Dison v. Posadas Digest

Dison v. Posadas

G.R. No. 36770 November 4, 1932

Butte, J.:

Facts:

1. Plaintiff Luis Dison filed a suit against CIR to recover inheritance tax paid under protest amounting to P2,808.73. Felix Dison, plaintiff's father executed  a deed of gift which transferred 22 tracts of land, reserving to himself during his lifetime the usufruct of 3 tracts. The donation was formally accepted by plaintiff.

2. The plaintiff (herein petitioner) alleged in his complaint that the tax is illegal since he received the property by a deed of gift inter vivos duly accepted and registered before the death of his father. He also contended that Act 2601 being an inheritance tax statute, does not tax gifts. The defendant answered in general denial with a countermand. The court dismissed the countermand. Both sides appealed, but the CIR appeal was dismissed.

Issue: Whether or not the gifts inter vivos are taxable (inheritance tax)

YES.

Inheritance tax is imposed upon the gift inter vivos that plaintiff received from his father as this was really an advancement upon the inheritance to which he would be entitled upon the death of the latter. Sec. 1540 of the Administrative Code did not tax gifts per se but only those which are made to those who shall prove to be heirs, devisees, legatees and donees mortis causa of the donor. The term 'heirs' include those given the status of heirs irrespective of the quantity of property they may receive as such.

Vidal de Roces vs. Posadas Digest

Vidal de Roces v. Posadas

G.R. No. 34937 March 13, 1933

Imperial, J.:

Facts:

1. Sometime in 1925, plaintiffs Concepcion Vidal de Roces and her husband, as well as one Elvira Richards, received as donation several parcels of land from Esperanza Tuazon. They took possession of the lands thereafter and likewise obtained the respective transfer certificates.

2.The donor died a year after without leaving any forced heir. In her will, which was admitted to probate, she bequeathed to each of the donees the sum of P5,000. After the distribution of the estate but before the delivery of their shares, the CIR (appellee) ruled that plaintiffs as donees and legatees should pay inheritance taxes. The plaintiffs paid the taxes under protest.

3. CIR filed a demurrer on ground that the facts alleged were not sufficient to constitute a cause of action. The court sustained the demurrer and ordered the amendment of the complaint but the appellants failed to do so. Hence, the trial court dismissed the action on ground that plaintiffs, herein appellants, did not really have a right of action.

4. Plaintiffs (appellant) contend that  Sec. 1540 of the Administrative Code does not include donation inter vivos and if it does, it is unconstitutional, null and void for violating SEC. 3 of the Jones Law (providing that no law shall embrace more than one subject and that the subject should be expressed in its titles ; that the Legislature has no authority to tax donation inter vivos; finally, that said provision violates the rule on uniformity of taxation.

5. CIR however contends that the word 'all gifts'  refer clearly to donation inter vivos and cited the doctrine in Tuason v. Posadas.

Issue: Whether or not the donations should be subjected to inheritance tax

YES. Sec. 1540 of the Administrative Code clearly refers to those donation inter vivos that take effect immediately or during the lifetime of the donor, but made in consideration of the death of the decedent. Those donations not made in contemplation of the decedent's death are not included as it would be equivalent to imposing a direct tax on property and not on its transmission.

The  phrase 'all gifts' as held in Tuason v. Posadas refers to gifts inter vivos as they are considered as advances in anticipation of inheritance since they are made in consideration of death.