FIRST DIVISION G.R. No.

140487 April 2, 2001

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM and ILDEFONSA MANGUBAT, 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 ViceMayor 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. THIRD DIVISION G.R. No. 110335 June 18, 2001

IGNACIO GONZALES, LILIA R. GONZALES, GUSTAVO R. GONZALES, WIGBERTO R. GONZALES, GILDA GONZALES-SALUTA, FERNANDO RAMIREZ, OCTAVIO RAMIREZ, JR., IGNACIO RAMIREZ, ESMIRNA RAMIREZ, MERCEDES GONZALES-FAVIZ, JAIME GONZALES, FEDERICO GONZALES, ROSARIO GONZALES, PATRICIA GONZALES, DANIEL GONZALES, ALDO GONZALES, CLAUDIA GONZALES and AMANDA GONZALES, petitioners, vs. HONORABLE COURT OF APPEALS, ESTANISLAO SALVADOR, MATEO SALVADOR, ALBERTO SARMIENTO, MAXIMO ESGUERRA, MAMERTO ANTONIO, VIRGILIO DE GUZMAN, ANGEL FAJARDO, ABAD DELA CRUZ, PEDRO FAJARDO, JUANITO DE LARA, ELIGIO DE GUZMAN, SALVADOR MARTINEZ, EDUARDO DELA CRUZ, JOSE MATIAS, SOLEDAD ESTRELLA, ROMAN GUINGON, CIRILO SALVADOR, CATALINA DELA CRUZ, BERNARDO ESGUERRA, JR., GLORIA CABANA, PAQUITO CHAVEZ, RENATO GARCIA, FRANCISCO PASCUAL, WALDO SALVADOR, MARIO SALVADOR, PEDRO GARCIA, ALBINO SALVADOR, ANTONIO DE GUZMAN, AMBROCIO SALVADOR, TERESITA CAPATE, EDUARDO TALENS, BENIGNO CARAIG, ERNESTO BERNABE, SERGIO CARLOS, SIMEON BALINGAY, ANTONIO NANGEL, TEOFILO BINUYA and WILFREDO DELA CRUZ, respondents. MELO, J.: Per A.M. No. 00-9-03-SC dated February 27, 2001, this case which could have been acted upon earlier, was raffled to undersigned ponente. Essentially, petitioners seek to annul and set aside the decision dated March 15, 1993 of the Court of Appeals in its CA-G.R. SP No.26416 which reversed the ruling of then Secretary of Agrarian Reform Benjamin T. Leong, as well as the order dated May 17, 1993 denying reconsideration thereof. The factual antecedents of the instant case may be chronicled as follows:

The now deceased spouses Ignacio Gonzales and Marina Gonzales were the registered owners of two parcels of agricultural Land situated at Barrio Fortaleza, Cabanatuan City, covered by Transfer Certificate of Title No. 2742 and denominated as Lot 551-C and Lot 552-A. Lot 551-C contains an area of 46.97 hectares while Lot 552-A contains an area of 37.5735 hectares. Herein petitioners are the successorsin-interest or the children and grandchildren of said Gonzales spouses. On the other hand, private respondents are the farmers and tenants of said spouses who have been cultivating the parcels of land even before World War II either personally or through their predecessors-in-interest. On May 7, 1969, Marina Gonzales died intestate and appointed as administratrix of her estate was petitioner Lilia Gonzales. Prior to the partition of said estate, Ignacio Gonzales executed a Deed of Donation on July 12, 1972 conveying his share of the property, specifically Lot No. 551-C, in favor of his 14 grandchildren. The said donation was not registered. Thus, when Presidential Decree No. 27 (P.D. No. 27) took effect on October 21, 1972, the landholdings of the spouses Gonzales were placed under Operation Land Transfer by virtue of said decree, and private respondents were accordingly issued the corresponding Certificates of Land Transfer and Emancipation Patents. On March 5, 1974, the administratrix Lilia Gonzales filed an application for retention with the then Ministry of Agrarian Reform, requesting that their property be excluded from the coverage of Operation Land Transfer. After initial investigation, Hearing Officer Melchor Pagsolingan recommended the denial of said application for retention and this action was affirmed by Assistant Secretary of Agrarian Reform Benjamin Labayen, in an order dated September 12, 1977. Apparently, however, a reinvestigation was conducted, resulting in the present Department of Agrarian Reform (DAR) resolution dated February 23, 1983 recommending that the land subject of the deed of donation, or Lot No. 551-C, be exempt from Operation Land Transfer. On September 3, 1991, DAR Secretary Benjamin Leong issued an order declaring that the subject landholdings covered by the deed of donation are exempt from Operation Land Transfer, and cancelling the Certificates of Land Transfer issued in favor of private respondents. In so ruling, the DAR Secretary reasoned: As the donation had been duly accepted by the donees who were already of legal age on the date of the donation and by the legal guardians of the donees who were still minors at that time, and the donor having known of said acceptance, the donation had therefore been perfected in accordance with the law, and the donees had acquired a valid title to the portion donated on the date the instrument was executed. (p. 4, DAR Order.) Aggrieved by this ruling, private respondents filed a petition for certiorari with the Court of Appeals which rendered its decision on March 15, 1993, reversing the action of the DAR and upholding the certificates of land transfer and emancipation patents. Petitioners moved for a reconsideration of the above decision but the same was denied by the Court of Appeals in its Resolution dated May 17, 1993.

Thus, the instant petition anchored on the following grounds: A. the CA failed to reconsider that the land subject of this case does not fall within the purview of P.D. 27; B. the CA should have found that the evidence clearly shows that the tenants (private respondents herein) were aware that the land had been donated by Ignacio Gonzales in favor of his grandchildren prior to the effectivity of P.D. 27; and C. the effect of non-registration under the land registration laws are inapplicable to the present case. The first and third assigned errors, being interrelated, shall be jointly discussed. The sole issue to be resolved is whether the property subject of the deed of donation which was not registered when P.D. No. 27 took effect, should be excluded from the Operation Land Transfer. Petitioners insist that the deed of donation executed by Ignacio Gonzales validly transferred the ownership and possession of Lot 551-C which comprises an area of 46.97 hectares to his 14 grandchildren. They further assert that inasmuch as Lot 551-C had already been donated, the same can no longer fall within the purview of P.D. No. 27, since each donee shall have a share of about three hectares only which is within the exemption limit of seven hectares for each landowner provided under P.D. No. 27. Article 749 of the Civil Code provides inter alia that "in order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy." Corollarily, Article 709 of the same Code explicitly states that "the titles of ownership, or other rights over immovable property, which are not duly inscribed or annotated in the Registry of property shall not prejudice third persons." From the foregoing provisions, it may be inferred that as between the parties to a donation of an immovable property, all that is required is for said donation to be contained in a public document. Registration is not necessary for it to be considered valid and effective. However, in order to bind third persons, the donation must be registered in the Registry of Property (now Registry of Land Titles and Deeds). Although the nonregistration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the rights of third persons are affected, as in the case at bar. It is actually the act of registration that operates to convey registered land or affect title thereto. Thus, Section 50 of Act No. 496 (Land Registration Act), as amended by Section 51 of P.D. No. 1529 (Property Registration Decree), provides: SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed, mortgage, lease, or other voluntary instrument, except a will purporting to convey or affect registered land, shall take effect as a conveyance or bind

the land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make registration. The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, . . . Further, it is an entrenched doctrine in our jurisdiction that registration in a public registry creates constructive notice to the whole world (Olizon vs. Court of Appeals, 236 SCRA 148 [1994]). Thus, Section 51 of Act No.496, as amended by Section 52 of P.D. No. 1529, provides: SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the Office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering. It is undisputed in this case that the donation executed by Ignacio Gonzales in favor of his grandchildren, although in writing and duly notarized, has not been registered in accordance with law. For this reason, it shall not be binding upon private respondents who did not participate in said deed or had no actual knowledge thereof. Hence, while the deed of donation is valid between the donor and the donees, such deed, however, did not bind the tenants-farmers who were not parties to the donation. As previously enunciated by this Court, non-registration of a deed of donation does not bind other parties ignorant of a previous transaction (Sales vs. Court of Appeals, 211 SCRA 858 [1992]). So it is of no moment that the right of the tenants-farmers in this case was created by virtue of a decree or law. They are still considered "third persons" contemplated in our laws on registration, for the fact remains that these tenants-farmers had no actual knowledge of the deed of donation. From the foregoing, the ineluctable conclusion drawn is that the unregistered deed of donation cannot operate to exclude the subject land from the coverage of the Operation Land Transfer of P.D. No. 27, which took effect on October 21, 1972. To rule otherwise would render ineffectual the rights and interests that the tenantsfarmers immediately acquired upon the promulgation of P.D. No. 27, especially so because in the case at bar, they have been cultivating the land even before World War II. Accordingly, the Certificates of Land Transfer and the Emancipation Patents respectively issued to private respondents over the land in question cannot be cancelled. It should be noted that one of the recognized modes of acquiring title to land is by emancipation patent which aims to ameliorate the sad plight of tenantsfarmers. By virtue of P.D. No. 27, tenants-farmers are deemed owners of the land they till. This policy is intended to be given effect by a provision of the law which declares that, "the tenant-farmer, whether in land classified as landed estate or not, shall be DEEMED OWNER of a portion constituting a family size farm of five (5) hectares if not irritated and three (3) hectares if irrigated" (P.D. No. 27, third paragraph). It may, therefore, be said that with respect to Lot 551-C, private respondents became owners thereof on October 27, 1972, the day P.D. No. 27 took effect.

The second error assigned deals with a question of fact. We have consistently ruled that it is not the function of this Court to assess and evaluate the evidence all over again, its jurisdiction being generally limited to reviewing errors of law that might have been committed by the lower court. Nevertheless, since the factual findings of the Court of Appeals are at variance with those of an administrative agency such as the Department of Agrarian Reform, we are compelled to review the records presented both in the Court of Appeals and the said Department (Deiparine vs. Court of Appeals, 299 SCRA 668 [1998]). Moreover, in the exercise of sound discretion and considering the fact that the parties have relentlessly pursued this case since 1974 or for a period of 27 years already, this Court has opted to look into the factual bases of the assailed decision of the Court of Appeals. Petitioners maintain that private respondents knew of the donation as evidenced by the affidavit and testimony of Francisco Villanueva and Abad Dela Cruz. This contention is unacceptable. Villanueva testified that as the overseer of Ignacio Gonzales, he was tasked to inform his co-tenants about the donation. However, the records show that Villanueva has transferred his right to cultivate the land to a certain Bemardo Esguerra as early as 1965 (p. 203, Rollo), leading one to logically conclude that Villanueva was no longer a tenant, much more an overseer, when the donation was executed in 1972. On the other hand, Dela Cruz, in an Affidavit executed on May 28, 1992, denied testifying before Atty. Romeo Bello at the Office of the Department of Agrarian Reform to the effect that he and his co-tenants were aware of the donation. He declared that he had no knowledge of the donation made by Ignacio Gonzales, nor did he have any idea that an investigation was conducted by DAR on said matter (pp. 204-205, Rollo). Likewise, petitioners claim that private respondents had been sharing their produce with the donees or the grandchildren of Ignacio Gonzales, suggesting thereby that private respondents have recognized the donees as the new owners of the land. Again, we find this argument to be unfounded. The evidence on record reveals that the tenants-farmers paid their rentals to Ignacio Gonzales and not to the grandchildren (pp. 150-194, Rollo). Petitioners contend that the deed of donation was not registered because of the pendency of the intestate proceedings. This argument was correctly rejected by the Court of Appeals, in this wise: We do not agree with respondents that the failure to register the deed of donation was due to the pendency of the intestate proceedings and the fact that the property had been mortgaged to the Philippine National Bank (PNB), because the pendency of the intestate proceedings and the real estate mortgaged to the PNB, do not preclude the registration annotation of the donation at the back of the certificate of title covering the land. (p. 4, Court of Appeals Decision.) Thus, we affirm the conclusion of the appellate court that the land subject of the donation is covered by Operation Land Transfer. The findings of fact made by the Court of Appeals are conclusive and binding on the Supreme Court even if contrary

to these of the trial court or the administrative agency, so long as such findings are supported by the records or based on substantial evidence (Tabaco vs. Court of Appeals, 239 SCRA 485 [1994]). While the foregoing doctrine is not absolute, petitioners have not sufficiently proved that the findings complained of are totally devoid of support in the records, or that they are so glaringly erroneous as to constitute serious abuse of discretion. As a final note, our laws on agrarian reform were enacted primarily because of the realization that there is an urgent need to alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws, the majority of these farmers still live on a hand-to-mouth existence. This can be attributed to the fact that these agrarian laws have never really been effectively implemented. Certain individuals have continued to prey on the disadvantaged, and as a result, the farmers who are intended to be protected and uplifted by the said laws find themselves back in their previous plight or even in a more distressing situation. This Court ought to be an instrument in achieving a dignified existence for these farmers free from pernicious restraints and practices, and there's no better time to do it than now. WHEREFORE, the petition is DENIED and the decision of the Court of Appeals dated March 15, 1993 in CA-G.R. SP No. 26416 is hereby AFFIRMED. SO ORDERED. SECOND DIVISION G.R. No. 125728 August 28, 2001

