Hilarion, Jr. v. Trusteeship of the Estate of Doña Margarita Rodriguez

Summary

This case involved a perpetual trust created by Doña Margarita Rodriguez's will that prohibited alienation of specified properties forever. After operating for over twenty years, heirs of a beneficiary moved to dissolve the trust, arguing it violated Civil Code provisions limiting such prohibitions to twenty years. The RTC denied the motion, distinguishing between the prohibition on alienation and the trust itself. The Supreme Court reversed, holding that the entire trust violated Articles 867 and 870 of the Civil Code and must be dissolved, with the properties subject to intestate succession since no heir was instituted. The decision clarifies that perpetual trusts cannot circumvent the twenty-year limitation on alienation prohibitions and reinforces the policy against perpetuation of large landholdings.