G.R. No.

L-22734

September 15, 1967

COMMISSIONER OF INTERN L RE!EN"E, petitioner, vs. M N"EL #. $INE% , &' o(e o) t*e *e+r' o) ,e-e&'e, T N SIO $INE% , respondent. Office of the Solicitor General for petitioner. Manuel B. Pineda for and in his own behalf as respondent.

Manue #. Pineda opposes the proposition on the $round that as an heir he is iab e for unpaid in!o"e ta, due the estate on y up to the e,tent of and in proportion to any share he re!eived. ?e re ies on Government of the Philippine Islands v. Pamintuan2 where =e he d that :after the partition of an estate, heirs and distributees are iab e individua y for the pay"ent of a awfu outstandin$ ! ai"s a$ainst the estate in proportion to the a"ount or va ue of the property they have respe!tive y re!eived fro" the estate.: =e ho d that the @overn"ent !an re8uire Manue #. Pineda to pay the fu a"ount of the ta,es assessed. Pineda is iab e for the assess"ent as an heir and as a ho derAtransferee of property be on$in$ to the estateBta,payer. As an heir he is individua y answerab e for the part of the ta, proportionate to the share he re!eived fro" the inheritan!e. 3 ?is iabi ity, however, !annot e,!eed the a"ount of his share. 4 As a ho der of property be on$in$ to the estate, Pineda is iab e for he ta, up to the a"ount of the property in his possession. -he reason is that the @overn"ent has a ien on the P2,511.11 re!eived by hi" fro" the estate as his share in the inheritan!e, for unpaid in!o"e ta,es4a for whi!h said estate is iab e, pursuant to the ast para$raph of 9e!tion 315 of the -a, &ode, whi!h we 8uote hereunder4 'f any person, !orporation, partnership, ;ointAa!!ount ( cuenta en participacion+, asso!iation, or insuran!e !o"pany iab e to pay the in!o"e ta,, ne$ e!ts or refuses to pay the sa"e after de"and, the a"ount sha be a ien in favor of the @overn"ent of the Phi ippines fro" the ti"e when the assess"ent was "ade by the &o""issioner of 'nterna 2evenue unti paid with interest, pena ties, and !osts that "ay a!!rue in addition thereto upon a property and ri$hts to property be on$in$ to the ta,payer4 . . . #y virtue of su!h ien, the @overn"ent has the ri$ht to sub;e!t the property in Pineda0s possession, i.e., the P2,511.11, to satisfy the in!o"e ta, assess"ent in the su" of P*31.2/. After su!h pay"ent, Pineda wi have a ri$ht of !ontribution fro" his !oAheirs,5 to a!hieve an ad;ust"ent of the proper share of ea!h heir in the distributab e estate. A to d, the @overn"ent has two ways of !o e!tin$ the ta, in 8uestion. One, by $oin$ after a the heirs and !o e!tin$ fro" ea!h one of the" the a"ount of the ta, proportionate to the inheritan!e re!eived. -his re"edy was adopted in Government of the Philippine Islands v. Pamintuan , supra. 'n said !ase, the @overn"ent fi ed an a!tion a$ainst a the heirs for the !o e!tion of the ta,. -his a!tion rests on the !on!ept that hereditary property !onsists on y of that part whi!h re"ains after the sett e"ent of a awfu ! ai"s a$ainst the estate, for the sett e"ent of whi!h the entire estate is first iab e.3 -he reason why in !ase suit is fi ed a$ainst a the heirs the ta, due fro" the estate is evied proportionate y a$ainst the" is to a!hieve thereby two resu ts4 first, pay"ent of the ta,< and se!ond, ad;ust"ent of the shares of ea!h heir in the distributed estate as lessened b the ta!. Another re"edy, pursuant to the ien !reated by 9e!tion 315 of the -a, &ode upon a property and ri$hts to property be on$in$ to the ta,payer for unpaid in!o"e ta,, is by sub;e!tin$ said property of the estate whi!h is in the hands of an heir or transferee to the pay"ent of the ta, due, the estate. -his se!ond re"edy is the very avenue the @overn"ent tooC in this !ase to !o e!t the ta,. -he #ureau of 'nterna 2evenue shou d be $iven, in instan!es iCe the !ase at bar, the ne!essary dis!retion to avai itse f of the "ost e,peditious way to !o e!t the ta, as "ay be envisioned in the parti!u ar provision of the -a, &ode above 8uoted, be!ause ta,es are the ifeb ood of $overn"ent and their pro"pt and !ertain avai abi ity is an i"perious need. * And as aforeAstated in this !ase the suit seeCs to a!hieve on y one ob;e!tive4 pay"ent of the ta,. -he ad;ust"ent of the respe!tive shares due to the heirs fro" the inheritan!e, as essened by the ta,, is eft to await the suit for !ontribution by the heir fro" who" the @overn"ent re!overed said ta,. =?%2%FO2%, the de!ision appea ed fro" is "odified. Manue #. Pineda is hereby ordered to pay to the &o""issioner of 'nterna 2evenue the su" of P*31.2/ as defi!ien!y in!o"e ta, for 1945 and 1943, and rea estate dea er0s fi,ed ta, for the fourth 8uarter of 1943 and for the who e year 194*, without pre;udi!e to his ri$ht of !ontribution for his !oAheirs. )o !osts. 9o ordered.

