Miguel, Vianca Mikaella S.

Trusteeship(2013) Digests
2016-89476

1. Goyanko, Jr. vs. United Coconut Planters Bank, Mango Avenue Branch |G.R. No. 179096 |
February 06, 2013 | BRION, J

Petitioner: JOSEPH GOYANKO, JR., as administrator of the Estate of Joseph Goyanko, Sr., 
Respondent: UNITED COCONUT PLANTERS BANK, MANGO AVENUE BRANCH

FACTS

 In 1995, the late Joseph Goyanko, Sr. invested P2,000,000.00 with Philippine Asia
Lending Investors, Inc. family, represented by the petitioner, and his illegitimate family
presented conflicting claims to PALII for the release of the investment.

 Pending the investigation of the conflicting claims, PALII deposited the proceeds of the
investment with UCPB under the name "Phil Asia: ITF (In Trust For) The Heirs of Joseph
Goyanko, Sr." In 1997, the deposit under the ACCOUNT was P1,509,318.76.

 UCPB allowed PALII to withdraw P1.5 Million from the Account, leaving a balance of only
P9,318.76.

 When UCPB refused the demand to restore the amount withdrawn plus legal interest
from, the petitioner filed a complaint before the RTC.

 RTC dismissed petitioner’s complaint since the words "ITF HEIRS" sufficient to charge
UCPB with knowledge of any trust relation between PALII and Goyanko’s heirs. UCPB
merely performed its duty as a depository bank in allowing PALII to withdraw from the
ACCOUNT, as the contract of deposit was officially only between PALII, in its own
capacity, and UCPB.

 CA affirmed RTC

o Petitioner alleges that by opening the ACCOUNT, PALII established a trust by

which it was the "trustee" and the HEIRS are the "trustors-beneficiaries;" thus,
UCPB should be liable for allowing the withdrawal.

o CA held that no express trust was created between the HEIRS and PALII.

 Petitioner: an express trust was created, as clearly shown by PALII’s letters. PALII is the
trustor as it created the trust; UCPB is the trustee as it is the party in whom confidence
is reposed as regards the property for the benefit of another; and the HEIRS are the
beneficiaries as they are the persons for whose benefit the trust is created. Since an
express trust clearly exists, UCPB, the trustee, should not have allowed the withdrawal.
  Respondent: the ACCOUNT involves an ordinary deposit contract between PALII and
UCPB only, which created a debtor-creditor relationship obligating UCPB to return the
proceeds to the account holder-PALII. Thus, it was not negligent in handling the
ACCOUNT when it allowed the withdrawal. The mere designation of the ACCOUNT as
"ITF" is insufficient to establish the existence of an express trust or charge it with
knowledge of the relation between PALII and the HEIRS. The records failed to show that
PALII and UCPB executed a trust agreement, and PALII’s letters made it clear that PALII,
on its own, intended to turn-over the proceeds of the ACCOUNT to its rightful owners.

ISSUE + RULING

1.Whether or not UCPB should be held liable for the amount withdrawn because a trust
agreement existed between PALII and UCPB, in favor of the HEIRS, when PALII opened the
ACCOUNT with UCPB NO

 A trust, either express or implied, is the fiduciary relationship "x x x between one person
having an equitable ownership of property and another person owning the legal title to
such property, the equitable ownership of the former entitling him to the performance
of certain duties and the exercise of certain powers by the latter."

  Express or direct trusts are created by the direct and positive acts of the trustor or of
the parties. No written words are required to create an express trust under Article
1444 of the Civil Code, but, the creation of an express trust must be firmly shown; it
cannot be assumed from loose and vague declarations or circumstances capable of
other interpretations.

 Rizal Surety & Insurance Co. v. CA: “elements include a competent trustor and trustee,
an ascertainable trust res, and sufficiently certain beneficiaries. xxx each of the above
elements is required to be established, and, if any one of them is missing, it is fatal to
the trusts (sic). Furthermore, there must be a present and complete disposition of the
trust property, notwithstanding that the enjoyment in the beneficiary will take place in
the future. xxx There must also be some power of administration other than a mere
duty to perform a contract although the contract is for a thirdparty beneficiary. A
declaration of terms is essential, and these must be stated with reasonable certainty in
order that the trustee may administer”

 In this case, no express trust was created. 

o 1) while an ascertainable trust res and sufficiently certain beneficiaries may

exist, a competent trustor and trustee do not

o 2) UCPB, as trustee of the ACCOUNT, was never under any equitable duty to deal
with or given any power of administration over it. On the contrary, it was PALII
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

that undertook the duty to hold the title to the ACCOUNT for the benefit of the
HEIRS

o 3) PALII, as the trustor, did not have the right to the beneficial enjoyment of the
ACCOUNT. 

o 4) the terms by which UCPB is to administer the ACCOUNT was not shown with
reasonable certainty.

 While a trust’s beneficiaries need not be particularly identified for a trust to exist, the
intention to create an express trust must first be firmly established, along with the
other elements laid above; absent these, no express trust exists.

 PALII’s letters and UCPB’s records established UCPB’s participation as a mere depositary
of the proceeds of the investment. Had it been PALII’s intention to create a trust in favor
of the HEIRS, it would have relinquished any right or claim over the proceeds in UCPB’s
favor as the trustee but PALII never did.

 While the words "ITF HEIRS" may have created the impression that a trust account was
created, a closer scrutiny reveals that it is an ordinary savings account.

o The word "ITF" was merely used to distinguish the ACCOUNT from PALII’s other
accounts with UCPB.

