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Const it ut ion St a t ut es Exec ut ive Issua nc es Judic ia l Issua nc es Ot her Issua nc es Jurisprudenc e Int erna t iona l Lega l Resourc es
AUSL Exc lusive

Republic of t he Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-34937 March 13, 1933

CONCEPCION VIDAL DE ROCES and her husband,

MARCOS ROCES, and ELVIRA VIDAL DE RICHARDS, plaint iff-appellant s,
vs.
JUAN POSADAS, JR., Collector of Internal Revenue, defendant -appellee.

Feria and La O for appellants.

Attorney-General Jaranilla for appellee.

IMPERIAL, J.:

T he plaint iffs herein brought t his act ion to recover from t he defendant , Collector of Int ernal Revenue, cert ain
sums of money paid by t hem under prot est as inherit ance t ax. T hey appealed from t he judgment rendered by
t he Court of First Inst ance of Manila dismissing t he act ion, wit hout cost s.

On March 10 and 12, 1925, Esperanza Tuazon, by means of public document s, donat ed cert ain parcels of land
sit uat ed in Manila to t he plaint iffs herein, who, wit h t heir respect ive husbands, accept ed t hem in t he same
public document s, which were duly recorded in t he regist ry of deeds. By virt ue of said donat ions, t he plaint iffs
took possession of t he said lands, received t he fruit s t hereof and obt ained t he corresponding t ransfer
cert ificat es of t it le.

On January 5, 1926, t he donor died in t he Cit y of Manila wit hout leaving any forced heir and her will which was
admit t ed to probat e, she bequeat hed to each of t he donees t he sum of P5,000. Aft er t he est at e had been
dist ribut ed among t he inst it ut ed legat ees and before delivery of t heir respect ive shares, t he appellee herein, as
Collector of Int ernal Revenue, ruled t hat t he appellant s, as donees and legat ees, should pay as inherit ance t ax
t he sums of P16,673 and P13,951.45, respect ively. Of t hese sums P15,191.48 was levied as t ax on t he donat ion
to Concepcion Vidal de Roces and P1,481.52 on her legacy, and, likewise, P12,388.95 was imposed upon t he
donat ion made to Elvira Vidal de Richards and P1,462.50 on her legacy. At first t he appellant s refused to pay t he
aforement ioned t axes but , at t he insist ence of t he appellee and in order not to delay t he adjudicat ion of t he
legacies, t hey agreed at last , to pay t hem under prot est .

T he appellee filed a demurrer to t he complaint on t he ground t hat t he fact s alleged t herein were not sufficient
to const it ut e a cause of act ion. Aft er t he legal quest ions raised t herein had been discussed, t he court
sust ained t he demurrer and ordered t he amendment of t he complaint which t he appellant s failed to do,
whereupon t he t rial court dismissed t he act ion on t he ground t hat t he afore- ment ioned appellant s did not
really have a right of act ion.

In t heir brief, t he appellant s assign only one alleged error, to wit : t hat t he demurrer int erposed by t he appellee
was sust ained wit hout sufficient ground.

T he judgment appealed from was based on t he provisions of sect ion 1540 Administ rat ive Code which reads as
follows:

SEC. 1540. Additions of gifts and advances. — Aft er t he aforement ioned deduct ions have been made, t here
shall be added to t he result ing amount t he value of all gift s or advances made by t he predecessor to any
t hose who, aft er his deat h, shall prove to be his heirs, devisees, legat ees, or donees mortis causa.

T he appellant s cont end t hat t he above-ment ioned legal provision does not include donat ions inter vivos and if it
does, it is unconst it ut ional, null and void for t he following reasons: first , because it violat es sect ion 3 of t he
Jones Law which provides t hat no law should embrace more t han one subject , and t hat subject should be
expressed in t he t it le t hereof; second t hat t he Legislat ure has no aut horit y to impose inherit ance t ax on
donat ions inter vivos; and t hird, because a legal provision of t his charact er cont ravenes t he fundament al rule of
uniformit y of t axat ion. T he appellee, in t urn, cont ends t hat t he words "all gift s" refer clearly to donat ions inter
vivos and, in support of his t heory, cit es t he doct rine laid in t he case of Tuason and Tuason vs. Posadas (54 Phil.,
289). Aft er a careful st udy of t he law and t he aut horit ies applicable t hereto, we are t he opinion t hat neit her
t heory reflect s t he t rue spirit of t he aforement ioned provision. T he gift s referred to in sect ion 1540 of t he
Revised Administ rat ion Code are, obviously, t hose donat ions inter vivos t hat t ake effect immediat ely or during
t he lifet ime of t he donor but are made in considerat ion or in cont emplat ion of deat h. Gift s inter vivos, t he
t ransmission of which is not made in cont emplat ion of t he donor's deat h should not be understood as included
wit hin t he said legal provision for t he reason t hat it would amount to imposing a direct t ax on propert y and not
on t he t ransmission t hereof, which act does not come wit hin t he scope of t he provisions cont ained in Art icle XI
of Chapt er 40 of t he Administ rat ive Code which deals expressly wit h t he t ax on inherit ances, legacies and ot her
acquisit ions mortis causa.

