DONATION DIGESTS.docx

DONATION

that Helen intended to convey to her son David certain parcels of land located in the Philippines, and to re-affirm the quitclaim she executed which likewise declared a waiver and renunciation of her rights over the parcels of land. The language of the deed of quitclaim is clear that Helen merely contemplated a waiver of her rights, title and interest over the lands in favor of David, and not a donation. That a donation was far from Helen's mind is further supported by her deposition which indicated that she was aware that a donation of the parcels of land was not possible since Philippine law does not allow such an arrangement. She reasoned that if she really intended to donate something to David it would have been more convenient if she sold the property and gave him the proceeds therefrom. It appears that foremost in Helen’s mind was the preservation of the Bulacan realty within the bloodline of Simeon from where they originated, over and above the benefit that would accrue to David by reason of her renunciation. The element of animus donandi therefore was missing.

ART. 725 REPUBLIC OF THE PHILIPPINES v. DAVID REY GUZMAN, et al. G.R. No. 132964, February 18, 2000, SECOND DIVISION (Bellosillo, J.) David Rey Guzman, a natural-born American citizen, is the son of the Simeon Guzman, a naturalized American citizen, and Helen Meyers Guzman, an American citizen. Simeon died leaving to his sole heirs Helen and David an estate consisting of several parcels of land in Bulacan. Helen and David executed a Deed of Extrajudicial Settlement of the Estate of Simeon Guzman dividing and adjudicating to themselves all the property belonging to the estate of Simeon.Helen executed a Quitclaim Deed assigning, transferring and conveying to her son David her undivided 1/2 interest on all the parcels of land subject matter of the Deed of Extrajudicial Settlement of the Estate of Simeon Guzman. Since the document appeared not to have been registered, Helen executed another Deed of Quitclaim.

Likewise, the 2 deeds of quitclaim executed by Helen may have been in the nature of a public document but they lack the essential element of acceptance in the proper form required by law to make the donation valid. We find no merit in petitioner’s argument that the Special Power of Attorney (SPA) executed by David in favor of Atty. Lolita G. Abela manifests his implied acceptance of his mother’s alleged donation as a scrutiny of the document clearly evinces the absence thereof. The SPA merely acknowledges that David owns the property referred to and that he authorizes Atty. Abela to sell the same in his name. There is no intimation, expressly or impliedly, that David’s acquisition of the parcels of land is by virtue of Helen’s possible donation to him and we cannot look beyond the language of the document to make a contrary construction as this would be inconsistent with the parol evidence rule.

David executed a Special Power of Attorney where he acknowledged that he became the owner of the parcels of land subject of the Deed of Quitclaim. Atty. Lolita G. Abela, upon instruction of Helen, paid donor’s taxes to facilitate the registry of the parcels of land in the name of David. A certain Atty. Mario Batongbacal wrote the OSG and furnished it with documents showing that David’s ownership of the 1/2 of the estate of Simeon Guzman was defective. The Government filed before the RTC a petition praying that 1/2 of David's interest in each of the subject parcels of land be forfeited in its favor. The RTC dismissed the petition holding that the 2 deeds of quitclaim had no legal force and effect so that the ownership of the property subject remained with her.

These requisites, definitely prescribed by law, have not been complied with, and no proof of compliance appears in the record. The 2 quitclaim deeds set out the conveyance of the parcels of land by Helen in favor of David but its acceptance by David does not appear in the deeds, nor in the SPA. Further, the records reveal no other instrument that evidences such acceptance and notice thereof to the donor in an authentic manner. It is well-settled that if the notification and notation are not complied with, the donation is void. Therefore, the provisions of the law not having been complied with, there was no effective conveyance of the parcels of land by way of donation inter vivos.

As a rule, only a Filipino citizen can acquire private lands in the Philippines. The only instances when a foreigner can acquire private lands in the Philippines are by hereditary succession and if he was formerly a naturalborn Filipino citizen who lost his Philippine citizenship. Petitioner contends that the acquisition of the parcels of land by David does not fall under any of these exceptions. It asserts that David being an American citizen could not validly acquire 1/2 interest in each of the subject parcels of land by way of the 2 deeds of quitclaim as they are in reality donations inter vivos. It also reasons out that the elements of donation are present in the conveyance made by Helen in favor of David. ISSUE:

SHOPPER’S PARADISE REALTY & DEVELOPMENT CORP. v. EFREN ROQUE

Is the quitclaim executed by Helen constitutes a donation in favor of David?

