Court Opinion

ID: 8537164
Source: CourtListenerOpinion
Date Created: 2022-11-23 11:07:37.044754+00
Date Added: 2024-06-11T16:52:05.043364
License: Public Domain

Mr. Justice Belaval,
with whom Mr. Justice Negron Fernández joins, concurring.
The opinion of the majority, on reconsideration, has deemed it advisable to rectify our previous decision insofar as we held that in Puerto Rico a father cannot create a trust inter vivos in favor of two children, aged 12 and 9, who live with their parents, on the ground that the Civil Code of Puerto Rico does not permit the corresponding waiver of the paternal duties as to the administration, representation, and alienation of property of minor children, nor recognizes the separability of property or gains between minor children who live with their parents and such parents, whenever such property is the parents’ own property.
The only problem in this case is that the scholars of our law do not wish to focus the problem in the proper manner, considering the following inescapable propositions: (1) the Puerto Rican trust is not the same as the Anglo-Saxon trust; (2) there is a fundamental difference between a testamentary trust and a trust inter vivos under our civil law; (3) the Puerto Rican trust is another civil institution within our codified civil system.
The best reference available as to the intent of the Legislature of Puerto Rico in adopting the Panamaian trust, is a letter sent by Miguel Guerra Mondragón, Vice President of our House of Representatives and author of the bill, to his colleague, Benicio Sánchez Castaño, which is quoted in an article by Ruford G. Patton, entitled “The Trust Systems in the Western Hemisphere,” XIX Tul. L. Rev. 398, 419, in which Mr. Guerra Mondragón informs that a repre*34sentative of a local bank (American Colonial Bank) furnished him with a copy of the Boletín de la Unión Pan-americana, containing an article on the Anglo-Saxon trust by Dr. Alfaro, then Minister of Panama in Washington; that that article convinced him of the necessity of legislating for the purpose of authorizing the creation of trusts, because the executorship provided by our Civil Code did not give the advantages or guarantees provided by the abolished Family Council (Consejo de Familia); that the executor might die, might travel, might get sick, might abandon the interests entrusted to him, or might even mismanage the inherited property to the prejudice of the beneficiaries; that, on the other hand, trust companies do not become ill, nor travel, nor neglect the interests of their clients, and that this is true, if not because of honesty, at least for business reasons; that for that matter “those of us who voted for the enactment of the said laws of 1928 had in mind the advantages of quasi-banking institutions over the individual as executor.”
We turn to consider the situation in Panama. Dr. Ricardo J. Alfaro having been confronted, in the practice of his profession, with certain problems concerning the administration, in life, and the conservation, after death, of certain inherited property, for which the Panamaian civil law provided no solution, and having discovered that part of those problems were solved by the principles of the Anglo-Saxon trust, he undertook to investigate the possibility of adapting certain principles of the Anglo-Saxon trust to the civil law. It is well to enumerate the problems which in Dr. Al-faro’s opinion remained unsolved under the Panamaian civil law: (1) a person who wished to obtain a substantial loan and to secure the same by an industrial or business establishment, in full operation, and its products; (2) three brothers who wished to waive the inheritance of real property in favor of a brother, with a very marked tendency to prodigality; (3) a gentleman of mature age, married to *35a young and beautiful woman by whom he had two children to whom he wished to transmit the inheritance, but worried about the fate of the inheritance after his death in the event his wife should remarry; (4) a married woman who did not wish to entrust to her husband the administration of her separate property, yet she did not wish to humiliate him by appointing an attorney in fact or by directly managing the property herself; (5) a father who wished to deliver to his marriageable daughter certain dowry or paraphernal property, excluding, however, the son-in-law from the administration; (6) a donor or testator who wished to protect the property donated, bequeathed, or transmitted against the contingency of a negligent, venturesome, or prodigal administration; (7) a debtor harassed by his creditors, who did not wish to deliver the property to the latter in order not to ruin his credit or go out of business and be subjected to the concourse of creditors; (8) a debtor having sufficient property to pay his creditors, who wished to make a contract of antichresis, but the creditors did not come to an agreement as to which one of them should manage the property; (9) the hypothecation of negotiable securities; (10) the issuance of bonds, certificates of indebtedness, or other stock exchange securities in substantial amounts; (11) other operations involving personal or real property or real and personal rights. See Alfaro, Adaptación del Trust del Derecho Anglosajón al Derecho Civil, pp. 10-16 (ed. by Academia Interamericana de Derecho Comparado e Internacio-nal, 1948).
Having examined in their origin the Roman Law institutions known as “inheritance trust” and “residuary trust,” and compared them with “trust property” in the Code of Andrés Bello, the provisions on “fideicomissary substitutions” of the European codes and the Anglo-Saxon trust, Dr. Alfaro finds a better solution of continuity between the Roman classical fidei commissum and the Anglo-Saxon trust. The only substantial difference between the Roman classical *36fidei commissum and the Anglo-Saxon trust is that the Roman classical fidei commissum was a purely testamentary institution, while the Anglo-Saxon trust is an act inter vivos.
Having examined the circumstances which determined the proscription of the Roman classical fidei commissum and its replacement by fideicommissary substitutions, Dr. Alfaro devised a model draft, not along the general lines of the Anglo-Saxon trust as we understand it here, but modernizing the Roman classical fidei commissum as to the provision on inheritance, and following the lead suggested by the Code of Andrés Bello on fiduciary property as to the provision on acts inter vivos. Only after this is clearly elucidated may the text of Dr. Alfaro’s model draft be correctly interpreted.
