1.CIRvs.

Pineda
Facts: Atanasio Pineda died, survived by his wife, Felicisima
Bagtas,and15children,theeldestofwhomisManuelB.Pineda,
a lawyer. Estate proceedings were had in the Court of First
Instance of Manila (Case No. 71129) wherein the surviving
widow was appointed administratrix. The estate was divided
amongandawardedtotheheirsandtheproceedingsterminated
onJune8,1948.Manuel B.Pineda'sshareamountedtoabout
P2,500.00.
The Bureau of Internal Revenue investigated the income tax
liabilityoftheestatefortheyears1945,1946,1947and1948and
itfoundthatthecorrespondingincometaxreturnswerenotfiled.
Manuel B. Pineda, who received the assessment, contested the
same. Subsequently, he appealed to the Court of Tax Appeals
alleging that hewas appealing "onlythat proportionatepart or
portionpertainingtohimasoneoftheheirs.

an adjustment of the proper share of each heir in the

distributableestate.
Alltold,theGovernmenthastwodaysofcollectingthetaxes
inquestion.One,bygoingafteralltheheirsandcollecting
fromeachoneofthemtheamountofthetaxproportionateto
theinheritancereceived.
Anotherremedy,pursuanttotheliencreatedbySection315
of the Tax Code upon all property and rights to property
belonging to the taxpayer for unpaid income tax is by
subjectingsaidpropertyoftheestatewhichisinthehandsof
anheirortransfereetothepaymentofthetaxduetheestate.
TheBureauofInternalRevenueshouldbegiven,ininstances
likethecaseatbar,thenecessarydiscreationtoavailitselfof
the most expeditious way to collect the tax as may be
envisionedintheparticularprovisionoftheTaxCodeabove
quoted, because taxes are the lifeblood of Government and
theirpromptandcertainavailabilityisanimperiousneed.

CourtofTaxAppealsrenderedjudgmentreversingthedecisionof
the Commissioner on the ground that his right to assess and
collectthetaxhasprescribed.TheCommissionerappealedand 2.CIRvs.Prieto
thisCourtaffirmedthefindingsoftheTaxCourtinrespecttothe
assessmentforincometaxfortheyear1947butheldthattheright Facts:
to assess and collect the taxes for 1945 and 1946 has not
prescribed.
DoaTeresaTuasonydelaPazdiedinManilaonMarch9,1951
leavingalastwillandtestament,subsequentlyadmittedtoprobate
Court of Tax Appeals rendered judgment holding Manuel B. intheCourtofFirstInstanceofsaidcity(CivilCaseNo.13447).
Pinedaliableforthepaymentcorrespondingtohisshare
It provided that, with the exception of five specific legacies
amountingtoP80,800.00,allherpropertybedistributedinequal
TheCommissionerofInternalRevenuehasappealedtoUsand sharesamong14heirs,respondentsAntonio,BenitoandMauro,
hasproposedtoholdManuelB.Pinedliableforthepaymentof allsurnamedPrieto,beingamongstthem.
allthetaxesfoundbytheTaxCourttobeduefromtheestatein
thetotalamount ofP760.28insteadofonlyfortheamountof Asstatedheretofore,thewillofDoaTeresaTuasonydelaPaz
taxescorrespondingtohisshareintheestate.ManuelB.Pineda directedthat,afterthepayment ofthespecificlegaciestherein
opposesthepropositiononthegroundthatasanheirheisliable providedfor,theresidueofherestateshouldbedividedinequal
forunpaidincometaxduetheestateonlyuptotheextentofand parts among 14 heirs, namely: (1) Antonio Prieto, (2) Benito
inproportiontoanysharehereceived.
Prieto, (3) Mauro Prieto, (4) Rosario Legarda, (5) Alejandro
Legarda, (6) Teresa Legarda, (7) Beatriz Legarda, (8) Jose
Legarda,(9)TeresaValdez,(10)JoseValdez,(11)MariaRosario
Valdez,(12)CarmenValdez,(13)MariaRitaValdez,and(14)
Held: Pinedaisliablefortheassessmentasanheirandasa constituting only one group of heirs the Valdezes named
holder transferee of property belonging to the Rafael,Mercedes,Manuel,Natividad,BenitoandJoseFrancisco.
estate/taxpayer.Asanheirheisindividuallyanswerableforthe
partofthetaxproportionatetotheshare hereceivedfrom the In accordance with the project of partition submitted in the
inheritance.3Hisliabilityhowevercannotexceedtheamountof probate proceedings and duly approved by the court, the total
value of the estate amounted to P3,513,073.63. Deducting
hisshare.4
therefrom the value of the five specific legacies amounting to
P80,800.00;thenetwouldbeP3,432,273.60tobedividedamong
Asaholderofpropertybelongingtotheestate,Pinedaisliable the14heirsattherateofP245,162.40foreachofthem.
forthetaxuptotheamountofthepropertyinhispossession.The
reason is that the Government has a lien on the P2,500.00 Becauseoftheimpossibilityofdividingtherealpropertiesofthe
receivedbyhimfromtheestateashisshareintheinheritance,for testatrix equally among the 14 heirs, to respondents Antonio,
unpaidincometaxes4forwhichsaidestateisliable,pursuantto Benito and Mauro Prieto were allotted properties with a total
Issue:Whetherornotheisliableforallthetaxes.

thelastparagraphofSection315oftheTaxCode.

valuegreaterthanthatofthepropertiesallottedtotheother11
heirs.Itwas,therefore,agreedthat,toequalizethesharesofthe
Byvirtueofsuchlien,theGovernmenthastherighttosubjectthe heirs,thethreerespondentsshouldreimburseincashtotheirco
property in Pineda's possession. After such payment, Pineda heirstheresultingdifferenceinvalue.
willhavearightofcontributionfromhiscoheirs, 5toachieve

Issue: whether or not there has been an overpayment in JosefinaPajonarfiledapetitionwiththeRegionalTrialCourtof

connectionwithrespondents'respectiveinheritancetaxliability.
Dumaguete City for the issuance in her favor of letters of
administration of the estate of her brother. The trial court
Whether the demand for refund was within the reglementary appointedJosefinaPajonarastheregularadministratrixofPedro
period.
Pajonar'sestate.
Held: The above shows conclusively that the cash payments
demandedfromandmadebyrespondentswereforthepurposeof
makingequaltheshareofeachoneofthefourteenheirsinstituted
inthelastwillofthedeceasedDoaTeresaTuasonydelaPaz.
Butpetitionercontendsthattheindividualshareofeachheirin
thenetestateiswhatappearsintheprojectofpartition,andthat
the cash payments made by respondents are immaterial in the
determination of their respective inheritance tax because the
moneypaiddidnotformpartoftheestateofthedecedent.We
findnomeritsinthesecontentions.

PursuanttoasecondassessmentbytheBIRfordeficiencyestate
tax,theestateofPedroPajonarpaidestatetaxintheamountof
P1,527,790.98.JosefinaPajonar,inhercapacityasadministratrix
andheirofPedroPajonar'sestate,filedaprotestonJanuary11,
1989 with the BIR praying that the estate tax payment in the
amount of P1,527,790.98, or at least some portion of it, be
returned to the heirs. Without waiting for her protest to be
resolvedbytheBIR,JosefinaPajonarfiledapetitionforreview
withtheCourtofTaxAppeals(CTA),prayingfortherefundof
P1,527,790.98,orinthealternative,P840,202.06,aserroneously
paidestatetax.