FACTS.

HELD:

Petitioner Shopper’s Paradise Realty & Development Corp. entered into a 25-year lease with Dr. Felipe Roque over a parcel of land located at Plaza Novaliches, Quezon City. Petitioner issued a P250, 000 check to Dr. Roque as “reservation payment”. The parties likewise entered into a memorandum of agreement (MOA) for the construction and development of a commercial building complex on the property. Conformably, petitioner issued another check worth P250, 000 as downpayment. However, due to the untimely death of Dr. Roque, the notarized contract of lease and MOA were not annotated on the TCT covering the lot. Petitioner was constrained to deal with respondent Efren Roque, one of the surviving children of Dr. Roque, but negotiations broke down due to some disagreements. Efren Roque then filed a case for annulment of the contract of lease and the memorandum of agreement, with a prayer for the issuance of a preliminary injunction.

No. There are 3 essential elements of a donation: (a) the reduction of the patrimony of the donor; (b) the increase in the patrimony of the donee; and, (c) the intent to do an act of liberality or animus donandi. When applied to a donation of an immovable property, the law further requires that the donation be made in a public document and that there should be an acceptance thereof made in the same deed of donation or in a separate public document. In cases where the acceptance is made in a separate instrument, it is mandated that the donor should be notified thereof in an authentic form, to be noted in both instruments. Not all the elements of a donation of an immovable property are present in the instant case. The transfer of the property by virtue of the Deed of Quitclaim executed by Helen resulted in the reduction of her patrimony as donor and the consequent increase in the patrimony of David as donee. However, Helen’s intention to perform an act of liberality in favor of David was not sufficiently established. A perusal of the 2 deeds of quitclaim reveals

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Efren Roque alleged that he had long been the absolute owner of the subject property by virtue of a deed of donation inter vivos executed in his favor by his parents and duly notarized. However, the title was only transferred in the name of respondent 16 years later. Respondent, while he resided in the United States of America, delegated to his father the mere administration of the property. Respondent came to know of the assailed contracts with petitioner only after retiring to the Philippines upon the death of his father.

Facts: Basilisa Comerciant, mom to five children, executed a Deed of Donation to her five children covered by Transfer Certificate 3268, with an area of 150 square meters. The said document reads as follows: “xxx Kusang loob na ibinibigay ko at ipinagkakaloob ng ganap at hindi na mababawi sa naulit ng apat na anak ko at sa kanilang mga tagamagmana (sic),xxx”

The trial court dismissed the complaint of respondent since the donation is not registered, third parties cannot be bound by it. On appeal, the CA reversed the decision of the trial court explaining that petitioner was not a lessee in good faith having had prior knowledge of the donation in favor of respondent, and that such actual knowledge had the effect of registration insofar as petitioner was concerned.

Thereafter, the parties executed another notarized document that stated” “xxx Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng tirahan ng Bagong Pook na nababanggit sa nasabing kasulatan, ay mananatili sa poder o possession ng Ina, na si Basilisa Comerciante habang siya ay nabubuhay at Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang

HELD. As to registration. The existence, albeit unregistered, of the donation in favor of respondent is undisputed. The trial court and the appellate court have not erred in holding that the non-registration of a deed of donation does not affect its validity. As being itself a mode of acquiring ownership, donation results in an effective transfer of title over the property from the donor to the donee. In donations of immovable property, the law requires for its validity that it should be contained in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. The Civil Code provides, however, that "titles of ownership, or other rights over immovable property, which are not duly inscribed or annotated in the Registry of Property (now Registry of Land Titles and Deeds) shall not prejudice third persons." It is enough, between the parties to a donation of an immovable property, that the donation be made in a public document but, in order to bind third persons, the donation must be registered in the registry of Property.

nasabing Basilisa Comerciante. Xxx “ On Feb 1979, Basilia executed a Deed of Sale in favor of Apolinaria Austria Magat for P5000. Basilia’s children contested the act, saying that the donation was intervivos and thereby irrevocable. The trial court disagreed, stating it was mortis causa and therefore revocable. The case went to the CA and the case was reversed. CA found the document to be intervivos because of the phrase “ganap at hindi na mababawi sa naulit”

Basilia, to their mind, definitely had no plans of revoking the donation. The document executed thereafter upheld such irrevocability.