Some critics are of the opinion that the new institution should have been called “fiduciary property” or “fiduciary operation,” fiducia instead of trust. In effect, it would have been more proper to modernize some of the forms of fiducia cum amico contracta and fiducia cum creditore contracta in the modality of the model draft of trusts inter vivos. See I. J. Arias Ramos, Derecho Romano, 421-22 (6th ed. by Editorial Revista de Derecho Privado, 1964). However, we must admit that the real difficulty which Dr. Alfaro encountered was to design an institution which would serve both as a fideicommissary substitution and as a trust inter vivos. As we know, fiducia in pure Roman law is fundamentally a real right of guarantee.
The Panama experiment, devised by Dr. Alfaro, could be summed up as follows: In the alternative between the fideicommissary substitution, as recognized by the Spanish Civil Code and the Civil Code of Puerto Rico, and its successor, the Roman classical fidei commissum, Panama chose the Roman classical fidei commissum plucking from it the perpetuating aspects which caused its discredit and replacement by the fideicommissary substitution. Having chosen that institution, instead of preserving it within the tradi*37tional Romanic sphere of successory institution, it enlarged it to include acts inter vivos so as to make it coincide with some aspects of the Anglo-Saxon trust.
However, this could be so devised in Panama because Panama is a country where there is absolute freedom to testate, there is no system of legal portions, no testamentary fideicommissary substitutions, no interdiction against spendthrifts, unlike Puerto Rico where there is no absolute freedom to testate, there exists a system of legal portions, testamentary fideicommissary substitutions — § § 703-18 of the Civil Code of Puerto Rico — and tutorship of prodigals — § 187 of the same Code — may be deferred by will if the incapacitated person has been declared a prodigal prior thereto. In the latter case, the previous tutor of the prodigal may intervene only for the purpose of accepting the inheritance, and the testamentary tutor continues in the discharge of the tutorship, within the limits of the deferment, according to the kind of heir or legatee in question, but always bearing in mind the preference in favor of the testamentary tutor. Section 175 of the Civil Code of Puerto Rico (1930).
These are the differences which compelled the Puerto Rican lawmakers to make certain amendments of a somewhat drastic nature. In Mr. Patton’s article referred to above it is stated that the older civil lawyers of the Legislature looked with alarm at the new institution, fearing that it might alter the inheritance system of Puerto Rico. Because of that fear, says Patton, a clause was added to the effect that, “provided nothing contained in this act shall be understood to repeal or modify the system of inheritance established by the Civil Code of Puerto Rico.” Moreover, although Mr. Patton does not mention it, another provision was added in § 13 to the effect that “trusts constituted to the detriment or impairment of the legal portion corresponding to the forced heirs, according to the provisions of the Civil Code in force in Puerto Rico, are prohibited and are likewise null and void.”
*38The effect of these amendments, as to the purely testamentary aspects of the trust which we adopted from the Panamaian model, is that they practically annulled all their effects by leaving in force both the fideicommissary substitutions and the system of legal portions. Possibly the only innovation is that executorship or administration of the property of a deceased, which theretofore had to be done by a private person, may now be done by fiduciary institutions. This may be seen more readily by examining the provisions of Act No. 40 of April 23, 1928 (Sess. Laws, p. 234), entitled “An Act to provide for the incorporation and regulation of trust companies, and for other purposes,” which is a law in pari materia. Only then do the words of Lie. Miguel Guerra Mondragón, author of the bill, acquire full significance in the sense that “those of us who voted for the enactment of the said laws of 1928 had in mind the advantages of quasi-banking institutions over the individual as executor.”
Hence, the countries which have been most successful in operating the modern Roman fidei commissum, or the Anglo-Saxon trust consecrated by the pragmatic jurisprudence, are those countries where there is absolute freedom to testate: England, United States of America, with the exception of the State of Louisiana, Canada, Mexico, Costa Rica, Honduras, Panama, Nicaragua, San Salvador, and Guatemala (6 Manresa, Comentarios al Código Civil Español 289, 7th ed. by Instituto Editorial Reus, 1951), and such countries where fideicommissary substitutions do not exist: England, United States of America, Canada, and Panama.
So much for testamentary trusts. Let us now turn to trusts inter vivos.
The fundamental difference between a testamentary trust and a trust inter vivos for the benefit of a third party is the same difference existing between a will and a contract. The only indication of the legislative intent is that in this modality as well as in the testamentary modality our *39trust was patterned after the Panamaian model. We must therefore delve into the Panamaian theory on this matter. Let us hear what Dr. Alfaro, undoubtedly the first authority on all matters concerning the Panamaian trust, has to say in this connection.
“How should a civil-law trust be treated? Should it be treated as a contract, as a unilateral act, as an obligation, or as a real or personal right of the beneficiary?
“The Anglo-American writers have indiscriminately designated the trust as ‘a confidence’; as a ‘holding of properties’ ; as a ‘right of property’; as an ‘equitable right, title, or interest in property’; and, lastly, as ‘an obligation.’ The recent act of the State of Louisiana, following the language of the definition formulated by the American Law Institute, designates the trust as ‘a fiduciary relationship,’ and Lepaulle, the exponent, after a detailed analysis designates it simply as a ‘juridical institution’ which consists of two elements: a patrimony and an affectation. . . .
“Bearing in mind that the determinative cause of the trust is the will of the constituent, the tendency to treat it as a unilateral act in the nature of a will or a donation is altogether natural in the Latin mentality. However, a trust such as that created by the Louisiana act, or a trust such as that created, by the Panamaian statute, presents in general the features of a contract which creates rights and obligations between the three parties thereto.
