CASE DIGEST SUCCESSION

Pros. Mark Maranes

1. Limjoco v Fragrante
G.R. No. L-770

April 27, 1948

ANGEL T. LIMJOCO, petitioner,

vs.
INTESTATE ESTATE OF PEDRO O. FRAGRANTE, deceased, respondent.
Angel Limjoco, Jr. and Delfin L. Gonzales for petitioner.
Bienvenido A. Tan for respondent.
HILADO, J.:
Under date of May 21, 1946, the Public Service Commission, through Deputy Commissioner Fidel Ibaez, rendered
its decision in case No. 4572 of Pedro O. Fragante, as applicant for a certificate of public convenience to install,
maintain and operate an ice plant in San Juan, Rizal, whereby said commission held that the evidence therein
showed that the public interest and convenience will be promoted in a proper and suitable manner "by authorizing
the operation and maintenance of another ice plant of two and one-half (2-) tons in the municipality of San Juan;
that the original applicant Pedro O. Fragante was a Filipino Citizen at the time of his death; and that his intestate
estate is financially capable of maintaining the proposed service". The commission, therefore, overruled the
opposition filed in the case and ordered "that under the provisions of section 15 of Commonwealth Act No. 146, as
amended a certificate of public convenience be issued to the Intestate Estate of the deceased Pedro Fragante,
authorizing said Intestate Estate through its Special or Judicial Administrator, appointed by the proper court of
competent jurisdiction, to maintain and operate an ice plant with a daily productive capacity of two and one-half (21/2) tons in the Municipality of San Juan and to sell the ice produced from said plant in the said Municipality of San
Juan and in the Municipality of Mandaluyong, Rizal, and in Quezon City", subject to the conditions therein set forth
in detail (petitioner's brief, pp. 33-34).
Petitioner makes four assignments of error in his brief as follows:
1. The decision of the Public Service Commission is not in accordance with law.
2. The decision of the Public Service Commission is not reasonably supported by evidence.
3. The Public Service Commission erred in not giving petitioner and the Ice and Cold Storage Industries of
the Philippines, Inc., as existing operators, a reasonable opportunity to meet the increased demand.
4. The decision of the Public Service Commission is an unwarranted departure from its announced policy
with respect to the establishment and operation of ice plant. (Pp. 1-2, petitioner's brief.)
In his argument petitioner contends that it was error on the part of the commission to allow the substitution of the
legal representative of the estate of Pedro O. Fragante for the latter as party applicant in the case then pending
before the commission, and in subsequently granting to said estate the certificate applied for, which is said to be in
contravention of law.
If Pedro O. Fragante had not died, there can be no question that he would have had the right to prosecute his
application before the commission to its final conclusion. No one would have denied him that right. As declared by
the commission in its decision, he had invested in the ice plant in question P 35,000, and from what the commission
said regarding his other properties and business, he would certainly have been financially able to maintain and
operate said plant had he not died. His transportation business alone was netting him about P1,440 a month. He
was a Filipino citizen and continued to be such till his demise. The commission declared in its decision, in view of

the evidence before it, that his estate was financially able to maintain and operate the ice plant. The aforesaid right
of Pedro O. Fragante to prosecute said application to its conclusion was one which by its nature did not lapse
through his death. Hence, it constitutes a part of the assets of his estate, for which a right was property despite the
possibility that in the end the commission might have denied application, although under the facts of the case, the
commission granted the application in view of the financial ability of the estate to maintain and operate the ice plant.
Petitioner, in his memorandum of March 19, 1947, admits (page 3) that the certificate of public convenience once
granted "as a rule, should descend to his estate as an asset". Such certificate would certainly be property, and the
right to acquire such a certificate, by complying with the requisites of the law, belonged to the decedent in his
lifetime, and survived to his estate and judicial administrator after his death.
If Pedro O. Fragrante had in his lifetime secured an option to buy a piece of land and during the life of the option he
died, if the option had been given him in the ordinary course of business and not out of special consideration for his
person, there would be no doubt that said option and the right to exercise it would have survived to his estate and
legal representatives. In such a case there would also be the possibility of failure to acquire the property should he
or his estate or legal representative fail to comply with the conditions of the option. In the case at bar Pedro O.
Fragrante's undoubted right to apply for and acquire the desired certificate of public convenience the evidence
established that the public needed the ice plant was under the law conditioned only upon the requisite citizenship
and economic ability to maintain and operate the service. Of course, such right to acquire or obtain such certificate
of public convenience was subject to failure to secure its objective through nonfulfillment of the legal conditions, but
the situation here is no different from the legal standpoint from that of the option in the illustration just given.
Rule 88, section 2, provides that the executor or administrator may bring or defend actions, among other cases, for
the protection of the property or rights of the deceased which survive, and it says that such actions may be brought
or defended "in the right of the deceased".
Rule 82, section 1, paragraph (a), mentions among the duties of the executor or administrator, the making of an
inventory of all goods, chattels, rights, credits, and estate of the deceased which shall come to his possession or
knowledge, or to the possession of any other person for him.
In his commentaries on the Rules of Court (Volume II, 2nd ed., pages 366, 367) the present chief Justice of this
Court draws the following conclusion from the decisions cited by him:
Therefore, unless otherwise expressly provided by law, any action affecting the property or rights(emphasis
supplied) of a deceased person which may be brought by or against him if he were alive, may likewise be
instituted and prosecuted by or against the administrator, unless the action is for recovery of money, debt or
interest thereon, or unless, by its very nature, it cannot survive, because death extinguishes the right . . . .
It is true that a proceeding upon the application for a certificate of public convenience before the Public Service
Commission is not an "action". But the foregoing provisions and citations go to prove that the decedent's rights
which by their nature are not extinguished by death go to make up a part and parcel of the assets of his estate
which, being placed under the control and management of the executor or administrator, can not be exercised but
by him in representation of the estate for the benefit of the creditors, devisees or legatees, if any, and the heirs of
the decedent. And if the right involved happens to consist in the prosecution of an unfinished proceeding upon an
application for a certificate of public convenience of the deceased before the Public Service Commission, it is but
logical that the legal representative be empowered and entitled in behalf of the estate to make the right effective in
that proceeding.
Manresa (Vol. III, 6th ed., p. 11) says that No. 10 of article 334 and article 336 of the Civil Code, respectively,
consider as immovable and movable things rights which are not material. The same eminent commentator says in
the cited volume (p. 45) that article 336 of the Civil Code has been deficiently drafted in that it is not sufficiently
expressive of all incorporeal rights which are also property for juridical purposes.
Corpus Juris (Vol. 50, p. 737) states that in the broad sense of the term, property includes, among other things, "an
option", and "the certificate of the railroad commission permitting the operation of a bus line", and on page 748 of
the same volume we read:

