In
th e
c as e
at
bar,
dono rs
A
and
Bi n t e n d e d t o m a k e t h e d o n a t i o n i r r e v o
c a b l e ,
a s
s t a t e d
i n
t h e provisions
of
t h e D e e d . T h u s , t h e donation was on reality inter vivos.Thu s,
gi ve n th at the don ation w as indeed
in te r vi v os
,
A s
sub se quen t a s s i g n m e n t
o f
h i s
r i g h t s
a
n d i n t e r e s t s i n t h e p r o p e r t y t o C i s void.
--------------------Arangote vs Maglunob
G.R. No. 178906
February 18, 2009
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
1997 Revised Rules of Civil Procedure seeking to reverse and set aside the
Decision[1] dated27 October 2006 and Resolution[2] dated 29 June 2007 of
the Court of Appeals in CA-G.R. SP No. 64970. In its assailed Decision, the
appellate court affirmed the Decision [3]dated 12 September 2000 of the
Regional Trial Court (RTC), 6 th Judicial Region, Branch 1, Kalibo, Aklan, in
Civil Case No. 5511, which reversed the Decision[4] dated 6 April 1998 of
the 7th Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, Ibajay, Aklan,
in Civil Case No. 156; and declared [5] the herein respondent-Spouses
Martin and Lourdes Maglunob (Spouses Maglunob) and respondent Romeo
Salido (Romeo) as the lawful owners and possessors of Lot 12897 with an
area of 982 square meters, more or less, located in Maloco, Ibajay, Aklan
(subject property). In its assailed Resolution, the appellate court denied
herein petitioner Elvira T. Arangotes Motion for Reconsideration.
Elvira T. Arangote, herein petitioner married to Ray Mars E.
Arangote, is the registered owner of the subject property, as evidenced by
Original Certificate of Title (OCT) No. CLOA-1748. [6] Respondents Martin
(Martin II) and Romeo are first cousins and the grandnephews of
Esperanza Maglunob-Dailisan (Esperanza), from whom petitioner acquired
the subject property.
The Petition stems from a Complaint[7] filed by petitioner and her
husband against the respondents for Quieting of Title, Declaration of
Ownership and Possession, Damages with Preliminary Injunction, and
Issuance of Temporary Restraining Order before the MCTC, docketed as
Civil Case No. 156.
The Complaint alleged that Esperanza inherited the subject property
from her uncle Victorino Sorrosa by virtue of a notarized Partition
Agreement[8] dated 29
April
1985,
executed
by
the
latters
heirs. Thereafter, Esperanza declared the subject property in her name for
real property tax purposes, as evidenced by Tax Declaration No. 16218
(1985).[9]
The Complaint further stated that on 24 June 1985, Esperanza
executed a Last Will and Testament [10] bequeathing the subject property to
petitioner and her husband, but it was never probated. On 9 June 1986,
Esperanza executed another document, an Affidavit, [11] in which she
renounced, relinquished, waived and quitclaimed all her rights, share,
interest and participation whatsoever in the subject property in favor of
petitioner and her husband. On the basis thereof, Tax Declaration No.
16218 in the name of Esperanza was cancelled and Tax Declaration No.
16666[12] (1987) was issued in the name of the petitioner and her husband.
In 1989, petitioner and her husband constructed a house on the
subject property. On 26 March 1993, OCT No. CLOA-1748 was issued by
the Secretary of the Department of Agrarian Reform (DAR) in the name of
petitioner, married to Ray Mars E. Arangote. However, respondents,
together with some hired persons, entered the subject property on3 June
1994 and built a hollow block wall behind and in front of petitioners
house, which effectively blocked the entrance to its main door.
As a consequence thereof, petitioner and her husband were
compelled to institute Civil Case No. 156.
In their Answer with Counterclaim in Civil Case No. 156, respondents
averred
that
they
co-owned
the
subject
property
with
Esperanza. Esperanza and her siblings, Tomas and Inocencia, inherited
the subject property, in equal shares, from their father Martin Maglunob
(Martin I). When Tomas and Inocencia passed away, their shares passed
on
by
inheritance
to
respondents
Martin
II
and
Romeo,
respectively. Hence, the subject property was co-owned by Esperanza,
respondent Martin II (together with his wife Lourdes), and respondent
Romeo, each holding a one-third pro-indiviso share therein. Thus,
Esperanza could not validly waive her rights and interest over the entire
subject property in favor of the petitioner.
Respondents also asserted in their Counterclaim that petitioner
and her husband, by means of fraud, undue influence and deceit were able
to make Esperanza, who was already old and illiterate, affix her
thumbmark to the Affidavit dated 9 June 1986, wherein she renounced all
her rights and interest over the subject property in favor of petitioner and
her husband. Respondents thus prayed that the OCT issued in petitioners
name be declared null and void insofar as their two-thirds shares are
concerned.
After trial, the MCTC rendered its Decision dated 6 April 1998 in Civil
Case No. 156, declaring petitioner and her husband as the true and lawful
owners of the subject property. The decretal portion of the MCTC Decision
reads:
WHEREFORE, judgment is hereby rendered:
A.
Declaring the [herein petitioner and her
husband] the true,
lawful and exclusive owners and entitled
to the possession of the [subject
property] described and
referred to under paragraph 2 of the [C]omplaint
and covered
by Tax Declaration No. 16666 in the names of the
[petitioner
and her husband];
B.
Ordering the [herein respondents] and
anyone hired by, acting or working for them, to cease
and desist from asserting or claiming any right or
interest in, or exercising any act of ownership or
possession over the [subject property];
C.
Ordering the [respondents] to pay the
[petitioner and her husband] the amount of P10,000.00
as attorneys fee. With cost against the [respondents].
[13]
No. 5988 (1942),[27] No. 6200 (1945)[28] and No. 7233 (1953)[29] were all
issued in the name of Victorino.
Since Martin I already passed away when the Deed of
Extrajudicial Settlement and Partition of Estate was executed, his
heirs[30] were represented therein by Esperanza. By virtue of the said
Deed, Martin I received as inheritance a portion of the parcel of land
measuring 897 square meters.