“In the first place, the legal existence of the trust commences with the acceptance of the commissioin by the fiduciary. This is so provided by the Panama act and the Louisiana act. By such acceptance, he assumes on behalf of the constituent, if living, the obligation to fulfill his commission, and, as to the beneficiary, the obligation to do or to give him the things provided for his benefit, not only in the trust deed but also by law. Several sections of the Panamaian and Puerto Rican acts provide the manner in which the fiduciary should discharge his duties and manage the trust prop*40erties. But the fiduciary has not only obligations; he also acquires rights as, for example, the right to compensation for his work, unless otherwise stipulated. The beneficiary, in turn, acquires the right to receive the benefit provided for in his favor. The law also gives him, expressly or impliedly, the right to exercise all precatory, conservative or essential, special or ordinary, real or personal actions which may be necessary to carry out the purpose of the trust. As respects the constituent, it would seem at first blush that, once the properties are transmitted by him to the fiduciary, he goes out of the picture without retaining any right. When the trust is extinguished by certain causes, the properties in possession of the fiduciary will revert to the constituent, which means that the latter has the right to recover them from the fiduciary. . . .
“My conclusion is, therefore, that although it is difficult to treat the Anglo-American trust by a single civil-law formula, the fideicomiso, according to the prevailing legal criterion, presents in general the characteristics of a contract which creates mutual rights and obligations between the parties. These characteristics are more or less strong, depending on the purposes for which the trust is created.” Alfaro, op. cit. 39-41.
It will be noted that the incorporation of some of the principles of the Anglo-Saxon trust into the Panamaian Law was not intended to create an independent civil institution bearing no relation to the rest of the civil system, but a civil institution coming more properly within the civil system. This is evident all throughout Dr. Alfaro’s annotation. Moreover, it is invariably the policy followed in a country governed by a civil system. The difference between incorporating a law institution in a civil-law country and incorporating it in a noncivil-law country lies in the fact that in the former case the institution is not left floating in the air, as something new, extraneous, and hostile to the secular system, while in the latter case the institution may subsist com*41pletely independent of the rest of the usage and jurisprudence because it has not an organic body of principles to regulate, generally, the entire juridical system of the country. Since the Panamaian trust taken as a model was designed to be grafted into a civil system without altering our general civil order, it can be used in its fashion of trust inter vivos, for the benefit of a third party, as an additional typical contract, as in pledge, deposit, antichresis, and the mortgage, in any number of cases, if we understand it correctly, without losing our heads and without attempting to adulterate it within the uncommon and innominate forms of the Anglo-Saxon trust. The typical cases commented by Dr. Alfaro in his interesting annotation dealing with trusts inter vivos are indicative of its potentiality as such contract.
In the case of Puerto Rico, there is no doubt that it was the legislative intent to incorporate the trust in our Civil Code as another civil institution, subject to all the provisions of our Code. The second paragraph of § 9 of Act No. 48 of April 28, 1930 (Sess. Laws, p. 368), which provides, “All the provisions of the acts stated below, which are not at present contained in this Code, and which were incorporated into it by the Code Commission, are hereby included in this Code: ... Cf) An Act to provide for the incorporation and regulation of trust companies, and for other purposes, approved April 23, 1928,” and the final provision of the Civil Code of Puerto Rico of 1930 which provides, “The Civil Code” and all other laws or bodies of law which directly or indirectly are in conflict with the provision of this Revised Civil Code are repealed and left without force or effect, both as laws directly binding, and as supplementary law. This provision is not applicable to the laws which in this revised Code are declared to be continued in force,” leave no room for doubt that we are concerned with a ease of codified law rather than compiled law, or of private law applicable to a class, or of a special law applicable to a matter not comprised in the Code. As we know, *42the numbered sections of a Civil Code form a coordinated homogeneous body, wholly interrelated, whose different institutions do not contradict each other and whose rational structure is based on doctrinal integrity and not on doctrinal diversity. Only in that way does § 855, which provides, “The constituent of a trust may create a trust in any form, for any purpose and upon any terms or conditions not contravening the law or the public morals or not specifically prohibited by this Code . . . ,” acquire full significance. Naturally, this was feasible in Puerto Rico because of the work which had already been done by the Panamaian jurists, particularly Dr. Alfaro, in adapting some of the principles of the Anglo-Saxon trust to a codified civil system.
