G.R. No.

L-27952 February 15, 1982

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA PALACIOS, Administratrix, petitioner-appellee,
vs.
MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors, JORGE and ROBERTO RAMIREZ, legatees, oppositors-
appellants.

The main issue in this appeal is the manner of partitioning the testate estate of Jose Eugenio
Ramirez among the principal beneficiaries, namely: his widow Marcelle Demoron de Ramirez; his
two grandnephews Roberto and Jorge Ramirez; and his companion Wanda de Wrobleski.

Facts:

The widow Marcelle is a French who lives in Paris, while the companion (Wanda) is an
Austrian who lives in Spain.

Jose Eugenio Ramirez, a Filipino national, died in Spain, with only his widow as compulsory
heir. His will was admitted to probate by the Court of First Instance of Manila.

Maria Luisa Palacios was appointed administratrix of the estate and she submitted an
inventory of the estate and a project of partition as follows: the property of the deceased is to be
divided into two parts. One part shall go to the widow in satisfaction of her legitime; the other part or
"free portion" shall go to Jorge and Roberto Ramirez. Furthermore, one third (1/3) of the free portion
is charged with the widow's usufruct and the remaining two-thirds (2/3) with a usufruct in favor of
Wanda.

Jorge and Roberto opposed the project of partition on the grounds:

(a) that the provisions for vulgar substitution in favor of Wanda de Wrobleski with respect to
the widow's usufruct and in favor of Juan Pablo Jankowski and Horacio V. Ramirez, with respect to
Wanda's usufruct are invalid because the first heirs Marcelle and Wanda) survived the testator;

(b) that the provisions for fideicommissary substitutions are also invalid because the first
heirs are not related to the second heirs or substitutes within the first degree, as provided in Article
863 of the Civil Code;

(c) that the grant of a usufruct over real property in the Philippines in favor of Wanda
Wrobleski, who is an alien, violates Section 5, Article III of the Philippine Constitution; and that

(d) the proposed partition of the testator's interest in the Santa Cruz (Escolta) Building
between the widow Marcelle and the appellants, violates the testator's express will to give this
property to them.

Nonetheless, the lower court approved the project of partition in its order prompting Jorge
and Roberto to appeal to the SC.

Held:

The estate of Jose Eugenio Ramirez is hereby ordered distributed as follows:

One-half (1/2) thereof to his widow as her legitime;

One-half (1/2) thereof which is the free portion to Roberto and Jorge Ramirez in naked ownership
and the usufruct to Wanda de Wrobleski with a simple substitution in favor of Juan Pablo Jankowski
and Horace V. Ramirez.

1. The widow's legitime.

The appellant's do not question the legality of giving Marcelle one-half of the estate in full
ownership. Indeed, under Art. 900 of the Civil Code "If the only survivor is the widow or widower, she
or he shall be entitled to one-half of the hereditary estate." And since Marcelle alone survived the
deceased, she is entitled to one-half of his estate over which he could impose no burden,
encumbrance, condition or substitution of any kind whatsoever. (Art. 904, par. 2, Civil Code.)

The court a quo erred for Marcelle who is entitled to one-half of the estate as her legitime
and which is more than what she is given under the will is not entitled to have any additional
share in the estate. To give Marcelle more than her legitime will run counter to the testator's
intention for as stated above his dispositions even impaired her legitime and tended to favor
Wanda.

2. The substitutions.
 It may be useful to recall that "Substitution is the appoint- judgment of another heir so
that he may enter into the inheritance in default of the heir originally instituted." (Art. 857, Civil
Code. And that there are several kinds of substitutions, namely: simple or common, brief or
compendious, reciprocal, and fideicommissary (Art. 858, Civil Code.) According to Tolentino,
"Although the Code enumerates four classes, there are really only two principal classes of
substitutions: the simple and the fideicommissary. The others are merely variations of these two."

The simple or vulgar is that provided in Art. 859 of the Civil Code which reads:
ART. 859. The testator may designate one or more persons to substitute the heir or
heirs instituted in case such heir or heirs should die before him, or should not wish,
or should be incapacitated to accept the inheritance.
A simple substitution, without a statement of the cases to which it refers, shall
comprise the three mentioned in the preceding paragraph, unless the testator has
otherwise provided.
The fideicommissary substitution is described in the Civil Code as follows:
ART. 863. A fideicommissary substitution by virtue of which the fiduciary or first heir
instituted is entrusted with the obligation to preserve and to transmit to a second heir
the whole or part of inheritance, shall be valid and shall take effect, provided such
substitution does not go beyond one degree from the heir originally instituted, and
provided further that the fiduciary or first heir and the second heir are living at time of
the death of the testator.