After the death of Victorino, his heirs [31] executed another
Partition Agreement on 29 April 1985, which was notarized on the same
date. The Partition Agreement mentioned four parcels of land. The
subject property, consisting of a portion of the consolidated parcels 1, 2,
and 3, and measuring around 982 square meters, was allocated to
Esperanza. In comparison, the property given to Esperanza under the
Partition Agreement is bigger than the one originally allocated to her
earlier under the Deed of Extrajudicial Settlement and Partition of Estate
dated July 1981, which had an area of only 897 square meters. It may be
reasonably assumed, however, that the subject property, measuring 982
square meters, allocated to Esperanza under the Partition Agreement
dated 29 April 1985, is already inclusive of the smaller parcel of 897
square meters assigned to her under the Deed of Extrajudicial Settlement
and Partition of Estate dated July 1981. As explained by the RTC in its 12
September 2000 Decision:
The [subject property] which is claimed by the
[herein petitioner and her husband] and that which is
claimed by the [herein respondents] are one and the
same, the difference in area and technical description
being due to the repartition and re-allocation of the
parcel of land originally co-owned by Pantaleon
Maglunob and his sister Placida Maglunob and
subsequently declared in the name of [Victorino] under
Tax Declaration No. 5988 of 1949.[32]
It is clear from the records that the subject property was not
Esperanzas exclusive share, but also that of the other heirs of her father,
Martin I. Esperanza expressly affixed her thumbmark to the Deed of
Extrajudicial Settlement of July 1981 not only for herself, but also on behalf
of the other heirs of Martin I. Though in the Partition Agreement dated29
April 1985 Esperanza affixed her thumbmark without stating that she was
doing so not only for herself, but also on behalf of the other heirs of Martin
I, this does not mean that Esperanza was already the exclusive owner
thereof. The evidence shows that the subject property is the share of the
heirs of Martin I. This is clear from the sketch [33] attached to the Partition
Agreement dated 29 April 1985, which reveals the proportionate areas
given to the heirs of the two siblings, Pantaleon and Placida, who were the
original owners of the whole parcel of land [34] from which the subject
property was taken.
Further, it bears emphasis that the Partition Agreement was
executed by and among the son, grandsons, granddaughters and cousins
of Victorino. Esperanza was neither the granddaughter nor the cousin of
Victorino, as she was only Victorinos grandniece. The cousin of Victorino
is Martin I, Esperanzas father. In effect, therefore, the subject property
allotted to Esperanza in the Partition Agreement was not her exclusive
share, as she holds the same for and on behalf of the other heirs of Martin
I, who was already deceased at the time the Partition Agreement was
made.
To further bolster the truth that the subject property was not
exclusively owned by Esperanza, the Affidavit she executed in favor of
petitioner and her husband on 6 June 1985 was worded as follows:
That I hereby renounce, relinquish, waive and
quitclaim all my rights, share, interest and participation
whatsoever in the [subject property] unto the said Sps.
Ray Mars Arangote and Elvira T. Arangote, their heirs,
successors, and assigns including the improvement
found thereon;[35]
Logically, if Esperanza fully owned the subject property, she
would have simply waived her rights to and interest in the subject
property, without mentioning her share and participation in the
same. By including such words in her Affidavit, Esperanza was aware of
and was limiting her waiver, renunciation, and quitclaim to her one-third
share and participation in the subject property.
Going to the issues raised by the petitioner in this Petition, this
Court will resolve the same concurrently as they are interrelated.
In this case, the petitioner derived her title to the subject
property from the notarized Affidavit executed by Esperanza, wherein the
latter relinquished her rights, share, interest and participation over the
same in favor of the petitioner and her husband.
A careful perusal of the said Affidavit reveals that it is not what it
purports to be. Esperanzas Affidavit is, in fact, a Donation. Esperanzas
real intent in executing the said Affidavit was to donate her share in the
subject property to petitioner and her husband.
As no onerous undertaking is required of petitioner and her
husband under the said Affidavit, the donation is regarded as a pure
donation of an interest in a real property covered by Article 749 of the Civil
Code.[36]
Article 749 of the Civil Code provides:
only proof of Esperanzas ownership over the same was a mere tax
declaration. This fact or circumstance alone was enough to put the
petitioner and her husband under inquiry. Settled is the rule that a tax
declaration does not prove ownership. It is merely an indicium of a claim
of ownership. Payment of taxes is not proof of ownership; it is, at best,
an indicium of possession in the concept of ownership. Neither tax
receipts nor a declaration of ownership for taxation purposes is evidence
of ownership or of a right to possess realty when not supported by other
effective proofs.[50]
With the foregoing, the petitioner is not entitled to the rights
under Article 448 and 546 as the petitioner is not a builder and possessor
in good faith.
WHEREFORE, premises considered, the instant Petition is
hereby DENIED. The Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 64970, dated 27 October 2006 and 29 June 2007,
respectively, affirming the RTC Decision dated 12 September 2000 in Civil
Case No. 5511 and declaring the respondents the lawful owners and
possessors of the subject property are hereby AFFIRMED. No costs.
------------------Arangote vs. Sps. MaglunobG.R. 178906, February 18, 2009FACTS:
Elvira Arangote acquired the subject parcel of land from Esperanza
Maglunob, who is grand auntof respondents Martin Maglunob and Romeo
Salido. In June 1986, Esperenza executed an affidavit inwhich she
renounced her rights, share and participation in the land in favor of Elvira
and her husband. Itappears that the lot was not exclusive property of
Esperanza but also of the other heirs of Martin Iwhom she represented in
the partition agreement. Elvira and her husband, Ray constructed a house
onthe land in 1989 and in 1993, OCT was issued in her name by the DAR.
However, respondents with thehelp of hired persons entered the property
and built a wall behind and in front
of Elviras house. Elvira
and Ray sued respondents for quieting of title and declaration of
ownership. Respondents averred thatthey were co-owners of the land with
Esperanza who allegedly inherited the land from Martin 1together with
Tomas and Inocencia
(Martin 2s and
Romeos predecessor in interest). They argued that
Esperanza could not have validly waived her rights in favor of Elvira and
Ray. MCTC ruled for Elvira. RTCreversed MCTC and declared respondents
lawful owners of the land together with the other heirs of Martin I. Elvira
went to the CA but the CA affirmed the RTC decision. Before SC, Elvira
argued that bothRTC and CA erred in declaring the affidavit of Esperanza
void because it is a valid and binding proof of transfer of ownership of the
subject property as it was coupled with actual delivery.
ISSUE:
Whether or not the donation to Elvira and her husband is valid.
RULING:
Supreme Court affirmed the decision of CA. SC ruled that the affidavit
executed by Esperanzawherein she renounced, relinquished and waived all
her rights, share, interest and participation in thesubject property in favor
of Elvira and Ray is in fact a donation.