As to petitioner’s good faith or bad faith. A person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore, and he is not required to go beyond the certificate to determine the condition of the property but, where such party has knowledge of a prior existing interest which is unregistered at the time he acquired a right thereto, his knowledge of that prior unregistered interest would have the effect of registration as regards to him. The appellate court was not without substantial basis when it found petitioner to have had knowledge of the donation at the time it entered into the two agreements with Dr. Roque. During their negotiation, petitioner, through its representatives, was apprised of the fact that the subject property actually belonged to respondent. Furthermore, it was not shown that Dr. Felipe C. Roque had been an authorized agent of respondent.

The parties proceeded to the Supreme Court Issue: Whether or not the deed of donation was intervivos. Held: Yes. The court found that whether the donation is inter vivos or mortis causa depends on whether the donor intended to transfer ownership over the properties upon the execution of the deed.

Petition denied. ART. 728

In Bonsato v. Court of Appeals, the court recalls the characteristics of a donation mortis causa,: (1) It conveys no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive; (2)That before his death, the transfer should be revocable by the transferor

ART. 729 APOLINARIA AUSTRIA-MAGAT, petitioner, vs. HON. COURT OF APPEALS, respondents.

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and death of the spouses. It also contained a clause which states that while the spouses are alive, they shall continue to govern the properties covered by the deed1. After Gabino’s death in 1962, Severa executed another deed of donation wherein she conveyed to Andrea Diaz her one -half share in Lot 2377-A, which one-half share is identified as Lot 2377-A-1, on condition that Andrea Diaz would bear the funeral expenses to be incurred after the donor's death. She died in 1964. It should be noted that the other one-half share in Lot 2377-A or Lot No. 2377-A-2 was previously adjudicated to Angel Diaz because he defrayed the funeral expenses on the occasion of the death of Gabino Diaz.

at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed; (3) That the transfer should be void if the transferor should survive the transferee. For the case at bar, the phrase “hindi na mababawi” definitely exudes the character of an intervivos agreement. The other provisions therein which seemingly make the donation mortis causa do not go against the irrevocable character of the subject donation. According to the petitioner, the provisions which state that the same will only take effect upon the death of the donor and that there is a prohibition to alienate, encumber is mortis causa. The court disagrees. The said provisions should be harmonized with its express irrevocability. In Bonsato where the donation per the deed of donation would also take effect upon the death of the donor with reservation for the donor to enjoy the fruits of the land, the Court held that the said statements only mean that “after the donor’s death, the donation will take effect so as to make the donees the absolute owners of the donated property, free from all liens and encumbrances.

In 1970, Andrea sued her brother Angel for the partition of Lots No. 2377-A and 2502. Teodorico Alejandro, the surviving spouse of Olimpia Diaz, and their children intervened in the said case. They claimed one-third of Lot No. 2502. Angel Diaz alleged in his answer that he had been occupying his share of Lot No. 2502 "for more than twenty years". The intervenors claimed that the 1949 donation was a void mortis causa disposition. The lower court held that the said deed of donation was a donation mortis causa because the ownership of the properties donated did not pass to the donees during the donors' lifetime but was transmitted to the donees only "upon the death of the donors". However, it sustained the division of Lot No. 2502 into two equal parts between Angel Diaz and Andrea Diaz on the theory that the said deed of donation was effective "as an extrajudicial partition among the parents and their children''

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

Issue WON the deed covering lot no. 2502 in 1949 was a donation mortis causa or inter vivos Decision The donation was inter vivos because it took effect during the lifetime of the donors. It was already effective during the donors' lifetime, or immediately after the execution of the deed, as shown by the granting, habendum2 and warranty clause of the deed. In that clause it is stated that, in consideration of the affection and esteem of the donors for the donees and the valuable services rendered by the donees to the donors, the latter, by means of the deed of donation, wholeheartedly transfer and unconditionally give to the donees the lots mentioned and described in the early part of the deed, free from any kind of liens and debts. The acceptance clause is another indication that the donation is inter vivos. Donations mortis causa, being in the form of a will, are never accepted by the donees during the donors' lifetime. Acceptance is a requirement for donations inter vivos.