MARIA ALVAREZ VDA. DE DELGADO, CATALINA C. DELGADO, NATIVIDAD D. CLUTARIO, ANTONIA DELGADO, FLORINTINO DELGADO, PACIENCIA D. CAZORLA, GLORIA D. SOTIANGCO, JOSE DELGADO, JR., MARLENE D. SENNER, JOEL DELGADO, MARISSA DELGADO, JESUS DELGADO, JANICE DELGADO, VICTORINO DELGADO, and JUAN DELGADO, petitioners, vs. HON. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents. QUISUMBING, J.: This petition assails the decision1 of the Court of Appeals in CA-G.R. CV No. 36923 dated June 14, 1996, which reversed the decision2 of the Regional Trial Court, of Catarman, Northern Samar, Branch 19, in a case originally involving reconveyance of property with damages between the Delgado family members as plaintiffs and the Republic of the Philippines as defendant. The following facts appear on the record: During his lifetime, Carlos Delgado was the absolute owner of a parcel of land with an area of 692,549 square meters, situated in the Municipality of Catarman, Samar. On October 5, 1936, said Carlos Delgado granted and conveyed, by way of donation or gift with quitclaim, all his rights, title, interest, claim and demand over a portion of said land consisting of 165,000 square meters in favor of the Commonwealth of the

Philippines or its successors. Acceptance3 was made by then President Manuel L. Quezon in his capacity as Commander-in-Chief of the Philippine Army.4 The Deed of Donation5 states as reason or consideration the donor's desire to contribute to the formation of the National Defense of the Philippines. It contained the following condition: The condition of this donation is, that the parcel of land above described shall be for the exclusive benefit of the Commonwealth of the Philippines to be used as military reservation for training cadres or for such other uses of the Philippine Army as the Commander-in-Chief or Chief of Staff thereof may determine, provided that when the Commonwealth of the Philippines no longer needs this parcel of land for any military purposes, then said land shall automatically revert to the donor or its heirs or assigns.6 The donee promptly occupied the donated land and constructed buildings thereon for military purposes, such as a military training campsite. Further, after entering into physical possession of the land and making the said improvements, the donee caused the property and several others similarly donated to it7 to be surveyed, with a view to having them all brought under the operation of the Torrens system and registered in the name of the Commonwealth of the Philippines. Upon approval of the application for registration with the Court of First Instance of Samar, the parcels of land donated by Carlos Delgado (165,000 sq. m.), Visitacion Diaz (8,220 sq. m.) and Leona Balite (10,080 sq. m.), containing a total of 183,300 square meters in all, became identified as Lot No. 1, Plan Psl-9. But said Lot No. 1 showed an area of 216,907 square meters, apparently with an excess of 33,607 square meters from the total area of the parcels actually donated. Such apparent excess came allegedly from the neighboring parcels of land also owned by Carlos Delgado. On February 6, 1939, the CFI of Samar decreed that on the basis of more than forty years of quiet, peaceful and continuous possession by the donors and their donee, and after finding a general default of opposition to the application for registration, the aforesaid parcels of land as well as the improvements thereon, were to be registered in the name of the Commonwealth of the Philippines as absolute owner thereof. Pursuant to the CFI order, Original Certificate of Title No. 2539 was issued by the Register of Deeds on September 9, 1939, covering among other parcels the aforesaid Lot No. 1, Plan Psl-9. The OCT contained an annotation of the express condition attached to the land donated by Carlos Delgado. Subsequently, said OCT was later cancelled and replaced with Transfer Certificate of Title No. (0-2539)-160. It appears, however, that said TCT did not contain an annotation of the condition originally found in the Deed of Donation. Upon declaration of independence on July 4, 1946, the Commonwealth of the Philippines passed out of existence. It was replaced by the existing Republic of the Philippines, which took over the subject land and turned portions of it over to the then Civil Aeronautics Administration (CAA), later renamed Bureau of Air

Transportation Office (ATO). Said government agency has since utilized the land in question, or portions of it as a domestic national airport, with some portions rented to the Philippine Airlines, and some to the provincial government for a capitol site and a hospital site, and for some other uses which clearly are not military in nature. A petition for reconveyance was filed on December 25, 1970, alleging as ground therefor the violation of the express condition imposed by the donor. It was also during this time that Jose Delgado, brother and lone heir of the donor, Carlos,8 obtained a court order dated March 15, 1971, directing the insertion of the automatic reversion clause as an annotation in the TCT. Due to the plaintiff's failure to prosecute, the case for reconveyance was eventually dismissed by the lower court without prejudice on September 26, 1983. Sometime in early 1989, the heirs of Jose Delgado sent letters9 to the different agencies occupying the subject property, inviting their attention to the donation and the violation of the condition imposed therein. No settlement or understanding was reached, such that on September 28, 1989, the widow and surviving heirs of Jose Delgado filed a new action for reconveyance with the RTC of Catarman, Northern Samar, Branch 19, docketed as Civil Case No. C-489. On March 8, 1990, an Amended Complaint was filed wherein plaintiffs prayed for reconveyance of the donated parcel of land based on the following reasons: a.) That there was non-compliance by the donee of the condition imposed in the deed of donation; b.) That assuming there was compliance, the donation became inoperative when the donee, the then Commonwealth of the Philippines, passed out of existence on July 4, 1946, with the birth of the Republic of the Philippines, making the donation inoperative and the land subject thereof automatically reverted to the donor or his heirs; c.) That in the event the court declares the donation to have subsisted, the excess of 33,607 square meters, over and above the 165,000 square meters donated by Carlos Delgado, should be declared to have been unlawfully included and registered in the name of the Commonwealth of the Philippines and is now in the possession of the Republic of the Philippines. They pray for the reconveyance of such excess, or in the alternative, to declare that portion to have been expropriated, entitling them to just compensation; and d.) That the Republic should be declared a possessor in bad faith and therefore liable to the petitioners for the fruits received or could have been received from the use and occupation of the land. They likewise pray for actual and compensatory damages as well as attorney's fees. In answer to the complaint, respondent Republic of the Philippines contends that the heirs have no cause of action and even denied knowledge of such donation, having no record thereof in its possession. It continually asserts government ownership over

the property in dispute. Assuming arguendo that indeed there was such a donation, the Republic interposed these defenses: 1.) That defendant (Republic) as successor-in-interest of the Commonwealth of the Philippines thereby succeeded to all the rights, titles and interests of the latter with respect to the property in question; that the said donation continued to be operative and no automatic reversion occurred; 2.) That granting there was a violation of the condition, the action for reconveyance is already barred by laches, waiver and/or prescription; and 3.) That the suit is one against the state or the government which is immune from suit, and no consent was given by the latter to be sued. The RTC ruled in favor of the petitioners herein and disposed of the case as follows: WHEREFORE, judgment is hereby rendered: a.) Ordering the defendant to reconvey in favor of the plaintiffs the ownership and possession of the portions of the land in question designated as Lots Nos. 1-A, 1-B, 1-C, 1-E, 1-G, 1-H and 1-I in the commissioner's report; b.) Declaring that portions designated as Lots 1-O, 1-J and 1-K deemed expropriated as of 1966 by the defendant and to pay just compensation therefor with interest thereon at the legal rate commencing from December 29, 1970, the date of filing of Civil Case No. C-504 (Exh. "X"), until fully paid; and c.) Ordering the defendant to pay plaintiffs the amounts of P10,000.00 and P5,000.00 as reimbursement for attorney's fee and other litigation expenses, respectively, and to pay the costs hereof. SO ORDERED. On appeal to the Court of Appeals, the RTC ruling was reversed and set aside. Hence, this petition for review, wherein the following are assigned by petitioners as errors committed by the respondent court: I. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN HOLDING THAT THE AUTOMATIC REVERSION CLAUSE CONDITION EXPRESSLY CONTAINED IN THE DEED OF DONATION AND AS ACCEPTED BY THE DONEE, IS NOT IMPRESCRIPTIBLE; II. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN NOT HOLDING THAT THE PORTION NOW OCCUPIED BY THE PHILIPPINE ARMY DESIGNATED AS LOT 1-M IN EXHS. V AND V-1 WITH AN AREA OF 89,959 SQUARE METERS, SHALL REMAIN IN THE POSSESSION AND USE OF THE PHILIPPINE ARMY;

III. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN NOT DECIDING THAT LOTS 1-A, 1-B, 1-C AND 1-D AS DESIGNATED IN EXHS. V AND V-1 CONTAINING A TOTAL AREA OF 19,781 SQUARE METERS, HAVE BEEN EXPROPRIATED DE FACTO FOR PUBLIC USE FOR WHICH PETITIONERS ARE ENTITLED TO JUST COMPENSATION; IV. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN NOT DECIDING THAT LOT 1-J WITH AN AREA OF 845 SQUARE METERS; LOT 1-K WITH AN AREA OF 739 SQUARE METERS; AND 1-O WITH AN AREA OF 59,408 SQUARE METERS AS DESIGNATED IN EXHS. V AND V-1, HAVE BEEN EXPROPRIATED DE FACTO FOR PUBLIC USE FOR WHICH PETITIONERS ARE ENTITLED TO JUST COMPENSATION; V. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN NOT DECIDING THAT LOTS 1-E, 1-G, 1-H, 1-I, AS DESIGNATED IN EXHS. V AND V-1 WITH A TOTAL AREA OF 30,575 SQUARE METERS, HAVE TO BE RECONVEYED BY RESPONDENT REPUBLIC OF THE PHILIPPINES TO THE PETITIONERS; AND VI. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN NOT AWARDING TO PETITIONERS ATTORNEY'S FEES, LITIGATION EXPENSES AND COST OF SUIT.10 The main issue to be resolved by this Court now is whether or not the petitioners' action for reconveyance is already barred by prescription. From a resolution of this issue will proceed the proper adjudication of the rights of the parties to the subject land, including any right to just compensation, damages and other fees. At the outset, we find that the case of Roman Catholic Archbishop of Manila vs. Court of Appeals, 198 SCRA 300 (1991), provides a precedent in the resolution of the issue at hand. It involved a donation by the Eusebio spouses as private respondents therein, of a parcel of land, with an express provision for automatic reversion of the donated property in case of a violation of the condition therein. This Court held that from parity of reasons, the rules governing onerous donations are applicable to donations with a resolutory condition.11 Although automatic reversion immediately happens upon a violation of the condition and therefore no judicial action is necessary for such purpose, still judicial intervention must be sought by the aggrieved party if only for the purpose of determining the propriety of the rescission made.12 Applying Article 1144 (1) of the Civil Code on prescription of actions based on a written contract,13 the petitioners herein should have instituted the action for reconveyance within 10 years from the time the condition in the Deed of Donation was violated. The earliest date the petitioners knew of the said violation of said condition was on July 4, 1946, when the Republic, as successor of the Commonwealth of the Philippines, took over the properties and diverted the property to uses other than that imposed by the donor. As found by the Court of Appeals, the cause of action of the petitioners has clearly prescribed,14 having instituted the action

for reconveyance only on December 29, 1970, or 24 years after the condition was violated. Said action was dismissed by the trial court on September 26, 1983 for failure of petitioners to prosecute the case. The institution of a new action for reconveyance made on September 28, 1989, does not alter respondent court's conclusion but in fact bolsters it, for by then, a total of 43 long years were allowed by petitioners to lapse before instituting the case at bar. Even if the written communication sent by petitioners sometime in January 196915 and those made on February 10 and March 16, 1989 can be considered as written extrajudicial demands made by the creditors, they were nevertheless made way beyond the ten-year period of prescription stated in the law. With regard to the alleged excess of 33,607 square meters mistakenly included in the Original Certificate of Title, we also find in order the ruling of the Court of Appeals that the action for its reconveyance has likewise prescribed. Article 1456 of the Civil code states, "If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes." In the case of Bueno vs. Reyes, G.R. No. L-22587, 27 SCRA 1179, 1183 (1969), we held that registration of property by one person in his name, whether by mistake or fraud, the real owner being another person, impresses upon the title so acquired the character of a constructive trust for the real owner, which would justify an action for reconveyance. However, it is now well-settled that an action for reconveyance of registered land based on an implied trust prescribes in ten years16 and it is from the date of issuance of such title that the effective assertion of adverse title for purposes of the statute of limitations is counted.17 Granting that in the present case, the said excess portion of petitioners' land was mistakenly registered in the name of the Commonwealth of the Philippines on September 9, 1939, still petitioners were admittedly aware of this fact. The issuance of the OCT on said date stating the total area included should have apprised them, even constructively, that a portion of their land was mistakenly claimed by the donee, respondent Republic's predecessor-in-interest. Petitioners should have taken appropriate legal action seasonably, within the ten years prescriptive period. Since petitioners filed their action belatedly, we find that they have also lost any right to the aforesaid portion of land consisting of 33,607 square meters. For now, the causes of action which petitioners may have against the respondent Republic, in our view, are already barred by prescription. Extinctive prescription has set in in favor of the Republic, and it cannot now be sued based on the same causes of action. The main issue presented to us having been resolved, the other issues raised by petitioners no longer need elaboration for patent lack of merit. WHEREFORE, the petition for review is DENIED and the appealed decision of the Court of Appeals in CA-G.R. CV No. 36923, dated June 14, 1996, is hereby AFFIRMED. No pronouncement as to costs. SO ORDERED

