Dizon vs Posadas Jr (57 Phil 465)

Dizon vs Posadas Jr
57 Phil 465 [GR No. L-36770 November 4, 1932]

Facts: Don Felix Dizon died on April 21, 1928. Before his death, he made a gift inter vivos in favor of the plaintiff Luis W. Dizon of all his property according to a deed of a gift of which includes all the property of Don Felix Dizon. The plaintiff did not receive the property of any kind of Don Felix upon the death of the latter. Don Luis is the legitimate and only son of Don Felix. The defendant, collector of internal revenue assess an inheritance tax of Php2,808.73 which Don Luis paid under protest and later filed an action to recover sum of money thus paid. Plaintiff alleged that the inheritance tax is illegal because he received the property, which is the basis of the tax from his father before his death by a deed of gift inter vivos which was duly accepted and registered before the death of his father.

Issue: Whether or not the gift inter vivos is subject to inheritance tax.

Held: Yes. Section 1540 of the administrative code plainly does not tax gifts per se but only when those gifts are made to those who shall prove to be the heirs, devisees, legatees or donees mortis cause of the donor.

In this case, the scanty facts before us may not warrant the inference that the conveyance, acknowledged by the donor 5 days before his death and accepted by the donee one day before the donor’s death, was fraudulently made for the purpose of evading the inheritance tax. But the facts, in our opinion, do not warrant the inference that the transfer was an advancement upon the inheritance which the donee as the sole and forced heir of the donor, would be entitled to receive upon the death of the donor.

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