EN BANC

G.R. No. L-13250 May 30, 1962

THE COLLECTOR OF INTERNAL REVENUE, Petitioner, vs. ANTONIO CAMPOS
RUEDA, Respondent.
Office of the Solicitor General for petitioner.
Ramirez and Ortigas for respondent.
RESOLUTION
PAREDES, J.:

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Doa Maria de la Estrella Soriano Vda. de Cerdeira, (Maria Cerdeira, for short), died in
Tangier, (North Africa), on January 2, 1955. At the time of her demise, she was married to a
Spanish Citizen and a permanent resident of Tangier from 1931 up to her death, on January 2,
1955. She left properties in Tangier as well as in the Philippines. Among the properties in the
Philippines are several parcels of land and many shares of stock, accounts receivable and other
intangible personal properties. The real estate situated in the Philippines had a market value of
P1,109,483.50 and her personal properties also in the Philippines had a value of P396,308.90. On
the real estate, the respondent Antonio Campos Rueda, as administrator of her estate, paid the
sum of P111,582.00 as estate tax and the sum of P151,791.48 as inheritance tax, on the transfer
of her real properties in the Philippines, but refused to pay the corresponding deficiency estate
and inheritance taxes due on the transfer of her intangible personal properties, claiming that the
estate is exempt from the payment of said taxes pursuant to section 122 of the Tax Code. The
Collector of Internal Revenue in a decision assessed the estate of the deceased, as deficiency
estate and inheritance taxes, the sum of P161,874.95 including interest and penalties, on the
transfer of intangible personal properties of Maria Cerdeira. On appeal the Court of Tax Appeals
reversed the decision of the Collector, without costs, who elevated the case to Us for review,
alleging that the Court of Tax Appeals erred in holding that (1) The testate estate of Maria Cerdeira is not liable for the payment of deficiency estate and
inheritance taxes in the sum of P161,874.95;
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(2) The international zone of Tangier, even if it is not recognized by the Philippine Government
as a state, could avail of the reciprocal provisions of our Tax Code;
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(3) The term "foreign country" in Section 122 of the Tax Code, refers to a foreign government
competent to levy taxes without any consideration for the international status of said
government;
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(4) There exists reciprocity between Tangier and Philippine Laws on the matter of death taxes on
intangible personal property;
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(5) The certification Exhibits D-1, G-1, Q-1, and T, considered together, are sufficient proof on
the non-liability of movable property located in Tangier for inheritance tax properties.
The pertinent portion of section 122, of the Tax Code, as amended by section 6, Rep. Act No. 83,
recites as follows:
SEC. 122. Definitions. - . . . . Provided, however, That in the case of a resident, the transmission
or transfer of any intangible personal property, regardless of its location, is subject to the taxes
prescribed in this Title; And provided, further, That no tax shall be collected under This Title in
respect of intangible personal property (a) if the decedent at the time of his death was a resident
of a foreign country which at the time of his death did not impose a transfer tax or death tax of
any character in respect of intangible personal property of citizens of the Philippines not residing
in the foreign country, or (b) if the laws of the foreign country of which the decedent was a
resident at the time of his death allow a similar exemption from transfer taxes or death taxes of
every character in respect of intangible personal property owned by citizens of the Philippines
not residing in that foreign country.
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In order to show the status of the law on the subject, in force or existing in Tangier at the time of
Maria Cerdeira's death in 1955, the respondent submitted certificates, the contents of which are
quoted hereunder Que las transmisiones hereditarias de bienes muebles situados en Tanger, no estan sujetas a
ningun impuesto sucesorio conforme al Dahir del 15 de Mayo de 1925 y Ley del 30 de Enero de
1932, vigentes en la Zona Internacional de Tanger, sea cualquiera la nacionalidad de los
intersesados en la sucesion (Exh. "d-1").
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Que conforme la ley del 30 de Enero de 1932, en relacion con el Dahir de 15 de Mayo de 1925,
al preceptuarse, que "quedan sujetos al pago del impuesto de derechos reales, establecido para
las donaciones entre vivos, las transmisiones de inmuebles por causa de muerte acontecida a
partir del 10 de Enero de 1932" deja como actos no sujetos a ningun impuesto sucesorio, las
transmisiones hereditarias de bienes muebles radicantes en Tanger, sea cualquiera la nacionalidad
de los interesados en la sucesion (Exh. "G-1").
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Praise be to God, The undersigned do hereby certify that neither Moroccan nor foreign legatees
at Tangier and its province, in the Sherifian State, are subject to any tax on movables, with

exception of real estate which is liable to inheritance tax by virtue of the law of January 10,
1932, published in Official Bulletin No. 72 (Exh. "Q-1").
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The law of January 30, 1932 modifying the Dahir of May 15, 1925 subjecting the transfer of real
estate through deaths to the payment of registration taxes, as of January 1, 1932, subjects to no
inheritance tax the successional transfers of movable property, whatever may be the nationality
of those interested in the succession (Exh. "I").
Exhibit D-1 is certified by the Register of Properties and Chief of the Bureau of Taxes at Tangier;
Exh. Q-1 by the Acting Administrator and Lands Registrar at Tangier; Exhibit Q-1 by the Judge
of the International Court at Tangier and Exhibit T, by the Governor at the Province of
Tangier..
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While section 122 of the Philippine Tax Code aforequoted speaks of "intangible personal
property" in both subdivisions (a) and (b); the alleged laws of Tangier refer to "bienes muebles
situados en Tanger", "bienes muebles radicantes en Tanger" "movables" and "movable property".
In order that this Court may be able to determine whether the alleged laws of Tangier grant the
reciprocal tax exemptions required by Section 122 of the Tax Code, and without, for the time
being, going into the merits of the issues raised by the petitioner-appellant, the case is
REMANDED to the Court of Tax Appeals for the reception of evidence or proofs on whether or
not the words "bienes muebles", "movables" and "movable property" as used in the Tangier laws,
include or embrace "intangible personal property", as used in the Tax Code. No costs.
Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera and Dizon, JJ., concur.
Bengzon, C.J., is on leave.