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G.R. No.

101262 September 14, 1994

SPOUSES ALBERTO GARRIDO AND COLOMA DAGURO, petitioners,


vs.
THE COURT OF APPEALS, SPOUSES RUFINO AND CONRADA SUPLEMENTO, respondents.

Ramon A. Gonzales for petitioners.

Franklin J. Andrada for private respondents.

BELLOSILLO, J.:

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

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

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

On 17 August 1978, during the pendency of her petition, Magdalena executed a Conditional Deed of
Sale of Lot 209-A in favor of respondent spouses Rufino and Conrada Suplemento "subject to the
lien subsisting and annotated on the face of the Certificate of Title." 3 Magdalena agreed to bear the
cost of the cancellation of the lien and respondents to be bound thereby as long as it subsisted, with
the understanding that in the event the lien was not cancelled, the amount already paid would be
refunded. It was further stipulated that "out of the Nineteen Thousand (P19,000.00) consideration . . .
only Three Thousand (P3,000.00) pesos . . . shall be paid pro rata monthly for ten (10) years and to
convene (commence?) one (1) year from the date of this Deed." 4

On 24 January 1979 the petition for cancellation of encumbrance was denied for the reason that the
ground cited for the cancellation was not one of those allowed by Sec. 112 of Act 496 and that
Magdalena failed to produce the deed of donation which contained the alleged restriction.
Nonetheless, on 19 July 1979 Magdalena executed with the conformity of her husband a Deed of
Absolute Sale covering Lot 209-A in favor of respondents, spouses Rufino and Conrada
Suplemento. 5 The deed was notarized on the same date. On 13 April 1982, Magdalena died. On 2
December 1982 TCT No. T-108689 was issued in the name of the Suplementos. 6

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

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

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

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

Petitioners contend that the appellate court erred in holding that they have no personality to assail
the Absolute Deed of Sale and the genuineness of the signature of Magdalena Rondael.

Petitioners assert that the issue raised in the trial court was whether Magdalena Rondael could sell
the property despite the prohibition in the deed of donation. In ruling that they were incapacitated to
question the non-observance of the condition, respondent court went beyond the issue, hence,
exceeded its jurisdiction.

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

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

Petitioners also submit that the finding of the appellate court that the signature of Magdalena
Rondael in the Deed of Absolute Sale is genuine has been overtaken by events. In a letter dated 1
August 1991, the Regional Director of the NBI, Iloilo City, furnished the Iloilo City Prosecutor with a
copy of NBI Questioned Document Report No. 413-791 dated 23 July 1991, purporting to show that
the questioned signature as well as the standard/sample signatures of the deceased Magdalena
Rondael were not written by one and the same person, 13 hence, a forgery.
Admittedly, the NBI report was never adduced before the lower courts; in fact, it is presented for the
first time and only before this Court. Obviously, this is not a newly discovered evidence within the
purview of Sec. 1, par. (b), Rule 37, of the Rules of Court. Petitioners should have thought of having
the signature of Magdalena Rondael on the deed of sale examined when the case was still with the
trial court. Nothing would have stopped them from doing so. Hence, it is now late, too late in fact, to
present it before this Court.

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

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

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

SO ORDERED.
G.R. No. L-15939 January 31, 1966

ANGELES UBALDE PUIG, ET AL., plaintiffs-appellants,


vs.
ESTELLA MAGBANUA PEÑAFLORIDA, ET AL., defendants-appellants.

Salonga and Ordonez for the plaintiffs-appellants.


Fulgencio Vega for the defendants-appellants.

RESOLUTION

(Main opinion was promulgated on November 29, 1965).

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

Defendants-appellants Estela Magbanua Peñaflorida, et al., insist that the reservation by the donor of the
right to dispose of the property during her lifetime in the deed of December 28, 1949 indicates that title
had passed to the donee in her lifetime, otherwise, it is argued, the reservation would be superfluous, and
they cite American authorities in support.

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

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

Que esta escritura de donacion mortis causa no se registrara en la oficina del Registrador de
Titulos de Iloilo sino despues del fallecimiento de la Donante

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

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

It being thus clear that the disposition contained in the deed is one that produces no effect until the death
of the grantor, we are clearly faced by an act mortis causa of the Roman and Spanish law. We thus see
no need of resorting to American authorities as to the import of the reservation of the donor's right to
dispose of the donated property, for the Spanish authorities are very clear on this point:
Desde el momento en que la muerte del donante es la que determina la adquisicion o el derecho
a los bienes; desde el montento en que la disposicion puede ser revocada voluntariamente, se
salva la linea divisoria entre unos y otros actos: la donacion equivale a un legado; mas aun que
esto: es un legado en realidad. (5 Manresa, 5th Ed., p. 107)

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

The presence of an acceptance is but a consequence of the erroneous concept of the true nature of the
juridical act, and does not indicate that in the same is a true donation inter vivos.

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

It is highly illuminating to compare the condition imposed in the deed of donation of December 28, 1949
with that established in the contract dealt with in Taylor vs. Uy Tieng Piao & Tau Liuan, 43 Phil. 874,
invoked by appellants.

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

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


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

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

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

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

Wherefore, the motion to reconsider is denied.


G.R. No. 112127 July 17, 1995

CENTRAL PHILIPPINE UNIVERSITY, petitioner,


vs.
COURT OF APPEALS, REMEDIOS FRANCO, FRANCISCO N. LOPEZ, CECILIA P. VDA. DE
LOPEZ, REDAN LOPEZ AND REMARENE LOPEZ, respondents.

BELLOSILLO, J.:

CENTRAL PHILIPPINE UNIVERSITY filed this petition for review on certiorari of the decision of the
Court of Appeals which reversed that of the Regional Trial Court of Iloilo City directing petitioner to
reconvey to private respondents the property donated to it by their predecessor-in-interest.

Sometime in 1939, the late Don Ramon Lopez, Sr., who was then a member of the Board of
Trustees of the Central Philippine College (now Central Philippine University [CPU]), executed a
deed of donation in favor of the latter of a parcel of land identified as Lot No. 3174-B-1 of the
subdivision plan Psd-1144, then a portion of Lot No. 3174-B, for which Transfer Certificate of Title
No. T-3910-A was issued in the name of the donee CPU with the following annotations copied from
the deed of donation —

1. The land described shall be utilized by the CPU exclusively for the establishment
and use of a medical college with all its buildings as part of the curriculum;

2. The said college shall not sell, transfer or convey to any third party nor in any way
encumber said land;

3. The said land shall be called "RAMON LOPEZ CAMPUS", and the said college
shall be under obligation to erect a cornerstone bearing that name. Any net income
from the land or any of its parks shall be put in a fund to be known as the "RAMON
LOPEZ CAMPUS FUND" to be used for improvements of said campus and erection
of a building thereon.1

On 31 May 1989, private respondents, who are the heirs of Don Ramon Lopez, Sr., filed an action
for annulment of donation, reconveyance and damages against CPU alleging that since 1939 up to
the time the action was filed the latter had not complied with the conditions of the donation. Private
respondents also argued that petitioner had in fact negotiated with the National Housing Authority
(NHA) to exchange the donated property with another land owned by the latter.

