G.R. No. L-24843 July 15, 1968
MEMBERS OF THE CULT OF SAN MIGUEL ARCANGEL, petitioners-appellees, vs. PEDRO NARCISO, trustee-appellant.

FACTS

Upon the death of Policarpio Narciso, a bachelor without forced heirs, special proceedings were commenced for the settlement of his estate. His last will and testament, executed on January 3, 1910, and allowed to probate, provided for the division of his estate into three parts: one for his nearest relatives, one as compensation for his executor (Tranquilino Jimenez), and one as a donation for the support of the Cult of San Miguel Archangel in the Ermita (chapel) of his barrio. In August 1920, the court ordered the executor to segregate the chapel, convent, bell, and religious images, divide the rest of the estate into three equal parts, distribute one part to the relatives, keep one part as compensation, and hold the remaining third part for the support of the cult under his administration as trustee. In December 1922, Tranquilino Jimenez was formally appointed trustee in a separate trusteeship proceeding (Special Proceeding No. 979). After Jimenez’s death, he was succeeded as trustee by Pedro Narciso. Later, petitions were filed by members of the Cult for a change of trustee. On January 3, 1963, the trustee Pedro Narciso and other alleged heirs of Policarpio Narciso objected to the appointment of a new trustee and moved for the reversion of the trust properties to the heirs, arguing that the trust had been terminated by a court order dated October 31, 1956, and that a trust cannot exist for more than twenty years under Article 870 of the Civil Code. The lower court denied the petition for reversion, prompting this appeal.

ISSUE

Whether the trust established under the will of Policarpio Narciso has been terminated, either by the court order of October 31, 1956, or by the alleged prohibition against trusts lasting more than twenty years under Article 870 of the Civil Code.

RULING

The Supreme Court affirmed the lower court’s order, holding that the trust was not terminated. The order of October 31, 1956, only terminated the inclusion of Special Proceeding No. 979 in the monthly reports of pending cases, explicitly without prejudice to the annual accounting by the trustee or any future incidents, thus not terminating the trust itself. Article 870 of the Civil Code of the Philippines, which took effect in 1950, does not apply retroactively to impair vested rights. The trust was established in 1920 under the regime of the Civil Code of 1889 and previous laws, which govern rights originating from acts done before the new Code. Furthermore, the validity of the perpetual trust provision in the will was upheld by implication in the earlier court proceedings (Special Proceedings Nos. 546 and 979), which recognized and enforced the trust. No appeal was taken from those orders, and they became final and executory over forty years prior. The petitioners are also barred by laches from assailing the trust’s validity. The case was remanded to the lower court for further proceedings.