#ENG.ON, /.$., J.: On May 23, 1945 Atanasio Pineda died, survived by his wife, Fe i!isi"a #a$tas, and 15 !hi dren, the e dest of who" is Manue #. Pineda, a awyer. %state pro!eedin$s were had in the &ourt of First 'nstan!e of Mani a (&ase )o. *1129+ wherein the survivin$ widow was appointed ad"inistratri,. -he estate was divided a"on$ and awarded to the heirs and the pro!eedin$s ter"inated on .une /, 194/. Manue #. Pineda0s share a"ounted to about P2,511.11. After the estate pro!eedin$s were ! osed, the #ureau of 'nterna 2evenue investi$ated the in!o"e ta, iabi ity of the estate for the years 1945, 1943, 194* and 194/ and it found that the !orrespondin$ in!o"e ta, returns were not fi ed. -hereupon, the representative of the &o e!tor of 'nterna 2evenue fi ed said returns for the estate on the basis of infor"ation and data obtained fro" the aforesaid estate pro!eedin$s and issued an assess"ent for the fo owin$4 1. 5efi!ien!y in!o"e ta, 1945 P135./3 1943 433.95 194* 1,213.91 P1,**9.39 Add4 56 sur!har$e //.9/ 16 "onth y interest fro" )ove"ber 31, 1953 to Apri 15, 195* *21.** &o"pro"ise for ate fi in$ /1.11 &o"pro"ise for ate pay"ent 41.11 P2,*1*.44 -ota a"ount due 77777777777 P14.51 2. Additiona residen!e ta, for 1945 77777777777 3. 2ea %state dea er0s ta, for the fourth 8uarter of 1943 P21*.51 and the who e year of 194* 77777777777 Manue #. Pineda, who re!eived the assess"ent, !ontested the sa"e. 9ubse8uent y, he appea ed to the &ourt of -a, Appea s a e$in$ that he was appea in$ :on y that proportionate part or portion pertainin$ to hi" as one of the heirs.: After hearin$ the parties, the &ourt of -a, Appea s rendered ;ud$"ent reversin$ the de!ision of the &o""issioner on the $round that his ri$ht to assess and !o e!t the ta, has pres!ribed. -he &o""issioner appea ed and this &ourt affir"ed the findin$s of the -a, &ourt in respe!t to the assess"ent for in!o"e ta, for the year 194* but he d that the ri$ht to assess and !o e!t the ta,es for 1945 and 1943 has not pres!ribed. For 1945 and 1943 the returns were fi ed on Au$ust 24, 1953< assess"ents for both ta,ab e years were "ade within five years therefro" or on O!tober 19, 1953< and the a!tion to !o e!t the ta, was fi ed within five years fro" the atter date, on Au$ust *, 195*. For ta,ab e year 194*, however, the return was fi ed on Mar!h 1, 194/< the assess"ent was "ade on O!tober 19, 1953, "ore than five years fro" the date the return was fi ed< hen!e, the ri$ht to assess in!o"e ta, for 194* had pres!ribed. A!!ordin$ y, =e re"anded the !ase to the -a, &ourt for further appropriate pro!eedin$s.1 'n the -a, &ourt, the parties sub"itted the !ase for de!ision without additiona eviden!e. On )ove"ber 29, 1933 the &ourt of -a, Appea s rendered ;ud$"ent ho din$ Manue #. Pineda iab e for the pay"ent !orrespondin$ to his share of the fo owin$ ta,es4 5efi!ien!y in!o"e ta, 1945 P135./3

1943 433.95 2ea estate dea er0s fi,ed ta, 4th 8uarter of 1943 and who e year of 194* P1/*.51 -he &o""issioner of 'nterna 2evenue has appea ed to >s and has proposed to ho d Manue #. Pineda iab e for the pay"ent of a the ta,es found by the -a, &ourt to be due fro" the estate in the tota a"ount of P*31.2/ instead of on y for the a"ount of ta,es !orrespondin$ to his share in the estate.1awphl.nt