Vidal de Roces v.

Posadas
G.R. No. 34937 March 13, 1933

Facts:

1. Sometime in 1925, plaintiffs Concepcion Vidal de Roces and her husband, as well as one Elvira
Richards, received as donation several parcels of land from Esperanza Tuazon. They took possession of
the lands thereafter and likewise obtained the respective transfer certificates.

2.The donor died a year after without leaving any forced heir. In her will, which was admitted to
probate, she bequeathed to each of the donees the sum of P5,000. After the distribution of the estate
but before the delivery of their shares, the CIR (appellee) ruled that plaintiffs as donees and legatees
should pay inheritance taxes. The plaintiffs paid the taxes under protest.

3. CIR filed a demurrer on ground that the facts alleged were not sufficient to constitute a cause of
action. The court sustained the demurrer and ordered the amendment of the complaint but the
appellants failed to do so. Hence, the trial court dismissed the action on ground that plaintiffs, herein
appellants, did not really have a right of action.

4. Plaintiffs (appellant) contend that Sec. 1540 of the Administrative Code does not include donation
inter vivos and if it does, it is unconstitutional, null and void for violating SEC. 3 of the Jones Law
(providing that no law shall embrace more than one subject and that the subject should be expressed in
its titles ; that the Legislature has no authority to tax donation inter vivos; finally, that said provision
violates the rule on uniformity of taxation.

5. CIR however contends that the word 'all gifts' refer clearly to donation inter vivos and cited the
doctrine in Tuason v. Posadas.

Issue:

Whether or not the donations should be subjected to inheritance tax

HELD:

YES. Sec. 1540 of the Administrative Code clearly refers to those donation inter vivos that take effect
immediately or during the lifetime of the donor, but made in consideration of the death of the
decedent. Those donations not made in contemplation of the decedent's death are not included as it
would be equivalent to imposing a direct tax on property and not on its transmission.

The phrase 'all gifts' as held in Tuason v. Posadas refers to gifts inter vivos as they are considered as
advances in anticipation of inheritance since they are made in consideration of death.