In its answer petitioner alleged that the right of private respondents to file the action had prescribed;
that it did not violate any of the conditions in the deed of donation because it never used the donated
property for any other purpose than that for which it was intended; and, that it did not sell, transfer or
convey it to any third party.

On 31 May 1991, the trial court held that petitioner failed to comply with the conditions of the
donation and declared it null and void. The court a quo further directed petitioner to execute a deed
of the reconveyance of the property in favor of the heirs of the donor, namely, private respondents
herein.
Petitioner appealed to the Court of Appeals which on 18 June 1993 ruled that the annotations at the
back of petitioner's certificate of title were resolutory conditions breach of which should terminate the
rights of the donee thus making the donation revocable.

The appellate court also found that while the first condition mandated petitioner to utilize the donated
property for the establishment of a medical school, the donor did not fix a period within which the
condition must be fulfilled, hence, until a period was fixed for the fulfillment of the condition,
petitioner could not be considered as having failed to comply with its part of the bargain. Thus, the
appellate court rendered its decision reversing the appealed decision and remanding the case to the
court of origin for the determination of the time within which petitioner should comply with the first
condition annotated in the certificate of title.

Petitioner now alleges that the Court of Appeals erred: (a) in holding that the quoted annotations in
the certificate of title of petitioner are onerous obligations and resolutory conditions of the donation
which must be fulfilled non-compliance of which would render the donation revocable; (b) in holding
that the issue of prescription does not deserve "disquisition;" and, (c) in remanding the case to the
trial court for the fixing of the period within which petitioner would establish a medical college.2

We find it difficult to sustain the petition. A clear perusal of the conditions set forth in the deed of
donation executed by Don Ramon Lopez, Sr., gives us no alternative but to conclude that his
donation was onerous, one executed for a valuable consideration which is considered the equivalent
of the donation itself, e.g., when a donation imposes a burden equivalent to the value of the donation.
A gift of land to the City of Manila requiring the latter to erect schools, construct a children's
playground and open streets on the land was considered an onerous donation.3 Similarly, where Don
Ramon Lopez donated the subject parcel of land to petitioner but imposed an obligation upon the
latter to establish a medical college thereon, the donation must be for an onerous consideration.

Under Art. 1181 of the Civil Code, on conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of the event
which constitutes the condition. Thus, when a person donates land to another on the condition that
the latter would build upon the land a school, the condition imposed was not a condition precedent or
a suspensive condition but a resolutory one.4 It is not correct to say that the schoolhouse had to be
constructed before the donation became effective, that is, before the donee could become the owner
of the land, otherwise, it would be invading the property rights of the donor. The donation had to be
valid before the fulfillment of the condition.5 If there was no fulfillment or compliance with the
condition, such as what obtains in the instant case, the donation may now be revoked and all rights
which the donee may have acquired under it shall be deemed lost and extinguished.

The claim of petitioner that prescription bars the instant action of private respondents is unavailing.

The condition imposed by the donor, i.e., the building of a medical school upon the land
donated, depended upon the exclusive will of the donee as to when this condition shall be
fulfilled. When petitioner accepted the donation, it bound itself to comply with the condition
thereof. Since the time within which the condition should be fulfilled depended upon the
exclusive will of the petitioner, it has been held that its absolute acceptance and the
acknowledgment of its obligation provided in the deed of donation were sufficient to prevent
the statute of limitations from barring the action of private respondents upon the original
contract which was the deed of donation.6

Moreover, the time from which the cause of action accrued for the revocation of the donation and
recovery of the property donated cannot be specifically determined in the instant case. A cause of
action arises when that which should have been done is not done, or that which should not have
been done is done.7 In cases where there is no special provision for such computation, recourse
must be had to the rule that the period must be counted from the day on which the corresponding
action could have been instituted. It is the legal possibility of bringing the action which determines
the starting point for the computation of the period. In this case, the starting point begins with the
expiration of a reasonable period and opportunity for petitioner to fulfill what has been charged upon
it by the donor.

The period of time for the establishment of a medical college and the necessary buildings and
improvements on the property cannot be quantified in a specific number of years because of the
presence of several factors and circumstances involved in the erection of an educational institution,
such as government laws and regulations pertaining to education, building requirements and
property restrictions which are beyond the control of the donee.

Thus, when the obligation does not fix a period but from its nature and circumstances it can be
inferred that a period was intended, the general rule provided in Art. 1197 of the Civil Code applies,
which provides that the courts may fix the duration thereof because the fulfillment of the obligation
itself cannot be demanded until after the court has fixed the period for compliance therewith and
such period has arrived.8

This general rule however cannot be applied considering the different set of circumstances existing
in the instant case. More than a reasonable period of fifty (50) years has already been allowed
petitioner to avail of the opportunity to comply with the condition even if it be burdensome, to make
the donation in its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no more
need to fix the duration of a term of the obligation when such procedure would be a mere technicality
and formality and would serve no purpose than to delay or lead to an unnecessary and expensive
multiplication of suits. 9 Moreover, under Art. 1191 of the Civil Code, when one of the obligors cannot
comply with what is incumbent upon him, the obligee may seek rescission and the court shall decree
the same unless there is just cause authorizing the fixing of a period. In the absence of any just
cause for the court to determine the period of the compliance, there is no more obstacle for the court
to decree the rescission claimed.

Finally, since the questioned deed of donation herein is basically a gratuitous one, doubts referring
to incidental circumstances of a gratuitous contract should be resolved in favor of the least
transmission of rights and interests. 10Records are clear and facts are undisputed that since the
execution of the deed of donation up to the time of filing of the instant action, petitioner has failed to
comply with its obligation as donee. Petitioner has slept on its obligation for an unreasonable length
of time. Hence, it is only just and equitable now to declare the subject donation already ineffective
and, for all purposes, revoked so that petitioner as donee should now return the donated property to
the heirs of the donor, private respondents herein, by means of reconveyance.

WHEREFORE, the decision of the Regional Trial Court of Iloilo, Br. 34, of 31 May 1991 is
REINSTATED and AFFIRMED, and the decision of the Court of Appeals of 18 June 1993 is
accordingly MODIFIED. Consequently, petitioner is directed to reconvey to private respondents Lot
No. 3174-B-1 of the subdivision plan Psd-1144 covered by Transfer Certificate of Title No. T-3910-A
within thirty (30) days from the finality of this judgment.

Costs against petitioner.

SO ORDERED.

Quiason and Kapunan, JJ., concur.


Separate Opinions

DAVIDE, JR., J., dissenting:

I agree with the view in the majority opinion that the donation in question is onerous considering the
conditions imposed by the donor on the donee which created reciprocal obligations upon both
parties. Beyond that, I beg to disagree.

