BPI vs. Posadas 1.

10
FACTS:
BPI, as administrator of the estate of deceased Adolphe Schuetze, appealed to CFI Manila
absolving defendant, Collector of Internal Revenue, from the complaint filed against him in
recovering the inheritance tax amounting to P1209 paid by the plaintiff, Rosario Gelano Vda de
Schuetze, under protest, and sum of P20,150 representing the proceeds of the insurance policy of
the deceased.

ISSUE: WON the plaintiff is entitled to the proceeds of the insurance.

HELD:
SC ruled that(1)the proceeds of a life-insurance policy payable to the insured's estate, on which
the premiums were paid by the conjugal partnership, constitute community property, and belong
one-half to the husband and the other half to the wife, exclusively; (2)if the premiums were paid
partly with paraphernal and partly conjugal funds, the proceeds are likewise in like proportion
paraphernal in part and conjugal in part; and (3)the proceeds of a life-insurance policy payable to
the insured's estate as the beneficiary, if delivered to the testamentary administrator of the former
as part of the assets of said estate under probate administration, are subject to the inheritance tax
according to the law on the matter, if they belong to the assured exclusively, and it is immaterial
that the insured was domiciled in these Islands or outside.
Hence, the defendant was ordered to return to the plaintiff one-half of the tax collected upon the
amount of P20,150, being the proceeds of the insurance policy on the life of the late Adolphe
Oscar Schuetze, after deducting the proportional part corresponding to the first premium.

Marcos II vs CA 1.11
FACTS: Bongbong Marcos sought for the reversal of the ruling of the Court of Appeals to grant
CIR's petition to levy the properties of the late Pres. Marcos to cover the payment of his tax
delinquencies during the period of his exile in the US. The Marcos family was assessed by the
BIR after it failed to file estate tax returns. However the assessment were not protested
administratively by Mrs. Marcos and the heirs of the late president so that they became final and
unappealable after the period for filing of opposition has prescribed. Marcos contends that the
properties could not be levied to cover the tax dues because they are still pending probate with the
court, and settlement of tax deficiencies could not be had, unless there is an order by the probate
court or until the probate proceedings are terminated.
Petitioner also pointed out that applying Memorandum Circular No. 38-68, the BIR's Notices
of Levy on the Marcos properties were issued beyond the allowed period, and are therefore null
and void.
ISSUE: Are the contentions of Bongbong Marcos correct?
HELD: No. The deficiency income tax assessments and estate tax assessment are already final
and unappealable -and-the subsequent levy of real properties is a tax remedy resorted to by the
government, sanctioned by Section 213 and 218 of the National Internal Revenue Code. This
summary tax remedy is distinct and separate from the other tax remedies (such as Judicial Civil
actions and Criminal actions), and is not affected or precluded by the pendency of any other tax
remedies instituted by the government.
The approval of the court, sitting in probate, or as a settlement tribunal over the deceased's estate
is not a mandatory requirement in the collection of estate taxes. On the contrary, under Section 87
of the NIRC, it is the probate or settlement court which is bidden not to authorize the executor or
judicial administrator of the decedent's estate to deliver any distributive share to any party
interested in the estate, unless it is shown a Certification by the Commissioner of Internal
Revenue that the estate taxes have been paid. This provision disproves the petitioner's contention
that it is the probate court which approves the assessment and collection of the estate tax.
On the issue of prescription, the omission to file an estate tax return, and the subsequent failure
to contest or appeal the assessment made by the BIR is fatal to the petitioner's cause, as under
Sec.223 of the NIRC, in case of failure to file a return, the tax may be assessed at anytime within
10 years after the omission, and any tax so assessed may be collected by levy upon real property
within 3 years (now 5 years) following the assessment of the tax. Since the estate tax assessment
had become final and unappealable by the petitioner's default as regards protesting the validity of
the said assessment, there is no reason why the BIR cannot continue with the collection of the
said tax.

