Nuisance and donation cases
citing decisions of California, Georgia, Idaho, Illinois, Kansas, Iowa,
HIDALGO ENTERPRISES vs. GUILLERMO BALANDAN, ET AL.
EN BANC
[G.R. No. L-3422. June 13, 1952.]
HIDALGO ENTERPRISES, INC., petitioner, vs. GUILLERMO BALANDAN, ANSELMA
ANILA and THE COURT OF APPEALS, respondents.
Quisumbing, Sycip, Quisumbing & Salazar for petitioner.
Antonio M. Moncado for respondents.
SYLLABUS
1. ATTRACTIVE NUISANCE, WHAT CONSTITUTES; MAINTAINER LIABLE FOR
INJURIES CAUSED TO CHILD. — One who maintains on his premises dangerous
instrumentalities or appliances of a character likely to attract children in play, and
who fails to exercise ordinary care to prevent children from playing therewith or
resorting thereto, is liable to a child of tender years who is injured thereby, even
if the child is technically a trespasser in the premises.
2. ID.; DOCTRINE NOT APPLICABLE TO SWIMMING POOL OR WATER TANK. — The
attractive nuisance doctrine generally is not applicable to bodies of water,
artificial as well as natural, in the absence of some unusual condition or artificial
feature other than the mere water and its location.
DECISION
BENGZON, J p:
This is an appeal by certiorari, from a decision of the Court of Appeals requiring
Hidalgo Enterprises, Inc. to pay Guillermo Balandan and his wife, damages in the
sum of P2,000 for the death of their son Mario.
It appears that the petitioner Hidalgo Enterprises, Inc. "was the owner of an ice-
plant factory in the City of San Pablo, Laguna, in whose premises were installed
two tanks full of water, nine feet deep, for cooling purposes of its engine. While
the factory compound was surrounded with fence, the tanks themselves were not
provided with any kind of fence or top covers. The edges of the tank were barely
a foot high from the surface of the ground. Through the wide gate entrance, which
was continually open, motor vehicles hauling ice and persons buying said
commodity passed, and any one could easily enter the said factory, as he pleased.
There was no guard assigned on the gate. At about noon of April 16, 1948,
plaintiffs' son, Mario Balandan, a boy barely 8 years old, while playing with and in
company of other boys of his age, entered the factory premises through the gate,
to take a bath in one of said tanks; and while thus bathing, Mario sank to the
bottom of the tank, only to be fished out later, already a cadaver, having died of
'asphyxia secondary to drowning.'".
The Court of Appeals, and the Court of First Instance of Laguna, took the view that
the petitioner maintained an attractive nuisance (the tanks), and neglected to
adopt the necessary precautions to avoid accident to persons entering its
premises. It applied the doctrine of attractive nuisance, of American origin,
recognized in this jurisdiction in Taylor vs. Manila Electric 16 Phil., 8.
The doctrine may be stated, in short, as follows: One who maintains on his
premises dangerous instrumentalities or appliances of a character likely to attract
children in play, and who fails to exercise ordinary care to prevent children from
playing therewith or resorting thereto, is liable to a child of tender years who is
injured thereby, even if the child is technically a trespasser in the premises. (See
65 C. J. S., p. 455.)
The principal reason for the doctrine is that the condition or appliance in question
although its danger is apparent to those of age, is so enticing or alluring to children
of tender years as to induce them to approach, get on or use it, and this
attractiveness is an implied invitation to such children (65 C. J. S., p. 458).
Now, is a swimming pool or water tank an instrumentality or appliance likely to
attract little children in play? In other words is the body of water an attractive
nuisance? The great majority of American decisions say no.
"The attractive nuisance doctrine generally is not applicable to bodies of water,
artificial as well as natural, in the absence of some unusual condition or artificial
feature other than the mere water and its location."
"There are numerous cases in which the attractive nuisance doctrine has been
held not to be applicable to ponds or reservoirs, pools of water, streams, canals,
dams, ditches, culverts, drains, cesspools or sewer pools, . . . ." (65 C. J. S., p. 476
1
et seg.
Louisiana, Miss., Missouri, Montana, Oklahoma, Pennsylvania, Tennessee, Texas,
Nebraska, Wisconsin.)
In fairness to the Court of Appeals it should be stated that the above volume of
Corpus Juris Secundum was published in 1950, whereas its decision was
promulgated on September 30, 1949.
The reason why a swimming pool or pond or reservoir of water is not considered
an attractive nuisance was lucidly explained by the Indiana Appellate Court as
follows:
"Nature has created streams, lakes and pools which attract children. Lurking in
their waters is always the danger of drowning. Against this danger children are
early instructed so that they are sufficiently presumed to know the danger; and if
the owner of private property creates an artificial pool on his own property,
merely duplicating the work of nature without adding any new danger, . . . (he) is
not liable because of having created an 'attractive nuisance.' Anderson vs. Reith-
Riley Const. Co., N. E., 2nd, 184, 185; 184, 185; 112 Ind. App., 170.
Therefore, as petitioner's tanks are not classified as attractive nuisance, the
question whether the petitioner had taken reasonable precautions becomes
immaterial. And the other issue submitted by petitioner - that the parents of the
boy were guilty of contributory negligence precluding recovery, because they left
for Manila on that unlucky day leaving their son under the care of no responsible
individual — needs no further discussion.
The appealed decision is reversed and the Hidalgo Enterprises, Inc. is absolved
from liability. No costs.
Feria, Padilla, Tuason, Montemayor and Bautista Angelo, JJ., concur.
SECOND DIVISION
[G.R. No. 149570. March 12, 2004.]
HEIRS OF ROSENDO SEVILLA FLORENCIO, as represented by ESTRELLITA
FLORENCIO-CRUZ and RODRIGO R. FLORENCIO, petitioners, vs. HEIRS OF TERESA
SEVILLA DE LEON as represented by VALERIANA MORENTE, respondents.
DECISION
CALLEJO, SR., J p:
Before us is a petition for review of the Joint Decision 1 of the Court of Appeals in
CA-G.R. SP Nos. 59698-99 which affirmed the June 5, 2000 Decisions 2 of the
Regional Trial Court of Malolos, Bulacan, Branch 20 in Civil Cases No. 1018-M-99
and 1019-M-99, and the resolution of the appellate court denying the petitioners'
motion for reconsideration.
The Antecedents
Teresa Sevilla de Leon, owned a residential lot with an area of 828 square meters
located in San Miguel, Bulacan. The said lot was covered by Transfer Certificate of
Title (TCT) No. T-44349. 3 In the 1960s, De Leon allowed the spouses Rosendo and
Consuelo Florencio to construct a house on the said property and stay therein
without any rentals therefor.
On September 26, 1966, De Leon, with the consent of her husband Luis, leased
the aforesaid parcel of land for P5 per month to Bienvenido Santos "for as long as
the lessor (Teresa de Leon) had an outstanding loan with the Second Quezon City
Development Bank of Quezon City but not to exceed the period of fifteen (15)
years." 4 De Leon assigned her leasehold right in favor of the Second Quezon City
Development Bank. The lease and De Leon's leasehold right were annotated at
the back of TCT No. T-44349 as Entry Nos. 152248 and 152249, 5 respectively.
Thereafter, Bienvenido Santos constructed a house thereon.
In November 1978, De Leon, then already a widow, died intestate. In deference
to her wishes, her heirs allowed Rosendo Florencio to continue staying in the
property. In March 1995, Florencio died intestate, but his heirs, the respondents,
remained in the property. On April 26, 1995, the heirs of De Leon, through
counsel, sent a letter to the heirs of Florencio, demanding that they vacate the
property within ninety (90) days from receipt thereof. 6 The latter refused and
failed to vacate the property.
The heirs of De Leon, through Valeriana L. Morente, thereafter filed a complaint
for ejectment against the heirs of Florencio before the Municipal Trial Court of
San Miguel, Bulacan, docketed as Civil Case No. 2061. Therein, the plaintiffs
alleged that they were the pro-indiviso owners of the 828 square-meter lot
covered by TCT No. T-44349, which they inherited from their mother. During her
lifetime, their mother allowed Florencio and his family to occupy the property
without any compensation, subject to the condition that they shall vacate the
same upon demand; such arrangement went on even after their mother's demise.
They further averred that sometime in 1995, they demanded that the heirs of
Florencio vacate the property, but that the latter refused to do so. 7
The plaintiff thence prayed:
WHEREFORE, premises considered, it is most respectfully prayed that after due
hearing, judgment be rendered ordering defendants to:
1. Vacate the premises which they are presently occupying; cIETHa
2. Pay plaintiff the amount of P100,000.00 as and by way of attorney's fees;
3. Pay plaintiff P100,000.00 as moral damages;
4. Pay plaintiff P100,000.00 as exemplary damages.
5. Pay plaintiff P 10,000.00 per month from April 26, 1995 up to and until
defendants vacate the premises.
Plaintiff prays for other reliefs just and equitable under the circumstances. 8
In their answer to the complaint, the heirs of Florencio alleged that the plaintiffs
had no cause of action against them, as Teresa de Leon had executed a Deed of
Donation on October 1, 1976 over the said parcel of land in favor of their
predecessor, Rosendo Florencio. The latter accepted the donation, as shown by
his signature above his typewritten name on page one of the deed. The execution
of the deed was witnessed by Patria L. Manotoc and Valeriana L. Morente. Atty.
Tirso L. Manguiat, a notary public in the City of Manila, notarized the deed on said
date and entered it in his notarial record as Doc. No. 1724, page 71, Book IV, series
of 1976. 9
The heirs of Florencio further averred that since then, their predecessor and his
family possessed the aforesaid property as owners. After De Leon's death,
Florencio and his children, in coordination with Jose de Leon, the administrator of
the aforesaid property, arranged for the registration of the land subject of the
donation in the name of Rosendo Florencio, which was, however, superseded by
the untimely demise of Jose de Leon in 1991. Thus, the property remained in the
name of Teresa Sevilla de Leon, even after Florencio's death in March of 1995. 10
On February 1, 1996, the heirs of De Leon, represented by Valeriana L. Morente,
also filed a complaint for ejectment against the heirs of Bienvenido Santos before
the MTC of San Miguel, Bulacan, docketed as Civil Case No. 2062. 11 They prayed,
thus:
WHEREFORE, premises considered, it is most respectfully prayed that after due
hearing, judgment be rendered ordering defendants to:
1. Vacate the premises which they are presently occupying;
2. Pay plaintiff the amount of P100,000.00 as and by way of attorney's fees;
3. Pay plaintiff P100,000.00 as moral damages;
4. Pay plaintiff P100,000.00 as exemplary damages;
5. Pay plaintiff P10,000.00 per month from April 26, 1995 up to and until
defendants vacate the premises.
Plaintiff prays for other reliefs just and equitable under the circumstances. 12
In their answer to the complaint, the heirs of Bienvenido Santos, through counsel,
alleged that the plaintiffs had no cause of action against them, and that they did
not occupy the property by mere tolerance but on the basis of a contract of lease
executed by De Leon on September 26, 1966. Furthermore, De Leon donated the
property to Rosendo Florencio on October 1, 1976, and the latter, after the
expiration of the contract of lease, allowed and permitted them to continue and
remain in possession of the property without any compensation. According to the
2
heirs of Bienvenido Santos, only Florencio's heirs had the right to cause their
eviction from the property by reason of the deed of donation executed in favor of
the latter.
The trial of the two cases was consolidated.
The parties agreed to litigate the following issues:
After the preliminary conference, parties submitted their respective position
papers.
Plaintiffs raised and argued on the following issues:
a). Defendants' possession of the premises was merely on the tolerance of the
late Teresa de Leon.
b). The alleged Deed of Donation does not exist, is patently a falsified document
and can never be the source of any right whatsoever.
Defendants, on the other hand, raised and argued on the following issues:
a). Defendants do not have only a better right of possession over the questioned
parcel of land and they do not have only the absolute and lawful possession of
the same but they have the absolute and lawful ownership of the same not only
against the plaintiffs but against the whole world.
b). Defendants are entitled to their counterclaim. 13
On motion of the plaintiffs in both cases, the court issued an Order directing the
heirs of Florencio to produce the original of the Deed of Donation purportedly
executed by Teresa de Leon. However, they failed to comply with the order of the
court and submitted a mere photocopy of the same. 14
The plaintiffs adduced in evidence the following: (1) TCT No. T-44349 in the name
of Teresa Sevilla; 15 (2) demand letters sent by the plaintiffs' counsel to the
defendants demanding that the latter vacate the subject premises; 16 (3)
affidavit-complaint of Valeriana Morente filed in the Office of the Provincial
Prosecutor of Bulacan docketed as I.S. No. 96-1513 for falsification, perjury and
applicable crimes against Rodrigo Florencio and Atty. Tirso Manguiat, dated May
8, 1996; 17 (4) affidavit-complaint executed by Ramon de Leon Manotoc dated
May 8, 1996; 18 (5) copies of Teresa de Leon's passport issued on April 28, 1975
containing specimens of her signature; 19 (6) copy of Patria Manotoc's passport
issued on September 16, 1997 with her specimen signature therein; 20 (7) copy
of Valeriana Morente's passports issued on the following dates: (a) February 20,
1967; 21 (b) April 28, 1975; 22 (c) October 4, 1984; 23 and (d) August 22, 1994, 24
with specimens of her signature appearing therein covering a span of thirty years;
(8) copy of the Certificate of Death of Patria Manotoc; 25 (9) Certification dated
April 23, 1996 issued by Teresita R. Ignacio, Chief, Archives Division of the Records
Management and Archives Division of Manila 26 to the effect that nothing in the
notarial register of Atty. Tirso L. Manguiat show that he notarized a deed of
donation dated October 1, 1976 in favor of Rosendo Florencio; (10) copy of
Sinumpaang Salaysay dated July 19, 1996 executed by one Rodolfo Apolinario; 27
and, (11) copies of the official receipts of the real estate taxes paid. 28
For their part, the heirs of Florencio adduced in evidence a photocopy of the Deed
of Donation dated October 1, 1976 purportedly executed by De Leon in favor of
Rosendo Florencio. 29
The heirs of Bienvenido Santos submitted in evidence as Exhibits "1" and "1-H"
the Contract of Lease dated September 6, 1966 between Teresa Sevilla and
Bienvenido R. Santos. 30
On December 3, 1996, the MTC rendered a decision in Civil Cases Nos. 2061 and
2062 dismissing the complaints for lack of jurisdiction upon the finding that the
issue of possession cannot be determined without resolving, in a full blown trial,
the issue of ownership. 31
The heirs of De Leon appealed the decisions of the MTC to the RTC of Bulacan,
Branch 83, which rendered judgment reversing the decision of the court a quo. It
held that the MTC had jurisdiction over the cases; as such, the trial court should
proceed and render judgment therefor. CaTcSA

In the course of the proceedings, the defendants adduced in evidence a copy of
the Deed of Donation as certified by the RTC of Bulacan on May 29, 1996. 32
On August 27, 1999, the MTC rendered an Amended Decision in Civil Case No.
2061 in favor of the defendants and against the plaintiffs. The dispositive portion
of the decision reads:
WHEREFORE, the court finds the defendants as having a better right of possession
over the subject parcel of land as against the plaintiffs and hereby orders this case
DISMISSED.
For lack of evidence to prove bad faith on the part of the plaintiffs in the filing of
this case, and in line with the policy not to put premium on the right to litigate,
the counterclaim of the defendants is, likewise, ordered DISMISSED.
With no pronouncements as to costs.
SO ORDERED. 33
The decision was appealed to the RTC of Bulacan. On June 5, 2000, the RTC
rendered judgment reversing the decision of the MTC and rendered a new
judgment in favor of the plaintiffs, as follows:
WHEREFORE, premises considered, the Decision dated August 27, 1999, rendered
by the Municipal Trial Court of San Miguel, Bulacan, in Civil Case No. 2061, is
hereby set aside and a new one is hereby rendered, as follows:
a) Ordering the heirs of Rosendo Florencio and all those claiming any rights under
them to vacate the subject premises, particularly that parcel of land covered by
Transfer Certificate of Title (TCT) No. T-44349, situated in San Jose, San Miguel,
Bulacan;
b) Ordering the Heirs of Rosendo Florencio to pay the heirs of Teresa Sevilla the
amount of P2,000.00 per month as reasonable monthly rental on the premises,
to commence on April 1995 until the premises is vacated by them; and
c) Ordering the heirs of Rosendo Florencio to pay the heirs of Teresa Sevilla the
amount of P10,000.00, as attorney's fees and expenses of litigation.
SO ORDERED. 34
The RTC ruled that the deed of donation was insufficient to support the claim of
the heirs of Florencio that they were the owners of the property and were, thus,
entitled to its possession.
The defendants, now the petitioners, filed a petition for review with the Court of
Appeals of the decision of the RTC. On May 28, 2001, the Court of Appeals
rendered judgment dismissing the petition and affirming the RTC decision. The CA
adopted the findings of the RTC and its disquisitions on why the deed of donation
was not a credible piece of evidence to support the petitioners' claim over the
property; hence, did not transfer title over the property in favor of the petitioners.
First. The deed of donation (Exh. "1"), which purports to have been executed in
1976, is not annotated on the title to the property which remains registered in
the name of Teresa Sevilla under TCT No. T-44349 (Exh. "A" and "A-1"). There is
no showing whatsoever that the same or a copy thereof was submitted to the
Office of the Register of Deeds.
Second. As earlier pointed out, throughout the years, the real estate taxes on the
property continued to be paid in the name of Teresa Sevilla by the caretaker
Rodolfo Apolinario and nobody else. There is no showing that the defendants had
previously laid any claim of title or ownership over the property and attempted
to pay the taxes thereon.
Third. Although it purports to have been notarized in the City of Manila by one
Atty. Tirso L. Manguiat, there is no indication of its existence in the notarial record
of Atty. Manguiat, as per Certification dated April 23, 1996 (Exh. "L") of the Manila
Records Management and Archives Office. One can only wonder why from the
place of execution in San Miguel, Bulacan on October 1, 1976, its notarization on
the same date had to be in the City of Manila.
3
Fourth. The Court has noted, as anyone can easily do, that the signature
purported to be that of Teresa de Leon appearing in the deed of donation (Exh.
"1-B"), is dissimilar to her customary signatures affixed to her passports (Exhs. "B"
and "E-1"). The same is true with those of Patria Manotoc and Valeriana L.
Morente appearing in the same deed of donation (Exhs. "1-D and "1-E"), with
those of their customary signatures appearing in their respective passports (Exhs.
"F" and "F-1"; "G," "G-1" and "G-2"; "H," "H-1" and "H-2"; "I" and "I-1" and "J" and
"J-1").
And Fifth. There is no explanation given why since 1976, when the deed of
donation was supposedly executed, up to the present, the defendants did not
register the same to secure a new title in their names. In fact, there is no showing
that efforts toward that end were ever executed.
As it is, the Court holds that the deed of donation in question is not a credible
piece of evidence to support the defendants' claim of acquisition of title and
ownership over the subject property and therefore insufficient to justify their
continuing possession and occupancy thereof. Thus, as against defendants' claim
which is unregistered, the plaintiffs' right over the property as the legal heirs and
successors-in-interest of the registered owner must prevail. 35
The Present Petition
The petitioners now contend in this case that the Court of Appeals and the RTC
erred in rendering judgment for the respondents, thus:
1. In finding no reversible error committed by the Regional Trial Court as an
appellate court and affirming its decision.
2. In concluding that the evidence presented reveals serious doubts as to the
veracity and authenticity of the notarized deed of donation, contrary to the
findings of the trial court that there is a legal presumption of regularity in the
execution thereof.
3. In holding that private respondents are entitled to possess the subject property
notwithstanding petitioners' claim to the contrary and despite the latter's
continuous, open and adverse possession for more than forty years. 36
The petitioners aver that donation is one of the modes of acquiring ownership.
Their claim for possession is precisely based on the deed of donation executed by
Teresa Sevilla de Leon on October 1, 1976 in favor of their father, Rosendo
Florencio. The aforesaid deed was duly notarized, and by virtue of its notarization,
such deed became a public document. Furthermore, according to the petitioners,
an examination of the deed reveals that it had conformed to all the essential
requisites of donation, as required by the provisions of the New Civil Code; hence,
its validity must be presumed. 37 From the time of the donation up to the present,
the petitioners assert that they possessed the property openly, publicly and
against the whole world. SacTCA
As regards the alleged forgery of the signatures of the donor and the witnesses,
the petitioners assert that absent any clear, positive and convincing evidence that
the same were forged, the presumption is that they are genuine. The mere
variance in the signatures of the donor and the witnesses cannot be considered
as conclusive proof of the forgery. They aver that the Certification dated April 23,
1996 of the Manila Records Management and Archives Office stating that no such
notarized deed existed in the notarial records of Atty. Manguiat cannot be
conclusive evidence that no donation ever existed. According to the petitioners,
such certification was merely preponderant and, therefore, not enough to
overthrow the presumption of regularity in the notarization as well as the
genuineness of the document.
The petitioners posit that their failure to register the deed of donation did not
affect its validity, it not being a requisite of a valid donation. They allege that their
effort to register the same during the lifetime of Jose de Leon, the administrator
of the property, did not materialize because of the latter's untimely death in 1991.
The petitioners conclude that because of the respondents' failure to destroy the
validity of the deed of donation, their right over the property should prevail; the
petitioners' right accrued on October 1, 1976, while that of the respondents
accrued only in November of 1978.
In their comment, the respondents, through counsel, argue that the deed of
donation executed by De Leon dated October 1, 1976 in favor of Rosendo
Florencio is not a credible piece of evidence. The deed is insufficient to justify the
petitioners' stay in the premises because the original copy was never presented
to them or to the court. Furthermore, while the photocopy of the deed of
donation states that it was notarized by a certain Tirso Manguiat, a notary public
for the City of Manila, under Doc. 1724, Page No. 71, Book No. IV, Series of 1976,
the presumption of regularity in the notarization of the deed was destroyed by
the certification from the Records Management and Archives Office of Manila
that no such deed exists. The respondents further assert that the signatures
appearing on the said deed, i.e., that of Teresa Sevilla de Leon, Patria Manotoc
and Valeriana Morente, were all forgeries.
According to the respondents, the following facts bolster the incredibility of the
deed of donation: (a) the deed of donation was executed in 1976 but was not
registered; (b) the TCT is still registered in the name of Teresa Sevilla de Leon; (c)
the owner's duplicate copy of the TCT should have been transmitted to the
donees; and, (d) the real estate taxes were continuously paid in the name of
Teresa Sevilla de Leon. Thus, the respondents, as her heirs, are the legal owners
of the property.
The Ruling of the Court
The threshold issue in this case is whether or not the petitioners, as heirs of
Rosendo Florencio, who appears to be the donee under the unregistered Deed of
Donation, have a better right to the physical or material possession of the
property over the respondents, the heirs of Teresa de Leon, the registered owner
of the property.
The petition has no merit.
Prefatorily, in ejectment cases, the issue is the physical or material possession
(possession de facto) and any pronouncement made by the trial court on the
question of ownership is provisional in nature. 38 A judgment rendered in
ejectment cases shall not bar an action between the same parties respecting title
to the land and shall not be conclusive as to the facts found therein in a case
between the same parties upon a different cause of action involving possession
of the same property. 39
We agree with the petitioners that under the New Civil Code, donation is one of
the modes of acquiring ownership. 40 Among the attributes of ownership is the
right to possess the property. 41
The essential elements of donation are as follows: (a) the essential reduction of
the patrimony of the donor; (b) the increase in the patrimony of the donee; and
(c) the intent to do an act of liberality or animus donandi. When applied to a
donation of an immovable property, the law further requires that the donation
be made in a public document and that the acceptance thereof be made in the
same deed or in a separate public instrument; in cases where the acceptance is
made in a separate instrument, it is mandated that the donor be notified thereof
in an authentic form, to be noted in both instruments. 42
As a mode of acquiring ownership, donation results in an effective transfer of title
over the property from the donor to the donee, and is perfected from the
moment the donor is made aware of the acceptance by the donee, provided that
the donee is not disqualified or prohibited by law from accepting the donation.
43 Once the donation is accepted, it is generally considered irrevocable, and the
donee becomes the absolute owner of the property, except on account of
officiousness, failure by the donee to comply with the charge imposed in the
donation, or ingratitude. 44 The acceptance, to be valid, must be made during the
lifetime of both the donor and the donee. It must be made in the same deed or in
a separate public document, and the donee's acceptance must come to the
knowledge of the donor. 45
In order that the donation of an immovable property may be valid, it must be
made in a public document. 46 Registration of the deed in the Office of the
Register of Deeds or in the Assessor's Office is not necessary for it to be
considered valid and official. Registration does not vest title; it is merely evidence
of such title over a particular parcel of land. 47 The necessity of registration comes
into play only when the rights of third persons are affected. 48 Furthermore, the
heirs are bound by the deed of contracts executed by their predecessors-in-
interest. 49
On the other hand, the fundamental principle is that a certificate of title serves as
evidence of an indefeasible and incontrovertible title to the property in favor of
4
the person whose name appears therein as the registered owner. 50 The
registered owner has the right to possess, enjoy and dispose of the property
without any limitations other than those imposed by law.
In this case, the deed of donation, on its face, appears to bear all the essential
requisites of a valid donation inter vivos. With Teresa de Leon as the donor and
Rosendo Florencio as the donee, the deed of donation appears to have been
notarized by Notary Public Tirso Manguiat. On this premise, Florencio, and after
his death, his heirs, acquired ownership over the property although Certificate of
Title No. T-44349 under the name of Teresa de Leon had not yet been cancelled.
However, as pointed out by the RTC and the Court of Appeals, there are cogent
facts and circumstances of substance which engender veritable doubts as to
whether the petitioners have a better right of possession over the property other
than the respondents, the lawful heirs of the deceased registered owner of the
property, Teresa de Leon, based on the Deed of Donation.
First. Teresa de Leon purportedly executed the Deed of Donation on October 1,
1976 in favor of Rosendo S. Florencio. If she, indeed, donated the property, she
would surely have turned over the owner's duplicate of TCT No. T-44349 to
Florencio, to facilitate the issuance of a new title over the property in his favor.
There was an imperative need for the deed to be registered in the Office of the
Register of Deeds, and the title to the property to be thereafter issued in the name
of the donee, Florencio. Before then, Florencio and his family had been residing
in the property solely at the sufferance of Teresa de Leon and her husband. Their
possession of the property and their continued stay therein was precarious. They
could be driven out from the property at any time by De Leon if she disowned the
deed or, after her death, by her heirs. It behooved Florencio to have the said deed
filed and duly registered 51 with the Office of the Register of Deeds without delay
and, thereafter, to secure a new title under his name. This would have resulted in
the cancellation of TCT No. T-44349 under the name of Teresa de Leon, and
thereby averted any disturbance of Florencio's possession of the property, and
after his death, that of his heirs.
At the very least, Florencio should have caused the annotation of the deed
immediately after October 1, 1976 or shortly thereafter, at the dorsal portion of
TCT No. T-44349. Such annotation would have been binding on the respondents,
as De Leon's successors-in-interest, as well as to third persons. However,
Florencio failed to do so. Even as De Leon died intestate in 1978, Florencio failed
to secure title over the property in his name before he himself died intestate in
1995. If, as the petitioners claimed, Florencio acquired ownership over the
property under the deed, it is incredible that he would fail to register the deed
and secure title over the property under his name for almost twenty years. All
these years, Florencio, and thereafter, his heirs, remained passive and failed to
act upon the deed of donation to protect their right. This, the Court finds difficult
to understand.
The claim that Florencio and his heirs sought the registration of the deed and the
transfer of the title to and under Florencio's name from 1978 to 1991, in
coordination with Jose de Leon is incredible. There is no evidence on record that
the deed of donation was ever filed with and registered in the Office of the
Register of Deeds at any time during the period from 1978 to 1991. The
petitioners' claim that the registration of the deed was delayed and later aborted
by the demise of Jose de Leon is not substantiated by evidence. Moreover, there
is no reason why Florencio, or after his death, the petitioners, could not have had
the deed registered even after Jose de Leon's death.
Second. Florencio failed to inform the heirs of De Leon that the latter, before her
death, had executed a deed of donation on October 1, 1976 over the property in
his favor. It was only in 1996, or eighteen years after the death of De Leon when
the respondents sued the petitioners for ejectment that the latter claimed, for
the first time, that De Leon had executed a deed of donation over the property in
favor of their predecessor, Florencio.
Third. In the meantime, the respondents consistently paid the realty taxes for the
property from 1978 up to 1996, completely oblivious to the existence of the deed
of donation. On the other hand, Florencio, and, after his death, the petitioners,
never paid a single centavo for the realty taxes due on the property, even as they
continued staying in the property without paying a single centavo therefor. The
petitioners should have declared the property under their names and paid the
realty taxes therefor, if they truly believed that they were its owners. They failed
to do so. The fact of Florencio's inaction and that of the petitioners' weakened the
latter's claim that they acquired ownership over the property under the deed of
donation.
Fourth. The petitioners never adduced in evidence the owner's duplicate of TCT
No. T-44349 under the name of De Leon. Their possession of the owner's
duplicate of the title would have fortified their claim that indeed, De Leon had
intended to convey the property by donation to Florencio. Furthermore, the
petitioners did not explain why they failed to adduce in evidence the said owner's
duplicate of the title. The only conclusion is that the said owner's duplicate copy
was not turned over to Florencio contemporaneously with or after the execution
of the deed of donation; hence, their failure to secure title over the property. 52
Fifth. The respondents adduced in evidence the affidavit-complaint of Valeriana
Morente dated May 8, 1996, one of the witnesses to the deed, for falsification
and perjury against Florencio and Atty. Tirso Manguiat. They also adduced the
Certification dated April 23, 1996 issued by Teresita R. Ignacio, Chief, Archives
Division of the Records Management and Archives Division of Manila, to the effect
that nothing in the notarial register of Atty. Tirso L. Manguiat, a notary public of
Manila, showed that the latter notarized a Deed of Donation executed by De Leon
and Florencio in San Miguel, Bulacan dated October 1, 1976. However, the
petitioners failed to adduce in evidence Atty. Manguiat's counter-affidavit to the
said complaint, or, at the very least, a separate affidavit explaining the facts and
circumstances surrounding the notarization of the deed of donation.
Sixth. A reading of the deed will show that at the bottom of page one thereof,
Florencio was to subscribe and swear to the truth of his acceptance of the
donation before Municipal Mayor Marcelo G. Aure of San Miguel, Bulacan.
However, the mayor did not affix his signature above his typewritten name, thus:
SUBSCRIBED AND SWORN to before me this 1st day of October, 1976, the DONOR
having exhibited her Res. Cert. No. A-3723337 issued at Quezon City on January
10, 1976.
MARCELO G. AURE
Municipal Mayor 53
It appears that a second page was added, with the name of Atty. Manguiat
typewritten therein as notary public, obviously, with the use of a different
typewriter.
In sum then, we agree with the RTC and the Court of Appeals that the deed of
donation relied upon by the petitioners is unreliable as evidence on which to
anchor a finding that the latter have a better right over the property than the
respondents, who, admittedly, are the heirs of Teresa de Leon, the registered
owner of the property under TCT No. T-44349 of the Registry of Deeds of Bulacan.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decisions of the
Regional Trial Court of Malolos, Bulacan, Branch 20, in Civil Cases Nos. 1018-M-99
and 1019-M-99, and the Court of Appeals in CA-G.R. SP No. 59698-99, are
AFFIRMED. DTSaIc
SO ORDERED.
Quisumbing, Austria-Martinez and Tinga, JJ., concur.
Puno, J., is on leave.
THIRD DIVISION
[G.R. No. 138463. October 30, 2006.]
HEIRS OF CIPRIANO REYES: RICARDO REYES, DAYLINDA REYES, BEATRIZ REYES,
JULIAN CUECO, ESPERANSA REYES, VICTORINO REYES, AND JOVITO REYES,
petitioners, vs. JOSE CALUMPANG, GEOFFREY CALUMPANG, AGAPITO AGALA,
LORENZO MANABAN, RESTITUTO MANABAN, OLYMPIA MANABAN, PELAGIA
MANABAN AND FELIPE CUECO, respondents.
DECISION
5
VELASCO, JR., J p:
Say not you know another entirely,
'til you have divided an inheritance with him.
––Johann Kaspar Lavater
Can a party who lost rights of ownership in a parcel of land due to laches be
allowed to regain such ownership when one who benefited from the delay waives
such benefit? This is the core issue to be resolved from this Petition for Review on
Certiorari 1 that seeks to set aside the January 26, 1999 Decision 2 of the Court of
Appeals (CA) in CA-GR CV No. 54795 which overturned the April 2, 1996 Decision
of the Dumaguete City Regional Trial Court (RTC) in Civil Case No. 9975 declaring
null and void the December 27, 1972 Deed of Quitclaim executed by petitioners
Jovito Reyes and Victorino Reyes and ordering respondents to vacate Lot No. 3880
in Tanjay, Negros Oriental, remove their houses from the said lot, and pay
petitioners' attorney's fees of PhP10,000.00. Also challenged is the March 25,
1999 Resolution 3 which denied petitioners' February 12, 1999 Motion for
Reconsideration. 4
The Facts
It is sad and tedious when relatives bicker over inheritance — when the
differences could have been amicably settled and harmony prevail among
relatives. The instant case involves Lot No. 3880 of the Cadastral Survey of Tanjay,
Negros Oriental which has a land area of around 25,277 square meters, more or
less. Said lot was originally owned by a certain Isidro Reyes, who sired eight
children, viz: Victoriana Reyes Manaban, Telesfora Reyes Manaban, Leonardo
Reyes, Juan Reyes, Eduarda Reyes, Miguel Reyes, Eleuteria Reyes, and
Hermogenes Reyes.
The protagonists are the descendants, specifically the grandchildren, of the three
eldest children of Isidro Reyes, namely, Victoriana, Telesfora and Leonardo. To
better understand the relation of the parties, it is apt to mention the lineal
positions of the pertinent heir-litigants whose names are emphasized for clarity
and identity.
1. Daughter Victoriana Reyes Manaban had five children, namely: Antonia
Manaban Sta. Cruz, Emerencia Manaban Agala, Juana Manaban Aguilar, Lope
Manaban, and Arcadia Manaban Balsamo. a.) Granddaughter Emerencia
Manaban Agala had five children, namely: Agapito Agala, Cresencio Agala, Nicasia
Agala, Filomena Agala, Baldomera Manaban Alido, and Pelagia Manaban Cueco,
the last two being illegitimate children. b.) Granddaughter Antonia Manaban Sta.
Cruz had no issue. c.) Granddaughter Juana Manaban Aguilar had eight children,
namely: Fructuoso, Salvadora, Delfin, Rufina, Felomina, Ceferino, Lucia, and
Cipriano, all surnamed Aguilar. d.) Grandson Lope Manaban had seven children,
namely: Aniana, Lucas, Isidro, Genera, Abadias, Jose, and Gabriela, all surnamed
Manaban. e.) Granddaughter Arcadia Manaban Balsamo had seven children,
namely: Lucrecia, Bienvenida, Gregoria, Antonio, Moises, Marcela, and Maria, all
surnamed Balsamo. Of the grandchildren of Victoriana Reyes Manaban, Agapito
Agala and Pelagia Manaban Cueco, are among the respondents in the instant
case. Respondent Felipe Cueco was included among the litigants, being the
husband of Pelagia Manaban.
2. Daughter Telesfora Reyes Manaban had only one child, Valentin Manaban who
in turn had three children, namely: Olympia Manaban Mayormita, Restituto
Manaban, and Lorenzo Manaban, all of whom are among the respondents in the
instant case.
3. Son Leonardo Reyes had six children, namely: Higino Reyes, Policarpio Reyes,
Ines Reyes Calumpang, Exaltacion Reyes Agir, Honorata Reyes, and Sofia Reyes.
a.) Grandson Higino Reyes had six children, namely: Victorino, Cipriano, Luis,
Ricardo, Jesus, and Daylinda, all surnamed Reyes. b.) Grandson Policarpio Reyes
had three children, namely: Beatriz, Guillermo, and Jovito, all surnamed Reyes.
Most of the children of Higino and Policarpio Reyes are the petitioners in the
instant case. c.) Granddaughter Ines Reyes Calumpang on the other hand had five
children, namely: Jose, Pedring, Cesar, Zosima, and Angel, all surnamed
Calumpang. Great-grandson Jose Calumpang and his son, Geoffrey Calumpang, a
great-great-grandson of Isidro, are among the respondents in the instant case. d.)
Granddaughter Exaltacion Reyes Agir had seven children, namely: Rafael Agir,
Remedios Agir, Cordova Agir Gabas, Natividad Agir, Rogelio Agir, Ramon Agir, and
Zenaida Agir Lopez. ISAaTH
The records do not show the heirs of granddaughters Honorata and Sofia Reyes,
the last two children of Leonardo Reyes. Likewise, the records do not mention the
heirs of the last five children of Isidro Reyes, namely: Juan, Eduarda, Miguel,
Eleuteria, and Hermogenes.
For clarity, a chart showing the family tree originating from Isidro Reyes is
provided as follows (with the parties' names given emphasis):
[image]
With the foregoing perspective on the relational positions of the protagonists, we
move on to the factual antecedents:
Among Isidro's children, it was Leonardo Reyes, in behalf of his seven (7) siblings,
who managed the properties of their father. In 1924, a cadastral survey was
conducted pursuant to Act No. 2259. Leonardo, through his representative, Angel
Calumpang, filed an answer in the cadastral court naming all eight children of
Isidro Reyes as claimants of the said lot.
However, on July 10, 1949, a certain Dominador Agir filed another claim over the
disputed lot, this time naming some grandchildren of Leonardo Reyes (great-
grandchildren of Isidro Reyes), which included most of the children of Higino and
Policarpio Reyes as claimants, namely: Victorino, Cipriano, Luis, Ricardo, and
Daylinda all surnamed Reyes, who are the children of Higino Reyes; and Beatriz,
Guillermo, and Jovito all surnamed Reyes, who are the children of Policarpio
Reyes. Subsequently, on July 19, 1949, a Decision was rendered in Cadastral Case
No. 12, G.L.R.O. Cad. Rec. No. 31 which covered four (4) lots, among which is Lot
No. 3880, whereby the Decision granted judicial confirmation of the imperfect
title of petitioners over said lot. Consequently, Original Certificate of Title (OCT)
No. OV-227 was issued on August 5, 1954 in the name of petitioners, namely:
Victorino, Cipriano, Luis, Ricardo, Jesus, Daylinda, Jovito, Guillermo, and Beatriz,
all surnamed Reyes.
The nine (9) registered co-owners, however, did not take actual possession of the
said lot, and it was Victorino and Cipriano Reyes who paid the land taxes. The heirs
of Telesfora Reyes Manaban and Victoriana Reyes Manaban (daughters of Isidro
Reyes) retained possession over a hectare portion of the said lot where they built
their houses and planted various crops and fruit bearing trees. Meanwhile,
sometime in 1968, Jose Calumpang, grandson of Leonardo Reyes and cousin of
petitioners, also took possession over a hectare of the said lot, planting it with
sugarcane. Thus, Jose Calumpang and his son Geoffrey continued to plant
sugarcane over almost a hectare of the said lot while the heirs of Telesfora Reyes
Manaban and Victoriana Reyes Manaban — the respondents Agalas and
Manabans — occupied the rest of the same lot which is about one hectare.
Sometime in 1972, respondent Agapito Agala (grandson of Victoriana Reyes
Manaban) was informed by his cousin Victorino Reyes, one of the petitioners and
registered co-owner of Lot No. 3880, that there was already a title over the said
lot. This prompted respondent Agapito Agala and the other heirs of Telesfora and
Victoriana to seek advice from a judge who suggested that they request the
registered co-owners to sign a quitclaim over the said lot.
A conference was allegedly held on December 27, 1972, where three (3) of the
registered co-owners — Victorino, Luis, and Jovito all surnamed Reyes — signed
a Deed of Quitclaim, 5 where, for a consideration of one peso (P1.00), they agreed
to "release, relinquish and quitclaim" all their rights over the land "in favor of the
legal heirs of the late Victoriana Reyes and Telesfora Reyes." 6
The Deed of Quitclaim was annotated on the back of OCT No. OV-227. Thereafter,
respondent Agapito Agala had the then Police Constabulary (PC) summon the
other registered co-owners, namely: Cipriano, Ricardo, Daylinda, Guillermo, and
Beatriz, to sign another deed of quitclaim. But the latter allegedly ignored the call,
prompting the heirs of Victoriana and Telesfora Reyes to file on June 9, 1975 in
Civil Case No. 6238, with the Dumaguete City RTC, Branch 40, a Complaint for
Reconveyance of Real Property, Cancellation of Certificate of Title and Damages
against the registered co-owners of the disputed lot who did not sign a deed of
quitclaim and Dominador Agir, who filed the amended answer in the cadastral
proceedings in 1949. On April 28, 1987, the trial court dismissed the complaint
and ruled in favor of the registered co-owners of Lot No. 3880. On appeal, the CA
upheld the trial court and affirmed the RTC November 29, 1989 Decision. 7 The
CA Decision was not raised for review before this Court, thereby attaining finality.
Consequently, on July 2, 1991, petitioners filed the instant civil case for Recovery
of Possession, Declaration of Non-existence of a Document, Quieting of Title and
6
Damages against Jose Calumpang, Geoffrey Calumpang, Agapito Agala, Lorenzo
Manaban, Heirs of Olympia Manaban, Pelagia Manaban, Felipe Cueco and Heirs
of Restituto Manaban (herein respondents) in Dumaguete City RTC. It was
docketed as Civil Case No. 9975 and raffled to RTC Branch 44.
In gist, petitioners, as registered owners of Lot No. 3880, alleged that by tolerance
they allowed respondents Jose and Geoffrey Calumpang to cultivate an area of
about one hectare of the said property; and also by tolerance allowed
respondents Manabans and Agalas to occupy another hectare portion of the same
lot. They further alleged that in December 1972, petitioners Victorino, Luis, and
Jovito Reyes got sick; and believing that they were bewitched by the occupants of
the said lot, they signed a Deed of Quitclaim, waiving all their rights and interests
over their respective shares in the disputed lot in favor of the heirs of Victoriana
and Telesfora Reyes; and that thereafter, the latter filed Civil Case No. 6238 in
1987, which was dismissed by the Dumaguete City RTC.
During the hearing of the instant case, petitioners presented their sole witness,
Ricardo Reyes, who testified on the identity of OCT No. OV-227, the character of
its possession, existence, and the Decision in the prior Civil Case No. 6238; 8 and
the estimated income of the disputed lot, and the expenses incurred in pursuing
the instant case.
On the other hand, respondent-heirs of Victoriana and Telesfora Reyes presented
Lorenzo Manaban, 9 who testified on the relationship of respondents to
Victoriana and Telesfora Reyes; that they were in actual and adverse possession
of Lot No. 3880; and, the existence and due execution of the assailed Deed of
Quitclaim in their favor which was duly annotated on the back of OCT No. OV-227.
Respondents Jose and Geoffrey Calumpang did not participate in the trial
although they filed their answer.
Subsequently, the trial court rendered its judgment on April 2, 1996. The
dispositive portion reads:
WHEREFORE, this Court renders judgment declaring NULL and VOID the Deed of
Quitclaim dated December 27, 1972 signed by Jovito and Victorino all surnamed
Reyes. Ordering defendants to vacate Lot No. 3880, Cadastral Survey of Tanjay
and to remove their house thereon; and to pay jointly and severally plaintiffs the
sum of P10,000.00, by way of reimbursement for attorney's fees, and to pay the
costs. 10
Believing that they were the legal and true owners of Lot No. 3880, respondents
interposed an appeal to the CA on June 27, 1996, which was docketed as CA-G.R.
CV No. 54795.
The Ruling of the Court of Appeals
For non-payment of the requisite docket fee, the appeal of respondent Jose
Calumpang was dismissed by the CA on December 19, 1997, 11 and a Partial Entry
of Judgment for Appellant Jose Calumpang Only 12 was issued on January 23,
1998.
However, the appeal filed by respondents Agalas and Manabans was found to be
meritorious, and on January 26, 1999, the CA reversed the Decision of the trial
court and dismissed Civil Case No. 9975. While it ruled that petitioners had a cause
of action to institute the case assailing the Deed of Quitclaim as its validity was
not disputed in Civil Case No. 6238, upon review of the evidence adduced, the CA
found that petitioners utterly failed to present evidence substantiating their
allegation of fraud and mistake in the execution of the assailed quitclaim. The CA
reasoned out that it was incumbent for petitioners to prove their allegations of
fraud and mistake, but they failed to overcome the presumptions that a person
takes ordinary care of one's concerns and that private transactions have been fair
and regular.
Thus, the CA ruled that the trial court had no basis in fact and in law to declare
the Deed of Quitclaim null and void, and concluded that it remained valid and
binding to all the signatories. The rights and interests in the shares of Victorino,
Luis, and Jovito Reyes over Lot No. 3880 were deemed waived in favor of the heirs
of Victoriana and Telesfora Reyes (that is, respondents Agalas and Manabans)
who had the right to retain possession of the lot.
Petitioners registered a Motion for Reconsideration of the January 26, 1999
Decision of the CA, which was however turned down in its March 25, 1999
Resolution, as petitioners were unable to raise new substantial issues which had
not been duly considered in arriving at the challenged judgment.
Hence, the instant petition.
The Issues
In the instant petition, petitioner raises the following assignment of errors for our
consideration:
(a) In exercising jurisdiction over the appeal of the defendants when in fact the
issues are purely questions of law misfiled in the Court of Appeals, which should
have been filed directly to the Supreme Court at that time;
(b) In reversing the RTC Decision dated April 2, 1993; and in reversing its own
resolution dated December 19, 1997;
(c) In declaring that the fraud and mistake in the execution of the waiver was not
substantiated, when in fact there is overwhelming evidence of infirmity of the
document as found by the trial court, which should not be disturbed on appeal.
(d) In sweepingly dismissing the complaint, including the claim against the
Calumpang defendants, even as the latter did not adduce any evidence in the trial
court, and whose appeal had already been dismissed by the CA Resolution dated
December 19, 1997; and the Calumpang defendants did not also appeal to the
Supreme Court from such dismissal. 13
The Court's Ruling
The petition is partly meritorious.
First Assignment of Error:
There is a Question of Fact
In the first assignment of error, petitioners argue that the appeal of the heirs of
Victoriana and Telesfora Reyes should have been filed before this Court and not
in the CA since it involves only pure questions of law, that is, whether their
counterclaims are barred by the judgment in Cadastral Case No. 12, LRC 311,
rendered by the Hon. Roman Ibañez, Judge of the CFI of Negros Oriental, which
involves the law on estoppel by judgment, and Sections 38, 39, and 47 of Act 496.
aDCIHE
We disagree.
A question of law exists when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue does
not call for an examination of the probative value of the evidence presented, the
truth or falsehood of facts being admitted. A question of fact exists when the
doubt or difference arises as to the truth or falsehood of facts or when the query
invites calibration of the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances, as
well as their relation to each other and to the whole, and the probability of the
situation. 14
The appeal before the CA by respondent-heirs of Victoriana and Telesfora Reyes
clearly assails the trial court's decision, inter alia, on the ground of lack of evidence
and questions the factual findings of the trial court. This question is undoubtedly
one of fact, falling squarely within the exclusive appellate jurisdiction of the Court
of Appeals. 15
The second issue "that the CA erred in reversing the April 2, 1993 Decision of the
RTC and its resolution dated December 19, 1997" will be jointly discussed with the
fourth issue that "the CA erred in dismissing the complaint including the claim
against the Calumpang defendants."
Third Assignment of Error:
Question of Evidence
In the third assignment of error, petitioners strongly assert that overwhelming
evidence of infirmity of the document substantiated the fraud and mistake in the
execution of the questioned waiver or deed of quitclaim.
We are not persuaded.
Petitioners failed to adduce evidence
Petitioners admit the execution of the quitclaim by Victorino, Luis, and Jovito, all
surnamed Reyes; however, petitioners allege fraud and mistake in its execution.
7
But, as correctly held by the appellate court, petitioners failed to present evidence
in support of their allegation. Indeed, even a cursory glance at the records reveals
that no evidence was adduced substantiating petitioners' allegation of fraud and
mistake in the execution of the assailed quitclaim, neither from the documentary
evidence formally offered 16 nor from the testimonial evidence of petitioners'
sole witness, Ricardo Reyes, who testified on the identity of some documents to
prove ownership, the character of the possession of the subject lot, and the
existence of the Decision in Civil Case No. 6238.
Basic is the rule of actori incumbit onus probandi, or the burden of proof lies with
the plaintiff. Differently stated, upon the plaintiff in a civil case, the burden of
proof never parts. 17 In the case at bar, petitioners must therefore establish their
case by a preponderance of evidence, 18 that is, evidence that has greater weight,
or is more convincing than that which is offered in opposition to it 19 — which
petitioners utterly failed to do so. Besides, it is an age-old rule in civil cases that
one who alleges a fact has the burden of proving it and a mere allegation is not
evidence. 20 Fraud is never presumed, but must be established by clear and
convincing evidence. 21 Thus, by admitting that Victorino, Luis, and Jovito, all
surnamed Reyes, indeed executed the Deed of Quitclaim coupled with the
absence of evidence substantiating fraud and mistake in its execution, we are
constrained to uphold the appellate court's conclusion that the execution of the
Deed of Quitclaim was valid. ICHcaD
This finding is consonant with the findings of the trial court in the prior Civil Case
No. 6238, 22 as affirmed in CA-G.R. CV No. 14527, 23 that while respondents
Agalas and Manabans (the heirs of Victoriana and Telesfora Reyes) had lost their
equitable remedy in law on the ground of laches, yet the Deed of Quitclaim is
deemed valid and binding.
Equitable Rights Subsist Despite Laches
On the issue of the rights of the heirs of Victoriana and Telesfora Reyes being
barred by the indefeasibility of petitioners' Torrens Title over subject lot, we
qualify. White it is true that the indefeasibility of petitioners' title on the ground
of laches bars the rights or interests of the heirs of Victoriana and Telesfora Reyes
over the disputed lot, still, the indefeasible rights of a holder of a Torrens Title
may be waived in favor of another whose equitable rights may have been barred
by laches.
In Soliva v. The Intestate Estate of Villalba, 'laches' is defined as:
the failure or neglect, for an unreasonable and unexplained length of time, to do
that which — by the exercise of due diligence — could or should have been done
earlier. It is the negligence or omission to assert a right within a reasonable period,
warranting the presumption that the party entitled to assert it has either
abandoned or declined to assert it.
Under this time-honored doctrine, relief has been denied to litigants who, by
sleeping on their rights for an unreasonable length of time — either by negligence,
folly or inattention — have allowed their claims to become stale. Vigilantibus, sed
non dormientibus, jura subveniunt. The laws aid the vigilant, not those who
slumber on their rights. 24 (Emphasis supplied and citations omitted.)
Verily, laches serves to deprive a party guilty of it to any judicial remedies.
However, the equitable rights barred by laches still subsist and are not otherwise
extinguished. Thus, parties guilty of laches retains equitable rights albeit in an
empty manner as they cannot assert their rights judicially. However, such
equitable rights may be revived or activated by the waiver of those whose right
has ripened due to laches, and can be exercised to the extent of the right waived.
Equitable Rights Revived through Waiver
In the case at bar, petitioners' title over Lot No. 3880 had become indefeasible
due to the laches of the heirs of Victoriana and Telesfora Reyes. However, like any
rights over immovable property, titleholders may convey, dispose, or encumber
their right or interest. Thus, through the waiver and quitclaim, the rights of the
heirs of Victoriana and Telesfora Reyes were acknowledged, revived, and
activated to the extent of the rights waived by titleholders Victorino, Luis, and
Jovito Reyes. Clearly, the quitclaim executed by titleholders Victorino, Luis, and
Jovito Reyes waived and conveyed their rights over the said lot in favor of the
heirs of Victoriana and Telesfora Reyes, whose equitable rights were barred by
laches.

In this light, we note that both trial and appellate courts in Civil Case No. 6238 did
not categorically pronounce that the heirs of Victoriana and Telesfora Reyes had
no rights over the disputed lot. Their pronouncements were to the effect that
whatever equitable rights the heirs of Victoriana and Telesfora Reyes may have
had over the subject lot had been barred by laches. Thus, the voluntary waiver of
Victorino, Luis, and Jovito Reyes revived and activated the equitable rights of the
heirs of Victoriana and Telesfora Reyes over Lot No. 3880. But such revived and
activated rights over Lot No. 3880 correspond only to the extent of the rights of
Victorino, Luis, and Jovito Reyes waived in their favor.
The Quitclaim (Waiver) is Valid
The waiver is clear. The recent case of Valderama v. Macalde reiterated the three
(3) essential elements of a valid waiver, thus: "(a) existence of a right; (b) the
knowledge of the existence thereof; and, (c) an intention to relinquish such right."
25 These elements are all present in the case at bar. The three (3) executors, who
were co-owners and titleholders of the said lot since 1954, were aware of their
rights, and executed the Deed of Quitclaim in clear and unambiguous language to
waive and relinquish their rights over Lot No. 3880 in favor of the heirs of
Victoriana and Telesfora Reyes. Thus, the existence of a valid waiver has been
positively demonstrated. Moreover, in People v. Bodoso, cited in Valderama, it
was held that the standard of a valid waiver requires that it "not only must be
voluntary, but must be knowing, intelligent, and done with sufficient awareness
of the relevant circumstances and likely consequences." 26 In the instant case,
petitioners utterly failed to adduce any evidence showing that the assailed
quitclaim was done absent such standard. Indeed, we note with approval the CA's
apt application of the presumption "that a person takes ordinary care of his
concerns and that private transactions have been fair and regular." 27
Waiver Complies with the Requisites of a Valid Contract
and the Formal Requisites to Convey Real Property
Petitioners argue that even if the conveyance or waiver was duly executed, such
is ineffective on the grounds of non-compliance with the requirements of Article
1318 of the new Civil Code on the requisites of a contract, and that it cannot be
considered a donation for non-compliance with the formalities required by the
law on donation, for example, acceptance.
The argument is bereft of merit.
The Deed of Quitclaim complies with the essential requisites of a contract
provided in Article 1318 of the Civil Code, viz: (a) consent of the parties; (b) object
certain that is the subject matter of the waiver and quitclaim; and, (c) the cause
of the waiver and quitclaim that is established. First, there is no doubt as to the
consent of the executing parties and the heirs of Victoriana and Telesfora Reyes.
Second, the object is the executors' right over the subject land. And third, the
cause is certain, that is, the recognition by the executors of the rights of the heirs
of Victoriana and Telesfora Reyes over the disputed lot.
It likewise complies with Article 1358 (1) of the Civil Code which requires that "acts
and contracts which have for their object the creation, transmission, modification
or extinguishments of real rights over immovable property" must appear in a
public document. This is complied with, as the Deed of Quitclaim is a public
document having been acknowledged before a notary public. 28 Moreover, the
Deed of Quitclaim has been duly annotated in the original certificate of title
covering the subject lot.
Deed of Quitclaim not a donation
Petitioners contended that the Deed of Quitclaim is really a donation and thus
necessitates acceptance by respondents Agalas and Manabans. A purview of the
factual antecedents of the execution of the Deed of Quitclaim shows otherwise.
Victorino, Luis, and Jovito Reyes signed the Deed of Quitclaim to relinquish their
rights in recognition of respondents' right over the said land and thus conveyed
their rights and interest in the quitclaim to respondents Agalas and Manabans
(the heirs of Victoriana and Telesfora Reyes). DACTSa
It should be remembered that respondents Agalas and Manabans are the heirs of
Victoriana and Telesfora Reyes. Originally the rights and interests of respondents
over Lot No. 3880 were formally filed in 1924 in the cadastral proceedings in the
Cadastral Court. Leonardo Reyes instructed his representative to file an answer
asserting the ownership of said lot by the eight (8) children of Isidro Reyes which
includes Victoriana and Telesfora. However on July 10, 1949, another claim was
filed by Dominador Agir only in behalf of the children of Higino and Policarpio
Reyes, and excluded Victoriana and Telesfora Reyes. Thus, when OCT No. OV-227
8
was issued, the respondents Agalas and Manabans, as heirs of Victoriana and
Telesfora, were excluded.
In this factual setting, respondents could have filed an action for reconveyance to
recover their shares in Lot No. 3880. However, instead of instituting such a suit,
respondents were able to convince Victorino, Luis, and Jovito, all surnamed Reyes,
to execute a Deed of Quitclaim restoring to them their shares. Therefore, it is clear
that the quitclaim is not a donation for the three (3) Reyeses — Victorino, Luis,
and Jovito — who merely acknowledged the ownership of and the better right
over the said lot by the heirs of Victoriana and Telesfora Reyes. Having acquired
title over the property in 1954 to the exclusion of respondents Agalas and
Manabans, through the Deed of Quitclaim executed in 1972, the three (3) Reyeses
merely acknowledged the legal rights of respondents over their shares in the said
lot. In fine, the Deed of Quitclaim, not being a donation, no formal acceptance is
needed from the Agalas and Manabans.
After resolving the validity of the Deed of Quitclaim and elucidating on why the
deed is not tantamount to a donation, we will now resolve what the heirs of
Victoriana and Telesfora Reyes are entitled to own and why they can legally
possess the disputed lot:
Heirs of Victoriana and Telesfora Reyes entitled to 1/3 of disputed lot
Through the Deed of Quitclaim, the heirs of Victoriana and Telesfora Reyes —
respondents Agalas and Manabans and their co-heirs — are entitled to the
aggregate shares of Victorino, Luis, and Jovito Reyes over Lot No. 3880.
OCT No. OV-227 shows that the said lot has a total area of around 25,277 square
meters, more or less. The shares of the registered co-owners in the OCT are given
as follows:
[I]t is hereby decreed that [1] Victorino Reyes, single; [2] Cipriano Reyes, single;
[3] Luis Reyes, 19 years of age, single; [4] Ricardo Reyes, 17 years of age, single;
[5] Jesus Reyes, 11 years of age; [6] Daylinda Reyes, 8 years of age; [7] Jovito
Reyes, single; [8] Guillermo Reyes, 19 years of age, single; and [9] Beatriz Reyes,
17 years of age, single; in the proportion of undivided 1/2 in equal shares to the
first six (6) named and the remaining 1/2 in undivided equal shares, to the last
three (3) named . . .
From the foregoing division of pro-indiviso shares, Victorino's share is 1/6 of 1/2
undivided share or 1/12 of the total area. Luis has the same share as Victorino's;
while Jovito's share is 1/3 of 1/2 undivided share or 2/12 [1/6] of the total area.
Thus, Victorino and Luis have equal shares of 2,106.417 square meters while
Jovito has a share of 4,212.833 square meters. Thus, the aggregate area of the
shares of Victorino, Luis, and Jovito is 8,425.667 square meters or 1/3 of the total
land area of subject lot, which will be passed on to the heirs of Victoriana and
Telesfora Reyes — respondents Agalas and Manabans, and their co-heirs, the
Balsamos, Aguilars, and Mayormitas.
Second and Fourth Issues:
Respondent Calumpangs barred by Civil Case No. 6238
We will now tackle both alleged assignments of errors as regards respondents
Calumpangs because both issues are closely related. In the second assignment of
error, petitioners, as registered owners, contend that they are in constructive
possession of the disputed land and have the right to demand that respondent
Calumpangs, who are occupying the land, to vacate it. And, in the last assignment
of error, petitioners contend that the appellate court erred in dismissing the
complaint, including the claim against respondents Jose and Geoffrey Calumpang,
who did not contest the case in the trial court, aside from their joint answer and
whose appeal before the appellate court was dismissed with finality.
We agree with petitioners.
As mentioned above, petitioners' title over Lot No. 3880, Tanjay Cadastre, Original
Certificate of Title No. OV-227 issued in their names sometime in 1954, had
become indefeasible pursuant to the trial court's Decision duly affirmed by the
appellate court in Civil Case No. 6238. Respondent Calumpangs apparently did not
adduce evidence to assert their rights over subject lot both in the prior Civil Case
No. 6238 and in the instant one. Be that as it may, the claim of respondent
Calumpangs over Lot No. 3880 had been conclusively denied in Civil Case No.
6238. Thus, whatever rights and interests respondents Jose and Geoffrey
Calumpang have had over Lot No. 3880 are barred by the Decision in Civil Case
No. 6238. Moreover, the December 19, 1997 Resolution of the CA had become
final and executory. Consequently, having no rights over Lot No. 3880, there is no
reason for respondents Jose and Geoffrey Calumpang to continue occupying a
portion of Lot No. 3880.
WHEREFORE, the petition is partly GRANTED. The January 26, 1999 Decision and
the March 25, 1999 Resolution of the Court of Appeals in CA-G.R. CV No. 54795
are hereby SET ASIDE. Respondents Jose and Geoffrey Calumpang are ORDERED
to VACATE Lot No. 3880, REMOVE their houses from the said lot, if any, and PAY
petitioners, jointly and severally, PhP 10,000.00 as attorney's fees. The heirs of
Victoriana and Telesfora Reyes — among whom are respondents Agalas and
Manabans — are entitled to 8,425.667 square meters of Lot No. 3880. The parties
are ORDERED to have Lot No. 3880 surveyed, and a subdivision plan prepared
showing the respective shares of the parties as basis for the issuance of separate
titles. The Register of Deeds of Tanjay, Negros Oriental is hereby ORDERED to
issue separate Transfer Certificates of Title based on the said survey plan; one title
in the name of the heirs of Victoriana and Telesfora Reyes over 8,425.667 square
meters, who will retain possession of such area only, and another title over the
remaining area of 16,851.333 square meters of Lot No. 3880 which shall be issued
in the names of Cipriano, Ricardo, Jesus, Daylinda, Guillermo, and Beatriz, all
surnamed Reyes, excluding Victorino, Luis, and Jovito Reyes, whose shares were
conveyed to the heirs of Victoriana and Telesfora Reyes.
No costs.
SO ORDERED.
Quisumbing, Carpio, Carpio Morales and Tinga, JJ., concur.
SECOND DIVISION
[G.R. No. 150416. July 21, 2006.]
SEVENTH DAY ADVENTIST CONFERENCE CHURCH OF SOUTHERN PHILIPPINES,
INC., and/or represented by MANASSEH C. ARRANGUEZ, BRIGIDO P. GULAY,
FRANCISCO M. LUCENARA, DIONICES O. TIPGOS, LORESTO C. MURILLON, ISRAEL
C. NINAL, GEORGE G. SOMOSOT, JESSIE T. ORBISO, LORETO PAEL and JOEL
BACUBAS, petitioners, vs. NORTHEASTERN MINDANAO MISSION OF SEVENTH
DAY ADVENTIST, INC., and/or represented by JOSUE A. LAYON, WENDELL M.
SERRANO, FLORANTE P. TY and JETHRO CALAHAT and/or SEVENTH DAY
ADVENTIST CHURCH [OF] NORTHEASTERN MINDANAO MISSION, * respondents.
DECISION
CORONA, J p:
This petition for review on certiorari assails the Court of Appeals (CA) decision 1
and resolution 2 in CA-G.R. CV No. 41966 affirming, with modification, the
decision of the Regional Trial Court (RTC) of Bayugan, Agusan del Sur, Branch 7 in
Civil Case No. 63.
This case involves a 1,069 sq. m. lot covered by Transfer Certificate of Title (TCT)
No. 4468 in Bayugan, Agusan del Sur originally owned by Felix Cosio and his wife,
Felisa Cuysona.
On April 21, 1959, the spouses Cosio donated the land to the South Philippine
Union Mission of Seventh Day Adventist Church of Bayugan Esperanza, Agusan
(SPUM-SDA Bayugan). 3 Part of the deed of donation read:
KNOW ALL MEN BY THESE PRESENTS:
That we Felix Cosio[,] 49 years of age[,] and Felisa Cuysona[,] 40 years of age,
[h]usband and wife, both are citizen[s] of the Philippines, and resident[s] with
post office address in the Barrio of Bayugan, Municipality of Esperanza, Province
of Agusan, Philippines, do hereby grant, convey and forever quit claim by way of
Donation or gift unto the South Philippine [Union] Mission of Seventh Day
Adventist Church of Bayugan, Esperanza, Agusan, all the rights, title, interest,
claim and demand both at law and as well in possession as in expectancy of in and
to all the place of land and portion situated in the Barrio of Bayugan, Municipality
of Esperanza, Province of Agusan, Philippines, more particularly and bounded as
follows, to wit:
9
1. a parcel of land for Church Site purposes only.
2. situated [in Barrio Bayugan, Esperanza].
3. Area: 30 meters wide and 30 meters length or 900 square meters.
4. Lot No. 822-Pls-225. Homestead Application No. V-36704, Title No. P-285.
aHDTAI
5. Bounded Areas
North by National High Way; East by Bricio Gerona; South by Serapio Abijaron and
West by Feliz Cosio . . . . 4
The donation was allegedly accepted by one Liberato Rayos, an elder of the
Seventh Day Adventist Church, on behalf of the donee.
Twenty-one years later, however, on February 28, 1980, the same parcel of land
was sold by the spouses Cosio to the Seventh Day Adventist Church of
Northeastern Mindanao Mission (SDA-NEMM). 5 TCT No. 4468 was thereafter
issued in the name of SDA-NEMM. 6
Claiming to be the alleged donee's successors-in-interest, petitioners asserted
ownership over the property. This was opposed by respondents who argued that
at the time of the donation, SPUM-SDA Bayugan could not legally be a donee
because, not having been incorporated yet, it had no juridical personality. Neither
were petitioners members of the local church then, hence, the donation could not
have been made particularly to them.
On September 28, 1987, petitioners filed a case, docketed as Civil Case No. 63 (a
suit for cancellation of title, quieting of ownership and possession, declaratory
relief and reconveyance with prayer for preliminary injunction and damages), in
the RTC of Bayugan, Agusan del Sur. After trial, the trial court rendered a decision
7 on November 20, 1992 upholding the sale in favor of respondents.
On appeal, the CA affirmed the RTC decision but deleted the award of moral
damages and attorney's fees. 8 Petitioners' motion for reconsideration was
likewise denied. Thus, this petition.
The issue in this petition is simple: should SDA-NEMM's ownership of the lot
covered by TCT No. 4468 be upheld? 9 We answer in the affirmative.
The controversy between petitioners and respondents involves two supposed
transfers of the lot previously owned by the spouses Cosio: (1) a donation to
petitioners' alleged predecessors-in-interest in 1959 and (2) a sale to respondents
in 1980.
Donation is undeniably one of the modes of acquiring ownership of real property.
Likewise, ownership of a property may be transferred by tradition as a
consequence of a sale.
Petitioners contend that the appellate court should not have ruled on the validity
of the donation since it was not among the issues raised on appeal. This is not
correct because an appeal generally opens the entire case for review.
We agree with the appellate court that the alleged donation to petitioners was
void.
Donation is an act of liberality whereby a person disposes gratuitously of a thing
or right in favor of another person who accepts it. The donation could not have
been made in favor of an entity yet inexistent at the time it was made. Nor could
it have been accepted as there was yet no one to accept it.
The deed of donation was not in favor of any informal group of SDA members but
a supposed SPUM-SDA Bayugan (the local church) which, at the time, had neither
juridical personality nor capacity to accept such gift.
Declaring themselves a de facto corporation, petitioners allege that they should
benefit from the donation.
But there are stringent requirements before one can qualify as a de facto
corporation:
(a) the existence of a valid law under which it may be incorporated;

