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Garrido vs.

Court of Appeals

G.R. No. 101262. September 14, 1994.*

SPOUSES ALBERTO GARRIDO AND COLOMA DAGURO, petitioners, vs. THE COURT OF
APPEALS, SPOUSES RUFINO AND CONRADA SUPLEMENTO, respondents.

Actions; Parties; Donation; Only the donor or his heirs have the personality to question the
violation of any restriction in the deed of donation.—We find for respondents. Petitioners
have no personality to question the violation of the restriction because they are not heirs
of the donor. When the donee fails to comply with any of the conditions imposed by the
donor, it is the donor who has the right to impugn the validity of the transaction affecting
the donated property, conformably with Art. 764 of the Civil Code, which provides that
the right to revoke may be transmitted to the heirs of the donor and may be exercised
against the heirs of the donee, and the action prescribes four years after the violation of
the condition.

Same; Same; Same; Appeals; An unassigned error closely related to an error properly
assigned, or upon which the determination of the question properly assigned is
dependent, may be considered by the appellate court.—Petitioners’ lack of capacity to
question the non-compliance with the condition is intimately connected with the issue
regarding the validity of the sale on account of the prohibition in the deed of donation.
Thus, we have established the rule that an unassigned error closely related to an error
properly assigned, or upon which the determination of the question properly assigned is
dependent, may be considered by the appellate court.

Same; Evidence; Newly Discovered Evidence; Forgery; A showing that the signature in a
document is a forgery should be adduced before the trial court, and it will be too late to
present it before the Supreme Court.—Petitioners also submit that the finding of the
appellate court that the signature of Magdalena Rondael in the Deed of Absolute Sale
is genuine has been overtaken by events. In a letter dated 1 August 1991, the Regional
Director of the NBI, Iloilo City, furnished the Iloilo City Prosecutor with a copy of NBI
Questioned Document Report No. 413-791 dated 23 July 1991, purporting to show that
the questioned signature as well as the standard/sample signatures of the deceased
Magdalena Rondael were not written by one and the same person, hence, a forgery.
Admittedly, the NBI report was never adduced before the lower courts; in fact, it is
presented for the first time and only before this Court. Obviously, this is not a newly
discovered evidence within the purview of Sec. 1, par. (b), Rule 37, of the Rules of Court.
Petitioners should have thought of having the signature of Magdalena Rondael on the
deed of sale examined when the case was still with the trial court. Nothing would have
stopped them from doing so. Hence, it is now late, too late in fact, to present it before
this Court.
Same; Same; Same; New Trial; A motion for new trial should be filed before the trial court
and within the period for appeal.—Petitioners’ reliance on the NBI report as basis for new
trial on the ground of “newly discovered evidence” is a mistake. In the first place, the rule
is explicit that a motion for new trial should be filed before the trial court and within the
period for appeal.

Same; Same; Same; Same; “Newly Discovered” Evidence, requisites.—In the second
place, in order that a particular piece of evidence may be properly regarded as “newly
discovered” for the purpose of granting new trial, the following requisites must concur:
(a) the evidence had been discovered after trial; (b) the evidence could not have been
discovered and produced during trial even with the exercise of reasonable diligence;
and, (c) the evidence is material and not merely corroborative, cumulative or
impeaching and is of such weight that if admitted would probably alter the result.

Same; Same; Same; Same; At the pith of these requirements is that what is essential is that
the offering party had exercised reasonable diligence in producing or locating such
evidence before or during trial but had nonetheless failed to secure it.—At the pith of
these requirements is that what is essential is not so much the time when the evidence
offered first sprang into existence nor the time when it first came to the knowledge of the
party now submitting it; rather, that the offering party had exercised reasonable
diligence in producing or locating such evidence before or during trial but had
nonetheless failed to secure it. The NBI report does not qualify as newly discovered
evidence because the second requirement was not complied with. Petitioners did not
exercise reasonable diligence in procuring such evidence before or during trial.

Same; Same; Forgery; The party who alleges forgery has the burden of proving the
same.—Having alleged forgery, petitioners had the burden of proof. Here, they utterly
failed. They even attached to their complaint five receipts purportedly signed by
Magdalena but, except for one which was signed “Magdalena Rondael,” said receipts
were signed “Magdalena Daguro.” Besides, there is no showing that the signatures
presented as bases for comparison are themselves genuine.

Same; Notarial Law; A notarized document carries the evidentiary weight conferred
upon it with respect to its due execution.—On the other hand, the Deed of Absolute Sale
is a notarized document which carries the evidentiary weight conferred upon such public
document with respect to its due execution.
PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Ramon A. Gonzales for petitioners.

Franklin J. Andrada for private respondents. Garrido vs. Court of Appeals, 236 SCRA
450, G.R. No. 101262 September 14, 1994

BELLOSILLO, J.:

Tomas Hingco, a widower, originally owned Lot 209 of the Dingle Cadastre, Iloilo. He
married Consolacion Rondael, a widow, who had a daughter Magdalena Rondael. In
1947 he donated one half (1/2) of Lot 209 to his stepdaughter Magdalena subject to the
condition that she could not sell, transfer or cede the same. When he died, Consolacion
inherited the remaining half of Lot 209 which, in turn, was inherited by Magdalena upon
the death of Consolacion. Consequently, the entire Lot 209 was registered in the name
of Magdalena Rondael, married to Lorenzo Daguro, under Transfer Certificate of Title No.
T-13089.

In 1973 Magdalena sold a portion of Lot 209 (Lot 209-B) to Mariano Platinos and Florida
Macahilo. The remaining portion (Lot 209-A) with an area of 343 square meters is the
subject of this litigation.

In 1976 Lorenzo Daguro died. Magdalena then filed before the Court of First Instance of
Iloilo a petition to cancel the lien prohibiting her from disposing of Lot 209-A because she
needed money for her subsistence and medical expenses as she was then in her 80's.
Besides, she was sickly. 1 He deposition on oral examination in connection with her
petition was taken on 24 January 1979. 2

On 17 August 1978, during the pendency of her petition, Magdalena executed a


Conditional Deed of Sale of Lot 209-A in favor of respondent spouses Rufino and Conrada
Suplemento "subject to the lien subsisting and annotated on the face of the Certificate
of Title." 3 Magdalena agreed to bear the cost of the cancellation of the lien and
respondents to be bound thereby as long as it subsisted, with the understanding that in
the event the lien was not cancelled, the amount already paid would be refunded. It
was further stipulated that "out of the Nineteen Thousand (P19,000.00) consideration . . .
only Three Thousand (P3,000.00) pesos . . . shall be paid pro rata monthly for ten (10) years
and to convene (commence?) one (1) year from the date of this Deed." 4
On 24 January 1979 the petition for cancellation of encumbrance was denied for the
reason that the ground cited for the cancellation was not one of those allowed by Sec.
112 of Act 496 and that Magdalena failed to produce the deed of donation which
contained the alleged restriction. Nonetheless, on 19 July 1979 Magdalena executed
with the conformity of her husband a Deed of Absolute Sale covering Lot 209-A in favor
of respondents, spouses Rufino and Conrada Suplemento. 5 The deed was notarized on
the same date. On 13 April 1982, Magdalena died. On 2 December 1982 TCT No. T-108689
was issued in the name of the Suplementos. 6

Magdalena had two (2) daughters but only one is still living, Coloma Daguro, married to
Alberto Garrido, the spouses being the petitioners herein. They were based in Davao City
and would visit Magdalena only on occasions. In February 1984, Alberto Garrido visited
the Suplementos in the house where Magdalena used to live. 7 He wanted to find out if
the taxes on the house were being paid. In reply, respondents showed him the Deed of
Absolute Sale signed by his parents-in-law and it was only then that he came to know
that Lot 209-A no longer belonged to his in-laws.

On 28 October 1985 petitioners Coloma Daguro and Alberto Garrido filed a complaint
before the Regional Trial Court of Iloilo City for annulment of the Deed of Absolute Sale
of Lot 209-A, reconveyance and damages claiming that the deed was fictitious since
Magdalena's signature thereon "appears to have been traced" and Lorenzo Daguro's
signature was likewise a forgery since he died prior to the execution thereof, or on 9
October 1976. 8

The trial court, relying on the deposition of Magdalena on 24 January 1979, found that
she wanted to sell and did in fact sell Lot 209-A to the Suplementos. In addition, the court
found that the genuineness of Lorenzo Daguro's signature was not germane to the
validity of the Deed of Absolute Sale as said signature was not necessary to convey title
to the paraphernal property of Magdalena. To petitioners' credit, it held that no evidence
was adduced by respondents to show payment of any installment of the balance of the
purchase price to Magdalena before her death or to her heir, Coloma. Thus, judgment
was rendered on 19 October 1988 declaring the sale of 19 July 1979 valid but ordering
the Suplementos to pay petitioners P16,000.00 with legal rate of interest until fully paid. 9

On appeal, respondent Court of Appeals affirmed the ruling of the Iloilo trial court in its
decision of 27 February 1991 10 and denied reconsideration on 29 July 1991. 11

Petitioners contend that the appellate court erred in holding that they have no
personality to assail the Absolute Deed of Sale and the genuineness of the signature of
Magdalena Rondael.
Petitioners assert that the issue raised in the trial court was whether Magdalena Rondael
could sell the property despite the prohibition in the deed of donation. In ruling that they
were incapacitated to question the non-observance of the condition, respondent court
went beyond the issue, hence, exceeded its jurisdiction.

We find for respondents. Petitioners have no personality to question the violation of the
restriction because they are not heirs of the donor. When the donee fails to comply with
any of the conditions imposed by the donor, it is the donor who has the right to impugn
the validity of the transaction affecting the donated property, conformably with Art. 764
of the Civil Code, which provides that the right to revoke may be transmitted to the heirs
of the donor and may be exercised against the heirs of the donee, and the action
prescribes four years after the violation of the condition.

Petitioners' lack of capacity to question the non-compliance with the condition is


intimately connected with the issue regarding the validity of the sale on account of the
prohibition in the deed of donation. Thus, we have established the rule that an
unassigned error closely related to an error properly assigned, or upon which the
determination of the question properly assigned is dependent, may be considered by
the appellate court. 12

Petitioners also submit that the finding of the appellate court that the signature of
Magdalena Rondael in the Deed of Absolute Sale is genuine has been overtaken by
events. In a letter dated 1 August 1991, the Regional Director of the NBI, Iloilo City,
furnished the Iloilo City Prosecutor with a copy of NBI Questioned Document Report No.
413-791 dated 23 July 1991, purporting to show that the questioned signature as well as
the standard/sample signatures of the deceased Magdalena Rondael were not written
by one and the same person, 13 hence, a forgery.

Admittedly, the NBI report was never adduced before the lower courts; in fact, it is
presented for the first time and only before this Court. Obviously, this is not a newly
discovered evidence within the purview of Sec. 1, par. (b), Rule 37, of the Rules of Court.
Petitioners should have thought of having the signature of Magdalena Rondael on the
deed of sale examined when the case was still with the trial court. Nothing would have
stopped them from doing so. Hence, it is now late, too late in fact, to present it before
this Court.

Petitioners' reliance on the NBI report as basis for new trial on the ground of "newly
discovered evidence" is a mistake. In the first place, the rule is explicit that a motion for
new trial should be filed before the trial court and within the period for appeal. In the
second place, in order that a particular piece of evidence may be properly regarded as
"newly discovered" for the purpose of granting new trial, the following requisites must
concur: (a) the evidence had been discovered after trial; (b) the evidence could not
have been discovered and produced during trial even with the exercise of reasonable
diligence; and, (c) the evidence is material and not merely corroborative, cumulative or
impeaching and is of such weight that if admitted would probably alter the result. 14 At
the pitch of these requirements is that what is essential is not so much the time when the
evidence offered first sprang into existence nor the time when it first came to the
knowledge of the party now submitting it; rather, that the offering party had exercised
reasonable diligence in producing or locating such evidence before or during trial but
had nonetheless failed to secure it. The NBI report does not qualify as newly discovered
evidence because the second requirement was not complied with. Petitioners did not
exercise reasonable diligence in procuring such evidence before or during trial. By their
own admission, the Fiscal sought NBI assistance only after the trial of the case. They could
have done so themselves when their case was tried. Besides, when the City Prosecutor
requested the NBI for a handwriting examination in connection with petitioners' criminal
complaint for falsification against respondents, the initial response of the NBI was: "no
definite opinion can be rendered on the matter due to lack of sufficient basis necessary
for a scientific comparative examination." 15 From there it can be deduced that
petitioners did not submit adequate documents before the NBI at the first instance, thus
showing their want of reasonable diligence in procuring the evidence they needed for a
new trial.

We accord finality to the finding of respondent court, supported as it is by substantial


evidence, that the alleged discrepancy between the signature of Magdalena Rondael
appearing on the Deed of Absolute Sale and her signatures on the Conditional Deed of
Sale, petition to cancel the annotation prohibiting the sale of the donated property,
petitioners' reply to opposition, 16 transcript of her deposition dated 24 January 1979, and
the deed of sale of Lot 209-B, does not exist. Having alleged forgery, petitioners had the
burden of proof. Here, they utterly failed. They even attached to their complaint five
receipts purportedly signed by Magdalena but, except for one which was signed
"Magdalena Rondael," said receipts were signed "Magdalena Daguro." 17 Besides, there
is not showing that the signatures presented as bases for comparison are themselves
genuine. On the other hand, the Deed of Absolute Sale is a notarized document which
carries the evidentiary weight conferred upon such public document with respect to its
due execution.

WHEREFORE, the petition is DENIED. The decision of the Court of Appeals of 27 February
1991 as well as its resolution denying reconsideration thereof is AFFIRMED.

SO ORDERED.

Davide, Jr., Quiason and Kapunan JJ. concur.

Cruz, J., is on leave.


Puig vs. Peñaflorida

No. L-15939. November 29, 1965.

ANGELES UBALDE PUIG, ET AL., plaintiffs-appellants, vs. EsTELA MAGBANUA


PEÑAFLORIDA, ET AL., defendants-appellants.

Donations; Inter vivos and mortis causa; Distinguished.—The Spanish Civil Code of 1889
(Art. 620) as well as the Civil Code of the Philippines (Art. 728), admit only gratuitous
transfers of title or real rights to property either by way of donation inter vivos or else by
way of last will and testament, executed with the requisite legal formalities. In the first
case, the act is immediately operative, even if the actual execution may be deferred
until the death of the donor; in the second, nothing is conveyed to the grantee and
nothing is acquired by the latter, until the death of the grantor-testator, the disposition
being until then ambulatory and not final (Bonsato vs. Court of Appetite. 95 Phil. 481).

Same; Same; Conveyance or alienation revocable at the discretion of donor.—In


dispositions mortis causa conveyance or alienation is revocable ad nutum, i.e., at the
discretion of the grantor or so-called "donor" simply because the latter has changed his
mind (Bautista vs. Sabiniano, 92 Phil. 244; Bonsato vs. Court of Appeals, supra).

Same; Same; Specification of whereby be revoked.—The specification in the deed of


donation of the causes whereby the act may be revoked by the donor indicates that
the donation is inter vivos, rather than a disposition mortis causa (Zapanta vs. Posadas,
52 Phil. 557).

Same; Same; Designation of the donation as mortis causa not controlling criterion.—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" are not controlling criteria
(Laureta vs. Mata, 44 Phil. 668; Concepcion vs. Concepcion, L-4225, August 25, 1952;
Cuevas us, Cuevas, 68 Phil. 68); such statements are to be construed together with the
rest of the instrument, in order to give effect to the real intent of the transferor
(Concepcion vs. Concepcion, supra; Bonsato vs. Court of Appeals, supra).

Same; Same; Rules governing conveyance for enerous consideration.—A conveyance


for onerous consideration is governed by the rules of contracts and not by those of
donation or testament (Carlos vs. Ramil, 20 Phil. 183; Manalo vs. De Mesa, 29 Phil. 495).
Same; Same; Nature of donation in case of doubt.—In case of doubt, the conveyance
should be deemed donation inter vivos rather than mortis causa, in order to avoid
uncertainty as to the ownership of the property subject of the deed.

Same; Same; Compliance or binding effect of donation cannot be left to the sole will of
grantor.—Defendant-appellant's argument that the stipulated power of the grantor to
encumber or alienate the property to persons, other than the donee, at any time before
the grantor dies, should be viewed as a mere resolutory condition that does not
contradict but confirms the immediate effectivity of the donation is not legally tenable,
since it ignores the circumstance that the co-called "resolutory condition" is one purely
dependent upon the exclusive will of the grantor, and is proof that the deed, as
executed, is not obligatory at all (Civ. Code of 1889, Art. 1115; Civil Code of the
Philippines, Art. 1182). Confirming the rule, both the old and the new Civil Codes prescribe
that the effectivity, compliance, or binding effect of contracts cannot be left to the sole
will of one of the parties (Art. 1256, Civ. Code of 1889; Art. 1308, Civil Code of the
Philippines).