Vera vs Navarro 1.13

FACTS
Judge Tan was appointed as the executor of the estate of Elsie Gaches. He Preliminarily
submitted a motion for advance payment of allowances inheritance Etc pending the finality of
probate of the will. He maintained that there are sufficient assets to cover whatever liability to the
government for taxes and other charge. The Commissioner opposed this motion and showed some
proof of claims For estate taxes and inheritance taxes. The court then disapproved the motion of
Tan. On a later date, Tan paid the taxes due but there was deficiency in payment of the inheritance
taxes. Upon payment, he moved again that he be allowed to pay advance inheritance, allowances,
etc. This time, the court allowed him to do so. The Commissioner tried to oppose this but to no
avail. He then tried to garnish the bank accounts of the estate but wasnt able to do so due to the
quick thinking of tan to have the writ of garnishment discharge.
Issue: can the estate be distributed?
Ruling: Under the provisions of the Rules of Court, together with the provision in the tax code,
the distribution of a decedents assets may only be ordered under the following circumstances (1)
when the inheritance tax, among others is paid (2) when a sufficient bond is given to meet the
payment of the inheritance tax and all other obligation of the nature enumerated (3) when the
payment of the said tax and all the other obligations mentioned in the rule has been provide for.
Non f these were present when the questioned orders were issued at the case at bar. On the issue
of attorneys fees, these should be shouldered by the heirs and not by the estate. The attorneys
fees payable were not for the benefit of the estate and thus, need not be paid by the estate.

Sison vs Teodoro 1.15

Facts:
1. The CFI of Manila which had jurisdiction over the estate of Margarita David, issued an order
appointing appellantCarlos Moran Sison as judicial administrator without compensation after
filing a bond. After entering into his duties as administrator, he filed an accounting of his
administration which included items as an expense of administration the premiums he paid on his
bond.
2. One of the heirs, herein appellee Narcisa Teodoro, objected to the approval of the items. The
court approved the report but disallowed the items objected to on the ground that these cannot be
considered as expenses of administration. Moran Sison filed a motion for reconsideration but was
denied hence this appeal.
Issue: Whether or not an executor or judicial administrator can validly charge the
premiums on his bond as an expense of administration against the estate
NO.
The premiums paid by an executor or administrator serving without a compensation for his bond
cannot be charged against the estate. Further Sec. 7 of Rule 86 of the Rules of Court does not
authorize the executor or administrator to charge to the estate the money spent for the bond. As
held in the case of Sulit v. Santos (56 Phil 626), the position of an executor or administrator is one
of trust. The law safeguards the estates of deceased persons by making as a requirement for
qualification the ability to give a suitable bond. The execution of said bond is therefore a
condition precedent to acceptance of the responsibilities of the trust.
Further, the giving of the bond is not a necessary expense in the care, management, and
settlement of the estate within the meaning of Sec. 680 of the Civil Code of Procedure, since such
are the requirements after the executor or administrator has already qualified for the office and
has entered the performance of his duties.

Vera vs Fernandez 1.16

FACTS: The BIR filed on July 29, 1969 a motion for allowance of claim and for payment of taxes
representing the estate's tax deficiencies in 1963 to 1964 in the intestate proceedings of Luis
Tongoy. The administrator opposed arguing that the claim was already barred by the statute of
limitation, Section 2 and Section 5 of Rule 86 of the Rules of Court which provides that all claims
for money against the decedent, arising from contracts, express or implied, whether the same be
due, not due, or contingent, all claims for funeral expenses and expenses for the last sickness of
the decedent, and judgment for money against the decedent, must be filed within the time limited
in the notice; otherwise they are barred forever.
ISSUE: Does the statute of non-claims of the Rules of Court bar the claim of the government for
unpaid taxes?
HELD: No. The reason for the more liberal treatment of claims for taxes against a decedent's
estate in the form of exception from the application of the statute of non-claims, is not hard to
find. Taxes are the lifeblood of the Government and their prompt and certain availability are
imperious need. (CIR vs. Pineda, 21 SCRA 105). Upon taxation depends the Government ability
to serve the people for whose benefit taxes are collected. To safeguard such interest, neglect or
omission of government officials entrusted with the collection of taxes should not be allowed to
bring harm or detriment to the people, in the same manner as private persons may be made to
suffer individually on account of his own negligence, the presumption being that they take good
care of their personal affairs. This should not hold true to government officials with respect to
matters not of their own personal concern. This is the philosophy behind the government's
exception, as a general rule, from the operation of the principle of estoppel.