G.R. No. 30921. February 16, 1929
EMILIANA PINEDA ET AL., PETITIONERS, VS. COURT OF FIRST INSTANCE OF TAYABAS AND COLLECTOR OF INTERNAL REVENUE, RESPONDENTS.
STREET, J.:
this court by Emiliana Pineda and Dominga G. Villadiego, as
administratrixes of the estate of Felix Villadiego, against the Judge
of the Court of First Instance of Tayabas and the Collector of Internal
Revenue, with a view to the abrogation of an order entered on December
8, 1928, by the respondent judge in the matter of the intestacy of
Felix Villadiego, deceased (civil cause No. 1661 of said court),
wherein his Honor ordered the petitioners to pay to the Collector of
Internal Revenue, within the period of fifteen days, the sum of P240.26
in satisfaction of income taxes assessed against the deceased for the
years 1925 and 1926; and further ordering that, in case of the failure
of the administratrixes to make such payment, said taxes should
constitute a preferential charge upon the shares pertaining to the
heirs or legatees of the deceased. The cause is now before us for
determination upon petition and answer, supplemented by oral testimony
submitted by the petitioners.
Before his death, the decedent, Felix Villadiego, had submitted to
the Collector of Internal Revenue the returns corresponding to his
income tax for the years 1925 and 1926; and he had also, before his
death, paid the taxes which the Collector of Internal Revenue had
estimated to be due upon said returns. After the death of the said
Felix Villadiego on May 7, 1927, intestate proceedings were duly opened
in the matter of his estate, and the petitioners herein were appointed
as his administratrixes (civil cause No. 1661 in the Court of First
Instance of Tayabas). On the same date a committee on claims was also
appointed; and at the time the present petition was filed, said
committee was still exercising its functions.
It further appears that, while said proceedings were pending, the
Collector of Internal Revenue made a revision of the assessment of the
income tax due from the deceased for the years 1925 and 1926, with the
result that he found that the tax for said years was underassessed to
the extent of P111.30 for the year 1925 and P128.96 for the year 1926,
making a total for the two years of P240.26.
In view of this fact the provincial fiscal of Tayabas, on behalf of
the Government, filed a motion before the respondent judge in the
intestate proceedings aforesaid, showing that the deceased Felix
Villadiego was indebted to the Government of the Philippine Islands,
upon the account above indicated, to the extent of P240.26, and asking
that, in the adjudication to be made concerning the property of the
deceased in the aforesaid proceedings, this additional tax should be
declared to constitute a preferential charge in favor of the
Government. Accompanying this motion was Exhibit A, showing the alleged
true status of the tax of the deceased for the years stated, as
reliquidated by the Collector. On December 8th, thereafter, the
respondent judge made the order which is the subject of complaint in
this petition, ordering the administratrixes to pay the tax as stated
in the first paragraph of this opinion, and declaring that, in case of
their failure so to do, the claim should constitute a preferred charge
in favor of the Government,
The order referred to is now made the subject of attack on two main
grounds, namely, first, that the court had no jurisdiction to order the
payment of the claim in question without the presentation of the same
for allowance in usual course to the committee on claims; and,
secondly, that the order was in fact made without adequate notice to
the administratrixes, as a result of which they were deprived of the
opportunity of making defense against the claim.
To reply to these contentions in turn, we observe that, while1 there
are a few courts that have expressed themselves to the effect that a
claim for taxes due to the Government should be presented like other
claims to the committee appointed for the purpose of passing upon
claims, the clear weight of judicial authority is to the effect that
claims for taxes and assessments, whether assessed before or after the
death of the decedent, are not required to be presented to the
committee. (24 C. J., 325; People vs. Olvera, 43 Cal., 492; Hancock vs. Whittemore, 50 Cal., 522; Findley vs. Taylor, 97 Iowa, 420; Bogue vs. Laughlin, 149 Wis., 271; 40 L. R. A. [N. S.], 927; Ann. Cas. 1913 C, p. 1367).
In the case before us the tax now, claimed by the Government was not
due until it was assessed; and this assessment was not made until after
the individual against whom the tax was assessed had died. The claim
therefore arose during the course of administration. The law imposes on
the administrator of a deceased person the duty to pay taxes assessed
against the property of the deceased; and as is well known, in case of
insolvency, such taxes constitute a preferential claim in the
distribution of assets over ordinary debts, under section 735 of the
Code of Civil Procedure. In the case before us it is not suggested that
the estate is insolvent, and there is therefore no danger of imperiling
the payment of funeral expenses or expenses of last sickness by
ordering the immediate payment of these taxes.
As it is the duty of an administrator to pay taxes assessed against
the estate of the decedent, where funds are available for that purpose,
the court, in the exercise of its administrative control over the
administrator, undoubtedly has authority to direct the payment of
assessed taxes. Moreover, it is evident that the act of the court in
directing the petitioners to pay this tax does not have the effect of
depriving the petitioners of the remedy, open to every taxpayer, of
paying the tax under protest and bringing an action to recover the
money; and assuming that leave of the court might properly be required
for the institution of such action, it is to be assumed that such leave
would be granted if the petitioners should be able to show to the court
any plausible ground for concluding that the tax had been improperly
collected.
In view of what has been said, the second point raised by the
petition, namely, that the motion made by the provincial fiscal, asking
the court to declare the additional tax a lien upon the shares of the
heirs, was notified to the attorney for the petitioners only on the day
before the motion was heard and that the refusal of the court to
postpone action thereon, in obedience to the telegraphic request of
said attorney, deprived the petitioners of the opportunity to make
defense, loses its force.
In this connection we observe that the petitioners are mistaken in
assuming, as they appear to do, that the reliquidation of the income
tax of Felix Villadiego for the years 1925 and 1926 was beyond the
competency of the respondent Collector of Internal Revenue; for, if the
original assessment was incorrect, the Government was not concluded
thereby, and it was clearly within the power of the Collector to
reassess and collect any additional tax due upon the returns for said
years, even after the death of the taxpayer. The Government is never
estopped by mistake or error on the part of its agents. It follows
that, in so far as this record shows, the petitioners have not made it
appear that the additional tax claimed by the Collector is not in fact
due and collectible. The assessment of the tax by the Collector
creates, it must be remembered, a charge that is at least prima facie valid.
From what has been said it follows that the petition is not well
founded. The same will therefore be dismissed, with costs against the
petitioners. So ordered.
Johnson, Villamor, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur.
Malcolm, J., dissents.