LORENZO vs POSADAS

G.R. No. 94005 April 6, 1993

RULE 98 TRUSTEES
Facts:
Thomas Hanley died, leaving a will and a considerable amount of real and personal properties.
Proceedings for the probate of his will and the settlement and distribution of his estate were begun in
the CFI of Zamboanga. The will was admitted to probate.
The CFI considered it proper for the best interests of the estate to appoint a trustee to administer the
real properties which, under the will, were to pass to nephew Matthew ten years after the two
executors named in the will was appointed trustee. Moore acted as trustee until he resigned and the
plaintiff Lorenzo herein was appointed in his stead.
During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue (Posadas)
assessed against the estate an inheritance tax, together with the penalties for delinquency in payment.
Lorenzo paid said amount under protest, notifying Posadas at the same time that unless the amount was
promptly refunded suit would be brought for its recovery. Posadas overruled Lorenzos protest and
refused to refund the said amount. Plaintiff went to court. The CFI dismissed Lorenzos complaint and
Posadas counterclaim. Both parties appealed to this court.
Issue:
Whether there has been delinquency in the payment of the inheritance tax.
Held:
Yes, the defendant maintains that it was the duty of the executor to pay the inheritance tax before the
delivery of the decedents property to the trustee. Stated otherwise, the defendant contends that
delivery to the trustee was delivery to the cestui que trust, the beneficiary in this case, within the
meaning of the first paragraph of subsection (b) of section 1544 of the Revised Administrative Code. This
contention is well taken and is sustained. A trustee is but an instrument or agent for the cestui que trust.
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