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Apolinaria Austria-Magat vs. Court of Appeals (G.R. No.

106755, February 1, 2002, 375 SCRA 556)

FACTS: On December 17, 1975, Basilisa Comerciante, mother of petitioner and one of respondents, furnished a Deed of Donation to donate her house and lot to her four children (petitioner and respondent included), provided that the funeral expenses will be deducted from the total value of the lot before it is to be divided among the children. The children signed to the same deed in acceptance to the donation. That same day, they also signed into a notarized document stating that the property and the document pertaining to the same will be under the custody of the original owner (Comerciante) for as long as she lives. On February 6, 1979, Comerciante executed a Deed of Absolute Sale over the same house and lot in favor of the petitioner, prompting the respondents to file an action against the petitioner for the annulment of the deed of sale on September 21, 1983. The lower court ruled in favor of the respondent (petitioner herein), but the Court of Appeals reversed the trial court decision. CONTENTIONS: Trial Court: (1) The donation is a donation mortis causa based on the provision on the deed of donation that it would take effect upon the death of the donor. (2) The provision stating that the donor reserved the right to revoke the donation is a feature of a donation mortis causa which must comply with the formalities of a will (3) Inasmuch as the donation did not follow the formalities pertaining to wills, the same is void and produced no effect whatsoever. Hence, the sale by the donor of the said property was valid since she remained to be the absolute owner thereof during the time of the said transaction. CA: A provision in the deed of donation in question providing for the irrevocability of the donation is a characteristic of a donation inter vivos. By those words, the donor expressly renounced the right to freely dispose of the house and lot in question. The right to dispose of a property is a right essential to full ownership. Hence, ownership of the house and lot was already with the donees even during the donors lifetime. HELD: We affirm the appellate courts decision. In Cuevas v. Cuevas, we ruled that when the deed of donation provides that the donor will not dispose or take away the property donated (thus making the donation irrevocable), he in effect is making a donation inter vivos. He parts away with his naked title but maintains beneficial ownership while he lives. It remains to be a donation inter vivos despite an express provision that the donor continues to be in possession and enjoyment of the donated property while he is alive. In the Bonsato case, we held that: What is most significant [in determining the type of donation] is the absence of stipulation that the donor could revoke the donations; on the contrary, the deeds expressly declare them to be irrevocable, a quality absolutely incompatible with the idea of conveyances mortis causa where revocability is of the essence of the act, to the extent that a testator can not lawfully waive or restrict his right of revocation. Appellate Court decision affirmed.