It is clear from the records that the subject property was not Esperanzas
exclusive share, but also that
of the other heirs of her father, Martin I. Esperanza expressly affixed her
thumbmark to the Deed of Extrajudicial Settlement of July 1981 not only
for herself, but also on behalf of the other heirs of MartinI. Though in the
Partition Agreement dated 29 April 1985 Esperanza affixed her thumbmark
withoutstating that she was doing so not only for herself, but also on
behalf of the other heirs of Martin I, thisdoes not mean that Esperanza was
already the exclusive owner thereof. The evidence shows that thesubject
property is the share of the heirs of Martin I. This is clear from the sketch
attached to thePartition Agreement dated 29 April 1985, which reveals the
proportionate areas given to the heirs of thetwo siblings, Pantaleon and
Placida, who were the original owners of the whole parcel of land
fromwhich the subject property was taken.Further, it bears emphasis that
the Partition Agreement was executed by and among the son,grandsons,
granddaughters and cousins of Victorino. Esperanza was neither the
granddaughter nor the
cousin of Victorino, as she was only Victorinos grandniece. The cousin of
Victorino is Martin I,Esperanzas father. In effect, therefore, the subject
property allotted to Esperanza in the Partition
Agreement was not her exclusive share, as she holds the same for and on
behalf of the other heirs of Martin I, who was already deceased at the time
the Partition Agreement was made.To further bolster the truth that the
subject property was not exclusively owned by Esperanza, theAffidavit she
executed in favor of petitioner and her husband on 6 June 1985 was
worded as follows:
---------------------------------G.R. No. 178906; February 18, 2009 - DigestElvira Arangote vs. Spouses Martin and Lourdes Maglunob and
RomeoSalido;FACTS:
El vi r a Ar an g o te a cqu i red th e su b j ect pa rc
el o f l an d fro m Esp er a n za
M a g l u n o b , wh o i s
BELLOSILLO, J.:
Filed by petitioner as an accion publicana 1 against private respondent, this
case assumed another dimension when it was dismissed by respondent
Judge on the ground that the parties being brother-in-law the complaint
should have alleged that earnest efforts were first exerted towards a
compromise.
Admittedly, the complaint does not allege that the parties exerted earnest
towards a compromise and that the same failed. However, private
respondent Pedro G. Hernando apparently overlooked this alleged defect
since he did not file any motion to dismiss nor attack the complaint on this
ground in his answer. It was only on 7 December 1992, at the pre-trial
conference, that the relationship of petitioner Gaudencio Guerrero and
respondent Hernando was noted by respondent Judge Luis B. Bello, Jr.,
they being married to half-sisters hence are brothers-in-law, and on the
basis thereof respondent Judge gave petitioner five (5) days "to file his
motion and amended complaint" to allege that the parties were very close
relatives, their respective wives being sisters, and that the complaint to be
maintained should allege that earnest efforts towards a compromise were
exerted but failed. Apparently, respondent Judge considered this
deficiency a jurisdictional defect.
On 11 December 1992, Guerrero moved to reconsider the 7 December
1992 Order claiming that since brothers by affinity are not members of the
same family, he was not required to exert efforts towards a compromise.
Guerrero likewise argued that Hernando was precluded from raising this
issue since he did not file a motion to dismiss nor assert the same as an
affirmative defense in his answer.
On 22 December 1992, respondent Judge denied the motion for
reconsideration holding that "[f]ailure to allege that earnest efforts
towards a compromise is jurisdictional such that for failure to allege same
the court would be deprived of its jurisdiction to take cognizance of the
case." He warned that unless the complaint was amended within five (5)
days the case would be dismissed.
On 29 January 1993, the 5-day period having expired without Guerrero
amending his complaint, respondent Judge dismissed the case, declaring
the dismissal however to be without prejudice.
Guerrero appeals by way of this petition for review the dismissal by the
court a quo. He raises these legal issues: (a) whether brothers by affinity
are considered members of the same family contemplated in Art. 217, par.
(4), and Art. 222 of the New Civil Code, as well as under Sec. 1, par. (j),
Rule 16, of the Rules of Court requiring earnest efforts towards a
compromise before a suit between them may be instituted and
maintained; and, (b) whether the absence of an allegation in the complaint
that earnest efforts towards a compromise were exerted, which efforts
failed, is a ground for dismissal for lack of jurisdiction.
The Constitution protects the sanctity of the family and endeavors to
strengthen it as a basic autonomous social institution. 2 This is also
embodied in Art. 149, 3 and given flesh in Art. 151, of the Family Code,
which provides:
Art. 151. No suit between members of the same family
shall prosper unless it should appear from the verified
complaint or petition that earnest efforts toward a
compromise have been made, but that the same had
failed. If it is shown that no such efforts were in fact
made, the case must be dismissed.
This rule shall not apply to cases which may not be the
subject of compromise under the Civil Code.
Considering that Art. 151 herein-quoted starts with the negative word
"No", the requirement is mandatory 4 that the complaint or petition, which
must be verified, should allege that earnest efforts towards a compromise
have been made but that the same failed, so that "[i]f it is shown that no
such efforts were in fact made, the case must be dismissed."
Further, Art. 151 is contemplated by Sec. 1, par. (j), Rule 16, of the Rules of
Court which provides as a ground for motion to dismiss "(t)hat the suit is
between members of the same family and no earnest efforts towards a
compromise have been made."
The Code Commission, which drafted the precursor provision in the Civil
Code, explains the reason for the requirement that earnest efforts at
compromise be first exerted before a complaint is given due course
SO ORDERED.
---------------11.G.R. No. 109068 January 10, 1994GAUDENCIO GUERRERO,
petitioner,vs.
REGIONAL TRIAL COURT OF ILOCOS NORTE, BR. XVI, JUDGE LUIS B.BELLO,
JR., PRESIDING, and PEDRO G. HERNANDO,
respondents.FACTS:
1.
Pedro G. Hernando apparently overlooked this alleged defectsince he did
not file any motion to dismiss nor attack thecomplaint on this ground in his
answer.
2.
@ PRE-TRIAL: Judge Luis B. Bello, Jr.: NOTED THAT: GUERREROand
HERNANDO were related as brothers-in-law then JUDGEgave petitioner five
(5) days "to file his motion and amendedcomplaint" to allege that the
parties were very close relatives,their respective wives being sisters, and
that the complaint tobe maintained should allege that earnest efforts
towards acompromise were exerted but failed and considered
thisdeficiency a JURISDICTIONAL DEFECT.
3.
MR was filed by GUERRERO: brothers by affinity are notmembers of the
same family, he was not required to exertefforts towards a compromise
starts
with
the
negative
word
"No",
MARIO
SIOCHI, Petitioner,
vs.
ALFREDO GOZON, WINIFRED GOZON, GIL TABIJE, INTER-DIMENSIONAL
REALTY, INC., and ELVIRA GOZON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 169977
INTER-DIMENSIONAL
vs.
MARIO SIOCHI, ELVIRA
GOZON, Respondents.
REALTY,
GOZON,
ALFREDO
INC., Petitioner,
GOZON,
and
WINIFRED
RESOLUTION
CARPIO, J.:
This is a consolidation of two separate petitions for review, 1 assailing the 7
July 2005 Decision 2 and the 30 September 2005 Resolution 3 of the Court of
Appeals in CA-G.R. CV No. 74447.
This case involves a 30,000 sq.m. parcel of land (property) covered by TCT
No. 5357.4 The property is situated in Malabon, Metro Manila and is
registered in the name of "Alfredo Gozon (Alfredo), married to Elvira Gozon
(Elvira)."
On 23 December 1991, Elvira filed with the Cavite City Regional Trial Court
(Cavite RTC) a petition for legal separation against her husband Alfredo.
On 2 January 1992, Elvira filed a notice of lis pendens, which was then
annotated on TCT No. 5357.
On 31 August 1993, while the legal separation case was still pending,
Alfredo and Mario Siochi (Mario) entered into an Agreement to Buy and
Sell5 (Agreement) involving the property for the price of P18 million.