DIRECT APPEAL from a decision of the Court of First Instance of Iloilo. Nañawa, J.

The facts are stated in the opinion of the Court.

Ceferino de los Santos, Jr. for plaintiffs-appellants.

Salonga, Ordoñez & Associates for defendants-appellants. Puig vs. Peñaflorida, 15


SCRA 276, No. L-15939 November 29, 1965

REYES, J.B.L., J.:

Defendants-appellants Estela Magbanua Peñaflorida, et al., insist that the reservation by


the donor of the right to dispose of the property during her lifetime in the deed of
December 28, 1949 indicates that title had passed to the donee in her lifetime, otherwise,
it is argued, the reservation would be superfluous, and they cite American authorities in
support.

This thesis would be plausible if the reservation of the power to dispose were the only
indication to be considered in deciding whether the donation of December 28, 1949
was mortis causa or inter vivos. But such is not the case. The Court in its decision took to
account not only the foregoing circumstance but also the fact that the deceased
expressly and consistently declared her conveyance to be one of donation mortis causa,
and further forbade the registration of the deed until after her death. All these features
concordantly indicated that the conveyance was not intended to produce any
definitive effects, nor to finally pass any interest to the grantee, except from and after the
death of the grantor.

We see nothing in the deed itself to indicate that any right, title or interest in the properties
described was meant to be transferred to Doña Estela Magbanua prior to the death of
the grantor, Carmen Ubalde Vda. de Parcon. Not ownership, certainly, for the stipulation:

Que esta escritura de donacion mortis causa no se registrara en la oficina del


Registrador de Titulos de Iloilo sino despues del fallecimiento de la Donante

necessarily meant, according to section 50 of the Land Registration Act, that the deed
in question should not take effect as a conveyance nor bind the land until after the
death of the "donor".

Neither did the document operate to vest possession upon Doña Estela Magbanua, in
view of the express condition that (paragraph 3) if at the date of her death the donor
had not transferred, sold, or conveyed one-half of lot 58 of the Pototan Cadastre to other
persons or entities, the donee would be bound to pay to Caridad Ubalde, married to
Tomas Pedrola, the amount of P600.00, and such payment was to be made on the date
the donee took possession of Lot No. 58. As the obligation to pay the legacy to Caridad
Ubalde would not definitely arise until after the death of the donor, because only by then
would it become certain that the "donor" could not transfer the property to someone
else, and such payment must precede the taking possession of the property "donated",
it necessarily follows that the "donee's" taking of possession could not occur before the
death of the donor.

It being thus clear that the disposition contained in the deed is one that produces no
effect until the death of the grantor, we are clearly faced by an act mortis causa of the
Roman and Spanish law. We thus see no need of resorting to American authorities as to
the import of the reservation of the donor's right to dispose of the donated property, for
the Spanish authorities are very clear on this point:

Desde el momento en que la muerte del donante es la que determina la


adquisicion o el derecho a los bienes; desde el montento en que la disposicion
puede ser revocada voluntariamente, se salva la linea divisoria entre unos y otros
actos: la donacion equivale a un legado; mas aun que esto: es un legado en
realidad. (5 Manresa, 5th Ed., p. 107)

Ahora bien: si el mal llamado donante no solo dilata la fecha de la ejecucion


para el momento de su muerte, sino que ademas se reserva la facultad de
revocar a su arbitrio la disposicion, entonces el acto no es valido bajo la forma de
contrato; hay en realidad una disposicion mortis causa que exige las
solemnidades del testamento. (V Manresa, 5th Ed., p. 109) (Emphasis supplied)

The presence of an acceptance is but a consequence of the erroneous concept of the


true nature of the juridical act, and does not indicate that in the same is a true
donation inter vivos.

Appellant Magbanua further argues that the reserved power of the donor to convey the
donated property to other parties during her lifetime is but a resolutory condition (albeit
a potestative one) that confirms the passing of the title to the donee. In reality, this
argument is a veritable petitio principii; it takes for granted what has to be proved, i.e.,
that some proprietary right has passed under the terms of the deed, which, as we have
shown, is not true until thedonor has died.

It is highly illuminating to compare the condition imposed in the deed of donation of


December 28, 1949 with that established in the contract dealt with in Taylor vs. Uy Tieng
Piao & Tau Liuan, 43 Phil. 874, invoked by appellants.

In the alleged deed of donation of December 28, 1949, the late Doña Carmen Ubalde
imposed expressly that:

Que antes de su muerte, la Donante podra enajenar, vender, traspasar e


hipotecar a cualesquiera personas o entidades los bienes aqui donados a favor
de la Donataria en concepto de Donacion mortis causa.

In the Taylor vs. Uy Tieng Piao case, on the other hand, the condition read:

It is understood and agreed that should the machinery to be installed in said


factory fail, for any reason, to arrive, in the City of Manila within the period of six
(6) months from date hereof, this contract may be cancelled by the party of the
second part at its option, such cancellation, however, not to occur before the
expiration of such six (6) months. (pp. 874-875, cas. cit.).

In the Uy Tieng Piao case the contract could only be cancelled after six months, so that
there could be no doubt that it was in force at least for that long, and the optional
cancellation can be viewed as a resolutory condition (or more properly, a non-
retroactive revocatory one); but no such restriction limited the power of the donor, Doña
Carmen Ubalde, to set at naught the alleged conveyance in favor of Doña Estela
Magbanua by conveying the property to other parties at any time, even at the very next
instant after executing the donation, if she so chose. It requires no argument to
demonstrate that the power, as reserved in the deed, was a power to destroy the
donation at any time, and that it meant that the transfer is not binding on the grantor
until her death made it impossible to channel the property elsewhere. Which, in the last
analysis, as held in our main decision, signifies that the liberality is testamentary in nature,
and must appear with the solemnities required of last wills and testaments in order to be
legally valid.

Wherefore, the motion to reconsider is denied.

Bengzon, C.J., Concepcion, Dizon, Regala, Bengzon and Zaldivar, JJ., concur.

Barrera, J., took no part.


Makalintal, J., is on leave.
Central Philippine University vs. Court of Appeals

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.

Donations; Onerous Donations; Words and Phrases; An onerous donation is one executed
for a valuable consideration which is considered the equivalent of the donation itself.—
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 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.

Same; Same; Obligations; Conditional Obligations; 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.—
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.

Same; Same; Same; Same; If there is no fulfillment or compliance with the resolutory
condition, the donation may now be revoked and all rights which the donee may have
acquired under it shall be deemed lost and extinguished.—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 shall be deemed lost and extinguished.
Same; Same; Same; Same; Statute of Limitations; Prescription; Where the time within
which the condition should be fulfilled depends upon the exclusive will of the donee, its
absolute acceptance and the acknowledgment of its obligation provided in the deed
of donation are sufficient to prevent the statute of limitations from barring the action for
annulment of donation.—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.

Same; Same; Same; Same; Same; Same; Actions; 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, and 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.—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. 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.

Same; Same; Same; Same; Same; Same; Same; When the obligation does not fix a period
but from its nature and circumstances it can be inferred that a period was intended, the
courts may fix the duration thereof.—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.
Same; Same; Same; Same; Same; Same; Same; There is no more need to fix the duration
of a term of the obligation when more than a reasonable period of fifty (50) years has
already been allowed the donee to avail of the opportunity to comply with the condition
in the donation.—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.

Same; Same; Same; Same; Same; Same; Same; Rescission; When obligor cannot comply
with what is incumbent upon him, the obligee may seek rescission, and 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.—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.

Same; Same; Same; Same; Contracts; Doubts referring to incidental circumstances of a


gratuitous contract 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.

DAVIDE, JR., J., Dissenting Opinion:

Donations; Obligations; “Conditions” as used in donations and as used in the law of


obligations, compared.—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 is 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 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.
Same; Same; Words and Phrases; “Modal Donation,” Explained.—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.

Same; Same; Statute of Limitations; Prescription; 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.—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.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Juanito M. Acanto for petitioner.

Santos B. Aguadera for private respondents. Central Philippine University vs. Court of
Appeals, 246 SCRA 511, G.R. No. 112127 July 17, 1995

BELLOSILLO, J.:

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 cornerstone 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

On 31 May 1989, private 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
prescribed; that it did not violate any of the conditions in the deed of donation because
it never used the donated property 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 1991, 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 the 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
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 alleges 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 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.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 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.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
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 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 than 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 interests. 10Records 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.


G.R. No. 140487. April 2, 2001.*

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM and ILDEFONSA MANGUBAT,
respondents.

Contracts; Donations; Kinds of; Words and Phrases; “Pure or Simple Donations,”
“Remuneratory or Compensatory Donations,” “Conditional or Modal Donations,” and
“Onerous Donations,” Defined and Distinguished.—Donations, according to its purpose
or cause, may be categorized as: (1) pure or simple; (2) remuneratory or compensatory;
(3) conditional or modal; and (4) onerous. A pure or simple donation is one where the
underlying cause is plain gratuity. This is donation in its truest form. On the other hand, a
remuneratory or compensatory donation is one made for the purpose of rewarding the
donee for past services, which services do not amount to a demandable debt. A
conditional or modal donation is one where the donation is made in consideration of
future services or where the donor imposes certain conditions, limitations or charges upon
the donee, the value of which is inferior than that of the donation given. Finally, an
onerous donation is that which imposes upon the donee a reciprocal obligation or, to be
more precise, this is the kind of donation made for a valuable consideration, the cost of
which is equal to or more than the thing donated.

Same; Same; Same; Of the different classifications of donations, onerous donations are
the most distinct since, unlike the other forms of donations, the validity of and the rights
and obligations of the parties involved in an onerous donation is completely governed
not by the law on donations but by the law on contracts.—Of all the foregoing
classifications, donations of the onerous type are the most distinct. This is because, unlike
the other forms of donation, the validity of and the rights and obligations of the parties
involved in an onerous donation is completely governed not by the law on donations but
by the law on contracts. In this regard, Article 733 of the New Civil Code provides: Art.
733. Donations with an onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that portion
which exceeds the value of the burden imposed.

Same; Same; Evidence; Pleadings and Practice; Presumptions; Where the trial court
considered the written acceptance of the donation in arriving at its decision, there is the
presumption that such exhibit was properly offered and admitted by the court.—Private
respondents, as shown above, admit that in the offer of exhibits by the defendants in the
trial court, an affidavit of acceptance and/or confirmation of the donation, marked as
Exhibit “8,” was offered in evidence. However, private respondents now question this
exhibit because, according to them “there is nothing in the record that the exhibits
offered by the defendants have been admitted nor such exhibit appear on record.”
Respondents’ stance does not persuade. The written acceptance of the donation
having been considered by the trial court in arriving at its decision, there is the
presumption that this exhibit was properly offered and admitted by the court.

Estoppel by Laches; Words and Phrases.—Estoppel by laches, or the negligence or


omission to assert a right within a reasonable time, warrants a presumption that the party
entitled to assert it either has abandoned it or declined to assert it.

Donations; The purpose of the formal requirement for acceptance of a donation is to


ensure that such acceptance is duly communicated to the donor.—The purpose of the
formal requirement for acceptance of a donation is to ensure that such acceptance is
duly communicated to the donor. Thus, in Pajarillo vs. Intermediate Appellate Court, the
Court held: x x x A strict interpretation of Article 633 can lead to no other conclusion that
the annulment of the donation for being defective in form as urged by the petitioners.
This would be in keeping with the unmistakable language of the above-quoted provision.
However, we find that under the circumstances of the present case, a literal adherence
to the requirement of the law might result not in justice to the parties but conversely a
distortion of their intentions. It is also a policy of the Court to avoid such an interpretation.
The purpose of the formal requirement is to insure that the acceptance of the donation
is duly communicated to the donor. In the case at bar, it is not even suggested that
Juana was unaware of the acceptance for she in fact confirmed it later and requested
that the donated land be not registered during her lifetime by Salud. Given this significant
evidence, the Court cannot in conscience declare the donation ineffective because
there is no notation in the extrajudicial settlement of the donee’s acceptance. That
would be placing too much stress on mere form over substance. It would also disregard
the clear reality of the acceptance of the donation as manifested in the separate
instrument dated June 20, 1946, and as later acknowledged by Juan.

Same; The actual knowledge by the donor of the construction and existence of the
school building pursuant to the condition of the donation fulfills the legal requirement
that the acceptance of the donation by the donee be communicated to the donor.—
In the case at bar, a school building was immediately constructed after the donation
was executed. Respondents had knowledge of the existence of the school building put
up on the donated lot through the efforts of the Parents-Teachers Association of
Barangay Kauswagan. It was when the school building was being dismantled and
transferred to the new site and when Vice-Mayor Wilfredo Palma was constructing a
house on the donated property that respondents came to know of the Deed of
Exchange. The actual knowledge by respondents of the construction and existence of
the school building fulfilled the legal requirement that the acceptance of the donation
by the donee be communicated to the donor.
Same; Contracts; Administrative Law; Contracts or conveyances may be executed for
and in behalf of the Government or of any of its branches, subdivisions, agencies, or
instrumentalities, whenever demanded by the exigency or exigencies of the service and
as long as the same are not prohibited by law.—On respondents’ claim, which was
upheld by the Court of Appeals, that the acceptance by BPS District Supervisor Gregorio
Buendia of the donation was ineffective because of the absence of a special power of
attorney from the Republic of the Philippines, it is undisputed that the donation was made
in favor of the Bureau of Public Schools. Such being the case, his acceptance was
authorized under Section 47 of the 1987 Administrative Code which states: SEC. 47.
Contracts and Conveyances.—Contracts or conveyances may be executed for and in
behalf of the Government or of any of its branches, subdivisions, agencies, or
instrumentalities, whenever demanded by the exigency or exigencies of the service and
as long as the same are not prohibited by law.

Same; Words and Phrases; “Exclusively used for school purposes,” Construed.—What
does the phrase “exclusively used for school purposes” convey? “School” is simply an
institution or place of education. “Purpose” is defined as “that which one sets before him
to accomplish or attain; an end, intention, or aim, object, plan, project. Term is
synonymous with the ends sought, an object to be attained, an intention, etc.”
“Exclusive” means “excluding or having power to exclude (as by preventing entrance or
debarring from possession, participation, or use); limiting or limited to possession, control
or use.”

Same; The condition for the donation—that the lot be exclusively used for school
purposes—is not violated when the lot donated is exchanged with another one, where
the purpose for the donation remains the same, which is for the establishment of a
school.—Without the slightest doubt, the condition for the donation was not in any way
violated when the lot donated was exchanged with another one. The purpose for the
donation remains the same, which is for the establishment of a school. The exclusivity of
the purpose was not altered or affected. In fact, the exchange of the lot for a much
bigger one was in furtherance and enhancement of the purpose of the donation. The
acquisition of the bigger lot paved the way for the release of funds for the construction
of Bagong Lipunan school building which could not be accommodated by the limited
area of the donated lot.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

The Solicitor General for the Republic.

Gregorio A. Pizarro for respondents.


KAPUNAN, J.:

Before the Court is a petition for review under Rule 45 seeking the reversal of the Decision
of the Court of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et al. vs. Wilfredo Palma,
et al., which declared null and void the donation made by respondents of a parcel of
land in favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del
Sur.

The antecedents of this case are as follows:

On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa Mangubat,
donated a 5,600 square meter parcel of land in favor of the Bureau of Public Schools,
Municipality of Malangas, Zamboanga del Sur (BPS). In the Deed of Donation,
respondents imposed the condition that the said property should "be used exclusively
and forever for school purposes only."1 This donation was accepted by Gregorio Buendia,
the District Supervisor of BPS, through an Affidavit of Acceptance and/or Confirmation of
Donation.

Through a fund raising campaign spearheaded by the Parent-Teachers Association of


Barangay Kauswagan, a school building was constructed on the donated land.
However, the Bagong Lipunan school building that was supposed to be allocated for the
donated parcel of land in Barangay Kauswagan could not be released since the
government required that it be built upon a one (1) hectare parcel of land. To remedy
this predicament, Assistant School Division Superintendent of the Province of Zamboanga
del Sur, Sabdani Hadjirol, authorized District Supervisor Buendia to officially transact for
the exchange of the one-half (1/2) hectare old school site of Kauswagan Elementary
School to a new and suitable location which would fit the specifications of the
government. Pursuant to this, District Supervisor Buendia and Teresita Palma entered into
a Deed of Exchange whereby the donated lot was exchanged with the bigger lot owned
by the latter. Consequently, the Bagong Lipunan school buildings were constructed on
the new school site and the school building previously erected on the donated lot was
dismantled and transferred to the new location.

When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo Palma was
constructing a house on the donated land, he asked the latter why he was building a
house on the property he donated to BPS. Vice Mayor Wilfredo Palma replied that he is
already the owner of the said property. Respondent Leon Silim endeavored to stop the
construction of the house on the donated property but Vice-Mayor Wilfredo Palma
advised him to just file a case in court.

