PAZ GARCIA Vda. de MAPA et.al. VS.

COURT OF APPEALS
G.R. No. L-38972, September 28, 1987

FACTS: On January 16, 1965, the petitoners Paz Garcia Vda. de Mapa et. al. instituted a
civil case before the Court of First Instance of Manila to recover the properties left by
Concepcion Mapa de Hidrosollo from the estate of Ludovico Hidrosollo which is also
subject to a special proceedings in the same court. They claimed that the deceased
Concepcion Mapa de Hidrosollo, in her last will and testament, instituted Ludovico
Hidrosollo as a universal heir with the obligation as a trustee to the residue of her estate
and to hold the same in trust for the petitioners and the private respondents.

The respondents, in their answer, denied the existence of trust and alleged that
Ludovico Hidrosollo, as the surviving spouse of Concepcion Mapa de Hidrosllo, became
the latter's universal heir when she died without ascendants or descendants, so that the
controverted properties became part of the estate of Ludovico Hidrosollo. They further
alleged that the civil case instituted by the petitioners was barred by an order denying their
motion to intervene in the special proceedings.

In disposing the case, the lower court ruled that a trust was created and the denial
order of the petitioner's motion to intervene did not deprive them to institute a separate civil
action to recover what pertains to them in their own right. The respondents moved for
reconsideration but the same was denied prompting them to file an appeal before the Court
of Appeals. Their appeal to the appellate court proved fruitful as the Court of Appeals
reversed the decision of the lower court and ruled that there is no trust nor fideicommissary
substition created in the will of Concepcion Mapa de Hidrosollo.

ISSUE:
1. Whether or not a trust was created.
2. Whether or not the denial order constitutes a bar to the civil case instituted.

HELD: The Supreme Court ruled that there was a trust created. Although the word "trust"
itself does not appear in the will, the testatrix intent to create one is nonetheless
demonstrated by the stipulations in her will.

In designating her husband Ludovico Hidrosollo as a sole and universal heir with
the obligation to deliver the properties to the petitioners and private respondents, she
intended that the legal title should vest in him and in significantly referring to petitioners
and private respondents as beneficiarios, she intended that the beneficial or equitable
interest over the properties should repose in them.

Article 1443 of the Civil Code also provides that No particular words are required
for the creation of an express trust, it being sufficient that a trust is clearly intended.

However, the trust created by Concepcion should be limited only to the free portion
of her estate.
 As to the second issue, the Supreme Court ruled that since the denial order was
anchored primarily on the non-existence of or the ineffectivity of the fidecommissary
substitution and did not resolve the issue on trust alleged by the petitioners, such order
cannot be considered as an adjudication on the merits of petitioner's claim against the
estate. Hence it is not barred.

Even assuming that a fideicommissary substitution was created, such substitution

cannot be give effect because Article 863 of the Civil Code requires that such substitution
must not go beyond one degree from the heir originally instituted. The petitioners and
private respondents are merely sobrinos of the fiduciary or first heir.