(b) an attempt in good faith to incorporate; and
(c) assumption of corporate powers. 10
While there existed the old Corporation Law (Act 1459), 11 a law under which
SPUM-SDA Bayugan could have been organized, there is no proof that there was
an attempt to incorporate at that time.
The filing of articles of incorporation and the issuance of the certificate of
incorporation are essential for the existence of a de facto corporation. 12 We have
held that an organization not registered with the Securities and Exchange
Commission (SEC) cannot be considered a corporation in any concept, not even
as a corporation de facto. 13 Petitioners themselves admitted that at the time of
the donation, they were not registered with the SEC, nor did they even attempt
to organize 14 to comply with legal requirements.
Corporate existence begins only from the moment a certificate of incorporation
is issued. No such certificate was ever issued to petitioners or their supposed
predecessor-in-interest at the time of the donation. Petitioners obviously could
not have claimed succession to an entity that never came to exist. Neither could
the principle of separate juridical personality apply since there was never any
corporation 15 to speak of. And, as already stated, some of the representatives of
petitioner Seventh Day Adventist Conference Church of Southern Philippines, Inc.
were not even members of the local church then, thus, they could not even claim
that the donation was particularly for them. 16
"The de facto doctrine thus effects a compromise between two conflicting public
interest[s] — the one opposed to an unauthorized assumption of corporate
privileges; the other in favor of doing justice to the parties and of establishing a
general assurance of security in business dealing with corporations." 17
Generally, the doctrine exists to protect the public dealing with supposed
corporate entities, not to favor the defective or non-existent corporation. 18
In view of the foregoing, petitioners' arguments anchored on their supposed de
facto status hold no water. We are convinced that there was no donation to
petitioners or their supposed predecessor-in-interest. TCDHIc
On the other hand, there is sufficient basis to affirm the title of SDA-NEMM. The
factual findings of the trial court in this regard were not convincingly disputed.
This Court is not a trier of facts. Only questions of law are the proper subject of a
petition for review on certiorari. 19
Sustaining the validity of respondents' title as well as their right of ownership over
the property, the trial court stated:
[W]hen Felix Cosio was shown the Absolute Deed of Sale during the hearing . . .
he acknowledged that the same was his . . . but that it was not his intention to sell
the controverted property because he had previously donated the same lot to the
South Philippine Union Mission of SDA Church of Bayugan-Esperanza. Cosio
avouched that had it been his intendment to sell, he would not have disposed of
it for a mere P2,000.00 in two installments but for P50,000.00 or P60,000.00.
According to him, the P2,000.00 was not a consideration of the sale but only a
form of help extended.
A thorough analysis and perusal, nonetheless, of the Deed of Absolute Sale
disclosed that it has the essential requisites of contracts pursuant to . . . Article
1318 of the Civil Code, except that the consideration of P2,000.00 is somewhat
insufficient for a [1,069-square meter] land. Would then this inadequacy of the
consideration render the contract invalid?
Article 1355 of the Civil Code provides:
Except in cases specified by law, lesion or inadequacy of cause shall not invalidate
a contract, unless there has been fraud, mistake or undue influence.
No evidence [of fraud, mistake or undue influence] was adduced by [petitioners].
xxx xxx xxx
Well-entrenched is the rule that a Certificate of Title is generally a conclusive
evidence of [ownership] of the land. There is that strong and solid presumption
10
that titles were legally issued and that they are valid. It is irrevocable and
indefeasible and the duty of the Court is to see to it that the title is maintained
and respected unless challenged in a direct proceeding. . . . The title shall be
received as evidence in all the Courts and shall be conclusive as to all matters
contained therein.
[This action was instituted almost seven years after the certificate of title in
respondents' name was issued in 1980.] 20
According to Art. 1477 of the Civil Code, the ownership of the thing sold shall be
transferred to the vendee upon the actual or constructive delivery thereof. On
this, the noted author Arturo Tolentino had this to say:
The execution of [a] public instrument . . . transfers the ownership from the
vendor to the vendee who may thereafter exercise the rights of an owner over
the same 21
Here, transfer of ownership from the spouses Cosio to SDA-NEMM was made
upon constructive delivery of the property on February 28, 1980 when the sale
was made through a public instrument. 22 TCT No. 4468 was thereafter issued
and it remains in the name of SDA-NEMM.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioners.
SO ORDERED.
Puno, Sandoval-Gutierrez, Azcuna and Garcia, JJ., concur.
THIRD DIVISION
[G.R. No. L-44628. August 27, 1987.]
CONSUELO SEVILLE JUTIC, JUAN JUTIC, CELESTINO SEVILLE, TIBURCIO SEVILLE,
RAVELLO SEVILLE, SONITA SEVILLE, LUCY SEVILLE, EPIFANIA SEVILLE, NARACY
SEVILLE, EMMANUEL SEVILLE, ORLANDO MANICAN, and PACIFICO MANICAN,
petitioner, vs. THE COURT OF APPEALS, MANILA, VICENTE SULLAN, TRINIDAD
SULLAN, TERESITA SULLAN, ULYSSES SULLAN, ALEJANDRINO SULLAN,
BUENAVENTURA SEVILLE, and ZOILO SEVILLE, respondents.
SYLLABUS
1. CIVIL LAW; DONATIONS; INSTRUMENT IS A MERE DECLARATION OF AN
INTENTION AND A DESIRE NOT CONSIDERED A CONCRETE AND FORMAL ACT OF
GIVING OR DONATING; THERE IS NO INTENTION TO TRANSFER OWNERSHIP. —
The trial court was correct in stating that "a close reading reveals that Exhibit 4 is
not a donation inter vivos or mortis causa but a mere declaration of an intention
and a desire. Certainly, it is not a concrete and formal act of giving or donating.
The form and contents of said Exhibit 4 amply support this conclusion." There
clearly was no intention to transfer ownership from Arsenio Seville to Melquiades
Seville at the time of the instrument's execution. It was a mere intention or a
desire on the part of Arsenio Seville that in the event of his death at some future
time, his properties should go to Melquiades Seville.
2. ID.; ID.; DONATIONS WHICH ARE TO TAKE EFFECT AFTER THE DEATH OF THE
DONOR PARTAKES THE NATURE OF TESTAMENTARY SUCCESSION. — It is quite
apparent that Arsenio Seville was thinking of succession (". . . in case I will die, I
will assign all my rights, share and participation over the above-mentioned
properties and that he shall succeed to me in case of my death. . . . "). Donations
which are to take effect upon the death of the donor partake of the nature of
testamentary provisions and shall be governed by the rules established in the title
on succession (Art. 728, Civil Code).
3. REMEDIAL LAW; CIVIL ACTIONS; PARTIES; LEGAL HEIRS HAVING ACTUAL AND
SUBSTANTIAL INTEREST IN THE SUBJECT OF LITIGATION QUALIFIES THEM AS REAL
PARTIES IN INTEREST. — Private respondents as legal heirs of Arsenio Seville have
actual and substantial interests in the subject of litigation thus qualifying them as
real parties-in-interest. Common ownership is shown by the records. Therefore,
any claim of ownership of the petitioners is not based on Exhibit 4 but on the fact
that they are heirs of Arsenio Seville together with the private respondents.
4. ID.; EVIDENCE; FINDINGS OF FACT OF THE TRIAL COURT GENERALLY NOT
DISTURBED ON APPEAL. — It is well-established rule that the factual findings of
the trial court are generally not disturbed except where there is a clear cause or
a strong reason appearing in the record to warrant a departure from such findings
(Alcaraz v. Racimo, 125 SCRA 328; People v. Tala, 141 SCRA 240; and People v.
Alcid, 135 SCRA 280).
DECISION
GUTIERREZ, JR., J p:
This is a petition to review on appeal by certiorari the decision of the Court of
Appeals which affirmed the decision of the then Court of First Instance of Davao
del Norte, Branch 9. The dispositive portion of the decision reads:
"WHEREFORE, the decision appealed from is hereby affirmed and this case is
remanded to the court a quo for implementation of, and compliance with Rule
69, Revised Rules of Court, and to partition the property in accordance with the
rights as herein determined, defined and declared, with costs against defendants-
appellants." (p. 48, Petitioner's brief)
Vicente Sullan and the other respondents filed a complaint with the then Court of
First Instance at Tagum, Davao del Norte against the petitioners for partition and
accounting of the properties of Arsenio Seville, alleging they are heirs of the
decedent.
The petitioners, averred the following in their answer: cdrep
xxx xxx xxx
"7. That the defendants are the owners of Lots 170 and 172 and improvements
thereon, containing an area of 11.9499 and 9.6862 hectares, respectively, both
covered by Original Certificates of Title No. P-15964.
"8. That defendants are the surviving heirs of Melquiades Seville. Melquiades
Seville in turn is the brother of the deceased Arsenio Seville. Arsenio Seville died
ahead. Melquiades Seville died later. During the lifetime of Arsenio Seville he
executed an instrument . . . .
xxx xxx xxx
"9. That Melquiades Seville and his family have been in actual possession,
occupation and cultivation of Lots Nos. 170 and 172, Cad-283, since 1954
continuously and peacefully in concept of owner, up to the time of his death, and
had introduced valuable improvements thereon. After his demise his heirs, the
defendants herein, succeeded to the occupation and possession of the said parcel
of land and improvements with the knowledge of the plaintiffs and with the
acquiescence of Arsenio Seville during his lifetime.
"10. That even during the lifetime of the deceased Arsenio Seville it had been his
desire, intention and his wish that Lots 170 and 172 shall be owned by Melquiades
Seville, the father of the herein defendants.
"11. That the ownership over the said Lots 170 and 172, Cad-283 and
improvements had been vested, transmitted, conveyed and or descended unto
the defendants by virtue of Exhibit '1' of this answer and through continuous
possession and cultivation of the land since 1954 continuously up to the present,
in concept of owner as alleged under paragraph '9' hereof.
"12. That by reason of this unfounded action by the plaintiffs, defendants have
been compelled to engage services of counsel for which they bound themselves
to pay P3,000.00 as attorney's fees.
"13. That Melquiades Seville during his lifetime had taken legal steps to perfect
titles to these parcels of land in his name." (pp. 11, 14-15, Record on Appeal).
On September 19, 1972, the trial court rendered judgment in favor of the private
respondents. The petitioners appealed to the Court of Appeals. The Court of
Appeals affirmed the trial court's decision.
11
Involved in this appeal is the issue of whether or not there was a valid donation
from Arsenio Seville to Melquiades Seville. The facts of the case are briefly stated
as follows —
During his lifetime, Arsenio Seville owned — (1) a parcel of agricultural land
described as Lot No. 170 situated at Anquibit, Asuncion (Saug), Davao del Norte
containing an area of 11.9499 hectares, more or less; (2) a parcel of agricultural
land described as Lot No. 172 likewise situated at Anquibit, Asuncion (Saug),
Davao del Norte with an area of 9.6862 hectares; (3) a residential house erected
on Lot 172; (4) rice and corn mills and their respective paraphernalia valued at
P5,000.00; and (5) five (5) carabaos in the possession of the then defendants (pp.
6-9, Petitioners' brief). Cdpr
On March 4, 1963, Arsenio Seville executed an affidavit in favor of Melquiades
Seville, which reads:
"A F F I D A V I T
"I, ARSENIO SEVILLE, of legal age, WIDOWER, Filipino, and a resident of Anquibit,
Cambanogoy, Saug, Davao, Philippines, after having been duly sworn to in
accordance with law do hereby depose and say, as follows:
"That I am the declared and legal owner of a certain parcel of land otherwise
known as Lot Nos. 172 and 170 Cad. 283, containing an area of 21.6361 has., and
situated at Cambanogoy, Saug, Davao and covered by H.A. No. V-77791 (E-69793)
and approved by the Director of Lands as per Order issued on March 5, 1954;
"That I am a widower as indicated above and that I have no one to inherit all my
properties except my brother Melquiades Seville who appears to be the only and
rightful person upon whom I have the most sympathy since I have no wife and
children: "That it is my desire that in case I will die I will assign all my rights,
interest share and participation over the above-mentioned property and that he
shall succeed to me in case of my death, however, as long as I am alive I will be
the one to possess, enjoy and benefit from the produce of my said land and that
whatever benefits it will give me in the future I shall be the one to enjoy it;
"That I make this affidavit to make manifest my intention and desire as to the way
the above mentioned property shall be dispose of and for whatever purpose it
may serve.
xxx xxx xxx
"(SGD.) ARSENIO SEVILLE
Affiant"
(p. 7. Appellees' brief; Exh. 4, p. 52, Folder of Exhibits).
On May 24, 1968, Arsenio Seville mortgaged said properties to the Philippine
National Bank in consideration of a loan. This was done with the knowledge and
acquiescence of Melquiades Seville.
On May 15, 1970, Arsenio Seville died intestate, single, without issue, and without
any debt. He was survived by his brothers, Buenaventura Seville and Zoilo Seville
who are included as respondents; brother Melquiades Seville; and sisters
Encarnacion Seville and Petra Seville. Thereafter, Melquiades died and is survived
by his children Consuelo, Celestino, Tiburcio, Ravelo, Sonita, Lucy, Epifania,
Naracy and Emmanuel, all surnamed Seville. Sisters Encarnacion and Petra died
later. Encarnacion is survived by her children Trinidad, Teresita, Ulysses and
Alejandrino, all surnamed Sullan, and her husband Vicente Sullan while Petra
Seville is survived by her children Orlando Manican and Pacifico Manican. cdrep
The children of Melquiades Seville are now claiming exclusive ownership of the
properties and improvements thereon on the basis of the instrument executed by
Arsenio Seville in favor of Melquiades Seville and on their alleged actual
possession, occupation, and cultivation of Lots Nos. 170 and 172 since 1954
continuously and peacefully in the concept of owner up to the time of Arsenio
Seville's death.
The petitioners assign the following alleged errors of the respondent court:
I
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE AFFIDAVIT IN
QUESTION A DEED OR INSTRUMENT OF DONATION INTER VIVOS:
II
THE COURT OF APPEALS ERRED IN NOT RULING CATEGORICALLY THAT ARSENIO
SEVILLE COULD VALIDLY DISPOSE OR DONATE THE PROPERTIES IN QUESTION.
III
THE COURT OF APPEALS ERRED IN NOT VACATING THE JUDGMENT OF THE LOWER
COURT AND ENTERED (SIC) A NEW ONE HOLDING THAT THE AFFIDAVIT IN
QUESTION IS A DEED OF DONATION AND THAT THE DONATION IS A DONATION
INTER VIVOS THUS VALIDLY CONVEYING THE LAND UNTO THE DONEE
MELQUIADES SEVILLE. (p. 10, Petitioners' brief).
All the above assigned errors discuss the issues as relating to a donation. The trial
court was correct in stating that "a close reading reveals that Exhibit 4 is not a
donation inter vivos or mortis causa but a mere declaration of an intention and a
desire. Certainly, it is not a concrete and formal act of giving or donating. The form
and contents of said Exhibit 4 amply support this conclusion." (p. 37, Record on
Appeal).
A discussion of the different kinds of donations and the requisites for their
effectivity is irrelevant in the case at bar. There clearly was no intention to transfer
ownership from Arsenio Seville to Melquiades Seville at the time of the
instrument's execution. It was a mere intention or a desire on the part of Arsenio
Seville that in the event of his death at some future time, his properties should go
to Melquiades Seville. LLpr
In Aldaba v. Court of Appeals (27 SCRA 263, 269-270) we ruled on a similar
expression of an intention, as follows:
"The question to be resolved in the instant case is: Was there a disposition of the
property in question made by the deceased Belen Aldaba in favor of herein
petitioners? The note, Exhibit 6, considered alone, was, as held by the Court of
Appeals, confirming the opinion of the lower court, only an indication of the
intention of Belen Aldaba to donate to the petitioners the property occupied by
the latter. We agree with this conclusion of the trial court and the Court of
Appeals. The note, in fact, expressed that the property was really intended for the
petitioners, 'talagang iyan ay para sa inyo.' If the property was only intended for
petitioners then, at the time of its writing, the property had not yet been disposed
of in their favor. There is no evidence in the record that such intention was
effectively carried out after the writing of the note. Inasmuch as the mere
expression of an intention is not a promise, because a promise is an undertaking
to carry the intention into effect, (17 American Jurisprudence, 2d p. 334) We
cannot, considering Exhibit 6 alone, conclude that the deceased promised, much
less did convey, the property in question to the petitioners. . . . . "
It is quite apparent that Arsenio Seville was thinking of succession (". . . in case I
will die, I will assign all my rights, share and participation over the above-
mentioned properties and that he shall succeed to me in case of my death. . . . ").
Donations which are to take effect upon the death of the donor partake of the
nature of testamentary provisions and shall be governed by the rules established
in the title on succession (Art. 728, Civil Code).
The petitioners likewise contend that the document was a valid donation as only
donations are accepted by the donees. However, the petitioners could not have
accepted something, which by the terms of the supposed "donation" was not
given to them at the time. The affidavit could not transmit ownership except in
clear and express terms.
Furthermore, the homestead application was later prosecuted in the name of
Arsenio Seville and the land, much later, was mortgaged by him to the Philippine
National Bank (Annex 1, p. 100, Rollo) in consideration of a loan. Arsenio dealt
with the land and entered into transactions as its owner. All these happened with
the knowledge and acquiescence of the supposed donee, Melquiades Seville.
Contrary to the petitioners' allegations in their brief, there was no immediate
transfer of title upon the execution of Exhibit 4.
Contrary to what the petitioners aver, private respondents as legal heirs of
Arsenio Seville have actual and substantial interests in the subject of litigation
thus qualifying them as real parties-in-interest.
12
Common ownership is shown by the records. Therefore, any claim of ownership
of the petitioners is not based on Exhibit 4 but on the fact that they are heirs of
Arsenio Seville together with the private respondents. prcd
It is likewise significant to note the respondents' assertion that the signed affidavit
is a forgery because Arsenio Seville was illiterate during his lifetime. He could not
write his name. He executed documents by affixing his thumbmark as shown in
the Real Estate Mortgage (Exhibit A-4), which he executed on May 24,1968 in
favor of the Philippine National Bank. The real estate mortgage came much later
or more than five years after the supposed donation (Exhibit 4) to Melquiades
Seville where Arsenio Seville allegedly affixed his signature. This fact was not
disputed by the petitioners.
Moreover, the petitioners' actions do not support their claim of ownership.
During the lifetime of Arsenio Seville, he paid the PNB amortization out of his
personal funds and out of the income on his property. The payments were not
continued by the petitioners when Arsenio Seville died so much so that the
property was extrajudicially foreclosed and had to be repurchased by Zoilo Seville,
one of the respondents, through installment arrangements. (Deed of Promise to
Sell appended as Annex 4 to respondents' brief). The actions of the respondents
are in consonance with their claim of co-ownership.
Finally, it is a well-established rule that the factual findings of the trial court are
generally not disturbed except where there is a clear cause or a strong reason
appearing in the record to warrant a departure from such findings (Alcaraz v.
Racimo, 125 SCRA 328; People v. Tala, 141 SCRA 240; and People v. Alcid, 135
SCRA 280). There is no such clear cause or strong reason in this case.
WHEREFORE, the petition is hereby DISMISSED. The judgment of the Court of
Appeals is AFFIRMED.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.
DI SIOCK JIAN vs. SY LIOC SUY ET AL.
FIRST DIVISION
[G.R. No. L-17783. June 22, 1922.]
DI SIOCK JIAN, as guardian of the minors Sy Kiong Chuan and Florencia Sy Lioc Suy,
plaintiff-appellant, vs. SY LIOC SUY ET AL., defendants-appellees.
M.G. Goyena and Ty Kong Tin for appellant.
Fisher & DeWitt and Francisco Lavides for appellees.
SYLLABUS
1. DONATIONS; PURE AND CONDITIONAL. — Where, in a donation, an obligation
is imposed upon the donee to support the donor and defray his necessary
expenses during his lifetime, the donation is not a pure, but a conditional, one,
since the obligation imposed upon the donee is in the nature of the condition
without which the donation would not have been made.
2. ID.; DONATION TO A MINOR; ACCEPTANCE BY NATURAL GUARDIAN. — A
conditional donation in favor of a minor is not perfected unless it is duly accepted
by his legal representative. The acceptance made by the mother of said minor is
not sufficient for the perfection of the donation unless said mother had been
appointed by competent court as guardian of the property of her minor child to
whom the donation was made.
3. ID., REVOCATION. — A conditional donation which has been accepted in
accordance with the law may be revoked by the donor, who afterwards dispose
of the property donated, as though no donation had been made.
4. FRAUDULENT CONVEYANCES; DAMAGE ESSENTIAL IN FRAUD; RIGHTS OF
HEIRS. — In order that the conveyances of the property may be held fraudulent,
it is necessary that the person alleging the fraud be possessed of an existing right
over the said estate, and not merely a right in expectancy. A donation which has
not been accepted in accordance with the law does not transmit any right to the
donee, and the donor has power to dispose of the thing donated in favor of the
third person after the revocation of said donation. The donee in such a case
cannot allege that the conveyance is fraudulent on the mere ground that the
purchaser had knowledge of the donation, inasmuch as the donee has not
acquired any right over the estate which could have been injured, and even if the
donee were a presumptive heir, he cannot allege the conveyance to be
fraudulent, for his right as an heir is but a right in expectancy.
DECISION
VILLAMOR, J p:
The plaintiff, in her capacity as guardian of the minors Sy Kiong Chuan and
Florencia Sy Lioc Suy, asks that the contract of purchase and sale Exhibit C be
declared void as it was made to defraud said minors; that the title of the said
minors to the property donated to them and described in Exhibits A and B
recognized; that in the event that the defendants should have transferred said
property to an innocent third person, the defendants be sentenced to pay jointly
and severally to the plaintiff the sum of one hundred twenty thousand pesos
(P120,000) as the reasonable value of said property; that the defendants be
prohibited from selling, transferring, or otherwise, disposing of the property thus
donated pending this litigation; that a copy of this complaint be sent to the
registrar of deeds of Manila for its notation; and that said plaintiff be granted such
further relief as may be deemed equitable.
The defendants, in turn, ask that judgment be entered to the effect that the
document Exhibit A (of donation) is null and void; that the defendants See Kiong
Pha, See Kiong Land, See Kiong Chian and See Kong Thi are the only legal owners
of the property described in the said document, and that the plaintiff render an
account of all the moneys received by her as rent of said property with interest
and costs.
The parties have agreed on the following facts which the submitted to the court
a quo for decision:
"1. The allegations of the first three paragraphs of the plaintiff's complaint;
"2. That the originals of the copies of the documents attached to the plaintiff's
complaint were executed on the dates therein set out by the parties whose names
appear therein;
"3. That on the date of execution of Exhibit B attached to the complaint, Di Siock
Jian was not the judicially appointed guardian of the property of the plaintiff
minors, but she was the mother of said minors; that later, on December 9, 1919,
she was appointed by the Court of First Instance of Manila as guardian of the
persons and properties of said minors;
"4. That after the execution of Exhibits A and B, Di Siock Jian took possession of,
and managed, the property described in the said exhibition, and collected the
rents on said property and paid tax thereon up to the end of July, 1919, on behalf
of the said minors;
"5. All the defendants had knowledge of the existence of documents Exhibits A
and B and of the facts mentioned in the proceeding paragraph;
"6. Exhibits A and B were registered;
"7. On July 5, 1919, Sy Lioc Suy executed the document hereto attached, marked
Exhibit D;
"8. On July 12, 1919, the defendant Sy Lioc Suy executed the deed, a copy of which
marked Exhibit C is attached to the complaint, which deed was presented to the
registrar of deeds, and a certificate of title issued under Act No. 496 in favor of Sy
Lioc Suy's codefendants who are mentioned in said exhibits as purchasers;
"9. That the land in litigation was registered under the provisions of the Mortgage
Law in the name of Sy Lioc Suy in the year 1899, and that said land, with the
improvements thereon, was registered under the provisions of the Act No. 496 in
the year 1914 and stood in his name in the registry under said Act No. 496 until
the conveyance was effected by virtue of the deed Exhibit C;
"10. That Sy Uy Si, the former wife of Sy Lioc Suy, and mother of his codefendants,
died in the year 1909;
"11. The plaintiff admit that no liquidation or distribution of the conjugal property
was made after the death of the first wife of Sy Lioc Suy in 1909, but the plaintiffs
allege that this fact is irrelevant, immaterial and incompetent, and they object to
it being considered by the court and shall be deemed to have expected to the
ruling of the court in the event that it be taken into consideration".
In view thereof the court adjudicated the case, declaring the defendants See Kionf
Pha, See Kiong Land , See Kiong Chian, and See Kiong Thi the sole owners of the
estate in question and sentenced the plaintiff to render an account of all the rents,
profits, and income obtained or received by her from the said property since
February 9, 1920, the date of the filling of the first answer of the defendants.
The seven errors assigned by the appellant have reference to the legal requisites
for the validity of a donation, and to the power of the donor to revoke it; while
error No. 8 is concerned with the nullity of the sale of the property donated, for
13
having been fraudulently made. The last error assails the omission of the court a
quo to decree the registration of the donation in the name of the donees.
It appears that Sy Lioc Suy, one of the defendants, executed on April 23, 1918, a
deed of donation Exhibit A in the favor of his minor children represented by their
mother, the herein plaintiff, which was accepted on the same date in the
document Exhibit B. Later on, that is, on July 5, 1919, the same Sy Lioc Suy
executed the document Exhibit D, revoking said donation, and on July 12 of the
same year, he executed another document of purchase and sale of the same
property, Exhibit C, in favor of the other defendants in the amount of P45,000.
The first question raised by the appellant deals with the nature of the donation
under consideration. The fifth clause of the deed of donation contains an
obligation on the part of the person, accepting the donation on behalf of the
donees, to provide the donee with lodging, food, clothing, and laundry, medical
attendance and medicine, and all other things necessary for his subsistence during
his lifetime, this obligation to cease upon the destruction of the property by
accident of fortuitous event.
The appellant contends that such a donation is pure, and not, as was held by the
court a quo, conditional or onerous. We concur with the trial court in that
donation involves a condition or burden which must be complied with by the
donees.
Articles 618 and 619 of Civil Code give an idea of the different kinds of donations
which treatise writers call simple, remuneratory, and conditional. Defining these
donations, Manresa says: "Simple are those referred to in article 618 and first part
of 619. Remuneratory or compensatory are the rest, as can be deducted from
article 622. Of these, some renumerate services previously rendered, and they
are the renumeratory proper, and the others compensate a burden, encumbrace
or condition imposed upon the donee, of lesser value than the thing donated, and
may be called conditional donations. Besides, articles 622 speaks of donations for
valuable considerations, such as those that renumerate services which constitute
demandable debts, that is debts which give rise to an action against the donor or
impose upon the donee a burden equivalent to the value of the so-called
donations. The conditional donations are also regarded by article 638 as
onerous." (5 Manresa, 74.)
In the case of Castillo vs. Castillo and Quizon (23 Phil., 364), this court, speaking
through the late Chief Justice Arellano said:
". . . If this alleged gift was really made, it was one of those mentioned in the
articles 619 of the aforecited code, as being a gift 'which imposes upon the donee
a burden inferior to the value of the gift,' for Simona Madlangbayan apparently
stated in the said instrument that she delivered the land to Urbano Castillo in
order that he defray the expenses of her subsistence and burial, 'and if perchance
anything should remain from the price of the land, the surplus of the said
expenses (?) is granted to him by me.' A gift of this kind is not in fact a gift for
valuable consideration, but is renumeratory or compensatory, made for the
purpose of renumerating or compensating a charge, burden or condition imposed
upon the donee, inferior to the value of the gift which, therefore, may very
properly be termed to be conditional . . ."
Adhering to this doctrine, we hold that the donation in question is conditional, for
the reason that it was made with the condition that the person accepting it on
behalf of the minor donees, should defray his lodging, food, clothing, and laundry
and fulfill the other obligations stated in the said clause of the donation.
Let us now inquire whether this donation was duly accepted. Article 626 of the
Civil Code provides that person who cannot enter into a contract cannot accept
conditional or onerous donations without the intervention of their legal
representatives and according to paragraph 3 of the stipulation of the facts, the
mother of the minors had not been appointed by the court as guardian of her
children when she accepted said donations. Not being then the legal
representative of her children, she could not validly accept said donation, for
while she is considered as the natural guardian of her minor children and by virtue
thereof she has the right to have them in her custody and educate them, yet this
right does not extend to the properties of said minors unless declared so by the
court. (Sec. 553. Code of Civil Proc.) If the donation was not duly accepted in
accordance with the article 623, there was not any contract binding upon the
donor, and nothing could, therefore prevent him from withdrawing the offer, as
he did, in the document Exhibit D.
The appellant argues that the defect in the acceptance of the donation in favor of
minor children does not render the donation absolutely, but only relatively,
invalid, and that under article 1302 of the Civil Code, the father making the
donation cannot set up this defect against the minor donees. In support of this
contention, appellant cites the case of Bernabe vs. Sauer (18 La. Ann., 148). We
have examined the case cited, and are of the opinion that the doctrine therein
laid down is not applicable to the case at bar in which a conditional or onerous
donation is involved. The rule established in that case is that a defect in the
acceptance of a pure donation in favor of a minor makes it relatively void, and
incapacitated donee. The soundness and justice of this rule are apparent if the
fact is taken into account that in a pure donation no obligation is imposed upon
the donee, and consequently, after the donation is perfected, no right is acquired
by the donor which need be protected. In such a case, the acceptance may be said
to be mere formality required by the law of the perfection of the contract.
In discussing the capacity to accept donations, Manresa says: "Whenever the
donation does not impose any obligation upon the donee, the acceptance may be
made by the donee himself, although under article 1263 he cannot consent. This
is very clearly inferred from Article 626.
"But this holds true only when the act is capable of being performed. A married
woman, for instance, may make the acceptance without her husband's consent,
and a child or minor possessing sufficient knowledge, without the intervention of
his parents or guardian. So also, in case of personal properties, the delivery and
simultaneous receipt of the thing donated may be regarded as a sufficient
acceptance, even if the donee be a child or an insane person. But how can he
accept in writing? How can a notary authorize the deed of donation of real
properties, containing the impossible consent and absurd acceptance of an insane
person or an infant who cannot speak? This legal provision must be reasonably
applied, — when the acceptance cannot be made by the donees themselves, the
donations whether pure or conditional, must be accepted by their legal
representatives in harmony with the spirit of article 627. This appears to be
recognized or admitted by article 631 as a truth of common sense. To hold
otherwise would be to regard the acceptance as a useless and ridiculous formality,
which is not, indeed, in harmony with the spirit of prevailing in the Code on this
matter." (5 Manresa, 3d ed., 98.)
But in a conditional or onerous donation in favor of minors, as is the case under
consideration, there is stronger reason for requiring for the intervention of their
legal representatives because it goes to the validity of the acceptance in such a
way that the lack of this is so, in the first place, because no one can contract in
the name of another without being authorized by him or without having his legal
representation (art. 1259, Civ. Code), and in the second place, because obligations
arising from contract have the force of law between the contracting parties and
must be performed in accordance with their stipulations (art. 1091, Civ. Code) and
it is precisely because, as in the case at bar, certain obligations are imposed upon
the donees, that the consent to assume them is required to be given by their legal
representative to protect the rights of the donor. If the mother who accepted the
conditional donation was legal representative of her children, the acceptance is
valid; if she did not have their legal representation, it is void, as made in violation
of the law.
Appellant insist that, under article 1302 of the Civil code, the father who made
the donation, being sui juris, cannot allege the incapacity of the minor donees for
the purpose of annulling the donation in questions. But it must be noted that the
questions under discussion does not consist in that the minors, who cannot give
consent, have entered into the contract of donation, but in that the person who
intervened in the acceptance did not have their legal representation. In our
opinion, article 1302 of the Civil Code is not applicable to the present case. It is
taken for granted that persons who cannot give consent may accept conditional
or onerous donations, but with the interventions of their legal representatives.
Articles 626 provided for procedure to be followed in order that a conditional or
onerous donation may be validly accepted by an incapacitated person. If this
procedure is not followed, there is no valid acceptance, and without acceptance,
there is and cannot be any donation.
Another error assigned by the appellant is the finding of the trial court that this
donation lacks formalities required by law in that it was not noted in the deed of
donation that notice of acceptance was given to the donor by the mother of the
minors. In the hypothesis that the acceptance is valid, if it is made in the separate
public writing, the notice of the acceptance must be note not only in the
document containing the acceptance, but also in the deed of donation, in
accordance with article 633 of the Civil Code. Commenting upon this article,
Manresa says: "If the acceptance does not appear in the same document, it must
be made in another. Solemn words are not necessary; it is sufficient if it shows
the intention to accept. But in this case, it is necessary that formal notice thereof
be given to the donor, and the fact that due notice has been given must be noted
in both instruments (that containing the offer to donate and that showing the
acceptance). Then and only then is the donation perfected (art. 623)." (5 Manresa,
115.)
And in the case of Santos vs. Robledo (28 Phil., 245), this court said:
"So important is the donee's acceptance with the notice to the donors of his
acceptance in order that the latter may have full force and effect, that when the
instrument which has been drawn up is recorded in the registry of property, the
document that evidences the acceptance — if this has not been made in the deed
of gifts — should also be recorded. And in one or both documents, as the case
14
may be, the notification of the acceptance as formally made to the donor or
donors should be duly set forth. These requisites, definitely prescribes by law,
have not been complied with and no proof that they have appears in the record."
The appellant questions the title of the defendants and contends that the
purchase made by them of the property in question is fraudulent. This contention
is untenable. There is not in the record any evidence of fraud, with the exception
of the knowledge which the defendants had of the documents, Exhibits A and B.
But such knowledge is no proof of bad faith if it is taken into account that they
knew, on the other hand, that the offer to donate had been withdrawn by the
donor in the document, Exhibit D; that said documents, Exhibits A and B, were not
recorded in the registry of property; and that the vendor was the only person
appearing in the registry as owner of the property.
Fraud, as defined in the case of Gray vs. Alba vs. De la Cruz (17 Phil., 49), means
actual fraud, dishonesty of some sort, with intent to deceived and deprive another
of his right or in some manner to injure him. It having been demonstrated that
the donation is void, the donees could not have derived from any right over the
property in question, which could have been prejudiced by the purchase made
the defendants. But ignoring the donation and supposing that the mother was in
possession of the property in the name of the minors, the property belonging to
the father or to the conjugal partnership, the knowledge which the defendants
had of said possessions does not prove bad faith on their part in purchasing the
property, not indicate any intention to prejudice any right of the mother or the
minors, for, so long as the father is alive, their right over his properties is but a
right in expentancy, unless they should have acquired them by legal transfer.
The due execution of the document Exhibit C being admitted in the stipulation of
facts, and it appearing that the registered title of the vendor contained nothing
restrictive of his title of the purchasers having been registered in the registry of
property, it is clear, in our opinion, that said purchasers acquired an irrevocable
right over the said property.
For the foregoing reasons, the judgment appealed from must be, as is hereby,
affirmed with cost against the appellant. So ordered.
Araullo, C.J., Avaceña, Astrand, Johns, and Romualdez, JJ., concur.
CITY OF MANILA vs. THE RIZAL PARK CO.
FIRST DIVISION
[G.R. No. 31063. September 13, 1929.]
THE CITY OF MANILA, plaintiff-appellee, vs. THE RIZAL PARK CO., INC., defendant-
appellant.
Alfredo Chicote and Jose Arnaiz for appellant.
City Fiscal Felix for appellee.
SYLLABUS
1. CONTRACTS; CONSTRUCTION OF. — According to the jurisprudence, both in
this jurisdiction and in Spain and the United States, where the terms of a contract
are clear and positive and leave no room for doubt, no interpretation should be
given which would alter or change its strict and literal signification. It was so held
in numerous decisions of this court. The same doctrine was upheld by the
Supreme Court of Spain in the decisions of June 30, 1890, November 19, 1891,
and October 5, 1905. And in the courts of the United States of America the same
rule of law is followed.
2. ID.; ID. — The intention of the parties is to be deduced from the language
employed by them, and the terms of the contract, where unambiguous, are
conclusive, in the absence of averment and proof of mistake, the question being,
not what intention existed in the minds of the parties, but what intention is
expressed by the language used. (13 C. J., 525, sec. 485.)
3. ID.; GIFT OF LANDS; ONEROUS DONATION. — This is a case of a contract of
assignment, or more specifically, a contract of onerous donation by virtue of
which the defendant binds itself to convey gratuitously in favor of the plaintiff the
land in question, in consideration of the improvements the plaintiff agrees to
make in the defendant's lands; and the plaintiff agrees to make certain
improvements in said lands, in consideration of the assignment of a portion
thereof which the defendant binds itself to make in favor of the plaintiff.
DECISION
VILLAMOR, J p:
This is an action to compel the defendant, Rizal Park Co., Inc., the successor in
interest of C. W. Rosenstock & Company to execute the transfer and conveyance
of the parcel of land known as block 44 of the Rizal Park subdivision in the City of
Manila to the plaintiff, the City of Manila.
The record shows that by the instrument Exhibit A, executed on October 24, 1912,
C. W. Rosenstock & Co., bound itself to assign, transfer and convey to the City of
Manila, gratuitously and irrevocably, the absolute ownership of said block 44,
whereon the city may build or erect a school or schools, or buildings for
educational purposes, with playgrounds, within the period of three years from the
date of the execution of said instrument. Said partnership, C. W. Rosenstock &
Co., assigned and transferred to the City of Manila the absolute ownership of a
strip of land 21,972.32 square meters in area, for the laying out, opening, and
construction of a main street in said Rizal Park subdivision, binding itself moreover
to assign, transfer and convey gratuitously, in favor of the City of Manila, other
portions of land for the laying out and opening of the streets marked and
indicated on the plan attached to the instrument, as soon as the city decided to
open any of said streets, with the understanding that said obligation should be in
force for three years from the date of said instrument. But if the partnership of C.
W. Rosenstock & Co., continued to be the owner of the land or any portion thereof
at the end of said three-year period, this obligation would be extended for
another three years. It was expressly and especially covenanted and agreed that
C. W. Rosenstock & Co., could not assign, sell, encumber or alienate the remainder
of said estate known as Rizal Park after segregating therefrom the parcel assigned
in the second clause of the contract, that is, the parcel intended for the main
street now known as Washington Street, with an area of 21,972.32 square meters,
except subject to the terms of said contract.
The City of Manila, in turn, accepted the assignment made and promised by C. W.
Rosenstock & Co., obligating itself to make the constructions indicated in
paragraph V of the instrument Exhibit A.
The contract Exhibit A was attached to the complaint and copied in its entirety in
the bill of exceptions, and in view of its importance in the decision of this case, we
quote it herewith:
"This deed, executed and delivered in the City of Manila, Philippine Islands, on
this twenty-fourth day of October in the year nineteen hundred and twelve, by
and between C. W. Rosenstock & Co., a duly constituted civil partnership doing
business in Manila, Philippine Islands, in accordance with the laws of said Islands,
the party of the first part, and the City of Manila, a municipal corporation created
and existing through and by virtue of Act Numbered One hundred eighty-three of
the Philippine Commission, the party of the second part, both contracting parties
being fully authorized and empowered to enter into this contract, witnesseth:
"Whereas said partnership C. W. Rosenstock & Co., is the absolute owner of the
parcel of land situated partly in Sampaloc District, City of Manila, and partly in the
Province of Rizal, Philippine Islands, being formerly a part of the Solocan or Santa
Clara Estate, now known as 'Rizal Park;' and
"Whereas said partnership C. W. Rosenstock & Co., in order to facilitate and
encourage the occupation of its aforementioned land, desires and has proposed
to donate to the City of Manila, gratuitously and free of all payment and
indemnity, certain parcels of land for the purposes hereinafter stated; and
"Whereas the City of Manila has accepted said proposal of a gratuitous gift of the
said parcels of land, subject to the terms and conditions hereinafter specified:
"Now therefore, for and in consideration of the foregoing, and of the terms,
stipulations, and conditions hereinafter inserted, the herein contracting parties
do hereby mutually covenant and agree upon the following, to wit:
"I. That said partnership, C. W. Rosenstock & Co., does hereby bind and obligate
itself to assign, transfer, and convey to the City of Manila, gratuitously and free of
all payment or indemnity and irrevocably, the absolute and unconditioned
ownership of the land hereinafter described, whereon the city may build a
schoolhouse or schoolhouses, or buildings for educational purposes, with
playgrounds for the recreation and enjoyment of the school children, within three
years from the date hereof. The land here referred to, which said partnership by
this clause bind and obligate itself to assign and transfer to the City of Manila as
aforesaid, is described as follows: (Here follows the technical description of this
parcel with an area of about 20,803 square meters.)
"II. The partnership C. W. Rosenstock & Co., does hereby assign, transfer,
transmit, and convey to the City of Manila, irrevocably and forever, the absolute
ownership of all the strip of land for the laying out, opening, and construction of
a street, described as follows: (Here follows the technical description of this
parcel, containing 21,972.32 square meters.)
"III. That the original parcels from which those described in clauses I and II hereof,
after the segregation referred to herein, shall be described as follows: Two parcels
of land situated in the Sampaloc District: (Here follows the technical description
of these two parcels: the first with an area of about 263,444 square meters, and
the second with an area of 263,592.23 square meters.)
15
"IV. The partnership, C. W. Rosenstock & Co., also binds and obligates itself to
assign, transfer, and convey gratuitously and free of all payment, compensation,
and indemnity, to the City of Manila, the other parcels of land for the laying out
and opening of the streets marked and indicated on the attached plan F-57, as
soon as the city decides to open any of said streets, it being understood that this
obligation shall be in force for only three years from the date hereof. However, if
C. W. Rosenstock & Co. continues to be the owner of said land or any portion
thereof at the termination of said three- year period, it shall be understood that
this obligation shall be extended for another period of three years.
"V. For and in consideration of the assignment, agreements and obligations,
contracted by the partnership, C. W. Rosenstock & Co., through clauses I and IV
hereof, in favor of the City of Manila, the latter hereby binds itself as follows:
"1. That the City of Manila shall immediately open and construct the portion of
the above-mentioned main street from the so-called Sangleyes Street, to the
southwestern boundary of said Rizal Park, which street shall have a width of
eighteen (19) meters, providing it with the necessary cement gutters, fresh water
pipes, together with at least two public fountains, and the necessary electric light
service. Providing, however, that the city shall not now be bound to open said
main street except a road of debris and gravel of a width not less than six (6)
meters.
"2. If any improvements be made in the streets by the construction of five (5) or
more houses within a block, the City binds itself to construct adequate gutters
and drains in the sections of the street thus improved.
"VI. The partnership, C. W. Rosenstock & Co., binds itself to reserve for the use of
the city, free of all rent, payment, or compensation, the lots necessary for the
establishment within said Rizal Park of the public water-closets said city may
deem necessary, or that may be required by the sanitary conditions of said land,
or of any portion thereof. Said partnership is furthermore bound to permit the
City to construct the drainage systems in such places of the Santa Clara or Solocan
Estate, now known as Rizal Park, as the city engineer may deem necessary.
"VII. The streets and alleys which must or may hereafter be assigned to the city,
shall be according to the general plan for streets described in the attached copy
of plan F-2-57, prepared by the city engineer and approved by the surveyor of the
Court of Land Registration.
"VIII. It is hereby expressly and especially covenanted and agreed that C. W.
Rosenstock & Co., shall not assign, sell, encumber, or alienate the remainder of
said Santa Clara or Solocan Estate, now known as Rizal Park, after segregating
therefrom the parcel of land, the object of the assignment made in clause II,
except subject to whatever has been agreed and stipulated herein, and that this
contract shall be recorded in the registry of deeds of Manila as a lien and
encumbrance in favor of the city endorsed upon the certificates of title and the
duplicates thereof; that pending such due inscription, the city shall not be bound
to commence the opening, laying out, and construction of said main street
mentioned and described in clause II. The encumbrance created by this clause
shall be understood as limited and circumscribed to the parcels of land mentioned
in clauses I and IV.
"IX. The partnership C. W. Rosenstock & Co., hereby binds itself to sign and
acknowledge all the documents necessary for the recording of this contract in the
registry of deeds.
"X. Messrs. C. W. Rosenstock, H. W. Elser, A. R. Hager, A. E. Chenoweth, and J. B.
Russell, the members constituting the partnership of C. W. Rosenstock & Co.,
jointly and severally bind themselves to, and guaranty the faithful and punctual
fulfillment of, each and every one of the conditions, terms, and stipulations
agreed upon in favor of the City of Manila.
"In witness whereof, the duly authorized officers of the respective contracting
parties sign this contract in the City of Manila, Philippine Islands, on the
aforementioned day, month, and year.
"For the City of Manila:
(Sgd.) "FELIX M. ROXAS
"President of the Municipal Council
"For C. W. Rosenstock & Co.:
(Sgd.) "C. W. ROSENSTOCK
"H. W. ELSER
"A. R. HAGER
"A. E. CHENOWETH
"J. B. RUSSELL
"Signed in the presence of:
(Sgd.) "A. GOMEZ CLAMOR
"AGUSTIN FARAL
"UNITED STATES OF AMERICA}
"PHILIPPINE ISLANDS} ss.
"CITY OF MANILA}
"On this twenty-fourth day of October of the year nineteen hundred and twelve,
before me, the undersigned D. R. Williams, notary public in the City of Manila,
personally appeared Messrs. Felix M. Roxas, C. W. Rosenstock, H. W. Elser, A. R.
Hager, A. E. Chenoweth, and J. B. Russell, whom I certify to be the persons who
executed the foregoing document, and they ratified this as an act freely and
voluntarily executed by the corporations whom they respectively represent. The
first-named exhibited his cedula No. F-9922, issued in Manila on January 24, 1912;
the second, No. F-6008, issued in Manila on January 15, 1912; the third , No. F-
10659, issued in Manila on January 29, 1912; the fourth, No. F-35629, issued in
Manila on January 29, 1912; the fifth, No. F-4983, issued in Manila on January 12,
1912; and the sixth, No. F-67, issued in Manila on January 3, 1912.
"In witness whereof, I, the undersigned notary, authorize these presents, affixing
my official seal on the aforesaid day, month, and year.
(Sgd.) "D. R. WILLIAMS
"Notary Public
"My commission expires December 31, 1912"
Block 44 is described in certificate of title No. 3378 of the office of the registrar of
deeds of Manila, in favor of C. W. Rosenstock & Co., upon which is endorsed the
promise of assignment referred to in paragraph 1 of the foregoing deed.
The City of Manila, complying with the obligations contracted in said instrument,
opened and constructed the main street named Washington, and in proportion
as it decided to open them, constructed and opened the streets indicated on the
plan Exhibit 6 referred to in the deed, and established adequate gutters and drains
in the streets of the blocks in which five or more houses had been built. And
having required the defendant, the Rizal Park Co., Inc., that succeeded to the
rights and obligations of C. W. Rosenstock & Co., in the block in question, to
execute the deed of conveyance of said block, the defendant refused to comply
with this obligation, thus giving rise to this action wherein the plaintiff prays for
judgment against the defendant compelling it to execute the necessary deed
assigning, transferring and conveying to the City of Manila gratuitously and
without any payment or compensation, irrevocably and free from all conditions,
the full and absolute ownership of the parcel of land described in the complaint,
whereon the City of Manila may construct a school or schools, or any building for
educational purposes, and the necessary playgrounds for the recreation of the
school children.
The defendant admits paragraph I of the complaint, but denies generally each and
every one of the other allegations thereof, except those implicitly admitted and
acknowledged, and by way of special defence alleges:
"That subsequent to October 24, 1912, or, when Exhibit A of the complaint was
executed, the Rizal Park Co., Inc., by a deed executed and ratified by and between
the herein plaintiff and defendant, on June 22, 1922, assigned and conveyed,
gratuitously, really, absolutely and definitely to the plaintiff City of Manila, twenty
parcels of land included within the area known as the Rizal Park, and containing
191,095.30 square meters, it was stipulated and agreed that all agreements,
contracts, deeds and documents prior to this date entered into between the City
of Manila and C. W. Rosenstock & Co., anent the assignment of lands or obligation
or promise to assign them, within the limits of the so-called Rizal Park, were
thereby declared cancelled, and null and void.
"That at that time, or on June 22, 1922, there was no other agreement, obligation,
or promise of assignment of lands by the Rizal Park Co. Inc., nor by C. W.
Rosenstock, to the City of Manila, other than that mentioned in Exhibit A of the
complaint."
And the defendant winds up praying that it be absolved from this complaint, and,
if need be, exempted from the performance of the obligation contracted by C. W.
Rosenstock & Co., with costs against the plaintiff.
The court below decided the case ordering the defendant to execute within ten
days from the date when its decision became final, the deed assigning and
conveying to the City of Manila the full ownership of block No. 44 described in the
certificate of title No. 3378, issued by the registrar of deeds of Manila, whereon
the City of Manila may build a school or schools, and the necessary playground
for the recreation and enjoyment of the school children, with costs against the
defendant.
The defendant entered an exception to this judgment, and in due time and form
prosecuted its appeal to this court by the proper bill of exceptions.
As grounds for the appeal, it is alleged: (1) that C. W. Rosenstock & Co., before,
and the Rizal Park Co., Inc., now, was and is bound to assign block 44 in question
to the City of Manila, provided the latter built a school or schools, or buildings for
educational purposes on said block within three years from the date of the deed
Exhibit A, and having failed to do so, the plaintiff has lost its right to the
conveyance of said block promised by the defendant; and (2) that the obligation
contracted by C. W. Rosenstock & Co., to assign, transfer, and convey to the City
of Manila gratuitously and irrevocably, and free from all conditions, the absolute
ownership of the land here in question, has been cancelled, annulled and declared
16
null and void by virtue of the deed Exhibit 5 of June 22, 1922, whereby the
defendant assigned, transferred and conveyed absolutely and definitely to the
plaintiff several parcels of land in the Rizal Park.
The first question raised by the appellant involves the interpretation of paragraph
I of the deed Exhibit A. Said paragraph I is as follows:
"I. That said partnership, C. W. Rosenstock & Co., does hereby bind and obligate
itself to assign, transfer, and convey to the City of Manila, gratuitously and free of
all payment or indemnity and irrevocably, the absolute and unconditioned
ownership of the land hereinafter described, whereon the city may build a
schoolhouse or schoolhouses, or buildings for educational purposes, with
playgrounds for the recreation and enjoyment of the school children, within three
years from the date hereof. . . .(Here follows the technical description of this
parcel.)"
The appellant deduces three conclusions from the terms of this paragraph, to wit:
(1) That the City of Manila should first have built upon the block in question, a
school or schools, or building for educational purposes, and the necessary
playground for the recreation and enjoyment of the school children, before
having the right to obtain the assignment promised by the defendant; (2) that the
construction of said buildings should have been made by the City within three
years from the date of the deed, or from October 24, 1912; and (3) that having
failed to construct said buildings within said period of three years, it has lost the
right to the assignment.
According to the jurisprudence, both in this jurisdiction and in Spain and the
United States, when the terms of a contract are clear and positive and leave no
room for doubt, no interpretation should be given which would alter or change
its strict and literal meaning. It was so held in the following cases: Azarraga vs.
Rodriquez (9 Phil., 637); Aniversario vs. Ternate (10 Phil., 53); Palacios vs.
Municipality of Cavite (12 Phil., 140); Jimeno vs. Gacilago (14 Phil., 16); Reyes vs.
Limjap (15 Phil., 420); Velasco vs. Lao Tam (23 Phil., 495); De Lizardi vs. Yaptico
(30 Phil., 211); De la Vega vs. Ballilos (34 Phil., 683); Legarda vs. Zarate (36 Phil.,
68); Chinchilla vs. Rafael and Verdaguer (39 Phil., 888); and Feliciano vs. Limjuco
and Calacalzada (41 Phil., 147).
The same doctrine was upheld by the Supreme Court of Spain in the decisions of
June 30, 1890, November 19, 1891, and October 5, 1905.
And in the courts of the United States of America the same rule of law is followed.
"The intention of the parties is to be deduced from the language employed by
them, and the terms of the contract, where unambiguous, are conclusive, in the
absence of averment and proof of mistake, the question being, not what intention
existed in the minds of the parties, but what intention is expressed by the
language used. When a written contract is clear and unequivocal, its meaning
must be determined by its contents alone; and a meaning cannot be given it other
than that expressed. Hence words cannot be read into a contract which import an
intent wholly unexpressed when the contract was executed. Where the contract
evidences care in its preparation, it will be presumed that its words were
employed deliberately and with intention." (13 Corpus Juris, 524, 525, sec. 485.)
A careful reading of paragraph 1 of the contract copied above, reveals the fact
that the construction of the buildings for the school in the block in question is not
a condition precedent to the assignment of said block to the City of Manila, and
that the three- year period from the date of the deed fixed therein was given for
the execution of the deed of gift by the defendant, and not for the building of the
schoolhouses by the City of Manila. This is a contract of assignment, or, more
specifically, a contract of onerous donation by virtue of which the defendant binds
itself to convey gratuitously in favor of the plaintiff the land in question, in
consideration of the improvements that the City of Manila agrees to make in the
Rizal Park subdivision; and the City of Manila agrees to make certain
improvements in said subdivision, in consideration of the assignment of a portion
thereof which the defendant binds itself to make in favor of the plaintiff.
Said improvements are definitely stated in paragraph V of the contract, to wit:
"1. That the City of Manila shall immediately open and construct the portion of
the above-mentioned main street from the so-called Sangleyes Street, to the
southwestern boundary of said Rizal Park, which street shall have a width of
eighteen (18) meters, providing it with the necessary cement gutters, fresh water
pipes, together with at least two public fountains, and necessary electric light
service. Providing, however, that the city shall not now be bound to open said
main street except a road of debris and gravel of a width not less than six (6)
meters.
"2. If any improvement be made in the streets by the construction of five (5) or
more houses within a block, the city binds itself to construct adequate gutters and
drains in the sections of the street thus improved."
The designation of the purpose to which block 44 in question is to be devoted,
namely, that the City of Manila may construct institutions of learning, only shows,
to our mind, that the partnership C. W. Rosenstock & Co., intended to provide
said subdivision with an element which would naturally encourage persons to
acquire the several parcels of which it is composed. There is nothing in paragraph
I of the deed in question requiring the City of Manila to construct buildings on the
block in question before the defendant would be obliged to execute the promised
assignment. If this was the intention of the parties, they would have clearly stated
it in the contract. And of course it would have been impossible for the City of
Manila to accept such a condition, knowing, as it should have known, that it
cannot erect any building on land that is not its absolute and exclusive property.
(See Act No. 1801, sec. 1.)
Such a designation has not the character of a condition precedent to the
execution of the deed of assignment. The cause or consideration by virtue of
which the partnership C. W. Rosenstock & Co., made this gratuitous assignment
to the City of Manila, or, if you will, the condition under which the defendant
promised this gratuitous assignment to the plaintiff is the improvements which
the latter bound itself to make, that is, the building of a main street, the
establishment of cement gutters, fresh water pipes, public fountains, electric
lights and the construction of other streets, ditches, gutters, and drains in places
where five or more houses have been built in a block. The City of Manila has
complied with these obligations, and the appellant makes no assignment of error
on this point.
We are of opinion, that, considering all the circumstances surrounding the
execution of the contract Exhibit A, the City of Manila cannot utilize the block in
question for any other purpose than that indicated in said paragraph I of the
contract, that is, for the construction of a school or schools or educational
buildings; and we are also of the opinion that the City of Manila must erect said
buildings in the block in question within a reasonable time, taking into account
chiefly the educational needs of the inhabitants of the Rizal Park subdivision.
The second question proposed by the appellant also invokes the interpretation of
the contract of June 22, 1922, or Exhibit 5 of the defendant. The terms of this
contract are as follows:
"I
"1. That the Rizal Park Company, Inc., is the full and absolute owner of a tract of
land situated in the District of Santa Cruz of this city, known as Rizal Park,
according to the certificate of transfer of title No. 5770, page 5, of the Book of
Transfers No. I-13 of the registry of deeds of Manila.
"2. That a system of streets and alleys in said Rizal Park is outlined and, desiring
to give the residents and occupants of the lots into which said land has been
subdivided all the benefits enjoyed by the rest of the inhabitants of this city from
the streets and public alleys established and maintained by the City of Manila, the
aforesaid corporation, the Rizal Park Company, Inc., does by these presents assign
and gratuitously transfer forever to said City of Manila and its successors, all the
streets and alleys appearing on the plan (II- 6621) of said streets and alleys, drawn
by the Bureau of Lands, for the purpose of converting the parcels of land
described in said plan into streets and public alleys of the City of Manila.
"3. That the parcels of land, the object of this assignment and conveyed hereby,
are the same twenty (20) parcels that are hereinafter described, to wit: (Here
follows the technical description of these twenty parcels.)
"4. That the parcels of land hereinbefore described are not subject to any lien or
encumbrance, nor included in any contract of lease in force upon the date hereof.
"II
"The City of Manila gratefully accepts the assignment and transfer gratuitously
made by the Rizal Park Company, Inc., of the twenty (20) parcels of land described
in the preceding paragraph, and by these presents states:
"1. That all agreements, contracts, deeds, and documents heretofore entered into
or had between the City of Manila and C. W. Rosenstock & Co., anent the
assignment of lands or the obligation or agreement to assign the same within the
meters and bounds of the so-called Rizal Park, that is, within the land described
and referred to in paragraph I hereof, are hereby declared cancelled and null and
void.
"2. That from the date hereof said parcels of land are hereby exempted from the
land tax.
"3. That it undertakes and binds itself to construct the street and alleys for which
said parcels of land are intended, gradually, or as soon as its economical situation
permits, without obligation itself to complete the construction of all the aforesaid
public streets within any term or fixed period.
"4. That it will forever preserve the present names of said streets and alleys."
It is thus seen that in the execution of this contract, the parties referred to the
land described and referred to in certificate of title No. 5770. It is well to
remember that the land in question, that is, block 44 of Rizal Park is the object, as
we have said, of certificate of title No. 3378, being first in the name of C. W.
Rosenstock & Co., and now in that of the Rizal Park Co., Inc. The land described in
this certificate of title has an area of about 20,803 square meters.
17
Originally, the partnership C. W. Rosenstock & Co., owned a parcel of land
situated in the District of Sampaloc, Manila, with an area of 569,816.55 square
meters, according to certificate of title No. 3228, and another parcel situated in
the same District of Sampaloc with an area of 2,330 square meters, according to
certificate of title No. 3229. When the deed Exhibit A was recorded, certificate of
title No. 3228 was cancelled, and in its place were issued: Certificate of title No.
3377 in the name of the City of Manila, for the parcel of land transferred for the
opening of the main street (now known by the name of Washington) with an area
of 21,977.32 square meters; certificate of title No. 3378 in the name of the
partnership C. W. Rosenstock & Co., for the strip of land of 20,803 square meters,
which it bound itself to covey gratuitously to the City of Manila; and certificate of
title No. 3379 in the name of the partnership C. W. Rosenstock & Co., for the two
last remaining parcels of the land described in certificate of title No. 3228,
containing respectively 263,444 and 263,592.23 square meters.
By virtue of the order of the court dated August 4, 1913, certificate of title No.
3379 was cancelled, and certificate No. 4128 was issued in the name of said
partnership C. W. Rosenstock & Co.
By virtue of the order of the court dated May 6, 1915, certificate of title Nos. 3229
and 4128 were cancelled, and in lieu thereof certificates Nos. 5769 and 5770 were
issued for the lands represented.
By order of the court dated February 16, 1917, the name C. W. Rosenstock was
blotted out of certificate of title Nos. 3378, 5769 and 5770, and in lieu thereof
"The Rizal Park Co., Inc." was written.
The register of deeds of Manila certifies in Exhibit D, that on the back of each of
said present certificates of title Nos. 3378, 5769 and 5770, the memoranda
referring to the obligations and agreements contracted by C. W. Rosenstock & Co.
in favor of the City of Manila in relation to the lands represented by said
certificates, are still in force.
As we have said, when entering into the contract of June 22, 1922, Exhibit 5, the
parties expressly referred to the lands included in certificate of title No. 5770, and
this certificate does not include block No. 44 in question, which is the object of
certificate of title No. 3378. Therefore, when the City of Manila, in said Exhibit 5
declared that all agreements, contracts, deeds and documents entered into or
had therefore between the City of Manila and C. W. Rosenstock & Co., anent the
assignment of lands, or the obligation or agreement to assign them, were
cancelled and null and void, it could not have referred to block 44 in question,
inasmuch as the contract of June 22, 1922, expressly refers to the land described
and referred to in paragraph I of the deed, namely, the Rizal Park land appearing
in certificate of title No. 5770. The reason why in this last contract the City of
Manila had to annul its former contracts relating to the assignment of land for
streets, is doubtless to fix once and for all which parts of the Rizal Park were
definitely set apart for the construction of streets, so that from that time the only
parts of Rizal Park donated by the defendant to the City of Manila for the
construction of streets are the twenty parcels described in paragraph I, No. 3, of
Exhibit 5 and nothing more.
Concretely speaking, the lands donated by the defendant to the plaintiff,
according to contracts Exhibits A and 5, are for three purposes: One is for the
school site, namely, block 44, under certificate No. 3378; another is for the main
street now known as Washington Street, under certificate No. 3377; and lastly,
the parcels of land intended for streets, under certificate No. 5770. In view of the
foregoing, we conclude that the previous contracts regarding the assignment of
lands for streets, which were annulled, did not and could not refer to block 44
(school site) which is not within the terms of the contract Exhibit 5. This being so,
we are of opinion, and so hold, that the appellant's contention set forth in the
second assignment of error is untenable.
With respect to the third and fourth assignments of error, the appellant only
made them as consequences of the first two, and we find no argument in its brief
which calls for a separate discussion.
The judgment appealed from being in accordance with law, it should be, as it is
hereby, affirmed, with the sole modification that the City of Manila, must build in
block 44 of the Rizal Park in question, within a reasonable period of time. With
costs against the appellant. So ordered.
Avanceña, C. J., Johnson, Street, Johns, Romualdez and Villa-Real, JJ., concur.
FIRST DIVISION
[G.R. No. 112796. March 5, 1998.]
TITO R. LAGAZO, petitioner, vs. COURT OF APPEALS and ALFREDO CABANLIT,
respondents.

Domingo G. Foronda for petitioner.
Puno and Puno for private respondent.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; DONATION; SIMPLE DONATION
DIFFERENTIATED FROM ONEROUS DONATION. — At the outset, let us
differentiate between a simple donation and an onerous one. A simple or pure
donation is one whose cause is pure liberality (no strings attached), while onerous
donation is one which is subject to burdens, charges or future services equal to or
more in value than the thing donated. Under Article 733 of the Civil Code,
donations with an onerous cause shall be governed by the rules on contracts;
hence, the formalities required for a valid simple donation are not applicable.
2. ID.; ID.; ID.; PAYMENT OF INSTALLMENTS DUE ON THE LAND DONATED NOT
IMPOSED BY THE DONOR, NOT A BURDEN OR CHARGE. — Even conceding that
petitioner's full payment of the purchase price of the lot might have been a
burden to him, such payment was not however imposed by the donor as a
condition for the donation. It is clear that the donor did not have any intention to
burden or charge petitioner as the donee, The words in the deed are in fact typical
of a pure donation. We agree with Respondent Court that the payments made by
petitioner were merely his voluntary acts. This much can be gathered from his
testimony in court, in which he never even claimed that a burden or charge had
been imposed by his grandmother.
3. ID.; ID.; ID.; PERFECTED ONLY UPON THE MOMENT THE DONORS KNOWS OF
THE ACCEPTANCE OF THE DONEE. — In the words of the esteemed Mr. Justice
Jose C. Vitug, 'Like any other contract, an agreement of the parties is essential.
The donation following the theory of cognition (Article 1319, Civil Code), is
perfected only upon the moment the donor knows of the acceptance by the
donee." Furthermore, "(i)f the acceptance is made in a separate instrument, the
donor shall be notified thereof in an authentic form, and this step shall be noted
in both instruments." Acceptance of the donation by the donee is, therefore,
indispensable; its absence makes the donation null and void.
4. REMEDIAL LAW; ACTIONS; AGREEMENTS, EVIDENCE, CAUSES OF ACTION AND
MATTERS NOT RAISED IN THE TRIAL COURT MAY NO LONGER BE RAISED ON
APPEAL; CASE AT BAR. — Exhibit E (the deed of donation) does not show any
indication that petitioner-donee accepted the gift. During the trial, he did not
present any instrument evidencing such acceptance despite the fact that private
respondent already raised this allegation in his supplemental pleading to which
petitioner raised no objection. It was only after the Court of Appeals had rendered
its decision, when petitioner came before this Court, that he submitted an
affidavit dated August 28, 1990, manifesting that he "wholeheartedly accepted"
the lot given to him by his grandmother, Catalina Reyes. This is too late, because
arguments, evidence, causes of action and matters not raised in the trial court
may no longer be raised on appeal.
5. CIVIL LAW; OBLIGATIONS AND CONTRACTS; DONATION; ACCEPTANCE OF
DONATIONS MUST BE DULY ANNOTATED. — True, the acceptance of a donation
may be made at any time during the life-time of the donor. And granting arguendo
that such acceptance may still be admitted in evidence on appeal, there is still
need for proof that a formal notice of such acceptance was received by the donor
and noted in both the deed of donation and the separate instrument embodying
the acceptance. At the very least, this last legal requisite of annotation in both
instruments of donation and acceptance was not fulfilled by petitioner.
6. REMEDIAL LAW; EVIDENCE; WEIGHT AND SUFFICIENCY; TESTIMONIES UNDER
OATH GIVEN MORE WEIGHT THAN INVESTIGATOR'S REPORT. — Between the
testimonies under oath of the contending parties and the report — not subjected
to cross-examination — which was prepared by the investigator who
recommended the approval of petitioner's request for transfer, it is the former to
which the Court is inclined to give more credence. The investigator's report must
have been based on the misrepresentations of petitioner who arrogated unto
himself the prerogatives of both Español and private respondent. Further, it is on
record that petitioner had required private respondent to vacate the subject
premises before he instituted this complaint. This shows he was not in actual
possession of the property, contrary to the report of the investigator.
7. ID.; ACTIONS; NO VALID JUDGMENT CAN BE RENDERED ON PARTIES NOT
IMPLEADED. — In resolving private respondent's claim of ownership, the
18
examination of the genuineness of the documents (deeds of assignment over the
lot between Catalina Reyes and Eduardo Español and between Español and
private respondent) upon which he asserts his right is necessary, especially in light
of petitioner's allegations of forgery. However, the respective assignors in both
documents are not parties to the instant case. Not having been impleaded in the
trial court, they had no participation whatsoever in the proceedings at bar.
Elementary norms of fair play and due process bar us from making any disposition
which may affect their rights. Verily, there can be no valid judgment for or against
them.
8. CIVIL LAW; DAMAGES, ATTORNEY'S FEES; NOT AWARDED FOR FAILURE TO
PROVE ANY RIGHT TO A VALID, JUST AND DEMANDABLE CLAIM. — Not having
proven any right to a valid, just and demandable claim that compelled him to
litigate or to incur expenses in order to protect his interests by reason of an
unjustified act or omission of private respondent, petitioner cannot be awarded
attorney's fees.
DECISION
PANGANIBAN, J p:
Where the acceptance of a donation was made in a separate instrument but not
formally communicated to the donor, may the donation be nonetheless
considered complete, valid and subsisting? Where the deed of donation did not
expressly impose any burden — the expressed consideration being purely one of
liberality and generosity — but the recipient actually paid charges imposed on the
property like land taxes and installment arrearages, may the donation be deemed
onerous and thus governed by the law on ordinary contracts? LLphil
The Case
The Court answers these questions in the negative as it resolves this petition for
review under Rule 45 of the Rules of Court seeking to set aside the Decision 1 of
the Court of Appeals 2 in CA-GR CV No. 38050 promulgated on November 29,
1993. The assailed Decision reversed the Regional Trial Court, Branch 30, Manila,
in Civil Case No. 87-39133 which had disposed 3 of the controversy in favor of
herein petitioner in the following manner: 4
"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against
the defendant as follows:
1. Ordering the defendant, or any person claiming rights under him, to surrender
to plaintiff possession of the premises known as Lot 8w, Block 6, Psd-135534 of
the Monserrat Estate, and the improvement standing thereon, located at 3320
2nd St., V. Mapa, Old Sta. Mesa, Manila;
2. Ordering the defendant to pay plaintiff the sum of Five Thousand (P5,000.00)
Pesos, as and for attorney's fees; and
3. Cost against the defendant.
The defendant's counterclaims are hereby dismissed."
The Facts
Although the legal conclusions and dispositions of the trial and the appellate
courts are conflicting, the factual antecedents of the case are not substantially
disputed. 5 We reproduce their narration from the assailed Decision:
"Civil Case No. 83-39133 involves an action filed by plaintiff-appellee [herein
petitioner] on January 22, 1987 seeking to recover from defendant-appellant [a]
parcel of land which the former claims to have acquired from his grandmother by
donation. Defendant-appellant [herein private respondent], on the other hand,
put up the defense that when the alleged donation was executed, he had already
acquired property by a Deed of Assignment from a transferee of plaintiff-
appellee's grandmother.
The evidence for plaintiff-appellee [herein petitioner] is summarized as follows:
Catalina Jacob Vda. de Reyes, a widow and grandmother of plaintiff-appellee, was
awarded in July 1975 a 60.10-square meter lot which is a portion of the Monserrat
Estate, more particularly described as Lot 8W, Block 6 of Psd-135834, located at
3320 2nd St., V. Mapa, Old Sta. Mesa, Manila. The Monserrat Estate is public land
owned by the City of Manila and distributed for sale to bona fide tenants under
its land-for-the-landless program. Catalina Jacob constructed a house on the lot.

