G.R. No. L-28734 - Rodriguez vs. Court of Appeals

Case Summary (G.R. No. L-28734)

Key Dates

Testamentary disposition dated: September 30, 1951 (will).
Testatrix’s death: July 19, 1960.
Probate/legalization of will: September 23, 1960.
Project of partition filed: August 27, 1962; approved by the trial court without opposition.
Trial court order granting trusteeship: May 11, 1964 (affirmed by Court of Appeals Jan. 18, 1967).
Court of Appeals original decision: January 18, 1967 (affirming trial court).
Court of Appeals resolution on reconsideration: January 8, 1968 (set aside prior decision insofar as the trusteeship clause rested on a perpetual prohibition to alienate).
Supreme Court decision: March 28, 1969.

Applicable Law and Authorities

Applicable constitution for the decision’s historical context: 1935 Philippine Constitution (decision rendered in 1969).
Civil Code provisions central to the dispute: Article 867 (prohibition on inalienability), Article 870 (“The dispositions of the testator declaring all or part of the estate inalienable for more than twenty years are void.”), Article 788 and Article 791 (rules of testamentary interpretation favoring operative construction and avoidance of intestacy).
Precedents and authorities cited in the decision: Santos v. Manarang; Agustines v. Court; Lizarraga Hermanos v. Yap Tico; People v. Mapa; Pacific Oxygen & Acytelene Co. v. Central Bank; Dequito v. Lopez; Padilla v. City of Pasay; Benedicto v. Javellana; Solla v. Ascueta; Barrera v. Tampoco; Bustamante v. Arevalo, among others.

Facts and Probate Proceedings

The testatrix executed a will dated September 30, 1951 and died July 19, 1960. The will was probated on September 23, 1960 without opposition to its extrinsic validity. A project of partition filed by the executor was approved by the Court of First Instance on August 27, 1962, likewise without opposition; the intrinsic validity of the will was therefore treated as settled in the probate proceedings. The testatrix had no compulsory (forced) heirs at the time of death, so she was legally free to dispose of her estate by will.

The Trust Clause Presented and Its Literal Terms

Clause Tenth (Clausula Decima) of the will created a perpetual trusteeship (fideicomiso) to administer certain enumerated properties “in perpetuity” and included the explicit prohibition that “all properties mentioned in this Clause (not including the generator and automobile) shall not be mortgaged or sold at any time (kailan man), except for the property at Quezon Boulevard which may be mortgaged under specified circumstances.” The clause therefore, on its face, declared a prohibition on alienation without temporal limitation for the properties it covered.

Procedural History and Conflicting Rulings in the Courts Below

The trial court granted letters of trusteeship to the executors and approved the trusteeship arrangement; that order was affirmed by the Court of Appeals in its January 18, 1967 decision. On motion for reconsideration, however, the Court of Appeals, by resolution dated January 8, 1968, set aside its prior decision insofar as the trusteeship clause was concerned, concluding that the testamentary provision constituted a perpetual prohibition to alienate and therefore violated Article 867 and Article 870 of the Civil Code. The Court of Appeals thus declared the trust provision a nullity and directed intestate succession for the affected properties, remanding the matter to the trial court.

Legal Issue Presented to the Supreme Court

Whether the will’s clause that appears to declare a perpetual prohibition on alienation renders the trusteeship provision void in its entirety and produces partial intestacy for the properties covered, or whether the clause can be interpreted and sustained within the limits set by the Civil Code (notably Article 870’s twenty‑year rule), thereby preserving the testamentary disposition and preventing intestacy.

Supreme Court’s Analytical Framework and Controlling Principle

The Supreme Court framed the dispute against the clear language of Article 870, which declares void dispositions rendering estate inalienable for more than twenty years. The Court emphasized that when a legal provision is clear and categorical, it must be applied according to its literal terms. At the same time, the Court reiterated the cardinal rules of testamentary interpretation: ambiguities should be resolved to make dispositions operative rather than inoperative; of two interpretations, that which prevents intestacy is preferred (Arts. 788 and 791). The Court also endorsed the principle that courts may, to the extent necessary to effectuate a testator’s manifest intention, adjust language or supply words so long as the testatrix’s clear purpose is respected.

