EN BANC

[G.R. No. 34937. March 13, 1933.]

CONCEPCION VIDAL DE ROCES and her husband, MARCOS ROCES,

and ELVIRA VIDAL DE RICHARDS , plaintiffs-appellants, vs . JUAN
POSADAS, JR., Collector of Internal Revenue , defendant-appellee.

Feria & La O, for appellants.

Attorney-General Jaranilla, for appellee.

SYLLABUS

1. INHERITANCE TAX; GIFTS "INTER VIVOS"; SECTION 1540, ADMINISTRATIVE

CODE. — The gifts referred to in section 1540 of the Revised Administrative Code are,
obviously, those donations inter vivos that take effect immediately or during the
lifetime of the donor, but are made in consideration of his death. Gifts inter vivos, the
transmission of which is not made in consideration of the donor's death, should not be
understood as included within the said legal provision for the reason that it would be
equivalent to levying a direct tax on property and not on the transmission thereof, which
act is not within the scope of the provisions contained in Article XI of Chapter 40 of the
Administrative Code referring expressly to tax on inheritances, legacies and other
acquisitions mortis causa.
2. ID.; ID.; INTERPRETATION. — Such interpretation of the law is not in con ict
with the rule laid down in the case of Tuason and Tuason vs. Posadas (54 Phil., 289),
wherein it was said that the expression "all gifts" refers to gifts inter vivos, because the
law considers them as advances in anticipation of inheritance in the sense that they are
gifts inter vivos made in consideration of death. In that case, it was not held that that
kind of gifts consisted in those made completely independent of death or without
regard to it.
3. ID.; ID.; ID.; VALIDITY. — The legal provision cited is not null and void on the
alleged ground that the subject matter thereof is not embraced in the title of the
section under which it is enumerated. On the contrary, its provisions are perfectly
summarized in the heading, "Tax on Inheritance etc." which constitutes the title of
Article XI. The constitutional provision should not be so strictly construed as to make it
necessary that the title contain a full index to all the contents of the law. It is su cient if
the language used therein is expressed in such a way, that, in case of doubt, it would
afford a means of determining the legislator's intention. (Lewis' Sutherland Statutory
Construction, Vol. II, page 651.)
4. ID.; ID.; JONES LAW. — The circumstance that the Administrative Code was
prepared and compiled strictly in accordance with the provisions of the Jones Law on
that matter should not be overlooked and that, in a compilation of laws such as the
Administrative Code, it is but natural and proper that provisions referring to diverse
matters should be found. (Ayson and Ignacio vs. Provincial Board of Rizal and Municipal
Council of Navotas, 39 Phil., 931.)
5. PLEADING AND PRACTICE; DEMURRER TO THE COMPLAINT; STEPS TO BE
TAKEN WHEN THE PLAINTIFF HAS NO CAUSE OF ACTION. — The demurrer interposed
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 by the appellee was well-founded inasmuch as it appears that the complaint does not
allege facts su cient to constitute a cause of action. When the appellants refused to
amend the same, in spite of the court's order to that effect, they voluntarily waived the
opportunity offered them and they are not now entitled to have the case remanded for
any further proceedings, which would serve no purpose altogether in view of the
insufficiency of the complaint.

