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Maimai

The document discusses a case involving Tambunting Pawnshop being assessed documentary stamp taxes by the BIR on pawn tickets issued to customers. Tambunting argued that pawn tickets are receipts, not contracts of pledge, so they are not subject to documentary stamp tax. However, the CIR argued that pawn tickets evidence pledges made in pawnshop transactions, making the pawnshop liable for the tax. The suggested answer explains that a pledge requires possession of the pledged item, and issuing a pawn ticket transfers possession to the pawnshop, constituting a pledge contract subject to tax.

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153 views3 pages

Maimai

The document discusses a case involving Tambunting Pawnshop being assessed documentary stamp taxes by the BIR on pawn tickets issued to customers. Tambunting argued that pawn tickets are receipts, not contracts of pledge, so they are not subject to documentary stamp tax. However, the CIR argued that pawn tickets evidence pledges made in pawnshop transactions, making the pawnshop liable for the tax. The suggested answer explains that a pledge requires possession of the pledged item, and issuing a pawn ticket transfers possession to the pawnshop, constituting a pledge contract subject to tax.

Uploaded by

Jonathan Clarus
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name: Leizyl Mae Galia

Case Title: G.R. No. 171138 - H. TAMBUNTING PAWNSHOP, INC. v. COMMISSIONER OF


INTERNAL REVENUE, April 7,2009
Topic: Special Contracts
Sub-topic: Pledge
Principle: A pledge is a real contract, hence, it is necessary in order to constitute the
contract of pledge, that the thing pledged be placed in the possession of the creditor, or
of a third person by common agreement.15 Consequently, the issuance of the pawn
ticket by the pawnshop means that the thing pledged has already been placed in its
possession and that the pledge has been constituted.

Question:
Tambunting is a pawnshop. It was issuing pawn tickets to its pawners. The BIR,
in its assessment, found that Tambunting had a deficiency tax of about 50,000 for failure
to pay documentary stamp tax. BIR found that Tambunting was not paying
Documentary stamp taxes on the pawn tickets.

Tambunting filed its written protest to the assessment notice alleging that it was
not subject to documentary stamp tax under Section 195 of the National Internal
Revenue Code (NIRC) because documentary stamp taxes were applicable only to pledge
contracts, and the pawnshop business did not involve contracts of pledge.

Further, they argued that it is the document evidencing a pledge of personal property
which is subject to the DST. A pawn ticket is defined under Section 3 of Presidential
Decree No. 114 as "the pawnbroker's receipt for a pawn [and] is neither a security nor a
printed evidence of indebtedness." Tambunting argues that since the document taxable
under Section 195 must show the existence of a debt, a pawn ticket which is merely a
receipt for a pawn is not subject to DST

On the other hand, the CIR, through the Office of the Solicitor General, argues
that Section 195 of the NIRC expressly provides that a documentary stamp tax shall be
collected on every pledge of personal property as a security for the fulfillment of the
contract of loan. Since the transactions in a pawnshop business partake of the nature of
pledge transactions, then pawn transactions evidenced by pawn tickets, are subject to
documentary stamp taxes.

The CIR further argues that the pawn ticket is the pledge contract itself and thus, it is
subject to documentary stamp tax.

a. What is a pledge?
b. Is a pawn ticket an evidence of pledge making Tambunting liable for DST?

Suggested Answer:
A.) A pledge is an accessory, real and unilateral contract by virtue of which the
debtor or a third person delivers to the creditor or to a third person movable
property as security for the performance of the principal obligation, upon
fulfillment of which the thing pledged, with all its accessions and accessories,
shall be returned to the debtor or to the third person.
B.) The pawn ticket is the document that evidences the pledge. True, the pawn
ticket is neither a security nor a printed evidence of indebtedness. But, precisely
being a receipt for a pawn, it documents the pledge. A pledge is a real contract,
hence, it is necessary in order to constitute the contract of pledge, that the thing
pledged be placed in the possession of the creditor, or of a third person by
common agreement. Consequently, the issuance of the pawn ticket by the
pawnshop means that the thing pledged has already been placed in its
possession and that the pledge has been constituted.

CONTRIBUTOR: Leizyl Mae R. Galia


TOPIC: Special Contracts
SUBTOPIC: Guaranty
CASE TITLE: Jose C. Tupaz Iv And Petronila C. Tupaz Vs The Court Of Appeals And BPI
G.R. No. 145578
PRINCIPLE: (1) Excussion is not a pre-requisite to secure judgment against a guarantor.
The guarantor can still demand deferment of the execution of the judgment against him
until after the assets of the principal debtor shall have been exhausted. (2) Excussion
may be waived.

Question:

In a dorsal portion of a Trust Receipt contains:

To the Bank of the Philippine Islands


 
In consideration of your releasing to under the terms of this Trust Receipt
the goods described herein, I/We, jointly and severally, agree and
promise to pay to you, on demand, whatever sum or sums of money
which you may call upon me/us to pay to you, arising out of, pertaining
to, and/or in any way connected with, this Trust Receipt, in the event of
default and/or non-fulfillment in any respect of this undertaking on the
part of the said . I/we further agree that my/our liability in this guarantee
shall be DIRECT AND IMMEDIATE, without any need whatsoever on your
part to take any steps or exhaust any legal remedies that you may have
against the said . before making demand upon me/us.
The above Trust Receipt was signed by Jared Leto in his personal capacity as the
same did not indicate his corporate position as the VP for Operations of Gotham
Armaments Inc. The trust receipt executed evidenced an obligation to bind himself to
sell the goods covered by a letter of credit and to remit the proceeds to BPI if sold, or to
return the goods, if not sold, on or before 29 December 1981. Failing to comply with the
undertaking, demand letters were sent by the bank until indeed the Corporation finally
replied that they couldn’t comply due to the Armed Forces (the buyer of the goods)
failed to pay the purchase price. A case for Estafa was filed. Trial ensued and the court
found Jared Leto liable to pay the debt obligation of Gotham Corporation.

On appeal, Jared Leto vehemently denied the liability as he cannot be made


personally liable to pay an obligation of the Corporation. In addition, he contended that
even granting that he is personally liable, being merely a guarantor, he cannot be sued
directly for the corporation’s debt, raising the provisions of law pertaining to the
guarantor’s remedy under the Benefit of Excussion which relates to the exhaustion of
the principal debtor’s property first before a guarantor answers the liability he
guarantees.

With the tenor of the promissory note abovestated, is Jared Leto correct in his
contention?

SUGGESTED ANSWER:

No,

Under Art. 2058 of the Civil Code, the guarantor cannot be compelled to pay the
creditor unless the latter has exhausted all the property of the debtor, and has resorted
to all the legal remedies against the debtor.

However, excussion is not a pre-requisite to secure judgment against a


guarantor. The guarantor can still demand deferment of the execution of the judgment
against him until after the assets of the principal debtor shall have been exhausted.
Second, the benefit of excussion may be waived.

In the case at bar, it was clearly stipulated in the trust receipt that Jared Leto
waived excussion when he agreed that his liability in the guaranty shall be DIRECT AND
IMMEDIATE, without any need whatsoever on the part of BPI to take any steps or
exhaust any legal remedies. The clear import of this stipulation is that Jared Leto waived
the benefit of excussion under his guarantee.

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