G.R. No. L-17809, De Leon et al. v. Molo-Peckson et al.

, 6 SCRA 978
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

December 29, 1962

G.R. No. L-17809

RESURRECCION DE LEON, ET AL., plaintiffs-appellees,
vs.
EMILIANA MOLO-PECKSON, ET AL., respondents-appellants.
Cornelio R. Magsarili for plaintiffs-appellees.
Sycip, Salazar, Luna and Associates for respondents-appellants.
BAUTISTA ANGELO, J.:
Resurreccion De Leon, et al. filed on November 13, 1958 before the Court of First
Instance of Rizal a complaint seeking to compel Emiliana Molo-Peckson, et al. to
convey to the former ten parcel of land located in Pasay City with an area of 1,749
sq. m. upon payment of P1.00 per parcel upon the plea that said lots were willed or

donated in 1948 to the latter by their foster parents Mariano Molo y Legaspi and
Juana Juan with the understanding that they should sell them to the plaintiffs under
the terms above-stated.

Defendants, in their answer, disclaimed any legal obligation on their part to sell the
above properties to the plaintiffs for the nominal consideration of P1.00 per lot
alleging that if they executed the document on which the complaint is predicated it
was on the mistaken assumption that their foster parents had requested them that
they executed on August 9, 1956 a document revoking said donation which was
acknowledged before Notary Public Leoncio C. Jimenez.

No testimonial evidence was presented by either party. Instead, both agreed to

submit the case upon the presentation of their respective exhibits which were all
admitted by the trial court.

After trial on the merits, the court a quo rendered on September 21, 1960 a decision
wherein it held that, under the facts established by the evidence, trust has been
constituted by the late spouses Mariano Molo and Juana Juan over the ten parcels of
land in question in favor plaintiffs as beneficiaries and, as a consequence
concluded:

Considering all the foregoing, the Court orders:

1. The defendants, jointly and severally to free the said ten (10) parcels of land from
the mortgage lien in favor of the Rehabilitation Finance Corporation (now
Development Bank of the Philippines) and Claro Cortez, and thereafter to sign and
execute in favor of the plaintiffs a deed of absolute sale of the said properties for
and in consideration of TEN (P10.00) PESOS already deposited in Court after all
conditions imposed in Exhibit A have been complied with;

2. That in the event the defendants shall refuse to execute and perform the above,
they are ordered, jointly and severally, to pay the plaintiffs the value of said ten (10)
parcels of land in question, the amount to be assessed by the City of Pasay City as
the fair market value of the same, upon orders of the Court to assess said value;

3. The defendants jointly and severally to pay the plaintiffs' Attorney's fees in the
amount of P3,000.00, as defendants acted in gross and evident bad faith in refusing
to satisfy the plaintiffs' plainly valid, just and demandable claim, under Article 2208
sub-paragraph 5 of the New Civil Code;

4. The defendants to render an accounting of the fruits of said ten (10) parcels of
land from the time plaintiffs demanded the conveyance of said parcels of land on
August 11, 1956 as per Exhibits B and C, in accordance with the provisions of Article
1164, New Civil Code which provides that the creditor has a right to the fruit of the
thing from the time the obligation to deliver it arises; and

5. The defendants to pay the costs.

Defendants took the present appeal.

On January 24, 1941, Mariano Molo y Legaspi died leaving a will wherein he
bequeathed his entire estate to his wife, Juana Juan. This will was probated in the
Court of First Instance of Pasay City, Rizal, which was affirmed by the Supreme
Court on November 26, 1956 (G.R. No. L-8774). On May 11, 1948, Juana Juan in turn
executed a will naming therein many devisees and legatees, one of whom is
Guillermo San Rafael, mother of the plaintiffs and defendant Pilar Perez Nable. On
June 7, 1948, however, Juana Juan executed a donation inter vivos in favor of
Emiliana Molo-Peckson and Pilar Perez Nable of almost all of her entire property
leaving only about P16,000.00 worth of property for the devisees mentioned in the

will. Among the properties conveyed to the donees are the ten parcels of land
subject of the present action. Juana Juan died on May 28, 1950.
On December 5, 1950, Emiliana Molo-Peckson and Pilar Perez Nable executed a
document which they called "MUTUAL AGREEMENT" the pertinent provisions of
which are:

That the above named parties hereby mutually agree by these presents . . . that the
following lots should be sold at ONE (1) PESO each to the following persons and
organization:

xxxxxxxxx

TO JUSTA DE LEON and RESURRECCION DE LEON, several parcels of land located

at Calle Tolentino (South of Tenorio and Kapitan Magtibay), Pasay City, share and
share alike or half and half of TEN (10) LOTS described in:

Transfer Certificate of Title No. 28157 and allocated as follows:

(a) To JUSTA DE LEON Five (5) Lots.

