CTA Case No. 3434 (Decision)

I / l1.t.i lJULtl.. OJ 11 f~ ILU Pi J<'~ ~~URT OF 1 A~ AP.PEALS -- lL4 .. ft ' I Y Tf IL � vr a- .� n lint � ---- -- x- � - - hi s an pp 1 t p y pl 1 , ~lv rsit,y f y' r - in~o ut lector f tnt rn 1 � 6, 592. S plus s rc r years 1946 to �n �total sum of 14, 11. h t have rr OUGly or 11 g � CO-l C y t. d f� nt t � s nt., ln he platnt ff v r , 1n n court, ( i �.. ith r 0 t paid � �a ~ y ~s ro f � nc , tho pr cti n 11 i t \S; th GU of 1 .~ � he co pla , or1 in ly f i y e p n- tiff n the our I nt u 1, 1954, t on un t is .., Ul.'t . s cr by the enact nt of epublic ct "o. 1125, a d pur� ;; 10 I

c���lSI � ivll -� � s 't ,.. 1 2 c rtif e 'W an � . - 111.- a! ion. aident I uca- 1s yan y� t0 & �tut n � o ner er � t or ally nized 0 <:or� po at1on 1 c �t � to o tai y1 1 ec � X � h ver, t n te lla 1 li Y� .f. y tut ende -,'). 1 � .. X � I� I a a ~k cr = on� toe rp c i div tJd nt hie ra d �- t ,. i Y n I.s tu c �a ntver i y nc n �v~r ! y � tt Q 1 yas. Ace o r 01 d cute 0 e rpor � t! n, t p inti f c rpo ation -� t f ._,. r niz �rhat t e purpose for leh su~h corp� oration 1� formed s to ive to the !lip o youth auch traln!n nd nstruettcn ch ay ake t o l� ~ ared to y exercise the rights and to per r �- char � the duties and o ligation of ~ , patriot c an uaeful eltlzen, t � corpora� ,, 11 If

��� - lSI � Cebu Civ l -- � tion w ll ta effor � o t � s � ~c 1 nt f th r chnr ct � d an of Int rn 1 con� tax lla 111ty f to 19 � th rd to - co o t x exe vr 1 6 on e l 1nt f ot nt1tl to th p.r!Jaar ly fo und r ctl n 27 ) f th Y. tM nefit of de fen i% platr.tt f � t ur 0 .an ntereatc. � f h c t x o, u urc r 1 � i7 , 604. 77 194 .7 �� � �� � ' 7822 [) c r 17, 1951 1, 4, 60 . 77 2 ( X� ) r y � 1952 , 60 . 77 57972 ( ) pril � 1 :.>2 11.31 ~79 2 ( " � } y � 52 ot,t, ��� �� ���� ,, 12 I'

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- c ���I S !c. 1v 1 -- he nt e ch a. h l2 � ry J d cial c=t!o an � r y for 0f a:rc . 1, t o- cr axe f 0 sc d , an ;iuri ctlon v X' t � th n' pl tt � �� t u �- Xi in 1 0 y- 1, � 11 ct n of ln � juri t 'X cy .Y� A (o c � l , t } In f t.h :l'8 est f r �f~ u ic el t n fo t recovery o uy 29, , 60 ��� 2 � uy , 1 � � Ct t ay a I�

- iv 1 ..-3434 - 6� u vd 1 al l y, are of t in." on h � t c rt � of et1 () h d � l� ni 1: rf tn for roc n �� day, �1 � ourt c 1n � ' � 7 (;b a P n er r n 7( t t. p f l nt r n � hp 27 ( ) o the Tax 6 ro t pa tax because t corpora ion or anl&e enca operate ex 1 ~1 y � r ,, 15 14

- � u i vll � - 3434 - 7- �due t o 1 ~po � and no t o ts net e !nur to t b~n f t of ny pr v t s ckholder or 1rut1Y duel. t cont:r y , th d f d t cl s -~ rof � nd �t hat t pl� org n earnin nu � th n f ...t ts r nt, t ns Vicent � G l a � df n that the ff ot X pt fro. th p n of !nco t x. , In sup ort f b t t th pl t f or antt� fo prof t , t nd t tl faet t h t tn plaln �f � a 0f tn t re � o prov on o t f ect t t t � prof t or en tat .o , end th t alt ou h t p as lrat or n z 19 � d accor t tu scr rt o .r ar fl t .. h eorpor t n r. on- rof '" or z .. t1on o s n t c nv rt �t nto cor poration. v ctor on hould b cl s #f a ~f t or no � Pr t h ch r re tre y 1 corporatlo , rd 0 t ..,.. , � � o. L� 4, 1954) v- for pr - t ��� 1� � � , :t a en a n f t for diatr ut n n its stockho der � ( ollect r IP 16 1'3

. �a- Yt . V. � � ue t o l C rp r t � 247..., � In th t � � c ory p r.1 1 of t rtJcl f inc o o::- t1 n of h p~a t � ..f orpo at n \� uld re�dil y shew th t � t w s or r1 zed f r due t 1 rpos � ~n no oth r p�rpo � lcl. r v r , t � plaint f or on c nd the m r he D .t r � no C' .�.�. r tin, . !on to toe t ,.ts c nn to th u pt on . ct � o 27 ) t rn 1 on. t on o f t nt ff cor r t n n 1 1 not t S'tOC old r .... ach t I' p �nte.: t f th stockh lda.r d c t 1 ~f t c orpor tio, ic nt r $t v nt v n f .o c r- !) \; r i t n on ,f en r yt def n to plc nt �fi ' s <' -1 d r c � of r nt 1 4 l.neo t t 1nv Gt nt~ n other chc;; 1 lvc in � od, n, on an � u ty s n ln lc pl ' rof t lng p rp � � r , lcent 1$ ati t c- I ~- 17

�� !.SI iv l -- t r!l xpl i n d h t the ull as Col ii u s nut wn d y th pl � t �.f t r r nt ~as p~!d for ts uG nt to h~ o ner h r ~f . And s to the alleg d nv st . nt �n ot cho l!l, "'t ear9 t hat the pla "n iff doe$ not 'In n st n tho. but the s xe su rv d/or o� ned y t n s Vicente ~ lla$ (t. 5. n. pp. 45- 48). / ot ler r gu y t n nt s that all t he pr of t , rplus s ~ pr 3f � the pla int ff l l v ntu 11 o o tr. es dant , � Vicen 11 ho r ct e l y o n t n v r ty, upon exp t 1on of t c r orat x s enc � n u;ust 2~ . l l . h s ar gu t nt h lr y bo n n d t~ upre c ourt �n th c f oll ctor o �ntern 1 evenu vs . ' � ~. ncv E ~c tlonal C r Dt qn , 3 � 24 , 1/ :. 18

I tv 1 � - � 1 on�ety o rp s� ts t c allen ed. � � for� o 9 cons!aera� tiona, the pl ln ' f � J r by d cl (:! t fro the pay:ne t "f nco r .. c on '27 ( i�F the at na n od � d th n� ant 1� or G pl t . ""f l. l r pr CO! X rron usly y th d nt. ih .x sseac- nts i.s d fen nt er t year D 19 unt of c usiv of I.d ar h�~� y clare u 1 vo d , ' t� ut n �� !) co t � � , J nu y 22, l � 11 � 111 p ;' . 19