Taxation Law

B.E. Johannes vs Judge Carlos Imperial

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G.R. No. L-19153 – 43 Phil. 597 – Taxation Law – Estate Tax – Deductions – Judicial Expenses
Civil Law – Succession – Deductions from the Estate

In August 1921, Carmen Johannes died leaving an estate of about P109k deposited in the Philippine National Bank. At the time of her death, Carmen was domiciled in Singapore.

In October 1921, Alfred D’Almeida, brother of Carmen in the Philippines was appointed as administrator of Carmen’s estate in the Philippines. It also appears that in September 1921, a Singapore court appointed B.E. Johannes, widower of Carmen as the administrator of Carmen’s estate. In January 1922, Johannes filed an opposition against the appointment of Alfred as administrator of Carmen’s estate in the Philippines.

The trial court, presided over by Judge Carlos Imperial,  disallowed the opposition and ordered Johannes to pay, among others, the attorney’s fees incurred by the estate in view of the opposition filed by Johannes.

ISSUE: Whether or not the award of attorney’s fees is proper.

HELD: Yes, it is proper. It was an expense incurred by the estate for its settlement. The Supreme Court clarified that since the issue here was a question of administration [of the estate], then expenses incurred by the estate are deductible as judicial expenses. But may be compensated by the award of attorney’s fees.

If the issue had been one where the question was whether the brothers and sisters of the deceased are entitled to a share in her estate, or whether the petitioner only, as the surviving husband, then expenses incurred thereon are not deductible for the issue becomes personal to the parties involved.

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