[CASE DIGEST] COLLECTOR v. LARA (102 Phil. 813)

FACTS

Hugo Miller, an American doing business in the Philippines who was subsequently taken as a prisoner and executed by the Japanese soldiers during WWII, lived at the Manila Hotel and later at the Army and Navy Club while he was still alive.

Upon his death, he left behind several properties, including real estate, cash, and stocks in US and Philippine corporations. In his will, however, he listed Sta. Cruz, California as his residence.

Testate proceedings were instituted in the US, followed by ancillary proceedings here in the Philippines. The Collector assessed estate and inheritance taxes (amounting to P77300.92) to which De Lara, the administrator of the Estate, protested. The CTA held Miller’s estate liable only for the estate taxes due. Both parties appealed.

RULING

The Supreme Court ruled in favor of the Estate of Hugo Miller.

At the time of his death, Miller was not a resident of the Philippines. For estate and inheritance tax purposes, the term “residence” is synonymous with the term domicile.

In US jurisprudence, for purposes of estate and taxation, “residence” is interpreted as synonymous with domicile and that the incidence of estate and succession has historically been determined by domicile and situs and not by the fact of actual residence.

It is clear that being a non-resident of the Philippines, the only properties of his estate subject to estate and inheritance taxes are those issued by Philippine corporations.

[CASE DIGEST] VICTOR BENIN, et al. v. MARIANO SEVERO TUASON (G.R. No. L-26127, G.R. No. L-26128, G.R. No. L-26129)

June 28, 1974

Ponente: Zaldivar, J.

FACTS:

The plaintiffs alleged that they were the owners and possessors of the three parcels of agricultural lands, described in paragraph V of the complaint, located in the barrio of La Loma (now barrio of San Jose) in the municipality (now city) of Caloocan, province of Rizal, that they inherited said parcels of land from their ancestor Sixto Benin, who in turn inherited the same from his father, Eugenio Benin; that they and their predecessors in interest had possessed these three parcels of land openly, adversely, and peacefully, cultivated the same and exclusively enjoyed the fruits harvested therefrom; that Eugenio Benin, plaintiff's grandfather, had said parcels of land surveyed on March 4 and 6, 1894, that during the cadastral survey by the Bureau of Lands of the lands in Barrio San Jose in 1933.

Sixto Benin and herein plaintiffs claim the ownership over said parcels of land; that they declared said lands for taxation purposes in 1940 under Tax Declaration No. 2429; that after the outbreak of the last World War, or sometime in 1942 and subsequently thereafter, evacuees from Manila and other places, after having secured the permission of the plaintiffs, constructed their houses thereon and paid monthly rentals to plaintiffs. Only defendant J.M. Tuason & Co., Inc. was actually served with summons. The other defendants were ordered summoned by publication in accordance with Sections 16 and 17 of the Rules of Court. Only defendant J.M. Tuason & Co., Inc. appeared. The other defendants were all declared in default.

RULING:

It will be noted that in Civil Case No. 3621 the plaintiffs base their claim of ownership of the three parcels of land described in the complaint on their being heirs or successors in interest of Sixto Benin who died in 1936. 

[FULL CASE] NATIONAL GRAINS AUTHORITY vs.INTERMEDIATE APPELLATE COURT, MELECIO MAGCAMIT, NENA COSICO and EMELITA MAGCAMIT (G.R. No. L-68741)

January 28, 1988

Ponente: Paras, J.

This is a petition for review of the decision of the then Intermediate Appellate Court * (now Court of Appeals) dated January 31, 1984, reversing the decision of the Court of First Instance of Laguna and San Pablo City, 8th Judicial District, Branch III, and of the resolution dated August 28, 1984 denying the motion for reconsideration filed thereof.

The undisputed facts of this case as found by the Trial Court and the Intermediate Appellate Court are as follows:

On December 2,1971, the spouses Paulino Vivas and Engracia Lizards, as owners of a parcel of land situated in Bo. San Francisco, Victoria, Laguna, comprising more or less 105,710 square meters, sold for P30,000.00 said property in favor of spouses Melencio Magcamit and Nena Cosico, and Amelita Magcamit (herein private respondents) as evidenced by "Kasulatan Ng Bilihang Mabiling Muli." This sale with right to repurchase was recorded in the Office of the Register of Deeds of Laguna on December 6,1971 under Act No. 3344. On January 31,1972 the sale was made absolute by the spouses Vivas and Lizardo in favor of the private respondents for the sum of P90,000.00; P50,000.00 of which was paid upon the execution of the instrument, entitled "Kasulatan Ng Bilihan Tuluyan," after being credited with the P30,000.00 consideration of the "Kasulatan Ng Mabibiling Muli," and the balance of P40,000.00 was to be paid the moment that the certificate of title is issued. From the execution of said Kasulatan, private respondent have remained in peaceful, adverse and open possession of subject property.