However, these terms (real property, as estate or interest) have also been declared to include every species
of title, inchoate or complete, and embrace rights which lie in contract, whether executory or executed.
(Emphasis supplied.)
Another important question raised by petitioner is whether the estate of Pedro O. Fragrante is a "person" within the
meaning of the Public Service Act.
Words and Phrases, First Series, (Vol. 6, p, 5325), states the following doctrine in the jurisdiction of the State of
Indiana:
As the estate of the decedent is in law regarded as a person, a forgery committed after the death of the man
whose name purports to be signed to the instrument may be prosecuted as with the intent to defraud the
estate. Billings vs. State, 107 Ind., 54, 55, 6 N. E. 914, 7 N. E. 763, 57 Am. Rep. 77.
The Supreme Court of Indiana in the decision cited above had before it a case of forgery committed after the death
of one Morgan for the purpose of defrauding his estate. The objection was urged that the information did not aver
that the forgery was committed with the intent to defraud any person. The Court, per Elliott, J., disposed of this
objection as follows:
. . . The reason advanced in support of this proposition is that the law does not regard the estate of a
decedent as a person. This intention (contention) cannot prevail. The estate of the decedent is a person in
legal contemplation. "The word "person" says Mr. Abbot, "in its legal signification, is a generic term, and
includes artificial as well as natural persons," 2 Abb. Dict. 271; Douglas vs. Pacific, etc. Co., 4 Cal. 304;
Planters', etc., Bank vs. Andrews, 8 Port. (Ala.) 404. It said in another work that 'persons are of two kinds:
natural and artificial. A natural person is a human being. Artificial persons include (1) a collection or
succession of natural persons forming a corporation; (2) a collection of property to which the law attributes
the capacity of having rights and duties. The latter class of artificial persons is recognized only to a limited
extent in our law. "Examples are the estate of a bankrupt or deceased person." 2 Rapalje & L. Law Dict. 954.
Our own cases inferentially recognize the correctness of the definition given by the authors from whom we
have quoted, for they declare that it is sufficient, in pleading a claim against a decedent's estate, to
designate the defendant as the estate of the deceased person, naming him. Ginn vs. Collins, 43 Ind. 271.
Unless we accept this definition as correct, there would be a failure of justice in cases where, as here, the
forgery is committed after the death of a person whose name is forged; and this is a result to be avoided if it
can be done consistent with principle. We perceive no difficulty in avoiding such a result; for, to our minds, it
seems reasonable that the estate of a decedent should be regarded as an artificial person. It is the creation
of law for the purpose of enabling a disposition of the assets to be properly made, and, although natural
persons as heirs, devises, or creditors, have an interest in the property, the artificial creature is a distinct
legal entity. The interest which natural persons have in it is not complete until there has been a due
administration; and one who forges the name of the decedent to an instrument purporting to be a promissory
note must be regarded as having intended to defraud the estate of the decedent, and not the natural
persons having diverse interests in it, since ha cannot be presumed to have known who those persons were,
or what was the nature of their respective interest. The fraudulent intent is against the artificial person, the
estate and not the natural persons who have direct or contingent interest in it. (107 Ind. 54, 55, 6 N.E.
914-915.)
In the instant case there would also be a failure of justice unless the estate of Pedro O. Fragrante is considered a
"person", for quashing of the proceedings for no other reason than his death would entail prejudicial results to his
investment amounting to P35,000.00 as found by the commission, not counting the expenses and disbursements
which the proceeding can be presumed to have occasioned him during his lifetime, let alone those defrayed by the
estate thereafter. In this jurisdiction there are ample precedents to show that the estate of a deceased person is also
considered as having legal personality independent of their heirs. Among the most recent cases may be mentioned
that of "Estate of Mota vs. Concepcion, 56 Phil., 712, 717, wherein the principal plaintiff was the estate of the
deceased Lazaro Mota, and this Court gave judgment in favor of said estate along with the other plaintiffs in these
words:
. . . the judgment appealed from must be affirmed so far as it holds that defendants Concepcion and
Whitaker are indebted to he plaintiffs in the amount of P245,804.69 . . . .

Under the regime of the Civil Code and before the enactment of the Code of Civil Procedure, the heirs of a
deceased person were considered in contemplation of law as the continuation of his personality by virtue of the
provision of article 661 of the first Code that the heirs succeed to all the rights and obligations of the decedent by the
mere fact of his death. It was so held by this Court in Barrios vs. Dolor, 2 Phil., 44, 46. However, after the enactment
of the Code of Civil Procedure, article 661 of the Civil Code was abrogated, as held in Suiliong & Co. vs. ChioTaysan, 12 Phil., 13, 22. In that case, as well as in many others decided by this Court after the innovations
introduced by the Code of Civil Procedure in the matter of estates of deceased persons, it has been the constant
doctrine that it is the estate or the mass of property, rights and assets left by the decedent, instead of the heirs
directly, that becomes vested and charged with his rights and obligations which survive after his demise.
The heirs were formerly considered as the continuation of the decedent's personality simply by legal fiction, for they
might not have been flesh and blood the reason was one in the nature of a legal exigency derived from the
principle that the heirs succeeded to the rights and obligations of the decedent. Under the present legal system,
such rights and obligations as survive after death have to be exercised and fulfilled only by the estate of the
deceased. And if the same legal fiction were not indulged, there would be no juridical basis for the estate,
represented by the executor or administrator, to exercise those rights and to fulfill those obligations of the deceased.
The reason and purpose for indulging the fiction is identical and the same in both cases. This is why according to
the Supreme Court of Indiana in Billings vs. State, supra, citing 2 Rapalje & L. Dictionary, 954, among the artificial
persons recognized by law figures "a collection of property to which the law attributes the capacity of having rights
and duties", as for instance, the estate of a bankrupt or deceased person.
Petitioner raises the decisive question of whether or not the estate of Pedro O. Fragrante can be considered a
"citizen of the Philippines" within the meaning of section 16 of the Public Service Act, as amended, particularly the
proviso thereof expressly and categorically limiting the power of the commission to issue certificates of public
convenience or certificates of public convenience and necessity "only to citizens of the Philippines or of the United
States or to corporations, copartnerships, associations, or joint-stock companies constituted and organized under
the laws of the Philippines", and the further proviso that sixty per centum of the stock or paid-up capital of such
entities must belong entirely to citizens of the Philippines or of the United States.
Within the Philosophy of the present legal system, the underlying reason for the legal fiction by which, for certain
purposes, the estate of the deceased person is considered a "person" is the avoidance of injustice or prejudice
resulting from the impossibility of exercising such legal rights and fulfilling such legal obligations of the decedent as
survived after his death unless the fiction is indulged. Substantially the same reason is assigned to support the
same rule in the jurisdiction of the State of Indiana, as announced in Billings vs. State, supra, when the Supreme
Court of said State said:
. . . It seems reasonable that the estate of a decedent should be regarded as an artificial person. it is the
creation of law for the purpose of enabling a disposition of the assets to be properly made . . . .
Within the framework and principles of the constitution itself, to cite just one example, under the bill of rights it
seems clear that while the civil rights guaranteed therein in the majority of cases relate to natural persons, the term
"person" used in section 1 (1) and (2) must be deemed to include artificial or juridical persons, for otherwise these
latter would be without the constitutional guarantee against being deprived of property without due process of law, or
the immunity from unreasonable searches and seizures. We take it that it was the intendment of the framers to
include artificial or juridical, no less than natural, persons in these constitutional immunities and in others of similar
nature. Among these artificial or juridical persons figure estates of deceased persons. Hence, we hold that within the
framework of the Constitution, the estate of Pedro O. Fragrante should be considered an artificial or juridical person
for the purposes of the settlement and distribution of his estate which, of course, include the exercise during the
judicial administration thereof of those rights and the fulfillment of those obligations of his which survived after his
death. One of those rights was the one involved in his pending application before the Public Service Commission in
the instant case, consisting in the prosecution of said application to its final conclusion. As stated above, an injustice
would ensue from the opposite course.
How about the point of citizenship? If by legal fiction his personality is considered extended so that any debts or
obligations left by, and surviving, him may be paid, and any surviving rights may be exercised for the benefit of his
creditors and heirs, respectively, we find no sound and cogent reason for denying the application of the same fiction
to his citizenship, and for not considering it as likewise extended for the purposes of the aforesaid unfinished
proceeding before the Public Service Commission. The outcome of said proceeding, if successful, would in the end