SECOND DIVISION G.R. No. 146683 November 22, 2001

CIRILA ARCABA, petitioner, vs. ERLINDA TABANCURA VDA. DE BATOCAEL, SEIGFREDO C. TABANCURA, DORIS C. TABANCURA, LUZELLI C. TABANCURA, BELEN C. TABANCURA, RAUL A. COMILLE, BERNADETTE A. COMILLE, and ABNER A. COMILLE, respondents. MENDOZA, J.: Petitioner Cirila Arcaba seeks review on certiorari of the decision1 of the Court of Appeals, which affirmed with modification the decision2 of the Regional Trial Court, Branch 10, Dipolog City, Zamboanga del Norte in Civil Case No. 4593, declaring as void a deed of donation inter vivos executed by the late Francisco T. Comille in her favor and its subsequent resolution3 denying reconsideration. The facts are as follows: On January 16, 1956, Francisco Comille and his wife Zosima Montallana became the registered owners of Lot No. 437-A located at the corner of Calle Santa Rosa (now Balintawak Street) and Calle Rosario (now Rizal Avenue) in Dipolog City, Zamboanga del Norte. The total area of the lot was 418 square meters.4 After the death of Zosima on October 3, 1980, Francisco and his mother-in-law, Juliana Bustalino Montallana, executed a deed of extrajudicial partition with waiver of rights, in which the latter waived her share consisting of one-fourth (1/4) of the property to Francisco.5 On June 27, 1916, Francisco registered the lot in his name with the Registry of Deeds.6 Having no children to take care of him after his retirement, Francisco asked his niece Leticia Bellosillo,7 the latter's cousin, Luzviminda Paghacian,8 and petitioner Cirila Arcaba, then a widow, to take care of his house, as well as the store inside. 9 Conflicting testimonies were offered as to the nature of the relationship between Cirila and Francisco. Leticia Bellosillo said Francisco and Cirila were lovers since they slept in the same room,10 while Erlinda Tabancura,11another niece of Francisco, claimed that the latter had told her that Cirila was his mistress.12 On the other hand, Cirila said she was a mere helper who could enter the master's bedroom only when the old man asked her to and that Francisco in any case was too old for her. She denied they ever had sexual intercourse.13 It appears that when Leticia and Luzviminda were married, only Cirila was left to take care of Francisco.14 Cirila testified that she was a 34-year old widow while Francisco was a 75-year old widower when she began working for the latter; that he could still walk with her assistance at that time;15 and that his health eventually deteriorated and he became bedridden.16 Erlinda Tabancura testified that Francisco's sole source of income consisted of rentals from his lot near the public streets.17 He did not pay

Cirila a regular cash wage as a househelper , though he provided her family with food and lodging.18 On January 24, 1991, a few months before his death, Francisco executed an instrument denominated "Deed of Donation Inter Vivos," in which he ceded a portion of Lot 437-A, consisting of 150 square meters, together with his house, to Cirila, who accepted the donation in the same instrument. Francisco left the larger portion of 268 square meters in his name. The deed stated that the donation was being made in consideration of "the faithful services [Cirila Arcaba] had rendered over the past ten (10) years." The deed was notarized by Atty. Vic T. Lacaya, Sr.19and later registered by Cirila as its absolute owner .20 On October 4, 1991, Francisco died without any children. In 1993, the lot which Cirila received from Francisco had a market value of P57,105.00 and an assessed value of P28,550.00.21 On February 18, 1993, respondents filed a complaint against petitioner 'for declaration of nullity of a deed of donation inter vivos, recovery of possession, and damages. Respondents, who are the decedent's nephews and nieces and his heirs by intestate succession, alleged that Cirila was the common-law wife of Francisco and the donation inter vivos made by Francisco in her favor is void under Article 87 of the Family Code, which provides: Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage. On February 25, 1999, the trial court rendered judgment in favor of respondents, holding the donation void under this provision of the Family Code. The trial court reached this conclusion based on the testimony of Erlinda Tabancura and certain documents bearing the signature of one "Cirila Comille." The documents were (1) an application for a business permit to operate as real estate lessor, dated January 8, 1991, with a carbon copy of the signature "Cirila Comille";22 (2) a sanitary permit to operate as real estate lessor with a health certificate showing the signature "Cirila Comille" in black ink;23 and (3) the death certificate of the decedent with the signature "Cirila A. Comille" written in black ink.24 The dispositive portion of the trial court's decision states: WHEREFORE, in view of the foregoing, judgment is rendered: 1. Declaring the Deed of Donation Inter Vivos executed by the late Francisco Comille recorded as Doc. No. 7; Page No. 3; Book No. V; Series of 1991 in the Notarial Register of Notary Public Vic T. Lacaya (Annex " A " to the Complaint) null and void; 2. Ordering the defendant to deliver possession of the house and lot subject of the deed unto the plaintiffs within thirty (30) days after finality of this decision; and finally

3. Ordering the defendant to pay attorney's fees in the sum of P10,000.00. SO ORDERED.25 Petitioner appealed to the Court of Appeals, which rendered on June 19, 2000 the decision subject of this appeal. As already stated, the appeals court denied reconsideration. Its conclusion was based on (1) the testimonies of Leticia, Erlinda, and Cirila; (2) the copies of documents purportedly showing Cirila's use of Francisco's surname; (3) a pleading in another civil case mentioning payment of rentals to Cirila as Francisco's common-law wife; and (4) the fact that Cirila did not receive a regular cash wage. Petitioner assigns the following errors as having been committed by the Court of Appeals: (a) The judgment of the Court of Appeals that petitioner was the common-law wife of the late Francisco Comille is not correct and is a reversible error because it is based on a misapprehension of facts, and unduly breaks the chain of circumstances detailed by the totality of the evidence, its findings being predicated on totally incompetent or hearsay evidence, and grounded on mere speculation, conjecture or possibility. (Salazar v. Gutierrez, 33 SCRA 243 and other cases; cited in Quiason, Philippine Courts and their J urisdictions, 1993 ed., p. 604) (b) The Court of Appeals erred in shifting the burden of evidence from the plaintiff to defendant. (Bunyi v. Reyes, 39 SCRA 504; Quiason, id.) (c) The Court of Appeals decided the case in away probably not in accord with law or with the applicable jurisprudence in Rodriguez v. Rodriguez, 20 SCRA 908, and Liguez v. CA, 102 Phil. 577, 584.26 The issue in this case is whether the Court of Appeals correctly applied Art. 87 of the Family Code to the circumstances of this case. After a review of the records, we rule in the affirmative. The general rule is that only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court, subject only to certain exceptions: (a) when the conclusion is a finding grounded entirely on speculations, surmises, or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) where there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee; (g) when the findings of the Court of Appeals are contrary to those of the trial court; (h) when the findings of fact are conclusions without citation of specific evidence on which they are based; (i) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record; and G) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different

conclusion.27 It appearing that the Court of Appeals based its findings on evidence presented by both parties, the general rule should apply. In Bitangcor v. Tan,28 we held that the term "cohabitation" or "living together as husband and wife" means not only residing under one roof, but also having repeated sexual intercourse. Cohabitation, of course, means more than sexual intercourse, especially when one of the parties is already old and may no longer be interested in sex. At the very least, cohabitation is public assumption by a man and a woman of the marital relation, and dwelling together as man and wife, thereby holding themselves out to the public as such. Secret meetings or nights clandestinely spent together, even if often repeated, do not constitute such kind of cohabitation; they are merely meretricious.29In this jurisdiction, this Court has considered as sufficient proof of common-law relationship the stipulations between the parties,30 a conviction of concubinage,31 or the existence of legitimate children.32 Was Cirila Francisco's employee or his common-law wife? Cirila admitted that she and Francisco resided under one roof for a long time, It is very possible that the two consummated their relationship, since Cirila gave Francisco therapeutic massage and Leticia said they slept in the same bedroom. At the very least, their public conduct indicated that theirs was not just a relationship of caregiver and patient, but that of exclusive partners akin to husband and wife. Aside from Erlinda Tabancura's testimony that her uncle told her that Cirila was his mistress, there are other indications that Cirila and Francisco were common-law spouses. Seigfredo Tabancura presented documents apparently signed by Cirila using the surname "Comille." As previously stated, these are an application for a business permit to operate as a real estate lessor,33 a sanitary permit to operate as real estate lessor with a health certificate,34 and the death certificate of Francisco.35 These documents show that Cirila saw herself as Francisco's commonlaw wife, otherwise, she would not have used his last name. Similarly, in the answer filed by Francisco's lessees in "Erlinda Tabancura, et al. vs. Gracia Adriatico Sy and Antonio Sy," RTC Civil Case No.4719 (for collection of rentals), these lessees referred to Cirila as "the common-law spouse of Francisco." Finally, the fact that Cirila did not demand from Francisco a regular cash wage is an indication that she was not simply a caregiver-employee, but Francisco's common law spouse. She was, after all, entitled to a regular cash wage under the law.36 It is difficult to believe that she stayed with Francisco and served him out of pure beneficence. Human reason would thus lead to the conclusion that she was Francisco's common-law spouse. Respondents having proven by a preponderance of evidence that Cirila and Francisco lived together as husband and wife without a valid marriage, the inescapable conclusion is that the donation made by Francisco in favor of Cirila is void under Art. 87 of the Family Code.
1wphi 1.nt

WHEREFORE, the decision of the Court of Appeals affirming the decision of the trial court is hereby AFFIRMED. SO ORDERED.

FIRST DIVISION G.R. No. 132681 December 3, 2001

RICKY Q. QUILALA, petitioner, vs. GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, respondent. 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 partydefendant. 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,7specifying 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 lefthand 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 vivos is 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.

SECOND DIVISION

[G.R. No. 106755. February 1, 2002]

APOLINARIA AUSTRIA-MAGAT, petitioner, vs. HON. COURT OF APPEALS and FLORENTINO LUMUBOS, DOMINGO COMIA,

TEODORA CARAMPOT, SUMPELO, MAMERTO SUMPELO, respondents.

ERNESTO APOLO, SUMPELO and

SEGUNDA RICARDO

DECISION
DE LEON, JR., J.:

Before us is a petition for review of the Decision of the Court of Appeals, dated June 30, 1989 reversing the Decision, dated August 15, 1986 of the Regional Trial Court (RTC) of Cavite, Branch 17. The Decision of the RTC dismissed Civil Case No. 4426 which is an action for annulment of title, reconveyance and damages.
[1] [2] [3]

The facts of the case are as follows: Basilisa Comerciante is a mother of five (5) children, namely, Rosario Austria, Consolacion Austria, herein petitioner Apolinaria Austria-Magat, Leonardo, and one of herein respondents, Florentino Lumubos. Leonardo died in a Japanese concentration camp at Tarlac during World War II. In 1953, Basilisa bought a parcel of residential land together with the improvement thereon covered and described in Transfer Certificate of Title No. RT-4036 (T-3268) and known as Lot 1, Block 1, Cavite Beach Subdivision, with an area of 150 square meters, located in Bagong Pook, San Antonio, Cavite City. On December 17, 1975, Basilisa executed a document designated as Kasulatan sa Kaloobpala (Donation). The said document which was notarized by Atty. Carlos Viniegra, reads as follows: KASULATANG SA KALOOBPALA (DONATION) TALASTASIN NG LAHAT AT SINUMAN: Na ako, si BASELISA COMERCIANTE, may sapat na gulang, Filipina, balo, at naninirahan sa blg. 809 L. Javier Bagong Pook, San Antonio, Lungsod ng Kabite, Filipinas, sa pamamagitan ng kasulatang itoy NAGSASALAYSAY Na alang-alang sa mabuting paglilingkod at pagtingin na iniukol sa akin ng apat kong mga tunay na anak na sila: ROSARIO AUSTRIA, Filipina, may sapat na gulang, balo, naninirahan sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite;

CONSOLACION AUSTRIA, Filipina, may sapat na gulang, balo naninirahan sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite; APOLINARIA AUSTRIA, Filipina, may sapat na gulang, may asawa, naninirahan sa Pasong Kawayan, Hen. Trias, Kabite; FLORENTINO LUMUBOS, Filipino, may sapat na gulang, asawa ni Encarnacion Magsino, at naninirahan din sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite; ay Kusang loob na ibinibigay ko at ipinagkakaloob ng ganap at hindi na mababawi sa naulit ng apat na anak ko at sa kanilang mga tagamagmana (sic), ang aking isang lupang residential o tirahan sampu ng aking bahay nahan ng nakatirik doon na nasa Bagong Pook din, San Antonio, Lungsod ng Kabite, at nakikilala bilang Lote no. 7, Block no.1, of Subdivision Plan Psd-12247; known as Cavite Beach Subdivision, being a portion of Lot No. 1055, of the Cadastral survey of Cavite, GLRO Cadastral Rec. no. 9539; may sukat na 150 metros cuadrados, at nakatala sa pangalan ko sa Titulo Torrens bilang TCT-T-3268 (RT-4036) ng Lungsod ng Kabite; Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na akoy pumanaw sa mundo, at sa ilalim ng kondision na: Magbubuhat o babawasin sa halaga ng nasabing lupa at bahay ang anumang magugul o gastos sa aking libing at nicho at ang anumang matitira ay hahatiin ng APAT na parte, parepareho isang parte sa bawat anak kong nasasabi sa itaas nito upang maliwanang (sic) at walang makakalamang sinoman sa kanila; At kaming apat na anak na nakalagda o nakadiit sa kasulatang ito ay TINATANGGAP NAMIN ang kaloob-palang ito ng aming magulang na si Basilisa Comerciante, at tuloy pinasasalamatan namin siya ng taos sa (sic) puso dahil sa kagandahan look (sic) niyang ito sa amin. SA KATUNAYAN, ay nilagdaan o diniitan namin ito sa Nobeleta, Kabite, ngayong ika-17 ng Disyembre taong 1975. HER MARK BASELISA COMERCIANTE Tagakaloobpala (Sgd.) APOLINARIA AUSTRIA Tagatanggap-pala HER MARK CONSOLACION AUSTRIA HER MARK ROSARIO AUSTRIA