Our int erpret at ion of t he law is not in conflict wit h t he rule laid down in t he case of Tuason and Tuason vs.
Posadas, supra. We said t herein, as we say now, t hat t he expression "all gift s" refers to gift s inter vivos inasmuch
as t he law considers t hem as advances on inherit ance, in t he sense t hat t hey are gift s inter vivos made in
cont emplat ion or in considerat ion of deat h. In t hat case, it was not held t hat t hat kind of gift s consist ed in
t hose made complet ely independent of deat h or wit hout regard to it .

Said legal provision is not null and void on t he alleged ground t hat t he subject mat t er t hereof is not embraced in
t he t it le of t he sect ion under which it is enumerat ed. On t he cont rary, it s provisions are perfect ly summarized in
t he heading, "Tax on Inherit ance, et c." which is t he t it le of Art icle XI. Furt hermore, t he const it ut ional provision
cit ed should not be st rict ly const rued as to make it necessary t hat t he t it le cont ain a full index to all t he
cont ent s of t he law. It is sufficient if t he language used t herein is expressed in such a way t hat in case of doubt
it would afford a means of det ermining t he legislators int ent ion. (Lewis' Sut herland St at utory Const ruct ion, Vol.
II, p. 651.) Last ly, t he circumst ance t hat t he Administ rat ive Code was prepared and compiled st rict ly in
accordance wit h t he provisions of t he Jones Law on t hat mat t er should not be overlooked and t hat , in a
compilat ion of laws such as t he Administ rat ive Code, it is but nat ural and proper t hat provisions referring to
diverse mat t ers should be found. (Ayson and Ignacio vs. Provincial Board of Rizal and Municipal Council of
Navot as, 39 Phil., 931.)

T he appellant s quest ion t he power of t he Legislat ure to impose t axes on t he t ransmission of real est at e t hat
t akes effect immediat ely and during t he lifet ime of t he donor, and allege as t heir reason t hat such t ax part akes
of t he nat ure of t he land t ax which t he law has already creat ed in anot her part of t he Administ rat ive Code.
Wit hout making express pronouncement on t his quest ion, for it is unnecessary, we wish to st at e t hat such is
not t he case in t hese inst ance. T he t ax collect ed by t he appellee on t he propert ies donat ed in 1925 really
const it ut es an inherit ance t ax imposed on t he t ransmission of said propert ies in cont emplat ion or in
considerat ion of t he donor's deat h and under t he circumst ance t hat t he donees were lat er inst it ut ed as t he
former's legat ees. For t his reason, t he law considers such t ransmissions in t he form of gift s inter vivos, as
advances on inherit ance and not hing t herein violat es any const it ut ional provision, inasmuch as said legislat ion
is wit hin t he power of t he Legislat ure.

Property Subject to Inheritance Tax. — T he inherit ance t ax ordinarily applies to all propert y wit hin t he power
of t he st at e to reach passing by will or t he laws regulat ing int est at e succession or by gift inter vivos in t he
manner designat ed by st at ut e, whet her such propert y be real or personal, t angible or int angible, corporeal
or incorporeal. (26 R.C.L., p. 208, par. 177.)

In t he case of Tuason and Tuason vs. Posadas, supra, it was also held t hat sect ion 1540 of t he Administ rat ive
Code did not violat e t he const it ut ional provision regarding uniformit y of t axat ion. It cannot be null and void on
t his ground because it equally subject s to t he same t ax all of t hose donees who lat er become heirs, legat ees or
donees mortis causa by t he will of t he donor. T here would be a repugnant and arbit rary except ion if t he provisions
of t he law were not applicable to all donees of t he same kind. In t he case cit ed above, it was said: "At any rat e
t he argument adduced against it s const it ut ionalit y, which is t he lack of Uniformit y, does not seem to be well
founded. It was said t hat under such an int erpret at ion, while a donee inter vivos who, aft er t he predecessor's
deat h proved to be an heir, a legat ee, or a donee mortis causa, would have to pay t he t ax, anot her donee inter vivos
who did not prove to he an heir, a legat ee, or a donee mortis causa of t he predecessor, would be exempt from
such a t ax. But as t hese are t wo different cases, t he principle of uniformit y is inapplicable to t hem."