Among the stipulations in the Agreement were that Alfredo would: (1)
secure an Affidavit from Elvira that the property is Alfredos exclusive
property and to annotate the Agreement at the back of TCT No. 5357; (2)
secure the approval of the Cavite RTC to exclude the property from the
legal separation case; and (3) secure the removal of the notice of lis
pendens pertaining to the said case and annotated on TCT No. 5357.
However, despite repeated demands from Mario, Alfredo failed to comply
with these stipulations. After paying the P5 million earnest money as
partial payment of the purchase price, Mario took possession of the
property in September 1993. On 6 September 1993, the Agreement was
annotated on TCT No. 5357.
Meanwhile, on 29 June 1994, the Cavite RTC rendered a decision 6 in the
legal separation case, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered decreeing the legal separation
between petitioner and respondent. Accordingly, petitioner Elvira Robles
Gozon is entitled to live separately from respondent Alfredo Gozon without
dissolution of their marriage bond. The conjugal partnership of gains of the
spouses is hereby declared DISSOLVED and LIQUIDATED. Being the
offending spouse, respondent is deprived of his share in the net profits and
the same is awarded to their child Winifred R. Gozon whose custody is
awarded to petitioner.
Furthermore, said parties are required to mutually support their child
Winifred R. Gozon as her needs arises.
SO ORDERED.7
As regards the property, the Cavite RTC held that it is deemed conjugal
property.
On 22 August 1994, Alfredo executed a Deed of Donation over the
property in favor of their daughter, Winifred Gozon (Winifred). The Register
of Deeds of Malabon, Gil Tabije, cancelled TCT No. 5357 and issued TCT No.
M-105088 in the name of Winifred, without annotating the Agreement and
the notice of lis pendens on TCT No. M-10508.
On 26 October 1994, Alfredo, by virtue of a Special Power of
Attorney9 executed in his favor by Winifred, sold the property to InterDimensional Realty, Inc. (IDRI) for P18 million.10 IDRI paid Alfredo P18
million, representing full payment for the property. 11 Subsequently, the
Register of Deeds of Malabon cancelled TCT No. M-10508 and issued TCT
No. M-1097612 to IDRI.
Mario then filed with the Malabon Regional Trial Court (Malabon RTC) a
complaint for Specific Performance and Damages, Annulment of Donation
and Sale, with Preliminary Mandatory and Prohibitory Injunction and/or
Temporary Restraining Order.
On 3 April 2001, the Malabon RTC rendered a decision, 13 the dispositive
portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered as
follows:
01. On the preliminary mandatory and prohibitory injunction:
1.1 The same is hereby made permanent by:
1.1.1 Enjoining defendants Alfredo Gozon,
Winifred Gozon, Inter-Dimensional Realty, Inc.
and Gil Tabije, their agents, representatives
and all persons acting in their behalf from any
attempt of commission or continuance of their
wrongful acts of further alienating or
disposing of the subject property;
1.1.2. Enjoining defendant Inter-Dimensional
Realty, Inc. from entering and fencing the
property;
1.1.3. Enjoining defendants Alfredo Gozon,
Winifred Gozon, Inter-Dimensional Realty, Inc.
to respect plaintiffs possession of the
property.
02. The Agreement to Buy and Sell dated 31 August 1993,
between plaintiff and defendant Alfredo Gozon is hereby
approved, excluding the property and rights of defendant Elvira
Robles-Gozon to the undivided one-half share in the conjugal
property subject of this case.
03. The Deed of Donation dated 22 August 1994, entered into by
and between defendants Alfredo Gozon and Winifred Gozon is
hereby nullified and voided.
04. The Deed of Absolute Sale dated 26 October 1994, executed
by defendant Winifred Gozon, through defendant Alfredo Gozon,
in favor of defendant Inter-Dimensional Realty, Inc. is hereby
nullified and voided.
05. Defendant Inter-Dimensional Realty, Inc. is hereby ordered to
deliver its Transfer Certificate of Title No. M-10976 to the Register
of Deeds of Malabon, Metro Manila.
06. The Register of Deeds of Malabon, Metro Manila is hereby
ordered to cancel Certificate of Title Nos. 10508 "in the name of
Winifred Gozon" and M-10976 "in the name of Inter-Dimensional
SO ORDERED.14
On appeal, the Court of Appeals affirmed the Malabon RTCs decision with
modification. The dispositive portion of the Court of Appeals Decision
dated 7 July 2005 reads:
WHEREFORE, premises considered, the assailed decision dated April 3,
2001 of the RTC, Branch 74, Malabon is hereby AFFIRMED with
MODIFICATIONS, as follows:
1. The sale of the subject land by defendant Alfredo Gozon to
plaintiff-appellant Siochi is declared null and void for the
following reasons:
a) The conveyance was done without the consent of
defendant-appellee Elvira Gozon;
b) Defendant Alfredo Gozons one-half () undivided
share has been forfeited in favor of his daughter,
defendant Winifred Gozon, by virtue of the decision in
the legal separation case rendered by the RTC, Branch
16, Cavite;
2. Defendant Alfredo Gozon shall return/deliver to plaintiffappellant Siochi the amount of P5 Million which the latter paid as
earnest money in consideration for the sale of the subject land;
3. Defendants Alfredo Gozon, Winifred Gozon and Gil Tabije are
hereby ordered to pay plaintiff-appellant Siochi jointly and
severally, the following:
a) P100,000.00 as moral damages;
b) P100,000.00 as exemplary damages;
c) P50,000.00 as attorneys fees;
d) P20,000.00 as litigation expenses; and
e) The awards of actual and compensatory damages
are hereby ordered deleted for lack of basis.
4. Defendants Alfredo Gozon and Winifred Gozon are hereby
ordered to pay defendant-appellant IDRI jointly and severally the
following:
a) P100,000.00 as moral damages;
b) P100,000.00 as exemplary damages; and
c) P50,000.00 as attorneys fees.
Defendant Winifred Gozon, whom the undivided one-half share of
defendant Alfredo Gozon was awarded, is hereby given the option whether
or not to dispose of her undivided share in the subject land.
The rest of the decision not inconsistent with this ruling stands.
SO ORDERED.15
Only Mario and IDRI appealed the decision of the Court of Appeals. In his
petition, Mario alleges that the Agreement should be treated as a
continuing offer which may be perfected by the acceptance of the other
spouse before the offer is withdrawn. Since Elviras conduct signified her
acquiescence to the sale, Mario prays for the Court to direct Alfredo and
Elvira to execute a Deed of Absolute Sale over the property upon his
payment of P9 million to Elvira.
On the other hand, IDRI alleges that it is a buyer in good faith and for
value. Thus, IDRI prays that the Court should uphold the validity of IDRIs
TCT No. M-10976 over the property.
We find the petitions without merit.
