Dison vs Posadas No. 36770. November 4, 1932

Facts:

                This is an appeal from the decision of the Court of First Instance of Pampanga in favor of the defendant Juan Posadas Jr., Collector of Internal Revenue, in a suit filed by the plaintiff, Luis DIson, for the recovery of an inheritance tax in the sum of P2,808.73 paid under protest.            

On April 9, 1928, a Deed of gift was executed by Felix Dison in favor of his son Luis Dison. The Deed of gift transferred twenty-two tracts of land to the donee, reserving to the donor for his life the usufruct of three tracts. It was acknowledged by the donor before a notary public then on April 17, Luis formally accepted the said gift. Felix Dison died on April 21, 1928.

Issue:

                Whether or not Luis Dison is liable for the payment of inheritance tax.

Ruling:

                Yes. He is liable.

                Section 1540 of the Administrative Code subjects plaintiff-appellant to the payment of the inheritance tax upon the gift inter vivos he received from his father and which really was advancement upon the inheritance he would be entitled to receive upon the death of the donor. The section does not tax gifts per se, but only those gifts are made to those who shall prove to be the heirs, devisees, legatees or donees mortis causa of the donor.