Furthermore, the act of selling the property to petitioner herein cannot be construed as a valid act of revocation of donation. A formal case ought to be filed pursuant to Art 764 which speaks of an action bearing a prescriptive period of 4 years from non compliance with the deed of donation. In this case, the 4 year prescriptive period does not even apply because none of the terms (if any) were even violated.

TEODORICO ALEJANDRO, IRENEO POLICARPIO, ET AL., PETITIONERS, VS. HON. AMBROSIO M. GERALDEZ, PRESIDING JUDGE, CFI OF BULACAN, BRANCH V, STA. MARIA, ANDREA DIAZ AND ANGEL DIAZ, RESPONDENTS. G.R. No. L-33849, August 18, 1977, SECOND DIVISION, AQUINO, J.

In the reddendum or reservation clause of the deed of donation, it is stipulated that the donees would shoulder the expenses for the illness and the funeral of the donors and that the donees cannot sell to a third person

1 The clause states “patuloy ang aming pamamahala, karapatan, at pagkamay-ari sa mga

Facts

nasabing pag-aari na sinasaysay sa unahan nito na pag-aari namin; ngunit sakaling kami ay bawian rig buhay ng Panginoong Dios at mamatay na ang mga karapatan at pagkamay-ari ng bawa't Pinagkalooban (Donatarios) sa bawa't pagaari na nauukol sa bawa't isa ay may lubos na kapangyarihan."

On January 20, 1949 the spouses Gabino (Gavino) Diaz and Severa Mendoza executed a deed of donation covering eight lots of the Lolomboy Friar Lands Estate, owned by the Diaz spouses, located in Sta. Maria, Bulacan. In such deed lot no. 2502 was divided and conveyed to Angel and Andrea Diaz. Further the deed also contains clauses which impose upon the donees the obligation to defray expenses in case of illness

2 The part of a deed or conveyance that states the estate or quantity of interest to be granted, e.g., the term of a lease. (oxford dictionaries)

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the donated properties during the donors’ lifetime but if the sale is necessary to defray the expenses and support of the donors, then the sale is valid.

Margarita David. According to the terms of the deed, the most essential elements of ownership — the right to dispose of the donated properties and the right to enjoy the products, profits, possession — remained with Margarita David during her lifetime, and would accrue to the donees only after Margarita David's death.

The limited right to dispose of the donated lots, which the deed gives to the donees, implies that ownership had passed to them by means of the donation and that, therefore, the donation was already effective during the donors' lifetime. That is a characteristic of a donation inter vivos. However, paragraph 3 of the reddendum or reservation clause provides that "also, while we, the spouses Gabino Diaz and Severa Mendoza, are alive, our administration, right, and ownership of the lots mentioned earlier as our properties shall continue but, upon our death, the right and ownership of the donees to each of the properties allocated to each of them shall be fully effective". The court construed par. 3 of the reddendum to be referring to beneficial ownership and not to the naked title and that what the donors reserved to themselves, by means of that clause, was the management of the donated lots and the fruits thereof. But, notwithstanding that reservation, the donation, as shown in the habendum clause, was already effective during their lifetime and was not made in contemplation of their death because the deed transferred to the donees the naked ownership of the donated properties.

ART. 732 JARABINI G. DEL ROSARIO, PETITIONER, VS. ASUNCION G. FERRER G.R. No. 187056, September 20, 2010, SECOND DIVISION, (ABAD, J.) The spouses Leopoldo and Guadalupe Gonzales executed a document entitled "Donation Mortis Causa" in favor of their two children, Asuncion and Emiliano, and their granddaughter, Jarabini (daughter of their predeceased son, Zoilo) covering the spouses' 126-square meter lot and the house on it in Pandacan, Manila in equal shares. The deed of donation was denominated as Donation Mortis Causa and shall be irrevocable. Guadalupe, the donor wife, died in September 1968. A few months later or on December 19, 1968, Leopoldo, the donor husband, executed a deed of assignment of his rights and interests in subject property to their daughter Asuncion. Leopoldo died in June 1972. Jarabini filed a "petition for the probate of deed of donation mortis causa" before the Regional Trial Court (RTC). Asuncion opposed the petition, invoking his father Leopoldo's assignment. After trial, the RTC found that the donation was in fact one made inter vivos due to its irrevocability. On appeal in CA, the decision was reversed.

