The Roman Catholic Bishop of Jaro v. Gregorio de La Peña

Summary

The Roman Catholic Bishop of Jaro sued the administrator of Father Agustin de la Peña's estate for P6,641 in charitable trust funds lost during the Philippine Revolution. Father de la Peña, as trustee, had deposited trust funds mixed with personal money in a bank account. When arrested by US military forces as a suspected insurgent, he was compelled to authorize release of the funds, which were then confiscated. The Court of First Instance held the estate liable, but the Supreme Court reversed, applying Civil Code Articles 1094 and 1105. The Court ruled that while trustees must exercise diligence, they are not liable for unforeseeable or inevitable events like military confiscation during war. The decision established that depositing trust funds in a bank does not make a trustee liable at all hazards, and force majeure during armed conflict excuses trustee liability under Spanish civil law.