 A trust can be created without using the word "trust" or "trustee," but the mere use of
these words does not automatically reveal an intention to create a trust. If at all, these
words showed a trustee-beneficiary relationship between PALII and the HEIRS.

 UCPB did not become a trustee by the mere opening of the ACCOUNT.1âwphi1 W

o by reason of the fiduciary nature of the bank’s relationship with its

depositors, this fiduciary relationship does not "convert the contract between
the bank and its depositors from a simple loan to a trust agreement, whether
express or implied."

o It simply means that the bank is obliged to observe "high standards of integrity
and performance" in complying with its obligations under the contract of simple
loan

 When UCPB allowed PALII to withdraw from the ACCOUNT, it was merely performing its
contractual obligation under their savings deposit agreement. No negligence or bad
faith can be imputed to UCPB for this action.
  As far as UCPB was concerned, PALII is the account holder and not the HEIRS.

 The petitioner’s recourse is to go before a court of competent jurisdiction to prove his

valid right over the money deposited.

Disposition: Petition Denied

2. Peñalber vs. Ramos |G.R. No. 178645|January 30, 2009| CHICO-NAZARIO, J

Petitioner: LINA PEÑALBER

Respondents: QUIRINO RAMOS, LETICIA PEÑALBER, and BARTEX INC.

FACTS

 Petitioner is the mother of respondent Leticia and the mother-in-law of respondent

Quirino, husband of Leticia. Respondent Bartex, Inc., on the other hand, is a domestic
corporation which bought from respondent spouses Ramos one of the two properties
involved in this case.
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 Petitioner filed before the RTC a Complaint for Declaration of Nullity of Deeds and Titles,
Reconveyance

o petitioner alleged in her Complaint that she was the owner of a parcel of land
situated in Ugac Norte, Tuguegarao, Cagayan, registered in her name.

o A residential house and a warehouse were constructed on the said parcel of land
which petitioner also claimed to own

o in the middle part of 1986, she discovered that her TCT was cancelled and new
one was issued in its stead in the name of respondent spouses Ramos.

o She learned that the basis for the cancellation of her title was a Deed of
Donation of a Registered Land, Residential House and Camarin which she
purportedly executed in favor of respondent spouses Ramos

o Petitioner insisted that her signature on the said Deed of Donation was a forgery
as she did not donate any property to respondent spouses Ramos.

o When petitioner confronted the respondent spouses Ramos about the false
donation, the latter pleaded that they would just pay for the Ugac properties in
the amount of P1 Million. Petitioner agreed to the proposition of the respondent
spouses Ramos.

o petitioner found out that the respondent spouses Ramos were selling the Ugac
properties to respondent Bartex, Inc. Petitioner then sent her son, Johnson
Paredes to caution Bartex, Inc. that respondent spouses Ramos were not the
lawful owners of the said properties

o Petitioner also warned respondent spouses Ramos not to sell. The respondent
spouses Ramos then assured her that they would do no such thing. As a
precaution, petitioner executed an Affidavit of Adverse Claim over the Ugac
Properties

o Despite petitioner's warnings, respondent spouses Ramos still executed in favor

of respondent Bartex, Inc. a Deed of Absolute Sale and the TCT in the name of
respondent spouses Ramos was cancelled and TCT in the name of respondent
Bartex, Inc. was issued

o Petitioner contended that the Deed of Absolute Sale executed by respondent

spouses Ramos in favor of respondent Bartex, Inc. did not convey any valid title,
not only because respondent Bartex, Inc. was a buyer in bad faith, but also
because respondent spouses Ramos did not ownthe Ugac properties.
 o petitioner claimed that for many years prior to 1984, she operated a hardware
store in a building she owned along Bonifacio St., Tuguegarao, Cagayan.
However, the commercial lot upon which the building stood is owned by and
registered in the name of Maria Mendoza, from whom petitioner rented the
same.

o She allowed respondent spouses Ramos to manage the hardware store.

Thereafter, in 1984, Mendoza put the Bonifacio property up for sale. As
petitioner did not have available cash to buy the property, she allegedly entered
into a verbal agreement with respondent spouses Ramos with the following
terms: The lot would be bought [by herein respondent spouses Ramos] for and
in behalf of [herein petitioner]

o Petitioner insisted that respondent spouses Ramos were, in reality, mere

trustees of the Bonifacio property, thus, they were under a moral and legal
obligation to reconvey title over the said property to her.

 respondent spouses Ramos alleged that:

o petitioner, together with her son, Johnson, and the latter's... wife, Maria Teresa
Paredes, mortgaged the Ugac properties to the Development Bank of the
Philippines (DBP)

o When the mortgage was about to be foreclosed because of the failure of

petitioner to pay the mortgage debt, petitioner asked respondent spouses
Ramos to redeem the mortgaged property or pay her mortgage debt to DBP.

o In return, petitioner promised to cede, convey and transfer full ownership of the
Ugac properties to them. Respondent spouses Ramos paid the mortgage debt
and, in compliance with herpromise, petitioner voluntarily transferred the Ugac
properties to the former by way of a Deed of Donation

o With regard to petitioner's Bonifacio property, respondent spouses Ramos

contended that they were given not only the management, but also the full
ownership of the hardware store by the petitioner, on the condition out of the
proceeds of the sales, respondent spouses Ramos shall pay petitioner's
outstanding obligations and liabilities

o After settling and paying the obligations and liabilities of petitioner, respondent
spouses Ramos bought the Bonifacio property from Mendoza out of their own
funds.