(Sgd.)FLORENTINO LUMUBOS Tagatanggap-pala (Acknowledgment signed by Notary Public C.T. Viniegra is omitted).
[4]

Basilisa and her said children likewise executed another notarized document denominated as Kasulatan which is attached to the deed of donation. The said document states that: KASULATAN TALASTASIN NG MADLA: Na kaming mga nakalagda o nakadiit sa labak nito sila Basilisa Comerciante at ang kanyang mga anak na sila: Rosario Austria, Consolacion Austria, Apolonio Austria, at Florentino Lumubos, pawang may mga sapat na gulang, na lumagda o dumiit sa kasulatang kaloob pala, na sinangayunan namin sa harap ng Notario Publico, Carlos T. Viniegra, ay nagpapahayag ng sumusunod: Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng tirahan ng Bagong Pook na nababanggit sa nasabing kasulatan, ay mananatili sa poder o possession ng Ina, na si Basilisa Comerciante habang siya ay nabubuhay at Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang nasabing Basilisa Comerciante. Sa katunayan ang nagsilagda kaming lahat sa labak nito sa harap ng abogado Carlos T. Viniegra at dalawang saksi. Nobeleta, Kabite. Ika-17 ng Disyembre, 1975.
[5]

On February 6, 1979, Basilisa executed a Deed of Absolute Sale of the subject house and lot in favor of herein petitioner Apolinaria Austria-Magat for Five Thousand Pesos (P5,000.00). As the result of the registration of that sale, Transfer Certificate of Title (TCT for brevity) No. RT-4036 in the name of the donor was cancelled and in lieu thereof TCT No. T-10434 was issued by the Register of Deeds of Cavite City in favor of petitioner Apolinaria Austria-Magat on February 8, 1979. On September 21, 1983, herein respondents Teodora Carampot, Domingo Comia, and Ernesto Apolo (representing their deceased mother Consolacion Austria), Ricardo, Mamerto and Segunda, all surnamed

Sumpelo (representing their deceased mother Rosario Austria) and Florentino Lumubos filed before the Regional Trial Court of Cavite an action, docketed as Civil Case No. 4426 against the petitioner for annulment of TCT No. T-10434 and other relevant documents, and for reconveyance and damages. On August 15,1986, the trial court dismissed Civil Case No. 4426 per its Decision, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, this Court hereby renders judgment for defendant dismissing this case and ordering plaintiffs to pay the amount ofP3,000.00 as attorneys fees and the costs of suit. SO ORDERED.
[6]

According to the trial court, the donation is a donation mortis causa pursuant to Article 728 of the New Civil Code inasmuch as the same expressly provides that it would take effect upon the death of the donor; that the provision stating that the donor reserved the right to revoke the donation is a feature of a donation mortis causa which must comply with the formalities of a will; and that inasmuch as the donation did not follow the formalities pertaining to wills, the same is void and produced no effect whatsoever. Hence, the sale by the donor of the said property was valid since she remained to be the absolute owner thereof during the time of the said transaction. On appeal, the decision of the trial court was reversed by the Court of Appeals in its subject decision, the dispositive portion of which reads, to wit: WHEREFORE, in view of the foregoing, the appealed decision is hereby SET ASIDE and a new one rendered:
1. declaring null and void the Deed of Sale of Registered Land (Annex B) and Transfer Certificate of Title No. T-10434 of the Registry of Deeds of Cavite City (Annex E) and ordering the cancellation thereof; and 2. declaring appellants and appellee co-owners of the house and lot in question in accordance with the deed of donation executed by Basilisa Comerciante on December 17, 1975.

No pronouncement as to costs. SO ORDERED.

[7]

The appellate court declared in its decision that:

In the case at bar, the decisive proof that the deed is a donation inter vivos is in the provision that : Ibinibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na anak ko at sa kanilang mga tagapagmana, ang aking lupang residential o tirahan sampu ng aking bahay nakatirik doon xxx. (emphasis supplied) This is a clear expression of the irrevocability of the conveyance. The irrevocability of the donation is a characteristic of a donation inter vivos. By the words hindi mababawi, the donor expressly renounced the right to freely dispose of the house and lot in question. The right to dispose of a property is a right essential to full ownership. Hence, ownership of the house and lot was already with the donees even during the donors lifetime. xxx xxx xxx In the attached document to the deed of donation, the donor and her children stipulated that: Gayon din ang nasabing titulo ay hindi mapapasangla o maipagbibili ang lupa habang may buhay ang nasabing Basilisa Comerciante. The stipulation is a reiteration of the irrevocability of the dispossession on the part of the donor. On the other hand, the prohibition to encumber, alienate or sell the property during the lifetime of the donor is a recognition of the ownership over the house and lot in issue of the donees for only in the concept of an owner can one encumber or dispose a property.
[8]

xxx

Hence this appeal grounded on the following assignment of errors:

I

THE RESPONDENT COURT OF APPEALS, WITH DUE RESPECT, IGNORED THE RULES OF INTERPRETATION OF CONTRACTS WHEN IT CONSIDERED THE DONATION IN QUESTION AS INTER VIVOS.
II

THE RESPONDENT COURT OF APPEALS, AGAIN WITH DUE RESPECT, ERRED IN NOT HOLDING THAT THE PRESENT ACTION HAS PRESCRIBED UNDER THE STATUTE OF LIMITATIONS.
[9]

Anent the first assignment of error, the petitioner argues that the Court of Appeals erred in ruling that the donation was a donation inter vivos. She claims that in interpreting a document, the other relevant provisions therein must be read in conjunction with the rest. While the document indeed stated that the donation was irrevocable, that must be interpreted in the light of the provisions providing that the donation cannot be encumbered, alienated or sold by anyone, that the property donated shall remain in the possession of the donor while she is alive, and that the donation shall take effect only when she dies. Also, the petitioner claims that the donation is mortis causa for the reason that the contemporaneous and subsequent acts of the donor, Basilisa Comerciante, showed such intention. Petitioner cites the testimony of Atty. Viniegra, who notarized the deed of donation, that it was the intent of the donor to maintain control over the property while she was alive; that such intent was shown when she actually sold the lot to herein petitioner. We affirm the appellate courts decision. The provisions in the subject deed of donation that are crucial for the determination of the class to which the donation belongs are, as follows: xxx xxx xxx(I)binibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na anak ko at sa kanilang mga tagapagmana, ang aking lupang residential o tirahan sampu ng aking bahay nakatirik doon na nasa Bagong Pook din, San Antonio, Lungsod ng Kabite xxx xxx Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na akoy pumanaw sa mundo, xxx. xxx xxx Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng tirahan ng Bagong Pook na nababanggit sa nasabing kasulatan, ay mananatili sa poder o possesion ng Ina, na si Basilisa Comerciante habang siya ay nabubuhay at Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang nasabing Basilisa Comerciante xxx. xxx xxx xxx

It has been held that whether the donation is inter vivos or mortis causa depends on whether the donor intended to transfer ownership over the properties upon the execution of the deed. In Bonsato v. Court of Appeals, this Court enumerated the characteristics of a donation mortis causa, to wit:
[10] [11]

(1)

It conveys no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive; That before his death, the transfer should be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed; That the transfer should be void if the transferor should survive the transferee.

(2)

(3)

Significant to the resolution of this issue is the irrevocable character of the donation in the case at bar. In Cuevas v. Cuevas, we ruled that when the deed of donation provides that the donor will not dispose or take away the property donated (thus making the donation irrevocable), he in effect is making a donation inter vivos. He parts away with his naked title but maintains beneficial ownership while he lives. It remains to be a donation inter vivos despite an express provision that the donor continues to be in possession and enjoyment of the donated property while he is alive. In the Bonsato case, we held that:
[12]

(W)hat is most significant [in determining the type of donation] is the absence of stipulation that the donor could revoke the donations; on the contrary, the deeds expressly declare them to be irrevocable, a quality absolutely incompatible with the idea of conveyances mortis causa where revocability is of the essence of the act, to the extent that a testator can not lawfully waive or restrict his right of revocation (Old Civil Code, Art.737; New Civil Code, Art. 828).
[13]

Construing together the provisions of the deed of donation, we find and so hold that in the case at bar the donation is inter vivos. The express irrevocability of the same (hindi na mababawi) is the distinctive standard that identifies that document as a donation inter vivos. The other provisions therein which seemingly make the donation mortis causa do not go against the irrevocable character of the subject donation. According to the petitioner, the provisions which state that the same will only take effect upon the death of the donor and that there is a prohibition to alienate, encumber, dispose, or sell the same, are proofs that the donation is mortis causa. We disagree. The said provisions should be harmonized with its express irrevocability. In Bonsato where the donation per the deed of donation would also take effect upon the death of the donor with reservation for the donor to enjoy the fruits of the land, the Court held that the said statements only mean that after the donors death, the donation

will take effect so as to make the donees the absolute owners of the donated property, free from all liens and encumbrances; for it must be remembered that the donor reserved for himself a share of the fruits of the land donated.
[14]

In Gestopa v. Court of Appeals, this Court held that the prohibition to alienate does not necessarily defeat the inter vivos character of the donation. It even highlights the fact that what remains with the donor is the right of usufruct and not anymore the naked title of ownership over the property donated. In the case at bar, the provision in the deed of donation that the donated property will remain in the possession of the donor just goes to show that the donor has given up his naked title of ownership thereto and has maintained only the right to use (jus utendi) and possess (jus possidendi) the subject donated property.
[15]

Thus, we arrive at no other conclusion in that the petitioners cited provisions are only necessary assurances that during the donors lifetime, the latter would still enjoy the right of possession over the property; but, his naked title of ownership has been passed on to the donees; and that upon the donors death, the donees would get all the rights of ownership over the same including the right to use and possess the same. Furthermore, it also appeared that the provision in the deed of donation regarding the prohibition to alienate the subject property is couched in general terms such that even the donor is deemed included in the said prohibition (Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang nasabing Basilisa Comerciante). Both the donor and the donees were prohibited from alienating and encumbering the property during the lifetime of the donor. If the donor intended to maintain full ownership over the said property until her death, she could have expressly stated therein a reservation of her right to dispose of the same. The prohibition on the donor to alienate the said property during her lifetime is proof that naked ownership over the property has been transferred to the donees. It also supports the irrevocable nature of the donation considering that the donor has already divested herself of the right to dispose of the donated property. On the other hand, the prohibition on the donees only meant that they may not mortgage or dispose the donated property while the donor enjoys and possesses the property during her lifetime. However, it is clear that the donees were already the owners of the subject property due to the irrevocable character of the donation. The petitioner argues that the subsequent and contemporaneous acts of the donor would show that her intention was to maintain control over her properties while she was still living. We disagree. Respondent Domingo Comia testified that sometime in 1977 or prior to the sale of the subject house and lot, his grandmother, the donor in the case at bar, delivered the

title of the said property to him; and that the act of the donor was a manifestation that she was acknowledging the ownership of the donees over the property donated. Moreover, Atty. Viniegra testified that when the donor sold the lot to the petitioner herein, she was not doing so in accordance with the agreement and intent of the parties in the deed of donation; that she was disregarding the provision in the deed of donation prohibiting the alienation of the subject property; and that she knew that the prohibition covers her as well as the donees.
[16] [17]

Another indication in the deed of donation that the donation is inter vivos is the acceptance clause therein of the donees. We have ruled that an acceptance clause is a mark that the donation is inter vivos. Acceptance is a requirement for donations inter vivos. On the other hand, donations mortis causa, being in the form of a will, are not required to be accepted by the donees during the donors lifetime.
[18]