On February 10, 1982, respondents filed a Complaint for Revocation and Cancellation of
Conditional Donation, Annulment of Deed of Exchange and Recovery of Possession and
Ownership of Real Property with damages against Vice Mayor Wilfredo Palma, Teresita
Palma, District Supervisor Buendia and the BPS before the Regional Trial Court of
Pagadian City, Branch 21. In its Decision dated 20 August 1993, the trial court dismissed
the complaint for lack of merit.2 The pertinent portion of the decision reads:

Thus, it is the considered view of this Court that there was no breach or violation of
the condition imposed in the subject Deed of Donation by the donee. The
exchange is proper since it is still for the exclusive use for school purposes and for
the expansion and improvement of the school facilities within the community. The
Deed of Exchange is but a continuity of the desired purpose of the donation made
by plaintiff Leon Silim.

In sum, it may be safely stated that the aforesaid transaction of exchange is a (sic)
exception to the law invoked by the plaintiffs (Art. 764, Civil Code). The donee,
being the State had the greater reciprocity of interest in the gratuitous and
onerous contract of donation. It would be illogical and selfish for the donor to
technically preclude the donee from expanding its school site and improvement
of its school facilities, a paramount objective of the donee in promoting the
general welfare and interests of the people of Barangay Kauswagan. But it is a
well-settled rule that if the contract is onerous, such as the Deed of Donation in
question, the doubt shall be settled in favor of the greatest reciprocity of interests,
which in the instant case, is the donee.

x x x

WHEREFORE, in view of all the foregoing, judgement is hereby rendered:

1. Dismissing the complaint for lack of merit;

2. Dismissing the counterclaim for the sake of harmony and reconciliation


between the parties;

3. With costs against plaintiffs.

SO ORDERED.3

Not satisfied with the decision of the trial court, respondents elevated the case to the
Court of Appeals. In its Decision dated 22 October 1999, the Court of Appeals reversed
the decision of the trial court and declared the donation null and void on the grounds
that the donation was not properly accepted and the condition imposed on the
donation was violated.4
Hence, the present case where petitioner raises the following issues:

I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL AND
VOID DUE TO AN INVALID ACCEPTANCE BY THE DONEE.

II. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN ALLEGED VIOLATION OF A CONDITION IN THE DONATION.5

The Court gives DUE COURSE to the petition.

Petitioner contends that the Court of Appeals erred in declaring the donation null and
void for the reason that the acceptance was not allegedly done in accordance with
Articles 7456 and 7497 of the New Civil Code.

We agree.

Donations, according to its purpose or cause, may be categorized as: (1) pure or simple;
(2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or
simple donation is one where the underlying cause is plain gratuity.8 This is donation in its
truest form. On the other hand, a remuneratory or compensatory donation is one made
for the purpose of rewarding the donee for past services, which services do not amount
to a demandable debt.9 A conditional or modal donation is one where the donation is
made in consideration of future services or where the donor imposes certain conditions,
limitations or charges upon the donee, the value of which is inferior than that of the
donation given.10 Finally, an onerous donation is that which imposes upon the donee a
reciprocal obligation or, to be more precise, this is the kind of donation made for a
valuable consideration, the cost of which is equal to or more than the thing donated.11

Of all the foregoing classifications, donations of the onerous type are the most distinct.
This is because, unlike the other forms of donation, the validity of and the rights and
obligations of the parties involved in an onerous donation is completely governed not by
the law on donations but by the law on contracts. In this regard, Article 733 of the New
Civil Code provides:

Art. 733. Donations with an onerous cause shall be governed by the rules on
contracts, and remuneratory donations by the provisions of the present Title as
regards that portion which exceeds the value of the burden imposed.

The donation involved in the present controversy is one which is onerous since there is a
burden imposed upon the donee to build a school on the donated property.12

The Court of Appeals held that there was no valid acceptance of the donation because:
x x x

Under the law the donation is void if there is no acceptance. The acceptance
may either be in the same document as the deed of donation or in a separate
public instrument. If the acceptance is in a separate instrument, "the donor shall
be notified thereof in an authentic form, and his 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 noticed thereof. (Abellera vs.
Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78 SCRA 245). 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
it must be noted in both instruments (that containing the offer to donate
and that showing acceptance). Then and only then is the donation
perfected. (11 Manresa 155-11, cited in Vol. II, Civil Code of the Philippines
by Tolentino.)."

This Court perused carefully the Deed of Donation marked as exhibit "A" and "1" to
determine whether there was acceptance of the donation. This Court found
none. We further examined the record if there is another document which
embodies the acceptance, we found one. Although the Court found that in the
offer of exhibits of the defendants, a supposed affidavit of acceptance and/or
confirmation of the donation, marked as exhibit "8" appears to have been offered.

However, there is nothing in the record that the exhibits offered by the defendants
have been admitted nor such exhibits appear on record.

Assuming that there was such an exhibit, the said supposed acceptance was not
noted in the Deed of Donation as required under Art. 749 of the Civil Code. And
according to Manresa, supra, a noted civilist, the notation is one of the
requirements of perfecting a donation. In other words, without such a notation,
the contract is not perfected contract. Since the donation is not perfected, the
contract is therefore not valid.13

x x x

We hold that there was a valid acceptance of the donation.


Sections 745 and 749 of the New Civil Code provide:

ART. 745. The donee must accept the donation personally, or through an
authorized person with a special power for the purpose, or with a general and
sufficient power; otherwise the donation shall be void.

ART. 749. In order that the donation of an immovable may be laid, it must be made
in a public document, specifying therein the property donated and the value of
the charge 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.

Private respondents, as shown above, admit that in the offer of exhibits by the defendants
in the trial court, an affidavit of acceptance and/or confirmation of the donation,
marked as Exhibit "8," was offered in evidence. However, private respondents now
question this exhibit because, according to them "there is nothing in the record that the
exhibits offered by the defendants have been admitted nor such exhibit appear on
record."

Respondents' stance does not persuade. The written acceptance of the donation having
been considered by the trial court in arriving at its decision, there is the presumption that
this exhibit was properly offered and admitted by the court.

Moreover, this issue was never raised in the Court of Appeals. Nowhere in their brief did
respondents question the validity of the donation on the basis of the alleged defect in
the acceptance thereof. If there was such a defect, why did it take respondents more
than ten (10) years from the date of the donation to question its validity? In the very least,
they are guilty of estoppel.14

Respondents further argue that assuming there was a valid acceptance of the donation,
the acceptance was not noted in the Deed of Donation as required in Article 749 of the
Civil Code, hence, the donation is void.

The purpose of the formal requirement for acceptance of a donation is to ensure that
such acceptance is duly communicated to the donor. Thus, in Pajarillo vs. Intermediate
Appellate Court,15 the Court held:
There is no question that the donation was accepted in a separate public
instrument and that it was duly communicated to the donors. Even the petitioners
cannot deny this. But what they do contend is that such acceptance was not
"noted in both instruments," meaning the extrajudicial partition itself and the
instrument of acceptance, as required by the Civil Code.

That is perfectly true. There is nothing in either of the two instruments showing that
"authentic notice" of the acceptance was made by Salud to Juana and Felipe.
And while the first instrument contains the statement that "the donee does hereby
accept this donation and does hereby express her gratitude for the kindness and
liberality of the donor," the only signatories thereof were Felipe Balane and Juana
Balane de Suterio. That was in fact the reason for the separate instrument of
acceptance signed by Salud a month later.

A strict interpretation of Article 633 can lead to no other conclusion that the
annulment of the donation for being defective in form as urged by the petitioners.
This would be in keeping with the unmistakable language of the above-quoted
provision. However, we find that under the circumstances of the present case, a
literal adherence to the requirement of the law might result not in justice to the
parties but conversely a distortion of their intentions. It is also a policy of the Court
to avoid such as interpretation.

The purpose of the formal requirement is to insure that the acceptance of the
donation is duly communicated to the donor. In the case at bar, it is not even
suggested that Juana was unaware of the acceptance for she in fact confirmed
it later and requested that the donated land be not registered during her lifetime
by Salud. Given this significant evidence, the Court cannot in conscience declare
the donation ineffective because there is no notation in the extrajudicial
settlement of the donee's acceptance. That would be placing too much stress on
mere form over substance. It would also disregard the clear reality of the
acceptance of the donation as manifested in the separate instrument dated June
20, 1946, and as later acknowledged by Juan.

In the case at bar, a school building was immediately constructed after the donation
was executed. Respondents had knowledge of the existence of the school building put
up on the donated lot through the efforts of the Parents-Teachers Association of
Barangay Kauswagan. It was when the school building was being dismantled and
transferred to the new site and when Vice-Mayor Wilfredo Palma was constructing a
house on the donated property that respondents came to know of the Deed of
Exchange. The actual knowledge by respondents of the construction and existence of
the school building fulfilled the legal requirement that the acceptance of the donation
by the donee be communicated to the donor.
On respondents' claim, which was upheld by the Court of Appeals, that the acceptance
by BPS District Supervisor Gregorio Buendia of the donation was ineffective because of
the absence of a special power of attorney from the Republic of the Philippines, it is
undisputed that the donation was made in favor of the Bureau of Public Schools. Such
being the case, his acceptance was authorized under Section 47 of the 1987
Administrative Code which states:

SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be


executed for and in behalf of the Government or of any of its branches,
subdivisions, agencies, or instrumentalities, whenever demanded by the exigency
or exigencies of the service and as long as the same are not prohibited by law.

Finally, it is respondents' submission that the donee, in exchanging the donated lot with
a bigger lot, violated the condition in the donation that the lot be exclusively used for
school purposes only.

What does the phrase "exclusively used for school purposes" convey? "School" is simply
an institution or place of education.16 "Purpose" is defined as "that which one sets before
him to accomplish or attain; an end, intention, or aim, object, plan, project. Term is
synonymous with the ends sought, an object to be attained, an intention,
etc."17"Exclusive" means "excluding or having power to exclude (as by preventing
entrance or debarring from possession, participation, or use); limiting or limited to
possession, control or use.18

Without the slightest doubt, the condition for the donation was not in any way violated
when the lot donated was exchanged with another one. The purpose for the donation
remains the same, which is for the establishment of a school. The exclusivity of the
purpose was not altered or affected. In fact, the exchange of the lot for a much bigger
one was in furtherance and enhancement of the purpose of the donation. The
acquisition of the bigger lot paved the way for the release of funds for the construction
of Bagong Lipunan school building which could not be accommodated by the limited
area of the donated lot.

WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE and
the decision of the Regional Trial Court is REINSTATED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Pardo, and Ynares-Santiago, JJ., concur.


Puno J., on official leave.
Quilala vs. Alcantara

G.R. No. 132681. December 3, 2001.*

RICKY Q. QUILALA, petitioner, vs. GLICERIA ALCANTARA, LEONORA ALCANTARA, INES


REYES and JOSE REYES, respondents.

Donations; 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 knows of the acceptance by the donee, provided the donee is not disqualified
or prohibited by law from accepting the donation.—The principal issue raised is the
validity of the donation executed by Catalina in favor of Violeta. Under Article 749 of the
Civil Code, the donation of an immovable must be made in a public instrument in order
to be valid, specifying therein the property donated and the value of the charges which
the donee must satisfy. 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 knows of the acceptance by the donee, provided the donee is not
disqualified or prohibited by law from accepting the donation. Once the donation is
accepted, it is generally considered irrevocable, and the donee becomes the absolute
owner of the property. The acceptance, to be valid, must be made during the lifetime
of both the donor and the donee. It may be made in the same deed or in a separate
public document, and the donor must know the acceptance by the donee.

Same; Words and Phrases; “Donation,” Defined; A stipulation in the donation that it was
made for and in consideration of the “love and affection which the DONEE inspires in the
DONOR, and as an act of liberality and generosity” is sufficient cause for a donation.—In
the case at bar, the deed of donation contained the number of the certificate of title as
well as the technical description of the real property donated. It stipulated that the
donation was made for and in consideration of the “love and affection which the DONEE
inspires in the DONOR, and as an act of liberality and generosity.” This was sufficient cause
for a donation. Indeed, donation is legally defined as “an act of liberality whereby a
person disposes gratuitously of a thing or right in favor of another, who accepts it.”

Same; Formalities; The requirement that the contracting parties and their witnesses should
sign on the left-hand margin of the instrument is not absolute—the specification of the
location of the signature is merely directory.—As stated above, the second page of the
deed of donation, on which the Acknowledgment appears, was signed by the donor
and one witness on the left-hand margin, and by the donee and the other witness on the
right-hand margin. Surely, the requirement that the contracting parties and their
witnesses should sign on the left-hand margin of the instrument is not absolute. The
intendment of the law merely is to ensure that each and every page of the instrument is
authenticated by the parties. The requirement is designed to avoid the falsification of the
contract after the same has already been duly executed by the parties. Hence, a
contracting party affixes his signature on each page of the instrument to certify that he
is agreeing to everything that is written thereon at the time of signing. Simply put, the
specification of the location of the signature is merely directory. The fact that one of the
parties signs on the wrong side of the page does not invalidate the document. The
purpose of authenticating the page is served, and the requirement in the above-quoted
provision is deemed substantially complied with.

Same; Same; Notarial Law; Acknowledgments; The lack of an acknowledgment by the


donee before the notary public does not render the donation null and void; An
instrument of donation should be treated in its entirety—it cannot be considered a
private document in part and a public document in another, as the fact that it was
acknowledged before a notary public converts the deed of donation in its entirety a
public document.—In the same vein, the lack of an acknowledgment by the donee
before the notary public does not also render the donation null and void. The instrument
should be treated in its entirety. It cannot be considered a private document in part and
a public document in another part. The fact that it was acknowledged before a notary
public converts the deed of donation in its entirety a public instrument. The fact that the
donee was not mentioned by the notary public in the acknowledgment is of no moment.
To be sure, it is the conveyance that should be acknowledged as a free and voluntary
act. In any event, the donee signed on the second page, which contains the
Acknowledgment only. Her acceptance, which is explicitly set forth on the first page of
the notarized deed of donation, was made in a public instrument.

Same; Succession; Collation; Property donated inter vivos is subject to collation after the
donor’s death, whether the donation was made to a compulsory heir or a stranger, unless
there is an express prohibition if that had been the donor’s intention.—It should be
stressed that this Court, not being a trier of facts, can not make a determination of
whether Violeta was the daughter of Catalina, or whether petitioner is the son of Violeta.
These issues should be ventilated in the appropriate probate or settlement proceedings
affecting the respective estates of Catalina and Violeta. Suffice it to state that the
donation, which we declare herein to be valid, will still be subjected to a test on its
inofficiousness under Article 771, in relation to Articles 752, 911 and 912 of the Civil Code.
Moreover, property donated inter vivos is subject to collation after the donor’s death,
whether the donation was made to a compulsory heir or a stranger, unless there is an
express prohibition if that had been the donor’s intention.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.


Feria, Feria, Lugtu, La O’, Noche for petitioner.

Teddy C. Macapagal for private respondents.

YNARES-SANTIAGO, J.:

On February 20, 1981, Catalina Quilala executed a "Donation of Real Property Inter Vivos"
in favor of Violeta Quilala over a parcel of land located in Sta. Cruz, Manila, containing
an area of 94 square meters, and registered in her name under Transfer Certificate of Title
No. 17214 of the Register of Deeds for Manila.

The "Donation of Real Property Inter Vivos" consists of two pages. The first page contains
the deed of donation itself, and is signed on the bottom portion by Catalina Quilala as
donor, Violeta Quilala as donee, and two instrumental witnesses.1 The second page
contains the Acknowledgment, which states merely that Catalina Quilala personally
appeared before the notary public and acknowledged that the donation was her free
and voluntary act and deed. There appear on the left-hand margin of the second page
the signatures of Catalina Quilala and one of the witnesses, and on the right-hand margin
the signatures of Violeta Quilala and the other witness.2 The Acknowledgment reads:

REPUBLIC OF THE PHILIPPINES )


QUEZON CITY ) S.S.

Before Me, a Notary Public, for and in the City of Quezon, Philippines, this 20th day
of Feb. 1981, personally appeared CATALINA QUILALA, with Residence Certificate
No. 19055265 issued at Quezon City on February 4, 1981, known to me and to me
known to be the same person who executed the foregoing instruments and
acknowledged to me that the same is her own free and voluntary act and deed.

I hereby certify that this instrument consisting of two (2) pages, including the page
on which this acknowledgment is written, has been signed by CATALINA QUILALA
and her instrumental witnesses at the end thereof and on the left-hand margin of
page 2 and both pages have been sealed with my notarial seal.

In witness whereof, I have hereunto set my hand, in the City of Quezon, Philippines,
this 20th day of Feb., 1981.

(SGD.) NOTARY PUBLIC


Until December 31, 1981

(illegible)

DOC NO. 22;

PAGE NO. 6;

BOOK NO. XV;

SERIES OF 1981.