DECISION

IMPERIAL , J : p

The plaintiffs herein brought this action to recover from the defendant, Collector
of Internal Revenue, certain sums of money paid by them under protest as inheritance
tax. They appealed from the judgment rendered by the Court of First Instance of Manila
dismissing the action, without costs.
On March 10 and 12, 1925, Esperanza Tuazon, by means of public documents,
donated certain parcels of land 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 certificates of title.
On January 5, 1926, the donor died in the City of Manila without leaving any
forced heir and in her will which was admitted to probate, she bequeathed to each of
the donees the sum of P5,000. After the estate had been distributed among the
instituted legatees and before delivery of their respective shares, the appellee herein, as
Collector of Internal Revenue, ruled that the appellants, as donees and legatees, should
pay as inheritance tax the sums of P16,673 and P13,951.45, respectively. Of these
sums P15,191.48 was levied as tax on the donation to Conception Vidal de Richards
and P1,481.52 on her legacy, and, likewise, P12,388.95 was imposed upon the donation
made to Elvira Vidal de Richards and P1,462.50 on her legacy. At rst the appellants
refused to pay the aforementioned taxes but, at the insistence of the appellee and in
order not to delay the adjudication of the legacies, they agreed at last, to pay them
under protest.
The appellee led a demurrer to the complaint on the ground that the facts
alleged therein were not su cient to constitute a cause of action. After the legal
questions raised therein had been discussed, the court sustained the demurrer and
ordered the amendment of the complaint which the appellants failed to do, whereupon
the trial court dismissed the action on the ground that the aforementioned appellants
did not really have a right of action. In their brief, the appellants assign only one alleged
error, to wit: that the demurrer interposed by the appellee was sustained without
sufficient ground.
The judgment appealed from was based on the provisions of section 1540 of the
Administrative Code which reads as follows:
"SEC. 1540. Additions of gifts and advances. — After the aforementioned
deductions have been made, there shall be added to the resulting amount the
value of all gifts or advances made by the predecessor to any of those who, after
his death, shall prove to be his heirs, devisees, legatees, or donees mortis causa."
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 The appellants contend that the above-mentioned legal provision does not
include donations inter vivos and if it does, it is unconstitutional, null and void for the
following reasons: rst, because it violates section 3 of the Jones Law which provides
that no law should embrace more than one subject, and that subject should be
expressed in the title thereof; second, that the Legislature has no authority to impose
inheritance tax on donations inter vivos; and third, because a legal provision of this
character contravenes the fundamental rule of uniformity of taxation. The appellee, in
turn, contends that the words "all gifts" refer clearly to donations inter vivos and, in
support of his theory, cites the doctrine laid down in the case of Tuason and Tuason vs.
Posadas (54 Phil., 289). After a careful study of the law and the authorities applicable
thereto, we are of the opinion that neither theory re ects the true spirit of the
aforementioned provision. The gifts referred to in section 1540 of the Revised
Administrative Code are, obviously, those donations inter vivos that take effect
immediately or during the lifetime of the donor but are made in consideration or in
contemplation of death. Gifts inter vivos, the transmission of which is not made in
contemplation of the donor's death should not be understood as included within the
said legal provision for the reason that it would amount to imposing a direct tax on
property and not on the transmission thereof, which act does not come within the
scope of the provisions contained in Article XI of Chapter 40 of the Administrative
Code which deals expressly with the tax on inheritances, legacies and other
acquisitions mortis causa.
Our interpretation of the law is not in con ict with the rule laid down in the case
of Tuason and Tuason vs. Posadas, supra. We said therein, as we say now, that the
expression "all gifts" refers to gifts inter vivos inasmuch as the law considers them as
advances on inheritance, in the sense that they are gifts inter vivos made in
contemplation or in consideration of death. In that case, it was not held that that kind of
gifts consisted in those made completely independent of death or without regard to it.
Said legal provision is not null and void on the alleged ground that the subject
matter thereof is not embraced in the title of the section under which it is enumerated.
On the contrary, its provisions are perfectly summarized in the heading, "Tax on
Inheritance, etc." which is the title of Article XI. Furthermore, the constitutional provision
cited should not be so strictly construed as to make it necessary that the title contain a
full index to all the contents of the law. It is su cient if the language used therein is
expressed in such a way that in case of doubt it would afford a means of determining
the legislator's intention. (Lewis' Sutherland Statutory Construction, Vol. II, p. 651.)
Lastly, the circumstance that the Administrative Code was prepared and compiled
strictly in accordance with the provisions of the Jones Law on that matter should not
be overlooked and that, in a compilation of laws such as the Administrative Code, it is
but natural and proper that provisions referring to diverse matters should be found.
(Ayson and Ignacio vs. Provincial Board of Rizal and Municipal Council of Navotas, 39
Phil., 931.)
The appellants question the power of the Legislature to impose taxes on the
transmission of real estate that takes effect immediately and during the lifetime of the
donor, and allege as their reason that such tax partakes of the nature of a land tax
which the law has already created in another part of the Administrative Code. Without
making express pronouncement on this question, for it is unnecessary, we wish to state
that such is not the case in this instance. 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 the circumstance that the donees were later instituted as the former's
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 legatees. For this reason, the law considers such transmissions in the form of gifts
inter vivos, as advances on inheritance and nothing therein violates any constitutional
provision, inasmuch 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 gift inter vivos in the manner
designated by statute, whether such property be real or personal, tangible or
intangible, corporeal or incorporeal." (26 R. C. L., p. 208, par. 177.)
In the case of Tuason and Tuason vs. Posadas, supra, it was also held that
section 1540 of the Administrative Code did not violate the constitutional provision
regarding uniformity of taxation. It cannot be null and void on this ground because it
equally subjects to the same tax all of those donees who later become heirs, legatees
or donees mortis causa by the will of the donor. There would by a repugnant and
arbitrary exception if the provisions of the law were not applicable to all donees of the
same kind. In the case cited above, it was said: "At any rate the argument adduced
against its constitutionality, which is the lack of uniformity, does not seem to be well
founded. It was said that under such an interpretation, while a donee inter vivos who,
after the predecessor's death proved to be an heir, a legatee, or a 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 a tax.
But as these are two different cases, the principle of uniformity is inapplicable to them."
The last question of a procedural nature arising from the case at bar, which
should be passed upon, is whether the case, as it now stands, can be decided on the
merits or should be remanded to the court a quo for further proceedings. According to
our view of the case, it follows that, if the gifts received by the appellants were not
given mortis causa, the same would not be subject to the payment of an inheritance tax
and said appellants would have the right to recover the sums of money claimed by
them. Hence the necessity of ascertaining whether the complaint contains an allegation
to that effect. We have examined said complaint and found nothing of that nature. On
the contrary, it may be inferred from the allegations contained in paragraphs 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 to 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 the payment of inheritance tax.
Wherefore, the demurrer interposed by the appellee was well- founded because it
appears that the complaint did not allege facts su cient to constitute a cause of
action. When the appellants refused to amend the same, in spite of the court's order to
that effect, they voluntarily waived the opportunity offered them and they are not now
entitled to have the case remanded for further proceedings, which would serve no
purpose altogether in view of the insufficiency of the complaint.
Wherefore, the judgment appealed from is hereby a rmed, with costs of this
instance against the appellants. So ordered.
Avanceña, C.J., Villamor, Ostrand, Abad Santos, Hull, Vickers and Butte, JJ.,
concur.

