G.R. No. 168660 ; June 30, 2009
HILARION, JR. and ENRICO ORENDAIN, represented by FE D. ORENDAIN, Petitioners, vs. TRUSTEESHIP OF THE ESTATE OF DOÑA MARGARITA RODRIGUEZ, Respondent.

FACTS

Doña Margarita Rodriguez died in 1960, leaving a last will and testament that was admitted to probate. She left no compulsory heirs. Her will created a trust to manage the income from her properties for distribution to specified beneficiaries. Clause 10 of the will placed certain properties under trusteeship to be administered “sa habang panahon” (forever) and prohibited their alienation or mortgage. Clause 24 provided for the use of trust income to assist named individuals, including Hilarion Orendain. In a 1969 case (Rodriguez v. Court of Appeals), the Supreme Court ruled that the prohibition against alienating the properties in Clause 10 was valid only for the first twenty years, pursuant to Article 870 of the Civil Code, and void thereafter. Decades later, petitioners Hilarion, Jr. and Enrico Orendain, heirs of Hilarion Orendain, Sr., moved to dissolve the trust, arguing it had existed for more than twenty years in violation of Articles 867 and 870 of the Civil Code. The Regional Trial Court denied their motion, ruling that while the prohibition against alienation was void after twenty years, the trust itself could be perpetual under Article 1013(4) of the Civil Code, and the testatrix’s wishes must be respected.

ISSUE

Whether the trusteeship over the properties left by Doña Margarita Rodriguez can be dissolved by applying Articles 867 and 870 of the Civil Code.

RULING

No. The Supreme Court denied the petition and affirmed the RTC’s order. The Court distinguished between the “trust” and the “condition prohibiting alienation.” The nullity under Article 870 of the Civil Code applies only to the testamentary disposition prohibiting the alienation of the properties for more than twenty years. This nullity does not extend to the trust itself, which was established to carry out the testatrix’s wishes, such as providing financial assistance to the beneficiaries named in Clause 24. The trust, as a legal institution, remains valid. The Court cited its ruling in Rodriguez v. Court of Appeals, which declared only the prohibition on alienation void after twenty years, not the entire testamentary disposition or the trust. Furthermore, the Court found support for a perpetual trust under Article 1013(4) of the Civil Code, which allows a court to order the establishment of a permanent trust where only the income from the property is used. The testatrix’s clear intent was to create a lasting source of aid for her beneficiaries, and her will must be given effect. The RTC correctly held that Articles 867 and 870 did not apply to dissolve the trust. The Court also noted that the petition, though captioned as certiorari, raised pure questions of law and was treated as a petition for review on certiorari. The dispositive portion ordered the remand of the case to the RTC to determine the identities of the current trustees and the intestate heirs entitled to the remaining properties.