PABLO LORENZO, as trustee of the estate of Thomas Hanley, deceased, plaintiffappellant,

vs.
JUAN POSADAS, JR., Collector of Internal Revenue, defendant-appellant.
Pablo

Lorenzo

and

Delfin

Joven

for

plaintiff-appellant.

Office of the Solicitor-General Hilado for defendant-appellant.

FACTS
On October 4, 1932, the plaintiff Pablo Lorenzo, in his capacity as trustee of the estate
of Thomas Hanley, deceased, brought this action in the Court of First Instance of
Zamboanga against the defendant, Juan Posadas, Jr., then the Collector of Internal
Revenue, for the refund of the amount of P2,052.74, paid by the plaintiff as inheritance
tax on the estate of the deceased, and for the collection of interst thereon at the rate of
6 per cent per annum, computed from September 15, 1932, the date when the aforesaid
tax was [paid under protest. The defendant set up a counterclaim for P1,191.27 alleged
to be interest due on the tax in question and which was not included in the original
assessment. From the decision of the Court of First Instance of Zamboanga dismissing
both the plaintiff's complaint and the defendant's counterclaim, both parties appealed to
this court.
It appears that on May 27, 1922, one Thomas Hanley died in Zamboanga, Zamboanga,
leaving a will (Exhibit 5) and considerable amount of real and personal properties. On
june 14, 1922, proceedings for the probate of his will and the settlement and distribution
of his estate were begun in the Court of First Instance of Zamboanga. The will was
admitted to probate.
The Court of First Instance of Zamboanga considered it proper for the best interests of
their estate to appoint a trustee to administer the real properties which, under the will,
were to pass to Matthew Hanley ten years after the two executors named in the will,
was, on March 8, 1924, appointed trustee.
During plaintiffs incumbency astrustee, the defendant Collector of Internal Revenue,
alleging that the estate left by the deceased at the time of his death consisted of realty
and personalty, assessed against the estate an inheritance tax. The defendant prayed
that the trustee be ordered to pay the Government the inheritance tax together with the
penalties for delinquency in paying such tax. The trustee paid under protest and
however, he demanded that he be refunded for the amount paid. The plaintiff contends
that the inheritance tax should be based upon the value of the estate at the expiration of
the period of ten years after which according to thetestators will, the property could be
and was to be delivered tothe instituted heir, and not upon the value thereof at the
timeof the death of the testator. The defendant overruled plaintiffs protest and refused
to refund the amount.

ISSUE:
1. When does the inheritance tax accrue and when must it be satisfied?
2. Should the inheritance tax be computed on the basis of the value of the estate at the
time of the testator's death, or on its value ten years later?
HELD
1. The accrual of the inheritance tax is distinct from the obligation to pay the same.
Section 1536 as amended, of the Administrative Code, imposes the tax upon
"every transmission by virtue of inheritance, devise, bequest, gift mortis causa, or
advance in anticipation of inheritance,devise, or bequest." The tax therefore is
upon transmission or the transfer or devolution of property of a decedent, made
effective by his death. (61 C. J., p. 1592.) It is in reality an excise or privilege tax
imposed on the right to succeed to, receive, or take property by or under a will or
the intestacy law, or deed, grant, or gift to become operative at or after death.
a. Furthermore, article 657 of the Civil Code, "the rights to the succession of
a person are transmitted from the moment of his death."
2. We hold 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.

SEVERINA MARABILLES, ET AL., Plaintiff and Appellants, vs. ALEJANDRO

QUITO and AIDA QUITO, Defendants-Appellees.
This concerns an action instituted in the Court of First Instance of Camarines Sur
by Plaintiffsagainst Defendants for the recovery of a parcel of land consisting of 18
hectares situated in Pili, Camarines Sur.
Defendants, instead of answering the complaint, filed a motion to dismiss on the
grounds (1) thatPlaintiffs have no legal capacity to sue, (2) that the complaint states no
cause of action, and (3) that the action had prescribed.
Plaintiffs filed a written opposition to the motion, to which Defendants replied, and
thereafter the court issued on November 8, 1954 an order sustaining the motion.
Accordingly, it dismissed the complaint with costs against the Plaintiffs.
When Plaintiffs appealed from this order to the Court of Appeals, the case was certified
to us on the ground that the questions raised are purely of law.
ISSUE:
1. WON plaintiffs have legal capacity to sue.
a. YES. The right to assert a cause of action as an heir, although he has not
been judicially declared to be so, if duly proven, is well settled in this
jurisdiction. This is upon the theory that the property of a deceased
person, both real and personal, becomes the property of the heir by the
mere fact of death of his predecessor in interest, and as such he can deal
with it in precisely the same way in which the deceased could have dealt,
subject only to the limitations which by law or by contract may be imposed
upon the deceased himself (Suiliong & Co. vs. Marine Insurance Co., Ltd.,
et al., 12 Phil., 13, 19).
2. WON Plaintiffshave cause of action against Defendants because there is no legal
bond by which the latter may be linked with the property.
a. YES. The rule is that, to determine the sufficiency of a cause of action on
a motion to dismiss, only the facts alleged in the complaint should be
considered first and considering the facts herein alleged, there is enough
ground to proceed with the case.