(b) To RESURRECCION DE LEON, the remaining Five (5) Lots.

That this agreement is made in conformity with the verbal wish of the late Don
Mariano Molo y Legaspi and the late Dona Juana Francisco Juan y Molo. These
obligations were repeatedly told to Emiliana Molo Peckson, before their death and
that same should be fulfilled after their death.

On August 9, 1956, however, the same defendants, assisted by their husbands,

executed another document in which they revoked the so-called mutual agreement
mentioned above, and another relating to the same subject matter, stating therein
that the parties, "after matured and thorough study, realized that the abovementioned public instruments . . . do not represent their true and correct
interpretation of the verbal wishes of the late spouses Don Mariano Molo y Legaspi
and Dona Juana Francisco Juan y Molo." But after the execution of this document,
that is, on August 11, 1956, the beneficiary Resurreccion de Leon and Justa de Leon,
thru their counsel demanded the conveyance to them of the ten parcels of land for
the consideration of P1.00 per parcel as stated in the document of December 5,
1950. And having the defendants refused to do so, said beneficiaries consigned on
July 8, 1957 the amount of P10.00 as the consideration of the ten parcels of land.
In this appeal, appellants assign the following errors:

THE LOWER COURT ERRED IN HOLDING THAT THE SPOUSES, MARIANO MOLO AND
JUANA JUAN, CONSTITUTED A TRUST OVER THE PROPERTIES IN QUESTION PETITION
WITH PLAINTIFFS-APPELLEES AS BENEFICIARIES.

II

THE LOWER COURT ERRED IN APPLYING ARTICLE 1440, 1441, 1449, 1453 AND 1457
OF THE NEW CIVIL CODE TO THE CASE AT BAR.

III

THE LOWER COURT ERRED IN HOLDING PLAINTIFFS-APPELLEES' EXHIBIT "A" TO BE A

DECLARATION AGAINST INTEREST AND AN ADMISSION BY DEFENDANTSAPPELLANTS.

IV

THE LOWER COURT ERRED IN HOLDING THAT DEFENDANTS-APPELLANTS HAD NO

RIGHT TO REVOKE EXHIBIT "A".

THE LOWER COURT ERRED, IN ORDERING APPELLANTS TO RENDER AN ACCOUNTING

OF THE FRUIT OF THE PROPERTIES IN QUESTION.

VI

THE LOWER COURT ERRED IN ORDERING APPELLANTS TO FREE THE PROPERTIES

FROM THE MORTGAGE LIENS IN FAVOR OF THE DEVELOPMENT BANK OF THE
PHILIPPINES AND CLARO CORTEZ.

VII

THE LOWER COURT ERRED IN AWARDING ATTORNEY'S FEES TO THE APPELLEES.

VIII

THE LOWER COURT ERRED IN NOT DISMISSING THE COMPLAINT.

There is no merit in the claim that the document executed on December 5, 1950
does not represent the true and correct interpretation by appellants of the verbal

wish of their foster parents relative to the conveyance for a nominal consideration
to appellees of the ten parcels of land in question considering the circumstances
obtaining in the present case. To begin with, this document was executed by
appellants on December 5, 1950, or about two years and six months from the time
they acquired title to the lands by virtue of the donation inter vivos executed in
their favor by their foster mother Juana Juan and six months after the death of the
donor. There is nobody who could cajole them to execute it, nor is there any force
that could corce them to make the declaration therein expressed, except the
constraining mandat of their conscience to comply with "the obligations repeatedly
told to Emiliana Molo Peckson," one of appellants, before their death, epitomized
inthe "verbal wish of the late Don Mariano Molo y Legaspi and the late Doa Juana
Francisco Juan y Molo" to convey after their death said ten parcelsof land at P1.00 a
parcel to appellees. In fact, the acknowledgement appended to the document they
subscribed states that it was "their own free act andvoluntary deed."
Indeed, it is to be supposed that appellants understood and comprehended the legal
import of said documents when they executed it more so when bothof them had
studied in reputable centers of learning, one being a pharmacist and the other a
member of the bar. Moreover, they have more than ample time the six months
intervening betwen the death of the donor and the execution of the document to
ponder not only wish of their predecessors-in-interest but also on the propriety of

putting in writing the mandate they have received. It is, therefore, reasonable to
presume that that document represents the real wish of appellants' predecessors-ininterest and that the only thing to be determinedis its real import and legal
implications.