We now rule on whether the donor validly revoked the donation when one of her daughters and donees, Consolacion Austria, violated the prohibition to encumber the property. When Consolacion Austria mortgaged the subject property to a certain Baby Santos, the donor, Basilisa Comerciante, asked one of the respondents herein, Domingo Comia, to redeem the property, which the latter did. After the petitioner in turn redeemed the property from respondent Domingo, the donor, Basilisa, sold the property to the petitioner who is one of the donees. The act of selling the subject property to the petitioner herein cannot be considered as a valid act of revocation of the deed of donation for the reason that a formal case to revoke the donation must be filed pursuant to Article 764 of the Civil Code which speaks of an action that has a prescriptive period of four (4) years from non-compliance with the condition stated in the deed of donation. The rule that there can be automatic revocation without benefit of a court action does not apply to the case at bar for the reason that the subject deed of donation is devoid of any provision providing for automatic revocation in event of non-compliance with the any of the conditions set forth therein. Thus, a court action is necessary to be filed within four (4) years from the non-compliance of the condition violated. As regards the ground of estoppel, the donor, Basilisa, cannot invoke the violation of the provision on the prohibition to encumber the subject property as a basis to revoke the donation thereof inasmuch as she acknowledged the validity of the mortgage executed by the donee, Consolacion Austria, when the said donor asked respondent Domingo Comia to redeem the same. Thereafter, the donor, Basilisa likewise asked respondent Florentino Lumubos and the petitioner herein to redeem the same. Those acts implied that the donees have the right of control and naked title of ownership over the property considering that the donor,
[19] [20]

Basilisa condoned and acknowledged the validity of the mortgage executed by one of the donees, Consolacion Austria. Anent the second issue, the petitioner asserts that the action, against the petitioner, for annulment of TCT No. T-10434 and other relevant documents, for reconveyance and damages, filed by the respondents on September 21, 1983 on the ground of fraud and/or implied trust has already prescribed. The sale happened on February 6, 1979 and its registration was made on February 8, 1979 when TCT No. RT-4036 in the name of the donor was cancelled and in lieu thereof TCT No. T-10434 in the name of the petitioner was issued. Thus, more than four (4) years have passed since the sale of the subject real estate property was registered and the said new title thereto was issued to the petitioner. The petitioner contends that an action for reconveyance of property on the ground of alleged fraud must be filed within four (4) years from the discovery of fraud which is from the date of registration of the deed of sale on February 8, 1979; and that the same prescriptive period also applies to a suit predicated on a trust relationship that is rooted on fraud of breach of trust. When ones property is registered in anothers name without the formers consent, an implied trust is created by law in favor of the true owner. Article 1144 of the New Civil Code provides: Art. 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. (n) Thus, an action for reconveyance of the title to the rightful owner prescribes in ten (10) years from the issuance of the title. It is only when fraud has been committed that the action will be barred after four (4) years.
[21] [22]

However, the four-year prescriptive period is not applicable to the case at bar for the reason that there is no fraud in this case. The findings of fact of the appellate court which are entitled to great respect, are devoid of any finding of fraud. The records do not show that the donor, Basilisa, and the petitioner ever intended to defraud the respondents herein with respect to the sale and ownership of the said property. On the other hand, the sale was grounded upon their honest but erroneous interpretation of the deed of donation that it is mortis causa, not inter vivos;and that the donor still had the rights to sell or dispose of the donated property and to revoke the donation.

There being no fraud in the trust relationship between the donor and the donees including the herein petitioner, the action for reconveyance prescribes in ten (10) years. Considering that TCT No. T-10434 in the name of the petitioner and covering the subject property was issued only on February 8, 1979, the filing of the complaint in the case at bar in 1983 was well within the ten-year prescriptive period. The Court of Appeals, therefore, committed no reversible error in its appealed Decision. WHEREFORE, the appealed Decision dated June 30, 1989 of the Court of Appeals is hereby AFFIRMED. No pronouncement as to costs. SO ORDERED.
SECOND DIVISION G.R. No. 149570 March 12, 2004

HEIRS OF ROSENDO SEVILLA FLORENCIO, as represented by ESTRELLITA FLORENCIO-CRUZ and RODRIGO R. FLORENCIO, petitioners, vs. HEIRS OF TERESA SEVILLA DE LEON as represented by VALERIANA MORENTE, respondents. DECISION CALLEJO, SR., J.: Before us is a petition for review of the Joint Decision1 of the Court of Appeals in CAG.R. SP Nos. 59698-99 which affirmed the June 5, 2000 Decisions2 of the Regional Trial Court of Malolos, Bulacan, Branch 20 in Civil Cases No. 1018-M-99 and 1019M-99, and the resolution of the appellate court denying the petitioners motion for reconsideration. The Antecedents Teresa Sevilla de Leon, owned a residential lot with an area of 828 square meters located in San Miguel, Bulacan. The said lot was covered by Transfer Certificate of Title (TCT) No. T-44349.3 In the 1960s, De Leon allowed the spouses Rosendo and Consuelo Florencio to construct a house on the said property and stay therein without any rentals therefor. On September 26, 1966, De Leon, with the consent of her husband Luis, leased the aforesaid parcel of land forP5 per month to Bienvenido Santos "for as long as the lessor (Teresa de Leon) had an outstanding loan with the Second Quezon City Development Bank of Quezon City but not to exceed the period of fifteen (15) years."4 De Leon assigned her leasehold right in favor of the Second Quezon City Development Bank. The lease and De Leons leasehold right were annotated at the

back of TCT No. T-44349 as Entry Nos. 152248 and 152249,5respectively. Thereafter, Bienvenido Santos constructed a house thereon. In November 1978, De Leon, then already a widow, died intestate. In deference to her wishes, her heirs allowed Rosendo Florencio to continue staying in the property. In March 1995, Florencio died intestate, but his heirs, the respondents, remained in the property. On April 26, 1995, the heirs of De Leon, through counsel, sent a letter to the heirs of Florencio, demanding that they vacate the property within ninety (90) days from receipt thereof.6 The latter refused and failed to vacate the property. The heirs of De Leon, through Valeriana L. Morente, thereafter filed a complaint for ejectment against the heirs of Florencio before the Municipal Trial Court of San Miguel, Bulacan, docketed as Civil Case No. 2061. Therein, the plaintiffs alleged that they were the pro-indiviso owners of the 828 square-meter lot covered by TCT No. T-44349, which they inherited from their mother. During her lifetime, their mother allowed Florencio and his family to occupy the property without any compensation, subject to the condition that they shall vacate the same upon demand; such arrangement went on even after their mothers demise. They further averred that sometime in 1995, they demanded that the heirs of Florencio vacate the property, but that the latter refused to do so.7 The plaintiff thence prayed: WHEREFORE, premises considered, it is most respectfully prayed that after due hearing, judgment be rendered ordering defendants to: 1. Vacate the premises which they are presently occupying; 2. Pay plaintiff the amount of P100,000.00 as and by way of attorneys fees; 3. Pay plaintiff P100,000.00 as moral damages; 4. Pay plaintiff P100,000.00 as exemplary damages. 5. Pay plaintiff P10,000.00 per month from April 26, 1995 up to and until defendants vacate the premises. Plaintiff prays for other reliefs just and equitable under the circumstances. 8 In their answer to the complaint, the heirs of Florencio alleged that the plaintiffs had no cause of action against them, as Teresa de Leon had executed a Deed of Donation on October 1, 1976 over the said parcel of land in favor of their predecessor, Rosendo Florencio. The latter accepted the donation, as shown by his signature above his typewritten name on page one of the deed. The execution of the deed was witnessed by Patria L. Manotoc and Valeriana L. Morente. Atty. Tirso L. Manguiat, a notary public in the City of Manila, notarized the deed on said date and entered it in his notarial record as Doc. No. 1724, page 71, Book IV, series of 1976. 9 The heirs of Florencio further averred that since then, their predecessor and his family possessed the aforesaid property as owners. After De Leons deat h, Florencio

and his children, in coordination with Jose de Leon, the administrator of the aforesaid property, arranged for the registration of the land subject of the donation in the name of Rosendo Florencio, which was, however, superseded by the untimely demise of Jose de Leon in 1991. Thus, the property remained in the name of Teresa Sevilla de Leon, even after Florencios death in March of 1995.10 On February 1, 1996, the heirs of De Leon, represented by Valeriana L. Morente, also filed a complaint for ejectment against the heirs of Bienvenido Santos before the MTC of San Miguel, Bulacan, docketed as Civil Case No. 2062.11 They prayed, thus: WHEREFORE, premises considered, it is most respectfully prayed that after due hearing, judgment be rendered ordering defendants to: 1. Vacate the premises which they are presently occupying; 2. Pay plaintiff the amount of P100,000.00 as and by way of attorneys fees; 3. Pay plaintiff P100,000.00 as moral damages; 4. Pay plaintiff P100,000.00 as exemplary damages; 5. Pay plaintiff P10,000.00 per month from April 26, 1995 up to and until defendants vacate the premises. Plaintiff prays for other reliefs just and equitable under the circumstances. 12 In their answer to the complaint, the heirs of Bienvenido Santos, through counsel, alleged that the plaintiffs had no cause of action against them, and that they did not occupy the property by mere tolerance but on the basis of a contract of lease executed by De Leon on September 26, 1966. Furthermore, De Leon donated the property to Rosendo Florencio on October 1, 1976, and the latter, after the expiration of the contract of lease, allowed and permitted them to continue and remain in possession of the property without any compensation. According to the heirs of Bienvenido Santos, only Florencios heirs had the right to cause their eviction from the property by reason of the deed of donation executed in favor of the latter. The trial of the two cases was consolidated. The parties agreed to litigate the following issues: After the preliminary conference, parties submitted their respective position papers. Plaintiffs raised and argued on the following issues: a). Defendants possession of the premises was merely on the tolerance of the late Teresa de Leon. b). The alleged Deed of Donation does not exist, is patently a falsified document and can never be the source of any right whatsoever.

Defendants, on the other hand, raised and argued on the following issues: a). Defendants do not have only a better right of possession over the questioned parcel of land and they do not have only the absolute and lawful possession of the same but they have the absolute and lawful ownership of the same not only against the plaintiffs but against the whole world. b). Defendants are entitled to their counterclaim.13 On motion of the plaintiffs in both cases, the court issued an Order directing the heirs of Florencio to produce the original of the Deed of Donation purportedly executed by Teresa de Leon. However, they failed to comply with the order of the court and submitted a mere photocopy of the same.14 The plaintiffs adduced in evidence the following: (1) TCT No. T-44349 in the name of Teresa Sevilla;15 (2) demand letters sent by the plaintiffs counsel to the defendants demanding that the latter vacate the subject premises;16 (3) affidavit-complaint of Valeriana Morente filed in the Office of the Provincial Prosecutor of Bulacan docketed as I.S. No. 96-1513 for falsification, perjury and applicable crimes against Rodrigo Florencio and Atty. Tirso Manguiat, dated May 8, 1996;17 (4) affidavitcomplaint executed by Ramon de Leon Manotoc dated May 8, 1996; 18 (5) copies of Teresa de Leons passport issued on April 28, 1975 containing specimens of her signature;19 (6) copy of Patria Manotocs passport issued on September 16, 1997 with her specimen signature therein;20 (7) copy of Valeriana Morentes passports issued on the following dates: (a) February 20, 1967;21 (b) April 28, 1975;22 (c) October 4, 1984;23 and (d) August 22, 1994,24 with specimens of her signature appearing therein covering a span of thirty years; (8) copy of the Certificate of Death of Patria Manotoc;25 (9) Certification dated April 23, 1996 issued by Teresita R. Ignacio, Chief, Archives Division of the Records Management and Archives Division of Manila26 to the effect that nothing in the notarial register of Atty. Tirso L. Manguiat show that he notarized a deed of donation dated October 1, 1976 in favor of Rosendo Florencio; (10) copy of Sinumpaang Salaysay dated July 19, 1996 executed by one Rodolfo Apolinario;27 and, (11) copies of the official receipts of the real estate taxes paid.28 For their part, the heirs of Florencio adduced in evidence a photocopy of the Deed of Donation dated October 1, 1976 purportedly executed by De Leon in favor of Rosendo Florencio.29 The heirs of Bienvenido Santos submitted in evidence as Exhibits "1" and "1-H" the Contract of Lease dated September 6, 1966 between Teresa Sevilla and Bienvenido R. Santos.30 On December 3, 1996, the MTC rendered a decision in Civil Cases Nos. 2061 and 2062 dismissing the complaints for lack of jurisdiction upon the finding that the issue of possession cannot be determined without resolving, in a full blown trial, the issue of ownership.31 The heirs of De Leon appealed the decisions of the MTC to the RTC of Bulacan, Branch 83, which rendered judgment reversing the decision of the court a quo. It

held that the MTC had jurisdiction over the cases; as such, the trial court should proceed and render judgment therefor. In the course of the proceedings, the defendants adduced in evidence a copy of the Deed of Donation as certified by the RTC of Bulacan on May 29, 1996.32 On August 27, 1999, the MTC rendered an Amended Decision in Civil Case No. 2061 in favor of the defendants and against the plaintiffs. The dispositive portion of the decision reads: WHEREFORE, the court finds the defendants as having a better right of possession over the subject parcel of land as against the plaintiffs and hereby orders this case DISMISSED. For lack of evidence to prove bad faith on the part of the plaintiffs in the filing of this case, and in line with the policy not to put premium on the right to litigate, the counterclaim of the defendants is, likewise, ordered DISMISSED. With no pronouncements as to costs. SO ORDERED.33 The decision was appealed to the RTC of Bulacan. On June 5, 2000, the RTC rendered judgment reversing the decision of the MTC and rendered a new judgment in favor of the plaintiffs, as follows: WHEREFORE, premises considered, the Decision dated August 27, 1999, rendered by the Municipal Trial Court of San Miguel, Bulacan, in Civil Case No. 2061, is hereby set aside and a new one is hereby rendered, as follows: a) Ordering the heirs of Rosendo Florencio and all those claiming any rights under them to vacate the subject premises, particularly that parcel of land covered by Transfer Certificate of Title (TCT) No. T-44349, situated in San Jose, San Miguel, Bulacan; b) Ordering the Heirs of Rosendo Florencio to pay the heirs of Teresa Sevilla the amount of P2,000.00 per month as reasonable monthly rental on the premises, to commence on April 1995 until the premises is vacated by them; and c) Ordering the heirs of Rosendo Florencio to pay the heirs of Teresa Sevilla the amount of P10,000.00, as attorneys fees and expenses of litigation. SO ORDERED.34 The RTC ruled that the deed of donation was insufficient to support the claim of the heirs of Florencio that they were the owners of the property and were, thus, entitled to its possession.