On February 26, 1975, an Original Certificate of Title No. T-1728 covering the property in question was issued to and in the name of the spouses Vivas and Lizardo without the knowledge of the private respondents and on April 30, 1975, said Spouses executed a Special Power of Attorney in favor of Irenea Ramirez authorizing the latter to mortgage the property with the petitioner, National Grains Authority.

On May 2, 1974, the counsel for the petitioner wrote the Provincial Sheriff in Sta. Cruz, Laguna, requesting for the extrajudicial foreclosure of the mortgage executed by Irenea Ramirez on May 18, 1975, covering, among others, the property involved in this case covered by OCT No. T-1728, for unpaid indebtedness in the amount of P63,948.80 in favor of the petitioner.

On May 31, 1974, the Provincial Sheriff caused the issuance of the notice of sale of the property in question, scheduling the public auction sale on June 28, 1974. The petitioner was the highest and successful bidder so that a Certificate of Sale was issued in its favor on the same date by the Provincial Sheriff.

[CASE DIGEST] CIR v. BOAC (149 SCRA 395)

FACTS

British Overseas Airways Corporation (BOAC), a 100 percent British Government-owned corporation and existing under the laws of the United Kingdom, was assessed by the CIR for deficiency income taxes for the years 1959 to 1963.

BOAC challenged the validity of the assessment, arguing that while it has local sales agents who sell airline tickets, its revenue was really derived from rendering transportation services, not from the mere ticket sales. Further, it argued that since it did not transport passengers and cargo to and from the Philippines, its income did not come from Philippine sources, therefore not taxable.

The Tax Court reversed the CIR, holding that the proceeds of sales of BOAC passage tickets in the Philippines by its sale agents did not constitute BOAC income from Philippine sources, hence not subject to Philippine income tax.

RULING

The Supreme Court ruled in favor of the CIR.

Being a resident foreign corporation, BOAC is subject to tax upon its total net income in the preceding taxable year from all sources within the Philippines. The source of an income is the property, activity or service that produced the income.

For the source of income to be considered as coming from the Philippines, it is sufficient that the income is derived from activity within the Philippines. In the present case, the BOAC derived its revenue from ticket sales in the Philippines; payment for the tickets were made in the Philippines and handed in Philippine currency; and the flow of wealth proceeded from, and occurred within, Philippine territory, enjoying the protection accorded by the Philippine government. In consideration of such protection, the flow of wealth should share the burden of supporting the government.

[FULL CASE] NATALIA REALTY CORPORATION v. PROTACIO RANCHU VALLEZ, CEFERINO MARTINEZ, PABLO ESPEMEDA, AUGUSTO ARIZOLA and CERIACO BANDOC (G.R. No. 78290-94)

May 23, 1989

Ponente: Regalado, J.

In these appeals in five (5) consolidated cases 1 certified by the Court of Appeals to this Court since they involve only a question of law, We affirm the summary judgment rendered by the court a quo.

Said appeals originated from five (5) civil cases commenced by herein appellee Natalia Realty Corporation against the five (5) appellants, namely, Protacio Ranchu Vallez,    2 Ceferino Martinez, 3 Pablo Espemeda 4 Augusta Arizola, 5 and Ceriaco Bandoc, 6 which were consolidated and assigned to the Regional Trial Court, Branch LXXI, at Antipolo, Rizal. 7 Plaintiff alleged that the defendants unlawfully occupied portions of the parcels of land belonging to it and registered in its name under Transfer Certificates of Title Nos. 31527 and 31528 (now N-67845) of the Register of Deeds of Rizal. It was prayed that defendants be adjudged without valid right whatsoever in plaintiffs land, that they be ordered to vacate the same and to pay the reasonable compensation and financial reliefs stated in the respective complaints against them.

After filing their consolidated answer, defendants sought the dismissal of all the aforesaid complaints for ejectment on the ground of lack of jurisdiction. Their motion was denied on September 26, 1983 on a holding that the grounds therefor are not indubitable.

On October 29, 1983, plaintiff corporation moved for a summary judgment on the consolidated cases under Rule 34 of the Rules of Court. Plaintiff claimed that the only issue for resolution, if any, is strictly legal; and that "the pleadings manifestly show that there is no genuine issue or issues as to any material fact averred in the complaint and that defendants in their common answer to complaint have put up sham defenses and counterclaims all of which are mere pretended denials and flimsy defenses." Annexed to said motion is the affidavit of the company's executive vice-president, Eugenia Oliveros, attesting to the truth of the averments therein. An opposition was filed by defendants on November 4, 1983 through a "Joint Motion to Dismiss the Complaint in Opposition to Plaintiff's Motion for Summary Judgment."