MELECIO R.

DOMINGO
vs.
HON. LORENZO C. GARLITOS and SIMEONA K. PRICE
FACTS:
In Domingo vs. Judge Moscoso, SC declared as final and executory the order of CFI of Leyte for the
payment of estate and inheritance taxes, charges and penalties amounting to P40,058.55 by the
estate of the private respondents late husband Walter Scott Price. In order to enforce the claims
against the estate, a petition for execution was filed by the fiscal. However, the lower court denied
said petition. The court held that the execution is not justifiable as the government is indebted to the
estate under administration in the amount of P262,200 and ordered the amount of inheritance taxes
be deducted from the governments indebtedness to the estate.
ISSUE:
Whether or not the compensation/set-off of debt and tax is proper.
RULING:
Yes. Both the claim of the government for the inheritance taxes and the claim of the intestate for
services rendered have already become overdue and demandable is well as fully liquidated.
Compensation therefore takes place by operation of law. In accordance with the provision of Articles
1279 and 1290 of the Civil Code and both debts are distinguished to the concurrent amount. Thus,
Art. 1200 provides that When all the requisites mentioned in article 1279 are present, compensation
takes effect by operation of law, and extinguished both debts to the concurrent amount, even though
the creditors and debtors are not aware of the compensation. It is clear, therefore, that the petitioner
has no clear right to execute the judgment for taxes against the estate of the deceased Walter Scott
Price.

SILVESTER M. PUNSALAN, ET AL
vs.
THE MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL.
FACTS:
The suit was commenced by 2 lawyers, a medical practitioner, a public accountant, a dental surgeon
and a pharmacist, purportedly "in their own behalf and in behalf of other professionals practicing in
the City of Manila who may desire to join it." assail Ordinance No. 3398 together with the law
authorizing it (Section 18 of the Revised Charter of the City of Manila). The ordinance imposes a
municipal occupation tax on persons exercising various professions in the city and penalizes nonpayment of the same. The law authorizing said ordinance empowers the Municipal Board of the city
to impose a municipal occupation tax on persons engaged in various professions. Petitioners, having
already paid their occupation tax under section 201 of the National Internal Revenue Code, paid the
tax under protest as imposed by Ordinance No. 3398. The lower court declared the ordinance invalid
and affirmed the validity of the law authorizing it.
ISSUE
Whether or Not the ordinance and law authorizing it constitute class legislation, and authorize what
amounts to double taxation.
HELD
The Legislature may, in its discretion, select what occupations shall be taxed, and in its discretion
may tax all, or select classes of occupation for taxation, and leave others untaxed. It is not for the
courts to judge which cities or municipalities should be empowered to impose occupation taxes
aside from that imposed by the National Government. That matter is within the domain of political
departments. The argument against double taxation may not be invoked if one tax is imposed by the
state and the other is imposed by the city. It is widely recognized that there is nothing inherently
terrible in the requirement that taxes be exacted with respect to the same occupation by both the
state and the political subdivisions thereof. Judgment of the lower court is reversed with regards to
the ordinance and affirmed as to the law authorizing it.