Itcannotbedisputedthattheinheritancetaxshouldbepaid
onthebasisofthevalueofthepropertiesinheritedbyanheir.
Ontheotherhand,itisclearinthiscasethatwhateachofthe
respondentsreallyandactuallyreceivedashisshareinthe
inheritance is the value of the properties allotted to them
minuswhattheyhadtopaytotheircoheirstocompensate
the latter for the difference in value existing between the
propertiesallottedtorespondents,ontheonehand,andthose
allottedtotheotherheirs,ontheother.Toclaimotherwise
wouldbeclosingone'seyestotherealitiesofthecase.The
resultingamount,therefore,isthejustandfairbasisforthe
determinationofthetaxliabilityofrespondents.

CTA ordered the Commissioner of Internal Revenue to refund

Josefina Pajonar the amount of P252,585.59, representing
erroneously paid estate tax for the year 1988. 5 Among the

Theclaimforrefundwaswithinthereglemantaryperiod.That
whenthetaxispaidininstallments,theprescriptiveperiodof
twoyearsprovidedinsection306oftheRevenueCodeshould
hecountedfromthedateofthefinalpayment.Weagreewith
thisviewasbeingreasonableandwhichappearstobetheuniform
doctrine in American jurisdiction. This rule proceeds from the
theorythat,incontemplationoftaxlaws, thereisnopayment
untilthewholeorentiretaxliabilityiscompletelypaid.Thus,
apaymentofapartorportion thereof,cannotoperateto
startthecommencementofthestatuteoflimitations.

Held: Expenses incurred in the extrajudicial settlement of the

estate shouldbe allowed as a deductionfrom the gross estate.
"Thereisnorequirementofformaladministration.Itissufficient
thattheexpensebeanecessarycontributiontowardthesettlement
ofthecase."

3.CIRvs.CA
Facts:PedroPajonar,amemberofthePhilippineScout,Bataan
Contingent, during the second World War, was a part of the
infamousDeathMarchbyreasonofwhichhesufferedshockand
becameinsane.HissisterJosefinaPajonarbecametheguardian
over his person, while his property was placed under the
guardianship of the Philippine National Bank (PNB) by the
RegionalTrialCourtofDumagueteCity.
PNB filed an accounting of the decedent's property under
guardianshipvaluedatP3,037,672.09inSpecialProceedingsNo.
1254.However,thePNBdidnotfileanestatetaxreturn,instead
it advised Pedro Pajonar's heirs to execute an extrajudicial
settlementandtopaythetaxesonhisestate.

deductionsfromthegrossestateallowedbytheCTAwerethe
amounts of P60,753 representing the notarial fee for the
Extrajudicial Settlement and the amount of P50,000 as the
attorney'sfeesinSpecialProceedingsNo.1254forguardianship.
Issue:whetherthenotarialfeepaidfortheextrajudicialsettlement
in the amount of P60,753 and the attorney's fees in the
guardianship proceedings in the amount of P50,000 may be
allowedasdeductionsfromthegrossestateofdecedentinorder
toarriveatthevalueofthenetestate.

Attorney's fees in order to be deductible from the grossestate

mustbeessentialtothecollectionofassets,paymentofdebtsor
thedistributionofthepropertytothepersonsentitledtoit.The
servicesforwhichthefeesarechargedmustrelatetotheproper
settlementoftheestate.Thiscase,theguardianshipproceeding
wasnecessaryforthedistributionofthepropertyofthelatePedro
Pajonartohisrightfulheirs.
Judicial expenses are expenses of administration. 19
Administrationexpenses,asanallowabledeductionfromthe
grossestateofthedecedentforpurposesofarrivingatthe
valueofthenetestateincludesallexpenses"essentialtothe
collectionoftheassets,paymentofdebtsorthedistributionof
thepropertytothepersonsentitledtoit."20Inotherwords,
theexpensesmustbeessentialtothepropersettlementofthe
estate.Expendituresincurredfortheindividualbenefitofthe
heirs,deviseesorlegateesarenotdeductible.
Attorney'sfees,ontheotherhand,inordertobedeductiblefrom
thegrossestatemustbeessentialtothesettlementoftheestate.

Coming to the case at bar, the notarial fee paid for the
extrajudicialsettlementisclearlyadeductibleexpensesincesuch
settlementeffectedadistributionofPedroPajonar'sestatetohis
lawfulheirs.Similarly,theattorney'sfeespaidtoPNBforacting
astheguardianofPedroPajonar'spropertyduringhislifetime
shouldalsobeconsideredasadeductibleadministrationexpense.
PNBprovidedadetailedaccountingofdecedent'spropertyand
gaveadviceastothepropersettlementofthelatter'sestate,acts
whichcontributedtowardsthecollectionofdecedent'sassetsand
thesubsequentsettlementoftheestate.

provisionsofActNo.3606favorabletothetaxpayerbegiven
retroactiveeffect?(e)Hastherebeendelinquencyinthepayment
oftheinheritancetax?Ifso,shouldtheadditionalinterestclaimed
bythedefendantinhisappealbepaidbytheestate?
Held:
A. The tax therefore is upon transmission or the transfer or
devolutionofpropertyofadecedent,madeeffectivebyhisdeath.

