GR 44579; (December, 1938) (Digest)
G.R. No. 44579 . December 24, 1938.
JULIAN E. TUASON, plaintiff-appellee, vs. LA PREVISORA FILIPINA, Mutual Building and Loan Association, defendant-appellant.
FACTS
Plaintiff Julian E. Tuason was a stockholder of defendant La Previsora Filipina, a mutual building and loan association. On February 15, 1932, he subscribed to 50,000 installment shares. The defendant prepared the corresponding stock certificate (No. 8463) and notified Tuason it was available for pickup. However, the defendant did not affix the required documentary stamps to the certificate. On August 1, 1932, the Collector of Internal Revenue discovered this omission and demanded payment of the stamp tax from the defendant. Subsequently, due to Tuason’s failure to pay the remaining installments, the defendant’s board declared the shares forfeited in December 1932. In March 1934, the defendant demanded that Tuason reimburse it for the stamp tax it paid. The stamps were only physically affixed and cancelled on the certificate stub by a revenue committee on April 25, 1934, long after the forfeiture.
ISSUE
Whether Tuason is obligated to reimburse the defendant for the value of the documentary stamps affixed to the stock certificate.
RULING
No. The Supreme Court affirmed the trial court’s judgment in favor of Tuason. The Court held: (1) The mere preparation and signing of a stock certificate, without affixing the required documentary stamps, does not constitute an “issue” of the certificate, even if the subscriber is notified of its availability. (2) A subscriber is not liable for the documentary stamp tax unless he expressly agreed to assume its payment. (3) Even assuming such an agreement existed, Tuason’s obligation was extinguished when his right to the shares was forfeited in December 1932, which occurred before the stamps were actually affixed in April 1934. The cause (the right to the shares) having ceased, the effect (the obligation to pay the tax) could not arise.
AI Generated by Armztrong.