[No. 10806. July 6, 1918.] death of the person whose inheritance is concerned.
(Decision of
MONICA BONA, petitioner and appellant, vs. HOSPICIO
BRIONES ET AL., objectors and appellees.
1. 1.WILLS; NOTARY AS WITNESS TO EXECUTION.—A will was
executed by a person capable of making it before two attesting
witnesses and a notary who, by the order and under the direction of
the testator, was charged with the drafting of the said will, and who
understood the instrument drafted by him as wholly containing the
will of the above-mentioned testator, who certified as to the
execution and authenticity of the said will and as to its having been
signed by the testator and the two witnesses in the act of its
execution and in his presence, stating further that these witnesses
affirm that they were present when the testator and the said notary
signed the said will. Held: That it cannot be questioned that in the
execution of the will the requisites laid down by section 618 of Act
No. 190 are present, and therefore it should be admitted to probate,
inasmuch as Domingo de la Fuente was present and intervenQd in
the making of the will by Francisco Briones more as an attesting
witness than as a notary—the latter's services being no longer
necessary in the execution of a will in accordance with the said Act.
1. 2.ID.; APPLICATION OP ACT No. 2645, PASSED AFTER
DEATH OF TESTATOR.—The will in question having been
executed in September, 1911, five years before Act No. 2645,
amending said section 618 of Act No. 190 went into effect (July 1,
1916), which amendment took place two years and some months
after the death of the testator Briones (August 14, 1913), it is
evident that said amendatory Act cannot apply to this case.
1. 3.STATUTORY CONSTRUCTION; RETROACTIVE EFFECT OF
NEW LAW.—The principle that a new law shall not have any
retroactive effect only governs the rights arising from acts done
under the rule of the former law; but if the right be declared for the
first time by the subsequent law it shall take effect from that time
even though it has arisen from acts subject to the former laws,
provided that it does not prejudice another acquired right of the
same origin. It is well known that hereditary rights are not born nor
does the will produce any effect except from the moment of the
the supreme court of Spain of June 24 1897.)
APPEAL from a judgment of the Court of First Instance of Ambos
Camarines. Salas, J.
277
VOL. 38, JULY 6, 1918 277
Bona vs, Briones.
The facts are stated in the opinion of the court.
Ramon Pimentel for appellant.
Ocampo & De la Rosa for appellees.
TORRES, J.:
Counsel for Monica Bona, the widow by the second marriage of the
deceased Francisco Briones who died on August 14, 1913, applied for
the probate of the will which the said deceased husband on September
16, 1911, executed during his lifetime; for the fixing of a day for the
hearing and presentation of evidence after all the interested parties had
been cited; and then for the approval of the partition of property made
by the testator in the said will. By an order dated January 20, 1915,
Moftica Bona's petition was granted and a date set for the trial and
other necessary proceedings for the probate of said will.
Counsel for Hospicio, Gregoria, and Carmen, all surnamed Briones,
the legitimate children by the first marriage of the testator, by a
pleading dated March 5, 1915, opposed the probate of the will
presented by the widow of the deceased Briones, alleging that the said
will was executed before two witnesses only and under unlawful and
undue pressure or influence exercised upon the person of the testator
who thus signed through fraud and deceit; and he prayed that for that
reason the said will be declared null and of no value, with costs against
the petitioners.
The trial of the case was opened and in the presence of counsel for
both parties, Gregorio Bustilla, one of the witnesses of the said will,
was examined and he stated under oath: That he, as well as Sixto
Barrameda and Domingo de la Fuente, was actually present as
attesting witness when Francisco Briones executed his will in the
month of September in his (Bustilla's) house situated in the
1
municipality of Bao, Ambos Camarines; that Francisco Briones
knowing of the presence of notary Domingo de la Fuente in the house,
he went upstairs and ann&unced himself; that on being asked what he
wanted, Briones stated
278
278 PHILIPPINE REPORTS ANNOTATED
Bona vs. Briones.
that he wanted to execute his will; that after Briones and the notary had
talked with each other, the former left and after a while returned
bringing with him some paper; that then Domingo de la Fuente, under
the direction of Francisco Briones, began to draft the will, which when
finished was signed by the latter in the presence of the notary, of the
declarant, and of another witness, Sixto Barrameda; that then the three
witnesses—the declarant, de la Fuente, and Barram6da—signed in the
presence of each other. The declarant identified the signature placed on
the will by the testator Briones and those of the other witnesses Sixto
Barrameda and Domingo de la Fuente, who all signed in the presence
of the testator himself. He stated further that the testator at that
moment was in his sound judgment and not forced to execute the will.
He identified the document Exhibit A as the will executed by
Francisco Briones and the signature of the latter as the one placed by
the testator. By agreement of both parties it was made to appear in the
record that, if the witnesses Sixto Barrameda and Domingo de la
Fuente were called, they would have testified in the same terms as
witness Gregorio Bustilla.
In view of the above, the judge rendered judgment, dated March 27,
1915, denying probate to the will Exhibit A as executed by Francisco
Briones. From the judgment, counsel for Monica Bona appealed and
prayed to be allowed to sue further as a pauper; whereupon, by order
of March 31,1915, the judge admitted the appeal, ordered the original
records to be brought up, and reiterated his order of December 23,
1913, declaring Bona as a pauper, for the purposes of the appeal
interposed.
The whole issue discussed by the parties and submitted for the
decision of this court resolves itself as to whether or not in the
execution of the will in question the solemnities prescribed by section
618 of Act No. 190 have been observed.
But before proceeding further it is indispensable to note that the
will in question was executed by Francisco Briones on September 16,
1911, as already stated and the order
279
VOL. 38, JULY 6, 1918 279
Bona vs. Briones.
denying probate was rendered on March 27, 1915, both .dates being
prior to that of Act No. 2645 amending said section 618 and
promulgated on February 24, 1916, which took effect only from July
first of the last named year; so that, in order to explain whether or not
the above-mentioned. will was executed in accordance with the law
then in force, the last named law cannot be applied and the will in
question should be examined in accordance with, and under the rules
of, the law in force at the time of its execution.
The oft-repeated section 618 of Act No. 190 says:
"No will, except as provided in the preceding section, shall be valid to pass
any estate, real or personal, nor charge or affect the same, unless it be in
writing and signed by the testator, or by the testator's name written by some
other person in his presence, and by his express direction, and attested and
subscribed by three or more credible witnesses in the presence of the testator
and of each other. The attestation shall state the fact that the testator signed
the will, or caused it to be signed by some other person, at his express
direction, in the presence of three witnesses, and that they attested and
subscribed it in his presence and in the presence of each other. But the
absence of such form of attestation shall not render the will invalid if it is
proven that the will was in fact signed and attested as in this section
provided."
A mere reading of the last four paragraphs or parts of the will Exhibit
A shows in a clear manner that the said will in its form and contents
expresses without shadow of doubt the will of the testator; and that in
its execution the solemnities prescribed by the above-mentioned
section 618 of Act No. 190 have been observed.
Even though Domingo de la Fuente drafted the will and intervened
in its preparation as a notary, by the order and under the express
direction of the testator, it is nevertheless true that he did it as a
witness to the execution of the said will with positive and concrete
acts, while the two other witnesses Gregorio Bustilla and Sixto
Barrameda merely at-
280
2
280 PHILIPPINE REPORTS ANNOTATED
Bona vs. Briones.
tested all that appeared in the second of the four paragraphs
mentioned; for in it they certify that the foregoing testament contains
the last will of the testator Francisco Briones; that the latter told them
that before and at the time that he dictated his will, there was no
inducement nor threat by anybody; and that as he did not know how to
write the Spanish language, said testator requested Domingo de la
Fuente to write the will, and he did it as it is now drafted, certifying
also, that the testator Briones signed his will voluntarily with his own
hand, in the presence of the declarants who, as witnesses, signed the
instrument on the date expressed. Domingo de la Fuente on his part
declared that the two said witnesses formally swore before him on the
certification which precedes the said will and, according to this
testimony as shown in the records and the testimony of the above-
mentioned witnesses, the said Domingo de la Fuente wrote and drafted
the said will Exhibit A by the order and under the direction of the
testator Francisco Briones, who signed in the presence of the
witnesses, Bustilla and Barrameda and of Notary Domingo de la
Fuente, all of whom immediately signed also in the presence of the
testator, each doing it in the presence of each other. So that, although it
is not shown expressly that Domingo de la Fuente was an attesting
witness to the will, yet it cannot be denied that it was he who wrote it
by the order and under the direction of the testator; that he was a
witness to its execution from the first to its last line; and that he was
perfectly aware of the fact that all that he had written in the document
Exhibit A expresses the genuine and true will of the testator. He saw
and was present when the latter signed his will, as also when the two
witnesses Bustilla and Barrameda affixed their signatures; said
witnesses also saw and were present when Domingo de la Fuente
signed at the end of the said document.
The name of Domingo de la Fuente appears as that of a notary who
certifies as to the certainty of the will made by Francisco Briones and
of the signatures of the testator
281
VOL. 38, JULY 6, 1918 281
Bona vs. Briones.
as well as of the witnesses at its end; and as the law does not require
that one of the witnesses must necessarily be a notary, and it cannot be
denied that Domingo de la Fuente attested the execution and the
signing of the will not only by the testator but also by the attesting
witnesses, it cannot but be admitted that Domingo de la Fuente
intervened, attested, and signed the testament as a witness.
This is a case in which the judicial criterion should be inspired in
the sense that it is not defeated, and, if the wish of the testator is so
manifest and express as in the instant case, it is not proper nor just to
invalidate the will of Francisco Briones merely because of some small
defect in form which is not essential nor of great importance, such as
the failure to state therein that Domingo de la Fuente was also a
witness to the said will when he signed it twice. As a matter of fact, he
understood the contents of the will better than the two other attesting
witnesses, f or he really was a witness and he attested the execution of
the will during its making until it was terminated and signed by the
testator, by the witnesses, and by himself,even though he did it in the
capacity of a notary.
The last paragraph of section 618 of Act No. 190 supplies a legal
basis to support the validity of the will in question with the conditions
for its probate because, notwithstanding the existence of such defect
merely in the form and not in the substance, the certification of
authenticity and the very text of the will show in a clear and
indubitable manner that the will Exhibit A contains the last will of the
testator, and that it was signed by the latter and attested, as being true
and legitimate not only by the two witnesses Bustilla and Barrameda
but also by the one who wrote it, Domingo de la Fuente, who was also
a truthful and reliable witness, even though he be called a notary
public.
The requisites established by Act No. 2645 which amended the oft-
repeated section 618 cannot be required in the probate of the will here,
inasmuch as this document was
282
282 PHILIPPINE REPORTS ANNOTATED
Bona vs. Briones.
executed in September, 1911, five years before said amendatory law
began to take effect (July 1, 1916), while the testator died on August
14, 1913, two years and some months before the enforcement of the
3
said law; and so, the only law applicable to the present case is the
provision contained in section 618 of Act No. 190, and in accordance
with the provisions of this section, the said will should be probated; for
it has been presented to the court many months before the amendatory
act went into effect.
It is well known that the principle that a new law shall not have
retroactive effect only governs the rights arising from acts done under
the rule of the former law; but if the right be declared for the first time
by a subsequent law it shall take effect from that time even though it
has arisen from acts subject to the former laws, provided that it does
not prejudice another acquired right of the same origin.
It is well known that hereditary rights are not born nor does the will
produce any effect until the moment of the death of the person whose
inheritance is concerned. (Decision rendered in cassation by the
supreme court of Spain on June 24, 1897.)