B. Transmission by inheritance is taxable at the time of the

predecessor's death, notwithstanding the postponement of the
actualpossessionorenjoymentoftheestatebythebeneficiary,
Facts:ThomasHanleydiedinZamboanga,Zamboanga,leavinga andthetaxmeasuredbythevalueofthepropertytransmittedat
will (Exhibit 5) and considerable amount of real and personal thattimeregardlessofitsappreciationordepreciation.
properties.OnJune14,1922,proceedingsfortheprobateofhis
willandthesettlementanddistributionofhisestatewerebegunin C.Inparagraph5ofhiswill,thetestatorexpressedthedesirethat
theCourtofFirstInstanceofZamboanga.Thewillwasadmitted hisrealestatebehandledandmanagedbyhisexecutorsuntilthe
expiration of the period often years therein provided. Judicial
toprobate.Saidwillprovidesamongotherthings,asfollows:
expensesareexpensesofadministration
"5.Idirectthatallrealestateownedbymeatthetimeofmy
deathbenotsoldorotherwisedisposedofforaperiodoften(10) The compensation of a trustee, earned, not in the
yearsaftermydeath,andthatthesamebehandledandmanaged administrationoftheestate,butinthemanagementthereof
bymyexecutors,andproceedsthereoftobegiventomynephew, for the benefit of the legatees or devisees, does not come
Matthew Hanley, at Castlemore, Ballaghaderine, County of properly within the class or reason for exempting
Rosecommon,Ireland,andthathebedirectedthatthesamebe administrationexpenses....Servicesrenderedinthatbehalf
used only for the education of my brother's children and their havenoreferencetoclosingtheestateforthepurposeofa
descendants.
distributionthereoftothoseentitledtoitandarenotrequired
or essential to the perfection of the rights of the heirs or
"6.Idirectthatten(10)yearsaftermydeathmypropertybegiven
legatees....Trusts...ofthecharacterofthatherebeforethe
totheabovementionedMatthewHanleytobedisposedofinthe
court, are created for the benefit of those to whom the
wayhethinksmostadvantageous.
property ultimately passes, are of voluntary creation, and
TheCourtofFirstInstanceofZamboangaconsidereditproperfor intendedforthepreservationoftheestate.Nosoundreasonis
thebestinterestsoftheestatetoappointatrusteetoadministerthe giventosupportthecontentionthatsuchexpensesshouldbe
realpropertieswhich,underthewill,weretopasstoMatthew takenintoconsiderationinfixingthevalueoftheestatefor
Hanleytenyearsafterthetestator'sdeath.Accordingly,P.J.M. thepurposeofthistax."
Moore, one of the two executors named in the will, was, on
March 8, 1924, appointed trustee. He acted as trustee until D.Itiswellsettledthatinheritancetaxationisgovernedbythe
February29,1932,whenheresignedandtheplaintiffhereinwas statuteinforceatthetimeofthedeathofthedecedent.Astatute
appointedinhisstead.
shouldbeconsideredasprospectiveinitsoperation,whetherit
enacts,amends,orrepealsaninheritancetax,unlessthelanguage
Defendantfiledamotioninthetestamentaryproceedin of the statute clearly demands or presses that it shall have a
gspendingbeforetheCourtofFirstInstanceof retroactiveeffect,
Zamboanga (Special proceedings No. 302) praying that the
trustee,plaintiffherein,beorderedtopaytotheGovernmentthe Revenue laws, generally, which impose taxes collected by the
saidsumofP2,052.74.Themotionwasgranted.OnSeptember meansordinarilyresortedtoforthecollectionoftaxesarenot
15,1932,theplaintiffpaidthisamountunderprotest,notifying classedaspenallaws,althoughthereareauthoritiestothecontr
the defendant at the same time that unless the amount was ary.Article22oftheRevisedPenalCodeisnotapplicableto
promptlyrefundedsuit wouldbebroughtforitsrecovery.The thecaseatbar,andintheabsenceofclearlegislativeintent,we
defendantoverruledtheplaintiff'sprotestandrefusedtorefund cannotgiveActNo.3606aretroactiveeffect.
thesaidamountoranypartthereof.
E.Themerefactthattheestateofthedeceasedwasplacedintrust
Issue:(a)Whendoestheinheritancetaxaccrueandwhenmustit didnotremoveitfromtheoperationofourinheritancetaxlawsor
besatisfied?(b)Shouldtheinheritancetaxbecomputedonthe exempt it from the payment of the inheritance tax. The
basisofthevalueoftheestateatthetimeofthetestator'sdeath,or correspondinginheritancetaxshouldhavebeenpaidonorbefore
onitsvaluetenyearslater?(c)Indeterminingthenetvalueofthe March10,1924,toescapethepenaltiesofthelaw.
estatesubjecttotax,isitpropertodeductthecompensationdue
totrustees? (d) What lawgoverns thecaseat bar? Shouldthe 5.CarlosSisonvs.NarcisaTeodoro
4.Lorenzovs.Posadas

Facts:CourtofFirstInstanceofManila,whichhasjurisdiction
over the estate of the late Margarita David, issued an order
appointingCarlosMoranSisonasjudicialadministrator,without
compensation,afterfilingabondintheamountofP5,000.The
nextday,CarlosMoranSisontookhisoathofofficeandputup
therequisitebondwhichwasdulyapprovedbythecourt.Onthe
sameday,lettersofadministrationwereissuedtohim.

obligations of the late president, as well as that of his family,

associates and "cronies". Said audit team concluded its
investigation with a Memorandum dated July 26, 1991. The
investigationdisclosedthattheMarcosesfailedtofileawritten
noticeofthedeathofthedecedent,anestatetaxreturns[sic],as
well as several income tax returns covering the years 1982 to
1986,allinviolationoftheNationalInternalRevenueCode
(NIRC).

The judicial administrator filed an accounting of his

administrationwhichcontainsdisbursementitems.
The Commissioner of Internal Revenue thereby caused the
preparationandfilingoftheEstateTaxReturnfortheestateof
NarcisaF.Teodoro,oneoftheheirs,objectedtotheapprovalof thelatepresident,theIncomeTaxReturnsoftheSpousesMarcos
theabovequoteditemsonthegroundthattheyarenotnecessary for the years 1985 to 1986, and the Income Tax Returns of
expensesofadministrationandshouldnotbechargedagainstthe petitionerFerdinand'Bongbong'MarcosIIfortheyears1982to
estate. The court approved the report of the administrator but 1985.Thenitissueddeficiencyassessments.
disallowedtheitemsobjectedtoonthegroundthattheycannotbe
consideredasexpensesofadministration.
The deficiency tax assessments were not protested
administratively,byMrs.Marcosandtheotherheirsofthelate
Issue: whether a judicial administrator, serving w ithout president,within30daysfromserviceofsaidassessments.
compensation, is entitled to charge as an expense of
administrationthepremiumsaidonhisbond.
OnFebruary22,1993,theBIRCommissionerissuedtwentytwo
noticesoflevyonreal propertyagainst certainparcelsofland
Held: Expense incurred by an executor or administrator to ownedbytheMarcosestosatisfytheallegedestatetaxand
produceabondisnotaproperchargeagainsttheestate.Section deficiencyincometaxesofSpousesMarcos.
680oftheCodeofCivilProcedure(similartosection7,Rule86)
doesnotauthorizetheexecutororadministratortochargeagainst NoticesofsaleatpublicauctionwerepostedonMay26,1993,at
the estate the money spent for the presentation, ruling, and thelobbyoftheCityHallofTaclobanCity.Thepublicauction
substitutionofabond.
forthesaleoftheeleven(11)parcelsoflandtookplaceonJuly5,
1993.Therebeingnobidder,thelotsweredeclaredforfeitedin
Thepositionofanexecutororadministratorisoneoftrust.In favorofthegovernment.
fact,thePhilippineCodeofCivilProceduresomentionsit.Itis
proper for the law to safeguard the estates of deceased On June 25, 1993, petitioner Ferdinand 'Bongbong' Marcos II
personsbyrequiringtheexecutororadministratortogivea filedtheinstantpetitionforcertiorariandprohibitionunderRule
suitablebond.Theabilitytogivethisbondisinthenatureof 65oftheRulesofCourt,withprayerfortemporaryrestraining
orderand/orwritofpreliminaryinjunction.
aqualificationfortheoffice. Theexecutionandapprovalof
thebondconstituteaconditionprecedenttoacceptanceofthe
Issue:Daghankaau.
responsibilitiesofthetrust.
It would be a very farfetched construction to deduce that the
givingofabondinordertoqualifyfortheofficeofexecutoror
administratorisanecessaryexpenseinthecare,management,and
settlementoftheestatewithinthemeaningofsection680ofthe
CodeofCivilProcedure,fortheseareexpensesincurredafter
theexecutororadministratorhasmettherequirementsofthe
lawandhasenteredupontheperformanceofhisduties.
Thereisnothinginthedecisionthatmayjustifytheconclusion
thattheallowanceordisallowanceofpremiumspaidonthebond
of the administrator is made dependent on the receipt of
compensation.
6.FerdinandMarcosvs.CA
Facts: On September 29, 1989, former President Ferdinand
MarcosdiedinHonolulu,Hawaii,USA.