T he last quest ion of a procedural nat ure arising from t he case at bar, which should be passed upon, is whet her
t he case, as it now st ands, can be decided on t he merit s or should be remanded to t he court a quo for furt her
proceedings. According to our view of t he case, it follows t hat , if t he gift s received by t he appellant s would have
t he right to recover t he sums of money claimed by t hem. Hence t he necessit y of ascert aining whet her t he
complaint cont ains an allegat ion to t hat effect . We have examined said complaint and found not hing of t hat
nat ure. On t he cont rary, it be may be inferred from t he allegat ions cont ained in paragraphs 2 and 7 t hereof t hat
said donat ions inter vivos were made in considerat ion of t he donor's deat h. We refer to t he allegat ions t hat such
t ransmissions were effect ed in t he mont h of March, 1925, t hat t he donor died in January, 1926, and t hat t he
donees were inst it ut ed legat ees in t he donor's will which was admit t ed to probat e. It is from t hese allegat ions,
especially t he last , t hat we infer a presumpt ion juris tantum t hat said donat ions were made mortis causa and, as
such, are subject to t he payment of inherit ance t ax.

Wherefore, t he demurrer int erposed by t he appellee was well-founded because it appears t hat t he complaint
did not allege fact sufficient to const it ut e a cause of act ion. When t he appellant s refused to amend t he same,
spit e of t he court 's order to t hat effect , t hey volunt arily waived t he opport unit y offered t hem and t hey are not
now ent it led to have t he case remanded for furt her proceedings, which would serve no purpose altoget her in
view of t he insufficiency of t he complaint .

Wherefore, t he judgment appealed from is hereby affirmed, wit h cost s of t his inst ance against t he appellant s.
So ordered.

Avanceña, C.J., Villamor, Ostrand, Abad Santos, Hull, Vickers and Buttes, JJ., concur.

Separate Opinions

VILLA-REAL, J., dissent ing:

I sust ain my concurrence in Just ice St reet 's dissent ing opinion in t he case of Tuason and Tuason vs. Posadas (54
Phil., 289).

T he majorit y opinion to dist inguish t he present case from above-ment ioned case of Tuason and Tuason vs.
Posadas, by int erpret ing sect ion 1540 of t he Administ rat ive Code in t he sense t hat it est ablishes t he legal
presumpt ion juris tantum t hat all gift s inter vivos made to persons who are not forced heirs but who are
inst it ut ed legat ees in t he donor's will, have been made in cont emplat ion of t he donor's deat h. Presumpt ions are
of t wo kinds: One det ermined by law which is also called presumpt ion of law or of right ; and anot her which is
formed by t he judge from circumst ances ant ecedent to, coincident wit h or subsequent to t he principal fact
under invest igat ion, which is also called presumpt ion of man (presuncion de hombre). (Escriche, Vol. IV, p. 662.)
T he Civil Code as well as t he code of Civil Procedure est ablishes presumpt ions juris et de jure and juris tantum
which t he court s should t ake into account in deciding quest ions of law submit t ed to t hem for decision. T he
presumpt ion which majorit y opinion wishes to draw from said sect ion 1540 of t he Administ rat ive Code can
neit her be found in t his Code nor in any of t he aforement ioned Civil Code and Code of Civil Procedure. T herefore,
said presumpt ion cannot be called legal or of law. Neit her can it be called a presumpt ion of man (presuncion de
hombre) inasmuch as t he majorit y opinion did not infer it from circumst ances ant ecedent to, coincident wit h or
subsequent to t he principal fact wit h is t he donat ion it self. In view of t he nat ure, mode of making and effect s of
donat ions inter vivos, t he cont rary presumpt ion would be more reasonable and logical; in ot her words, donat ions
inter vivos made to persons who are not forced heirs, but who are inst it ut ed legat ees in t he donor's will, should
be presumed as not made mortis causa, unless t he cont rary is proven. In t he case under considerat ion, t he
burden of t he proof rest s wit h t he person who cont ends t hat t he donat ion inter vivos has been made mortis
causa.

It is t herefore, t he undersigned's humble opinion t hat t he order appealed from should be reversed and t he
demurrer overruled, and t he defendant ordered to file his answer to t he complaint .

Street, J., concurs.

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