inure to the benefit of the same creditors and the heirs. Even in that event petitioner could not allege any prejudice
in the legal sense, any more than he could have done if Fragrante had lived longer and obtained the desired
certificate. The fiction of such extension of his citizenship is grounded upon the same principle, and motivated by the
same reason, as the fiction of the extension of personality. The fiction is made necessary to avoid the injustice of
subjecting his estate, creditors and heirs, solely by reason of his death to the loss of the investment amounting to
P35,000, which he has already made in the ice plant, not counting the other expenses occasioned by the instant
proceeding, from the Public Service Commission of this Court.
We can perceive no valid reason for holding that within the intent of the constitution (Article IV), its provisions on
Philippine citizenship exclude the legal principle of extension above adverted to. If for reasons already stated our
law indulges the fiction of extension of personality, if for such reasons the estate of Pedro O. Fragrante should be
considered an artificial or juridical person herein, we can find no justification for refusing to declare a like fiction as to
the extension of his citizenship for the purposes of this proceeding.
Pedro O. Fragrante was a Filipino citizen, and as such, if he had lived, in view of the evidence of record, he would
have obtained from the commission the certificate for which he was applying. The situation has suffered but one
change, and that is, his death. His estate was that of a Filipino citizen. And its economic ability to appropriately and
adequately operate and maintain the service of an ice plant was the same that it received from the decedent
himself. In the absence of a contrary showing, which does not exist here, his heirs may be assumed to be also
Filipino citizens; and if they are not, there is the simple expedient of revoking the certificate or enjoining them from
inheriting it.
Upon the whole, we are of the opinion that for the purposes of the prosecution of said case No. 4572 of the Public
Service Commission to its final conclusion, both the personality and citizenship of Pedro O. Fragrante must be
deemed extended, within the meaning and intent of the Public Service Act, as amended, in harmony with the
constitution: it is so adjudged and decreed.
Decision affirmed, without costs. So ordered.
Moran, C.J., Pablo, Bengzon, Briones, Padilla and Tuason, JJ., concur.
Paras, J., I hereby certify that Mr. Justice Feria voted with the majority.

Separate Opinions
PERFECTO, J., dissenting:
Commonwealth Act No. 146 reserves to Filipino citizens the right to obtain a certificate of public convenience to
operate an ice plant in San Juan, Rizal. The limitation is in accordance with section 8 of Article XIV of the
Constitution which provides
No franchise, certificate, or any other form of authorization for the operation of a public utility shall be
granted except to citizens of the Philippines or to corporations or other entities organized under the laws of
the Philippines, sixty per centum of the capital of which is owned by citizens of the Philippines, nor such
franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. No
franchise granted to any individual, firm or corporation, except under the condition that it shall be subject to
amendment, alteration, or repeal by Congress when the public interest so requires.
The main question in this case is whether the estate of Pedro O. Fragrante fulfills the citizenship requirement. To our
mind, the question can be restated by asking whether the heirs of Pedro O. Fragrante fulfill the citizenship
requirement of the law.
The estate is an abstract entity. As such, its legal value depends on what it represents. It is a device by which the
law gives a kind of personality and unity to undetermined tangible persons, the heirs. They inherit and replace the
deceased at the very moment of his death. As there are procedural requisites for their identification and

determination that need time for their compliance, a legal fiction has been devised to represent them. That legal
fiction is the estate, a liquid condition in process of solidification.
The estate, therefore, has only a representative value. What the law calls estate is, a matter of fact, intended to
designate the heirs of the deceased. The question, therefore, in this case, boils down to the citizenship of the heirs
of Fragrante.
There is nothing in the record to show conclusively the citizenship of the heirs of Fragrante. If they are Filipino
citizens, the action taken by the Public Service Commission should be affirmed. If they are not, it should be
reversed.
Petitioner alleges that the estate is just a front or dummy for aliens to go around the citizenship constitutional
provision. It is alleged that Gaw Suy, the special administrator of the estate, is an alien.
We are of the opinion that the citizenship of the heirs of Fragrante should be determined by the Commission upon
evidence that the party should be present. It should also determine the dummy question raised by the petitioner.
We are of opinion and so vote that the decision of the Public Service Commission of May 21, 1946, be set aside and
that the Commission be instructed to receive evidence of the above factual questions and render a new decision
accordingly.

2 IBARIES V PO, 92 Phil 721

G.R. No. L-5064

February 27, 1953

BIENVENIDO A. IBARLE, plaintiff-appellant,

vs.
ESPERANZA M. PO, defendant-appellant.
Quirico del Mar for appellant.
Daniel P. Tumulak and Conchita F. Miel appellee.
TUASON, J.:
This action commenced in the Court of First Instance of Cebu to annul a deed of sale conveying to the defendant, in
consideration of P1,700, one undivided half of a parcel of land which previously had been sold, along with the other
half, by the same vendor to the plaintiff's grantors. judgment was against the plaintiff.
The case was submitted for decision upon an agreed statement of facts, the pertinent parts of which are thus
summarized in the appealed decision:
1st. That Leonard j. Winstanley and Catalina Navarro were husband and wife, the former having died on
June 6, 1946 leaving heir the surviving spouse and some minor children;
2nd. hat upon the death of L.J. Winstanley, he left a parcel of land described under Transfer Certificate of
title No. 2391 of the Registry of Deeds of the Province of Cebu;
3rd. That the above mentioned property was a conjugal property;
4th. That on April 15, 1946, the surviving spouse Catalina Navarro Vda. de Winstanley sold the entire
parcel of land to the spouses Maria Canoy, alleging among other things, that she needed money for the
support of her children;