Held:Thenatureoftheprocessofestatetaxcollectionhasbeen
describedasfollows:
"Strictlyspeaking,theassessmentofaninheritancetaxdoesnot
directlyinvolvetheadministrationofadecedent'sestate,although
itmaybeviewedasanincidenttothecompletesettlementofan
estate,and,undersomestatutes,itismadethedutyoftheprobate
courttomaketheamountoftheinheritancetaxapartofthefinal
decreeofdistributionoftheestate.Itisnotagainstthepropertyof
decedent,nor isit aclaim against theestateas such,but it is
against the interest or property right which the heir, legatee,
devisee, etc., has in the property formerly held by decedent.
Further,undersomestatutes,ithasbeenheldthatitisnotasuitor
controversybetweentheparties,norisitanadversaryproceeding
between the state and the person who owes the tax on the
inheritance.However,underotherstatutesithasbeenheldthat
thehearinganddeterminationofthecashvalueoftheassetsand
the determination of the tax are adversary proceedings. The
proceedinghasbeenheldtobenecessarilyaproceedinginrem."

On June 27, 1990, a Special Tax Audit Team was created to

conductinvestigationsandexaminationsofthetaxliabilitiesand Claimsfortaxes,whetherassessedbeforeorafterthedeathofthe

deceased, can be collected from the heirs even after the agency tasked to determine the amount of taxes due upon the
distributionofthepropertiesofthedecedent.Theyareexempted subject estate, but the Bureau of Internal Revenue, 16 whose
fromtheapplicationofthestatuteofnonclaims.Theheirsshall determinationsandassessmentsarepresumedcorrectandmadein
beliabletherefor,inproportiontotheirshareintheinheritance.
goodfaith.17Thetaxpayerhasthedutyofprovingotherwise.In
TheGovernmenthastwowaysofcollectingthetaxesinquestion. theabsenceofproofofanyirregularitiesintheperformance
One,bygoingafteralltheheirsandcollectingfromeachoneof ofofficialduties,anassessmentwillnotbedisturbed.Evenan
them the amount of the tax proportionate to the inheritance assessmentbasedonestimatesisprimafacievalidandlawful
received.Anotherremedy,pursuanttotheliencreatedbySection whereitdoesnotappeartohavebeenarrivedatarbitrarilyor
315 of the Tax Code upon all property and rights to property capriciously. The burden of proof is upon the complaining
belongtothetaxpayerforunpaidincometax,isbysubjectingsaid partytoshowclearlythattheassessmentiserroneous.
propertyoftheestatewhichisinthehandsofanheirortransferee
tothepaymentofthetaxduetheestate.
Petitioner argues that all the questioned Notices of Levy,
however,mustbenullifiedforhavingbeenissuedwithoutvalidly
It is discernible that the approval of the court, sitting in servingcopiesthereoftothepetitioner.Asamandatoryheirofthe
probate,orasasettlementtribunaloverthedeceasedisnota decedent,petitioneraversthathehasaninterestinthesubject
estate,andnoticesoflevyuponitspropertiesshouldhavebeen
mandatoryrequirementinthecollectionofestatetaxes.
serveduponhim.
There is nothing in the Tax Code, and in the pertinent
remedial laws that implies the necessity of the probate or Wedonotagree.Inthecaseofnoticesoflevyissuedtosatisfy
estate settlement court's approval of the state's claim for thedelinquentestatetax,thedelinquenttaxpayeristheEstate
of the decedent, and not necessarily and exclusively, the
estatetaxes,beforethesamecanbeenforcedandcollected.
petitionerasheirofthedeceased.
On the contrary, under Section 87 of the NIRC, it is the
probateorsettlementcourtwhichisbiddennottoauthorize 7.Dizonvs.CIR
theexecutororjudicialadministratorofthedecedent'sestate
todeliveranydistributivesharetoanypartyinterestedinthe FACTS:
estate,unlessitisshownaCertificationbytheCommissioner
There were claims against the estate which the BIR contested
ofInternalRevenuethattheestatetaxeshavebeenpaid.
statingthat loweramountswerepaidascompromisepayments
IfthereisanyissueastothevalidityoftheBIR'sdecisionto duringthesettlementoftheestateandtheseamountsshouldbe
assesstheestatetaxes,thisshouldhavebeenpursuedthroughthe whatwillbeconsideredasdeductionsinarrivingatthenetestate.
properadministrativeandjudicialavenuesprovidedforbylaw.
Such assessment may be protested administratively by filing a
request for reconsideration orreinvestigation insuch form and
mannerasmaybeprescribedbyimplementingregulationswithin
(30)daysfromreceiptoftheassessment.Iftheprotestisdenied
in whole or in part, the individual, association or corporation
adverselyaffectedbythedecisionontheprotestmayappealto
theCourtofTaxAppealswithinthirty(30)daysfromreceiptof
said decision; otherwise, the decision shall become final,
executoryanddemandable.
Thedeficiencytaxassessment,havingalreadybecomefinal,
executory, and demandable, the same can now becollected
throughthesummaryremedyofdistraintorlevypursuantto
Section205oftheNIRC.
The omission to file an estate tax return, and the subsequent
failuretocontestorappealtheassessmentmadebytheBIRis
fataltothepetitioner'scause,asundertheabovecitedprovision,
incaseoffailuretofileareturn,thetaxmaybeassessedat
anytimewithintenyearsaftertheomission,andanytaxso
assessedmaybecollectedbylevyuponrealpropertywithin
threeyearsfollowingtheassessmentofthetax.
It is not the Department of Justice which is the government

ISSUE:
Will the compromise amounts be the amounts considered as
deductionstothegrossestate?
HELD:
NO.Thedeductionsallowablearetheamountsdeterminedat
thetimeofdeath.Postdeathdevelopmentsarenotmaterialin
determiningtheamountofdeduction.Thus,theCourtapplied
the dateofdeath valuation rule which is the US rule on
deductionsandwhichisapplicablealsointhePhilippines.The
amountdeductibleisthedebtwhichcouldhavebeenenforced
againstthedeceasedinhislifetime.
8. Republic of the Philippines vs. AFP Retirement and
SeparationBenefits
FACTS:
LotsX,Y1andY2werelandsofthepublicdomainpursuantto
Proclamation No. 168 (Proc. 168). In 1983, Proclamation No.

2273(Proc.2273)wasissuedwhichremovedandsegregatedLots
Y1andY2fromthereservationanddeclaringthemopenfor
dispositiontoqualifiedapplicants.Asaresult,onlyLotXwhich
consistsof15,020squaremetersremainedpartofthereservation
now

known

as

Magsaysay

Park.

werethebeneficiariesthereof;nordidtheyobjecttotheretention
ofLotXaspartoftheparkreserve.Instead,in1997,theyapplied
for, and were granted, sales patents over Lot X.
Evidently,thesalespatentsoverLotXarenullandvoid,forat
thetimethesalespatentswereappliedforandgranted,theland
hadlostitsalienableanddisposablecharacter.Itwassetasideand
wasbeingutilizedforapublicpurpose,thatis,asarecreational
park. And under the present Constitution, national parks are
declaredpartofthepublicdomain,andshallbeconservedand
may not be increased nor diminished, except by law.