That the document represents a recognition of pre-existing trust or a declaration of

an express trust impressed on the ten parcels of land in question is evident. A
declaration of trust has been defined as an act by which a person acknowledges
that the property, title to which he holds, is held by him for the use of another
(Griffith v. Maxfield, 51 S.W. 832, 66Ark. 513, 521). This is precisely the nature of
the will of the donor: to convey the titles of the lands to appellants with the duty to
hold them intrust for the appellees. Appellants oblingly complied with this duty
byexecuting the document under consideration.

True it is that to establish a trust the proof must be clear, satisfactory and
convincing. It cannot rest on vague, uncertain evidence, or on a loose,equivocal or
indefinite declaration (In re Tuttle's Estate, 200 A. 921, 132 Pa. Super 356); but here
the document in question clearly and unequivocallydeclares the existence of the
trust even if the same was executed subsequent to the death of the trustor, Juana
Juan, for it has been held that the right creating or declaring a trust need not be

contemporaneous or inter-parties (Stephenson v. Stephenson, 171 S.W. 2d 265, 351

Mo. 8; In re Corbin's Trust Orhp., 57 York Leg. Rec. 201). It was even held that an
express trust maybe declared by a writing made after the legal estate has been
vested in the trustee (Kurtz v. Robinson, Tex. Civ. App. 256 S.W. 2d 1003). The
contention, therefore, of appellants that the will and the donation executed by their
predecessors-in-interest were absolute for it did not contain a hint that the lots in
question will be held in trust by them does not merit weight because the fact that
an express trust was created by a deed which was absolute on its face may be
shown by a writing separate from the deed itself (Mugan v. Wheeler, 145 S.W. 462,
241 Mo. 376).
The fact that the beneficiaries were not notified of the existence of the trust or that
the latter have not been given an opportunity to accept it isof no importance, for it
is not essential to the existence of a valid trustand to the right of the beneficiaries
to enforce the same that they had knowledge thereof the time of its creation
(Stoehr v. Miller, 296 F. 414).Neither is it necessary that the beneficiary should
consent to the creation of the trust (Wockwire-Spencer Steel Corporation v. United
Spring Mfg. Co.,142 N.E. 758, 247 Mass. 565). In fact it has been held that in case of
a voluntary trust the assent of the beneficiary is not necessary to render itvalid
because as a general rule acceptance by the beneficiary is presumed (Article 1446,
new Civil Code; Cristobal v. Gomez, 50 Phil. 810).

It is true, as appellants contend, that the alleged declaration of trust was revoked,
and having been revoked it cannot be accepted, but the attempted revocation did
not have any legal effect. The rule is that in the absence of any reservation of the
power to revoke a voluntary trust is irrevocable without the consent of the
beneficiary (Allen v. Safe Deposit and Trust Co.of Baltimore, 7 A. 2d 180, 177 Md.
26). It cannot be revoked by the creatoralone, nor by the trustee (Fricke v. Weber,
C.C.A. Ohio, 145 F. 2d 737;Hughes v. C.I.R., C.C.A. 9, 104 F. 2d 144; Ewing v.
Shannahan, 20 S.W. 1065,113 Mo. 188). Here, there is no such reservation.
Appellants contend that the lower court erred in applying the provisions of the new
Civil Code on trust. This is correct. The express trust was constituted during the
lifetime of the predecessor-in-interest of appellants,that is, before the effectivity of
the new Civil Code, although the instrumentrecognizing and declaring such trust
was executed on December 5, 1950, afterthe effectivity of said Code. The Civil Code
of 1889 and previous laws andauthorities on the matter, therefore, should govern
the herein trust under the provisions of Article 2253 of the new Civil code.