In view of these facts, it follows that the judgment appealed from
should be reversed and it should be declared as we hereby declare that
the will Exhibit A has been executed in due form by Francisco Briones
on September 16, 1911, and that the said will contains and expresses
the last will and testamentary wishes of the deceased testator.
Consequently, let the records be returned to the court wherefrom they
came with a certified copy of this resolution in order that the judge,
upon petition by the proper party, may provide for the necessary
proceedings with respect to the inheritance, and the clerk of the court
may issue certified. copies of the said testament; without any special
ruling as to costs. So ordered.
Johnson, Carson, Street, Malcolm, Avancena, and Fisher,
JJ., concur.
Judgment reversed.
283
G.R. No. 136921. April 17, 2001. *
LORNA GUILLEN PESCA, petitioner, vs. ZOSIMO A. PESCA,
respondent.
Marriages; Annulment; Words and Phrases; “Psychological
Incapacity,” Explained.—The term “psychological incapacity,” as a ground
for the declaration of nullity of a marriage under Article 36 of the Family
Code, has been explained by the Court in Santos and reiterated
in Molina. The Court, in Santos, concluded: “It should be obvious, looking at
all the foregoing disquisitions, including, and most importantly, the
deliberations of the Family Code Revision Committee itself, that the use of
the phrase ‘psychological incapacity under Article 36 of the Code has not
been meant to comprehend all such possible cases of psychoses as, likewise
mentioned by some ecclesiastical authorities, extremely low intelligence,
immaturity, and like circumstances (cited in Fr. Artemio Balumad’s ‘Void
and Voidable Marriages in the Family Code and their Parallels in Canon
Law,’ quoting from the Diagnostic Statistical Manual of Mental Disorder by
the American Psychiatric Association; Edward Hudson’s ‘Handbook II for
Marriage Nullity Cases’). Article 36 of the Family Code cannot be taken and
construed independently of, but must stand in conjunction with, existing
precepts in our law on marriage. Thus correlated, ‘psychological incapacity’
should refer to no less than a mental (not physical) incapacity that causes a
party to be truly incognitive of the basic marital covenants that concomitantly
must be assumed and discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their mutual obligations
to live together, observe love, respect and fidelity and render help and
support. There is hardly any doubt that the intendment of the law has been to
confine the meaning of ‘psychological incapacity’ to the most serious cases
of personality disorders clearly demonstrative of an utter insensitivity or
inability to give meaning and significance to the marriage. This psychologic
condition must exist at the time the marriage is celebrated.”
Same; Same; Judgments; Doctrine of Stare Decisis; Statutory
Construction; The interpretation placed upon the written law by a competent
court has the force of law.—The “doctrine of stare decisis,” ordained in
Article 8 of the Civil Code, expresses that judicial decisions applying or
interpreting the law shall form part of the legal system of the Philippines. The
rule follows the settled legal maxim—“legis interpretado legis vim
_______________
*
THIRD DIVISION.
589
4
 VOL. 356, APRIL 17, 2001 589
Pesca vs. Pesca
obtinet”—that the interpretation placed upon the written law by a
competent court has the force of law. The interpretation or construction
placed by the courts establishes the contemporaneous legislative intent of the
law. The latter as so interpreted and construed would thus constitute a part of
that law as of the date the statute is enacted. It is only when a prior ruling of
this Court finds itself later overruled, and a different view is adopted, that the
new doctrine may have to be applied prospectively in favor of parties who
have relied on the old doctrine and have acted in good faith in accordance
therewith under the familiar rule of “lex prospicit, non respicit.”
Same: Same; Words and Phrases: The phrase “psychological
incapacity,” borrowed from Canon law, is an entirely novel provision in our
statute books, and, until the relatively recent enactment of the Family Code,
the concept has escaped jurisprudential attention.—The phrase
“psychological incapacity,” borrowed from Canon law, is an entirely novel
provision in our statute books, and, until the relatively recent enactment of
the Family Code, the concept has escaped jurisprudential attention. It is in
Santos when, for the first time, the Court has given life to the term. Molina,
that followed, has additionally provided procedural guidelines to assist the
courts and the parties in trying cases for annulment of marriages grounded on
psychological incapacity. Molina has strengthened, not overturned, Santos.
Same; Same; Same; Emotional immaturity and irresponsibility cannot
be equated with psychological incapacity.—At all events, petitioner has
utterly failed, both in her allegations in the complaint and in her evidence, to
make out a case of psychological incapacity on the part of respondent, let
alone at the time of solemnization of the contract, so as to warrant a
declaration of nullity of the marriage. Emotional immaturity and
irresponsibility, invoked by her, cannot be equated with psychological
incapacity.
PETITION for review on certiorari of a decision of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Vigilia and Vigilia Law Office for petitioner.
Ernesto M. Tomaneng for respondent.
590
VITUG, J.:
Submitted for review is the decision of the Court of Appeals, promulgated
on 27 May 1998, in C.A. G.R. CV. No. 52374, reversing the decision of
the Regional Trial Court ("RTC") of Caloocan City, Branch 130, which has
declared the marriage between petitioner and respondent to be null and
void ab initio on the ground of psychological incapacity on the part of
respondent.
Petitioner Lorna G. Pesca and respondent Zosimo A. Pesca first met
sometime in 1975 while on board an inter-island vessel bound for
Bacolod City. After a whirlwind courtship, they got married on 03 March
1975. Initially, the young couple did not live together as petitioner was still
a student in college and respondent, a seaman, had to leave the country
on board an ocean-going vessel barely a month after the marriage. Six
months later, the young couple established their residence in Quezon
City until they were able to build their own house in Caloocan City where
they finally resided. It was blissful marriage for the couple during the two
months of the year that they could stay together - when respondent was
on vacation. The union begot four children, 19-year old Ruhem, 17-year
old Rez, 11-year old Ryan, and 9-year old Richie.
It started in 1988, petitioner said, when she noticed that respondent
surprisingly showed signs of "psychological incapacity" to perform his
marital covenant. His "true color" of being an emotionally immature and
irresponsible husband became apparent. He was cruel and violent. He
was a habitual drinker, staying with friends daily from 4:00 o'clock in the
afternoon until 1:00 o'clock in the morning. When cautioned to stop or, to
at least, minimize his drinking, respondent would beat, slap and kick her.
At one time, he chased petitioner with a loaded shotgun and threatened
to kill her in the presence of the children. The children themselves were
not spared from physical violence.
Finally, on 19 November 1992, petitioner and her children left the
conjugal abode to live in the house of her sister in Quezon City as they
could no longer bear his violent ways. Two months later, petitioner
decided to forgive respondent, and she returned home to give him a
chance to change. But, to her dismay, things did not so turn out as
expected. Indeed, matters became worse.
On the morning of 22 March 1994, about eight o'clock, respondent
assaulted petitioner for about half an hour in the presence of the children.
She was battered black and blue. She submitted herself to medical
examination at the Quezon City General Hospital, which diagnosed her
5
injuries as contusions and abrasions. Petitioner filed a complaint with the
barangay authorities, and a case was filed against respondent for slight
physical injuries. He was convicted by the Metropolitan Trial Court of
Caloocan City and sentenced to eleven days of imprisonment.
This time, petitioner and her children left the conjugal home for good and
stayed with her sister. Eventually, they decided to rent an apartment.
Petitioner sued respondent before the Regional Trial Court for the
declaration of nullity of their marriage invoking psychological incapacity.
Petitioner likewise sought the custody of her minor children and prayed
for support pendente lite .
Summons, together with a copy of the complaint, was served on
respondent on 25 April 1994 by personal service by the sheriff. As
respondent failed to file an answer or to enter his appearance within the
reglementary period, the trial court ordered the city prosecutor to look into
a possible collusion between the parties. Prosecutor Rosa C. Reyes, on
03 August 1994, submitted her report to the effect that she found no
evidence to establish that there was collusion between the parties. 1âwphi1.nêt
On 11 January 1995, respondent belatedly filed, without leave of court,
an answer, and the same, although filed late, was admitted by the court.
In his answer, respondent admitted the fact of his marriage with petitioner
and the birth of their children. He also confirmed the veracity of Annex "A"
of the complaint which listed the conjugal property. Respondent
vehemently denied, however, the allegation that he was psychologically
incapacitated.
On 15 November 1995, following hearings conducted by it, the trial court
rendered its decision declaring the marriage between petitioner and
respondent to be null and void ab initio on the basis of psychological
incapacity on the part of respondent and ordered the liquidation of the
conjugal partnership.
Respondent appealed the above decision to the Court of Appeals,
contending that the trial court erred, particularly, in holding that there was
legal basis to declare the marriage null and void and in denying his
motion to reopen the case.
The Court of Appeals reversed the decision of the trial court and declared
the marriage between petitioner and respondent valid and subsisting. The
appellate court said:
"Definitely the appellee has not established the following: That the
appellant showed signs of mental incapacity as would cause him
to be truly incognitive of the basic marital covenant, as so
provided for in Article 68 of the Family Code; that the incapacity is
grave, has preceded the marriage and is incurable; that his
incapacity to meet his marital responsibility is because of a
psychological, not physical illness; that the root cause of the
incapacity has been identified medically or clinically, and has
been proven by an expert; and that the incapacity is permanent
and incurable in nature.
"The burden of proof to show the nullity of marriage lies in the
plaintiff and any doubt should be resolved in favor of the
existence and continuation of the marriage and against its
dissolution and nullity."1
Petitioner, in her plea to this Court, would have the decision of the Court
of Appeals reversed on the thesis that the doctrine enunciated in Santos
vs. Court of Appeals, promulgated on 14 January 1995, as well as the
2
guidelines set out in Republic vs. Court of Appeals and
Molina, promulgated on 13 February 1997, should have no retroactive
3
application and, on the assumption that the Molina ruling could be applied
retroactively, the guidelines therein outlined should be taken to be merely
advisory and not mandatory in nature. In any case, petitioner argues, the
application of the Santos and Molina dicta should warrant only a remand
of the case to the trial court for further proceedings and not its dismissal.
Be that as it may, respondent submits, the appellate court did not err in
its assailed decision for there is absolutely no evidence that has been
shown to prove psychological incapacity on his part as the term has been
so defined in Santos.
Indeed, there is no merit in the petition.
The term "psychological incapacity," as a ground for the declaration of
nullity of a marriage under Article 36 of the Family Code, has been
explained by the Court, in Santos and reiterated in Molina. The Court,
in Santos, concluded:
"It should be obvious, looking at all the foregoing disquisitions,
including, and most importantly, the deliberations of the Family
Code Revision Committee itself, that the use of the phrase
6
 'psychological incapacity' under Article 36 of the Code has not
been meant to comprehend all such possible cases of psychoses
as, likewise mentioned by some ecclesiastical authorities,
extremely low intelligence, immaturity, and like circumstances
(cited in Fr. Artemio Balumad's 'Void and Voidable Marriages in
the Family Code and their Parallels in Canon Law,' quoting form
the Diagnostic Statistical Manuel of Mental Disorder by the
American Psychiatric Association; Edward Hudson's 'Handbook II
for Marriage Nullity Cases'). Article 36 of the Family. Code cannot
be taken and construed independently of, but must stand in
conjunction with, existing precepts in our law on marriage. Thus
correlated, 'psychological incapacity' should refer to no less than
a mental (not physical) incapacity that causes a party to be truly
incognitive of the basic marital covenants that concomitantly must
be assumed and discharged by the parties to the marriage which,
as so expressed by Article 68 of the Family Code, include their
mutual obligations to live together, observe love, respect and
fidelity and render help and support. There is hardly any doubt
that the intendment of the law has been to confine the meaning of
'psychological incapacity' to the most serious cases of personality
disorders clearly demonstrative of an utter insensitivity or inability
to give meaning and significance to the marriage. This
psychologic condition must exist at the time the marriage is
celebrated."
jurisprudential attention. It is in Santos when, for the first time, the Court
has given life to the term. Molina, that followed, has additionally provided
procedural guidelines to assist the courts and the parties in trying cases
for annulment of marriages grounded on psychological
incapacity. Molina has strengthened, not overturned, Santos.
