PRIVONA vs CIR

Facts: De la Rama Steamship Co. insured the life of Enrico Pirovano who was then its President and
General Manager. The company initially designated itself as the beneficiary of the policies but, after
Pirovanos death, it renounced all its rights, title and interest therein, in favor of Pirovanos heirs.
The CIR subjected the donation to gift tax. Pirovanos heirs contended that the grant was not subject to
such donees tax because it was not a simple donation, as it was made for a full and adequate
compensation for the valuable services by the late Priovano (i.e. that it was remuneratory).

Issue: WON the donation is remuneratory and therefore not subject to donees tax, but rather taxable as
part of gross income.

Held: No. the donation is not remuneratory. There is nothing on record to show that when the late Enrico
Pirovano rendered services as President and General Manager of the De la Rama Steamship Co. and was
largely responsible for the rapid and very successful development of the activities of the company", he was
not fully compensated for such services. The fact that his services contributed in a large measure to the
success of the company did not give rise to a recoverable debt, and the conveyances made by the
company to his heirs remain a gift or a donation. The companys gratitude was the true consideration for
the donation, and not the services themselves.

CIR vs PINEDA
FACTS: BIR investigated the income tax liability of Anastacio Pinedas estate for the years 1945, 1946,
1947, and 1948 and it found that the corresponding income tax return were not filed. This resulted to a
P760.28 deficiency income tax for 1945 and 1946 and real estate dealers fixed tax for the 4 thquarter of
1946 and for the whole year 1947. Manuel Pineda, eldest son of Anastacio, received the assessment. He
contested the same alleging that only a proportionate part should be his liability. CTA ruled that Pineda is
liable only for taxes corresponding to his share in the estate. Hence, the present petition.

ISSUE: Whether the Government can require Manuel Pineda to pay the full amount of the tax assessed

RULING: Yes. As a holder of property belonging to the estate, Pineda is liable for the tax up to the amount
of the property in his possession. The BIR is given the discretion to avail of the most expeditious way to
collect the tax. This is, of course, without prejudice to Pinedas right of contribution for his co-heirs. Put
simply, the Supreme Court held that the rule on solidarity applies to taxes because it is not an ordinary
contract. Two persons liable for payment of estate tax:

1. Executor or administrator;

2. Heirs up to the extent of their inheritance.