But the Civil Code of 1889 contains no specific provisions on trust as doesthe new
Civil Code. Neither does the Code of Civil Procedure of 1901 for thesame merely
provides for the proceeding to be followed relative to trustsand trustees (Chapter
XVIII). This silence, however, does not mean that thejuridical institution of trust was

then unknown in this jurisdiction, for theprinciples relied upon by the Supreme Court
before the effectivity of thenew Civil Code were those embodied in Anglo-American
jurisprudence as derivedfrom the Roman and Civil Law principles (Government v.
Abadilla, 46 Phil. 42). And these are the same principles on which we predicate our
ruling heretoforestated and on which we now rely for the validity of trust in
question.
The trial court ordered appellants to render an accounting of the fruits of the
properties in question even if appellees did not expressly ask for it intheir prayer for
relief. We, however, believe that this is covered by the general prayer "for such
other relief just and equitable under the premises."What is important is to know
from what what date the accounting should bemade. The trial court ordered that the
accounting be made from the time appellees demanded the conveyance of the ten
parcels of land on August 11, 1956, in accordance with Article 1164 of the new Civil
Code which provides that the creditor has a right to the fruit of the thing from
thetime the obligation to deliver it arises. But this cannot be done without first
submitting proof that the conditions stated in the mutual agreement hadbeen
complied with. And this only happened when the decision of the Supreme Court in
G.R. No. L-8774 became final and executory. The ruling of the trialcourt in this
respect should therefore be modified in the sense that the accounting should be
made from the date of the finality of the said decision.

We find no error in the directive of the trial court that appellants shouldfree the
lands in question from the encumbrance that was created thereon by them in favor
of the Development Bank of the Philippines and one Claro cortez, for as trustees it is
their duty to deliver the properties to the cestui que trust free from all liens and
encumbrances.
To recapitulate, we hold: (1) that the document executed on December 5, 1950
creates an express trust in favor of appellees; (2) that appellants had no right to
revoke it without the consent of the cestui que trust; (3) that appellants must render
an accounting of the fruits of the lands from the datethe judgement rendered in G.R.
No. L-8774 became final and executory; and (4)that appellants should free said
lands from all liens and encumbrances.
WHEREFORE, with the modification as above indicated with regard to accounting,we
hereby affirm the decision appealed from, without pronouncement as to costs.

Labrador, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
Padilla and Concepcion, JJ., took no part.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION
G.R. No. L-59879 May 13, 1985
PATRICIO SINAON and MARIA, FRANCISCA and JOSE, all surnamed SINAON, petitioners,
vs.
ANDRES SOROGON, ANASTACIA PARREO, SOLEDAD PARREO, ANA PARREO,
MARCELINA, CLARITA, RUFINO and MANUEL, all surnamed ARELLANO, SIMPLICIO
SOMBLINGO and BRIGIDA SOMBLINGO and COURT OF APPEALS, respondents.
Neil D. Hechanova for petitioners.
Benjamin P. Sorongon for respondents.

AQUINO, J.:
The issue in this case is whether an action for reconveyance of a registered five-hectare land,
based on implied trust, would lie after the supposed trustees had held the land for more than
forty years.
According to the documentary evidence consisting of public documents and tax records, Judge
(later Justice) Carlos A. Imperial in a decree dated March 4, 1916 adjudicated to Canuta
Soblingo (Somblingo), a widow, Lot No. 4781 of the Sta. Barbara, Iloilo cadastre with an area of
5.5 hectares. OCT No. 6178-A was issued in 1917 to Canuta (Exh. 6 and 7 or B).
In 1923 Canuta sold the lot to the spouses Patricio Sinaon and Julia Sualibio for P2,000 (Exh.
8). TCT No. 2542 was issued to the Sinaon spouses (Exh. 9 or C). It is still existing and
uncancelled up to this time, Julia was the granddaughter of Canuta.
The lot was declared for tax purposes in Sinaon's name (Exh. 3). The Sinaon spouses and their
children paid the realty taxes due thereon (Exh. 1 to 5-C). They have possessed the land as
owners from 1923 up to this time or for more than half a century.
Canuta was one of the five children of Domingo Somblingo, the alleged original owner of the lot
when it was not yet registered. His other four children were Felipe, Juan, Esteban and Santiago.
The theory of respondents Sorogon, et al.,
which they adopted in their 1968 second amended complaint (they filed the action in 1964) is
that Canuta and the Sinaons were trustees of the lot and that the heirs of Domingo's four
children are entitled to a 4/5 share thereof.
That theory was sustained by the trial court and the Appellate Court. The trial court ordered the
Sinaons to convey 4/5 of Lot No. 4781 to respondents Sorogon, et al. It decreed partition of the