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 Separate Opinions
VILLA-REAL , J., dissenting :

I sustain my concurrence in Justice Street's dissenting opinion in the case of

Tuason and Tuason vs. Posadas (54 Phil., 289).
The majority opinion attempted to distinguish the present case from the above-
mentioned case of Tuason and Tuason vs. Posadas, by interpreting section 1540 of the
Administrative Code in the sense that it establishes the legal presumption juris tantum
that all gifts inter vivos made to persons who are not forced heirs but who are
instituted legatees in the donor's will, have been made in contemplation of the donor's
death. Presumptions are of two kinds: One determined by law which is also called
presumption of law or of right; and another which is formed by the judge from
circumstances antecedent to, coincident with or subsequent to the principal fact under
investigation, which is also called presumption of man ( presuncion de hombre).
(Escriche, Vol. IV, p. 662.) The Civil Code as well as the Code of Civil Procedure
establishes presumptions juris et de jure and juris tantum which the courts should take
into account in deciding questions of law submitted to them for decision. The
presumption which the majority opinion wishes to draw from said section 1540 of the
Administrative Code can neither be found in this Code nor in any of the aforementioned
Civil Code and Code of Civil Procedure. Therefore, said presumption cannot be called
legal or of law. Neither can it be called a presumption of man ( presuncion de hombre)
inasmuch as the majority opinion did not infer it from circumstances antecedent to,
coincident with or subsequent to the principal fact which is the donation itself. In view
of the nature, mode of making and effects of donations inter vivos, the contrary
presumption would be more reasonable and logical; in other words, donations inter
vivos made to persons who are not forced heirs, but who are instituted legatees in the
donor's will, should be presumed as not made mortis causa, unless the contrary is
proven. In the case under consideration, the burden of proof rests with the person who
contends that the donation inter vivos has been made mortis causa.
It is therefore, the undersigned's humble opinion that the order appealed from
should be reversed and the demurrer overruled, and the defendant ordered to le his
answer to the complaint.
Street, J., concurs.

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