At all events, petitioner has utterly failed, both in her allegations in the
complaint and in her evidence, to make out a case of psychological
incapacity on the part of respondent, let alone at the time of
solemnization of the contract, so as to warrant a declaration of nullity of
the marriage. Emotional immaturity and irresponsibility, invoked by her,
cannot be equated with psychological incapacity.
The Court reiterates its reminder that marriage is an inviolable social
institution and the foundation of the family6 that the State cherishes and
protects. While the Court commisserates with petitioner in her unhappy
marital relationship with respondent, totally terminating that relationship,
however, may not necessarily be the fitting denouement to it. In these
cases, the law has not quite given up, neither should we.
WHEREFORE, the herein petition is DENIED. No costs.
SO ORDERED.

The- "doctrine of stare decisis," ordained in Article 8 of the Civil Code, Vitug, J.C.; Melo, J.A.R; Panganiban, A.V.; Gonzaga-Reyes, M.P.;
expresses that judicial decisions applying or interpreting the law shall Sandoval-Gutierez, A., Concur.
form part of the legal system of the Philippines. The rule follows the
settled legal maxim - "legis interpretado legis vim obtinet" - that the
interpretation placed upon the written law by a competent court has the
force of law. The interpretation or construction placed by the courts
3

establishes the contemporaneous legislative intent of the law. The latter

as so interpreted and construed would thus constitute a part of that law
as of the date the statute is enacted. It is only when a prior ruling of this
Court finds itself later overruled, and a different view is adopted, that the
new doctrine may have to be applied prospectively in favor of parties who
have relied on the old doctrine and have acted in good faith in
accordance therewith5 under the familiar rule of "lex prospicit, non
respicit."

The phrase "psychological incapacity ," borrowed from Canon law, is an

entirely novel provision in our statute books, and, until the relatively
recent enactment of the Family Code, the concept has escaped
7
 Quita vs. Court of Appeals
by respondent court is clear: If there is a controversy before the court
as to who are the lawful heirs of the deceased person or as to the distributive
shares to which each person is entitled under the law, the controversy shall
be heard and decided as in ordinary cases.
Same; Same; Same; Husband and Wife; Conflict of Laws; Divorce; If
there is a question as to whether a wife was still a Filipino citizen at the time
of her divorce from her husband—the decedent—the trial court should
conduct a hearing to establish her citizenship.—We note that in her comment
to petitioner’s motion private respondent raised, among others, the issue as to
whether petitioner was still entitled to inherit from the decedent considering
that she had secured a divorce in the U.S.A. and in fact had twice remarried.
She also invoked the above quoted procedural rule. To this, petitioner replied
that Arturo was a Filipino and as such remained legally married to her in
spite of the divorce they obtained. Reading between the lines, the implication
is that petitioner was no longer a Filipino citizen at the time of her divorce
from Arturo. This should have prompted the trial court to conduct a hearing
to establish her citizenship. The purpose of a hearing is to ascertain the truth
of the matters in issue with the aid of documentary and testimonial evidence
as well as the arguments of the parties either supporting or opposing the
evidence. Instead, the lower court perfunctorily settled her claim in her favor
by merely applying the ruling in Tenchavez v. Escaño.
Same; Same; Same; Same; Same; Same; Aliens may obtain divorces
abroad, which may be recognized in the Philippines, provided they are valid
according to their national law; Once proved that a wife was no longer a
Filipino citizen at the time of her divorce from her husband, then she could
G.R. No. 124862. December 22, 1998 very well lose her right to inherit from the latter.—Then in private
FE D. QUITA, petitioner, vs. COURT OF APPEALS and respondent’s motion to set aside and/or reconsider the lower court’s decision
BLANDINA DANDAN, respondents. ** she stressed that the citizenship of petitioner was relevant in the light of the
Actions; Settlement of Estates; Succession; If there is a controversy ruling in Van Dorn v. Romillo, Jr. that aliens may obtain divorces abroad,
before the court as to who are the lawful heirs of the deceased person or as which may be recognized in the Philippines, provided they are valid
to the distributive shares to which each person is entitled under the law, the according to their national law. She prayed therefore that the case be set for
controversy shall be heard and decided as in ordinary cases.—We cannot hearing. Petitioner opposed the motion but failed to squarely address the
sustain petitioner. The provision relied upon issue on her citizenship. The trial court did not grant private respondent’s
_________ prayer for a hearing but proceeded to resolve her motion with the finding that
both petitioner and Arturo were “Filipino citizens and were married in the
*
SECOND DIVISION. Philippines.” It main-
**
The name of private respondent Blandina Dandan appears as Blandina Padlan in the 408
proceedings before the lower courts.
407 408 SUPREME COURT REPORTS
VOL. 300, DECEMBER 22, 1998 407 ANNOTATED

8
 Quita vs. Court of Appeals
tained that their divorce obtained in 1954 in San Francisco, California,
U.S.A., was not valid in Philippine jurisdiction. We deduce that the finding
on their citizenship pertained solely to the time of their marriage as the trial
court was not supplied with a basis to determine petitioner’s citizenship at the
time of their divorce. The doubt persisted as to whether she was still a
Filipino citizen when their divorce was decreed. The trial court must have
overlooked the materiality of this aspect. Once proved that she was no longer
a Filipino citizen at the time of their divorce, Van Dornwould become
applicable and petitioner could very well lose her right to inherit from
Arturo.
Same; Same; Same; Forum Shopping; There is no forum shopping
where one petition deals with declaration of heirship while the subsequent
petitions filed before other courts concern the issuance of new owner’s
duplicate copies of titles of certain properties belonging to the estate of the
decedent.—As regards the motion of private respondent for petitioner and her
counsel to be declared in contempt of court and that the present petition be
dismissed for forum shopping, the same lacks merit. For forum shopping to
exist the actions must involve the same transactions and same essential facts
and circumstances. There must also be identical causes of action, subject
matter and issue. The present petition deals with declaration of heirship while
the subsequent petitions filed before the three (3) trial courts concern the
issuance of new owner’s duplicate copies of titles of certain properties
belonging to the estate of Arturo. Obviously, there is no reason to declare the
existence of forum shopping.
PETITION for review on certiorari of a decision of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Puruganan, Chato, Tan and Geronimo Law Officesfor
petitioner.
Balgos & Perez Law Offices for private respondent.
BELLOSILLO, J.:
FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in the
Philippines on 18 May 1941. They were not however blessed with
children. Somewhere along the way their relationship soured. Eventually
Fe sued Arturo for divorce in San Francisco, California, U.S.A. She
submitted in the divorce proceedings a private writing dated 19 July 1950
evidencing their agreement to live separately from each other and a
settlement of their conjugal properties. On 23 July 1954 she obtained a
final judgment of divorce. Three (3) weeks thereafter she married a
certain Felix Tupaz in the same locality but their relationship also ended
in a divorce. Still in the U.S.A., she married for the third time, to a certain
Wernimont.
On 16 April 1972 Arturo died. He left no will. On 31 August 1972 Lino
Javier Inciong filed a petition with the Regional Trial Court of Quezon City
for issuance of letters of administration concerning the estate of Arturo in
favor of the Philippine Trust Company. Respondent Blandina Dandan
(also referred to as Blandina Padlan), claiming to be the surviving spouse
of Arturo Padlan, and Claro, Alexis, Ricardo, Emmanuel, Zenaida and
Yolanda, all surnamed Padlan, named in the children of Arturo Padlan
opposed the petition and prayed for the appointment instead of Atty.
Leonardo Casaba, which was resolved in favor of the latter. Upon motion
of the oppositors themselves, Atty. Cabasal was later replaced by Higino
Castillon. On 30 April 1973 the oppositors (Blandina and Padlan children)
submitted certified photocopies of the 19 July 1950 private writing and the
final judgment of divorce between petitioner and Arturo. Later Ruperto T.
Padlan, claiming to be the sole surviving brother of the deceased Arturo,
intervened.
On 7 October 1987 petitioner moved for the immediate declaration of
heirs of the decedent and the distribution of his estate. At the scheduled
hearing on 23 October 1987, private respondent as well as the six (6)
Padlan children and Ruperto failed to appear despite due notice. On the
same day, the trial court required the submission of the records of birth of
the Padlan children within ten (10) days from receipt thereof, after which,
with or without the documents, the issue on the declaration of heirs would
be considered submitted for resolution. The prescribed period lapsed
without the required documents being submitted.
The trial court invoking Tenchavez v. Escaño which held that "a
1
foreign divorce between Filipino citizens sought and decreed after
the effectivity of the present Civil Code (Rep. Act 386) was not
entitled to recognition as valid in this jurisdiction," disregarded the
2
divorce between petitioner and Arturo. Consecuently, it expressed
the view that their marriage subsisted until the death of Arturo in
1972. Neither did it consider valid their extrajudicial settlement of
conjugal properties due to lack of judicial approval. On the other
3
9
hand, it opined that there was no showing that marriage existed
between private respondent and Arturo, much less was it shown
that the alleged Padlan children had been acknowledged by the
deceased as his children with her. As regards Ruperto, it found that
he was a brother of Arturo. On 27 November 1987 only petitioner
4
and Ruperto were declared the intestate heirs of Arturo.
Accordingly, equal adjudication of the net hereditary estate was
ordered in favor of the two intestate heirs.5
On motion for reconsideration, Blandina and the Padlan children
were allowed to present proofs that the recognition of the children
by the deceased as his legitimate children, except Alexis who was
recognized as his illegitimate child, had been made in their
respective records of birth. Thus on 15 February 1988 partial
6
reconsideration was granted declaring the Padlan children, with the
exception of Alexis, entitled to one-half of the estate to the
exclusion of Ruperto Padlan, and petitioner to the other
half. Private respondent was not declared an heir. Although it was
7
stated in the aforementioned records of birth that she and Arturo
were married on 22 April 1947, their marriage was clearly void since
it was celebrated during the existence of his previous marriage to
petitioner.
In their appeal to the Court of Appeals, Blandina and her children
assigned as one of the errors allegedly committed by the trial court
the circumstance that the case was decided without a hearing, in
violation of Sec. 1, Rule 90, of the Rules of Court, which provides
that if there is a controversy before the court as to who are the
lawful heirs of the deceased person or as to the distributive shares
to which each person is entitled under the law, the controversy shall
be heard and decided as in ordinary cases.
Respondent appellate court found this ground alone sufficient to
sustain the appeal; hence, on 11 September 1995 it declared null
and void the 27 November 1987 decision and 15 February 1988
order of the trial court, and directed the remand of the case to the
trial court for further proceedings. On 18 April 1996 it denied
8
reconsideration. 9
Should this case be remanded to the lower court for further
proceedings? Petitioner insists that there is no need because, first,
no legal or factual issue obtains for resolution either as to the
heirship of the Padlan children or as to the decedent; and, second,
the issue as to who between petitioner and private respondent is the
proper hier of the decedent is one of law which can be resolved in
the present petition based on establish facts and admissions of the
parties.