lot in five equal parts. The Sinaons appealed to this Court. The respondents did not file any
brief.
We hold that after the Sinaons had appeared to be the registered owners of the lot for more
than forty years and had possessed it during that period, their title had become indefeasible and
their possession could not be disturbed. Any pretension as to the existence of an implied trust
should not be countenanced.
The trustors. who created the alleged trust, died a long time ago. An attempt to prove the trust
was made by unreliable oral evidence. The title and possession of the Sinaons cannot be
defeated by oral evidence which can be easily fabricated and contradicted. The contradictory
oral evidence leaves the court sometimes bothered and bewildered.
There was no express trust in this case. Express trusts concerning real property cannot be
proven by parol evidence (Art. 1443, Civil Code). An implied trust "cannot be
established, contrary to the recitals of a Torrens title, upon vague and inconclusive proof"
(Suarez vs. Tirambulo, 59 Phil. 303; Salao vs. Salao, L-26699, March 16,1976, 70 SCRA 65,
83).
Even assuming that there was an implied trust, plaintiffs' action was clearly barred by
prescription (Salao vs. Salao,supra, p. 84).
Prescription is rightly regarded as a statute of repose whose object is to suppress fraudulent
and stale claims from springing up at great distances of time and surprising the parties or their
representatives when the facts have become obscure from the lapse of time or the defective
memory or death or removal of witnesses (53 C.J.S. 903). See Teves Vda. de Bacong vs.
Teves and CA, G.R. No. 50143, October 24, 1983, 125 SCRA 137; Ramos vs. Ramos, L-19872,
December 3, 1974, 61 SCRA 284; Gallanosa vs. Arcangel, L-29300, June 21, 1978, 83 SCRA
676 and Sinco vs. Longa 51 Phil. 507.
It was not necessary for the Sinaons to plead prescription as a defense because there is no
dispute as to the dates. There was no factual issue as to prescription (Chua Lamko vs. Dioso,
97 Phil. 821, 824; Ferrer vs. Ericta, L-41767, August 23, 1978, 84 SCRA 705).
At any rate, the Sinaons invoked in the lower court the ruling laid down in Gerona vs. De
Guzman, 120 Phil. 149, 153 that an action for reconveyance of realty, based upon a
constructive or implied trust resulting from fraud, may be barred by prescription. The
prescriptive period is reckoned from the issuance of the title which operates as a constructive
notice (Diaz vs. Gorricho and Aguado, 103 Phil. 261, 266-267; J.M. Tuason & Co., Inc. vs.
Magdangal, 114 Phil. 42, 46-47; Lopez vs. Gonzaga, 119 Phil. 424, 437).
The supposed trust in this case, which is neither an express nor a resulting trust, is a
constructive trust arising by operation of law (Art. 1456, Civil Code). It is not a trust in the
technical sense (Gayondato vs. Treasurer of the P.I., 49 Phil. 244). *

WHEREFORE, the judgment of the Court of Appeals is reversed and the complaint is
dismissed. The receivership is terminated. The receiver is directed to wind up his accounts. No
costs.
SO ORDERED.
Makasiar (Chairman), Abad Santos, Escolin and Cuevas, JJ., concur.
Justice Concepcion, Jr., took no part.

G.R. No. 21334, Government v. Abadilla et al., 46 Phil. 642

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

December 10, 1924

G.R. No. 21334

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, petitioner,
vs.
ANASTASIA ABADILLA, ET AL., claimants.
THE MUNICIPALITY OF TAYABAS, ET AL., claimants-appellees,
MARIA PALAD, ET AL., claimants-appellants.

Domingo Lopez, Ramon Diokno and Gabriel N. Trinidad for appellants.

Attorney-General Villa-Real for municipality as appellee.
No appearance for the other appellees.

OSTRAND, J.:

This is an appeal from a judgment in cadastral and land registration case No. 3 of
the Court of First Instance of Tayabas (G. L. R. O. Record No. 213) in which case lots
Nos. 3464, 3469, and 3470 are claimed by the municipality of Tayabas and the
governor of the province on one side, and by Maria, Eufemio, Eugenia, Felix,
Caridad, Segunda, and Emilia Palad on the other. Lot No. 3470 is also claimed by
Dorotea Lopez. The court below ordered the registration of the three lots in the
name of the governor of the Province of Tayabas in trust for a secondary school to
be established in the municipality of Tayabas. The claimants Palad and Dorotea
Lopez appealed.

