Bank Of The Philippine Islands v. Trinidad

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 20780 November 9, 1923 BANK OF THE PHILIPPINE ISLANDS, plaintiff-appellant, vs. WENCESLAO TRINIDAD, as Collector of Internal Revenue, defendant-appellee. Hartigan and Welch for appellant. Attorney-General Villa-Real for appellee.

STATEMENT The plaintiff is a domestic banking corporation, with its principal office and place of business in the City of Manila, operating under a special character granted by the Philippine Legislature, known as Act No. 1790. The defendant is the duly appointed, qualified, and acting Collector of Internal Revenue of the Philippine Islands. For cause of action, plaintiff alleges that article 26 of its Character provides: The bank shall be held to renounce all claim to the exclusive privilege of issuing notes in the Philippine Islands, or to any other exclusive privilege not set forth in this Act; but no laws or regulations shall be made or enforced affecting the bank, or imposing charges or taxation upon it, which shall not apply equally to other banks of a similar type operating under similar conditions, and no bank shall be authorized to issue circulating notes in the Philippine Islands with a paid-up capital less than two million pesos; but this provision shall not preclude the Government from granting special privileges to agricultural banks, savings banks, mortgage banks, or other institutions of special types whose principal business is not commercial banking.

That after it was granted by Act No. 2612 on February 4, 1916, Legislature of the Philippine Islands granted a charter to the Philippine National Bank, by section 18 of which authority is given the bank to issue circulating notes and that in such section it was provided that: . . .

Said circulating notes shall be exempt from any and all taxes levied or assessed by the Philippine Government, or any department, division or subdivision thereof. That, through the Collector of Internal Revenue, the Government has always claimed and exercised the right to collect from the plaintiff internal revenue taxes upon its circulating notes issued by the plaintiff under the authority of its charter for one-twelfth of one per cent upon the average amount of its circulation, and compelled the plaintiff to pay such taxes, and that it has paid such taxes; that the enactment of the provisions of article 26 above quoted was in violation of the contract entered into between the plaintiff and the Philippine Government; that the defendant has not collected taxes upon the circulation of the Philippine National Bank, and that, by reason of the fact above stated, the plaintiff was and is entitled to the same exemptions and privileges as the Philippine National Bank, it being a bank of similar type and operating under similar conditions; that the defendant wrongfully and unlawfully demanded and collected from the plaintiff upon its circulation the following sums upon the following dates, to wit: On October 27, 1919, the sum of .....................................

P15,170.72 On April 30, 1920, the sum of ............................................ 20,884.75 On October 30, 1920 the sum of ..................................... 22,415.58 On April 30, 1921, the sum of ...........................................

22,460.00 On October 31, 1921, the sum of ..................................... 22,458.56