This case involves the conjugal property of Alfredo and Elvira. Since the
disposition of the property occurred after the effectivity of the Family
Code, the applicable law is the Family Code. Article 124 of the Family Code
provides:
Art. 124. The administration and enjoyment of the conjugal partnership
property shall belong to both spouses jointly. In case of disagreement, the
husbands decision shall prevail, subject to the recourse to the court by
the wife for a proper remedy, which must be availed of within five years
from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do not
include the powers of disposition or encumbrance which must have the
authority of the court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall
be void. However, the transaction shall be construed as a continuing offer
on the part of the consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by the other spouse
or authorization by the court before the offer is withdrawn by either or
both offerors. (Emphasis supplied)
In this case, Alfredo was the sole administrator of the property because
Elvira, with whom Alfredo was separated in fact, was unable to participate
in the administration of the conjugal property. However, as sole
administrator of the property, Alfredo still cannot sell the property without
the written consent of Elvira or the authority of the court. Without such
consent or authority, the sale is void. 16 The absence of the consent of one
of the spouse renders the entire sale void, including the portion of the
conjugal property pertaining to the spouse who contracted the sale. 17 Even
if the other spouse actively participated in negotiating for the sale of the
property, that other spouses written consent to the sale is still required by
law for its validity.18 The Agreement entered into by Alfredo and Mario was
without the written consent of Elvira. Thus, the Agreement is entirely void.
As regards Marios contention that the Agreement is a continuing offer
which may be perfected by Elviras acceptance before the offer is
withdrawn, the fact that the property was subsequently donated by
Alfredo to Winifred and then sold to IDRI clearly indicates that the offer
was already withdrawn.
However, we disagree with the finding of the Court of Appeals that the
one-half undivided share of Alfredo in the property was already forfeited in
favor of his daughter Winifred, based on the ruling of the Cavite RTC in the
legal separation case. The Court of Appeals misconstrued the ruling of the
Cavite RTC that Alfredo, being the offending spouse, is deprived of his
share in the net profits and the same is awarded to Winifred.
The Cavite RTC ruling finds support in the following provisions of the
Family Code:
Art. 63. The decree of legal separation shall have the following effects:
(1) The spouses shall be entitled to live separately from each
other, but the marriage bonds shall not be severed;
(2) The absolute community or the conjugal partnership shall be
dissolved and liquidated but the offending spouse shall have no
right to any share of the net profits earned by the absolute
community or the conjugal partnership, which shall be forfeited
in accordance with the provisions of Article 43(2);
(3) The custody of the minor children shall be awarded to the
innocent spouse, subject to the provisions of Article 213 of this
Code; and
(2) We ORDER Alfredo Gozon and Winifred Gozon to pay InterDimensional Realty, Inc. jointly and severally the Eighteen Million
Pesos (P18,000,000) which was the amount paid by InterDimensional Realty, Inc. for the property, with legal interest
computed from the finality of this Decision.
SO ORDERED.
-------------------------SIOCHI V. GOZON
Facts:This case involves a 30,000 sq.m. parcel of land. The property is
situated in Malabon, Metro Manila and
is registered in the name of Alfredo
Gozon (Alfredo), married to Elvira Gozon (E
lvira).
On 23 December 1991, Elvira filed with the RTC of Cavite City a petition
for
legal
separation
against
herhusband Alfredo. On Jan 2,
1992, Elvira filed a notice of
lis pendens
, which was thenannotated on TCT no. 5357.While the legal separation
case was still pending, Alfredo and Mario Siochi (Mario) entered into
anagreement to buy and sell
(agreement) involving the property for the price of P18 million.However,
despite repeated demands from Mario, Alfredo failed to comply with the
stipulationsprovided in the agreement. After paying the P5 million earnest
money as partial payment of thepurchase price, Mario took possession of
the property. On September 6, 1993, the agreement wasannotated on TCT
no. 5357.Meanwhile, on 29 June 1994, the Cavite RTC rendered a decision
in the legal separation case, whichgranted the same. The RTC ordered
among others that, the conjugal partnership of gains of the spousesis
hereby declared dissolved and liquidated. As regards the property, it held
that it is deemed conjugalproperty.Alfredo executed a deed of donation
over the property in favor of their daughter, Winifred Gozon. Lateron,
Alfredo through an SPA executed by his daughter Winifred, sold the
property to IDRI and the latterpaid the purchase price in full. A new TCT
was issued by the Register of Deeds in favor of IDRI.Mario then filed with
the Malabon RTC a complaint for specific performance and damages,
annulmentof donation and sale, with preliminary mandatory and
prohibitory injunction and/or temporaryrestraining order.RTC: Malabon RTC
upheld original agreement to buy and sell between Mario and Alfredo and
declaredvoidhe sale by Alfredo and Winifred to Inter-Dimensional.CA: Court
of Appeals said agreement between Mario and Alfredo is void because (1)
it was entered intowithout the consent of Elvira,
Alfredos wife; and, (2) Alfredos undivided share has been forfeited in
favour of Winifred by the grant of legal separation by the Cavite
RTC.Issue:Whether or not Alfredo may sell the conjugal property, being
the sole administrator of the same withoutobtaining the consent of Elvira?
Held:NO.This case involves the conjugal property of Alfredo and Elvira.
Since the disposition of the propertyoccurred after the effectivity of the
Family Code, the applicable law is the Family Code. Article 124 of thefamily
code provides:
FACTS: Alfredo and Elvira are married. Winifred is their daughter. The
property involved in this case is a 30,000 sq. m. lot in Malabon which is
registered in the name of Alfredo. The property regime of the couple is
conjugal
partnership
of
gains.
Elvira filed for legal separation. B filed a notice of lis pendens over the title
of
the
lot
in
Malabon.
While the legal separation case was still pending, Alfredo entered into an
agreement with Mario who paid P5 million in earnest moneyand took
possession of the property. Title still with notice of lis pendens.
Cavite RTC granted legal separation. CPG was dissolved and liquidated.
Alfredo, the guilty spouse, did not receive his share in the net profits,
which instead went to their daughter, Winifred. Cavite RTC ruled land in
Malabon
as
conjugal
property.
Alfred executed a Deed of Donation over the property in favour of
Winifred. Malabon RTC issued new TCT in the name of Winifred without
annotating the agreement between Alfredo and Mario Siochi, nor the
notice of lis pendens filed by Elvira, the wife. Then, through an SPA,
Winifred gave authority to her father, Alfred, to sell the lot. Alfred sold it to
Inter-Dimensional Realty for P18 million. A TCT was issued to InterDimensional
Realty.
Mario filed a case with Malabon RTC (property was in Malabon) to Annul
donation to Winifred, Annul the Sale to Inter-Dimensional, and to remove
notice
of
lis
pendens
over
title
of
land.
Malabon RTC upheld original agreement to buy and sell between Mario and
Alfredo and declared void the sale by Alfredo and Winifred to InterDimensional.
(2) Was the donation to Winifred valid? No, the donation was not
valid. Elviras
consent
was
absent.