The appellants question the sustitucion vulgar y fideicomisaria a favor de Da. Wanda
de Wrobleski".However, this question has become moot because the widow is not entitled to
any usufruct.

The appellants also question the sustitucion vulgar y fideicomisaria in connection with
Wanda's usufruct over two thirds of the estate in favor of Juan Pablo Jankowski and Horace v.
Ramirez.They allege that the substitution in its vulgar aspect as void because Wanda survived the
testator or stated differently because she did not predecease the testator. But dying before the
testator is not the only case for vulgar substitution for it also includes refusal or incapacity to
accept the inheritance as provided in Art. 859 of the Civil Code, supra. Hence, the vulgar
substitution is valid.

As regards the substitution in its fideicommissary aspect, the appellants are correct in their
claim that it is void for the following reasons:
(a) The substitutes (Juan Pablo Jankowski and Horace V. Ramirez) are not related to
Wanda, the heir originally instituted. Art. 863 of the Civil Code validates a fideicommissary
substitution "provided such substitution does not go beyond one degree from the heir
originally instituted."
What is meant by "one degree" from the first heir is explained by Tolentino

Manresa, Morell and Sanchez Roman, however, construe the word "degree" as
generation, and the present Code has obviously followed this interpretation. by
providing that the substitution shall not go beyond one degree "from the heir
originally instituted." The Code thus clearly indicates that the second heir must be
related to and be one generation from the first heir.

From this, it follows that the fideicommissary can only be either a child or a parent of
the first heir. These are the only relatives who are one generation or degree from the
fiduciary

3. The usufruct of Wanda.

The appellants claim that the usufruct over real properties of the estate in favor of Wanda is
void because it violates the constitutional prohibition against the acquisition of lands by aliens.

The 1935 Constitution which is controlling provides as follows:

SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be

transferred or assigned except to individuals, corporations, or associations qualified
to acquire or hold lands of the public domain in the Philippines. (Art. XIII.)

The court a quo upheld the validity of the usufruct given to Wanda on the ground that the
Constitution covers not only succession by operation of law but also testamentary succession. The
SC is of the opinion that the Constitutional provision which enables aliens to acquire private lands
does not extend to testamentary succession for otherwise the prohibition will be for naught and
meaningless. Any alien would be able to circumvent the prohibition by paying money to a Philippine
landowner in exchange for a devise of a piece of land.

This opinion notwithstanding, the SC uphold the usufruct in favor of Wanda because a
usufruct, albeit a real right, does not vest title to the land in the usufructuary and it is the vesting of
title to land in favor of aliens which is proscribed by the Constitution.
G.R. No. L-38972 September 28, 1987

PAZ GARCIA vda. de MAPA, * SEGUNDO MAPA, PRISCILLA M. MONZON, TERESA

MAPA, IGNACIO SALAZAR AND JOSE SALAZAR, petitioners,
vs.
COURT OF APPEALS, LUIS HIDROSOLLO and TEODORO HIDROSOLLO, in their own
behalf and as Joint Administrators of the testate estate of Ludovico Hidrosollo, and
VICTORIA ** HIDROSOLLO, CORAZON HIDROSOLLO, ROSARIO HIDROSOLLO and
MAGDALENA HIDROSOLLO, respondents.

Facts:

Petitioners instituted Civil Case before the then CFI Manila to recover from the estate of the
late Ludovico Hidrosollo, then the subject of Special Proceedings of the same court, the properties
left by the late Concepcion Mapa de Hidrosollo. They claimed that the deceased Concepcion Mapa
de Hidrosollo, in her last will and testament and admitted to probate, instituted Ludovico as universal
heir to the residue of her estate with the obligation as trustee to hold the same in trust for petitioners
herein who are nephews and nieces of the deceased Concepcion Mapa de Hidrosollo and for
respondents Luis, Teodoro, Victorina, Corazon, Violets.

Respondents, in their Answer, denied the existence of a trust and alleged that Ludovico,
being the surviving spouse of the deceased Concepcion Mapa de Hidrosollo became the latter's
universal heir when she died without descendants or ascendants; that as such universal heir,
Ludovico stepped into the rights, title and claims of the deceased Concepcion Mapa de Hidrosollo,
so that the controverted properties became part of his own estate subject of settlement in Special
Proceeding. They further claimed that the Civil Case was barred by the order of the same court
sitting as a probate court in Special Proceedings No. 52229 which denied petitioners' motion for
intervention, and that petitioners, in having instituted the Civil Case had forfeited any benefits under
the will.