5th. That on May 24, 1947, the spouses Maria Canoy and Roberto Canoy sold the same parcel of land to
the plaintiff in this case named Bienvenido A. Ebarle;
6th. That the two deeds of sale referred to above were not registered and have never been registered up
to the date;
7th. That on January 17, 1948 surviving spouse Catalina Navarro Vda. de Winstanley, after her
appointment as guardian of her children by this court (Special proceeding no. 212-R) sold one-half of the
land mentioned above to Esperanza M. Po, defendant in the instant case, which portion belongs to the
children of the above named spouses.
As stated by the trial Judge, the sole question for determination is the validity of the sale to Esperanza M. Po, the
last purchaser. This question in turn depends upon the validity of the prior ale to Maria Canoy and Roberto Canoy.
Article 657 of the old Civil Code provides: "The rights to the succession of a person are transmitted from the
moment of his death." in a slightly different language, this article is incorporated in the new Civil Code as article 777.
Manresa, commending on article 657 of the Civil Code of Spain, says:
The moment of death is the determining factor when the heirs acquire a definite right to the inheritance,
whether such right be pure or contingent. It is immaterial whether a short or long period of time lapses
between the death of the predecessor and the entry into possession of the property of the inheritance
because the right is always deemed to be retroactive from the moment of death. (5 Manresa, 317.)
The above provision and comment make it clear that when Catalina Navarro Vda. de Winstanley sold the entire
parcel to the Canoy spouses, one-half of it already belonged to the seller's children. No formal or judicial declaration
being needed to confirm the children's title, it follows that the first sale was null and void in so far as it included the
children's share.
On the other hand, the sale to the defendant having been made by authority of the competent court was undeniably
legal and effective. The fact that it has not been recorded is of no consequence. If registration were necessary, still
the non-registration would not avail the plaintiff because it was due to no other cause than his own opposition.
The decision will be affirmed subject to the reservation, made in said decision, of the right of the plaintitff and/or the
Canoy spouses to bring such action against Catalina Navarro Vda. de Winstanley as may be appropriate for such
damages as they may have incurred by reason of the voiding of the sale in their favor.
Paras, C.J., Feria, Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo, Bautista Angelo and Labrador, JJ., concur.

3. Lorenzo v Posadas 64 Phil 353

G.R. No. L-43082

June 18, 1937

PABLO LORENZO, as trustee of the estate of Thomas Hanley, deceased, plaintiff-appellant,

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.
LAUREL, J.:

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. Said will provides, among other things, as follows:
4. I direct that any money left by me be given to my nephew Matthew Hanley.
5. I direct that all real estate owned by me at the time of my death be not sold or otherwise disposed of for a
period of ten (10) years after my death, and that the same be handled and managed by the executors, and
proceeds thereof to be given to my nephew, Matthew Hanley, at Castlemore, Ballaghaderine, County of
Rosecommon, Ireland, and that he be directed that the same be used only for the education of my brother's
children and their descendants.
6. I direct that ten (10) years after my death my property be given to the above mentioned Matthew Hanley
to be disposed of in the way he thinks most advantageous.
xxx

xxx

xxx

8. I state at this time I have one brother living, named Malachi Hanley, and that my nephew, Matthew
Hanley, is a son of my said brother, Malachi Hanley.
The Court of First Instance of Zamboanga considered it proper for the best interests of ther 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. Moore took his oath of office and gave
bond on March 10, 1924. He acted as trustee until February 29, 1932, when he resigned and the plaintiff herein was
appointed in his stead.
During the incumbency of the plaintiff as trustee, the defendant Collector of Internal Revenue, alleging that the
estate left by the deceased at the time of his death consisted of realty valued at P27,920 and personalty valued at
P1,465, and allowing a deduction of P480.81, assessed against the estate an inheritance tax in the amount of
P1,434.24 which, together with the penalties for deliquency in payment consisting of a 1 per cent monthly interest
from July 1, 1931 to the date of payment and a surcharge of 25 per cent on the tax, amounted to P2,052.74. On
March 15, 1932, the defendant filed a motion in the testamentary proceedings pending before the Court of First
Instance of Zamboanga (Special proceedings No. 302) praying that the trustee, plaintiff herein, be ordered to pay to
the Government the said sum of P2,052.74. The motion was granted. On September 15, 1932, the plaintiff paid said
amount under protest, notifying the defendant at the same time that unless the amount was promptly refunded suit
would be brought for its recovery. The defendant overruled the plaintiff's protest and refused to refund the said
amount hausted, plaintiff went to court with the result herein above indicated.
In his appeal, plaintiff contends that the lower court erred:

I. In holding that the real property of Thomas Hanley, deceased, passed to his instituted heir, Matthew
Hanley, from the moment of the death of the former, and that from the time, the latter became the owner
thereof.
II. In holding, in effect, that there was deliquency in the payment of inheritance tax due on the estate of said
deceased.
III. In holding that the inheritance tax in question be based upon the value of the estate upon the death of the
testator, and not, as it should have been held, upon the value thereof at the expiration of the period of ten
years after which, according to the testator's will, the property could be and was to be delivered to the
instituted heir.
IV. In not allowing as lawful deductions, in the determination of the net amount of the estate subject to said
tax, the amounts allowed by the court as compensation to the "trustees" and paid to them from the
decedent's estate.
V. In not rendering judgment in favor of the plaintiff and in denying his motion for new trial.
The defendant-appellant contradicts the theories of the plaintiff and assigns the following error besides:
The lower court erred in not ordering the plaintiff to pay to the defendant the sum of P1,191.27, representing
part of the interest at the rate of 1 per cent per month from April 10, 1924, to June 30, 1931, which the
plaintiff had failed to pay on the inheritance tax assessed by the defendant against the estate of Thomas
Hanley.
The following are the principal questions to be decided by this court in this appeal: (a) When does the inheritance
tax accrue and when must it be satisfied? (b) 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? (c) In determining the net value of the
estate subject to tax, is it proper to deduct the compensation due to trustees? (d) What law governs the case at bar?
Should the provisions of Act No. 3606 favorable to the tax-payer be given retroactive effect? (e) Has there been
deliquency in the payment of the inheritance tax? If so, should the additional interest claimed by the defendant in his
appeal be paid by the estate? Other points of incidental importance, raised by the parties in their briefs, will be
touched upon in the course of this opinion.
(a) 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,
giftmortis 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. Acording to article 657 of the
Civil Code, "the rights to the succession of a person are transmitted from the moment of his death." "In other words",
said Arellano, C. J., ". . . the heirs succeed immediately to all of the property of the deceased ancestor. The property
belongs to the heirs at the moment of the death of the ancestor as completely as if the ancestor had executed and
delivered to them a deed for the same before his death." (Bondad vs. Bondad, 34 Phil., 232. See also, Mijares vs.
Nery, 3 Phil., 195; Suilong & Co., vs. Chio-Taysan, 12 Phil., 13; Lubrico vs. Arbado, 12 Phil., 391; Innocencio vs.
Gat-Pandan, 14 Phil., 491; Aliasas vs.Alcantara, 16 Phil., 489; Ilustre vs. Alaras Frondosa, 17 Phil., 321; Malahacan
vs. Ignacio, 19 Phil., 434; Bowa vs. Briones, 38 Phil., 27; Osario vs. Osario & Yuchausti Steamship Co., 41 Phil.,
531; Fule vs. Fule, 46 Phil., 317; Dais vs. Court of First Instance of Capiz, 51 Phil., 396; Baun vs. Heirs of Baun, 53
Phil., 654.) Plaintiff, however, asserts that while article 657 of the Civil Code is applicable to testate as well as
intestate succession, it operates only in so far as forced heirs are concerned. But the language of article 657 of the
Civil Code is broad and makes no distinction between different classes of heirs. That article does not speak of