The defendants, now the petitioners, filed a petition for review with the Court of Appeals of the decision of the RTC. On May 28, 2001, the Court of Appeals rendered judgment dismissing the petition and affirming the RTC decision. The CA adopted the findings of the RTC and its disquisitions on why the deed of donation was not a credible piece of evidence to support the petitioners claim over the property; hence, did not transfer title over the property in favor of the petitioners. First. The deed of donation (Exh. "1"), which purports to have been executed in 1976, is not annotated on the title to the property which remains registered in the name of Teresa Sevilla under TCT No. T-44349 (Exh. "A" and "A-1"). There is no showing whatsoever that the same or a copy thereof was submitted to the Office of the Register of Deeds. Second. As earlier pointed out, throughout the years, the real estate taxes on the property continued to be paid in the name of Teresa Sevilla by the caretaker Rodolfo Apolinario and nobody else. There is no showing that the defendants had previously laid any claim of title or ownership over the property and attempted to pay the taxes thereon. Third. Although it purports to have been notarized in the City of Manila by one Atty. Tirso L. Manguiat, there is no indication of its existence in the notarial record of Atty. Manguiat, as per Certification dated April 23, 1996 (Exh. "L") of the Manila Records Management and Archives Office. One can only wonder why from the place of execution in San Miguel, Bulacan on October 1, 1976, its notarization on the same date had to be in the City of Manila. Fourth. The Court has noted, as anyone can easily do, that the signature purported to be that of Teresa de Leon appearing in the deed of donation (Exh. "1-B"), is dissimilar to her customary signatures affixed to her passports (Exhs. "E" and "E-1"). The same is true with those of Patria Manotoc and Valeriana L. Morente appearing in the same deed of donation (Exhs. "1-D and "1-E"), with those of their customary signatures appearing in their respective passports (Exhs. "F" and "F-1"; "G," "G-1" and "G-2"; "H," "H-1" and "H-2"; "I" and "I-1" and "J" and "J-1"). And Fifth. There is no explanation given why since 1976, when the deed of donation was supposedly executed, up to the present, the defendants did not register the same to secure a new title in their names. In fact, there is no showing that efforts toward that end were ever executed. As it is, the Court holds that the deed of donation in question is not a credible piece of evidence to support the defendants claim of acquisition of title and ownership over the subject property and therefore insufficient to justify their continuing possession and occupancy thereof. Thus, as against defendants claim which is unregistered, the plaintiffs right over the property as the legal heirs and successorsin-interest of the registered owner must prevail.35 The Present Petition The petitioners now contend in this case that the Court of Appeals and the RTC erred in rendering judgment for the respondents, thus:

1. In finding no reversible error committed by the Regional Trial Court as an appellate court and affirming its decision. 2. In concluding that the evidence presented reveals serious doubts as to the veracity and authenticity of the notarized deed of donation, contrary to the findings of the trial court that there is a legal presumption of regularity in the execution thereof. 3. In holding that private respondents are entitled to possess the subject property notwithstanding petitioners claim to the contrary and despite the latters continuous, open and adverse possession for more than forty years. 36 The petitioners aver that donation is one of the modes of acquiring ownership. Their claim for possession is precisely based on the deed of donation executed by Teresa Sevilla de Leon on October 1, 1976 in favor of their father, Rosendo Florencio. The aforesaid deed was duly notarized, and by virtue of its notarization, such deed became a public document. Furthermore, according to the petitioners, an examination of the deed reveals that it had conformed to all the essential requisites of donation, as required by the provisions of the New Civil Code; hence, its validity must be presumed.37 From the time of the donation up to the present, the petitioners assert that they possessed the property openly, publicly and against the whole world. As regards the alleged forgery of the signatures of the donor and the witnesses, the petitioners assert that absent any clear, positive and convincing evidence that the same were forged, the presumption is that they are genuine. The mere variance in the signatures of the donor and the witnesses cannot be considered as conclusive proof of the forgery. They aver that the Certification dated April 23, 1996 of the Manila Records Management and Archives Office stating that no such notarized deed existed in the notarial records of Atty. Manguiat cannot be conclusive evidence that no donation ever existed. According to the petitioners, such certification was merely preponderant and, therefore, not enough to overthrow the presumption of regularity in the notarization as well as the genuineness of the document. The petitioners posit that their failure to register the deed of donation did not affect its validity, it not being a requisite of a valid donation. They allege that their effort to register the same during the lifetime of Jose de Leon, the administrator of the property, did not materialize because of the latters untimely death in 1991. The petitioners conclude that because of the respondents failure to destroy the validity of the deed of donation, their right over the property should prevail; the petitioners right accrued on October 1, 1976, while that of the respondents accrued only in November of 1978. In their comment, the respondents, through counsel, argue that the deed of donation executed by De Leon dated October 1, 1976 in favor of Rosendo Florencio is not a credible piece of evidence. The deed is insufficient to justify the petitioners stay in the premises because the original copy was never presented to them or to the court. Furthermore, while the photocopy of the deed of donation states that it was notarized by a certain Tirso Manguiat, a notary public for the City of Manila, under Doc. 1724, Page No. 71, Book No. IV, Series of 1976, the presumption of regularity in the notarization of the deed was destroyed by the certification from the Records

Management and Archives Office of Manila that no such deed exists. The respondents further assert that the signatures appearing on the said deed, i.e., that of Teresa Sevilla de Leon, Patria Manotoc and Valeriana Morente, were all forgeries. According to the respondents, the following facts bolster the incredibility of the deed of donation: (a) the deed of donation was executed in 1976 but was not registered; (b) the TCT is still registered in the name of Teresa Sevilla de Leon; (c) the owners duplicate copy of the TCT should have been transmitted to the donees; and, (d) the real estate taxes were continuously paid in the name of Teresa Sevilla de Leon. Thus, the respondents, as her heirs, are the legal owners of the property. The Ruling of the Court The threshold issue in this case is whether or not the petitioners, as heirs of Rosendo Florencio, who appears to be the donee under the unregistered Deed of Donation, have a better right to the physical or material possession of the property over the respondents, the heirs of Teresa de Leon, the registered owner of the property. The petition has no merit. Prefatorily, in ejectment cases, the issue is the physical or material possession (possession de facto) and any pronouncement made by the trial court on the question of ownership is provisional in nature.38 A judgment rendered in ejectment cases shall not bar an action between the same parties respecting title to the land and shall not be conclusive as to the facts found therein in a case between the same parties upon a different cause of action involving possession of the same property. 39 We agree with the petitioners that under the New Civil Code, donation is one of the modes of acquiring ownership.40 Among the attributes of ownership is the right to possess the property.41 The essential elements of donation are as follows: (a) the essential reduction of the patrimony of the donor; (b) the increase in the patrimony of the donee; and (c) the intent to do an act of liberality or animus donandi. When applied to a donation of an immovable property, the law further requires that the donation be made in a public document and that the acceptance thereof be made in the same deed or in a separate public instrument; in cases where the acceptance is made in a separate instrument, it is mandated that the donor be notified thereof in an authentic form, to be noted in both instruments.42 As a mode of acquiring ownership, donation results in an effective transfer of title over the property from the donor to the donee, and is perfected from the moment the donor is made aware of the acceptance by the donee, provided that the donee is not disqualified or prohibited by law from accepting the donation. 43 Once the donation is accepted, it is generally considered irrevocable, and the donee becomes the absolute owner of the property, except on account of officiousness, failure by the donee to comply with the charge imposed in the donation, or ingratitude. 44 The acceptance, to be valid, must be made during the lifetime of both the donor and the

donee. It must be made in the same deed or in a separate public document, and the donees acceptance must come to the knowledge of the donor.45 In order that the donation of an immovable property may be valid, it must be made in a public document.46Registration of the deed in the Office of the Register of Deeds or in the Assessors Office is not necessary for it to be considered valid and official. Registration does not vest title; it is merely evidence of such title over a particular parcel of land.47 The necessity of registration comes into play only when the rights of third persons are affected.48Furthermore, the heirs are bound by the deed of contracts executed by their predecessors-in-interest.49 On the other hand, the fundamental principle is that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein as the registered owner.50The registered owner has the right to possess, enjoy and dispose of the property without any limitations other than those imposed by law. In this case, the deed of donation, on its face, appears to bear all the essential requisites of a valid donation inter vivos. With Teresa de Leon as the donor and Rosendo Florencio as the donee, the deed of donation appears to have been notarized by Notary Public Tirso Manguiat. On this premise, Florencio, and after his death, his heirs, acquired ownership over the property although Certificate of Title No. T-44349 under the name of Teresa de Leon had not yet been cancelled. However, as pointed out by the RTC and the Court of Appeals, there are cogent facts and circumstances of substance which engender veritable doubts as to whether the petitioners have a better right of possession over the property other than the respondents, the lawful heirs of the deceased registered owner of the property, Teresa de Leon, based on the Deed of Donation. First. Teresa de Leon purportedly executed the Deed of Donation on October 1, 1976 in favor of Rosendo S. Florencio. If she, indeed, donated the property, she would surely have turned over the owners duplicate of TCT No. T-44349 to Florencio, to facilitate the issuance of a new title over the property in his favor. There was an imperative need for the deed to be registered in the Office of the Register of Deeds, and the title to the property to be thereafter issued in the name of the donee, Florencio. Before then, Florencio and his family had been residing in the property solely at the sufferance of Teresa de Leon and her husband. Their possession of the property and their continued stay therein was precarious. They could be driven out from the property at any time by De Leon if she disowned the deed or, after her death, by her heirs. It behooved Florencio to have the said deed filed and duly registered51 with the Office of the Register of Deeds without delay and, thereafter, to secure a new title under his name. This would have resulted in the cancellation of TCT No. T-44349 under the name of Teresa de Leon, and thereby averted any disturbance of Florencios possession of the property, and after his death, t hat of his heirs. At the very least, Florencio should have caused the annotation of the deed immediately after October 1, 1976 or shortly thereafter, at the dorsal portion of TCT No. T-44349. Such annotation would have been binding on the respondents, as De

Leons successors-in-interest, as well as to third persons. However, Florencio failed to do so. Even as De Leon died intestate in 1978, Florencio failed to secure title over the property in his name before he himself died intestate in 1995. If, as the petitioners claimed, Florencio acquired ownership over the property under the deed, it is incredible that he would fail to register the deed and secure title over the property under his name for almost twenty years. All these years, Florencio, and thereafter, his heirs, remained passive and failed to act upon the deed of donation to protect their right. This, the Court finds difficult to understand. The claim that Florencio and his heirs sought the registration of the deed and the transfer of the title to and under Florencios name from 1978 to 1991, in coordination with Jose de Leon is incredible. There is no evidence on record that the deed of donation was ever filed with and registered in the Office of the Register of Deeds at any time during the period from 1978 to 1991. The petitioners claim that the registration of the deed was delayed and later aborted by the demise of Jose de Leon is not substantiated by evidence. Moreover, there is no reason why Florencio, or after his death, the petitioners, could not have had the deed registered even after Jose de Leons death. Second. Florencio failed to inform the heirs of De Leon that the latter, before her death, had executed a deed of donation on October 1, 1976 over the property in his favor. It was only in 1996, or eighteen years after the death of De Leon when the respondents sued the petitioners for ejectment that the latter claimed, for the first time, that De Leon had executed a deed of donation over the property in favor of their predecessor, Florencio. Third. In the meantime, the respondents consistently paid the realty taxes for the property from 1978 up to 1996, completely oblivious to the existence of the deed of donation. On the other hand, Florencio, and, after his death, the petitioners, never paid a single centavo for the realty taxes due on the property, even as they continued staying in the property without paying a single centavo therefor. The petitioners should have declared the property under their names and paid the realty taxes therefor, if they truly believed that they were its owners. They failed to do so. The fact of Florencios inaction and that of the petitioners weakened the latters claim that they acquired ownership over the property under the deed of donation. Fourth. The petitioners never adduced in evidence the owners duplicate of TCT No. T-44349 under the name of De Leon. Their possession of the owners duplicate of the title would have fortified their claim that indeed, De Leon had intended to convey the property by donation to Florencio. Furthermore, the petitioners did not explain why they failed to adduce in evidence the said owners duplicate of the title. The only conclusion is that the said owners duplicate copy was not turned over to Florencio contemporaneously with or after the execution of the deed of donation; hence, their failure to secure title over the property.52 Fifth. The respondents adduced in evidence the affidavit-complaint of Valeriana Morente dated May 8, 1996, one of the witnesses to the deed, for falsification and perjury against Florencio and Atty. Tirso Manguiat. They also adduced the Certification dated April 23, 1996 issued by Teresita R. Ignacio, Chief, Archives Division of the Records Management and Archives Division of Manila, to the effect

