PABLO LORENZO, as trustee of the estate of Thomas Hanley v.

JUAN POSADAS, JR., Collector of Internal Revenue. G.R. No. L-

43082. June 18, 1937
FACTS:

Thomas Hanley died, leaving a will and considerable amount of real and personal properties. The
will bequeathed Matthew Hanley, Thomas' nephew, the money and the real estate. Also stipulated
was that the property will only be given ten years after Thomas' death.

The CFI appointed PJM Moore as considered trustee to administer the real properties. Moore acted
as trustee until he resigned and Pablo Lorenzo was appointed in his stead.

Juan Posadas, the CIR, assessed inheritance tax against the estate amounting to P2,057.74. Lorenzo
paid the tax after he was ordered by the CFI due to the CIR's motion. Lorenzo claimed that the
inheritance tax should have been assessed after 10 years and asked for a refund.

The CIR denied the protest and reassessed Lorenzo of P1,191.27 which represents interest due on the
tax and which was not included in the original assessment. However, the CFI dismissed this
counterclaim and also denied Lorenzo’s claim for refund against the CIR, thus the case.

ISSUES :Whether the estate was delinquent in paying the inheritance.

Whether the inheritance tax be computed from its value ten years later.
Whether the compensation of the trustees should be part of the estate subject to tax.

RULING:

YES. The delinquency in payment occurred when Moore became trustee. The interest due should be
computed from that date and it is error of Lorenzo to compute it one month later. A surcharge 25 per
centum should be added to the tax and interest due and unpaid within ten days after the date of
notice. The CIR communicated with Moore and a date was fixed. As the tax and interest due were not
paid on that date, the estate became liable for the payment of the surcharge.

NO. The Court held that a transmission by inheritance is taxable at the time of the predecessor's
death, notwithstanding the postponement of the actual possession or enjoyment of the estate by the
beneficiary, and the tax measured by the value of the property transmitted at that time regardless of
its appreciation or depreciation.

NO. A trustee, no doubt, is entitled to receive a fair compensation for his services . But from this it
does not follow that the compensation due him may lawfully be deducted in arriving at the net value
of the estate subject to tax

RABADILLA vs. CA

June 29, 2000

FACTS:

In a Codicil appended to the Last Will and Testament of testatrix Aleja Belleza, Dr.
Jorge Rabadilla, predecessor-in-interest of the herein petitioner, Johnny S. Rabadilla, was
instituted as a devisee of parcel of land. The Codicil provides that Jorge Rabadilla shall have
the obligation until he dies, every year to give Maria Marlina Coscolluela y Belleza, (75) (sic)
piculs of Export sugar and (25) piculs of Domestic sugar, until the said Maria Marlina
Coscolluela y Belleza dies.

Dr. Jorge Rabadilla died. Private respondent brought a complaint, to enforce the
provisions of subject Codicil.

ISSUE:

WON the obligations of Jorge Rabadilla under the Codicil are inherited by his heirs.

HELD:

Under Article 776 of the NCC, inheritance includes all the property, rights and
obligations of a person, not extinguished by his death. Conformably, whatever rights Dr.
Jorge Rabadilla had by virtue of subject Codicil were transmitted to his forced heirs, at the
time of his death. And since obligations not extinguished by death also form part of
the estate of the decedent; corollarily, the obligations imposed by the Codicil on the
deceased Dr. Jorge Rabadilla, were likewise transmitted to his compulsory heirs upon his
death.