First of all, may I point out an inconsistency in the majority opinion's description of the donation in
question. In one part, it says that the donation in question is onerous. Thus, on page 4 it states:

We find it difficult to sustain the petition. A clear perusal of the conditions set forth in
the deed of donation executed by Don Ramon Lopez, Sr., give us no alternative but
to conclude that his donation was onerous, one executed for a valuable
consideration which is considered the equivalent of the donation itself, e.g., when a
donation imposes a burden equivalent to the value of the donation . . . . (emphasis
supplied)

Yet, in the last paragraph of page 8 it states that the donation is basically a gratuitous one.
The pertinent portion thereof reads:

Finally, since the questioned deed of donation herein is basically a gratuitous one,
doubts referring to incidental circumstances of a gratuitous contract should be
resolved in favor of the least transmission of rights and interest . . . (emphasis
supplied)

Second, the discussion on conditional obligations is unnecessary. There is no conditional obligation


to speak of in this case. It seems that the "conditions" imposed by the donor and as the word is used
in the law of donations is confused with "conditions" as used in the law of obligations. In his
annotation of Article 764 of the Civil Code on Donations, Arturo M. Tolentino, citing the well-known
civilists such as Castan, Perez Gonzalez and Alguer, and Colin & Capitant, states clearly the context
within which the term "conditions" is used in the law of donations, to wit:

The word "conditions" in this article does not refer to uncertain events on which the
birth or extinguishment of a juridical relation depends, but is used in the vulgar sense
of obligations or chargesimposed by the donor on the donee. It is used, not in its
technical or strict legal sense, but in its broadest sense.1 (emphasis supplied)

Clearly then, when the law and the deed of donation speaks of "conditions" of a donation, what are
referred to are actually the obligations, charges or burdens imposed by the donor upon the donee
and which would characterize the donation as onerous. In the present case, the donation is, quite
obviously, onerous, but it is more properly called a "modal donation." A modal donation is one in
which the donor imposes a prestation upon the donee. The establishment of the medical college as
the condition of the donation in the present case is one such prestation.

The conditions imposed by the donor Don Ramon Lopez determines neither the existence nor the
extinguishment of the obligations of the donor and the donee with respect to the donation. In fact,
the conditions imposed by Don Ramon Lopez upon the donee are the very obligations of the
donation — to build the medical college and use the property for the purposes specified in the deed
of donation. It is very clear that those obligations are unconditional, the fulfillment, performance,
existence or extinguishment of which is not dependent on any future or uncertain event or past and
unknown event, as the Civil Code would define a conditional obligation.2

Reliance on the case of Parks vs. Province of Tarlac3 as cited on page 5 of the majority opinion is
erroneous in so far as the latter stated that the condition in Parks is a resolutory one and applied this
to the present case. A more careful reading of this Court's decision would reveal that nowhere did
we say, whether explicitly or impliedly, that the donation in that case, which also has a condition
imposed to build a school and a public park upon the property donated, is a resolutory condition.4 It
is incorrect to say that the "conditions" of the donation there or in the present case are resolutory
conditions because, applying Article 1181 of the Civil Code, that would mean that upon fulfillment of
the conditions, the rights already acquired will be extinguished. Obviously, that could not have been
the intention of the parties.

What the majority opinion probably had in mind was that the conditions are resolutory because if
they are notcomplied with, the rights of the donee as such will be extinguished and the donation will
be revoked. To my mind, though, it is more accurate to state that the conditions here are not
resolutory conditions but, for the reasons stated above, are the obligations imposed by the donor.

Third, I cannot subscribe to the view that the provisions of Article 1197 cannot be applied here. The
conditions/obligations imposed by the donor herein are subject to a period. I draw this conclusion
based on our previous ruling which, although made almost 90 years ago, still finds application in the
present case. In Barretto vs. City of Manila,5 we said that when the contract of donation, as the one
involved therein, has no fixed period in which the condition should be fulfilled, the provisions of what
is now Article 1197 (then Article 1128) are applicable and it is the duty of the court to fix a suitable
time for its fulfillment. Indeed, from the nature and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was contemplated by the donor. Don Ramon Lopez
could not have intended his property to remain idle for a long period of time when in fact, he
specifically burdened the donee with the obligation to set up a medical college therein and thus put
his property to good use. There is a need to fix the duration of the time within which the conditions
imposed are to be fulfilled.

It is also important to fix the duration or period for the performance of the conditions/obligations in
the donation in resolving the petitioner's claim that prescription has already barred the present action.
I disagree once more with the ruling of the majority that the action of the petitioners is not barred by
the statute of limitations. There is misplaced reliance again on a previous decision of this Court
in Osmeña vs. Rama.6 That case does not speak of a deed of donation as erroneously quoted and
cited by the majority opinion. It speaks of a contract for a sum of money where the debtor herself
imposed a condition which will determine when she will fulfill her obligation to pay the creditor, thus,
making the fulfillment of her obligation dependent upon her will. What we have here, however, is not
a contract for a sum of money but a donation where the donee has not imposed any conditions on
the fulfillment of its obligations. Although it is admitted that the fulfillment of the conditions/obligations
of the present donation may be dependent on the will of the donee as to when it will comply
therewith, this did not arise out of a condition which the donee itself imposed. It is believed that the
donee was not meant to and does not have absolute control over the time within which it will perform
its obligations. It must still do so within a reasonable time. What that reasonable time is, under the
circumstances, for the courts to determine. Thus, the mere fact that there is no time fixed as to when
the conditions of the donation are to be fulfilled does not ipso facto mean that the statute of
limitations will not apply anymore and the action to revoke the donation becomes imprescriptible.

Admittedly, the donation now in question is an onerous donation and is governed by the law on
contracts (Article 733) and the case of Osmeña, being one involving a contract, may apply. But we
must not lose sight of the fact that it is still a donation for which this Court itself applied the pertinent
law to resolve situations such as this. That the action to revoke the donation can still prescribe has
been the pronouncement of this Court as early as 1926 in the case of Parks which, on this point,
finds relevance in this case. There, this Court said,

[that] this action [for the revocation of the donation] is prescriptible, there is no doubt.
There is no legal provision which excludes this class of action from the statute of
limitations. And not only this, the law itself recognizes the prescriptibility of the action
for the revocation of a donation, providing a special period of [four] years for the
revocation by the subsequent birth of children [Art. 646, now Art. 763], and . . . by
reason of ingratitude. If no special period is provided for the prescription of the action
for revocation for noncompliance of the conditions of the donation [Art. 647, now Art.
764], it is because in this respect the donation is considered onerous and is
governed by the law of contracts and the general rules of prescription.7

More recently, in De Luna v. Abrigo,8 this Court reiterated the ruling in Parks and said that:

It is true that under Article 764 of the New Civil Code, actions for the revocation of a
donation must be brought within four (4) years from the non-compliance of the
conditions of the donation. However, it is Our opinion that said article does not apply
to onerous donations in view of the specific provision of Article 733 providing that
onerous donations are governed by the rules on contracts.

