CIR v. Fisher - Foreign Law

CIR v.
Fisher
Facts:
Walter G. Stevenson was born in the Philippines of British parents, and married in
Manila to another British subject, Beatrice. He died in 1951 in California where he
and his wife moved and established their permanent residence since May 10, 1945.
In his will, he instituted Beatrice as his sole heiress to certain real and personal
properties, among which are 210,000 shares of stocks in Mindanao Mother Lode
Mines (Mines).
On May 1951, ancillary administration proceedings were instituted in the CFI Manila
for the settlement of the estate in the Philippines. In due time, Stevenson's will was
duly admitted to probate by our court and Ian Murray Statt was appointed ancillary
administrator of the estate. He filed a preliminary estate and inheritance tax return
with the reservation of having the properties declared therein finally appraised at their
values six months after the death of Stevenson. He made a preliminary return to
secure the waiver of the CIR on the inheritance of the Mines shares of stock.
In 1952, Beatrice assigned all her rights and interests in the estate to the spouses
Fisher. Thereafter, ancillary administrator filed a second amended estate and
inheritance tax return. The return declared the same assets of the estate stated in the
amended return of September 22, 1952, except that it contained new claims for
additional exemption and deduction, to wit:
(1) deduction in the amount of P4,000.00 from the gross estate of the decedent
as provided for in Section 861 (4) of the U.S. Federal Internal Revenue Code
which the ancillary administrator averred was allowable by way of the
reciprocity granted by Section 122 of the National Internal Revenue Code; and
(2) exemption from the imposition of estate and inheritance taxes on the
210,000 shares of stock in the Mindanao Mother Lode Mines, Inc. also
pursuant to the reciprocity proviso of Section 122 of the National Internal
Revenue Code.
In this last return, the estate claimed that it was liable only for the amount of P525.34
for estate tax and P238.06 for inheritance tax and that, as a consequence, it had
overpaid the government. The refund of the amount of P15,259.83, allegedly overpaid,
was accordingly requested by the estate. The Collector denied the claim. For this
reason, action was commenced in the Court of First Instance of Manila by
respondents, as assignees of Beatrice Mauricia Stevenson, for the recovery of said
amount.
CFI ruled that (a) the ½ share of Beatrice should be deducted from the net estate of
Walter, (b) the intangible personal property belonging to the estate of said Stevenson is
exempt from inheritance tax, pursuant to the provision of section 122 of the
National Internal Revenue Code in relation to Section 13851 of the California
Inheritance Tax Law but decedent's estate is not entitled to an exemption of
P4,000.00 in the computation of the estate tax
Issue: WON Section 13851 of the California Inheritance Tax Law has been duly proven
by the respondents.
Held:
Yes.
It is well-settled that foreign laws do not prove themselves in our jurisdiction and our
courts are not authorized to take judicial notice of them. Like any other fact, they must
be alleged and proved.
Pursuant to Section 41, Rule 123 of ROC (Section 25, Rule 132 of ROC), it does not
exclude the presentation of other competent evidence to prove the existence of a
foreign law. In Willamette Iron Steel Works v. A.H. Muzzal, the testimony of an
attorney-at-law of San Francisco, California who quoted verbatim a section of
California Civil Code and who stated that the same was in force at the time the
obligations were contracted, as sufficient evidence to establish the existence of
California Civil Code, following the provisions stated in Section 41, Rule 123 of ROC
(now Section 25, Rule 132 of ROC).
In the case at bar, in proving the pertinent California Inheritance Tax Law, Attorney
Allison Gibbs, counsel for herein respondents, testified that as an active member of
the California Bar since 1931, he is familiar with the revenue and taxation laws of the
State of California. When asked by the lower court to state the pertinent California law
as regards exemption of intangible personal properties, the witness cited article 4,
section 13851 (a) and (b) of the California Internal and Revenue Code as published in
Derring's California Code, a publication of the Bancroft-Whitney Company inc. And as
part of his testimony, a full quotation of the cited section was offered in evidence.
Hence, in view of the foregoing, we find no error, therefore on the part of the Tax Court
in considering the pertinent California Law as proved by respondents’ witness.

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