The record discloses that the heirs of CabaloKusop and Atty.

FlavianopetitionedthePresidenttohaveLotsY1andY2taken
outofthereservationforthereasonthatthroughtheirpredecessor
CabaloKusop(Kusop),theyhaveacquiredvestedprivaterights
overtheselots.ThiscampaignresultedinProc.2273,whichre
classified and returned Lots Y1 and Y2 to their original
alienable

and

disposable

state. Thegovernment,astheagent oftheState,ispossessedofthe

plenarypowerasthepersonainlawtodeterminewhoshallbethe
In1997,theheirsandFlavianofiledapplicationsfortheissuance favoredrecipientsofpubliclands,aswellasunderwhatterms
ofindividualmiscellaneoussalespatentsoverthewholeofLotX. theymaybegrantedsuchprivilege,notexcludingtheplacingof
Consequently,16originalcertificatesoftitle(OCTs)coveringLot obstaclesinthewayoftheirexerciseofwhatotherwisewouldbe
Xwereissuedinthenamesoftheheirs,Flavianoandseveral ordinary

acts

of

ownership.
others. These 16 titles were simultaneously conveyed to
respondent AFPRetirement and Separation Benefits System TheheirsandFlavianosactionsbetraytheirclaimofownershipto
(AFPRSBS).
LotX.WhenProc.168wasissued,theydidnotinstituteactionto
question its validity, using as cause of action their claimed
PetitionerRepublicofthePhilippinesacomplaintforreversion, ownershipandtitleovertheland.ThesameistruewhenProc.
cancellationandannulmentoftheAFPRSBStitles,onthethesis 2273cameout.Theydidnotfilesuittoinvalidateitbecauseit
thattheywereissuedoverapublicparkwhichisclassifiedas contravenestheirclaimedownershipoverLotX.Theysimplysat
inalienable and nondisposable public land. andwaitedforthegoodgracesofthegovernmenttofallontheir
laps. They simply waited for the State to declare them
TheheirsandFlavianointervened,and,togetherwiththeAFP beneficiaries

of

the

land.
RSBS, argued that their predecessorininterest Kusop had
acquiredvestedinterestsoverLotXforhavingoccupiedthesame Theprincipleofestoppelbarsonefromdenyingthetruthofafact
formorethan30years.TheRTCruledinfavoroftheRepublic. whichhas,inthecontemplationoflaw,becomesettledbytheacts
andproceedingsofjudicialorlegislativeofficersorbytheactof
TheCAreversedtheRTCandruledthatthelandsindisputeare the party himself, either by conventional writing or by
alienable and disposable lands. Hence this present appeal. representations, express or implied or in pais.
ISSUE:WhetherornottheCAerredinrulingthatthelandsin Finally, as regards AFPRSBS rights, the Court sustains the
question are alienable and disposable lands? petitionersviewthatanytitleissuedcoveringnondisposablelots
eveninthehandsofanallegedinnocentpurchaserforvalueshall
HELD: The Court grants the Petition. be

cancelled.
CIVIL LAW: alienable and disposable lands; estoppel TheCourtcannotignorethebasicprinciplethataspringcannot
risehigher thanitssource; assuccessorininterest,AFPRSBS
FromthewordingofProc.168,thelanditcomprisesissubjectto cannot acquire a better title than its predecessor, the herein
saleorsettlement,andthusalienableanddisposable. However, respondentsintervenors.
thisalienableanddisposablecharacterofthelandcoveredby
theproclamationwassubsequentlywithdrawn,andtheland Petition is GRANTED. Decision of the Court of Appeals is
wasreclassifiedbythenPresidentMacapagaltopavetheway ANNULLEDandSETASIDE.
fortheestablishmentofaparkreservation,subjectonlyto
previouslyacquiredprivaterights. Theheirsthenlobbiedfor
the exclusionofcertain portionsof thereservation whichthey 9.Republicvs.Guzman
claimed to be theirs, allegedly acquired by their predecessor
Kusopthroughprescription.Theyweresuccessful,forin1983, Facts:DavidReyGuzman,anaturalbornAmericancitizen,isthe
then President Marcos issued Proc. 2273, which excluded and sonofthespousesSimeonGuzman, 3 anaturalized American
segregatedLotsY1andY2fromthecoverageofProc.168.In citizen,andHelenMeyersGuzman,anAmericancitizen.In1968
addition, Proc. 2273 declared Lots Y1 and Y2 open for SimeondiedleavingtohissoleheirsHelenandDavidanestate
distribution to qualified beneficiaries which included the heirs. consistingofseveralparcelsoflandlocatedinBagbaguin,Sta.
However, Lot X was retained as part of the reservation. Maria,Bulacan.
The heirs did not question Proc. 2273, precisely because they HelenandDavidexecutedaDeedofExtrajudicialSettlementof

the Estate of Simeon Guzman dividing and adjudicating to donationbemadeinapublicdocumentandthatthereshould

