GR L 9456; (January, 1958) (Digest)
G.R. No. L-9456 and L-9481; January 6, 1958
THE COLLECTOR OF INTERNAL REVENUE, petitioner, vs. DOMINGO DE LARA, as ancilliary administrator of the estate of HUGO H. MILLER (Deceased), and the COURT OF TAX APPEALS, respondents.
FACTS
Hugo H. Miller, an American citizen born in California, came to the Philippines in 1905. He worked in the public school system until 1917 and later as the Oriental representative for Ginn & Co., stationed in the Philippines but covering other Asian countries. He never owned a residential house in the Philippines, living in hotels and clubs. His wife resided in California, and he visited her there. After her death in 1931, he continued living in transient accommodations. In 1941, he executed a will in Santa Cruz, California, declaring himself “of Santa Cruz, California.” He was captured and executed by Japanese forces in Samar in 1944. His estate included real and personal properties in the United States and shares of stock in Philippine corporations valued at P51,906.45. Testate proceedings in California found him a resident of Santa Cruz County at his death. Ancilliary proceedings were instituted in Manila. The Bank of America, as co-executor, filed an estate tax return covering only the Philippine shares. The Collector of Internal Revenue assessed estate and inheritance taxes on a larger basis, leading to a protest and appeal to the Court of Tax Appeals.
ISSUE
Whether Hugo H. Miller was a resident or non-resident of the Philippines for estate and inheritance tax purposes at the time of his death, which determines the scope of properties subject to tax.
RULING
The Supreme Court affirmed the decision of the Court of Tax Appeals, with modification. It ruled that for estate and inheritance tax purposes under the National Internal Revenue Code, the term “residence” is synonymous with “domicile.” At the time of his death, Miller’s domicile was in Santa Cruz, California, USA, making him a non-resident of the Philippines. Consequently, only his shares of stock in Philippine corporations, situated in the Philippines, were subject to estate and inheritance taxes. The Court also held that Miller’s estate was entitled to the benefits of Republic Act No. 1253 , exempting it from paying interests and other increments due to his death as a victim of Japanese atrocities. The estate tax due was P2,047.22.