On October 3, 1977, or shortly before she left for Canada where she is now a
permanent resident, Catalina Jacob executed a special power of attorney (Exh.
'A') in favor of her son-in-law Eduardo B. Español authorizing him to execute all
documents necessary for the final adjudication of her claim as awardee of the lot.
Due to the failure of Eduardo B. Español to accomplish the purpose of the power
of attorney granted to him, Catalina Jacob revoked said authority in an instrument
executed in Canada on April 16, 1984 (Exh. 'D'). Simultaneous with the revocation,
Catalina Jacob executed another power of attorney of the same tenor in favor
plaintiff-appellee.
On January 30, 1985, Catalina Jacob executed in Canada a Deed of Donation over
a Lot 8W in favor of plaintiff-appellee (Exh. 'E'). Following the donation, plaintiff-
appellee checked with the Register of Deeds and found out that the property was
in the delinquent list, so that he paid the installments in arrears and the remaining
balance on the lot (Exhs. 'F', 'F-1' and 'F-2') and declared the said property in the
name of Catalina Jacob (Exhs. 'G', 'G-1', 'G-2' and 'G-3').
On January 29, 1986, plaintiff-appellee sent a demand letter to defendant-
appellant asking him to vacate the premises (Exh. 'H'). A similar letter was sent by
plaintiff-appellee's counsel to defendant on September 11, 1986 (Exh. 'I').
However, defendant-appellant refused to vacate the premises claiming
ownership thereof. Hence, plaintiff-appellee instituted the complaint for recovery
of possession and damages against defendant-appellant.
Opposing plaintiff-appellee's version, defendant-appellant claimed that the house
and lot in controversy were his by virtue of the following documents:
1. Deed of Absolute Sale executed by Catalina Jacob dated October 7, 1977 in
favor of Eduardo B. Español covering the residential house located at the premises
(Exh. '4').
2. Deed of Assignment over Lot 8W executed by Catalina Jacob in favor of Eduardo
Español dated September 30, 1980 (Exh. '5'); and
3. Deed of Assignment executed by Eduardo B. Español over Lot 8W and a
residential house thereon in favor of defendant-appellant dated October 2, 1982
(Exh. '6').
After trial, the lower court decided in favor of plaintiff-appellee and against
defendant-appellant, rationalizing that the version of the former is more credible
than that of the latter. According to the lower court:
'From the oral and documentary evidence adduced by the parties[,] it appears
that the plaintiff-has a better right over the property, subject matter of the case.
The version of the plaintiff is more credible than that of the defendant. The theory
of the plaintiff is that the house and lot belong to him by virtue of the Deed of
Donation in his favor executed by his grandmother Mrs. Jacob Vda. de Reyes, the
real awardee of the lot in question. The defendant's theory is that he is the owner
thereof because he bought the house and lot from Eduardo Español, after the
latter had shown and given to him Exhibits 1, 4 and 5. He admitted that he signed
the Deed of Assignment in favor of Eduardo Español on September 30, 1980, but
did not see awardee Catalina Jacob Vda. de Reyes signed [sic] it. In fact the
acknowledgment in Exhibit '5' shows that the assignor/awardee did not appear
before the notary public. It may be noted that on said date, the original awardee
of the lot was no longer in the Philippines, as both parties admitted that she had
not come back to the Philippines since 1977. (Exhs. K, K-1). Defendant, claiming
to be the owner of the lot, unbelievably did not take any action to have the said
house and lot be registered or had them declared in his own name. Even his
Exhibit 7 was not mailed or served to the addressee. Such attitude and laxity is
very unnatural for a buyer/owner of a property, in stark contrast of [sic] the
interest shown by the plaintiff who saw to it that the lot was removed from the
delinquent list for non-payment of installments and taxes due thereto [sic]." 6
Ruling of the Appellate Court
In reversing the trial court's decision, 7 Respondent Court of Appeals anchored its
ruling upon the absence of any showing that petitioner accepted his
grandmother's donation of the subject land. Citing jurisprudence that the donee's
failure to accept a donation whether in the same deed of donation or in a separate
instrument renders the donation null and void, Respondent Court denied
19
petitioner's claim of ownership over the disputed land. The appellate court also
struck down petitioner's contention that the formalities for a donation of real
property should not apply to his case since it was an onerous one — he paid for
the amortizations due on the land before and after the execution of the deed of
donation — reasoning that the deed showed no burden, charge or condition
imposed upon the donee; thus, the payments made by petitioner were his
voluntary acts.
Dissatisfied with the foregoing ruling, petitioner now seeks a favorable disposition
from this Court. 8
Issues
Petitioner anchors his petition on the following grounds: 9
"[I.] In reversing the decision of the trial court, the Court of Appeals decided a
question of substance in a way not in accord with the law and applicable decisions
of this Honorable Court. LLphil
[II.] Even granting the correctness of the decision of the Court of Appeals, certain
fact and circumstances transpired in the meantime which would render said
decision manifestly unjust, unfair and inequitable to petitioner."
We believe that the resolution of this case hinges on the issue of whether the
donation was simple or onerous.
The Court's Ruling
The petition lacks merit.
Main Issue:
Simple or Onerous Donation?
At the outset, let us differentiate between a simple donation and an onerous one.
A simple or pure donation is one whose cause is pure liberality (no strings
attached), while an onerous donation is one which is subject to burdens, charges
or future services equal to or more in value than the thing donated. 10 Under
Article 733 of the Civil Code, donations with an onerous cause shall be governed
by the rules on contracts; hence, the formalities required for a valid simple
donation are not applicable.
Petitioner contends that the burdens, charges or conditions imposed upon a
donation need not be stated on the deed of donation itself. Thus, although the
deed did not categorically impose any charge, burden or condition to be satisfied
by him, the donation was onerous since he in fact and in reality paid for the
installments in arrears and for the remaining balance of the lot in question. Being
an onerous donation, his acceptance thereof may be express or implied, as
provided under Art. 1320 of the Civil Code, and need not comply with the
formalities required by Art. 749 of the same code. His payment of the arrearages
and balance and his assertion of his right of possession against private respondent
clearly indicate his acceptance of the donation.
We rule that the donation was simple, not onerous. Even conceding that
petitioner's full payment of the purchase price of the lot might have been a
burden to him, such payment was not however imposed by the donor as a
condition for the donation. Rather, the deed explicitly stated:
"That for and in consideration of the love and affection which the DONEE inspires
in the DONOR, and as an act of liberality and generosity and considering further
that the DONEE is a grandson of the DONOR, the DONOR hereby voluntarily and
freely gives, transfer[s] and conveys, by way of donation unto said DONEE, his
heirs, executors, administrators and assigns, all the right, title and interest which
the said DONOR has in the above described real property, together with all the
buildings and improvements found therein, free from all lines [sic] and
encumbrances and charges whatsoever;" 11 [emphasis supplied]
It is clear that the donor did not have any intention to burden or charge petitioner
as the donee. The words in the deed are in fact typical of a pure donation. We
agree with Respondent Court that the payments made by petitioner were merely
his voluntary acts. This much can be gathered from his testimony in court, in
which he never even claimed that a burden or charge had been imposed by his
grandmother.
"ATTY . FORONDA:
q After you have received this [sic] documents, the . . . revocation of power of
attorney and the Special Power of Attorney in your favor, what did you do?
WITNESS:
a I went here in City Hall and verif[ied] the status of the award of my grandmother.
q When you say the award, are you referring to the award in particular [of the] lot
in favor of your grandmother?
a Yes, Sir
q What was the result of your verification?
a According to the person in the office, the papers of my grandmother is [sic]
includ[ed] in the dilinquent [sic] list.
q What did you do then when you found out that the lot was includ[ed] in the
dilinquent [sic] list?
a I talked to the person in charged [sic] in the office and I asked him what to do so
that the lot should not [be] included in the dilinquent [sic] list.
ATTY. FORONDA:
q And what was the answer [sic] given to you to the inquiry which you made?
WITNESS:
a According to the person in the office, that I would pay the at least [sic] one half
of the installment in order to take [out] the document [from] the delinquent list.
q And [were] you able to pay?
a I was able to pay, sir.
q What were you able to pay, one half of the balance or the entire amounts [sic]?
a First, I paid the [sic] one half of the balance since the time the lot awarded to
us.
q What about the remaining balance, were you able to pay it?
a I was able to pay that, sir.
q So, as of now, the amount in the City of Manila of the lot has already been duly
paid, is it not?
a Yes, sir" 12
The payments even seem to have been made pursuant to the power of attorney
13 executed by Catalina Reyes in favor of petitioner, her grandson, authorizing
him to execute acts necessary for the fulfillment of her obligations. Nothing in the
records shows that such acts were meant to be a burden in the donation.
As a pure or simple donation, the following provisions of the Civil Code are
applicable: LLphil
"Art. 734. The donation is perfected from the moment the donor knows of the
acceptance by the donee."
"Art. 746. Acceptance must be made during the lifetime of the donor and the
donee."
"Art. 749. In order that the donation of an immovable may be valid, it must be
made in a public instrument, specifying therein the property donated and the
value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation and in a separate
public document, but it shall not take effect unless it is done during the lifetime
of the donor.
20
If the acceptance is made in a separate instrument, the donor shall be notified
thereon in authentic form, and this step shall be noted in both instruments."
In the words of the esteemed Mr. Justice Jose C. Vitug, 14 "Like any other contract,
an agreement of the parties is essential. The donation, following the theory of
cognition (Article 1319, Civil Code), is perfect only upon the moment the donor
knows of the acceptance by the donee." Furthermore, "[i]f the acceptance is
made in a separate instrument, the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments." 15
Acceptance of the donation by the donee is, therefore, indispensable; its absence
makes the donation null and void. 16 The perfection and the validity of a donation
are well explained by former Sen. Arturo M. Tolentino in this wise:
" . . . Title to immovable property does not pass from the donor to the donee by
virtue of a deed of donation until and unless it has been accepted in a public
instrument and the donor duly notified thereof. The acceptance may be made in
the very same instrument of donation. If the acceptance does not appear in the
same document, it must be made in another. Solemn words are not necessary; it
is sufficient if it shows the intention to accept. But in this case it is necessary that
formal notice thereof be given to the donor, and the fact that due notice has been
given must be noted in both instruments (that containing the offer to donate and
that showing the acceptance). Then and only then is the donation perfected. If
the instrument of donation has been recorded in the registry of property, the
instrument that shows the acceptance should also be recorded. Where the deed
of donation fails to show the acceptance, or where the formal notice of the
acceptance, made in a separate instrument, is either not given to the donor or
else not noted in the deed of donation and in separate acceptance, the donation
is null and void." 17
Exhibit E (the deed of donation) does not show any indication that petitioner —
donee accepted the gift. During the trial, he did not present any instrument
evidencing such acceptance despite the fact that private respondent already
raised this allegation in his supplemental pleading 18 to which petitioner raised
no objection. It was only after the Court of Appeals had rendered its decision,
when petitioner came before this Court, that he submitted an affidavit 19 dated
August 28, 1990, manifesting that he "wholeheartedly accepted" the lot given to
him by his grandmother, Catalina Reyes. This is too late, because arguments,
evidence, causes of action and matters not raised in the trial court may no longer
be raised on appeal. 20
True, the acceptance of a donation may be made at any time during the lifetime
of the donor. And granting arguendo that such acceptance may still be admitted
in evidence on appeal, there is still need for proof that a formal notice of such
acceptance was received by the donor and noted in both the deed of donation
and the separate instrument embodying the acceptance. At the very least, this
last legal requisite of annotation in both instruments of donation and acceptance
was not fulfilled by petitioner. For this reason, the subject lot cannot be
adjudicated to him.
Secondary Issue:
Supervening Events
Petitioner also contends that certain supervening events have transpired which
render the assailed Decision "manifestly unjust, unfair and inequitable" to him.
The City of Manila has granted his request for the transfer to his name of the lot
originally awarded in favor of Catalina Reyes. A deed of sale 21 covering the
subject lot has in fact been executed between the City of Manila, as the vendor;
and petitioner, as the vendee. The corresponding certificate of title 22 has also
been issued in petitioner's name.
A close perusal of the city government's resolution 23 granting petitioner's
request reveals that the request for and the grant of the transfer of the award
were premised on the validity and perfection of the deed of donation executed
by the original awardee, petitioner's grandmother. This is the same document
upon which petitioner, as against private respondent, assert his right over the lot.
But, as earlier discussed and ruled, this document has no force and effect and,
therefore, passes no title, right or interest.
Furthermore, the same resolution states:
WHEREAS, in a report submitted by Ms. [Menchu C.] Bello [Special Investigator]
on February 7, 1990, it is stated that . . . constructed on the lot is a make-shift
structure used for residential purposes by the proposed transferee Tito Lagazo
and his family; . . . and that constructed at Lot 8, Block 6, former Monserrat Estate
is a make-shift structure used as a dwelling place by Lagazo and family because
the front portion of their house which was constructed on a road lot was
demolished, and the structure was extended backward covering a portion of the
old temporary road lot . . . "
The above findings of the investigator are, however, directly contradictory to the
testimonies in court of petitioner himself and of private respondent. Petitioner
claimed the following: that the house constructed on the subject lot was owned
by his grandmother Catalina Jacob; that before the latter left for Canada in 1977,
Eduardo Español had already been living in the same house and continued to do
so until 1982; and that private respondent occupied the premises after Español
left. 24 On the other hand, private respondent testified that he bought the subject
house and lot from Eduardo Español in 1982, after which he and his family
occupied the same; but sometime in 1985, they had to leave the place due to a
road-widening project which reduced the house to "about three meters [in]
length and one arm[']s width." 25
Between the testimonies under oath of the contending parties and the report —
not subjected to cross-examination — which was prepared by the investigator
who recommended the approval of petitioner's request for transfer, it is the
former to which the Court is inclined to give more credence. The investigator's
report must have been based on the misrepresentations of petitioner who
arrogated unto himself the prerogatives of both Español and private respondent.
Further, it is on record that petitioner had required private respondent to vacate
the subject premises before he instituted this complaint. This shows he was not
in actual possession of the property, contrary to the report of the investigator.
Cabanlit's Claim of Ownership
Petitioner also assails Respondent Court's conclusion that it is unnecessary to pass
upon private respondent's claim over the property. Petitioner insists that principal
issue in the case, as agreed upon by the parties during pre-trial, is "who between
the parties is the owner of the house and lot in question."
In disposing of the principal issue of the right of petitioner over the subject
property under the deed of donation, we arrive at one definite conclusion: on the
basis of the alleged donation, petitioner cannot be considered the lawful owner
of the subject property. This does not necessarily mean, however, that private
respondent is automatically the rightful owner.
In resolving private respondent's claim of ownership, the examination of the
genuineness of the documents (deeds of assignment over the lot between
Catalina Reyes and Eduardo Español and between Español and private
respondent) upon which he asserts his right is necessary, especially in light of
petitioner's allegations of forgery. However, the respective assignors on both
documents are not parties to the instant case. Not having been impleaded in the
trial court, they had no participation in whatsoever in the proceedings at bar.
Elementary norms of fair play and due process bar us from making any disposition
which may effect their rights. Verily, there can be no valid judgment for or against
them. 26
Anyhow, since petitioner, who has the plaintiff below, failed to prove with clear
and convincing evidence his ownership claim over the subject property, the
parties thus resume their status quo ante. The trial court should have dismissed
his complaint for his failure to prove a right superior to that of private respondent,
but without prejudice to any action that Catalina Reyes or Eduardo Español or
both may have against said private respondent. Stating this point otherwise, we
are not ruling in this case on the rights and obligations between, on the one hand,
Catalina Reyes, her assigns and/or representatives; and, on the other, Private
Respondent Cabanlit.
Not having proven any right to a valid, just and demandable claim that compelled
him to litigate or to incur expenses in order to protect his interests by reason of
an unjustified act or omission of private respondent, petitioner cannot be
awarded attorney's fees. 27
WHEREFORE, the petition is hereby DENIED and the assailed Decision is
AFFIRMED. cdasia
SO ORDERED.
21
Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ ., concur.
SECOND DIVISION
[G.R. No. 111904. October 5, 2000.]
SPS. AGRIPINO GESTOPA and ISABEL SILARIO GESTOPA, petitioners, vs. COURT OF
APPEALS and MERCEDES DANLAG y PILAPIL, respondents.
Batiquin & Batiquin Law Office for petitioners.
Danilo L. Pilapil for private respondent.
SYNOPSIS
Sometime in 1965 and 1966, three (3) deeds of donation mortis causa over several
parcels of unregistered land were executed in favor of Mercedes Danlag y Pilapil
by spouses Diego and Catalina Danlag. In January 1973, Diego, with the consent
of Catalina, executed a deed of donation inter vivos over said parcels of land again
in favor of respondent Mercedes. This contained the condition that the spouses
Danlag shall continue to enjoy the fruits of the land during their lifetime. Likewise,
it imposed a limitation on Mercedes' right to sell the land during the lifetime of
the spouses without their consent and approval. However, years later, spouses
Danlag sold several parcels of the land so donated to spouses Gestopa. Thus,
Mercedes filed with the Regional Trial Court a petition for quieting of title, the
main issue being the nature of the donation executed in favor of Mercedes. The
trial court ruled in favor of the defendants. The Court of Appeals reversed this
judgment. Hence, this petition for review.
The granting clause in the Deed of Donation showed that Diego donated the
properties out of love and affection for the spouse. This is a mark of a donation
inter vivos. The reservation of lifetime usufruct indicates that the donor intended
to transfer the naked ownership over the properties. The donor reserved
sufficient properties for his maintenance indicating that the donor intended to
part with the parcels of land donated. Lastly, the donee accepted the donation.
Acceptance is a requirement for donations inter vivos.
SYLLABUS
1. CIVIL LAW; MODES OF ACQUIRING OWNERSHIP; DONATIONS; TO DETERMINE
WHETHER DONATION IS INTER VIVOS OR MORTIS CAUSA, INTENT OF DONOR
MUST BE ASCERTAINED. — Crucial in resolving whether the donation was inter
vivos or mortis causa is the determination of whether the donor intended to
transfer the ownership over the properties upon the execution of the deed. In
ascertaining the intention of the donor, all of the deed's provisions must be read
together.
2. ID.; ID.; ID.; ID.; CASE AT BAR. — The granting clause shows that Diego donated
the properties out of love and affection for the donee. This is a mark of a donation
inter vivos. Second, the reservation of lifetime usufruct indicates that the donor
intended to transfer the naked ownership over the properties. As correctly posed
by the Court of Appeals, what was the need for such reservation if the donor and
his spouse remained the owners of the properties? Third, the donor reserved
sufficient properties for his maintenance in accordance with his standing in
society, indicating that the donor intended to part with the six parcels of land.
Lastly, the donee accepted the donation.
3. ID.; ID.; ID.; ID.; A DEED OF REVOCATION, THE VALIDITY OF WHICH IS BEING
ASSAILED, CANNOT BE USED TO SHOW DONOR'S INTENT. — As correctly observed
by the Court of Appeals, the Danlag spouses were aware of the difference
between the two donations. If they did not intend to donate inter vivos, they
would not again donate the four lots already donated mortis causa. Petitioner's
counter argument that this proposition was erroneous because six years after, the
spouses changed their intention with the deed of revocation, is not only
disingenuous but also fallacious. Petitioners cannot use the deed of revocation to
show the spouses' intent because its validity is one of the issues in this case.
4. ID.; ID.; ID.; ACCEPTANCE CLAUSE IS A MARK OF A DONATION INTER VIVOS. —
In the case of Alejandro vs. Geraldez, 78 SCRA 245 (1977), we said that an
acceptance clause is a mark that the donation is inter vivos. Acceptance is a
requirement for donations inter vivos. Donations mortis causa, being in the form
of a will, are not required to be accepted by the donees during the donors'
lifetime.
5. ID.; ID.; ID.; LIMITATION ON THE RIGHT TO SELL, AN IMPLICATION THAT
OWNERSHIP HAD PASSED TO THE DONEE. — A limitation on the right to sell during
the donors' lifetime implied that ownership had passed to the donees and
donation was already effective during the donors' lifetime.
6. ID.; ID.; ID.; REVOCATION; GENERALLY, A VALID DONATION, ONCE ACCEPTED IS
IRREVOCABLE; EXCEPTIONS. — A valid donation, once accepted, becomes
irrevocable, except on account of officiousness, failure by the donee to comply
with the charges imposed in the donation, or ingratitude. The donor-spouses did
not invoke any of these reasons in the deed of revocation.
7. REMEDIAL LAW; EVIDENCE, PRESUMPTIONS; REGULARITY IN THE
PERFORMANCE OF OFFICIAL DUTIES, PRESUMED UNLESS PROVEN OTHERWISE. —
Petitioners aver that Mercedes' tax declarations in her name can not be a basis in
determining the donor's intent. They claim that it is easy to get tax declarations
from the government offices such that tax declarations are not considered proofs
of ownership. However, unless proven otherwise, there is a presumption of
regularity in the performance of official duties. ACaEcH
8. ID.; ID.; FINDINGS OF FACT BY APPELLATE COURT GENERALLY UPHELD IN A
PETITION FOR REVIEW. — As a rule, a finding of fact by the appellate court,
especially when it is supported by evidence on record, is binding on us.
DECISION
QUISUMBING, J p:
This petition for review, 1 under Rule 45 of the Rules of Court, assails the decision
2 of the Court of Appeals dated August 31, 1993, in CA-G.R. CV No. 38266, which
reversed the judgment 3 of the Regional Trial Court of Cebu City, Branch 5.
The facts, as culled from the records, are as follows:
Spouses Diego and Catalina Danlag were the owners of six parcels of unregistered
lands. They executed three deeds of donation mortis causa, two of which are
dated March 4, 1965 and another dated October 13, 1966, in favor of private
respondent Mercedes Danlag-Pilapil. 4 The first deed pertained to parcels 1 & 2
with Tax Declaration Nos. 11345 and 11347, respectively. The second deed
pertained to parcel 3, with TD No. 018613. The last deed pertained to parcel 4
with TD No. 016821. All deeds contained the reservation of the rights of the
donors (1) to amend, cancel or revoke the donation during their lifetime, and (2)
to sell, mortgage, or encumber the properties donated during the donors'
lifetime, if deemed necessary.
On January 16, 1973, Diego Danlag, with the consent of his wife, Catalina Danlag,
executed a deed of donation inter vivos 5 covering the aforementioned parcels of
land plus two other parcels with TD Nos. 11351 and 11343, respectively, again in
favor of private respondent Mercedes. This contained two conditions, that (1) the
Danlag spouses shall continue to enjoy the fruits of the land during their lifetime,
and that (2) the donee can not sell or dispose of the land during the lifetime of
the said spouses, without their prior consent and approval. Mercedes caused the
transfer of the parcels' tax declaration to her name and paid the taxes on them.
On June 28, 1979 and August 21, 1979, Diego and Catalina Danlag sold parcels 3
and 4 to herein petitioners, Mr. and Mrs. Agripino Gestopa. On September 29,
1979, the Danlags executed a deed of revocation 6 recovering the six parcels of
land subject of the aforecited deed of donation inter vivos.
On March 1, 1983, Mercedes Pilapil (herein private respondent) filed with the RTC
a petition against the Gestopas and the Danlags, for quieting of title 7 over the
above parcels of land. She alleged that she was an illegitimate daughter of Diego
Danlag; that she lived and rendered incalculable beneficial services to Diego and
his mother, Maura Danlag, when the latter was still alive. In recognition of the
services she rendered, Diego executed a Deed of Donation on March 20, 1973,
conveying to her the six (6) parcels of land. She accepted the donation in the same
instrument, openly and publicly exercised rights of ownership over the donated
properties, and caused the transfer of the tax declarations to her name. Through
machination, intimidation and undue influence, Diego persuaded the husband of
Mercedes, Eulalio Pilapil, to buy two of the six parcels covered by the deed of
22
donation. Said donation inter vivos was coupled with conditions and, according to
Mercedes, since its perfection, she had complied with all of them; that she had
not been guilty of any act of ingratitude; and that respondent Diego had no legal
basis in revoking the subject donation and then in selling the two parcels of land
to the Gestopas. aTIEcA
In their opposition, the Gestopas and the Danlags averred that the deed of
donation dated January 16, 1973 was null and void because it was obtained by
Mercedes through machinations and undue influence. Even assuming it was
validly executed, the intention was for the donation to take effect upon the death
of the donor. Further, the donation was void for it left the donor, Diego Danlag,
without any property at all.
On December 27, 1991, the trial court rendered its decision, thus:
"WHEREFORE, the foregoing considered, the Court hereby renders judgment in
favor of the defendants and against the plaintiff:
1. Declaring the Donations Mortis Causa and Inter Vivos as revoked, and,
therefore, has (sic) no legal effect and force of law.
2. Declaring Diego Danlag the absolute and exclusive owner of the six (6) parcels
of land mentioned in the Deed of revocation (Exh. P-plaintiff, Exh. 6-defendant
Diego Danlag).
3. Declaring the Deeds of Sale executed by Diego Danlag in favor of spouses
Agripino Gestopa and Isabel Gestopa dated June 28, 1979 (Exh. S-plaintiff; Exh.
18-defendant); Deed of Sale dated December 18, 1979 (Exh. T-plaintiff; Exh. 9-
defendant); Deed of Sale dated September 14, 1979 (Exh. 8); Deed of Sale dated
June 30, 1975 (Exh. U); Deed of Sale dated March 13, 1978 (Exh X) as valid and
enforceable duly executed in accordance with the formalities required by law.
4. Ordering all tax declaration issued in the name of Mercedes Danlag y Pilapil
covering the parcel of land donated cancelled and further restoring all the tax
declarations previously cancelled, except parcels nos. 1 and 5 described, in the
Deed of Donation Inter Vivos (Exh. "1") and Deed of Sale (Exh. "2") executed by
defendant in favor of plaintiff and her husband.
5. With respect to the contract of sale of abovestated parcels of land, vendor
Diego Danlag and spouse or their estate have the alternative remedies of
demanding the balance of the agreed price with legal interest, or rescission of the
contract of sale.
SO ORDERED." 8
In rendering the above decision, the trial court found that the reservation clause
in all the deeds of donation indicated that Diego Danlag did not make any
donation; that the purchase by Mercedes of the two parcels of land covered by
the Deed of Donation Inter Vivos bolstered this conclusion; that Mercedes failed
to rebut the allegations of ingratitude she committed against Diego Danlag; and
that Mercedes committed fraud and machination in preparing all the deeds of
donation without explaining to Diego Danlag their contents.
Mercedes appealed to the Court of Appeals and argued that the trial court erred
in (1) declaring the donation dated January 16, 1973 as mortis causa and that the
same was already revoked on the ground of ingratitude; (2) finding that Mercedes
purchased from Diego Danlag the two parcels of land already covered by the
above donation and that she was only able to pay three thousand pesos, out of
the total amount of twenty thousand pesos; (3) failing to declare that Mercedes
was an acknowledged natural child of Diego Danlag.
On August 31, 1993, the appellate court reversed the trial court. It ruled:
"PREMISES CONSIDERED, the decision appealed from is REVERSED and a new
judgment is hereby rendered as follows:
1. Declaring the deed of donation inter vivos dated January 16, 1973 as not having
been revoked and consequently the same remains in full force and effect;
2. Declaring the Revocation of Donation dated June 4, 1979 to be null and void
and therefore of no force and effect;

3. Declaring Mercedes Danlag Pilapil as the absolute and exclusive owner of the
six (6) parcels of land specified in the above-cited deed of donation inter vivos;
4. Declaring the Deed of Sale executed by Diego Danlag in favor of spouses
Agripino and Isabel Gestopa dated June 28, 1979 (Exhibits S and 18), Deed of Sale
dated December 18, 1979 (Exhibits T and 19), Deed of Sale dated September 14,
1979 (Exhibit 8), Deed of Sale dated June 30, 1975 (Exhibit U), Deed of Sale dated
March 13, 1978 (Exhibit X) as well as the Deed of Sale in favor of Eulalio Danlag
dated December 27, 1978 (Exhibit 2) not to have been validly executed;
5. Declaring the above-mentioned deeds of sale to be null and void and therefore
of no force and effect;
6. Ordering spouses Agripino Gestopa and Isabel Silario Gestopa to reconvey
within thirty (30) days from the finality of the instant judgment to Mercedes
Danlag Pilapil the parcels of land above-specified, regarding which titles have
been subsequently fraudulently secured, namely those covered by O.C.T. T-17836
and O.C.T. No. 17523.
7. Failing to do so, ordering the Branch Clerk of Court of the Regional Trial Court
(Branch V) at Cebu City to effect such reconveyance of the parcels of land covered
by O.C.T. T-17836 and 17523.
SO ORDERED." 9
The Court of Appeals held that the reservation by the donor of lifetime usufruct
indicated that he transferred to Mercedes the ownership over the donated
properties; that the right to sell belonged to the donee, and the donor's right
referred to that of merely giving consent; that the donor changed his intention by
donating inter vivos properties already donated mortis causa; that the transfer to
Mercedes' name of the tax declarations pertaining to the donated properties
implied that the donation was inter vivos; and that Mercedes did not purchase
two of the six parcels of land donated to her.
Hence, this instant petition for review filed by the Gestopa spouses, asserting
that:
"THE HONORABLE COURT OF APPEALS, TWELFTH DIVISION, HAS GRAVELY ERRED
IN REVERSING THE DECISION OF THE COURT A QUO." 10
Before us, petitioners allege that the appellate court overlooked the fact that the
donor did not only reserve the right to enjoy the fruits of the properties, but also
prohibited the donee from selling or disposing the land without the consent and
approval of the Danlag spouses. This implied that the donor still had control and
ownership over the donated properties. Hence, the donation was post mortem.
Crucial in resolving whether the donation was inter vivos or mortis causa is the
determination of whether the donor intended to transfer the ownership over the
properties upon the execution of the deed. 11
In ascertaining the intention of the donor, all of the deed's provisions must be
read together. 12 The deed of donation dated January 16, 1973, in favor of
Mercedes contained the following:
"That for and in consideration of the love and affection which the Donor inspires
in the Donee and as an act of liberality and generosity, the Donor hereby gives,
donates, transfers and conveys by way of donation unto the herein Donee, her
heirs, assigns and successors, the above-described parcels of land;
That it is the condition of this donation that the Donor shall continue to enjoy all
the fruits of the land during his lifetime and that of his spouse and that the donee
cannot sell or otherwise, dispose of the lands without the prior consent and
approval by the Donor and her spouse during their lifetime.
xxx xxx xxx
That for the same purpose as hereinbefore stated, the Donor further states that
he has reserved for himself sufficient properties in full ownership or in usufruct
enough for his maintenance of a decent livelihood in consonance with his
standing in society.
23
That the Donee hereby accepts the donation and expresses her thanks and
gratitude for the kindness and generosity of the Donor." 13
Note first that the granting clause shows that Diego donated the properties out
of love and affection for the donee. This is a mark of a donation inter vivos. 14
Second, the reservation of lifetime usufruct indicates that the donor intended to
transfer the naked ownership over the properties. As correctly posed by the Court
of Appeals, what was the need for such reservation if the donor and his spouse
remained the owners of the properties? Third, the donor reserved sufficient
properties for his maintenance in accordance with his standing in society,
indicating that the donor intended to part with the six parcels of land. 15 Lastly,
the donee accepted the donation. In the case of Alejandro vs. Geraldez, 78 SCRA
245 (1977), we said that an acceptance clause is a mark that the donation is inter
vivos. Acceptance is a requirement for donations inter vivos. Donations mortis
causa, being in the form of a will, are not required to be accepted by the donees
during the donors' lifetime. acHCSD
Consequently, the Court of Appeals did not err in concluding that the right to
dispose of the properties belonged to the donee. The donor's right to give consent
was merely intended to protect his usufructuary interests. In Alejandro, we ruled
that a limitation on the right to sell during the donors' lifetime implied that
ownership had passed to the donees and donation was already effective during
the donors' lifetime.
The attending circumstances in the execution of the subject donation also
demonstrated the real intent of the donor to transfer the ownership over the
subject properties upon its execution. 16 Prior to the execution of donation inter
vivos, the Danlag spouses already executed three donations mortis causa. As
correctly observed by the Court of Appeals, the Danlag spouses were aware of the
difference between the two donations. If they did not intend to donate inter
vivos, they would not again donate the four lots already donated mortis causa.
Petitioners' counter argument that this proposition was erroneous because six
years after, the spouses changed their intention with the deed of revocation, is
not only disingenious but also fallacious. Petitioners cannot use the deed of
revocation to show the spouses' intent because its validity is one of the issues in
this case.
Petitioners aver that Mercedes' tax declarations in her name can not be a basis in
determining the donor's intent. They claim that it is easy to get tax declarations
from the government offices such that tax declarations are not considered proofs
of ownership. However, unless proven otherwise, there is a presumption of
regularity in the performance of official duties. 17 We find that petitioners did not
overcome this presumption of regularity in the issuance of the tax declarations.
We also note that the Court of Appeals did not refer to the tax declarations as
proofs of ownership but only as evidence of the intent by the donor to transfer
ownership.
Petitioners assert that since private respondent purchased two of the six parcels
of land from the donor, she herself did not believe the donation was inter vivos.
As aptly noted by the Court of Appeals, however, it was private respondent's
husband who purchased the two parcels of land.
As a rule, a finding of fact by the appellate court, especially when it is supported
by evidence on record, is binding on us. 18 On the alleged purchase by her
husband of two parcels, it is reasonable to infer that the purchase was without
private respondent's consent. Purchase by her husband would make the
properties conjugal to her own disadvantage. That the purchase is against her self-
interest, weighs strongly in her favor and gives credence to her claim that her
husband was manipulated and unduly influenced to make the purchase, in the
first place.
Was the revocation valid? A valid donation, once accepted, becomes irrevocable,
except on account of officiousness, failure by the donee to comply with the
charges imposed in the donation, or ingratitude. 19 The donor-spouses did not
invoke any of these reasons in the deed of revocation. The deed merely stated:
WHEREAS, while the said donation was a donation Inter Vivos, our intention
thereof is that of Mortis Causa so as we could be sure that-in case of our death,
the above-described properties will be inherited and/or succeeded by Mercedes
Danlag de Pilapil; and that said intention is clearly shown in paragraph 3 of said
donation to the effect that the Donee cannot dispose and/or sell the properties
donated during our life-time, and that we are the one enjoying all the fruits
thereof." 20
Petitioners cited Mercedes' vehemence in prohibiting the donor to gather
coconut trees and her filing of instant petition for quieting of title. There is nothing
on record, however, showing that private respondent prohibited the donors from
gathering coconuts. Even assuming that Mercedes prevented the donor from
gathering coconuts, this could hardly be considered an act covered by Article 765
of the Civil Code. 21 Nor does this Article cover respondent's filing of the petition
for quieting of title, where she merely asserted what she believed was her right
under the law. AcHaTE
Finally, the records do not show that the donor-spouses instituted any action to
revoke the donation in accordance with Article 769 of the Civil Code. 22
Consequently, the supposed revocation on September 29, 1979, had no legal
effect.
WHEREFORE, the instant petition for review is DENIED. The assailed decision of
the Court of Appeals dated August 31, 1993, is AFFIRMED.
Costs against petitioners.
SO ORDERED. ASTIED
Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.
FIRST DIVISION
[G.R. No. L-8327. December 14, 1955.]
ANTONINA CUEVAS, plaintiff-appellant, vs. CRISPULO CUEVAS, defendant-
appellee.
Pedro D. Maldia for appellant.
Teodoro P. Santiago for appellee.
SYLLABUS
1. DONATION; CHARACTERISTIC OF DONATION "INTER VIVOS." — Where the
donor stated in the deed of donation that he will not dispose or take away the
land "because I am reserving it to him (donee) upon my death," he, in effect,
expressly renounced the right to freely dispose of the property in favor of another
(a right essential to full ownership) and manifested the irrevocability of the
conveyance of the naked title to the property in favor of the donee. A stated in
the case of Bonsato vs. Court of Appeals, 50 Off. Gaz. (8), p. 3568, Phil., 481, such
irrevocability is characteristic of donations inter vivos, because it is incompatible
with the idea of a disposition post mortem.
2. ID.; ID.; STATUTORY CONSTRUCTION; "EJUSDEM GENERIS." — When the donor
stated that she would continue to retain the "possession, cultivation, harvesting
and all other rights and attributes of ownership" she meant only the dominium
utile, not the full ownership. The words "rights and attributes of ownership"
should be construed ejusdem generis with the preceding rights of "possession,
cultivation and harvesting" expressly enumerated in the deed. Had the donor
meant to retain full or absolute ownership she had no need to specify possession,
cultivation and harvesting, since all these rights are embodied in full or absolute
ownership; nor would she then have excluded the right of free disposition from
the "rights and attributes of ownership" that she reserved for herself.
3. ID.; DUTY OF PERSONS CALLED UPON TO PREPARE OR NOTARIZE DONATIONS.
— Persons who are called to prepare or notarize deeds of donation should call
the attention of the donors to the necessity of clearly specifying whether,
notwithstanding the donation, they wish to retain the right to control and dispose
at will of the property before their death, without need of the consent or
intervention of the beneficiary, since the express reservation of such right would
be conclusive indication that the liberality is to exist only at the donor's death,
and therefore, the formalities of testaments should be observed; while a
converso, the express waiver of the right of free disposition would place the inter
vivos character of the donation beyond dispute (Heirs of Bonsato vs. Court of
Appeal, supra.)
24
4. ID.; ACCEPTANCE; WHAT CONSTITUTE SUFFICIENT ACCEPTANCE. — To respect
the terms of the donation and at the same time express gratitude for the donor's
benevolence, constitutes sufficient acceptance of the donation.
DECISION
REYES, J.B.L., J p:
On September 18, 1950, Antonina Cuevas executed a notarized conveyance
entitled "Donacion Mortis Causa," ceding to her nephew Crispulo Cuevas the
northern half of a parcel of unregistered land in barrio Sinasajan, municipality of
Peñaranda, Province of Nueva Ecija (Exhibit A). In the same instrument appears
the acceptance of Crispulo Cuevas.
"Subsequently, on May 26, 1952, the donor executed another notarial instrument
entitled "Revocacion de Donacion Mortis Causa" (Exhibit B) purporting to set
aside the preceding conveyance; and on August 26, 1952, she brought action in
the Court of First Instance to recover the land conveyed, on the ground (1) that
the donation being mortis causa, it had been lawfully revoked by the donor; and
(2) even if it were a donation inter vivos, the same was invalidated because (a) it
was not properly accepted; (b) because the donor did not reserve sufficient
property for her own maintenance, and (c) because the donee was guilty of
ingratitude, for having refused to support the donor.
Issues having been joined, and trial had, the Court of First Instance denied the
recovery sought, and Antonina Cuevas thereupon appealed. The Court of Appeals
forwarded the case to this Court because, the case having been submitted on a
stipulation of facts, the appellant raised only questions of law.
The first issue tendered concerns the true nature of the deed "Exhibit A"; whether
it embodies a donation inter vivos, or a disposition of property mortis causa
revocable freely by the transferor at any time before death. 1
It has been ruled that neither the designation mortis causa, nor the provision that
a donation is "to take effect at the death of the donor", is a controlling criterion
in defining the true nature of donations (Laureta vs. Mata, 44 Phil., 668;
Concepcion vs. Concepcion, 91 Phil., 823). Hence, the crux of the controversy
revolves around the following provisions of the deed of donation:
"Dapat maalaman ni Crispulo Cuevas na samantalang ako ay nabubuhay, ang lupa
na ipinagkakaloob ko sa kaniya ay ako pa rin ang patuloy na mamomosecion,
makapagpapatrabaho, makikinabang at ang iba pang karapatan sa pagmamayari
ay sa akin pa rin hanggang hindi ko binabawian ng buhay ng Maykapal at ito
naman ay hindi ko ñga iya-alis pagkat kung ako ay mamatay na ay inilalaan ko sa
kaniya."
There is an apparent conflict in the expression above quoted, in that the donor
reserves to herself "the right of possession, cultivation, harvesting and other
rights and attributes of ownership while I am not deprived of life by the Almighty";
but right after, the same donor states that she "will not take away" (the property)
"because I reserve it for him (the donee) when I die."
The question to be decided is whether the donor intended to part with the title
to the property immediately upon the execution of the deed, or only later, when
she had died. If the first, the donation is operative inter vivos; if the second, we
would be confronted with a disposition mortis causa, void from the beginning
because the formalities of testaments were not observed (new Civil Code, Arts.
728 and 828; heirs of Bonsato vs. Court of Appeals, 2 50 Off. Gaz. (8), p. 3568;
Tuason vs. Posadas, 54 Phil., 289; Sent. Trib. Sup. of Spain, 8 July 1943).
We agree with the Court below that the decisive proof that the present donation
is operative inter vivos lies in the final phrase to the effect that the donor will not
dispose or take away ("hindi ko ñga iya-alis" in the original) the land "because I
am reserving it to him upon my death." By these words the donor expressly
renounced the right to freely dispose of the property in favor of another (a right
essential to full ownership) and manifested the irrevocability of the conveyance
of the naked title to the property in favor of the donee. As stated in our decision
in Bonsato vs. Court of Appeals, ante, such irrevocability is characteristic of
donations inter vivos, because it is incompatible with the idea of a disposition post
mortem. Witness article 828 of the New Civil Code, that provides:
"ART. 828. A will may be revoked by the testator at any time before his death. Any
waiver or restriction of this right is void."
It is apparent from the entire context of the deed of donation that the donor
intended that she should retain the entire beneficial ownership during her
lifetime, but that the naked title should irrevocably pass to the donee. It is only
thus that all the expressions heretofore discussed can be given full effect; and
when the donor stated that she would continue to retain the "possession,
cultivation, harvesting and all other rights and attributes of ownership," she
meant only the dominium utile, not the full ownership. As the Court below
correctly observed, the words "rights and attributes of ownership" should be
construed ejusdem generis with the preceding rights of "possession, cultivation
and harvesting" expressly enumerated in the deed. Had the donor meant to retain
full or absolute ownership she had no need to specify possession, cultivation and
harvesting, since all these rights are embodied in full or absolute ownership; nor
would she then have excluded the right of free disposition from the "rights and
attributes of ownership" that she reserved for herself.
Hence, the Court below rightly concluded that the deed Exhibit A was a valid
donation inter vivos, with reservation of beneficial tit]e during the lifetime of the
donor. We may add that it is highly desirable that all those who are called to
prepare or notarize deeds of donation should call the attention of the donors to
the necessity of clearly specifying whether, notwithstanding the donation, they
wish to retain the right to control and dispose at will of the property before their
death, without need of the consent or intervention of the beneficiary, since the
express reservation of such right would be conclusive indication that the liberality
is to exist only at the donor's death, and therefore, the formalities of testaments
should be observed; while, a converso, the express waiver of the right of free
disposition would place the inter vivos character of the donation beyond dispute
(Heirs of Bonsato vs. Court of Appeals, 50 Off. Gaz. (8), p. 3568).
The argument that there was no sufficient acceptance, because the deed "merely
recites that (1) the donee has duly read all the contents of this donation; (2) that
he 'shall fully respect all its terms'; and (3) that 'for the act of benevolence' he is
expressing his gratitude" but there is no show of acceptance (Appellant's brief, p.
7), is without basis. To respect the terms of the donation, and at the same time
express gratitude for the donor's benevolence, constitutes sufficient acceptance.
If the donee did not accept, what had he to be grateful about? We are no longer
under the formulary system of the Roman law, when specific expressions had to
be used under pain of nullity.
Also unmeritorious is the contention that the donation is void because the donor
failed to reserve enough for her own support. As we have seen, she expressly
reserved to herself all the benefits derivable from the donated property as long
as she lived. During that time, she suffered no diminution of income. If that was
not enough to support her, the deficiency was not due to the donation.
Finally, the donee is not rightfully chargeable with ingratitude, because it was
expressly stipulated that the donee had a total income of only P30 a month, out
of which he had to support himself, his wife and his two children. Evidently his
means did not allow him to add the donor's support to his own burdens.
Wherefore, the decision appealed from is affirmed. No costs in this instance,
appellant having obtained leave to litigate as a pauper. So ordered.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo,
Labrador and Concepcion, JJ., concur.
SECOND DIVISION
[G.R. No. L-33849. August 18, 1977.]
TEODORICO ALEJANDRO, IRENEO POLICARPIO, VIRGINIA ALEJANDRO, MARIA
ALEJANDRO, SALUD ALEJANDRO. EMILIA ALEJANDRO, FLORENCIO ALEJANDRO
and DIONISIA ALEJANDRO, petitioners, vs. HON. AMBROSIO M. GERALDEZ,
Presiding Judge, Court of First Instance of Bulacan, Branch V, Sta. Maria, ANDREA
DIAZ and ANGEL DIAZ, respondents.
[G.R. No. L-33968. August 18, 1977.]
ANDREA DIAZ, petitioner, vs. HON. AMBROSIO M. GERALDEZ, in his capacity as
Presiding Judge of the Court of First Instance of Bulacan, Branch V, TEODORICO
ALEJANDRO, IRENEO POLICARPIO, VIRGINIA ALEJANDRO, MARIA ALEJANDRO,
EMILIA ALEJANDRO, FLORENCIO ALEJANDRO and DIONISIA ALEJANDRO,
respondents.
Ponciano G. Hernandez for Teodorico Alejandro, et al.
Porfirio Villaroman for Andrea Diaz and Angel Diaz.
DECISION
AQUINO, J p:
This is a case about donations inter vivos and mortis causa. The bone of
contention is Lot No. 2502 of the Lolomboy Friar Lands Estate with an area of
5,678 square meters, situated in Sta. Maria, Bulacan and covered by Transfer
Certificate of Title No. 7336. The facts are as follows:
25
On January 20, 1949 the spouses Gabino (Gavino) Diaz and Severa Mendoza, their
daughter-in-law Regina Fernando, and their three children, Olimpia Diaz, Angel
Diaz and Andrea Diaz, executed a deed of donation covering eight lots of the
Lolomboy Friar Lands Estate, owned by the Diaz spouses, located at Barrio Parada,
Sta. Maria, Bulacan. The deed reads as follows:
"'KASULATAN NG PAGKAKALOOB'"
(A DEED OF DONATION)
"ALAMIN NG LAHAT NG MAKATUTUNGHAY NITO:
"Ang pagkakaloob (donation) na ito, ginawa at pinagtibay dito sa municipio ng Sta.
Maria, lalawigan ng Bulacan, Pilipinas, ngayong ika 20 ng Enero, 1949, ng mag-
asawang GABINO DIAZ at SEVERA MENDOZA, filipinos, may mga sapat na gulang,
naninirahan sa nayon ng Parada, Sta. Maria, Bulacan na dito'y kinikilalang
NAGKALOOB (DONORS), sa kapakanan nila REGINA FERNANDO, filipina, may
sapat na gulang, viuda; OLIMPIA DIAZ, filipina, may sapat na gulang, kasal kay
Teodorico Alejandro, ANGEL DIAZ, filipino, may sapat na gulang, kasal kay Catalina
Marcelo, at ANDREA DIAZ, filipina, may sapat na gulang, kasal kay Perfecto
Marcelo, mga naninirahan sa nayon ng Parada, Sta. Maria, Bulacan, na dito'y
kinikilalang PINAGKALOOBAN (DONEES).
PAGPAPATUNAY:
"Na, ang Nagkaloob (DONORS) ay siyang mayari, at kamayari at namomosision sa
kasalukuyan ng mga parcelang lupa kasama ang mga kagalingan na nasa lugar ng
Parada, Sta. Maria, Bulacan, mapagkikilala sa paraang mga sumusunod
(description and statements as to registration are omitted):
1. TCT No. 7336, Lot No. 2502, 5,678 square meters.
2. TCT No. 10998, Lot No. 2485, 640 square meters.
3. TCT No. 10840, Lot No. 2377, 16,600 square meters.
4. TCT No. 10997, Lot No. 2448, 12,478 square meters.
5. TCT No. 2051, Lot No. 4168, 1,522 square meters.
6. TCT No. 17960, Lot No. 2522, 3,418 square meters.
7. TCT No. 17961, Lot No. 2521, 715 square meters.
8. TCT No. 21453, Lot No. 2634, 8,162 square meters.
"Na dahil at alang-alang sa pagmamahal at masuyong pagtingin na taglay ng
NAGKAKALOOB (DONORS) sa Pinagkakalooban (DONEES) gayun din sa tapat at
mahalagang paglilingkod noong mga lumipas na panahon na ginawa ng huli sa
una, ang nabanggit na nagkakaloob sa pamamagitan ng kasulatang ito ng
pagkakaloob (Donation) ay buong pusong inililipat at lubos na ibinibigay sa
nasabing pinagkakalooban ang lupang binabanggit at makikilala sa unahan nito,
laya sa ano mang sagutin at pagkakautang, katulad nito:
"(a) — Na ang lupang sinasaysay sa Lote No. 2502 o Titulo No. 7336, (No. 1) sa
unahan nito ay hinati sa dalawang parte ang unang parte (1/2) na nasa bandang
Kanluran (West) ay ipinagkakaloob ng magasawang Gabino Diaz at Severa
Mendoza sa kanilang anak na si Angel Diaz, kasal kay Catalina Marcelo, at ang
ikalawang parte (1/2) na nasa bandang silangan (East) ay ipinagkakaloob ng
magasawang Gabino Diaz at Severa Mendoza sa kanilang anak na si Andrea Diaz,
kasal kay Perfecto Marcelo.".
(Note — Some dispositions are not reproduced verbatim but are merely
summarized because they are not involved in this case. Paragraph (a) above is the
one involved herein).
(b) — Lot No. 2485, TCT No. 10998, to Regina Fernando (daughter-in-law of the
donors and widow of their deceased son, Miguel Diaz) and Olimpia Diaz in equal
shares.
(c) — Lot No. 2377, TCT No. 10840, 1/3 to Angel Diaz, 1/3 to Andrea Diaz, and 1/3
"ay inilalaan o inihahanda ng magasawang Gabino Diaz at Severa Mendoza sa
kanilang sariling kapakanan o mga gastos nila".
(d) — Lot No. 2448, TCT No. 10997 to Olimpia Diaz "sa condicion na
pagkakalooban ni Olimpia Diaz si Crisanta de la Cruz, asawa ni
Alejandro ______ (sic) sakaling si Crisanta ay mamatay ng halagang isang daang
piso (P100), bilang gastos sa libing."
(e) — Na ang lupang-solar na sinasaysay sa Lote No. 4168 o Titulo No. 2051 (No.
5); lupang-bukid na sinasaysay sa Lote No. 2522 o Titulo No. 17960 (No. 6); at
lupang-bukid na sinasaysay sa Lote No. 2521 o Titulo No. 17961 (No. 7) sa unahan
nito ay inilalaan o inihahanda ng magasawang Gabino Diaz at Severa Mendoza sa
kanilang sariling kapakanan o mga gastos nila."
(f) — Lot No. 2643, TCT No. 21453, to Regina Fernando and her children with the
deceased Miguel Diaz in whose name the said Lot was already registered.
"Na kaming mga pinagkakalooban (DONEES) na sila Regina Fernando, Olimpia
Diaz, Angel Diaz at Andrea Diaz ay tinatanggap namin ng buong kasiyahang loob
ang pagkakaloob (Donation) na ito, at sa pamamagitan nito ay kinikilala,
pinahahalagahan, at lubos na pinasasalamatan namin ang kagandahang loob at
paglingap na ipinakita at ginawa ng nagkakaloob (Donors).
"AT SA WAKAS, ang pagkakaloob na ito (DONATION), ay sumasailalim sa paraang
mga sumusunod:
"1. Ang mga Pinagkakalooban (Donatarios) na sila Regina Fernando, Olimpia Diaz,
Angel Diaz, at Andrea Diaz, siyang nakaaalam sa mga gastos sa pagkakasakit at sa
libing ng NAGKALOOB (DONANTE);
"2. Na ang mga Pinagkalooban (DONATARIOS) ay hindi maaaring makapagbili sa
pangatlong tao ng nasabing mga pagaari samantalang ang nagkaloob (Donante)
ay buhay. Datapwa't kung ang paghibiling gagawin ay upang malunasan ang mga
gastos at menitencion ng Nagkaloob (Donante) samakatuwid ang nasabing
pagbibili ay matuwid;
"3. Gayun din, samantalang kaming magasawang Gabino Diaz at Severa Mendoza
ay buhay, patuloy ang aming pamamahala, karapatan, at pagkamay-ari sa mga
nasabing pagaari na sinasaysay sa unahan nito na pag-aari namin; ngunit sakaling
kami ay bawian ng buhay ng Panginoong Dios at mamatay na ang mga karapatan
at pagkamay-ari ng bawa't Pinagkalooban (Donatarios) sa bawa't papaari na
nauukol sa bawa't isa ay may lubos na kapangyarihan."
"SA KATUNAYAN NG LAHAT, linagdaan namin ang kasulatang ito, dito sa Sta.
Maria, Bulacan, ngayon ika 20 ng Enero, 1949, sa patibay ng dalawang sacsing
kaharap.
Signature Thumbmark Signature
—————— ————————— —————————
GABINO DIAZ SEVERA MENDOZA REGINA FERNANDO
Thumbmark Signature Signature
—————— ————————— —————————
OLIMPIA DIAZ ANGEL DIAZ ANDREA DIAZ
(Acknowledgment signed by Notary Celedonio Reyes is omitted)
Gabino Diaz died in 1962. On October 20, 1964 Severa Mendoza and her two
children, Andrea Diaz and Angel Diaz, executed a deed of donation denominated
as "Kasulatan ng Pagbibigay na Magkakabisa Pagkamatay (Donation Mortis
Causa)" over one-half of Lot No. 2377-A, which is a portion of Lot No. 2377 of the
Lolomboy Friar Lands Estate (which in turn is item 3 or [c] in the 1949 deed of
donation already mentioned).
In that deed of donation, Severa Mendoza donated to Andrea Diaz her one-half
share in Lot 2377-A, which one-half share is identified as Lot 2377-A-1, on
condition that Andrea Diaz would bear the funeral expenses to be incurred after
the donor's death. She died in 1964.
It should be noted that the other one-half share in Lot 2377-A or Lot No. 2377-A-
2 was previously adjudicated to Angel Diaz because he defrayed the funeral
expenses on the occasion of the death of Gabino Diaz.
On May 12, 1970 Andrea Diaz sued-her brother, Angel Diaz, in the Court of First
Instance of Bulacan, Sta. Maria Branch V for the partition of Lots Nos. 2377-A and
2502 (Civil Case No. SM-357). Teodorico Alejandro, the surviving spouse of
Olimpia Diaz, and their children intervened in the said case. They claimed one-
third of Lot No. 2502. Angel Diaz alleged in his answer that he had been occupying
26
his share of Lot No. 2502 "for more than twenty years". The intervenors claimed
that the 1949 donation was a void mortis causa disposition.
On March 15, 1971 the lower court rendered a partial decision with respect to Lot
No. 2377-A. The case was continued with respect to Lot No. 2502 which is item
No. 1 or (a) in the 1949 deed of donation. The record does not show what
happened to the other six lots mentioned in the deed of donation. cdll
The trial court in its decision of June 30, 1971 held that the said deed of donation
was a donation mortis causa because the ownership of the properties donated
did not pass to the donees during the donors' lifetime but was transmitted to the
donees only "upon the death of the donors".
However, it sustained the division of Lot No. 2502 into two equal parts between
Angel Diaz and Andrea Diaz on the theory that the said deed of donation was
effective "as an extrajudicial partition among the parents and their children".
Consequently, the Alejandro intervenors were not given any share in Lot No.
2502. Angel Diaz and the intervenors were ordered to pay Andrea Diaz "attorney's
fees of P1,000 each or a total of P2,000".
The Alejandro intervenors filed a motion for reconsideration. On July 16, 1971 the
trial court denied that motion but eliminated the attorney's fees. Andrea Diaz and
the Alejandro intervenors filed separate appeals to this Court under Republic Act
No. 5440.
Andrea Diaz contends that the 1949 deed of donation is a valid donation inter
vivos and that the trial court erred in deleting the award for attorney's fees.
The Alejandro intervenors contend that the said donation is mortis causa; that
they are entitled to a one-third share in Lot No. 2502, and that the trial court erred
in characterizing the deed as a valid partition. In the ultimate analysis, the appeal
involves the issue of whether the Alejandro intervenors should be awarded one-
third of Lot No. 2502, or 1,892 square meters thereof, as intestate heirs of the
Diaz spouses.
To resolve that issue, it is necessary to determine whether the deed of donation
is inter vivos or mortis causa. A brief exposition on the nature of donation inter
vivos and mortis causa may facilitate the resolution of that issue, Many legal
battles have been fought on the question of whether a particular deed is an inter
vivos or mortis causa donation. The copious jurisprudence on that point sheds
light on that vexed question. The Civil Code provides:
"ART. 728. Donations which are to take effect upon the death of the donor
partake of the nature of testamentary provisions, and shall be governed by the
rules established in the Title on Succession. (620).
"ART 729. When the donor intends that the donation shall take effect during the
lifetime of the donor, though the property shall not be delivered till after the
donor's death, this shall be a donation inter vivos. The fruits of the property from
the time of the acceptance of the donation, shall pertain to the donee, unless the
donor provides otherwise. (n).
"ART. 730. The fixing of an event or the imposition of a suspensive condition,
which may take place beyond the natural expectation of life of the donor, does
not destroy the nature of the act as a donation a inter vivos, unless a contrary
intention appears. (n).
"ART. 731. When a person donates something subject to the resolutory condition
of the donor's survival, there is a donation inter vivos. (n).
"ART. 732. Donations which are to take effect inter vivos shall be governed by the
general provisions on contracts and obligations in all that is not determined in this
Title. (621)."
Nature of donations inter vivos and mortis causa transfers. — Before tackling the
issues raised in this appeal, it is necessary to have some familiarization with the
distinctions between donations inter vivos and mortis causa because the Code
prescribes different formalities for the two kinds of donations. An inter vivos
donation of real property must be evidenced by a public document and should be
accepted by the donee in the same deed of donation or in a separate instrument.
In the latter case, the donor should be notified of the acceptance in an authentic
form and that step should be noted in both instruments. (Art. 749, Civil Code. As
to inter vivos donation of personal property, see art. 748).
On the other hand, a transfer mortis causa should be embodied in a last will and
testament (Art. 728, supra). It should not be called donation mortis causa. It is in
reality a legacy (5 Manresa, Codigo Civil, 6th Ed., p. 107). If not embodied in a valid
will, the donation is void (Narag vs. Cecilio, 109 Phil. 299; Aznar vs. Sucilla, 102
Phil. 902; Tuazon vs. Posadas, 54 Phil 289; Serrano vs. Solomon, 105 Phil. 998,
1002).
This Court advised notaries to apprise donors of the necessity of clearly specifying
whether, notwithstanding the donation, they wish to retain the right to control
and dispose at will of the property before their death, without the consent or
intervention of the beneficiary, since the reservation of such right would be a
conclusive indication that the transfer would be effective only at the donor's
death, and, therefore, the formalities of testaments should be observed; while, a
converso, the express waiver of the right of free disposition would place the inter
vivos character of the donation beyond dispute (Cuevas vs. Cuevas, 98 Phil. 68,
72).
From the aforequoted articles 728 to 732, it is evident that it is the time of
effectivity (aside from the form) which distinguishes a donation inter vivos from a
donation mortis causa. And the effectivity is determined by the time when the full
or naked ownership (dominium plenum or dominium directum) of the donated
properties is transmitted to the donees. (See Lopez vs. Olbes, 15 Phil. 540;
Gonzales and Fuster Fabra vs. Gonzales Mondragon, 35 Phil. 105). The execution
of a public instrument is a mode of delivery or tradition (Ortiz vs. Court of Appeals,
97 Phil. 46).
If the donation is made in contemplation of the donor's death, meaning that the
full or naked ownership of the donated properties will pass to the donee only
because of the donor's death, then it is at that time that the donation takes effect,
and it is a donation mortis causa which should be embodied in a last will and
testament (Bonsato vs. Court of Appeals, 95
Phil. 481).
But if the donation takes effect during the donor's lifetime or independently of
the donor's death, meaning that the full or naked ownership (nuda proprietas) of
the donated properties passes to the donee during the donor's lifetime, not by
reason of his death but because of the deed of donation, then the donation is
inter vivos (Castro vs. Court of Appeals, L-20122, April 28, 1969, 27 SCRA 1076).
The effectivity of the donation should be ascertained from the deed of donation
and the circumstances surrounding its execution. Where, for example, it is
apparent from the document of trust that the donee's acquisition of the property
or right accrued immediately upon the effectivity of the instrument and not upon
the donor's death, the donation is inter vivos (Kiene vs. Collector of Internal
Revenue, 91 Phil. 352).
There used to be a prevailing notion, spawned by a study of Roman Law, that the
Civil Code recognizes a donation mortis causa as a juridical act in contraposition
to a donation inter vivos. That impression persisted because the implications of
article 620 of the Spanish Civil Code, now article 728, that "las donaciones que
hayan de producir sus efectos pro muerte del donante participan de la naturaleza
de las disposiciones de ultima voluntad, y se regiran por las reglas establecidas en
el capitulo de la sucesion testamentaria" had not been fully expounded in the law
schools. Notaries assumed that the donation mortis causa of the Roman Law was
incorporated into the Civil Code. LexLib
As explained by Justice J. B. L. Reyes in the Bonsato case, supra, article 620 broke
away from the Roman Law tradition and followed the French doctrine that no one
may both donate and retain. Article 620 merged donations mortis causa with
testamentary dispositions and this suppressed the said donations as an
independent legal concept. Castan Tobeñas says:
"(b) Subsisten hoy en nuestro Derecho las donaciones 'mortis causa? — De lo que
acabamos de decir se desprende que las donaciones mortis causa han perdido en
el Codigo civil su caracter distintivo y su naturaleza, y hay que considerarlas hoy
como una institucion susprimida, refundida en la del legado . . .
"Las tesis de la desaparicion de las donaciones mortis causa en nuestro Codigo
Civil, acusada ya precedentemente por el projecto de 1851, puede decirse que
27
constituye una communis opinio entre nuestros expositores, inclusio los mas
recientes . . .
"Garcia Goyena, comentando dicho proyecto, decia que la Comision se habia
adherido al acuerdo de suprimir las donaciones mortis causa, seguido por casi
todos los Codigos modernos. 'Las donaciones mortis causa — añadia — eran una
especie de monstruo reomano y patrio sobre los puntos de semenjanza y
disparidad de estas donaciones con los pactos y legados no podia producir sino
dudas, confusion y pleitos en los rarisimos casos que ocurriesen por la dificultad
de apreciar y fijar sus verdaderos caracteres'" (4 Derecho Civil Español, Comun y
Foral, 8th Ed., 1956, pp. 182-3).
Manresa is more explicit. He says that "la disposicion del articulo 620 significa, por
lo tanto: (1) que han desaparecido las llamados antes donaciones mortis causa,
por lo que el Codigo no se ocupa de ellas en absoluto; (2) que toda disposicion de
bienes para despues de la muerte sigue las reglas establecidas para la sucesion
testamentaria" (5 Comentarios al Codigo Civil Español, 6th Ed., p. 107). Note that
the Civil Code does not use the term donation mortis causa. (Section 1536 of the
Revised Administrative Code in imposing the inheritance tax uses the term "gift
mortis causa").
What are the distinguishing characteristics of a donation mortis causa? Justice
Reyes in the Bonsato case says that in a disposition post mortem (1) the transfer
conveys no title or ownership to the transferee before the death of the transferor,
of the transferor (meaning testator) retains the ownership, full or naked (domino
absoluto or nuda proprietas) (Vidal vs. Posadas, 58 Phil. 108; De Guzman vs. Ibea,
67 Phil. 633; (2) the transfer is revocable before the transferor's death and
revocability may be provided for indirectly by means of a reserved power in the
donor to dispose of the properties conveyed (Bautista vs. Sabiniano, 92 Phil. 244),
and (3) the transfer would be void if the transferor survived the transferee.
In other words, in a donation mortis causa it is the donor's death that determines
that acquisition of, or the right to, the property donated, and the donation is
revocable at the donor's will. Where the donation took effect immediately upon
the donee's acceptance thereof and it was subject to the resolutory condition that
the donation would be revoked if the donee did not give the donor a certain
quantity of rice or a sum of money, the donation is inter-vivos. (Zapanta vs.
Posadas, Jr., 52 Phil. 557).
Justice Reyes in the subsequent case of Puig vs. Peñaflorida, L-15939, November
29, 1965, 15 SCRA 276, synthesized the rules as follows: cdrep
1. That the Civil Code recognizes only gratuitous transfers of property which are
effected by means of donations inter vivos or by last will and testament executed
with the requisite legal formalities.
2. That in inter vivos donations the act is immediately operative even if the
material or physical deliver (execution) of the property may be deferred until the
donor's death, whereas, in a testamentary disposition, nothing is conveyed to the
grantee and nothing is acquired by him until the death of the grantortestator. The
disposition is ambulatory and not final.
3. That in a mortis causa disposition the conveyance or alienation should be
(expressly or by necessary implication) revocable ad nutum or at the discretion of
the grantor or so called donor if he changes his mind (Bautista vs. Saniniano, 92
Phil. 244).
4. That, consequently, the specification in the deed of the cases whereby the act
may be revoked by the donor indicates that the donation is inter vivos and not a
mortis causa disposition (Zapanta vs. Posadas; 52 Phil. 557).
5. That the designation of the donation as mortis causa, or a provision in the deed
to the effect that the donation "is to take effect at the death of the donor", is not
a controlling criterion because those statements are to be construed together
with the rest of the instrument in order to give effect to the real intent of the
transferor (Laureta vs. Mata and Mango, 44 Phil. 668; Concepcion vs. Concepcion,
91 Phil. 823; Cuevas vs. Cuevas, 98 Phil. 68).
6. That a conveyance for an onerous consideration is governed by the rules of
contracts and not by those of donations or testaments (Carlos vs. Ramil, 20 Phil.
183; Manalo vs. De Mesa, 29 Phil. 495).