The deed of donation was registered with the Register of Deeds and, in due course, TCT
No. 17214 was cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.

On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22,
1984. Petitioner Ricky Quilala alleges that he is the surviving son of Violeta Quilala.

Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan
Reyes, claiming to be Catalina's only surviving relatives within the fourth civil degree of
consanguinity, executed a deed of extrajudicial settlement of estate, dividing and
adjudicating unto themselves the above-described property.

On September 13, 1984, respondents instituted against petitioner and Guillermo T. San
Pedro, the Registrar of Deeds of Manila, an action for the declaration of nullity of the
donation inter vivos, and for the cancellation of TCT No. 143015 in the name of Violeta
Quilala. The case was docketed as Civil Case No. 84-26603 of the Regional Trial Court of
Manila, Branch 17. Subsequently, respondents withdrew their complaint as against
Guillermo T. San Pedro and he was dropped as a party-defendant.

The trial court found that the deed of donation, although signed by both Catalina and
Violeta, was acknowledged before a notary public only by the donor, Catalina.
Consequently, there was no acceptance by Violeta of the donation in a public
instrument, thus rendering the donation null and void. Furthermore, the trial court held
that nowhere in Catalina's SSS records does it appear that Violeta was Catalina's
daughter. Rather, Violeta was referred to therein as an adopted child, but there was no
positive evidence that the adoption was legal. On the other hand, the trial court found
that respondents were first cousins of Catalina Quilala. However, since it appeared that
Catalina died leaving a will, the trial court ruled that respondents' deed of extrajudicial
settlement can not be registered. The trial court rendered judgment as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria Alcantara,
Leonarda Alcantara, Ines Reyes and Juan Reyes and against defendant Ricky A.
Quilala, as follows:

1. Declaring null and void the deed of donation of real property inter vivos
executed on February 20, 1981 by Catalina Quilala in favor of Violeta Quilala (Exhs.
A as well as 11 and 11-A.);

2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title


No. 143015 in the name of Violeta Quilala and to issue a transfer certificate of title
in the name of the Estate of Catalina Quilala;.

3. Dismissing the complaint insofar as it seeks the registration of the deed of


extrajudicial settlement (Exhs. B and B-1,) and the issuance by the Register of
Deeds of Manila of a transfer certificate of title in the names of the plaintiffs; and

4. Dismissing the counterclaim of defendant Ricky A. Quilala.

No costs.

SO ORDERED.3

Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals
rendered a decision affirming with modification the decision of the trial court by
dismissing the complaint for lack of cause of action without prejudice to the filing of
probate proceedings of Catalina's alleged last will and testament.4

WHEREFORE, the appealed decision is hereby AFFIRMED with the following


MODIFICATION:

(3) DISMISSING the complaint for lack of cause of action without prejudice to the
filing of the necessary probate proceedings by the interested parties so as not to
render nugatory the right of the lawful heirs.

Petitioner filed a motion for reconsideration, which the Court of Appeals denied on
February 11, 1998.5 Hence, this petition for review, raising the following assignment of
errors:

A. THE COURT OF APPEALS ERRED IN RULING THAT THE DEED OF DONATION OF REAL
PROPERTY INTER-VIVOS IS NOT REGISTRABLE.

B. THE COURT OF APPEALS ERRED ON UPHOLDING THE LOWER COURT'S RULING


THAT VIOLETA QUILALA IS NOT THE DAUGHTER OF CATALINA QUILALA.6
The principal issue raised is the validity of the donation executed by Catalina in favor of
Violeta. Under Article 749 of the Civil Code, the donation of an immovable must be made
in a public instrument in order to be valid,7 specifying therein the property donated and
the value of the charges which the donee must satisfy. As a mode of acquiring
ownership, donation results in an effective transfer of title over the property from the
donor to the donee,8 and is perfected from the moment the donor knows of the
acceptance by the donee,9 provided the donee is not disqualified or prohibited by law
from accepting the donation. Once the donation is accepted, it is generally considered
irrevocable,10 and the donee becomes the absolute owner of the property.11 The
acceptance, to be valid, must be made during the lifetime of both the donor and the
donee.12 It may be made in the same deed or in a separate public document,13 and the
donor must know the acceptance by the donee.14

In the case at bar, the deed of donation contained the number of the certificate of title
as well as the technical description of the real property donated. It stipulated that the
donation was made for and in consideration of the "love and affection which the DONEE
inspires in the DONOR, and as an act of liberality and generosity."15 This was sufficient
cause for a donation. Indeed, donation is legally defined as "an act of liberality whereby
a person disposes gratuitously of a thing or right in favor of another, who accepts it."16

The donee's acceptance of the donation was explicitly manifested in the penultimate
paragraph of the deed, which reads:

That the DONEE hereby receives and accepts the gift and donation made in her
favor by the DONOR and she hereby expresses her appreciation and gratefulness
for the kindness and generosity of the DONOR.17

Below the terms and stipulations of the donation, the donor, donee and their witnesses
affixed their signature. However, the Acknowledgment appearing on the second page
mentioned only the donor, Catalina Quilala. Thus, the trial court ruled that for Violeta's
failure to acknowledge her acceptance before the notary public, the same was set forth
merely on a private instrument, i.e., the first page of the instrument. We disagree.

The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which
states:

Deeds, conveyances, encumbrances, discharges, powers of attorney and other


voluntary instruments, whether affecting registered or unregistered land, executed
in accordance with law in the form of public instruments shall be registrable:
Provided, that, every such instrument shall be signed by person or persons
executing the same in the presence of at least two witnesses who shall likewise
sign thereon, and shall be acknowledged to be the free act and deed of the
person or persons executing the same before a notary public or other public
officer authorized by law to take acknowledgment. Where the instrument so
acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in
the office of the Register of Deeds, or if registration is not contemplated, each
page of the copy to be kept by the notary public, except the page where the
signatures already appear at the foot of the instrument shall be signed on the left
margin thereof by the person or persons executing the instrument and their
witnesses, and all the pages sealed with the notarial seal, and this fact as well as
the number of pages shall be stated in the acknowledgment. Where the
instrument acknowledged relates to a sale, transfer, mortgage or encumbrance
of two or more parcels of land, the number thereof shall likewise be set forth in said
acknowledgment." (italics supplied).

As stated above, the second page of the deed of donation, on which the
Acknowledgment appears, was signed by the donor and one witness on the left-hand
margin, and by the donee and the other witness on the right hand margin. Surely, the
requirement that the contracting parties and their witnesses should sign on the left-hand
margin of the instrument is not absolute. The intendment of the law merely is to ensure
that each and every page of the instrument is authenticated by the parties. The
requirement is designed to avoid the falsification of the contract after the same has
already been duly executed by the parties. Hence, a contracting party affixes his
signature on each page of the instrument to certify that he is agreeing to everything that
is written thereon at the time of signing.

Simply put, the specification of the location of the signature is merely directory. The fact
that one of the parties signs on the wrong side of the page does not invalidate the
document. The purpose of authenticating the page is served, and the requirement in the
above-quoted provision is deemed substantially complied with.

In the same vein, the lack of an acknowledgment by the donee before the notary public
does not also render the donation null and void. The instrument should be treated in its
entirety. It cannot be considered a private document in part and a public document in
another part. The fact that it was acknowledged before a notary public converts the
deed of donation in its entirety a public instrument. The fact that the donee was not
mentioned by the notary public in the acknowledgment is of no moment. To be sure, it is
the conveyance that should be acknowledged as a free and voluntary act. In any event,
the donee signed on the second page, which contains the Acknowledgment only. Her
acceptance, which is explicitly set forth on the first page of the notarized deed of
donation, was made in a public instrument.
It should be stressed that this Court, not being a trier of facts, can not make a
determination of whether Violeta was the daughter of Catalina, or whether petitioner is
the son of Violeta. These issues should be ventilated in the appropriate probate or
settlement proceedings affecting the respective estates of Catalina and Violeta. Suffice
it to state that the donation, which we declare herein to be valid, will still be subjected
to a test on its inofficiousness under Article 771,18 in relation to Articles 752, 911 and 912 of
the Civil Code. Moreover, property donated inter vivosis subject to collation after the
donor's death,19 whether the donation was made to a compulsory heir or a
stranger,20 unless there is an express prohibition if that had been the donor's intention.21

WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed decision of
the Court of Appeals , is REVERSED and SET ASIDE, and a new judgment is rendered
dismissing Civil Case No. 84-26603.

SO ORDERED.

Davide, Jr., C. J.; Puno, Kapunan, and Pardo, JJ., concur.


C-J Yulo & Sons, Inc. vs. Roman Catholic Bishop of San Pablo, Inc.

G.R. No. 133705. March 31, 2005.*

C-J YULO & SONS, INC., petitioner, vs. ROMAN CATHOLIC BISHOP OF SAN PABLO, INC.,
respondent.

Civil Law; Property; Donations; Donations, according to its purpose or cause, may be
categorized as: (1) pure or simple; (2) remuneratory or compensatory; (3) conditional or
modal; and (4) onerous.—Donations, according to its purpose or cause, may be
categorized as: (1) pure or simple; (2) remuneratory or compensatory; (3) conditional or
modal; and (4) onerous. A pure or simple donation is one where the underlying cause is
plain gratuity. This is donation in its truest form. On the other hand, a remuneratory or
compensatory donation is one made for the purpose of rewarding the donee for past
services, which services do not amount to a demandable debt. A conditional or modal
donation is one where the donation is made in consideration of future services or where
the donor imposes certain conditions, limitations or charges upon the donee, the value
of which is inferior than that of the donation given. Finally, an onerous donation is that
which imposes upon the donee a reciprocal obligation or, to be more precise, this is the
kind of donation made for a valuable consideration, the cost of which is equal to or more
than the thing donated. Of all the foregoing classifications, donations of the onerous type
are the most distinct. This is because, unlike the other forms of donation, the validity of
and the rights and obligations of the parties involved in an onerous donation is
completely governed not by the law on donations but by the law on contracts.

Same; Same; Same; Revocation; Considering that the donee’s acts did not detract from
the very purpose for which the donation was made but precisely to achieve such
purpose, a lack of prior written consent of the donor would only constitute casual breach
of the deed, which will not warrant the revocation of the donation.—As in Silim, the three
(3) lease contracts herein entered into by the donee were for the sole purpose of
pursuing the objective for which the donation was intended. In fact, such lease was
authorized by the donor by express provision in the deed of donation, albeit the prior
written consent therefor of the donor is needed. Hence, considering that the donee’s
acts did not detract from the very purpose for which the donation was made but
precisely to achieve such purpose, a lack of prior written consent of the donor would only
constitute casual breach of the deed, which will not warrant the revocation of the
donation.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.


Yulo, Aliling & Associates for petitioner.

Padilla Law Office for respondent.

GARCIA, J.:

Appealed to this Court by way of a petition for review on certiorari are


the Decision1 dated December 19, 1997 and Resolution2 dated April 30, 1998 of the Court
of Appeals in CA-G.R. CV No. 45392, reversing an earlier decision of the Regional Trial
Court at Calamba, Laguna, Branch 34, which ruled in favor of the herein petitioner C-J
Yulo & Sons, Inc., in a suit for revocation of donation with reconveyance of title, thereat
commenced by the petitioner against the herein respondent, Roman Catholic Bishop of
San Pablo, Inc.

The facts are not at all disputed:

On September 24, 1977, petitioner donated unto respondent a parcel of land at


Canlubang, Calamba, Laguna with an area of 41,117 square meters and registered in its
name under Transfer Certificate of Title (TCT) No. T-82803. The deed of donation which
also bears the acceptance of the donee recites the considerations therefor and the
conditions thereto attached, to wit:

WHEREAS, Donee is a religious corporation engaged in much (sic) humanitarian Christian


work in Laguna and elsewhere, educating and forming the young, caring for the infirm
and the aged in the fulfillment of its mission;

WHEREAS, Donor recognizes the need for a privately endowed institution that will care
for the homeless and destitute old people in the community, as well as the other senior
citizens who for some reason or other find themselves without family with whom to live
the last years of their life:

WHEREFORE, Donor is willing, in order to help establish and support such an institution to
donate the land necessary for its housing, as well as an area of land whereon it may raise
crops for its support and for the sustenance of its residents;

WHEREAS, Donee is willing and able, with the wanted help of Donor and of other
benefactors, to establish, operate and maintain such a home for the aged.

NOW, THEREFORE, in consideration of all the foregoing premises, Donor hereby transfers
and conveys to Donee by way of donation all its rights, title and interest in that certain
parcel of land covered by TCT No. T-82803 of the Land Records of Laguna, the technical
descriptions of which are recited above, subject to the following conditions and
covenants, each of which is a material consideration for this Deed:

1. So much of the land as may be necessary shall be used for the construction of a home
for the aged and infirm, regardless of religion or creed, but preferably those coming from
Canlubang, Calamba, Laguna; provided that retired and/or aged priests may be
admitted to the home; and provided further that any senior citizen from the area who
has retired from business or work may likewise be admitted to the home, subject to the
payment to the institution of such sum as he may afford for his support.

2. A Green Belt that is 15 meters wide shall be established and maintained by the Donor
along the length of the land to separate and insulate it from the projected highway.

3. Such part of land as may not be needed for the residence and the Green Belt shall be
devoted by Donee with the help of such residents of the home as are able, to the raising
of agricultural crops for the consumption of the residents of the home, and of such other
crops that may be sold to defray the cost of running the home and feeding its residents;
provided, that should the area later become so fully urbanized as to make this limitation
on use economically, impractical, any portion of the land may, with the written consent
of the Donor, be put to commercial use by the Donee by leasing the same for wholesome
and socially-acceptable activities; provided further that the rentals from such
commercial leases shall be used, first, to meet the expenses of the home; second, to
enlarge its population and expand its facilities; and finally for other charitable purposes
in Laguna, in that order.

4. Donee acknowledges that Donor’s generous act will greatly aid Donee in
accomplishing its mission on earth, and, recognizing the generosity of the Yulo family as
the reason for such act, Donee undertakes to cause every year the celebration of masses
for the intention of the various members of the family of Mr. Jose Yulo, Sr., on festive and
solemn occasions in the said family.

5. Except with prior written consent of the Donor or its successor, the Donee shall not use
the land except for the purpose as provided above in paragraph 1 hereof, nor sell or
dispose the land for any reason whatsoever, nor convey any portion of the same except
in lease for commercial use as provided above in paragraph 3 hereof, otherwise the said
land with all real improvements thereon shall revert in trust to the Donor for prompt
disposition in favor of some other charitable organization that Donor may deem best
suited to the care of the aged. (Underscoring supplied).
On the basis of the same deed, TCT No. T-82803 of the donor was cancelled and
replaced by TCT No. T-91348 in the name of donee Roman Catholic Bishop of San Pablo,
Inc.

Thereafter, or sometime in 1980, the donee, for purposes of generating funds to build the
perimeter fence on the donated property and the construction of a nucleus building for
the aged and the infirm, leased a portion of the donated property to one Martin Gomez
who planted said portion with sugar cane. There is no dispute that the lease agreement
was entered into by the donee without the prior written consent of the donor, as required
in the deed of donation. The lease to Gomez ended in 1985.

The following year, 1986, a portion of the donated property was again leased by the
donee, this time to one Jose Bostre who used the leased area as a ranch. As explained
by the donee, it entered into a lease agreement with Bostre to protect the premises from
vandals and for the electrification of the nucleus building of the home for the aged and
in the infirm, which was named as "Casa dela Merced." As before, however, the donee
executed the lease contract without the prior written consent of the donor.

After the termination of the Bostre lease agreement, the donee, for the third time, leased
a portion of the donated property to one Rudy Caballes who used the leased area for
fattening cattles. The donee explained that the lease agreement with Bostre was also for
the purposes of generating funds for the completion of "Casa dela Merced." Again,
however, the donee did not secure the prior written consent of the donor.

Hence, on September 20, 1990, pursuant to a board resolution, the donor, through its
president Miguel A. Yulo, addressed a letter to the donee informing the latter that it was
revoking the donation in accordance with Section 5 of the deed due to the donee’s
non-compliance with and material breach of the conditions thereunder stipulated. In the
same letter, the donor requested for the turn-over of the donee’s TCT No. T-91348 over
the donated property.

In a reply-letter dated November 5, 1990, the donee, through Bishop Pedro N. Bantigue,
D.D., denied any material breach of the conditions of the deed of donation and
manifested its continued and faithful compliance with the provisions thereof. In the same
letter, the donee refused the turn-over of its title to the donor.

It was against the foregoing backdrop of events when, on November 19, 1990, in the
Regional Trial Court at Calamba, Laguna the donor, alleging non-compliance with and
violation by the donee of the conditions of the deed of donation, filed its complaint in
this case against donee Roman Catholic Archbishop of San Pablo, Inc., therein reciting
the imputed non-compliance and violations by the donee of the terms and conditions
of the deed of donation, as follows:
a) non-construction of the home for the aged and infirmed in the lot despite the lapse of
a reasonable and considerable length of time;

b) present land use of the area is a cattle farm, the owner of which has a lease contract
with the donee; and

c) no prior written consent of the donor has been obtained for the present and actual
use of the property donated,

and accordingly prayed that the subject deed of donation be adjudged revoked and
void and the donee ordered to return and/or reconvey the property donated.

