COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. OLIMPIO LIMLINGAN, AS SOLE HEIR OF THE DECEASED CECILIA BAUTISTA LIMLINGAN, AND AS ADMINISTRATOR AND/OR EXECUTOR OF THE ESTATE …

LABRADOR, J.:

This is a petition for certiorari to review and set aside two orders of the
Court of First Instance of Manila in Special Proceedings No. 43516 entitled
“Testate Estate of Cecilia Bautista Limlingan”, Hon. Antonio Cañizares,
presiding. The first order is dated February 1, 1962 and declares the testate
proceedings closed “it appearing that the estate and inheritance taxes have
already been paid”. The second order, dated April 26, 1962, denies a motion to
reconsider the order for the closing of the proceeding, on the ground that an
heir is still liable for taxes even after distribution.

On March 7, 1962, about a month after the final; order declaring the
proceedings closed, the Commissioner of Internal Revenue, petitioner herein,
filed a “Manifestation and Motion” in the proceeding to the effect that the
amounts of estate and inheritance taxes appearing in the receipts to have been
paid represent only a portion of the taxes due, that the taxes due are still
being verified and suggested that the proper amounts of the estate and
inheritance taxes be first determined, assessed and collected before the
proceeding can be closed. This manifestation and motion was denied in the second
order of the court already alluded to, which order denied there consideration of
the closing of the case.

On May 29, 1962 the Solicitor General, in representation of the Collector of
Internal Revenue, moved to reconsider the order of closing, citing the
provisions of Section 103 of the National Internal Revenue Code and Rule 91,
Sec. 1 of the Rules of Court. These provisions are as follows:-

“SEC. 103. Payment before delivery by executor or administrator. –
No judge shall authorize the executor or judicial administrator to deliver a
distributive share to any party interested in the estate unless it shall appear
that the estate tax has been paid.” (Nationa1 Internal Revenue Code).

“SEC. 1. When order for distribution of residue made. Testimony taken on
controversy preserved. -“When the debts, funeral charges and expenses of
administration, the allowances to the widow, and inheritance tax, if any,
chargeable to the estate in accordance with law, have been paid, the court, on
the application of the executor or administrator, or of a person interested in
the estate, and after hearing upon notice, shall assign the residue of the
estate to the persons entitled to the same, naming them and the proportions, or
parts, to which each is entitled, a net such persons may demand and recover
their respective shares from the executor or administrator., or any other person
having the same in his possession. If there is a controversy before the court as
to who are the lawful heirs of the deceased person or as to the distributive
share to which each person is entitled under the law, the testimony as to such
controversy shall be taken in writing by the judge, under oath.

“No distribution shall be allowed until the payment of the obligations
above-mentioned has been made or provided for, unless the distributees, or any
of them, give a bond, in a sum to be fixed by the court, conditioned for the
payment of said obligations within such time as the court directs.” (Rule 91,
Rules of Court).

In respondents answer it is alleged that the order of December 29, 1961 had
the effect of closing the proceedings; that when the motions for reconsideration
were presented on March 6 and 7, the estate had already been distributed and so
the court no longer had Jurisdiction of the case.

We find no merit in these objections to the petition. The order closing the
proceedings is dated February 1, 1962 and the motion to reconsider it was filed
on March 7, 1962. Considering that the Commissioner of Internal Revenue had no
knowledge of the proceedings except the payment of the taxes and had had no time
to check the correctness of the amounts paid, We should consider the motion of
the Commissioner of Internal Revenue as a motion for reconsideration under Rule
38 of the Rules of Court and, therefore, presentable within 60 days of the order
sought to be suspended.

In view of the provisions of Rule 91 Sec. 1, of the Rules of Court and Sec.
103 of the National Internal Revenue Code,, We hold, that the court erred and
committed an abuse of discretion in denying the motion for reconsideration of
its order closing the proceedings.

Wherefore, the orders sought to “be reviewed are hereby set aside, and the
court below is directed to proceed as herein indicated.

So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Paredes,
Dizon and Makalintal. JJ., concur.