A.W. Beam, A.W. Beam, Jr. and Eugenia Beam (through their guardian ad litem John W. Haussermann), plaintiff-appellants vs. Collector of Internal Revenue A.L. Yatco, defendant-appellee. (G.R. No. 48122, 29 October 1948, 82 Phil 30) Doctrines Civil Law – Conflict of Laws, Pleading Foreign Law: The Supreme Court held that when foreign law is pleaded and no evidence has been presented as to that law, it is presumed that it is same with the law of the forum. The Court ruled that even granting A.W. Beam's contention that his late wife Lydia became resident of California only in 1934, she was a citizen of that state at the time of her death and her national law applicable to the case, in accordance with Article 10 of the Civil Code (now Articles 16-18, Rep. Act 386, New Civil Code of the Philippines), is the law of California which, in absence of contrary evidence, is to be presumed to be the same as Philippine law. Taxation – Estate and Inheritance Taxation: The Court ruled that properties acquired by husband and wife (in this case, A.W. Beam and Lydia McKee-Beam) during their marriage should be considered community property, and upon Lydia’s death, the one that belonged to her passed by succession to heirs is subject to estate (inheritance) tax. Moreover, section 1536 of 1917 Administrative Code states that the shares owned by A.W. Beam, his wife and children are subject to inheritance tax, 1.
2. 3. 4. 5.
Transmission by inheritance, devise, bequest, gift mortis causa, advance in anticipation of inheritance, devise, or bequest of real property in the Philippines and real rights in such property; Any franchise which must be exercised in Philippines. Any shares, obligations, or bonds issued by any corporation or sociedad anonima organized or constituted in accordance with Philippine law. Any shares or rights in any partnership, business, or industry established in the Philippines. Any personal property in the Philippines.
Type of Appeal/Action – Plaintiffs-appellants A.W. Beam, his children A.W. Beam, Jr. and Eugenia Beam (through their guardian ad litem John W. Haussermann) appealed the lower court’s decision dated 30 September 1940, which dismissed their complaint (filed on 17 June 1937) for refund of PhP343,298.72 paid as inheritance tax. Facts – A.W. Beam and Lydia McKee-Beam were married in 1913 and begot out of their union two (legitimate) children A.W. Beam Jr. and Eugenia. They were citizens of United States of America from birth. Mr. A.W. Beam was a resident domiciled in Philippines for many years, beginning from 1902. Until 18 April 1934, he was Vice-President and Assistant General Manager of Benguet Consolidated Mining Company, member of Board of Directors of the said company and of /archibald.manansala Archibald Jose T. Manansala CEU School of Law and Jurisprudence, A.Y. 2015-2016
A.W. Beam, A.W. Beam, Jr. and Eugenia Beam (through their guardian ad litem John W. Haussermann), plaintiff-appellants vs. Collector of Internal Revenue A.L. Yatco, defendant-appellee. (G.R. No. 48122, 29 October 1948, 82 Phil 30) Balatoc Mining Company. He was also, and up to the present, is, the President of the Beam Investment Company. Beam Investment Company, Balatoc Mining Company and Manila Building and Loan Association are corporations organized and existing under Philippine laws, while Benguet Consolidated Mining Company is a sociedad anonima organized and existing under Philippine laws. He filed an application for a tax clearance certificate with Bureau of Internal Revenue, prior to his departure from the Philippines for California on 18 April 1934 with his wife Lydia and daughter Eugenia. Later, they left the Philippines for California on 18 April 1934 and arrived at San Francisco on 9 May 1934. Except for A.W. Beam who was in the Philippines from 20 December 1936 until 15 January 1937, neither Lydia nor her children have been in the Philippines since they arrived in San Francisco. During their marriage and up until Lydia’s death, A.W. Beam, his wife and children acquired the following properties in the Philippines from 1913 until 18 April 1934: "LYDIA McKEE BEAM: 15,000 shares of stock of Beam Investment Company, evidenced by Certificates Nos. 2, 15 and 25 issued to and in the name of Lydia McKee Beam; A. W. BEAM: 88,163 shares of stock of Beam Investment Company, evidenced by Certificates Nos. 11, 23 and 24 issued to and in the name of A. W. Beam; 500 shares of stock of Benguet Consolidated Mining Company, evidenced by Certificate No. 3342 issued to and in the name of A. W. Beam; 2,080 shares of stock of Balatoc Mining