We cannot sustain petitioner. The provision relied upon by
respondent court is clear: If there is a controversy before the court
as to who are the lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under the law,
the controversy shall be heard and decided as in ordinary cases.
We agree with petitioner that no dispute exists either as to the right
of the six (6) Padlan children to inherit from the decedent because
there are proofs that they have been duly acknowledged by him and
petitioner herself even recognizes them as heirs of Arturo
Padlan; nor as to their respective hereditary shares. But
10
controversy remains as to who is the legitimate surviving spouse of
Arturo. The trial court, after the parties other than petitioner failed to
appear during the scheduled hearing on 23 October 1987 of the
motion for immediate declaration of heirs and distribution of estate,
simply issued an order requiring the submission of the records of
birth of the Padlan children within ten (10) days from receipt thereof,
after which, with or without the documents, the issue on declaration
of heirs would be deemed submitted for resolution.
We note that in her comment to petitioner's motion private
respondent raised, among others, the issue as to whether petitioner
was still entitled to inherit from the decedent considering that she
had secured a divorce in the U.S.A. and in fact had twice remarried.
She also invoked the above quoted procedural rule. To this,
11
petitioner replied that Arturo was a Filipino and as such remained
legally married to her in spite of the divorce they
obtained. Reading between the lines, the implication is that
12
petitioner was no longer a Filipino citizen at the time of her divorce
from Arturo. This should have prompted the trial court to conduct a
hearing to establish her citizenship. The purpose of a hearing is to
ascertain the truth of the matters in issue with the aid of
documentary and testimonial evidence as well as the arguments of
the parties either supporting or opposing the evidence. Instead, the
lower court perfunctorily settled her claim in her favor by merely
applying the ruling in Tenchavez v. Escaño.
10
Then in private respondent's motion to set aside and/or reconsider
the lower court's decision she stressed that the citizenship of
petitioner was relevant in the light of the ruling in Van Dorn v.
Romillo Jr. that aliens may obtain divorces abroad, which may be
13
recognized in the Philippines, provided they are valid according to
their national law. She prayed therefore that the case be set for
hearing. Petitioner opposed the motion but failed to squarely
14
address the issue on her citizenship. The trial court did not grant
15
private respondent's prayer for a hearing but proceeded to resolve
her motion with the finding that both petitioner and Arturo were
"Filipino citizens and were married in the Philippines." It16
maintained that their divorce obtained in 1954 in San Francisco,
California, U.S.A., was not valid in Philippine jurisdiction. We
deduce that the finding on their citizenship pertained solely to the
time of their marriage as the trial court was not supplied with a
basis to determine petitioner's citizenship at the time of their
divorce. The doubt persisted as to whether she was still a Filipino
citizen when their divorce was decreed. The trial court must have
overlooked the materiality of this aspect. Once proved that she was
no longer a Filipino citizen at the time of their divorce, Van
Dorn would become applicable and petitioner could very well lose
her right to inherit from Arturo.
Respondent again raised in her appeal the issue on petitioner's
citizenship; it did not merit enlightenment however from
17
petitioner. In the present proceeding, petitioner's citizenship is
18
brought anew to the fore by private respondent. She even furnishes
the Court with the transcript of stenographic notes taken on 5 May
1995 during the hearing for the reconstitution of the original of a
certain transfer certificate title as well as the issuance of new
owner's duplicate copy thereof before another trial court. When
asked whether she was an American citizen petitioner answered
that she was since 1954. Significantly, the decree of divorce of
19
petitioner and Arturo was obtained in the same year. Petitioner
however did not bother to file a reply memorandum to erase the
uncertainty about her citizenship at the time of their divorce, a
factual issue requiring hearings to be conducted by the trial court.
Consequently, respondent appellate court did not err in ordering the
case returned to the trial court for further proceedings.
We emphasize however that the question to be determined by the
trial court should be limited only to the right of petitioner to inherit
from Arturo as his surviving spouse. Private respondent's claim to
heirship was already resolved by the trial court. She and Arturo
were married on 22 April 1947 while the prior marriage of petitioner
and Arturo was subsisting thereby resulting in a bigamous marriage
considered void from the beginning under Arts. 80 and 83 of the
Civil Code. Consequently, she is not a surviving spouse that can
inherit from him as this status presupposes a legitimate
relationship.20
As regards the motion of private respondent for petitioner and a her
counsel to be declared in contempt of court and that the present
petition be dismissed for forum shopping, the same lacks merit.
21
For forum shopping to exist the actions must involve the same
transactions and same essential facts and circumstances. There
must also be identical causes of action, subject matter and
issue. The present petition deals with declaration of heirship while
22
the subsequent petitions filed before the three (3) trial courts
concern the issuance of new owner's duplicate copies of titles of
certain properties belonging to the estate of Arturo. Obviously,
there is no reason to declare the existence of forum shopping.
WHEREFORE, the petition is DENIED. The decision of respondent
Court of Appeals ordering the remand of the case to the court of
origin for further proceedings and declaring null and void its
decision holding petitioner Fe D. Quita and Ruperto T. Padlan as
intestate heirs is AFFIRMED. The order of the appellate court
modifying its previous decision by granting one-half (1/2) of the net
hereditary estate to the Padlan children, namely, Claro, Ricardo,
Emmanuel, Zenaida and Yolanda, with the exception of Alexis, all
surnamed Padlan, instead of Arturo's brother Ruperto Padlan, is
likewise AFFIRMED. The Court however emphasizes that the
reception of evidence by the trial court should he limited to the
hereditary rights of petitioner as the surviving spouse of Arturo
Padlan.
The motion to declare petitioner and her counsel in contempt of
court and to dismiss the present petition for forum shopping is
DENIED.
SO ORDERED.
Puno, Mendoza and Martinez, JJ., concur.
11

[Nos. L-11622 and L-11668. January 28, 1961]
THE COLLECTOR OF INTERNAL REVENUE,
petitioner vs. DOUGLAS FlSHER and BETTINA FlSHER, and
THE COURT OF TAX APPEALS, respondents.
DOUGLAS FISHER and BETTINA FISHER, petitioners vs. THE
COLLECTOR OF INTERNAL REVENUE and THE COURT OF
TAX APPEALS, respondents.
1. 1.SUCCESSlON; FOREIGNERS WHO MARRIED IN THE
PHILlPPINES; LAW DETERMINATIVE OF PROPERTY
RELATIONS OF SPOUSES.—The decedent was born in the
Philippines in 1874 of British parents. ln 1909, he married another
British subject in Manila. In 1951, he died in San Francisco,
California, U.S.A., where he and his wife established their
permanent residence. The spouse? acquired real and personal
properties in the Philippines. Query: What law governs the property
relation of the spouses? Held: Since the marriage iage took place in
1909, the applicable law is Article 1325 of the old Civil Code and
not Article 124 of the new Civil Code which became effective only
in 1950. It is true that both articles adhere to the nationality theory
of determining the property relation of spouses where one of them
is a foreigner and they have made 110 prior agreement as to the
administration, disposition, and ownership of their
687
VOL. 110, JANUARY 28, 1961 687
Collector of lnternal Revenue vs. Fisher
1. properties. In such a case, the national law of the husband becomes
the dominant law in determining the property relation of the
spouses. There is, however, a difference between the two articles in
that Art. 124 expressly provides that it shall be applicable
regardless of whether the marriage was celebrated in the
Philippines or abroad, while Art. 1325 is limited to marriages
contracted in a foreign land. What has been said, however, refers to
mixed marriages between a Filipino citizen and a foreigner. In the
instant case, both spouses are foreigners who married in the
Philippines. In such a case, the law determinative of the property
relation of the spouses would be the English law even if the
marriage was celebrated in the Philippines, both of them being
foreigners. (See IX Manresa, Comentarios al Código Civil Español,
p. 202).
1. 2.ID.; ID.; ID.; FAILURE TO PROVE FOREIGN LAW; EFFECT
OF.—In the present case, however, the pertinent English law that
allegedly vests in the decedent husband full ownership of the
properties acquired during the marriage has not been proven. In the
absence of proof, the court is, therefore, justified in presuming that
the law of England on this matter is the same as the Philippine law,
viz: in the absence of any ante-nuptial agreement, the contracting
parties are presumed to have adopted the system of conjugal
partnership as to the properties acquired during their marriage.
Hence, the lower court correctly deducted the half of the conjugal
property in determining the hereditary estate left by the decedent.
1. 3.ID.; ID.; ID.; APPLICABILITY OF ART. 16 NEW CIVIL CODE.
—Article 16 of the new Civil Code (art. 10, old Civil Code) which
provides that in testate and intestate proceedings, the amount of
successional rights, among others, is to be determined by the
national law of the decedent, is not applicable to the present case. A
reading of Article 10 of the old Civil Code, which incidentally is
the one applicable, shows that it does not encompass or
contemplate to govern the question of property relation between
spouses. Said article distinctly speaks of amount of
successionalrights and this term properly refers to the extent or
12
 amount of property that each heir is legally entitled to inherit from
the estate available for distribution.
1. 4.TAXATION; ESTATE AND INHERITANCE
TAXES; EXEMPTION OF INTANGIBLE PERSONAL
PROPERTIES; PROOF OF FOREIGN LAW GRANTING
EXEMPTION.—Petitioner disputes the action of the Tax Court in
exempting the respondents from paying inheritance tax on the
personal intangible property belonging to the
688
688 PHILIPPINE REPORTS ANNOTATED
Collector of lnternal Revenue vs. Fisher
1. estate in virtue of the reciprocity proviso of Section 122 of the
National Internal Revenue Code, in relation to Section 13851 of the
California Revenue and Taxation Code. To prove the pertinent
California law, counsel for respondents testified that as an active
member of the California Bar since 1931, he is familiar with the
revenue and taxation laws of the State of California. When asked by
the lower court to state the pertinent California law as regards
exemption of intangible personal properties, the witnesses cited
article 4, section 13851 (a) and (b) of the California Internal
Revenue Code as published in the Deering's California Code. And
as part of his testimony, a full quotation of the cited section was
offered in evidence by the respondents. Held: Section 41, Rule 123
of the Rules of Court prescribes the manner of proving foreign laws
before Philippine courts- Although it is desirable that foreign laws
be proved in accordance with said rule, this Court held in the case
Willamete Iron and Steel Works vs. Muzzal, 61 Phil., 471, that "a
reading of sections 300 and 301 of our Code of Civil Procedure
(now section 41, Rule 123) will convince one that these sections do
not exclude the presentation of other competent evidence to prove
the existence of a foreign law." In that case, this Court considered
the testimony of an attorneyat-law of San Francisco, California,
who quoted verbatim a section of the California Civil Code and
who stated that the same was in force at the time the obligations
were contracted, as sufficient evidence to establish the 'existence of
said law. In line with this view, the Tax Court, therefore, did not err
in considering' the pertinent California law as proved by
respondents' witness.
