Wells Fargo Bank & Union Trust Company vs. Collector of Internal Revenue.

G.R. No. 46720, June 28, 1940.


Birdie Lillian Eye died in Los Angeles, California, the place of her alleged last residence and domicile. Among the properties she left was 35,000 shares of stock in the Benguet Consolidated Mining Company, a Philippine corporation.  Her will was duly admitted to probate in California. Wells Fargo was duly appointed trustee.

The CIR sought to subject the  shares of stock to the Philippine inheritance tax. 
Wells Fargo protested. It concedes that  (a) the Philippine inheritance tax is not a tax on property, but upon transmission by inheritance and  (b) intangibles, like the shares of stocks, their situs is in the domicile of the owner thereof, and, therefore, their trans­mission by death necessarily takes place under his domicil­iary laws.


Whether the shares are subject to inheritance tax. 


YES. The ac­tual situs of the shares of stock is in the Philippines, the corporation being domiciled therein. And besides, the certificates of stock have remained in this country up to the time when the deceased died in California, and they were in possession of one Syrena McKee, secretary of the Benguet Consolidated Mining Company, to whom they have been delivered and indorsed in blank. 

The owner residing in California has ex­tended here her activities with respect to her intangibles so as to avail herself of the protection and benefit of the Philippine laws. Accordingly, the jurisdiction of the Philippine Government to tax must be upheld.

In the cases decided by the US Supreme Court sustained the power of each State to impose the tax. When the taxpayer extends his activities with respect to his intangibles, so as to avail himself of the protection and benefit of the laws of another state, in such a way as to bring his person or property within the reach of the tax gatherer there. It supports the constitutional power of each state concerned to tax.

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