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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-22734 September 15, 1967 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. MANUEL B. PINEDA, as one of the heirs of deceased ATANASIO PINEDA, respondent. Office of the Solicitor General for petitioner. Manuel B. Pineda for and in his own behalf as respondent. BENGZON, J.P., J.: On May 23, 1945 Atanasio Pineda died, survived by his wife, Felicisima Bagtas, and 15 children, the eldest of whom is Manuel B. Pineda, a lawyer. Estate
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  Republic of the Philippines SUPREME COURT ManilaEN BANC G.R. No. L-22734 September 15, 1967COMMISSIONER OF INTERNAL REVENUE, petitioner,vs. MANUEL B. PINEDA, as one of the heirs of deceased ATANASIO PINEDA, respondent. Office of the Solicitor General for petitioner.Manuel B. Pineda for and in his own behalf as respondent.   BENGZON, J.P., J.: On May 23, 1945 Atanasio Pineda died, survived by his wife, Felicisima Bagtas, and 15 children, the eldest of whom is Manuel B.Pineda, a lawyer. Estate proceedings were had in the Court of First Instance of Manila (Case No. 71129) wherein the surviving widowwas appointed administratrix. The estate was divided among and awarded to the heirs and the proceedings terminated on June 8, 1948.Manuel B. Pineda's share amounted to about P2,500.00.After the estate proceedings were closed, the Bureau of Internal Revenue investigated the income tax liability of the estate for theyears 1945, 1946, 1947 and 1948 and it found that the corresponding income tax returns were not filed. Thereupon, the representative of the Collector of Internal Revenue filed said returns for the estate on the basis of information and data obtained from the aforesaid estateproceedings and issued an assessment for the following:1.Deficiency income tax1945P135.831946436.9519471,206.91P1,779.69Add: 5% surcharge88.981% monthly interest fromNovember 30, 1953 to April 15,1957720.77Compromise for late filing80.00Compromise for late payment40.00Total amount dueP2,707.44===========2.Additional residence tax for 1945P14.50===========3.Real Estate dealer's tax for the fourthquarter of 1946 and the whole year of 1947P207.50===========Manuel B. Pineda, who received the assessment, contested the same. Subsequently, he appealed to the Court of Tax Appealsalleging that he was appealing only that proportionate part or portion pertaining to him as one of the heirs. After hearing the parties, the Court of Tax Appeals rendered judgment reversing the decision of the Commissioner on the groundthat his right to assess and collect the tax has prescribed. The Commissioner appealed and this Court affirmed the findings of the TaxCourt in respect to the assessment for income tax for the year 1947 but held that the right to assess and collect the taxes for 1945 and1946 has not prescribed. For 1945 and 1946 the returns were filed on August 24, 1953; assessments for both taxable years were madewithin five years therefrom or on October 19, 1953; and the action to collect the tax was filed within five years from the latter date, onAugust 7, 1957. For taxable year 1947, however, the return was filed on March 1, 1948; the assessment was made on October 19, 1953,more than five years from the date the return was filed; hence, the right to assess income tax for 1947 had prescribed. Accordingly, Weremanded the case to the Tax Court for further appropriate proceedings. 1 In the Tax Court, the parties submitted the case for decision without additional evidence.On November 29, 1963 the Court of Tax Appeals rendered judgment holding Manuel B. Pineda liable for the paymentcorresponding to his share of the following taxes:Deficiency income tax1945P135.831946436.95Real estate dealer's fixedtax 4th quarter of 1946and whole year of 1947P187.50The Commissioner of Internal Revenue has appealed to Us and has proposed to hold Manuel B. Pineda liable for the payment of all the taxes found by the Tax Court to be due from the estate in the total amount of P760.28 instead of only for the amount of taxescorresponding to his share in the estate. 1awphîl.nèt  Manuel B. Pineda opposes the proposition on the ground that as an heir he is liable for unpaid income tax due the estate only up tothe extent of and in proportion to any share he received. He relies on Government of the Philippine Islands v. Pamintuan 2 where We heldthat after the partition of an estate, heirs and distributees are liable individually for the payment of all lawful outstanding claims againstthe estate in proportion to the amount or value of the property they have respectively received from the estate. We hold that the Government can require Manuel B. Pineda to pay the full amount of the taxes assessed. 1  Pineda is liable for the assessment as an heir and as a holder-transferee of property belonging to the estate/taxpayer. As an heir heis individually answerable for the part of the tax proportionate to the share he received from the inheritance. 3 His liability, however, cannotexceed the amount of his share. 