It appears from the evidence that the lands in question were originally owned by
one Luis Palad, a school teacher, who obtained titled to the land by composicion
gratuita in 1894. On January 25, 1892, Palad executed a holographic will party in
Spanish and partly in Tagalog. Palad died on December 3, 1896, without
descendants, but leaving a widow, the appellant Dorotea Lopez, to whom he had

been married since October 4, 1885. On July 27, 1987, the Court of First Instance of
Tayabas ordered the protocolization of the will over the opposition of Leopoldo and
Policarpio Palad, collateral heirs of the deceased and of whom the appellants Palad
are descendants.

The will contained a clause in Tagalog which, translated into English, reads:

That the cocoanut land in Colongcolong, which I have put under cultivation, be used
by my wife after my death during her life or until she marries, which property is
referred to in the inventory under No. 5, but from this cocoanut land shall be taken
what is to be lent to the persons who are to plant cocoanut trees and that which is
to be paid to them as their share of the crop if any should remain; and that she try
to earn with the product of the cocoanut trees of which those bearing fruit are
annually increasing; and if the times aforementioned should arrive, I prepare and
donate it to secondary college to be erected in the capital of Tayabas; so this will be
delivered by my wife and the executors to the Ayuntamiento of this town, should
there be any, and if not, to the civil governor of this province in order to cause the
manager thereof to comply with my wishes for the good of many and the welfare of
the town.

After the death of Luis Palad the widow Dorotea Lopez remained in possession of the
land and in the year 1900 married one Calixto Dolendo. On April 20, 1903, the
aforesaid collateral heirs of Luis Palad brought an action against the widow for the
partition of the lands here in question on the ground that she, by reason of her
second marriage, had lost the right to their exclusive use and possession. In the
same action the municipality of Tayabas intervened claiming the land under the
clause of the Palad will above quoted. During the pendency of the action an
agreement was arrived at by the parties under which the land which now
constitutes lots Nos. 3464 and 3469 were turned over to the municipality as its
share of the inheritance under the will, and the remaining portion of the land in
controversy and which now forms lot No. 3470 was left in the possession of Dorotea
Lopez. On the strength of the agreement the action was dismissed on November 9,
1904, upon motion by the counsel for the municipality and concurred in by all the
parties, reserving to the collateral heirs the right to bring another action. The
municipality of Tayabas has been in possession of said lots Nos. 3464 and 3469 ever
since and Dorotea Lopez has likewise held uninterrupted possession of lot No. 3470.

In regard to lots Nos. 3464 and 3469, claimed by the appellants Palad and the
appellees, the case presents several problems not directly covered by statutory
provisions or by Spanish or local precedents and, for the solution of which, we must

resort to the underlying principles of the law on the subject. As it is doubtful

whether the possession of the municipality of Tayabas can be considered adverse
within the meaning of section 41 of the Code of Civil Procedure, the case as to these
lots turns upon the construction and validity of the clause quoted from the will of
Luis Palad, rather than upon the question of prescription of title.

The clause is very unskillfully drawn; its language is ungrammatical and at first
blush seems somewhat obscure, but on closer examination it sufficiently reveals the
purpose of the testator. And if its provisions are not in contravention of some
established rule of law or public policy, they must be respected and given effect. It
may be observed that the question as to the sufficiency of the form of the will must
be regarded as settled by the protocolization proceedings had in the year 1897.

It is a well-known rule that testamentary dispositions must be liberally construed so

as to give effect to the intention of the testator as revealed by the will itself.
Applying this rule of construction it seems evident that by the clause in question the
testator proposed to create a trust for the benefit of a secondary school to be
established in the town of Tayabas, naming as trustee the ayuntamiento of the town
or if there be no ayuntamiento, then the civil governor of the Province of Tayabas.

As the law of trusts has been much more frequently applied in England and in the
United Stated than it has in Spain, we may draw freely upon American precedents in
determining the effect of the testamentary trust here under consideration,
especially so as the trusts known to American and English equity jurisprudence are
derived from the fidei commissa of the Roman law and are based entirely upon Civil
Law principles.

In order that a trust may become effective there must, of course, be a trustee and
acestui que trust, and counsel for the appellants Palad argues that we here have
neither; that there is no ayuntamiento, no Gobernador Civil of the province, and no
secondary school in the town of Tayabas.