The lower court ruled that a trust was created over the properties of petitioners' claim,
however, respondents had forfeited their rights thereto; and that the denial of petitioners' motion to
intervene in Special Proceedings No. 52229 did not deprive the petitioners of their right to institute a
separate action to recover what pertains to them in their own right. Thus, the lower court ordered
respondents Luis and Teodoro Hidrosollo or whoever of the rest of therein defendants had
disposition of the properties to reconvey the same in favor of petitioners, to render an accounting of
the income of said properties and to deliver to petitioners the net proceeds of such income.

On appeal, the appellate court reversed the decision of the lower court and ruled instead that no
trust nor fideicommissary substitution was created in Concepcion Mapa de Hidrosollo's Will and that
petitioners' claim was barred by a final judgment, i.e., the order denying their motion to intervene in
Special Proceedings No. 52229 from which no appeal was taken. Hence, the petition.

Issue: WON the will of Concepcion Mapa de Hidrosollo created a trust in favor of petitioners, not a
fideicommissary substitution, and WON the denial of the petitioner’s motion to intervene in Special
Proceedings No. 52229 did not constitute a bar to Civil Case.

Held:

A careful perusal and scrutiny of the pertinent provisions of Concepcion Mapa de

Hidrosollo's Will reveal that she intended to create a trust in favor of both petitioners and private
respondents.

Under paragraph 8 of the Will, Ludovico was instituted as sole and universal heir to the rest
of the properties not covered by the legacies in the preceding paragraphs. Under paragraph 9,
however, said Ludovico was charged with the obligation to deliver the rest of the estate in equal
parts to the Mapa, Salazar and Hidrosollo nephews and nieces, who, as beneficiaries, were directed
to deliver annually to one Salvador Genova, during his lifetime, 12 cavans of palay on the condition
that the latter assist Luis Hidrosollo in each harvest. Said beneficiaries were likewise required to
allow said Salvador Genova to maintain his house on a parcel of land situated at Ilaud, Municipality
of Dumarao, without payment of any compensation (Par. 10 of the Will).

In paragraph 11 of the same Will, the testatrix expressly provided that any obligations which
her husband might incur after her death, shall be charged against the share corresponding to the
Hidrosollo nephews and nieces and in no case shall the participation of her own nephews and
nieces be charged with said obligations.

Although the word "trust" itself does not appear in the Will, the testatrix's intent to create one
is nonetheless clearly demonstrated by the stipulations in her Will. In designating her husband
Ludovico as universal and sole heir with the obligation to deliver the properties to 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 to these properties should repose in them. To our mind, these designations,
coupled with the other provisions for co-ownership and joint administration of the properties, as well
as the other conditions imposed by the testatrix effectively created a trust in favor of the parties over
the properties adverted to in the Will. "No particular words are required for the creation of an express
trust, it being sufficient that a trust is clearly intended. " (Art. 1443, Civil Code of the Philippines).

However, we must not lose sight of the fact that as the surviving spouse of the testatrix,
Ludovico was entitled to a legitime of one-half (1/2) of her hereditary estate. As that portion is
reserved by law for the compulsory heirs, no burden, encumbrance, condition or substitution of any
kind whatsoever may be imposed upon the legitime by the testator. (Art. 904, second
paragraph, Ibid) The trust created by Concepcion Mapa should therefore be, as it is hereby declared
to be effective only on the free portion of her estate, i.e., that portion not covered by Ludovico
Hidrosollo's legitime.

Anent the issue of res judicata, The SC rule that the order denying petitioners' motion for
intervention in Special Proceedings No. 52229 did not constitute an adjudication on the merits and
therefore could not operate as a bar to Civil Case.

WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 40448-A is hereby
reversed. Private respondents Luis and Teodoro Hidrosollo or their successors as administrators of
the estate of Ludovico Hidrosollo are hereby ordered to deliver to petitioners their lawful shares in
the trust constituted over the free portion of the estate of Concepcion Mapa. Said Luis and Teodoro
Hidrosollo or their successors are further ordered to render an accounting of the income of the
properties pertaining to petitioners and to deliver to the latter the net proceeds of such income.