In its answer, defendant donee alleged that it was doing its best to comply with the
provisions of the deed of donation relative to the establishment of the home for the aged
and the infirm, adding that the leases of portions of the land were with the express, albeit
unwritten consent, of Jesus Miguel Yulo himself. In the same answer, defendant donee
interposed the defense that the donor’s cause of action for revocation, if any, had
already prescribed because the leases were known to the latter since 1980.

In a decision dated December 22, 1995, the trial court rendered judgment for donor-
plaintiff C-J Yulo & Sons, Inc., thus:

WHEREFORE, judgment is hereby rendered for plaintiff and against the defendant,
declaring the Deed of Donation dated September 24, 1977 (Exh. "C") REVOKED, affirming
plaintiff’s revocation of the same in the letter dated September 20, 1990 (Exh. "D").

Defendant and all persons claiming rights under them are hereby ordered to
immediately vacate the premises of the donated property and to hand over to plaintiff
the peaceful possession of the aforesaid premises.

To avoid multiplicity of suits, the Register of Deeds of Calamba, Laguna, is hereby ordered
to require the defendant to surrender Transfer Certificate of Title No. T-91348 (Exh. "B") and
thereafter cancel the same and issue, upon payment of the required fees, a new Transfer
Certificate of Title in favor of plaintiffs, with cost against the defendant.

SO ORDERED.

Therefrom, donee-defendant Roman Catholic Bishop of San Pablo, Inc., went to the
Court of Appeals in CA-G.R. CV No. 45392.

In the herein assailed Decision dated December 19, 1997,3 the Court of Appeals reversed
that of the trial court and upheld the donation in question, to wit:
WHEREFORE, the decision of the trial court dated December 22, 1993 is
hereby REVERSED and the donation dated September 24, 1977 (Exhibit C) which
conveyed title to the donated property in the appellee’s name is hereby UPHELD.

SO ORDERED.

Its motion for reconsideration having been denied by the same court in its Resolution of
April 30, 1998,4 donor C-J Yulo & Sons, Inc., has come to this Court via the present
recourse on its sole submission that –

THE RULING OF THE COURT OF APPEALS (THAT THE REVOCATION OF THE DONATION BY
PETITIONER WAS IMPROPER) IS CONTRARY TO LAW AND APPLICABLE JURISPRUDENCE.

We DENY.

The Court of Appeals sustained the trial court’s finding that the donation is an onerous
one since the donee was burdened with the establishment on the donated property of
a home for the aged and the infirm. It likewise agreed with the trial court that there were
violations of the terms and conditions of the deed of donation when the donee thrice
leased a portion of the property without the prior written consent of the donor. Likewise
upheld by the appellate court is the ruling of the trial court that the prescriptive period of
the donor’s right to revoke the donation is ten (10) years based on Article 1144 of the Civil
Code, instead of four (4) years per Article 764 of the same Code, and therefore the action
for revocation filed by the petitioner is not barred by prescription.

Even then, the Court of Appeals reversed the trial court’s decision, the reversal being
premised on the appellate court’s finding that the breaches thrice committed by the
respondent were merely casual breaches which nevertheless did not detract from the
purpose of which the donation was made: the establishment of a home for the aged
and the infirm.

We agree.

Petitioner contends that the case at bar is similar to the 1995 case of Central Philippine
University vs. Court of Appeals,5 where the donee failed for more than 50 years to
establish, as required, a medical school on the land donated, and where this Court
declared the donation to have been validly revoked.

To the mind of the Court, what is applicable to this case is the more recent [2001] case
of Republic vs. Silim,6 where respondent Silim donated a 5,600-square meter parcel of
land in favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del
Sur with the condition that the said property should be used exclusively and forever for
school purposes only. Although a school building was constructed on the property
through the efforts of the Parent-Teachers Association of Barangay Kauswagan, the funds
for a Bagong Lipunan school building could not be released because the government
required that it be built on a one-hectare parcel of land. This led the donee therein to
exchange the donated property for a bigger one.

In Silim, the Court distinguished the four (4) types of donations:

Donations, according to its purpose or cause, may be categorized as: (1) pure or simple;
(2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or
simple donation is one where the underlying cause is plain gratuity. This is donation in its
truest form. On the other hand, a remuneratory or compensatory donation is one made
for the purpose of rewarding the donee for past services, which services do not amount
to a demandable debt. A conditional or modal donation is one where the donation is
made in consideration of future services or where the donor imposes certain conditions,
limitations or charges upon the donee, the value of which is inferior than that of the
donation given. Finally, an onerous donation is that which imposes upon the donee a
reciprocal obligation or, to be more precise, this is the kind of donation made for a
valuable consideration, the cost of which is equal to or more than the thing donated.

Of all the foregoing classifications, donations of the onerous type are the most distinct.
This is because, unlike the other forms of donation, the validity of and the rights and
obligations of the parties involved in an onerous donation is completely governed not by
the law on donations but by the law on contracts. In this regard, Article 733 of the New
Civil Code provides:

ARTICLE 733 Donations with onerous cause shall be governed by the rules on contracts,
and remuneratory donations by the provisions of the present Title as regards that portion
which exceeds the value of the burden imposed.

The donation involved in the present controversy is one which is onerous since there is a
burden imposed upon the donee to build a school on the donated property.

Here, the Court of Appeals correctly applied the law on contracts instead of the law on
donations because the donation involved in this case is onerous, saddled as it is by a
burden imposed upon the donee to put up and operate a home for the aged and the
infirm. We thus quote with approval the terse ruling of the appellate court in the
challenged decision:

First, the violations of the conditions of the donation committed by the donee were
merely casual breaches of the conditions of the donation and did not detract from the
purpose by which the donation was made, i.e., for the establishment of a home for the
aged and the infirm. In order for a contract which imposes a reciprocal obligation, which
is the onerous donation in this case wherein the donor is obligated to donate a 41,117
square meter property in Canlubang, Calamba, Laguna on which property the donee is
obligated to establish a home for the aged and the infirm (Exhibit C), may be rescinded
per Article 1191 of the New Civil Code, the breach of the conditions thereof must be
substantial as to defeat the purpose for which the contract was perfected (Tolentino,
"Civil Code of the Philippines," Vol. IV, pp. 179-180; Universal Food Corp. v. Court of
Appeals, 33 SCRA 1, 18; Ocampo v. Court of Appeals, 233 SCRA 551, 562). Thus, in the
case of "Ocampo v. C.A." (ibid), citing the case of "Angeles v. Calasanz" (135 SCRA 323,
330), the Supreme Court ruled:

The right to rescind the contract for non-performance of one of its stipulations x x x is not
absolute. In Universal Food Corp. v. Court of Appeals (33 SCRA 1) the Court stated that:

The general rule is that rescission of a contract will not be permitted for a slight or casual
breach, but only for such substantial and fundamental breach as would defeat the very
object of the parties in making the agreement (Song Fo & Co. v. Hawaiian-Philippine Co.,
47 Phil. 821,827). The question of whether a breach of a contract is substantial depends
upon the attendant circumstances (Corpus v. Hon. Alikpala, et al., L-23707 & L-23720,
Jan. 17, 1968).

The above ruling of the Court of Appeals is completely in tune with this Court’s disposition
in Republic vs. Silim, supra. The donor therein sought to revoke the donation on the
ground that the donee breached the condition to exclusively and forever use the land
for school purpose only, but this Court ruled in favor of the donee:

Without the slightest doubt, the condition for the donation was not in any way violated
when the lot donated was exchanged with another one. The purpose for the donation
remains the same, which is for the establishment of a school. The exclusivity of the
purpose was not altered or affected. In fact, the exchange of the lot for a much bigger
one was in furtherance and enhancement of the purpose of the donation. The
acquisition of the bigger lot paved way for the release of funds for the construction of
Bagong Lipunan school building which could not be accommodated by the limited area
of the donated lot.

As in Silim, the three (3) lease contracts herein entered into by the donee were for the
sole purpose of pursuing the objective for which the donation was intended. In fact, such
lease was authorized by the donor by express provision in the deed of donation, albeit
the prior written consent therefor of the donor is needed. Hence, considering that the
donee’s acts did not detract from the very purpose for which the donation was made
but precisely to achieve such purpose, a lack of prior written consent of the donor would
only constitute casual breach of the deed, which will not warrant the revocation of the
donation.

Besides, this Court cannot consider the requirement of a prior written consent by the
donor for all contracts of lease to be entered into by the donee as an absolute ground
for revocation of the donation because such a condition, if not correlated with the
purpose of the donation, would constitute undue restriction of the donee’s right of
ownership over the donated property.

Instructive on this point is the ruling of this Court in The Roman Catholic Archbishop of
Manila vs. Court of Appeals,7viz:

Donation, as a mode of acquiring ownership, results in an effective transfer of title over


the property from the donor to the donee. Once a donation is accepted, the donee
becomes the absolute owner of the property donated. Although the donor may impose
certain conditions in the deed of donation, the same must not be contrary to law, morals,
good customs, public order and public policy.

xxx

In the case at bar, we hold that the prohibition in the deed of donation against the
alienation of the property for an entire century, being an unreasonable emasculation
and denial of an integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the Civil Code.
Consequently, as specifically stated in said statutory provision, such condition shall be
considered as not imposed. No reliance may accordingly be placed on said prohibitory
paragraph in the deed of donation. The net result is that, absent said proscription, the
deed of sale supposedly constitutive of the cause of action for the nullification of the
deed of donation is not in truth violative of the latter, hence, for lack of cause of action,
the case for private respondents must fail.

If petitioner would insist that the lack of prior written consent is a resolutory condition that
is absolute in character, the insistence would not stand the validity test under the
foregoing doctrine. What would have been casual breaches of the terms and conditions
of the donation, may, in that event, even be considered as no breach at all when the
Court strikes down such absolute condition of prior written consent by the donor in all
instances without any exception whatsoever. The Court, however, understands that such
a condition was written with a specific purpose in mind, which is, to ensure that the
primary objective for which the donation was intended is achieved. A reasonable
construction of such condition rather than totally striking it would, therefore, be more in
accord with the spirit of the donation. Thus, for as long as the contracts of lease do not
detract from the purpose for which the donation was made, the complained acts of the
donee will not be deemed as substantial breaches of the terms and conditions of the
deed of donation to merit a valid revocation thereof by the donor.

Finally, anent petitioner’s contention that the Court of Appeals failed to consider that
respondent had abandoned the idea of constructing a home for the aged and infirm,
the explanation in respondent’s comment is enlightening. Petitioner relies on Bishop
Bantigue’s letter8 dated June 21, 1990 as its basis for claiming that the donee had
altogether abandoned the idea of constructing a home for the aged and the infirm on
the property donated. Respondent, however, explains that the Bishop, in his letter, written
in the vernacular, expressed his concern that the surrounding area was being considered
to be re-classified into an industrial zone where factories are expected to be put up. There
is no question that this will definitely be disadvantageous to the health of the aged and
the infirm. Thus, the Bishop asked permission from the donor for a possible exchange or
sale of the donated property to ultimately pursue the purpose for which the donation
was intended in another location that is more appropriate.

The Court sees the wisdom, prudence and good judgment of the Bishop on this point, to
which it conforms completely. We cannot accede to petitioner’s view, which attributed
the exact opposite meaning to the Bishop’s letter seeking permission to sell or exchange
the donated property.

In Silim, supra, this Court ruled that such exchange does not constitute breach of the
terms and conditions of the donation. We see no reason for the Court to think otherwise
in this case. To insist that the home for the aged and infirm be constructed on the
donated property, if the industrialization indeed pushes through, defies rhyme and
reason. Any act by the donor to prevent the donee from ultimately achieving the
purpose for which the donation was intended would constitute bad faith, which the
Court will not tolerate.

WHEREFORE, the instant petition is DENIED and the assailed decision of the Court of
Appeals AFFIRMED in toto.

No pronouncement as to costs.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.


Secretary of Education, The vs. Heirs of Rufino Dulay, Sr.

G.R. No. 164748. January 27, 2006.*

THE SECRETARY OF EDUCATION and DR. BENITO TUMAMAO, Schools Division


Superintendent of Isabela, petitioners, vs. HEIRS OF RUFINO DULAY, SR., represented by
IGNACIA VICENTE, RUFINO DULAY, JR., SUSANA DULAY, ADELAIDA DULAY, LUZVIMINDA
DULAY and CECILIA DULAY, respondents.

Civil Law; Donations; Civil Procedure; The issue of whether or not petitioner DECS was able
to comply with the condition imposed in the deed of donation is one of fact. Under Rule
45 of the 1997 Rules of Civil Procedure, only questions of law may be raised in a petition
for review on certiorari, for the simple reason that the Supreme Court is not a trier of
facts.—The issue of whether or not petitioner DECS was able to comply with the condition
imposed in the deed of donation is one of fact. There is a question of fact when the doubt
or difference arises as to the truth or falsehood of alleged facts or when the query
necessarily solicits calibration of the whole evidence considering mostly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation
to each other and to the whole and probabilities of the situation. Under Rule 45 of the
1997 Rules of Civil Procedure, only questions of law may be raised in a petition for review
on certiorari, for the simple reason that this Court is not a trier of facts. It is not for the Court
to calibrate the evidence on record, as this is the function of the trial court. Although
there are well-defined exceptions to the rule, nevertheless, after a review of the records,
we find no justification to depart therefrom. Moreover, the trial court’s findings of facts,
as affirmed by the appellate court on appeal, are binding on this Court, unless the trial
and appellate courts overlooked, misconstrued or misinterpreted facts and
circumstances of substance which, if considered, would change the outcome of the
case. The case has been reviewed thoroughly, and we find no justification to reverse the
CA decision.

Same; Same; Contracts; It must be stressed that the donation is onerous because the
DECS, as donee, was burdened with the obligation to utilize the land donated for school
purposes. Under Article 733 of the New Civil Code, a donation with an onerous cause is
essentially a contract and is thus governed by the rules on contract.—We reject the
contention of the OSG that respondents’ cause of action is already barred by
prescription under Article 764 of the New Civil Code, or four years from the non-
compliance with the condition in the deed of donation. Since such failure to comply with
the condition of utilizing the property for school purposes became manifest sometime in
1988 when the DECS utilized another property for the construction of the school building,
the four-year prescriptive period did not commence on such date. Petitioner was given
more than enough time to comply with the condition, and it cannot be allowed to use
this fact to its advantage. It must be stressed that the donation is onerous because the
DECS, as donee, was burdened with the obligation to utilize the land donated for school
purposes. Under Article 733 of the New Civil Code, a donation with an onerous cause is
essentially a contract and is thus governed by the rules on contract.

Same; Same; Same; It has been 16 years since the execution of the deed of donation.
Petitioner DECS failed to use the property for the purpose specified in the deed of
donation. In fine, petitioner DECS has no use for the property, hence, the same shall be
reverted to the respondents.—It has been 16 years since the execution of the deed of
donation. Petitioner DECS failed to use the property for the purpose specified in the deed
of donation. The property remained barren and unutilized. Even after respondents sought
the return of the property before the courts, petitioner DECS still failed to draw up plans
to use the property for school purposes. In fine, petitioner DECS has no use for the
property; hence, the same shall be reverted to the respondents.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

The Solicitor General for petitioners.

Elmer C. Labog for respondents.

CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in
CA-G.R. CV No. 78314 which affirmed the Decision2 of the Regional Trial Court (RTC) of
Santiago City, Isabela, Branch 35, in Civil Case No. 35-2397.

The spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of land
located in Rizal, Santiago, Isabela, with an area of 29,002 square meters. The lot was
covered by Original Certificate of Title No. P-6776.

On August 3, 1981, the spouses Dulay executed a deed of donation3 over a 10,000-
square-meter portion of their property in favor of the Ministry of Education and Culture
(now the Department of Education, Culture and Sports [DECS]). The deed provided,
among others:
That for and in consideration of the benefits that may be derived from the use of the
above described property which is intended for school purposes, the said DONORS do
by by (sic) these presents TRANSFER AND CONVEY by way of DONATION unto the DONEE,
its successors and assigns, the above property to become effective upon the signing of
this document.4

The property was subdivided. On April 13, 1983, Transfer Certificate of Title (TCT) No. T-
1433375 covering the portion identified as Lot 8858-A was issued in the name of the
Ministry of Education and Culture, represented by Laurencio C. Ramel, the
Superintendent of Schools of Isabela. However, the property was not used for school
purposes and remained idle.

Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal
National High School building on a parcel of land it acquired from Alejandro Feliciano.
The school site was about 2 kilometers away from the land donated by the spouses Dulay.