forced heirs; it does not even use the word "heir". It speaks of the rights of succession and the transmission thereof
from the moment of death. The provision of section 625 of the Code of Civil Procedure regarding the authentication
and probate of a will as a necessary condition to effect transmission of property does not affect the general rule laid
down in article 657 of the Civil Code. The authentication of a will implies its due execution but once probated and
allowed the transmission is effective as of the death of the testator in accordance with article 657 of the Civil Code.
Whatever may be the time when actual transmission of the inheritance takes place, succession takes place in any
event at the moment of the decedent's death. The time when the heirs legally succeed to the inheritance may differ
from the time when the heirs actually receive such inheritance. "Poco importa", says Manresa commenting on article
657 of the Civil Code, "que desde el falleimiento del causante, hasta que el heredero o legatario entre en posesion
de los bienes de la herencia o del legado, transcurra mucho o poco tiempo, pues la adquisicion ha de retrotraerse
al momento de la muerte, y asi lo ordena el articulo 989, que debe considerarse como complemento del presente."
(5 Manresa, 305; see also, art. 440, par. 1, Civil Code.) Thomas Hanley having died on May 27, 1922, the
inheritance tax accrued as of the date.
From the fact, however, that Thomas Hanley died on May 27, 1922, it does not follow that the obligation to pay the
tax arose as of the date. The time for the payment on inheritance tax is clearly fixed by section 1544 of the Revised
Administrative Code as amended by Act No. 3031, in relation to section 1543 of the same Code. The two sections
follow:
SEC. 1543. Exemption of certain acquisitions and transmissions. The following shall not be taxed:
(a) The merger of the usufruct in the owner of the naked title.
(b) The transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the
trustees.
(c) The transmission from the first heir, legatee, or donee in favor of another beneficiary, in
accordance with the desire of the predecessor.
In the last two cases, if the scale of taxation appropriate to the new beneficiary is greater than that paid by
the first, the former must pay the difference.
SEC. 1544. When tax to be paid. The tax fixed in this article shall be paid:
(a) In the second and third cases of the next preceding section, before entrance into possession of
the property.
(b) In other cases, within the six months subsequent to the death of the predecessor; but if judicial
testamentary or intestate proceedings shall be instituted prior to the expiration of said period, the
payment shall be made by the executor or administrator before delivering to each beneficiary his
share.
If the tax is not paid within the time hereinbefore prescribed, interest at the rate of twelve per centum per
annum shall be added as part of the tax; and to the tax and interest due and unpaid within ten days after the
date of notice and demand thereof by the collector, there shall be further added a surcharge of twenty-five
per centum.
A certified of all letters testamentary or of admisitration shall be furnished the Collector of Internal Revenue
by the Clerk of Court within thirty days after their issuance.

It should be observed in passing that the word "trustee", appearing in subsection (b) of section 1543, should read
"fideicommissary" or "cestui que trust". There was an obvious mistake in translation from the Spanish to the English
version.
The instant case does fall under subsection (a), but under subsection (b), of section 1544 above-quoted, as there is
here no fiduciary heirs, first heirs, legatee or donee. Under the subsection, the tax should have been paid before the
delivery of the properties in question to P. J. M. Moore as trustee on March 10, 1924.
(b) The plaintiff contends that the estate of Thomas Hanley, in so far as the real properties are concerned, did not
and could not legally pass to the instituted heir, Matthew Hanley, until after the expiration of ten years from the death
of the testator on May 27, 1922 and, that the inheritance tax should be based on the value of the estate in 1932, or
ten years after the testator's death. The plaintiff introduced evidence tending to show that in 1932 the real properties
in question had a reasonable value of only P5,787. This amount added to the value of the personal property left by
the deceased, which the plaintiff admits is P1,465, would generate an inheritance tax which, excluding deductions,
interest and surcharge, would amount only to about P169.52.
If death is the generating source from which the power of the estate to impose inheritance taxes takes its being and
if, upon the death of the decedent, succession takes place and the right of the estate to tax vests instantly, the tax
should be measured by the vlaue of the estate as it stood at the time of the decedent's death, regardless of any
subsequent contingency value of any subsequent increase or decrease in value. (61 C. J., pp. 1692, 1693; 26 R. C.
L., p. 232; Blakemore and Bancroft, Inheritance Taxes, p. 137. See also Knowlton vs. Moore, 178 U.S., 41; 20 Sup.
Ct. Rep., 747; 44 Law. ed., 969.) "The right of the state to an inheritance tax accrues at the moment of death, and
hence is ordinarily measured as to any beneficiary by the value at that time of such property as passes to him.
Subsequent appreciation or depriciation is immaterial." (Ross, Inheritance Taxation, p. 72.)
Our attention is directed to the statement of the rule in Cyclopedia of Law of and Procedure (vol. 37, pp. 1574, 1575)
that, in the case of contingent remainders, taxation is postponed until the estate vests in possession or the
contingency is settled. This rule was formerly followed in New York and has been adopted in Illinois, Minnesota,
Massachusetts, Ohio, Pennsylvania and Wisconsin. This rule, horever, is by no means entirely satisfactory either to
the estate or to those interested in the property (26 R. C. L., p. 231.). Realizing, perhaps, the defects of its anterior
system, we find upon examination of cases and authorities that New York has varied and now requires the
immediate appraisal of the postponed estate at its clear market value and the payment forthwith of the tax on its out
of the corpus of the estate transferred. (In re Vanderbilt, 172 N. Y., 69; 69 N. E., 782; In re Huber, 86 N. Y. App. Div.,
458; 83 N. Y. Supp., 769; Estate of Tracy, 179 N. Y., 501; 72 N. Y., 519; Estate of Brez, 172 N. Y., 609; 64 N. E., 958;
Estate of Post, 85 App. Div., 611; 82 N. Y. Supp., 1079. Vide also, Saltoun vs. Lord Advocate, 1 Peter. Sc. App., 970;
3 Macq. H. L., 659; 23 Eng. Rul. Cas., 888.) California adheres to this new rule (Stats. 1905, sec. 5, p. 343).
But whatever may be the rule in other jurisdictions, 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.
(c) Certain items are required by law to be deducted from the appraised gross in arriving at the net value of the
estate on which the inheritance tax is to be computed (sec. 1539, Revised Administrative Code). In the case at bar,
the defendant and the trial court allowed a deduction of only P480.81. This sum represents the expenses and
disbursements of the executors until March 10, 1924, among which were their fees and the proven debts of the
deceased. The plaintiff contends that the compensation and fees of the trustees, which aggregate P1,187.28
(Exhibits C, AA, EE, PP, HH, JJ, LL, NN, OO), should also be deducted under section 1539 of the Revised
Administrative Code which provides, in part, as follows: "In order to determine the net sum which must bear the tax,
when an inheritance is concerned, there shall be deducted, in case of a resident, . . . the judicial expenses of the
testamentary or intestate proceedings, . . . ."