1. 5.ID.; ID.; ID.; RECIPROCITY EXEMPTION BETWEEN STATE
OF CALIFORNIA AND PHILIPPINES.—Section 122 of the
National Internal Revenue Code exempts payment of both estate
and inheritance taxes on intangible personal properties if the laws
of the foreign country of which the decedent was a resident at the
time of his death allow a similar exemption from transfer taxes or
death taxes of every character in respect of intangible personal
property owned by citizens of the Philippines not resident of that
foreign country. On the other hand, Section 13851 of the California
Law exempts the payment of inheritance tax if the laws of the
country in which the decedent resided allow a similar exemption
from legacy, succession, or death taxes of every character. It is
clear from these provisions that the reciprocity must be total, that is,
with respect to
689
VOL. 110, JANUARY 28, 1961 689
Collector of lnternal Revenue vs. Fisher
1. transfer or death taxes of any and every character, in the case of the
Philippine law, and to legacy, succession, or death tax of any and
every character, in the case of the California law. Therefore, if any
of the two states collects or imposes and does not exempt any
transfer, death, legacy, or succession tax of any character, the
reciprocity does not work. This is the underlying principle of the
reciprocity clauses in both laws. Since in the Philippines two taxes
are collectible from a decedent's estate (inheritance and estate
taxes) and in California, only inheritance tax, reciprocal exemption
of the inheritance tax in both countries, leaving payable the estate
tax in the Philippines, will not work as that would violate the
California law that authorizes exemption only when there is in the
other country an exemption from legacy, succession or death taxes
of every character. Held: There could not be partial reciprocity. It
would have to be total or none at all.
1. 6.ID.; ID.; ID.; DEDUCTION UNDER FEDERAL LAW CANNOT
BE CLAIMED UNDER RECIPROCITY PROVISO.—The amount
13
 of $2,000.00 allowed under the Federal Estate Tax Law is in the
nature of a deduction and not of an exemption regarding which
reciprocity cannot be claimed under the proviso of Section 122 of
the National Internal Revenue Code. Nor is reciprocity authorized
under the Federal Law.
1. 7.ID.; ID.; WHEN ASSESSED VALUE CONSIDERED AS FAIR
MARKET VALUE OF PROPERTY.—It is contended that the
assessed values of the real properties situated in Baguio City, as
appearing in the tax rolls 6 months after the death of the decedent,
ought to have been considered by petitioner as their fair market
value, pursuant to Section 91 of the National Internal Revenue
Code. It should be pointed out, however, that in accordance with
said proviso the properties are required to be appraised at their fair
market value and the assessed value thereof shall be considered as
the fair market value only when evidence to the contrary has not
been shown. In the present case, such evidence exists to justify the
valuation made by petitioner which was sustained by the Tax Court.
1. 8.ID.; ID.; SHARES OF STOCK; VALUE OF SHARES, HOW
DETERMINED.—Respondents contend that the value of the shares
of stock in the Mindanao Mother Lode Mines, Inc., a domestic
corporation, should be fixed on the basis of the market quotation
obtaining at the San Francisco (California) Stock Exchange, on the
theory that the certificates of stocks were then held in that place and
registered with the said stock exchange. The
690
690 PHILIPPINE REPORTS ANNOTATED
Collector of lnternal Revenue vs. Fisher
1. argument is untenable. The situs of the shares of stocks, for purposes
of taxation, being located in the Philippines, and considering that
they are sought to be taxed in this jurisdiction, their fair market
value should be fixed on the basis of the price prevailing in this
country.
1. 9.ID.; ID.; INDEBTEDNESS INCURRED DURING LIFETIME OF
DECEDENT; WHEN MAY BE ALLOWED AS
DEDUCTION; DOMICILLARY ADMINISTRATION
DlSTINGUISHED FROM ANCILLARY ADMINISTRATION.—
It would appear that while still living, the decedent obtained a loan
of $5,000 from the Bank of California National Association,
secured by a pledge on his shares of stock in the Mindanao Mother
Lode Mines, Inc. The Tax Court disallowed this item on the ground
that the local probate court had not approved the same as a valid
claim against the estate and because it constituted an indebtedness
in respect to intangible personal property which the Tax Court held
to be exempt from inheritance tax. Held: The action of the lower
court must be sustained. The approval of the Philippine probate
court of this particular indebtedness of the decedent is necessary.
This is so although the same has been already admitted and
approved by the corresponding probate court in California, situs of
the principal or domicillary administration. It is true that there is in
the Philippines only an ancillary administration in this case but the
distinction between domicillary or principal administration and
ancillary administration serves only to distinguish one
administration from the other, for the two proceedings are separate
and independent. The reason for the ancillary administration is that,
a grant of administration does not ex proprio vigore, have any
effect beyond the limits of the country in which it was granted.
Hence, Rule 78, Secs. 1, 2, and 3 of the Rules of Court requires that
before a will duly probated outside of the Philippines can have
effect here, it must first be proved and allowed before the
Philippine courts, in much the same manner as wills originally
presented for allowance therein. And the estate shall be
administered under letters, testamentary, or letters of administration
granted by the court, and disposed of according to the will as
probated, after payment of just debts and expenses of
administration (Rule 78, Sec. 4, Rules of Court.)
1. 10.ID.; ID.; ID.; ID.; EXTENT OF DEDUCTION ALLOWED
ESTATE OF DECEDENT.—Another reason for the disallowance
of this indebtedness as a deduction, springs from the provisions of
Section 89, letter (d), number (1), of the National Internal Revenue
691
VOL. 110, JANUARY 28, 1961 691
Collector of Internal Revenue vs. Fisher
14
 1. Code which provides that no deductions shall be allowed unless a
statement of the gross estate of the nonresident not situated in the
Philippines appears in the return submitted to the office of the
Collector of Internal Revenue. The purpose of this requirement is to
enable the revenue officer to determine how much of the
indebtedness may be allowed to be deducted, pursuant to letter (b),
number (1) of the same section 89 of the Internal Revenue Code,
which allows only deduction to the extent of that portion of the
indebtedness which is equivalent to the proportion that the estate in
the Philippines bears to the total estate wherever situated. Stated
differently, if the properties in the Philippines constitute but 1/5 of
the entire assets wherever situated, then only 1/5 of the
indebtedness may be deducted.
1. 11.ID.; ID.; OVERPAYMENT OF TAXES; LIABILITY OF
GOVERNMENT FOR INTEREST OF AMOUNT
REFUNDABLE.—In case of overpayment of taxes, the National
Government cannot be required to pay interest on the amount
refundable, in the absence of a statutory provision expressly
directing or authorizing such payment.
PETITIONS for review by certiorari of a decision of the Court of Tax
Appeals.
The facts are stated in the opinion of the Court. In L-11622.
Solicitor General A. Padilla, Assistant Solicitor General J. P.
Alejandro, Solicitor P. P. de Castro and Atty. J. G. Azurin for
petitioner.
Allison J. Gibbs Law Office for respondents. In L-11668.
Allison J. Gibbs Law Office for petitioners.
Solicitor General A. Padilla, Assistant Solicitor General J. P.
Alejandro, Solicitor P. P. de Castro and Atty. J. G. Azurin for
respondents.
BARRERA, J.:
This case relates to the determination and settlement of the hereditary
estate left by the deceased Walter G. Stevenson, and the laws
applicable thereto. Walter G. Stevenson (born in the Philippines on
August 9, 1874 of British parents and married in the City of Manila on
January 23, 1909 to Beatrice Mauricia Stevenson another British
subject) died on February 22, 1951 in San Francisco, California,
U.S.A. whereto he and his wife moved and established their
permanent residence since May 10, 1945. In his will executed in San
Francisco on May 22, 1947, and which was duly probated in the
Superior Court of California on April 11, 1951, Stevenson instituted his
wife Beatrice as his sole heiress to the following real and personal
properties acquired by the spouses while residing in the Philippines,
described and preliminary assessed as follows:
Gross Estate
Real Property — 2 parcels of land in Baguio, covered
by T.C.T. Nos. 378 and 379 P4
Personal Property
(1) 177 shares of stock of Canacao Estate at P10.00
each
(2) 210,000 shares of stock of Mindanao Mother Lode
Mines, Inc. at P0.38 per share 7
(3) Cash credit with Canacao Estate Inc.
(4) Cash, with the Chartered Bank of India, Australia &
China
Total Gross Assets P13
On May 22, 1951, ancillary administration proceedings were instituted
in the Court of First Instance of Manila for the settlement of the estate
in the Philippines. In due time Stevenson's will was duly admitted to
probate by our court and Ian Murray Statt was appointed ancillary
administrator of the estate, who on July 11, 1951, filed a preliminary
estate and inheritance tax return with the reservation of having the
properties declared therein finally appraised at their values six months
after the death of Stevenson. Preliminary return was made by the
ancillary administrator in order to secure the waiver of the Collector of
Internal Revenue on the inheritance tax due on the 210,000 shares of
stock in the Mindanao Mother Lode Mines Inc. which the estate then
desired to dispose in the United States. Acting upon said return, the
Collector of Internal Revenue accepted the valuation of the personal
properties declared therein, but increased the appraisal of the two
parcels of land located in Baguio City by fixing their fair market value
15
in the amount of P52.200.00, instead of P43,500.00. After allowing the
deductions claimed by the ancillary administrator for funeral expenses
in the amount of P2,000.00 and for judicial and administration
expenses in the sum of P5,500.00, the Collector assessed the state
the amount of P5,147.98 for estate tax and P10,875,26 or inheritance
tax, or a total of P16,023.23. Both of these assessments were paid by
the estate on June 6, 1952.
On September 27, 1952, the ancillary administrator filed in amended
estate and inheritance tax return in pursuance f his reservation made
at the time of filing of the preliminary return and for the purpose of
availing of the right granted by section 91 of the National Internal
Revenue Code.
In this amended return the valuation of the 210,000 shares of stock in
the Mindanao Mother Lode Mines, Inc. was reduced from 0.38 per
share, as originally declared, to P0.20 per share, or from a total
valuation of P79,800.00 to P42,000.00. This change in price per share
of stock was based by the ancillary administrator on the market
notation of the stock obtaining at the San Francisco California) Stock
Exchange six months from the death of Stevenson, that is, As of
August 22, 1931. In addition, the ancillary administrator made claim
for the following deductions:
Funeral expenses ($1,04326)
Judicial Expenses:
(a) Administrator's Fee
(b) Attorney's Fee
(c) Judicial and Administration expenses as of
August 9, 1952
Real Estate Tax for 1951 on Baguio real
properties (O.R. No. B-1 686836)
Claims against the estate:
($5,000.00) P10,000.00 P10,000.00
Plus: 4% int. p.a. from Feb. 2 to 22, 1951
Sub-Total
In the meantime, on December 1, 1952, Beatrice Mauricia Stevenson
assigned all her rights and interests in the estate to the spouses,
Douglas and Bettina Fisher, respondents herein.
On September 7, 1953, the ancillary administrator filed a second
amended estate and inheritance tax return (Exh. "M-N"). This return
declared the same assets of the estate stated in the amended return
of September 22, 1952, except that it contained new claims for
additional exemption and deduction to wit: (1) deduction in the amount
of P4,000.00 from the gross estate of the decedent as provided for in
Section 861 (4) of the U.S. Federal Internal Revenue Code which the
ancillary administrator averred was allowable by way of the reciprocity
granted by Section 122 of the National Internal Revenue Code, as
then held by the Board of Tax Appeals in case No. 71 entitled
"Housman vs. Collector," August 14, 1952; and (2) exemption from
the imposition of estate and inheritance taxes on the 210,000 shares
of stock in the Mindanao Mother Lode Mines, Inc. also pursuant to the
reciprocity proviso of Section 122 of the National Internal Revenue
Code. In this last return, the estate claimed that it was liable only for
the amount of P525.34 for estate tax and P238.06 for inheritance tax
and that, as a consequence, it had overpaid the government. The
refund of the amount of P15,259.83, allegedly overpaid, was
accordingly requested by the estate. The Collector denied the claim.