 RTC decided against petitioner for the ugac properties but in favor of petitioner for the
Bonifacio property
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 CA ruled in favor of the respondent

o Although oral testimony is allowed to prove that a trust exists, contrary to the
contention of [respondent spouses Ramos], and the court may rely on parol
evidence to arrive at a conclusion that an express trust exists, what is crucial is
the intention to create a trust. While oftentimes the intention is manifested by
the trustor in express or explicit language, such intention may be manifested by
inference from what the trustor has said or done, from the nature of the
transaction, or from the circumstances surrounding the creation of the
purported trust. An inference of intention to create a trust, predicated only
oncircumstances, can be made only where they admit of no other interpretation.
Here, [petitioner] failed to establish with reasonable certainty her claim that the
purchase of the subject lot was pursuant to a verbal trust agreement with
[respondent spouses Ramos].

 petitioner maintains that she was able to prove the existence of a trust agreement
between her and respondent spouses Ramos.

o the fact that respondent spouses Ramos could not account for the ₱116,946.15
difference in the beginning inventory and the second inventory of the stocks of
the hardware store, and they failed to present proof to support their allegation
that the amount was used to pay the other obligations of petitioner proves the
express trust

o given the respondent spouses Ramos’ failure to discharge the burden of proving
where the amount had gone, the only conclusion would be that they did use the
amount to purchase the Bonifacio property.

o based on the verbal agreement between her and respondent spouses Ramos, a
trust agreement was created and that the same is valid and enforceable.

o she is the trustor for it was she who entrusted the Bonifacio property to
respondent spouses Ramos as the trustees, with the condition that the same be
used to secure a loan, the proceeds of which would be used to build a bigger
building to expand petitioner’s business.

o a trust agreement was clearly intended by the parties when petitioner left the
management of the hardware store to respondent spouses Ramos, with the
agreement that the proceeds from the sales from said store be used to buy the
lot upon which the store stands.

o spouses Ramos’ assumption of the management of the hardware store and their
eventual purchase of the Bonifacio property indubitably shows that respondent
 spouses Ramos honored their obligation under the verbal agreement. Such being
the case, it behooved for the respondent spouses Ramos to hold the Bonifacio
property for petitioner’s benefit.

ISSUES + RULING

1. Whether or not there Bonifacio property should be reconveyed to petitioner as part of a

trust agreementNO

 a trust is defined as the right, enforceable solely in equity, to the beneficial enjoyment
of property, the legal title to which is vested in another, but the word "trust" is
frequently employed to indicate duties, relations, and responsibilities which are not
strictly technical trusts.

o  A person who establishes a trust is called the trustor; one in whom confidence is
reposed is known as the trustee; and the person for whose benefit the trust has
been created is referred to as the beneficiary.

o There is a fiduciary relation between the trustee and the beneficiary (cestui que
trust) as regards certain property, real, personal, money or choses in action.

 Trusts are either express or implied. Express trusts are created by the intention of the
trustor or of the parties. Implied trusts come into being by operation of law. Express
trusts are those which are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words either expressly or impliedly evincing an intention
to create a trust. No particular words are required for the creation of an express trust, it
being sufficient that a trust is clearly intended.

o However, in accordance with Article 1443 of the Civil Code, when an express
trust concerns an immovable property or any interest therein, the same may not
be proved by parol or oral evidence.

 In the case, petitioner has the burden of proving her cause of action in the instant case
and she may not rely on the weakness of the defense of respondent spouses Ramos.

 From the allegations of the petitioner’s Complaint the alleged verbal trust agreement
between petitioner and respondent spouses Ramos is in the nature of an express trust
as petitioner explicitly agreed therein to allow the respondent spouses Ramos to acquire
title to the Bonifacio property in their names, but to hold the same property for
petitioner’s benefit.

 Given that the alleged trust concerns an immovable property, however, respondent
spouses Ramos counter that the same is unenforceable since the agreement was made
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

verbally and no parol evidence may be admitted to prove the existence of an express
trust concerning an immovable property or any interest therein.

 The spouses were deemed to have waived their objection to the parol evidence as they
failed to timely object when petitioner testified on the said verbal agreement.

o The requirement in Article 1443 that the express trust concerning an

immovable or an interest therein be in writing is merely for purposes of proof,
not for the validity of the trust agreement.

o Therefore, the said article is in the nature of a statute of frauds. The term
statute of frauds is descriptive of statutes which require certain classes of
contracts to be in writing.

o Oral evidence of the contract will be excluded upon timely objection. But if the
parties to the action, during the trial, make no objection to the admissibility of
the oral evidence to support the contract covered by the statute, and thereby
permit such contract to be proved orally, it will be just as binding upon the
parties as if it had been reduced to writing.

 Despite the admissibility of the said testimonies, the Court holds that the same carried
little weight in proving the alleged verbal trust agreement between petitioner and
respondent spouses.

