GESTOPA VS.

CA FACTS- Acceptance in Donation

Acceptance is a mark that the donation is inter vivos. Donations mortis causa, being in
the form of a will, are not required to be accepted by the donee during the donor’s lifetime.

FACTS:
Spouses Danlag own six parcels of land. To four parcels of land, they executed a donation
mortis causa in favor of respondent Mercedes Danlag-Pilapil, reserving donor's rights to
amend, cancel, or revoke the donation and to sell or encumber such properties. Years
later, they executed another donation, this time inter vivos, to six parcels of land in favor
of respondents, reserving their rights to the fruits of the land during their lifetime and for
prohibiting the donee to sell or dispose the properties donated. Subsequently, the
spouses sold 2 parcels to herein petitioners, spouses Gestopa, and eventually revoking
the donation. Respondent filed a petition to quiet title, stating that she had already become
the owner of the parcels of land. Trial Court ruled in favor of petitioners, but CA reversed.

ISSUE:
Whether the (second) donation was inter vivos or mortis causa

RULING:
It was donation inter vivos. The spouses were aware of the difference between the two
donations, and that they needed to execute another deed of donation inter vivos, since it
has a different application to a donation mortis causa. Also, the court stated four reasons
to the matter: (1) that the spouses donated the parcels of land out of love and affection,
a clear indication of a donation inter vivos; (2) the reservation of a lifetime usufruct; (3)
reservation of sufficient properties for maintenance that shows the intention to part with
their six lot; and (4) respondent's acceptance, contained in the deed of donation. Once a
deed of donation has been accepted, it cannot be revoked, except for officiousness or
ingratitude, which the spouses failed to invoke.
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.

Facts:
1. Plaintiff Luis Dison filed a suit against CIR to recover inheritance tax paid under protest
amounting to P2,808.73. Felix Dison, plaintiff's father executed a deed of gift which
transferred 22 tracts of land, reserving to himself during his lifetime the usufruct of 3 tracts.
The donation was formally accepted by plaintiff.

2. The plaintiff (herein petitioner) alleged in his complaint that the tax is illegal since he
received the property by a deed of gift inter vivos duly accepted and registered before the
death of his father. He also contended that Act 2601 being an inheritance tax statute,
does not tax gifts. The defendant answered in general denial with a countermand. The
court dismissed the countermand. Both sides appealed, but the CIR appeal was
dismissed.

Issue: Whether or not the gifts inter vivos are taxable (inheritance tax)

YES.

Inheritance tax is imposed upon the gift inter vivos that plaintiff received from his father
as this was really an advancement upon the inheritance to which he would be entitled
upon the death of the latter. Sec. 1540 of the Administrative Code did not tax gifts per
se but only those which are made to those who shall prove to be heirs, devisees, legatees
and donees mortis causa of the donor. The term 'heirs' include those given the status of
heirs irrespective of the quantity of property they may receive as such

Vidal de Roces vs. Posadas Digest

Vidal de Roces v. Posadas
G.R. No. 34937 March 13, 1933
Imperial, J.:

Facts:
1. Sometime in 1925, plaintiffs Concepcion Vidal de Roces and her husband, as well as
one Elvira Richards, received as donation several parcels of land from Esperanza
Tuazon. They took possession of the lands thereafter and likewise obtained the
respective transfer certificates.

2.The donor died a year after without leaving any forced heir. In her will, which was
admitted to probate, she bequeathed to each of the donees the sum of P5,000. After the
distribution of the estate but before the delivery of their shares, the CIR (appellee) ruled
that plaintiffs as donees and legatees should pay inheritance taxes. The plaintiffs paid the
taxes under protest.

3. CIR filed a demurrer on ground that the facts alleged were not sufficient to constitute a
cause of action. The court sustained the demurrer and ordered the amendment of the
complaint but the appellants failed to do so. Hence, the trial court dismissed the action on
ground that plaintiffs, herein appellants, did not really have a right of action.

4. Plaintiffs (appellant) contend that Sec. 1540 of the Administrative Code does not
include donation inter vivos and if it does, it is unconstitutional, null and void for violating
SEC. 3 of the Jones Law (providing that no law shall embrace more than one subject and
that the subject should be expressed in its titles ; that the Legislature has no authority to
tax donation inter vivos; finally, that said provision violates the rule on uniformity of
taxation.

5. CIR however contends that the word 'all gifts' refer clearly to donation inter vivos and
cited the doctrine in Tuason v. Posadas.

Issue: Whether or not the donations should be subjected to inheritance tax

YES. Sec. 1540 of the Administrative Code clearly refers to those donation inter vivos that
take effect immediately or during the lifetime of the donor, but made in consideration of
the death of the decedent. Those donations not made in contemplation of the decedent's
death are not included as it would be equivalent to imposing a direct tax on property and
not on its transmission.

The phrase 'all gifts' as held in Tuason v. Posadas refers to gifts inter vivos as they are
considered as advances in anticipation of inheritance since they are made in
consideration of death.
VIDAL DE ROCES VS POSADAS JR (58 PHIL 108)
Vidal de Roces vs Posadas Jr
58 Phil 108 [GR No. L-34937 March 13, 1933]

Facts: On March 1o and 12, 1925, Esperanza Tuazon, by means of public documents,
donated certain parcel of lands situated in Manila to the plaintiffs herein who with their
respective husbands accepted them in the same public documents which were duly
recorded in the registry of deeds. By virtue of said donations, the plaintiffs took possession
of the said lands, received the fruits thereof and obtained the corresponding transfer
certificate of title. On January 25, 1926, the donor died in the city of Manila leaving the
forced heir and her will which was admitted to probate, she bequeathed to each of the
donees the sum of Php5,000. After the estate had been distributed among the instituted
legatees and before the delivery of their respective shares, the appellee herein, as
collector of internal revenue, ruled that the appellant as donees and legatees should pay
as inheritance taxes the sums of Php16,673 and Php13,951.45 respectively. At first, the
appellants refused to pay the aforementioned taxes but, at the insistence of the appellee
in order not to delay the adjudication of the legacies, they agreed at last to pay them under
protest. Hence, plaintiff-appellants filed an action to recover the taxes paid under protest.

Issue: Whether or not inheritance tax should be imposed on donations inter vivos.

Held: Yes. The tax collected by the appellee on the properties donated in 1925 really
constitutes an inheritance tax imposed on the transmission of said properties in
contemplation or in consideration of the donor’s death and under circumstance that the
donees were later instituted as the former’s legatees. For this reason, the law considers
such transmission in the form of gifts inter vivos, as advances on the inheritance and
nothing therein violates any constitutional provision, in as much as said legislation is
within the power of the legislature.
Property subject to inheritance tax – the inheritance tax ordinarily applies to all property
within the power of the state to reach passing by will or the laws regulating intestate
succession or by gifts inter vivos in the manner designated by statute, whether such
property be real or personal, tangible or intangible, corporeal or incorporeal.
While a donee inter vivos, who after the predecessor’s death proved to be an heir, legatee
or donee mortis causa, would have to pay the tax, another donee inter vivos who did not
prove to be an heir, a legatee or a donee mortis causa of the predecessor, would be
exempt from such tax.
It may be inferred from the allegations contained in par 2 and 7 thereof that said donations
inter vivos were made in consideration of the donor’s death. We refer to the allegations
that such transmissions were effected in the month of March 1925, that the donor died in
January 1926, and that the donees were instituted legatees in the donor’s will which was
admitted in probate. It is from these allegations, especially the last, that we infer a
presumption juris tantum that said donations were made mortis causa and, as such are
subject to payment of inheritance tax.