Decision of lower court reversed and set aside. GONZALO D. DAVID vs. CARLOS SISON

ISSUE: Whether the spouses Leopoldo and Guadalupe's donation to Asuncion, Emiliano, and Jarabini was a donation mortis causa, as it was denominated, or in fact a donation inter vivos?

Facts: The full text of the deed of donation was presented before the court: "Na and naturang "donor," Margarita David y Puato, alang-alang sa malaki niyang pagtiñgin, pagliñgap at pagmamahal sa mga nabanguit na "donees" Narcisa de la Fuente at Priscila de la Fuente, sa pamamagitan nang kasulatang ito, malayang ibinigay at ipinagkakaloob sa mga naturang Narcisa de la Fuente at Priscila de la Fuente, at sa kanilang mga tagapagmana, "albacea" at "Administradores", sa habang panahon, ang kanyang mga titulo, interes at participacion sa mag sumusunod na ari-arian na pawang malines sa lahat nang mga pananagutan:

HELD: That the document in question in this case was captioned "Donation Mortis Causa" is not controlling. This Court has held that, if a donation by its terms is inter vivos, this character is not altered by the fact that the donor styles it mortis causa. In Austria-Magat v. Court of Appeals, the Court held that "irrevocability" is a quality absolutely incompatible with the idea of conveyances mortis causa, where "revocability" is precisely the essence of the act. A donation mortis causa has the following characteristics: ….

Datapwa't ang lahat nang mga tubo at pakinabangan nang nagbibigay o "donor" na si Margarita David y Puato hanggang siya ay hindi binabawian nang buhay nang maykapal; at ang mga pinagbibigyan na si Narcisa de la Fuente at Priscila de la Fuente ay hindi maaaring maipagbili, maisangal, a maipagpalit o sa ano pa man paraan, kung walang kaalaman at pahintulot nang naturang Margarita David y Puato.”

2. That before his death, the transfer should be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed; and ….

Issue: Is the donation mortis causa? Held: Yes.

The donors in this case of course reserved the "right, ownership, possession, and administration of the property" and made the donation operative upon their death. But this Court has consistently held that such reservation (reddendum) in the context of an irrevocable donation simply means that the donors parted with their naked title, maintaining only beneficial ownership of the donated property while they lived.

In one of the paragraphs of the deed of donation above quoted, it appears that all rents, proceeds, fruits, of the donated properties shall remain for the exclusive benefit and disposal of the donor, Margartia David, during her lifetime; and that, without the knowledge consent of the donor, the donated properties could not be disposed of in any way, whether by sale, mortgage, barter, or in any other way possible, thus making the donees just as paper owners of the properties which , for all practical purposes, remained the properties of Margarita David.

Notably, the three donees signed their acceptance of the donation, which acceptance the deed required. This Court has held that an acceptance clause indicates that the donation is inter vivos, since acceptance is a requirement only for such kind of donations. Donations mortis causa, being in the form of a will, need not be accepted by the donee during the donor's lifetime.

From all the foregoing, the Court concluded that the donation in question is, in fact, a donation mortis causa, because the combined effect of the circumstances surrounding the execution of the deed of donation and of the above-quoted clauses thereof could not have taken effect before the death of

Finally, as Justice J. B. L. Reyes said in Puig v. Peñaflorida, in case of doubt, the conveyance should be deemed a donation inter vivos rather than mortis

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causa, in order to avoid uncertainty as to the ownership of the property subject of the deed.

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.

Since the donation in this case was one made inter vivos, it was immediately operative and final. The reason is that such kind of donation is deemed perfected from the moment the donor learned of the donee's acceptance of the donation. The acceptance makes the donee the absolute owner of the property donated.