An ayuntamiento corresponds to what in English is termed a municipal corporation

and it may be conceded that the ordinary municipal government in these Island falls
short of being such a corporation. But we have provincial governors who like their
predecessors, the civil governors, are the chief executives of their respective
provinces. It is true that in a few details the function and power of the two offices
may vary somewhat, but it cannot be successfully disputed that one office is the
legal successor of the other. It might as well be contended that when under the
present regime the title of the chief executive of the Philippine was changed from
Civil Governor to that of Governor-General, the latter was not the legal successor of

the former. There can therefore be but very little doubt that the governor of the
Province of Tayabas, as the successor of the civil governor of the province under the
Spanish regime, may acts as trustee in the present case.

In regard to private trust it is not always necessary that the cestui que trust should
be named, or even be in esse at the time the trust is created in his favor. (Flint on
Trusts and Trustees, section 25; citing Frazier vs. Frazier, 2 Hill Ch., 305;
Ashurt vs. Given, 5 Watts & S., 329; Carson vs. Carson, 1 Wins. [N. C.] 24.) Thus a
devise to a father in trust for accumulation for his children lawfully begotten at the
time of his death has been held to be good although the father had no children at
the time of the vesting of the funds in him as trustees. In charitable trust such as
the one here under discussion, the rule is still further relaxed. (Perry on Trusts, 5th
ed., section 66.)

This principle is in harmony with article 788 of the Civil Code which reads as follows:

Any disposition which imposes upon an heirs the obligation of periodically investing
specified sums in charitable works, such as dowries for poor maidens or
scholarships for students, or in favor of the poor, or any charitable public
educational institution, shall be valid under the following conditions:

If the charge is imposed on real property and is temporary, the heir or heirs may
dispose of the encumbered estate, but the lien shall continue until the record
thereof is canceled.

If the charge is perpetual, the heir may capitalize it and invest the capital at
interest, fully secured by first mortgage.

The capitalization and investment of the principal shall be made with the
intervention of the civil governor of the province after hearing the opinion of the
prosecuting officer.

In any case, if the testator should not have laid down any rules for the management
and application of the charitable legacy, it shall be done by the executive
authorities upon whom this duty devolves by law.

It is true that minor distinctions may possibly be drawn between the case before us
and that presupposed in the article quoted, but the general principle is the same in
both cases. Here the trustee, who holds the legal title, as distinguished from the
beneficial title resting in the cestui que trust, must be considered the heirs. The
devise under consideration does not in terms require periodical investments of
specified sums, but it is difficult to see how this can affect the general principle

involved, and unless the devise contravenes some other provision of the Code it
must be upheld.

We have been unable to find any such provision. There is no violation of any rule
against perpetuities: the devise does not prohibit the alienation of the land devised.
It does not violate article 670 of the Code: the making of the will and the
continuance or quantity of the estate of the heir are not left in the discretion of the
third party. The devisee is not uncertain and the devise is therefore are repugnant to
article 750 of the Civil Code. The provincial governor can hardly be regarded as a
public establishment within the meaning of article 748 and may therefore receive
the inheritance without the previous approval of the Government.

But counsel argues that assuming all this to be true the collateral heirs of the
deceased would nevertheless be entitled to the income of the land until the cestui
que trust is actually in esse. We do not think so. If the trustee holds the legal title
and the devise is valid, the natural heirs of the deceased have no remaining interest
in the land except their right to the reversion in the event the devise for some
reason should fail, an event which has not as yet taken place. From a reading of the
testamentary clause under discussion it seems quite evident that the intention of
the testator was to have income of the property accumulate for the benefit of the
proposed school until the same should be established.

From what has been said it follows that the judgment appealed from must be
affirmed in regard to lots Nos. 3464 and 3469.

As to lot No. 3470 little need be said. It may be noted that though the Statute of
Limitation does not run as between trustee and cestui que trust as long as the trust
relations subsist, it may run as between the trust and third persons. Contending
that the Colongcolong land was community property of her marriage with Luis Palad
and that lot No. 3470 represented her share thereof, Dorotea Lopez has held
possession of said lot, adverse to all other claimants, since the year 1904 and has
now acquired title by prescription.

The judgment appealed from is affirmed in regard to lots Nos. 3464 and 3469 and is
reversed as to lot No. 3470, and it is ordered that said lot No. 3470 be registered in
the name of the claimant Dorotea Lopez. No costs will be allowed. So ordered.

Street, Avancea, Villamor and Romualdez, JJ., concur.