7. That in case of doubt the conveyance should be deemed a donation inter vivos,
rather than mortis causa, in order to avoid uncertainty as to the ownership of the
property subject of the deed.
It may be added that the fact that the donation is given in consideration of love
and affection or past or future services is not a characteristic of donations inter
vivos because transfers mortis causa may be made also for those reasons.
There is difficulty in applying the distinctions to controversial cases because it is
not easy sometimes to ascertain when the donation takes effect or when the full
or naked title passes to the transferee. As Manresa observes, "when the time fixed
for the commencement of the enjoyment of the property donated be at the death
of the donor, or when the suspensive condition is related to his death, confusion
might arise" (5 Codigo Civil, 6th Ed., p. 108).
The existence in the deed of donation of conflicting stipulations as to its effectivity
may generate doubt as to the donor's intention and as to the nature of the
donation (Concepcion vs. Concepcion, 91 Phil. 823).
Where the donor declared in the deed that the conveyance was mortis causa and
forbade the registration of the deed before her death, the clear inference is that
the conveyance was not intended to produce any definitive effect nor to pass any
interest to the grantee except after her death. In such a case, the grantor's
reservation of the right to dispose of the property during her lifetime means that
the transfer is not binding on her until she dies. It does not mean that the title
passed to the grantee during her lifetime. (Ubalde Puig vs. Magbanua Peñaflorida,
L-15939, Resolution of January 31, 1966, 16 SCRA 136).
In the following cases, the conveyance was considered a void mortis causa
transfer because it was not cast in the form of a last will and testament as required
in article 728, formerly article 620: cdphil
(a) Where it was stated in the deed of donation that the donor wanted to give the
donee something "to take effect after his death" and that "this donation shall
produce effect only by and because of the death of the donor, the property herein
donated to pass title after the donor's death" (Howard vs. Padilla, 96 Phil. 983). In
the Padilla case the donation was regarded as mortis causa although the donated
property was delivered to the donee upon the execution of the deed and although
the donation was accepted in the same deed.
(b) Where it was provided that the donated properties would be given to the
donees after the expiration of thirty days from the donor's death, the grant was
made in the future tense, and the word "inherit" was used (Cariño vs. Abaya, 70
Phil. 182).
(c) Where the donor has the right to dispose of all the donated properties and the
products thereof. Such reservation is tantamount to a reservation of the right to
revoke the donation (Bautista vs. Sabiniano, 92 Phil. 244).
(d) Where the circumstances surrounding the execution of the deed of donation
reveal that the donation could not have taken effect before the donor's death and
the rights to dispose of the donated properties and to enjoy the fruits remained
with the donor during her lifetime (David vs. Sison, 76 Phil. 418).
But if the deed of donation makes an actual conveyance of the property to the
donee, subject to a life estate in the donors, the donation is inter vivos (Guarin vs.
De Vera, 100 Phil. 1100).
Articles 729, 730 and 731 have to some extent dissipated the confusion
surrounding the two kinds of donation. The rule in article 729 is a crystallization
of the doctrine announced in decided cases.
A clear instance where the donor made an inter vivos donation is found in De
Guzman vs. Ibea, 67 Phil. 633. In that case, it was provided in the deed that the
donor donated to the donee certain properties so that the donee "may hold the
same as her own and always" and that the donee would administer the lands
donated and deliver the fruits thereof to the donor, as long as the donor was alive,
but upon the donor's death the said fruits would belong to the donee. It was held
that the naked ownership was conveyed to the donee upon the execution of the
deed of donation and, therefore, the donation became effective during the
donor's lifetime.
28
In Sambaan vs. Villanueva, 71 Phil. 303, the deed of donation, as in Balaqui vs.
Dongso, 53 Phil. 673, contained conflicting provisions. It was provided in the deed
that the donation was made "en consideracion al afecto y cariño" of the donor for
the donee but that the donation "surtira efectos despues de ocurrida mi muerte"
(donor's death).
That donation was held to be inter vivos because death was not the consideration
for the donation but rather the donor's love and affection for the donee. The
stipulation that the properties would be delivered only after the donor's death
was regarded as a mere modality of the contract which did not change its inter
vivos character. The donor had stated in the deed that he was donating, ceding
and transferring the donated properties to the donee. (See Joya vs. Tiongco, 71
Phil. 379).
In Laureta vs. Mata and Magno, 44 Phil. 668 the deed of donation provided that
the donor was donating mortis causa certain properties as a reward for the
donee's services to the donor and as a token of the donor's affection for him. The
donation was made under the condition that "the donee cannot take possession
of the properties donated before the death of the donor"; that the donee should
cause to be held annually masses for the repose of the donor's soul, and that he
should defray the expenses for the donor's funeral.
It was held that the said donation was inter vivos despite the statement in the
deed that it was mortis causa. The donation was construed as a conveyance in
praesenti ("a present grant of a future interest") because it conveyed to the donee
the title to the properties donated "subject only to the life estate of the donor"
and because the conveyance took effect upon the making and delivery of the
deed. The acceptance of the donation was a circumstance which was taken into
account in characterizing the donation as inter vivos. LLjur
In Balaqui vs. Dongso, supra, the deed of donation involved was more confusing
than that found in the Laureta case. In the Balaqui case, it was provided in the
deed that the donation was made in consideration of the services rendered to the
donor by the donee; that "title" to the donated properties would not pass to the
donee during the donor's lifetime, and that it would be only upon the donor's
death that the donee would become the "true owner" of the donated properties.
However, there was the stipulation that that the donor bound herself to answer
to the donee for the property donated and that she warranted that nobody would
disturb or question the donee's right.
Notwithstanding the provision in the deed that it was only after the donor's death
when the 'title" to the donated properties would pass to the donee and when the
donee would become the owner thereof, it was held in the Balaqui case that the
donation was inter vivos.
It was noted in that case that the donor, in making a warranty, implied that the
title had already been conveyed to the donee upon the execution of the deed and
that the donor merely reserved to herself the "possession and usufruct" of the
donated properties.
In Concepcion vs. Concepcion, 91 Phil. 823, it was provided in the deed of
donation, which was also styled as mortis causa, that the donation was made in
consideration of the services rendered by the donee to the donor and of the
donor's affection for the donee; that the donor had reserved what was necessary
for his maintenance, and that the donation "ha de producir efectos solamente por
muerte de la donante".
It was ruled that the donation was inter vivos because the stipulation that the
donation would take effect only after the donor's death "simply meant that the
possession and enjoyment, of the fruits of the properties donated should take
effect only after the donor's death and not before".
Resolution of the instant case.— The donation in the instant case is inter vivos
because it took effect during the lifetime of the donors. It was already effective
during the donors' lifetime, or immediately after the execution of the deed, as
shown by the granting, habendum and warranty clause of the deed (quoted
below).
In that clause it is stated that, in consideration of the affection and esteem of the
donors for the donees and the valuable services rendered by the donees to the
donors, the latter, by means of the deed of donation, wholeheartedly transfer and
unconditionally give to the donees the lots mentioned and described in the early
part of the deed, free from any kind of liens and debts:

"Na dahil at alang-alang sa pagmamahal at masuyong pagtingin na taglay ng
NAGKAKALOOB (DONORS) sa Pinagkakalooban (DONEES) gayun din sa tapat at
mahalagang paglilingkod noong mga lumipas na panahon na ginawa ng huli sa
una, ang nabanggit na nagkakaloob sa pamagitan ng kasulatang ito ng
pagkakaloob (Donation) ay buong pusong inililipat at lubos na ibinibigay sa
nasabing pinagkakalooban ang lupang binabanggit at makikilala sa unahan nito,
laya sa ano mang sagutin at pagkakautang, katulad nito:"
Following the above-quoted granting, habendum and warranty clause is the
donors' declaration that they donate (ipinagkakaloob) Lot No. 2502, the property
in litigation, in equal shares to their children Angel Diaz and Andrea Diaz, the
western part to Angel and the eastern part to Andrea.
The acceptance clause is another indication that the donation is inter vivos.
Donations mortis causa, being in the form of a will, are never accepted by the
donees during the donors' lifetime. Acceptance is a requirement for donations
inter vivos.
In the acceptance clause herein, the donees declare that they accept the donation
to their entire satisfaction and, by means of the deed, they acknowledge and give
importance to the generosity and solicitude shown by the donors and sincerely
thank them. cdll
In the reddendum or reservation clause of the deed of donation, it is stipulated
that the donees would shoulder the expenses for the illness and the funeral of the
donors and that the donees cannot sell to a third person the donated properties
during the donors' lifetime but if the sale is necessary to defray the expenses and
support of the donors, then the sale is valid.
The limited right to dispose of the donated lots, which the deed gives to the
donees, implies that ownership had passed to them by means of the donation and
that, therefore, the donation was already effective during the donors' lifetime.
That is a characteristic of a donation inter vivos.
However, paragraph 3 of the reddendum or reservation clause provides that
"also, while we, the spouses Gabino Diaz and Severa Mendoza, are alive, our
administration, right, and ownership of the lots mentioned earlier as our
properties shall continue but, upon our death, the right and ownership of the
donees to each of the properties allocated to each of them shall be fully effective."
The foregoing is the translation of the last paragraph of the deed of donation
which reads:
"(3) Gayun din, samantalang kaming mag-asawang Gabino Diaz at Severa
Mendoza ay buhay, patuloy ang aming pamamahala, karapatan, at pagkamayari
sa mga nasabing pagaari na sinasaysay sa unahan nito na pagaari namin; ngunit
sakaling kami ay bawian ng buhay ng Panginoong Dios at mamatay na, ang mga
karapatan at pagkamayari ng bawa't pinagkalooban (Donatorios) sa bawa't
pagaari nauukol sa bawa't isa ay may lubos na kapangyarihan."
Evidently, the draftsman of the deed did not realize the discordant and
ambivalent provisions thereof. The habendum clause indicates the transfer of the
ownership over the donated properties to the donees upon the execution of the
deed. But the reddendum clause seems to imply that the ownership was retained
by the donors and would be transferred to the donees only after their death.
We have reflected on the meaning of the said contradictory clauses. All the
provisions of the deed, like those of a statute and testament, should be construed
together in order to ascertain the intention of the parties. That task would have
been rendered easier if the record shows the conduct of the donors and the
donees after the execution of the deed of donation.
But the record is silent on that point, except for the allegation of Angel Diaz in his
answer (already mentioned) that he received his share of the disputed lot long
before the donors' death and that he had been "openly and adversely occupying'
his share "for more than twenty years". (Andrea Diaz on page 17 of her brief in L-
33849 states that the donees took possession of their respective shares as
stipulated in the deed of donation. Pages 3, 4, 18 and 19, tsn March, 1971).
Our conclusion is that the aforequoted paragraph 3 of the reddendum or
reservation clause refers to the beneficial ownership (dominium utile) and not to
29
the naked title and that what the donors reserved to themselves, by means of
that clause, was the management of the donated lots and the fruits thereof. But,
notwithstanding that reservation, the donation, as shown in the habendum
clause, was already effective during their lifetime and was not made in
contemplation of their death because the deed transferred to the donees the
naked ownership of the donated properties.
That conclusion is further supported by the fact that in the deed of donation, out
of the eight lots owned by the donors, only five were donated. Three lots, Lots
Nos. 4168, 2522 and 2521 were superflously reserved for the spouses or donors
in addition to one-third of Lot No, 2377. If the deed of donation in question was
intended to be a mortis causa disposition, then all the eight lots would have been
donated or devised to the three children and daughter-in-law of the donors.
The trial court's conclusion that the said deed of donation, although void as a
donation inter vivos, is valid "as an extrajudicial partition among the parents and
their children" is not well-taken. Article 1080 of the Civil Code provides that
should a person make a partition of his estate by an act inter vivos, or by will, such
partition shall be respected, insofar as it does not prejudice the legitime of the
compulsory heirs."
We have already observed that the said donation was not a partition of the entire
estate of the Diaz spouses since, actually, only five of the eight lots, constituting
their estate, were partitioned. Hence, that partition is not the one contemplated
in article 1080.
There is another circumstance which strengthens the view that the 1949 deed of
donation in question took effect during the donors' lifetime. It may be noted that
in that deed Lot No. 2377 (items 3 and [c]) was divided into three equal parts:
one-third was donated to Andrea Diaz and one-third to Angel Diaz. The remaining
one-third was reserved and retained by the donors, the spouses Gabino Diaz and
Severa Mendoza, for their support. That reserved one-third portion came to be
known as Lot No. 237-A.
In 1964 or after the death of Gabino Diaz, his surviving spouse Severa Mendoza
executed a donation mortis causa wherein she conveyed to her daughter, Andrea
Diaz (plaintiff-appellant herein), her one-half share in Lot No. 2377-A, which one-
half share is known as Lot No. 2377-A-1, the other half or Lot No. 2377-A-2 having
been already conveyed to Angel Diaz.
That disposition of Lot No. 2377-A-2 clearly implies that the conveyance in the
1949 deed of donation as to Lot No. 2377 took effect during the lifetime of the
donors, Gabino Diaz and Severa Mendoza, and proves that the 1949 donation was
inter vivos.
The instant case has a close similarity to the prewar cases already cited and to
three post-liberation cases. In the Bonsato case, the deed of donation also
contained contradictory dispositions which rendered the deed susceptible of
being construed as a donation inter vivos or as a donation mortis causa.
It was stated in one part of the deed that the donor was executing "una donacion
perfecta e irrevocable consumada" in favor of the donee in consideration of his
past services to the donor; that at the time of the execution of the deed, the donor
"ha entregado" to the donee "dichos terrenos donados"; that while the donor was
alive, he would receive the share of the fruits corresponding to the owner; and
"que en vista de la vejez del donante, el donatario Felipe Bonsato tomara posesion
inmediatamente de dichos terrenos a su favor". These provisions indicate that the
donation in question was inter vivos.
However, in the last clause of the deed in the Bonsato case (as in the instant case),
it was provided 'que despues de la muerte del donante entrara en vigor dicha
donacion y el donatario Felipe Bonsato tendra todos los derechos de dichos
terrernos en concepto de dueño absoluto de la propriedad libre de toda
responsabilidad y gravemen y pueda ejercitar su derecho que crea conveniente".
These provisions would seem to show that the donation was mortis causa.
Nevertheless, it was held in the Bonsato case that the donation was inter vivos
because (1) the ownership of the things donated passed to the donee; (2) it was
not provided that the transfer was revocable before the donor's death, and (3) it
was not stated that the transfer would be void if the transferor should survive the
transferee.
It was further held in the Bonsato case that the stipulation "que despues de la
muerte del donante entrara en vigor dicha donacion", should he interpreted
together with the prior provision regarding its irrevocable and consummated
character, and that would mean that the charge or condition as to the donor's
share of the fruits would be terminated upon the donor's death.
The Puig case, supra, is even more doubtful and controversial than the instant
case. In the Puig case, the donor, Carmen Ubalde Vda. de Parcon, in a deed
entitled "Donacion Mortis Causa" dated November 24, 1948 "cede y transfiere,
en concepto de donacion mortis causa", to the donee, Estela Magbanua
Peñaflorida, three parcels of land in consideration of the donee's past services
and the donor's love and affection for the latter.
It was stipulated in the deed that the donor could alienate or mortgage the
donated properties "cuando y si necesita fondos para satisfacer sus proprias
necesidades, sin que para ello tenga que intervenir la Donataria, pues su
consentimiento se sobre entiende aqui, parte de que la donacion que aqui se hace
es mortis causa, es decir que la donacion surtira sus efectos a la muerte de la
donante". It was repeated in another clause of the deed "que la cesion y
transferencia aqui provista surtira efecto al fallecer la Donante".
It was further stipulated that the donee would defray the medical and funeral
expenses of the donor unless the donor had funds in the bank or "haya cosecho
levantada or recogida, en cual caso dichos recursos responderan portales gastos
a disposicion y direccion de la donataria". Another provision of the deed was that
it would be registered only after the donor's death. In the same deed the donee
accepted the donation.
In the Puig case the donor in another deed entitled "Escritura de Donacion mortis
Causa" dated December 28, 1949 donated to the same donee, Estela Magbanua
Peñaflorida, three parcels of land "en concepto de una donacion mortis causa" in
consideration of past services. It was provided in the deed "que antes de su
muerte, la donante, podra enajenar vender, traspasar o hipotecar a cualesquiera
persona o entidades los bienes aqui donados a favor de la donataria en concepto
de una donacion mortis causa". The donee accepted the donation in the same
deed.
After the donor's death both deeds were recorded in the registry of deeds. In the
donor's will dated March 26, 1951, which was duly probated, the donation of a
parcel of land in the second deed of donation was confirmed.
Under these facts, it was held that the 1948 deed of donation mortis causa was
inter vivos in character in spite of repeated expressions therein that it was a
mortis causa donation and that it would take effect only upon the donor's death.
Those expressions were not regarded as controlling because they were
contradicted by the provisions that the donee would defray the donor's expenses
even if not connected with her illness and that the donee's husband would
assume her obligations under the deed, should the donee predecease the donor.
Moreover, the donor did not reserve in the deed the absolute right to revoke the
donation. prcd
But the 1949 deed of donation was declared void because it was a true
conveyance mortis causa which was not embodied in a last will and testament.
The mortis causa character of the disposition is shown by the donor's reservation
of the right to alienate or encumber the donated properties to any person or
entity.
In the Cuevas case, supra, one Antonina Cuevas executed on September 18, 1950
a notarial conveyance styled as "Donacion Mortis Causa" where she ceded to her
nephew Crispulo Cuevas a parcel of unregistered land. Crispulo accepted the
donation in the same instrument. Subsequently, or on May 26, 1952, the donor
revoked the donation.
The deed of donation in the Cuevas case contained the following provisions
which, as in similar cases, are susceptible of being construed as making the
conveyance an inter vivos or a mortis causa transfer:
"Dapat maalaman ni Crispulo Cuevas na samantalang ako ay nabubuhay, ang lupa
na ipinagkakaloob ko sa kaniya ay ako pa rin ang patuloy na mamomosecion,
makapagpapatrabajo, makikinabang at ang iba pang karapatan sa pagmamayari
ay sa akin pa rin hanggang hindi ako binabawian ng buhay ng Maykapal at ito
30
naman ay hindi ko nga iya-alis pagkat kung ako ay mamatay na ay inilalaan ko sa
kaniya."
Translation
"Crispulo Cuevas should know that while I am alive, the land which I donated to
him will still be under my continued possession; I will be the one to have it
cultivated; I will enjoy its fruits and all the other rights of ownership until
Providence deprives me of life and I cannot take away the property from him
because when I die I reserve the property for him." (sic).
It was held that the donation was inter vivos because the phrase "hindi ko nga iya-
alis" ("I will not take away the property") meant that the donor expressly
renounced the right to freely dispose of the property in favor of another person
and thereby manifested the irrevocability of the conveyance of the naked title to
the donee. The donor retained the beneficial ownership or dominium utile. Being
an inter vivos donation, it could be revoked by the donor only on the grounds
specified by law. No such grounds existed. The donee was not guilty of
ingratitude.
The other point to be disposed of is the matter of the claim for attorney's fees of
Andrea Diaz against the Alejandro intervenors.
The other point to be disposed of is the matter of the claim for attorney's fees of
Andrea Diaz against the Alejandro intervenors.
After a careful consideration of the facts and circumstances of the case,
particularly the apparent good faith of the Alejandro intervenors in asserting a
one-third interest in the disputed lot and their close relationship to Andrea Diaz,
we find that it is not proper to require them to pay attorney's fees (Salao vs. Salao,
L-26699, March 16, 1976, 70 SCRA 65). (Andrea Diaz did not implead Angel Diaz
as a respondent in her petition for review.).
WHEREFORE, the trial court's amended decision is reversed insofar as it
pronounces that the deed of donation is void. That donation is declared valid as a
donation inter vivos.
The disputed lot should be partitioned in accordance with that deed between
Andrea Diaz and Angel Diaz.
The decision is affirmed insofar as it does not require the Alejandro intervenors
to pay attorney's fees to Andrea Diaz. No costs.
SO ORDERED.
Fernando (Chairman), Barredo, Concepcion, Jr. and Santos, JJ., concur.
FIRST DIVISION
[G.R. No. 50553. February 19, 1991.]
NAZARIO VITA, plaintiff-appellant, vs. SOLEDAD MONTANANO, ESTANISLAO
JOVELLANO AND ESTEBANA JOVELLANO, defendants-appellants. JOSE, ELENA
AND ALODIA, ALL SURNAMED MONTANANO, intervenors-appellants.
DECISION
MEDIALDEA, J p:
In a resolution dated March 16, 1979, the Court of Appeals certified this case to
Us because it involves pure questions of law (pp. 70-80, Rollo).
The pertinent facts are as follows:
A complaint was filed before the Court of First Instance (now Regional Trial Court)
of Laguna by plaintiff-appellant Nazario Vita, in his capacity as judicial
administrator of the estate of deceased Edilberto Vita, seeking to recover from
defendants-appellants Soledad Montanano, Estanislao Jovellano and Estebana
Jovellano the possession of three (3) parcels of land located in Barrio Talangan,
Nagcarlan, Laguna and their annual yield since January, 1962 in the amount of
P1,100.00 a year. Plaintiff-appellant claims that during the lifetime of Edilberto
Vita, he was the owner and possessor of these three (3) parcels of land covered
by: Tax Declaration No. 1252 (73, old) with an area of 3,640 square meters, Tax
Declaration No. 1231(72, old) with an area of 1,000 square meters, and Tax
Declaration No. 1253 (4, old) with an area of 640 square meters; and he was
enjoying the fruits therefrom. When he died on January 23, 1962, defendants-
appellants, through stealth and strategy, took possession of the above-stated
parcels of land and gathered the fruits therefrom. Notwithstanding demands from
plaintiff-appellant, defendants-appellants refused to surrender the possession of
these parcels of land. Plaintiff-appellant further claims reimbursement in the sum
of P2,000.00 as attorney's fees and P1,000.00 as actual or compensatory
damages. cdphil
In their answer dated December 1, 1964, defendants-appellants deny that the
three (3) parcels of land belong to the estate of Edilberto Vita. Instead, they claim
that the two parcels of land covered by Tax Declaration No. 1252 and Tax
Declaration No. 1231 belong to Soledad Montanano as these were conveyed to
her by Isidra Montanano (her aunt and wife of Edilberto Vita) and Edilberto Vita
in a document signed and executed by them on November 22, 1938 and ratified
by one Mr. Matienzo, a Notary Public from Nagcarlan, Laguna. However, all copies
of said document were lost during the last war. The parcel of land covered by Tax
Declaration No. 1253 is owned in common by Soledad Montanano, her brother
Jose and sisters Elena and Alodia. It originally belonged to Francisca Asilo,
deceased sister of their grandmother, Micaela Asilo. Its ownership was
transferred to them under the arrangement sanctioned by Edilberto Vita himself
wherein all the proceeds from the yearly harvests therefrom shall be spent for the
yearly masses to be held for the souls of Francisca Asilo and Isidra Montanano.
This being the case, plaintiff-appellant is now estopped from instituting this
action. Defendants-appellants claim also that Edilberto Vita could not have
inherited these parcels of land from Isidra Montanano as the latter's estate has
never been the subject of a judicial or extra-judicial proceeding. The erroneous
inclusion of these parcels of land in the inventory of the estate of Edilberto Vita in
Special Proceedings No. SC-136 of the Court of First Instance of Laguna does not
make them actually a part of his estate. There is no fixed income from these
parcels of land because since 1962, plaintiff-appellant, with unknown persons,
has been gathering whatever crops that may be taken therefrom. And, by reason
of the malicious filing of this complaint, they seek reimbursement of the amount
of P1,000.00 representing attorney's fees and other litigation expenses. LexLib
Replying to defendants-appellants' answer, plaintiff-appellant claims that Isidra
Montanano and Edilberto Vita never executed any document on November 22,
1938 and if they had, it was thereafter repudiated, canceled and destroyed, for
which reason, the three (3) parcels of land remained in the possession of Isidra
Montanano and Edilberto Vita; that upon the death on September 25, 1957 of
Isidra Montanano, who left neither descendants nor ascendants, her surviving
spouse Edilberto Vita succeeded her and took immediate possession of her
estate; and that from the time defendants-appellants took possession of these
parcels of land, they have continuously gathered the fruits therefrom. llcd
In a petition dated August 20, 1966, Jose, Elena and Alodia Montanano sought
leave of court to intervene in this case. In the order of the trial court dated April
12, 1967, the amended answer dated September 10, 1966, which intervenors-
appellants filed jointly with Soledad Montanano, was admitted as their answer-
in-intervention. Incorporated therein is a counterclaim that Soledad, Jose, Elena
and Alodia Montanano are the co-owners of (pp. 43-44, Record on Appeal):
"(a) A parcel of coconut land situated in Bo. Bangbang, Nagcarlan, Laguna,
containing an area of 2,450 square meters, more or less, covered by Tax
Declaration No. 8953;
"(b) A parcel of coconut and secano land situated in Bo. Buboy, Nagcarlan, Laguna
with an area of 15,096 square meters, more or less, and covered by Tax
Declaration No. 10228;
"(c) A parcel of coconut land, with its improvements, situated in Bo. Yucos,
Nagcarlan, Laguna, with an area of 2,500 square meters, more or less, and
covered by Tax Declaration No. 7999;
"(d) A parcel of coconut land, with its improvements, situated in Bo. Talangan,
Nagcarlan, Laguna, with an area of 12,865 square meters, more or less, and
covered by Tax Declaration No. 1233 (sic) (third parcel of land in the complaint);
and
31
"(e) A parcel of residential land, with its improvements, situated in Gen. Luna,
Nagcarlan, Laguna, with an area of 167.50 square meters, more or less, and
covered by Tax Declaration No. 102;"
that Jose Montanano is the sole owner of (p. 44, ibid):
"(a) A parcel of coconut land, with improvements thereon, situated in Bo.
Bangbang, Nagcarlan, Laguna, with an area of 10,000 square meters, more or less,
and covered by Tax Declaration No. 6493; and
"(b) A parcel of coconut land, with improvements thereon, situated in Bo. Banago,
Nagcarlan, Laguna, with an area of 9,604 square meters, more or less, and
covered by Tax Declaration No. 8304;"
that Soledad Montanano is the sole owner of (p. 44, ibid):
"(a) A parcel of coconut land, with improvements thereon, situated in Bo.
Talangan, Nagcarlan, Laguna, with an area of 4,165 square meters more or less,
and covered by Tax Declaration No. 123 (sic) (the second parcel of land in the
complaint); and
"(b) A parcel of coconut land, with improvements thereon, situated in Bo.
Talangan, Nagcarlan, Laguna, containing an area of 10,434 square meters, more
or less; and covered by Tax Declaration No. 1252 (the first parcel of land in the
complaint);"
that Alodia Montanano is the sole owner of (p. 44, ibid):
"(a) A parcel of coconut land and irrigated riceland, with improvements thereon,
situated in Bo. Buboy, Nagcarlan, Laguna, containing an area of 24,153 square
meters, more or less and covered by Tax Declaration No. 10268; and
"(b) A parcel of coconut land, with improvements thereon, situated in Bo. Buboy,
Nagcarlan, Laguna, containing an area of 1,619 square meters, more or less, and
covered by Tax Declaration No. 8510;"
that Elena Montanano is the sole owner of (p. 44, ibid):
"(a) A parcel of coconut land, with improvements thereon, situated in Bo. Buboy,
Nagcarlan, Laguna, containing an area of 6,242 square meters, more or less, and
covered by Tax Declaration No. 8511; and
"(b) A portion of a parcel of riceland situated at C. Lirio St., Nagcarlan, Laguna,
containing an area of 9,691 square meters, more or less and covered by Tax
Declaration No. 1184."
They alleged therein that they acquired ownership of the three (3) parcels of land
mentioned in the complaint, which are in the possession of Soledad Montanano,
and the other parcels of land mentioned in their counterclaim, which are in the
possession of plaintiff-appellant, by virtue of a donation mortis causa executed by
Isidra Montanano on November 22, 1938 or by a donation executed by her on
December 20, 1940 which was confirmed by Edilberto Vita. They pray that these
parcels of land be adjudicated to them in the manner set forth in their
counterclaim; that plaintiff-appellant be ordered to account for the harvests from
these parcels of land from the time he took possession; and that they be awarded
damages corresponding to their litigation expenses.
In his reply dated July 4, 1967, plaintiff-appellant denied all the allegations
contained in the answer-in-intervention and reiterated that there was no such
donation executed by Isidra Montanano. If such donation were really executed,
she was forced to do so at a time when she was not mentally in a position to
execute and sign freely said document.
On September 15, 1973, the trial court rendered judgment adverse to all parties,
the dispositive portion of which reads (p. 52, Record on Appeal):
"Considering that the plaintiff has not shown by preponderating evidence that the
three (3) parcels of land covered in the complaint belong to the estate of Edilberto
Vita and it appearing likewise that the defendants and intervenors have not
shown that the parcels of land covered in the counterclaim were validly donated
to them and that they have legally accepted the donation made by Isidra
Montanano, the complaint filed by the plaintiff and the counterclaim filed by the
intervenors are hereby DISMISSED. This is without prejudice to the filing of a
separate proceedings (sic) in Court for the proper disposition of the estate of the
deceased Isidra Montanano, including that of her share in the fruits of the
properties donated to her during her marriage with Edilberto Vita which is
considered part of their conjugal properties. No assessment is hereby made with
respect to the damages sustained by the parties as they offset each other, if any.

"Without pronouncement as to costs.
"SO ORDERED."
All parties appealed to the Court of Appeals. The case is now before Us raising
mainly the following legal issues:
1) whether or not the three (3) parcels of land mentioned in the complaint are
included in the estate of Edilberto Vita (as regards the appeal of plaintiff-
appellant); and
2) whether or not acceptance is necessary in a donation mortis causa; and
whether the donation dated December 20, 1940 is mortis causa or inter vivos
(with respect to the appeal of defendants-appellants and intervenors-appellants).
Plaintiff-appellant avers that the trial court failed to consider that Edilberto Vita's
right to the conjugal half in the first two parcels as surviving spouse had ceased to
be inchoate upon the death of Isidra in 1957, and that such right had been vested
upon him by operation of law. With respect to the conjugal half pertaining to
Isidra in said two parcels, and the entirety of the third parcel as her paraphernal
property, they were likewise vested upon him by operation of law, subject only to
the right of her nephew and nieces, pursuant to Articles 995 and 1001 of the New
Civil Code. cdphil
In other words, plaintiff-appellant is again claiming that the parcels of land
covered by Tax Declaration No. 1252 (73, old) and Tax Declaration No. 1231(72,
old) are conjugal properties of Isidra Montanano and Edilberto Vita whereas the
parcel of land covered by Tax Declaration No. 1253 (4, old) is the paraphernal
property of Isidra Montanano. We are in conformity with the finding of the trial
court that the three (3) parcels of land mentioned in the complaint were
paraphernal properties of Isidra Montanano, being supported by documentary
and testimonial evidence (p. 48, Record on Appeal):
". . ., plaintiff claims that in accordance with the inventory prepared by Edilberto
Vita of his properties before his death (Exhs. "O","O-1", "O-1-A","O-1-B" and "O-
1-C"), the parcel of land covered by Tax Declaration No. 4 (old) was a paraphernal
property of his wife Isidra Montanano while the parcels of land covered by Tax
Declaration Nos. 72 (old) and 73 were conjugal properties of the spouses Edilberto
Vita and Isidra Montanano as they were donated to the latter by Francisca Asilo
during their marriage. It is the contention of the plaintiff that upon the death of
Isidra Montanano, her husband Edilberto Vita acquired ownership of these
properties.
"This contention of the plaintiff in effect corroborates the claim of the defendants
and intervenors that all the three (3) parcels of land, subject-matter of the
complaint, including all the parcels of land being claimed by them in the
intervenor's counterclaim, were all paraphernal properties of Isidra Montanano.
The two (2) parcels of land supposedly received as donation by Isidra Montanano
during her marriage with Edilberto Vita should be classified as her paraphernal
properties, it being acquired by her through lucrative title (Art. 148, Civil Code).
On the other hand, plaintiff's testimony that the third parcel of land covered in
the complaint was inherited by Edilberto Vita from Isidra Montanano is an
admission that the said property was the paraphernal property of the latter.
"The defendants and intervenors claim that the above-stated three (3) parcels of
land and the properties covered in their counterclaim were donated to them by
Isidra Montanano by virtue of two (2) deeds of donation she executed on
November 22, 1938 and December 20, 1940. They presented testimonial and
documentary evidence to prove that Isidra Montanano acquired all these parcels
of land, either by inheritance or donation, from her father Domingo Montanano,
her aunt Francisca Asilo and her uncle Juan Asilo. Aside from this, the tax
declarations covering the properties involved in the complaint and counterclaim
are mostly in the name of Isidra Montanano, except one each in the name of her
father Domingo Montanano, her aunt Francisca Asilo and her nephew Jose
Samonte. The court is convinced, therefore, that all the properties involved in this
litigation were the paraphernal properties of the deceased Isidra Montanano."
Whatever merit there may be in plaintiff-appellant's claim that upon the death of
Isidra Montanano, the ownership of these parcels of land (except with respect to
the parcel of land covered by Tax Declaration No. 1253 (4, old) which was validly
32
donated to defendants-appellants and intervenors-appellants by Isidra
Montanano, as We shall discuss later) are vested upon Edilberto Vita by operation
of law, subject only to the right of her nephew and nieces, liquidation of the
conjugal partnership of Isidra Montanano and Edilberto Vita must be undertaken
prior to the adjudication of properties to the heirs (Vicente J. Francisco, The
Revised Rules of Court in the Philippines, 1970 Edition, p. 619). In this connection,
contrary to the trial court's ruling, it is not necessary to file a separate proceeding
in court for the proper disposition of the estate of Isidra Montanano. Under Rule
73, Section 2 of the Rules of Court, if both spouses have died, the conjugal
partnership shall be liquidated in the testate or intestate proceedings of either. In
the present case, therefore, the conjugal partnership of Isidra Montanano and
Edilberto Vita should be liquidated in the testate proceedings of the latter.
Defendants-appellants and intervenors-appellants allege the following: 1) that a
donation mortis causa (as in the case of the November 22, 1938 donation), being
in the nature of a legacy, need not be accepted; their acceptance of that donation
is superfluous; and 2) that the December 20, 1940 donation is a donation inter
vivos because: a) there is no stipulation or provision therein that the donation is
essentially revocable; b) there was an acceptance of the donation; c) the donation
was not simply made in consideration of the death of the donor but of her
affection for the donees.
It is explicit in Article 725 * of the Civil Code that acceptance is necessary in a
donation. This applies to all kinds of donation because the law does not make any
distinction. The rationale behind the requirement of acceptance is that nobody is
obliged to receive a benefit against his will (Arturo M. Tolentino, Commentaries
and Jurisprudence on the Civil Code of the Philippines, Volume II, 1972 Edition, p.
521). We uphold the trial court that (p. 50, Record on Appeal):
". . ., notwithstanding the fact that from the secondary evidence presented, the
said deed of donation mortis causa of November 22, 1938 seems to have been
legally and validly executed, it cannot be given force and effect as the acceptance
thereof by the donees is void and illegal in as much (sic) as they were made at the
time of the execution of the document, not after the death of the donor Isidra
Montanano. A donation mortis causa takes effect only after the death of the
donor, consequently it is only after the latter's death that its acceptance may be
made.
"xxx xxx xxx
However, We adopt a view contrary to that of the trial court regarding the second
allegation of defendants-appellants and intervenors-appellants. According to the
trial court (p. 50, Record on Appeal):
"The defendants and intervenors further claim that all the properties covered by
that counterclaim were donated to them by Isidra Montanano pursuant to a
second deed of donation executed by the latter on December 20, 1940 (Exh. '3').
A careful study of the said document, however, shows that it is another deed of
donation mortis causa, considering the following provisions appearing therein
with respect to its effectivity:
'Na bagaman at sa kasulatang ito ay lubusan ng ibinibigay at ipinagkakaloob sa
bawat isa ng pag-aaring dito'y itinungod sa kani-kanila, matangi ang ganang
napaukol sa kay Dr. Vicente C. Chipongian at kay Maria Osuna, na iyon ay
patuluyan nang ngayo'y iguinagawad sa kanila ng walang pasubali, na magagawa
na nila ang buong karapatan ngayon bilang tunay na may-ari, gayon man, ay kami
pa ring mag-asawa ang mananatili sa pag-mamayari, pakikinabang at
pamomosision, sa kani-kaniyang pag-aaring dito'y ipinagkakaloob, sa buong
panahon na ang bawat isa sa amin mag-asawa'y nabubuhay, at kung kailan bawian
kami ng hiram na buhay, ay saka at saka pa lamang maaring matamo nila ang
ganap na pagmamayari at pakikinabang sa mga pag-aaring iyan na dito'y inihayag
nila ang pagtangap.'
"From this provision of the document, it clearly appears that the donors shall
continue to be the owner and possessors of the properties involved in the
donation and shall continue to enjoy the fruits of said properties while they are
still having and it is only upon their death that ownership will transfer to the
donees. It was the evident intent of the donors in this case to give the donation
after their death. In the meantime, they retain full or naked ownership and
control of the properties while they are still living and title will pass to the donees
only after their death. This is donation mortis causa (Heirs of Bonsato v. Court of
Appeals, G.R. No. L-6600, July 30, 1954, 50 O.G. 3568; Howard v. Padilla, G.R. L-
7064, 7098, April 22, 1955)."
The quoted provision in the second deed of donation should be understood in its
entirety. Thus, based on the first part of the paragraph which states "'[n]a
bagaman at sa kasulatang ito ay lubusan ng ibinibigay at ipinagkakaloob sa bawat
isa . . . na iyon ay patuluyan nang ngayo'y iguinagawad sa kanila ng walang
pasubali, na magagawa na nila ang buong karapatan ngayon bilang tunay na may-
ari . . ."' (emphasis supplied), supra, it was obviously the intention of Isidra
Montanano to grant a donation inter vivos to defendants-appellants and
intervenors-appellants. Although the rest of the paragraph states "'gayon man, ay
kami pa ring mag-asawa ang mananatili sa pag-mamayari, pakikinabang at
pamomosision, — na kani-kaniyang pag-aaring dito'y ipinagkakaloob, sa buong
panahon na ang bawat isa sa amin mag-asawa'y nabubuhay, at kung kailan bawian
kami ng hiram na buhay, ay saka at saka pa lamang maaring matamo nila ang
ganap na pagmamayari at pakikinabang sa mga pag-aaring iyan . . .,'" supra, We
have adjudged in the case of Heirs of Juan Bonsato, et al. v. Court of Appeals, et
al., 95 Phil. 481, 488:
"It is true that the last paragraph in each donation contains the phrase 'that after
the death of the donor the aforesaid donation shall become effective.' . . .
However, said expression must be construed together with the rest of the
paragraph, and thus taken, its meaning clearly appears to be that after the donor's
death, the donation will take effect so as to make the donees the absolute owners
of the donated property, free from all liens and encumbrances; for it must be
remembered that the donor reserved for himself a share of the fruits of the land
donated. Such reservation constituted a charge or encumbrance that would
disappear upon the donor's death, when full title would become vested in the
donees."
It was also Our observation therein that (ibid, at p. 487):
". . .. The donor only reserved for himself, during his lifetime, the owner's share
of the fruits or produce . . ., a reservation that would be unnecessary if the
ownership of the donated property remained with the donor. Most significant is
the absence of stipulation that the donor could revoke the donations . . ..".
Furthermore, mention must be made of the fact that the consideration of the
second deed of donation is love and services rendered by defendants-appellants
and intervenors-appellants to Isidra Montanano, as revealed by the third and
fourth paragraphs therein (Exhibit "3," for the defendants):
"Na sapagkat ang banal kong nais ay kung bawian man ako ng aking hiram na
buhay ay matumbasan man lamang sa pamamagitan ng isinasagawa kong
pagkakaloob sa hinaharap na kasulatan yuong manga pagdamay, pagmamahal at
paghahasikaso na tinanggap ko at tunay na ipinakita sa akin ng mga dito'y itinangi
ko, —
"Kaya't dahil diya'y buong puso kong ibinibigay, isinusulit at ganap na
IPINAGKAKALOOB, ang mga natitira ko pang mga pag-aari, na wala pang
kinatutunguran o napagbibigyan, sa kaparaanang dito'y itinatagubilen ko, sa
manga taong gaya nitong mga sumusunod:
"xxx xxx xxx"
As We have ruled in Concepcion, et al. v. Concepcion, 91 Phil. 823, 830:
". . ., even if he (donor) says it (the donation) is to take effect after his death, when
from the body of the instrument or donation it is to be gathered that the main
consideration of the donation is not the death of the donor but rather services
rendered to him, by the donee or his affection for the latter, then the donation
should be considered as inter vivos, . . ., and the condition that the donation is to
take effect only after the death of the donor should be interpreted as meaning
that the possession and enjoyment of the fruits of the property donated should
take place only after donor's death."
Along the same line of ratiocination is Our holding in Balaqui, et al. v. Dongso, et
al., 53 Phil. 673, 677:
". . ., that as the donor guaranteed the right which she conferred on the donee by
virtue of the deed of gift, wherein, in recompense of the latter's good services to
the former, she donates to her the two parcels of land with their improvements,
said gift is inter vivos and irrevocable, and not mortis causa, notwithstanding the
fact that the donor stated in said deed that she did not transfer the ownership of
the two parcels of land donated, save upon her death, for such a statement can
mean nothing else than that she only reserved to herself the possession and
usufruct of said property, and because the donor could not very well guarantee
the aforesaid right after her death."
33
ACCORDINGLY, the appeal of plaintiff-appellant is hereby DENIED whereas the
appeal of defendants-appellants is hereby PARTLY GRANTED. The decision of the
Court of First Instance of Laguna dated September 15, 1973 is MODIFIED as
follows: 1) the dismissal of the complaint of plaintiff-appellant is AFFIRMED; 2)
the dismissal of the counterclaim of defendants-appellants and intervenors-
appellants is SET ASIDE; and 3) plaintiff-appellant is ordered: a) to deliver the
possession of the properties donated to defendants-appellants and intervenors-
appellants by virtue of the deed of donation dated December 20, 1940, and b) to
render an accounting of the products harvested therefrom from January 23, 1962
up to the present. LLphil
SO ORDERED.
Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.
THIRD DIVISION
[G.R. No. 125888. August 13, 1998.]
SPOUSES ERNESTO and EVELYN SICAD, petitioners, vs. COURT OF APPEALS,
CATALINO VALDERRAMA, JUDY CRISTINA M. VALDERRAMA and JESUS ANTONIO
VALDERRAMA, respondents.
Quiason, Makalintal, Barot, Torres & Ibarra for petitioners.
Bautista, Picazo, Buyco, Tan & Fider for private respondents.
SYNOPSIS
The late Aurora Virto Vda. de Montinola executed a deed entitled "DEED OF
DONATION INTER VIVOS" on December 11, 1979. It named as donees her
grandchildren, herein private respondents, namely; Catalino Valderrama, Judy
Cristina Valderrama and Jesus Antonio Valderrama. The donated property
consisted of a parcel of land located at Brgy. Pawa, Panay Capiz covered by
Transfer Certificate of Title No. T-16105 in the name of Montinola. The deed was
presented for recording in the Property Registry, and the Register of Deeds
cancelled TCT No. T-16105 and, in its place, issued TCT No. T-16622 in the names
of the donees. Montinola, however, retained the owner's duplicate copy of the
new title, as well as the property itself, until she transferred the same to herein
petitioners, the spouses Ernesto and Evelyn Sicad ten (10) years later, on July 10,
1990. On March 12, 1987, Aurora Montinola drew up a deed of revocation of the
donation. She filed a petition with the Regional Trial Court in Roxas City for the
cancellation of TCT No. T-16622 and the reinstatement of TCT No. T-16105.
Montinola's petition was founded on the theory that donation to her (three) 3
grandchildren was one mortis causa which thus had to comply with the formalities
of a will; and since it had not, the donation was void. The donees opposed the
petition. They averred that the donation in their favor was one inter vivos which
having fully complied with the requirements therefor set out in Article 729 of the
Civil Code, was perfectly valid and efficacious. The trial court rendered judgment
holding that the donation was indeed one inter vivos and dismissing Montinola's
petition for lack of merit. Montinola elevated the case to the Court of Appeals.
She, however, died pending the appeal. The appellate court, upon motion,
ordered the substitution of Ofelia de Leon, Estela M. Jaen, and Teresita M.
Valderrama as plaintiffs-appellants in place of the late Aurora Montinola, as well
as the joinder of the spouses Ernesto and Evelyn Sicad as additional appellants.
The appellate court affirmed the judgment of the Regional Trial Court. The issue
raised in this appeal centers on the character of the deed of donation executed
by Montinola, whether inter vivos or mortis causa. SCaDAE
The Supreme Court ruled that the donation in question, though denominated
inter vivos, is in truth one mortis causa; it is void because the essential requisites
for its validity have not been complied with. A donation which purports to be one
inter vivos but withholds from the donee the right to dispose of the donated
property during the donor's lifetime is in truth one mortis causa. In the case at
bar, nothing of any consequence was transferred by the deed of donation in
question to Montinola's grandchildren, the ostensible donees. They did not get
possession of the property donated. They did not acquire the right to the fruits
thereof, or any other right of dominion over the property. More importantly, they
did not acquire the right to dispose of the property. They were simply "paper
owners" of the donated property.
SYLLABUS
CIVIL LAW; MODES OF ACQUIRING OWNERSHIP; DONATION; A DONATION
WHICH PURPORTS TO BE ONE INTER VIVOS BUT WITHHOLDS FROM THE DONEE
THE RIGHT TO DISPOSE OF THE DONATED PROPERTY DURING THE DONOR'S
LIFETIME IS IN TRUTH ONE MORTIS CAUSA; CASE AT BAR. — The real nature of a
deed is to be ascertained by both its language and the intention of the parties as
demonstrated by the circumstances attendant upon its execution. In this respect,
case law has laid down significant parameters. Thus, in a decision handed down
in 1946, this Court construed a deed purporting to be a donation inter vivos to be
in truth one mortis causa because it stipulated (like the one now being inquired
into) "that all rents, proceeds, fruits, of the donated properties shall remain for
the exclusive benefit and disposal of the donor, Margarita David, during her
lifetime; and that, without the knowledge and consent of the donor, the donated
properties could not be disposed of in any way, whether by sale, mortgage, barter,
or in any other way possible." On these essential premises, the Court said, such a
donation must be deemed one "mortis causa, because the combined effect of the
circumstances surrounding the execution of the deed of donation and of the
above-quoted clauses thereof . . . (was that) the most essential elements of
ownership — the right to dispose of the donated properties and the right to enjoy
the products, profits, possession — remained with Margarita David during her
lifetime, and would accrue to the donees only after Margarita David's death." So
too, in the case at bar, did these rights remain with Aurora Montinola during her
lifetime, and could not pass to the donees until ten (10) years after her death. In
another case decided in 1954 involving a similar issue, Bonsato vs. Court of
Appeals, this Court emphasized that the decisive characteristics of a donation
mortis causa, which it had taken into account in David vs. Sison, were that "the
donor not only reserved for herself all the fruits of the property allegedly
conveyed, but what is even more important, specially provided that 'without the
knowledge and consent of the donor, the donated properties could not be
disposed of in any way; thereby denying to the transferees the most essential
attribute of ownership, the power to dispose of the properties." A donation which
purports to be one inter vivos but withholds from the donee the right to dispose
of the donated property during the donor's lifetime is in truth one mortis causa.
In a donation mortis causa "the right of disposition is not transferred to the donee
while the donor is still alive. " In the instant case, nothing of any consequence was
transferred by the deed of donation in question to Montinola's grandchildren, the
ostensible donees. They did not get possession of the property donated. They did
not acquire the right to the fruits thereof. or any other right of dominion over the
property. More importantly, they did not acquire the right to dispose of the
property — this would accrue to them only after ten (10) years from Montinola's
death. Indeed, they never even laid hands on the certificate of title to the same.
They were therefore simply "paper owners" of the donated property. All these
circumstances including, to repeat, the explicit provisions of the deed of donation
— reserving the exercise of rights of ownership to the donee and prohibiting the
sale or encumbrance of the property until ten (10) years after her death —
ineluctably lead to the conclusion that the donation in question was a donation
mortis causa, contemplating a transfer of ownership to the donees only after the
donor's demise. caIEAD
DECISION
NARVASA, C .J p:
The issue raised in the appeal by certiorari at bar centers on the character of a
deed of donation executed by the late Aurora Virto Vda. de Montinola of the City
of Iloilo — as either inter vivos or mortis causa. That deed, entitled "DEED OF
DONATION INTER VIVOS," 1 was executed by Montinola on December 11, 1979.
It named as donees her grandchildren, namely: Catalino Valderrama, Judy Cristina
Valderrama and Jesus Antonio Valderrama; and treated of a parcel of land, Lot
3231 of the Cadastral Survey of Panay, located at Brgy. Pawa, Panay, Capiz,
covered by Transfer Certificate of Title No. T-16105 in the name of Montinola. The
deed also contained the signatures of the donees in acknowledgment of their
acceptance of the donation.
Montinola's Secretary, Gloria Salvilla, afterwards presented the deed for
recording in the Property Registry, and the Register of Deeds cancelled TCT No. T-
16105 (the donor's title) and in its place, issued TCT No. T-16622 on February 7,
1980, in the names of the donees. 2 Montinola however retained the owner's
duplicate copy of the new title (No. T-16622), as well as the property itself, until
she transferred the same ten (10) years later, on July 10, 1990, to the spouses,
Ernesto and Evelyn Sicad.
34
On March 12, 1987, Aurora Montinola drew up a deed of revocation of the
donation, 3 and caused it to be annotated as an adverse claim on TCT No. T-16622
(issued, as aforestated, in her grandchildren's names). Then, on August 24, 1990,
she filed a petition with the Regional Trial Court in Roxas City for the cancellation
of said TCT No. T-16622 and the reinstatement of TCT No. T-16105 (in her name),
the case being docketed as Special Proceeding No. 3311. Her petition was
founded on the theory that the donation to her three (3) grandchildren was one
mortis causa which thus had to comply with the formalities of a will; and since it
had not, the donation was void and could not effectively serve as basis for the
cancellation of TCT No. T-16105 and the issuance in its place of TCT No. T-16622.
The donees (Montinola's grandchildren) opposed the petition. In their opposition
dated August 29, 1990, they averred that the donation in their favor was one inter
vivos which, having fully complied with the requirements therefor set out in
Article 729 of the Civil Code, was perfectly valid and efficacious. They also
expressed doubt about the sincerity of their grandmother's intention to recover
the donated property, since she had not pursued the matter of its revocation after
having it annotated as an adverse claim.
The case, originally treated as a special proceeding, was subsequently considered
by the lower Court as an ordinary civil action in view of the allegations and issues
raised in the pleadings. Pre-trial was had, followed by trial on the merits which
was concluded with the filing of the parties' memoranda. The Trial Court then
rendered judgment on March 27, 1991, holding that the donation was indeed one
inter vivos, and dismissing Aurora Montinola's petition for lack of merit. 4 The
matter of its revocation was not passed upon.
Montinola elevated the case to the Court of Appeals, her appeal being docketed
as CA-G.R. CV No. 33202. She however died on March 10, 1993, 5 while the appeal
was pending.
Shortly after Montinola's demise, a "Manifestation and Motion" dated March 31,
1993 was filed by Ernesto Sicad and Evelyn Bofill-Sicad, herein petitioners, 6 in
which they (a) alleged that they had become the owners of the property covered
by TCT No. T-16622 in virtue of a "deed of definite sale dated May 25, 1992"
accomplished by Montinola in their favor, which was confirmed by "an affidavit
dated November 26, 1997 also executed by the latter, and (b) prayed that they be
substituted as appellants and allowed to prosecute the case in their own behalf.
Another motion was subsequently presented under date of April 7, 1993, this time
by the legal heirs of Aurora Montinola, namely: Ofelia M. de Leon, Estela M. Jaen
and Teresita M. Valderama. They declared that they were not interested in
pursuing the case, and asked that the appeal be withdrawn. Montinola's counsel
opposed the motion.
On June 21, 1993, the Court of Appeals issued a Resolution: a) ordering the
substitution of the persons above mentioned — Ofelia de Leon, Estela M. Jaen,
and Teresita M. Valderama — as plaintiffs-appellants in place of the late Aurora
Montinola, as well as the joinder of the spouses Ernesto and Evelyn Bofill-Sicad as
additional appellants; 7 and (b) denying the motion for the withdrawal of the
appeal.
On June 30, 1995, the Eighth Division of the Court of Appeals promulgated its
Decision on the case affirming the judgment of the Regional Trial Court; 8 and on
July 31, 1996, it denied the separate motions for reconsideration filed by Ofelia
M. de Leon, Estela M. Jaen, and Teresita M. Valderrama, on the one hand, and by
the spouses, Ernesto and Evelyn Sicad, on the other. 9
The Sicad Spouses have appealed to this Court; and here, they contend that the
following errors were committed by the Appellate Tribunal, to wit:
1) ". . . in ruling that the donation was inter vivos and in not giving due weight to
the revocation of the donation; and
2) ". . . in not ordering that the case be remanded for further reception of
evidence." 10
The Comment filed for private respondents (the donees) under date of December
19, 1996 deals with what they consider the "principal issue in this case . . . (i.e.)
whether the donation is mortis causa or inter vivos," and sets forth the argument
that the donor clearly intended to effect the immediate transfer of ownership to
the donees, that the prohibition in the deed of donation "against selling the
property within ten (10) years after the death of the donor does not indicate that
the donation is mortis causa," that the donors "alleged act of physically keeping
the title does not suggest any intention to defer the effectivity of the donation,"
that the payment of real property taxes is consistent with the donor's reservation
of the right of usufruct, that the donor's intent is not determined by . . . (her) self-
serving post-execution declarations," the "donation was never effectively
revoked," and petitioners "have waived their right to question the proceedings in
the trial court." 11
The Reply of the Sicad Spouses dated March 14, 1997 reiterates their thesis that
the donation was mortis causa, that "the provisions of the deed of donation
indicate that it was intended to take effect upon the death of the donor," that
"the circumstances surrounding the execution of the deed, and the subsequent
actions of the donor incontrovertibly signify the donor's intent to transfer the
property only after her death," that the donor "did not intend to give effect to the
donation," and that the procedure adopted by the Trial Court in the case was
fatally defective. 12 A "Rejoinder" dated April 3, 1997 was then submitted by the
Valderramas, traversing the assertions of the Reply. 13
Considering the focus of the opposing parties, and their conflicting theories, on
the intention of Aurora Montinola in executing the document entitled "Deed of
Donation Inter Vivos," it is needful to review the circumstances of the signing of
that document by Montinola, as ostensible donor, and her grandchildren, as
ostensible donees.
The evidence establishes that on December 11, 1979, when the deed of donation
prepared by Montinola's lawyer (Atty. Treñas) was read and explained by the
latter to the parties, Montinola expressed her wish that the donation take effect
only after ten (10) years from her death, and that the deed include a prohibition
on the sale of the property for such period. Accordingly, a new proviso was
inserted in the deed reading: "however, the donees shall not sell or encumber the
properties herein donated within 10 years after the death of the donor. 14 The
actuality of the subsequent insertion of this new proviso is apparent on the face
of the instrument: the intercalation is easily perceived and identified — it was
clearly typed on a different machine, and is crammed into the space between the
penultimate paragraph of the deed and that immediately preceding it. 15
Not only did Aurora Montinola order the insertion in the deed of that restrictive
proviso, but also, after recordation of the deed of donation, she never stopped
treating the property as her own. She continued, as explicitly authorized in the
deed itself, to possess the property, enjoy its fruits and otherwise exercise the
rights of dominion, paying the property taxes as they fell due — all these she did
until she transferred the property to the Sicad Spouses on July 10, 1990. She did
not give the new certificate of title to the ostensible donees but retained it, too,
until she delivered it to the Sicads on the occasion of the sale of the property to
them. In any event, the delivery of the title to the donees would have served no
useful purpose since, as just stated, they were prohibited to effect any sale of
encumbrance thereof for a period of ten (10) years after the ostensible donor's
decease. And consistent with these acts denoting retention of ownership of the
property was Montinola's openly expressed view that the donation was
ineffectual and could not be given effect even after ten (10) years from her death.
For this view she sought to obtain judicial approval. She brought suit on August
24, 1990 to cancel TCT No. T-16622 (issued to her grandchildren) premised
precisely on the invalidity of the donation for failure to comply with the requisites
of testamentary dispositions. Before that, she attempted to undo the conveyance
to her grandchildren by executing a deed of revocation of the donation on March
12, 1987, and causing annotation thereof as an adverse claim on said TCT No. T-
16622. She also exercised indisputable acts of ownership over said property by
executing, as just stated, deeds intended to pass title over it to third parties —
petitioners herein. 16
As already intimated, the real nature of a deed is to be ascertained by both its
language and the intention of the parties as demonstrated by the circumstances
attendant upon its execution. In this respect, case law has laid down significant
parameters. Thus, in a decision handed down in 1946, 17 this Court construed a
deed purporting to be a donation inter vivos to be in truth one mortis causa
because it stipulated (like the one now being inquired into) "that all rents,
proceeds, fruits, of the donated properties shall remain for the exclusive benefit
and disposal of the donor, Margarita David, during her lifetime; and that, without
the knowledge and consent of the donor, the donated properties could not be
disposed of in any way, whether by sale, mortgage, barter, or in any other way
possible." On these essential premises, the Court said, such a donation must be
35
deemed one "mortis causa, because the combined effect of the circumstances
surrounding the execution of the deed of donation and of the above-quoted
clauses thereof . . . (was that) the most essential elements of ownership — the
right to dispose of the donated properties and the right to enjoy the products,
profits, possession — remained with Margarita David during her lifetime, and
would accrue to the donees only after Margarita David's death. So, too, in the
case at bar, did these rights remain with Aurora Montinola during her lifetime,
and could not pass to the donees until ten (10) years after her death.
In another case decided in 1954 involving a similar issue, Bonsato v. Court of
Appeals, 18 this Court emphasized that the decisive characteristics of a donation
mortis causa, which it had taken into account in David v. Sison, were that the
donor not only reserved for herself all the fruits of the property allegedly
conveyed, but what is even more important, specially provided that without the
knowledge and consent of the donor, the donated properties could not be
disposed of in any way, thereby denying to the transferees the most essential
attribute of ownership, the power to dispose of the properties."
A donation which purports to be one inter vivos but withholds from the donee
the right to dispose of the donated property during the donor's lifetime is in truth
one mortis causa. In a donation mortis causa "the right of disposition is not
transferred to the donee while the donor is still alive. 19
In the instant case, nothing of any consequence was transferred by the deed of
donation in question to Montinola's grandchildren, the ostensible donees. They
did not get possession of the property donated. They did not acquire the right to
the fruits thereof, or any other right of dominion over the property. More
importantly, they did not acquire the right to dispose of the property — this would
accrue to them only after ten (10) years from Montinola's death. Indeed, they
never even laid hands on the certificate of title to the same. They were therefore
simply "paper owners" of the donated property. All these circumstances,
including, to repeat, the explicit provisions of the deed of donation — reserving
the exercise of rights of ownership to the donee and prohibiting the sale or
encumbrance of the properly until ten (10) years after her death — ineluctably
lead to the conclusion that the donation in question was a donation mortis causa,
contemplating a transfer of ownership to the donees only after the donor's
demise.
The case of Alejandro v. Geraldez 20 cited by the Court of Appeals in support of
its challenged judgment is not quite relevant. For in the deed of donation there in
issue, there was a partial relinquishment of the right to dispose of the property,
in the event only that this became necessary "to defray the expenses and support
of the donors." That limited right to dispose of the donated lots, said this Court,
"implies that ownership had passed to . . . (the donees) by means of the donation
and . . ., therefore, the donation was already effective during the donors' lifetime.
That is a characteristic of a donation inter vivos." On the other hand, in the case
at bar, the donees were expressly prohibited to make any disposition of any
nature or for any purpose whatever during the donor's lifetime, and until ten (10)
years after her death — a prohibition which, it may be added, makes inapplicable
the ruling in Castro v. Court of Appeals, 21 where no such prohibition was
imposed, and the donor retained only the usufruct over the property.
The Valderramas' argument that the donation is inter vivos in character and that
the prohibition against their disposition of the donated property is merely a
condition which, if violated, would give cause for its revocation, begs the
question. It assumes that they have the right to make a disposition of the
property, which they do not. The argument also makes no sense, because if they
had the right to dispose of the property and did in fact dispose of it to a third
person, the revocation of the donation they speak of would be of no utility or
benefit to the donor, since such a revocation would not necessarily result in the
restoration of the donor's ownership and enjoyment of the property.
It is also error to suppose that the donation under review should be deemed one
inter vivos simply because founded on considerations of love and affection. In
Alejandro v. Geraldez, supra, 22 this Court also observed that "the fact that the
donation is given in consideration of love and affection . . . is not a characteristic
of donations inter vivos (solely) because transfers mortis causa may also be made
for the same reason. Similarly, in Bonsato v. Court of Appeals, supra, this Court
opined that the fact that the conveyance was due to the affection of the donor
for the donees and the services rendered by the latter, is or no particular
significance in determining whether the deeds, Exhs. '1' and '2', constitute
transfers inter vivos or not, because a legacy may have identical motivation. 23
Finally, it is germane to advert to the legal principle in Article 1378 of the Civil
Code to the effect that in case of doubt relative to a gratuitous contract, the
construction must be that entailing "the least transmission of rights and
interests." 24
The donation in question, though denominated inter vivos, is in truth one mortis
causa; It is void because the essential requisites for its validity have not been
complied with.
WHEREFORE, the Decision of the Court of Appeals, in CA-G.R. CV No. 33202 dated
June 30, 1995 as well as the Resolution denying reconsideration thereof, and the
Decision of the Regional Trial Court in Special Case No. 3311 are SET ASIDE. The
Deed of Donation Inter Vivos (Exh. "A" ) executed by Aurora Virto Vda. de
Montinola on December 11, 1979 in favor of Catalino M. Valderrama, Judy Cristina
M. Valderrama and Jesus Antonio M. Valderrama is declared null and void. The
Register of Deeds of Roxas City is directed to cancel Transfer Certificate of Title
No. T-16622, revive and reinstate Transfer Certificate of Title No. T-16105.
SO ORDERED.
Romero, Kapunan and Purisima, JJ ., concur.
SECOND DIVISION
[G.R. No. 106755. February 1, 2002.]
APOLINARIA AUSTRIA-MAGAT, petitioner, vs. HON. COURT OF APPEALS and
FLORENTINO LUMUBOS, DOMINGO COMIA, TEODORA CARAMPOT, ERNESTO
APOLO, SEGUNDA SUMPELO, MAMERTO SUMPELO and RICARDO SUMPELO,
respondents.
Rudolf Philip Jurado for petitioner.
Public Attorney's Office for respondents.
SYNOPSIS
Basilisa Comerciante executed a deed of donation over a parcel of residential land
together with the improvements thereon in favor of her four children with
express irrevocability and prohibition to alienate the said property.
Thereafter, Basilisa executed a Deed of absolute Sale of the subject house and lot
in favor of herein petitioner and as a result of which a Transfer Certificate of Title
was issued by the Register of Deeds in the name of petitioner.
Herein respondents filed an action against the petitioner for annulment of the
Transfer Certificate of Title and other relevant documents and for reconveyance
and damages. The Regional Trial Court dismissed the case on the ground that the
donation was void because it did not comply with the formalities of a will, it being
a donation mortis causa.
On appeal, the decision of the trial court was reversed by the Court of Appeals
declaring null and void the Deed of Sale of the subject property because the
donation is inter vivos. Hence, the appeal.
The Supreme Court affirmed the appellate court's decision and held that in the
case at bar, the donation is inter vivos. The express irrevocability of the same
("hindi na mababawi") is the distinctive standard that identifies the document as
a donation inter vivos. The other provisions therein which seemingly make the
donation mortis causa do not go against the irrevocable character of the subject
donation. SDHITE
SYLLABUS
1. CIVIL LAW; DONATIONS; DONATION INTER VIVOS; IRREVOCABILITY,
DISTINCTIVE STANDARD THEREOF; CASE AT BAR. — Construing together the
provisions of the deed of donation, we find and so hold that in the case at bar the
donation is inter vivos. The express irrevocability of the same ("hindi na
36
mababawi") is the distinctive standard that identifies that document as a donation
inter vivos. The other provisions therein which seemingly make the donation
mortis causa do not go against the irrevocable character of the subject donation.
2. ID.; ID.; ID.; CHARACTERIZED BY TRANSFER OF NAKED OWNERSHIP OF THE
PROPERTY TO DONEES DUE TO IRREVOCABLE CHARACTER OF THE DONATION;
CASE AT BAR. — The prohibition on the donor to alienate the said property during
her lifetime is proof that naked ownership over the property has been transferred
to the donees. It also support the irrevocable nature of the donation considering
that the donor has already divested herself of the right to dispose of the donated
property. On the other hand, the prohibition on the donees only meant that they
may not mortgage or dispose the donated property while the donor enjoys and
possesses the property during her lifetime. However, it is clear that the donees
were already the owners of the subject property due to the irrevocable character
of the donation.
3. ID.; ID.; ID.; ACCEPTANCE CLAUSE, REQUIREMENT OF. — Another indication in
the deed of donation that the donation is inter vivos is the acceptance clause
therein of the donees. We have ruled that an acceptance clause is a mark that the
donation is inter vivos. Acceptance is a requirement for donations inter vivos.
4. ID.; ID.; ID.; SALE OF THE SUBJECT PROPERTY DOES NOT OPERATE AS AN
AUTOMATIC REVOCATION OF THE DEED OF DONATION IN CASE AT BAR. — The
act of selling the subject property to the petitioner herein cannot be considered
as a valid act of revocation of the deed of donation for the reason that a formal
case to revoke the donation must be filed pursuant to Article 764 of the Civil Code
which speaks of an action that has a prescriptive period of four (4) years from non-
compliance with the condition stated in the deed of donation. The rule that there
can be automatic revocation without benefit of a court action does not apply to
the case at bar for the reason that the subject deed of donation is devoid of any
provision providing for automatic revocation in the event of non-compliance with
any of the conditions set forth therein. Thus, a court action is necessary to be filed
within four (4) years from the non-compliance of the condition violated. SEHTAC
5. ID.; TRUSTS; IMPLIED TRUST; PRESCRIPTIVE PERIOD OF ACTIONS BASED
THEREON; CASE AT BAR. — When one's property is registered in another's name
without the former's consent, an implied trust is created by law in favor of the
true owner. Article 1144 of the New Civil Code provides: Art. 1144. The following
actions must be brought within ten years from the time the right of action
accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3)
Upon a judgment. Thus, an action for reconveyance of the title to the rightful
owner prescribes in ten (10) years from the issuance of the title. It is only when
fraud has been committed that the action will be barred after four (4) years.
However, the four-year prescriptive period is not applicable to the case at bar for
the reason that there is no fraud in this case. The findings of fact of the appellate
court which are entitled to great respect, are devoid of any finding of fraud. The
records do not show that the donor, Basilisa, and the petitioner ever intended to
defraud the respondents herein with respect to the sale and ownership of the said
property. On the other hand, the sale was grounded upon their honest but
erroneous interpretation of the deed of donation that it is mortis causa, not inter
vivos; and that the donor still had the rights to sell or dispose of the donated
property and to revoke the donation. There being no fraud in the trust
relationship between the donor and the donees including the herein petitioner,
the action for reconveyance prescribes in ten (10) years. Considering that TCT No.
T-10434 in the name of the petitioner and covering the subject property was
issued only on February 8, 1979, the filing of the complaint in the case at bar in
1983 was well within the ten-year prescriptive period.
DECISION
DE LEON, JR., J p:
Before us is a petition for review of the Decision 1 of the Court of Appeals, 2 dated
June 30, 1989 reversing the Decision, 3 dated August 15, 1986 of the Regional
Trial Court (RTC) of Cavite, Branch 17. The Decision of the RTC dismissed Civil Case
No. 4426 which is an action for annulment of title, reconveyance and damages.
The facts of the case are as follows:
Basilisa Comerciante is a mother of five (5) children, namely, Rosario Austria,
Consolacion Austria, herein petitioner Apolinaria Austria-Magat, Leonardo, and
one of herein respondents, Florentino Lumubos. Leonardo died in a Japanese
concentration camp at Tarlac during World War II.
In 1953, Basilisa bought a parcel of residential land together with the
improvement thereon covered and described in Transfer Certificate of Title No.
RT-4036 (T-3268) and known as Lot 1, Block 1, Cavite Beach Subdivision, with an
area of 150 square meters, located in Bagong Pook, San Antonio, Cavite City.
On December 17, 1975, Basilisa executed a document designated as "Kasulatan
sa Kaloobpala (Donation)". The said document which was notarized by Atty.
Carlos Viniegra, reads as follows:
KASULATANG SA KALOOBPALA
(DONATION)
TALASTASIN NG LAHAT AT SINUMAN:
Na ako, si BASELISA COMERCIANTE, may sapat na gulang, Filipina, balo, at
naninirahan sa blg. 809 L. Javier Bagong Pook, San Antonio, Lungsod ng Kabite,
Filipinas, sa pamamagitan ng kasulatang ito'y
NAGSASALAYSAY
Na alang-alang sa mabuting paglilingkod at pagtingin na iniukol sa akin ng apat
kong mga tunay na anak na sila:
ROSARIO AUSTRIA, Filipina, may sapat na gulang, balo, naninirahan sa 809 L.
Javier, Bagong Pook, San Antonio, Lungsod ng Kabite;
CONSOLACION AUSTRIA, Filipino, may sapat na gulang, balo naninirahan sa 809 L.
Javier, Bagong Pook, San Antonio, Lungsod ng Kabite;
APOLINARIA AUSTRIA, Filipina, may sapat na gulang, may asawa, naninirahan sa
Pasong Kawayan, Hen. Trias, Kabite;
FLORENTINO LUMUBOS, Filipino, may sapat na gulang, asawa ni Encarnacion
Magsino, at naninirahan din sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod
ng Kabite; ay
Kusang loob na ibinibigay ko at ipinagkakaloob ng ganap at hindi na mababawi sa
naulit ng apat na anak ko at sa kanilang mga tagamagmana (sic), ang aking isang
lupang residential o tirahan sampu ng aking bahay nahan ng nakatirik doon na
nasa Bagong Pook din, San Antonio, Lungsod ng Kabite, at nakikilala bilang Lote
no. 7, Block no. 1, of Subdivision Plan Psd-12247; known as Cavite Beach
Subdivision; being a portion of Lot No. 1055, of the Cadastral survey of Cavite,
GLRO Cadastral Rec. no. 9539; may sukat na 150 metros cuadrados, at nakatala
sa pangalan ko sa Titulo Torrens bilang TCT-T-3268 (RT-4036) ng Lungsod ng
Kabite;
Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na ako'y
pumanaw sa mundo, at sa ilalim ng kondision na:
Magbubuhat o babawasin sa halaga ng nasabing lupa at bahay ang anumang
magugul o gastos sa aking libing at nicho at ang anumang matitira ay hahatiin ng
APAT na parte, parepareho isang parte sa bawat anak kong nasasabi sa itaas nito
upang maliwanang (sic) at walang makakalamang sinoman sa kanila;
At kaming apat na anak na nakalagda o nakadiit sa kasulatang ito ay
TINATANGGAP NAMIN ang kaloob-palang ito ng aming magulang na si Basilisa
Comerciante, at tuloy pinasasalamatan namin siya ng taos sa (sic) puso dahil sa
kagandahan look (sic) niyang ito sa amin.
SA KATUNAYAN, ay nilagdaan o diniitan namin ito sa Nobeleta, Kabite, ngayong
ika-17 ng Disyembre taong 1975.
HER MARK HER MARK
BASELISA COMERCIANTE ROSARIO AUSTRIA
Tagakaloob-pala
(Sgd.) APOLINARIA AUSTRIA HER MARK
Tagatanggap-pala CONSOLACION AUSTRIA
(Sgd.) FLORENTINO LUMUBOS
Tagatanggap-pala
37
(Acknowledgment signed by Notary Public C.T. Viniegra is omitted). 4
Basilisa and her said children likewise executed another notarized document
denominated as "Kasulatan" which is attached to the deed of donation. The said
document states that:
KASULATAN
TALASTASIN NG MADLA:
Na kaming mga nakalagda o nakadiit sa labak nito — sila Basilisa Comerciante at
ang kanyang mga anak na sila:
Rosario Austria, Consolacion Austria, Apolonio Austria, at Florentino Lumubos,
pawang may mga sapat na gulang, na lumagda o dumiit sa kasulatang kaloob pala,
na sinangayunan namin sa harap ng Notario Publico, Carlos T. Viniegra, ay
nagpapahayag ng sumusunod:
Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng
tirahan ng Bagong Pook na nababanggit sa nasabing kasulatan, ay mananatili sa
poder o possession ng Ina, na si Basilisa Comerciante habang siya ay nabubuhay
at
Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa
habang maybuhay ang nasabing Basilisa Comerciante.
Sa katunayan ang nagsilagda kaming lahat sa labak nito sa harap ng abogado
Carlos T. Viniegra at dalawang saksi.
Nobeleta, Kabite. Ika-17 ng Disyembre, 1975. 5
On February 6, 1979, Basilisa executed a Deed of Absolute Sale of the subject
house and lot in favor of herein petitioner Apolinaria Austria-Magat for Five
Thousand Pesos (P5,000.00). As the result of the registration of that sale, Transfer
Certificate of Title (TCT for brevity) No. RT-4036 in the name of the donor was
cancelled and in lieu thereof TCT No. T-10434 was issued by the Register of Deeds
of Cavite City in favor of petitioner Apolinaria Austria-Magat on February 8, 1979.
On September 21, 1983, herein respondents Teodora Carampot, Domingo Comia,
and Ernesto Apolo (representing their deceased mother Consolacion Austria),
Ricardo, Mamerto and Segunda, all surnamed Sumpelo (representing their
deceased mother Rosario Austria) and Florentino Lumubos filed before the
Regional Trial Court of Cavite an action, docketed as Civil Case No. 4426 against
the petitioner for annulment of TCT No. T-10434 and other relevant documents,
and for reconveyance and damages.
On August 15, 1986, the trial court dismissed Civil Case No. 4426 per its Decision,
the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, this Court hereby renders judgment for
defendant dismissing this case and ordering plaintiffs to pay the amount of
P3,000.00 as attorney's fees and the costs of suit.
SO ORDERED. 6
According to the trial court, the donation is a donation mortis causa pursuant to
Article 728 of the New Civil Code inasmuch as the same expressly provides that it
would take effect upon the death of the donor; that 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; and that 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.
On appeal, the decision of the trial court was reversed by the Court of Appeals in
its subject decision, the dispositive portion of which reads, to wit:
WHEREFORE, in view of the foregoing, the appealed decision is hereby SET ASIDE
and a new one rendered:

1. declaring null and void the Deed of Sale of Registered Land (Annex B) and
Transfer Certificate of Title No. T-10434 of the Registry of Deeds of Cavite City
(Annex E) and ordering the cancellation thereof; and
2. declaring appellants and appellee co-owners of the house and lot in question
in accordance with the deed of donation executed by Basilisa Comerciante on
December 17, 1975.
No pronouncement as to costs.
SO ORDERED. 7
The appellate court declared in its decision that:
In the case at bar, the decisive proof that the deed is a donation inter vivos is in
the provision that:
Ibinibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na
anak ko at sa kanilang mga tagapagmana, ang aking lupang residential o tirahan
sampu ng aking bahay nakatirik doon . . . (emphasis supplied)
This is a clear expression of the irrevocability of the conveyance. The irrevocability
of the donation is a characteristic of a donation inter vivos. By the words "hindi
mababawi", 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 donor's lifetime. . .
xxx xxx xxx
In the attached document to the deed of donation, the donor and her children
stipulated that:
Gayon din ang nasabing titulo ay hindi mapapasangla o maipagbibili ang lupa
habang may buhay ang nasabing Basilisa Comerciante."
The stipulation is a reiteration of the irrevocability of the dispossession on the
part of the donor. On the other hand, the prohibition to encumber, alienate or
sell the property during the lifetime of the donor is a recognition of the ownership
over the house and lot in issue of the donees for only in the concept of an owner
can one encumber or dispose a property. 8
Hence this appeal grounded on the following assignment of errors:
I property while he is alive. In the Bonsato case, we held that:
THE RESPONDENT COURT OF APPEALS, WITH DUE RESPECT, IGNORED THE RULES
OF INTERPRETATION OF CONTRACTS WHEN IT CONSIDERED THE DONATION IN
QUESTION AS INTER VIVOS.
II
THE RESPONDENT COURT OF APPEALS, AGAIN WITH DUE RESPECT, ERRED IN NOT
HOLDING THAT THE PRESENT ACTION HAS PRESCRIBED UNDER THE STATUTE OF
LIMITATIONS. 9
Anent the first assignment of error, the petitioner argues that the Court of
Appeals erred in ruling that the donation was a donation inter vivos. She claims
that in interpreting a document, the other relevant provisions therein must be
read in conjunction with the rest. While the document indeed stated that the
donation was irrevocable, that must be interpreted in the light of the provisions
providing that the donation cannot be encumbered, alienated or sold by anyone,
that the property donated shall remain in the possession of the donor while she
is alive, and that the donation shall take effect only when she dies. Also, the
petitioner claims that the donation is mortis causa for the reason that the
contemporaneous and subsequent acts of the donor, Basilisa Comerciante,
showed such intention. Petitioner cites the testimony of Atty. Viniegra, who
notarized the deed of donation, that it was the intent of the donor to maintain
control over the property while she was alive; that such intent was shown when
she actually sold the lot to herein petitioner.
We affirm the appellate court's decision.
38
The provisions in the subject deed of donation that are crucial for the
determination of the class to which the donation belongs are, as follows:
xxx xxx xxx
. . . (I)binibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat
na anak ko at sa kanilang mga tagapagmanana, ang aking lupang residential o
tirahan sampu ng aking bahay nakatirik doon na nasa Bagong Pook din, San
Antonio, Lungsod ng Kabite
xxx xxx xxx
Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na ako'y
pumanaw sa mundo, . . . .
Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng
tirahan ng Bagong Pook na nababanggit sa nasabing kasulatan, ay mananatili sa
power o possession ng Ina, na si Basilisa Comerciante habang siya ay nabubuhay
at
Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa
habang maybuhay ang nasabing Basilisa Comerciante . . . .
It has been held that whether the donation is inter vivos or mortis causa depends
on whether the donor intended to transfer ownership over the properties upon
the execution of the deed. 10 In Bonsato v. Court of Appeals, 11 this Court
enumerated the characteristics of a donation mortis causa, to wit:
(1) It conveys no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive;
(2) That before his death, the transfer should be revocable by the transferor at
will, ad nutum; but revocability may be provided for indirectly by means of a
reserved power in the donor to dispose of the properties conveyed;
(3) That the transfer should be void if the transferor should survive the transferee.
Significant to the resolution of this issue is the irrevocable character of the
donation in the case at bar. In Cuevas v. Cuevas, 12 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
(W)hat 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 (Old Civil Code, Art. 737; New Civil Code, Art. 828). 13
Construing together the provisions of the deed of donation, we find and so hold
that in the case at bar the donation is inter vivos. The express irrevocability of the
same ("hindi na mababawi") is the distinctive standard that identifies that
document as a donation inter vivos. The other provisions therein which seemingly
make the donation mortis causa do not go against the irrevocable character of
the subject donation. According to the petitioner, the provisions which state that
the same will only take effect upon the death of the donor and that there is a
prohibition to alienate, encumber, dispose, or sell the same, are proofs that the
donation is mortis causa. We disagree. The said provisions should be harmonized
with its express irrevocability. In Bonsato where the donation per the deed of
donation would also take effect upon the death of the donor with reservation for
the donor to enjoy the fruits of the land, the Court held that the said statements
only mean that "after the donor's death, the donation will take effect so as to
make the donees the absolute owners of the donated property, free from all liens
and encumbrances; for it must be remembered that the donor reserved for
himself a share of the fruits of the land donated." 14
In Gestopa v. Court of Appeals, 15 this Court held that the prohibition to alienate
does not necessarily defeat the inter vivos character of the donation. It even
highlights the fact that what remains with the donor is the right of usufruct and
not anymore the naked title of ownership over the property donated. In the case
at bar, the provision in the deed of donation that the donated property will remain
in the possession of the donor just goes to show that the donor has given up his
naked title of ownership thereto and has maintained only the right to use (jus
utendi) and possess (jus possidendi) the subject donated property.
Thus, we arrive at no other conclusion in that the petitioner's cited provisions are
only necessary assurances that during the donor's lifetime, the latter would still
enjoy the right of possession over the property; but, his naked title of ownership
has been passed on to the donees; and that upon the donor's death, the donees
would get all the rights of ownership over the same including the right to use and
possess the same.
Furthermore, it also appeared that the provision in the deed of donation
regarding the prohibition to alienate the subject property is couched in general
terms such that even the donor is deemed included in the said prohibition
("Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa
habang maybuhay ang nasabing Basilisa Comerciante"). Both the donor and the
donees were prohibited from alienating and encumbering the property during the
lifetime of the donor. If the donor intended to maintain full ownership over the
said property until her death, she could have expressly stated therein a
reservation of her right to dispose of the same. The prohibition on the donor to
alienate the said property during her lifetime is proof that naked ownership over
the property has been transferred to the donees. It also supports the irrevocable
nature of the donation considering that the donor has already divested herself of
the right to dispose of the donated property. On the other hand, the prohibition
on the donees only meant that they may not mortgage or dispose the donated
property while the donor enjoys and possesses the property during her lifetime.
However, it is clear that the donees were already the owners of the subject
property due to the irrevocable character of the donation.
The petitioner argues that the subsequent and contemporaneous acts of the
donor would show that her intention was to maintain control over her properties
while she was still living. We disagree. Respondent Domingo Comia testified that
sometime in 1977 or prior to the sale of the subject house and lot, his
grandmother, the donor in the case at bar, delivered the title of the said property
to him; and that the act of the donor was a manifestation that she was
acknowledging the ownership of the donees over the property donated. 16
Moreover, Atty. Viniegra testified that when the donor sold the lot to the
petitioner herein, she was not doing so in accordance with the agreement and
intent of the parties in the deed of donation; that she was disregarding the
provision in the deed of donation prohibiting the alienation of the subject
property; and that she knew that the prohibition covers her as well as the donees.
17
Another indication in the deed of donation that the donation is inter vivos is the
acceptance clause therein of the donees. We have ruled that an acceptance clause
is a mark that the donation is inter vivos. Acceptance is a requirement for
donations inter vivos. On the other hand, donations mortis causa, being in the
form of a will, are not required to be accepted by the donees during the donor's
lifetime. 18
We now rule on whether the donor validly revoked the donation when one of her
daughters and donees, Consolacion Austria, violated the prohibition to encumber
the property. When Consolacion Austria mortgaged the subject property to a
certain Baby Santos, the donor, Basilisa Comerciante, asked one of the
respondents herein, Domingo Comia, to redeem the property, which the latter
did. After the petitioner in turn redeemed the property from respondent
Domingo, the donor, Basilisa, sold the property to the petitioner who is one of the
donees.
The act of selling the subject property to the petitioner herein cannot be
considered as a valid act of revocation of the deed of donation for the reason that
a formal case to revoke the donation must be filed pursuant to Article 764 of the
Civil Code 19 which speaks of an action that has a prescriptive period of four (4)
years from non-compliance with the condition stated in the deed of donation. The
rule that there can be automatic revocation without benefit of a court action does
not apply to the case at bar for the reason that the subject deed of donation is
devoid of any provision providing for automatic revocation in the event of non-
compliance with the any of the conditions set forth therein. Thus, a court action
39
is necessary to be filed within four (4) years from the non-compliance of the
condition violated. As regards the ground of estoppel, the donor, Basilisa, cannot
invoke the violation of the provision on the prohibition to encumber the subject
property as a basis to revoke the donation thereof inasmuch as she acknowledged
the validity of the mortgage executed by the donee, Consolacion Austria, when
the said donor asked respondent Domingo Comia to redeem the same.
Thereafter, the donor, Basilisa likewise asked respondent Florentino Lumubos
and the petitioner herein to redeem the same. 20 Those acts implied that the
donees have the right of control and naked title of ownership over the property
considering that the donor, Basilisa condoned and acknowledged the validity of
the mortgage executed by one of the donees, Consolacion Austria.
Anent the second issue, the petitioner asserts that the action, against the
petitioner, for annulment of TCT No. T-10434 and other relevant documents, for
reconveyance and damages, filed by the respondents on September 21, 1983 on
the ground of fraud and/or implied trust has already prescribed. The sale
happened on February 6, 1979 and its registration was made on February 8, 1979
when TCT No. RT-4036 in the name of the donor was cancelled and in lieu thereof
TCT No. T-10434 in the name of the petitioner was issued. Thus, more than four
(4) years have passed since the sale of the subject real estate property was
registered and the said new title thereto was issued to the petitioner. The
petitioner contends that an action for reconveyance of property on the ground of
alleged fraud must be filed within four (4) years from the discovery of fraud which
is from the date of registration of the deed of sale on February 8, 1979; and that
the same prescriptive period also applies to a suit predicated on a trust
relationship that is rooted on fraud of breach of trust.
When one's property is registered in another's name without the former's
consent, an implied trust is created by law in favor of the true owner. Article 1144
of the New Civil Code provides:
Art. 1144. The following actions must be brought within ten years from the time
the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment. (n)
Thus, an action for reconveyance of the title to the rightful owner prescribes in
ten (10) years from the issuance of the title. 21 It is only when fraud has been
committed that the action will be barred after four (4) years. 22
However, the four-year prescriptive period is not applicable to the case at bar for
the reason that there is no fraud in this case. The findings of fact of the appellate
court which are entitled to great respect, are devoid of any finding of fraud. The
records do not show that the donor, Basilisa, and the petitioner ever intended to
defraud the respondents herein with respect to the sale and ownership of the said
property. On the other hand, the sale was grounded upon their honest but
erroneous interpretation of the deed of donation that it is mortis causa, not inter
vivos; and that the donor still had the rights to sell or dispose of the donated
property and to revoke the donation.
There being no fraud in the trust relationship between the donor and the donees
including the herein petitioner, the action for reconveyance prescribes in ten (10)
years. Considering that TCT No. T-10434 in the name of the petitioner and
covering the subject property was issued only on February 8, 1979, the filing of
the complaint in the case at bar in 1983 was well within the ten-year prescriptive
period.
The Court of Appeals, therefore, committed no reversible error in its appealed
Decision.
WHEREFORE, the appealed Decision dated June 30, 1989 of the Court of Appeals
is hereby AFFIRMED. No pronouncement as to costs. ScaCEH
SO ORDERED.
Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.
SECOND DIVISION
[G.R. No. 187056. September 20, 2010.]
JARABINI G. DEL ROSARIO, petitioner, vs. ASUNCION G. FERRER, substituted by
her heirs, VICENTE, PILAR, ANGELITO, FELIXBERTO, JR., all surnamed G. FERRER,
and MIGUELA FERRER ALTEZA, respondents.
DECISION
ABAD, J p:
This case pertains to a gift, otherwise denominated as a donation mortis causa,
which in reality is a donation inter vivos made effective upon its execution by the
donors and acceptance thereof by the donees, and immediately transmitting
ownership of the donated property to the latter, thus precluding a subsequent
assignment thereof by one of the donors. IDTcHa
The Facts and the Case
On August 27, 1968 the spouses Leopoldo and Guadalupe Gonzales executed a
document entitled "Donation Mortis Causa" 1 in favor of their two children,
Asuncion and Emiliano, and their granddaughter, Jarabini (daughter of their
predeceased son, Zoilo) covering the spouses' 126-square meter lot and the
house on it in Pandacan, Manila 2 in equal shares. The deed of donation reads:
It is our will that this Donation Mortis Causa shall be irrevocable and shall be
respected by the surviving spouse.
It is our will that Jarabini Gonzales-del Rosario and Emiliano Gonzales will continue
to occupy the portions now occupied by them.
It is further our will that this DONATION MORTIS CAUSA shall not in any way affect
any other distribution of other properties belonging to any of us donors whether
testate or intestate and where ever situated.
It is our further will that any one surviving spouse reserves the right, ownership,
possession and administration of this property herein donated and accepted and
this Disposition and Donation shall be operative and effective upon the death of
the DONORS. 3
Although denominated as a donation mortis causa, which in law is the equivalent
of a will, the deed had no attestation clause and was witnessed by only two
persons. The named donees, however, signified their acceptance of the donation
on the face of the document.
Guadalupe, the donor wife, died in September 1968. A few months later or on
December 19, 1968, Leopoldo, the donor husband, executed a deed of
assignment of his rights and interests in subject property to their daughter
Asuncion. Leopoldo died in June 1972.
In 1998 Jarabini filed a "petition for the probate of the August 27, 1968 deed of
donation mortis causa" before the Regional Trial Court (RTC) of Manila in Sp. Proc.
98-90589. 4 Asuncion opposed the petition, invoking his father Leopoldo's
assignment of his rights and interests in the property to her. HITAEC
After trial, the RTC rendered a decision dated June 20, 2003, 5 finding that the
donation was in fact one made inter vivos, the donors' intention being to transfer
title over the property to the donees during the donors' lifetime, given its
irrevocability. Consequently, said the RTC, Leopoldo's subsequent assignment of
his rights and interest in the property was void since he had nothing to assign. The
RTC thus directed the registration of the property in the name of the donees in
equal shares. 6
On Asuncion's appeal to the Court of Appeals (CA), the latter rendered a decision
on December 23, 2008, 7 reversing that of the RTC. The CA held that Jarabini
cannot, through her petition for the probate of the deed of donation mortis causa,
collaterally attack Leopoldo's deed of assignment in Asuncion's favor. The CA
further held that, since no proceeding exists for the allowance of what Jarabini
claimed was actually a donation inter vivos, the RTC erred in deciding the case the
way it did. Finally, the CA held that the donation, being one given mortis causa,
did not comply with the requirements of a notarial will, 8 rendering the same void.
Following the CA's denial of Jarabini's motion for reconsideration, 9 she filed the
present petition with this Court.
40
Issue Presented
The key issue in this case is whether or not the spouses Leopoldo and Guadalupe's
donation to Asuncion, Emiliano, and Jarabini was a donation mortis causa, as it
was denominated, or in fact a donation inter vivos.
The Court's Ruling
That the document in question in this case was captioned "Donation Mortis
Causa" is not controlling. This Court has held that, if a donation by its terms is inter
vivos, this character is not altered by the fact that the donor styles it mortis causa.
10
In Austria-Magat v. Court of Appeals, 11 the Court held that "irrevocability" is a
quality absolutely incompatible with the idea of conveyances mortis causa, where
"revocability" is precisely the essence of the act. A donation mortis causa has the
following characteristics:
1. It conveys no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive; EDSAac
2. That before his death, the transfer should be revocable by the transferor at will,
ad nutum; but revocability may be provided for indirectly by means of a reserved
power in the donor to dispose of the properties conveyed; and
3. That the transfer should be void if the transferor should survive the transferee.
12 (Underscoring supplied)
The Court thus said in Austria-Magat that the express "irrevocability" of the
donation is the "distinctive standard that identifies the document as a donation
inter vivos." Here, the donors plainly said that it is "our will that this Donation
Mortis Causa shall be irrevocable and shall be respected by the surviving spouse."
The intent to make the donation irrevocable becomes even clearer by the proviso
that a surviving donor shall respect the irrevocability of the donation.
Consequently, the donation was in reality a donation inter vivos.
The donors in this case of course reserved the "right, ownership, possession, and
administration of the property" and made the donation operative upon their
death. But this Court has consistently held that such reservation (reddendum) in
the context of an irrevocable donation simply means that the donors parted with
their naked title, maintaining only beneficial ownership of the donated property
while they lived. 13
Notably, the three donees signed their acceptance of the donation, which
acceptance the deed required. 14 This Court has held that an acceptance clause
indicates that the donation is inter vivos, since acceptance is a requirement only
for such kind of donations. Donations mortis causa, being in the form of a will,
need not be accepted by the donee during the donor's lifetime. 15
Finally, as Justice J. B. L. Reyes said in Puig v. Peñaflorida, 16 in case of doubt, the
conveyance should be deemed a donation inter vivos rather than mortis causa, in
order to avoid uncertainty as to the ownership of the property subject of the
deed.
Since the donation in this case was one made inter vivos, it was immediately
operative and final. The reason is that such kind of donation is deemed perfected
from the moment the donor learned of the donee's acceptance of the donation.
The acceptance makes the donee the absolute owner of the property donated. 17
Given that the donation in this case was irrevocable or one given inter vivos,
Leopoldo's subsequent assignment of his rights and interests in the property to
Asuncion should be regarded as void for, by then, he had no more rights to assign.
He could not give what he no longer had. Nemo dat quod non habet. 18 SaIHDA
The trial court cannot be faulted for passing upon, in a petition for probate of
what was initially supposed to be a donation mortis causa, the validity of the
document as a donation inter vivos and the nullity of one of the donor's
subsequent assignment of his rights and interests in the property. The Court has
held before that the rule on probate is not inflexible and absolute. 19 Moreover,
in opposing the petition for probate and in putting the validity of the deed of
assignment squarely in issue, Asuncion or those who substituted her may not now
claim that the trial court improperly allowed a collateral attack on such
assignment.

WHEREFORE, the Court GRANTS the petition, SETS ASIDEthe assailed December
23, 2008 Decision and March 6, 2009 Resolution of the Court of Appeals in CA-
G.R. CV 80549, and REINSTATES in toto the June 20, 2003 Decision of the Regional
Trial Court of Manila, Branch 19, in Sp. Proc. 98-90589.
SO ORDERED.
Carpio, Peralta, Bersamin * and Perez, ** JJ., concur.
FIRST DIVISION
[G.R. No. 131953. June 5, 2002.]
MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and MERLY S. CABATINGAN,
petitioners, vs. THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M. BOQUIA,
PERLA M. ABELLA, ESTRELLA M. CAÑETE, LOURDES M. YUSON, and JULIA L.
MAYOL, HEIRS OF GENOVIVA C. NATIVIDAD namely, OSCAR C. NATIVIDAD, OLGA
NATIVIDAD, ODETTE NATIVIDAD, OPHELIA NATIVIDAD, RICHARD NATIVIDAD,
RAYMUND NATIVIDAD, RICHIE NATIVIDAD, SONIA NATIVIDAD and ENCARNACION
CABATINGAN VDA. DE TRINIDAD, ALFREDO CABATINGAN and JESUSA C. NAVADA,
respondents.
Bienvenido R. Saniel, Jr. for petitioners.
Senining Belciña & Atup for private respondents.
SYNOPSIS
Conchita Cabatingan, during her lifetime, executed four Deeds of Donation in
favor of petitioners. The Deeds provide, among others, that the donation will
become effective upon the death of the donor and the same shall be rescinded in
case the donee predeceased the donor. After Conchita's death, respondents,
heirs of Conchita, filed an action before the Regional Trial Court of Mandaue,
seeking the annulment of the said four Deeds of Donation. Respondents alleged,
inter alia, that the documents were void for failing to comply with the provisions
of the Civil Code regarding formalities of wills and testaments, considering that
the Deeds were donation mortis causa. The RTC favorably ruled for the
respondents. Hence, this petition.
Petitioners insisted that the Deeds were inter vivos donations as they were made
by the late Conchita "in consideration of the love and affection of the donor" for
the donee, and there was nothing in the Deeds which indicate that the donations
were made in consideration of Conchita's death. Petitioners further alleged that
the stipulation on rescission in case petitioners die ahead of Conchita was a
resolutory condition that confirmed the nature of the donations as inter vivos.
The Supreme Court found petitioners' arguments bereft of merit. It held that in a
donation mortis causa, "the right of disposition is not transferred to the donee
while the donor is still alive." In the present case, the nature of the donations as
mortis causa was confirmed by the fact that the donations did not contain any
clear provision that intends to pass proprietary rights to petitioners prior to
Conchita's death. The phrase "to become effective upon the death of the DONOR"
admits of no other interpretation but that Conchita did not intend to transfer the
ownership of the properties to petitioners during her lifetime. That the donations
were made "in consideration of the love and affection of the donor" did not
qualify the donations as inter vivos because transfers mortis causa may also be
made for the same reason. Considering that the disputed donations were
donations mortis causa, and the same partakes of testamentary provisions, the
Court held that the trial court did not commit any reversible error in declaring the
subject Deeds null and void for failure to comply with the requisites on
solemnities of wills and testaments under Articles 805 and 806 of the Civil Code.
Petition denied.
SYLLABUS
1. CIVIL LAW; DONATIONS; DONATION MORTIS CAUSA; CHARACTERISTICS; RIGHT
OF DISPOSITION IS NOT TRANSFERRED TO THE DONEE WHILE THE DONOR IS STILL
ALIVE; CASE AT BAR. — In a donation mortis causa, "the right of disposition is not
transferred to the donee while the donor is still alive." In determining whether a
donation is one of mortis causa, the following characteristics must be taken into
41
account: (1) It conveys no title or ownership to the transferee before the death of
the transferor; or what amounts to the same thing, that the transferor should
retain the ownership (full or naked) and control of the property while alive; (2)
That before his death, the transfer should be revocable by the transferor at will,
ad nutum; but revocability may be provided for indirectly by means of a reserved
power in the donor to dispose of the properties conveyed; and (3) That the
transfer should be void if the transferor should survive the transferee. In the
present case, the nature of the donations as mortis causa is confirmed by the fact
that the donations do not contain any clear provision that intends to pass
proprietary rights to petitioners prior to Cabatingan's death. The phrase "to
become effective upon the death of the DONOR" admits of no other
interpretation but that Cabatingan did not intend to transfer the ownership of the
properties to petitioners during her lifetime.
2. ID.; ID.; ID.; MAY BE MADE IN CONSIDERATION OF THE LOVE AND AFFECTION
OF THE DONOR TO THE DONEE. — That the donations were made "in
consideration of the love and affection of the donor" does not qualify the
donations as inter vivos because transfers mortis causa may also be made for the
same reason.
3. ID.; ID.; ID.; TRANSFER SHALL BE CONSIDERED VOID IF DONOR SHOULD
SURVIVE THE DONEE. — The herein subject deeds expressly provide that the
donation shall be rescinded in case petitioners predecease Conchita Cabatingan.
As stated in Reyes v. Mosqueda, one of the decisive characteristics of a donation
mortis causa is that the transfer should be considered void if the donor should
survive the donee. This is exactly what Cabatingan provided for in her donations.
If she really intended that the donation should take effect during her lifetime and
that the ownership of the properties donated be transferred to the donee or
independently of, and not by reason of her death, she would have not expressed
such proviso in the subject deeds.
4. ID.; ID.; ID.; MUST BE EXECUTED IN ACCORDANCE WITH REQUISITES ON
SOLEMNITIES OF WILLS AND TESTAMENTS; SUBJECT DEEDS OF DONATION
CONSIDERED NULL AND VOID IN CASE AT BAR. — Considering that the disputed
donations are donations mortis causa, the same partake of the nature of
testamentary provisions and as such, said deeds must be executed in accordance
with the requisites on solemnities of wills and testaments under Articles 805 and
806 of the Civil Code, to wit: . . . The deeds in question although acknowledged
before a notary public of the donor and the donee, the documents were not
executed in the manner provided for under the above-quoted provisions of law.
Thus, the trial court did not commit any reversible error in declaring the subject
deeds of donation null and void.
DECISION
AUSTRIA-MARTINEZ, J p:
Posed for resolution before the Court in this petition for review on certiorari filed
under Rule 45 of the Rules of Court is the sole issue of whether the donations
made by the late Conchita Cabatingan are donations inter vivos or mortis causa.
ISaCTE
The facts of the case are as follows: DSEIcT
On February 17, 1992, Conchita Cabatingan executed in favor of her brother,
petitioner Nicolas Cabatingan, a "Deed of Conditional of Donation (sic) Inter Vivos
for House and Lot" covering one-half (1/2) portion of the former's house and lot
located at Cot-cot, Liloan, Cebu. 1 Four (4) other deeds of donation were
subsequently executed by Conchita Cabatingan on January 14, 1995, bestowing
upon: (a) petitioner Estela C. Maglasang, two (2) parcels of land — one located in
Cogon, Cebu (307 sq. m.) and the other, a portion of a parcel of land in Masbate
(50,232 sq. m.); (b) petitioner Nicolas Cabatingan, a portion of a parcel of land
located in Masbate (80,000 sq. m.); and (c) petitioner Merly S. Cabatingan, a
portion of the Masbate property (80,000 sq. m.). 2 These deeds of donation
contain similar provisions, to wit:
"That for and in consideration of the love and affection of the DONOR for the
DONEE, . . . the DONOR does hereby, by these presents, transfer, convey, by way
of donation, unto the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become effective upon the
death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE
should die before the DONOR, the present donation shall be deemed
automatically rescinded and of no further force and effect; . . ." 3 (Emphasis Ours)
On May 9, 1995, Conchita Cabatingan died.
Upon learning of the existence of the foregoing donations, respondents filed with
the Regional Trial Court of Mandaue, Branch 55, an action for Annulment And/Or
Declaration of Nullity of Deeds of Donations and Accounting, docketed as Civil
Case No. MAN-2599, seeking the annulment of said four (4) deeds of donation
executed on January 14, 1995. Respondents allege, inter alia, that petitioners,
through their sinister machinations and strategies and taking advantage of
Conchita Cabatingan's fragile condition, caused the execution of the deeds of
donation, and, that the documents are void for failing to comply with the
provisions of the Civil Code regarding formalities of wills and testaments,
considering that these are donations mortis causa. 4 Respondents prayed that a
receiver be appointed in order to preserve the disputed properties, and, that they
be declared as co-owners of the properties in equal shares, together with
petitioner Nicolas Cabatingan. 5
Petitioners in their Amended Answer, deny respondents' allegations contending
that Conchita Cabatingan freely, knowingly and voluntarily caused the
preparation of the instruments. 6
On respondents' motion, the court a quo rendered a partial judgment on the
pleadings on December 2, 1997 in favor of respondents, with the following
dispositive portion:
"WHEREFORE, and in consideration of all the foregoing, judgment is hereby
rendered in favor of the plaintiffs and against the defendant and unwilling co-
plaintiff with regards (sic) to the four Deeds of Donation Annexes "A", "A-1", "B"
and Annex "C" which is the subject of this partial decision by:
a) Declaring the four Deeds of Donation as null and void ab initio for being a
donation Mortis Causa and for failure to comply with formal and solemn requisite
under Art. 806 of the New Civil Code;
b) To declare the plaintiffs and defendants as well as unwilling co-plaintiff as the
heirs of the deceased Conchita Cabatingan and therefore hereditary co-owners of
the properties subject of this partial decision, as mandated under Art. 777 of the
New Civil Code;
SO ORDERED." 7
The court a quo ruled that the donations are donations mortis causa and
therefore the four (4) deeds in question executed on January 14, 1995 are null
and void for failure to comply with the requisites of Article 806 of the Civil Code
on solemnities of wills and testaments. 8
Raising questions of law, petitioners elevated the court a quo's decision to this
Court, 9 alleging that:
"THE LOWER COURT PALPABLY DISREGARDED THE LONG-AND-WELL-
ESTABLISHED RULINGS OF THIS HONORABLE SUPREME COURT ON THE
CHARACTERIZATION OF DONATIONS AS INTER VIVOS OR MORTIS CAUSA AND,
INSTEAD, PROCEEDED TO INTERPRET THE DONATIONS IN QUESTION IN A
MANNER CONTRARY THERETO." 10
Petitioners insist that the donations are inter vivos donations as these were made
by the late Conchita Cabatingan "in consideration of the love and affection of the
donor" for the donee, and there is nothing in the deeds which indicate that the
donations were made in consideration of Cabatingan's death. 11 In addition,
petitioners contend that the stipulation on rescission in case petitioners die ahead
of Cabatingan is a resolutory condition that confirms the nature of the donation
as inter vivos.
Petitioners' arguments are bereft of merit.
In a donation mortis causa, "the right of disposition is not transferred to the donee
while the donor is still alive." 12 In determining whether a donation is one of
mortis causa, the following characteristics must be taken into account:
(1) It conveys no title or ownership to the transferee before the death of the
transferor; or what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive;
42
(2) That before his death, the transfer should be revocable by the transferor at
will, ad nutum; but revocability may be provided for indirectly by means of a
reserved power in the donor to dispose of the properties conveyed;
and
(3) That the transfer should be void if the transferor should survive the transferee.
13
In the present case, the nature of the donations as mortis causa is confirmed by
the fact that the donations do not contain any clear provision that intends to pass
proprietary rights to petitioners prior to Cabatingan's death. 14 The phrase "to
become effective upon the death of the DONOR" admits of no other
interpretation but that Cabatingan did not intend to transfer the ownership of the
properties to petitioners during her lifetime. Petitioners themselves expressly
confirmed the donations as mortis causa in the following Acceptance and
Attestation clauses, uniformly found in the subject deeds of donation, to wit:
"That the DONEE does hereby accept the foregoing donation mortis causa under
the terms and conditions set forth therein, and avail herself of this occasion to
express her profound gratitude for the kindness and generosity of the DONOR."
xxx xxx xxx
"SIGNED by the above-named DONOR and DONEE at the foot of this Deed of
Donation mortis causa, which consists of two (2) pages . . . ." 15
That the donations were made "in consideration of the love and affection of the
donor" does not qualify the donations as inter vivos because transfers mortis
causa may also be made for the same reason. 16
Well in point is National Treasurer of the Phils. v. Vda. de Meimban. 17 In said
case, the questioned donation contained the provision:
"That for and in consideration of the love and affection which the DONOR has for
the DONEE, the said Donor by these presents does hereby give, transfer, and
convey unto the DONEE, her heirs and assigns a portion of ONE HUNDRED
THOUSAND (100,000) SQUARE METERS, on the southeastern part Pro-indiviso of
the above described property. (The portion herein donated is within Lot 2-B of
the proposed amendment Plan Subdivision of Lots Nos. 1 and 2, Psu-109393),
with all the buildings and improvements thereon, to become effective upon the
death of the DONOR. (emphasis supplied)" 18
Notably, the foregoing provision is similar to that contained in the donation
executed by Cabatingan. We held in Meimban case that the donation is a mortis
causa donation, and that the above quoted provision establishes the donor's
intention to transfer the ownership and possession of the donated property to
the donee only after the former's death. Further:
"As the donation is in the nature of a mortis causa disposition, the formalities of
a will should have been complied with under Article 728 of the Civil Code,
otherwise, the donation is void and would produce no effect. As we have held in
Alejandro v. Geraldez (78 SCRA 245, 253), "If the donation is made in
contemplation of the donor's death, meaning that the full or naked ownership of
the donated properties will pass to the donee because of the donor's death, then
it is at that time that the donation takes effect, and it is a donation mortis causa
which should be embodied in a last will and testament. (Citing Bonsato v. Court
of Appeals, 95 Phil. 481)." 19
We apply the above rulings to the present case. The herein subject deeds
expressly provide that the donation shall be rescinded in case petitioners
predecease Conchita Cabatingan. As stated in Reyes v. Mosqueda, 20 one of the
decisive characteristics of a donation mortis causa is that the transfer should be
considered void if the donor should survive the donee. This is exactly what
Cabatingan provided for in her donations. If she really intended that the donation
should take effect during her lifetime and that the ownership of the properties
donated be transferred to the donee or independently of, and not by reason of
her death, she would have not expressed such proviso in the subject deeds.
Considering that the disputed donations are donations mortis causa, the same
partake of the nature of testamentary provisions 21 and as such, said deeds must
be executed in accordance with the requisites on solemnities of wills and
testaments under Articles 805 and 806 of the Civil Code, to wit:

"ART. 805. Every will, other than a holographic will, must be subscribed at the end
thereof by the testator himself or by the testator's name written by some other
person in his presence, and by his express direction, and attested and subscribed
by three or more credible witnesses in the presence of the testator and of one
another.
The testator or the person requested by him to write his name and the
instrumental witnesses of the will, shall also sign, as aforesaid, each and every
page thereof, except the last, on the left margin, and all the pages shall be
numbered correlatively in letters placed on the upper part of each page.
The attestation shall state the number of pages used upon which the will is
written, and the fact that the testator signed the will and every page thereof, or
caused some other person to write his name, under his express direction, in the
presence of the instrumental witnesses, and that the latter witnessed and signed
the will and all the pages thereof in the presence of the testator and of one
another.
If the attestation clause is in a language not known to the witnesses, it shall be
interpreted to them. (n)
ART. 806. Every will must be acknowledged before a notary public by the testator
and the witnesses. The notary public shall not be required to retain a copy of the
will, or file another with the office of the Clerk of Court. (n)"
The deeds in question although acknowledged before a notary public of the donor
and the donee, the documents were not executed in the manner provided for
under the above-quoted provisions of law.
Thus, the trial court did not commit any reversible error in declaring the subject
deeds of donation null and void.
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.
Vitug and Kapunan, JJ., concur.
Davide, Jr., C.J. and Ynares-Santiago, J., on official leave.
JOSE M. CARIÑO vs. P. FERNANDO MA. ABAYA
FIRST DIVISION
[G.R. No. 46706. June 26, 1940.]
JOSE M. CARIÑO, petitioner-appellant, vs. P. FERNANDO MA. ABAYA, respondent-
appellee.
Fortunato de Leon for petitioner.
B. Quitoriano for respondent.
SYLLABUS
1. DONATION "MORTIS CAUSA"; REQUISITES; NULLITY.-The document in dispute
is a donation mortis causa. The seventh clause of the document reciting that "we
the sisters do hereby order that all these properties shall be given to those to
whom they have been assigned by virtue of this instrument at the expiration of
thirty days after the death of the last one to die between us," considered in
conjunction with the fact that the grantors employed the terms "there shall be
given to," "shall administer," and "shall be administered," which have reference
to the future, clearly brings forth the intention on the part of the G sisters to make
the distribution of their estate, as mapped out in Exhibit C-1, effective after their
death. The above-quoted seventh clause, being without limitation, applies as well
to the properties intended to be distributed as the properties merely to be
administered by M. C. It is worthy of observation, also, that in the ninth clause of
Exhibit C-1 the phrase "together with those who had been mentioned to inherit
from us" supplies a cogent reason for concluding that the grant therein made was
meant to take effect after the death of the grantors, for the word "inherit", as
43
used here, implies the acquisition of property by the heirs after the death of the
G sisters.
2. ID.; ID.; ID. — Donations which are to become effective upon the death of the
donor partake of the nature of disposals of property by will and shall be governed
by the rules established for testamentary successions. (Art. 620, Civil Code.)
Accordingly, said donations can only be made with the formalities of a will.
(Tuason and Tuason vs. Posadas, 64 Phil., 289.) As the document Exhibit C-1 was
not executed in conformity with the provisions of section 618 of the Code of Civil
Procedure, conspicuously for lack of attestation clause and marginal signatures,
we are constrained to hold that the same cannot be accorded any force and
effect.
DECISION
LAUREL, J p:
The root cause of the present legal controversy is a document executed on April
11, 1921 by Petrona Gray and Dorotea Gray, sisters, which, translated into English
from its original Ilocano version, recites as follows:
"We the sisters, Petrona J. Gray, 70 years of age, single, and resident of the
municipality of Candon, Ilocos Sur, and Dorotea Gray, 74 years old, also single and
resident of the same municipality of Candon, Province of Ilocos Sur, by this
instrument declare and set forth the following:
"First, not knowing when we are going to part from this life and having no
legitimate heirs we the sisters have agreed to distribute our properties, including
those which we have inherited from our deceased sister and brother, Paula Gray
and Antero Gray, among our relatives to be mentioned in this instrument by
reason of the love and affection which we profess toward them and for the
services rendered by them to us, to be divided as follows:
"(a) There shall be given to Jose Cariño the following (Description of the
properties)
"(b) There shall be given to Jose Cariño and Carmen Gallardo in the proportion of
one-half each the following: (Description of the properties)
"(c) There shall be given to be divided among Eufemia Escobar, Esperanza Oasan
and Severo Oasan the following: (Description of the properties)
"(d) There shall be given to Eufemia Escobar the following: (Description of the
properties)
"(e) There shall be given to Esperanza Cariño the following: (Description of the
property)
"(f) There shall be given to be divided equally between Manuel C. Cariño and
Antero C. Cariño the following: (Description of the properties)
"(g) There shall be given to be divided equally between Benito Abaya and Maximo
Abaya the following: (Description of the properties)
"(h) The shall be given to be divided equally between Esperanza Oasan and Severo
Oasan the following: (Description of the properties)
"(i) There shall be given to Potenciana Gray the following: (Description of the
properties)
"Second, we do order that there shall be administered by Miguel Cariño and those
whom he may designate to succeed him the following lands and that the proceeds
of sale of the products thereof shall be used for the necessary upkeep of the image
of the Lady La Purisima Concepcion: (Description of the properties)
"Third, we also do hereby order that Miguel Cariño and those whom he may
designate to succeed him shall administer the following lands and that the
proceeds of the sale of the products thereof shall be used for the necessary
upkeep of the images of Nuestra Senora de las Angustias and that of San Pedro:
(Description of the properties)
"Fourth, we likewise do hereby order to be set aside and to be placed in the
charge of Miguel Cariño and those whom he may designate to succeed him the
following lands, and that the proceeds of the sale of the products thereof shall be
used for the souls of the dead: (Description of the properties)
"Fifth, we also do hereby order that the lands in our possession together with
those under Miguel Cariño shall be administered by him and by those whom he
may designate to succeed him and that the proceeds of the products thereof shall
be used for the purposes to which they are at present dedicated in the same
manner as it had been ordered by our grandfather priest Julio Madarang and
grandmother Policarpia Madarang now deceased: (Description of the properties)
"Sixth, we do hereby also order that Isidro Abaya and those whom he may
designate to succeed him shall administer the lands which are now in his
possession and that the proceeds of the sale of the products thereof shall be used
for the same purposes to which our grandfather, Salvador Lazaro Madarang,
deceased, had ordered them to the used. Said properties are the following:
(Description of the properties)
"Seventh, we the sisters do hereby order that all these properties shall be given "In the municipality of San Esteban of the above-mentioned province this April
to those to whom they have been assigned by virtue of this instrument at the 11, 1921, A. D., personally appeared Petrona J. Gray Abaya and Dorotea Gray
expiration of thirty days after the death of the last one to die between us. Abaya, known to me to be same persons who executed the foregoing document
"Eighth, we do order that Miguel Cariño shall act as our representative to deliver and who acknowledged to have executed the same freely and voluntarily.
the aforesaid properties to the donees as set forth in this instrument so that no "The interested parties did not exhibit their cedula tax by reason of their sex.
controversy may arise among themselves in connection therewith And that Before me:
Miguel Cariño shall likewise take charge of all funds, if any left, belonging to us (Sgd.) BLAS J. ESPIRITU
and use the same to pay whatever expenses might be incurred during our sickness
including our funeral expenses and also to pay debts if any may appear to be due Justice of the Peace and
after our death.
"Ninth, we do hereby further order that Miguel Cariño together with those who Notary Public Ex-Officio
had been mentioned to inherit from us, shall take care of us in our sickness and
death as well as of our adequate burial in the cemetery of the Roman Catholic Not. Reg. No. 21
Church commensurate with our standing and position.
"Tenth, we, Jose Cariño, Carmen Gallardo, Eufemia Escobar, Esperanza Oasan, Pages 58-68
Severa Oasan, Esperanza C. Cariño, Manuel C. Cariilo, Antero Cariño, Benito
Abaya, Maximo Abaya, Potenciana A. Gray, Miguel Cariño and Isidro Abaya, after S. 1921
expressing our gratitude for this act of generosity granted us by Doña Petrona J.
Gray and Doña Dorotea Gray, do hereby declare that we accept the aforesaid Petrona Gray and Dorotea Gray both died intestate and without either ascendants
properties which had been designated for each of us And we do hereby promise or descendants, the first on January 28, 1927, and the second on July 9, 1927.
that we shall comply without fail with all the conditions, especially those of us Miguel Cariño, designated in the above-quoted document as the one to
who are charged with the trust set forth in this deed of donation. administer or deliver the properties therein referred to, predeceased Dorotea
"In the testimony whereof we hereby sign in the presence of witnesses here in Gray as he died on February 12, 1927. After the lapse of about seven years from
this town of Candon, Province of Ilocos Sur, P. I., this eleventh day of April of the the death of Dorotea Gray, or on February 16, 1935, Jose Cariño, son of Miguel
year 1921. Cariño and petitioner herein, commenced intestate proceedings in the Court of
"Donors: First Instance of Ilocos Sur in which he prayed that he be appointed administrator
(Sgd.) "PETRONA J. GRAY ABAYA of the estate left by the Gray sisters. Subsequently, on June 5, 1935, the said Jose
"DOROTEA GRAY ABAYA Cariño filed an amended petition praying that the properties described in
"Signed in the presence of: paragraph III thereof be declared trust properties and that he be appointed
"Witnesses: trustee of the same. On July 12, 1935, Father Fernando Ma. Abaya, respondent
(Sgd.) "AGUSTIN CARIÑO herein and first cousin of Petrona anad Dorotea Gray, interposed an opposition
"HONORATO E. ORDENES to the amended petition alleging that the document executed on April 11, 1921,
"MARCELO ESCOBAR by the Gray sisters (Exhibit C-1) is null and void and praying that the court make
"Donees: an adjudication to that effect. While on the hand, Jose Cariño contended that
"JOSE CARIÑO Exhibit C-1 is a do nation inter vivos creating at the same time a trust, Father
Fernando Abaya, on the other, alleged that said document is a will. The Court of
(Sgd. by) "MIGUEL CARIÑO First Instance of Ilocos Sur rendered judgment, the dispositive part of which is as
follows:
"ANTERO CARIÑO
"In view of the foregoing reasons, the court is of the opinion and so declare that
(Sgd. by) "MIGUEL CARIÑO the properties described in paragraph 2, 3 and 4 of Exhibit C-1 are trust properties
destined by the said trustors for religious and pious purposes; and that the
"MANUEL CARIÑO properties enumerated in paragraphs 5 and 6 of the said Exhibit C-1 are invalid
trust for the reason that the properties described in paragraph 5 did not belong
(Sgd. by) "MIGUEL CARIÑO to the said trustors, and, that the properties described in paragraph 6 thereof
were destined for a trust, the purpose of which is uncertain; and that while the
(Sgd.) "MIGUEL CARIÑO designation of said Jose Cariño is invalid. still the court may appoint one to act as
such (R.C.L,. p. 1274).
(Sgd.) "BENITO ABAYA "In view thereof, the court declares the properties described in paragraphs 2, 3
and 4 of Exhibit C-1 trust properties, and, for the purpose of carrying into effect
"ISIDRO ABAYA the provisions contained in said trust, application for the appointment of a
competent trustee may be made by the interested parties and after due hearing,
(Sgd. by) "MAXIMO ABAYA the court will appoint trustee or trustees, according as the situation may
demand."
(Sgd.) "MAXIMO ABAYA From this judgment, appeal was taken to the Court of Appeals which held that
Exhibit C-1 was neither a donation inter vivos as contended by the petitioner
(Sgd.) "POTENCIANA GRAY herein nor a will as alleged by the respondent, but a void donation mortis causa,
void because it was not executed with the formalities of a will. The dispositive
(Sgd.) "ESPERANZA OASAN part of the decision of the Court of Appeals is of the following tenor:
"Wherefore, the appealed judgment is hereby reversed without pronouncement
(Sgd.) "SEVERA OASAN as to the costs. Let the record of this case be remanded to the court of origin with
instructions to proceed with the appointment of an administrator of the
(Sgd.) "EUFEMIA ESCOBAR properties belonging to the estate of the deceased, Petrona and Dorotea Gray,
involved in this appeal, said administrator to be proposed by the appellant,
(Sgd.) "CARMEN GALLARDO Fernando Abaya, and for such other appropriate proceedings as the law requires."
We are now urged to hold by counsel for the petitioner that the Court of Appeals
(Sgd.) "ESPERANZA CARIÑO erred:
"I. In passing upon the validity of the deed of donation, Exhibit C-1 in the absence
(Sgd.) "JOSE MADARANG of any appeal on this point inviolation of established rules of pleading and
practice.
UNITED STATES OF AMERICA "II. In holding that the deed of donation, Exhibit C-1, is a void donation MORTIS
PHILIPPINE ISLANDS CAUSA wanting in the formalities of a will, and not a consummated donation IN
PROVINCE OF ILOCOS SUR PRAESENTI (inter vivos).
44
"III. In holding that Miguel Cariño was not authorized by the donees to accept the
donation in Exhibit C-1 in their behalf, when the question of authority is not in
issue, thereby committing an act of supererogation in violation of code practice.
"IV. In not holding that the respondent Fernando Abaya (oppositor below) is
without legal personality and interest in the suit, and cannot therefore attack the
validity of Exhibit C-1 collaterally.
"V. In not holding that whatever right or action the respondent Fernando Abaya
(oppositor below) has, by his laches and voluntary waiver and failure to appeal
from so much of the judgment of the trial court, has already pre scribed.
"VI. In not applying the doctrine of estoppel to the fact for the case in violation of
established rules and juris prudence applicable thereto.
"VII. In not holding that the properties described in paragraphs 2, 3, 4 and 5 of
Exhibit C-1 are absolute gifts to Miguel Cariño, predecessor in interest of
petitioner Jose M. Cariño, subject only to a charge.
"VIII. In not submitting the decision appealed from to the Court in BANC in view
of the considerable value of the estate, the weighty questions of law anad the
special circumstances of the case.
"IX. In not granting the relief prayed for by the petitioner Jose M. Cariño (applicant
below), and in rendering the judgment object of this review.
"X. The Honorable Court of Appeals has departed from the accepted usual course
of judicial proceedings in rendering the decision object of this review.
Under the first assignment of error, the petitioner raises the point that the nature
or validity of Exhibit C-1, not being a subject of appeal, could not be passed upon
by the Court of Appeals. We dismiss this point for lack of basis. In the Court of
First Instance of Ilocos Sur the question of validity was directly controverted
when, in his opposition, the respondent alleged that "el documento de supuesta
donacion a que alude la solicitud en mendada es nulo y carece de eficacia legal."
In the Court of Appeals the same issue was put in litigation as a result of the
exception taken by the respondent to the judgment of the trial court, and,
particularly, to the conclusion of said court that the properties described in
paragraphs 2, 3, and 4 of Exhibit C-1 are trust properties, an exception which, if
considered in relation to the respondent's ground of opposition, necessarily
involved the proposition that said properties could not be trust properties
because the document creating the alleged trust is null and void. Counsel for the
petitioner also argues that the trial court could not pass upon the validity of the
document in question for the reason that, relying on the case of Lopez vs. Olbes
(15 Phil., 540), the instant case is a special proceeding. We cannot concede
controlling force to the decision cited, because it merely held that objections
"founded on some defect or vice, which affect the essential nature and formalities
of the act of consideration of the action relative thereto, must be heard and
argued in an ordinary action, and must be decided in accordance with law by a
final judgment, and not by a ruling on a demurrer which ordinarily occurs in
connection with an incidental motion concerning mere formalities of procedure
and not in a full trial or due process of law wherein the rights of the contestants
have been examined, argued, and proved." In the present case the question
regarding the validity of Exhibit C-1 was not determined in a ruling upon a
demurrer. Furthermore, the record indicates that this is the first time the
petitioner has taken the trouble of interposing the technical objection suggested
in his first assignment of error, and we have already expressed our disapproval of
such practice. (Tan Machan vs. De la Trinidad et al., 3 Phil., 684; Alafriz vs. Mina,
28 Phil., 137; Vergara vs. Laciapag, 28 Phil., 439; Morales vs. Macandog, 7 Phil.,
132; U. S. vs. Inductivo, 40 Phil., 84; Martines and Villar vs. Tolentino, 43 Phil., 492;
Government vs. Osorio, 50 Phil., 864; Ramiro vs. Grano, 54 Phil., 744; Enriquez vs.
People, 37 Off. Gaz., 2121; Spencer Kellogg & Sons (Philippines), Inc. vs. Gelino, G.
R. No. 46271, promulgated October 18, 1939; Meneses vs. National Loan &
Investment Board, G.R. No. 46571, promulgated October 1, 1939.) It may be
added that the line of argument of the petitioner, if adopted, would be conducive
to multiplicity of suits.
The second, third and seventh errors assigned by counsel for the petitioner
submit the major question whether Exhibit C-1 is a donation inter vivos as claimed
by the petitioner, or a will as insisted by the respondent. We concur in the
conclusion of the Court of Appeals that the document in dispute is a donation
mortis causa. The seventh clause of the document reciting that "we the sisters do
hereby order that all these properties shall be given those to whom they have
been assigned by virtue of this instrument at the expiration of thirty days after
the death of the last one to die between us," considered in conjunction with the
fact that the grantors employed the terms "there shall be given to," "shall
administer," and "shall be administered," which have reference to the future,
clearly brings forth the intention on the part of the Gray sisters to make the
distribution of their estate, as mapped out in Exhibit C-1, effective after their
death. The above-quoted seventh clause, being without limitation, applies as to
the properties intended to be distributed as to the properties merely to be
administered by Miguel Cariño. It is worthy of observation, also, that in the ninth
45
clause of Exhibit C-1 the phrase "together with those who had been mentioned to
inherit from us" supplies a cogent reason for concluding that the grant therein
made was meant to take effect after the death of the grantors, for the word
"inherit," as used here, implies the acquisition of property by the heirs after the
death of the Gray sisters. In support of the contention that the document in
controversy is a donation inter vivos, the petitioner alleges that Miguel Cariño
administered the properties described in the second, third, fourth and fifth
paragraphs of Exhibit C-1, thereby insinuating that the donation took effect even
be fore the death of the grantors. Upon this question we can make no choice as
it is not within our province to review, much less alter, the finding of the Court of
Appeals that the petitioner's contention "is not supported by the facts." (Hodges
vs. People, G.R. No. 45446, promulgated May 25, 1939; Mora Electric Co., Inc. vs.
Matic et al., G.R. No. 45441, promulgated June 26, 1939; Bundoc vs. Hilario et al.,
G.R. No. 46852, promulgated February 27, 1940.)
Donations which are to become effective upon the death of the donor partake of
the nature of disposals of property by will and shall be governed by the rules
established for testamentary successions. (Art. 620, Civil Code.) Accordingly, said
donations can only be made with the formalities of a will. (Tuason and Tuason vs.
Posadas, 54 Phil. 289.) As the document Exhibit C-1 was not executed in
conformity with the provisions of section 618 of the Code of Civil Procedure,
conspicuously for lack of attestation clause and marginal signatures, we are
constrained to hold that the same cannot be accorded any force and effect. It may
be stated in passing that the case at bar cannot be controlled by the decisions in
Laureta vs. Mata and Magno (44 Phil., 668); Zapanta vs. Posadas (52 Phil., 557);
and Balaqui vs. Dongso (d3 Phil., 673), cited by the petitioner, in view of difference
in factual basis.
The Court of Appeals found that the respondent is the nearest relative of Petrona
and Dorotea Gray, a finding of fact which we cannot revise. It results that, as such,
the respondent has an interest in any property of his deceased cousins, in that, in
default of testamentary heirs, he would be entitled to inherit from them to the
exclusion of more remote relatives. (Arts. 913, 921, Civil Code.) The respondent is
accordingly interested in obtaining a judicial declaration in the present action that
the document which would otherwise have impaired such right to inherit, is void.
Hence, the petitioner's contention, under the fourth assignment of error, that the
respondent is without legal personality and interest in this suit, is without merit
Moreover, the appellate court should not incline to hear this criticism for the
reason that, as the Court of Appeals found, it was not raised in the trial court. (Tan
Machan vs. De la Trinidad, supra; Alafriz vs. Mina, supra; Vergara vs. Laciapag,
supra; Martinez and Villar vs. Tolentino, supra; Soriano vs. Ramirez, supra;
Government vs. Ossorio, supra; Ramiro vs. Grano, supra; Meneses National Loan
& Investment Board, supra.)
Under the fifth and sixth assignment of error, it is maintained by counsel for the
petitioner that the opposition of the respondent being in the nature of an action
to annul, the right of action of the latter has prescribed as the said opposition was
filed on July 12, 1935, or about fourteen years after the date of the execution of
Exhibit C-1. To dispose of this argument it is only necessary to state that this
defense of prescription on the part of the petitioner was neither pleaded nor
raised in the trial court, and the same was raised for the first time in the motion
filed by the petitioner for the reconsideration of the decision of the Court of
Appeals. And the argument of the petitioner that the respondent has waived his
right over the properties in question is refuted by the finding of the Court of
Appeals that "as a matter of fact the appellant, Abaya, is in actual possession of
those properties, and was, at least at the time the original petition of Jose Cariño
was filed, the latter having alleged it in said petition."
Much less did the Court of Appeals err in not submitting the appealed decision to
the court in banc, since there is no law or rule making the submission to the court
in banc of such a case as is now before us, mandatory.
In view of what has been said, the judgment of the Court of Appeals will be, as
the same is hereby, affirmed, with costs against the petitioner. So ordered.
Avanceña, C.J., Imperial, Diaz, and Moran, JJ., concur.
FIRST DIVISION
[G.R. No. 112127. July 17, 1995.]
CENTRAL PHILIPPINE UNIVERSITY, petitioner, vs. COURT OF APPEALS, REMEDIOS
FRANCO, FRANCISCO N. LOPEZ, CECILIA P. VDA. DE LOPEZ, REDAN LOPEZ AND
REMARENE LOPEZ, respondents.
Juanito M. Acanto for petitioner.
Santos B. Aguadera for private respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY; MODES OF ACQUIRING OWNERSHIP; DONATION;
CONSIDERED ONEROUS WHEN EXECUTED FOR A VALUABLE CONSIDERATION
WHICH IS CONSIDERED THE EQUIVALENT OF THE DONATION. — A clear perusal
of the condition set forth in the deed of donation executed by Don Ramon Lopez,
Sr., gives us no alternative but to conclude that his donation was onerous, one
executed for a valuable consideration which is considered the equivalent of the
donation itself, e.g., when a donation imposes a burden equivalent to the value
of the donation. A gift of land to the City of Manila requiring the latter to erect
schools, construct a children's playground and open streets on the land was
considered an onerous donation. Similarly, where Don Ramon Lopez donated the
subject parcel of land to petitioner but imposed an obligation upon the latter to
establish a medical college thereon, the donation must be for an onerous
consideration.
2. ID.; ID.; ID.; ID.; MAY BE REVOKED FOR NON-FULFILLMENT OR NON-
COMPLIANCE OF THE CONDITIONS SET FORTH THEREIN; CASE AT BAR. — Under
Art. 1181 of the Civil Code, on conditional obligations, the acquisition of rights, as
well as the extinguishment or loss of those already acquired, shall depend upon
the happening of the event which constitutes the condition. Thus, when a person
donates land to another on the condition that the latter would build upon the
land a school, the condition imposed was not a condition precedent or a
suspensive condition but a resolutory one. It is not correct to say that the
schoolhouse had to be constructed before the donation became effective, that is,
before the donee could become the owner of the land, otherwise, it would be
invading the property rights of the donor. The donation had to be valid before the
fulfillment of the condition. If there was no fulfillment or compliance with the
condition, such as what obtains in the instant case, the donation may now be
revoked and all rights which the donee may have acquired under it.
3. ID.; ID.; ID.; ID.; DONEE'S ACCEPTANCE AND ACKNOWLEDGMENT OF ITS
OBLIGATION PROVIDED IN THE DEED, SUFFICIENT TO PREVENT THE STATUTE OF
LIMITATION FROM BARRING THE ACTION OF DONOR UPON THE ORIGINAL
CONTRACT. — The claim of petitioner that prescription bars the instant action of
private respondents is unavailing. The condition imposed by the donor, i.e., the
building of a medical school upon the land donated, depended upon the exclusive
will of the donee as to when this condition shall be fulfilled. When petitioner
accepted the donation, it bound itself to comply with the condition thereof. Since
the time within which the condition should be fulfilled depended upon the
exclusive will of the petitioner, it has been held that its absolute acceptance and
the acknowledgment of its obligation provided in the deed of donation were
sufficient to prevent the statute of limitations from barring the action of private
respondents upon the original contract which was the deed of donation.
4. ID.; ID.; ID.; ID.; IN CASE OF REVOCATION, A CAUSE OF ACTION ARISES WHEN
THAT WHICH SHOULD HAVE BEEN DONE IS NOT DONE, OR THAT WHICH SHOULD
NOT HAVE BEEN DONE IS DONE. — The time from which the cause of action
accrued for the revocation of the donation and recovery of the property donated
cannot be specifically determined in the instant case. A cause of action arises
when that which should have been done is not done, or that which should not
have been done is done. In cases where there is no special provision for such
computation, recourse must be had to the rule that the period must be counted
from the day on which the corresponding action could have been instituted. It is
the legal possibility of bringing the action which determines the starting point for
the computation of the period. In this case, the starting point begins with the
expiration of a reasonable period and opportunity for petitioner to fulfill what has
been charged upon it by the donor.
5. ID.; ID.; ID.; ID.; GENERALLY, WHEN THE OBLIGATION DOES NOT FIX A PERIOD
BUT FROM ITS NATURE AND CIRCUMSTANCES IT CAN BE INFERRED THAT A
PERIOD WAS INTENDED, COURT MAY FIX THE PERIOD FOR COMPLIANCE. — The
period of time for the establishment of a medical college and the necessary
buildings and improvements on the property cannot be quantified in a specific
number of years because of the presence of several factors and circumstances
involved in the erection of an educational institution, such as government laws
and regulations pertaining to education, building requirements and property
restrictions which are beyond the control of the donee. Thus, when the obligation
does not fix a period but from its nature and circumstances it can be inferred that
46
a period was intended, the general rule provided in Art. 1197 of the Civil Code
applies, which provides that the courts may fix the duration thereof because the
fulfillment of the obligation itself cannot be demanded until after the court has
fixed the period for compliance therewith and such period has arrived.
6. ID.; ID.; ID.; ID.; WHEN OBLIGOR CANNOT COMPLY WITH WHAT IS INCUMBENT
UPON HIM, THE OBLIGEE MAY SEEK RESCISSION; EXCEPTION. — This general rule
however cannot be applied considering the different set of circumstances existing
in the instant case. More than a reasonable period of fifty (50) years has already
been allowed petitioner to avail of the opportunity to comply with the condition
even if it be burdensome, to make the donation in its favor forever valid. But,
unfortunately, it failed to do so. Hence, there is no more need to fix the duration
of a term of the obligation when such procedure would be a mere technicality and
formality and would serve no purpose than to delay or lead to an unnecessary and
expensive multiplication of suits. Moreover, under Art. 1191 of the Civil Code,
when one of the obligors cannot comply with what is incumbent upon him, the
obligee may seek rescission and the court shall decree the same unless there is
just cause authorizing the fixing of a period. In the absence of any just cause for
the court to determine the period of the compliance, there is no more obstacle
for the court to decree the rescission claimed.
7. ID.; ID.; ID.; ID.; IN CASE OF GRATUITOUS DONATION DOUBTS SHOULD BE
RESOLVED IN FAVOR OF THE LEAST TRANSMISSION OF RIGHTS AND INTERESTS.
— Finally, since the questioned deed of donation herein is basically a gratuitous
one, doubts referring to incidental circumstances of a gratuitous contract should
be resolved in favor of the least transmission of rights and interests. Records are
clear and facts are undisputed that since the execution of the deed of donation
up to the time of filing of the instant action, petitioner has failed to comply with
its obligation as donee. Petitioner has slept on its obligation for an unreasonable
length of time. Hence, it is only just and equitable now to declare the subject
donation already ineffective and, for all purposes, revoked so that petitioner as
donee should now return the donated property to the heirs of the donor, private
respondents herein, by means of reconveyance.
DAVIDE, JR., J, dissenting opinion:
1. CIVIL LAW; PROPERTY, MODES OF ACQUIRING OWNERSHIP; DONATION; IN
LAW OF DONATION, "CONDITIONS" REFERS TO OBLIGATION OR CHARGES
IMPOSED BY THE DONOR ON THE DONEE. — There is no conditional obligation to
speak of in this case. It seems that the "conditions" imposed by the donor and as
the word is used in the law of donations confused with "conditions" as used in the
law of obligations. In his annotation of Article 764 of the Civil Code on Donations,
Arturo M. Tolentino, citing the well-known civilists such as Castan, Perez Gonzalez
and Alguer, and Colin & Capitant, states clearly the context within which the term
"conditions" is used in the law of donations, to wit: The word "conditions" in this
article does not refer to uncertain events on which the birth or extinguishment of
a juridical relation depends, but it is used in the vulgar sense of obligations or
charges imposed by the donor on the donee. It is used, not in its technical or strict
legal sense, but in its broadest sense. (Italics supplied) Clearly then, when the law
and the deed of donation speaks of "conditions" of a donation, what are referred
to are actually the obligations, charges or burdens imposed by the donor upon
the donee and which would characterize the donation as onerous. In the present
case, the donation is, quite obviously, onerous, but it is more properly called a
"modal donation." A modal donation is one in which the donor imposes a
prestation upon the donee. The establishment of the medical college as the
condition of the donation in the present case is one such prestation.
2. ID.; ID.; ID.; ID.; WHEN NO FIXED PERIOD IN WHICH THE CONDITION SHOULD
BE FULFILLED, IT IS THE DUTY OF THE COURT TO FIX A SUITABLE TIME FOR ITS
FULFILLMENT. — J. Davide, Jr., cannot subscribe to the view that the provisions of
Article 1197 cannot be applied here. The conditions/obligations imposed by the
donor herein are subject to a period. I draw this conclusion/based on our previous
ruling which, although made almost 90 years ago, still finds application in the
present case. In Barreto vs. City of Manila, we said that when the contract of
donation, as the one involved therein, has no fixed period in which the condition
should be fulfilled, the provisions of what is now Article 1197 (then Article 1128)
are applicable and it is the duty of the court to fix a suitable time for its fulfillment.
Indeed, from the nature and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was contemplated by the donor.
Don Ramon Lopez could not have intended his property to remain idle for a long
period of time when in fact, he specifically burdened the donee with the
obligation to set up a medical college therein and thus put his property to good
use. There is a need to fix the duration of the time within which the conditions
imposed are to be fulfilled.
3. ID.; ID.; ID.; ID.; MERE FACT THAT THERE IS NO TIME FIXED AS TO WHEN THE
CONDITION THEREOF ARE TO BE FULFILLED DOES NOT IPSO FACTO MEAN THAT
THE STATUTE OF LIMITATION WILL NOT APPLY. — There is misplaced reliance
again on a previous decision of this Court in Osmeña vs. Rama. That case does not
speak of a deed of donation as erroneously quoted and cited by the majority
opinion. It speaks of a contract for a sum of money where the debtor herself
imposed a condition which will determine when she will fulfill her obligation to
pay the creditor, thus, making the fulfillment of her obligation dependent upon
her will. What we have here, however, is not a contract for a sum of money but a
donation where the donee has not imposed any conditions on the fulfillment of
its obligations. Although it is admitted that the fulfillment of the
conditions/obligations of the present donation may be dependent on the will of
the donee as to when it will comply therewith, this did not arise out of a condition
which the donee itself imposed. It is believed that the donee was not meant to
and does not have absolute control over the time within which it will perform its
obligations. It must still do so within a reasonable time. What that reasonable
time is, under the circumstances, for the courts to determine. Thus, the mere fact
that there is no time fixed as to when the conditions of the donation are to be
fulfilled does not ipso facto mean that the statute of limitations will not apply
anymore and the action to revoke the donation becomes imprescriptible.
4. ID.; ID.; ID.; ID.; ACTION TO REVOKE THEREOF PRESCRIBES IN FOUR (4) YEARS.
— More recently, in De Luna vs. Abrigo, this Court reiterated the ruling in Parks
and said that: It is true that under Article 764 of the New Civil Code, actions for
the revocation of a donation must be brought within four (4) years from the non-
compliance of the conditions of the donation. However, it is Our opinion that said
article does not apply to onerous donations in view of the specific provision of
Article 733 providing that onerous donations are governed by the rules on
contracts. In the light of the above, the rules on contracts and the general rules
on prescription and not the rules on donations are applicable in the case at bar.
The law applied in both cases is Article 1144(1). It refers to the prescription of an
action upon a written contract, which is what the deed of an onerous donation is.
The prescriptive period is ten years from the time the cause of action accrues, and
that is, from the expiration of the time within which the donee must comply with
the conditions/obligations of the donation. As to when this exactly is remains to
be determined, and that is for the courts to do as reposed upon them by Article
1197.
DECISION
BELLOSILLO, J p:
CENTRAL PHILIPPINE UNIVERSITY filed this petition for review on certiorari of the
decision of the Court of Appeals which reversed that of the Regional trial Court of
Iloilo City directing petitioner to reconvey to private respondents the property
donated to it by their predecessor-in-interest.
Sometime in 1939, the late Don Ramon Lopez, Sr., who was then a member of the
Board of Trustees of the Central Philippine College (now Central Philippine
University [CPU]), executed a deed of donation in favor of the latter of a parcel of
land identified as Lot No. 3174-B-1 of the subdivision plan Psd-1144, then a
portion of Lot No. 3174-B, for which Transfer Certificate of Title No. T-3910-A was
issued in the name of the donee CPU with the following annotations copied from
the deed of donation.
1. The land described shall be utilized by the CPU exclusively for the establishment
and use of a medical college with all its buildings as part of the curriculum:
2. The said college shall not sell, transfer or convey to any third party nor in any
way encumber said land;
3. The said land shall be called "RAMON LOPEZ CAMPUS", and the said college
shall be under obligation to erect a cornerstones bearing that name. Any net
income from the land or any of its parks shall be put in a fund to be known as the
"RAMON LOPEZ CAMPUS FUND" to be used for improvements of said campus and
erection of a building thereon. " 1
47
On 31 May 1989, privates respondents, who are the heirs of Don Ramon Lopez,
Sr., filed an action for annulment of donation, reconveyance and damages against
CPU alleging that since 1939 up to the time the action was filed the latter had not
complied with the conditions of the donation. Private respondents also argued
that petitioner had in fact negotiated with the National Housing Authority (NHA)
to exchange the donated property with another land owned by the latter.
In its answer petitioner alleged that the right of private respondents to file the
action had prescribe; that it did not violate any of the conditions in the deed of
donation because it never used the donated properly for any other purpose than
that for which it was intended; and, that it did not sell, transfer or convey it to any
third party.
On 31 May 11991, the trial court held that petitioner failed to comply with the
conditions of the donation and declared it null and void. The court a quo further
directed petitioner to execute a deed of reconveyance of the property in favor of
the heirs of the donor, namely, private respondents herein.
Petitioner appealed to the Court of Appeals which on 18 June 1993 ruled that the
ruled that the annotations at the back of petitioner's certificate of title were
resolutory conditions breach of which should terminate the rights of the donee
thus making the donation revocable.
The appellate court also found that while the first condition mandated petitioner
to utilize the donated property for the establishment of a medical school, the
donor did not fix a period within which the condition must be fulfilled, hence, until
a period was fixed for the fulfillment of the condition, petitioner could not be
considered as having failed to comply with its part of the bargain. Thus, the
appellate court rendered its decision reversing the appealed decision and
remanding the case to the court of origin for the determination of the time within
which petitioner should comply with the first condition annotated in the
certificate of title.
Petitioner now alleged that the court of Appeals erred: (a) in holding that the
quoted annotations in the certificate of title of petitioner are onerous obligations
and resolutory conditions of the donation which must be fulfilled non-compliance
of which would render the donation revocable; (b) in holding that the issue of
prescription does not deserve "disquisition;" and, (c) in remanding the case to the
trial court for the fixing of the period within which petitioner would establish a
medical college. 2
We find it difficult to sustain the petition. A clear perusal of the conditions set
forth in the deed of donation executed by Don Ramon Lopez, Sr., gives us no
alternative but to conclude that this donation was onerous, one executed for a
valuable consideration which is considered the equivalent of the donation itself,
e.g., when a donation imposes a burden equivalent to the value of the donation.
A gift of land to the City of Manila requiring the latter to erect schools, construct
a children's playground and open streets on the land was considered an onerous
donation. 3 Similarly, where Don Ramon Lopez donated the subject parcel of land
to petitioner but imposed an obligation upon the latter to establish a medical
college thereon, the donation must be for an onerous consideration.
Under Art. 1181 of the Civil Code, on conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those already acquired, shall
depend upon the happening of the event which constitutes the condition. Thus,
when a person donates land to another on the condition that the latter would
build upon the land a school, the condition imposed was not a condition
precedent or a suspensive condition but a resolutory one. 4 It is not correct to say
that the schoolhouse had to be constructed before the donation became
effective, that is, before the donee could become the owner of the land,
otherwise, it would be invading the property rights of the donor. The donation
had to be valid before the fulfillment of the condition. 5 If there was no fulfillment
or compliance with the condition, such as what obtains in the instant case, the
donation may now be revoked and all rights which the donee may have acquired
under it shall be deemed lost and extinguished.
The claim of petitioner that prescription bars the instant action of private
respondents is unavailing. The condition imposed by the donor, i.e., the building
of a medical school upon the land donated, depended upon the exclusive will of
the donee as to when this condition shall fulfilled. When petitioner accepted the
donation, it bound itself to comply with the condition thereof. Since the time
within which the condition should be fulfilled depended upon the exclusive will of
the petitioner, it has been held that its absolute acceptance and the
acknowledgement of its obligation provided in the deed of donation were
sufficient to prevent the statute of limitations from barring the action of private
respondents upon the original contract which was the deed of donation. 6
Moreover, the time from which the cause of action accrued for the revocation of
the donation and recovery of the property donated cannot be specifically
determined in the instant case. A cause of action arises when that which should
have been done is not done, or that which should not have been done is done. 7
In cases where there is no special provision for such computation, recourse must
be had to the rule that the period must be counted from the day on which the
corresponding action could have been instituted. It is the legal possibility of
bringing the action which determines the starting point for the computation of
the period. In this case, the starting point begins with the expiration of a
reasonable period and opportunity for petitioner to fulfill what has been charged
upon it by the donor.
The period of time for the establishment of a medical college and the necessary
buildings and improvements on the property cannot be quantified in a specific
number of years because of the presence of several factors and circumstances
involved in the erection of an educational institution, such as government laws
and regulations pertaining to government laws and regulations pertaining to
education, building requirements and property restrictions which are beyond the
control of the donee. LibLex
Thus, when the obligation does not fix a period but from its nature and
circumstances it can be inferred that a period was intended, the general rule
provided in Art. 1197 of the Civil Code applies, which provides that the courts may
fix the duration thereof because the fulfillment of the obligation itself cannot be
demanded until after the court has fixed the period for compliance therewith and
such period has arrived. 8
This general rule however cannot be applied considering the different set of
circumstances existing in the instant case. More than a reasonable period of fifty
(50) years has already been allowed petitioner to avail of the opportunity to
comply with the condition even if it be burdensome, to make the donation in its
favor forever valid. But, unfortunately, it failed to do so. Hence, there is no more
need to fix the duration of a term of the obligation when such procedure would
be a mere technicality and formality and would serve no purpose that to delay or
lead to an unnecessary and expensive multiplication of suits. 9 Moreover, under
Art. 1191 of the Civil Code, when one of the obligors cannot comply with what is
incumbent upon him, the obligee may seek rescission and the court shall decree
the same unless there is just cause authorizing the fixing of a period. In the
absence of any just cause for the court to determine the period of the compliance,
there is no more obstacle for the court to decree the rescission claimed.
Finally, since the questioned deed of donation herein is basically a gratuitous one,
doubts referring to incidental circumstances of a gratuitous contract should be
resolved in favor of the least transmission of rights and interest. 10 Records are
clear and facts are undisputed that since the execution of the deed of donation
up to the time of filing of the instant action, petitioner has failed to comply with
its obligation as donee. Petitioner has slept on its obligation for an unreasonable
length of time. Hence, it is only just and equitable now to declare the subject
donation already ineffective and, for all purposes, revoked so that petitioner as
donee should now return the donated property to the heirs of the donor, private
respondents herein, by means of reconveyance.
WHEREFORE, the decision of the Regional Trial Court of Iloilo, Br. 34, of 31 May
1991 is REINSTATED and AFFIRMED, and the decision of the Court of Appeals of
18 June 1993 is accordingly MODIFIED. Consequently, petitioner is directed to
reconvey to private respondents Lot No. 3174-B-1 of the subdivision plan Psd-
1144 covered by Transfer Certificate of Title No. T-3910-A within thirty (30) days
from the finality of this judgment.
Costs against petitioner.
SO ORDERED.
Quiason and Kapunan, JJ ., concur.
SECOND DIVISION
[G.R. No. 126444. December 4, 1998.]
ALFONSO QUIJADA, CRESENTE QUIJADA, REYNELDA QUIJADA, DEMETRIO
QUIJADA, ELIUTERIA QUIJADA, EULALIO QUIJADA, and WARLITO QUIJADA,
petitioners, vs. COURT OF APPEALS, REGALADO MONDEJAR, RODULFO GOLORAN,
ALBERTO ASIS, SEGUNDINO RAS, ERNESTO GOLORAN, CELSO ABISO, FERNANDO
BAUTISTA, ANTONIO MACASERO, and NESTOR MAGUINSAY, respondents.
48
SYLLABUS
1. CIVIL LAW; DONATION; DONATION WITH A RESOLUTORY CONDITION; IF
PERFECTED, DONEE BECOMES THE OWNER OF THE PROPERTY DONATED
NOTWITHSTANDING THE CONDITION IMPOSED. — When the Municipality's
acceptance of the donation was made known to the donor, the former became
the new owner of the donated property — donation being a mode of acquiring
and transmitting ownership — notwithstanding the condition imposed by the
donee. The donation is perfected once the acceptance by the donee is made
known to the donor. Accordingly, ownership is immediately transferred to the
latter and that ownership will only revert to the donor if the resolutory condition
is not fulfilled. aSATHE
2. ID.; ID.; ID.; NON-FULFILLMENT THEREOF, WHEN BROUGHT TO THE
KNOWLEDGE OF THE DONOR AUTOMATICALLY REVERTS OWNERSHIP OF THE
PROPERTY DONATED AS PROVIDED. — Since no period was imposed by the donor
on when must comply with the condition, the latter remains the owner so long as
he has tried to comply with the condition within a reasonable period. Such period,
however, became irrelevant herein when the donee-Municipality manifested
through a resolution that it cannot comply with the condition of building a school
and the same was made known to the donor. Only then — when the non-
fulfillment of the resolutory condition was brought to the donor's knowledge —
that ownership of the donated property reverted to the donor as provided in the
automatic reversion clause of the deed of donation.
3. ID.; ID.; ID.; DONOR'S INCHOATE INTEREST IN THE DONATED PROPERTY MAY
BE THE SUBJECT OF CONTRACTS INCLUDING A CONTRACT OF SALE. — The donor
may have an inchoate interest in the donated property during the time that
ownership of the land has not reverted to her. Such inchoate interest may be the
subject of contracts including a contract of sale.
4. ID.; LACHES; IS NEGLIGENCE OR OMISSION TO ASSERT A RIGHT WITHIN A
REASONABLE TIME GIVING RISE TO A PRESUMPTION THAT THE PARTY ENTITLED
TO ASSERT IT EITHER HAS ABANDONED OR DECLINED TO ASSERT IT; CASE AT BAR.
— As to laches, petitioner's action is not yet barred thereby. Laches presupposes
failure or neglect for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; "it is
negligence or omission to assert a right within a reasonable time, thus, giving rise
to a presumption that the party entitled to assert it either has abandoned or
declined to assert it." Petitioners' cause of action to quiet title commenced only
when the property reverted to the donor and/or his successors-in-interest in
1987. Certainly, when the suit was initiated the following year, it cannot be said
that petitioners had slept on their rights for a long time. The 1960's sales made by
Trinidad Quijada cannot be the reckoning point as to when petitioners' cause of
action arose. They had no interest over the property at the time except under the
deed of donation to which private respondents were not privy. Moreover,
petitioners had previously filed an ejectment suit against private respondents
only that it did not prosper on a technicality.
5. ID.; SALE; A CONSENSUAL CONTRACT PERFECTED BY MERE CONSENT;
OWNERSHIP BY THE SELLER OF THE THING SOLD IS NOT AN ELEMENT OF
PERFECTION. — Sale, being a consensual contract, is perfecting by mere consent,
which is manifested the moment there is a meeting of the minds as to the offer
and acceptance thereof on three (3) elements; subject matter, price and terms of
payment of the price. Ownership by the seller on the thing sold at the time of the
perfection of the contract of sale is not an element for its perfection. What the
law requires is that the seller has the right to transfer ownership at the time the
thing sold is delivered. Perfection per se does not transfer ownership which occurs
upon the actual or constructive delivery of the thing sold. A perfected contract of
sale cannot be challenged on the ground of non-ownership on the part of the
seller at the time of its perfection: hence, the sale is still valid.
6. ID.; ID,; CONSUMMATION THEREOF OCCURS UPON THE CONSTRUCTIVE OR
ACTUAL DELIVERY OF THE SUBJECT MATTER TO THE BUYER; CASE AT BAR. — The
consummation, however, of the perfected contract is another matter. It occurs
upon the constructive or actual delivery of the subject matter to the buyer when
the seller of her successors-in-interest subsequently acquires ownership thereof.
Such circumstance happened in this case when petitioners — who are Trinidad
Quijada's heirs and successors-in-interest — became the owners of the subject
property upon the reversion of the ownership of the land to them. Consequently,
ownership is transferred to respondent Mondejar and those who claim their right
from him. Article 1434 of the New Civil Code supports the ruling that the seller's
"title passes by operation of law to the buyer." This rule applies not only when the
subject matter of the contract of sale is goods, but also to other kinds of property,
including real property. CADHcI
7. ID.; DONATION; DONOR MAY IMPOSE ONLY REASONABLE AND JUST
CONDITIONS THEREON. — Nowhere in Article 1409 (4) is it provided that the
properties of a municipality, whether it be those for public use or its patrimonial
property are outside the commerce of men. Besides, the lots in this case were
conditionally owned by the municipality. To rule that the donated properties are
outside the commerce of men would render nugatory the unchallenged
reasonableness and justness of the condition which the donor has the right to
impose as owner thereof. Moreover, the objects referred to as outsides the
commerce of men are those which cannot be appropriated, such as the open seas
and the heavenly bodies.
8. ID.; DAMAGES; ATTORNEY'S FEES, LITIGATION EXPENSES AND MORAL
DAMAGES CANNOT BE RECOVERED IN THE CASE AT BAR. — With respect to the
trial court's award of attorney's fees, litigation expenses and moral damages,
there is neither factual nor legal basis thereof. Attorney's fees and expenses of
litigation cannot, following the general rule in Article 2208 of the New Civil Code,
be recovered in this case, there being no stipulation to that effect and the case
does not fall under any of the exceptions. It cannot be said that private
respondents had compelled petitioners to litigate with third persons. Neither can
it be ruled that the former acted in "gross and evident bad faith" in refusing to
satisfy the latter's claims considering that private respondents were under an
honest belief that they have legal right over the property by virtue of the deed of
sale. Moral damages cannot likewise be justified as one of the circumstances
enumerated under Article 2219 and 2220 of the New Civil Code concur in this
case. CITaSA
DECISION
MARTINEZ, J p:
Petitioners, as heirs of the late Trinidad Quijada, filed a complaint against private
respondents for quieting of title, recovery of possession and ownership of parcels
of land with claim for attorney's fees and damages. The suit was premised on the
following facts found by the Court of Appeals, which is materially the same as that
found by the trial court: prcd
"Plaintiffs-appellees (petitioners) are the children of the late Trinidad Corvera
Vda. de Quijada. Trinidad was one of the heirs of the late Pedro Corvera and
inherited from the latter the two-hectare parcel of land subject of the case,
situated in the barrio of San Agustin, Talacogon, Agusan del Sur. On April 5, 1956,
Trinidad Quijada together with her sisters Leonila Corvera Vda. de Sequeña and
Paz Corvera Cabiltes and brother Epapiadito Corvera executed a conditional deed
of donation (Exh. C) of the two-hectare parcel of land subject of the case in favor
of the Municipality of Talacogon, the condition being that the parcel of land shall
be used solely and exclusively as part of the campus of the proposed provincial
high school in Talacogon. Apparently, Trinidad remained in possession of the
parcel of land despite the donation. On July 29, 1962, Trinidad sold one (1) hectare
of the subject parcel of land to defendant-appellant Regalado Mondejar (Exh. 1).
Subsequently, Trinidad verbally sold the remaining one (1) hectare to defendant-
appellant (respondent) Regalado Mondejar without the benefit of a written deed
of sale and evidenced solely by receipts of payment. In 1980, the heirs of Trinidad,
who at that time was already dead, filed a complaint for forcible entry (Exh. E)
against defendant-appellant (respondent) Regalado Mondejar, which complaint
was, however, dismissed for failure to prosecute (Exh. F). In 1987, the proposed
provincial high school having failed to materialize, the Sangguniang Bayan of the
municipality of Talacogon enacted a resolution reverting the two (2) hectares of
land donated back to the donors (Exh. D). In the meantime, defendant-appellant
(respondent) Regalado Mondejar sold portions of the land to defendants-
appellants (respondents) Fernando Bautista (Exh. 5), Rodolfo Goloran (Exh. 6),
Efren Guden (Exh. 7) and Ernesto Goloran (Exh. 8).
"On July 5, 1988, plaintiffs-appellees (petitioners) filed this action against
defendants-appellants (respondents). In the complaint, plaintiffs-appellees
(petitioners) alleged that their deceased mother never sold, conveyed,
transferred or disposed of the property in question to any person or entity much
less to Regalado Mondejar save the donation made to the Municipality of
Talacogon in 1956; that at the time of the alleged sale to Regalado Mondejar by
Trinidad Quijada, the land still belongs to the Municipality of Talacogon, hence,
the supposed sale is null and void.
49
"Defendants-appellants (respondents), on the other hand, in their answer
claimed that the land in dispute was sold to Regalado Mondejar, the one (1)
hectare on July 29, 1962, and the remaining one (1) hectare on installment basis
until fully paid. As affirmative and/or special defense, defendants-appellants
(respondents) alleged that plaintiffs' action is barred by laches or has prescribed.
cdphil
"The court a quo rendered judgment in favor of plaintiffs-appellees (petitioners):
firstly because 'Trinidad Quijada had no legal title or right to sell the land to
defendant Mondejar in 1962, 1966, 1967 and 1968, the same not being hers to
dispose of because ownership belongs to the Municipality of Talacogon' (Decision,
p. 4; Rollo, p. 39) and, secondly, that the deed of sale executed by Trinidad Quijada
in favor of Mondejar did not carry with it the conformity and acquiescence of her
children, more so that she was already 63 years old at the time, and a widow
(Decision, p. 6; Rollo, p. 41)." 1
The dispositive portion of the trial court's decision reads:
"WHEREFORE, viewed from the above perceptions, the scale of justice having
tilted in favor of the plaintiffs, judgment is, as it is hereby rendered:
1). ordering the Defendants to return and vacate the two (2) hectares of land to
Plaintiffs as described in Tax Declaration No. 1209 in the name of Trinidad
Quijada;
2) ordering any person acting in Defendants' behalf to vacate and restore the
peaceful possession of the land in question to Plaintiffs;
3) ordering the cancellation of the Deed of Sale executed by the late Trinidad
Quijada in favor of Defendant Regalado Mondejar as well as the Deeds of
Sale/Relinquishments executed by Mondejar in favor of the other Defendants;
4) ordering Defendants to remove their improvements constructed on the
questioned lot;
5) ordering the Defendants to pay Plaintiffs, jointly and severally, the amount of
P10,000.00 representing attorney's fees;
6) ordering Defendants to pays the amount of P8,000.00 as expenses of litigation;
and
7) ordering Defendants to pay the sum of P30,000.00 representing moral
damages.
SO ORDERED." 2
On appeal, the Court of Appeals reversed and set aside the judgment a quo 3
ruling that the sale made by Trinidad Quijada to respondent Mondejar was valid
as the former retained an inchoate interest on the lots by virtue of the automatic
reversion clause in the deed of donation. 4 Thereafter, petitioners filed a motion
for reconsideration. When the CA denied their motion, 5 petitioners instituted a
petition for review to this Court arguing principally that the sale of the subject
property made by Trinidad Quijada to respondent Mondejar is void, considering
that at that time, ownership was already transferred to the Municipality of
Talacogon. On the contrary, private respondents contend that the sale was valid,
that they are buyers in good faith, and that petitioners' case is barred by laches.
6
We affirm the decision of the respondent court. cdlex
The donation made on April 5, 1956 by Trinidad Quijada and her brother and
sisters 7 was subject to the condition that the donated property shall be "used
solely and exclusively as a part of the campus of the proposed Provincial High
School in Talacogon." 8 The donation further provides that should "the proposed
Provincial High School be discontinued or if the same shall be opened but for some
reason or another, the same may in the future be closed" the donated property
shall automatically revert to the donor. 9 Such condition, not being contrary to
law, morals, good customs, public order or public policy was validly imposed in
the donation. 10
When the Municipality's acceptance of the donation was made known to the
donor, the former became the new owner of the donated property — donation
being a mode of acquiring and transmitting ownership 11 — notwithstanding the
condition imposed by the donee. The donation is perfected once the acceptance
by the donee is made known to the donor. 12 Accordingly, ownership is
immediately transferred to the latter and that ownership will only revert to the
donor if the resolutory condition is not fulfilled.
In this case, that resolutory condition is the construction of the school. It has been
ruled that when a person donates land to another on the condition that the latter
would build upon the land a school, the condition imposed is not a condition
precedent or a suspensive condition but a resolutory one. 13 Thus, at the time of
the sales made in 1962 towards 1968, the alleged seller (Trinidad) could not have
sold the lots since she had earlier transferred ownership thereof by virtue of the
deed of donation. So long as the resolutory condition subsists and is capable of
fulfillment, the donation remains effective and the donee continues to be the
owner subject only to the rights of the donor or his successors-in-interest under
the deed of donation. Since no period was imposed by the donor on when must
the donee comply with the condition, the latter remains the owner so long as he
has tried to comply with the condition within a reasonable period. Such period,
however, became irrelevant herein when the donee-Municipality manifested
through a resolution that it cannot comply with the condition of building a school
and the same was made known to the donor. Only then — when the non-
fulfillment of the resolutory condition was brought to the donor's knowledge —
that ownership of the donated property reverted to the donor as provided in the
automatic reversion clause of the deed of donation.
The donor may have an inchoate interest in the donated property during the time
that ownership of the land has not reverted to her. Such inchoate interest may be
the subject of contracts including a contract of sale. In this case, however, what
the donor sold was the land itself which she no longer owns. It would have been
different if the donor-seller sold her interests over the property under the deed
of donation which is subject to the possibility of reversion of ownership arising
from the non-fulfillment of the resolutory condition.
As to laches, petitioners' action is not yet barred thereby. Laches presupposes
failure or neglect for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; 14 "it
is negligence or omission to assert a right within a reasonable time, thus, giving
rise to a presumption that the party entitled to assert it either has abandoned or
declined to assert it." 15 Its essential elements of: prLL
a.) Conduct on the part of the defendant, or of one under whom he claims, giving
rise to the situation complained of;
b.) Delay in asserting complainant's right after he had knowledge of the
defendant's conduct and after he has an opportunity to sue;
c.) Lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and,
d.) Injury or prejudice to the defendant in the event relief is accorded to the
complainant." 16
are absent in this case. Petitioners' cause of action to quiet title commenced only
when the property reverted to the donor and/or his successors-in-interest in
1987. Certainly, when the suit was initiated the following year, it cannot be said
that petitioners had slept on their rights for a long time. The 1960's sales made by
Trinidad Quijada cannot be the reckoning point as to when petitioners' cause of
action arose. They had no interest over the property at that time except under
the deed of donation to which private respondents were not privy. Moreover,
petitioners had previously filed an ejectment suit against private respondents
only that it did not prosper on a technicality.
Be that at it may, there is one thing which militates against the claim of
petitioners. Sale, being a consensual contract, is perfected by mere consent,
which is manifested the moment there is a meeting of the minds 17 as to the offer
and acceptance thereof on three (3) elements: subject matter, price and terms of
payment of the price. 18 Ownership by the seller on the thing sold at the time of
the perfection of the contract of sale is not an element for its perfection. What
the law requires is that the seller has the right to transfer ownership at the time
the thing sold is delivered. 19 Perfection per se does not transfer ownership which
occurs upon the actual or constructive delivery of the thing sold. 20 A perfected
50
contract of sale cannot be challenged on the ground of non-ownership on the part
of the seller at the time of its perfection; hence, the sale is still valid.
The consummation, however, of the perfected contract is another matter. It
occurs upon the constructive or actual delivery of the subject matter to the buyer
when the seller or her successors-in-interest subsequently acquires ownership
thereof. Such circumstance happened in this case when petitioners — who are
Trinidad Quijada's heirs and successors-in-interest — became the owners of the
subject property upon the reversion of the ownership of the land to them.
Consequently, ownership is transferred to respondent Mondejar and those who
claim their right from him. Article 1434 of the New Civil Code supports the ruling
that the seller's "title passes by operation of law to the buyer." 21 This rule applies
not only when the subject matter of the contract of sale is goods, 22 but also to
other kinds of property, including real property. 23
There is also no merit in petitioners' contention that since the lots were owned
by the municipality at the time of the sale, they were outside the commerce of
men under Article 1409 (4) of the NCC; 24 thus, the contract involving the same
is inexistent and void from the beginning. However, nowhere in Article 1409 (4) is
it provided that the properties of a municipality, whether it be those for public
use or its patrimonial property 25 are outside the commerce of men. Besides, the
lots in this case were conditionally owned by the municipality. To rule that the
donated properties are outside the commerce of men would render nugatory the
unchallenged reasonableness and justness of the condition which the donor has
the right to impose as owner thereof. Moreover, the objects referred to as
outsides the commerce of man are those which cannot be appropriated, such as
the open seas and the heavenly bodies. cdtai
With respect to the trial court's award of attorney's fees, litigation expenses and
moral damages, there is neither factual nor legal basis thereof. Attorney's fees
and expenses of litigation cannot, following the general rule in Article 2208 of the
New Civil Code, be recovered in this case, there being no stipulation to that effect
and the case does not fall under any of the exceptions. 26 It cannot be said that
private respondents had compelled petitioners to litigate with third persons.
Neither can it be ruled that the former acted in "gross and evident bad faith" in
refusing to satisfy the latter's claims considering that private respondents were
under an honest belief that they have a legal right over the property by virtue of
the deed of sale. Moral damages cannot likewise be justified as none of the
circumstances enumerated under Articles 2219 27 and 2220 28 of the New Civil
Code concur in this case.
WHEREFORE, by virtue of the foregoing, the assailed decision of the Court of
Appeals is AFFIRMED.
SO ORDERED.
Melo, Puno and Mendoza JJ ., concur. cda
THIRD DIVISION
[G.R. No. 152663. November 18, 2005.]
EDGARDO D. DOLAR, petitioner, vs. BARANGAY LUBLUB (now P.D. Monfort North)
of the Municipality of Dumangas, herein represented by its Punong Barangay,
PEPITO DUA, PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, DUMANGAS
WATER DISTRICT, 4th ILOILO MOBILE GROUP, ILOILO PROVINCIAL POLICE, ILOILO
REGIONAL TRIAL COURT, BRANCH 68, respondents.
Norberto J. Procesion for petitioner.
Cartagena Sombiro Erebaren & Gallego for respondent Brgy. Lublub.
Rausa-Chan Mabasa & Associates for PLDT.
Rameses M. Padilla for Dumangas-Barotac Nuevo Water District.
SYLLABUS
1.CIVIL LAW; CONTRACTS; DONATION; RESCISSION; WHEN JUDICIAL
DECLARATION IS REQUIRED EVEN IF THE CONTRACT OF DONATION EXPRESSLY
PROVIDES FOR AUTOMATIC RESCISSION AND/OR REVERSION IN CASE OF BREACH
OF CONDITION THEREIN AND THE DONEE VIOLATES OR FAILS TO COMPLY WITH
THE CONDITION; RATIONALE. — If the corresponding contract of donation
expressly provides for automatic rescission and/or reversion in case of breach of
the condition therein, and the donee violates or fails to comply with the condition,
the donated property reverts back automatically to the donor. Such provision, De
Luna teaches, is in the nature of an agreement granting a party the right to rescind
a contract in case of breach, without need of going to court and that upon the
happening of the resolutory condition or non-compliance with the conditions of
the contract, the donation is automatically revoked without need of a judicial
declaration to that effect. Where, however, the donee denies, as here, the
rescission or challenges the propriety thereof, then only the final award of the
court can, to borrow from University of the Philippines vs. de los Angeles,
"conclusively settle whether the resolution is proper or not." Or, in the language
of Catholic Archbishop of Manila: The rationale for the foregoing is that in
contracts providing for automatic revocation, judicial intervention is necessary
not for purposes of obtaining a judicial declaration rescinding a contract already
deemed rescinded by virtue of an agreement providing for rescission even
without judicial intervention, but in order to determine whether or not the
rescission was proper. When a deed of donation, . . . expressly provides for
automatic revocation and reversion of the property donated, the rules on
contract and the general rules on prescription should apply, and not Article 764
of the Civil Code. Since Article 1306 of said Code authorizes the parties to a
contract to establish such stipulations, . . . not contrary to law, . . . public order or
public policy, we are of the opinion that, at the very least, that stipulation of the
parties providing for automatic revocation of the deed of donation, without prior
judicial action for that purpose, is valid subject to the determination of the
propriety of the rescission sought. Where such propriety is sustained, the decision
of the court will be merely declaratory of the revocation, but it is not in itself the
revocatory act.
2.ID.; ACTION TO QUIET TITLE; EXCEPTION TO THE IMPRESCRIPTIBILITY OF ACTION
IS WHERE THE PLAINTIFF IS NOT IN ACTUAL POSSESSION OF THE LAND; PRESENT
IN CASE AT BAR. — Lest it be overlooked, the rule on the imprescriptibility of
actions to quiet title admits of exceptions. The trial court correctly mentioned
one, referring to a situation where the plaintiff in an action to quiet title is not in
actual possession of the land. In the case at bench, petitioner is not in possession
of the property. For sure, he is even asking in his complaint in Civil Case No. 98-
033 for recovery of possession of the donated property. Given the above
disquisition, petitioner can hardly fault the trial court for its holding that
petitioner's action to revoke is time-barred. As may be recalled, respondent
barangay had, under the terms of the deed of donation, five (5) years from the
execution of the conveying deed in September 1981, or up September 1986,
within which to introduce and complete the contemplated development of the
donated area. Following Article 764 of the Civil Code, petitioner had four (4) years
from September 1986, or up to September 1990, within which to seek the
revocation of the subject donation on the ground of breach of contract. The Court
can grant that the prescription of actions for the revocation of onerous donations,
as here, are governed by the general rules on prescription, which, in context, is
Article 1144 of the Civil Code providing that actions upon a written contract shall
be brought within ten (10) years from accrual of the right of action. Ten years from
September 1986 — the date when petitioner's right to revoke accrued — would
be September 1996. Here, however, what partakes as petitioner's suit to revoke
was filed only in May 1998. In all, petitioner's right of action to revoke or cancel
the donation had indeed prescribed, regardless of whether the applicable legal
provision is Article 764 or the favorable Article 1144 of the Civil Code. It should be
stated in this regard, however, that respondent barangay had disputed the
existence of the grounds upon which petitioner anchored his right to revoke,
claiming it had already complied with the construction and development
conditions of the donation. From the records, it would appear that respondent
barangay's boast of compliance is not an empty one. As we see it, the
establishment on the donated area of telephone service, a water service, a police
mobile force, and a courtroom, all for the benefits of the barangay residents,
substantially satisfies the terms and conditions of the subject donation. The
concrete paving of roads and the construction of government offices, sports
complex for public enjoyment and like infrastructures which, per respondent
barangay's estimate, cost not less than P25 Million, add persuasive dimension to
the conclusion just made. Petitioner's long silence vis-Ã -vis the kind of
development structures that Barangay Lublub had decided to put up or allowed
to be established on the subject area cannot but be taken as an indicia of his
satisfaction with respondent barangay's choice of public service projects. The
51
prolonged silence was broken only after the provincial and municipal
governments advertised, then sold the property in a public auction to satisfy
questionable tax liabilities.
3.ID.; CONTRACTS; DONATION; REGISTRATION OF THE DEED WITH THE REGISTRY
OF DEEDS IS NOT NEEDED FOR THE VALIDITY AND EFFICACY OF THE DONATION.
— Petitioner's contention that the donation was invalid because it was not
registered in the Registry of Property deserves no merit. For, as between the
parties to the donation and their assigns, the registration of the deed of donation
with the Registry of Deeds is not needed for its validity and efficacy. In Pajarillo
vs. Intermediate Appellate Court, the Court emphatically dismissed the notion
that registration was necessary to make the donation a binding commitment
insofar as the donor and the donee were concerned.
DECISION
GARCIA, J p:
Via this petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Edgardo D. Dolar seeks the annulment and setting aside of the Orders
dated January 3, 2002 1 and March 5, 2002 2 of the Regional Trial Court at Iloilo
City, Branch 38, in its consolidated Civil Cases No. 98-033 and 00-140.
The facts:
Petitioner and Serafin Jaranilla were co-owners of a parcel of land with an area of
4.6 hectares, identified as Lot No. 1, Pcs-06-000744 (Lot No. 1, for brevity),
situated in Brgy. Lublub, Municipality of Dumangas, Iloilo. Said property forms
part of Lots No. 4181 and 4183 of the Dumangas Cadastre.
On September 16, 1981, petitioner and Jaranilla donated Lot No. 1 to respondent
Barangay Lublub, subject to the following conditions:
A.)That the area donated shall be for the purpose of con[s]tructing building
and/or establishing public plaza, sports complex, public market, health centers
and the like for the use of the Barangay of Lublub . . . which area shall be
hereinafter be known as DON VENANCIO DOLAR PLAZA and shall be so designated
in a proper landmark;
B.)That the construction and development of the area above-described shall be
initiated and completed within five (5) years from the execution of this Deed of
Donation and should the same be not made or completed then this Deed of
Donation shall have no force and effect whatsoever and the ownership of the
above-described property will revert back to the DONORS including all or any
unfinished improvement the DONEE might have placed or constructed.
C.)That . . . should the use of the area be converted to uses other than herein
stipulated, then this DEED OF DONATION shall be deemed revoked and the
ownership shall revert back to the DONORS . . . (Underscoring added) 3
Then barangay captain Jose Militar accepted the donation in behalf of Brgy.
Lublub.
Following the execution of the deed of donation, Brgy. Lublub immediately took
possession of the donated property, which soon became the site of several
government office buildings and recreational facilities. For what in hindsight is a
typical case of complacency on the part of a government unit, respondent
barangay did not have the donation registered under its name. On April 12, 1989,
or almost eight (8) years from contract execution, petitioner was issued Transfer
Certificate of Title (TCT) No. T-129837 4 by the Registry of Deeds of Iloilo covering
the donated area. IaAHCE
Sometime in June 1989, petitioner executed another deed 5 donating to Brgy.
Lublub, represented by its incumbent barangay captain, the very same area he
and Serafin Jaranilla had earlier donated to the same donee. The second deed of
donation contained exactly the same conditions expressly set forth in the first.
Barangay Lublub's peaceful possession of the donated area remained undisturbed
until mother Lots No. 4181 and 4183 were included in the published list of tax
delinquent properties for disposition. At the auction sale that followed, petitioner
emerged as the highest bidder and was, accordingly, awarded the property.
On May 6, 1998, in the Regional Trial Court (RTC) at Iloilo City, petitioner filed
against Brgy. Lublub a complaint for Quieting of Title and Recovery of Possession
With Damages involving the 4.6-hectare area he had earlier donated. Basically,
petitioner claimed that the donation in question had ceased to be effective, the
donee barangay having failed to comply with the conditions of the donation.
Impleaded as co-defendants of Brgy. Lublub were entities each occupying a
portion of the donated property, such as the Philippine Long Distance Company
(PLDT), the Dumangas Water District, Branch 86 of RTC-Iloilo and the Iloilo
Provincial Police. Docketed in the trial court as Civil Case No. 98-033, the
complaint alleged, inter alia, as follows:
10.That . . . defendant [barangay] failed to build or establish within the period
therein stipulated, a public plaza, sports complex . . . and like structures for the
use of Barangay Lublub and neither had it designated in a proper landmark that
the area donated is known as the 'Don Venancio Dolar Plaza'
11.That . . . defendant barangay allowed the use of the area donated to be
converted to uses other than those provided in the donation documents when it
allowed entities like defendants PLDT, Dumangas Water District, PNP Mobile
Force, and Branch 68 of the RTC of Iloilo, to construct buildings and occupy
portions of the lot in question . . .;
12.That because of the failure of defendant barangay to declare the lot in
question in its name for taxation purposes, the same was sold at public auction
for non-payment of real property taxes . . . .
13.That in the light of the terms and conditions in the Deeds of Donation and
actuations of the defendant barangay in relation to the property donated; the
donation . . . has automatically lost its force and effect whatsoever and the
ownership of the property has reverted to the plaintiff or the donation has been
deemed automatically revoked . . .;
14.That the act of defendant barangay in allowing the construction of buildings
by public and private entities on the donated property and holding offices therein
has cast a doubt or cloud on the title of the plaintiff over the property in litigation
....
15.That the plaintiff, as exclusive, absolute, and registered owner of the property
in question is entitled to the possession of the same. 6
In its Answer With Counterclaim, 7 Brgy. Lublub, after traversing the material
allegations of the complaint, alleged the following as affirmative defenses:
3.2.The said donation was made and accepted on the same public instrument duly
notarized by notary public Nicolas P. Sonalan . . .
3.3.The acceptance of donation was made by then Barangay Captain of Barangay
Lublub Jose Militar with authority from the barangay council;
3.4.After the said deed of donation was executed in compliance with the
conditions set forth in the deed of donation and within five (5) years from its
execution thereof several structures/buildings were constructed thereon for the
use and benefit of Brgy. Lublub, Dumangas, Iloilo. . . . ;
3.5.Later on . . . (PLDT) was invited to construct an office building on subject
property for the benefit and use of the residents of Barangay Lublub, Dumangas,
Iloilo;
3.6.Likewise for the use and benefit of the barangay residents an office building
of Dumangas Water District was constructed . . .;
3.7.Likewise . . . a PNP Mobile Force was put up on the said place and a PNP office,
in line with this, was constructed . . .;
3.8.Likewise because of the desire of the barangay residents to make the subject
property a plaza and a center place for their needs, Branch 68 of the RTC of Iloilo
was established thereon. All these for the use and benefit of Barangay Lublub,
now P.D. Monfort North, . . . .
And, as grounds for its motion to dismiss embodied in the same answer, Brgy.
Lublub raised the matter of lack of cause of action or prescription of the cause of
action, if any, thus:
52
4.3Plaintiff proceeded with his complaint . . . without first seeking the revocation
of the deed of donation in a proper court . . . as provided for under Article 764 of
the New Civil Code;
4.4What plaintiff did was to unilaterally revoke the deed of donation . . . and
proceeded with the filing of this case with the assumption that the deed of
donation was already validly revoked. . . . .
xxx xxx xxx
4.6It must be noted that the deed of donation was executed in September 16,
1981. Even if the donee . . . failed to comply with the conditions of the deed within
5 years or until 1986, plaintiff should have sought revocation of the donation
within 4 years from 1986 or until 1990 only. . . . ;
4.7The deed of donation having been executed in 1981 yet, the donee . . . took
possession of the same in concept of an owner, with just title, adverse, open,
peaceful and continuously up to the present. Hence, even if the donation is void
or conditions were not complied with, the property is now owned by the donee,
. . . as it can be considered that it has been acquired by prescription.
On top of its Answer with Counterclaim, Brgy. Lublub, this time renamed and
known as Brgy. P.D. Monfort North, filed with the same branch of the court a
complaint for Cancellation of Title, Reconveyance/Issuance of Title, Declaration
of Nullity of Notice of Delinquency in the Payment of Real Property Tax. 8 Named
as defendants were petitioner and his wife, certain municipal officials of
Dumangas and the Provincial Treasurer and Register of Deeds of Iloilo. In its
complaint, docketed as Civil Case No. 00-140, the plaintiff barangay averred
having conducted an investigation which led to the discovery that the spouses
Dolar, colluding with some local officials, engineered the whole levy process
which culminated in the auction sale of what is now a very valuable donated
property.
To Brgy. Lublub's complaint, petitioner interposed a Motion to Dismiss 9 on
grounds of forum shopping and litis pendentia, obviously on account of the
pendency of Civil Case No. 98-033.
Eventually, the two (2) cases, Civil Cases No. 98-033 and 00-140, wherein the
respective principal defendants have each interposed a motion to dismiss, were
consolidated.
In the herein assailed Order dated January 3, 2002, 10 the trial court, on the
finding that petitioner's action was already barred by extinctive prescription
under Article 764, 11 in relation to Articles 733 12 and 1144 (1) 13 of the Civil
Code, granted the Barangay's motion to dismiss in Civil Case No. 98-033 and
denied petitioner's similar motion in Civil Case No. 00-140, to wit:
WHEREFORE, in view of all the foregoing, this Court resolved, as it hereby
resolves, the pending incidents in these two cases, to wit:
1.Defendant Barangay Lublub's built-in Motion to Dismiss/Affirmative Defenses
raised in its Answer in Civil Case No. 98-033, being impressed with merit, is
granted; consequently, said Civil Case No. 98-033 . . . is hereby ordered dismissed;
2.Defendants-spouses Edgardo D. Dolar's and Corazon Yap's Motion to Dismiss in
Civil Case No. 00-140, being without merit, the same is herby denied.
With this disposition, this Court shall proceed hearing Civil Case No. 00-140
entitled Barangay P.D. Monfort North, Dumangas Iloilo, etc. vs. Municipality of
Dumangas, Iloilo, et al.
SO ORDERED.
Explains the trial court in its impugned Order of January 3, 2002:
Stress should be made that the Deed of Donation executed by Edgardo D. Dolar
(plaintiff in Civil Case No. 98-033) in favor of Barangay Lublub . . . clearly imposes
the following conditions:
xxx xxx xxx
Based on the foregoing conditions, . . . should the barangay donee fails (sic) to
comply therewith, the donor had the right to bring action to revoke the donation
(Art. 764, supra) within a period of ten (10) years after the 5-year period of non-
compliance with the conditions in the deed of donation (Art. 733, supra, in
relation to Art. 1144(1), supra). Since the deed of donation was executed on
September 16, 1981, the 5-year period lapsed in 1986; consequently, the action
to revoke should have been brought not later than 1996, however, it appears that
Civil Case No. 98-033 was filed by plaintiff Dolar on May 6, 1998. cCSDTI
Obviously, since the petitory portion of his complaint in Civil Case No. 98-033
seeks for quieting of his title over the subject property and seeks judgment
declaring him to be the absolute owner thereof, plaintiff Dolar also seeks the
revocation of the subject deed of donation. . . .
. . . . Accordingly, in the light of the foregoing jurisprudence, the action to revoke
donation was to have been filed within ten (10) years from the time the action
accrued, i.e., from the time of the non-compliance of the conditions . . . .
In yet another Order dated March 5, 2002, 14 same court denied petitioner's
motion for reconsideration.
Therefrom, petitioner directly comes to the Court on pure questions of law,
submitting issues which may be formulated in the following wise:
1.Whether or not his action is one for revocation of donation instead of for
quieting of title; whether or not the action for quieting has prescribed.
2.Whether or not the deed of donation in question is (a) valid for defective
acceptance and/or (b) no longer effective by reason of the automatic reversion
clause therein.
3.Whether or not respondent barangay had acquired the property in question by
acquisitive prescription.
The petition lacks merit.
It bears stressing that petitioner, at the outset, predicated his action to quiet title
on the ground of ineffectiveness of the donation, albeit he would later add the
matter of its invalidity. Indeed, the make or break issue to be resolved and to
which all others must yield turns on the validity and/or continued efficacy of the
subject donation. Valid and effective, the donation virtually forecloses any claim
which petitioner may have over the donated property against the donee and
other occupants thereof, and his action to quiet title is virtually doomed to fail.
Invalid and ineffective, however, the arena is left open for petitioner to recover
ownership and possession of the donated property and have the cloud on his title
thereto, if any there be, removed.
According to petitioner, the subject donation is, by force of Article 745 15 of the
Civil Code, void, the accepting barangay captain being without sufficient authority
for the purpose. On this point, petitioner cites Section 88 of Batas Pambansa Blg.
337 16 — the law then in force — and Sections 91 and 389 the Local Government
Code of 1991 17 . In gist, these provisions empower the punong barangay to enter
into contracts for the barangay upon authorization of the Sangguniang Barangay,
or, in the alternative, the Sanggunian may authorize the barangay head to enter
into contracts for the barangay.
Excepting, however, respondent barangay alleged that then barangay captain
Jose Militar accepted the donation "in the same Deed of Donation per authority
granted by the barangay council." 18
The question then of whether Militar was clothed with authority to accept the
donation for respondent barangay stands as disputed. Since the present recourse
is interposed on pure questions of law, we need not resolve the factual issue
regarding Militar's authority, or lack of it, to accept the donation in behalf of
respondent barangay. It should be pointed out, nevertheless, that petitioner is
hardly the proper party to challenge the validity of the donation — which is
presumed to be valid — on the ground he presently invokes. The honor to
question Militar's ultra vires act, if this be the case, belongs to the Sanggunian of
Barangay P.D. Monfort North. And more to the point, even assuming ex gratia
argumenti petitioner's legal standing to raise such a question, the final answer
would still lean towards the validity of the donation. For, from the allegations of
all the parties, it would appear that, through the years, the Sanggunian of Lublub
as well as all the succeeding Sangunians of P.D. Monfort North neither repudiated
53
the acceptance of the donation by Militar nor acted in a manner reflective of their
opposition to the donation. On the contrary, the respondent barangay has been
enjoying the material and public-service benefits arising from the infrastructures
projects put up on the subject property. In a very real sense, therefore, the
Sangguniang Barangay and the good people of P.D. Monfort North, by availing
themselves of such benefits for more than two decades now, effectively ratified
Militar's acceptance of the donation.
This brings us to the question of the efficaciousness of the donation. Petitioner
asserts that the 1981 and 1989 deeds of donation, pursuant to the uniform
automatic rescission/reversion clauses therein, ceased to be effective upon
respondent's failure to meet the conditions for which it was charged to fulfill. To
petitioner, the automatic rescission/reversion clause works, in appropriate
instances, to revoke the donation and revert the ownership of the donated
property to the donor without the need of judicial intervention. In support of this
argument, petitioner cites De Luna vs. Abrigo 19 wherein this Court put to rest
any lingering doubt as to the validity of a stipulation providing for the automatic
reversion of the donated property to the donor upon non-compliance by the
donee of the conditions or charges incumbent upon him.
Cited likewise is the subsequent complementary holding in Roman Catholic
Archbishop of Manila vs. Court of Appeals 20 , thus:
Although it is true that under Article 764 of the Civil Code an action for the
revocation of a donation must be brought within four (4) years from the non-
compliance of the conditions of the donation, the same is not applicable in the
case at bar. The deed of donation involved herein expressly provides for
automatic reversion of the property donated in case of violation of the condition
therein, hence a judicial declaration revoking the same is not necessary.
De Luna and Archbishop of Manila are, to be sure, apropos. However, petitioner's
argument to support his thesis on the automatic rescission of the donation in
question and the consequent reversion of the property to the donor is an
incomplete presentation of the Court's pronouncements on the point.
We shall explain.
If the corresponding contract of donation expressly provides for automatic
rescission and/or reversion in case of breach of the condition therein, and the
donee violates or fails to comply with the condition, the donated property reverts
back automatically to the donor. Such provision, De Luna teaches, is in the nature
of an agreement granting a party the right to rescind a contract in case of breach,
without need of going to court and that upon the happening of the resolutory
condition or non-compliance with the conditions of the contract, the donation is
automatically revoked without need of a judicial declaration to that effect.
Where, however, the donee denies, as here, the rescission or challenges the
propriety thereof, then only the final award of the court can, to borrow from
University of the Philippines vs. de los Angeles, 21 "conclusively settle whether
the resolution is proper or not." Or, in the language of Catholic Archbishop of
Manila: 22
The rationale for the foregoing is that in contracts providing for automatic
revocation, judicial intervention is necessary not for purposes of obtaining a
judicial declaration rescinding a contract already deemed rescinded by virtue of
an agreement providing for rescission even without judicial intervention, but in
order to determine whether or not the rescission was proper.
When a deed of donation, . . . expressly provides for automatic revocation and
reversion of the property donated, the rules on contract and the general rules on
prescription should apply, and not Article 764 of the Civil Code. Since Article 1306
of said Code authorizes the parties to a contract to establish such stipulations, . .
. not contrary to law, . . . public order or public policy, we are of the opinion that,
at the very least, that stipulation of the parties providing for automatic revocation
of the deed of donation, without prior judicial action for that purpose, is valid
subject to the determination of the propriety of the rescission sought. Where such
propriety is sustained, the decision of the court will be merely declaratory of the
revocation, but it is not in itself the revocatory act. ISCaTE
In the case at bench, it cannot be gainsaid that respondent barangay denied or
challenged the purported revocation of the donation. In fact, the denial or
challenge is embodied in respondent barangay's complaint in Civil Case No. 00-
140 and in its Answer cum motion to dismiss in Civil Case 98-033, which similarly
prayed for, among other things, the cancellation of petitioner's title on the subject
property.
The foregoing discussion veritably disposes of the second formulated issue.
Now back to the first issue. It is petitioner's posture that his action in Civil Case
No. 98-033 is one for quieting of title under Article 476 23 of the Civil Code, not,
as erroneously regarded by the trial court, an action to revoke donation under
Article 764 of the Code which, insofar as pertinent, reads as follows:
Article 764.The donation shall be revoked at the instance of the donor, when the
donee fails to comply with any of the conditions which the former imposed upon
the latter.
xxx xxx xxx
This action shall prescribe after four years from the noncompliance with the
condition, may be transmitted to the heirs of the donor, and may be exercised
against the donee's heirs. (Underscoring added)
Petitioner's posture does not persuade.
As aptly observed by the trial court, the petitory portion of petitioner's complaint
in Civil Case No. 98-033 seeks for a judgment declaring him the absolute owner of
the donated property, a plea which necessarily includes the revocation of the
deed of donation in question. Verily, a declaration of petitioner' absolute
ownership appears legally possible only when the deed of donation is contextually
declared peremptorily revoked.
Owing to the prescriptive component of Article 764 of the Civil Code, petitioner's
dread of the invocation and application of said provision is at once apparent as it
is understandable. For, an action to revoke thereunder prescribes after four (4)
years from non-compliance by the donee with any of the conditions set forth in
the deed of donation. A little less than seventeen (17) years separate September
16, 1981, when the Deed of Donation was executed, from May 6, 1998, when
petitioner filed his complaint in Civil Case No. 98-033. Seventeen (17) years is, in
turn, too far removed, as shall be illustrated shortly, from the 4-year prescriptive
period referred to in Article 764 or even from the 10-year period under Article
1144. 24
It cannot be overemphasized that respondent barangay traces its claim of
ownership over the disputed property to a valid contract of donation which is yet
to be effectively revoked. Such rightful claim does not constitute a cloud on the
supposed title of petitioner over the same property removable by an action to
quiet title. Withal, the remedy afforded in Article 476 of the Civil Code is
unavailing until the donation shall have first been revoked in due course under
Article 764 or Article 1144 of the Code.
Lest it be overlooked, the rule on the imprescriptibility of actions to quiet title
admits of exceptions. The trial court correctly mentioned one, referring to a
situation where the plaintiff in an action to quiet title is not in actual possession
of the land. 25 In the case at bench, petitioner is not in possession of the property.
For sure, he is even asking in his complaint in Civil Case No. 98-033 for recovery
of possession of the donated property.
Given the above disquisition, petitioner can hardly fault the trial court for its
holding that petitioner's action to revoke is time-barred. As may be recalled,
respondent barangay had, under the terms of the deed of donation, five (5) years
from the execution of the conveying deed in September 1981, or up September
1986, within which to introduce and complete the contemplated development of
the donated area. Following Article 764 of the Civil Code, petitioner had four (4)
years from September 1986, or up to September 1990, within which to seek the
revocation of the subject donation on the ground of breach of contract.
The Court can grant that the prescription of actions for the revocation of onerous
donations, as here, are governed by the general rules on prescription, 26 which,
in context, is Article 1144 of the Civil Code providing that actions upon a written
contract shall be brought within ten (10) years from accrual of the right of action.
Ten years from September 1986 — the date when petitioner's right to revoke
accrued — would be September 1996. Here, however, what partakes as
petitioner's suit to revoke was filed only in May 1998.
54
In all, petitioner's right of action to revoke or cancel the donation had indeed
prescribed, regardless of whether the applicable legal provision is Article 764 or
the favorable Article 1144 of the Civil Code. It should be stated in this regard,
however, that respondent barangay had disputed the existence of the grounds
upon which petitioner anchored his right to revoke, claiming it had already
complied with the construction and development conditions of the donation.
From the records, it would appear that respondent barangay's boast of
compliance is not an empty one. As we see it, the establishment on the donated
area of telephone service, a water service, a police mobile force, and a courtroom,
all for the benefits of the barangay residents, substantially satisfies the terms and
conditions of the subject donation. The concrete paving of roads and the
construction of government offices, sports complex for public enjoyment and like
infrastructures which, per respondent barangay's estimate, cost not less than P25
Million, 27 add persuasive dimension to the conclusion just made.
Petitioner's long silence vis-à-vis the kind of development structures that
Barangay Lublub had decided to put up or allowed to be established on the
subject area cannot but be taken as an indicia of his satisfaction with respondent
barangay's choice of public service projects. The prolonged silence was broken
only after the provincial and municipal governments advertised, then sold the
property in a public auction to satisfy questionable tax liabilities.
Much is made by petitioner about his execution of the 1989 deed of donation,
which, to him, should be utilized as a point of reference in determining the
prescriptive period 28 defined under either Article 764 or 1144 of the Civil Code.
He states:
. . . It has not been explained up to this juncture why the Deed of Donation of June
1989 . . . is not being mentioned or considered when it is alleged in the complaint.
As will be noted in the Deed of Donation dated 1981 the property was jointly
owned by plaintiff Dolar and Jarantilla, with separate title; in Annex "B", the
Donation of 1989 only plaintiff Dolar signed the same as the only registered
owne[r] of the lot donated; . . . . As previously adverted to, the prescriptive period
for violation or contravention of the terms and conditions of Annex "B" should be
reckoned from 1994 and therefore this action filed in 1998 is within the period.
ETDHSa
With the view we take of the case, the execution of the 1989 deed of donation is
really of little moment in terms of furthering petitioner's cause. For, at that time,
the property subject of this recourse was no longer his to donate, having earlier
relinquished his ownership thereon. Nemo dat qui non habet — No one can give
what he has not. 29 Stated a bit differently, respondent barangay's right over the
donated area proceeds from the 1981 donation. The legal effects, therefore, of
its action or inaction respecting the donated property should be assayed on the
basis of the 1981 donation.
The last issue raised pivots on whether or not respondent barangay can acquire
the subject property by acquisitive prescription, the petitioner's thesis being that
prescription does not run against registered land. 30
Petitioner's point is theoretically correct and may perhaps tip the balance in his
favor, but for the fact that the respondent barangay anchors its title and right over
the donated lot, first and foremost, by virtue of the deed of donation. Admittedly,
standing alone, adverse, continuous and long possession of a piece of real
property cannot defeat the title of a registered owner. But, then, this postulate
presupposes a Torrens Title lawfully acquired and issued. As may be recalled,
however, respondent barangay instituted Civil Case No. 00-140, supra, for
Cancellation of Title, Reconveyance/Issuance of Title precisely because of the
dubious manner by which petitioner allegedly acquired his TCT No. T-129837 over
a lot he admits donating.
Parenthetically, petitioner's contention that the donation was invalid because it
was not registered in the Registry of Property deserves no merit. For, as between
the parties to the donation and their assigns, the registration of the deed of
donation with the Registry of Deeds is not needed for its validity and efficacy. In
Pajarillo vs. Intermediate Appellate Court, 31 the Court emphatically dismissed
the notion that registration was necessary to make the donation a binding
commitment insofar as the donor and the donee were concerned.
As a final consideration, let it be made clear that this opinion merely resolves the
question of the correctness of the dismissal by the trial court of Civil Case No. 98-
033 on the basis of facts attendant thereto in the light of applicable laws and
jurisprudence. It is not meant to prejudge the outcome of Civil Case No. 00-140
which, while related to Civil Case No. 98-033, tenders different issues, foremost
of which is the validity of a Torrens title issued over a piece of land to one who
had previously donated the same.
WHEREFORE, the petition is DENIED for lack of merit.
Costs against petitioner.
SO ORDERED.
Panganiban, Corona and Carpio-Morales, JJ., concur.
Sandoval-Gutierrez, J., is on official leave.
EN BANC
[G.R. No. L-18872. July 15, 1966.]
In the Matter of the Trusteeship of Minors Benigno, Angela and Antonio, all
surnamed Perez y Tuason. J. ANTONIO ARANETA, petitioner-appellee, vs.
ANTONIO PEREZ, Judicial Guardian of Angela and ANTONIO PEREZ Y TUASON,
oppositor-appellant.
Alfonso Felix, Jr. for oppositor-appellant.
Araneta & Araneta for petitioner-appellee.
SYLLABUS
1. TRUSTEESHIP; PROHIBITION AGAINST DONATION OF PROPERTIES UNDER
TRUST. — Article 736, prohibiting guardians and trustees from making a donation
of the properties entrusted to them, is a new provision of the Civil Code, which
took effect on August 30, 1950, and, pursuant to Articles 2253 and 2255 of said
Code, does not apply retroactively to a testamentary trust established in 1948.
2. ID.; ID.; WHEN DONATION BY TRUSTEE MAY BE ALLOWED. — In prohibiting a
trustee from donating properties entrusted to him, the new Civil Code does so for
the protection of the trust beneficiaries and evidently contemplates gifts of pure
beneficence, that is, those which are supported by no other cause than the
liberality of the donor. When the donation is clearly in the interest of the
beneficiaries, to say it cannot be done would be contrary to the spirit and intent
of the law.
DECISION
MAKALINTAL, J p:
This appeal was originally taken to the Court of Appeals, and subsequently
certified to Us for the reason that it involves a purely legal question. The order
appealed from was issued by the Court of First Instance of Rizal on April 4, 1957
in trusteeship proceeding No. Q-73.
The trust was established pursuant to the will of the late Angela S. Tuason,
particularly the clause which reads as follows:
"CUATRO. Instituyo como mis unicos herederos a mis mencionados tres hiyos, a
razon de una novena parte del caudal hereditario que dejare para cada uno de
ellos. Lego a mi hijo Antonio otra porcion equivalente a dos novenas partes del
caudal hereditario. Y finalmente lego a mis nietos que fueren hijos de mi hija
Angela otra porcion equivalente a dos novenas partes del caudal hereditario.
Dichos tres legados sin embargo, estan sujetos a la manda que se menciona en el
parrafo siguiente. Los dos legados a favor de mis mencionados nietos seran
administrados por mi albacea, J. Antonio Araneta (y en defecto de este, su
hermano, Salvador Araneta), con amplios poderes de vender los mismos y con su
producto adquirir otros bienes, y con derecho a cobrar por su administracion,
honorarios razonables. Los poderes de dicho administrador seran los de un
trustee con los poderos mas amplios permitidos por la ley. Debera, sin embargo,
rendir trimestralmente, cuenta de su administracion a los legatarios que fueren
mayores de edad y a los tutores de los que fueren menores de edad. Y asimismo,
debera hacerles entrega de la participacion que a cada legatario corresponda en
las rentas netas de la administracion. La administracion sobre un grupo cesará
55
cuando todos mis nietos de dicho grupo llegaren a su mayoria de edad, y una
mayoria de los mismos acordaren la termination de la administracion. Por nietos,
debe enterderse no solamente a los nietos varones sino tambien sino tambien a
los nietos mujeres."
Appellee J. Antonio Araneta was appointed trustee on March 24, 1950 and he
qualified on the following May 5 when he took his oath of office. The beneficiaries
of the trust are Benigno, Angela and Antonio, all surnamed Perez y Tuason, the
last two being represented by appellant Antonio Perez, who is their father and
judicial guardian.
In the order appealed from the lower court approved, upon petition of the
trustee, a deed of donation executed by him on April 30, 1955 in favor of the City
of Manila covering a lot — pertaining to the trusteeship, with an area of 853.1
square meters. Such approval was given over the opposition of appellant Antonio
Perez. As found by the lower court, the said lot was being used as a street and had
been so used since prior to its acquisition by the late Angela S. Tuason. The street
leads to other lots also pertaining to the trusteeship with an area of 8,176.6
square meters, and it is through the said street that the tenant occupying those
other lots pass in going to and from their respective houses. On the lot in question
the trustee had been paying a realty tax of P100.00 yearly.
The lower court also found that the lots aforementioned would be converted into
a residential subdivision and that for the purpose the corresponding plan has been
prepared; that the lot donated to the City of Manila appears on the plan to be
included among the areas covered by the street lay-outs as required by law; and
that the donation would save the trusteeship the amount of the realty tax and
relieve it from the duty of maintaining the lot in usable condition as a street. There
can be no dispute therefore that the donation was beneficial to the trusteeship,
not to say necessary under the law if the planned residential subdivision is to be
realized.
Appellant does not deny the beneficial aspects of the donation. But he maintains
that it is invalid on the ground that under Article 736 of the Civil Code "guardians
and trustees cannot donate the properties entrusted to them". It should be
remembered that this article is a new provision of the Civil Code, which took effect
only on August 30, 1950 (Rep. Act No. 386) and does not apply retroactively to
the testamentary trust established upon the death of Angela S. Tuason on March
20, 1948, taking into account Articles 2253 and 2255, which provide against such
retrospective operation on acts or events that took place under former laws.
There being nothing in the old Civil Code which prohibits a trustee from donating
properties under trusteeship, and considering that the powers given to herein
appellee as trustee are of a plenary character, subject only to the limitation that
they should be permissible under the law; considering further that when the
testatrix conferred such powers she must have had in mind the law that was in
force at the time; and considering finally that after all a trust is created for the
benefit of the cestuis que trust and that in this particular case the acts of the
trustee are subject to the supervision of the Court, We see no reason why the
donation in question should not be allowed.
The new Civil Code, in prohibiting a trustee from donating properties entrusted
to him does so for the protection of the trust beneficiaries and evidently
contemplates gifts of pure beneficence, that is, those which are supported by no
other cause than the liberality of the donor. But when the donation, as in the
present instance, is clearly in their interest, to say it cannot be done would be
contrary to the spirit and intent of the law.
The order appealed from is hereby affirmed, with costs against the appellant.
Concepcion, C.J., J.B.L. Reyes, Barrera, Dizon, Regala, J.P. Bengzon, Zaldivar and
Sanchez, JJ., concur.
EN BANC
[G.R. No. L-24983. May 20, 1968.]
FLORENTINO GENATO, FRANCISCO GENATO and GENATO COMMERCIAL
CORPORATION, petitioners, vs. FELISA GENATO DE LORENZO, respondent.
Crispin D. Baizas & Associates for petitioners.
Carlos, Carballo, Valdez & Gil R. Carlos for respondent.
SYLLABUS
1. CORPORATION LAW; SHARES OF STOCK, TRANSFER OF; LACK OF
CONSIDERATION; EFFECT. — Where the evidence of record showed that the
transfer of shares of stock was not supported by valid cause or consideration,
which in itself is a ground to declare it invalid, it is immaterial that the evidence
did not show any fraudulent machinations on the part of appellant to secure the
consent of their mother to said transfer of shares.
2. ID.; ID.; PRESUMPTION OF REGULARITY; NOT APPLICABLE. — Granting that
even private transactions are to be presumed fair and regular, the presumption is
only prima facie and must yield to evidence. By his own testimony, Florentino
Genato showed that the indorsement of the shares cannot be taken literally, and
that it was used to disguise a different factual situation. Hence, the presumption
invoked by appellants cannot apply, since they have themselves avowed the
existence of a simulation.
3. CIVIL LAW; DONATION; JOINT DONATION TO TWO DONEES; ACCEPTANCE BY
DONEES; ACCEPTANCE BY BOTH REQUIRED. — Assuming ad arguendo, that the
late Simona Vda. de Genato gave the Certificates of Stock Nos. 7 and 18 to
Florentino with instructions to transfer the same to him and his brother, this act
did not constitute a valid manual donation in law for lack of proper acceptance
(Civil Code of 1889, Article 630). Incontestably, one of the two donees was not
present at the delivery, and there is no showing that he, Francisco Genato, had
authorized his brother, Florentino to accept for both of them. As pointed out by
Manresa in his Commentaries to the Civil Code of 1889 (Vol. V, 6th edition, pp.
131, 132, 141-142), the delivery by the donor and the acceptance by donee must
be simultaneous, and the acceptance by a person other than the true donee must
be authorized by a proper power of attorney set forth in a public document. None
has been claimed to exist in this case. Since by appellants' own version, the
donation intended was a joint one to both donees, one could not accept
independently of his co-donee, for there is no accretion among donees unless
expressly so provided (Article 637) or unless they be husband and wife.
4. ID.; ORIGINAL CERTIFICATES OF STOCK CANCELLED ILLEGALLY AND
IMPROPERLY STILL FORMS PART OF THE ESTATE. — There being neither valid
donation, nor sale, the cancellation of the original certificates of stock as well as
the issuance of new certificates in the name of Florentino and Francisco Genato
was illegal and improper for lack of valid authority. It is a consequence of this that
the shares in question are deemed never to have ceased to be property of their
mother, Simona S. de Genato, and must be considered still forming part of the
assets of her estate.
5. REMEDIAL LAW; APPEAL; INTEREST OF ALL HEIRS INSEPARABLE; APPEAL BY ONE
INURES TO THE BENEFIT OF ALL. — Where, as in this case, the interests of all the
heirs are so interwoven as to become inseparable, the appeal by one heir
prevented the appealed decision from becoming final as to the others. Hence,
reversal of the Court of First Instance decision as to one heir is reversal as to all of
them (Mun. of Orion vs. Concha, 50 Phil., 679).
DECISION
REYES, J.B.L., Actg. C.J. p:
Appeal by certiorari from a judgment of the Court of Appeals in its Case CA-G.R.
No. 28052-R, that reversed that of the Court of First Instance of Manila, ordering
the cancellation of Certificates of Stock Nos. 118 and 119 of the Genato
Commercial Corporation and the issuance of another in lieu thereof in the name
of the Administrator of the Estate of Simona B. Vda. de Genato.
The decision under the appeal states the background facts and issues to be as
follows:
"The Genato Commercial Corporation is a family corporation, founded by the
spouses Vicente Genato and Simona D. de Genato. The spouses had six children
named Francisco, Florentino, Manuel, Carmen, Felisa and Juan all surnamed
Genato. As of March 26, 1928, Simona B. de Genato had 430 shares of stock, par
value P100.00 per share, represented by share certificate No. 7 signed by Vicente
Genato, President, and Simona B. de Genato, Secretary-Treasurer.
56
"On December 23, 1942, a majority of the members of the Board of Directors
composed of Francisco G. Genato, President, Simona B. Vda. de Genato, Director
and Secretary-Treasurer, and Florentino Genato, Vice-President and Director,
held a meeting at 1075-1079 R. Hidalgo, Manila, at which Florentino Genato, was
elected and designated Assistant Secretary-Treasurer of the Corporation. The
reason for said election and designation appears in the minutes of the meeting of
the Board (Exhibit 1) which reads as follows:
'MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF THE GENATO
COMMERCIAL CORPORATION
Held on the 23rd day of December, 1942, at 1075-1079 R. Hidalgo, Manila
'There were present at the meeting the following directors:
Simona B. Vda. de Genato
Francisco G. Genato
Florentino Genato
Absent: Carmen Genato Luz and Felisa Genato Lorenzo
'Mr. Francisco G. Genato presided over the meeting and Mr. Florentino Genato
acted as Secretary and kept the minutes of the proceedings.
'Doña Simona Vda. de Genato explained that due to her advanced age it is more
convenient that Florentino Genato, now Vice-President of the corporation, act as
Assistant Secretary-Treasurer as, as a matter of fact, he has heretofore been
acting as such, since the work is rather strenuous. Thereupon, Doña Simona Vda.
de Genato moved, seconded by the Chairman, that:
'RESOLVED, that Mr. Florentino Genato be elected and designated Assistant
Secretary-Treasurer of the Corporation.
'The above resolution was unanimously carried.
'At this point the chairman invited the attention of the Board that it might be
advisable to reward the services of Mr. Elpidio Villamiel by giving him a bonus of
one share of stock of the corporation out of the Treasury stock, considering that
the par value thereof is only P100.00. On motion duly made and seconded, it was
'RESOLVED, That the corporation gives as it does hereby give and grant unto Mr.
Elpidio Villamiel a bonus of one share of stock of the par value of P100.00 out of
the Treasury stock of the corporation, for faithful services rendered, hereby
authorizing the officers of the corporation to issue unto him the corresponding
stock certificate.
'There being no further business the meeting was adjourned.
'(Sgd.) FLORENTINO GENATO
Secretary of the meeting
'(Sgd.) FRANCISCO G. GENATO
Chairman of the meeting.'
"Four or five days thereafter, Florentino Genato as Assistant Secretary-Treasurer
cancelled share certificates Nos. 7 and 18 and in lieu thereof issued share
certificate No 118 for 265 shares in favor of Florentino Genato and share
certificate No. 119 for 265 shares in favor of Francisco G. Genato.
"The new share certificates were not presented in evidence; they were merely
mentioned by Florentino Genato in the course of his testimony as a witness called
by the plaintiff later on as a witness for the defendants.
"Simona B. Vda. de Genato having died shortly after liberation, an intestate
proceeding of her estate (Special Proc. 71546, Court of First Instance, Manila) was
filed. The inventory (Exhibit D), which did not include the shares in litigation
presented in the proceeding by Francisco G. Genato as special administrator
dated March 1, 1946 showed that the value of the estate left by the decedent was
approximately P39,806.58.
"On July 8, 1948, the Philippine Trust Company, judicial administrator of the
intestate estate, and the legal heirs Manuel Genato, Felisa Genato de Lorenzo and
Juan Genato filed the complaint in the case at bar to recover from the other two
legal heirs, Florentino Genato and Francisco G. Genato, the 530 shares of stock in
order that they may be included in the inventory of the intestate estate of their
deceased mother and in due course distributed among all the surviving children
of the decedent. In their answer, the defendants Florentino Genato and Francisco
G. Genato alleged that they had acquired the ownership of the 530 shares by
simple donation from their mother.
"The trial court found that defendants Francisco G. Genato and Florentino Genato
had acquired the ownership of the 530 shares by simple donation from their
widowed mother on December 25, 1942. From the judgment dismissing the
complaint, plaintiff Felisa Genato de Lorenzo appealed.
"Appellant contends that there was no simple donation of the 530 shares in
litigation. We find the contention meritorious in view of the following
considerations:
"(1) There is no clear, satisfactory and convincing evidence of the alleged simple
donation of the shares in litigation having a par value of P53,000.00. Florentino
Genato, as a witness called by the plaintiffs and subsequently as a witness for the
defendants, substantially testified that on December 25, 1942, Juan Camus, an
employee of the Corporation, came to see him at the Royal Market located on
Echague Street and told him that his mother wanted to see him; that he
immediately left and saw his mother at the residence at the back part of the
premises of the Corporation situated on R. Hidalgo Street; that his mother
delivered to him the two (2) share certificates Nos. 7 and 18, already indorsed;
that is, with the blank spaces of the indorsement already filled by typewriter and
her signature already affixed at the bottom of the indorsement and that his
mother told him 'transfer them'; that two or three days later as Assistant
Secretary-Treasurer of the Corporation, he cancelled share certificates Nos. 7 and
18 and issued in lieu thereof the new share certificates No. 118 in favor of
Florentino Genato for 265 shares and No. 119 in favor of Francisco G. Genato for
265 shares.
"The indorsement appearing on the back of share certificate No. 7 (which is
identical, except as to the number of shares, to that appearing on the back of
share certificate No. 18), with the typewritten words filling the blank spaces
indicated by underlines, reads as follows:
"For value Received, I hereby sell, assign and transfer unto Florentino Genato and
Francisco G. Genato his heirs, administrators and legal representatives, the Shares
of the Capital stock represented by the within Certificate, and all rights, interests,
participations and privileges represented thereby, and do hereby irrevocably
constitute and appoint Genato Commercial Corporation to transfer the said Stock
on the books of the within corporation with full power of substitution in the
premises.
'Date December 25, 1942
(Sgd.) S. VDA. de GENATO
(Signature of Owner)
Signed in the presence of
(Sgd.) Juan Camus'"
Finding that there had been neither consideration for the sale of shares nor valid
donation of the same, due to lack of proper acceptance and non-compliance with
statutory requirements, and that the appeal of respondent Felisa Genato de
Lorenzo inured to the benefit of her other co-plaintiffs, the Court of Appeals, as
previously related, invalidated the transfer of the shares to Florentino and
Francisco Genato, and decreed that said stock remained a part of the estate of
the transferor.
For the brief of appellants, the following errors are assigned:
1. Respondent and respondent-appellee failed to prove by preponderance of
evidence that there was fraud committed by petitioners in the transfer of the
shares of stock in their names.
2. There has been no showing that the transfer made by Simona B. Vda. de Genato
of her shares of stock to petitioners was not made validly and regularly.
3. The evidence shows that there was a simple donation made by Simona B. Vda.
de Genato in favor of the herein petitioners Florentino Genato and Francisco
Genato; and
57
4. The judgment of the lower court became final with respect to the other
plaintiffs who did not appeal therefrom.
We find the appeal without merit.
With respect to the first two errors assigned, it is immaterial that the evidence did
not show any fraudulent machinations on the part of appellants to secure the
consent of their mother to the transfer of the shares, if the uncontested evidence
of record showed that the transfer was not supported by valid cause or
consideration, which in itself is a ground for invalidating the transaction. It was so
charged by the plaintiffs in the Court of First Instance and expressly so found by
the Court of Appeals. This finding being one of fact, reached after consideration
of the evidence, is binding upon this Court. In addition, it is confirmed by the
petitioner's own claim that their mother's shares in the corporation were donated
to them, and not sold, as recited by the indorsement of Certificates Nos. 7 and 18
of the Genato Commercial Corporation.
Granting that even private transactions are to be presumed fair and regular, the
presumption is only prima facie, and must yield to evidence. By his own
testimony, Florentino Genato showed that the indorsement of the shares cannot
be taken literally, and that it was used to disguise a different factual situation.
Hence, the presumption invoked by appellants cannot apply, since they have
themselves avowed the existence of a simulation.
The key question, therefore, is whether there has been a valid donation as
appellants claim. The Court of Appeals concluded that there was none, and we
find no reason to overturn the opinion thus reached. Assuming, ad arguendo, that
the late Simona Vda. de Genato gave the Certificates of Stock Nos. 7 and 18 to
Florentino with instructions to transfer the same to him and his brother, this act
did not constitute a valid manual donation in law for lack of proper acceptance
(Civ. Code of 1889, Art. 630). Incontestably, one of the two donees was not
present at the delivery, and there is no showing that he, Francisco Genato, had
authorized his brother, Florentino to accept for both of them. As pointed out by
Manresa in his Commentaries to the Civil Code of 1889 (Vol. V, 6th edition, pp.
131-132, 141-142), the delivery by the donor and the acceptance by donee must
be simultaneous, and the acceptance by a person other than the true donee must
be authorized by a proper power of attorney set forth in a public document. None
has been claimed to exist in this case.
Since by appellants' own version, the donation intended was a joint one to both
donees, one could not accept independently of his co-donee, for there is no
accretion among donees unless expressly so provided (Art. 637) or unless they be
husband and wife.
There being neither valid donation, nor sale, the cancellation of the original
certificates of stock as well as the issuance of new certificates in the name of
Florentino and Francisco Genato was illegal and improper for lack of valid
authority. It is a consequence of this that the shares in question are deemed never
to have ceased to be property of their mother, Simona B. de Genato, and must be
considered still forming part of the assets of her estate.
It is finally contended by appellants that as appellee Felisa Genato de Lorenzo was
the only one who appealed from the decision of the Court of First Instance
upholding the transaction, her appeal cannot inure to the benefit of the other
children of Simona de Genato.
This contention would be plausible if the interest of each child or descendant had
been susceptible of individual delimitation. But as the estate of the mother is still
pending liquidation, the interest of each heir cannot be deemed independent of
that of the others. As correctly declared by the Court of Appeals, the interests of
all the heirs are so interwoven as to become inseparable, and the appeal by one
heir prevented the appealed decision from becoming final as to the others. Hence,
reversal of the Court of First Instance decision as to one heir is reversal as to all of
them (Municipality of Orion vs. Concha, 50 Phil. 679). 1 Actually, none of the
plaintiff heirs attempted to have himself declared owner of any portion of the
shares in question. They could not do so, since the necessities of the liquidation
of their mother's estate might require the eventual disposition of all or part of the
shares to strangers in order to meet obligations of the estate. PREMISES
CONSIDERED, the decision of the Court of Appeals is affirmed. Costs against
petitioners-appellants.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ.,
concur.
Fernando, J., on official leave, did not take part.
THIRD DIVISION
[G.R. No. 110335. June 18, 2001.]
IGNACIO GONZALES, LILIA R. GONZALES, GUSTAVO R. GONZALES, WIGBERTO R.
GONZALES, GILDA GONZALES-SALUTA, FERNANDO RAMIREZ, OCTAVIO RAMIREZ,
JR., IGNACIO RAMIREZ, ESMIRNA RAMIREZ, MERCEDES GONZALES-FAVIZ, JAIME
GONZALES, FEDERICO GONZALES, ROSARIO GONZALES, PATRICIA GONZALES,
DANIEL GONZALES, ALDO GONZALES, CLAUDIA GONZALES and AMANDA
GONZALES, petitioners, vs. HONORABLE COURT OF APPEALS, ESTANISLAO
SALVADOR, MATEO SALVADOR, ALBERTO SARMIENTO, MAXIMO ESGUERRA,
MAMERTO ANTONIO, VIRGILIO DE GUZMAN, ANGEL FAJARDO, ABAD DELA CRUZ,
PEDRO FAJARDO, JUANITO DE LARA, ELIGIO DE GUZMAN, SALVADOR MARTINEZ,
EDUARDO DELA CRUZ, JOSE MATIAS, SOLEDAD ESTRELLA, ROMAN GUINGON,
CIRILO SALVADOR, CATALINA DE LA CRUZ, BERNARDO ESGUERRA, JR., GLORIA
CABANA, PAQUITO CHAVEZ, RENATO GARCIA, FRANCISCO PASCUAL, WALDO
SALVADOR, MARIO SALVADOR, PEDRO GARCIA, ALBINO SALVADOR, ANTONIO DE
GUZMAN, AMBROCIO SALVADOR, TERESITA CAPATE, EDUARDO TALENS,
BENIGNO CARAIG, ERNESTO BERNABE, SERGIO CARLOS, SIMEON BALINGAY,
ANTONIO NANGEL, TEOFILO BINUYA and WILFREDO DELA CRUZ, respondents.
San Jose Enriquez Lacas Santos Borje & Vendero for petitioners.
Joventino A. Cornista and Irineo G. Calderon for private respondents.
SYNOPSIS
The late spouses Ignacio Gonzales and Marina Gonzales were the registered
owners of two parcels of agricultural Land situated at Barrio Fortaleza,
Cabanatuan City, covered by Transfer Certificate of Title No. 2742 and
denominated as Lot 551-C and Lot 552-A. Lot 551-C contains an area of 46.97
hectares while Lot 552-A contains an area of 37.5735 hectares. Prior to the
partition of said estate, Ignacio Gonzales executed a Deed of Donation on July 12,
1972 conveying his share of the property, specifically Lot No. 551-C, in favor of his
14 grandchildren, herein petitioners. The said donation was not registered. When
Presidential Decree No. 27 took effect on October 21, 1972, the landholdings of
the spouses Gonzales were placed under "Operation Land Transfer" by virtue of
said decree, and private respondents were accordingly issued the corresponding
Certificates of Land Transfer and Emancipation Patents. The administratrix, Lilia
Gonzales, filed an application for retention with the then Ministry of Agrarian
Reform, requesting that their property be excluded from the coverage of
Operation Land Transfer. On September 3, 1991, Department of Agrarian Reform
Secretary Benjamin Leong issued an order declaring that the subject landholdings
covered by the deed of donation are exempt from Operation Land Transfer, and
cancelling the Certificates of Land Transfer issued in favor of private respondents.
Aggrieved by this ruling, private respondents filed a petition for certiorari with the
Court of Appeals which rendered its decision on March 15, 1993, reversing the
action of the DAR and upholding the certificates of land transfer and
emancipation patents. Petitioners moved for a reconsideration of the above
decision, but the same was denied by the Court of Appeals. Hence, the present
petition. The sole issue to be resolved is whether the property subject of the deed
of donation which was not registered when PD. No. 27 took effect, should be
excluded from the Operation Land Transfer.
The Supreme Court affirmed the decision of the Court of Appeals. The Court ruled
that although the non-registration of a deed of donation shall not affect its
validity, the necessity of registration comes into play when the rights of third
persons are affected, as in the case at bar. According to the Court, while the
donation executed by Ignacio Gonzales in favor of his grandchildren was in writing
and duly notarized, it was not, however, registered in accordance with law and,
therefore, not binding upon private respondents who did not participate in said
deed or had no actual knowledge thereof. Hence, while the deed of donation is
valid between the donor and the donees, such deed, however, did not bind the
tenants-farmers who were not parties to the donation. It is of no moment that
the right of the tenants-farmers in this case was created by virtue of a decree or
law. They are still considered "third persons" contemplated in our laws on
registration, for the fact remains that herein private respondents tenants-farmers
had no actual knowledge of the deed of donation.
58
SYLLABUS
1. CIVIL LAW; DONATION; AS BETWEEN PARTIES TO A DONATION OF AN
IMMOVABLE PROPERTY, ALL THAT IS REQUIRED IS FOR SAID DONATION TO BE
CONTAINED IN A PUBLIC DOCUMENT; REGISTRATION NOT NECESSARY FOR IT TO
BE CONSIDERED VALID AND EFFECTIVE. — Article 749 of the Civil Code provides
inter alia that "in order that the donation of an immovable may be valid, it must
be made in a public document, specifying therein the property donated and the
value of the charges which the donee must satisfy." Corollarily, Article 709 of the
same Code explicitly states that "the titles of ownership, or other rights over
immovable property, which are not duly inscribed or annotated in the Registry of
Property shall not prejudice third persons." From the foregoing provisions, it may
be inferred that as between the parties to a donation of an immovable property,
all that is required is for said donation to be contained in a public document.
Registration is not necessary for it to be considered valid and effective.
2. ID.; ID.; MUST BE REGISTERED IN THE REGISTRY OF LAND TITLES AND DEEDS TO
BIND THIRD PERSONS. — In order to bind third persons, the donation must be
registered in the Registry of Property (now Registry of Land Titles and Deeds).
Although the non-registration of a deed of donation shall not affect its validity,
the necessity of registration comes into play when the rights of third persons are
affected, as in the case at bar. It is actually the act of registration that operates to
convey registered land or affect title thereto. Further, it is an entrenched doctrine
in our jurisdiction that registration in a public registry creates constructive notice
to the whole world (Olizon vs. Court of Appeals, 236 SCRA 148 [1994]).
3. ID.; ID.; NON-REGISTRATION OF A DEED OF DONATION DOES NOT BIND OTHER
PARTIES IGNORANT OF A PREVIOUS TRANSACTION. — It is undisputed in this case
that the donation executed by Ignacio Gonzales in favor of his grandchildren,
although in writing and duly notarized, has not been registered in accordance with
law. For this reason, it shall not be binding upon private respondents who did not
participate in said deed or had no actual knowledge thereof. Hence, while the
deed of donation is valid between the donor and the donees, such deed, however,
did not bind the tenants-farmers who were not parties to the donation. As
previously enunciated by this Court, non-registration of a deed of donation does
not bind other parties ignorant of a previous transaction (Sales vs. Court of
Appeals, 211 SCRA 858 [1992]). So it is of no moment that the right of the tenants-
farmers in this case was created by virtue of a decree or law. They are still
considered "third persons" contemplated in our laws on registration, for the fact
remains that these tenants-farmers had no actual knowledge of the deed of
donation.
4. LABOR AND SOCIAL LEGISLATION; PRESIDENTIAL DECREE NO. 27;
UNREGISTERED DEED OF DONATION CANNOT OPERATE TO EXCLUDE SUBJECT
LAND FROM COVERAGE OF OPERATION LAND TRANSFER THEREOF. — The
ineluctable conclusion drawn is that the unregistered deed of donation cannot
operate to exclude the subject land from the coverage of the Operation Land
Transfer of P.D. No. 27, which took effect on October 21, 1972. To rule otherwise
would render ineffectual the rights and interests that the tenants-farmers
immediately acquired upon the promulgation of P.D. No. 27, especially so because
in the case at bar, they have been cultivating the land even before World War II.
Accordingly, the Certificates of Land Transfer and the Emancipation Patents
respectively issued to private respondents over the land in question cannot be
cancelled. It should be noted that one of the recognized modes of acquiring title
to land is by emancipation patent which aims to ameliorate the sad plight of
tenants-farmers. By virtue of P.D. No. 27, tenants-farmers are deemed owners of
the land they till. This policy is intended to be given effect by a provision of the
law which declares that, "the tenant-farmer, whether in land classified as landed
estate or not, shall be DEEMED OWNER of a portion constituting a family size farm
of five (5) hectares if not irrigated and three (3) hectares if irrigated" (P.D. No. 27,
third paragraph). It may, therefore, be said that with respect to Lot 551-C, private
respondents became owners thereof on October 27, 1972, the day P.D. No. 27
took effect.
5. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT; COURT COMPELLED TO REVIEW
FACTUAL FINDINGS OF COURT OF APPEALS IF AT VARIANCE WITH THOSE OF THE
DEPARTMENT OF AGRARIAN REFORM. — We have consistently ruled that it is not
the function of this Court to assess and evaluate the evidence all over again, its
jurisdiction being generally limited to reviewing errors of law that might have
been committed by the lower court. Nevertheless, since the factual findings of
the Court of Appeals are at variance with those of an administrative agency such
as the Department of Agrarian Reform, we are compelled to review the records
presented both in the Court of Appeals and the said Department (Deiparine vs.
Court of Appeals, 299 SCRA 668 [1998]). Moreover, in the exercise of sound
discretion and considering the fact that the parties have relentlessly pursued this
case since 1974 or for a period of 27 years already, this Court has opted to look
into the factual bases of the assailed decision of the Court of Appeals.
6. ID.; ID.; ID.; IF MADE BY COURT OF APPEALS ARE CONCLUSIVE AND BINDING
ON SUPREME COURT EVEN IF CONTRARY TO THOSE OF TRIAL COURT OR
ADMINISTRATIVE AGENCY, SO LONG AS SUCH FINDINGS ARE SUPPORTED BY THE
RECORDS OR BASED ON SUBSTANTIAL EVIDENCE. — We affirm the conclusion of
the appellate court that the land subject of the donation is covered by Operation
Land Transfer. The findings of fact made by the Court of Appeals are conclusive
and binding on the Supreme Court even if contrary to those of the trial court or
the administrative agency, so long as such findings are supported by the records
or based on substantial evidence (Tabaco vs. Court of Appeals, 239 SCRA 485
[1994]). While the foregoing doctrine is not absolute, petitioners have not
sufficiently proved that the findings complained of are totally devoid of support
in the records, or that they are so glaringly erroneous as to constitute serious
abuse of discretion.
DECISION
MELO, J p:
Per A.M. No. 00-9-03-SC dated February 27, 2001, this case which could have been
acted upon earlier, was raffled to undersigned ponente. Essentially, petitioners
seek to annul and set aside the decision dated March 15, 1993 of the Court of
Appeals in its CA-G.R. SP No. 26416 which reversed the ruling of then Secretary of
Agrarian Reform Benjamin T. Leong, as well as the order dated May 17, 1993
denying reconsideration thereof.
The factual antecedents of the instant case may be chronicled as follows:
The now deceased spouses Ignacio Gonzales and Marina Gonzales were the
registered owners of two parcels of agricultural land situated at Barrio Fortaleza,
Cabanatuan City, covered by Transfer Certificate of Title No. 2742 and
denominated as Lot 551-C and Lot 552-A. Lot 551-C contains an area of 46.97
hectares while Lot 552-A contains an area of 37.5735 hectares. Herein petitioners
are the successors-in-interest or the children and grandchildren of said Gonzales
spouses. On the other hand, private respondents are the farmers and tenants of
said spouses who have been cultivating the parcels of land even before World
War II either personally or through their predecessors-in-interest.
On May 7, 1969, Marina Gonzales died intestate and appointed as administratrix
of her estate was petitioner Lilia Gonzales. Prior to the partition of said estate,
Ignacio Gonzales executed a Deed of Donation on July 12, 1972 conveying his
share of the property, specifically Lot No. 551-C, in favor of his 14 grandchildren.
The said donation was not registered. Thus, when Presidential Decree No. 27 (P.D.
No. 27) took effect on October 21, 1972, the landholdings of the spouses Gonzales
were placed under Operation Land Transfer by virtue of said decree, and private
respondents were accordingly issued the corresponding Certificates of Land
Transfer and Emancipation Patents. On March 5, 1974, the administratrix Lilia
Gonzales filed an application for retention with the then Ministry of Agrarian
Reform, requesting that their property be excluded from the coverage of
Operation Land Transfer. After initial investigation, Hearing Officer Melchor
Pagsolingan recommended the denial of said application for retention and this
action was affirmed by Assistant Secretary of Agrarian Reform Benjamin Labayen,
in an order dated September 12, 1977. Apparently, however, a reinvestigation
was conducted, resulting in the present Department of Agrarian Reform (DAR)
resolution dated February 23, 1983 recommending that the land subject of the
deed of donation, or Lot No. 551-C, be exempt from Operation Land Transfer. On
September 3, 1991, DAR Secretary Benjamin Leong issued an order declaring that
the subject landholdings covered by the deed of donation are exempt from
Operation Land Transfer, and cancelling the Certificates of Land Transfer issued in
favor of private respondents. In so ruling, the DAR Secretary reasoned:
As the donation had been duly accepted by the donees who were already of legal
age on the date of the donation and by the legal guardians of the donees who
were still minors at that time, and the donor having known of said acceptance,
the donation had therefore been perfected in accordance with the law, and the
59
donees had acquired a valid title to the portion donated on the date the
instrument was executed.
(p. 4, DAR Order.)
Aggrieved by this ruling, private respondents filed a petition for certiorari with the
Court of Appeals which rendered its decision on March 15, 1993, reversing the
action of the DAR and upholding the certificates of land transfer and
emancipation patents.
Petitioners moved for a reconsideration of the above decision but the same was
denied by the Court of Appeals in its Resolution dated May 17, 1993.
Thus, the instant petition anchored on the following grounds:
A. the CA failed to reconsider that the land subject of this case does not fall within
the purview of P.D. 27;
B. the CA should have found that the evidence clearly shows that the tenants
(private respondents herein) were aware that the land had been donated by
Ignacio Gonzales in favor of his grandchildren prior to the effectivity of P.D. 27;
and
C. the effect of non-registration under the land registration laws are inapplicable
to the present case.
The first and third assigned errors, being interrelated, shall be jointly discussed.
The sole issue to be resolved is whether the property subject of the deed of
donation which was not registered when P.D. No. 27 took effect, should be
excluded from the Operation Land Transfer.
Petitioners insist that the deed of donation executed by Ignacio Gonzales validly
transferred the ownership and possession of Lot 551-C which comprises an area
of 46.97 hectares to his 14 grandchildren. They further assert that inasmuch as
Lot 551-C had already been donated, the same can no longer fall within the
purview of P.D. No. 27, since each donee shall have a share of about three
hectares only which is within the exemption limit of seven hectares for each
landowner provided under P.D. No. 27.
Article 749 of the Civil Code provides inter alia that "in order that the donation of
an immovable may be valid, it must be made in a public document, specifying
therein the property donated and the value of the charges which the donee must
satisfy." Corollarily, Article 709 of the same Code explicitly states that "the titles
of ownership, or other rights over immovable property, which are not duly
inscribed or annotated in the Registry of Property shall not prejudice third
persons." From the foregoing provisions, it may be inferred that as between the
parties to a donation of an immovable property, all that is required is for said
donation to be contained in a public document. Registration is not necessary for
it to be considered valid and effective. However, in order to bind third persons,
the donation must be registered in the Registry of Property (now Registry of Land
Titles and Deeds). Although the non-registration of a deed of donation shall not
affect its validity, the necessity of registration comes into play when the rights of
third persons are affected, as in the case at bar. ACEIac
It is actually the act of registration that operates to convey registered land or
affect title thereto. Thus, Section 50 of Act No. 496 (Land Registration Act), as
amended by Section 51 of P.D. No. 1529 (Property Registration Decree), provides:
SECTION 51. Conveyance and other dealings by registered owner — . . . But no
deed, mortgage, lease, or other voluntary instrument, except a will purporting to
convey or affect registered land, shall take effect as a conveyance or bind the land,
but shall operate only as a contract between the parties and as evidence of
authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned, . . .
Further, it is an entrenched doctrine in our jurisdiction that registration in a public
registry creates constructive notice to the whole world (Olizon vs. Court of
Appeals, 236 SCRA 148 [1994]). Thus, Section 51 of Act No. 496, as amended by
Section 52 of P.D. No. 1529, provides:
SECTION 52. Constructive notice upon registration — Every conveyance,
mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting
registered land shall, if registered, filed or entered in the Office of the Register of
Deeds for the province or city where the land to which it relates lies, be
constructive notice to all persons from the time of such registering, filing or
entering.
It is undisputed in this case that the donation executed by Ignacio Gonzales in
favor of his grandchildren, although in writing and duly notarized, has not been
registered in accordance with law. For this reason, it shall not be binding upon
private respondents who did not participate in said deed or had no actual
knowledge thereof. Hence, while the deed of donation is valid between the donor
and the donees, such deed, however, did not bind the tenants-farmers who were
not parties to the donation. As previously enunciated by this Court, non-
registration of a deed of donation does not bind other parties ignorant of a
previous transaction (Sales vs. Court of Appeals, 211 SCRA 858 [1992]). So, it is of
no moment that the right of the tenants-farmers in this case was created by virtue
of a decree or law. They are still considered "third persons" contemplated in our
laws on registration, for the fact remains that these tenants-farmers had no actual
knowledge of the deed of donation.
From the foregoing, the ineluctable conclusion drawn is that the unregistered
deed of donation cannot operate to exclude the subject land from the coverage
of the Operation Land Transfer of P.D. No. 27, which took effect on October 21,
1972. To rule otherwise would render ineffectual the rights and interests that the
tenants-farmers immediately acquired upon the promulgation of P.D. No. 27,
especially so because in the case at bar, they have been cultivating the land even
before World War II. Accordingly, the Certificates of Land Transfer and the
Emancipation Patents respectively issued to private respondents over the land in
question cannot be cancelled. It should be noted that one of the recognized
modes of acquiring title to land is by emancipation patent which aims to
ameliorate the sad plight of tenants-farmers. By virtue of P.D. No. 27, tenants-
farmers are deemed owners of the land they till. This policy is intended to be given
effect by a provision of the law which declares that, "the tenant-farmer, whether
in land classified as landed estate or not, shall be DEEMED OWNER of a portion
constituting a family size farm of five (5) hectares if not irrigated and three (3)
hectares if irrigated" (P.D. No. 27, third paragraph). It may, therefore, be said that
with respect to Lot 551-C, private respondents became owners thereof on
October 27, 1972, the day P.D. No. 27 took effect.
The second error assigned deals with a question of fact. We have consistently
ruled that it is not the function of this Court to assess and evaluate the evidence
all over again, its jurisdiction being generally limited to reviewing errors of law
that might have been committed by the lower court. Nevertheless, since the
factual findings of the Court of Appeals are at variance with those of an
administrative agency such as the Department of Agrarian Reform, we are
compelled to review the records presented both in the Court of Appeals and the
said Department (Deiparine vs. Court of Appeals, 299 SCRA 668 [1998]).
Moreover, in the exercise of sound discretion and considering the fact that the
parties have relentlessly pursued this case since 1974 or for a period of 27 years
already, this Court has opted to look into the factual bases of the assailed decision
of the Court of Appeals.
Petitioners maintain that private respondents knew of the donation as evidenced
by the affidavit and testimony of Francisco Villanueva and Abad Dela Cruz. This
contention is unacceptable. Villanueva testified that as the overseer of Ignacio
Gonzales, he was tasked to inform his co-tenants about the donation. However,
the records show that Villanueva has transferred his right to cultivate the land to
a certain Bernardo Esguerra as early as 1965 (p. 203, Rollo), leading one to
logically conclude that Villanueva was no longer a tenant, much more an overseer,
when the donation was executed in 1972. On the other hand, Dela Cruz, in an
Affidavit executed on May 28, 1992, denied testifying before Atty. Romeo Bello at
the Office of the Department of Agrarian Reform to the effect that he and his co-
tenants were aware of the donation. He declared that he had no knowledge of
the donation made by Ignacio Gonzales, nor did he have any idea that an
investigation was conducted by DAR on said matter (pp. 204-205, Rollo).
Likewise, petitioners claim that private respondents had been sharing their
produce with the donees or the grandchildren of Ignacio Gonzales, suggesting
thereby that private respondents have recognized the donees as the new owners
of the land. Again, we find this argument to be unfounded. The evidence on
60
record reveals that the tenants-farmers paid their rentals to Ignacio Gonzales and
not to the grandchildren (pp. 150-194, Rollo).
Petitioners contend that the deed of donation was not registered because of the
pendency of the intestate proceedings. This argument was correctly rejected by
the Court of Appeals, in this wise:
We do not agree with respondents that the failure to register the deed of
donation was due to the pendency of the intestate proceedings and the fact that
the property had been mortgaged to the Philippine National Bank (PNB), because
the pendency of the intestate proceedings and the real estate mortgaged to the
PNB, do not preclude the registration annotation of the donation at the back of
the certificate of title covering the land.
(p. 4, Court of Appeals Decision.)
Thus, we affirm the conclusion of the appellate court that the land subject of the
donation is covered by Operation Land Transfer. The findings of fact made by the
Court of Appeals are conclusive and binding on the Supreme Court even if
contrary to these of the trial court or the administrative agency, so long as such
findings are supported by the records or based on substantial evidence (Tabaco
vs. Court of Appeals, 239 SCRA 485 [1994]). While the foregoing doctrine is not
absolute, petitioners have not sufficiently proved that the findings complained of
are totally devoid of support in the records, or that they are so glaringly erroneous
as to constitute serious abuse of discretion.
As a final note, our laws on agrarian reform were enacted primarily because of
the realization that there is an urgent need to alleviate the lives of the vast
number of poor farmers in our country. Yet, despite such laws, the majority of
these farmers still live on a hand-to-mouth existence. This can be attributed to
the fact that these agrarian laws have never really been effectively implemented.
Certain individuals have continued to prey on the disadvantaged, and as a result,
the farmers who are intended to be protected and uplifted by the said laws find
themselves back in their previous plight or even in a more distressing situation.
This Court ought to be an instrument in achieving a dignified existence for these
farmers free from pernicious restraints and practices, and there's no better time
to do it than now.
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals
dated March 15, 1993 in CA-G.R. SP No. 26416 is hereby AFFIRMED.
SO ORDERED.
Vitug, Panganiban, Gonzaga-Reyes and Sandoval-Gutierrez, JJ., concur.
SECOND DIVISION
[G.R. No. 141882. March 11, 2005.]
J.L.T. AGRO, INC., represented by its Manager, JULIAN L. TEVES, petitioner, vs.
ANTONIO BALANSAG and HILARIA CADAYDAY, respondents.
DECISION
TINGA, J p:
Once again, the Court is faced with the perennial conflict of property claims
between two sets of heirs, a conflict ironically made grievous by the fact that the
decedent in this case had resorted to great lengths to allocate which properties
should go to which set of heirs.
This is a Rule 45 petition assailing the Decision 1 dated 30 September 1999 of the
Court of Appeals which reversed the Decision 2 dated 7 May 1993 of the Regional
Trial Court (RTC), Branch 45, of Bais City, Negros Oriental.
The factual antecedents follow.
Don Julian L. Teves (Don Julian) contracted two marriages, first with Antonia
Baena (Antonia), and after her death, with Milagros Donio Teves (Milagros Donio).
Don Julian had two children with Antonia, namely: Josefa Teves Escaño (Josefa)
and Emilio Teves (Emilio). He had also four (4) children with Milagros Donio,
namely: Maria Evelyn Donio Teves (Maria Evelyn), Jose Catalino Donio Teves (Jose
Catalino), Milagros Reyes Teves (Milagros Reyes) and Pedro Reyes Teves (Pedro).
3 45 of Bais City, seeking the declaration of nullity and cancellation of TCT No. T-375
The present controversy involves a parcel of land covering nine hundred and fifty-
four (954) square meters, known as Lot No. 63 of the Bais Cadastre, which was
originally registered in the name of the conjugal partnership of Don Julian and
Antonia under Original Certificate of Title (OCT) No. 5203 of the Registry of Deeds
of Bais City. When Antonia died, the land was among the properties involved in
an action for partition and damages docketed as Civil Case No. 3443 entitled
"Josefa Teves Escaño v. Julian Teves, Emilio B. Teves, et al." 4 Milagros Donio, the
second wife of Don Julian, participated as an intervenor. Thereafter, the parties
to the case entered into a Compromise Agreement 5 which embodied the
partition of all the properties of Don Julian.
On the basis of the compromise agreement and approving the same, the Court of
First Instance (CFI) of Negros Oriental, 12th Judicial District, rendered a Decision
6 dated 31 January 1964. The CFI decision declared a tract of land known as
Hacienda Medalla Milagrosa as property owned in common by Don Julian and his
two (2) children of the first marriage. The property was to remain undivided
during the lifetime of Don Julian. 7 Josefa and Emilio likewise were given other
properties at Bais, including the electric plant, the "movie property," the
commercial areas, and the house where Don Julian was living. The remainder of
the properties was retained by Don Julian, including Lot No. 63. acCITS
Paragraph 13 of the Compromise Agreement, at the heart of the present dispute,
lays down the effect of the eventual death of Don Julian vis-à-vis his heirs:
13. That in the event of death of Julian L. Teves, the properties hereinafter
adjudicated to Josefa Teves Escaño and Emilio B. Teves, (excluding the properties
comprised as Hacienda Medalla Milagrosa together with all its accessories and
accessions) shall be understood as including not only their one-half share which
they inherited from their mother but also the legitimes and other successional
rights which would correspond to them of the other half belonging to their father,
Julian L. Teves. In other words, the properties now selected and adjudicated to
Julian L. Teves (not including his share in the Hacienda Medalla Milagrosa) shall
exclusively be adjudicated to the wife in second marriage of Julian L. Teves and
his four minor children, namely, Milagros Donio Teves, his two acknowledged
natural children Milagros Reyes Teves and Pedro Reyes Teves and his two
legitimated children Maria Evelyn Donio Teves and Jose Catalino Donio Teves.
(Emphasis supplied)
On 16 November 1972, Don Julian, Emilio and Josefa executed a Deed of
Assignment of Assets with Assumption of Liabilities 8 in favor of J.L.T. Agro, Inc.
(petitioner). Less than a year later, Don Julian, Josefa and Emilio also executed an
instrument entitled Supplemental to the Deed of Assignment of Assets with the
Assumption of Liabilities (Supplemental Deed) 9 dated 31 July 1973. This
instrument which constitutes a supplement to the earlier deed of assignment
transferred ownership over Lot No. 63, among other properties, in favor of
petitioner. 10 On 14 April 1974, Don Julian died intestate.
On the strength of the Supplemental Deed in its favor, petitioner sought the
registration of the subject lot in its name. A court, so it appeared, issued an order
11 cancelling OCT No. 5203 in the name of spouses Don Julian and Antonia on 12
November 1979, and on the same date TCT No. T-375 was issued in the name of
petitioner. 12 Since then, petitioner has been paying taxes assessed on the subject
lot. 13
Meanwhile, Milagros Donio and her children had immediately taken possession
over the subject lot after the execution of the Compromise Agreement. In 1974,
they entered into a yearly lease agreement with spouses Antonio Balansag and
Hilaria Cadayday, respondents herein. 14 On Lot No. 63, respondents temporarily
established their home and constructed a lumber yard. Subsequently, Milagros
Donio and her children executed a Deed of Extrajudicial Partition of Real Estate
15 dated 18 March 1980. In the deed of partition, Lot No. 63 was allotted to
Milagros Donio and her two (2) children, Maria Evelyn and Jose Catalino. Unaware
that the subject lot was already registered in the name of petitioner in 1979,
respondents bought Lot No. 63 from Milagros Donio as evidenced by the Deed of
Absolute Sale of Real Estate 16 dated 9 November 1983. jur2005cda
At the Register of Deeds while trying to register the deed of absolute sale,
respondents discovered that the lot was already titled in the name of petitioner.
Thus, they failed to register the deed. 17
61
Respondents, as vendees of Lot No. 63, filed a complaint before the RTC Branch
in the name of petitioner and the transfer of the title to Lot No. 63 in their names,
plus damages. 18
After hearing, the trial court dismissed the complaint filed by respondents. The
dispositive portion of the decision reads:
WHEREFORE, premises considered, by preponderance of evidence, this Court
finds judgment in favor of the defendant and against the plaintiff, and thus hereby
orders:
(1) That complaint be dismissed; ASHaTc
(2) That plaintiffs vacate the subject land, particularly identified as Lot No. 63
registered under Transfer Certificate of Title No. T-375;
(3) That plaintiffs pay costs.
Finding no basis on the counterclaim by defendant, the same is hereby ordered
dismissed. 19
The trial court ruled that the resolution of the case specifically hinged on the
interpretation of paragraph 13 of the Compromise Agreement. 20 It added that
the direct adjudication of the properties listed in the Compromise Agreement was
only in favor of Don Julian and his two children by the first marriage, Josefa and
Emilio. 21 Paragraph 13 served only as an amplification of the terms of the
adjudication in favor of Don Julian and his two children by the first marriage.
According to the trial court, the properties adjudicated in favor of Josefa and
Emilio comprised their shares in the estate of their deceased mother Antonia, as
well as their potential share in the estate of Don Julian upon the latter's death.
Thus, upon Don Julian's death, Josefa and Emilio could not claim any share in his
estate, except their proper share in the Hacienda Medalla Milagrosa which was
adjudicated in favor of Don Julian in the Compromise Agreement. As such, the
properties adjudicated in favor of Don Julian, except Hacienda Medalla Milagrosa,
were free from the forced legitimary rights of Josefa and Emilio, and Don Julian
was under no impediment to allocate the subject lot, among his other properties,
to Milagros Donio and her four (4) children. 22
The trial court further stressed that with the use of the words "shall be," the
adjudication in favor of Milagros Donio and her four (4) children was not final and
operative, as the lot was still subject to future disposition by Don Julian during his
lifetime. 23 It cited paragraph 14 24 of the Compromise Agreement in support of
his conclusion. 25 With Lot No. 63 being the conjugal property of Don Julian and
Antonia, the trial court also declared that Milagros Donio and her children had no
hereditary rights thereto except as to the conjugal share of Don Julian, which they
could claim only upon the death of the latter. 26
The trial court ruled that at the time of Don Julian's death on 14 April 1974, Lot
No. 63 was no longer a part of his estate since he had earlier assigned it to
petitioner on 31 July 1973. Consequently, the lot could not be a proper subject of
extrajudicial partition by Milagros Donio and her children, and not being the
owners they could not have sold it. Had respondents exercised prudence before
buying the subject lot by investigating the registration of the same with the
Registry of Deeds, they would have discovered that five (5) years earlier, OCT No.
5203 had already been cancelled and replaced by TCT No. T-375 in the name of
petitioner, the trial court added. 27
The Court of Appeals, however, reversed the trial court's decision. The decretal
part of the appellate decision reads:
WHEREFORE, premises considered, the decision appealed from is hereby
REVERSED and SET ASIDE and a new one is entered declaring the Transfer
Certificate of Title No. T-375 registered in the name of J.L.T. Agro, Inc. as null and
void.
With costs against defendant J.L.T. Agro, Inc. represented by its Manager, Julian
L. Teves.
SO ORDERED. 28
Per the appellate court, the Compromise Agreement incorporated in CFI decision
dated 31 January 1964, particularly paragraph 13 thereof, determined,
adjudicated and reserved to Don Julian's two sets of heirs their future legitimes in
his estate except as regards his (Don Julian's) share in Hacienda Medalla
Milagrosa. 29 The two sets of heirs acquired full ownership and possession of the
properties respectively adjudicated to them in the CFI decision and Don Julian
himself could no longer dispose of the same, including Lot No. 63. The disposition
in the CFI decision constitutes res judicata. 30 Don Julian could have disposed of
only his conjugal share in the Hacienda Medalla Milagrosa. 31
The appellate court likewise emphasized that nobody in his right judgment would
preterit his legal heirs by simply executing a document like the Supplemental
Deed which practically covers all properties which Don Julian had reserved in
favor of his heirs from the second marriage. It also found out that the blanks
reserved for the Book No. and Page No. at the upper right corner of TCT No. T-
375, "to identify the exact location where the said title was registered or
transferred," were not filled up, thereby indicating that the TCT is "spurious and
of dubious origin." 32
Aggrieved by the appellate court's decision, petitioner elevated it to this Court via
a petition for review on certiorari, raising pure questions of law. DcaSIH
Before this Court, petitioner assigns as errors the following rulings of the appellate
court, to wit: (a) that future legitime can be determined, adjudicated and reserved
prior to the death of Don Julian; (b) that Don Julian had no right to dispose of or
assign Lot No. 63 to petitioner because he reserved the same for his heirs from
the second marriage pursuant to the Compromise Agreement; (c) that the
Supplemental Deed was tantamount to a preterition of his heirs from the second
marriage; and (d) that TCT No. T-375 in the name of petitioner is spurious for not
containing entries on the Book No. and Page No. 33
While most of petitioner's legal arguments have merit, the application of the
appropriate provisions of law to the facts borne out by the evidence on record
nonetheless warrants the affirmance of the result reached by the Court of Appeals
in favor of respondents.
Being the key adjudicative provision, paragraph 13 of the Compromise Agreement
has to be quoted again:
13. That in the event of death of Julian L. Teves, the properties herein adjudicated
to Josefa Teves Escaño and Emilio B. Teves, (excluding the properties comprised
as Hacienda Medalla Milagrosa together with all its accessories and accessions)
shall be understood as including not only their one-half share which they inherited
from their mother but also the legitimes and other successional rights which
would correspond to them of the other half belonging to their father, Julian L.
Teves. In other words, the properties now selected and adjudicated to Julian L.
Teves (not including his share in the Hacienda Medalla Milagrosa) shall exclusively
be adjudicated to the wife in second marriage of Julian L. Teves and his four minor
children, namely, Milagros Donio Teves, his two acknowledged natural children
Milagros Reyes Teves and Pedro Reyes Teves and his two legitimated children
Maria Evelyn Donio Teves and Jose Catalino Donio Teves." (Emphasis supplied)
With the quoted paragraph as basis, the Court of Appeals ruled that the
adjudication in favor of the heirs of Don Julian from the second marriage became
automatically operative upon the approval of the Compromise Agreement,
thereby vesting on them the right to validly dispose of Lot No. 63 in favor of
respondents.
Petitioner argues that the appellate court erred in holding that future legitime can
be determined, adjudicated and reserved prior to the death of Don Julian. The
Court agrees. Our declaration in Blas v. Santos 34 is relevant, where we defined
future inheritance as any property or right not in existence or capable of
determination at the time of the contract, that a person may in the future acquire
by succession. Article 1347 of the New Civil Code explicitly provides:
ART. 1347. All things which are not outside the commerce of men, including future
things, may be the object of a contract. All rights which are not intransmissible
may also be the object of contracts.
No contract may be entered into upon future inheritance except in cases
expressly authorized by law.
62
All services which are not contrary to law, morals, good customs, public order or
public policy may likewise be the object of a contract.
Well-entrenched is the rule that all things, even future ones, which are not outside
the commerce of man may be the object of a contract. The exception is that no
contract may be entered into with respect to future inheritance, and the
exception to the exception is the partition inter vivos referred to in Article 1080.
35
For the inheritance to be considered "future," the succession must not have been
opened at the time of the contract. 36 A contract may be classified as a contract
upon future inheritance, prohibited under the second paragraph of Article 1347,
where the following requisites concur:
(1) That the succession has not yet been opened; HEcaIC
(2) That the object of the contract forms part of the inheritance; and
(3) That the promissor has, with respect to the object, an expectancy of a right
which is purely hereditary in nature. 37
The first paragraph of Article 1080, which provides the exception to the exception
and therefore aligns with the general rule on future things, reads:
ART. 1080. Should a person make a partition of his estate by an act inter vivos, or
by will, such partition shall be respected, insofar as it does not prejudice the
legitime of the compulsory heirs.
xxx xxx xxx
In interpreting this provision, Justice Edgardo Paras advanced the opinion that if
the partition is made by an act inter vivos, no formalities are prescribed by the
Article. 38 The partition will of course be effective only after death. It does not
necessarily require the formalities of a will for after all it is not the partition that
is the mode of acquiring ownership. Neither will the formalities of a donation be
required since donation will not be the mode of acquiring the ownership here
after death; since no will has been made it follows that the mode will be
succession (intestate succession). Besides, the partition here is merely the
physical determination of the part to be given to each heir. 39
The historical antecedent of Article 1080 of the New Civil Code is Article 1056 40
of the old Civil Code. The only change in the provision is that Article 1080 now
permits any person (not a testator, as under the old law) to partition his estate by
act inter vivos. This was intended to abrogate the then prevailing doctrine that for
a testator to partition his estate by an act inter vivos, he must first make a will
with all the formalities provided by law. 41
Article 1056 of the old Civil Code (now Article 1080) authorizes a testator to
partition inter vivos his property, and distribute them among his heirs, and this
partition is neither a donation nor a testament, but an instrument of a special
character, sui generis, which is revocable at any time by the causante during his
lifetime, and does not operate as a conveyance of title until his death. It derives
its binding force on the heirs from the respect due to the will of the owner of the
property, limited only by his creditors and the intangibility of the legitime of the
forced heirs. 42
The partition inter vivos of the properties of Don Julian is undoubtedly valid
pursuant to Article 1347. However, considering that it would become legally
operative only upon the death of Don Julian, the right of his heirs from the second
marriage to the properties adjudicated to him under the compromise agreement
was but a mere expectancy. It was a bare hope of succession to the property of
their father. Being the prospect of a future acquisition, the interest by its nature
was inchoate. It had no attribute of property, and the interest to which it related
was at the time nonexistent and might never exist. 43
Evidently, at the time of the execution of the deed of assignment covering Lot No.
63 in favor of petitioner, Don Julian remained the owner of the property since
ownership over the subject lot would only pass to his heirs from the second
marriage at the time of his death. Thus, as the owner of the subject lot, Don Julian
retained the absolute right to dispose of it during his lifetime. His right cannot be
challenged by Milagros Donio and her children on the ground that it had already
been adjudicated to them by virtue of the compromise agreement.