ART. 733 C-J YULO & SONS, INC. v. ROMAN CATHOLIC BISHOP OF SAN PABLO, INC. G.R. No. 133705, March 31, 2005, THIRD DIVISION (Garcia, J.) C-J Yulo & Sons donated to Roman Catholic Bishop of San Pablo a parcel of land at Calamba, Laguna with an area of 41,117 sq.m. The deed of donation which also bears the acceptance of the donee recites the considerations and the conditions attached wherein the land 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; that a Green Belt shall be established and maintained by the 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; and 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, 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, 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.

Finally, anent petitioner’s contention that the CA failed to consider that respondent had abandoned the idea of constructing a home for the aged and infirm, the explanation in respondent’s comment is enlightening. Petitioner relies on Bishop Bantigue’s letter as its basis for claiming that the donee had altogether abandoned the idea of constructing a home for the aged and the infirm on the property donated. Respondent, however, explains that the Bishop, in his letter, written in the vernacular, expressed his concern that the surrounding area was being considered to be re-classified into an industrial zone where factories are expected to be put up. There is no question that this will definitely be disadvantageous to the health of the aged and the infirm. Thus, the Bishop asked permission from the donor for a possible exchange or sale of the donated property to ultimately pursue the purpose for which the donation was intended in another location that is more appropriate. The Court sees the wisdom, prudence and good judgment of the Bishop on this point, to which it conforms completely. We cannot accede to petitioner’s view, which attributed the exact opposite meaning to the Bishop’s letter seeking permission to sell or exchange the donated property.

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 thrice without prior written consent of the donor. The donor informed the donee that it was revoking the donation in accordance with the deed due to the donee’s non-compliance with and material breach of the conditions. The done denied such breach of the conditions and refused the turn-over of its title to the donor. The RTC rendered judgment in favor of the donor but it was later reversed by the CA.

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.

ISSUE: SECRETARY OF EDUCATION and DR. BENITO TUMAMAO v. HEIRS OF RUFINO DULAY

Are the breaches committed by the respondent merely casual breaches which did not detract from the purpose of which the donation was made?

FACTS. On August 3, 1981, Spouses Ignacia and Rufino Dulay Sr. executed a deed of donation over a portion of their property in favor of the Ministry of Education and Culture intended for school purposes. However, the property was not used for school purposes and remained idle. Sometime in 1988, DECS started the construction of the Rizal National High School building on a parcel of land which was about 2 kilometers away from the land donated by the spouses Dulay. The spouses then requested that the property be returned to them considering that it was never used for almost 13 years. The Barangay Council of Rizal issued a Resolution, recognizing the right of the donors to redeem the subject parcel of land, resolving that the school no longer needed the donated land. Rufino Dulay

HELD: YES. In the case at bar, the Court holds 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.

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Sr. passed away; his heirs sought the help of the Sangguniang Panlungsod requesting the approval of the aforesaid Resolution but was denied.

FACTS

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 the title, alleging that (1) 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, (2) the DECS did not fulfill the condition and that the land remained idle up to the present, and (3) the donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more than what he could give by will. Petitioner interposed various defenses, one of which is that the action filed by the respondent’s had already prescribed.

On May 10, 1903, the spouses Fernando Regalado and Placida Manalo declared in a document that they are now old and incapacitated for work; that the woman has been ill for over a year and she feels that her death is approaching; that as both are without children to inherit from them, and moreover taking into consideration that their nephew and niece, the spouses Gregorio de Mesa and Leoncia Manalo, the latter of whom has lived with them from childhood and has been treated by them as a daughter, have been caring for them both up to the present time, they agree to donate to them the tract of land which they own and state that on account of the circumstances recited they make the donation to the exclusion of their other nephews and nieces, and they request the donees to bear such expenses as would be incurred in case the donor Placida Manalo should die. To this end title of ownership was made over to the donees with the injunction that in case any claim to said land should be set up by any brother or other nephew of the donors, said claim was to be rejected and ignored by all the authorities.

ISSUE. WON the respondents' right to seek the revocation of the deed of donation is already barred by prescription and laches. HELD. NO. The Court rejected 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.