 Petitioner’s allegations as to the existence of an express trust agreement with

respondent spouses Ramos, supported only by her own and her son Johnson’s
testimonies, do not hold water.

o a resulting difference of ₱116,946.15 in the beginning inventory of the stocks of

the hardware store (before management was transferred to respondent spouses
Ramos) and the second inventory thereof (after management was returned to
petitioner), by itself, is not conclusive proof that the said amount was used to
pay the purchase price of the Bonifacio property, such as would make it the
property of petitioner held merely in trust by respondent spouses Ramos.

o The resulting difference in the two inventories might have been caused by other
factors and the same is capable of other interpretations the exclusion of which
rested upon the shoulders of petitioner alone who has the burden of proof in the
instant case. This petitioner miserably failed to do. The fact that respondent
spouses Ramos never denied the ₱116,946.15 difference, or that they failed to
present proof that they indeed used the said amount to pay the other
obligations and liabilities of petitioner is not sufficient to discharge petitioner’s
burden to prove the existence of the alleged express trust agreement
DISPOSITION: PETITION DENIED

3. Parish Priest of Roman Catholic Church of Victoria, Tarlac vs. Rigor| G.R. No. L-22036|April
30, 1979| Aquino, J
Petitioner: TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL RIGOR. THE PARISH
PRIEST OF THE ROMAN CATHOLIC CHURCH OF VICTORIA, TARLAC
Respondents: BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE RIGOR and JOVITA
ESCOBAR DE FAUSTO

FACTS:
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 Father Rigor, the parish priest of Pulilan, Bulacan, died leaving a will executed which was
probated by the Court of First Instance of Tarlac in. Named as devisees in the will were
the testators nearest relatives, namely, his three sisters: Florencia Rigor-Escobar, Belina
Rigor-Manaloto and Nestora Rigor-Quiambao. The testator gave a devise to his cousin,
Fortunato Gamalinda.
 the will contained the following controversial bequest. A devise was made in the will of
the late Father Pascual Rigor in favor of his nearest male relative who would study for
the priesthood.
 To implement the foregoing bequest, the administratix in 1940 submitted a project
containing the following item:
o 5. LEGACY OF THE CHURCH. That it be adjudicated in favor of the legacy
purported to be given to the nearest male relative who shall take the priesthood,
and in the interim to be administered by the actual Catholic Priest of the Roman
Catholic Church of Victoria, Tarlac, Philippines, or his successors, the real
properties
 the project of partition approved directed that after payment of the obligations of the
estate (including the sum of P3,132.26 due to the church of the Victoria parish) the
administratrix should deliver to the devisees their respective shares.
 Inasmuch as no nephew of the testator claimed the devise and as the administratrix and
the legal heirs believed that the parish priest of Victoria had no right to administer the
ricelands, the same were not delivered to that ecclesiastic. The testate proceeding
remained pending.
 13 years after the approval of the project of partition, the parish priest of Victoria filed
in the pending testate proceeding a petition praying for the appointment of a new
administrator (succeeding the deceased administration Florencia Rigor), who should
deliver to the church the said ricelands, and further praying that the possessors thereof
be ordered to render an accounting of the fruits.
 The probate court granted the petition. A new administrator was appointed.
 the parish priest filed another petition for the delivery of the ricelands to the church as
trustee.
 The intestate heirs of Father Rigor countered with a petition praying that the bequest be
deemed inoperative and that they be adjudged as the persons entitled to the said
ricelands since, as admitted by the parish priest of Victoria, "no nearest male relative of"
the testator "has ever studied for the priesthood"
 the lower court, declared the bequest inoperative and adjudicated the ricelands to the
testator's legal heirs. The parish priest filed and Motion for reconsideration which was
grantedon the ground that the testator had a grandnephew named Edgardo G. Cunanan
(the grandson of his first cousin) who was a seminarian in the San Jose Seminary of the
Jesuit Fathers in Quezon City.
 The administrator was directed to deliver the ricelands to the parish priest of Victoria as
trustee.
 CA reversed the order holding that Father Rigor had created a testamentary trust for his
nearest male relative who would take the holy orders but that such trust could exist
 only for twenty years because to enforce it beyond that period would violate "the rule
against perpetuities.
o Since no legatee claimed the ricelands within twenty years after the testator's
death, the same should pass to his legal heirs,
 Parish priest: CA erred in not finding that the testator created a public charitable trust
and in not liberally construing the testamentary provisions so as to render the trust
operative and to prevent intestacy.
 Legal heirs: bequest is inoperative because no one among the testator's nearest male
relatives had studied for the priesthood and not because the trust was a private
charitable trust.

ISSUES + RULING
1. Whether or not the legal heirs are entitled to the properties  YES
 The will of the testator is the first and principal law in the matter of testaments. When
his intention is clearly and precisely expressed, any interpretation must be in accord
with the plain and literal meaning of his words, except when it may certainly appear
that his intention was different from that literally expressed
 "the testator's intention is to be ascertained from the words of the wilt taking into
consideration the circumstances under which it was made", but excluding the testator's
oral declarations as to his intention (Art. 789, Civil Code of the Philippines).
 To ascertain Father Rigor's intention, it may be useful to make the following re-
statement of the provisions of his will.
o 1. that he bequeathed the ricelands to anyone of his nearest male relatives who
would pursue an ecclesiastical career until his ordination as a priest.
o 2. That the devisee could not sell the ricelands.
o 3. That the devisee at the inception of his studies in sacred theology could enjoy
and administer the ricelands, and once ordained as a priest, he could continue
enjoying and administering the same up to the time of his death but the devisee
would cease to enjoy and administer the ricelands if he discontinued his studies
for the priesthood.
o 4. That if the devisee became a priest, he would be obligated to celebrate every
year twenty masses with prayers for the repose of the souls of Father Rigor and
his parents.
o 5. That if the devisee is excommunicated, he would be divested of the legacy and
the administration of the riceland would pass to the incumbent parish priest of
Victoria and his successors.
o 6. That during the interval of time that there is no qualified devisee as
contemplated above, the administration of the ricelands would be under the
responsibility of the incumbent parish priest of Victoria and his successors, and
o 7. That the parish priest-administrator of the ricelands would accumulate
annually the products thereof, obtaining or getting from the annual produce
five percent thereof for his administration and the fees corresponding to the
twenty masses with prayers that the parish priest would celebrate for each
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
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year, depositing the balance of the income of the devise in the bank in the
name of his bequest.

