Paper

G.R. No. L-12287

http://www.lawphil.net/judjuris/juri1918/aug1918/gr_l-12287_...

Today is Thursday, March 03, 2016

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-12287

August 7, 1918

VICENTE MADRIGAL and his wife, SUSANA PATERNO, plaintiffs-appellants,

vs.

JAMES J. RAFFERTY, Collector of Internal Revenue, and VENANCIO CONCEPCION, Deputy Collector of

Internal Revenue, defendants-appellees.

Gregorio Araneta for appellants.

Assistant Attorney Round for appellees.

MALCOLM, J.:

This appeal calls for consideration of the Income Tax Law, a law of American origin, with reference to the Civil Code,

a law of Spanish origin.

STATEMENT OF THE CASE.

Vicente Madrigal and Susana Paterno were legally married prior to January 1, 1914. The marriage was contracted

under the provisions of law concerning conjugal partnerships (sociedad de gananciales). On February 25, 1915,

Vicente Madrigal filed sworn declaration on the prescribed form with the Collector of Internal Revenue, showing, as

his total net income for the year 1914, the sum of P296,302.73. Subsequently Madrigal submitted the claim that the

said P296,302.73 did not represent his income for the year 1914, but was in fact the income of the conjugal

partnership existing between himself and his wife Susana Paterno, and that in computing and assessing the

additional income tax provided by the Act of Congress of October 3, 1913, the income declared by Vicente Madrigal

should be divided into two equal parts, one-half to be considered the income of Vicente Madrigal and the other half

of Susana Paterno. The general question had in the meantime been submitted to the Attorney-General of the

Philippine Islands who in an opinion dated March 17, 1915, held with the petitioner Madrigal. The revenue officers

being still unsatisfied, the correspondence together with this opinion was forwarded to Washington for a decision by

the United States Treasury Department. The United States...