A trustee, no doubt, is entitled to receive a fair compensation for his services (Barney vs. Saunders, 16 How., 535;
14 Law. ed., 1047). But from this it does not follow that the compensation due him may lawfully be deducted in
arriving at the net value of the estate subject to tax. There is no statute in the Philippines which requires trustees'
commissions to be deducted in determining the net value of the estate subject to inheritance tax (61 C. J., p. 1705).
Furthermore, though a testamentary trust has been created, it does not appear that the testator intended that the
duties of his executors and trustees should be separated. (Ibid.; In re Vanneck's Estate, 161 N. Y. Supp., 893; 175
App. Div., 363; In re Collard's Estate, 161 N. Y. Supp., 455.) On the contrary, in paragraph 5 of his will, the testator
expressed the desire that his real estate be handled and managed by his executors until the expiration of the period
of ten years therein provided. Judicial expenses are expenses of administration (61 C. J., p. 1705) but, in State vs.
Hennepin County Probate Court (112 N. W., 878; 101 Minn., 485), it was said: ". . . The compensation of a trustee,
earned, not in the administration of the estate, but in the management thereof for the benefit of the legatees or
devises, does not come properly within the class or reason for exempting administration expenses. . . . Service
rendered in that behalf have no reference to closing the estate for the purpose of a distribution thereof to those
entitled to it, and are not required or essential to the perfection of the rights of the heirs or legatees. . . . Trusts . . . of
the character of that here before the court, are created for the the benefit of those to whom the property ultimately
passes, are of voluntary creation, and intended for the preservation of the estate. No sound reason is given to
support the contention that such expenses should be taken into consideration in fixing the value of the estate for the
purpose of this tax."
(d) The defendant levied and assessed the inheritance tax due from the estate of Thomas Hanley under the
provisions of section 1544 of the Revised Administrative Code, as amended by section 3 of Act No. 3606. But Act
No. 3606 went into effect on January 1, 1930. It, therefore, was not the law in force when the testator died on May
27, 1922. The law at the time was section 1544 above-mentioned, as amended by Act No. 3031, which took effect
on March 9, 1922.
It is well-settled that inheritance taxation is governed by the statute in force at the time of the death of the decedent
(26 R. C. L., p. 206; 4 Cooley on Taxation, 4th ed., p. 3461). The taxpayer can not foresee and ought not to be
required to guess the outcome of pending measures. Of course, a tax statute may be made retroactive in its
operation. Liability for taxes under retroactive legislation has been "one of the incidents of social life." (Seattle vs.
Kelleher, 195 U. S., 360; 49 Law. ed., 232 Sup. Ct. Rep., 44.) But legislative intent that a tax statute should operate
retroactively should be perfectly clear. (Scwab vs. Doyle, 42 Sup. Ct. Rep., 491; Smietanka vs. First Trust & Savings
Bank, 257 U. S., 602; Stockdale vs. Insurance Co., 20 Wall., 323; Lunch vs. Turrish, 247 U. S., 221.) "A statute
should be considered as prospective in its operation, whether it enacts, amends, or repeals an inheritance tax,
unless the language of the statute clearly demands or expresses that it shall have a retroactive effect, . . . ." (61 C.
J., P. 1602.) Though the last paragraph of section 5 of Regulations No. 65 of the Department of Finance makes
section 3 of Act No. 3606, amending section 1544 of the Revised Administrative Code, applicable to all estates the
inheritance taxes due from which have not been paid, Act No. 3606 itself contains no provisions indicating legislative
intent to give it retroactive effect. No such effect can begiven the statute by this court.
The defendant Collector of Internal Revenue maintains, however, that certain provisions of Act No. 3606 are more
favorable to the taxpayer than those of Act No. 3031, that said provisions are penal in nature and, therefore, should
operate retroactively in conformity with the provisions of article 22 of the Revised Penal Code. This is the reason
why he applied Act No. 3606 instead of Act No. 3031. Indeed, under Act No. 3606, (1) the surcharge of 25 per cent
is based on the tax only, instead of on both the tax and the interest, as provided for in Act No. 3031, and (2) the
taxpayer is allowed twenty days from notice and demand by rthe Collector of Internal Revenue within which to pay
the tax, instead of ten days only as required by the old law.
Properly speaking, a statute is penal when it imposes punishment for an offense committed against the state which,
under the Constitution, the Executive has the power to pardon. In common use, however, this sense has been
enlarged to include within the term "penal statutes" all status which command or prohibit certain acts, and establish
penalties for their violation, and even those which, without expressly prohibiting certain acts, impose a penalty upon

their commission (59 C. J., p. 1110). Revenue laws, generally, which impose taxes collected by the means ordinarily
resorted to for the collection of taxes are not classed as penal laws, although there are authorities to the contrary.
(See Sutherland, Statutory Construction, 361; Twine Co. vs. Worthington, 141 U. S., 468; 12 Sup. Ct., 55; Rice vs.
U. S., 4 C. C. A., 104; 53 Fed., 910; Com. vs. Standard Oil Co., 101 Pa. St., 150; State vs. Wheeler, 44 P., 430; 25
Nev. 143.) Article 22 of the Revised Penal Code is not applicable to the case at bar, and in the absence of clear
legislative intent, we cannot give Act No. 3606 a retroactive effect.
(e) The plaintiff correctly states that the liability to pay a tax may arise at a certain time and the tax may be paid
within another given time. As stated by this court, "the mere failure to pay one's tax does not render one delinqent
until and unless the entire period has eplased within which the taxpayer is authorized by law to make such payment
without being subjected to the payment of penalties for fasilure to pay his taxes within the prescribed period." (U. S.
vs. Labadan, 26 Phil., 239.)
The defendant maintains that it was the duty of the executor to pay the inheritance tax before the delivery of the
decedent's property to the trustee. Stated otherwise, the defendant contends that delivery to the trustee was
delivery to the cestui que trust, the beneficiery 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. The
appointment of P. J. M. Moore as trustee was made by the trial court in conformity with the wishes of the testator as
expressed in his will. It is true that the word "trust" is not mentioned or used in the will but the intention to create one
is clear. No particular or technical words are required to create a testamentary trust (69 C. J., p. 711). The words
"trust" and "trustee", though apt for the purpose, are not necessary. In fact, the use of these two words is not
conclusive on the question that a trust is created (69 C. J., p. 714). "To create a trust by will the testator must
indicate in the will his intention so to do by using language sufficient to separate the legal from the equitable estate,
and with sufficient certainty designate the beneficiaries, their interest in the ttrust, the purpose or object of the trust,
and the property or subject matter thereof. Stated otherwise, to constitute a valid testamentary trust there must be a
concurrence of three circumstances: (1) Sufficient words to raise a trust; (2) a definite subject; (3) a certain or
ascertain object; statutes in some jurisdictions expressly or in effect so providing." (69 C. J., pp. 705,706.) There is
no doubt that the testator intended to create a trust. He ordered in his will that certain of his properties be kept
together undisposed during a fixed period, for a stated purpose. The probate court certainly exercised sound
judgment in appointment a trustee to carry into effect the provisions of the will (see sec. 582, Code of Civil
Procedure).
P. J. M. Moore became trustee on March 10, 1924. On that date trust estate vested in him (sec. 582 in relation to
sec. 590, Code of Civil Procedure). The mere fact that the estate of the deceased was placed in trust did not remove
it from the operation of our inheritance tax laws or exempt it from the payment of the inheritance tax. The
corresponding inheritance tax should have been paid on or before March 10, 1924, to escape the penalties of the
laws. This is so for the reason already stated that the delivery of the estate to the trustee was in esse delivery of the
same estate to the cestui que trust, the beneficiary in this case. A trustee is but an instrument or agent for thecestui
que trust (Shelton vs. King, 299 U. S., 90; 33 Sup. Ct. Rep., 689; 57 Law. ed., 1086). When Moore accepted the
trust and took possesson of the trust estate he thereby admitted that the estate belonged not to him but to his cestui
que trust (Tolentino vs. Vitug, 39 Phil.,126, cited in 65 C. J., p. 692, n. 63). He did not acquire any beneficial interest
in the estate. He took such legal estate only as the proper execution of the trust required (65 C. J., p. 528) and, his
estate ceased upon the fulfillment of the testator's wishes. The estate then vested absolutely in the beneficiary (65
C. J., p. 542).
The highest considerations of public policy also justify the conclusion we have reached. Were we to hold that the
payment of the tax could be postponed or delayed by the creation of a trust of the type at hand, the result would be
plainly disastrous. Testators may provide, as Thomas Hanley has provided, that their estates be not delivered to
their beneficiaries until after the lapse of a certain period of time. In the case at bar, the period is ten years. In other
cases, the trust may last for fifty years, or for a longer period which does not offend the rule against petuities. The
collection of the tax would then be left to the will of a private individual. The mere suggestion of this result is a