 From the foregoing testamentary provisions, it may be deduced that the testator
intended to devise the ricelands to his nearest male relative who would become a
priest, who was forbidden to sell the ricelands, who would lose the devise if he
discontinued his studies for the priesthood, or having been ordained a priest, he was
excommunicated, and who would be obligated to say annually twenty masses with
prayers for the repose of the souls of the testator and his parents.
 tthe parish priest of Victoria would administer the ricelands only in two situations:
one, during the interval of time that no nearest male relative of the testator was
studying for the priesthood and two, in case the testator's nephew became a priest
and he was excommunicated.
 What is not clear is how long after the testator's death would it be determined that he
had a nephew who would pursue an ecclesiastical vocation
 The bequest refers to the testator's nearest male relative living at the time of his death
and not to any indefinite time thereafter. "In order to be capacitated to inherit, the heir,
devisee or legatee must be living at the moment the succession opens, except in case of
representation, when it is proper" (Art. 1025, Civil Code).
 The said testamentary provisions should be sensibly or reasonably construed. To
construe them as referring to the testator's nearest male relative at anytime after his
death would render the provisions difficult to apply and create uncertainty as to the
disposition of his estate. That could not have been his intention.
 In 1935, when the testator died, his nearest legal heirs were his three sisters or second-
degree relatives, Mrs. Escobar, Mrs. Manaloto and Mrs. Quiambao. Obviously, when the
testator specified his nearest male relative, he must have had in mind his nephew or a
son of his sister, who would be his third-degree relative, or possibly a grandnephew. But
since he could not prognosticate the exact date of his death or state with certitude what
category of nearest male relative would be living at the time of his death, he could not
specify that his nearest male relative would be his nephew or grandnephews (the son of
his nephew or niece) and so he had to use the term "nearest male relative".
 The reasonable view is that the testator was referring to a situation whereby his
nephew living at the time of his death, who would like to become a priest, was still in
grade school or in high school or was not yet in the seminary. In that case, the parish
priest of Victoria would administer the ricelands before the nephew entered the
seminary. But the moment the testator's nephew entered the seminary, then he would
be entitled to enjoy and administer the ricelands and receive the fruits thereof. In that
event, the trusteeship would be terminated.
 Inasmuch as the testator was not survived by any nephew who became a priest, the
unavoidable conclusion is that the bequest in question was ineffectual or inoperative.
 Therefore, the administration of the ricelands by the parish priest of Victoria, as
envisaged in the wilt was likewise inoperative.
2. Whether or not a public charitable trust was constituted by the testator in his favor NO
  A reading of the testamentary provisions regarding the disputed bequest not support
the view that the parish priest of Victoria was a trustee or a substitute devisee in the
event that the testator was not survived by a nephew who became a priest.
 that the parish priest of Victoria could become a trustee only when the testator's
nephew living at the time of his death, who desired to become a priest, had not yet
entered the seminary or, having been ordained a priest, he was excommunicated.
Those two contingencies did not arise, and could not have arisen in this case because
no nephew of the testator manifested any intention to enter the seminary or ever
became a priest.
DISPOSITION: CA AFFIRMED

4. Robles, et al. vs. De Santiago| G.R. No. L-10111 August 31, 1960| BARRERA, Jaaaaaaaaaaaa

Petitioners: Trusteeship of the Estate of BENIGNO DIAZ Y HEREDIA, deceased.

BANK OF THE PHILIPPINE ISLANDS, trustee.
SOLEDAD ROBLES, ET AL
Respondents: ISABEL MANAHAN DE SANTIAGO and NESTOR M. SANTIAGO

FACTS:
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 In the will Benigno Diaz y Heredia, a trust estate was created out of the properties not
otherwise disposed of, which the Bank of the Philippine Islands was designated as
Trustee.c

 After the death of his wife, Da. Rafaela Mercado y Beleti, Diaz, then still living, caused
the preparation of a codicil

 The testator died, and his will and the codicil were accordingly probated

 the Bank of the Philippine Islands was appointed Trustee of the trust created by the
testator in his will and codicil, for the purpose of paying the monthly and yearly
legacies of the legatees named therein, to which office it duly qualified.chanrob

 Pursuant to the terms of the codicil, and 10 years having already elapsed from the
testator's death, the Trustee, on petitioned the court, with the consent of all the
legatees, for authority to sell all the properties and liquidate the estate.

