CONTRACT REVIEW

No. _______
Series of 2016

FOR : THE

ATTENTION : ATTY.

RE : DRAFT DEED OF DONATION BETWEEN

THE AND THE

DATE : 4 MAY 2016

I. Preliminary Statement / Antecedents

We refer to your Letter dated 28 March 2016 and received by this Office on
31 March 2016 requesting for a review of the Deed of Donation (Deed) between
your organization and the involving an amount of ten million pesos (Php
10,000,000.00).

You state in your Letter that the said amount is intended as contribution to
aid the in producing martial law-related information, education, and
communication materials pursuant to its mandate under Republic Act (R.A.) No.
Contract of Review No. ______ Page 2 of 4
Series of 2016

1 as the agency primarily responsible for the establishment, restoration,

preservation, and conservation of the memorial, museum, library, or compendium
in honor of the human rights violations victims (HRVVs) during the
regime.

You add that the said donation has already been approved by the
Governing Board during the held on 16 March 2016.

Hence, the draft Deed for our review.

II. Discussion
After a careful reading and evaluation of the draft Deed, this Office observes
a potential issue with the manner in which the draft Deed is written.

As it is, the contract between your organization and the appears to be

one of a conditional or modal donation. A conditional and modal donation is one
which imposes certain conditions, limitations, or charges upon the donee.2 In this
case, your organization will transfer funds to the on the condition that the
latter shall utilize it for the production of martial law-related information,
education, and communication materials. Hence, the contract between your
organization and the falls squarely within the definition of a conditional or
modal donation.

Consequently, the contract between your organization and the is subject

to Article 733 of the Civil Code which reads:

1
.
2
Calanasan v. Spouses Dolorito, G.R. No. 171937, 25 November 2013.
Contract of Review No. ______ Page 3 of 4
Series of 2016

Article 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. (622)

As such, only the portion in excess of the value of the burden imposed upon
the is subject to the law on donation. The remainder will be governed by
the law on ordinary contract. This may result in complications such as the need
to assess the value of the production of martial law-related information,
education, and communication materials by the .

Hence, in order to remove the draft Deed from the operation of Article 733
of the Civil Code and for the sake of simplicity, it is recommended that the
conditions imposed upon the be removed from the body of the contract.
Also, text must be inserted emphasizing that the consideration for the donation
is pure liberality on the part of your organization. As such, this would transform
the arrangement between your organization and the into a contract of
simple donation, which may accordingly be embodied solely in the draft Deed.

Moreover, it is likewise recommended that statements to the effect that the

donation was being made for the ultimate objective of setting up a memorial,
museum, or library honoring HRVVs within the premises of be
inserted into the draft Deed. This is in recognition of the historical significance
of as the place where many HRVVs were detained during martial
law. The purpose is to emphasize that the execution of the donation is pursuant
to the mandate of administering under Section 4 (a) of
R.A. No. 3:

3
.
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Series of 2016

Section 4. Purposes of the Conversion Authority. - The Conversion Authority shall have the
following purposes:
(a) To own, hold and/or administer the military reservations of John Hay
Station, Wallace Air Station, O’Donnell Transmitter Station, San Miguel
Naval Communication Station, Mt. Sta. Rita Station (Hermosa, Bataan)
and those portions of Metro Manila, military camps which may be
transferred to it by the President;
xxx

This review does not pass upon the financial aspect of the draft Deed as this
is best left to Management’s sound business discretion.

Please be guided accordingly.