Dizon vs Posadas Jr

57 Phil 465 [GR No. L-36770 November 4, 1932]

Facts: Don Felix Dizon died on April 21, 1928. Before his death, he made a gift inter vivos in favor
of the plaintiff Luis W. Dizon of all his property according to a deed of a gift of which includes all
the property of Don Felix Dizon. The plaintiff did not receive the property of any kind of Don Felix
upon the death of the latter. Don Luis is the legitimate and only son of Don Felix. The defendant,
collector of internal revenue assess an inheritance tax of Php2,808.73 which Don Luis paid under
protest and later filed an action to recover sum of money thus paid. Plaintiff alleged that the
inheritance tax is illegal because he received the property, which is the basis of the tax from his
father before his death by a deed of gift inter vivos which was duly accepted and registered
before the death of his father.

Issue: Whether or not the gift inter vivos is subject to inheritance tax.

Held: Yes. Section 1540 of the administrative code plainly does not tax gifts per se but only when
those gifts are made to those who shall prove to be the heirs, devisees, legatees or donees mortis
cause of the donor.

In this case, the scanty facts before us may not warrant the inference that the conveyance,
acknowledged by the donor 5 days before his death and accepted by the donee one day before
the donor’s death, was fraudulently made for the purpose of evading the inheritance tax. But the
facts, in our opinion, do not warrant the inference that the transfer was an advancement upon
the inheritance which the donee as the sole and forced heir of the donor, would be entitled to
receive upon the death of the donor.