In re estate of the deceased Victoriana Saavedra. MACARIO MACROHON ONG

HAM, administrator-appellant,
vs.
JUAN SAAVEDRA, ET AL., opponents-appellees.
Frank H. Young and Pablo Lorenzo for appellant.
No appearance for appellees.

FACTS:
Macario Macrohon Ong Ham, widower and executor of the joint last will and testament
of Victoriana Saavedra and himself, presented said will for probate, which was ordered
by the Court of First Instance of Zamboanga in its decree of February 21, 1924.
Victoriana Saavedra died without descendants or ascendants, being at that time
married to Macario Macrohon Ong Ham, both of them having executed a joint will,
which joint will has been duly admitted to probate in this court. The only near relations of
the said Victoriana Saavedra, with the right to inherit her estate are her brothers Juan
and Segundo Saavedra; her nephews and nieces, Teofilo Saavedra, Manuel Saavedra,
Victoriana Saavedra, Mariano Saavedra, Froilan Saavedra, Josefa Saavedra,
Encarnacion Carpio and Macra Carpio, in case that the said Victoriana Saavedra died
intestate, or did not dispose of her property in said will. It was stated in the will that in
case of the death of Macario Macrohon Ong Ham before Victoriana Saavedra, the
properties be given to Ong Ka Chiew and Ong Ka Jian jointly, and should either of the
two die before Macario Macrohon Ong Ham, all the said properties be given to the
survivor. In case that Victoriana Saavedra should survive Macario Macrohon Ong
Ham,Lot No. 838, Lot No. 817 and Lot No. 768 shall belong exclusively to Victoriana
Saavedra. Should Victoriana Saavedra die before Macario Macrohon Ong Ham, Lot No.
817 be adjudicated to Segunda Saavedra, widow, sister of Victoriana Saavedra, free of
all liens and encumbrances. Lot No. 768 be adjudicated to Segunda Saavedra and her

heirs, on condition that she devote the products of the same to having masses said for
the repose of the soul of Victoriana Saavedra. In case of the death of either of the two,
the surviving spouse be appointed executor of this our last will and testament.This
executor submitted a scheme of partition and distribution of the property in accordance
with the terms of the joint will, to which Juan Saavedra and others filed an opposition.
The executor rejoined insisting upon the approval of the scheme and asking that the
opposition of Juan Saavedra and others be overruled.
The lower court solving the question raised by the parties in their agreement of facts,
held that the one-half of the property described in the will
ISSUE:
1. WON the trial court erred in holding that Victoriana Saavedra died partly
intestate.
2. WON the brother, sister, nephews, and nieces of the testatrix, were entitled to
receive her share in the said sixteen parcels of land, given to the legatees, Ong
Ka Chiew and Ong Ka Jian, under the terms of the said joint will.
HELD
1.
ART. 658. Succession is effected either by the will of man expressed by the testament
or, in the absence of a testament, by operation of law.
The first is called testamentary, the second legal succession.
It may also be effected partly by the will of man and partly by operation of law.
According to this, there are three ways in which succession may be effected: by the will
of man, by the law, or by both at the same time. In the first case the succession is called
testamentary, because it is based on the last will and testament, which is the orderly
manifestation of the testator's will; in the second, it is called legal, because it takes

effect by operation of the law; and the third is called mixed, because it partakes of the
character of both testamentary and legal succession.
This is a refutation of the appellant's argument that no one who has executed a will can
die partly intestate. That the rule of indivisibility of the testator's will invoked by the
appellant does not hold good in this jurisdiction, is shown, moreover, by articles 764 and
912 of the Civil Code. According to the first of these articles, a will is valid even though it
does not contain any institution of an heir, or if such institution does not include the
entire estate, and even though the person instituted does not accept the inheritance or
is disqualified to inherit; according to the second, one of the ways in which legal
succession may take place is when the will does not institute an heir to all or part of the
property, or does not dispose of all that belongs to the testator, in which case legal
succession shall take place only with respect to the property which the testator has not
disposed of.
2. Yes.
Yes. As we have said, the acquisition of right by the alleged legatees depends on the
occurrence of the event constituting the condition, that is, the death of Macario
Macrohon Ong Ham prior to that of his wife; and this condition not having been
complied with, the said Ong Ka Chiew and Ong Ka Jian have not acquired any right,
and therefore the testatrix's estate is to be divided among her heirs in accordance with
the law.