In a letter6 to the DECS Secretary dated August 19, 1994, the spouses Dulay requested
that the property be returned to them considering that the land was never used since
1981, or a period of more than 13 years. On August 28, 1994, the Barangay Council of
Rizal, Santiago City issued Resolution No. 397 recognizing the right of the donors to
redeem the subject parcel of land because of the DECS’ failure to utilize it for the
intended purpose. It further resolved that the Rizal National High School no longer
needed the donated land "considering its distance from the main campus and [the]
failure to utilize the property for a long period of time."

On December 22, 1994, Rufino Dulay, Sr. passed away at the age of 80.8 His heirs sought
the help of the Sangguniang Panlungsod of Santiago City via an undated
letter9 requesting the approval of a resolution allowing them to redeem the donated
property. The Sangguniang Panlungsod denied the request inasmuch as the city
government was not a party to the deed of donation.10

On August 31, 1997, the heirs of Dulay, Sr., herein respondents, filed a complaint for the
revocation of the deed of donation and cancellation of TCT No. T-143337 before the RTC
of Santiago City, Isabela, Branch 35, against the DECS Secretary and Dr. Benito
Tumamao, the Schools Division Superintendent of Isabela. Respondents alleged that
there was a condition in the deed of donation: that the DECS, as donee, utilize the
subject property for school purposes, that is, the construction of a building to house the
Rizal National High School. Respondents alleged that the DECS did not fulfill the condition
and that the land remained idle up to the present. Respondents also averred that the
donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more than
what he could give by will.
Petitioners, through the Office of the Solicitor General (OSG), interposed the following
defenses: (a) the DECS complied with said condition because the land was being used
by the school as its technology and home economics laboratory; (b) the donation was
not inofficious for the donors were the owners of five other parcels of land, all located at
Rizal, Santiago City; (c) the DECS acquired the disputed property by virtue of purchase
made on December 8, 1997 by the barangay of Rizal, Santiago City in the amount
of P18,000.00 as certified by its former Barangay Captain, Jesus San Juan;11 and (d) the
action of the respondents had prescribed. The OSG also claimed that students planted
a portion of the land with rice, mahogany seedlings, and fruit-bearing trees; the produce
would then be sold and the proceeds used for the construction of a school building on
the subject property.

In their Reply,12 respondents denied that the donated land was being used as a
technology and home economics laboratory, and averred that there were no
improvements on the property. Moreover, the fact that rice was planted on the lot was
contrary to the intended purpose of the donation. The respondents likewise denied that
the property had been sold to the barangay. While the other properties of the late donor
had been sold, the deeds thereon had not been registered, and the tax declarations not
yet transferred in the names of the purchasers.

Thereafter, trial ensued. On March 6, 2001, an ocular inspection of the property was
conducted by the parties and their respective counsels, including the Presiding Judge. It
was confirmed that the land was barren, save for a small portion which was planted with
palay. A demolished house was also found in the periphery of the donated lot.13

On December 26, 2002, the trial court rendered its decision in favor of respondents. The
fallo reads:

WHEREFORE, in the light of the foregoing considerations, the Court hereby DECLARES the
deed of donation, Exhibit "A," executed by the late Rufino Dulay, Sr. and his wife Ignacia
Vicente over a portion of the land covered by O.C.T. No. P-6776 and now covered by
T.C.T. No. T-143337 in the name of the donee Department of Education and Culture as
REVOKED. The defendant DECS is ORDERED to execute the deed of reconveyance of
the land in favor of the plaintiffs heirs of Rufino Dulay, Sr.

SO ORDERED.14

In revoking the deed of donation, the trial court ruled that the donation was subject to a
resolutory condition, namely, that the land donated shall be used for school purposes. It
was no longer necessary to determine the intended "school purpose" because it was
established that the donee did not use the land. Thus, the condition was not complied
with since the property was donated in July 1981. Moreover, the DECS did not intend to
use the property for school purposes because a school had already been built and
established in another lot located in the same barangay, about two kilometers away
from the subject land. Finally, the trial court rejected petitioners’ contention that the
donation was inofficious.

Aggrieved, the OSG appealed the decision to the CA.

On July 30, 2004, the appellate court rendered judgment affirming the decision. The court
held that the DECS failed to comply with the condition in the donation, that is, to use the
property for school purposes. The CA further ruled that the donation was onerous
considering that the donee was burdened with the obligation to utilize the land for school
purposes; therefore, the four-year prescriptive period under Article 764 of the New Civil
Code did not apply. Moreover, the CA declared that a deed of donation is considered
a written contract and is governed by Article 1144 of the New Civil Code, which provides
for a 10-year prescriptive period from the time the cause of action accrues. According
to the CA, the respondents’ cause of action for the revocation of the donation should
be reckoned from the expiration of a reasonable opportunity for the DECS to comply
with what was incumbent upon it.

Petitioners filed a motion for reconsideration, which the CA denied.

Petitioners seek relief from this Court via petition for review on certiorari, contending that:

I.

THE DEPARTMENT OF EDUCATION, THROUGH THE RIZAL NATIONAL HIGH SCHOOL,


HAD COMPLIED WITH THE CONDITION IMPOSED IN THE DEED OF DONATION.

II.

RESPONDENTS’ RIGHT TO SEEK THE REVOCATION OF THE DEED OF DONATION, IF


THERE BE ANY, IS ALREADY BARRED BY PRESCRIPTION AND LACHES.15

The Court shall resolve the issues raised by petitioners seriatim.

The donee failed to comply with the condition imposed in the deed of donation

The issue of whether or not petitioner DECS was able to comply with the condition
imposed in the deed of donation is one of fact. There is a question of fact when the doubt
or difference arises as to the truth or falsehood of alleged facts or when the query
necessarily solicits calibration of the whole evidence considering mostly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation
to each other and to the whole and probabilities of the situation.16 Under Rule 45 of the
1997 Rules of Civil Procedure, only questions of law may be raised in a petition for review
on certiorari, for the simple reason that this Court is not a trier of facts. It is not for the Court
to calibrate the evidence on record, as this is the function of the trial court. Although
there are well-defined exceptions to the rule, nevertheless, after a review of the records,
we find no justification to depart therefrom. Moreover, the trial court’s findings of facts,
as affirmed by the appellate court on appeal, are binding on this Court, unless the trial
and appellate courts overlooked, misconstrued or misinterpreted facts and
circumstances of substance which, if considered, would change the outcome of the
case. The case has been reviewed thoroughly, and we find no justification to reverse the
CA decision.

Petitioners, through the OSG, maintain that the condition (to use the property for school
purposes) is not limited to the construction of a school building, but includes utilizing it as
a technology and home economics laboratory where students and teachers plant
palay, mahogany seedlings, and fruit-bearing trees. The OSG insists that the donee did
not specify in the deed that the property should be used for the construction of a school
building. According to the OSG, the proceeds of the harvest were used and are still being
used by the Rizal National High School for the construction and improvement of its
present school site. Moreover, it was verified that there was palay planted on the
donated property during the ocular inspection on the property.

In their comment on the petition, respondents dispute petitioners’ contentions, and aver
that no evidence was presented to prove that, indeed, palay, mahogany seedlings and
fruit-bearing trees were planted on the property. Respondents also emphasized that
when the trial court inspected the subject property, it was discovered to be barren and
without any improvement although some portions thereof were planted with palay.
Petitioners even failed to adduce evidence to identify the person who planted the palay.

The contention of petitioners has no merit.

As gleaned from the CA decision, petitioners failed to prove that the donated property
was used for school purposes as indicated in the deed of donation:

We find it difficult to sustain that the defendant-appellants have complied with the
condition of donation. It is not amiss to state that other than the bare allegation of the
defendant-appellants, there is nothing in the records that could concretely prove that
the condition of donation has been complied with by the defendant-appellants. In the
same breadth, the planting of palay on the land donated can hardly be considered and
could not have been the "school purposes" referred to and intended by the donors when
they had donated the land in question. Also, the posture of the defendant-appellants
that the land donated is being used as technology and home economics laboratory of
the Rizal National High School is far from being the truth considering that not only is the
said school located two kilometers away from the land donated but also there was not
even a single classroom built on the land donated that would reasonably indicate that,
indeed, classes have been conducted therein. These observations, together with the
unrebutted ocular inspection report made by the trial court which revealed that the land
donated remains idle and without any improvement thereon for more than a decade
since the time of the donation, give Us no other alternative but to conclude that the
defendant-appellants have, indeed, failed to comply with what is incumbent upon them
in the deed of donation.17

In its Order18 dated March 6, 2001, the RTC reiterated that during the ocular inspection of
the property conducted in the presence of the litigants and their counsel, it observed
that "the land was barren; there were no improvements on the donated property though
a portion thereof was planted with palay [and a demolished house built in 1979.]"

Moreover, petitioners failed to adduce a shred of evidence to prove that the palay
found in the property was planted by DECS personnel or at its instance or even by
students of the Rizal National High School. No evidence was adduced to prove that there
were existing plans to use the property for school purposes. Petitioners even debilitated
their cause when they claimed in the trial court that the barangay acquired the property
by purchase, relying on the certification of former Barangay Captain Jesus San Juan.

The right to seek the revocation of donation had not yet prescribed when respondents
filed their complaint

Anent the second issue, we reject the contention of the OSG that respondents’ cause of
action is already barred by prescription under Article 764 of the New Civil Code, or four
years from the non-compliance with the condition in the deed of donation. Since such
failure to comply with the condition of utilizing the property for school purposes became
manifest sometime in 1988 when the DECS utilized another property for the construction
of the school building, the four-year prescriptive period did not commence on such date.
Petitioner was given more than enough time to comply with the condition, and it cannot
be allowed to use this fact to its advantage. It must be stressed that the donation is
onerous because the DECS, as donee, was burdened with the obligation to utilize the
land donated for school purposes. Under Article 733 of the New Civil Code, a donation
with an onerous cause is essentially a contract and is thus governed by the rules on
contract.19 We fully agree with the ruling of the appellate court:

xxx With this, [we] decline to apply the four-year prescriptive period for the revocation of
donation provided under Article 764 of the New Civil Code and instead apply the
general rules on contracts since Article 733 of the same Code, specifically provided that
onerous donations shall be governed by the rules on contracts.
Corollarily, since a deed of donation is considered a written contract, it is governed by
Article 1144 of the New Civil Code, which provides that the prescriptive period for an
action arising from a written contract is ten (10) years from the time the cause of action
accrues. In the case of donation, the accrual of the cause of action is from the expiration
of the time within which the donee must comply with the conditions or obligations of the
donation. In the instant case, however, it must be noted that the subject donation fixed
no period within which the donee can comply with the condition of donation. As such,
resort to Article 1197 of

the New Civil Code is necessary. Said article provides that if the obligation does not fix a
period, but from its nature and the circumstances it can be inferred that a period was
intended, the courts may fix the duration thereof. Indeed, from the nature and
circumstances of the condition of the subject donation, it can be inferred that a period
was contemplated by the donors. The donors could not have intended their property to
remain idle for a very long period of time when, in fact, they specifically obliged the
defendant-appellants to utilize the land donated for school purposes and thus put it in
good use. xxx20

In Central Philippine University v. Court of Appeals,21 a case squarely in point, we have


established that the legal possibility of bringing the action begins with the expiration of a
reasonable opportunity for the donee to fulfill what has been charged upon it by the
donor. Likewise, we held that even if Article 1197 of the New Civil Code provides that the
courts may fix the duration when the obligation does not determine the period but from
its nature and circumstances it can be inferred that a period was intended, the general
rule cannot be applied because to do so would be a mere technicality and would serve
no other purpose than to delay or lead to an unnecessary and expensive multiplication
of suits.22

Altogether, it has been 16 years since the execution of the deed of donation. Petitioner
DECS failed to use the property for the purpose specified in the deed of donation. The
property remained barren and unutilized. Even after respondents sought the return of the
property before the courts, petitioner DECS still failed to draw up plans to use the property
for school purposes. In fine, petitioner DECS has no use for the property; hence, the same
shall be reverted to the respondents.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV
No. 78314 dated July 30, 2004 is AFFIRMED.

SO ORDERED.
Roman Catholic Archbishop of Manila vs. Court of Appeals

G.R. No. 77425. June 19, 1991.*

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP OF


IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners, vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO and
MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA
TOLENTINO, respondents.

G.R. No. 77450. June 19, 1991.*

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP OF


IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners, vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO and
MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA
TOLENTINO, respondents.

Civil Law; Donation; Rescission; Article 764 of the Civil Code not applicable in the case at
bar; The deed of donation 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.––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.

Same; Same; Same; Same; There is nothing in the law that prohibits the parties from
entering into an agreement that a violation of the terms of the contract would cause its
cancellation even without court intervention.––In support of its aforesaid position,
respondent court relied on the rule that a judicial action for rescission of a contract is not
necessary where the contract provides that it may be revoked and cancelled for
violation of any of its terms and conditions. It called attention to the holding that there is
nothing in the law that prohibits the parties from entering into an agreement that a
violation of the terms of the contract would cause its cancellation even without court
intervention, and that it is not always necessary for the injured party to resort to court for
rescission of the contract. It reiterated the doctrine that a judicial action is proper only
when there is absence of a special provision granting the power of cancellation.
Same; Same; Same; Same; Validity of a stipulation in the deed of donation providing for
the automatic reversion of the donated property to the donor upon non-compliance of
the condition was upheld in the recent case of De Luna et. al, vs Abrigo, et. al.––The
validity of such a stipulation in the deed of donation providing for the automatic reversion
of the donated property to the donor upon non-compliance of the condition was upheld
in the recent case of De Luna, et al. vs. Abrigo, et al. It was held therein that said
stipulation is in the nature of an agreement granting a party the right to rescind a
contract unilaterally 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.

Same; Same; Same; Same; In contracts providing for automatic revocation, judicial
intervention is necessary in order to determine whether or not the rescission was proper.–
–The rationale for the foregoing is that in contracts providing for automatic revocation,
judical 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.

Same; Same; Same; When the 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.––When a deed
of donation, as in this case, 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.

Same; Same; Same; 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.––Since Article 1306 of said Code
authorizes the parties to a contract to establish such stipulations, clauses, terms and
conditions not contrary to law, morals, good customs, 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.

Same; Same; Prescription; Court of Appeals committed no error in holding that the cause
of action of private respondents has not yet prescribed since an action to enforce a
written contract prescribed in ten (10) years.––On the foregoing ratiocinations, the Court
of Appeals committed no error in holding that the cause of action of herein private
respondents has not yet prescribed since an action to enforce a written contract
prescribes in ten (10) years. It is our view that Article 764 was intended to provide a judicial
remedy in case of non-fulfillment or contravention of conditions specified in the deed of
donation if and when the parties have not agreed on the automatic revocation of such
donation upon the occurrence of the contingency contemplated therein. That is not the
situation in the case at bar.

Same; Same; The condition imposed in the deed of donation in this case constitutes a
patently unreasonable and undue restriction on the right of the donee to dispose of the
property donated.––Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee. Once a donation is
accepted, the donee becomes the absolute owner of the property donated. Although
the donor may impose certain conditions in the deed of donation, the same must not be
contrary to law, morals, good customs, public order and public policy. The condition
imposed in the deed of donation in the case before us constitutes a patently
unreasonable and undue restriction on the right of the donee to dispose of the property
donated, which right is an indispensable attribute of ownership. Such a prohibition
against alienation, in order to be valid, must not be perpetual or for an unreasonable
period of time.

Same; Same; Same; The prohibition in the deed of donation against the alienation of the
property for an entire century should be declared as an illegal or impossible condition
within the contemplation of Article 727 of the Civil Code.––In the case at bar, we hold
that the prohibition in the deed of donation against the alienation of the property for an
entire century, being an unreasonable emasculation and denial of an integral attribute
of ownership, should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code. Consequently, as specifically stated in
said statutory provision, such condition shall be considered as not imposed. No reliance
may accordingly be placed on said prohibitory paragraph in the deed of donation.

Remedial Law; Appeal; Court is clothed with ample authority to review matters even if
they are not assigned as errors on appeal if it finds that their consideration is necessary in
arriving at a just decision of the case.––This Court is clothed with ample authority to review
matters, even if they are not assigned as errors on appeal, if it finds that their
consideration is necessary in arriving at a just decision of the case: Thus, we have held
that an unassigned error closely related to an error properly assigned, or upon which the
determination of the question properly assigned is dependent, will be considered by the
appellate court notwithstanding the failure to assign it as error.
Same; Same; Same; Remand of the case to the lower court for further reception of
evidence not necessary where the court is in a position to resolve the dispute based on
the records before it.––Additionally, we have laid down the rule that the remand of the
case to the lower court for further reception of evidence is not necessary where the Court
is in a position to resolve the dispute based on the records before it. On many occasions,
the Court, in the public interest and for the expeditious administration of justice, has
resolved actions on the merits instead of remanding them to the trial court for further
proceedings, such as where the ends of justice, would not be subserved by the remand
of the case.