 This petition was granted.

o the property located at Rosario, Binondo, Manila, was sold to legatee Isabel
Manahan de Santiago

 the same year, legatees Soledad Robles and her children Pilar, Jose, Vicente and
Angeles, all surnamed Legarda filed a motion praying that the trustee be ordered to
deliver to them, in accordance with the provisions of the will, 90 per cent of the rentals
collected from the property in Rosario during the period of liquidation of the estate,
which the Trustee refused to deliver, the latter contending that upon the authorization
of the court of the sale of the properties, the trusteeship ceased already and the
rentals collected thereafter not only from the Rosario property but also from all the
other properties of the estate, constitute the mass of the residuary estate to be
distributed among the legatees in accordance with the terms of the codicil, i.e., only 30
per cent and not 90 per cent to the heirs of Domingo Legarda

 Soledad Robles and children filed a second motion likewise claiming 90 per cent of the
rentals

 The Trustee Bank countered that said rentals were liable first to the payment of the
expenses of the Testate Estate of Rafaela Mercado, the Testate Estate of Benigno Diaz,
and the Trusteeship of Benigno Diaz before they could be distributed; that movants,
having agreed not to collect the proceeds of their legacies from 1946 to 1949, they
were estopped from claiming the same; and that the right to claim said legacies from
1946 to 1949, had already prescribed
  The court issued an order directing the Trustee to deliver to Soledad Robles and
children, their shares in the rentals collected from the Rosario property after deducting
therefrom the real estate tax, the indispensable expenses for the conservation of the
property, and the corresponding estate and inheritance taxes.

 appeal was interposed by legatees Isabel Manahan de Santiago who, in the distribution
of the residuary estate, would get 50 % according to the codicil.

 appellants set up the defense of prescription, alleging that, being money-claim, the
claim should have been made within 4 years. And, as the demand was made only in
1955, it was argued the same was already barred

ISSUE + RULING

1. Whether or not said legatees- appellees may still demand their share of the rentals from
November 4, 1946 to October, 1949, and from January 20 to March 18, 1955  YES

 from the provisions of the will, the legacies given to appellees Soledad Robles and her
children were not made subject to any condition; hence, the right thereto passed to the
said legatees upon the death of the testator 

 As the Rosario was leased from 1946 to 1955, it follows that the legatees were entitled
to their share of the rentals for the duration of said period. they have already been paid
their 1949-1955

2. Whether or not their Claim is not barred by prescription NO

 From testamentary provisions in the will and the codicil, it seems clear that the testator
intended the enjoyment by the legatees, of their respective legacies for the entire
duration of the trust estate, even the specified properties are sold, the proceeds of
which have been directed to be invested in mortgages with interest, or in the purchase
of other rental-bearing properties.

 The legacies should, therefore, be viewed as one whole, continuing obligation, to be

carried out by the trustee.

o The fact that the rentals are to be delivered monthly, did not make each delivery
a separate, distinct prestation, or render the obligation divisible, for to treat it as
such, would destroy or alter the essence of the legacy.

 Considering that the obligation terminated upon the sale of the said property on March
1955, the demand for complete delivery of the inheritance made in April, 1955, has not
yet prescribed
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 the claim is based upon a specific legacy contained in a probated will hence, it is an
obligation based upon a judgment and the prescription period is 10 years.

3. Whether or not Appellees are estopped from claiming for additional share when they
received their share in the rentals and agreed to the approval to the Trustee's statement of
accountsNO

 appellees merely desisted from pressing the collection of their shares for 1946 to 1949,
by reason of the Trustee's representation that the money would be needed for expense
of administration, and assurance that they would be paid before the division of the
residuary estate among the heirs.

 since the trial court inferentially rejected this contention of appellants and the latter,
having appealed directly to us on purely legal issues, appellants should be deemed to
have waived this defense. 

4. Whether or not Appellees' filing of an opposition to the probate of the will caused the
forfeiture of their right to the legacies NO

 under the will, the unsuccessful opposition, by any legatee, to the probate of the will
and non-compliance with its provisions after the probate shall cause the forfeiture of his
right thereunder.

 In this case, appellees' counsel filed an opposition to the probate of the will but the
same was withdrawn  and the will was finally probated

 Appellees having voluntarily desisted from their opposition long before the probate of
the will and, apparently, even before presentation of evidence on the part of the
proponent, such an opposition could not have been the opposition contemplated in the
will, as otherwise the provision prohibiting opposition would be null and void.

5. WHETHER OR NOT Appellee’s claim over the rentals from January 20 to March 18, 1955c
terminated from the moment (January 19 1955), the court allowed the sale of the properties
of the estate, had the effect of terminating the trust and putting an end to the legatees' right
to the fruits of the Rosario propertyNO

 appellants contend that appellees' claim over rentals terminated on said date, hence,
appellees are not entitled to the rentals from January 20 to March 18, 1955, date when
the Rosario property was actually sold.

 The trust has been created to carry out the dispositions made in the will, principally the
payment of the legacies.
  The codicil provides that after the lapse of ten or fifteen years from the date of the
testator's death (November 7, 1944), the properties may be sold upon agreement of all
the legatees and the proceeds of the sale, after deducting certain amounts, are to be
distributed in the manner indicated therein. The approval of the petition to sell did not
automatically terminate the trusteeship, nor did it constitute full accomplishment of the
trust.

 It was only after the actual sale of the properties on March 18, 1955, and the
distribution of the proceeds directed by the testator that the trust could be considered
as accomplished and terminated. Consequently, the appellees are entitled to their share
of the rentals during the liquidation of the trusteeship from January 20 to March 18,
1955.