Gregorio de Mesa accepted the donation and with his wife, the other donee, entered into possession of the land donated, even in the lifetime of the donor Placida and her husband Regalado. De Mesa also made the declaration of ownership for the assessment in June of that year and paid the land tax. Thereafter, Placida died and her body was buried and de Mesa fulfilled the obligation conditioned in the donation by paying the expenses occasioned by her death and burial. Plaintiff Bonifacio Manalo, as administratix of the estate of the deceased Placida, filed a complaint against de Mesa. The court ruled in favor of the defendant. Hence, this appeal. ISSUE: WON the said donation is null and void because it was not made in a public instrument in accordance with the provisions of article 633 of the Civil Code, and that it was recorded in a private document

In Central Philippine University v. Court of Appeals, 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.

RULING: NO. "When two persons advanced in years, being entirely alone and requiring the care of younger people, enter into a contract whereby it is agreed that, in consideration of such care during the lifetime of the former, they transferred their real estate to the persons thus caring for them, such a contract does not constitute a donacion remuneratoria but a donacion con causa onerosa, and is governed by the law of contracts and not that of donation." (Carlos vs. Ramil)

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. Petition denied.

There can be no doubt that the donation in question was made for a valuable consideration, since the donors made it conditional upon the donees' bearing the expenses that might be occasioned by the death and burial of the donor Placida Manalo, a condition and obligation which the donee Gregorio de Mesa carried out in his own behalf and for his wife Leoncia Manalo; therefore in order to determine whether or not said donation is valid and effective it should be sufficient to demonstrate that, as a contract, it embraces the conditions the law requires and is valid and effective, although not recorded in a public instrument.

BONIFACIA MANALO, AS ADMINISTRATRIX OF THE ESTATE OF THE DECEASED PLACIDA MANALO, PLAINTIFF AND APPELLANT, VS. GREGORIO DE MESA, DEFENDANT AND APPELLEE.

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Under article 1278 of the Civil Code, contracts are binding when entered in to between the parties, whatever may be the form in which they may have been executed, provided the essential conditions required for their validity exist, as set forth in article 1261 of the same code.

favor of the foundation, in a document entitled "Revival of Donation Intervivos" subject to terms and conditions3. On September 23, 1980, herein petitioners, who claim to be the children and only heirs of the late Prudencio de Luna who died on August 18, 1980, filed a complaint with the RTC of Quezon alleging that the terms and conditions of the donation were not complied with by the foundation. Among others, it prayed for the cancellation of the donation and the reversion of the donated land to the heirs.

The donation in question was recorded in a private instrument executed by the donors and signed by three witnesses, the obligation or valuable consideration imposed upon the donee being stated therein. If, in accordance with the provisions of article 622 of the Civil Code, such a donation as this one, made for a valuable consideration, is governed by the laws of contracts, and if these laws do not require that the stipulations between the parties be recorded in a public instrument (inasmuch as a contract entered into verbally is valid and effective and produces all its consequences under the law), then with greater reason the said donation for a valuable consideration set forth in the said document Exhibit 1 (p. 6), although this was a private document, must be respected, especially when under article 1225 of the Civil Code a private instrument duly authenticated has the same force as a public instrument between those who sign it and their successors in interest.

The RTC dismissed the complaint for the reason that under Article 764 of the New Civil Code, actions to revoke a donation on the ground of non-compliance with any of the conditions of the donation shall prescribe in four years counted from such non-compliance. The complaint herein being filed September 23, 1980 is 5 months short for it has already prescribed on April 9, 1980. Issue WON the lower court erred in dismissing the complaint of the petitioners Held Yes, the lower court erred in appreciating the nature of the donation. It is not disputed by parties, that the donation subject of this case is one with an onerous cause. Under Art.733 of the NCC, “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.” 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, 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.

By means of the donation of the parcel of land hereinbefore mentioned, made by the donors for a valuable consideration, the former ceded or transferred the said parcel of land to the donees, and, being a contract legally entered into between the interested parties, it does not require for its validity and efficacy that it should have been recorded in a public instrument. Even though the value of the land donated does not exceed 1,500 pesetas, it is a fact that said donation was reduced to writing, at least in a private document; and therefore it comes under the rules fixed in section 335 of the Code of Civil Procedure, since the donation for a valuable consideration, regarded in law as a contract, was recorded in a document legalized by the donors and the signatures of three witnesses (one of which was the plaintiff herself) who attested the genuineness of the act performed by said donors.