PETITIONS for review on certiorari to overturn the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Severino C. Dominguez for petitioner Roman Catholic Bishop of Imus, Cavite.

Dolorfino and Dominguez Law Offices for Sps. Ignao.

Joselito R. Enriquez for private respondents. Roman Catholic Archbishop of Manila vs.
Court of Appeals, 198 SCRA 300, G.R. No. 77425, G.R. No. 77450 June 19, 1991

REGALADO, J.:

These two petitions for review on certiorari1 seek to overturn the decision of the Court of
Appeals in CA-G.R. CV No. 054562 which reversed and set aside the order of the Regional
Trial Court of Imus, Cavite dismissing Civil Case No. 095-84, as well as the order of said
respondent court denying petitioner's motions for the reconsideration of its aforesaid
decision.

On November 29, 1984, private respondents as plaintiffs, filed a complaint for nullification
of deed of donation, rescission of contract and reconveyance of real property with
damages against petitioners Florencio and Soledad C. Ignao and the Roman Catholic
Bishop of Imus, Cavite, together with the Roman Catholic Archbishop of Manila, before
the Regional Trial Court, Branch XX, Imus, Cavite and which was docketed as Civil Case
No. 095-84 therein.3

In their complaint, private respondents alleged that on August 23, 1930, the spouses
Eusebio de Castro and Martina Rieta, now both deceased, executed a deed of
donation in favor of therein defendant Roman Catholic Archbishop of Manila covering
a parcel of land (Lot No. 626, Cadastral Survey of Kawit), located at Kawit, Cavite,
containing an area of 964 square meters, more or less. The deed of donation allegedly
provides that the donee shall not dispose or sell the property within a period of one
hundred (100) years from the execution of the deed of donation, otherwise a violation of
such condition would render ipso facto null and void the deed of donation and the
property would revert to the estate of the donors.

It is further alleged that on or about June 30, 1980, and while still within the prohibitive
period to dispose of the property, petitioner Roman Catholic Bishop of Imus, in whose
administration all properties within the province of Cavite owned by the Archdiocese of
Manila was allegedly transferred on April 26, 1962, executed a deed of absolute sale of
the property subject of the donation in favor of petitioners Florencio and Soledad C.
Ignao in consideration of the sum of P114,000. 00. As a consequence of the sale, Transfer
Certificate of Title No. 115990 was issued by the Register of Deeds of Cavite on November
15, 1980 in the name of said petitioner spouses.

What transpired thereafter is narrated by respondent court in its assailed decision.4

On December 17, 1984, petitioners Florencio Ignao and Soledad C. Ignao filed a motion
to dismiss based on the grounds that (1) herein private respondents, as plaintiffs therein,
have no legal capacity to sue; and (2) the complaint states no cause of action.

On December 19, 1984, petitioner Roman Catholic Bishop of Imus also filed a motion to
dismiss on three (3) grounds, the first two (2) grounds of which were identical to that of
the motion to dismiss filed by the Ignao spouses, and the third ground being that the
cause of action has prescribed.

On January 9, 1985, the Roman Catholic Archbishop of Manila likewise filed a motion to
dismiss on the ground that he is not a real party in interest and, therefore, the complaint
does not state a cause of action against him.

After private respondents had filed their oppositions to the said motions to dismiss and
the petitioners had countered with their respective replies, with rejoinders thereto by
private respondents, the trial court issued an order dated January 31, 1985, dismissing the
complaint on the ground that the cause of action has prescribed.5

Private respondents thereafter appealed to the Court of Appeals raising the issues on (a)
whether or not the action for rescission of contracts (deed of donation and deed of sale)
has prescribed; and (b) whether or not the dismissal of the action for rescission of
contracts (deed of donation and deed of sale) on the ground of prescription carries with
it the dismissal of the main action for reconveyance of real property.6
On December 23, 1986, respondent Court of Appeals, holding that the action has not
yet prescibed, rendered a decision in favor of private respondents, with the following
dispositive portion:

WHEREFORE, the Order of January 31, 1985 dismissing appellants' complaint is SET
ASIDE and Civil Case No. 095-84 is hereby ordered REINSTATED and REMANDED to
the lower court for further proceedings. No Costs.7

Petitioners Ignao and the Roman Catholic Bishop of Imus then filed their separate motions
for reconsideration which were denied by respondent Court of Appeals in its resolution
dated February 6, 1987,8 hence, the filing of these appeals by certiorari.

It is the contention of petitioners that the cause of action of herein private respondents
has already prescribed, invoking Article 764 of the Civil Code which provides that "(t)he
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," and that "(t)his
action shall prescribe after four years from the non-compliance with the condition, may
be transmitted to the heirs of the donor, and may be exercised against the donee's heirs.

We do not agree.

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, As aptly stated by the Court of Appeals:

By the very express provision in the deed of donation itself that the violation of the
condition thereof would render ipso facto null and void the deed of donation, WE
are of the opinion that there would be no legal necessity anymore to have the
donation judicially declared null and void for the reason that the very deed of
donation itself declares it so. For where (sic) it otherwise and that the donors and
the donee contemplated a court action during the execution of the deed of
donation to have the donation judicially rescinded or declared null and void
should the condition be violated, then the phrase reading "would render ipso
facto null and void"would not appear in the deed of donation.9

In support of its aforesaid position, respondent court relied on the rule that a judicial
action for rescission of a contract is not necessary where the contract provides that it
may be revoked and cancelled for violation of any of its terms and conditions.10 It called
attention to the holding that there is nothing in the law that prohibits the parties from
entering into an agreement that a violation of the terms of the contract would cause its
cancellation even without court intervention, and that it is not always necessary for the
injured party to resort to court for rescission of the contract.11 It reiterated the doctrine
that a judicial action is proper only when there is absence of a special provision granting
the power of cancellation.12

It is true that the aforesaid rules were applied to the contracts involved therein, but we
see no reason why the same should not apply to the donation in the present case. Article
732 of the Civil Code provides that donations inter vivosshall be governed by the general
provisions on contracts and obligations in all that is not determined in Title III, Book III on
donations. Now, said Title III does not have an explicit provision on the matter of a
donation with a resolutory condition and which is subject to an express provision that the
same shall be considered ipso facto revoked upon the breach of said resolutory
condition imposed in the deed therefor, as is the case of the deed presently in question.
The suppletory application of the foregoing doctrinal rulings to the present controversy is
consequently justified.

The validity of such a stipulation in the deed of donation providing for the automatic
reversion of the donated property to the donor upon non-compliance of the condition
was upheld in the recent case of De Luna, et al. vs. Abrigo, et al.13 It was held therein that
said stipulation is in the nature of an agreement granting a party the right to rescind a
contract unilaterally 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. While what was the subject of that case was an onerous donation which,
under Article 733 of the Civil Code is governed by the rules on contracts, since the
donation in the case at bar is also subject to the same rules because of its provision on
automatic revocation upon the violation of a resolutory condition, from parity of reasons
said pronouncements in De Luna pertinently apply.

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.14

When a deed of donation, as in this case, 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, clauses, terms
and conditions not contrary to law, morals, good customs, 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.

On the foregoing ratiocinations, the Court of Appeals committed no error in holding that
the cause of action of herein private respondents has not yet prescribed since an action
to enforce a written contract prescribes in ten (10) years.15 It is our view that Article 764
was intended to provide a judicial remedy in case of non-fulfillment or contravention of
conditions specified in the deed of donation if and when the parties have not agreed
on the automatic revocation of such donation upon the occurrence of the contingency
contemplated therein. That is not the situation in the case at bar.

Nonetheless, we find that although the action filed by private respondents may not be
dismissed by reason of prescription, the same should be dismissed on the ground that
private respondents have no cause of action against petitioners.

The cause of action of private respondents is based on the alleged breach by petitioners
of the resolutory condition in the deed of donation that the property donated should not
be sold within a period of one hundred (100) years from the date of execution of the
deed of donation. Said condition, in our opinion, constitutes an undue restriction on the
rights arising from ownership of petitioners and is, therefore, contrary to public policy.

Donation, as a mode of acquiring ownership, results in an effective transfer of title over


the property from the donor to the donee. Once a donation is accepted, the donee
becomes the absolute owner of the property donated. Although the donor may impose
certain conditions in the deed of donation, the same must not be contrary to law, morals,
good customs, public order and public policy. The condition imposed in the deed of
donation in the case before us constitutes a patently unreasonable and undue restriction
on the right of the donee to dispose of the property donated, which right is an
indispensable attribute of ownership. Such a prohibition against alienation, in order to be
valid, must not be perpetual or for an unreasonable period of time.

Certain provisions of the Civil Code illustrative of the aforesaid policy may be considered
applicable by analogy.1âwphi1Under the third paragraph of Article 494, a donor or
testator may prohibit partition for a period which shall not exceed twenty (20) years.
Article 870, on its part, declares that the dispositions of the testator declaring all or part
of the estate inalienable for more than twenty (20) years are void.

It is significant that the provisions therein regarding a testator also necessarily involve, in
the main, the devolution of property by gratuitous title hence, as is generally the case of
donations, being an act of liberality, the imposition of an unreasonable period of
prohibition to alienate the property should be deemed anathema to the basic and
actual intent of either the donor or testator. For that reason, the regulatory arm of the law
is or must be interposed to prevent an unreasonable departure from the normative policy
expressed in the aforesaid Articles 494 and 870 of the Code.

In the case at bar, we hold that the prohibition in the deed of donation against the
alienation of the property for an entire century, being an unreasonable emasculation
and denial of an integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the Civil Code.
Consequently, as specifically stated in said statutory provision, such condition shall be
considered as not imposed. No reliance may accordingly be placed on said prohibitory
paragraph in the deed of donation. The net result is that, absent said proscription, the
deed of sale supposedly constitutive of the cause of action for the nullification of the
deed of donation is not in truth violative of the latter hence, for lack of cause of action,
the case for private respondents must fail.

It may be argued that the validity of such prohibitory provision in the deed of donation
was not specifically put in issue in the pleadings of the parties. That may be true, but such
oversight or inaction does not prevent this Court from passing upon and resolving the
same.

It will readily be noted that the provision in the deed of donation against alienation of
the land for one hundred (100) years was the very basis for the action to nullify the deed
of d donation. At the same time, it was likewise the controverted fundament of the
motion to dismiss the case a quo, which motion was sustained by the trial court and set
aside by respondent court, both on the issue of prescription. That ruling of respondent
court interpreting said provision was assigned as an error in the present petition. While the
issue of the validity of the same provision was not squarely raised, it is ineluctably related
to petitioner's aforesaid assignment of error since both issues are grounded on and refer
to the very same provision.

This Court is clothed with ample authority to review matters, even if they are not assigned
as errors on appeal, if it finds that their consideration is necessary in arriving at a just
decision of the case:16 Thus, we have held that an unassigned error closely related to an
error properly assigned,17 or upon which the determination of the question properly
assigned is dependent, will be considered by the appellate court notwithstanding the
failure to assign it as error.18

Additionally, we have laid down the rule that the remand of the case to the lower court
for further reception of evidence is not necessary where the Court is in a position to
resolve the dispute based on the records before it. On many occasions, the Court, in the
public interest and for the expeditious administration of justice, has resolved actions on
the merits instead of remanding them to the trial court for further proceedings, such as
where the ends of justice, would not be subserved by the remand of the case. 19 The
aforestated considerations obtain in and apply to the present case with respect to the
matter of the validity of the resolutory condition in question.

WHEREFORE, the judgment of respondent court is SET ASIDE and another judgment is
hereby rendered DISMISSING Civil Case No. 095-84 of the Regional Trial Court, Branch XX,
Imus, Cavite.

SO ORDERED.

Melencio-Herrera and Paras, JJ., concur.


Padilla, J., took no part.
Sarmiento, J., is on leave.
Heirs of William Sevilla vs. Sevilla

G.R. No. 150179. April 30, 2003.*

HEIRS OF WILLIAM SEVILLA, NAMELY: WILFREDO SEVILLA, WILSON SEVILLA, WILMA SEVILLA,
WILLINGTON SEVILLA, AND WILLIAM SEVILLA, JR., HEIRS OF MARIA SEVILLA, NAMELY:
AMADOR SEVILLA, JENO CORTES, VICTOR CORTES, MARICEL CORTES, ALELEI** CORTES
AND ANJEI*** CORTES, petitioners, vs. LEOPOLDO SEVILLA, PETER SEVILLA, AND LUZVILLA
SEVILLA, respondents.

Civil Law; Property; Donations; Donation is an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another who accepts it; Like any other contract,
an agreement of the parties is essential and the attendance of a wise consent renders
the donation voidable.—Donation is an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another who accepts it. Under Article 737 of the
Civil Code, the donor’s capacity shall be determined as of the time of the making of the
donation. Like any other contract, an agreement of the parties is essential, and the
attendance of a vice of consent renders the donation voidable.

Same; Same; Same; Evidence; Factual findings of the trial court, if affirmed by the Court
of Appeals, are entitled to great respect.—Petitioners, however, insist that respondent
Leopoldo Sevilla employed fraud and undue influence on the person of the donor. This
argument involves appreciation of the evidence. The settled rule is that factual findings
of the trial court, if affirmed by the Court of Appeals, are entitled to great respect. There
are exceptional circumstances when findings of fact of lower courts may be set aside
but none is present in the case at bar.

Same; Same; Same; Same; Fraud and undue influence that vitiated a party’s consent
must be established by full, clear and convincing evidence otherwise, the latter’s
presumed consent to the contract prevails.—Ei incumbit probatio qui dicit, non qui
negat. He who asserts, not he who denies, must prove. We have consistently applied the
ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of
action, fails to show in a satisfactory manner facts on which he bases his claim, the
defendant is under no obligation to prove his exception or defense. In the instant case,
the self-serving testimony of the petitioners are vague on what acts of Leopoldo Sevilla
constituted fraud and undue influence and on how these acts vitiated the consent of
Felisa Almirol. Fraud and undue influence that vitiated a party’s consent must be
established by full, clear and convincing evidence, otherwise, the latter’s presumed
consent to the contract prevails. Neither does the fact that the donation preceded the
partition constitute fraud. It is not necessary that partition should first be had because
what was donated to Leopoldo was the 1/2 undivided share of Felisa in Lot No. 653.

Same; Same; Same; There is said to be no consent and consequently no contract when
the agreement is entered into by one in behalf of another who has never given him
authorization therefor unless he has by law a right to represent the latter.—Anent the
Deed of Extra-judicial Partition, we find that the same is void ab initio and not merely
unenforceable. In Delos Reyes v. Court of Appeals, which is a case involving the sale of
a lot by a person who is neither the owner nor the legal representative, we declared the
contract void ab initio. It was held that one of the requisites of a valid contract under
Article 1318 of the Civil Code is the consent and the capacity to give consent of the
parties to the contract. The legal capacity of the parties is an essential element for the
existence of the contract because it is an indispensable condition for the existence of
consent. There is no effective consent in law without the capacity to give such consent.
In other words, legal consent presupposes capacity. Thus, there is said to be no consent,
and consequently, no contract when the agreement is entered into by one in behalf of
another who has never given him authorization therefor unless he has by law a right to
represent the latter.

Same; Same; Same; A donation inter vivos is immediately operative and final.—In the
case at bar, at the time Felisa executed the deed of extra-judicial partition dividing the
share of her deceased sister Honarata between her and the heirs of Filomena Almirol de
Sevilla, she was no longer the owner of the 1/2 undivided portion of Lot No. 653, having
previously donated the same to respondent Leopoldo Sevilla who accepted the
donation in the same deed. A donation inter vivos, as in the instant case, is immediately
operative and final. As a mode of acquiring ownership, it results in an effective transfer
of title over the property from the donor to the donee and the donation is perfected from
the moment the donor knows of the acceptance by the donee. And once a donation is
accepted, the donee becomes the absolute owner of the property donated.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Feliciano M. Maraon for petitioners.

Jose C. Tabiliran, Jr. for respondents. Heirs of William Sevilla vs. Sevilla, 402 SCRA 501,
G.R. No. 150179 April 30, 2003
YNARES-SANTIAGO, J.:

One who alleges defect or lack of valid consent to a contract by reason of fraud or
undue influence must establish by full, clear and convincing evidence such specific acts
that vitiated a party's consent, otherwise, the latter's presumed consent to the contract
prevails.1

The instant petition for review seeks to set aside the September 26, 2000 Decision 2 of the
Court of Appeals in CA-G.R. CV No. 48956, affirming in toto the Decision3 of the Regional
Trial Court of Dipolog City, Branch 6, in Civil Case No. 4240 which declared, inter alia, the
questioned Deed of Donation Inter Vivos valid and binding on the parties.