But there is another criterion which aids us more in concluding that the sections of our Civil Code dealing with trusts form part of our codified civil system: concordance. It is well to note the concordance between § 834, dealing with trusts, and § § 1600 and 1605, dealing with agency; between § 835, dealing with trusts, and § § 560, 582, and 586, dealing with gifts inter vivos, and §§ 616 and 620, dealing with wills, and § 703, dealing with fideicommissary substitutions; between §838, dealing with trusts, and §575, dealing with gifts, and § 1181, dealing with the date of the private document; between §839, dealing with trusts, and § § 1068, 1070, 1071, and 1078, dealing with conditional obligations, with a fixed period, etc.; between § 840, dealing with trusts, and § § 398 and 1207, dealing with the permissible terms and conditions in a contract; between § 841, dealing with trusts, and § 443, dealing with usufruct period; between § 842, dealing with trusts, and § § 396, 451, and 454, dealing with use and habitation, and § 716, dealing with fideicommissary substitutions; between § 843, dealing with trusts, and § 713, dealing with fideicommissary substitutions; between § 845, dealing with trusts, and § '§ 569 and 586, dealing with reduction of gifts by reason of survival of the children, and § § 710 and 711, dealing with fideicommissary *43substitutions, and §914, dealing with posthumous children; between § 846, dealing with trusts, and § § 710 and 711, dealing with fideicommissary substitutions; between §847, dealing with trusts, and § § 676 and 685, dealing with disqualifications to succeed; between § 848, dealing with trusts, and §443, dealing with usufruct; between §849, dealing with trusts, and § 1609, dealing with agency; between § 851, dealing with trusts, and § 216, dealing with tutorships, and § 1602, dealing with agency; § 852, dealing with trusts, and § 217, dealing with tutorships, and § 1625, dealing with agency; between § 855, dealing with trusts, and § 814, dealing with permissible agreements and conditions in a contract; between § 857, dealing with trusts, and §703, dealing with fideicommissary substitutions; between § 859, dealing with trusts, and § 195, dealing with tutorships; between § 860, dealing with trusts, and § 175, dealing with tutorship; between § 861, dealing with trusts, and § 821, dealing with tutorship; between § 862, dealing with trusts, and § 220, dealing with tutorship; and between § 865, dealing with trusts, and § 212, dealing with tutorship. This, of course, is nothing more than what may be called gross concordance of the most obvious things, where the similarity strikes at first glance. If we were to use a more phenomenological method, it could be categorically asserted that between the civil institutions of agency, gift, tutorship, usufruct, fidei-commissary substitutions, and the trust, properly understood, there is such identity of essence that it would not be necessary to establish any similarity by mere deduction.
It should be clear now that, whenever we come across a juridical problem involving trusts, we are dealing with a case of pure Puerto Rican civil law.
We have said that the difference between a trust mortis causa and a trust inter vivos is the same difference existing between a will and a contract. A trust inter vivos when it is not in favor of the constituent himself is a contract for the benefit of a third party. Any doubt in this connection *44is expressly determined by § 834, which provides: “A trust {fidei commissum) is an irrevocable mandate whereby certain property is transferred to a person, named the trustee (fiduciario), in order that he may dispose of it as directed by the party who transfers the property, named constituent (fidei comitente), . . . for the benefit of a third party, named the beneficiary (cestui que trust) or (fideicomisa-rio) Since such obligation is for the benefit of a third party, it is not perfected without the acceptance by the beneficiary. Section 1209 of the Civil Code of Puerto Rico.
The confusion in the sense that the third party is not bound to accept the obligation created for his benefit in order that such obligation may be perfected, seems to flow from the belief that the Civil Code of Puerto Rico contains, as other codes, a separate chapter on pollicitation devoted to the unilateral declaration of the will in acts inter vivos, in which are included the offers to the public, agreements in favor of third parties, and the obligation in civil documents to order and to the bearer. If this generic permissibility were applicable to a nominate civil contract — in my opinion it is not — ■ we would still have to consider that such chapter does not exist in the Civil Code of Puerto Rico; that what does exist in that Code is the express declaration that the obligations for the benefit of a third party will not be perfected until the contract is accepted by the beneficiary, which is more rational and juridical.
The exceptions to this general rule are the obligations for the benefit of an innominate or generic third party, and mostly all of them are expressly authorized by law. See, for example, Act No. 33 of March 7, 1912 (Sess. Laws, p. 67), which amends §153 of the Mortgage Law, and art. 132 of the Regulations for the Execution of the Mortgage Law, which in the part pertinent hereto provides: “Such obligations may be constituted by the owner of an estate or interest, without specifying the name of the creditor, executing them generically to the order of the person *45in whose favor the handwritten documents may be transferred or endorsed by the mortgager,” and the provision of our Insurance Law of 1921 (Sess. Laws, p. 522) bearing on group policies covering the life or health of a person, or injuries or physical disability resulting from accident. In like manner, there would be included the trusts for nonprofit purposes, in the form of bequests for charity institutions authorized both by our system of fideicommissary substitutions and by the same sections dealing with trusts, as amended.
The majority opinion, on reconsideration, seems to find support for its conclusion to the effect that the third beneficiary is not bound to accept the trust in order that it may be perfected, on our previous decisions based on § 849 of our Code, which provides: “The legal existence of a trust shall begin at the time when the trustee accepts the mandate and, once accepted, the mandate becomes irrevocable.” This is not a new principle in civil law. The agent, whether called attorney in fact or fiduciary, is bound by the acceptance to carry out the agency and shall be liable for the losses and damages caused to the principal through his noncompliance — § 1609 of the Civil Code — but this does not mean that by the mere acceptance of the agency, which is an inter-individual relation between two persons strictly for purposes of administration or custody, other persons extraneous to such relation become obligated; the tutor in charge of the administration of a legacy bequeathed to a minor is bound to accept the appointment and also to register the same in the Registry of Tutorships— § 175 of the Civil Code — but such acceptance is not effective as to the minor until the legacy has been accepted by the father, mother, or the universal tutor; the testamentary executor is bound to accept the executorship, unless he excuses himself within six days following that on which he has received notice of his appointment — § 820 of the Civil Code — but this does not mean that the heirs are subject to the conditions and charges of an *46inheritance until it is accepted by the heirs on their own account. Therefore, the acceptance by the fiduciary, in our present state of law, in the case of a trust inter vivos, simply means an interindividual relation, administrative in character, which does not bind the third beneficiary unless he accepts it.