For this reason, action was commenced in the Court of First Instance
of Manila by respondents, as assignees of Beatrice Mauricia
P1,204.34
Stevenson, for the recovery of said amount. Pursuant to Republic Act
No. 1125, the case was forwarded to the Court of Tax Appeals which
6.000.00
court, after hearing, rendered decision the dispositive portion of which
reads as follows:
1,400.05
In fine, we are of the opinion and so hold that: (a) the one-half
(½) share of the surviving spouse in the conjugal partnership
property as diminished by the obligations properly chargeable
to such property should be deducted from the net estate of the
deceased Walter G. Stevenson, pursuant to Section 89-C of
the National Internal Revenue Code; (b) the intangible
personal property belonging to the estate of said Stevenson is
exempt from inheritance tax, pursuant to the provision of
16
 section 122 of the National Internal Revenue Code in relation
to the California Inheritance Tax Law but decedent's estate is
not entitled to an exemption of P4,000.00 in the computation of
the estate tax; (c) for purposes of estate and inheritance
taxation the Baguio real estate of the spouses should be
valued at P52,200.00, and 210,000 shares of stock in the
Mindanao Mother Lode Mines, Inc. should be appraised at
P0.38 per share; and (d) the estate shall be entitled to a
deduction of P2,000.00 for funeral expenses and judicial
expenses of P8,604.39.
From this decision, both parties appealed.
The Collector of Internal Revenue, hereinafter called petitioner
assigned four errors allegedly committed by the trial court, while the
assignees, Douglas and Bettina Fisher hereinafter called
respondents, made six assignments of error. Together, the assigned
errors raise the following main issues for resolution by this Court:
(1) Whether or not, in determining the taxable net estate of the
decedent, one-half (½) of the net estate should be deducted therefrom
as the share of tile surviving spouse in accordance with our law on
conjugal partnership and in relation to section 89 (c) of the National
Internal revenue Code;
(2) Whether or not the estate can avail itself of the reciprocity proviso
embodied in Section 122 of the National Internal Revenue Code
granting exemption from the payment of estate and inheritance taxes
on the 210,000 shares of stock in the Mindanao Mother Lode Mines
Inc.;
(3) Whether or not the estate is entitled to the deduction of P4,000.00
allowed by Section 861, U.S. Internal Revenue Code in relation to
section 122 of the National Internal Revenue Code;
(4) Whether or not the real estate properties of the decedent located
in Baguio City and the 210,000 shares of stock in the Mindanao
Mother Lode Mines, Inc., were correctly appraised by the lower court;
(5) Whether or not the estate is entitled to the following deductions:
P8,604.39 for judicial and administration expenses; P2,086.52 for
funeral expenses; P652.50 for real estate taxes; and P10,0,22.47
representing the amount of indebtedness allegedly incurred by the
decedent during his lifetime; and
(6) Whether or not the estate is entitled to the payment of interest on
the amount it claims to have overpaid the government and to be
refundable to it.
In deciding the first issue, the lower court applied a well-known
doctrine in our civil law that in the absence of any ante-nuptial
agreement, the contracting parties are presumed to have adopted the
system of conjugal partnership as to the properties acquired during
their marriage. The application of this doctrine to the instant case is
being disputed, however, by petitioner Collector of Internal Revenue,
who contends that pursuant to Article 124 of the New Civil Code, the
property relation of the spouses Stevensons ought not to be
determined by the Philippine law, but by the national law of the
decedent husband, in this case, the law of England. It is alleged by
petitioner that English laws do not recognize legal partnership
between spouses, and that what obtains in that jurisdiction is another
regime of property relation, wherein all properties acquired during the
marriage pertain and belong Exclusively to the husband. In further
support of his stand, petitioner cites Article 16 of the New Civil Code
(Art. 10 of the old) to the effect that in testate and intestate
proceedings, the amount of successional rights, among others, is to
be determined by the national law of the decedent.
In this connection, let it be noted that since the mariage of the
Stevensons in the Philippines took place in 1909, the applicable law is
Article 1325 of the old Civil Code and not Article 124 of the New Civil
Code which became effective only in 1950. It is true that both articles
adhere to the so-called nationality theory of determining the property
relation of spouses where one of them is a foreigner and they have
made no prior agreement as to the administration disposition, and
ownership of their conjugal properties. In such a case, the national
law of the husband becomes the dominant law in determining the
property relation of the spouses. There is, however, a difference
between the two articles in that Article 1241 of the new Civil Code
expressly provides that it shall be applicable regardless of whether the
17
marriage was celebrated in the Philippines or abroad while Article
13252 of the old Civil Code is limited to marriages contracted in a
foreign land.
It must be noted, however, that what has just been said refers to
mixed marriages between a Filipino citizen and a foreigner. In the
instant case, both spouses are foreigners who married in the
Philippines. Manresa,3 in his Commentaries, has this to say on this
point:
La regla establecida en el art. 1.315, se refiere a las
capitulaciones otorgadas en Espana y entre espanoles. El
1.325, a las celebradas en el extranjero cuando alguno de los
conyuges es espanol. En cuanto a la regla procedente cuando
dos extranjeros se casan en Espana, o dos espanoles en el
extranjero hay que atender en el primer caso a la legislacion
de pais a que aquellos pertenezean, y en el segundo, a las
reglas generales consignadas en los articulos 9 y 10 de
nuestro Codigo. (Emphasis supplied.)
If we adopt the view of Manresa, the law determinative of the property
relation of the Stevensons, married in 1909, would be the English law
even if the marriage was celebrated in the Philippines, both of them
being foreigners. But, as correctly observed by the Tax Court, the
pertinent English law that allegedly vests in the decedent husband full
ownership of the properties acquired during the marriage has not
been proven by petitioner. Except for a mere allegation in his answer,
which is not sufficient, the record is bereft of any evidence as to what
English law says on the matter. In the absence of proof, the Court is
justified, therefore, in indulging in what Wharton calls "processual
presumption," in presuming that the law of England on this matter is
the same as our law.4
Nor do we believe petitioner can make use of Article 16 of the New
Civil Code (art. 10, old Civil Code) to bolster his stand. A reading of
Article 10 of the old Civil Code, which incidentally is the one
applicable, shows that it does not encompass or contemplate to
govern the question of property relation between spouses. Said article
distinctly speaks of amount of successional rights and this term, in
speaks in our opinion, properly refers to the extent or amount of
property that each heir is legally entitled to inherit from the estate
available for distribution. It needs to be pointed out that the property
relation of spouses, as distinguished from their successional rights, is
governed differently by the specific and express provisions of Title VI,
Chapter I of our new Civil Code (Title III, Chapter I of the old Civil
Code.) We, therefore, find that the lower court correctly deducted the
half of the conjugal property in determining the hereditary estate left
by the deceased Stevenson.
On the second issue, petitioner disputes the action of the Tax Court in
the exempting the respondents from paying inheritance tax on the
210,000 shares of stock in the Mindanao Mother Lode Mines, Inc. in
virtue of the reciprocity proviso of Section 122 of the National Internal
Revenue Code, in relation to Section 13851 of the California Revenue
and Taxation Code, on the ground that: (1) the said proviso of the
California Revenue and Taxation Code has not been duly proven by
the respondents; (2) the reciprocity exemptions granted by section
122 of the National Internal Revenue Code can only be availed of by
residents of foreign countries and not of residents of a state in the
United States; and (3) there is no "total" reciprocity between the
Philippines and the state of California in that while the former exempts
payment of both estate and inheritance taxes on intangible personal
properties, the latter only exempts the payment of inheritance tax..
To prove the pertinent California law, Attorney Allison Gibbs, counsel
for herein respondents, testified that as an active member of the
California Bar since 1931, he is familiar with the revenue and taxation
laws of the State of California. When asked by the lower court to state
the pertinent California law as regards exemption of intangible
personal properties, the witness cited article 4, section 13851 (a) and
(b) of the California Internal and Revenue Code as published in
Derring's California Code, a publication of the Bancroft-Whitney
Company inc. And as part of his testimony, a full quotation of the cited
section was offered in evidence as Exhibits "V-2" by the respondents.
It is well-settled that foreign laws do not prove themselves in our
jurisdiction and our courts are not authorized to take judicial notice of
them.5 Like any other fact, they must be alleged and proved.6
Section 41, Rule 123 of our Rules of Court prescribes the manner of
proving foreign laws before our tribunals. However, although we
believe it desirable that these laws be proved in accordance with said
18
rule, we held in the case of Willamette Iron and Steel Works v.
Muzzal, 61 Phil. 471, that "a reading of sections 300 and 301 of our
Code of Civil Procedure (now section 41, Rule 123) will convince one
that these sections do not exclude the presentation of other
competent evidence to prove the existence of a foreign law." In that
case, we considered the testimony of an attorney-at-law of San
Francisco, California who quoted verbatim a section of California Civil
Code and who stated that the same was in force at the time the
obligations were contracted, as sufficient evidence to establish the
existence of said law. In line with this view, we find no error, therefore,
on the part of the Tax Court in considering the pertinent California law
as proved by respondents' witness.
We now take up the question of reciprocity in exemption from transfer
or death taxes, between the State of California and the Philippines.F
Section 122 of our National Internal Revenue Code, in pertinent part,
provides:
... And, provided, further, 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
of tax or death tax of any character in respect of intangible
personal property of citizens of the Philippines not residing in
that foreign country, or (b) if the laws of the foreign country of
which the decedent was a resident at the time of his death
allow a similar exemption from transfer taxes or death taxes of
every character in respect of intangible personal property
owned by citizens of the Philippines not residing in that foreign
country." (Emphasis supplied).
On the other hand, Section 13851 of the California Inheritance Tax
Law, insofar as pertinent, reads:.
"SEC. 13851, Intangibles of nonresident: Conditions.
Intangible personal property is exempt from the tax imposed
by this part if the decedent at the time of his death was a
resident of a territory or another State of the United States or
of a foreign state or country which then imposed a legacy,
succession, or death tax in respect to intangible personal
property of its own residents, but either:.
(a) Did not impose a legacy, succession, or death tax of any
character in respect to intangible personal property of
residents of this State, or
(b) Had in its laws a reciprocal provision under which
intangible personal property of a non-resident was exempt
from legacy, succession, or death taxes of every character if
the Territory or other State of the United States or foreign state
or country in which the nonresident resided allowed a similar
exemption in respect to intangible personal property of
residents of the Territory or State of the United States or
foreign state or country of residence of the decedent." (Id.)
It is clear from both these quoted provisions that the reciprocity must
be total, that is, with respect to transfer or death taxes of any and
every character, in the case of the Philippine law, and to legacy,
succession, or death taxes of any and every character, in the case of
the California law. Therefore, if any of the two states collects or
imposes and does not exempt any transfer, death, legacy, or
succession tax of any character, the reciprocity does not work. This is
the underlying principle of the reciprocity clauses in both laws.