sufficient warning against the accpetance of the essential to the very exeistence of government. (Dobbins vs. Erie
Country, 16 Pet., 435; 10 Law. ed., 1022; Kirkland vs. Hotchkiss, 100 U. S., 491; 25 Law. ed., 558; Lane County vs.
Oregon, 7 Wall., 71; 19 Law. ed., 101; Union Refrigerator Transit Co. vs. Kentucky, 199 U. S., 194; 26 Sup. Ct. Rep.,
36; 50 Law. ed., 150; Charles River Bridge vs. Warren Bridge, 11 Pet., 420; 9 Law. ed., 773.) The obligation to pay
taxes rests not upon the privileges enjoyed by, or the protection afforded to, a citizen by the government but upon
the necessity of money for the support of the state (Dobbins vs. Erie Country, supra). For this reason, no one is
allowed to object to or resist the payment of taxes solely because no personal benefit to him can be pointed out.
(Thomas vs. Gay, 169 U. S., 264; 18 Sup. Ct. Rep., 340; 43 Law. ed., 740.) While courts will not enlarge, by
construction, the government's power of taxation (Bromley vs. McCaughn, 280 U. S., 124; 74 Law. ed., 226; 50 Sup.
Ct. Rep., 46) they also will not place upon tax laws so loose a construction as to permit evasions on merely fanciful
and insubstantial distictions. (U. S. vs. Watts, 1 Bond., 580; Fed. Cas. No. 16,653; U. S. vs. Wigglesirth, 2 Story,
369; Fed. Cas. No. 16,690, followed in Froelich & Kuttner vs. Collector of Customs, 18 Phil., 461, 481; Castle Bros.,
Wolf & Sons vs. McCoy, 21 Phil., 300; Muoz & Co. vs. Hord, 12 Phil., 624; Hongkong & Shanghai Banking
Corporation vs. Rafferty, 39 Phil., 145; Luzon Stevedoring Co. vs. Trinidad, 43 Phil., 803.) When proper, a tax
statute should be construed to avoid the possibilities of tax evasion. Construed this way, the statute, without
resulting in injustice to the taxpayer, becomes fair to the government.
That taxes must be collected promptly is a policy deeply intrenched in our tax system. Thus, no court is allowed to
grant injunction to restrain the collection of any internal revenue tax ( sec. 1578, Revised Administrative Code;
Sarasola vs. Trinidad, 40 Phil., 252). In the case of Lim Co Chui vs. Posadas (47 Phil., 461), this court had
occassion to demonstrate trenchment adherence to this policy of the law. It held that "the fact that on account of
riots directed against the Chinese on October 18, 19, and 20, 1924, they were prevented from praying their internal
revenue taxes on time and by mutual agreement closed their homes and stores and remained therein, does not
authorize the Collector of Internal Revenue to extend the time prescribed for the payment of the taxes or to accept
them without the additional penalty of twenty five per cent." (Syllabus, No. 3.)
". . . It is of the utmost importance," said the Supreme Court of the United States, ". . . that the modes adopted to
enforce the taxes levied should be interfered with as little as possible. Any delay in the proceedings of the officers,
upon whom the duty is developed of collecting the taxes, may derange the operations of government, and thereby,
cause serious detriment to the public." (Dows vs. Chicago, 11 Wall., 108; 20 Law. ed., 65, 66; Churchill and Tait vs.
Rafferty, 32 Phil., 580.)
It results that the estate which plaintiff represents has been delinquent in the payment of inheritance tax and,
therefore, liable for the payment of interest and surcharge provided by law in such cases.
The delinquency in payment occurred on March 10, 1924, the date when Moore became trustee. The interest due
should be computed from that date and it is error on the part of the defendant to compute it one month later. The
provisions cases is mandatory (see and cf. Lim Co Chui vs. Posadas, supra), and neither the Collector of Internal
Revenuen or this court may remit or decrease such interest, no matter how heavily it may burden the taxpayer.
To the tax and interest due and unpaid within ten days after the date of notice and demand thereof by the Collector
of Internal Revenue, a surcharge of twenty-five per centum should be added (sec. 1544, subsec. (b), par. 2, Revised
Administrative Code). Demand was made by the Deputy Collector of Internal Revenue upon Moore in a
communiction dated October 16, 1931 (Exhibit 29). The date fixed for the payment of the tax and interest was
November 30, 1931. November 30 being an official holiday, the tenth day fell on December 1, 1931. As the tax and
interest due were not paid on that date, the estate became liable for the payment of the surcharge.
In view of the foregoing, it becomes unnecessary for us to discuss the fifth error assigned by the plaintiff in his brief.
We shall now compute the tax, together with the interest and surcharge due from the estate of Thomas Hanley
inaccordance with the conclusions we have reached.

At the time of his death, the deceased left real properties valued at P27,920 and personal properties worth P1,465,
or a total of P29,385. Deducting from this amount the sum of P480.81, representing allowable deductions under
secftion 1539 of the Revised Administrative Code, we have P28,904.19 as the net value of the estate subject to
inheritance tax.
The primary tax, according to section 1536, subsection (c), of the Revised Administrative Code, should be imposed
at the rate of one per centum upon the first ten thousand pesos and two per centum upon the amount by which the
share exceed thirty thousand pesos, plus an additional two hundred per centum. One per centum of ten thousand
pesos is P100. Two per centum of P18,904.19 is P378.08. Adding to these two sums an additional two hundred per
centum, or P965.16, we have as primary tax, correctly computed by the defendant, the sum of P1,434.24.
To the primary tax thus computed should be added the sums collectible under section 1544 of the Revised
Administrative Code. First should be added P1,465.31 which stands for interest at the rate of twelve per centum per
annum from March 10, 1924, the date of delinquency, to September 15, 1932, the date of payment under protest, a
period covering 8 years, 6 months and 5 days. To the tax and interest thus computed should be added the sum of
P724.88, representing a surhcarge of 25 per cent on both the tax and interest, and also P10, the compromise sum
fixed by the defendant (Exh. 29), giving a grand total of P3,634.43.
As the plaintiff has already paid the sum of P2,052.74, only the sums of P1,581.69 is legally due from the estate.
This last sum is P390.42 more than the amount demanded by the defendant in his counterclaim. But, as we cannot
give the defendant more than what he claims, we must hold that the plaintiff is liable only in the sum of P1,191.27
the amount stated in the counterclaim.
The judgment of the lower court is accordingly modified, with costs against the plaintiff in both instances. So
ordered.
Avancea, C.J., Abad Santos, Imperial, Diaz and Concepcion, JJ., concur.
Villa-Real, J., concurs.

