Pablo Lorenzo v. Juan Posadas, Jr.

Summary

Supreme Court case involving inheritance tax dispute on estate of Thomas Hanley who died in 1922. Trustee Pablo Lorenzo sued Collector Juan Posadas for refund of P2,052.74 inheritance tax paid under protest, while Collector counterclaimed for additional P1,191.27 interest. Key issues included when inheritance tax accrues, proper valuation date, deductibility of trustee fees, and applicable tax law. Supreme Court held inheritance tax accrues at death under Civil Code Article 657, must be paid before property delivery to trustee under Administrative Code Section 1544, and estate was delinquent from March 10, 1924. Court computed tax on estate value at death (P28,904.19), rejected trustee compensation deductions, applied Act No. 3031 rather than later Act No. 3606, and held estate liable for tax, interest and surcharge. Judgment modified to require plaintiff pay defendant P1,191.27. Decision established important precedents on inheritance tax timing, trust property taxation, and retroactivity of tax laws.