Xavier Aseron

Conflicts 4 B
CIR vs Fisher
G.R. No. L 11622 January 28, 1961
Facts: The case relates to the determination and settlement of the hereditary estate left by the deceased Walter G. Stevenson, and the
laws applicable in such case.
- Walter Stevenson died in San Francisco U.S.A on February 22, 1951 and established their permanent residence there.
- He executed his will in San Francisco on May 22, 1947 and duly probated in the Superior Court of California on April 11, 1951.
- Stevenson instituted his wife Beatrice as his sole heiress of his real and personal properties acquired by the spouses while
residing in the Philippines.
- Ancillary administration proceedings were instituted in the CFI of Manila for the settlement of the estate in the Philippines which
declared the estate to pay estate and inheritance taxes.. Hence, Stevensons will was duly admitted to probate by our Court.
- On December 1, 1952, Beatrice Mauricia Stevenson assigned all her rights and interests in the estate to the spouses, Douglas
and Bettina Fisher, respondents herein.
- The Ancillary Administrator filed an amended estate and inheritance tax return which declared that the estate should receive a
deduction in the amount of P 4,000.00 As provided under section 861 (4) of the U.S. Federal Internal Revenue Code (by way of
recpiprocity) and that the estate should be exempted from the imposition of estate and inheritance taxes on the 210,000 shares
of stock in the Mindanao Mother Lode Mines Inc. Hence the estate allegedly overpaid and requested to refund the amount of
P15,259.83. But the Collector denied such claim and hence prompted the respondents to commence an action to claim the
recovery of said amount. The case was brought to the CTA which rendered a decision and both parties appealed. The decision
stated that:
1. The one-half () share of the surviving spouse in the conjugal partnership property as diminished by the obligations properly
chargeable to such property should be deducted from the net estate of the deceased Walter G. Stevenson, pursuant to
Section 89-C of the National Internal Revenue Code.
2. The intangible personal property belonging to the estate of said Stevenson is exempt from inheritance tax, pursuant to the
provision of section 122 of the National Internal Revenue Code in relation to the California Inheritance Tax Law but
decedent's estate is not entitled to an exemption of P4,000.00 in the computation of the estate tax
3. For purposes of estate and inheritance taxation the Baguio real estate of the spouses should be valued at P52,200.00, and
210,000 shares of stock in the Mindanao Mother Lode Mines, Inc. should be appraised at P0.38 per share
As to the decision on the first matter, the lower court stated that in the absence of any ante-nuptial agreement, the contracting
parties are presumed to have adopted the system of conjugal partnership as to the properties acquired during their marriage.
The application of this doctrine to the instant case is being disputed, however, by petitioner Collector of Internal Revenue, who
contends that pursuant to Article 124 of the New Civil Code, the property relation of the spouses Stevensons ought not to be
 determined by the Philippine law, but by the national law of the decedent husband, in this case, the law of England. It is alleged
by petitioner that English laws do not recognize legal partnership between spouses, and that what obtains in that jurisdiction is
another regime of property relation, wherein all properties acquired during the marriage pertain and belong Exclusively to the
husband.

Issue:
1. Whether or not, in determining the taxable net estate of the decedent, one-half () of the net estate should be deducted therefrom as
the share of tile surviving spouse in accordance with our law on conjugal partnership and in relation to section 89 (c) of the National
Internal Revenue Code.
2. Whether or not the estate can avail itself of the reciprocity proviso embodied in Section 122 of the National Internal Revenue Code
granting exemption from the payment of estate and inheritance taxes on the 210,000 shares of stock in the Mindanao Mother Lode
Mines Inc.
3. Whether or not the estate is entitled to the deduction of P4,000.00 allowed by Section 861, U.S. Internal Revenue Code in relation to
section 122 of the National Internal Revenue Code

Held: Regarding the issue on the first matter the SC stated that, as correctly observed by the Tax Court, the pertinent English law that
allegedly vests in the decedent husband full ownership of the properties acquired during the marriage has not been proven by
petitioner. Except for a mere allegation in his answer, which is not sufficient, the record is bereft of any evidence as to what English law
says on the matter. In the absence of proof, the Court is justified, therefore, in indulging in what Wharton calls "processual
presumption," in presuming that the law of England on this matter is the same as our law. Hence only the one-half (1/2) share of the
decedent Stevenson in the conjugal partnership property constitutes his hereditary estate subject to the estate and inheritance taxes;

