EN BANC

[G.R. No. 29204. December 29, 1928.]

RUFINA ZAPANTA ET AL. , plaintiffs-appellees , vs. JUAN

POSADAS, JR., ET AL., defendants-appellants.

[G.R. No. 29205. December 29, 1928.]

ROSARIO PINEDA, plaintiff-appellee, vs. JUAN POSADAS, JR.,

ET AL., defendants-appellants.

[G.R. No. 29206. December 29, 1928.]

OLIMPIO GUANZON, ET AL., plaintiffs and appellees, vs. JUAN

POSADAS, JR., ET AL., defendants-appellants.

[G.R. No. 29207. December 29, 1928.]

LEONCIA PINEDA, ET AL., plaintiffs and appellees, vs. JUAN

POSADAS, JR., ET AL., defendants and appellants.

[G.R. No. 29208. December 29, 1928.]

EMIGDIO DAVID, ET AL., plaintiffs-appellees , vs. JUAN

POSADAS, JR., ET AL., defendants-appellants.

[G.R. No. 29209. December 29, 1928.]

GERONIMA PINEDA, plaintiff-appellee, vs. JUAN POSADAS, JR.,

ET AL., defendants-appellants.

Solicitor-General Reyes, for appellants.

Aurelio Pineda, for appellees.

SYLLABUS

1. INTERNAL REVENUE; INHERITANCE: TAX UPON DONATIONS. —

The principal characteristics of a donation mortis causa, which distinguish it
essentially from a donation inter vivos, are that in the former it is the donor's
death that determines the acquisition of, or the right to, the property, and
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 that it is revocable at the will of the donor. In the donations in question, their
effect, that is, the acquisition of, or the right to, the property, was produced
while the donor was still alive, for, according to their expressed terms they
were to have this effect upon acceptance, and this took place during the
donor's lifetime.
2. ID.; ID. — Neither can these donations be considered as an
advance on inheritance or legacy, according to the terms of section 1536 of
the Administrative Code, because they are neither an inheritance nor a
legacy. And it cannot be said that the plaintiffs received such advance on
inheritance or legacy, since they were not heirs or legatees of their
predecessor in interest upon his death (sec. 1540 of the Administrative
Code). Neither can it be said that they obtained this inheritance or legacy by
virtue of a document which does not contain the requisites of a will (sec. 618
of the Code of Civil Procedure),