In the light of the above, the rules on contracts and the general rules on prescription
and not the rules on donations are applicable in the case at bar.

The law applied in both cases is Article 1144(1). It refers to the prescription of an action upon a
written contract, which is what the deed of an onerous donation is. The prescriptive period is ten
years from the time the cause of action accrues, and that is, from the expiration of the time within
which the donee must comply with the conditions/obligations of the donation. As to when this exactly
is remains to be determined, and that is for the courts to do as reposed upon them by Article 1197.

For the reasons expressed above, I register my dissent. Accordingly, the decision of the Court of
Appeals must be upheld, except its ruling that the conditions of the donation are resolutory.

Padilla, J., dissents

Separate Opinions

DAVIDE, JR., J., dissenting:

I agree with the view in the majority opinion that the donation in question is onerous considering the
conditions imposed by the donor on the donee which created reciprocal obligations upon both
parties. Beyond that, I beg to disagree.

First of all, may I point out an inconsistency in the majority opinion's description of the donation in
question. In one part, it says that the donation in question is onerous. Thus, on page 4 it states:

We find it difficult to sustain the petition. A clear perusal of the conditions set forth in
the deed of donation executed by Don Ramon Lopez, Sr., give us no alternative but
to conclude that his donation was onerous, one executed for a valuable
consideration which is considered the equivalent of the donation itself, e.g., when a
donation imposes a burden equivalent to the value of the donation . . . . (emphasis
supplied)

Yet, in the last paragraph of page 8 it states that the donation is basically a gratuitous one.
The pertinent portion thereof reads:

Finally, since the questioned deed of donation herein is basically a gratuitous one,
doubts referring to incidental circumstances of a gratuitous contract should be
resolved in favor of the least transmission of rights and interest . . . (emphasis
supplied)

Second, the discussion on conditional obligations is unnecessary. There is no conditional obligation


to speak of in this case. It seems that the "conditions" imposed by the donor and as the word is used
in the law of donations is confused with "conditions" as used in the law of obligations. In his
annotation of Article 764 of the Civil Code on Donations, Arturo M. Tolentino, citing the well-known
civilists such as Castan, Perez Gonzalez and Alguer, and Colin & Capitant, states clearly the context
within which the term "conditions" is used in the law of donations, to wit:

The word "conditions" in this article does not refer to uncertain events on which the
birth or extinguishment of a juridical relation depends, but is used in the vulgar sense
of obligations or chargesimposed by the donor on the donee. It is used, not in its
technical or strict legal sense, but in its broadest sense.1 (emphasis supplied)

Clearly then, when the law and the deed of donation speaks of "conditions" of a donation, what are
referred to are actually the obligations, charges or burdens imposed by the donor upon the donee
and which would characterize the donation as onerous. In the present case, the donation is, quite
obviously, onerous, but it is more properly called a "modal donation." A modal donation is one in
which the donor imposes a prestation upon the donee. The establishment of the medical college as
the condition of the donation in the present case is one such prestation.

The conditions imposed by the donor Don Ramon Lopez determines neither the existence nor the
extinguishment of the obligations of the donor and the donee with respect to the donation. In fact,
the conditions imposed by Don Ramon Lopez upon the donee are the very obligations of the
donation — to build the medical college and use the property for the purposes specified in the deed
of donation. It is very clear that those obligations are unconditional, the fulfillment, performance,
existence or extinguishment of which is not dependent on any future or uncertain event or past and
unknown event, as the Civil Code would define a conditional obligation.2

Reliance on the case of Parks vs. Province of Tarlac3 as cited on page 5 of the majority opinion is
erroneous in so far as the latter stated that the condition in Parks is a resolutory one and applied this
to the present case. A more careful reading of this Court's decision would reveal that nowhere did
we say, whether explicitly or impliedly, that the donation in that case, which also has a condition
imposed to build a school and a public park upon the property donated, is a resolutory condition.4 It
is incorrect to say that the "conditions" of the donation there or in the present case are resolutory
conditions because, applying Article 1181 of the Civil Code, that would mean that upon fulfillment of
the conditions, the rights already acquired will be extinguished. Obviously, that could not have been
the intention of the parties.

What the majority opinion probably had in mind was that the conditions are resolutory because if
they are notcomplied with, the rights of the donee as such will be extinguished and the donation will
be revoked. To my mind, though, it is more accurate to state that the conditions here are not
resolutory conditions but, for the reasons stated above, are the obligations imposed by the donor.

Third, I cannot subscribe to the view that the provisions of Article 1197 cannot be applied here. The
conditions/obligations imposed by the donor herein are subject to a period. I draw this conclusion
based on our previous ruling which, although made almost 90 years ago, still finds application in the
present case. In Barretto vs. City of Manila,5 we said that when the contract of donation, as the one
involved therein, has no fixed period in which the condition should be fulfilled, the provisions of what
is now Article 1197 (then Article 1128) are applicable and it is the duty of the court to fix a suitable
time for its fulfillment. Indeed, from the nature and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was contemplated by the donor. Don Ramon Lopez
could not have intended his property to remain idle for a long period of time when in fact, he
specifically burdened the donee with the obligation to set up a medical college therein and thus put
his property to good use. There is a need to fix the duration of the time within which the conditions
imposed are to be fulfilled.

It is also important to fix the duration or period for the performance of the conditions/obligations in
the donation in resolving the petitioner's claim that prescription has already barred the present action.
I disagree once more with the ruling of the majority that the action of the petitioners is not barred by
the statute of limitations. There is misplaced reliance again on a previous decision of this Court
in Osmeña vs. Rama.6 That case does not speak of a deed of donation as erroneously quoted and
cited by the majority opinion. It speaks of a contract for a sum of money where the debtor herself
imposed a condition which will determine when she will fulfill her obligation to pay the creditor, thus,
making the fulfillment of her obligation dependent upon her will. What we have here, however, is not
a contract for a sum of money but a donation where the donee has not imposed any conditions on
the fulfillment of its obligations. Although it is admitted that the fulfillment of the conditions/obligations
of the present donation may be dependent on the will of the donee as to when it will comply
therewith, this did not arise out of a condition which the donee itself imposed. It is believed that the
donee was not meant to and does not have absolute control over the time within which it will perform
its obligations. It must still do so within a reasonable time. What that reasonable time is, under the
circumstances, for the courts to determine. Thus, the mere fact that there is no time fixed as to when
the conditions of the donation are to be fulfilled does not ipso facto mean that the statute of
limitations will not apply anymore and the action to revoke the donation becomes imprescriptible.