Company, Nos. 600, 614 and 809 issued to and in the name of A. W. Beam; A. W. BEAM, JUNIOR: 5,000 shares of stock of Beam Investment Company, evidenced by Certificates Nos. 17 and 26 issued to and in the name of A. W. Beam, Junior; Deposit of P2,933.18 in Manila Building and Loan Association in the name and to the credit of A. W. Beam, Junior; EUGENIA BEAM: 5,000 shares of stock of Beam Investment Company, evidenced by Certificates Nos. 19 and 27 issued to and in the name of Eugenia Beam; Deposit of P2,933.18 in Manila Building and Loan Association in the name and to the credit of Eugenia Beam.” Lydia left a last will and testament upon her death in the State of California on 8 October 1934, which after due and regular proceedings, was admitted to probate in the superior court of State of California for the County of Almeda. /archibald.manansala Archibald Jose T. Manansala CEU School of Law and Jurisprudence, A.Y. 2015-2016
A.W. Beam, A.W. Beam, Jr. and Eugenia Beam (through their guardian ad litem John W. Haussermann), plaintiff-appellants vs. Collector of Internal Revenue A.L. Yatco, defendant-appellee. (G.R. No. 48122, 29 October 1948, 82 Phil 30) As plaintiffs, A.W. Beam, his children A.W. Beam, Jr. and Eugenia Beam (through their guardian ad litem John W. Haussermann) filed on 17 June 1937) complaint for refund of PhP343,298.72 paid as inheritance tax:
PhP40,480 to A. W. Beam PhP151,409.36 to his son A. W. Beam, Jr. PhP151,409.36 to his daughter Eugenia Beam.
However, on 30 September 1940, the lower court’s decision dismissed their complaint for refund of inheritance tax and as a result, they went to the Supreme Court (of the Philippines) to appeal. Issues and held by the Supreme Court – The issues presented in the plaintiffs-appellants’ appeal are, (1) Whether the properties acquired from Lydia by her husband and children subject to inheritance tax? The Court ruled that properties acquired by spouses (husband and wife) during their marriage should be considered community property, and upon the wife’s death, the one that belonged to her passed by succession to heirs is subject to estate (inheritance) tax. Moreover, the provisions of Sec. 1536 of 1917 Administrative Code states that the shares of A.W. Beam, his wife and children are subject to inheritance tax, 1. Transmission by inheritance, devise, bequest, gift mortis causa, advance in anticipation of inheritance, devise, or bequest of real property in the Philippines and real rights in such property; 2. Any franchise which must be exercised in Philippines. 3. Any shares, obligations, or bonds issued by any corporation or sociedad anonima organized or constituted in accordance with Philippine law. 4. Any shares or rights in any partnership, business, or industry established in the Philippines. 5. Any personal property in the Philippines. (2) Whether the laws of California can be invoked by plaintiffs-appellants as the law applicable to the properties of A.W. and Lydia McKee-Beam? The Supreme Court held that when foreign law is pleaded and no evidence has been presented as to that law (pleaded), it is presumed that it is same with the law of the forum.
/archibald.manansala Archibald Jose T. Manansala CEU School of Law and Jurisprudence, A.Y. 2015-2016
A.W. Beam, A.W. Beam, Jr. and Eugenia Beam (through their guardian ad litem John W. Haussermann), plaintiff-appellants vs. Collector of Internal Revenue A.L. Yatco, defendant-appellee. (G.R. No. 48122, 29 October 1948, 82 Phil 30) Beam and his co-appellants contend that no evidence whatsoever has been adduced to prove California law of community property and the trial court should not have taken into consideration the provision of that law, as quoted in the memorandum filed by Solicitor General (Ramon Ozaeta), while Yatco countered there is no dispute that California is a community property state, as cited in 31 C. J., 12 and in Osorio vs. Posadas (56 Phil. 748). The Court ruled that even granting A.W. Beam's contention that his late wife Lydia became resident of California only in 1934, she was a citizen of that state at the time of her death and her national law applicable to the case, in accordance with Article 10 of the Civil Code (now Articles 16-18, Rep. Act 386, New Civil Code of the Philippines), is the law of California which, in absence of contrary evidence, is to be presumed to be the same as Philippine law. Verdict – The Supreme Court AFFIRMED the lower court's decision, with costs against appellants.
/archibald.manansala Archibald Jose T. Manansala CEU School of Law and Jurisprudence, A.Y. 2015-2016