If the purpose of a trust inter vivos for the benefit of a third party is the individualization of a patrimony, as something distinct and separate from the constituent’s patrimony, the only way of accomplishing it is through the express approval of the third beneficiary. Nor would the fact that the fiduciary has all or some of the rights and actions inherent in fee-simple ownership create the individualization of the patrimony, which is the aim sought — § § 865 and 866 of our Civil Code. In the same boat are the agent having a general or special power and the testamentary executor or substitute heir, according to the terms of the will. Furthermore, in a trust there is no occasion for absolute irreversibility presupposed by the transmission in fee simple. A mere glance at the sections of our Code bearing on trusts would have been sufficient to rule out such a fragile idea and dangerous as well.
In the present opinion of the majority an effort is made to engraft the Anglo-Saxon theory of the divisibility of the title into legal title and equitable property. This is the worst approach to solve the question, because such a thing not only does not exist in civil law but would also contradict the very theory of the transfer of ownership to the fiduciary, as pointed out by Dr. Alfaro himself — pp. 52-55 of the article supra — a requirement sine qua non for the individualization of the patrimony in favor of a third party in such countries where the acceptance by the beneficiary is not necessary to perfect an obligation in his favor, something which, as has been seen, does not occur in Puerto Rico.
But even assuming that a trust inter vivos for the benefit of a third party were perfected by the mere acceptance by *47the fiduciary, we would still have to investigate whether the transfer of property is not expressly prohibited by our Code, since our Code expressly provides in § 855 that the constituent may create a trust in any form, for any purpose, and upon any terms or conditions not contravening the law, or not specifically prohibited by this Code.
We know that the Anglo-Saxon trust has been used to regulate all kinds of family relations, precisely because there is no limitation as to the manner of testating or as to the manner of organizing the internal order of the family. In this connection, the Anglo-Saxon law is still contaminated with feudal drawbacks having their origin in the Roman law during the conquest of the Normans. Our Civil Code, on the contrary, is the product of the liberal complex as to family and property relations characteristic of the nineteenth century, an anatomically revolutionary century essentially inspired on statism, whose historic mission was to liquidate all prerogatives and privileges of a nobiliary society in which the freedom to dispose of any patrimony was absolute and the will of the father was sufficient to organize the entire internal order of the family.
In the European civil codes of the nineteenth century all these paterno-filial institutions of nobiliary origin are transformed into public law institutions which are imposed upon the father as real obligations rather than as rights. As stated by Puig Peña in referring to the patria potestas: “. . . A general principle which governs the institution underlies the whole subject matter, to the effect that the patria potestas must be conceived and executed as a function which the State recognizes to the parents with respect to the children, for the benefit of the latter . . . ,” the features of the patria potestas being, therefore, the following: “(a) It constitutes, above all, a duty or obligation which can not be excused [or renounced] for it is imposed on the parents by virtue of the supreme principles of the family morale and social reason of the State, which incor-*48por ates the same therein as subject to those to whom it corresponds exclusively. (6) This obligation is personal in character and may not be fulfilled through a third person. ... (c) Moreover, it is not transferable; the father can not transmit en bloc to a third person the patria potestas over his children. ... (d) Lastly, it represents a positive obligation of continuous performance, which requires and demands an efficient and unfailing conduct which will satisfactorily meet the responsibility inherent in the patria potes-tas. . . .” As to the administration of the property of the minor, Puig Peña further says: “In addition to the foregoing duties, the parents must administer faithfully the property belonging to the children who come under the patria potestas. This administration being traditionally treated as a diverse exclusive benefit of the father, since it is considered as part of the complex duties inherent in the patria potes-tas. ... A result of this criterion is the unwaivability of the administration, for such unwaivability is established principally for the benefit of the minors and to preserve better order in the family. . . .” As to the right of representation — § 155 of the Spanish Civil Code (§ 153 of our Civil Code) — Puig Peña goes on to say that it belongs to the father . . . “which representation, notwithstanding the incomplete drafting of the Code, should be amply considered in the exercise of such poivers as correspond to any function of natural law, and equivalent, at least, to that attributed to the tutelary institution, without any limitations other than those expressly provided by the legal provisions” (certain cases of representation at a trial and representation in case of conflicting interests). Puig Peña, Tratado de Derecho Civil Español, Vol. II, pt. II, pp. 152, 153, 154, 178, and 180 (ed. by Editorial Revista de Derecho Privado, 1951). By the same token, the legal usufruct which the father has on the property of the children cannot be waived or alienated (Puig Peña, op. cit. at 175), because we are not dealing with the father’s right, “his own right, but with an *49attribute granted to him by law for the better fulfillment of the duties proper to the patria potestas,” implying “that in this usufruct the father does not enjoy all the rights appertaining to the normal usufructuary.”
I have made this digression to establish clearly that in Puerto Rico we cannot stand on the principle that the father has absolute freedom to organize, in the manner he may deem best, patrimonies relating to the internal organization of the family, as may be done under the Anglo-Saxon law. The father cannot renounce the administration of the property of his minor children — even if such property is a gift (§157 of our Civil Code) — nor the representation of the actions involving such property; nor may he waive or alienate the legal usufruct which the father has on the property of the minor children, for such duties are public duties not subject to private contracts.
Incidentally, the establishment of a trust inter vivos by the father for the benefit of the minor children who live with the parents creates an evasion of the right of the State to investigate any alienation of property of minors which it may approve or disapprove; a waiver by the father, in favor of a third party, of the administration of the minors’ property; a waiver by the father, in favor of another person, of the minor’s representation in actions involving such property; and a waiver in favor of another person of the legal usufruct enjoyed by the father on the property of a minor child for the benefit of the minor. It cannot even be imagined that the legislative intent was to sacrifice the greater part of the family statute to authorize the use of a single contract.