themselvesallthepropertybelongingtotheestateofSimeon.
beanacceptancethereofmadeinthesamedeedofdonation
or in a separate public document. 7 In cases where the
Helen executed a Quitclaim Deed assigning, transferring and
acceptanceismadeinaseparateinstrument,itismandated
conveyingtohersonDavidherundividedonehalf(1/2)interest
on all the parcels of land subject matter of the Deed of thatthedonorshouldbenotifiedthereofinanauthenticform,
ExtrajudicialSettlementoftheEstateofSimeonGuzman.Since tobenotedinbothinstruments.
the document appeared not to have been registered, Helen
executedanotherdocument,aDeedofQuitclaim,on9August Aperusalofthetwo(2)deedsofquitclaimrevealsthatHelen
1989 confirming the earlier deed of quitclaim as well as intended to convey to her son David certain parcels of land
modifyingthedocumenttoencompassallherotherpropertyin located in the Philippines, and to reaffirm the quitclaim she
executed in 1981 which likewise declared a waiver and
thePhilippines.
renunciationofherrightsovertheparcelsofland.Thelanguage
David executed a Special Power of Attorney where he ofthedeedofquitclaimisclearthatHelenmerelycontemplateda
acknowledgedthat hebecametheowneroftheparcelsofland waiverofherrights,titleandinterestoverthelandsinfavorof
subjectoftheDeedofQuitclaimexecutedbyHelenon9August David,andnotadonation.ThatadonationwasfarfromHelen's
1989andempoweringAtty.LolitaG.Abelatosellorotherwise mindisfurthersupportedbyherdepositionwhichindicatedthat
she was aware that a donation of the parcels of land was not
disposeofthelots.
possiblesincePhilippinelawdoesnotallowsuchanarrangement.
Atty. Mario A. Batongbacal wrote the Office of the Solicitor 9Shereasonedthatifshereallyintendedtodonatesomethingto
General and furnished it with documents showing that David's David it would have been more convenient if she sold the
ownershipoftheonehalf(1/2)oftheestateofSimeonGuzman propertyandgavehimtheproceedstherefrom. 10Itappearsthat
wasdefective.Onthebasisthereof,theGovernmentfiledbefore
foremost in Helen's mind was the preservation of the Bulacan
the Regional Trial Court of Malolos Bulacan a Petition for
realtywithinthebloodlineofSimeonfromwheretheyoriginated,
Escheatprayingthatonehalf(1/2)ofDavid'sinterestineachof
overandabovethebenefitthatwouldaccruetoDavidbyreason
thesubjectparcelsoflandbeforfeitedinitsfavor.Davidfileda
ofherrenunciation.11Theelementofanimusdonanditherefore
petitiontodismiss.
wasmissing.cdll
Trialcourtdismissedthepetitionholdingthatthetwo(2)deedsof
quitclaimexecutedbyHelenMeyersGuzmanhadnolegalforce TheSpecialPowerofAttorneymerelyacknowledgesthatDavid
andeffectsothattheownershipofthepropertysubjectthereof ownsthepropertyreferredtoandthatheauthorizesAtty.Abelato
sellthesameinhisname.Thereisnointimation,expresslyor
remainedwithher.5
impliedly,that David'sacquisitionoftheparcelsoflandisby
virtueofHelen'spossibledonationtohim andwecannotlook
Issue: Whether the lands should be forfeited in favor of the
beyond the language of the document to make a contrary
government.
constructionasthiswouldbeinconsistentwiththeparolevidence
12
Held: As a rule, only a Filipino citizen can acquire private rule.
landsinthePhilippines.Theonlyinstanceswhenaforeigner
canacquireprivatelandsinthePhilippinesarebyhereditary Moreover,itismandatedthatifanacceptanceismadeina
succession and if he was formerly a naturalborn Filipino separatepublicwritingthenoticeoftheacceptancemustbe
notednotonlyinthedocumentcontainingtheacceptancebut
citizenwholosthisPhilippinecitizenship.
alsointhedeedofdonation.Itisnecessarythatformalnotice
Petitionerthereforecontendsthattheacquisitionoftheparcelsof thereofbegiventothedonor,andthefactthatduenoticehas
land by David does not fall under any of these exceptions. It beengivenmustbenotedinbothinstruments.Thenandonly
assertsthat DavidbeinganAmericancitizencouldnot validly thenisthedonationperfected."14
acquireonehalf(1/2)interestineachofthesubjectparcelsof
landbywayofthetwo(2)deedsofquitclaimastheyareinreality Wherethedeedofdonationfailstoshowtheacceptance,or
donationsintervivos.Davidmaintains,ontheotherhand,thathe wheretheformalnoticeoftheacceptancemadeinaseparate
acquired thepropertybyright ofaccretionandnot byway of instrumentiseithernotgiventothedonororelsenotedinthe
donation,withthedeedsofquitclaim merelydeclaringHelen's deedofdonation,andintheseparateacceptance,thedonation
intention to renounce her share in the property and not an isnullandvoid.
intentiontodonate.
Therearethree(3)essentialelementsofadonation:(a)the
reductionofthepatrimonyofthedonor;(b)theincreasein
thepatrimonyofthedonee;and,(c)theintenttodoanactof
liberalityoranimusdonandi.Whenappliedtoadonationof
an immovable property, the law further requires that the

The inexistence of a donation does not render the repudiation

made by Helen in favor of David valid. There is no valid
repudiationofinheritanceasHelenhadalreadyacceptedhershare
oftheinheritancewhenshe,togetherwithDavid,executedaDeed
ofExtrajudicialSettlementoftheEstateofSimeonGuzman

Article1056oftheCivilCodeprovides

motivesorpurposeswhichdonotcontradictdonativeintent.

Theacceptanceorrepudiationofaninheritance,oncemadeis
irrevocable and cannot be impugned, except when it was
madethroughanyofthecausesthatvitiateconsentorwhen
anunknownwillappears.

The proper performance of his duties as a legislator is his

obligationasanelectedpublicservantoftheFilipinopeopleand
notaconsiderationforthepoliticalcontributionshereceived.In
fact,asapublicservant,hemayevenbecalledtoenactlawsthat
arecontrarytotheinterestsofhisbenefactors,forthebenefitof
the greater good. In fine, the purpose for which the sums of
moneyweregiven,whichwastofundthecampaignofSenator
Angarainhisbidforasenatorialseat,cannotbeconsideredasa
materialconsiderationsoastonegateadonation.prcd

Thus,pursuanttoArt.1056,Helencannotbelatedlyexecutean
instrument which has the effect of revoking or impugning her
previous acceptance of her onehalf (1/2) share of the subject
propertyfromSimeon'sestate.Thenullityoftherepudiationdoes
not ipso facto operate to convert the parcels of land into res
CongressapprovedRepublicActNo.7166onNovember25,
nullius 18 to be escheated in favor of the Government. The
1991,providingin Section 13thereofthatpolitical/electoral
repudiationbeingofnoeffectwhatsoevertheparcelsofland
contributions,dulyreportedtotheCommissiononElections,
should revert to their private owner, Helen, who, although
arenotsubjecttothepaymentofanygifttax.Thisallthe
being an American citizen, is qualified by hereditary
moreshowsthatthepoliticalcontributionshereinmadeare
successiontoownthepropertysubjectofthelitigation.llcd
subjecttothepaymentofgifttaxes,sincethesameweremade
priortotheexemptinglegislation,andRepublicActNo.7166
10.Abellovs.CIR
providesnoretroactiveeffectonthispoint.
Facts: During the 1987 national elections, petitioners, who are
partners in the Angara, Abello, Concepcion, Regala and Cruz 11.Lydiavs.BrigidoBanga
(ACCRA) law firm, contributed P882,661.31 each to the
campaignfundsofSenatorEdgardoAngara,thenrunningforthe Facts: Spouses Placida Tabotabo and Lauro Sumipat, who
contractedmarriageonJuly20,1939,acquiredthreeparcelsof
Senate.
land.Thecouplewaschildless.LauroSumipat,however,sired
The Bureau of Internal Revenue (BIR) assessed each of the fiveillegitimatechildrenoutofanextramaritalaffairwithPedra
Dacola, namely: herein defendantsappellees. Lauro Sumipat
petitionersP263,032.66fortheircontributions.
executed a document denominated DEED OF ABSOLUTE
PetitionersquestionedtheassessmentthroughalettertotheBIR. TRANSFER AND/OR QUITCLAIM OVER REAL
They claimed that political or electoral contributions are not PROPERTIES(theassaileddocument)infavorofdefendants
considered gifts under the National Internal Revenue Code appelleescoveringthethreeparcelsofland(theproperties).
(NIRC),andthat,therefore,theyarenotliablefordonor'stax.
Whentheassaileddocumentwasexecuted,LauroSumipatwas
TheclaimforexemptionwasdeniedbytheCommissioner.
already very sick and bedridden; that upon defendantappellee
PetitionersfiledapetitionforreviewwiththeCTA,whichwas Lydiasrequest,theirneighborBenjaminRiveraliftedthebodyof
LauroSumipat whereuponLydiaguidedhis(LauroSumipats)
decidedonOctober7,1991infavorofthepetitioners.
handinaffixinghissignatureontheassaileddocumentwhichshe
TheCourtofAppealsreversedandsetasidetheCTAdecisionon hadbrought;thatLydiathereafterleftbutlaterreturnedonthe
samedayandrequestedLaurosunletteredwifePlacidatosignon
April20,1994. 3 TheappellateCourtorderedthepetitionersto
theassaileddocument,asshedidinhaste,evenwithoutthelatter
paydonor'staxamountingtoP263,032.66each.
gettingaresponsiveanswertoherqueryonwhatitwasallabout.
Issue:Whetherornotthecontributionissubjecttodonorstax.
Held:Yes
Donation has the following elements: (a) the reduction of the