The undisputed facts reveal that on December 10, 1973, Filomena Almirol de Sevilla died
intestate leaving 8 children, namely: William, Peter, Leopoldo, Felipe, Rosa, Maria, Luzvilla,
and Jimmy, all surnamed Sevilla. William, Jimmy and Maria are now deceased and are
survived by their respective spouses and children.4 Filomena Almirol de Sevilla left the
following properties:

PARCEL I:

A parcel of land known as Lot No. 653 situated at General Luna St., Dipolog City,
with an area of about 804 square meters, more or less, duly covered by Transfer
Certificate of Title No. (T-6671)-1448 [in the name of Filomena Almirol de Sevilla,
Honorata Almirol and Felisa Almirol] and assessed at P31,360.00 according to Tax
Dec. No. 018-947;

PARCEL II:

A parcel of land known as Lot No. 3805-B situated at Olingan, Dipolog City, with
an area of about 18,934 square meters, more or less, duly covered by Transfer
Certificate of Title No. T-6672 and assessed at P5,890 according to Tax Dec. No.
009-761;

PARCEL III:

A parcel of land known as Lot No. 837-1/4 situated at Magsaysay Street, Dipolog
City, with an area of about 880 square meters more or less, duly covered by
Original Certificate of Title No. 0-6064 and assessed at P12,870.00 according to Tax
Dec. No. 020-1078;

PARCEL IV:
A parcel of residential land known as Lot No. 1106-B-3 situated at Sta. Filomena,
Dipolog City, with an area of 300 square meters, more or less, assessed at P3,150.00
according to Tax Dec. No. 006-317;

Commercial building erected on Parcel I above-described; and residential


building erected just at the back of the commercial building above-described
and erected on Parcel I above-described;5

Parcel I, Lot No. 653, is the paraphernal property of Filomena Almirol de Sevilla which she
co-owned with her sisters, Honorata Almirol and Felisa Almirol,6 who were both single and
without issue. Parcels II, III and IV are conjugal properties of Filomena Almirol de Sevilla
and her late husband Andres Sevilla.7 When Honorata died in 1982, her 1/3 undivided
share in Lot No. 653 was transmitted to her heirs, Felisa Almirol and the heirs of Filomena
Almirol de Sevilla, who thereby acquired the property in the proportion of one-half share
each.

During the lifetime of Felisa and Honorata Almirol, they lived in the house of Filomena
Almirol de Sevilla, together with their nephew, respondent Leopoldo Sevilla and his family.
Leopoldo attended to the needs of his mother, Filomena, and his two aunts, Honorata
and Felisa.8

Felisa died on July 6, 1988.9 Previous thereto, on November 25, 1985, she executed a last
will and testament devising her 1/2 share in Lot No. 653 to the spouses Leopoldo Sevilla
and Belen Leyson.10 On August 8, 1986, Felisa executed another document denominated
as "Donation Inter Vivos" ceding to Leopoldo Sevilla her 1/2 undivided share in Lot No.
653, which was accepted by Leopoldo in the same document.11

On September 3, 1986, Felisa Almirol and Peter Sevilla, in his own behalf and in behalf of
the heirs of Filomena Almirol de Sevilla, executed a Deed of Extra-judicial Partition,
identifying and adjudicating the 1/3 share of Honorata Almirol to the heirs of Filomena
Almirol de Sevilla and to Felisa Almirol.12

Thereafter, respondents Leopoldo, Peter and Luzvilla Sevilla obtained the cancellation of
Transfer Certificate of Title No. (T-6671)-1448, over Lot No. 653, and the issuance of the
corresponding titles to Felisa Almirol and the heirs of Filomena Almirol de Sevilla. However,
the requested titles for Lot Nos. 653-A and 653-B, were left unsigned by the Register of
Deeds of Dipolog City, pending submission by Peter Sevilla of a Special Power of Attorney
authorizing him to represent the other heirs of Filomena Almirol de Sevilla.13

On June 21, 1990, Felipe Sevilla, Rosa Sevilla, and the heirs of William, Jimmy and Maria,
all surnamed Sevilla, filed the instant case against respondents Leopoldo Sevilla, Peter
Sevilla and Luzvilla Sevilla, for annulment of the Deed of Donation and the Deed of
Extrajudicial Partition, Accounting, Damages, with prayer for Receivership and for
Partition of the properties of the late Filomena Almirol de Sevilla.14 They alleged that the
Deed of Donation is tainted with fraud because Felisa Almirol, who was then 81 years of
age, was seriously ill and of unsound mind at the time of the execution thereof; and that
the Deed of Extra-judicial Partition is void because it was executed without their
knowledge and consent.15

In their answer,16 respondents denied that there was fraud or undue pressure in the
execution of the questioned documents. They alleged that Felisa was of sound mind at
the time of the execution of the assailed deeds and that she freely and voluntarily ceded
her undivided share in Lot No. 653 in consideration of Leopoldo's and his family's love,
affection, and services rendered in the past. Respondents further prayed that Parcels II,
III, and IV be partitioned among the heirs of Filomena Almirol de Sevilla in accordance
with the law on intestate succession.

On December 16, 1994, a decision was rendered by the Regional Trial Court of Dipolog
City, Zamboanga del Norte, Branch 6, upholding the validity of the Deed of Donation
and declaring the Deed of Extra-judicial Partition unenforceable. The dispositive portion
thereof, reads:

WHEREFORE, IN VIEW OF THE FOREGOING, summing up the evidence for both the
plaintiffs and the defendants, the Court hereby renders judgment:

1) Declaring the questioned Deed of Donation Inter Vivos valid and binding, and,
therefore, has the full force and effect of law;

2) Declaring the questioned Deed of Extra-Judicial Partition as unenforceable as


yet as against the other heirs, as it lacks the legal requisites of Special Power of
Attorney or any other appropriate instrument to be executed by the other heirs
who were not made parties thereto;

3) Finding the parties herein entitled to the partition of Parcel II, III, IV as designated
in the Complaint, in equal shares, and, as to Lot No. 653 designated as Parcel I, it
shall be divided equally into two, between defendant Leopoldo Sevilla on one
hand, and, collectively, the Heirs of William Sevilla, Heirs of Jimmy Sevilla, Heirs of
Maria Sevilla, Felipe Sevilla, Leopoldo Sevilla, Peter Sevilla, Luzvilla Sevilla-Tan, on
the other hand, as well as the two buildings thereon in proportionate values;

4) Directing the parties, if they can agree, to submit herewith a project of partition,
which shall designate the share which pertains to the heirs entitled thereto, that is,
the particular and specific portions of the properties subject of the partition;
5) Directing defendant Peter Sevilla to pay and/or collect from the parties the
amounts corresponding to each one entitled or liable thereto, as recorded in the
Statement of Accounts, except for defendant Leopoldo Sevilla who is found by
the Court to have incurred only an overdraft of P5,742.98 and not P33,204.33 as
earlier computed therein.

6) Dismissing the plaintiffs' claim for damages, which is not proved with sufficient
evidence, and defendants' counterclaim, on the same ground.

7) With costs de officio.

IT IS SO ORDERED.17

Both parties appealed to the Court of Appeals. Petitioners contended that the Deed of
Donation should be declared void and that Lot No. 653 should be divided equally among
them. Respondents, on the other hand, posited that the trial court erred in declaring the
Deed of Extra-judicial Partition unenforceable against the other heirs of Filomena Almirol
de Sevilla who were not parties to said Deed.

On September 26, 2000, the Court of Appeals affirmed in toto the assailed decision of the
trial court.18 Petitioners filed a motion for reconsideration but the same was denied on
August 30, 2001.19

Hence, the instant petition based on the following assignment of errors:

THAT THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING AS VOID AB INITIO THE
DEED OF DONATION EXECUTED BY FELISA ALMIROL IN FAVOR OF RESPONDENT LEOPOLDO
SEVILLA CEDING TO HIM ONE HALF PORTION OF LOT 653, DIPOLOG CADASTRE, IT HAVING
BEEN EXECUTED WITH FRAUD, UNDUE PRESSURE AND INFLUENCE;

THAT THE APPELLATE COURT GREATLY ERRED IN NOT ORDERING THE PARTITION OF LOT 653,
DIPOLOG CADASTRE EQUALLY AMONG THE EIGHT (8) HEIRS OF FILOMENA, HONORATA
AND FELISA, ALL SURNAMED ALMIROL.20

To resolve the issue raised in the instant petition for review, the validity of the
donation inter vivos executed by Felisa Almirol in favor of Leopoldo Sevilla must first be
determined.

Donation is an act of liberality whereby a person disposes gratuitously of a thing or right


in favor of another who accepts it.21 Under Article 737 of the Civil Code, the donor's
capacity shall be determined as of the time of the making of the donation. Like any other
contract, an agreement of the parties is essential,22 and the attendance of a vice of
consent renders the donation voidable.23

In the case at bar, there is no question that at the time Felisa Almirol executed the deed
of donation she was already the owner of 1/2 undivided portion of Lot No. 653. Her 1/3
undivided share therein was increased by 1/2 when she and Filomena inherited the 1/3
share of their sister Honorata after the latter's death. Hence, the 1/2 undivided share of
Felisa in Lot No. 653 is considered a present property which she can validly dispose of at
the time of the execution of the deed of donation.24

Petitioners, however, insist that respondent Leopoldo Sevilla employed fraud and undue
influence on the person of the donor. This argument involves appreciation of the
evidence.25 The settled rule is that factual findings of the trial court, if affirmed by the
Court of Appeals, are entitled to great respect.26 There are exceptional circumstances
when findings of fact of lower courts may be set aside27 but none is present in the case
at bar. Indeed, neither fraud nor undue influence can be inferred from the following
circumstance alleged by the petitioners, to wit —

A. That Felisa Almirol lived with respondent Leopoldo Sevilla in the residential house
owned by petitioners and respondents;

B. That the old woman Felisa Almirol was being supported out of the rentals
derived from the building constructed on the land which was a common fund. . .
.

C. That when Felisa Almirol was already 82 years old, he [Leopoldo Sevilla]
accompanied her in the Office of Atty. Vic T. Lacaya, Sr., for the purpose of
executing her last will and testament . . .

D. That in the last will and testament executed by Felisa Almirol, she had devised
in favor of respondent Leopoldo Sevilla one-half of the land in question;

E. That respondent Leopoldo Sevilla not contented with the execution by Felisa
Almirol of her last will and testament, had consulted a lawyer as to how he will be
able to own the land immediately;

F. That upon the advice of Atty. Helen Angeles, Clerk of Court of the Regional Trial
Court of Zamboanga del Norte, Dipolog City, Felisa Almirol executed a Deed of
Donation, hence, the questioned Deed of Donation executed in his favor;
G. That the subject matter of the Deed of Donation was the one-half portion of
Lot 653, Dipolog Cadastre, which was willed by Felisa Almirol, in favor of
respondent Leopoldo Sevilla in her last will and testament;

H. That at the time of the execution of the Deed of Donation, Lot No. 653, Dipolog
Cadastre, was not yet partitioned between petitioners and respondents they
being heirs of the late Filomena and Honorata, all surnamed Almirol;

I. That after the execution of the Deed of Donation, respondent Peter Sevilla and
the late Felisa Almirol were the only ones who executed the Deed of Extra-judicial
Partition over Lot 653, Dipolog Cadastre, the petitioners were not made parties in
the said Deed of Extrajudicial Partition;

J. That on the basis of the Deed of Extrajudicial Partition and Deed of Donation,
respondent Leopoldo Sevilla caused the subdivision survey of Lot 653, Dipolog
Cadastre, dividing the same into two (2) lots, adjudicating one-half of the lot in his
favor and the other half in favor of respondents Peter Sevilla and Luzvilla Sevilla,
and to respondent Leopoldo Sevilla himself;

K. That only two persons knew the actual survey of the land, petitioner Felipe Sevilla
and respondent Leopoldo Sevilla himself, the rest of the co-owners were not even
notified;

L. That on the basis of the Extrajudicial Partition, Deed of Donation, the approved
subdivision plan, respondent Leopoldo Sevilla filed a petition for issuance of the
corresponding titles for the two lots, but the Register of Deeds of Dipolog City
refused to issue the corresponding titles for the two lots to respondent Leopoldo
Sevilla so that up to this moment . . . the two titles were left unsigned by the Register
of Deeds.28

There is fraud when, through the insidious words or machinations of one of the
contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to.29 There is undue influence when a person takes improper
advantage of his power over the will of another, depriving the latter of a reasonable
freedom of choice. The following circumstances shall be considered: the confidential,
family, spiritual and other relations between the parties, or the fact that the person
alleged to have been unduly influenced was suffering from mental weakness, or was
ignorant or in financial distress.30

Ei incumbit probatio qui dicit, non qui negat. He who asserts, not he who denies, must
prove. We have consistently applied the ancient rule that if the plaintiff, upon whom rests
the burden of proving his cause of action, fails to show in a satisfactory manner facts on
which he bases his claim, the defendant is under no obligation to prove his exception or
defense.31 In the instant case, the self-serving testimony of the petitioners are vague on
what acts of Leopoldo Sevilla constituted fraud and undue influence and on how these
acts vitiated the consent of Felisa Almirol. Fraud and undue influence that vitiated a
party's consent must be established by full, clear and convincing evidence, otherwise,
the latter's presumed consent to the contract prevails.32 Neither does the fact that the
donation preceded the partition constitute fraud. It is not necessary that partition should
first be had because what was donated to Leopoldo was the 1/2 undivided share of
Felisa in Lot No. 653.

Moreover, petitioners failed to show proof why Felisa should be held incapable of
exercising sufficient judgment in ceding her share to respondent Leopoldo.33 As testified
by the notary public who notarized the Deed of Donation, Felisa confirmed to him her
intention to donate her share in Lot No. 653 to Leopoldo. He stressed that though the
donor was old, she was of sound mind and could talk sensibly. Significantly, there is
nothing in the record that discloses even an attempt by petitioners to rebut said
declaration of the notary public.

Clearly, therefore, the courts below did not err in sustaining the validity of the deed of
donation.

Anent the Deed of Extra-judicial Partition, we find that the same is void ab initio and not
merely unenforceable. In Delos Reyes v. Court of Appeals,34 which is a case involving the
sale of a lot by a person who is neither the owner nor the legal representative, we
declared the contract void ab initio. It was held that one of the requisites of a valid
contract under Article 1318 of the Civil Code is the consent and the capacity to give
consent of the parties to the contract. The legal capacity of the parties is an essential
element for the existence of the contract because it is an indispensable condition for the
existence of consent. There is no effective consent in law without the capacity to give
such consent. In other words, legal consent presupposes capacity. Thus, there is said to
be no consent, and consequently, no contract when the agreement is entered into by
one in behalf of another who has never given him authorization therefor unless he has by
law a right to represent the latter.35

In the case at bar, at the time Felisa executed the deed of extra-judicial partition dividing
the share of her deceased sister Honorata between her and the heirs of Filomena Almirol
de Sevilla, she was no longer the owner of the 1/2 undivided portion of Lot No. 653, having
previously donated the same to respondent Leopoldo Sevilla who accepted the
donation in the same deed. A donation inter vivos, as in the instant case, is immediately
operative and final.36As a mode of acquiring ownership, it results in an effective transfer
of title over the property from the donor to the donee and the donation is perfected from
the moment the donor knows of the acceptance by the donee. And once a donation is
accepted, the donee becomes the absolute owner of the property donated.

Evidently, Felisa did not possess the capacity to give consent to or execute the deed of
partition inasmuch as she was neither the owner nor the authorized representative of
respondent Leopoldo to whom she previously transmitted ownership of her undivided
share in Lot No. 653. Considering that she had no legal capacity to give consent to the
deed of partition, it follows that there is no consent given to the execution of the deed,
and therefore, there is no contract to speak of. As such, the deed of partition is void ab
initio, hence, not susceptible of ratification.

Nevertheless, the nullity of the deed of extra-judicial partition will not affect the validity of
the donation inter vivosceding to respondent Leopoldo Sevilla the 1/2 undivided share
of Felisa Almirol in Lot No. 653. Said lot should therefore be divided as follows: 1/2 shall go
to respondent Leopoldo Sevilla by virtue of the deed of donation, while the other half
shall be divided equally among the heirs of Filomena Almirol de Sevilla including
Leopoldo Sevilla, following the rules on intestate succession.

Finally, we note that the name of Rosa Sevilla, daughter of Filomena Almirol de Sevilla,
and one of the plaintiffs herein, was omitted in the dispositive portion of the trial court's
decision.37 Her name should therefore be included in the dispositive portion as one of the
heirs entitled to share in the properties of the late Filomena Almirol de Sevilla.

WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-G.R.
CV No. 48956, affirming in toto the Decision of the Regional Trial Court of Dipolog City,
Branch 6, in Civil Case No. 4240, is AFFIRMED with MODIFICATION. The Deed of Extra-
judicial Partition dated September 3, 1986 is declared void, and the name of Rosa Sevilla
is ordered included in the dispositive portion of the trial court's judgment.

SO ORDERED.

Davide, Jr., C .J ., Vitug, Carpio and Azcuna, JJ ., concur.