DECISION

AVANCEÑA, C.J : p

Father Braulio Pineda died in January 1925 without any ascendants or

descendants, leaving a will in which he instituted his sister Irene Pineda as
his sole heiress. During his lifetime Father Braulio donated some of his
property by public instruments to the six plaintiffs, severally, with the
condition that some of them would pay him a certain amount of rice, and
others of money every year, and with the express provision that failure to
fulfill this condition would revoke the donations ipso facto. These six plaintiff-
donees are relatives, and some of them brothers of Father Braulio Pineda.
The donations contained another clause that they would take effect upon
acceptance. They were accepted during Father Braulio's lifetime by every
one of the donees.
Every one of the six plaintiffs filed a separate action against the
Collector of Internal Revenue and his deputy for the sums of which each of
them paid, under protest, as inheritance tax on the property donated to
them, in accordance with section 1536 of the Administrative Code, as
amended by section 10 of Act No. 2835, and by section 1 of Act No. 3031.
Section 1536 of the Administrative Code reads:
"Every transmission by virtue of inheritance, devise, bequest, gift
mortis causa or advance in anticipation of inheritance, devise, or
bequest of real property located in the Philippine Islands and real rights
in such property; . . ."
The trial court in deciding these six cases, held that the donations to
the six plaintiffs made by the deceased Father Braulio Pineda are donations
inter vivos, and therefore, not subject to the inheritance tax, and ordered the
defendants to return to each of the plaintiffs the sums paid by the latter.
The defendants appealed from this judgment.
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 The whole question involved in this appeal resolves into whether the
donations made by Father Braulio Pineda to each of the plaintiffs are
donations inter vivos, o r mortis causa, for it is the latter upon which the
Administrative Code imposes inheritance tax. In our opinion, said donations
are inter vivos. It is so expressly stated in the instruments in which they
appear. They were made in consideration of the donor's affection for the
donees, and of the services they had rendered him, but he has charged
them with the obligation to pay him a certain amount of rice and money,
respectively, each year during his lifetime, the donations to become effective
upon acceptance. They are therefore not in the nature of donations mortis
causa but inter vivos.
The principal characteristics of a donation mortis causa which
distinguish it essentially from a donation inter vivos, are that in the former it
is the donor's death that determines the acquisition of, or the right to, the
property, and that it is revocable at the will of the donor. In the donations in
question, their effect, that is, the acquisition of, or the right to, the property,
was produced while the donor was still alive, for, according to their
expressed terms they were to have this effect upon acceptance, and this
took place during the donor's lifetime. The nature of these donations is not
affected by the fact that they were subject to a condition, since it was
imposed as a resolutory condition, and in this sense, it necessarily implies
that the right came into existence first as well as its effect, because
otherwise there would be nothing to resolve upon the nonfulfillment of the
condition imposed. Neither does the fact that these donations are revocable,
give them the character of donations mortis causa, inasmuch as the
revocation is not made to depend on the donor's exclusive will, but on the
failure to fulfill the condition imposed. In relation to the donor's will alone,
these donations are irrevocable. On the other hand, this condition, in so far
as it renders the donation onerous, takes it further away from the
dispositions mortis causa and brings it nearer to contract. In this sense, by
virtue of this condition imposed, they are not donations throughout their full
extent, but only so far as they exceed the incumbrance imposed, for so far
as concerns the portion equivalent to or less than said incumbrance, it has
the nature of a real contract and is governed by the rules on contracts (art.
622 of the Civil Code). And in the part in which it is strictly a donation, it is a
donation inter vivos, because its effect was produced by the donees'
acceptance during the donor's lifetime and was not determined by the
donor's death. Upon being accepted they had full effect. If the donor's life is
mentioned in connection with this condition, it is only to fix the donor's death
as the end of the term within which the condition must be fulfilled, and not
because such death of the donor is the cause which determines the birth of
the right to the donation. The property donated passed to the ownership of
the donees from the acceptance of the donations, and these could not be
revoked except upon the nonfulfillment of the condition imposed, or for
other causes prescribed by the law, but not by the mere will of the donor.
Neither can these donations be considered as an advance on
inheritance or legacy, according to the terms of section 1536 of the
Administrative Code, because they are neither an inheritance nor a legacy.
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 And it cannot be said that the plaintiffs received such advance on
inheritance or legacy, since they were not heirs or legatees of their
predecessor in interest upon his death (sec. 1540 of the Administrative
Code). Neither can it be said that they obtained this inheritance or legacy by
virtue of a document which does not contain the requisites of a will (sec. 618
of the Code of Civil Procedure).
Besides, if the donations made by the plaintiffs are, as the appellants
contend, mortis causa, then they must be governed by the law on testate
succession (art. 620 of the Civil Code). In such a case, the documents in
which these donations appear, being instruments which do not contain the
requisites of a will, are not valid to transmit the property to the donees (sec.
618, Code of Civil Procedure.) Then the defendants are not justified in
collecting from the donees the inheritance tax on property which has not
been legally transferred to them, and in which they acquired no right.
For these reasons the judgment appealed from is affirmed, without
special pronouncement as to costs. So ordered.
Johnson, Malcolm, Villamor, Romualdez and Villa-Real, JJ., concur.
Ostrand and Johns, JJ., dissent.

Separate Opinions
STREET, J., dissenting:

Of course I agree with so much of the discussion in the majority opinion

as declares that the various donations made prior to his death by Rev.
Braulio Pineda to various nephews and nieces were not donations mortis
causa. But this is by no means decisive of the case. Among the forms of
succession which are by law made subject to the inheritance tax are
advances in anticipation of inheritance (Adm. Code, sec. 1536, as amended);
and I consider these donations to be taxable in that character. The device
adopted in this case for the distribution of the bulk of the donor's property
before his death is, to my mind, a transparent attempt at an evasion of the
tax. The donations in question were made to all of the persons who would
have been entitled to inherit if no will had been made, except one; and this
one was instituted as sole heir in the will. If no will had been left, all of the
donees and the heir instituted in the will would have shared jointly in the
estate by regular succession. It is thus seen that the making of the donations
and the making of the will were part of a single purpose, which was, to effect
the distribution of the donor's property. What else is necessary to make an
advance "in anticipation of inheritance?"
The suggestion in the opinion that the institution of another person as
heir in the will had the effect of destroying the capacity of the donees to take
as heirs, is not well founded, for the question whether these donations
should be considered advances in anticipation of inheritance ought to be
determined with reference to the situation at the time the donations were
made. The very reason that the prospective heir to whom no donation had
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 been made was instituted as sole heir in the will is of course found in the fact
that advances had already been made to the others. The purpose of the
statute was to impose a tax on successions; and in order to prevent the
successful use of devices of this kind, the lawmaker expressly made the tax
applicable to advances in anticipation of inheritance. If the situation before
us is not within both the letter and meaning of that provision, the
undersigned has entirely misinterpreted its purport.

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