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Collector v. Lara

This case involves determining the estate tax liability of Hugo Miller, a U.S. citizen who lived and worked in the Philippines. The Collector determined that Miller was a resident of the Philippines at the time of his death, but the Ancilliary Administrator argued Miller's residence was in California based on the facts that he owned no property in the Philippines, maintained ties to California, and declared California as his residence in his will. The Court of Tax Appeals and Supreme Court agreed with the Ancilliary Administrator, finding that for tax purposes "residence" is synonymous with "domicile", and that Miller's domicile remained in California. Therefore, only Miller's shares in Philippine corporations were subject

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508 views2 pages

Collector v. Lara

This case involves determining the estate tax liability of Hugo Miller, a U.S. citizen who lived and worked in the Philippines. The Collector determined that Miller was a resident of the Philippines at the time of his death, but the Ancilliary Administrator argued Miller's residence was in California based on the facts that he owned no property in the Philippines, maintained ties to California, and declared California as his residence in his will. The Court of Tax Appeals and Supreme Court agreed with the Ancilliary Administrator, finding that for tax purposes "residence" is synonymous with "domicile", and that Miller's domicile remained in California. Therefore, only Miller's shares in Philippine corporations were subject

Uploaded by

Jaypoll Diaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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COLLECTOR V.

LARA
(multiplicity of situs)

FACTS:

Hugo H. Miller, an American citizen, was born in SantaCruz, California, U.S.A., in 1883.
In 1905, he came to thePhilippines. From 1906 to 1917, he was connected with
thepublic school system, first as a teacher and later as a divisionsuperintendent of
schools. After his retirement, Miller acceptedan executive position in the local branch of
Ginn & Co., bookpublishers with principal offices in New York and Boston,U.S.A., up to
the outbreak of the Pacific War. Miller lived at theManila Hotel. He never lived in any
residential house in thePhilippines. After the death of his wife in 1931, he
transferredfrom the Manila Hotel to the Army and Navy Club, where hewas staying at
the outbreak of the Pacific War. On January 17,1941, Miller executed his last will and
testament in Santa Cruz,California, in which he declared that he was "of Santa
Cruz,California". On December 7, 1941, because of the Pacific War,the office of Ginn &
Co. was closed, and Miller joined theBoard of Censors of the United States Navy.
During the war,he was taken prisoner by the Japanese forces in Leyte, and inJanuary,
1944, he was transferred to Catbalogan, Samar,where he was reported to have been
executed by said forceson March 11, 1944.Testate proceedings were instituted before
the Courtof California in Santa Cruz County, which subsequently issuedan order and
decree of settlement of final account and finaldistribution. The Bank of America,
National Trust and SavingsAssociation of San Francisco California, co-executor named
inMiller's will, filed an estate and inheritance tax return with theCollector, covering only
the shares of stock issued byPhilippine corporations. After due investigation, the
Collector assessed estate and inheritance taxes, which was received bythe said
executor. The estate of Miller protested saidassessment. This assessment was
appealed by De Lara asAncilliary Administrator before the Board of Tax Appeals,
whichappeal was later heard and decided by the Court of TaxAppeals.In determining
the "gross estate" of a decedent, under Section 122 in relation to section 88 of our Tax
Code, it is firstnecessary to decide whether the decedent was a resident or anon-
resident of the Philippines at the time of his death. TheCollector maintains that under
the tax laws, residence anddomicile have different meanings; that tax laws on estate
andinheritance taxes only mention resident and non-resident, andno reference
whatsoever is made to domicile except in Section93 (d) of the Tax Code; that Miller
during his long stay in thePhilippines had required a "residence" in this country, and
wasa resident thereof at the time of his death, and consequently,his intangible personal
properties situated here as well as inthe United States were subject to said taxes. The
AncilliaryAdministrator, however, equally maintains that for estate andinheritance tax
purposes, the term "residence" is synonymouswith the term domicile.
ISSUE:

W/N the estate is liable to file an estate andinheritance tax return besides those
covering shares of stocksissued by Philippine corporations.

HELD:

No

The Court agrees with the Court of Tax Appealsthat at the time that The National
Internal Revenue Code waspromulgated in 1939, the prevailing construction given by
thecourts to the "residence" was synonymous with domicile. andthat the two were used
intercnangeabiy. Moreover, there isreason to believe that the Legislature adopted the
American(Federal and State) estate and inheritance tax system (see e.g.Report to the
Tax Commision of the Philippines, Vol. II, pages122-124, cited in I Dalupan, National
Internal Revenue CodeAnnotated, p. 469-470). In the United States, for estate
taxpurposes, a resident is considered one who at the time of hisdeath had his domicile
in the United States, and in American jurisprudence, for purposes of estate and
taxation, "residence"is interpreted as synonymous with domicile, and that—
The incidence of estate and succession hashistorically been determined by
domicile andsitus and not by the fact of actual residence.

(Bowring vs. Bowers)At the time of his death, Miller had his residence or domicile in
Santa Cruz, California. During his stay in thecountry, Miller never acquired a house for
residential purposesfor he stayed at the Manila Hotel and later on at the Army andNavy
Club. The bulk of his savings and properties were in theUnited States. To his home in
California, he had been sendingsouvenirs. In November, 1940, Miller took out a
propertyinsurance policy and indicated therein his address as SantaCruz, California,
this aside from the fact that Miller, as alreadystated, executed his will in Santa Cruz,
California, wherein hestated that he was "of Santa Cruz, California".*** As to the shares
of stocks issued by Philippinecorporations, an exemption was granted to the estate by
virtueof Section 122 of the Tax Code, which provides as follows:. . ."And Provided,
however, That no tax shall becollected under this Title in respect of intangiblepersonal
property (a) if the decedent at the time of hisdeath was a resident of a foreign country
which at thetime of his death did not impose a transfer tax or death tax of any character
in respect of intangiblepersonal property of citizens of the Philippines notresiding in that
country, or (b) if the laws of the foreigncountry of which the decedent was resident at
thetune of his death allow a similar exemption fromtransfer taxes or death taxes of
every character inrespect of intangible personal property owned bycitizen, of the
Philippine not residing in that foreigncountry.

Affirmed, with modification.

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