After Lauro Sumipats death on January 30, 1984, his wife

Placida, hereinafter referred to as plaintiffappellant, and
defendantsappelleesjointlyadministeredtheproperties50%of
theproduceofwhichwenttoplaintiffappellant.ADCEaH

patrimonyofthedonor;(b)theincreaseinthepatrimonyofthe As plaintiffappellants share in the produce of the properties

donee; and, (c) the intent to do an act of liberality or animus dwindleduntilshenolongerreceivedanyandlearningthatthe
titlestothepropertiesinquestionwerealreadytransferred/made
donandi.7
infavorofthedefendantsappellees,shefiledacomplaintfor
declaration of nullity of titles, contracts, partition, recovery of
Firstofall,donativeintentisacreatureofthemind.Itcannot
ownershipnowthesubjectofthepresentappeal.
beperceivedexceptbythematerialandtangibleactswhich
manifestitspresence.Thisbeingthecase,donativeintentis DefendantappelleeLydiadisclaimsparticipationintheexecution
presumedpresentwhenonegivesapartofonespatrimonyto of the assailed document, she claiming to have acquired
anotherwithoutconsideration.Second,donativeintentisnot knowledgeofitsexistenceonlyonJanuary10,1983orfivedays
negated when the person donating has other intentions,

12. Ganuelas vs. Cawed (AMBUT NGANU APIL APILON

PANI SA TAX MAKANUMDOM NA NUON KO NA NA
7

theappellatecourtheldthatsincePlacidawasunlettered, the WRONGKOSSUCCESSIONPISTIYAWAGIATAY!)

appellees, the petitioners herein, as the parties interested in
enforcing the deed, have the burden of proving that the terms Facts: That,forandinconsiderationoftheloveandaffection
which the DONOR has for the DONEE, and of the faithful
thereofwerefullyexplainedtoher.
servicesthelatterhasrenderedinthepasttotheformer,thesaid
Issue: whether the questioned deed by its terms or under the DONORdoesbythesepresentstransferandconvey,bywayof
surrounding circumstances has validly transferred title to the DONATION,untotheDONEEthepropertyabove,described,to
becomeeffectiveuponthedeathoftheDONOR;butintheevent
disputedpropertiestothepetitioners.
that the DONEE should die before the DONOR, the present
Held:Aperusalofthedeedrevealsthatitisactuallyagratuitous donationshallbedeemedrescindedandofnofurtherforceand
effect.
dispositionofpropertyadonation.
afteritsexecution.

Art.749.Inorderthat thedonationoftheimmovablemaybe Issue:Whetherthedonationisintervivosormortiscausa

valid,itmustbemadeinapublicdocument,specifyingtherein
thepropertydonatedandthevalueofthechargeswhichthedonee Held:Donationintervivosdiffersfromdonationmortiscausa
inthatintheformer,theactisimmediatelyoperativeevenif
mustsatisfy.
theactualexecutionmaybedeferreduntilthedeathofthe
Theacceptancemaybemadeinthesamedeedofdonationorina donor,whileinthelatter,nothingisconveyedtooracquired
separatepublicdocument,butitshallnottakeeffectunlessitis bythedoneeuntilthedeathofthedonortestator.
doneduringthelifetimeofthedonor.
Ifthedonationismadeincontemplationofthedonor'sdeath,
Iftheacceptanceismadeinaseparateinstrument,thedonorshall meaning that the full or naked ownership of the donated
benotifiedthereofinanauthenticform,andthisstepshallbe
propertieswillpasstothedoneeonlybecauseofthedonor's
notedinbothinstruments.
death,thenitisatthattimethatthedonationtakeseffect,and
Titletoimmovablepropertydoesnotpassfromthedonorto itisadonationmortiscausawhichshouldbeembodiedina
thedoneebyvirtueofadeedofdonationuntilandunlessit lastwillandtestament.Butifthedonationtakeseffectduring
hasbeenacceptedinapublicinstrumentandthedonorduly the donor's lifetime or independently of the donor's death,
notified thereof. The acceptance may be made in the very meaningthatthefullornakedownership(nudaproprietas)of
same instrument of donation. If the acceptance does not thedonatedpropertiespassestothedoneeduringthedonor's
appearinthesamedocument,itmustbemadeinanother. lifetime,notbyreasonofhisdeathbutbecauseofthedeedof
Wherethedeedofdonationfailstoshowtheacceptance,or donation,thenthedonationisintervivos.

wheretheformalnoticeoftheacceptance,madeinaseparate
Thedistinctionbetweenatransferintervivosandmortiscausais
instrument,iseithernotgiventothedonororelsenotnoted
importantasthevalidityorrevocationofthedonationdepends
inthedeedofdonationandintheseparateacceptance,the uponitsnature.Ifthedonationisintervivos,itmustbeexecuted
donationisnullandvoid.
andacceptedwiththeformalitiesprescribedbyArticles748 25
We also note the absence of any proof of filing of the and74926oftheCivilCode,exceptwhenitisonerousinwhich

necessaryreturn,paymentofdonorstaxesonthetransfer,or
exemptionfrompaymentthereof.UndertheNationalInternal
RevenueCodeof1977,thetaxcodeinforceatthetimeofthe
executionofthedeed,anindividualwhomakesanytransfer
bygiftshallmakeareturnandfilethesamewithin30days
after the date the gift is made with the Revenue District
Officer,CollectionAgentordulyauthorizedTreasurerofthe
municipalityinwhichthedonorwasdomiciledatthetimeof

the transfer. 21 The

filing of the return and payment of

casetherulesoncontractswillapply.Ifitismortiscausa,the
donationmustbeintheformofawill,withalltheformalitiesfor
the validity of wills, otherwise it is void and cannot transfer
ownership.27

Thedistinguishingcharacteristicsofadonationmortiscausa
arethefollowing:

1.Itconveysnotitleorownershiptothetransfereebeforethe
deathofthetransferor;or,whatamountstothesamething,
donorstaxesaremandatory.Infact,theregistrarofdeedsis
thatthetransferorshouldretaintheownership(fullornaked)
mandated not to register in the registry of property any
andcontrolofthepropertywhilealive;
document transferring real property by way of gifts inter
vivosunlessacertificationthatthetaxesfixedandactually
2.Thatbeforehisdeath,thetransfershouldberevocableby
dueonthetransferhadbeenpaidorthatthetransactionis
the transferor at will, ad nutum; but revocability may be
taxexemptfromtheCommissionerofInternalRevenue,in
providedforindirectlybymeansofareservedpowerinthe
eithercase,ispresented.22
donortodisposeofthepropertiesconveyed;