In the Philippines, upon the death of any citizen or resident, or non-
resident with properties therein, there are imposed upon his estate
and its settlement, both an estate and an inheritance tax. Under the
laws of California, only inheritance tax is imposed. On the other hand,
the Federal Internal Revenue Code imposes an estate tax on non-
residents not citizens of the United States,7 but does not provide for
any exemption on the basis of reciprocity. Applying these laws in the
manner the Court of Tax Appeals did in the instant case, we will have
a situation where a Californian, who is non-resident in the Philippines
but has intangible personal properties here, will the subject to the
payment of an estate tax, although exempt from the payment of the
inheritance tax. This being the case, will a Filipino, non-resident of
California, but with intangible personal properties there, be entitled to
the exemption clause of the California law, since the Californian has
not been exempted from every character of legacy, succession, or
death tax because he is, under our law, under obligation to pay an
19
estate tax? Upon the other hand, if we exempt the Californian from
paying the estate tax, we do not thereby entitle a Filipino to be exempt
from a similar estate tax in California because under the Federal Law,
which is equally enforceable in California he is bound to pay the
same, there being no reciprocity recognized in respect thereto. In both
instances, the Filipino citizen is always at a disadvantage. We do not
believe that our legislature has intended such an unfair situation to the
detriment of our own government and people. We, therefore, find and
declare that the lower court erred in exempting the estate in question
from payment of the inheritance tax.
We are not unaware of our ruling in the case of Collector of Internal
Revenue vs. Lara (G.R. Nos. L-9456 & L-9481, prom. January 6,
1958, 54 O.G. 2881) exempting the estate of the deceased Hugo H.
Miller from payment of the inheritance tax imposed by the Collector of
Internal Revenue. It will be noted, however, that the issue of
reciprocity between the pertinent provisions of our tax law and that of
the State of California was not there squarely raised, and the ruling
therein cannot control the determination of the case at bar. Be that as
it may, we now declare that in view of the express provisions of both
the Philippine and California laws that the exemption would apply only
if the law of the other grants an exemption from legacy, succession, or
death taxes of every character, there could not be partial reciprocity. It
would have to be total or none at all.
With respect to the question of deduction or reduction in the amount
of P4,000.00 based on the U.S. Federal Estate Tax Law which is also
being claimed by respondents, we uphold and adhere to our ruling in
the Lara case (supra) that the amount of $2,000.00 allowed under the
Federal Estate Tax Law is in the nature of a deduction and not of an
exemption regarding which reciprocity cannot be claimed under the
provision of Section 122 of our National Internal Revenue Code. Nor
is reciprocity authorized under the Federal Law. .
On the issue of the correctness of the appraisal of the two parcels of
land situated in Baguio City, it is contended that their assessed
values, as appearing in the tax rolls 6 months after the death of
Stevenson, ought to have been considered by petitioner as their fair
market value, pursuant to section 91 of the National Internal Revenue
Code. It should be pointed out, however, that in accordance with said
proviso the properties are required to be appraised at their fair market
value and the assessed value thereof shall be considered as the fair
market value only when evidence to the contrary has not been shown.
After all review of the record, we are satisfied that such evidence
exists to justify the valuation made by petitioner which was sustained
by the tax court, for as the tax court aptly observed:
"The two parcels of land containing 36,264 square meters
were valued by the administrator of the estate in the Estate
and Inheritance tax returns filed by him at P43,500.00 which is
the assessed value of said properties. On the other hand,
defendant appraised the same at P52,200.00. It is of common
knowledge, and this Court can take judicial notice of it, that
assessments for real estate taxation purposes are very much
lower than the true and fair market value of the properties at a
given time and place. In fact one year after decedent's death
or in 1952 the said properties were sold for a price of
P72,000.00 and there is no showing that special or
extraordinary circumstances caused the sudden increase from
the price of P43,500.00, if we were to accept this value as a
fair and reasonable one as of 1951. Even more, the counsel
for plaintiffs himself admitted in open court that he was willing
to purchase the said properties at P2.00 per square meter. In
the light of these facts we believe and therefore hold that the
valuation of P52,200.00 of the real estate in Baguio made by
defendant is fair, reasonable and justified in the premises."
(Decision, p. 19).
In respect to the valuation of the 210,000 shares of stock in the
Mindanao Mother Lode Mines, Inc., (a domestic corporation),
respondents contend that their value should be fixed on the basis of
the market quotation obtaining at the San Francisco (California) Stock
Exchange, on the theory that the certificates of stocks were then held
in that place and registered with the said stock exchange. We cannot
agree with respondents' argument. The situs of the shares of stock,
for purposes of taxation, being located here in the Philippines, as
respondents themselves concede and considering that they are
sought to be taxed in this jurisdiction, consistent with the exercise of
our government's taxing authority, their fair market value should be
taxed on the basis of the price prevailing in our country.
20
Upon the other hand, we find merit in respondents' other contention
that the said shares of stock commanded a lesser value at the Manila
Stock Exchange six months after the death of Stevenson. Through
Atty. Allison Gibbs, respondents have shown that at that time a share
of said stock was bid for at only P.325 (p. 103, t.s.n.). Significantly, the
testimony of Atty. Gibbs in this respect has never been questioned nor
refuted by petitioner either before this court or in the court below. In
the absence of evidence to the contrary, we are, therefore,
constrained to reverse the Tax Court on this point and to hold that the
value of a share in the said mining company on August 22, 1951 in
the Philippine market was P.325 as claimed by respondents..
It should be noted that the petitioner and the Tax Court valued each
share of stock of P.38 on the basis of the declaration made by the
estate in its preliminary return. Patently, this should not have been the
case, in view of the fact that the ancillary administrator had reserved
and availed of his legal right to have the properties of the estate
declared at their fair market value as of six months from the time the
decedent died..
On the fifth issue, we shall consider the various deductions, from the
allowance or disallowance of which by the Tax Court, both petitioner
and respondents have appealed..
Petitioner, in this regard, contends that no evidence of record exists to
support the allowance of the sum of P8,604.39 for the following
expenses:.
1) Administrator's fee
2) Attorney's fee
3) Judicial and Administrative expenses
Total Deductions
An examination of the record discloses, however, that the foregoing
items were considered deductible by the Tax Court on the basis of
their approval by the probate court to which said expenses, we may
presume, had also been presented for consideration. It is to be
supposed that the probate court would not have approved said items
were they not supported by evidence presented by the estate. In
allowing the items in question, the Tax Court had before it the
pertinent order of the probate court which was submitted in evidence
by respondents. (Exh. "AA-2", p. 100, record). As the Tax Court said,
it found no basis for departing from the findings of the probate court,
as it must have been satisfied that those expenses were actually
incurred. Under the circumstances, we see no ground to reverse this
finding of fact which, under Republic Act of California National
Association, which it would appear, that while still living, Walter G.
Stevenson obtained we are not inclined to pass upon the claim of
respondents in respect to the additional amount of P86.52 for funeral
expenses which was disapproved by the court a quo for lack of
evidence.
In connection with the deduction of P652.50 representing the amount
of realty taxes paid in 1951 on the decedent's two parcels of land in
Baguio City, which respondents claim was disallowed by the Tax
Court, we find that this claim has in fact been allowed. What
happened here, which a careful review of the record will reveal, was
that the Tax Court, in itemizing the liabilities of the estate, viz:
1) Administrator's fee
2) Attorney's fee
3) Judicial and Administration expenses as of August 9, 1952
Total
added the P652.50 for realty taxes as a liability of the estate, to the
P1,400.05 for judicial and administration expenses approved by the
P1,204.34
court, making a total of P2,052.55, exactly the same figure which was
arrived at by the Tax Court for judicial and administration expenses.
Hence, the difference between the total of P9,256.98 allowed by the
Tax Court as deductions, and the P8,604.39 as found by the probate
P8,604.39
court, which is P652.50, the same amount allowed for realty taxes. An
evident oversight has involuntarily been made in omitting the
P2,000.00 for funeral expenses in the final computation. This amount
has been expressly allowed by the lower court and there is no reason
why it should not be. .
We come now to the other claim of respondents that pursuant to
section 89(b) (1) in relation to section 89(a) (1) (E) and section 89(d),
21
National Internal Revenue Code, the amount of P10,022.47 should
have been allowed the estate as a deduction, because it represented
an indebtedness of the decedent incurred during his lifetime. In
support thereof, they offered in evidence a duly certified claim,
presented to the probate court in California by the Bank of California
National Association, which it would appear, that while still living,
Walter G. Stevenson obtained a loan of $5,000.00 secured by pledge
on 140,000 of his shares of stock in the Mindanao Mother Lode
Mines, Inc. (Exhs. "Q-Q4", pp. 53-59, record). The Tax Court
disallowed this item on the ground that the local probate court had not
approved the same as a valid claim against the estate and because it
constituted an indebtedness in respect to intangible personal property
which the Tax Court held to be exempt from inheritance tax.
For two reasons, we uphold the action of the lower court in disallowing
the deduction.
Firstly, we believe that the approval of the Philippine probate court of
this particular indebtedness of the decedent is necessary. This is so
although the same, it is averred has been already admitted and
approved by the corresponding probate court in California, situs of the
principal or domiciliary administration. It is true that we have here in
the Philippines only an ancillary administration in this case, but, it has
been held, the distinction between domiciliary or principal
administration and ancillary administration serves only to distinguish
one administration from the other, for the two proceedings are
separate and independent.8 The reason for the ancillary
administration is that, a grant of administration does not ex proprio
vigore, have any effect beyond the limits of the country in which it was
granted. Hence, we have the requirement that before a will duly
probated outside of the Philippines can have effect here, it must first
be proved and allowed before our courts, in much the same manner
as wills originally presented for allowance therein.9 And the estate
shall be administered under letters testamentary, or letters of
administration granted by the court, and disposed of according to the
will as probated, after payment of just debts and expenses of
administration.10 In other words, there is a regular administration
under the control of the court, where claims must be presented and
approved, and expenses of administration allowed before deductions
from the estate can be authorized. Otherwise, we would have the
actuations of our own probate court, in the settlement and distribution
of the estate situated here, subject to the proceedings before the
foreign court over which our courts have no control. We do not believe
such a procedure is countenanced or contemplated in the Rules of
Court.
Another reason for the disallowance of this indebtedness as a
deduction, springs from the provisions of Section 89, letter (d),
number (1), of the National Internal Revenue Code which reads:
(d) Miscellaneous provisions — (1) No deductions shall be
allowed in the case of a non-resident not a citizen of the
Philippines unless the executor, administrator or anyone of the
heirs, as the case may be, includes in the return required to be
filed under section ninety-three the value at the time of his
death of that part of the gross estate of the non-resident not
situated in the Philippines."
In the case at bar, no such statement of the gross estate of the non-
resident Stevenson not situated in the Philippines appears in the three
returns submitted to the court or to the office of the petitioner Collector
of Internal Revenue. The purpose of this requirement is to enable the
revenue officer to determine how much of the indebtedness may be
allowed to be deducted, pursuant to (b), number (1) of the same
section 89 of the Internal Revenue Code which provides:
(b) Deductions allowed to non-resident estates. — In the case
of a non-resident not a citizen of the Philippines, by deducting
from the value of that part of his gross estate which at the time
of his death is situated in the Philippines —
(1) Expenses, losses, indebtedness, and taxes. — That
proportion of the deductions specified in paragraph (1) of
subjection (a) of this section11 which the value of such part
bears the value of his entire gross estate wherever situated;"
In other words, the allowable deduction is only to the extent of
the portion of the indebtedness which is equivalent to the proportion
that the estate in the Philippines bears to the total estate wherever
situated. Stated differently, if the properties in the Philippines
constitute but 1/5 of the entire assets wherever situated, then only 1/5
22
of the indebtedness may be deducted. But since, as heretofore
adverted to, there is no statement of the value of the estate situated
outside the Philippines, no part of the indebtedness can be allowed to
be deducted, pursuant to Section 89, letter (d), number (1) of the
Internal Revenue Code.