Admittedly, the donation now in question is an onerous donation and is governed by the law on
contracts (Article 733) and the case of Osmeña, being one involving a contract, may apply. But we
must not lose sight of the fact that it is still a donation for which this Court itself applied the pertinent
law to resolve situations such as this. That the action to revoke the donation can still prescribe has
been the pronouncement of this Court as early as 1926 in the case of Parks which, on this point,
finds relevance in this case. There, this Court said,

[that] this action [for the revocation of the donation] is prescriptible, there is no doubt.
There is no legal provision which excludes this class of action from the statute of
limitations. And not only this, the law itself recognizes the prescriptibility of the action
for the revocation of a donation, providing a special period of [four] years for the
revocation by the subsequent birth of children [Art. 646, now Art. 763], and . . . by
reason of ingratitude. If no special period is provided for the prescription of the action
for revocation for noncompliance of the conditions of the donation [Art. 647, now Art.
764], it is because in this respect the donation is considered onerous and is
governed by the law of contracts and the general rules of prescription.7

More recently, in De Luna v. Abrigo,8 this Court reiterated the ruling in Parks and said that:
It is true that under Article 764 of the New Civil Code, actions for the revocation of a
donation must be brought within four (4) years from the non-compliance of the
conditions of the donation. However, it is Our opinion that said article does not apply
to onerous donations in view of the specific provision of Article 733 providing that
onerous donations are governed by the rules on contracts.

In the light of the above, the rules on contracts and the general rules on prescription
and not the rules on donations are applicable in the case at bar.

The law applied in both cases is Article 1144(1). It refers to the prescription of an action upon a
written contract, which is what the deed of an onerous donation is. The prescriptive period is ten
years from the time the cause of action accrues, and that is, from the expiration of the time within
which the donee must comply with the conditions/obligations of the donation. As to when this exactly
is remains to be determined, and that is for the courts to do as reposed upon them by Article 1197.

For the reasons expressed above, I register my dissent. Accordingly, the decision of the Court of
Appeals must be upheld, except its ruling that the conditions of the donation are resolutory.

Padilla, J., dissents


[G.R. No. 140487. April 2, 2001]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM and


ILDEFONSA MANGUBAT, respondents.

DECISION
KAPUNAN, J.:

Before the Court is a petition for review under Rule 45 seeking the reversal of the
Decision of the Court of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et al. vs.
Wilfredo Palma, et al., which declared null and void the donation made by
respondents of a parcel of land in favor of the Bureau of Public Schools, Municipality
of Malangas, Zamboanga del Sur.
The antecedents of this case are as follows:
On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa
Mangubat, donated a 5,600 square meter parcel of land in favor of the Bureau of
Public Schools, Municipality of Malangas, Zamboanga del Sur (BPS). In the Deed of
Donation, respondents imposed the condition that the said property should be used
exclusively and forever for school purposes only.[1] This donation was accepted by
Gregorio Buendia, the District Supervisor of BPS, through an Affidavit of Acceptance
and/or Confirmation of Donation.
Through a fund raising campaign spearheaded by the Parent-Teachers Association
of Barangay Kauswagan, a school building was constructed on the donated
land. However, the Bagong Lipunan school building that was supposed to be allocated
for the donated parcel of land in Barangay Kauswagan could not be released since the
government required that it be built upon a one (1) hectare parcel of land. To remedy
this predicament, Assistant School Division Superintendent of the Province of
Zamboanga del Sur, Sabdani Hadjirol, authorized District Supervisor Buendia to
officially transact for the exchange of the one-half (1/2) hectare old school site of
Kauswagan Elementary School to a new and suitable location which would fit the
specifications of the government. Pursuant to this, District Supervisor Buendia and
Teresita Palma entered into a Deed of Exchange whereby the donated lot was
exchanged with the bigger lot owned by the latter. Consequently, the Bagong Lipunan
school buildings were constructed on the new school site and the school building
previously erected on the donated lot was dismantled and transferred to the new
location.
When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo
Palma was constructing a house on the donated land, he asked the latter why he was
building a house on the property he donated to BPS. Vice Mayor Wilfredo Palma
replied that he is already the owner of the said property. Respondent Leon Silim
endeavored to stop the construction of the house on the donated property but Vice-
Mayor Wilfredo Palma advised him to just file a case in court.
On February 10, 1982, respondents filed a Complaint for Revocation and
Cancellation of Conditional Donation, Annulment of Deed of Exchange and Recovery
of Possession and Ownership of Real Property with damages against Vice Mayor
Wilfredo Palma, Teresita Palma, District Supervisor Buendia and the BPS before the
Regional Trial Court of Pagadian City, Branch 21. In its Decision dated 20 August
1993, the trial court dismissed the complaint for lack of merit. [2] The pertinent portion
of the decision reads:

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

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

xxx

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 745[6] and 749[7] 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:
xxx

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]

xxx
We hold that there was a valid acceptance of the donation.
Sections 745 and 749 of the New Civil Code provide:
ART. 745. The donee must accept the donation personally, or through an authorized
person with a special power for the purpose, or with a general and sufficient power;
otherwise the donation shall be void.

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

The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof
in an authentic form, and this step shall be noted in both instruments.

Private respondents, as shown above, admit that in the offer of exhibits by the
defendants in the trial court, an affidavit of acceptance and/or confirmation of the
donation, marked as Exhibit "8," was offered in evidence. However, private
respondents now question this exhibit because, according to them "there is nothing in
the record that the exhibits offered by the defendants have been admitted nor such
exhibit appear on record."
Respondents' stance does not persuade. The written acceptance of the donation
having been considered by the trial court in arriving at its decision, there is the
presumption that this exhibit was properly offered and admitted by the court.
Moreover, this issue was never raised in the Court of Appeals. Nowhere in their
brief did respondents question the validity of the donation on the basis of the alleged
defect in the acceptance thereof. If there was such a defect, why did it take
respondents more than ten (10) years from the date of the donation to question its
validity? In the very least, they are guilty of estoppel.[14]
Respondents further argue that assuming there was a valid acceptance of the
donation, the acceptance was not noted in the Deed of Donation as required in Article
749 of the Civil Code, hence, the donation is void.
The purpose of the formal requirement for acceptance of a donation is to ensure
that such acceptance is duly communicated to the donor. Thus, in Pajarillo vs.
Intermediate Appellate Court,[15] the Court held:

There is no question that the donation was accepted in a separate public instrument
and that it was duly communicated to the donors. Even the petitioners cannot deny
this. But what they do contend is that such acceptance was not "noted in both
instruments," meaning the extrajudicial partition itself and the instrument of
acceptance, as required by the Civil Code.
That is perfectly true. There is nothing in either of the two instruments showing that
"authentic notice" of the acceptance was made by Salud to Juana and Felipe. And
while the first instrument contains the statement that "the donee does hereby accept
this donation and does hereby express her gratitude for the kindness and liberality of
the donor," the only signatories thereof were Felipe Balane and Juana Balane de
Suterio. That was in fact the reason for the separate instrument of acceptance signed
by Salud a month later.

