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Rules of Court
Rule 98 Trustees
Sec. 1. Where trustee appointed. - A trustee necessary
to carry into effect the provisions of a will or written instrument
shall be appointed by the Court of First Instance in which
the will was allowed if it be a will allowed in the Philippines,
otherwise by the Court of First Instance of the province in
which the property, or some portion thereof, affected by the
trust is situated.
Sec. 2. Appointment and powers of trustee under will; Executor of former trustee
need not administer trust. - If a testator has omitted in
his will to appoint a trustee in the Philippines, and if such
appointment is necessary to carry into effect the provisions
of the will, the proper Court of First Instance may, after
notice to all persons interested, appoint a trustee who shall
have the same rights, powers, and duties, and in whom the
estate shall vest, as if he had been appointed by the testator.
No person succeeding to a trust as executor or administrator
of a former trustee shall be required to accept such trust.
Sec. 3. Appointment and powers of new trustee under written
instrument. - When a trustee under a written instrument
declines, resigns, dies, or is removed before the objects
of the trust are accomplished, and no adequate provision is
made in such instrument for supplying the vacancy, the proper
Court of First Instance may, after due notice to all persons
interested, appoint a new trustee to act alone or jointly
with the others, as the case may be. Such new trustee shall
have and exercise the same powers, rights, and duties as if
he had been originally appointed, and the trust estate shall
vest in him in like manner as it had vested or would have
vested, in the trustee in whose place he is substituted; and
the court may order such conveyance to be made by the former
trustee or his representatives, or by the other remaining
trustees, as may be necessary or proper to vest the trust
estate in the new trustee, either alone or jointly with the
others.
Sec. 4. Proceedings where trustee appointed abroad. -
When land in the Philippines is held in trust for persons
resident here by a trustee who derives his authority from
without the Philippines, such trustee shall, on petition filed
in the Court of First Instance of province where the land
is situated, and after due notice to all persons interested,
be ordered to apply to the court for appointment as trustee;
and upon his neglect or refusal to comply with such order,
the court shall declare such trust vacant, and shall appoint
a new trustee in whom the trust estate shall vest in like
manner as if he had been originally appointed by such court.
Sec. 5. Trustee must file bond. Before entering on the duties of his trust, a
trustee shall file with the clerk of the court having jurisdiction
of the trust a bond in the amount fixed by the judge of said
court, payable to the Government of the Philippines and sufficient
and available for the protection of any party in interest,
and a trustee who neglects to file such bond shall be considered
to have declined or resigned the trust; but the court may
until further order exempt a trustee under a will from giving
a bond when the testator has directed or requested such exemption,
and may so exempt any trustee when all persons beneficially
interested in the trust, being of full age, request the exemption.
Such exemption may be cancelled by the court at any time and
the trustee required to forthwith file
a bond.
Sec. 6. Conditions included in bond. - The following conditions shall be deemed
to be a part of the bond whether written therein or not:
(a) That the trustee will
make and return to the court, at such time as it may order,
a true inventory of all the real and personal estate belonging
to him as trustee, which at the time of the making of such
inventory shall have come to his possession or knowledge;
(b) That he will manage
and dispose of all such estate, and faithfully discharge
his trust in relation thereto, according to law and the
will of the testator or the provisions of the instrument
or order under which he is appointed;
(c) That he will render
upon oath at least once a year until his trust is fulfilled,
unless he is excused therefrom in any year by the court,
a true account of the property in his hands and of the management
and disposition thereof, and will render such other accounts
as the court may order;
(d) That at the expiration
of his trust he will settle his accounts in court and pay
over and deliver all the estate remaining in his hands,
or due from him on such settlement, to the person or persons
entitled thereto.
But when the trustee is appointed
as a successor to a prior trustee, the court may dispense
with the making and return of an inventory, if one has already
been filed, and in such case the condition of the bond shall
be deemed to be altered accordingly.
Sec. 7. Appraisal; Compensation of trustee. - When an
inventory is required to be returned by a trustee, the estate
and effects belonging to the trust shall be appraised and
the court may order one or more inheritance tax appraisers
to assist in the appraisement. The compensation of the trustee
shall be fixed by the court, if it be not determined in the
instrument creating the trust.
Sec. 8. Removal or resignation of trustee. - The proper
Court of First Instance may, upon petition of the parties
beneficially interested and after due notice to the trustee
and hearing, remove a trustee if
such removal appears essential in the interests of the petitioners.
The court may also, after due notice to all persons interested,
remove a trustee who is insane or otherwise incapable of discharging
his trust or evidently unsuitable therefor.
A trustee, whether appointed by the court or under a written
instrument, may resign his trust if it appears to the court
proper to allow such resignation.
Sec. 9. Proceedings for sale or encumbrance of trust estate.
- When the sale or encumbrance of any real or personal estate
held in trust is necessary or expedient, the court having
jurisdiction of the trust may, on petition and after due notice
and hearing, order such sale or encumbrance to be made, and
the reinvestment and application of the proceeds thereof in
such manner as will best effect the objects of the trust.
The petition, notice, hearing, order of sale or encumbrance,
and record of proceedings, shall conform as nearly as may
be to the provisions concerning the sale or encumbrance by
guardians of the property of minors or other wards.
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