G.R. No. L-18414 July 15, 1968
ANTONIO M. PEREZ, as Judicial Guardian of BENIGNO, ANGELA and ANTONIO, all surnamed PEREZ y TUASON, petitioner-appellant, vs. J. ANTONIO ARANETA, as Trustee of Minors, respondent-appellee.

FACTS

Antonio M. Perez, as judicial guardian of his minor children Benigno, Angela, and Antonio Perez y Tuason, filed a petition in the lower court to remove appellee J. Antonio Araneta as trustee of the minors’ trust. The lower court dismissed the petition and absolved the trustee of all charges. The guardian appealed the order of dismissal. The lower court’s order, dated October 31, 1960, meticulously examined and rejected each of the seven charges against the trustee: (1) Withholding allowances for October-December 1956, which the court found was due to a delayed court order and lack of funds, not trustee misconduct; (2) An alleged threat by the trustee’s law associate to charge trustee’s fees against income if the guardian opposed an investment, which the court found unsubstantiated; (3) Again failing to pay allowances to coerce the guardian into condoning a sale, which the court attributed to lack of trust funds; (4) Making improper and unwise investments in family-controlled companies (Philippine-American Drug Co., Ramie Textiles, Inc., International Textile Mills, Inc.) that paid no dividends, which the court found either already upheld in a separate order or not proven to be Araneta-controlled or inherently unsound given the companies’ recent organization; (5) Questionable acquisition of Lepanto shares, which the court found to be a sound investment yielding substantial dividends; (6) Non-cooperation by the trustee, which the court found baseless and attributed to the guardian’s own untenable views; and (7) Deception and self-dealing in the sale of trust lots to Insular Life Assurance Co., Ltd., wherein the court found the sale was properly to Caltex’s nominee and the trustee’s minimal shareholding in Insular Life negated self-dealing.

ISSUE

Whether the lower court erred in absolving the trustee, J. Antonio Araneta, from the seven charges filed by the appellant-guardian, Antonio M. Perez, and in dismissing the petition for his removal.

RULING

The Supreme Court affirmed the appealed order. The appellant’s first assignment of error, challenging the lower court’s factual findings, was improper for a direct appeal to the Supreme Court, as such factual review falls under the jurisdiction of the Court of Appeals. On the merits, the Supreme Court found no error in the lower court’s conclusion. The appealed order demonstrated a careful and dispassionate inquiry into each charge, and its factual findings were supported. Furthermore, the Supreme Court cited its precedent in Trusteeship of the Minors v. Araneta, stating that the trustor had placed full faith in the trustee’s judgment and discretion, which should not be disturbed absent clear proof of fraud, bad faith, or manifest prejudice to the minors’ interests—a situation not present in this case. The order absolving the trustee was affirmed, with costs against the appellant-guardian.