that nothing in the notarial register of Atty. Tirso L. Manguiat, a notary public of Manila, showed that the latter notarized a Deed of Donation executed by De Leon and Florencio in San Miguel, Bulacan dated October 1, 1976. However, the petitioners failed to adduce in evidence Atty. Manguiats counter-affidavit to the said complaint, or, at the very least, a separate affidavit explaining the facts and circumstances surrounding the notarization of the deed of donation. Sixth. A reading of the deed will show that at the bottom of page one thereof, Florencio was to subscribe and swear to the truth of his acceptance of the donation before Municipal Mayor Marcelo G. Aure of San Miguel, Bulacan. However, the mayor did not affix his signature above his typewritten name, thus: SUBSCRIBED AND SWORN to before me this 1st day of October, 1976, the DONOR having exhibited her Res. Cert. No. A-3723337 issued at Quezon City on January 10, 1976. MARCELO G. AURE Municipal Mayor53 It appears that a second page was added, with the name of Atty. Manguiat typewritten therein as notary public, obviously, with the use of a different typewriter. In sum then, we agree with the RTC and the Court of Appeals that the deed of donation relied upon by the petitioners is unreliable as evidence on which to anchor a finding that the latter have a better right over the property than the respondents, who, admittedly, are the heirs of Teresa de Leon, the registered owner of the property under TCT No. T-44349 of the Registry of Deeds of Bulacan. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decisions of the Regional Trial Court of Malolos, Bulacan, Branch 20, in Civil Cases Nos. 1018-M-99 and 1019-M-99, and the Court of Appeals in CA-G.R. SP No. 59698-99, are AFFIRMED. SO ORDERED. THIRD DIVISION G.R. No. 133705. March 31, 2005 C-J YULO & SONS, INC., Petitioners, vs. ROMAN CATHOLIC BISHOP OF SAN PABLO, INC., Respondents. DECISION 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 petitionerC-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 Donors 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 donees non-compliance with and material breach of the conditions thereunder stipulated. In the same letter, the donor requested for the turn-over of the donees 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 donors 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 donorplaintiff 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 plaintiffs 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. T91348 (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 appellees 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 courts 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 donors 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 courts decision, the reversal being premised on the appellate courts 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,6where 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. 179180; 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. HawaiianPhilippine 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 Courts 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 donees 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 donees 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,7 viz: 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 petitioners 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 respondents comment is enlightening. Petitioner relies on Bishop Bantigues 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 petitioners view, which attributed the exact opposite meaning to the Bishops 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. FIRST DIVISION G.R. No. 146586 January 26, 2005

DEPARTMENT OF EDUCATION CULTURE and SPORTS, petitioner, vs. JULIA DEL ROSARIO, MARIA DEL ROSARIO, PACENCIA DEL ROSARIO, and HEIRS OF SANTOS DEL ROSARIO, respondents. DECISION CARPIO, J.: The Case This is a petition for review1 to set aside the Decision2 dated 25 September 2000 and the Resolution dated 29 December 2000 of the Court of Appeals in CA-G.R. CV No. 43929. The Court of Appeals reversed the Decision3dated 7 July 1993 of the Regional Trial Court of Bulacan, Branch 8, Malolos ("trial court") in Civil Case No. 70-M-92. The Facts

On 14 February 1992, respondents Julia Del Rosario, Maria Del Rosario, Pacencia Del Rosario and the Heirs of Santos Del Rosario ("respondents") filed before the trial court a complaint for Recovery of Possession against petitioner Department of Education, Culture and Sports ("DECS"). Respondents alleged that they own a parcel of land with an area of 1,181 square meters ("Property") situated in Kaypombo,4 Sta. Maria, Bulacan. The Property was registered in 1976 in the name of respondents under Transfer Certificate of Title No. T-222432 of the Bulacan Register of Deeds. Respondents alleged that the Kaypombo Primary School Annex ("KPPS") under DECS was occupying a portion of the Property through respondents tolerance and that of their predecessors-in-interest. Respondents further alleged that KPPS refused to vacate the premises despite their valid demands to do so. In its Answer, DECS countered that KPPSs occupation of a portion of the Property was with the express consent and approval of respondents father, the late Isaias Del Rosario ("Isaias"). DECS claimed that some time in 1959 Isaias donated a portion ("Donated Site") of the Property to the Municipality of Sta. Maria ("Municipality") for school site purposes. Atty. Ely Natividad, now a regional trial court judge ("Judge Natividad"), prepared the deed of donation and the acceptance. KPPS started occupying the Donated Site in 1962. At present, KPPS caters to the primary educational needs of approximately 60 children between the ages of 6 and 8. Because of the donation, DECS now claims ownership of the 650 square meter Donated Site. In fact, DECS renamed the school the Isaias Del Rosario Primary School. During the pre-trial conference held on 3 September 1992, DECS admitted the existence and execution of TCT No. T-222432 (Exhibit "A"), Tax Declaration No. 6310 (Exhibit "B"), and the tax receipts in respondents names for the years 1991 and 1992 (Exhibits "B-1" and "B-2"). On the other hand, respondents admitted the existence of Judge Natividads affidavit that he prepared the deed of donation (Exhibit "1") and the tax declaration for 1985 in the Municipalitys name (Exhibit "2"). Since there was no dispute that the Property was registered in respondents names, the parties agreed to a reverse trial with DECS presenting its evidence first to prove that there was a valid donation to the Municipality. DECS presented three witnesses: Ricardo Nicolas, Vidal De Jesus and Judge Natividad, all residents of Kaypombo, Sta. Maria, Bulacan. The trial court summarized the witnesses testimonies, thus: Defendant, represented by the Office of the Solicitor General, proceeded to present as its first witness, Ricardo Nicolas, 78 years old, widower, housekeeper and residing at [K]aypombo, Sta. Maria, Bulacan, since 1953 up to the present. He testified that during the duration of his residency in [K]aypombo, he came across a public elementary school (KPPS); that as far as he knows, the land occupied by the primary school was formerly owned by Isaias del Rosario who donated said land to the people of Sta. Maria, Bulacan in 1959; that the act of donating said land was made during a political meeting in his residence by Isaias del Rosario and in the presence of the then incumbent mayor; he actually saw Isaias del Rosario and Mayor Ramos sign a document which is a deed of donation in favor of the Municipality of Sta. Maria; that the signing was made in the presence of Judge Natividad who was then a municipal councilor; that Isaias del Rosario is now dead

but his death occurred long after the construction of the KPPS and that Isaias del Rosario even witnessed the construction of the primary school. Vidal de Jesus, the second witness for the defense, 65 years old, married, a barangay councilman of Kaypombo, Sta. Maria, Bulacan, and presently residing at No. 437 Kaypombo, Sta. Maria, Bulacan, testified that as barangay councilman, he was aware of the land problem of KPPS; that in 1991, the barangay council and the children of Isaias del Rosario had a meeting in the presence of Judge Natividad, during which, the latter told the children of Isaias del Rosario that the land had been donated by their father. The children agreed but requested that the school be renamed after their fathers name; that the barangay council tried to secure a copy of the deed of donation from the Municipality of Sta. Maria, but according to the people at the municipal hall, when they transferred to the new municipal building, the deed got lost, only they were able to get a copy of the tax declaration in the name of the municipality of Sta. Maria, Bulacan (Exh. "2"), a certification to that effect was issued by the municipal mayor (Exh. "3"). They went to the DECS office in Malolos, but could not likewise find a copy of the deed. The last witness for the defense was Judge Eli Natividad, 63 years old, widower, resident of Kaypombo, Sta. Maria, Bulacan. He testified that KPPS is very near his house; that the land occupied by said school is formerly owned by Isaias del Rosario, a close relative; that as far as he knows, the municipality of Sta. Maria is now the owner of the land; that when he was still one of the incumbent municipal councilors of Sta. Maria in 1961, his relative Isaias del Rosario went to his house and told him that he wanted to have a primary school in their place as he saw the plight of small pupils in their place; that the elementary school then existing was very far from their place and Isaias del Rosario wanted to have a primary school to help these pupils; that Isaias del Rosario was willing to donate a portion of the questioned lot for school site, so that said matter was relayed to the municipal council; he also testified that he prepared the deed of donation which was signed by Isaias del Rosario in his residence which was accepted by the municipality of Sta. Maria, Bulacan through a resolution signed in the office of the secretary and the municipal mayor; that a copy of said resolution could not be found due to the transfer of the municipal hall from the old to the new building.5 Respondents presented two witnesses: Eugenia R. Ignacio and Maria Del RosarioEsteban, daughters of the late Isaias. The trial court summarized their testimonies, as follows: For the plaintiffs, Eugenia R. Ignacio, 59, residing at Kaypombo, Sta. Maria, Bulacan testified that she knows the plaintiffs as they are her brothers/sisters; that their father Isaias del Rosario died on April 18, 1966 long after the construction of the school and that she does not know everything about the donation because her father never informed them of his dealings and she did not inquire from him about the occupancy of the lot by the school. Maria del Rosario-Esteban, 66, residing at Pulang-lupa, Pandi, one of the plaintiffs herein, testified that she knows the property in question and that they own it by virtue of succession and that she cannot recall how the school was constructed on the land; that her parents never donated any property because that is their only property.

Also, she stated that their father told them that he just lent the property temporarily to the municipality and she never found any document conveying the lot in question to the municipality of Sta. Maria, Bulacan.6 On 7 July 1993, the trial court rendered judgment dismissing respondents complaint for recovery of possession as follows: WHEREFORE, based on the foregoing premises, and for a much greater cause, the instituted complaint, for recovery of possession of 1,181 square meters of land in Kaypombo, Sta. Maria, Bulacan, covered by TCT No. T-222432 against the defendant is hereby DISMISSED without costs.7 The trial court explained its decision in this wise: After a careful consideration of the facts at hand, taking into account the credibility and reasonableness of the testimonies of the witnesses, the court is of the opinion that the defense was able to prove the due execution of the deed of donation and its acceptance, as well as the loss of the same, in accordance with Rule 130[,] Sec. 4. It is recalled that Judge Eli Natividad, then a municipal councilor of Sta. Maria, testified that he was the person who prepared the deed of donation and later notarized the same, and that said deed was duly executed and signed before him and in his presence. Likewise, he affirmed that the municipal board of Sta. Maria, Bulacan, passed a resolution accepting the deed of donation in favor of the said municipality. Noteworthy is the rule that a recantation/recollection of witness is a form of secondary evidence to prove the existence/content of a document. Since the loss of the deed subject matter of this case was likewise duly proved by the defense, exerting the best possible efforts to locate or secure a copy of the same and without bad faith on its part, this Court is bent to give a greater weight to the secondary evidence adduced by the defense vis--vis the title in the name of the plaintiff[s], most particularly in this case, where the plaintiffs failed to make it appear that other and more secondary evidence is known to the defendant and can be produced by them. Further judging on the consistency, credibility and personality of the witnesses of the defense, notably Judge Eli Natividad who was then a municipal councilor of Sta. Maria at the time of the execution of the deed of donation and who is thus in a best position to testify on the matter, not to mention the fact that their testimonies were all under oath, the Court cannot avoid but give weight to their statements and declarations. The defense witnesses were not induced by ill motive to testify in favor of the DECS, considering that they will not derive any personal benefit, material or otherwise, from such an act. On the contrary, such act may be considered heroic, as it is a manifestation of a moral compulsion to help shed light to the truth. On the part of the plaintiffs, it was testified to by Eugenia Ignacio that their father (donor) died on April 18, 1966, long after the school was constructed on the subject land with the occupation of the land by the school which continued up to the present, and even after the land was allegedly transferred by succession to the plaintiffs in 1976, it was only now that it comes to the mind of the plaintiffs to seek recovery of the possession of the same. This, among other things, may be taken to favor the

