A sold one million four
hundred ninety-eight thousand three hundred seventy-two pesos and one
centavo (P1,498,372.01) worth of copra cake, as itemized in the said
Exhibit A, to Arnold Otto Meyer, a commercial firm of Hamburg, Germany,
on terms c. i. f. (cost, insurance and freight), Hamburg. The aforesaid
merchants paid the corresponding percentage tax on the sales made by
them as specified in the aforesaid Exhibit A.

“These facts
are admitted by the defendant who claims and maintains the theory that
the taxes collected by the Bureau of Internal Revenue from the
plaintiff herein were in conformity with law on the ground that two
independent sales covering the same merchandise (copra cake) took place
and therefore the Bureau of Internal Revenue was in duty bound and had
the right to collect the tax in question twice. The Bureau of Internal
Revenue maintains that the merchants named in Exhibit A first sold
their merchandise to the plaintiff firm which, in turn, sold the same
to Arnold Otto Meyer of Hamburg, Germany.

“Had the facts
really happened in accordance with the defendant’s theory, he would
have the right to collect the required tax twice. However, the evidence
does not show that said merchants sold their merchandise to the
plaintiff.

“The oral as well as the documentary evidence
presented by the plaintiff, under Exhibits B to XXX, clearly shows that
the merchants named in said Exhibit A sold their merchandise to Arnold
Otto Meyer of Hamburg, Germany, and not to the plaintiff corporation.
The greater part of the said exhibits consists of invoices issued by
the said merchants to the purchaser Arnold Otto Meyer of Hamburg,
Germany. Although all the invoices in question bear the same footnote
to the effect that payment thereof should be made through Behn, Meyer
& Co., H. Mij., of Manila, which is the plaintiff herein, such
footnote is nothing more than a mere indication of the method or
procedure to be followed by the purchaser Arnold Otto Meyer of Hamburg,
Germany, in making the payment due to the vendors, the merchants named
in Exhibit A.

“The court finds no evidence in support of
the defendant’s allegation that the plaintiff corporation bought the
quantities of copra cake specified in Exhibit A from the dealers named
therein and that the said plaintiff Behn, Meyer & Co., H. Mij.,
later sold the same copra cake to Arnold Otto Meyer of Hamburg, Germany.

“The
defendant contends that Exhibit 19 (copies of cablegrams exchanged
between the plaintiff and Arnold Otto Meyer of Hamburg, Germany)
consists of offers to sell certain quantities of copra cake at a
certain price a ton. The court does not concur in this opinion of the
defendant and holds that the cablegrams constituting Exhibit 19 are
mere Quotations on copra cake prevailing in Manila on the respective
dates thereof. These support the plaintiff’s testimony to the effect
that it merely acted as agent or intermediary between the German firm
and the copra cake dealers in Manila and explain why the invoices,
Exhibits A to XXX issued by the respective vendors bear a footnote to
the effect that payments should be made through the plaintiff in
Manila, which acted as intermediary between the local vendors and the
purchaser in Germany.

“The defendant further contends that
the item under the heading ‘Arnold Otto Meyer’s Suspense Account’ found
in the plaintiff’s account books supports his theory that the said
plaintiff sold the copra cake, which it had purchased from the local
merchants, to Arnold Otto Meyer of Hamburg, Germany. The court finds
that the evidence of the defendant in this case does not support his
assertion. Even granting that the books of the plaintiff show that it
has realized some profit or was benefited by reason of its intervention
in the sale of copra made by the merchants named in Exhibit A to Arnold
Otto Meyer of Hamburg, Germany, such alleged profits or benefits, if
they actually exist, would not be subject to the percentage tax
collected by the defendant from the plaintiff, but to another tax, the
Income Tax, for instance.

“Wherefore, the court holds that
the evidence in the case at bar shows that there has been only one
contract of sale of copra cake entered into by the merchants named in
Exhibit A, as vendors, and Arnold Otto Meyer of Hamburg, Germany, as
vendee; that there has been no contract of sale of copra cake between
the merchants named in Exhibit A, as vendors, and the herein plaintiff,
as vendee, and that neither has there been any other contract of sale
of the same copra cake between the plaintiff, as vendor, and Arnold
Otto Meyer of Hamburg, Germany, as vendee. In conformity with this
conclusion, the court declares that the tax collected by the defendant
from the plaintiff, which the latter seeks to recover in this action,
is illegal.”

In the case of Atkins, Kroll & Co. vs. Posadas (48 Phil., 352, 359), cited favorably in the case of Sy Yoco vs. Collector of Internal Revenue (49 Phil., 136), this court laid down the following doctrine:

“We
are clearly of the opinion that the Government has no legal right to
levy and collect the same tax from two different persons on one
consignment abroad on one shipment of the same copra.”

In the case at bar, the defendant-appellant, after having collected a
tax from the vendors of copra cake, who shipped and consigned the same
direct to Arnold Otto Meyer at Hamburg, Germany, seeks to collect the
same tax on the very same shipment from the herein plaintiff-appellee
Behn, Meyer & Co., H. Mij., to which, it is claimed, the
merchandise in question had been sold and which, in turn, sold it at a
profit to Arnold Otto Meyer at Hamburg, Germany. In other words, he
seeks to collect a double tax on the same shipment consigned abroad,
from two different persons, which is contrary to the afore-cited
doctrine laid down by this court.

With respect to that
portion of the judgment allowing interest and costs against the
defendant-appellant Collector of Internal Revenue, the
plaintiff-appellee itself admits that it is erroneous, according to the
doctrine laid down by this court in the cases of Hongkong &
Shanghai Banking Corporation vs. Rafferty (39 Phil., 145), and Murphy vs. Trinidad (44 Phil., 649).

Wherefore, with the sole modification that the pronouncement as to
interest and costs be eliminated from the dispositive part of the
judgment appealed from, the same is hereby affirmed in all other
respects, without special pronouncement as to costs. So ordered.

Avanceña, C. J., Malcolm, Hull, and Imperial, JJ., concur.