Application of Article 870 and Interpretation of the Clauses

Applying Article 870 literally, the Court held that what is void under that provision is testamentary declarations making the estate inalienable for more than twenty years. The Supreme Court concluded that the trusteeship clause, insofar as it operated for the initial twenty‑year period, did not offend Article 870 and was therefore valid. The Court rejected the notion that the clause must be struck down in toto and thereby generate partial intestacy. Instead, the proper course is to interpret the will so as to give effect to the testatrix’s expressed wishes within the limits fixed by law — preserving the trusteeship and the prohibition on alienation for the permissible twenty‑year sp

Case Syllabus (G.R. No. L-28734)

Procedural History

Petition for certiorari filed in the Supreme Court to review a resolution of the Court of Appeals dated January 8, 1968, which set aside its prior decision of January 18, 1967.
Underlying events: probate of a will, approval of a project of partition, and subsequent trusteeship proceedings in the Court of First Instance of Manila (Special Proceeding No. 3845; trusteeship proceedings No. 51872).
Probate: the will of Doña Margarita Rodriguez was legalized by the Court of First Instance of Manila on September 23, 1960.
Project of partition: presented by the executor on August 27, 1962, and approved by the Court of First Instance of Manila without opposition from appellants.
Court of Appeals initial decision (January 18, 1967): affirmed the lower court’s grant of trusteeship and did not pass on the validity of clause 10, effectively assuming its validity.
Court of Appeals resolution on reconsideration (January 8, 1968): set aside the January 18, 1967 decision insofar as clause 10 was concerned, held the trust a nullity for violation of rules against perpetuities and inalienability, and remanded for intestate succession for the properties covered.
Supreme Court disposition: reviewed and reversed the Court of Appeals’ January 8, 1968 resolution, reinstating the January 18, 1967 decision and the lower court order of May 11, 1964, with costs against private respondents.

Facts

Doña Margarita Rodriguez died in the City of Manila on July 19, 1960.
She executed a last will and testament dated September 30, 1951.
At her death she "left no compulsory heirs or forced heirs" and thus had full freedom to dispose of her properties by will.
The testatrix created a trust (fideicomiso) by clause 10 of her will; private respondents (Petra Rodriguez, Antonia Rodriguez, and Rosa Rodriguez) objected, claiming to be first cousins.
Executors-petitioners were granted letters testamentary/trusteeship by the lower court; this order was appealed by private respondents to the Court of Appeals.
The properties described in clause 10 included several items and expressly excluded "generator" and "automobile"; a specific property on Quezon Boulevard, Manila, was given an express exception regarding pledge under certain conditions.

Text of the Disputed Clause (Clause 10)

Clause as quoted in source:
- "[ Clausula Decima O Pang Sampu ]. - Ipinaguutos ko na ang mga pag-aaring nasasabi sa Clausulang ito ay pangangasiwaan sa habang panahon , at ito nga ang ipagbubukas ng ' Fideicomiso ' sa Juzgado pagakatapos na maayos ang naiwanan kong pag-aari . Ang pangangasiwaang pag-aari ay ang mga sumusunod : * * *. Ang lahat ng pag-aaring nasasabi Clausulang ito ( hindi kasama ang 'generator' at automobile) hindi maisasanla o maipagbibili kailan man, maliban sa pag-aaring nasa Quezon Boulevard, Maynila , na maaring isanla kung walang pondo sa gagamitin sa ipagpapaigi o ipagpapagawa ng panibago at alinsunod sa kaayusang hinihingi ng panahon ."
Clause purports to place the described properties under perpetual trusteeship and permanently prohibit mortgaging or selling ("hindi maisasanla o maipagbibili kailan man"), with one limited exception for a specified property.

Lower Court Rulings

Court of First Instance of Manila:
- Probated the will on September 23, 1960, without opposition in Special Proceeding No. 3845.
- Approved the project of partition on August 27, 1962, again without opposition.
- Granted letters of trusteeship to petitioners and recognized the trust arrangement in an order of May 11, 1964 (affirmed later by Court of Appeals on January 18, 1967).
The lower court overruled objections by private respondents to the trust.

Court of Appeals Decisions

January 18, 1967 Decision:
- Affirmed the lower court's action granting the trusteeship.
- Assumed the intrinsic validity of the will and did not pass upon the validity of clause 10, considering the probate and approved partition to resolve extrinsic and intrinsic validity questions.
- Noted that the deceased left no compulsory heirs and was therefore free to dispose of her property.
January 8, 1968 Resolution (on reconsideration):
- Set aside the January 18, 1967 decision as to the validity of clause 10.
- Held that the "perpetual prohibition to alienate" violated Article 867 and Article 870 of the Civil Code.
- Declared the trust a nullity for violating rules against perpetuities and the statutory limitation on inalienability of hereditary estate.
- Determined that intestate succession should govern the properties covered by the trust and remanded the case to the lower court.

Issues Presented

Whether clause 10 of the will creating a perpetual trusteeship and prohibiting alienation "kailan man" is void under Article 870 (and Article 867) of the Civil Code as an inalienability provision extending beyond twenty years, thereby rendering the trust a nullity.
Whether prior probate and approval of a project of partition, made without opposition, precluded later challenge to the intrinsic validity of clause 10.
Whether the Court of Appeals properly set aside its earlier decision and ordered pa