The fact that the contributions were given to be used as campaign funds
of Sen. Angara does not affect the character of the fund transfers as
donation or gift. There was thereby no retention of control over the
disposition of the contributions. There was simply an indication of the
purpose for which they were to be used. For as long as the contributions
were used for the purpose for which they were intended, Sen. Angara had
complete and absolute power to dispose of the contributions. He was fully
entitled to the economic benefits of the contributions.
Section 91 of the Tax Code is very clear. A donors or gift tax is imposed
on the transfer of property by gift.
The Bureau of Internal Revenue issued Ruling No. 344 on July 20, 1988,
which reads:
Political Contributions. For internal revenue purposes, political
contributions in the Philippines are considered taxable gift rather than
taxable income. This is so, because a political contribution is indubitably
not intended by the giver or contributor as a return of value or made
because of any intent to repay another what is his due, but bestowed only
because of motives of philanthropy or charity. His purpose is to give and
to bolster the morals, the winning chance of the candidate and/or his
party, and not to employ or buy. On the other hand, the recipient-donee
does not regard himself as exchanging his services or his product for the
money contributed. But more importantly he receives financial
advantages gratuitously.
When the U.S. gift tax law was adopted in the Philippines (before May 7,
1974), the taxability of political contributions was, admittedly, an
unsettled issue; hence, it cannot be presumed that the Philippine Congress
then had intended to consider or treat political contributions as nontaxable gifts when it adopted the said gift tax law. Moreover, well-settled
is the rule that the Philippines need not necessarily adopt the present rule
or construction in the United States on the matter. Generally, statutes of
different states relating to the same class of persons or things or having
the same purposes are not considered to be in pari materia because it
cannot be justifiably presumed that the legislature had them in mind when
2.
3.
4.
5.
6.
7.
8.
(B)
However,
In matters which are governed by the Code of Commerce and special laws,
their deficiency shall be supplied by the provisions of this Code.
Thus, reference may be made to the definition of a donation in the Civil
Code. Article 725 of said Code defines donation as:
. . . an act of liberality whereby a person disposes gratuitously of a thing or
right in favor of another, who accepts it.
Donation has the following elements: (a) the reduction of the patrimony of
the donor; (b) the increase in the patrimony of the donee; and, (c) the
intent to do an act of liberality or animus donandi.[7]
The present case falls squarely within the definition of a donation.
Petitioners, the late Manuel G. Abello[8], Jose C. Concepcion, Teodoro D.
Regala and Avelino V. Cruz, each gaveP882,661.31 to the campaign funds
of Senator Edgardo Angara, without any material consideration. All three
elements of a donation are present. The patrimony of the four petitioners
were reduced by P882,661.31 each. Senator Edgardo Angaras patrimony
correspondingly increased by P3,530,645.24[9]. There was intent to do an
act of liberality or animus donandi was present since each of the
petitioners gave their contributions without any consideration.
Taken together with the Civil Code definition of donation, Section 91
of the NIRC is clear and unambiguous, thereby leaving no room for
construction. In Rizal Commercial Banking Corporation v. Intermediate
Appellate Court[10] the Court enunciated:
It bears stressing that the first and fundamental duty of the Court is to
apply the law. When the law is clear and free from any doubt or ambiguity,
there is no room for construction or interpretation. As has been our
consistent ruling, where the law speaks in clear and categorical language,
there is no occasion for interpretation; there is only room for application
(Cebu Portland Cement Co. v. Municipality of Naga, 24 SCRA 708 [1968])
Where the law is clear and unambiguous, it must be taken to mean exactly
what it says and the court has no choice but to see to it that its mandate is
obeyed (Chartered Bank Employees Association v. Ople, 138 SCRA 273
[1985]; Luzon Surety Co., Inc. v. De Garcia, 30 SCRA 111 [1969]; Quijano
v. Development Bank of the Philippines, 35 SCRA 270 [1970]).
Only when the law is ambiguous or of doubtful meaning may the court
interpret or construe its true intent. Ambiguity is a condition of admitting
two or more meanings, of being understood in more than one way, or of
referring to two or more things at the same time. A statute is ambiguous if
it is admissible of two or more possible meanings, in which case, the Court
is called upon to exercise one of its judicial functions, which is to interpret
the law according to its true intent.
Second Issue
Since animus donandi or the intention to do an act of liberality is an
essential element of a donation, petitioners argue that it is important to
look into the intention of the giver to determine if a political contribution is
a gift. Petitioners argument is not tenable. First of all, donative intent is a
creature of the mind. It cannot be perceived except by the material and
tangible acts which manifest its presence. This being the case, donative
intent is presumed present when one gives a part of ones patrimony to
another without consideration. Second, donative intent is not negated
when the person donating has other intentions, motives or purposes which
do not contradict donative intent. This Court is not convinced that since
the purpose of the contribution was to help elect a candidate, there was
no donative intent. Petitioners contribution of money without any
Third Issue
Seventh Issue
Petitioners maintain that the definition of an electoral contribution
under the Omnibus Election Code is essential to appreciate how a political
contribution differs from a taxable gift. [11]Section 94(a) of the said Code
defines electoral contribution as follows:
The term "contribution" includes a gift, donation, subscription, loan,
advance or deposit of money or anything of value, or a contract, promise
or agreement to contribute, whether or not legally enforceable, made for
the purpose of influencing the results of the elections but shall not include
services rendered without compensation by individuals volunteering a
portion or all of their time in behalf of a candidate or political party. It shall
also include the use of facilities voluntarily donated by other persons, the
money value of which can be assessed based on the rates prevailing in the
area.
Since the purpose of an electoral contribution is to influence the
results of the election, petitioners again claim that donative intent is not
present. Petitioners attempt to place the barrier of mutual exclusivity
between donative intent and the purpose of political contributions. This
Court reiterates that donative intent is not negated by the presence of
other intentions, motives or purposes which do not contradict donative
intent.
Petitioners would distinguish a gift from a political donation by saying
that the consideration for a gift is the liberality of the donor, while the
consideration for a political contribution is the desire of the giver to
influence the result of an election by supporting candidates who, in the
perception of the giver, would influence the shaping of government
policies that would promote the general welfare and economic well-being
of the electorate, including the giver himself.
Petitioners attempt is strained. The fact that petitioners will
somehow in the future benefit from the election of the candidate to whom
they contribute, in no way amounts to a valuable material consideration so
as to remove political contributions from the purview of a donation.
Senator Angara was under no obligation to benefit the petitioners. The
proper performance of his duties as a legislator is his obligation as an
elected public servant of the Filipino people and not a consideration for the
political contributions he received. In fact, as a public servant, he may
even be called to enact laws that are contrary to the interests of his
benefactors, for the benefit of the greater good.
In fine, the purpose for which the sums of money were given, which
was to fund the campaign of Senator Angara in his bid for a senatorial
seat, cannot be considered as a material consideration so as to negate a
donation.