The present majority opinion considers the possibility of authorizing, as a contract inter vivos, a gift by the father in favor of a minor child who lives with his father, without deciding, of course, how the contract is perfected by the acceptance by the minor, which is the true algid point of the question. In the previous opinion of this ease, consider*50ing the possible impact of § 156 of the Civil Code of Puerto Rico, which provides that the father or mother possesses the ownership and usufruct of whatever property the child may acquire with the capital of each of his parents, and in an appropriate situation of facts, such as the transfer in favor of two minor children of certain corporate shares owned by the father, and in view of the contention of the Secretary of the Treasury that such transfer was tantamount to a gift, we held that such gift would produce the legal anomaly of a gift for the benefit of the donor himself, for § 156 does not recognize the separability of property or gains between minors who live with their parents and the parents, whenever such property is derived from the parental estate. It may well be that the language used was not precise enough, and after reconsideration I believe we should clarify it further.
A gift which is to become effective inter vivos shall be governed by the general provisions of contracts. Section 562 of the Civil Code of Puerto Rico. There is a general prohibition to the effect that parents cannot contract with their minor children, because under the law a contract is the meeting of two or more distinct and autonomous minds. Ever since Partida Fifth (Title V, Law 2), it was provided that father and son cannot contract for both “are naturally and considered in law” as one only person. The applicable section is § 1213 of our Civil Code, which provides: “There is no contract unless the following requisites exist: 1. The consent of the contracting parties. 2. A definite object which may be the subject of the contract. 3. The cause for the obligation which may be established.”
In his commentaries on the absolute and radical nullity of contracts, Castán points out: “A contract may be considered in our law as nonexistent or entirely void in the following cases: (A) Whenever it lacks any of the elements necessary for its making (hypothesis of § 1261) [§ 1213 of our Code], that is: (a’) When there is absolute lack of con*51sent, as in the case of an act which has been termed false or simulated (with absolute simulation), or when the consent was not given because of the lack of conformity between the offer and the acceptance; (b’) lack of the meeting of two or more distinct and autonomous minds (Judgment of March 6, 1909 (Spain) rendered in a case involving a contract made by a father with his minor children) ; (c’) lack of object; {d’) absence or illicitness of the consideration (§1275) [§1227 of our Code]; (e’) Nonobservance of the statutory requirements in the nature of essential requirement (as in the mortgage or gift of real property without a public deed) ; (B) where the contract has been executed in violation of a legal provision or prohibition based on reasons of public policy (hypothesis of § 4 of the Code) [§ 4 of our Code]; as in the case of covenants involving future inheritances (§ 1271) [§ 1223 of our Code], universal partnerships between spouses, covenants concerning the civil status, usurious contracts of the Act of July 23, 1908, etc. . . . in proper terms, it may be said that a contract which is nonexistent and absolutely void has no legal effect as such. Its characteristic is precisely the lack of specific effects. Quod nullum est nullum producit effectum. Under the law, such a contract is considered as not made.” 3 Castán, Dere-cho Civil Español, Común y Foral, pp. 437-38 (8th ed. by Instituto Editorial Reus, 1954).
The general rule as to gifts made by fathers to the minor children who live with them is that minor children cannot by themselves accept gratuitous gifts made by the parents to such minor children, although they may accept by themselves gratuitous gifts made by third persons in favor of such minors whenever they have discernment therefor, according to our ruling in the first opinion in this same case — Alvarez v. Secretary of the Treasury, 78 P.R.R. 395, 399-400, where we established clearly the specialty consecrated by our Civil Code as to gifts made by third persons— § § 567-68.
*52The error which we committed in deciding the case of Piris v. Registrar, 67 P.R.R. 760 — in which it is held that a minor may accept a gift from his father — consisted in applying to a gratuitous gift between father and son the rule which permits a minor child, having discernment, to accept gratuitous gifts from a third person. If we examine the authorities cited in that case, it will be noted that all of them refer to the rule which permits a minor child to accept gratuitous gifts made in his favor by third persons. In the latest edition of Castán’s op. cit. supra, he comments that: “On the other hand, from the ruling of the Directorate of Registries of December 29, 1922, it may be inferred, although it is not expressly declared, that minors cannot appear before a notary for the purpose of accepting gifts.” Castán, I-II Derecho Civil Español, Común y Foral 154, footnote 3 (9th ed. by Instituto Editorial Reus, 1955). Later in this opinion we will discuss this ruling.
If a child cannot accept gratuitous gifts made by his father in his favor, the question arises, who can accept on behalf of the child? In order to make as short as possible a frenzied debate — Scaevola, De Diego Valverde, Castán, Puig Peña — a solution has been suggested that the acceptance be made through a guardian ad litem as if it were a case involving a conflicting interest between father and son —§ 160 of our Civil Code.
But against the universality of that rule militates a moral principle — that the child should not lose dependence with respect to his father, in his intimate conception of the patria potestas — and a legal principle — that since the father is the true legal representative of his minor child, the appointment of a guardian ad litem in a case not typically of conflict of interests, would be tantamount to authorizing the renunciation of the duty to represent inherent in the patria potes-tas — which is not wholly justified, since for the act of mere liberality there would always exist the possibility of the unilateral act of the gift made by deed, which would be evidence *53against third parties of its date and of the fact which gives rise to its execution — § 1172 of the Civil Code of Puerto Rico — subject to the acceptance by the child upon emancipation or attaining majority— § § 565 and 575 of our Civil Code-^and the gifts by will.
The possibility has also been considered that the acceptance by the minor be made, in representation of the minor, by the donor father himself, by means of a sort of self-contract, applying to one single patrimony the power of disposition which, in the strict theory of self-contract, is applied to the disposition of two patrimonies consolidated in the same person.