DISPOSITION: RESOLUTION AFFIRMED

5. Perez vs. Araneta (1968)|G.R. No. L-18414| July 15, 1968| FERNANDO, J.

Petitioner: ANTONIO M. PEREZ, as Judicial Guardian of BENIGNO, ANGELA and ANTONIO, all
surnamed PEREZ y TUASON

Respondent:  J. ANTONIO ARANETA, as Trustee of Minors

FACTS:

 appellant-guardian Antonio M. Perez of the minors, his children, Benigno, Angela and
Antonio Perez y Tuason, filed an petition to remove trustee, appellee J. Antonio
Araneta,

 The first charge,imputed to the trustee the withholding of "the allowances due the
beneficiaries for October, November and December, 1956

o Lower court: the trustee complied by delivering the allowances. The delay in
payment is not attributable to the trustee, and in any case can not be said to
have occurred because he was withholding the allowances law library

 second charge attributed to an associate of the trustee in the practice of the law the
statement that if appellant-guardian "would not withdraw his opposition to the
trustee's investment in the Philippine-American Drug Company shares, the trustee
would charge to income of the trust the amount of P30,120.95 which the trustee had
been authorized to collect as trustee's and attorney's fees.

o lower court was not convinced about a remark of that character having been
made or even if it were, that it was in fact authorized by the trustee.
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 Third charge consisted in the trustee again failing to pay the allowances with the end in
view of coercing appellant-guardian to condone "the sale of the Marikina property
which the trustee had consummated and which had been previously approved in the
order of October 15, 1959

o  lower court: no proof "that the trustee refused to deliver the allowances though
he had enough funds in his possession for that purpose. The failure of the
trustee to deliver on time the allowances and net income was because of lack of
funds and not because he wanted to withhold payment thereof

 fourth charge contested trustee's investing in shares of the Philippine-American Drug

Co., Ramie Textiles, Inc. and International Textile Mills, Inc. alleged to be business
enterprises of trustee's family as improper and unwise as no dividends on said shares
were forthcoming

o Lower court: "Insofar as the Philippines American Drug Company shares are
concerned, it is improper to touch upon them in this incident because the
property of their purchase is precisely the issue in the guardian's unresolved
appeal from the order of February 14, 1959 wherein this Court upheld said
purchase. The evidence failed to sustain, according to the lower court, the
imputation that Ramie Textiles, Inc. and International Textile Mills, Inc. were
Araneta controlled. Delayed payment of dividends alone is not decisive of the
unprofitability of an investment and certainly does not by itself establish the
instability of the enterprise concerned. This is particularly true in this case where
the

 Fifth charge: questioned the trustee's acquisition of Lepanto shares.

o lower court: Evidence proved Lepanto Consolidated Mining Co. is very sound and
the trustee's accounts show that the trusteeship has regularly earned substantial
dividends out of said investment. To sustain the charge that the investments in
question are improper or that the making of said investments constitutes an
abuse of discretion which is the sole factor that will justify its interference with
the trustee's personal judgment in the administration of this trust

 Sixth charge: non-cooperation against the trustee

o Lower Court: palpably baseless because the data the trustee did not furnish him
were either those that the trustee was not bound to furnish him or those that
should be reported in the trustee's quarterly accounts. If the trustee can at any
time be compelled to furnish him things that the accounts will anyway contain
the trustee's duty to account will become unduly burdensome. Disagreements
 between the trustee and the guardian were provoked by the guardian's
untenable views and not by any lack of cooperation on the part of the trustee." 10

 Seventh charge: trustee was guilty "of deception and self-dealing on the allegation that
the trustee notified him of the sale of certain lots belonging to the trust in favor of
Caltex (Phil.), Inc. but subsequently sold them to the Insular Life Assurance Co. Ltd. in
which the trustee is substantially interested."

o Lower court: there being the imputation of trustee's interest in the Insular Life
Assurance Co., Ltd., on the date of the sale, the trustee owned, only 100
common shares in said company out of its outstanding 114,826 common shares
at P10.00 per share and 117,000 preferred shares at P100.00 per share. This
neglible stockholding of the trustee in the Insular Life Assurance Co., Ltd. will not
suffice to destroy the distinction between their separate personalities and serve
as basis to hold that the trustee dealt with himself when he executed the sale in
its favor

 Guardian appealed the order

o Prayed for the removal of the trustee or, in the alternative, to strip him of his
power to sell, mortgage or otherwise alienate or exercise any power of strict
dominion unless with the unanimous consent of the co-trustee sought to be
appointed in the event that removal is not effected was denied and the trustee
absolved of all the charges presented

ISSUE + RULING

Whether or not the lower court erred in absolving trustee of the charges filed NO

 The appealed order is far from an arbitrary dismissal of the charges aired by the
appellant-guardian. Rather, a careful effort was made to inquire into and dispassionately
pass upon the alleged shortcomings and failures of the trustee.c

 It is obvious on the face of the first assignment of error that the same is essentially
factual in character. Where the correctness of the findings of fact of the lower court is
assailed, the Court of Appeals is the proper forum.

 With the lower court carefully examining the charges preferred and thereafter absolving
the trustee, it logically follows that there is no justification for his removal or for
restricting his authority to exercise his power to sell, mortgage, alienate or for that
matter any power of strict dominion without the consent of such co-trustee or co-
trustees

 there is no occasion for the reversal of the order appealed from.

Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

 It may not be inappropriate to refer to the absence of goodwill that undeniably marks
the relationship of appellant-guardian and the trustee, J. Antonio Araneta - a matter
which is apparent from the number of litigations between them. law library

 What must be emphasized, however, is that the uppermost consideration should be the
welfare of the minor beneficiaries, the children of appellant- guardian, for whom the
trust was created.

 as of this time and after all these litigations, there is no requisite of the failure of the
trustee to live up to the exacting responsibility entrusted to him or his subordination of
the well-being of such minors to his own personal interest.

