Sunday, February 05, 2012

Imperial vs. Collector

Facts: Domingo Imperial owned a nine-door camarin in Albay, which he leased out and collected rentals amounting to 6,240 pesos annually.

The Collector of Internal Revenue assessed Imperial a real estate dealer's tax for the years 1946 to 1950. The tax laws at the time defined “real estate dealer” as any person engaged in the business of buying, selling, exchanging, leasing or renting property on his own account as principal and holding himself out as a full or part time dealer in real estate or as owner of rental property or properties rented or offered to rent.

Imperial was at the time serving as a Senator of the Republic, and later on as a minister in a foreign country, Justice of the Court of Appeals, and finally appointed as a Commissioner of the COMELEC. He argued that he was not engaged in the business of a real estate dealer.

Issue: Whether or not Imperial was engaged in the business of a real estate dealer.

Held: No. To engage is to embark on a business or to employ oneself therein. The word “engaged” connotes more than a single act or a single transaction – it involves some continuity of action.

To “engage in business” is uniformly construed as signifying to follow the employment or occupation which occupies time, attention and labor for the purpose of livelihood or profit.

The expression “engage in business,” “carrying on business” or “doing business” do not have different meanings but separately or connectedly convey the idea of progression, continuity or sustained activity, and “engaged in business” means occupied or employed in business. “Carrying on business” does not mean the performance of a single disconnected act but means conducting, prosecuting and continuing business by performing progressively all the acts normally incident thereto, while “doing business” conveys the idea of business being done, not from time to time, but all the time.

Under the circumstances, the Court found that while Imperial was engaged in leasing real estate, the act of leasing his only camarin was an isolated transaction and as he was at that time occupied in holding an office under the Philippines Government which required the greater part of this time and attention, therefore he was not engaged in the business of dealing in real estate.

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