FACTS
Birdie Lillian Eye left various properties upon her death in September 1932 in her domicile California, USA. Among these properties include some intangibles consisting of 70,000 shares in the Benguet Consolidated Mining Company, a corporation organized and existing under Philippine laws. The CIR sought to assess and collect estate tax on the said shares.
Wells Fargo Banks & Union Trust Company, the trustee of the Estate of the decedent Eye, objected to said assessment. Wells Fargo averred that said shares were already subjected to inheritance tax in California and should not therefore be taxed again in the Philippines.
RULING
The Supreme Court ruled for the CIR.
Even though the Philippines was considered a US territory at the time of Eye's death, it was still a separate jurisdiction from the US in several aspects, particularly taxation. Hence, the Philippines has the power to impose tax on said shares.
The situs of the shares of stock concerned is here in the Philippines because of the fact that the said shares were issued here by a Philippine corporation. In addition, when Eye was still alive, she actually delivered the title to said shares to the resident secretary of the corporation here in the Philippines.
This goes to show that the shares had never really left the Philippines.
