Municipality Of Opon v. Caltex

SANCHEZ, J.:

Suit lodged in 1956 to recover P37,050.00 in municipal license taxes paid for the years 1950-1955. The Cebu court dismissed the complaint. 1 The Court of Appeals modified, allowed recovery of P27,900.00.

2 Petitioners - defendants below - came to this Court on appeal. The facts, the Court of Appeals found, are: "Plaintiff-appellant Caltex (Philippines) Inc., is a domestic corporation engaged in the business of importing, distributing and selling gasoline, kerosene and other petroleum products. For the purpose of storing its imported petroleum products it has an establishment called 'Caltex Opon Terminal' located in the Municipality of Opon, Cebu.

In addition, the said 'Caltex Opon Terminal' has a tin can factory whereby plaintiff-appellant manufactures 5-gallon tin cans for its use in the sale and distribution of its petroleum products. Pursuant, however, to a service agreement dated August 1, 1946 and entered into between plaintiff-appellant and Tidewater Associated Oil Company (hereinafter called Tidewater), plaintiff-appellant agreed to arrange, within its ability to do so, in drum and package factories owned and operated by it, to manufacture, supply and/or fill cans and drums for Tidewater, provided the latter reimburses herein plaintiff-appellant for all cost and expense caused thereby, plus three (3%) per cent of such cost and expense. From 1950 to 1955, plaintiff-appellant tin can factory at its 'Caltex Opon Terminal' manufactured 8,037,775 tin cans out of which 6,883,429 were used for the sale and distribution of its own products and 1,154,346 tin cans were delivered to Tidewater by virtue of the service agreement abovementioned.

An annual breakdown of the foregoing figures is provided by Exhibit '1' and plaintiff-appellant's brief, as follows: Year Used by Caltex Delivered to Tidewater Total Tins Manufactured Percentage for Tidewater 1950 1,115,839 153,674 1,269,513 12.014% 1951 1,346,091 196,527 1,542,618 12.739% 1952 1,141,645 131,276 1,272,921 10.312% 1953 1,152,559 213,612 1,366,171 15.635% 1954 1,026,549 209,848 1,236,397 16.972% 1955 1,100,746 249,409 1,350,155 18.472%