Fourth Issue
Petitioners raise the fact that since 1939 when the first Tax Code was
enacted, up to 1988 the BIR never attempted to subject political
contributions to donors tax. They argue that:
. . . It is a familiar principle of law that prolonged practice by the
government agency charged with the execution of a statute, acquiesced in
and relied upon by all concerned over an appreciable period of time, is an
authoritative interpretation thereof, entitled to great weight and the
highest respect. . . .[12]
This Court holds that the BIR is not precluded from making a new
interpretation of the law, especially when the old interpretation was
flawed. It is a well-entrenched rule that
. . . erroneous application and enforcement of the law by public officers do
not block subsequent correct application of the statute (PLDT v. Collector
2,
21
0
51
5
We also agree with the Court of Tax Appeals that at the time of his death,
Miller had his residence or domicile in Santa Cruz, California. During his
country, Miller never acquired a house for residential purposes for he
stayed at the Manila Hotel and later on at the Army and Navy Club. Except
this wife never stayed in the Philippines. The bulk of his savings and
properties were in the United States. To his home in California, he had
been sending souvenirs, such as carvings, curios and other similar
collections from the Philippines and the Far East. In November, 1940, Miller
took out a property insurance policy and indicated therein his address as
Santa Cruz, California, this aside from the fact that Miller, as already
stated, executed his will in Santa Cruz, California, wherein he stated that
he was "of Santa Cruz, California". From the foregoing, it is clear that as a
non-resident of the Philippines, the only properties of his estate subject to
estate and inheritance taxes are those shares of stock issued by
Philippines corporations, valued at P51,906.45. It is true, as stated by the
Tax Court, that while it may be the general rule that personal property, like
shares of stock in the Philippines, is taxable at the domicile of the owner
(Miller) under the doctrine of mobilia secuuntur persona, nevertheless,
when he during his life time,
. . . extended his activities with respect to his intangibles, so as
to avail himself of the protection and benefits of the laws of the
Philippines, in such a way as to bring his person or property
within the reach of the Philippines, the reason for a single place
of taxation no longer obtains- protection, benefit, and power over
the subject matter are no longer confined to California, but also
to the Philippines (Wells Fargo Bank & Union Trust Co. vs.
Collector (1940), 70 Phil. 325). In the instant case, the actual
situs of the shares of stock is in the Philippines, the corporation
being domiciled herein: and besides, the right to vote the
certificates at stockholders' meetings, the right to collect
dividends, and the right to dispose of the shares including the
transmission and acquisition thereof by succession, all enjoy the
protection of the Philippines, so that the right to collect the
estate and inheritance taxes cannot be questioned (Wells Fargo
Bank & Union Trust Co. vs. Collector supra). It is recognized that
the state may, consistently with due process, impose a tax upon
transfer by death of shares of stock in a domestic corporation
owned by a decedent whose domicile was outside of the state
(Burnett vs. Brooks, 288 U.S. 378; State Commission vs. Aldrich,
(1942) 316 U.S. 174, 86 L. Ed. 1358, 62 ALR 1008)." (Brief for the
Petitioner, p. 79-80).
The Ancilliary Administrator for purposes of exemption invokes the proviso
in Section 122 of the Tax Code, which provides as follows:
. . ."And Provided, however, That no tax shall be collected under
this Title in respect of intangible personal property (a) if the
decedent at the time of his death was a resident of a foreign
country which at the time of his death did not impose a transfer
tax or death tax of any character in respect of intangible
personal property of citizens of the Philippines not residing in
that country, or (b) if the laws of the foreign country of which the
decedent was resident at the tune of his death allow a similar
exemption from transfer taxes or death taxes of every character
in respect of intangible personal property owned by citizen, of
the Philippine not residing in that foreign country.
The Ancilliary Administrator bases his claim of exemption on (a) the
exemption of non-residents from the California inheritance taxes with
respect to intangibles, and (b) the exemption by way of reduction of
P4,000 from the estates of non-residents, under the United States Federal
Estate Tax Law. Section 6 of the California Inheritance Tax Act of 1935, now
reenacted as Section 13851, California Revenue and Taxation Code, reads
as follows:
SEC. 6. The following exemption from the tax are hereby allowed:
xxx
xxx
xxx.
(7) The tax imposed by this act in respect of intangible personal
property shall not be payable if decedent is a resident of a State
or Territory of the United States or a foreign state or country
which at the time of his death imposed a legacy, succession of
death tax in respect of intangible personal property within the
State or Territory or foreign state or country of residents of the
States or Territory or foreign state or country of residence of the
decedent at the time of his death contained a reciprocal
provision under which non-residents were exempted from legacy
or succession taxes or death taxes of every character in respect
of intangible personal property providing the State or Territory or
foreign state or country of residence of such non-residents
allowed a similar exemption to residents of the State, Territory or
foreign state or country of residence of such decedent.
Considering the State of California as a foreign country in relation to
section 122 of Our Tax Code we beleive and hold, as did the Tax Court, that
the Ancilliary Administrator is entitled to exemption from the tax on the
intangible personal property found in the Philippines. Incidentally, this
exemption granted to non-residents under the provision of Section 122 of
our Tax Code, was to reduce the burden of multiple taxation, which
otherwise would subject a decedent's intangible personal property to the
inheritance tax, both in his place of residence and domicile and the place
where those properties are found. As regards the exemption or reduction
of P4,000 based on the reduction under the Federal Tax Law in the amount
of $2,000, we agree with the Tax Court that the amount of $2,000 allowed
under the Federal Estate Tax Law is in the nature of deduction and not of
an exemption. Besides, as the Tax Court observes--.
. . . this exemption is allowed on all gross estate of non-residents
of the United States, who are not citizens thereof, irrespective of
whether there is a corresponding or similar exemption from
transfer or death taxes of non-residents of the Philippines, who
are citizens of the United States; and thirdly, because this
exemption is allowed on all gross estates of non-residents
irrespective of whether it involves tangible or intangible, real or
personal property; so that for these reasons petitioner cannot
claim a reciprocity. . .
Furthermore, in the Philippines, there is already a reduction on gross
estate tax in the amount of P3,000 under section 85 of the Tax Code,
before it was amended, which in part provides as follows:
SEC. 85. Rates of estate tax.There shall be levied, assessed,
collected, and paid upon the transfer of the net estate of every
decedent, whether a resident or non-resident of the Philippines, a
tax equal to the sum of the following percentages of the value of
the net estate determined as provided in sections 88 and 89:
One per centrum of the amount by which the net estate exceeds
three thousand pesos and does not exceed ten thousand
pesos;. . .
It will be noticed from the dispositive part of the appealed decision of the
Tax Court that the Ancilliary Administrator was ordered to pay the amount
of P2,047.22, representing estate taxes due, together with interest and
other increments. Said Ancilliary Administrator invokes the provisions of
Republic Act No. 1253, which was passed for the benefit of veterans,
guerrillas or victims of Japanese atrocities who died during the Japanese
occupation. The provisions of this Act could not be invoked during the
hearing before the Tax Court for the reason that said Republic Act was
approved only on June 10, 1955. We are satisfied that inasmuch as Miller,
not only suffered deprivation of the war, but was killed by the Japanese
military forces, his estate is entitled to the benefits of this Act.