For the reasons thus stated, we affirm the ruling of the lower court
disallowing the deduction of the alleged indebtedness in the sum of
P10,022.47.
In recapitulation, we hold and declare that:
(a) only the one-half (1/2) share of the decedent Stevenson in
the conjugal partnership property constitutes his hereditary
estate subject to the estate and inheritance taxes;
(b) the intangible personal property is not exempt from
inheritance tax, there existing no complete total reciprocity as
required in section 122 of the National Internal Revenue Code,
nor is the decedent's estate entitled to an exemption of
P4,000.00 in the computation of the estate tax;
(c) for the purpose of the estate and inheritance taxes, the
210,000 shares of stock in the Mindanao Mother Lode Mines,
Inc. are to be appraised at P0.325 per share; and
(d) the P2,000.00 for funeral expenses should be deducted in
the determination of the net asset of the deceased Stevenson.
In all other respects, the decision of the Court of Tax Appeals is
affirmed.
Respondent's claim for interest on the amount allegedly overpaid, if
any actually results after a recomputation on the basis of this decision
is hereby denied in line with our recent decision in Collector of
Internal Revenue v. St. Paul's Hospital (G.R. No. L-12127, May 29,
1959) wherein we held that, "in the absence of a statutory provision
clearly or expressly directing or authorizing such payment, and none
has been cited by respondents, the National Government cannot be
required to pay interest."
WHEREFORE, as modified in the manner heretofore indicated, the
judgment of the lower court is hereby affirmed in all other respects not
inconsistent herewith. No costs. So ordered.
Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepcion,
Reyes, J.B.L., Gutierrez David, Paredes and Dizon, JJ., concur.
No. L-23678. June 6, 1967.
TESTATE ESTATE OF AMOS G. BELLIS, deceased. PEOPLE'S
BANK & TRUST COMPANY, executor. MARIA CRISTINA
BELLIS and MIRIAM PALMA BELLIS, oppositors-
appellants, vs. EDWARD A. BELLIS, ET AL., heirs-appellees.
Wills; Succession; Conflict of laws; Renvoi doctrine.—The doctrine
of renvoi is usually pertinent where the decedent is a national of one country
and is domiciled in another. It does not apply to a case where the decedent
was a citizen of Texas and was domiciled therein at the time of his death. So
that, even assuming that Texas has a conflicts rule providing that the
domiciliary law should govern successional rights, the same would not result
in a reference back (renvoi) to Philippine law, but it would still refer to Texas
law. Nonetheless, if Texas has a conflicts rule, adopting the rule of lex rei
sitae, which calls for the application of the law of the place where the
properties are situated, renvoi would arise, where the properties involved are
found in the Philippines.
Same; Foreign laws.—In the absence of proof as to the conflicts rule of
Texas, it would be presumed to be the same as our local conflicts rule.
Same; Applicability of national law to succession; Capacity to succeed
—The decedent's national law governs the order of succession, the amount of
successional rights, the intrinsic validity of the provisions of the will and
capacity to succeed.
23
 Same; Third paragraph of article 17 of New Civil Code does not Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
modify article 16.—The third paragraph of article 17 of the New Civil Code J. R. Balonkita for appellee People's Bank & Trust Company.
is not an exception to the second paragraph of article 16. Precisely, Congress Ozaeta, Gibbs & Ozaeta for appellee A. B. Allsman.
deleted the phrase, "notwithstanding the provisions of this and the next
preceding article," when it incorporated article 11 of the old Civil Code as BENGZON, J.P., J.:
article 17, while reproducing without substantial change the second
paragraph of article 10 of the old Civil Code, as article 16. The legislative
This is a direct appeal to Us, upon a question purely of law, from an
intent must have been to make the second paragraph of article 176 a specific
order of the Court of First Instance of Manila dated April 30, 1964,
provision in itself which must be applied in testate and intestate succession.
approving the project of partition filed by the executor in Civil Case
As a further indication of this legislative intent, Congress added a new
No. 37089 therein.1äwphï1.ñët
provision, under article 1039, which decrees that capacity to succeed is
governed by the decedent's national law,
Same; Legitimes; Statutes; Special and general provisions.—Whatever The facts of the case are as follows:
public policy and good customs may be involved in our system of legitimes,
Congres has not intended to extend the same to the succession of foreign Amos G. Bellis, born in Texas, was "a citizen of the State of Texas
nationals. It has specifically chosen the decedent's national law to and of the United States." By his first wife, Mary E. Mallen, whom he
govern, inter alia, divorced, he had five legitimate children: Edward A. Bellis, George
359 Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander
VOL. 20, JUNE 6, 1967 359 Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy,
who survived him, he had three legitimate children: Edwin G. Bellis,
Bellis vs. Bellis Walter S. Bellis and Dorothy Bellis; and finally, he had three
the amount of successional rights. Specific provisions must prevail over illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam
general ones. Palma Bellis.
Same; Testamentary provision that successional right to decedent's
estate would be governed by law other than his national law is void.—A
On August 5, 1952, Amos G. Bellis executed a will in the Philippines,
provision in a foreigner's will that his properties should be distributed in
in which he directed that after all taxes, obligations, and expenses of
accordance with Philippine law and not in accordance with his national law is
administration are paid for, his distributable estate should be divided,
void, being contrary to article 16 of the New Civil Code.
in trust, in the following order and manner: (a) $240,000.00 to his first
Same; System of legitimes does not apply to estate of a citizen of Texas.
wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate children,
—Where the decedent was a citizen of Texas and under Texas laws there are
Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or
no forced heirs, the system of legitimes in Philippine law cannot be applied
P40,000.00 each and (c) after the foregoing two items have been
to the succession to the decedent's testate because the intrinsic validity of the
satisfied, the remainder shall go to his seven surviving children by his
provisions of the decedent's will and the amount of successional rights are to
first and second wives, namely: Edward A. Bellis, Henry A. Bellis,
be determined under Texas law.
Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S.
Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët
APPEAL from an order of the Court of First Instance of Manila.
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of
The facts are stated in the opinion of the Court.
San Antonio, Texas, U.S.A. His will was admitted to probate in the
Vicente R. Macasaet and Jose D. Villena for oppositorsappellants. Court of First Instance of Manila on September 15, 1958.
Paredes, Poblador, Cruz & Nazareno for heirs-appellees E. A.
Bellis, et al.

24
The People's Bank and Trust Company, as executor of the will, paid
all the bequests therein including the amount of $240,000.00 in the
form of shares of stock to Mary E. Mallen and to the three (3)
illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam
Palma Bellis, various amounts totalling P40,000.00 each in
satisfaction of their respective legacies, or a total of P120,000.00,
which it released from time to time according as the lower court
approved and allowed the various motions or petitions filed by the
latter three requesting partial advances on account of their respective
legacies.
On January 8, 1964, preparatory to closing its administration, the
executor submitted and filed its "Executor's Final Account, Report of
Administration and Project of Partition" wherein it reported, inter alia,
the satisfaction of the legacy of Mary E. Mallen by the delivery to her
of shares of stock amounting to $240,000.00, and the legacies of
Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the
amount of P40,000.00 each or a total of P120,000.00. In the project of
partition, the executor — pursuant to the "Twelfth" clause of the
testator's Last Will and Testament — divided the residuary estate into
seven equal portions for the benefit of the testator's seven legitimate
children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis
filed their respective oppositions to the project of partition on the
ground that they were deprived of their legitimes as illegitimate
children and, therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof
of service of which is evidenced by the registry receipt submitted on
April 27, 1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order
overruling the oppositions and approving the executor's final account,
report and administration and project of partition. Relying upon Art. 16
of the Civil Code, it applied the national law of the decedent, which in
this case is Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by
the lower court on June 11, 1964, oppositors-appellants appealed to
this Court to raise the issue of which law must apply — Texas law or
Philippine law.
In this regard, the parties do not submit the case on, nor even
discuss, the doctrine of renvoi, applied by this Court in Aznar v.
Christensen Garcia, L-16749, January 31, 1963. Said doctrine is
usually pertinent where the decedent is a national of one country, and
a domicile of another. In the present case, it is not disputed that the
decedent was both a national of Texas and a domicile thereof at the
time of his death.2 So that even assuming Texas has a conflict of law
rule providing that the domiciliary system (law of the domicile) should
govern, the same would not result in a reference back (renvoi) to
Philippine law, but would still refer to Texas law. Nonetheless, if Texas
has a conflicts rule adopting the situs theory (lex rei sitae) calling for
the application of the law of the place where the properties are
situated, renvoi would arise, since the properties here involved are
found in the Philippines. In the absence, however, of proof as to the
conflict of law rule of Texas, it should not be presumed different from
ours.3 Appellants' position is therefore not rested on the doctrine of
renvoi. As stated, they never invoked nor even mentioned it in their
arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in
relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable
the national law of the decedent, in intestate or testamentary
successions, with regard to four items: (a) the order of succession; (b)
the amount of successional rights; (e) the intrinsic validity of the
provisions of the will; and (d) the capacity to succeed. They provide
that —
ART. 16. Real property as well as personal property is subject
to the law of the country where it is situated.
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may he
the nature of the property and regardless of the country
wherein said property may be found.
25
 ART. 1039. Capacity to succeed is governed by the law of the matters that Article 10 — now Article 16 — of the Civil Code states
nation of the decedent. said national law should govern.

Appellants would however counter that Art. 17, paragraph three, of The parties admit that the decedent, Amos G. Bellis, was a citizen of
the Civil Code, stating that — the State of Texas, U.S.A., and that under the laws of Texas, there
are no forced heirs or legitimes. Accordingly, since the intrinsic validity
Prohibitive laws concerning persons, their acts or property, of the provision of the will and the amount of successional rights are
and those which have for their object public order, public policy to be determined under Texas law, the Philippine law on legitimes
and good customs shall not be rendered ineffective by laws or cannot be applied to the testacy of Amos G. Bellis.
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country. Wherefore, the order of the probate court is hereby affirmed in toto,
with costs against appellants. So ordered.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-
quoted. This is not correct. Precisely, Congress deleted the phrase, Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,
"notwithstanding the provisions of this and the next preceding article" Sanchez and Castro, JJ., concur.
when they incorporated Art. 11 of the old Civil Code as Art. 17 of the
new Civil Code, while reproducing without substantial change the
second paragraph of Art. 10 of the old Civil Code as Art. 16 in the
new. It must have been their purpose to make the second paragraph
of Art. 16 a specific provision in itself which must be applied in testate
and intestate succession. As further indication of this legislative intent,
Congress added a new provision, under Art. 1039, which decrees that
capacity to succeed is to be governed by the national law of the
decedent.

It is therefore evident that whatever public policy or good customs

may be involved in our System of legitimes, Congress has not
intended to extend the same to the succession of foreign nationals.
For it has specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national law. Specific provisions
must prevail over general ones.

Appellants would also point out that the decedent executed two wills
— one to govern his Texas estate and the other his Philippine estate
— arguing from this that he intended Philippine law to govern his
Philippine estate. Assuming that such was the decedent's intention in
executing a separate Philippine will, it would not alter the law, for as
this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
foreigner's will to the effect that his properties shall be distributed in
accordance with Philippine law and not with his national law, is illegal
and void, for his national law cannot be ignored in regard to those
26