Emerging as the crucial question in this case is whether Don Julian had validly
transferred ownership of the subject lot during his lifetime. The lower court ruled
that he had done so through the Supplemental Deed. The appellate court
disagreed, holding that the Supplemental Deed is not valid, containing as it does
a prohibited preterition of Don Julian's heirs from the second marriage. Petitioner
contends that the ruling of the Court of Appeals is erroneous. The contention is
well-founded.
Article 854 provides that the preterition or omission of one, some, or all of the
compulsory heirs in the direct line, whether living at the time of the execution of
the will or born after the death of the testator, shall annul the institution of heir;
but the devises and legacies shall be valid insofar as they are not inofficious.
Manresa defines preterition as the omission of the heir in the will, either by not
naming him at all or, while mentioning him as father, son, etc., by not instituting
him as heir without disinheriting him expressly, nor assigning to him some part of
the properties. 44 It is the total omission of a compulsory heir in the direct line
from inheritance. 45 It consists in the silence of the testator with regard to a
compulsory heir, omitting him in the testament, either by not mentioning him at
all, or by not giving him anything in the hereditary property but without expressly
disinheriting him, even if he is mentioned in the will in the latter case. 46 But there
is no preterition where the testator allotted to a descendant a share less than the
legitime, since there was no total omission of a forced heir. 47
In the case at bar, Don Julian did not execute a will since what he resorted to was
a partition inter vivos of his properties, as evidenced by the court approved
Compromise Agreement. Thus, it is premature if not irrelevant to speak of
preterition prior to the death of Don Julian in the absence of a will depriving a
legal heir of his legitime. Besides, there are other properties which the heirs from
the second marriage could inherit from Don Julian upon his death. A couple of
provisions in the Compromise Agreement are indicative of Don Julian's desire
along this line. 48 Hence, the total omission from inheritance of Don Julian's heirs
from the second marriage, a requirement for preterition to exist, is hardly
imaginable as it is unfounded. IcESaA
Despite the debunking of respondents' argument on preterition, still the petition
would ultimately rise or fall on whether there was a valid transfer effected by Don
Julian to petitioner. Notably, Don Julian was also the president and director of
petitioner, and his daughter from the first marriage, Josefa, was the treasurer
thereof. There is of course no legal prohibition against such a transfer to a family
corporation. Yet close scrutiny is in order, especially considering that such transfer
would remove Lot No. 63 from the estate from which Milagros and her children
could inherit. Both the alleged transfer deed and the title which necessarily must
have emanated from it have to be subjected to incisive and detailed examination.
Well-settled, of course, is the rule that a certificate of title serves as evidence of
an indefeasible title to the property in favor of the person whose name appears
therein. 49 A certificate of title accumulates in one document a precise and
correct statement of the exact status of the fee held by its owner. The certificate,
in the absence of fraud, is the evidence of title and shows exactly the real interest
of its owner. 50
To successfully assail the juristic value of what a Torrens title establishes, a
sufficient and convincing quantum of evidence on the defect of the title must be
adduced to overcome the predisposition in law in favor of a holder of a Torrens
title. Thus, contrary to the appellate court's ruling, the appearance of a mere
thumbmark of Don Julian instead of his signature in the Supplemental Deed would
not affect the validity of petitioner's title for this Court has ruled that a
thumbmark is a recognized mode of signature. 51
The truth, however, is that the replacement of OCT No. 5203 in the name of Julian
by T.C.T. No. T-375 is marred by a grave irregularity which is also an illegality, as
it contravenes the orthodox, conventional and normal process established by law.
And, worse still, the illegality is reflected on the face of both titles. Where, as in
this case, the transferee relies on a voluntary instrument to secure the issuance
of a new title in his name such instrument has to be presented to the Registry of
Deeds. This is evident from Sections 53 and 57 of Presidential Decree (P.D.) No.
1529 or the Property Registration Decree. The sections read, thus:
SEC. 53. Presentation of owner's duplicate upon entry of new certificate. — No
voluntary instrument shall be registered by the Register of Deeds unless the
63
owner's duplicate certificate is presented with such instrument, except in cases
expressly provided for in this Decree or upon order of the court, for cause shown.
(Emphasis supplied)
xxx xxx xxx
SEC. 57. Procedure in registration of conveyances. — An owner desiring to convey
his registered land in fee simple shall execute and register a deed of conveyance
in a form sufficient in law. The Register of Deeds shall thereafter make out in the
registration book a new certificate of title to the grantee and shall prepare and
deliver to him an owner's duplicate certificate. The Register of Deeds shall note
upon the original and duplicate certificate the date of transfer, the volume and
page of the registration book in which the new certificate is registered and a
reference by number to the last preceding certificate. The original and the
owner's duplicate of the grantor's certificate shall be stamped "cancelled." The
deed of conveyance shall be filed and endorsed with the number and the place of
registration of the certificate of title of the land conveyed. (Emphasis supplied)
As petitioner bases its right to the subject lot on the Supplemental Deed, it should
have presented it to the Register of Deeds to secure the transfer of the title in its
name. Apparently, it had not done so. There is nothing on OCT No. 5203 or on the
succeeding TCT No. T-375 either which shows that it had presented the
Supplemental Deed. In fact, there is absolutely no mention of a reference to said
document in the original and transfer certificates of title. It is in this regard that
the finding of the Court of Appeals concerning the absence of entries on the
blanks intended for the Book No. and Page No. gains significant relevance. Indeed,
this aspect fortifies the conclusion that the cancellation of OCT No. 5203 and the
consequent issuance of TCT No. T-375 in its place are not predicated on a valid
transaction.
What appears instead on OCT No. 5203 is the following pertinent entry:
Entry No. 1374: Kind: Order: Executed in favor of J.L.T. AGRO, INC.
CONDITIONS: Lost owner's duplicate is hereby cancelled, and null and void and a
new Certificate of Title No. 375 is issued per Order of the Court of First Instance
on file in this office. CIaHDc
Date of Instrument: November 12, 1979
Date of Inscription: Nov. 12, 1979 4:00 P.M.
(SGD) MANUEL C. MONTESA
Acting Deputy Register of Deeds II
(Emphasis supplied) 52
What the entry indicates is that the owner's duplicate of OCT No. 5203 was lost,
a petition for the reconstitution of the said owner's duplicate was filed in court,
and the court issued an order for the reconstitution of the owner's duplicate and
its replacement with a new one. But if the entry is to be believed, the court
concerned (CFI, according to the entry) issued an order for the issuance of a new
title which is TCT No. T-375 although the original of OCT No. 5203 on file with the
Registry of Deeds had not been lost.
Going by the legal, accepted and normal process, the reconstitution court may
order the reconstitution and replacement of the lost title only, nothing else. Since
what was lost is the owner's copy of OCT No. 5203, only that owner's copy could
be ordered replaced. Thus, the Register of Deeds exceeded his authority in issuing
not just a reconstituted owner's copy of the original certificate of title but a new
transfer certificate of title in place of the original certificate of title. But if the court
order, as the entry intimates, directed the issuance of a new transfer certificate
of title — even designating the very number of the new transfer certificate of title
itself — the order would be patently unlawful. A court cannot legally order the
cancellation and replacement of the original of the O.C.T. which has not been lost,
53 as the petition for reconstitution is premised on the loss merely of the owner's
duplicate of the OCT.
Apparently, petitioner had resorted to the court order as a convenient
contrivance to effect the transfer of title to the subject lot in its name, instead of
the Supplemental Deed which should be its proper course of action. It was so
constrained to do because the Supplemental Deed does not constitute a deed of
conveyance of the "registered land in fee simple" "in a form sufficient in law," as
required by Section 57 of P.D. No. 1529.
A plain reading of the pertinent provisions of the Supplemental Deed discloses
that the assignment is not supported by any consideration. The provision reads:
xxx xxx xxx
WHEREAS, in the Deed of Assignment of Assets with the Assumption of Liabilities
executed by Julian L. Teves, Emilio B. Teves and Josefa T. Escaño at Dumaguete
City on 16th day of November 1972 and ratified in the City of Dumaguete before
Notary Public Lenin Victoriano, and entered in the latter's notarial register as Doc.
No. 367; Page No. 17; Book No. V; series of 1972, Julian L. Teves, Emilio B. Teves
and Josefa T. Escaño, transferred, conveyed and assigned unto J.L.T. AGRO, INC.,
all its assets and liabilities as reflected in the Balance Sheet of the former as of
December 31, 1971.
WHEREAS, on the compromise agreement, as mentioned in the Decision made in
the Court of First Instance of Negros Oriental, 12th Judicial District Branch II, on
Dec. 31, 1964 pertaining to Civil Case No. 3443 the following properties were
adjudicated to Don Julian L. Teves. We quote. HCacDE
From the properties at Bais
Adjudicated to Don Julian L. Teves
xxx xxx xxx
Lot No. 63, Tax Dec. No. 33, Certificate of Title No. 5203, together with all
improvements. Assessed value — P2,720.00
xxx xxx xxx
WHEREAS, this Deed of Assignment is executed by the parties herein in order to
effect the registration of the transfer of the above corporation.
NOW, THEREFORE, for and in consideration of the above premises the ASSIGNOR
hereby transfers, conveys, and assigns unto J.L.T. AGRO, INC., the above described
parcel of land[s] with a fair market value of EIGHTY-FOUR THOUSAND PESOS
(P84,000.00), Philippine Currency, and which transfer, conveyance and
assignment shall become absolute upon signing. 54 (Emphasis supplied)
The amount of P84,000.00 adverted to in the dispositive portion of the instrument
does not represent the consideration for the assignment made by Don Julian.
Rather, it is a mere statement of the fair market value of all the nineteen (19)
properties enumerated in the instrument, of which Lot No. 63 is just one, that
were transferred by Don Julian in favor of petitioner. Consequently, the testimony
55 of petitioner's accountant that the assignment is supported by consideration
cannot prevail over the clear provision to the contrary in the Supplemental Deed.
The Court of Appeals, on the other hand, apparently considered the 1948
mortgage which is annotated on the back of the TCT No. T-375 as the
consideration for the assignment. 56 However, the said annotation 57 shows that
the mortgage was actually executed in favor of Rehabilitation Finance
Corporation, not of petitioner. 58 Clearly, said mortgage, executed as it was in
favor of the Rehabilitation Finance Corporation and there being no showing that
petitioner itself paid off the mortgage obligation, could not have been the
consideration for the assignment to petitioner.
Article 1318 of the New Civil Code enumerates the requisites of a valid contract,
namely: (1) consent of the contracting parties; (2) object certain which is the
subject matter of the contract; and (3) Cause of the obligation which is
established.
Thus, Article 1352 declares that contracts without cause, or with unlawful cause
produce no effect whatsoever. Those contracts lack an essential element and they
are not only voidable but void or inexistent pursuant to Article 1409, paragraph
(2). 59 The absence of the usual recital of consideration in a transaction which
normally should be supported by a consideration such as the assignment made
by Don Julian of all nineteen (19) lots he still had at the time, coupled with the
fact that the assignee is a corporation of which Don Julian himself was also the
64
President and Director, forecloses the application of the presumption of existence
of consideration established by law. 60
Neither could the Supplemental Deed validly operate as a donation. Article 749 of
the New Civil Code is clear on the point, thus:
Art. 749. In order that the donation of the immovable may be valid, it must be
made in a public document, specifying therein the property donated and the value
of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the
donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments.
AcHCED
In Sumipat, et al v. Banga, et al., 61 this Court declared that title to immovable
property does not pass from the donor to the donee by virtue of a deed of
donation until and unless it has been accepted in a public instrument and the
donor duly notified thereof. The acceptance may be made in the very same
instrument of donation. If the acceptance does not appear in the same document,
it must be made in another. Where the deed of donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a separate
instrument, is either not given to the donor or else not noted in the deed of
donation and in the separate acceptance, the donation is null and void.
In the case at bar, although the Supplemental Deed appears in a public document,
62 the absence of acceptance by the donee in the same deed or even in a separate
document is a glaring violation of the requirement.
One final note. From the substantive and procedural standpoints, the cardinal
objectives to write finis to a protracted litigation and avoid multiplicity of suits are
worth pursuing at all times. 63 Thus, this Court has ruled that appellate courts
have ample authority to rule on specific matters not assigned as errors or
otherwise not raised in an appeal, if these are indispensable or necessary to the
just resolution of the pleaded issues. 64 Specifically, matters not assigned as
errors on appeal but consideration of which are necessary in arriving at a just
decision and complete resolution of the case, or to serve the interest of justice or
to avoid dispensing piecemeal justice. 65
In the instant case, the correct characterization of the Supplemental Deed, i.e.,
whether it is valid or void, is unmistakably determinative of the underlying
controversy. In other words, the issue of validity or nullity of the instrument which
is at the core of the controversy is interwoven with the issues adopted by the
parties and the rulings of the trial court and the appellate court. 66 Thus, this
Court is also resolute in striking down the alleged deed in this case, especially as
it appears on its face to be a blatant nullity.
WHEREFORE, foregoing premises considered, the Decision dated 30 September
1999 of the Court of Appeals is hereby AFFIRMED. Costs against petitioner J.L.T.
Agro, Inc.
SO ORDERED.
Puno, Austria-Martinez, Callejo, Sr. and Chico-Nazario, JJ., concur.
SECOND DIVISION
[G.R. No. L-7307. May 19, 1955.]
PACITA ORTIZ, ET AL., petitioners, vs. THE COURT OF APPEALS and ANDRES
BASADA, respondents.
Marciano Chitongco for petitioners.
Flaviano de Asis for respondents.
SYLLABUS
1. DONATION OF REAL PROPERTY; WHEN DONEE ACQUIRES OWNERSHIP AND
POSSESSION OF DONARED PROPERTY. — From the time the public instrument of
donation is simultaneously executed and acknowledged by donors and donees,
the latter acquired not only the ownership but also the possession of the donated
property, since the execution of a public instrument of conveyance is one of the
recognized ways in which delivery (tradition) of lands may be made, unless the
countrary is expressed or inferable from the terms of the deeds.
2. ID.; DONATION IS ABSOLUTE AND UNCONDITIONAL IN THE ABSENCE OF
RESERVATION. — Where the donation is on its face absolute and unconditional
and nothing in its text authorizes us to conclude that it is limited to the naked
ownership of the land donated, the absence in the deed of any express
reservation of usufruct in favor of the donors is proof that no such reservation
was ever intended considering that under the law, a donation of land by public
instrument is required to express the charges that the donee must assume.
DECISION
REYES, J.B.L., J p:
Pacita Ortiz and Cresencia Ortiz pray for a review of the decision of the Court of
Appeals in its CA-G. R. No. 7691-R, dismissing their complaint against Andres
Basada for recovery of a parcel of land in Lapinig, Samar, described as follows:
"Terreno cocalero ubicado en el municipio de Lapinig, Samar, lindante al Norte —
Basilio Piangdon, ahora Pedro Mojica; al Este — Eugenio Montibon, ahora solar
de la escuela; al Sur — Colina; y al Oeste — Octavia Anacta, ahora Donata Abique,
con un area de 3,200 m.c., poco más o menos avaluado en P100.00 bajo el Tax
No. 4649." (Dec. CA. p. 1).
As determined by the Court of Appeals, the parcel of land in question belonged
originally to the spouses Bonifacio Yupo and Vicenta de Guerra. On April 19, 1940,
the owners donated the lot (among others) to their grandchildren, petitioners
Ortiz, by public document acknowledged before Notary Public Liberato Cinco, and
couched in the following terms:
"DEED OF DONATION
LET IT BE KNOWN BY ANYBODY WHO MIGHT SEE THIS:
That, we, BONIFACIO YUPO AND VICENTA DE GUERRA, Married to each other,
both of age, residing at barrio Lapinig, Palapag, Samar, Philippine and CRESENCIA
ORTIZ-PINANGAY, ALEJANDRO ORTIZ and PACITA ORTIZ, also of age all of them,
the first one residing at the same place and the two others at barrio Potong,
Palapag, Samar, have agreed on the following:
THAT BONIFACIO YUPO and VICENTA DE GUERRA, for and in consideration of the
liberality and love to their grandchildren, CRESENCIA ORTIZ-PINANGAY,
ALEJANDRO ORTIZ and PACITA ORTIZ, announce to everybody that that at their
free will give and donate to CRESENCIA ORTIZ-PINANGAY, ALEJANDRO ORTIZ and
PACITA ORTIZ three (3) parcels of land which are as follows:
Tax No. 19738, Awang, Lapinig, Palapag, Samar, bounded in the North — Jacoba
Enage; East — Jacoba Enage and Swamp, South — Awang Stream; and on the
West — Fermin Espinisin, Teresa Cesesta and Francisco Donceras.
Tax No. 4649, Lapinig, Palapag, Samar; bounded in the North — Basilio Piangdon;
on East — Eugenio Montibon; and the South — Colina; and the West — Octavio
Anacta.
Tax No. 12144, Potong, Palapag, Samar, bounded on the North — Bo. de Potong;
on the East — Playa Mar; South — Juan Sidro; on the West — Juan Sidro.
We trust that the donee would divide the lands donated to them by themselves.
That CRESENCIA ORTIZ-PINANGAY, ALEJANDRO ORTIZ and PACITA ORTIZ, hereby
accept this donation intervivos of the above-mentioned three (3) parcels of land
and that they hereby manifest their gratefulness to the sympathy, love and
liberality and benevolence of BONIFACIO YUPO and VICENTA DE GUERRA.
"In truth hereof, we have placed our names below this 19th day of April, 1940 at
Palapag, Samar.
(Sgd.) CRESENCIA ORTIZ-PINANGAY
(SGD.) ALEJANDRO ORTIZ (FDO.) BONIFACIO YUPO
(SGD.) PACITA ORTIZ (FDO.) VICENTA DE GUERRA
Signed in the presence of:
Signature illegible
Signature illegible
ACKNOWLEDGMENT BY NOTARY PUBLIC LIBERATO B. CINCO.
(Exhibit D-2, trans. of Exh. D)" (Dec. CA. pp. 2-3).
The donors were duly notified of donee's acceptance. Alejandro Ortiz died
without issue in Capas, Tarlac, as a prisoner of war, during the last occupation by
the Japanese.
It appears further that on August 14, 1941, the donor spouses executed another
notarial deed of donation of the same property, in favor of Andres Basada,
nephew of the donor Vicenta de Guerra, subject to the condition that the donee
65
would serve and take care of the donors until their death. This donation was also
duly accepted by the donee in the same instrument (Exh. 1-a).
In 1947, the first donee (Ortiz) filed revindicatory action against the second donee
(Basada) alleging that in 1946, the latter entered and usurped the land donated
to and owned by them, and refused to vacate the same. Basada claimed
ownership of the land on the ground that the donation in favor of the Ortizes had
been revoked. The Court of First Instance of Samar upheld Basada's claim and
dismissed the complaint, on the ground that the donees Ortiz had abandoned the
donors "to public mercy", with" most base ingratitude and highly condemnable
heartlessness".
Upon appeal to the Court of Appeals, the latter correctly held that the donation
in favor of appellants Ortiz had been duly perfected in accordance with law, and
it should "stand until after its revocation should have been asked and granted in
the proper proceedings," citing our decision in Ventura vs. Felix, 26 Phil. 500-503.
It added that the subsequent donation of the property to Basada "is not, certainly,
the way a prior donation should be revoked."
Nevertheless, the Court of Appeals upheld the dismissal of the complaint, holding
that:
"However, to all appearances, the donors in the instant case had always reserved
for themselves the possession and use of the properties donated. This may be
inferred from the fact that the Ortizes were in possession of the land in question
from the time it was donated to them until the donors left their house, and that
later, we believe, Basada took possession of it after the donation thereof in his
favor was signed and the donors went to live with him. The recovery of possession
of the land sought by plaintiffs is, therefore, premature because one of the donors
in behalf of whom Basada is now in occupancy of the property is still living. At
least he should have been included in the case to determine whether he really
had parted definitely not only with the ownership but also with the use and
possession of the land."
Dec. CA p. 9).
We agree with the petitioners that the conclusion thus drawn is unwarranted.
From the time the public instrument of donation (Exh. D) was executed and
acknowledged by donors and donees in 1940, the latter acquired not only the
ownership but also the possession of the donated property, since the execution
of a public instrument of conveyance is one of the recognized ways in which
delivery (tradition) of lands may be made (Civ. Code of 1889, Art. 1463; new Civil
Code, Art. 1498), unless from the terms of the deed, the contrary is expressed or
inferable. In the present case, the donation (Exh. D) is on its face absolute and
unconditional, and nothing in its text authorizes us to conclude that it was limited
to the naked ownership of the land donated. Considering that under the law, a
donation of land by Public instrument is required to express the charges that the
donee must assume (old Civil Code, Art. 633; new Civil Code, Art. 749), the
absence in the deed of any express reservation of usufruct in favor of the donors
is proof that no such reservation was ever intended.
The mere fact that the donors remain in the property after donating it is
susceptible of varied explanations and does not necessarily imply that possession
or usufruct was excluded from the donation. And the donees Ortiz having been
vested with ownership and attendant possession since 1940, it is clear that the
subsequent donation of the property in favor of respondent Basada conferred on
the latter no right whatever over the property as against the former donees.
Wherefore, and without prejudice to any action of revocation that may lawfully
apertain to the donors, the decisions of the Court of Appeals and of the Court of
First Instance of Samar dismissing the complaint are hereby reversed, and the
respondent Andres Basada is sentenced to restore possession to petitioners
Cresencia and Pacita Ortiz. The records of the case are ordered remanded to the
Court of origin for assessment of the damages suffered by the petitioners. Cost
against respondent Andrés Basada.
Pablo, Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador and
Concepcion, JJ., concur.
SECOND DIVISION
[G.R. No. 155810. August 13, 2004.]
LYDIA SUMIPAT, LAURITO SUMIPAT, ALEJANDRO SUMIPAT, ALICIA SUMIPAT, and
LIRAFE SUMIPAT, petitioners, vs. BRIGIDO BANGA, HERMINIGILDO TABOTABO,
VIVIANO TABOTABO, BERNARDITA ANIÑON, and LEONIDA TABOTABO,
respondents.
DECISION
TINGA, J p:

This is a Petition for Review on Certiorari 1 of the Decision 2 of the Court of
Appeals which reversed and set aside the decision 3 of the Regional Trial Court
(RTC) and partially annulled the Deed of Absolute Transfer and/or Quitclaim (the
deed) subject of this case.
We quote the appellate court’s findings of fact:
The spouses Placida Tabo-tabo and Lauro Sumipat, who contracted marriage on
July 20, 1939, acquired three parcels of land two of which were covered by
Original Certificate of Title No. P-17842 and Transfer Certificate of Title No. T-
15826.
The couple was childless.
Lauro Sumipat, however, sired five illegitimate children out of an extra-marital
affair with Pedra Dacola, namely: herein defendants-appellees Lydia, Laurito,
Alicia, Alejandro and Lirafe, all surnamed Sumipat.
On January 5, 1983, Lauro Sumipat executed a document denominated “DEED OF
ABSOLUTE TRANSFER AND/OR QUIT-CLAIM OVER REAL PROPERTIES” (the assailed
document) in favor of defendants-appellees covering the three parcels of land
(the properties). On the document appears the signature of his wife Placida which
indicates that she gave her marital consent thereto.
It appears that on January 5, 1983 when the assailed document was executed,
Lauro Sumipat was already very sick and bedridden; that upon defendant-
appellee Lydia’s request, their neighbor Benjamin Rivera lifted the body of Lauro
Sumipat whereupon Lydia guided his (Lauro Sumipat’s) hand in affixing his
signature on the assailed document which she had brought; that Lydia thereafter
left but later returned on the same day and requested Lauro’s unlettered wife
Placida to sign on the assailed document, as she did in haste, even without the
latter getting a responsive answer to her query on what it was all about.
After Lauro Sumipat’s death on January 30, 1984, his wife Placida, hereinafter
referred to as plaintiff-appellant, and defendants-appellees jointly administered
the properties 50% of the produce of which went to plaintiff-appellant. ADCEaH
As plaintiff-appellant’s share in the produce of the properties dwindled until she
no longer received any and learning that the titles to the properties in question
were already transferred/made in favor of the defendants-appellees, she filed a
complaint for declaration of nullity of titles, contracts, partition, recovery of
ownership now the subject of the present appeal.
Defendant-appellee Lydia disclaims participation in the execution of the assailed
document, she claiming to have acquired knowledge of its existence only on
January 10, 1983 or five days after its execution when Lauro Sumipat gave the
same to her.
Branch 6 of the Regional Trial Court of Dipolog City decided the case in favor of
defendants-appellees, it holding that by virtue of the assailed document the due
execution of which was not contested by plaintiff-appellant, the properties were
absolutely transferred to defendants-appellees. 4
The trial court found that the subject properties are conjugal having been
acquired during the marriage of Lauro Sumipat and Placida Tabotabo (Placida).
However, because Placida failed to question the genuineness and due execution
of the deed and even admitted having affixed her signature thereon, the trial
court declared that the entirety of the subject properties, and not just Lauro
Sumipat’s conjugal share, were validly transferred to the defendants, the
petitioners herein. 5
On appeal, 6 the appellate court held that since Placida was unlettered, 7 the
appellees, the petitioners herein, as the parties interested in enforcing the deed,
have the burden of proving that the terms thereof were fully explained to her. 8
This they failed to do.
Under the Civil Code, a contract where consent is given through mistake, violence,
intimidation, undue influence or fraud is voidable. 9 In order that mistake may
invalidate consent, it should refer to the substance of the thing which is the object
of the contract, or to those conditions which have principally moved one or both
parties to enter into the contract. 10
66
The appellate court found that Placida did not understand the full import of the
deed because the terms thereof were not explained to her either by the
petitioners or by the notary public before whom the deed was acknowledged.
According to the appellate court, Judge Pacifico Garcia (Judge Garcia), before
whom the deed was acknowledged, did not identify Placida as having appeared
before him on January 5, 1983 to acknowledge the deed. The jurat indicates that
it was only Lauro Sumipat who appeared before Judge Garcia and to whom he
explained the contents of the deed. Further, the appellate court noted that Judge
Garcia himself was under the impression that the deed conveyed the exclusive
properties of Lauro Sumipat. Hence, he could not have explained to Placida that
the deed actually transferred the conjugal properties of Lauro Sumipat and
Placida. 11
The Court of Appeals, therefore, annulled the deed insofar as it covers Placida’s
conjugal share in the subject properties because the latter’s consent thereto was
vitiated by mistake when she affixed her signature on the document.
The petitioners filed a Motion for Reconsideration on the grounds of estoppel,
absence of fraud and prescription. The appellate court denied the Motion for
Reconsideration in its Resolution 12 dated October 16, 2002 ruling that the
grounds relied upon have been addressed in its Decision dated April 11, 2002.
Anent the ground of prescription, the appellate court held that since the
properties were acquired through fraud or mistake, the petitioners are
considered trustees of an implied trust for the benefit of Placida. Citing
jurisprudence, 13 the Court of Appeals ruled that actions based on implied or
constructive trust prescribe 10 years from the issuance of a Torrens Title over the
property. Since two (2) of the subject properties were issued Transfer Certificates
of Title (TCT) Numbered T-40037 14 and T-40038 15 under the petitioners’ names
on August 18, 1987, the Complaint for declaration of nullity of titles, partition,
recovery of ownership and possession, reconveyance, accounting and damages,
which was filed on March 3, 1993, was filed well within the prescriptive period.
The petitioners are now before this Court principally claiming that Placida freely
consented to the execution of the deed and that they did not commit fraudulent
acts in connection with its execution. They also reiterate their argument that the
Court of Appeals should have dismissed the case on the ground of prescription. It
is their contention that the present action being one to annul a contract on the
ground of fraud, it should have been filed within four (4) years from the discovery
of fraud or registration of the instrument with the Registry of Deeds.
The respondents filed their Comment 16 dated February 7, 2003, essentially
echoing the findings of the Court of Appeals on the matter of Placida’s consent.
According to them, Placida was deceived and misled into affixing her signature on
the deed. They further claim that Placida did not actually appear before the notary
public to acknowledge the instrument.
In their Reply 17 dated April 29, 2003, the petitioners insist that Placida was not
illiterate and that Lauro Sumipat validly transferred the titles over the properties
in question to them. They also argue that if Placida did not understand the import
of the deed, she could have questioned Lauro Sumipat about it since the deed was
executed a year before the latter died. IECcAT
The trial court and the Court of Appeals are in agreement that the subject
properties are conjugal, having been acquired during the marriage of Lauro
Sumipat and Placida. They came out, however, with disparate denouements.
While the trial court upheld the validity of the deed as an instrument of transfer
of all the litigated parcels of land in their entirety on the ground that Placida failed
to question its authenticity and due execution, the appellate court struck the deed
down insofar as the conjugal share of Placida is concerned based on its finding
that her consent was vitiated by mistake.
At bottom, the crux of the controversy is whether the questioned deed by its
terms or under the surrounding circumstances has validly transferred title to the
disputed properties to the petitioners.
A perusal of the deed reveals that it is actually a gratuitous disposition of property
— a donation — although Lauro Sumipat imposed upon the petitioners the
condition that he and his wife, Placida, shall be entitled to one-half (1/2) of all the
fruits or produce of the parcels of land for their subsistence and support. The
preliminary clauses of the deed read:
That conscious of my advanced age and failing health, I feel that I am not capable A Lydia Sumipat arrived.
anymore of attending to and maintaining and keeping in continuous cultivation
my above described properties; Court: (To the witness)

That my children are all desirous of taking over the task of maintaining my Q Who is this Lydia Sumipat?
properties and have demonstrated since childhood the needed industry and hard
work as they have in fact established possession over my real properties and A The daughter of my husband with his paramour.
introduced more improvements over my lands, the fruit of which through their
concerted efforts and labors, I myself and my family have enjoyed; Q How old was she?