4 As a holder of property belonging to the estate, Pineda is liable for he tax up to the amount of the property in his possession. Thereason is that the Government has a lien on the P2,500.00 received by him from the estate as his share in the inheritance, for unpaidincome taxes 4a for which said estate is liable, pursuant to the last paragraph of Section 315 of the Tax Code, which we quote hereunder:If any person, corporation, partnership, joint-account ( cuenta en participacion ), association, or insurance company liable to pay theincome tax, neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the Government of the Philippinesfrom the time when the assessment was made by the Commissioner of Internal Revenue until paid with interest, penalties, and costs thatmay accrue in addition thereto upon all property and rights to property belonging to the taxpayer: . . .By virtue of such lien, the Government has the right to subject the property in Pineda's possession, i.e., the P2,500.00, to satisfy theincome tax assessment in the sum of P760.28. After such payment, Pineda will have a right of contribution from his co-heirs, 5 to achievean adjustment of the proper share of each heir in the distributable estate.All told, the Government has two ways of collecting the tax in question. One, by going after all the heirs and collecting from eachone of them the amount of the tax proportionate to the inheritance received. This remedy was adopted in Government of the PhilippineIslands v. Pamintuan , supra . In said case, the Government filed an action against all the heirs for the collection of the tax. This actionrests on the concept that hereditary property consists only of that part which remains after the settlement of all lawful claims against theestate, for the settlement of which the entire estate is first liable. 6 The reason why in case suit is filed against all the heirs the tax due fromthe estate is levied proportionately against them is to achieve thereby two results: first, payment of the tax; and second, adjustment of theshares of each heir in the distributed estate as lessened by the tax  .Another remedy, pursuant to the lien created by Section 315 of the Tax Code upon all property and rights to property belonging tothe taxpayer for unpaid income tax, is by subjecting said property of the estate which is in the hands of an heir or transferee to thepayment of the tax due, the estate. This second remedy is the very avenue the Government took in this case to collect the tax. TheBureau of Internal Revenue should be given, in instances like the case at bar, the necessary discretion to avail itself of the mostexpeditious way to collect the tax as may be envisioned in the particular provision of the Tax Code above quoted, because taxes are thelifeblood of government and their prompt and certain availability is an imperious need. 7 And as afore-stated in this case the suit seeks toachieve only one objective: payment of the tax. The adjustment of the respective shares due to the heirs from the inheritance, aslessened by the tax, is left to await the suit for contribution by the heir from whom the Government recovered said tax.WHEREFORE, the decision appealed from is modified. Manuel B. Pineda is hereby ordered to pay to the Commissioner of InternalRevenue the sum of P760.28 as deficiency income tax for 1945 and 1946, and real estate dealer's fixed tax for the fourth quarter of 1946and for the whole year 1947, without prejudice to his right of contribution for his co-heirs. No costs. So ordered. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur. Footnotes 1 Collector of Internal Revenue v. Manuel B. Pineda as one of the heirs of the deceased Atanasio Pineda, L-14522, May 31, 1961. 2 55 Phil. 13. 3 Government of the Philippine Islands v. Santos, 56 Phil. 827. 4 Art. 1311, Civil Code of the Philippines. 4a Real estate dealer's fixed tax is subject to the same lien pursuant to the first paragraph of Sec. 355, Tax Code. 5 Government of the Philippine Islands v. Santos, G.R. No. 34152, Dec. 15, 1931, 56 Phil. 827. 6 Lopez v. Enriquez, 16 Phil. 336. 7 Bull v. United States, 295 U.S. 247, 15 AFTR 1069, 1073.Republic of the Philippines SUPREME COURT ManilaFIRST DIVISION G.R. No. L-31364 March 30, 1979 2  MISAEL P. VERA, as Commissioner of Internal Revenue, and JAIME ARANETA, as Regional Director, Revenue Region No. 14,Bureau of Internal Revenue, petitioners,vs. HON. JOSE F. FERNANDEZ, Judge of the Court of First Instance of Negros Occidental, Branch V, and FRANCIS A. TONGOY,Administrator of the Estate of the late LUIS D. TONGOY respondents.  DE CASTRO, J.: Appeal from two orders of the Court of First Instance of Negros Occidental, Branch V in Special Proceedings No. 7794, entitled: IntestateEstate of Luis D. Tongoy, the first dated July 29, 1969 dismissing the Motion for Allowance of Claim and for an Order of Payment of Taxes by the Government of the Republic of the Philippines against the Estate of the late Luis D. Tongoy, for deficiency income taxes for the years 1963 and 1964 of the decedent in the total amount of P3,254.80, inclusive 5% surcharge, 1% monthly interest and compromisepenalties, and the second, dated October 7, 1969, denying the Motion for reconsideration of the Order of dismissal.The Motion for allowance of claim and for payment of taxes dated May 28, 1969 was filed on June 3, 1969 in the abovementioned specialproceedings, (par. 3, Annex A, Petition, pp. 1920, Rollo). The claim represents the indebtedness