3.Thatthetransfershouldbevoidifthetransferorshould generosity, the Donor hereby gives, donates, transfers and

conveysbywayof donationuntothehereinDonee,herheirs,
survivethetransferee.
assignsandsuccessors,theabovedescribedparcelsofland;
Thephrase"tobecomeeffectiveuponthedeathoftheDONOR"
admitsofnootherinterpretationbutthat Celestinaintendedto That it is the condition of this donation that the Donor shall
transfertheownershipofthepropertiestoUrsulinaonherdeath, continuetoenjoyallthefruitsofthelandduringhislifetimeand
thatofhisspouseandthatthedoneecannotsellorotherwise,
notduringherlifetime.29
disposeofthelandswithoutthepriorconsentandapprovalbythe
Donorandherspouseduringtheirlifetime.
More importantly, the provision in the deed stating that if the
doneeshoulddiebeforethedonor,thedonationshallbedeemed
xxxxxxxxx
rescinded and of no further force and effect shows that the
donationisapostmortemdisposition.
That for the same purpose as hereinbefore stated, the Donor
furtherstatesthathehasreservedforhimselfsufficientproperties
As stated in a long line of cases, one of the decisive
infullownershiporinusufructenoughforhismaintenanceofa
characteristics of a donation mortis causa is that the transfer
decentlivelihoodinconsonancewithhisstandinginsociety.
shouldbeconsideredvoidifthedonorshouldsurvivethedonee.
13.Sps.Gestopavs.CA
Facts:SpousesDiegoandCatalinaDanlagweretheownersofsix
parcels of unregistered lands. They executed three deeds of
donationmortiscausa,infavorofprivaterespondentMercedes
DanlagPilapil.Alldeedscontainedthereservationoftherightsof
thedonors(1)toamend,cancelorrevokethedonationduring
their lifetime, and (2) to sell, mortgage, or encumber the
properties donated during the donors' lifetime, if deemed
necessary.
Diego Danlag, with the consent of his wife, Catalina Danlag,
executed a deed of donation inter vivos 5 covering the

ThattheDoneeherebyacceptsthedonationandexpressesher
thanks and gratitude for the kindness and generosity of the
Donor."
Issue:Whetherthedonationwasintervivosormortiscausa.
Held: Note first that the granting clause shows that Diego
donatedthepropertiesoutofloveandaffectionforthedonee.
This is a mark of a donation inter vivos. 14 Second, the

reservation of lifetime usufruct indicates that the donor

intendedtotransferthenakedownershipovertheproperties.
As correctly posed by the Court of Appeals, what was the
need for such reservation if the donor and his spouse
remained the owners of the properties? Third, the donor
reserved sufficient properties for his maintenance in
accordance with his standing in society, indicating that the
donorintendedtopartwiththesixparcelsofland.15Lastly,

aforementionedparcelsoflandplustwootherparcelswithTD
Nos. 11351 and 11343, respectively, again in favor of private
respondentMercedes.Thiscontainedtwoconditions,that(1)the
Danlag spouses shall continue to enjoy the fruits of the land
duringtheirlifetime,andthat(2)thedoneecannotsellordispose
thedoneeacceptedthedonation.InthecaseofAlejandrovs.
ofthelandduringthelifetimeofthesaidspouses,withouttheir
Geraldez,78SCRA245(1977),wesaid thatan acceptance
priorconsentandapproval.Mercedescausedthetransferofthe
clauseisamarkthatthedonationisintervivos.Acceptanceis
parcels'taxdeclarationtohernameandpaidthetaxesonthem.
a requirement for donations inter vivos. Donations mortis
Diego and Catalina Danlag sold parcels 3 and 4 to herein causa, being in the form of a will, are not required to be
petitioners,Mr.andMrs.AgripinoGestopa.OnSeptember29, acceptedbythedoneesduringthedonors'lifetime.
1979,theDanlagsexecutedadeedofrevocation 6recoveringthe
The donor's right to give consent was merely intended to
sixparcelsoflandsubjectoftheaforeciteddeedofdonationinter
protecthisusufructuaryinterests.InAlejandro,weruledthat
vivos.
alimitation on the right to sell duringthe donors' lifetime
MercedesPilapil(hereinprivaterespondent)filedwiththeRTCa impliedthatownershiphadpassedtothedoneesanddonation
petitionagainsttheGestopasandtheDanlags,forquietingoftitle wasalreadyeffectiveduringthedonors'lifetime.
7 overtheaboveparcelsofland.Sheallegedthat shewasan
illegitimatedaughterofDiegoDanlag;thatshelivedandrendered Theattendingcircumstancesintheexecutionofthesubject
incalculablebeneficialservicestoDiegoandhismother,Maura donation also demonstrated the real intent of the donor to
transfertheownership overthesubjectpropertiesuponits
Danlag,whenthelatterwasstillalive.
execution. 16 Priortotheexecutionofdonationintervivos,
GestopasandtheDanlagsaverredthatthedeedofdonationdated theDanlagspousesalreadyexecutedthreedonationsmortis
January16,1973wasnullandvoidbecauseitwasobtainedby causa. As correctly observed by the Court of Appeals, the
Mercedesthroughmachinationsandundueinfluence.
Danlagspouseswereawareofthedifferencebetweenthetwo
donations.Iftheydidnotintendtodonateintervivos,they
"Thatforandinconsiderationoftheloveandaffectionwhichthe
wouldnotagaindonatethefourlotsalreadydonatedmortis
Donor inspires in the Donee and as an act of liberality and

causa.

donationofaparceloflandthedominicalrightsofwhichdo
notbelongtothedonoratthetimeofthedonation,isvoid.
Was the revocation valid? A valid donation, once accepted, Thisholdstrueevenifthesubjectofthedonationisnotthe
becomesirrevocable,exceptonaccountofofficiousness,failure landitselfbutthepossessoryandproprietaryrightsoversaid
bythedoneetocomplywiththechargesimposedinthedonation,
land.24
oringratitude.19Thedonorspousesdidnotinvokeanyofthese
reasonsinthedeedofrevocation.
Inthiscase,althoughtheyallegedlydeclaredMagsaysayParkas
theirownfortaxationpurposes,theheirsofCabaloKusopdidnot
13. Be that as it may, the donation is void. There are three have any transmissible proprietary rights over the donated
essentialelementsofdonations:[1]thereductionofthepatrimony propertyatthetimeofthedonation.Infact,withrespecttoLotY
ofthedonor,[2]theincreaseinthepatrimonyofthedonee,and 2, they still had to file a free patents application to obtain an
[3] the intent to do an act of liberality (animus donandi) . 22 originalcertificateoftitlethereon.ThisisbecauseProclamation
Grantingthatthereisananimusdonandi,wefindthatthealleged No.2273declaringas"opentodispositionundertheprovisionsof
donation lacksthefirsttwoelementswhich presupposethe thePublicLandAct"someportionsoftheMagsaysayPark,isnot
donor's ownership rights over the subject of the donation anoperativelawwhichautomaticallyvestsrightsofownershipon
theheirsofCabaloKusopovertheirclaimedparcelsofland.Cd
whichhetransmitstothedoneetherebyenlargingthedonee's
estate. Thisisinconsonancewiththerulethatadonorcannot
lawfullyconveywhatisnothisproperty. 23 Inotherwords, a