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

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

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

Finally, it is respondents' submission that the donee, in exchanging the donated lot
with a bigger lot, violated the condition in the donation that the lot be exclusively used
for school purposes only.
What does the phrase "exclusively used for school purposes" convey? "School" is
simply an institution or place of education.[16] "Purpose" is defined as "that which one
sets before him to accomplish or attain; an end, intention, or aim, object, plan,
project. Term is synonymous with the ends sought, an object to be attained, an
intention, etc."[17] "Exclusive" means "excluding or having power to exclude (as by
preventing entrance or debarring from possession, participation, or use); limiting or
limited to possession, control or use.[18]
Without the slightest doubt, the condition for the donation was not in any way
violated when the lot donated was exchanged with another one. The purpose for the
donation remains the same, which is for the establishment of a school. The exclusivity
of the purpose was not altered or affected. In fact, the exchange of the lot for a much
bigger one was in furtherance and enhancement of the purpose of the donation. The
acquisition of the bigger lot paved the way for the release of funds for the construction
of Bagong Lipunan school building which could not be accommodated by the limited
area of the donated lot.
WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and
SET ASIDE and the decision of the Regional Trial Court is REINSTATED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Pardo, and Ynares-Santiago, JJ., concur.
Puno J., on official leave.
[G.R. No. 132681. December 3, 2001]

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


ALCANTARA, INES REYES and JOSE REYES, respondents.

DECISION
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 20 th 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 acknowledgement 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 Catalinas only surviving relatives within the fourth civil degree of consanguinity,
executed a deed of extrajudicial settlement of estate, dividing and adjudicating unto themselves
the above-described property.
On September 13, 1984, respondents instituted against petitioner and Guillermo T. San
Pedro, the Registrar of Deeds of Manila, an action for the declaration of nullity of the
donation inter vivos, and for the cancellation of TCT No. 143015 in the name of Violeta
Quilala. The case was docketed as Civil Case No. 84-26603 of the Regional Trial Court of
Manila, Branch 17. Subsequently, respondents withdrew their complaint as against Guillermo T.
San Pedro and he was dropped as a party-defendant.
The trial court found that the deed of donation, although signed by both Catalina and Violeta,
was acknowledged before a notary public only by the donor, Catalina. Consequently, there was
no acceptance by Violeta of the donation in a public instrument, thus rendering the donation null
and void. Furthermore, the trial court held that nowhere in Catalinas SSS records does it appear
that Violeta was Catalinas 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 Catalinas
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 COURTS RULING
THAT VIOLETA QUILALA IS NOT THE DAUGHTER OF CATALINA QUILALA.[6]
The principal issue raised is the validity of the donation executed by Catalina in favor of
Violeta. Under Article 749 of the Civil Code, the donation of an immovable must be made in a
public instrument in order to be valid,[7] specifying therein the property donated and the value of
the charges which the donee must satisfy. As a mode of acquiring ownership, donation results in
an effective transfer of title over the property from the donor to the donee,[8] and is perfected from
the moment the donor knows of the acceptance by the donee,[9] provided the donee is not
disqualified or prohibited by law from accepting the donation. Once the donation is accepted, it
is generally considered irrevocable,[10] and the donee becomes the absolute owner of the
property.[11] The acceptance, to be valid, must be made during the lifetime of both the donor and
the donee.[12] It may be made in the same deed or in a separate public document,[13] and the donor
must know the acceptance by the donee.[14]
In the case at bar, the deed of donation contained the number of the certificate of title as well
as the technical description as 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 donees 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 Violetas 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 the 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. (underscoring ours).

As stated above, the second page of the deed of donation, on which the Acknowledgment
appears, was signed by the donor and one witness on the left-hand margin, and by the donee and
the other witness on the right-hand margin. Surely, the requirement that the contracting parties
and their witnesses should sign on the left-hand margin of the instrument is not absolute. The
intendment of the law merely is to ensure that each and every page of the instrument is
authenticated by the parties. The requirement is designed to avoid the falsification of the contract
after the same has already been duly executed by the parties. Hence, a contracting party affixes
his signature on each page of the instrument to certify that he is agreeing to everything that is
written thereon at the time of signing.
Simply put, the specification of the location of the signature is merely directory. The fact
that one of the parties signs on the wrong side of the page, that 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 donors 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 donors intention.[21]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed decision
of the Court of Appeals is REVERSED and SET ASIDE, and a new judgment is rendered
dismissing Civil Case No. 84-26603.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur.
[G.R. No. 133705. March 31, 2005]

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

DECISION
GARCIA, J.:

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


the Decision[1] dated December 19, 1997 and Resolution[2] dated April 30,
1998 of the Court of Appeals in CA-G.R. CV No. 45392, reversing an earlier
decision of the Regional Trial Court at Calamba, Laguna, Branch 34, which
ruled in favor of the herein petitioner C-J Yulo & Sons, Inc., in a suit for
revocation of donation with reconveyance of title, thereat commenced by the
petitioner against the herein respondent, Roman Catholic Bishop of San
Pablo, Inc.
The facts are not at all disputed:
On September 24, 1977, petitioner donated unto respondent a parcel of
land at Canlubang, Calamba, Laguna with an area of 41,117 square meters
and registered in its name under Transfer Certificate of Title (TCT) No. T-
82803. The deed of donation which also bears the acceptance of the donee
recites the considerations therefor and the conditions thereto attached, to wit:

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


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

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

WHEREFORE, Donor is willing, in order to help establish and support such an


institution to donate the land necessary for its housing, as well as an area of land
whereon it may raise crops for its support and for the sustenance of its residents;

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

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

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

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

4. Donee acknowledges that 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 donor-plaintiff C-J Yulo & Sons, Inc., thus:

WHEREFORE, judgment is hereby rendered for plaintiff and against the defendant,
declaring the Deed of Donation dated September 24, 1977 (Exh. C) REVOKED,
affirming 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. T-91348
(Exh. B) and thereafter cancel the same and issue, upon payment of the required fees,
a new Transfer Certificate of Title in favor of plaintiffs, with cost against the
defendant.
SO ORDERED.

Therefrom, donee-defendant Roman Catholic Bishop of San Pablo, Inc.,


went to the Court of Appeals in CA-G.R. CV No. 45392.
In the herein assailed Decision dated December 19, 1997,[3] the Court of
Appeals reversed that of the trial court and upheld the donation in question, to
wit:

WHEREFORE, the decision of the trial court dated December 22, 1993 is
hereby REVERSED and the donation dated September 24, 1977 (Exhibit C) which
conveyed title to the donated property in the 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,[6] where respondent Silim donated a 5,600-
square meter parcel of land in favor of the Bureau of Public Schools,
Municipality of Malangas, Zamboanga del Sur with the condition that the said
property should be used exclusively and forever for school purposes only.
Although a school building was constructed on the property through the efforts
of the Parent-Teachers Association of Barangay Kauswagan, the funds for
a Bagong Lipunan school building could not be released because the
government required that it be built on a one-hectare parcel of land. This led
the donee therein to exchange the donated property for a bigger one.
In Silim, the Court distinguished the four (4) types of donations:

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

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

ARTICLE 733 Donations with onerous cause shall be governed by the rules on
contracts, and remuneratory donations by the provisions of the present Title as regards
that portion which exceeds the value of the burden imposed.
The donation involved in the present controversy is one which is onerous since there
is a burden imposed upon the donee to build a school on the donated property.