to the Government of the late Luis D.Tongoy for deficiency income taxes in the total sum of P3,254.80 as above stated, covered by Assessment Notices Nos. 11-50-29-1-11061-21-63 and 11-50-291-1 10875-64, to which motion was attached Proof of Claim (Annex B, Petition, pp. 21-22, Rollo). TheAdministrator opposed the motion solely on the ground that the claim was barred under Section 5, Rule 86 of the Rules of Court (par. 4,Opposition to Motion for Allowance of Claim, pp. 23-24, Rollo). Finding the opposition well-founded, the respondent Judge, Jose F.Fernandez, dismissed the motion for allowance of claim filed by herein petitioner, Regional Director of the Bureau of Internal Revenue, inan order dated July 29, 1969 (Annex D, Petition, p. 26, Rollo). On September 18, 1969, a motion for reconsideration was filed, of theorder of July 29, 1969, but was denied in an Order dated October 7, 1969.Hence, this appeal on certiorari, petitioner assigning the following errors:1. The lower court erred in holding that the claim for taxes by the government against the estate of Luis D. Tongoy was filed beyond theperiod provided in Section 2, Rule 86 of the Rules of Court.2. The lower court erred in holding that the claim for taxes of the government was already barred under Section 5, Rule 86 of the Rules of Court.which raise the sole issue of whether or not the statute of non-claims Section 5, Rule 86 of the New Rule of Court, bars claim of thegovernment for unpaid taxes, still within the period of limitation prescribed in Section 331 and 332 of the National Internal Revenue Code.Section 5, Rule 86, as invoked by the respondent Administrator in hid Oppositions to the Motion for Allowance of Claim, etc. of thepetitioners reads as follows:All claims for money against the decedent, arising from contracts, express or implied, whether the same be due, not due, or contingent, allclaims for funeral expenses and expenses for the last sickness of the decedent, and judgment for money against the decedent, must befiled within the time limited in they notice; otherwise they are barred forever, except that they may be set forth as counter claims in anyaction that the executor or administrator may bring against the claimants. Where the executor or administrator commence an action, or prosecutes an action already commenced by the deceased in his lifetime, the debtor may set forth may answer the claims he has againstthe decedents, instead of presenting them independently to the court has herein provided, and mutual claims may be set off against eachother in such action; and in final judgment is rendered in favored of the decedent, the amount to determined shall be considered the truebalance against the estate, as though the claim has been presented directly before the court in the administration proceedings. Claimsnot yet due, or contingent may be approved at their present value.A perusal of the aforequoted provisions shows that it makes no mention of claims for monetary obligation of the decedent created by law,such as taxes which is entirely of different character from the claims expressly enumerated therein, such as: all claims for money againstthe decedent arising from contract, express or implied, whether the same be due, not due or contingent, all claim for funeral expensesand expenses for the last sickness of the decedent and judgment for money against the decedent. Under the familiar rule of statutoryconstruction of  expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not mentioned. Thus, if a statute enumerates the things upon which it is to operate, everything else must necessarily, and by implication be excluded from itsoperation and effect (Crawford, Statutory Construction, pp. 334-335).In the case of  Commissioner of Internal Revenue vs. Ilagan Electric & Ice Plant, et al. , G.R. No. L-23081, December 30, 1969, it was heldthat the assessment, collection and recovery of taxes, as well as the matter of prescription thereof are governed by the provisions of theNational Internal revenue Code, particularly Sections 331 and 332 thereof, and not by other provisions of law. (See also Lim Tio, Dy Hengand Dee Jue vs. Court of Tax Appeals & Collector of Internal Revenue, G.R. No. L-10681, March 29, 1958). Even without beingspecifically mentioned, the provisions of Section 2 of Rule 86 of the Rules of Court may reasonably be presumed to have been also in themind of the Court as not affecting the aforecited Section of the National Internal Revenue Code.In the case of  Pineda vs. CFI of Tayabas, 52 Phil. 803, it was even more pointedly held that taxes assessed against the estate of adeceased person ... need not be submitted to the committee on claims in the ordinary course of administration. In the exercise of itscontrol over the administrator, the court may direct the payment of such taxes upon motion showing that the taxes have been assessedagainst the estate. The abolition of the Committee on Claims does not alter the basic ruling laid down giving exception to the claim for taxes from being filed as the other claims mentioned in the Rule should be filed before the Court. Claims for taxes may be collected evenafter the distribution of the decedent's estate among his heirs who shall be liable therefor in proportion of their share in the inheritance.