The theory of self-contract, in the case of a gift from the father to a minor, is based on two abstractions, both of which are highly debatable: (1) that a gratuitous gift is, essentially, a pure act of liberality the economical consequences of which are normally resolved in favor of the donee, and should not therefore be considered as a contract; and (2) that in a gratuitous gift it is not absolutely necessary to presuppose a conflicting interest between the father and the son — which is the alleged reason for the appointment of a guardian ad litem — it being possible, in principle, to authorize the concurrence in a single juridical person of the double capacity of donor and donee. This was the principle applied in the famous and rather problematic resolution of December 29, 1922, of the General Directorate of Registries: V — Roca Sastre y Molina Juyol — Jurisprudencia Registrad —761-66 (ed. by Casa Editorial Bosch, 1953), which indeed denied the registration of a deed of gift on the ground that two of its clauses implied a waiver or settlement of the future legal portion.
A moment’s reflection suffices to make us realize that in the contemporaneous world there can not conceivably exist a gratuitous gift the economical consequences of which are indefectibly resolved in favor of the donee, both at the time of its execution and thereafter. I wonder what would be *54■the economic philosophy prevailing in Spain on this matter; but even under the governing principles of the Spanish Civil Code, which regards every property and the profits therefrom as a limited thing subject to the orbit of public law :and every transfer of property as subject to a rule, to a 'certain extent, it is very difficult to conceive this abstract 'donation as sought by the General Directorate in which everything is indefectibly resolved in favor of the donee.
It is a safer rule to conceive every transfer of property as a complex of present and future rights and obligations, capable of transforming itself at any moment into a real burden. This is an experience preeminently American, characteristic of the mechanics of depression and emergency economy, which has precisely its neuralgic point in the income tax.
As to the case at bar — diversification of an income tax where the taxpayer alleges that part of the tax should be imposed on the minor’s patrimony, subject to a trust, which is, in legal substance and by express declaration of Act No. 103 of April 25, 1950 (Sess. Laws, p. 262), a gift — it appears that the potentiality of a conflict of interest cannot be as easily ruled out in the gratuitous gift as it seems. There is no question that the most immediate and evident effect of every paternal gift is to shift to the child part of the father’s tax burden. This being so, we would have before us a typical case involving a conflict of interest in which the judicial authority should intervene, a criterion which we rejected in Belaval v. Court of Eminent Domain, 71 P.R.R. 246.
It is curious to note the reaction of the Spanish civil jurists on this decision of December 29, 1922 of the General Directorate of Registries. In referring to this decision, Valverde affirms that “as to acts performed with one’s self outside the field of representation, such as in the case of the mortgage of the owner, I believe that they cannot be called contracts but rather unilateral juridical acts, pre*55cisely because there is no clash or conflict of interests between different persons, and the dual personality of the maker of the instrument may be readily admitted and validated. (P) But a self-contract when it operates within the field of representation, requires certain guarantees: the double will of an individual so that it can be wholly validated at law. In the voluntary representation, only when the agent is expressly authorized to self-contracting (selbscontrahiren), may he perform acts which are wholly valid, and in the legal representation, such as tutors and the parents, v. g., the law should require either express legal authorization to simplify them, or the ratification of the acts by the persons represented, or the intervention of other persons or bodies who represent the persons under protection in these cases, for only then will the interests of those who are protected by the law be guaranteed. . . . The European civil codes do not favor the validity of acts in which the legal representatives contract with themselves, and many of them adopt guarantees to render them effective, cause other persons to intervene, or require special requisites as to form, but it may be affirmed in general that they are opposed to such acts” See Revista Critica de Derecho Inmobiliario, Vol. II, No. 19, pp. 782-83 (1926).
Castán, on his part, in reaffirming his commentaries on the capacity of the minor to accept gifts from third persons, which we commented at length in our original opinion in this same case (pp. 399-400),- adds this short commentary: “. . . On the other hand, from the ruling of December 29, 1922, of the Directorate of Registries it may be inferred, although it is not expressly declared, that minors cannot appear before a notary for the purpose of accepting gifts.” Castán, I-IX Derecho Civil Español, Común y Foral 154, footnote 3 (9th ed. by Instituto Editorial Reus, 1955).
Puig Peña, on the contrary, “points out the inconsistency between the Supreme Court of Spain and the General Directorate of Registries.” He states that, while the de-*56'cisión of May 30, 1950 — which, by the way, also denied the registration sought relying on the decision of December 29, 1922 — does not exclude at all the possibility of self-contract when it is not accompanied by conflicting interests or by the risk of causing present or future detriment to the rights «of one of the parties, the Supreme Court of Spain in its Judgment of March 6, 1909, which we comment here, objected to its admission on the ground that two or more distinct and autonomous wills should always concur in every contract. IV-II Puig Peña, Tratado de Derecho Civil Espa-ñol, pp. 28-29 (Editorial Revista de Derecho Privado, 1951).
