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Lorenzo Vs Posadas 64 Phil 353

This case involved an estate belonging to Thomas Hanley who died in 1922. His will appointed a trustee to manage the estate and distribute it after 10 years. The Collector of Internal Revenue assessed inheritance tax on the estate in 1932 which the new trustee, Pablo Lorenzo, paid under protest. Lorenzo argued the tax should have been paid after 10 years per the will. The court ruled the tax was due when the first trustee assumed office in 1924 under the Revenue Code. It also found Hanley intended to create a trust for his estate as the will ordered certain properties be kept together for a set time period. The estate was liable for additional interest on the late tax payment.

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714 views1 page

Lorenzo Vs Posadas 64 Phil 353

This case involved an estate belonging to Thomas Hanley who died in 1922. His will appointed a trustee to manage the estate and distribute it after 10 years. The Collector of Internal Revenue assessed inheritance tax on the estate in 1932 which the new trustee, Pablo Lorenzo, paid under protest. Lorenzo argued the tax should have been paid after 10 years per the will. The court ruled the tax was due when the first trustee assumed office in 1924 under the Revenue Code. It also found Hanley intended to create a trust for his estate as the will ordered certain properties be kept together for a set time period. The estate was liable for additional interest on the late tax payment.

Uploaded by

Gina Portuguese Gawon
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Lorenzo vs.

Posadas (digest)
Lorenzo vs. Posadas
64 Phil 353

Facts:

On 27 May 1922, Thomas Hanley died in Zamboanga, leaving a will and considerable amount of real
and personal properties. Hanley’s will provides the following: his money will be given to his nephew,
Matthew Hanley, as well as the real estate owned by him. It further provided that the property will only
be given ten years after Thomas Hanley’s death. Thus, in the testamentary proceedings, the Court of
First Instance of Zamboanga appointed P.J.M. Moore as trustee of the estate. Moore took oath of office
on March 10, 1924, and resigned on Feb. 29, 1932. Pablo Lorenzo was appointed in his stead. Juan
Posadas, Collector of Internal Revenue, assessed inheritance tax against the estate amounting to
P2,057.74 which includes penalty and surcharge. He filed a motion in the testamentary proceedings so
that Lorenzo will be ordered to pay the amount due. Lorenzo paid the amount in protest after CFI
granted Posadas’ motion. He claimed that the inheritance tax should have been assessed after 10
years. He asked for a refund but Posadas declined to do so. The latter counterclaimed for the additional
amount of P1,191.27 which represents interest due on the tax and which was not included in the original
assessment. However, CFI dismissed this counterclaim. It also denied Lorenzo’s claim for refund
against Posadas. Hence, both appealed.
Issue: Whether the estate was delinquent in paying the inheritance tax and therefore liable for the
P1,191.27 that Posadas is asking for?
Held: Yes. It was delinquent because according to Sec. 1544 (b) of the Revised Administrative Code,
payment of the inheritance tax shall be made before delivering to each beneficiary his share. This
payment should have been made before March 10, 1924, the date when P.J.M. Moore formally
assumed the function of trustee.
Although the property was only to be given after 10 years from the death of Hanley, the court considered
that delivery to the trustee is delivery to cestui que trust, the beneficiary within the meaning of Sec.
1544 (b).
Even though there was no express mention of the word “trust” in the will, the court of first instance was
correct in appointing a trustee because no particular or technical words are required to create a
testamentary trust (69 C.J.,p. 711). The requisites of a valid testamentary trust are: 1) sufficient words
to raise a trust, 2) a definite subject, 3) a certain or ascertained object. There is no doubt that Hanley
intended to create a trust since he ordered in his will that certain of his properties be kept together
undisposed during a fixed period or for a stated purpose.

***this case was assigned in our Agency and Partnership class. I created this file as a reviewer. I
decided to share it with the world, especially law students like me. hope it helped!
Posted by Atty. HVD at 12:37 AM
Labels: 64 Phil. 353, digest, express trusts, lorenzo vs. posadas, philippine cases

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