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

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

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

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

The above ruling of the Court of Appeals is completely in tune with this
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 letter[8] 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.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-
Morales, JJ., concur.
THE SECRETARY OF G.R. No. 164748
EDUCATION and DR. BENITO
TUMAMAO, Schools Division Present:
Superintendent of Isabela,
Petitioners,
PANGANIBAN, C.J., Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR., and
CHICO-NAZARIO, JJ.

HEIRS OF RUFINO DULAY, Promulgated:


SR., represented by IGNACIA
VICENTE, RUFINO DULAY, January 27, 2006
JR., SUSANA DULAY,
ADELAIDA DULAY,
LUZVIMINDA DULAY and
CECILIA DULAY,
Respondents.
x--------------------------------------------------x

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals
(CA) in CA-G.R. CV No. 78314 which affirmed the Decision[2] of the Regional
Trial Court (RTC) of Santiago City, Isabela, Branch 35, in Civil Case No. 35-2397.

The spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of
land located in Rizal, Santiago, Isabela, with an area of 29,002 square meters. The
lot was covered by Original Certificate of Title No. P-6776.
On August 3, 1981, the spouses Dulay executed a deed of donation[3] over a
10,000-square-meter portion of their property in favor of the Ministry of Education
and Culture (now the Department of Education, Culture and Sports [DECS]). The
deed provided, among others:

That for and in consideration of the benefits that may be derived from
the use of the above described property which is intended for school
purposes, the said DONORS do by by (sic) these presents TRANSFER
AND CONVEY by way of DONATION unto the DONEE, its
successors and assigns, the above property to become effective upon the
signing of this document.[4]

The property was subdivided. On April 13, 1983, Transfer Certificate of Title
(TCT) No. T-143337[5] covering the portion identified as Lot8858-A was issued in
the name of the Ministry of Education and Culture, represented by Laurencio C.
Ramel, the Superintendent of Schools of Isabela. However, the property was not
used for school purposes and remained idle.

Sometime in 1988, the DECS, through its Secretary, started construction of


the Rizal National High School building on a parcel of land it acquired from
Alejandro Feliciano. The school site was about 2 kilometers away from the land
donated by the spouses Dulay.

In a letter[6] to the DECS Secretary dated August 19, 1994, the


spouses Dulay requested that the property be returned to them considering that the
land was never used since 1981, or a period of more than 13 years. On
August 28, 1994, the Barangay Council of Rizal, Santiago City issued Resolution
No. 39[7] recognizing the right of the donors to redeem the subject parcel of land
because of the DECS failure to utilize it for the intended purpose. It further
resolved that the Rizal National High Schoolno longer needed the donated land
considering its distance from the main campus and [the] failure to utilize the
property for a long period of time.

On December 22, 1994, Rufino Dulay, Sr. passed away at the age of 80.[8] His
heirs sought the help of the Sangguniang Panlungsod of Santiago City via an
undated letter[9] requesting the approval of a resolution allowing them to redeem
the donated property. The Sangguniang Panlungsod denied the request inasmuch
as the city government was not a party to the deed of donation.[10]

On August 31, 1997, the heirs of Dulay, Sr., herein respondents, filed a complaint
for the revocation of the deed of donation and cancellation of TCT No. T-143337
before the RTC of Santiago City, Isabela, Branch 35, against the DECS Secretary
and Dr. Benito Tumamao, the Schools Division Superintendent of
Isabela. Respondents alleged that there was a condition in the deed of donation:
that the DECS, as donee, utilize the subject property for school purposes, that is,
the construction of a building to house the Rizal National High
School. Respondents alleged that the DECS did not fulfill the condition and that
the land remained idle up to the present. Respondents also averred that the
donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more
than what he could give by will.

Petitioners, through the Office of the Solicitor General (OSG), interposed the
following defenses: (a) the DECS complied with said condition because the land
was being used by the school as its technology
and home economics laboratory; (b) the donation was not inofficious for the
donors were the owners of five other parcels of land, all located at Rizal, Santiago
City; (c) the DECS acquired the disputed property by virtue of purchase made on
December 8, 1997 by the barangay of Rizal, Santiago City in the amount
of P18,000.00 as certified by its former Barangay Captain, Jesus San Juan;[11] and
(d) the action of the respondents had prescribed. The OSG also claimed that
students planted a portion of the land with rice, mahogany seedlings, and fruit-
bearing trees; the produce would then be sold and the proceeds used for the
construction of a school building on the subject property.

In their Reply,[12] respondents denied that the donated land was being used as a
technology and home economics laboratory, and averred that there were no
improvements on the property. Moreover, the fact that rice was planted on the lot
was contrary to the intended purpose of the donation. The respondents likewise
denied that the property had been sold to the barangay. While the other properties
of the late donor had been sold, the deeds thereon had not been registered, and the
tax declarations not yet transferred in the names of the purchasers.
Thereafter, trial ensued. On March 6, 2001, an ocular inspection of the
property was conducted by the parties and their respective counsels, including the
Presiding Judge. It was confirmed that the land was barren, save for a small portion
which was planted with palay. A demolished house was also found in the
periphery of the donated lot.[13]

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

WHEREFORE, in the light of the foregoing considerations, the


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

SO ORDERED.[14]

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

Aggrieved, the OSG appealed the decision to the CA.

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

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

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

I.
THE DEPARTMENT OF EDUCATION, THROUGH
THE RIZAL NATIONAL HIGH SCHOOL, HAD COMPLIED WITH
THE CONDITION IMPOSED IN THE DEED OF DONATION.

II.
RESPONDENTS RIGHT TO SEEK THE REVOCATION OF THE
DEED OF DONATION, IF THERE BE ANY, IS ALREADY BARRED
BY PRESCRIPTION AND LACHES.[15]

The Court shall resolve the issues raised by petitioners seriatim.

The donee failed to comply with


the condition imposed in the deed
of donation

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

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

In their comment on the petition, respondents dispute petitioners contentions, and


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

The contention of petitioners has no merit.


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

We find it difficult to sustain that the defendant-appellants have


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

In its Order[18] dated March 6, 2001, the RTC reiterated that during the ocular
inspection of the property conducted in the presence of the litigants and their
counsel, it observed that the land was barren; there were no improvements on the
donated property though a portion thereof was planted with palay [and a
demolished house built in 1979.]