stand of the defense that the land occupied by the school was in truth, donated to the municipality of Sta. Maria.8 Respondents appealed to the Court of Appeals. On 25 September 2000, the Court of Appeals rendered judgment as follows: WHEREFORE, premises considered, the appealed decision is REVERSED and another one entered ordering the defendant to vacate the subject premises. 9 The appellate court denied DECS motion for reconsideration in the Resolution dated 29 December 2000. Hence, this petition. The Court of Appeals Ruling The Court of Appeals held that DECS failed to prove the existence and due execution of the deed of donation as well as the Resolution of the municipal council accepting the donation. The Court of Appeals was not fully satisfied that DECS or the Municipality had made a diligent search of the alleged "lost" deed of donation. Pertinent portions of the Court of Appeals Decision read: It is unfortunate that the Deed of Donation and the Resolution were not produced during the trial. The defendant alleged that these were lost when the Municipality transferred to a new building. The defendant resorted to proving the documents existence through Sec. 5 of Rule 130 (B) of the Revised Rules on Evidence by relying on the testimony of the witnesses who were present during the execution of the lost documents. xxx. xxx The Court disagrees with the ruling of the lower court to the effect that the defendant was able to satisfy the foregoing requisites. The defense was not able to prove the due execution or existence of the deed of donation and the resolution, as well as the loss of these documents as the cause of their unavailability. The Rule requires that the defendant must "prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of the witnesses in the order stated". However, the defendant proceeded with the last resort-testimony of the witnesses, without even showing any diligent effort to secure a copy of the deed of donation and the resolution. Note that Atty. Eli Natividad, then a municipal councilor of Sta. Maria, testified that he was the person who prepared the deed of donation and later notarized the same. He also affirmed that the municipal board of Sta. Maria, Bulacan passed a Resolution as he was a municipal councilor at that time such resolution was passed. He testified that he furnished the municipal government, the Division Office of Education in Bulacan, the court of Sta. Maria a copy of the deed. However, the defendant only submitted an affidavit showing that the deed can no longer be located in the municipal government. There was no evidence to show that the defendant looked for a copy from the Clerk of Court of Sta. Maria, Bulacan. If it is true that Atty. Natividad notarized the deed, he should have a copy of it. In fact, such act of notarizing the deed should have been in his notarial register. This notarial register was supposed to be forwarded to the Clerk

of Court of the Court of First Instance of the province and later, to the Chief of the National Library. "Before secondary evidence of a writing may be introduced on the ground that the instrument has been lost there must be proof that a diligent search has been made in the place where it is most likely to be found and that the search has not been successful." In the case at bar, this Court is not fully satisfied that a search was made or that there was diligence in the search. The lower court erred in hastily concluding that the loss of the document was sufficiently established when in fact, the defendant did not look for it in the office of the Clerk of Court and the National Library. Since there was no diligent search, this Court finds it hard to believe the defendants theory that such documents existed because, for sure, if there really was a notarized deed or a resolution, there must be a copy. "Secondary evidence of the contents of writings is admitted upon the theory that the original cannot be produced by the party by whom the evidence is offered within a reasonable time by the exercise of reasonable diligence. Until, however, the nonproduction of the primary evidence has been sufficiently accounted for, secondary evidence is not ordinarily admissible." For this Court to affirm the ruling of the lower court based on testimonies alone will work injustice to the plaintiffs.10 The Issue In its memorandum, DECS raises the sole issue of WHETHER THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER FAILED TO PROVE THE DUE EXECUTION OR EXISTENCE OF THE DEED OF DONATION AND THE RESOLUTION OF THE MUNICIPAL COUNCIL ACCEPTING THE DONATION, AS WELL AS THE LOSS OF THE DOCUMENTS AS THE CAUSE OF THEIR UNAVAILABILITY.11 The Solicitor General contends that DECS had satisfactorily proven by secondary evidence the fact of donation, the existence and due execution of the deed of donation as well as the municipal council Resolution accepting the donation. DECS had also adequately proven the loss of these documents. According to the Solicitor General, based on the evidence presented in the trial court, DECS established that Isaias donated a parcel of land to the Municipality as the site of a school. Isaias executed a deed of donation, which then Atty. Eli Natividad notarized. There was a municipal council Resolution accepting the donation and expressing gratitude to Isaias. There was notice of this acceptance as DECS constructed the school on the Donated Site during the lifetime of the donor, without objection on his part. Since all the essential formalities had been followed, the donation made by Isaias long after the death of his wife Nieves Gumatay is valid and proven by secondary evidence. The Courts Ruling

The petition lacks merit. Formal Requisites of Donations of Real Property The donation of real property, which is a solemn contract, is void without the formalities stated in Article 749 of the Civil Code of the Philippines ("Civil Code"). Article 749 of the Civil Code reads: Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor. If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments. Article 749 of the Civil Code requires that the donation of real property must be made in a public instrument. Otherwise, the donation is void. A deed of donation acknowledged before a notary public is a public document.12The notary public shall certify that he knows the person acknowledging the instrument and that such person is the same person who executed the instrument, acknowledging that the instrument is his free act and deed. The acceptance may be made in the same deed of donation or in a separate instrument. An acceptance made in a separate instrument must also be in a public document. If the acceptance is in a separate public instrument, the donor shall be notified in writing of such fact. Both instruments must state the fact of such notification.13 Best and Secondary Evidence The best or primary evidence of a donation of real property is an authentic copy of the deed of donation with all the formalities required by Article 749 of the Civil Code. The duty to produce the original document arises when the subject of the inquiry are the contents of the writing in which case there can be no evidence of the contents of the writing other than the writing itself. Simply put, when a party wants to prove the contents of the document, the best evidence is the original writing itself. A party may prove the donation by other competent or secondary evidence under the exceptions in Section 3, Rule 130 of the Revised Rules on Evidence. Section 3 reads: SEC. 3. Original document must be produced; exceptions. When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases: (a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror; (b) xxx;

(c) xxx; (d) xxx. In relation to this, Section 5 of Rule 130 reads: SEC. 5. When original document is unavailable. When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated. Secondary evidence of the contents of a document refers to evidence other than the original document itself.14 A party may introduce secondary evidence of the contents of a written instrument not only when the original is lost or destroyed, but also when it cannot be produced in court, provided there is no bad faith on the part of the offeror. However, a party must first satisfactorily explain the loss of the best or primary evidence before he can resort to secondary evidence. A party must first present to the court proof of loss or other satisfactory explanation for non-production of the original instrument. The correct order of proof is as follows: existence, execution, loss, contents, although the court in its discretion may change this order if necessary.15 The testimony of Ricardo Nicolas may have established to some extent the existence of the deed of donation since he testified that he was present when Isaias and the mayor talked about the donation and that he witnessed the signing of the document. However, Ricardo Nicolas admitted during cross-examination that he did not read and did not have personal knowledge of the contents of the document that Isaias and the mayor supposedly signed.16
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In the same vein, Vidal De Jesus testimony does not help to establish the deed of donations existence, executionand contents. He testified that he never saw the deed of donation. On cross-examination, Vidal De Jesus admitted that the information that Isaias donated the lot to the Municipality was only relayed to him by Judge Natividad himself.17 If at all, DECS offered Vidal De Jesus testimony to establish the loss of the deed of donation. Vidal de Jesus testified that the barangay council tried to get a copy of the deed but the Municipality informed the barangay council that the deed was lost when the municipal office was transferred to a new building. DECS also made a search in the DECS office in Malolos but this proved futile too. This leaves us with Judge Natividads testimony. Judge Natividad testified that he prepared and notarized the deed of donation. He further testified that there was a municipal council Resolution, signed in the Office of the Secretary and of the Mayor, accepting the donation and expressing gratitude to the donor. He furnished the municipal government, the DECS Division Office of Bulacan and the clerk of court of Sta. Maria a copy of the deed of donation. DECS did not introduce in evidence the municipal council Resolution accepting the donation. There is also no proof that the donee communicated in writing its acceptance to the donor aside from the circumstance that DECS constructed the

school during Isaias lifetime without objection on his part. There is absolutely no showing that these steps were noted in both instruments. Sufficiency of Proof of Loss What mainly militates against DECS claim is, as the Court of Appeals found, inadequate proof that DECS or the Municipality made a diligent search in the places where the deed of donation may likely be found and that the search was unsuccessful. Prior to the introduction of secondary evidence, a party must establish the existence and due execution of the instrument. After a party establishes the existence and due execution of the document, he must prove that the document was lost or destroyed.18 The destruction of the instrument may be proved by any person knowing the fact. The loss may be shown by any person who knew the fact of its loss, or by any one who had made, on the judgment of the court, a sufficient examination in the place [or] places where the document or papers of similar character are usually kept by the person in whose custody the document lost was, and has been unable to find it; or who has made any other investigation which is sufficient to satisfy the court that the instrument is indeed lost. 19 Here, DECS allegedly made a search in the municipal building and in the DECS Division Office in Bulacan. The copies of the deed of donation furnished these offices were purportedly "lost" when these offices transferred to new locations. However, as the Court of Appeals correctly pointed out, Judge Natividad who claimed to have notarized the deed of donation failed to account for other copies of the deed, which the law strictly enjoins him to record, and furnish to other designated government offices. The Notarial Law is explicit on the obligations and duties of a notary public. The law requires him to keep a notarial register where he shall record all his official acts as notary public. The law specifies the information that the notary public must enter in the notarial register. Failure to perform this duty results in the revocation of his commission as notary public. We quote the provisions of the Notarial Law pertinent to the case: SECTION 245. Notarial register. - Every notary public shall keep a register to be known as the notarial register, wherein record shall be made of all his official acts as notary; and he shall supply a certified copy of such record, or any part thereof, to any person applying for it and paying the legal fees therefor.
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Such register shall be kept in books to be furnished by the Attorney-General (Solicitor-General) to any notary public upon request and upon payment of the actual cost thereof, but officers exercising the functions of notaries public ex officio shall be supplied with the register at government expense. The register shall be duly paged, and on the first page, the Attorney-General (Solicitor-General) shall certify the number of pages of which the book consist[s]. SECTION 246. Matters to be entered therein. - The notary public shall enter in such register, in chronological order, the nature of each instrument executed, sworn to, or acknowledged before him, the person executing, swearing to, or acknowledging the

instrument, the witnesses, if any, to the signature, the date of the execution, oath, or acknowledgment or the instrument, the fees collected by him for his services as notary in connection therewith, and; when the instrument is contract, he shall keep a correct copy thereof as part of his records, and shall likewise enter in said records a brief description of the substance thereof, and shall give to each entry a consecutive number, beginning with number one in each calendar year. The notary shall give to each instrument executed, sworn to, or acknowledged before him a number corresponding to the one in his register, and shall also state on the instrument the page or pages of his register on which the same is recorded. No blank line shall be left between entries. xxx At the end of each week the notary shall certify in his register the number of instruments executed, sworn to, acknowledged, or protested before him; or if none, such certificate shall show this fact. A certified copy of each months entries as described in this section and a certified copy of any instrument acknowledged before them shall within the first ten days of the month next following be forwarded by the notaries public to the clerk of the Court of First Instance of the province and shall be filed under the responsibility of such officer; Provided, that if there is no entry to certify for the month, the notary shall forward a statement to this effect in lieu of the certified copies herein required. (As amended by C.A. 72, Sec. 1.) SECTION 247. Disposition of notarial register. - Immediately upon his notarial register being filled, and also within fifteen days after the expiration of his commission, unless reappointed, the notary public shall forward his notarial register to the clerk of the Court of First Instance of the province or of the City of Manila, as the case may be, wherein he exercises his office, who shall examine the same and report thereon to the judge of the Court of First Instance. If the judge finds that no irregularity has been committed in the keeping of the register, he shall forward the same to the chief of the division of archives, patents, copyrights, and trade-marks. In case the judge finds that irregularities have been committed in the keeping of the register, he shall refer the matter to the fiscal of the province - and in the City of Manila, to the fiscal of the city - for action and the sending of the register to the chief of the division of archives, patents, copyrights, and trade-marks shall be deferred until the termination of the case against the notary public. (Emphasis and underscoring supplied) The Notarial Law mandates a notary public to record in his notarial register the necessary information regarding the instrument acknowledged before him. The Notarial Law also mandates the notary public to retain a copy of the instrument acknowledged before him when it is a contract.20 The notarial register is a record of the notary publics official acts. Acknowledged instruments recorded in the notarial register are public documents.21 If the instrument is not recorded in the notarial register and there is no copy in the notarial records, the presumption arises that the document was not notarized and is not a public document. 22

DECS should have produced at the trial the notarial register where Judge Natividad as the notary public should have recorded the deed of donation. Alternatively, DECS should have explained the unavailability of the notarial register. Judge Natividad could have also explained why he did not retain a copy of the deed of donation as required by law. As the Court of Appeals correctly observed, there was no evidence showing that DECS looked for a copy from the Clerk of Court concerned or from the National Archives. All told, these circumstances preclude a finding that DECS or the Municipality made a diligent search to obtain a copy of the deed of donation. In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. "Preponderance of evidence" means that the evidence as a whole adduced by one side is superior to that of the other. In other words, preponderance of evidence means the greater weight of the evidence - or evidence that outweighs the evidence of the adverse party. This Court is not satisfied that the evidence on the side of the party carrying the burden of proof is of preponderating weight. Finally, DECS raises for the first time before this Court the issue on whether respondents claim is barred by the equitable defense of laches. DECS did not raise this matter in the complaint or during the trial in the court below. DECS did not also raise this matter in its appeal to the Court of Appeals. This Court cannot entertain this issue at this late stage, for to do so would plainly violate the basic rule of fair play, justice and due process.23
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Much as we sympathize with the plight of the schoolchildren, we do not find reversible error in the Decision of the Court of Appeals. We cannot grant the relief DECS is seeking and disregard existing laws and jurisprudence. DECS, however, is not without remedy. The government can expropriate at any time the Donated Site, paying just compensation to respondents. WHEREFORE, we DENY the petition. The Decision dated 25 September 2000 and the Resolution dated 29 December 2000 of the Court of Appeals in CA-G.R. CV No. 43929 are AFFIRMED. SO ORDERED.