FIRST
DIVISION
ESTATE
OF THE
DECEASED
JUAN DE LA VIÑA,
Plaintiff-Appellee,
G.
R.
No. 42669
January
29, 1938
-versus-
GOVERNMENT
OF THE
PHILIPPINE ISLANDS,
Appellant.
D
E C I S I
O N
CONCEPCION,
J :
The question raised on
this appeal is whether or not the action of the government to collect a
tax through the courts is imprescriptible.
In In re Estate of
the deceased Juan de la Viña, represented by his Judicial
Administratrix,
the Collector of Internal Revenue had filed a claim for the payment of
unpaid income tax allegedly due from said estate for the years 1919,
1920,
1923, 1924, 1926, 1928, 1929, 1930 and 1931. The Court ordered the
Administratrix
to give preference to the payment to the Government of the Philippine
Islands
of the sum of P6,236.25, the total amount of back taxes owing for the
years
1926, 1928, 1929, 1930 and 1931, and held that the payment of the back
taxes for the years 1919, 1920, 1923 and 1924 was not demandable
because
the government's action has prescribed. It likewise held that neither
the
surcharge of 5 percent on the amount owing for said taxes nor the
interest
of 1 percent also claimed by the government was collectible, because
this
has to do with claims against a deceased person falling under the
exemption
established at the end of Section 9 [a] of Act No. 2833.
From this Decision,
an appeal was taken by the Solicitor-General on behalf of the
government
after his motion for a new trial was denied by the Court. The Judicial
Administratrix of the deceased Juan de la Viña alleged in her
answer
that the deceased while living had paid all the taxes for the years
above-mentioned,
with the exception of the years 1928 and 1929, and that the claim of
the
government was for taxes in addition to those already paid. With
respect
to the years 1928 and 1929, she alleged that due to the amount of the
income
in 1928, Viña did not have to pay any tax, and as to the year
1929,
that no income tax return had been filed for said year because
Viña
was then seriously ill. Said Judicial Administratrix did not appeal
from
the decision notwithstanding the holding of the court that her evidence
was not sufficient to impugn that of the government and notwithstanding
the fact that she was ordered to pay the back taxes for the five years
above-mentioned.
In view thereof, there
is now no question upon the facts. The Court found established all
those
which form the basis of the government's claim for back taxes owing
from
the estate of said deceased for the nine years claimed. The Judicial
Administratrix
does not question them, for, as already stated, she has neither
appealed
nor even presented a brief in reply to that of the government. The
whole
question, therefore, boils down to a determination of whether or not
the
general law regarding prescription of actions found in the Code of
Civil
Procedure, is applicable to cases involving, as the one at bar,
government
claims of the nature of those in the present case, filed in the matter
of the estate of the deceased Viña. The Court affirmatively
resolved
this question with respect to the claim for the years 1919, 1920, 1923,
and 1924, applying thereto the prescription of six years established in
Number 2 of Section 43 of the aforesaid Code of Civil Procedure. The
Solicitor-General
contends that this was error in view of the settled doctrine, both in
this
jurisdiction as well as in that of the United States, that, unless
expressly
provided by law, the statutes of limitations do not run against the
State,
and that this principle is applicable to actions brought for the
collection
of taxes. We believe that the government's contention is sustainable.
[26
R. C. L., 388; 37 C. J., 711].
"Is the Philippine
Government bound by the statute of limitations? The Supreme Court of
the
United States in United States vs. Nashville, Chattanooga & St.
Louis
Railway Co. (118 U. S., 120, 125), said:
"'It is settled
beyond
doubt or controversy - upon the foundation of the great principle of
public
policy, applicable to all governments alike, which forbids that the
public
interests should be prejudiced by the negligence of the officers or
agents
to whose care they are confided - that the United States, asserting
rights
vested in it as a sovereign government, is not bound by any statute of
limitations, unless Congress has clearly manifested its intention that
it should be so bound.' [Lindsey vs. Miller, 6 Pet., 666; U. S. vs.
Knight,
14 Pet., 301, 315; Gibson vs. Chouteau, 13 Wall., 92; U. S. vs.
Thompson,
98 U. S., 486; Fink vs. O'Neil, 106 U. S., 272, 281].
xxx
"These principles
being
based 'upon the foundation of the great principle of public policy'
are,
in the very nature of things, applicable to the Philippine Government."
[Government of the Philippine Islands vs. Monte de Piedad y Caja de
Ahorros
de Manila, 35 Phil., 728, 751-753; italics ours].
Having shown that the government's
action to collect judicially the back taxes in question, does not
prescribe,
the only remaining point for determination is whether the action of the
government should be conditioned upon the fact that the discovery of
the
erroneous, false and fraudulent return of the taxpayer, should take
place
within 3 years following the date of such return or the date of the
payment
of the tax, as required by Section 9 [a] of Act No. 2833 in order that
the Collector of Internal Revenue may collect the back tax owing. This
question has already been decided by this court in the case of
Collector
of Internal Revenue vs. Villeges [56 Phil., 554, 559], wherein it was
said:
"It is, therefore,
a matter established by the American jurisprudence that the three-year
prescription refers to the discovery of erroneous, false, or,
fraudulent
returns, and to tax assessments and their summary collection, but not
to
their collection through judicial channels. The motion filed by the
Collector
of Internal Revenue in this case, is equivalent to a judicial action
for
the collection of the accrued income tax. Therefore, the fact that the
omission of the net income from the administrator's return was
discovered
after the period of three years from the filing of such return, on
March
13, 1926, does not prevent the collection of the proper tax assessed
after
such discovery."
And further on, this Court
said in conclusion:
"In view of the
foregoing
considerations, we are of opinion and so hold that the three-year
prescription
established in Section 9, Subdivision [a], of Act No. 2833, refers to
the
discovery of erroneous, false, or fraudulent returns made by a
taxpayer,
and to the summary assessment and collection of said tax, but not to
its
collection by an action in Court."
Wherefore, the appealed
decision is modified by ordering the estate of the deceased Juan de la
Viña to pay the back income taxes owing therefrom, for the
amounts
and for the years following:
For the year 1919
P4,171.46
For the year 1920
266.32
For the year 1923
1,688.26
For the year 1924
1,321.73
_______
7,447.77
======= The appealed Decision is
affirmed in all other respects, with the costs to the estate of the
deceased
Juan de la Viña. So ordered.
Avanceña, C.J.,
Villa-Real, Imperial, Diaz and Laurel, JJ., concur. |