G. R. No. L-6779. August 31, 1954

This is an appeal taken by Consuelo L. Vda. De Prieto—hereinafter
referred to as the appellant—as administratix of the testate estate of
Teresa Tuason y de la Paz, from a “resolution” of the Court of First
Instance of Manila, dated February 10, 1953, disapproving an item for
P104,178.44, in her statement of accounts dated December 22, 1952,
representing a payment made to the City Treasurer of Manila as “balance
of estate tax due on the testate estate” aforementioned.

It appears that on February 14, 1952 said court approved the
corresponding project of partition of said estate, which provided, inter
alia, that the estate tax due the Government would be paid directly by
said administratix. The decedent had 14 heirs, who belong to three
families, namely, the Legardas (Rosario, Alejandro, Beatriz, Teresa and
Jose), the Valdezes (Maria Rosario, Teresa, Maria Rita, Jose, Carmen and
Rafael), and the Prietos ( Antonio, Mauro and Benito). The latter are
children of appellant herein. On May 22, 1952 the Valdezes and the
Legardas, hereinafter referred to as the appelles, filed a motion
praying that their respective shares in the estate, as set forth in said
project of partition, be delivered to them. To answer for the payment
of the inheritance tax due from them, appellees filed, also, a bond in
the sum of P710,173.20. Said motion was objected to by the appellant,
upon the ground, among others, that there is still due to the government
by way of “estate tax” the sum of P351,349, of which “corresponden
11/14 partes a los herederos VALDEZ Y LEGARDA, o sea, la cantidad de
P276.059.93.” The Collector of Internal Revenue in turn filed a
“manifestation” stating that

“there is still due and collectible on transmission of the
decedent’s estate infavor of the Legarda and Valdes heirs the balance of
the estate and inheritance taxes in the total sum of P986,223.13,
computed as follows:

Balance of the estate tax…       P276,059.93
Balance of the inheritance tax…  710,173.20
TOTAL                                        P986,233.13”

and declaring, in effect, that he would not object to the motion
above referred to if a bond for the aggregate sum due, as already
adverted, were filed. In conformity therewith, the appellees had,
meanwhile, filed an additional bond for P276,059.93, as their share of
the estate tax. By an order dated June 30, 1952, the court approved the
said bonds for P710,173.20 and P276,059.93 and directed the appellant to
deliver to the appellees their respective shares in the estate of the
deceased and to execute on their favor the corresponding deeds of
conveyance.

On the motion of the appellant, the court, by an order dated August
6, 1952, required the appellees to file a third bond in the sum of
P100,00, to answer for the expenses of administration. In compliance
with this order, the appellees filed said bond, which was approved by
the court on August 13, 1952. Soon after, or on September 6, 1952, the
court approved the bonds filed by the Prietos, with the conformity of
their mother, appellant herein, to answer for the payment of their
respective shares of the estate and the inheritance taxes, and ordered
the delivery to them of their respective shares in the estate of the
decendant. On September 16, 1952, the appellees moved for the
cancellation of their bond for P276,059.93, upon the ground that their
share of the estate tax, payment of which was granted their by, had been
satisfied already. This allegation was borne dated October 1, 1952,
reading as follows:

“With reference to your letter of the 27 the ultimo, wherein you
requested the cancellation of the Philippine Guarantee Co., Inc. Bond
No. 27466 in the sum of P276,059.93, which was filed in the case
entitled ‘Testate Estate of the Late Teresa Tuason y De la Paz’, Sp.
Proc. No. 13447 of the Court of First Instance of Manila, to guarantee
the payment of the Court of First Instance of Manila, to guarantee the
payment of the estate taxes due from the Valdes and Legarda heirs, I
have the honor to inform you that, it appearing from the Estate Tax
Receipts received by this Office that the estate taxes due and assessed
against the Valdeses and Legardas were already paid, this Office will
interpose no objection to the motion filed by you in court of
cancellation of the said bond, the hearing of which is set by the court
on October 2, 1952.

“A copy of this letter is being furnished to the Court of First
Instance of Manila for its information.” (Manila CFI Records, Vol. I, p.
615)

According, by an order dated October 24, 1952, said bond for
P275,059.93 was cancelled. Meanwhile, or on October 9, 1952, appellant
had paid the City Treasurer of Manila the sum of P104,178.44, as balance
of the estate tax due from the decedent. When this sum was included on
the statement of accounts by her, on or about December 20, 1952, the
appellees objected to its approval, alleging that the said item
represented the share of appellant’s children, the Prietos, in the
estate tax; that when appellant paid said sum of P104,178.44, she knew
that the appellees had already settled their liability for the estate
tax; and that, accordingly, she should be required to reimburse the
aforementioned sum of P104,178.44. By an order dated February 10, 1953,
the lower court sustained this objection, and approved appellant’s
accounts, with the exception of said item for P104,178.44. Hence, the
present appeal.

Appellant maintains that the lower court erred in disapproving said
item of P104,178.44, inasmuch as the project of partition, approved on
February 14, 1952, specifically provided that the estate tax would be
paid by her and, pursuant to Section 95 of the National Internal Revenue
Code, “the estate tax * * * shall be paid by the executor or
administrator.” The issue before us, but who shall bear the burden
of its payment. The law is silent thereon, and this is easily
understandable when we considered that the government is mainly
interested in insuring the collection of the tax. For this reason, it
directs that the same be paid by the executor or administrator “before
delivery to any beneficiary of his distributive share of the estate.”
Upon the other hand, in instituting the appellees and the Prietos as her
heirs, the decendent ordained, in the seventh paragraph of her last
will and testament, that “en lo que respecta as ‘estate and inheritance
tax’ cada uno pagara de lo que reciba* * *.” (Italics
supplied). This clause, pursuant to which each heir shall pay, from his
own share, the corresponding estate and inheritance taxes, was
incorporated by reference in the project of partition, which explicitly
declared that “*** en lo que respecta al estate and inhereance tax
cada uno pagara de lo ue reciba, de acuerdo con el parrafo SEPTIMO del
Testamento Exhibito ‘A’.” (Italics ours)

Consequently, the provision of the project of partition, directing
the administratix to pay the estate tax, should be understood to mom
mean that payment thereof shall be for the account of the heirs,
in proportion to their respective shares, not share and share alike, as
contended by appellant herein. This conclusion becomes inescapable when
we bear in mind that when that when the appellees later moved for the
delivery of their respective shares in the estate, the Collector of
Internal Revenue in effect express no objection thereto, provided that
sufficient bonds be given to the answer for the payment of the estate
tax due from said appellees, and that, in the bonds subsequently filed
by the latter, they assumed as principals the obligation to
settle the corresponding estate tax. When the Court approved said bonds
and granted the aforesaid motion of the appellees, it was understood,
therefore, that the heirs would satisfy their respective shares
of the estate tax.

It appearing from the records that the appellees have already paid
the estate tax corresponding to their respective shares, it is obvious
that when appellant received the communication of the Collector of
Internal Revenue demanding payment of the sum of P104,178.44 as balance
of the estate tax, she knew that this sum represented the share of her
children, the Prietos, from whom, therefore, she should have demanded
its satisfaction. Accordingly, when she paid the same, without making
such demand, she assumed the corresponding risk, subject to her right to
seek reimbursement from said heirs, the Prietos. WHEREFORE, without
prejudice to said right of action of appellant herein, the resolution
appealed from is hereby affirmed, with costs against the appellant.

aras, C. J., Pablo, Bengzon,Padilla, Montemayor, Reyes A., Jugo,
Bautista Angelo, Labrador and Reyes JJ., concur.