Regarding the issue on the second matter the SC stated that, Attorney Allison Gibbs, counsel for herein respondents, testified that as
an active member of the California Bar since 1931, he is familiar with the revenue and taxation laws of the State of California wherein
he stated pertinent provisions of the California law as regards exemption of intangible personal properties. It is well-settled that foreign
laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact,
they must be alleged and proved. The SC considered the testimony of Atty. Gibbs who quoted verbatim a section of California Civil
Code and who stated the same was in force at the time the obligations were contracted as sufficient evidence to establish the existence
of said law.
As to the third issue the SC stated that it is clear from both these quoted provisions that the reciprocity must be total, that is, with
respect to transfer or death taxes of any and every character, in the case of the Philippine law, and to legacy, succession, or death
taxes of any and every character, in the case of the California law. Therefore, if any of the two states collects or imposes and does not
exempt any transfer, death, legacy, or succession tax of any character, the reciprocity does not work. This is the underlying principle of
the reciprocity clauses in both laws. Hence the intangible personal property is not exempt from inheritance tax, there existing no
complete total reciprocity as required in section 122 of the National Internal Revenue Code.
In the Philippines, upon the death of any citizen or resident, or non-resident with properties therein, there are imposed upon his estate
and its settlement, both an estate and an inheritance tax. Under the laws of California, only inheritance tax is imposed. On the other
hand, the Federal Internal Revenue Code imposes an estate tax on non-residents not citizens of the United States but does not provide
for any exemption on the basis of reciprocity.
SC declared that lower court erred in exempting the estate in question from payment of P4,000 of estate tax.

Pardo vs Republic
85 Phil 323
(1950)
Facts: - Vicente Rosal Pardo, a Spanish Citizen born in Spain but residing in the Philippines since 1905, where he married a Filipino
woman and where is at present employed, in Manila, with an annual salary of P4800, who is applying in the CFI of Manila to become a
Filipino Citizen through Naturalization.
- The Republic of the Philippines alleged that Pardo is unable to speak and write any of the Principal Filipino languages.
- Pardo testifies that he knows enough Tagalog to be understood in that language which is affirmed by a citizen who has intimately
known Pardo for 27 years, having had business relations with him.
- Trial judge is satisfied by observing him and also by the fact that Pardo arrived in the Philippines when he was only ten years old
and has lived here for 44 years continuously except when visiting Spain for business.
- Pardo introduced a certificate signed by the Consul General of Spain in the Philippines stating that articles 17 and 225 of the
Spanish Civil Code, that Filipinos are eligible to Spanish Citizenship in Spain.
- Pardo also alleged that the Spanish Civil Code at that time is still the basic code in force of the Philippines and that it should be
regarded as matters known to judges of the Philippines by reason of their judicial functions and maybe introduced by them
without introduction of proof.
- A motion for reconsideration was filed by the Republic of the Philippines
Issue: W/N Pardo can be naturalized as a Filipino?
W/N the sufficiency of the evidence on whether the laws of Spain grant Filipinos the right to become naturalized citizens of that
country?

Held: The SC stated that a copy of the foreign law certified only by the local consul of the applicants country does not conform to the
requirement concerning the certification and authentication of such law.
These rules shall not apply to land registration, cadastral and election cases, naturalization and insolvency proceedings, and other
cases not herein provided for, except by analogy or in a suppletory character and whenever practicable and convenience. By reason of
this provision, literal adherence to the Rules of Court, which include rules of evidence, is not obligatory in a proceeding like that under
the Philippine law is judicial in character, and strict compliance with the process prescribed by statute, if there were one, would be
essential, yet when, as here, no specific procedure is indicated in the premises, it is only necessary that the merits of the petition be
passed on and a decision reached on a far consideration of the evidence on satisfactory proof. Accordingly, evidence of the law of a
foreign country or reciprocity regarding the acquisition of citizenship, although not meeting the prescribed rule of practice by section 41
of Rule 123, may be allowed and used as basis for a favorable action if, in the light of all circumstances, the court is satisfied of the
authenticity of the written proof offered.