(Government of the Philippines vs. Pamintuan, 55 Phil. 13).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 areimperious need. (Commissioner of Internal Revenue vs. Pineda, G. R. No. L-22734, September 15, 1967, 21 SCRA 105). Upon taxationdepends 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, inthe same manner as private persons may be made to suffer individually on account of his own negligence, the presumption being thatthey take good care of their personal affairs. This should not hold true to government officials with respect to matters not of their ownpersonal concern. This is the philosophy behind the government's exception, as a general rule, from the operation of the principle of  3  estoppel. (Republic vs. Caballero, L-27437, September 30, 1977, 79 SCRA 177; Manila Lodge No. 761, Benevolent and Protective Order of the Elks Inc. vs. Court of Appeals, L-41001, September 30, 1976, 73 SCRA 162; Sy vs. Central Bank of the Philippines, L-41480, April30,1976, 70 SCRA 571; Balmaceda vs. Corominas & Co., Inc., 66 SCRA 553; Auyong Hian vs. Court of Tax Appeals, 59 SCRA 110;Republic vs. Philippine Rabbit Bus Lines, Inc., 66 SCRA 553; Republic vs. Philippine Long Distance Telephone Company, L-18841,January 27, 1969, 26 SCRA 620; Zamora vs. Court of Tax Appeals, L-23272, November 26, 1970, 36 SCRA 77; E. Rodriguez, Inc. vs.Collector of Internal Revenue, L- 23041, July 31, 1969, 28 SCRA 119.) As already shown, taxes may be collected even after thedistribution of the estate of the decedent among his heirs (Government of the Philippines vs. Pamintuan, supra ; Pineda vs. CFI of Tayabas, supra Clara Diluangco Palanca vs. Commissioner of Internal Revenue, G. R. No. L-16661, January 31, 1962).Furthermore, as held in Commissioner of Internal Revenue vs. Pineda, supra, citing the last paragraph of Section 315 of the Tax Codepayment of income tax shall be a lien in favor of the Government of the Philippines from the time the assessment was made by theCommissioner of Internal Revenue until paid with interests, penalties, etc. By virtue of such lien, this court held that the property of theestate already in the hands of an heir or transferee may be subject to the payment of the tax due the estate.  A fortiori  before theinheritance has passed to the heirs, the unpaid taxes due the decedent may be collected, even without its having been presented under Section 2 of Rule 86 of the Rules of Court. It may truly be said that until the property of the estate of the decedent has vested in the heirs,the decedent, represented by his estate, continues as if he were still alive, subject to the payment of such taxes as would be collectiblefrom the estate even after his death. Thus in the case above cited, the income taxes sought to be collected were due from the estate, for the three years 1946, 1947 and 1948 following his death in May, 1945.Even assuming arguendo that claims for taxes have to be filed within the time prescribed in Section 2, Rule 86 of the Rules of Court, theclaim in question may be filed even after the expiration of the time srcinally fixed therein, as may be gleaned from the italicized portion of the Rule herein cited which reads:Section 2. Time within which claims shall be filed. - In the notice provided in the preceding section, the court shall state the time for thefiling of claims against the estate, which shall not be more than twelve (12) nor less than six (6) months after the date of the firstpublication of the notice. However, at any time before an order of distribution is entered, on application of a creditor who has failed to filehis claim within the time previously limited the court may, for cause shown and on such terms as are equitable, allow such claim to beflied within a time not exceeding one (1) month. (Emphasis supplied)In the instant case, petitioners filed an application (Motion for Allowance of Claim and for an Order of Payment of Taxes) which, thoughfiled after the expiration of the time previously limited but before an order of the distribution is entered, should have been granted by therespondent court, in the absence of any valid ground, as none was shown, justifying denial of the motion, specially considering that it wasfor allowance Of claim for taxes due from the estate, which in effect represents a claim of the people at large, the only reason given for the denial that the claim was filed out of the previously limited period, sustaining thereby private respondents' contention, erroneously ashas been demonstrated.WHEREFORE, the order appealed from is reverse. Since the Tax Commissioner's assessment in the total amount of P3,254.80 with 5 %surcharge and 1 % monthly interest as provided in the Tax Code is a final one and the respondent estate's sole defense of prescriptionhas been herein overruled, the Motion for Allowance of Claim is herein granted and respondent estate is ordered to pay and dischargethe same, subject only to the limitation of the interest collectible thereon as provided by the Tax Code. No pronouncement as to costs.SO ORDERED. Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and Melencio-Herrera, JJ., concur. Republic of the Philippines SUPREME COURT ManilaEN BANC G.R. No. 144104 June 29, 2004 4
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