FACTS:

Elsie M. Gaches died without a child. However, she left a last will and testament
in which he distributed her properties. Judge Tan filed a petition for the probate of the
will, he was appointed as the executor of the estate. Judge Tan informed the
Commissioner that the testate estate was about 10 million and that the estate and
inheritance taxes dues were about 9.5 million. Tan preliminarily submitted a motion for
advance payment of allowances, inheritance, etc. pending the finality of probate of the
will. He maintained that there are sufficient assets to cover whatever liability to the
government for taxes and other charges. The Commissioner opposed this motion and
showed some proof of claims for estate taxes and inheritance taxes. The court then
disapproved the motion of Tan. On a later date, Tan paid the taxes due but there was
deficiency in payment of the inheritance taxes. Upon payment, he moved again that he
be allowed to pay advance inheritance, allowances, etc. This time, the court allowed
him to do so. The Commissioner tried to oppose this but to no avail. He then tried to
garnish the bank accounts of the estate but wasn't able to do so due to the quick
thinking of Tan to have the writ of garnishment discharged.

ISSUE:
Whether or not the herein respondent heirs be required to pay first the inheritance tax
before the probate court may authorize the delivery of the hereditary share pertaining to
each of them.

RULING:
No, under the provisions of the Rules of Court, together with the provision in the
tax code, the distribution of a decedents assets may only be ordered under the
following circumstances 1. When the inheritance tax, among others, is paid 2. When a
sufficient bond is given to meet the payment of the inheritance tax and all other
obligations of the nature enumerated 3. When the payment of the said tax and all the
other obligations mentioned in the Rule has been provided for. None of these were
present when the questioned orders were issued at the case at bar. Also, the Supreme
Court held that there is no evidence on record that would show that the probate court
ever made a serious attempt to de what the values of the different assets the
correctness of that such properties shall be preserved for the satisfaction of those case
In the third place that main of pesos taxes were being called by the Bureau of Inc.
Revenue, the least reasonable thing that the probate court should have done was to
require the heirs to deposit the amount of inheritance tax being claimed in a suitable
institution or to authorize the sale of non-cash assets under the court's control and
supervision.
 PABLO LORENZO VS. JUAN POSADAS, JR.
G.R. NO. 43082; JUNE 18, 1937
LAUREL, J.

FACTS:
Thomas Henley died leaving a will and considerable amounts of real and
personal properties. The will contains that the properties were to pass to Matthew
Henley ten years after his death. The court then appointed a trustee, in the name of
Pablo Lorenzo to administer the real properties. Juan Posadas Jr. the then collector of
internal revenue prompted Lorenzo to pay an inheritance tax in the sum of PhP
2,054.74. Lorenzo paid the same under protest, and notifying Posadas that unless the
amount was promptly refunded suit would be brought for its recovery. Posadas
overruled the protest and refused to refund the said amount.

ISSUE:
Whether or not the inheritance tax may be computed on the basis of the value of the
estate at the time of the testators death.

RULING:
Yes, the court held that if death is the generating source from which the power of
the state to impose inheritance taxes its being and if, upon the death of the decedent,
succession takes place and the right of the state to tax vests instantly, the tax should be
measured by the value of the estate as it stood at the time of the decedents death
regardless of any subsequent contingency affecting value or any subsequent increase
or decrease in value. The right of the state to an inheritance tax accrues at the moment
of death, and hence is ordinarily measured as to any beneficiary by the value at that
time of such property as passes to him. Subsequent appreciation or depreciation is
immaterial. (Ross Inheritance Taxation)
A transmission by inheritance is taxable at the time of the predecessors death,
notwithstanding the postponement of the actual possession or enjoyment of the estate
by the beneficiary, and the tax measured by the value of the property transmitted at that
time regardless of its appreciation or depreciation.