GR L 8255; (July, 1957) (Digest)
G.R. No. L-8255; July 11, 1957.
CITY OF MANILA, plaintiff-appellee, vs. BUGSUK LUMBER CO., defendant-appellant.
FACTS
The Bugsuk Lumber Company, Inc., a domestic corporation with its principal office in Manila and a field office in Palawan, was organized to engage in the lumber business, including buying, selling, and sawing lumber, and acquiring lumber concessions. In 1951 and the first three quarters of 1952, the company sold lumber to various firms in Manila. The City of Manila, through its Treasurer, demanded payment from the company for license and mayor’s permit fees pursuant to City Ordinances Nos. 3420, 3364, and 3000, claiming the company was engaged in wholesale and retail sales of timber products without the required licenses. The company refused to pay, arguing it was a producer of logs, not a dealer, and had paid other taxes like timber license fees, privilege tax, sales tax, and municipal licenses in Palawan, so the city’s fees would constitute double taxation. The City Fiscal filed a complaint. The Municipal Court ruled for the City, and the Court of First Instance affirmed, holding the company engaged in wholesale and retail transactions in Manila and that the imposition did not constitute double taxation. The company appealed to the Supreme Court.
ISSUE
Whether the Bugsuk Lumber Company, maintaining a principal office in Manila where it receives orders and accepts payments for its products, is a “dealer” subject to the license tax and permit fees under the cited Manila city ordinances.
RULING
No. The Supreme Court reversed the lower court’s decision. The Court held that the company is a producer, not a dealer. A dealer is defined as one who buys to sell again, acting as a middleman between producer and consumer. The company sold the produce from its own concession in Palawan. Merely having a principal office in Manila to facilitate transactions, receive orders, and accept payments does not transform that office into a “store” where goods are kept for sale, which is a necessary element for being considered a dealer. The Court cited its precedent in Central Azucarera de Don Pedro vs. City of Manila, which held that a manufacturer who sells its products from its central office and warehouses, but does not maintain stores for selling, is not engaged in the business of selling as a dealer. Therefore, the appellant company is exempt from the license and permit fees sought by the City of Manila.