4. Garcia v Lacuesta 90 Phil 489

G.R. No. L-4067

November 29, 1951

In the Matter of the will of ANTERO MERCADO, deceased. ROSARIO GARCIA, petitioner,
vs.
JULIANA LACUESTA, ET AL., respondents.
Elviro L. Peralta and Hermenegildo A. Prieto for petitioner.
Faustino B. Tobia, Juan I. Ines and Federico Tacason for respondents.
PARAS, C.J.:
This is an appeal from a decision of the Court of Appeals disallowing the will of Antero Mercado dated January 3,
1943. The will is written in the Ilocano dialect and contains the following attestation clause:
We, the undersigned, by these presents to declare that the foregoing testament of Antero Mercado was
signed by himself and also by us below his name and of this attestation clause and that of the left margin of
the three pages thereof. Page three the continuation of this attestation clause; this will is written in Ilocano
dialect which is spoken and understood by the testator, and it bears the corresponding number in letter
which compose of three pages and all them were signed in the presence of the testator and witnesses, and
the witnesses in the presence of the testator and all and each and every one of us witnesses.

In testimony, whereof, we sign this statement, this the third day of January, one thousand nine hundred forty
three, (1943) A.D.

(Sgd.) NUMERIANO EVANGELISTA

(Sgd.) "ROSENDA CORTES

(Sgd.) BIBIANA ILLEGIBLE

The will appears to have been signed by Atty. Florentino Javier who wrote the name of Antero Mercado, followed
below by "A reugo del testator" and the name of Florentino Javier. Antero Mercado is alleged to have written a cross
immediately after his name. The Court of Appeals, reversing the judgement of the Court of First Instance of Ilocos
Norte, ruled that the attestation clause failed (1) to certify that the will was signed on all the left margins of the three
pages and at the end of the will by Atty. Florentino Javier at the express request of the testator in the presence of
the testator and each and every one of the witnesses; (2) to certify that after the signing of the name of the testator
by Atty. Javier at the former's request said testator has written a cross at the end of his name and on the left margin
of the three pages of which the will consists and at the end thereof; (3) to certify that the three witnesses signed the
will in all the pages thereon in the presence of the testator and of each other.
In our opinion, the attestation clause is fatally defective for failing to state that Antero Mercado caused Atty.
Florentino Javier to write the testator's name under his express direction, as required by section 618 of the Code of
Civil Procedure. The herein petitioner (who is appealing by way of certiorari from the decision of the Court of
Appeals) argues, however, that there is no need for such recital because the cross written by the testator after his
name is a sufficient signature and the signature of Atty. Florentino Javier is a surplusage. Petitioner's theory is that
the cross is as much a signature as a thumbmark, the latter having been held sufficient by this Court in the cases of
De Gala vs. Gonzales and Ona, 53 Phil., 104; Dolar vs. Diancin, 55 Phil., 479; Payad vs. Tolentino, 62 Phil., 848;
Neyra vs. Neyra, 76 Phil., 296 and Lopez vs. Liboro, 81 Phil., 429.
It is not here pretended that the cross appearing on the will is the usual signature of Antero Mercado or even one of
the ways by which he signed his name. After mature reflection, we are not prepared to liken the mere sign of the
cross to a thumbmark, and the reason is obvious. The cross cannot and does not have the trustworthiness of a
thumbmark.
What has been said makes it unnecessary for us to determine there is a sufficient recital in the attestation clause as
to the signing of the will by the testator in the presence of the witnesses, and by the latter in the presence of the
testator and of each other.
Wherefore, the appealed decision is hereby affirmed, with against the petitioner. So ordered.
Feria, Pablo, Bengzon, Padilla, Reyes, Jugo and Bautista Angelo, JJ., concur.

5. Nera v Rimando 18 Phil 450

G.R. No. L-5971

February 27, 1911

BEATRIZ NERA, ET AL., plaintiffs-appellees,

vs.
NARCISA RIMANDO, defendant-appellant.
Valerio Fontanilla and Andres Asprer for appellant.
Anacleto Diaz for appellees.
CARSON, J.:

The only question raised by the evidence in this case as to the due execution of the instrument propounded as a will
in the court below, is whether one of the subscribing witnesses was present in the small room where it was executed
at the time when the testator and the other subscribing witnesses attached their signatures; or whether at that time
he was outside, some eight or ten feet away, in a large room connecting with the smaller room by a doorway, across
which was hung a curtain which made it impossible for one in the outside room to see the testator and the other
subscribing witnesses in the act of attaching their signatures to the instrument.
A majority of the members of the court is of opinion that this subscribing witness was in the small room with the
testator and the other subscribing witnesses at the time when they attached their signatures to the instrument, and
this finding, of course, disposes of the appeal and necessitates the affirmance of the decree admitting the document
to probate as the last will and testament of the deceased.
The trial judge does not appear to have considered the determination of this question of fact of vital importance in
the determination of this case, as he was of opinion that under the doctrine laid down in the case of Jaboneta vs.
Gustilo (5 Phil. Rep., 541) the alleged fact that one of the subscribing witnesses was in the outer room when the
testator and the other describing witnesses signed the instrument in the inner room, had it been proven, would not
be sufficient in itself to invalidate the execution of the will. But we are unanimously of opinion that had this
subscribing witness been proven to have been in the outer room at the time when the testator and the other
subscribing witnesses attached their signatures to the instrument in the inner room, it would have been invalid as a
will, the attaching of those signatures under circumstances not being done "in the presence" of the witness in the
outer room. This because the line of vision from this witness to the testator and the other subscribing witnesses
would necessarily have been impeded by the curtain separating the inner from the outer one "at the moment of
inscription of each signature."
In the case just cited, on which the trial court relied, we held that:
The true test of presence of the testator and the witnesses in the execution of a will is not whether they
actually saw each other sign, but whether they might have been seen each other sign, had they chosen to
do so, considering their mental and physical condition and position with relation to each other at the moment
of inscription of each signature.
But it is especially to be noted that the position of the parties with relation to each other at the moment of the
subscription of each signature, must be such that they may see each other sign if they choose to do so. This, of
course, does not mean that the testator and the subscribing witnesses may be held to have executed the instrument
in the presence of each other if it appears that they would not have been able to see each other sign at that
moment, without changing their relative positions or existing conditions. The evidence in the case relied upon by the
trial judge discloses that "at the moment when the witness Javellana signed the document he was actually and
physically present and in such position with relation to Jaboneta that he could see everything that took place by
merely casting his eyes in the proper direction and without any physical obstruction to prevent his doing so." And the
decision merely laid down the doctrine that the question whether the testator and the subscribing witnesses to an
alleged will sign the instrument in the presence of each other does not depend upon proof of the fact that their eyes
were actually cast upon the paper at the moment of its subscription by each of them, but that at that moment
existing conditions and their position with relation to each other were such that by merely casting the eyes in the
proper direction they could have seen each other sign. To extend the doctrine further would open the door to the
possibility of all manner of fraud, substitution, and the like, and would defeat the purpose for which this particular
condition is prescribed in the code as one of the requisites in the execution of a will.
The decree entered by the court below admitting the instrument propounded therein to probate as the last will and
testament of Pedro Rimando, deceased, is affirmed with costs of this instance against the appellant.
Arellano, C. J., Mapa, Moreland and Trent, JJ., concur.