That it would be to the best interest of my above mentioned children that the A I did not know if she was already 30 years old at that time because he was born
ownership over my above described properties be transferred in their names, in 1950. SCIcTD
thereby encouraging them more in developing the lands to its fullest productivity.
18 Atty. Legorio: (To the witness)

The deed covers three (3) parcels of land. 19 Being a donation of immovable Q When you said Lydia Sumipat, you are referring to one of the defendants in this
property, the requirements for validity set forth in Article 749 of the Civil Code case?
should have been followed, viz:
A Yes, sir. She is the one.

Art. 749. In order that the donation of the immovable may be valid, it must be
made in a public document, specifying therein the property donated and the value
of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the
donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments.
Title to immovable property does not pass from the donor to the donee by virtue
of a deed of donation until and unless it has been accepted in a public instrument
and the donor duly notified thereof. The acceptance may be made in the very
same instrument of donation. If the acceptance does not appear in the same
document, it must be made in another. Where the deed of donation fails to show
the acceptance, or where the formal notice of the acceptance, made in a separate
instrument, is either not given to the donor or else not noted in the deed of
donation and in the separate acceptance, the donation is null and void. 20
Q This Lydia Sumipat you are referring to as one of the principal defendant and
daughter of your husband with his paramour, in January, 1983 what was her
educational attainment, if you know?
A She has already finished schooling.
Q Do you know what she obtained?
A Teacher.
Q You said she arrived in the afternoon of January 5, 1983 in your house while you
were boiling water. What did she do when she arrived there?
A She brought with her a paper.
Q What did she say to you?
A She told me to sign that paper immediately because there is the witness waiting
and so I asked from her what was that paper I am going to sign. I asked her
because I am unlettered but she said never mind just sign this immediately.

In this case, the donees’ acceptance of the donation is not manifested either in Q By the way, what is your highest educational attainment?
the deed itself or in a separate document. Hence, the deed as an instrument of
donation is patently void. A I have never gone to school.

We also note the absence of any proof of filing of the necessary return, payment Q Do you know how to read or to write?
of donor’s taxes on the transfer, or exemption from payment thereof. Under the
National Internal Revenue Code of 1977, the tax code in force at the time of the A I know how to write only my name.
execution of the deed, an individual who makes any transfer by gift shall make a
return and file the same within 30 days after the date the gift is made with the Q You know how to write your name only?
Revenue District Officer, Collection Agent or duly authorized Treasurer of the
municipality in which the donor was domiciled at the time of the transfer. 21 The A Yes, sir.
filing of the return and payment of donor’s taxes are mandatory. In fact, the
registrar of deeds is mandated not to register in the registry of property any Q You said she told you to sign that piece of paper and you asked her what was
document transferring real property by way of gifts inter vivos unless a that and she told you “you just sign that”, what did you do then?
certification that the taxes fixed and actually due on the transfer had been paid
or that the transaction is tax exempt from the Commissioner of Internal Revenue, A She was in a hurry to let me sign that document so I signed it without knowing
in either case, is presented. 22 what was that.

Neither can we give effect to the deed as a sale, barter or any other onerous Q Did she tell you that piece of paper was a document wherein the land including
conveyance, in the absence of valid cause or consideration and consent your land in Siayan were to be given to them?
competently and validly given. 23 While it is true that the appellate court found
Placida’s consent to have been vitiated by mistake, her testimony on the matter A I did not give my land. 24
actually makes out a case of total absence of consent, not merely vitiation thereof.
She testified in this regard, thus: During cross-examination, Placida again denied any knowledge of the nature of
the deed:
Q What have you been doing on that day on January 5, 1983?
q You are aware that the titles over these lots had already been transferred in the
A I was at home boiling water. name of the defendants?

Q While you were boiling water in the house, at that time who arrived, if there a They surreptitiously transferred the title in their names, I do not know about it.
was any?
q You mean to say you signed a document transferring them in their names?
67

a There was a piece of paper brought to me to be signed by Lydia; I asked what’s
all about but she did not tell me; I was forced to sign considering that according
to her somebody was waiting for it.
q What do you mean that you are force to sign?
a She told me to sign that paper immediately because there is a witness waiting
that paper but she was alone when she came to me.
q So you signed that paper?
a I signed it because she was in a hurry.
q That was done during the lifetime of your husband?
a Yes, sir.
q And your husband also signed that paper?
a I do not know because I have not seen my husband signed, Lydia only came to
me to let me sign that paper.
q Is it not a fact that you and your husband were brought before the office of
Judge Pacifico Garcia of Manukan, and in the office you signed that document?
a I have not gone to the Municipal building of Manukan and I do not know Judge
Garcia.
q But what you know now that the titles are transferred in the name of the
defendants?
a It was Lydia who caused the transfer of the titles in their names.
q And you know that fact when you signed that paper?
a At the time I signed the paper, I do not know yet that the title would be
transferred, it was only at the time when I requested my niece to follow it up
because according to them I am no longer entitled to the land. 25
In Baranda v. Baranda, 26 this Court declared that the deeds of sale questioned
therein are not merely voidable (as intimated by the plaintiffs themselves in their
complaint for annulment of the deeds and reconveyance of the lots) but null and
void ab initio as the supposed seller declared under oath that she signed the deeds
without knowing what they were. The significant circumstance meant, the Court
added, that her consent was not merely marred by vices of consent so as to make
the contracts voidable, but that she had not given her consent at all.
Parenthetically, as Placida’s Complaint is entitled Declaration of Nullity of Titles;
Contracts; Partition, Recovery of Ownership and Possession; Reconveyance;
Accounting and Damages with Prayer for Preliminary Injunction and Receivership,
the validity of the deed was directly assailed, but its absolute nullity was not
specifically raised as an issue. Nevertheless, both the RTC and the appellate court
took the cue from Placida’s theory that the deed is merely voidable as regards her
conjugal share of the properties. However, since the real issue is whether the
questioned deed has validly transferred ownership of the litigated properties, it
is appropriate for the Court to inquire into the form of the deed and the existence
of valid consent thereto to ascertain the validity or nullity of the deed. cDaEAS
From the substantive and procedural standpoints, the objectives to write finis to
a protracted litigation and avoid multiplicity of suits are worth pursuing at all
times. Conformably, we have ruled in a number of cases that an appellate court
is accorded broad discretionary power to consider even errors not assigned. We
have applied this tenet, albeit as a matter of exception, in the following instances:
(1) grounds not assigned as errors but affecting jurisdiction over the subject
matter; (2) matters not assigned as errors on appeal but are evidently plain or
clerical errors within contemplation of law; (3) matters not assigned as errors on
appeal but consideration of which is necessary in arriving at a just decision and
complete resolution of the case or to serve the interests of justice or to avoid
dispensing piecemeal justice; (4) matters not specifically assigned as errors on
appeal but raised in the trial court and are matters of record having some bearing
on the issue submitted which the parties failed to raise or which the lower court
ignored; (5) matters not assigned as errors on appeal but closely related to an
68
error assigned; and (6) matters not assigned as errors on appeal but upon which
the determination of a question properly assigned is dependent. 27
In the instant case, the validity of the deed was directly assailed although both
parties are of the view that it is not an absolute nullity. The correct
characterization of the deed is, therefore, determinative of the present
controversy. Elsewise framed, the issue of validity or nullity is interwoven with
the positions adopted by the parties and the rulings made by the courts below.
Hence, we shall be resolute in striking down the deed especially as it appears on
its face to be a patent nullity.
Having said this, we shall now proceed to the issue of prescription. Being an
absolute nullity, both as a donation and as a sale, the deed is subject to attack at
any time, in accordance with the rule in Article 1410 of the Civil Code that an
action to declare the inexistence of a void contract does not prescribe.
We are thus unimpressed by the petitioners’ contention that the appellate court
should have dismissed Placida’s appeal on the ground of prescription. Passage of
time cannot cure the fatal flaw in an inexistent and void contract. 28 The defect
of inexistence of a contract is permanent and incurable; hence, it cannot be cured
either by ratification or by prescription. 29
Turning now to the effects of the absolute nullity of the deed, it is well-settled
that when there is a showing of illegality, the property registered is deemed to be
simply held in trust for the real owner by the person in whose name it is
registered, and the former then has the right to sue for the reconveyance of the
property. The action for the purpose is also imprescriptible. As long as the land
wrongfully registered under the Torrens system is still in the name of the person
who caused such registration, an action in personam will lie to compel him to
reconvey the property to the real owner. 30
One final note. After this Decision shall have become final and executory, the
parties may either extrajudicially divide the estates of Lauro Sumipat and Placida
Tabotabo pursuant to Rule 74 of the Rules of Court or judicially settle the estates
pursuant to Rules 78, et seq., in accordance with this Decision and the law.
WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The Decision
of the Regional Trial Court dated September 29, 1997 and the Decision of the
Court of Appeals dated April 11, 2002, as well as its Resolution dated October 16,
2002, are VACATED. In lieu thereof, judgment is hereby rendered in favor of the
respondents, to wit: (i) DECLARING the Deed of Absolute Transfer and/or
Quitclaim dated January 5, 1983 NULL AND VOID; and (ii) ORDERING the
CANCELLATION of Transfer Certificates of Title Numbered T-40037 and T-40038
(Zamboanga del Norte) and the tax declaration covering the unregistered parcel
of land, all issued in the names of the petitioners Lydia, Laurito, Alicia, Alejandro
and Lirafe, all surnamed Sumipat, and the REINSTATEMENT of Original Certificate
of Title No. P-17842 (Zamboanga del Norte) Transfer Certificate Title No. T-15826
(Zamboanga del Norte) and the tax declaration covering the unregistered parcel
of land, all in the name of “Lauro Sumipat . . . married to Placida Tabotabo.”
Costs against the petitioners.
SO ORDERED. AcaEDC
Puno, Austria-Martinez, Callejo, Sr. and Chico-Nazario, JJ ., concur.
THIRD DIVISION
[G.R. No. 178906. February 18, 2009.]
ELVIRA T. ARANGOTE, petitioner, vs. SPS. MARTIN MAGLUNOB and LOURDES S.
MAGLUNOB, and ROMEO SALIDO, respondents.
DECISION
CHICO-NAZARIO, J p:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997
Revised Rules of Civil Procedure seeking to reverse and set aside the Decision 1
dated 27 October 2006 and Resolution 2 dated 29 June 2007 of the Court of
Appeals in CA-G.R. SP No. 64970. In its assailed Decision, the appellate court
affirmed the Decision 3 dated 12 September 2000 of the Regional Trial Court
(RTC), 6th Judicial Region, Branch 1, Kalibo, Aklan, in Civil Case No. 5511, which
reversed the Decision 4 dated 6 April 1998 of the 7th Municipal Circuit Trial Court
(MCTC) of Ibajay-Nabas, Ibajay, Aklan, in Civil Case No. 156; and declared 5 the
herein respondent-Spouses Martin and Lourdes Maglunob (Spouses Maglunob)
and respondent Romeo Salido (Romeo) as the lawful owners and possessors of
Lot 12897 with an area of 982 square meters, more or less, located in Maloco,
Ibajay, Aklan (subject property). In its assailed Resolution, the appellate court
denied herein petitioner Elvira T. Arangote's Motion for Reconsideration. TcCSIa
Elvira T. Arangote, herein petitioner married to Ray Mars E. Arangote, is the
registered owner of the subject property, as evidenced by Original Certificate of
Title (OCT) No. CLOA-1748. 6 Respondents Martin (Martin II) and Romeo are first
cousins and the grandnephews of Esperanza Maglunob-Dailisan (Esperanza), from
whom petitioner acquired the subject property.
The Petition stems from a Complaint 7 filed by petitioner and her husband against
the respondents for Quieting of Title, Declaration of Ownership and Possession,
Damages with Preliminary Injunction, and Issuance of Temporary Restraining
Order before the MCTC, docketed as Civil Case No. 156.
The Complaint alleged that Esperanza inherited the subject property from her
uncle Victorino Sorrosa by virtue of a notarized Partition Agreement 8 dated 29
April 1985, executed by the latter's heirs. Thereafter, Esperanza declared the
subject property in her name for real property tax purposes, as evidenced by Tax
Declaration No. 16218 (1985). 9
The Complaint further stated that on 24 June 1985, Esperanza executed a Last
Will and Testament 10 bequeathing the subject property to petitioner and her
husband, but it was never probated. On 9 June 1986, Esperanza executed another
document, an Affidavit, 11 in which she renounced, relinquished, waived and
quitclaimed all her rights, share, interest and participation whatsoever in the
subject property in favor of petitioner and her husband. On the basis thereof, Tax
Declaration No. 16218 in the name of Esperanza was cancelled and Tax
Declaration No. 16666 12 (1987) was issued in the name of the petitioner and her
husband.
In 1989, petitioner and her husband constructed a house on the subject property.
On 26 March 1993, OCT No. CLOA-1748 was issued by the Secretary of the
Department of Agrarian Reform (DAR) in the name of petitioner, married to Ray
Mars E. Arangote. However, respondents, together with some hired persons,
entered the subject property on 3 June 1994 and built a hollow block wall behind
and in front of petitioner's house, which effectively blocked the entrance to its
main door. ASICDH
As a consequence thereof, petitioner and her husband were compelled to
institute Civil Case No. 156.
In their Answer with Counterclaim in Civil Case No. 156, respondents averred that
they co-owned the subject property with Esperanza. Esperanza and her siblings,
Tomas and Inocencia, inherited the subject property, in equal shares, from their
father Martin Maglunob (Martin I). When Tomas and Inocencia passed away, their
shares passed on by inheritance to respondents Martin II and Romeo,
respectively. Hence, the subject property was co-owned by Esperanza,
respondent Martin II (together with his wife Lourdes), and respondent Romeo,
each holding a one-third pro-indiviso share therein. Thus, Esperanza could not
validly waive her rights and interest over the entire subject property in favor of
the petitioner.
Respondents also asserted in their Counterclaim that petitioner and her husband,
by means of fraud, undue influence and deceit were able to make Esperanza, who
was already old and illiterate, affix her thumbmark to the Affidavit dated 9 June
1986, wherein she renounced all her rights and interest over the subject property
in favor of petitioner and her husband. Respondents thus prayed that the OCT
issued in petitioner's name be declared null and void insofar as their two-thirds
shares are concerned.
After trial, the MCTC rendered its Decision dated 6 April 1998 in Civil Case No.
156, declaring petitioner and her husband as the true and lawful owners of the
subject property. The decretal portion of the MCTC Decision reads: HAIDcE
WHEREFORE, judgment is hereby rendered:
69
A. Declaring the [herein petitioner and her husband] the true, lawful and exclusive
owners and entitled to the possession of the [subject property] described and
referred to under paragraph 2 of the [C]omplaint and covered by Tax Declaration
No. 16666 in the names of the [petitioner and her husband];
B. Ordering the [herein respondents] and anyone hired by, acting or working for
them, to cease and desist from asserting or claiming any right or interest in, or
exercising any act of ownership or possession over the [subject property];
C. Ordering the [respondents] to pay the [petitioner and her husband] the amount
of P10,000.00 as attorney's fee. With cost against the [respondents]. 13
The respondents appealed the aforesaid MCTC Decision to the RTC. Their appeal
was docketed as Civil Case No. 5511.
Respondents argued in their appeal that the MCTC erred in not dismissing the
Complaint filed by the petitioner and her husband for failure to identify the
subject property therein. Respondents further faulted the MCTC for not declaring
Esperanza's Affidavit dated 9 June 1986 — relinquishing all her rights and interest
over the subject property in favor of petitioner and her husband — as null and
void insofar as respondents' two-thirds share in the subject property is concerned.
On 12 September 2000, the RTC rendered its Decision reversing the MCTC
Decision dated 6 April 1998. The RTC adjudged respondents, as well as the other
heirs of Martin Maglunob, as the lawful owners and possessors of the entire
subject property. The RTC decreed:
WHEREFORE, judgment is hereby rendered as follows:
1) The appealed [D]ecision is REVERSED;
2) [Herein respondents] and the other heirs of Martin Maglunob are declared the
lawful owners and possessors of the whole [subject property] as described in
Paragraph 2 of the [C]omplaint, as against the [herein petitioner and her
husband]. cSIADa
3) [Petitioner and her husband] are ordered to immediately turn over possession
of the [subject property] to the [respondents] and the other heirs of Martin
Maglunob; and
4) [Petitioner and her husband] are ordered to pay [respondents] attorney's fees
of P5,000.00, other litigation expenses of P5,000.00, moral damages of
P10,000.00 and exemplary damages of P5,000.00. 14
Petitioner and her husband filed before the RTC, on 26 September 2000, a Motion
for New Trial or Reconsideration 15 on the ground of newly discovered evidence
consisting of a Deed of Acceptance 16 dated 23 September 2000, and notice 17
of the same, which were both made by the petitioner, for herself and in behalf of
her husband, 18 during the lifetime of Esperanza. In the RTC Order 19 dated 2
May 2001, however, the RTC denied the aforesaid Motion for New Trial or
Reconsideration.
The petitioner and her husband then filed a Petition for Review, under Rule 42 of
the 1997 Revised Rules of Civil Procedure, before the Court of Appeals, where the
Petition was docketed as CA-G.R. SP No. 64970.
In their Petition before the appellate court, petitioner and her husband raised the
following errors committed by the RTC in its 12 September 2000 Decision:
I. It erred in reversing the [D]ecision of the [MCTC];
II. It erred in declaring the [herein respondents] and the other heirs of Martin
Maglunob as the lawful owners and possessors of the whole [subject property];
III. It erred in declaring [OCT] No. CLOA-1748 in the name of [herein petitioner]
Elvie T. Arangote as null and void;
IV. It erred in denying [petitioner and her husband's] [M]otion for [N]ew [T]rial or
[R]econsideration dated [26 September 2000; and
V. It erred in not declaring the [petitioner and her husband] as possessors in good
faith. 20
On 27 October 2006, the Court of Appeals rendered a Decision denying the
Petition for Review of petitioner and her husband and affirming the RTC Decision
dated 12 September 2000. Petitioner and her husband's subsequent Motion for
Reconsideration was similarly denied by the Court of Appeals in its Resolution
dated 29 June 2007.
Hence, petitioner 21 now comes before this Court raising in her Petition the
following issues:
I. Whether the [RTC] acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it declared the [petitioner and her husband's title to
the subject property] null and void;
II. Whether the [RTC] acted with grave abuse of discretion amounting to lack of
jurisdiction when it declared the Affidavit of Quitclaim null and void; and
III. Whether the [RTC] and the Honorable Court of Appeals acted with grave abuse
of discretion amounting to lack or excess of jurisdiction when it rejected
petitioner's claim as possessors (sic) in good faith, hence, entitled to the rights
provided in [Article] 448 and [Article] 546 of the Civil Code. 22 cHCIDE
Petitioner contends that the aforesaid OCT No. CLOA-1748 was issued in her name
on 26 March 1993 and was registered in the Registry of Deeds of Aklan on 20 April
1993. From 20 April 1993 until the institution of Civil Case No. 156 on 10 June
1994 before the MCTC, more than one year had already elapsed. Considering that
a Torrens title can only be attacked within one year after the date of the issuance
of the decree of registration on the ground of fraud and that such attack must be
through a direct proceeding, it was an error on the part of the RTC and the Court
of Appeals to declare OCT No. CLOA-1748 null and void.
Petitioner additionally posits that both the RTC and the Court of Appeals
committed a mistake in declaring null and void the Affidavit dated 9 June 1986
executed by Esperanza, waiving all her rights and interest over the subject
property in favor of petitioner and her husband. Esperanza's Affidavit is a valid
and binding proof of the transfer of ownership of the subject property in
petitioner's name, as it was also coupled with actual delivery of possession of the
subject property to petitioner and her husband. The Affidavit is also proof of good
faith on the part of petitioner and her husband.
Finally, petitioner argues that, assuming for the sake of argument, that
Esperanza's Affidavit is null and void, petitioner and her husband had no
knowledge of any flaw in Esperanza's title when the latter relinquished her rights
to and interest in the subject property in their favor. Hence, petitioner and her
husband can be considered as possessors in good faith and entitled to the rights
provided under Articles 448 and 546 of the Civil Code.
This present Petition is devoid of merit.
It is a hornbook doctrine that the findings of fact of the trial court are entitled to
great weight on appeal and should not be disturbed except for strong and valid
reasons, because the trial court is in a better position to examine the demeanor
of the witnesses while testifying. It is not a function of this Court to analyze and
weigh evidence by the parties all over again. This Court's jurisdiction is, in
principle, limited to reviewing errors of law that might have been committed by
the Court of Appeals. 23 This rule, however, is subject to several exceptions, 24
one of which is present in this case, i.e., when the factual findings of the Court of
Appeals and the trial court are contradictory. AcaEDC
In this case, the findings of fact of the MCTC as regards the origin of the subject
property are in conflict with the findings of fact of both the RTC and the Court of
Appeals. Hence, this Court will have to examine the records to determine first the
true origin of the subject property and to settle whether the respondents have
the right over the same for being co-heirs and co-owners, together with their
grand aunt, Esperanza, before this Court can resolve the issues raised by the
petitioner in her Petition.
After a careful scrutiny of the records, this Court affirms the findings of both the
RTC and the Court of Appeals as regards the origin of the subject property and the
fact that respondents, with their grand aunt Esperanza, were co-heirs and co-
owners of the subject property.
70
The records disclosed that the subject property was part of a parcel of land 25
situated in Maloco, Ibajay, Aklan, consisting of 7,176 square meters and
commonly owned in equal shares by the siblings Pantaleon Maglunob (Pantaleon)
and Placida Maglunob-Sorrosa (Placida). Upon the death of Pantaleon and
Placida, their surviving and legal heirs executed a Deed of Extrajudicial Settlement
and Partition of Estate in July 1981, 26 however, the Deed was not notarized.
Considering that Pantaleon died without issue, his one-half share in the parcel of
land he co-owned with Placida passed on to his four siblings (or their respective
heirs, if already deceased), namely: Placida, Luis, Martin I, and Victoria, in equal
shares.
According to the aforementioned Deed of Extrajudicial Settlement and Partition
of Estate, the surviving and legal heirs of Pantaleon and Placida agreed to have
the parcel of land commonly owned by the siblings declared for real property tax
purposes in the name of Victorino Sorrosa (Victorino), Placida's husband. Thus,
Tax Declarations No. 5988 (1942), 27 No. 6200 (1945) 28 and No. 7233 (1953) 29
were all issued in the name of Victorino.
Since Martin I already passed away when the Deed of Extrajudicial Settlement and
Partition of Estate was executed, his heirs 30 were represented therein by
Esperanza. By virtue of the said Deed, Martin I received as inheritance a portion
of the parcel of land measuring 897 square meters.
After the death of Victorino, his heirs 31 executed another Partition Agreement
on 29 April 1985, which was notarized on the same date. The Partition Agreement
mentioned four parcels of land. The subject property, consisting of a portion of
the consolidated parcels 1, 2, and 3, and measuring around 982 square meters,
was allocated to Esperanza. In comparison, the property given to Esperanza under
the Partition Agreement is bigger than the one originally allocated to her earlier
under the Deed of Extrajudicial Settlement and Partition of Estate dated July 1981,
which had an area of only 897 square meters. It may be reasonably assumed,
however, that the subject property, measuring 982 square meters, allocated to
Esperanza under the Partition Agreement dated 29 April 1985, is already inclusive
of the smaller parcel of 897 square meters assigned to her under the Deed of
Extrajudicial Settlement and Partition of Estate dated July 1981. As explained by
the RTC in its 12 September 2000 Decision: HCTAEc
The [subject property] which is claimed by the [herein petitioner and her
husband] and that which is claimed by the [herein respondents] are one and the
same, the difference in area and technical description being due to the repartition
and re-allocation of the parcel of land originally co-owned by Pantaleon Maglunob
and his sister Placida Maglunob and subsequently declared in the name of
[Victorino] under Tax Declaration No. 5988 of 1949. 32
It is clear from the records that the subject property was not Esperanza's exclusive
share, but also that of the other heirs of her father, Martin I. Esperanza expressly
affixed her thumbmark to the Deed of Extrajudicial Settlement of July 1981 not
only for herself, but also on behalf of the other heirs of Martin I. Though in the
Partition Agreement dated 29 April 1985 Esperanza affixed her thumbmark
without stating that she was doing so not only for herself, but also on behalf of
the other heirs of Martin I, this does not mean that Esperanza was already the
exclusive owner thereof. The evidence shows that the subject property is the
share of the heirs of Martin I. This is clear from the sketch 33 attached to the
Partition Agreement dated 29 April 1985, which reveals the proportionate areas
given to the heirs of the two siblings, Pantaleon and Placida, who were the original
owners of the whole parcel of land 34 from which the subject property was taken.
Further, it bears emphasis that the Partition Agreement was executed by and
among the son, grandsons, granddaughters and cousins of Victorino. Esperanza
was neither the granddaughter nor the cousin of Victorino, as she was only
Victorino's grandniece. The cousin of Victorino is Martin I, Esperanza's father. In
effect, therefore, the subject property allotted to Esperanza in the Partition
Agreement was not her exclusive share, as she holds the same for and on behalf
of the other heirs of Martin I, who was already deceased at the time the Partition
Agreement was made.
To further bolster the truth that the subject property was not exclusively owned
by Esperanza, the Affidavit she executed in favor of petitioner and her husband
on 6 June 1985 was worded as follows:
That I hereby renounce, relinquish, waive and quitclaim all my rights, share,
interest and participation whatsoever in the [subject property] unto the said Sps.
Ray Mars Arangote and Elvira T. Arangote, their heirs, successors, and assigns
including the improvement found thereon; 35
Logically, if Esperanza fully owned the subject property, she would have simply
waived her rights to and interest in the subject property, without mentioning her
"share" and "participation" in the same. By including such words in her Affidavit,
Esperanza was aware of and was limiting her waiver, renunciation, and quitclaim
to her one-third share and participation in the subject property.
Going to the issues raised by the petitioner in this Petition, this Court will resolve
the same concurrently as they are interrelated.
In this case, the petitioner derived her title to the subject property from the
notarized Affidavit executed by Esperanza, wherein the latter relinquished her
rights, share, interest and participation over the same in favor of the petitioner
and her husband. DICSaH
A careful perusal of the said Affidavit reveals that it is not what it purports to be.
Esperanza's Affidavit is, in fact, a Donation. Esperanza's real intent in executing
the said Affidavit was to donate her share in the subject property to petitioner
and her husband.
As no onerous undertaking is required of petitioner and her husband under the
said Affidavit, the donation is regarded as a pure donation of an interest in a real
property covered by Article 749 of the Civil Code. 36 Article 749 of the Civil Code
provides:
Art. 749. In order that the donation of an immovable may be valid, it must be
made in a public document, specifying therein the property donated and the value
of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the
donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments.
From the aforesaid provision, there are three requisites for the validity of a simple
donation of a real property, to wit: (1) it must be made in a public instrument; (2)
it must be accepted, which acceptance may be made either in the same Deed of
Donation or in a separate public instrument; and (3) if the acceptance is made in
a separate instrument, the donor must be notified in an authentic form, and the
same must be noted in both instruments.
This Court agrees with the RTC and the Court of Appeals that the Affidavit
executed by Esperanza relinquishing her rights, share, interest and participation
over the subject property in favor of the petitioner and her husband suffered from
legal infirmities, as it failed to comply with the aforesaid requisites of the law.
AEDcIH
In Sumipat v. Banga, 37 this Court declared that title to immovable property does
not pass from the donor to the donee by virtue of a Deed of Donation until and
unless it has been accepted in a public instrument and the donor duly notified
thereof. The acceptance may be made in the very same instrument of donation.
If the acceptance does not appear in the same document, it must be made in
another. Where the Deed of Donation fails to show the acceptance, or where the
formal notice of the acceptance, made in a separate instrument, is either not
given to the donor or else not noted in the Deed of Donation and in the separate
acceptance, the donation is null and void. 38
In the present case, the said Affidavit, which is tantamount to a Deed of Donation,
met the first requisite, as it was notarized; thus, it became a public instrument.
Nevertheless, it failed to meet the aforesaid second and third requisites. The
acceptance of the said donation was not made by the petitioner and her husband
either in the same Affidavit or in a separate public instrument. As there was no
acceptance made of the said donation, there was also no notice of the said
acceptance given to the donor, Esperanza. Therefore, the Affidavit executed by
Esperanza in favor of petitioner and her husband is null and void.
71
The subsequent notarized Deed of Acceptance 39 dated 23 September 2000, as
well as the notice 40 of such acceptance, executed by the petitioner did not cure
the defect. Moreover, it was only made by the petitioner several years after the
Complaint was filed in court, or when the RTC had already rendered its Decision
dated 12 September 2000, although it was still during Esperanza's lifetime.
Evidently, its execution was a mere afterthought, a belated attempt to cure what
was a defective donation.
It is true that the acceptance of a donation may be made at any time during the
lifetime of the donor. And granting arguendo that such acceptance may still be
admitted in evidence on appeal, there is still need for proof that a formal notice
of such acceptance was received by the donor and noted in both the Deed of
Donation and the separate instrument embodying the acceptance. 41 At the very
least, this last legal requisite of annotation in both instruments of donation and
acceptance was not fulfilled by the petitioner. Neither the Affidavit nor the Deed
of Acceptance bears the fact that Esperanza received notice of the acceptance of
the donation by petitioner. For this reason, even Esperanza's one-third share in
the subject property cannot be adjudicated to the petitioner. IHcTDA
With the foregoing, this Court holds that the RTC and the Court of Appeals did not
err in declaring null and void Esperanza's Affidavit.
The next issue to be resolved then is whether the RTC, as well as the Court of
Appeals, erred in declaring OCT No. CLOA-1748 in the name of petitioner and her
husband null and void.
Again, this Court answers the said issue in the negative.
Section 48 of Presidential decree No. 1529 states:
SEC. 48. Certificate not subject to collateral attack. — A certificate of title shall not
be subject to collateral attack. It cannot be altered, modified, or cancelled except
in a direct proceeding in accordance with law.
Such proscription has long been enshrined in Philippine jurisprudence. The judicial
action required to challenge the validity of title is a direct attack, not a collateral
attack. 42
The attack is considered direct when the object of an action is to annul or set aside
such proceeding, or enjoin its enforcement. Conversely, an attack is indirect or
collateral when, in an action to obtain a different relief, an attack on the
proceeding is nevertheless made as an incident thereof. Such action to attack a
certificate of title may be an original action or a counterclaim, in which a
certificate of title is assailed as void. 43
A counterclaim is considered a new suit in which the defendant is the plaintiff and
the plaintiff in the complaint becomes the defendant. It stands on the same
footing as, and is to be tested by the same rules as if it were, an independent
action. 44
In their Answer to the Complaint for Quieting of Title filed by the petitioner and
her husband before the MCTC, respondents included therein a Counterclaim
wherein they repleaded all the material allegations in their affirmative defenses,
the most essential of which was their claim that petitioner and her husband — by
means of fraud, undue influence and deceit — were able to make their grand
aunt, Esperanza, who was already old and illiterate, affix her thumbmark to the
Affidavit, wherein she renounced, waived, and quitclaimed all her rights and
interest over the subject property in favor of petitioner and her husband. In
addition, respondents maintained in their Answer that as petitioner and her
husband were not tenants either of Esperanza or of the respondents, the DAR
could not have validly issued in favor of petitioner and her husband OCT No. CLOA-
1748. Thus, the respondents prayed, in their counterclaim in Civil Case No. 156
before the MCTC, that OCT No. CLOA-1748 issued in the name of petitioner,
married to Ray Mars E. Arangote, be declared null and void, insofar as their two-
thirds shares in the subject property are concerned. CEDHTa
It is clear, thus, that respondents' Answer with Counterclaim was a direct attack
on petitioner's certificate of title. Furthermore, since all the essential facts of the
case for the determination of the validity of the title are now before this Court, to
require respondents to institute a separate cancellation proceeding would be
pointlessly circuitous and against the best interest of justice.
Esperanza's Affidavit, which was the sole basis of petitioner's claim to the subject
property, has been declared null and void. Moreover, petitioner and her husband
were not tenants of the subject property. In fact, petitioner herself admitted in
her Complaint filed before the MCTC that her husband is out of the country,
rendering it impossible for him to work on the subject property as a tenant.
Instead of cultivating the subject property, petitioner and her husband possessed
the same by constructing a house thereon. Thus, it is highly suspicious how the
petitioner was able to secure from the DAR a Certificate of Land Ownership Award
(CLOA) over the subject property. The DAR awards such certificates to the
grantees only if they fulfill the requirements of Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Program (CARP). 45 Hence, the
RTC and the Court of Appeals did not err in declaring null and void OCT No. CLOA-
1748 in the name of the petitioner, married to Ray Mars E. Arangote.
Considering that Esperanza died without any compulsory heirs and that the
supposed donation of her one-third share in the subject property per her Affidavit
dated 9 June 1985 was already declared null and void, Esperanza's one-third share
in the subject property passed on to her legal heirs, the respondents.
As petitioner's last-ditch effort, she claims that she is a possessor in good faith
and, thus, entitled to the rights provided for under Articles 448 and 546 of the
Civil Code.
This claim is untenable.
The Civil Code describes a possessor in good faith as follows:
Art. 526. He is deemed a possessor in good faith who is not aware that there exists
in his title or mode of acquisition any flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any case contrary to the
foregoing.
Mistake upon a doubtful or difficult question of law may be the basis of good faith.
Art. 1127. The good faith of the possessor consists in the reasonable belief that
the person from whom he received the thing was the owner thereof, and could
transmit his ownership. ISCaTE
Possession in good faith ceases from the moment defects in the title are made
known to the possessor by extraneous evidence or by a suit for recovery of the
property by the true owner. Every possessor in good faith becomes a possessor in
bad faith from the moment he becomes aware that what he believed to be true
is not so. 46
In the present case, when respondents came to know that an OCT over the subject
property was issued and registered in petitioner's name on 26 March 1993,
respondents brought a Complaint on 7 August 1993 before the Lupon of Barangay
Maloco, Ibajay, Aklan, challenging the title of petitioner to the subject property
on the basis that said property constitutes the inheritance of respondent,
together with their grandaunt Esperanza, so Esperanza had no authority to
relinquish the entire subject property to petitioner. From that moment, the good
faith of the petitioner had ceased.
Petitioner cannot be entitled to the rights under Articles 448 and 546 of the Civil
Code, because the rights mentioned therein are applicable only to builders in
good faith and not to possessors in good faith.
Moreover, the petitioner cannot be considered a builder in good faith of the
house on the subject property. In the context that such term is used in particular
reference to Article 448 of the Civil Code, a builder in good faith is one who, not
being the owner of the land, builds on that land, believing himself to be its owner
and unaware of any defect in his title or mode of acquisition. 47
The various provisions of the Civil Code, pertinent to the subject, read:
Article 448. The owner of the land on which anything has been built, sown, or
planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in Articles 546
and 548, or to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or planter cannot
be obliged to buy the land if its value is considerably more than that of the building
or trees. In such a case, he shall pay reasonable rent, if the owner of the land does
72
not choose to appropriate the building or trees after proper indemnity. The
parties shall agree upon the terms of the lease and in case of disagreement, the
court shall fix the terms thereof. aTcSID
Article 449. He who builds, plants, or sows in bad faith on the land of another,
loses what is built, planted or sown without right to indemnity.
Article 450. The owner of the land on which anything has been built, planted or
sown in bad faith may demand the demolition of the work, or that the planting or
sowing be removed, in order to replace things in their former condition at the
expense of the person who built, planted or sowed; or he may compel the builder
or planter to pay the price of the land, and the sower the proper rent.
Under the foregoing provisions, the builder in good faith can compel the
landowner to make a choice between appropriating the building by paying the
proper indemnity or obliging the builder to pay the price of the land. The choice
belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way
around. Even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one. He cannot, for instance, compel
the owner of the building to instead remove it from the land. In order, however,
that the builder can invoke that accruing benefit and enjoy his corresponding right
to demand that a choice be made by the landowner, he should be able to prove
good faith on his part. 48
Good faith, here understood, is an intangible and abstract quality with no
technical meaning or statutory definition, and it encompasses, among other
things, an honest belief, the absence of malice and the absence of design to
defraud or to seek an unconscionable advantage. An individual's personal good
faith is a concept of his own mind and, therefore, may not conclusively be
determined by his protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon
inquiry. The essence of good faith lies in an honest belief in the validity of one's
right, ignorance of a superior claim, and absence of intention to overreach
another. Applied to possession, one is considered in good faith if he is not aware
that there exists in his title or mode of acquisition any flaw which invalidates it.
49
In this case, the subject property waived and quitclaimed by Esperanza to the
petitioner and her husband in the Affidavit was only covered by a tax declaration
in the name of Esperanza. Petitioner did not even bother to look into the origin of
the subject property and to probe into the right of Esperanza to relinquish the
same. Thus, when petitioner and her husband built a house thereon in 1989 they
cannot be considered to have acted in good faith as they were fully aware that
when Esperanza executed an Affidavit relinquishing in their favor the subject
property the only proof of Esperanza's ownership over the same was a mere tax
declaration. This fact or circumstance alone was enough to put the petitioner and
her husband under inquiry. Settled is the rule that a tax declaration does not
prove ownership. It is merely an indicium of a claim of ownership. Payment of
taxes is not proof of ownership; it is, at best, an indicium of possession in the
concept of ownership. Neither tax receipts nor a declaration of ownership for
taxation purposes is evidence of ownership or of a right to possess realty when
not supported by other effective proofs. 50 EADSIa
With the foregoing, the petitioner is not entitled to the rights under Article 448
and 546 as the petitioner is not a builder and possessor in good faith.
WHEREFORE, premises considered, the instant Petition is hereby DENIED. The
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 64970, dated
27 October 2006 and 29 June 2007, respectively, affirming the RTC Decision dated
12 September 2000 in Civil Case No. 5511 and declaring the respondents the
lawful owners and possessors of the subject property are hereby AFFIRMED. No
costs.
SO ORDERED.
Quisumbing, * Austria-Martinez, Nachura and Peralta, JJ., concur.
THIRD DIVISION
[G.R. No. 119730. September 2, 1999.]
RODOLFO NOCEDA, petitioner, vs. COURT OF APPEALS and AURORA ARBIZO
DIRECTO, respondents.
Eufracio Segundo C. Pagunuran for petitioner.
Edano, Amog and Associates Law Office for private respondent.
SYNOPSIS
On June 1, 1981, Aurora Directo, Rodolfo Noceda and Maria Arbizo extrajudicially
settled a parcel of land. On the same date, Directo donated 625 square meters of
her share to Noceda, who is her nephew being the son of her deceased sister,
Carolina. On August 17, 1981, the same parties executed another extrajudicial-
settlement partition of the same lot. Three fifths of the said land went to Arbizo
while Directo and Noceda got only one-fifth each. Sometime in 1981, Noceda
constructed a house on the land donated to him by Directo. Directo fenced the
portion allotted to her in the extrajudicial settlement, excluding the donated lot
and constructed thereon 3 huts. However, in 1985, Noceda removed the fence
earlier constructed by Directo and occupied the 3 huts and fenced the entire lot
of Directo without her consent. Directo demanded from Noceda to vacate her
land, but the latter refused. Directo filed a complaint for recovery of possession
and rescission/annulment of donation, against Noceda before the trial court. The
trial court rendered a decision in favor of Directo. The trial court ordered Noceda
to vacate and reconvey the property to Directo. The trial court also declared the
extrajudicial settlement dated August 17, 1981 valid and revoked the Deed of
Donation dated June 1, 1981. Noceda appealed to the Court of Appeals which
affirmed the trial court. Hence, the present petition. IDaCcS
The Supreme Court denied the petition and affirmed the decision of both the trial
court and the Court of Appeals. The Court ruled that petitioner's act of occupying
the portion pertaining to private respondent Directo without the latter's
knowledge is an act of usurpation which is an offense against property of the
donor and considered as an act of ingratitude of a donee against the donor. The
law does not require conviction of the donee, it is enough that the offense be
proved in the action for revocation. With regard to the contention of petitioner
Noceda that the right to enforce the revocation of the donation had already
prescribed, the Court was not persuaded. The Court ruled that while the
complaint for revocation was filed more than one (1) year from the alleged
usurpation by petitioner of private respondent's share in the subject lot, no
competent proof was adduced by petitioner to prove his allegation. The action to
revoke by reason of ingratitude prescribes within one (1) year to be counted from
the time (a) the donor had knowledge of the fact; (b) provided that it was possible
for him to bring the action. It is incumbent upon petitioner to show proof of the
concurrence of these two condition in order that the one (1) year period for
bringing the action be considered to have already prescribed. According to the
Court, no competent proof was adduced by petitioner to prove his allegation The
Court stressed that in civil cases, the party having the burden of proof must
establish his case by preponderance of evidence and he who alleges a fact has the
burden of proving it and a mere allegation is not evidence.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PARTIES TO CIVIL ACTIONS; A PARTY IS NOT
INDISPENSABLE TO THE SUIT IF HIS INTEREST IN THE CONTROVERSY OR SUBJECT
MATTER IS DISTINCT AND DIVISIBLE FROM THE INTEREST OF THE OTHER PARTIES
AND WILL NOT NECESSARILY BE PREJUDICED BY A JUDGMENT WHICH DOES NOT
COMPLETE JUSTICE TO THE PARTIES. — Notably, defendant's counsel requested
for the appearance of Cecilia Obispo and despite notice to her to appear in court
and bring with her the alleged free patent in her name, she failed to appear and
even failed to intervene to protect whatever interest and right she has over the
subject lot. As to the other possessors of residential houses in Lot 8 of Lot 1121,
they are not considered as indispensable parties to this case. A party is not
indispensable to the suit if his interest in the controversy or subject matter is
distinct and divisible from the interest of the other parties and will not necessarily
be prejudiced by a judgment which does complete justice to the parties in court.
Private respondent is not claiming the entire area of Lot 1121 but only a portion
thereof which was adjudicated to her based on the August 17, 1981 extrajudicial
settlement and which was denominated in the survey plan as Lot C of Lot 1121;
thus there was no need to implead the occupants of Lot 8. ATcaID
73
2. CIVIL LAW; SUCCESSION; EFFECT OF PARTITION ON PROPERTY OWNED IN
COMMON. — In this case the source of co-ownership among the heirs was
intestate succession. Where there are two or more heirs, the whole estate of the
decedent is, before its partition, owned in common by such heirs subject to the
payment of debts of the deceased. Partition, in general, is the separation, division
and assignment of a thing held in common among those to whom it may belong.
The purpose of partition is to put an end to co-ownership. It seeks a severance of
the individual interest of each co-owner vesting in each a sole estate in specific
property and giving to each one a right to enjoy his estate without supervision or
interference from the other. And one way of effecting a partition of the
decedent's estate is by the heirs themselves extrajudicially. The heirs of the late
Celestino Arbizo namely Maria Arbizo, Aurora A. Directo (private respondent) and
Rodolfo Noceda (petitioner) entered into an extrajudicial settlement of the estate
on August 17, 1981 and agreed to adjudicate among themselves the property left
by their predecessor-in-interest. Thus, the areas allotted to each heir are now
specifically delineated in the survey plan. There is no co-ownership where portion
owned is correctly determined and identifiable, though not technically described,
or that said portions are still embraced in one and the same certificate of title
does not make said portions less determinable or identifiable, or distinguishable,
one from the other, nor that dominion over each portion less exclusive, in their
respective owners. A partition legally made confers upon each heir the exclusive
ownership of the property adjudicated to him.
3. ID.; MODES OF ACQUIRING OWNERSHIP; DONATION; GROUNDS FOR
REVOCATION; PETITIONER'S ACT OF OCCUPYING THE PORTION PERTAINING TO
ONE OF THE PRIVATE RESPONDENTS WITHOUT THE LATTER'S KNOWLEDGE AND
CONTEST IS AN ACT OF USURPATION WHICH IS AN OFFENSE AGAINST PROPERTY
OF THE DONOR AND CONSIDERED AS AN ACT OF INGRATITUDE OF A DONEE
AGAINST THE DONOR. — We also find unmeritorious petitioner's argument that
since there was no effective and real partition of the subject lot there exist no
basis for the charge of usurpation and hence there is also no basis for finding
ingratitude against him. It was established that petitioner Noceda occupied not
only the portion donated to him by private respondent Aurora Arbizo-Directo but
he also fenced the whole area of Lot C which belongs to private respondent
Directo, thus petitioner's act of occupying the portion pertaining to private
respondent Directo without the latter's knowledge and consent is an act of
usurpation which is an offense against the property of the donor and considered
as an act of ingratitude of a donee against the donor. The law does not require
conviction of the donee; it is enough that the offense be proved in the action for
revocation. CITSAc
4. ID.; ID.; ID.; ID.; ACTION TO REVOKE DONATION HAS NOT YET PRESCRIBED. —
The action to revoke by reason of ingratitude prescribes within one (1) year to be
counted from the time (a) the donor had knowledge of the fact; (b) provided that
it was possible for him to bring the action. It is incumbent upon petitioner to show
proof of the concurrence of these two conditions in order that the one (1) year
period for bringing the action be considered to have already prescribed. No
competent proof was adduced by petitioner to prove his allegation. In Civil Cases,
the party having burden of proof must establish his case by preponderance of
evidence. He who alleges a fact has the burden of proving it and a mere allegation
is not evidence.
DECISION
GONZAGA-REYES, J p:
This petition for review on certiorari under Rule 45 of the Rules of Court seeks to
reverse the decision dated March 31, 1995 of the respondent Court of Appeals 1
in CA GR CV No. 38126, affirming with modification the decision of the Regional
Trial Court, Branch 71, of Iba, Zambales, 2 in an action by private respondent
against petitioner for recovery of possession and ownership and
rescission/annulment of donation.
The facts of the case as summarized by the respondent Court are as follows: 3
"On June 1, 1981, plaintiff Aurora Directo, defendant Rodolfo Noceda, and Maria
Arbizo, the daughter, grandson, and widow, respectively, of the late Celestino
Arbizo, who died in 1956, extrajudicially settled a parcel of land, Lot 1121, located
at Bitaog, San Isidro, Cabangan, Zambales, which was said to have an area of
66,530 square meters. Plaintiff Directo's share was 11,426 square meters,
defendant Noceda got 13,294 square meters, and the remaining 41,810 square
meters went to Maria Arbizo (Exhibit G). On the same date, plaintiff Directo
donated 625 square meters of her share to defendant Noceda, who is her nephew
being the son of her deceased sister, Carolina (Exhibit D). However, on August 17,
1981, another extrajudicial settlement-partition of Lot 1121 was executed by
plaintiff Directo, defendant Noceda, and Maria Arbizo. Three fifths of the said land
went to Maria Arbizo while plaintiff Directo and defendant Noceda got only one-
fifth each. In said extrajudicial settlement-partition as well as in the Tax
Declaration 16-0032 over Lot 1121 in the name of the late Celestino Arbizo, the
said parcel of land was said to have an area of only 29,845 square meters (Exhibit
C). Sometime in 1981, defendant Noceda constructed his house on the land
donated to him by plaintiff Directo. Plaintiff Directo fenced the portion allotted to
her in the extrajudicial settlement, excluding the donated portion, and
constructed thereon three huts. But in 1985, defendant Noceda removed the
fence earlier constructed by plaintiff Directo, occupied the three huts (3) and
fenced the entire land of plaintiff Directo without her consent. Plaintiff Directo
demanded from defendant Noceda to vacate her land, but the latter refused.
Hence, plaintiff Directo filed the present suit, a complaint for the recovery of
possession and ownership and rescission/annulment of donation, against
defendant Noceda before the lower court. During the trial, the lower court
ordered that a relocation survey of Lot 1121 be conducted by Engr. Edilberto
Quejada of the Bureau of Lands. After the survey of Lot 1121 in the presence of
both parties, Engr. Edilberto Quejada reported that the area of Lot 1121 stated in
the extrajudicial settlement-partition of August 17, 1981 was smaller than the
actual area of Lot 1121 which is 127,298 square meters. Engr. Quejada subdivided
Lot 1121, excluding the portions occupied by third persons, known as Lot 8, the
salvage zone and the road lot, on the basis of the actual occupancy of Lot 1121 by
the heirs of the late Celestino Arbizo and the extrajudicial settlement-partition of
August 17, 1981. The portion denominated as Lot A, with an area of 12,957 square
meters was the share of defendant Noceda; Lot C, with the same area as that of
Lot A, was the share of plaintiff Directo, a portion of which was donated to
defendant Noceda; and Lot B, with an area of 38,872 square meters, went to
Maria Arbizo (Exhibit E)." cdphil
On November 6, 1991, the Regional Trial Court, Branch 71, of Iba, Zambales
rendered a decision, the dispositive portion of which reads as follows: 4
"WHEREFORE, in view of the foregoing considerations, the Court hereby renders
judgment:
(a) Declaring the Extra-Judicial Settlement-Partition dated August 19, 1981, valid;
(b) Declaring the Deed of Donation dated June 1, 1981, revoked;
(c) Ordering the defendant to vacate and reconvey that donated portion of Lot 2,
Lot 1121 subject of the Deed of Donation dated June 1, 1981 to the plaintiff or
her heirs or assigns;
(d) Ordering the defendant to remove the house built inside the donated portion
at the defendant's expense or pay a monthly rental of P300.00 Philippine
Currency;
(e) Ordering the defendant to pay attorney's fees in the amount of P5,000.00; and
(f) To pay the cost."
Rodolfo Nocedo appealed to the respondent Court which affirmed the trial court
as follows: 5
"WHEREFORE, judgment is hereby rendered, ORDERING defendant Rodolfo
Noceda to VACATE the portion known as Lot "C" of Lot 1121 per Exhibit E, which
was allotted to plaintiff Aurora Arbizo Directo. Except for this modification, the
Decision, dated November 6, 1991, of the RTC-Iba, Zambales, Branch 71, in Civil
Case No. RTC-354-I, is hereby AFFIRMED in all other respects. Costs against
defendant Rodolfo Noceda."
Dissatisfied, petitioner filed the instant petition for review with the following
assignment of errors: 6
THE COURT OF APPEALS ERRED IN HOLDING THAT THE SUBJECT PROPERTY
IDENTIFIED AS LOT 1121 CONTAINS AN AREA IN EXCESS OF THAT STATED IN ITS
TAX DECLARATION.
74
THE COURT OF APPEALS ERRED IN HOLDING THAT LOT 1121 SHOULD BE
PARTITIONED IN ACCORDANCE WITH THE EXTRA-JUDICIAL SETTLEMENT DATED
17 AUGUST 1981.
THE COURT OF APPEALS ERRED IN ADJUDICATING AND ALLOTTING LOT "C" AS
APPEARING IN THE SURVEY PLAN PREPARED BY GEODETIC ENGINEER EDILBERTO
QUEJADA TO THE RESPONDENT.
THE COURT OF APPEALS ERRED IN FINDING THAT THE PETITIONER USURPED AN
AREA ADJUDICATED TO THE RESPONDENT.
THE COURT OF APPEALS ERRED IN REVOKING THE DEED OF DONATION DATED 1
JUNE 1981.
The first issue raised refers to the actual area of the subject lot known as Lot 1121,
which was registered under Tax Declaration No. 16-0032 under the name of the
late Celestino Arbizo. Petitioner claims that Tax Declaration No. 16-0032 contains
only an area of 29,845 sq. meter; thus the respondent Court exceeded its judicial
authority when it sustained the lower court's findings that the subject property
actually contains an area of 127,289 square meters.
We find the argument unmeritorious. The records disclose that the trial court in
an Order dated June 8, 1987 gave both parties to this case the chance to have the
subject property re-surveyed by a licensed surveyor to determine the actual area
of Lot 1121. 7 Plaintiff Aurora Directo filed a motion/compliance where she
suggested that Geodetic Engineer Edilberto V. Quejada of the Bureau of Lands,
Iba, Zambales be commissioned to undertake the survey 8 said motion was also
sent to defendant's counsel, Atty. Eufracio Pagunuran for Comment, 9 but Atty.
Pagunuran however failed to file his Comment within the given period. Thus the
trial court designated Engineer Quejada to undertake the survey of Lot 1121. 10
Petitioner Noceda through counsel belatedly filed his Comment without any
opposition to the appointment of Engineer Quejada but proposed that the latter
be tasked to solely (a) re-survey, determine and identify the metes and bounds of
the lot covered by Tax Declaration No. 16-0032; (b) to identify the areas occupied
by the parties therein; and (c) to conduct the re-survey with notice and in the
presence of the parties therein and their respective counsels. 11 The Comment
was not, however, acted upon by the trial court in view of its earlier Order
directing Engineer Quejada to undertake the survey of the land. 12 Engr. Quejada
conducted the survey with the conformity and in the presence of both parties,
taking into consideration the extrajudicial partition dated August 17, 1981, deed
of donation dated June 1, 1981 executed by plaintiff Aurora Directo in favor of
defendant Rodolfo Noceda and the actual area occupied by the parties, 13 as well
as the sketch plan 14 and the technical description of Lot 1121 taken from the
Records Section of the Bureau of Lands, Manila. 15 The report and the survey plan
submitted by Engr. Quejada were approved by the Trial Court in an Order dated
December 7, 1987. 16 These circumstances show that the lower court ordered
the re-survey of the lot to determine the actual area of Lot 1121 and such survey
was done with the conformity and in the presence of both parties. The actual land
area based on the survey plan which was conducted in the presence of both
parties, showed a much bigger area than the area declared in the tax declaration
but such differences are not uncommon as early tax declarations are, more often
than not, based on approximation or estimation rather than on computation. 17
We hold that the respondent court did not err in sustaining the trial court's
findings that the actual area of Lot 1121 is 127,289 square meters. LexLib
Petitioner also contends that said judicial determination improperly encroaches
on the rights and claims of third persons who were never impleaded below; that
the subject lot was also declared in the name of one Cecilia Obispo and a Free
Patent over the said lot was also issued in her name and that there are several
residential houses constructed and existing on Lot 8 of lot 1121, thus these
possessors/occupants of Lot 8 should be joined as defendants for their non-
inclusion would be fatal to respondent's cause of action.
We find no merit in this argument. The respondent Court correctly ratiocinated
on this issue as follows: 18
"The fact that Cecilia Obispo has tax declarations in her name over Lot 1121 and
several persons occupied a portion thereof did not make them indispensable
parties in the present case. Defendant Noceda merely presented the tax
declarations in the name of Cecilia Obispo without the alleged free patent in her
name. Moreover, no evidence was presented showing that Cecilia Obispo
possessed or claimed possession of Lot 1121. Tax receipts and declarations of
ownership for tax purposes are not conclusive evidence of ownership of property
(Republic vs. Intermediate Appellate Court, 224 SCRA 285).
It was not necessary that the occupants of a portion of Lot 1121, designated as
Lot 8, be impleaded in the present case. Lot 8, though part of Lot 1121, was
excluded by Engr. Quejada in determining the respective portions of Lot 1121
occupied by plaintiff Directo, defendant Noceda and Maria Arbizo pursuant to the
extrajudicial settlement which they executed on August 17, 1981. The result of
the present suit shall not in any way affect the occupants of Lot 8, since the issues
involved in the present case are the usurpation by defendant Noceda of the land
adjudicated to plaintiff Directo and the propriety of the cancellation of the deed
of donation in favor of defendant Noceda due to his ingratitude to plaintiff
Directo."
Notably, defendant's counsel requested for the appearance of Cecilia Obispo and
despite notice to her to appear in court and bring with her the alleged free patent
in her name, 19 she failed to appear and even failed to intervene to protect
whatever interest and right she has over the subject lot. As to the other
possessors of residential houses in Lot 8 of Lot 1121, they are not considered as
indispensable parties to this case. A party is not indispensable to the suit if his
interest in the controversy or subject matter is distinct and divisible from the
interest of the other parties and will not necessarily be prejudiced by a judgment
which does complete justice to the parties in court. 20 Private respondent is not
claiming the entire area of Lot 1121 but only a portion thereof which was
adjudicated to her based on the August 17, 1981 extrajudicial settlement and
which was denominated in the survey plan as Lot C of Lot 1121; thus there was
no need to implead the occupants of Lot 8.
Petitioner further claims that the subject property could not be partitioned based
on the extrajudicial settlement-partition dated August 17, 1981, since the
distributive share of the heirs of the late Celestino Arbizo and the area of Lot 1121
stated therein were different from the extrajudicial settlement executed on June
1, 1981; that the discrepancies between the two deeds of partition with respect
to the area of Lot 1121 and the respective share of the parties therein indicated
that they never intended that any of the deeds to be the final determination of
the portions of Lot 1121 allotted to them; that the extrajudicial settlement-
partition of August 17, 1981 could not effectively subdivide Lot 1121 because it
partitioned only 29,845 square meters, and not its actual area of 127,298 square
meters.
We see no cogent reason to disturb the findings of the respondent Court as
follows: 21
The discrepancies between the extrajudicial settlements executed by plaintiff
Directo, defendant Noceda and Maria Arbizo on June 1, 1981 and August 17, 1981
only meant that the latter was intended to supersede the former. The signature
of defendant Noceda in the extrajudicial settlement of August 17, 1981 would
show his conformity to the new apportionment of Lot 1121 among the heirs of
the late Celestino Arbizo. The fact that defendant Noceda occupied the portion
allotted to him in the extrajudicial settlement, as well as the donated portion of
the share of plaintiff Directo, presupposes his knowledge of the extent of
boundaries of the portion of Lot 1121 allotted to him. Moreover, the statement
in the extrajudicial settlement of August 17, 1981 with respect to the area of Lot
1121, which was 29,845 square meters, is not conclusive because it was found
out, after the relocation survey was conducted on Lot 1121, that the parties
therein occupied an area larger than what they were supposed to possess per the
extrajudicial settlement-partition of August 17, 1981. llcd
Although in the extrajudicial settlement dated August 17, 1981 the heirs of
Celestino Arbizo partitioned only a 29,845 square meter lot to conform with the
area declared under tax declaration 16-0032 yet the heirs were each actually
occupying a bigger portion the total area of which exceeded 29,845 square
meters. This was confirmed by Geodetic Engineer Quejada in his report submitted
to the trial court where he stated among other things: 22
7. that upon computation of actual survey, it is informed (sic) that the area dated
(sic) as per extrajudicial settlement-partition in the name of Celestino Arbizo was
smaller than the computed lots of their actual occupancy as per survey on the
ground;
75
8. The Lot A, Lot B, and Lot C as appearing on prepared plan for ready reference
was subdivided, base (sic) on stated sharing as per EXTRA JUDICIAL SETTLEMENT-
PARTITION base (sic) on actual occupancy.
The survey conducted on Lot 1121 was only a confirmation of the actual areas
being occupied by the heirs taking into account the percentage proportion
adjudicated to each heir on the basis of their August 17, 1981 extrajudicial
settlement.
Petitioner further alleges that the said partition tries to vest in favor of a third
person, Maria Arbizo, a right over the said property notwithstanding the absence
of evidence establishing that she is an heir of the late Celestino Arbizo since Maria
Arbizo was never impleaded as a party in this case and her interest over Lot 1121
was not established.
Such contention deserves scant consideration. We find no compelling basis to
disturb the finding of the trial court on this factual issue, as follows: 23
In effect, the defendant denies the allegation of the plaintiff that Maria Arbizo
was the third wife of Celestino Arbizo and Agripina is her half sister with a
common father. On this point, the Court believes the version of the plaintiff. The
Court observes that in the "Extra-Judicial Settlement-Partition" (Exhibit "C"),
Maria Arbizo is named one of the co-heirs of the defendant, being the widow of
his grandfather, Celestino Arbizo. The names of Anacleto and Agripina do not also
appear in the Extra-judicial Settlement and Partition because according to the
plaintiff, they had sold their shares to Maria Arbizo. And the defendant is one of
the signatories to the said Deed of Extra-judicial Settlement-Partition
acknowledged before Notary Public Artemio Maranon. Under the circumstances,
the Court is convinced that the defendant knew that Maria Arbizo was the widow
of Celestino Arbizo and he knew of the sale of the share of Anacleto Arbizo his
share, as well as that of Agripina. When the defendant signed the Extra-Judicial
Settlement, he was already an adult since when he testified in 1989, he gave his
age as 50 years old. So that in 1981, he was already 41 years old. If he did not
know all of these, the defendant would have not agreed to the sharing and signed
this document and acknowledged it before the Notary Public. And who could have
a better knowledge of the relationship of Agripina and Maria Arbizo to Celestino
Arbizo than the latter's daughter? Besides, at the time of the execution of the
Extra-Judicial Settlement-Partition by the plaintiff and defendant, they were still
in good terms. There was no reason for the plaintiff to favor Maria Arbizo and
Agripina Arbizo over the defendant. Furthermore, the defendant had failed to
support his allegation that when his grandfather died he had no wife and child.
cdphil
We likewise find unmeritorious petitioner's claim that there exist no factual and
legal basis for the adjudication of Lot C of Lot 1121 to private respondent Aurora
Directo. It bears stress that the relocation survey plan prepared by Geodetic
Engineer Quejada was based on the extrajudicial settlement dated August 17,
1981, and the actual possession by the parties and the technical description of Lot
1121. It was established by the survey plan that based on the actual possession of
the parties, and the extrajudicial settlement among the heirs the portion
denominated as Lot C of Lot 1121 of the survey plan was being occupied by private
respondent Aurora Directo and it was also shown that it is in Lot C where the 625
square meter area donated by private respondent Directo to petitioner is located.
There is no obstacle to adjudicate Lot C to private respondent as her rightful share
allotted to her in the extrajudicial settlement.
Petitioner argues that he did not usurp the property of respondent Directo since,
to date, the metes and bounds of the parcel of land left by their predecessor in
interest, Celestino Arbizo, are still undetermined since no final determination as
to the exact areas properly pertaining to the parties herein; hence they are still
considered as co-owners thereof.
We do not agree.
In this case the source of co-ownership among the heirs was intestate succession.
Where there are two or more heirs, the whole estate of the decedent is, before
its partition, owned in common by such heirs subject to the payment of debts of
the deceased. 24 Partition, in general, is the separation, division and assignment
of a thing held in common among those to whom it may belong. 25 The purpose
of partition is to put an end to co-ownership. It seeks a severance of the individual
interest of each co-owner, vesting in each a sole estate in specific property and
giving to each one a right to enjoy his estate without supervision or interference
from the other. 26 And one way of effecting a partition of the decedent's estate
is by the heirs themselves extrajudicially. The heirs of the late Celestino Arbizo
namely Maria Arbizo, Aurora A. Directo (private respondent) and Rodolfo Noceda evidence. 33 He who alleges a fact has the burden of proving it and a mere
(petitioner) entered into an extrajudicial settlement of the estate on August 17, allegation is not evidence. 34
1981 and agreed to adjudicate among themselves the property left by their
predecessor-in-interest in the following manner:

To Rodolfo Noceda goes the northern one-fifth (1/5) portion containing an area Factual findings of the Court of Appeals, supported by substantial evidence on
of 5,989 sq. meters; record are final and conclusive on the parties and carry even more weight when
the Court of Appeals affirms the factual findings of the trial court; 35 for it is not
To Maria Arbizo goes the middle three-fifths (3/5) portion; the function of this Court to re-examine all over again the oral and documentary
evidence submitted by the parties unless the findings of fact of the Court of
and To Aurora Arbizo goes the southern one-fifth (1/5) portion. 27 Appeals are not supported by the evidence on record or the judgment is based on
the misapprehension of facts. 36 The jurisdiction of this court is thus limited to
In the survey plan submitted by Engineer Quejada, the portions indicated by red reviewing errors of law unless there is a showing that the findings complained of
lines and numbered alphabetically were based on the percentage proportion in are totally devoid of support in the record or that they are so glaringly erroneous
the extrajudicial settlement and the actual occupancy of each heir which resulted as to constitute serious abuse of discretion. 37 We find no such showing in this
to these divisions as follows: 28 case.
Lot A; the area is 2,957 sq.m. — goes to Rodolfo A. Noceda (1/5)
We find that both the trial court and the respondent Court had carefully
Lot B; 38,872 sq.m. Maria Arbizo (3/5) LLpr considered the questions of fact raised below and the respondent Court's
conclusions are based on the evidence on record. No cogent reason exists for
Lot C; 12,957 sq.m. Aurora Arbizo (1/5) disturbing such findings. 38 We also note that petitioner in this petition merely
rehashed the same issues and arguments raised in the respondent Court in whose
Thus, the areas allotted to each heir are now specifically delineated in the survey decision we find no reversible error. Clearly, petitioner failed to present any
plan. There is no co-ownership where portion owned is concretely determined substantial argument to justify a reversal of the assailed decision.
and identifiable, though not technically described, or that said portions are still
embraced in one and the same certificate of title does not make said portions less WHEREFORE, the petition for review is hereby DENIED. Costs against appellant.
determinable or identifiable, or distinguishable, one from the other, nor that
dominion over each portion less exclusive, in their respective owners. 29 A SO ORDERED.
partition legally made confers upon each heir the exclusive ownership of the
property adjudicated to him. 30 Melo, Vitug, Panganiban and Purisima, JJ., concur.
We also find unmeritorious petitioner's argument that since there was no
effective and real partition of the subject lot there exists no basis for the charge
of usurpation and hence there is also no basis for finding ingratitude against him.
It was established that petitioner Noceda occupied not only the portion donated
to him by private respondent Aurora Arbizo-Directo but he also fenced the whole
area of Lot C which belongs to private respondent Directo, thus petitioner's act of
occupying the portion pertaining to private respondent Directo without the
latter's knowledge and consent is an act of usurpation which is an offense against
the property of the donor and considered as an act of ingratitude of a donee
against the donor. 31The law does not require conviction of the donee; it is
enough that the offense be proved in the action for revocation. 32

Finally, petitioner contends that granting revocation is proper, the right to enforce
the same had already prescribed since as admitted by private respondent,
petitioner usurped her property in the first week of September 1985 while the
complaint for revocation was filed on September 16, 1986, thus more than one
(1) year had passed from the alleged usurpation by petitioner of private
respondent's share in Lot 1121. We are not persuaded. The respondent Court
rejected such argument in this wise:

"Article 769 of the New Civil Code states that: "The action granted to the donor
by reason of ingratitude cannot be renounced in advance. This action prescribes
within one year to be counted from the time the donor had knowledge of the fact
and it was possible for him to bring the action." As expressly stated, the donor
must file the action to revoke his donation within one year from the time he had
knowledge of the ingratitude of the donee. Also, it must be shown that it was
possible for the donor to institute the said action within the same period. The
concurrence of these two requisites must be shown by defendant Noceda in order
to bar the present action. Defendant Noceda failed to do so. He reckoned the one
year prescriptive period from the occurrence of the usurpation of the property of
plaintiff Directo in the first week of September, 1985, and not from the time the
latter had the knowledge of the usurpation. Moreover, defendant Noceda failed
to prove that at the time plaintiff Directo acquired knowledge of his usurpation,
it was possible for plaintiff Directo to institute an action for revocation of her
donation." Cdpr

The action to revoke by reason of ingratitude prescribes within one (1) year to be
counted from the time (a) the donor had knowledge of the fact; (b) provided that
it was possible for him to bring the action. It is incumbent upon petitioner to show
proof of the concurrence of these two conditions in order that the one (1) year
period for bringing the action be considered to have already prescribed. No
competent proof was adduced by petitioner to prove his allegation. In Civil Cases,
the party having the burden of proof must establish his case by preponderance of
76