Consequently, the interests and other increments provided in the appealed
judgment should not be paid by his estate.
With the above modification, the appealed decision of the Court of Tax
Appeals is hereby affirmed. We deem it unnecessary to pass upon the
other points raised in the appeal. No costs.
--------------------COLLECTOR V. LARA
(multiplicity of situs)
FACTS:
Hugo H. Miller, an American citizen, was born in SantaCruz, California,
U.S.A., in 1883. In 1905, he came to thePhilippines. From 1906 to 1917, he
was connected with thepublic school system, first as a teacher and later as
a divisionsuperintendent of schools. After his retirement, Miller acceptedan
executive position in the local branch of Ginn & Co., bookpublishers with
principal offices in New York and Boston,U.S.A., up to the outbreak of the
Pacific War. Miller lived at theManila Hotel. He never lived in any
residential house in thePhilippines. After the death of his wife in 1931, he
transferredfrom the Manila Hotel to the Army and Navy Club, where hewas
staying at the outbreak of the Pacific War. On January 17,1941, Miller
executed his last will and testament in Santa Cruz,California, in which he
declared that he was "of Santa Cruz,California". On December 7, 1941,
because of the Pacific War,the office of Ginn & Co. was closed, and Miller
joined theBoard of Censors of the United States Navy. During the war,he
was taken prisoner by the Japanese forces in Leyte, and inJanuary, 1944,
he was transferred to Catbalogan, Samar,where he was reported to have
been executed by said forceson March 11, 1944.Testate proceedings were
instituted before the Courtof California in Santa Cruz County, which
subsequently issuedan order and decree of settlement of final account and
finaldistribution.
The
Bank
of
America,
National
Trust
and
SavingsAssociation of San Francisco California, co-executor named
inMiller's will, filed an estate and inheritance tax return with theCollector,
covering only the shares of stock issued byPhilippine corporations. After
due investigation, the Collector assessed estate and inheritance taxes,
which was received bythe said executor. The estate of Miller protested
saidassessment. This assessment was appealed by De Lara asAncilliary
Administrator before the Board of Tax Appeals, whichappeal was later
heard and decided by the Court of TaxAppeals.In determining the "gross
estate" of a decedent, under Section 122 in relation to section 88 of our
Tax Code, it is firstnecessary to decide whether the decedent was a
resident or anon-resident of the Philippines at the time of his death.
TheCollector maintains that under the tax laws, residence anddomicile
have different meanings; that tax laws on estate andinheritance taxes only
mention resident and non-resident, andno reference whatsoever is made
to domicile except in Section93 (d) of the Tax Code; that Miller during his
long stay in thePhilippines had required a "residence" in this country, and
wasa resident thereof at the time of his death, and consequently,his
intangible personal properties situated here as well as inthe United States
were subject to said taxes. The AncilliaryAdministrator, however, equally
maintains that for estate andinheritance tax purposes, the term
"residence" is synonymouswith the term domicile.
ISSUE:
W/N the estate is liable to file an estate andinheritance tax return besides
those covering shares of stocksissued by Philippine corporations.
HELD: No
. The Court agrees with the Court of Tax Appealsthat at the time that The
National Internal Revenue Code waspromulgated in 1939, the prevailing
construction given by thecourts to the "residence" was synonymous with
domicile. andthat the two were used intercnangeabiy. Moreover, there
isreason to believe that the Legislature adopted the American(Federal and
State) estate and inheritance tax system (see e.g.Report to the Tax
Commision of the Philippines, Vol. II, pages122-124, cited in I Dalupan,
National Internal Revenue CodeAnnotated, p. 469-470). In the United
States, for estate taxpurposes, a resident is considered one who at the
time of hisdeath had his domicile in the United States, and in
American jurisprudence, for purposes of estate and taxation, "residence"is
interpreted as synonymous with domicile, and that
The incidence of estate and succession hashistorically been determined by
domicile andsitus and not by the fact of actual residence.
(Bowring vs. Bowers)At the time of his death, Miller had his residence
or domicile in Santa Cruz, California. During his stay in thecountry, Miller
never acquired a house for residential purposesfor he stayed at the Manila
Hotel and later on at the Army andNavy Club. The bulk of his savings and
properties were in theUnited States. To his home in California, he had been
sendingsouvenirs. In November, 1940, Miller took out a propertyinsurance
policy and indicated therein his address as SantaCruz, California, this aside
from the fact that Miller, as alreadystated, executed his will in Santa Cruz,
California, wherein hestated that he was "of Santa Cruz, California".*** As
to the shares of stocks issued by Philippinecorporations, an exemption was
granted to the estate by virtueof Section 122 of the Tax Code, which
provides as follows:. . ."And Provided, however, That no tax shall
becollected under this Title in respect of intangiblepersonal property (a) if
the decedent at the time of hisdeath was a resident of a foreign country
which at thetime of his death did not impose a transfer tax or death tax of
any character in respect of intangiblepersonal property of citizens of the
Philippines notresiding in that country, or (b) if the laws of the
foreigncountry of which the decedent was resident at thetune of his death
allow a similar exemption fromtransfer taxes or death taxes of every
character inrespect of intangible personal property owned bycitizen, of the
Philippine not residing in that foreigncountry.
----------------------G.R. No. L-13250 October 29, 1971
THE
COLLECTOR
OF
INTERNAL
vs.
ANTONIO CAMPOS RUEDA, respondent..
REVENUE, petitioner,
FERNANDO, J.:
The basic issue posed by petitioner Collector of Internal Revenue in this
appeal from a decision of the Court of Tax Appeals as to whether or not the
requisites of statehood, or at least so much thereof as may be necessary
for the acquisition of an international personality, must be satisfied for a
"foreign country" to fall within the exemption of Section 122 of the
National Internal Revenue Code 1 is now ripe for adjudication. The Court of
Tax Appeals answered the question in the negative, and thus reversed the
action taken by petitioner Collector, who would hold respondent Antonio
Campos Rueda, as administrator of the estate of the late Estrella Soriano
Vda. de Cerdeira, liable for the sum of P161,874.95 as deficiency estate
and inheritance taxes for the transfer of intangible personal properties in
the Philippines, the deceased, a Spanish national having been a resident of
Tangier, Morocco from 1931 up to the time of her death in 1955. In an
earlier resolution promulgated May 30, 1962, this Court on the assumption
that the need for resolving the principal question would be obviated,
referred the matter back to the Court of Tax Appeals to determine whether
the alleged law of Tangier did grant the reciprocal tax exemption required
by the aforesaid Section 122. Then came an order from the Court of Tax
Appeals submitting copies of legislation of Tangier that would manifest
that the element of reciprocity was not lacking. It was not until July 29,
1969 that the case was deemed submitted for decision. When the petition
for review was filed on January 2, 1958, the basic issue raised was
impressed with an element of novelty. Four days thereafter, however, on
January 6, 1958, it was held by this Court that the aforesaid provision does
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