 In the case of Trusteeship of the Minors v. Araneta it states: " the trustor had such faith
and confidence in appellee that she relied fully upon his judgment and discretion. The
exercise thereof by appellee should not be disturbed, therefore, except upon clear proof
of fraud or bad faith, or unless the transaction in question is manifestly prejudicial to the
interest of the minors aforementioned. Such is not the situation obtaining in the present
case."

DISPOSITION: APPEALED ORDER AFFIRMED

6. Members of the Cult of San Miguel Arcangel vs. Narciso |G.R. No. L-24843| July 15, 1968|
CONCEPCION, J.

Petitioners:MEMBERS OF THE CULT OF SAN MIGUEL ARCANGEL

Respondent: PEDRO NARCISO, trustee

Facts:
 Upon the death of Policarpio Narciso, a bachelor, without forced heirs, a special
proceeding settlement of his estate, was commenced.
o his last will and testament dated 1910 allowed to probate stated that his: first-
degree nephews and my relatives who should inherit from my assets expressed
in this will have the right to divide them into three; that in the first part it is the
duty that the heirs themselves will distribute; In the second part is my donation
to the cult of San Miguel Arcangel to sustain the necessary occasion, and the
third part I pledge to give voluntarily to the Executor, Tranquilino Jimenez to
take care and to fix all my assets,
 1920 :the court ordered the executor ranquilino Jimenez,
o (1) to segregate from the mass of the estate of the deceased a building used as
chapel (Ermita), a house of wood intended for convent, a bell, and the religious
images and ornaments specified in said instrument;
o (2) to divide the rest of the estate into three (3) equal parts;
o (3) to distribute one part among the nearest relatives 1 of the deceased and
o (4) to keep another part for himself, as compensation for his (executor’s)
services.
 The order, likewise, provided that the remaining third part is intended for the care and
support of worship in the Hermitage and also for the convent house and ornaments
and will be under the care and administration of the executor Tranquilino Jimenez,
who as such trustee will provide a bond equal to the value of the assets and the
Hermitage, convent and other things, also presenting an inventory of all the assets
placed in his care as trustee
 the court directed that third part be administered by the executor, as trustee thereof,
for the application of its products to the support of the Cult as ordained by the testator,
without authority to alienate the chapel and other religious objects mentioned but with
the duty to conserve them, according to the testator’s will.
 Court ordered the executor to institute a trusteeship proceeding for the administration
of the property bequeathed for the support of the Cult in the Chapel in the barrio of San
Miguel which Tranquilino Jimenez did and was appointed trustee.

 1956 Order: the presiding judge ordered the case be no longer included in pending
cases report to DOJ , because for practical purposes it should be considered as
terminated without prejudice, however, that the annual report of accounts of the
Miguel, Vianca Mikaella S. Trusteeship(2013) Digests
2016-89476

trustee and/or any incident that may hereinafter arise be presented to the court for
its resolution."

 Tranquilino Jimenez had died 2 and was succeeded, as trustee, by Pedro Narciso.

 two (2) petitions were filed for a change of trustee by several members of the "Cult of
San Miguel Arcangel", alleging mismanagement by Pedro Narciso and praying that
another member of the "Cult", be appointed in his stead
 Petitioners trustee Pedro Narciso and Carmen Narciso, Rafael Narciso and Felix Aquino,
as alleged heirs of the founder of the trust, objected to the appointment of a new
trustee and moved for the reversion, to the heirs of Policarpio Narciso, of the properties
held in trust

o Alleged that the trust had been terminated by the 1956 order, and that a trust
cannot exist for more than twenty (20) years, pursuant to Art. 870 of the Civil
Code of the Philippines.
 lower court denied this petition for reversion

ISSUE + RULING

1. Whether or not the trust has been terminated and that the trust should be reverted to the
heirs of Policarpio Narciso NO

 the trust was terminated by the 1956 order.

o The order declared the special proceeding terminated insofar only as the
monthly report of pending cases were concerned "without prejudice to the
annual report of accounts of the trustee and/or any incident that may arise"
thereafter, which "should be presented to the court for its resolution."
 the Civil Code of the Philippines became effective in 1950, or 30 years after the
establishment of the trust in 1920.
 Art. 870 of said Code which sets the period of 20 years for the existence of a trust, is not
applicable

2. Whether or not petitioners are barred, by the principle of laches, from assailing the validity
and existence of said trustYES
 Petitioners: perpetuities are void under the common law and against public policy and
that, accordingly, the provision in the will of Policarpio Narciso seeking to establish a
perpetual trust is null and void.
 The validity of said provision was, however, upheld by necessary implication, in 2 Special
Proceedings in the CFI:
o the Court ordered the executor therein to submit a project of partition, giving
effect to said provision of the will, and later approved 10 said project of
 partition, as well as directed him to initiate another judicial proceeding for the
administration of the trust;
o the Court appointed Tranquilino Jimenez as trustee and, then, for many years,
passed upon 11 his accounts as such and those of his successor
 the orders of the Court in said two (2) proceedings recognizing and, upholding the
validity of said trust and actually enforcing as well as implementing the same, were and
are valid.
 he nullity of said trust cannot now be decreed without, in effect, reversing said valid
orders, from which no appeal was taken by petitioners herein or their predecessors in
interest, and which had become final and executory over 40 years ago.
 petitioners are barred, by the principle of laches, from assailing the validity and
existence of said trust

DISPOSITION: LOWER COURT AFFIRMED