Moreover, petitioners failed to adduce a shred of evidence to prove that


the palay found in the property was planted by DECS personnel or at its instance
or even by students of the Rizal National High School. No evidence was adduced
to prove that there were existing plans to use the property for school
purposes. Petitioners even debilitated their cause when
they claimed in the trial court that the barangay acquired the property by purchase,
relying on the certification of former Barangay Captain Jesus San Juan.
The right to seek the revocation of
donation had not yet prescribed
when respondents filed their complaint

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

xxx With this, [we] decline to apply the four-year prescriptive period for
the revocation of donation provided under Article 764 of the New Civil
Code and instead apply the general rules on contracts since Article 733
of the same Code, specifically provided that onerous donations shall be
governed by the rules on contracts.

Corollarily, since a deed of donation is considered a written contract, it is


governed by Article 1144 of the New Civil Code, which provides that
the prescriptive period for an action arising from a written contract is ten
(10) years from the time the cause of action accrues. In the case of
donation, the accrual of the cause of action is from the expiration of the
time within which the donee must comply with the conditions or
obligations of the donation.In the instant case, however, it must be noted
that the subject donation fixed no period within which the donee can
comply with the condition of donation. As such, resort to Article 1197
of

the New Civil Code is necessary. Said article provides that if the
obligation does not fix a period, but from its nature and the
circumstances it can be inferred that a period was intended, the courts
may fix the duration thereof. Indeed, from the nature and circumstances
of the condition of the subject donation, it can be inferred that a period
was contemplated by the donors. The donors could not have intended
their property to remain idle for a very long period of time when, in fact,
they specifically obliged the defendant-appellants to utilize the land
donated for school purposes and thus put it in good use. xxx[20]

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


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

Altogether, it has been 16 years since the execution of the deed of


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

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in


CA-G.R. CV No. 78314 dated July 30, 2004 is AFFIRMED.

SO ORDERED.

ROMEO J. CALLEJO, SR.


Associate Justice
WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ


Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice
G.R. No. 77425 June 19, 1991

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


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

G.R. No. 77450 June 19, 1991

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


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

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


Dolorfino and Dominguez Law Offices for Sps. Ignao.
Joselito R. Enriquez for private respondents.

REGALADO, J.:

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

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

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

It is further alleged that on or about June 30, 1980, and while still within the prohibitive period to
dispose of the property, petitioner Roman Catholic Bishop of Imus, in whose administration all
properties within the province of Cavite owned by the Archdiocese of Manila was allegedly
transferred on April 26, 1962, executed a deed of absolute sale of the property subject of the
donation in favor of petitioners Florencio and Soledad C. Ignao in consideration of the sum of
P114,000. 00. As a consequence of the sale, Transfer Certificate of Title No. 115990 was issued by
the Register of Deeds of Cavite on November 15, 1980 in the name of said petitioner spouses.
What transpired thereafter is narrated by respondent court in its assailed decision.4

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

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

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

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

Private respondents thereafter appealed to the Court of Appeals raising the issues on (a) whether or
not the action for rescission of contracts (deed of donation and deed of sale) has prescribed; and (b)
whether or not the dismissal of the action for rescission of contracts (deed of donation and deed of
sale) on the ground of prescription carries with it the dismissal of the main action for reconveyance
of real property.6

On December 23, 1986, respondent Court of Appeals, holding that the action has not yet prescibed,
rendered a decision in favor of private respondents, with the following dispositive portion:

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

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

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

We do not agree.

Although it is true that under Article 764 of the Civil Code an action for the revocation of a donation
must be brought within four (4) years from the non-compliance of the conditions of the donation, the
same is not applicable in the case at bar. The deed of donation involved herein expressly provides
for automatic reversion of the property donated in case of violation of the condition therein, hence a
judicial declaration revoking the same is not necessary, As aptly stated by the Court of Appeals:
By the very express provision in the deed of donation itself that the violation of the condition
thereof would render ipso facto null and void the deed of donation, WE are of the opinion that
there would be no legal necessity anymore to have the donation judicially declared null and
void for the reason that the very deed of donation itself declares it so. For where (sic) it
otherwise and that the donors and the donee contemplated a court action during the
execution of the deed of donation to have the donation judicially rescinded or declared null
and void should the condition be violated, then the phrase reading "would render ipso facto
null and void"would not appear in the deed of donation.9

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

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

The validity of such a stipulation in the deed of donation providing for the automatic reversion of the
donated property to the donor upon non-compliance of the condition was upheld in the recent case
of De Luna, et al. vs. Abrigo, et al.13 It was held therein that said stipulation is in the nature of an
agreement granting a party the right to rescind a contract unilaterally in case of breach, without need
of going to court, and that, upon the happening of the resolutory condition or non-compliance with
the conditions of the contract, the donation is automatically revoked without need of a judicial
declaration to that effect. While what was the subject of that case was an onerous donation which,
under Article 733 of the Civil Code is governed by the rules on contracts, since the donation in the
case at bar is also subject to the same rules because of its provision on automatic revocation upon
the violation of a resolutory condition, from parity of reasons said pronouncements in De
Luna pertinently apply.

The rationale for the foregoing is that in contracts providing for automatic revocation, judicial
intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for rescission even without judicial
intervention, but in order to determine whether or not the rescission was proper.14

When a deed of donation, as in this case, expressly provides for automatic revocation and reversion
of the property donated, the rules on contract and the general rules on prescription should apply,
and not Article 764 of the Civil Code. Since Article 1306 of said Code authorizes the parties to a
contract to establish such stipulations, clauses, terms and conditions not contrary to law, morals,
good customs, public order or public policy, we are of the opinion that, at the very least, that
stipulation of the parties providing for automatic revocation of the deed of donation, without prior
judicial action for that purpose, is valid subject to the determination of the propriety of the rescission
sought. Where such propriety is sustained, the decision of the court will be merely declaratory of the
revocation, but it is not in itself the revocatory act.

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

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

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

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

Certain provisions of the Civil Code illustrative of the aforesaid policy may be considered applicable
by analogy. Under the third paragraph of Article 494, a donor or testator may prohibit partition for a
1âwphi 1

period which shall not exceed twenty (20) years. Article 870, on its part, declares that the
dispositions of the testator declaring all or part of the estate inalienable for more than twenty (20)
years are void.

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

In the case at bar, we hold that the prohibition in the deed of donation against the alienation of the
property for an entire century, being an unreasonable emasculation and denial of an integral
attribute of ownership, should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code. Consequently, as specifically stated in said statutory
provision, such condition shall be considered as not imposed. No reliance may accordingly be
placed on said prohibitory paragraph in the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the cause of action for the nullification of the
deed of donation is not in truth violative of the latter hence, for lack of cause of action, the case for
private respondents must fail.
It may be argued that the validity of such prohibitory provision in the deed of donation was not
specifically put in issue in the pleadings of the parties. That may be true, but such oversight or
inaction does not prevent this Court from passing upon and resolving the same.

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

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

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

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

SO ORDERED.