The authority on which the opinion of the majority seems to rely is the article by Federico Castro, El Autocontrato en el Derecho Privado Español, 151 Revista General de Legis-lación y Jurisprudencia 395-455, at 414-21 (1926), in which the decision of December 29, 1922 is commented. If we examine closely this entire essay, particularly pp. 362-86, it will be seen, as stated by Castán, that “it takes up the self-contract independently of the representation, considering it as a unilateral act having special characteristics which may arise in all those situations where a person, having the power to dispose of two independent patrimonies, creates binding juridical relations between them” —3 Castán, Dere-cho Civil Español, Común y Forál 354, n. 1 (8th ed. by Ins-tituto Editorial Reus, 1954) — as in the case of the “title holder of a patrimony and the administrator of another, or the administrator of two extraneous and distinct patrimonies, which establishes a juridical relation between his patrimony and the extraneous patrimony, or between the two extraneous patrimonies,” or “the ease of two special patrimonies, as for example, a dowry and paraphernal property, or the free property and those subject to substitution, or one’s own patrimony and that acquired by inheritance accepted for the benefit of inventory.” But, “in the case of representation, the conflict of interests is much more frequent than in that of special patrimonies belonging to the *57same title holder; the result being that the juridical act with himself becomes less possible in the former case.” 3 Castán, op. cit. at 354.
As has been noted, a contract between a father and his own child should not be favored, not even under the theory of self-contract, which as yet is exactly that, a theory, among the many theories that abound in the juridical literature looking for a legislative future, applied only until now as a practical formula within the registral jurisprudence and not yet accepted by the civil jurisprudence of the Supreme Court of Spain.
The sight of the father locked in an office with his notary and structuring, against public policy, the future organization of the property of his minor children, is a feudal sight which positively hurts the liberal conscience of our new civil times. For the promotion of the economic independence of the minor child, at an opportune age, the civil law provides the institution of peculium profectitium, which is better reasoned and more carefully framed within the spiritual elements of the patria potestas as well as within the social elements of family institution. It goes without saying that such paternal self-contract shall work a terrible impact on our entire income-tax institution. It is as if the distribution of the tax burden were left to the taxpayer’s discretion.
It is worthy of note that in sanctioning, in an indirect manner, the paternal self-contract, the opinion of the majority, on the one hand, revives the ease of Piris v. Registrar, supra, in which it is held that a minor child may accept by himself a gift from his father, and, on the other hand, it consecrates the paternal self-contract in which the father himself is the one who accepts, in representation of his minor child, the gift which the father himself makes. But as to the last aspect of the question, which is of utmost importance because it deals with the separability of property or gains between minors and their parents, when the donated. *58property flows from the paternal estate, it remains silent. However, in an income-tax case it is essential to know who owns the rent or usufruct from the property donated by the parents to a minor child.
There are two ways of deciding this question: (1) either to consider this gratuitous gift as any other patrimony acquired by labor, industry, or lucrative title from a third person, in which case the property would belong to the minors and the usufruct to the parents with patria potestas over them — premise of § 155 of our Civil Code— (2) or to consider such gift as any other patrimony acquired with the paternal estate, in which case both the property and the usufruct of whatever the child may acquire would belong to the parents with patria potestas over them — premise of ■§ 156. To me it is unquestionable that, except in the cases of renunciation permitted by law — estate delivered to the children to be worked by them, or a gift or legacy made by third persons for their education — the paternal usufruct extends to all the rest of the property belonging to the minor child and is not waiveable as being contrary to public law. Because I believe this to be so, I affirm that, insofar as rents and gains are concerned, which is the question before us, a gratuitous gift from a father to his minor child produces the anomaly in law of being a gift in favor of the donor himself, for such rent and gains would always belong to the father in usufruct and, as such, would be taxable as income of the father.
On the other hand, the opinion of the majority finds support to justify a trust inter vivos made by the father in favor of the minor children who live with him, on the provision of § 845 of our Civil Code concerning trusts. It provides : “The constitution of a trust in favor of a nonexisting person, excepting only future children of the constituent, is null and void.” The majority is of the opinion that “it is difficult to believe that the Legislature meant to permit the *59establishment of such trusts created by a father for future children but to prohibit them for children already born.”
It will be seen at first blush that it involves the reformulation, absolutely unnecessary, of the typical fideicommis-sary substitution by survival of the children — juridical position of the nascitarus, as pointed out by Puig Peña, to prevent the annulment of the trust, which can never affect the legal portion by the birth of a posthumous child, in the same way that it is used in our hereditary system, to prevent the annulment of the institution of heirs by the birth of a posthumous child — § 742 of the Civil Code of Puerto Rico. Such provision could only be used in a trust mortis causa. It is so recognized by Dr. Alfaro himself — op. cit. at 81. Its inclusion in our provisions dealing with trusts is accounted by the fact that Dr. Alfaro’s draft was designed to serve both as a trust inter vivos and as a trust mortis causa, a situation which evidently the majority opinion chooses to ignore.
Final conclusions: There is nothing in the legislative history of the Puerto Rican trust to enable us to conclude that, in adapting some of the features of the Panamaian trust, it was the intent of the Legislature of Puerto Rico to set aside the institutions bearing on the internal order of the family and to alienate the power of the State in everything concerning the contracting by minors.
Every trust inter vivos for the benefit of a third party partakes of the nature of a contract, which requires for its perfection the express consent of the three parties which are bound by its terms. The mere acceptance by the fiduciary of the agency of the constituent neither binds the minor beneficiary nor creates the individualization of the trust property in favor of such minor.
The transfer of the constituent’s property to the fiduciary does not entail full ownership, for such transfer preserves all the characteristics of a relation between the principal and the agent. It is only through the acceptance by a *60third beneficiary that a trust inter vivos may accomplish the individualization of the trust property, as something distinct from the constituent’s patrimony.
Although a minor child, with discernment, may accept a gratuitous gift from a third person, he cannot accept a gift from his father because there is lacking the meeting of two distinct and autonomous minds. The acceptance by the fionor father himself, in representation of his minor child, ■of a donation made by the former on behalf of the latter .should not be favored.