G.R. No. 179859; August 9, 2010
IN RE: PETITION FOR PROBATE OF LAST WILL AND TESTAMENT OF BASILIO SANTIAGO, MA. PILAR SANTIAGO and CLEMENTE SANTIAGO, Petitioners, vs. ZOILO S. SANTIAGO, FELICIDAD SANTIAGO-RIVERA, HEIRS OF RICARDO SANTIAGO, HEIRS OF CIPRIANO SANTIAGO, HEIRS OF TOMAS SANTIAGO, Respondents. FILEMON SOCO, LEONILA SOCO, ANANIAS SOCO, URBANO SOCO, GERTRUDES SOCO AND HEIRS OF CONSOLACION SOCO, Oppositors.

FACTS

Basilio Santiago died testate in 1973. His will was admitted to probate by the Regional Trial Court (RTC) in 1978, and a decree of distribution was issued, transferring certain properties to petitioners Ma. Pilar and Clemente Santiago as trustees, not absolute owners, for a period of 20 years from Basilio’s death. The oppositors, heirs from Basilio’s first marriage, initially filed a Complaint-in-Intervention in the probate proceedings, contesting the will’s validity and alleging violation of their legitime. This was dismissed by the probate court. They subsequently filed a separate civil case for “completion of legitime,” which the RTC decided in their favor. On appeal, the Court of Appeals annulled the RTC decision, applying the principle of res judicata, a ruling which was affirmed by the Supreme Court in G.R. No. 155606.
After the 20-year trust period expired in 1993, the petitioners filed a motion in the original probate case (SP No. 1549-M) for the delivery of the trust properties to them as absolute owners, arguing the trust had terminated. The heirs from the second and third marriages opposed, contending the properties should now be partitioned among all compulsory heirs. The RTC granted the petitioners’ motion. The Court of Appeals reversed, ordering the partition of the properties among all legitimate heirs.

ISSUE

Whether the Court of Appeals erred in ordering the partition of the properties among all legitimate heirs upon the termination of the 20-year trust period, instead of ordering their delivery to petitioners Ma. Pilar and Clemente as absolute owners.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic rests on the proper interpretation of the will and the finality of the probate decree. The probate court’s 1978 Order, which became final, explicitly approved the distribution “in accordance with the will.” The will’s provisions, particularly paragraphs 4(e), (f), and (g), clearly state that the properties were given to Ma. Pilar and Clemente “hindi bilang pamana” (not as an inheritance) but to “pamahalaan at pangalagaan lamang” (only to administer and care for) for a 20-year period. The income was to be managed and distributed, while the capital was to be preserved.
The termination of the trust period did not convert the petitioners’ limited fiduciary title into one of absolute ownership. The trust was a modal institution intended to delay the actual distribution of the naked ownership. Upon its termination, the full ownership, which had remained with the estate, must be distributed according to the law on testate succession. The final 1978 decree of distribution, which incorporated the will’s terms, already adjudicated that the petitioners held the properties only in trust. Therefore, the next logical step is the partition and delivery of the properties to all the compulsory heirs as determined by law, not a conveyance