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.
G.R. No. L-21334 December 10, 1924 OSTRAND, J.

Provisions/Concepts/Doctrines and How Applied to the Case

ARTICLE 1440 - A person who established a trust is called the trustor

One in whom the confidence is reposed as regard property for the benefit if another person is known as
trustee
The person for whose benefit the trust has been created is referred to as the beneficiary

ARTICLE 1441 - Trusts are either express or implied. Express trusts are created by the intention of the
trustor or the parties. Implied trusts come into being by operation of law.

FACTS

Luis Palad, a school teacher, owns several parcels of land.

On January 25, 1892, Palad executed a holographic will to determine the partition of the subject
property. When Palad died on December 3, 1896, he had no descendants but had a wife, the
appellant Dorotea Lopez, to whom he had been married since October 4, 1885.

The holographic will which was made by Luis Palad contained a clause which states that:

● The coconut land in Colongcolong, which I have put under cultivation, shall be used by my wife
after my death during her life or until she marries,
● From this coconut land shall be taken what is to be lent to the persons who are to plant
coconut 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 coconut trees of which those bearing
fruit are annually increasing; If the times aforementioned should arrive, it shall be donated to
a secondary college to be built in the capital of Tayabas; (The income derived from the coconut
land shall be accumulated and used for the benefit of the secondary school until the same should
be established)
● 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

TRUSTOR: Luis Palad

TRUSTEE: Ayuntamiento (Municipal Corporation) or Civil Governor
BENEFICIARY:Municipality of Tayabas

After the death of Luis Palad the widow Dorotea Lopez remained in possession of the land and in the
year 1900 married Calixto Dolendo.
On April 20, 1903, the 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 which was stated in the
aforementioned clause of Luis Palad’s will.

During the pendency of the action, an agreement was made 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.

Because of this agreement, the action was dismissed on November 9, 1904, with the concurrence of
all parties, but reserving the right of the collateral heirs 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.

The collateral heirs and the widow filed an appeal with regards to the ownership of lot 3464 & 3469.
The heirs claim that in order that a trust may become effective there must be a trustee and a cestui
que trust, (beneficiary). The collateral heirs argue 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.

Furthermore, the collateral heirs argue that they are entitled to the possession and income of the
said land since the secondary school is not yet in esse/ has not have been built at the time the trust
has been created.
ISSUE

Whether or not the collateral heirs is entitled in the share of the Luis Palad’s land? – NO

RULING (include how the law was applied)

The Court held that a liberal interpretation of the will revealed that the testator intended to create a trust
for the benefit of the secondary school, naming the ayuntamiento of the town or the Civil Governor of the
Province as trustee. In order that a trust may be effective, there must be a trustee and a cestui que trust
(beneficiary). In this case, the intention of the testator (Luis Palad) was to have the income of the
property accumulate for the benefit of the proposed school until the same should be established.

The Governor of Tayabas, as the successor of the Civil Governor under the Spanish regime, acted as
trustee in the present case. If the trustee holds the legal title and the devise is valid, the collateral heirs of
the deceased testator 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 yet taken place.

Furthermore, it is not always necessary that the cestui que trust (beneficiary) shall be named or be in esse
(in existence). To illustrate, a devise (real property) left in a will by a a father in trust for
accumulation for his children which were 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.

Hence, the lands with lot nos. 3464 and 3469 shall hereby remain in the possession of the Municipality of
Tayabas as trustee until the secondary school has been established. The ownership of lot no. 3470 has
lawfully passed to Dorothea by prescription, having held possession of the land, adverse to all claimants,
since 1904.

DISPOSITIVE PORTION

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.

ADDITIONAL NOTES

Holographic will is an unattested will that is written and signed in the

testator's own handwriting. A holographic will, by definition, does not
need witnesses to be valid. Therefore, holographic wills are different
from typical wills because a holographic will does not have an
attestation requirement.