As provided in the donation executed on April 9, 1971, compliance with the terms and conditions of the contract of donation, shall be made within five (5) years from its execution. The complaint which was filed on September 23, 1980 was then well within the ten (10) year prescriptive period to enforce a written contract (Article 1144(1), New Civil Code), counted from April 9, 1976. It is clear, however, that 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.

EVELYN DE LUNA, ROSALINA DE LUNA, PRUDENCIO DE LUNA, JR., WILLARD DE LUNA, ANTONIO DE LUNA AND JOSELITO DE LUNA, PETITIONERS, VS. HON. SOFRONIO F. ABRIGO, PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE OF QUEZON, BRANCH IX, AND LUZONIAN UNIVERSITY FOUNDATION, INC., RESPONDENTS. G.R. No. 57455, January 18, 1990, FIRST DIVISION, MEDIALDEA, J. Facts

The automatic revocation is not contrary to law.

On January 24, 1965, Prudencio de Luna donated a portion of 7,500 sqm. of Lot No. 3707 of to the Luzonian Colleges, Inc., (now Luzonian University Foundation, Inc.,). The donation, embodied in a Deed of Donation Inter vivos was subject to certain terms and conditions and provided for the automatic reversion to the donor of the donated property in case of violation or non-compliance. The foundation failed to comply with the conditions of the donation. On April 9, 1971, Prudencio de Luna "revived" the said donation in

Under Art. 1036 of the NCC, the parties to a contract have the right "to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy." Paragraph 11 of the "Revival of Donation Intervivos, has provided that "violation of any of the conditions (herein) shall cause the automatic reversion of the donated area to the donor, his heirs, x x x, without the need of executing any other document for

3 That the foundation is to construct, at its own expense, a chapel to be named St. Veronica which is to be finished by at least 70% after 3 years. There was also a provision for automatic reversion where in such case that the done fails to comply with its obligation, the land shall automatically revert to the donor or his heirs.

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that purpose and without obligation on the part of the DONOR". Said stipulation not being contrary to law, morals, good customs, public order or public policy, is valid and binding upon the foundation who voluntarily consented thereto.

ART. 744

Petition Granted. Respondent judge is ordered to conduct a trial on the merits to determine the propriety of the revocation of the subject donation.

EUGENIO CAGAOAN vs. FELIX CAGAOAN The plaintiff and the defendant Felix Cagaoan are brothers, the sons of Gregorio Cagaoan. On November 3, 1915, Gregorio Cagaoan executed a deed of gift of four parcels of land situated in the municipality of Tayug, Province of Pangasinan, in favor of Felix Cagaoan and on October 26, 1918, he executed a similar deed in favor of Eugenio Cagaoan for a parcel of land which, apparently, is the same as that described as parcel No. 4 in the deed of gift executed in favor of Felix. Both of the deeds of gift are free from formal defects and were duly accepted by the donees.

Lagazo v. Cabanlit Facts: Petitioner filed an action seeking to recover from defendant a parcel of land which the former claims to have acquired from his grandmother by donation. Respondent on the other hand, put up the defense that when the alleged donation was executed, he had already acquired the property by a Deed of Assignment (allegedly executed before the Deed of Donation to Plaintiff) from a transferee (the former agent) of petitioner’s grandmother. Defendant also claims that petitioner failed to accept the donation whether in the same deed of donation or in a separate instrument rendering the donation null and void. Petitioner defends that the donation in any case was onerous as he wsd the one who paid the land’s amortization.

Eugenio Cagaoan went into possession of the parcel donated to him immediately after the execution of the deed of gift in his favor, but on account of variance between the land description given in the deed and that appearing in the registry, he failed to get the donation recorded with the register of deeds. The deed given Felix was duly recorded on June 10, 1919, but though he appears to have held possession of parcels Nos. 1,2, and 3 described in his deed, at least since the year 1915, he has never had possession of parcel No. 4. Gregorio Cagaoan died on December 16, 1918. Eugenio Cagaoan filed an action to declare that he is the owner of the parcel donated to him, to set aside for fraud the donation made in favor of Felix Cagaoan and to have the record of the same in the registry of deeds cancelled.

Issue:

Issue: Can Eugenio be declared the owner of the donated lot in dispute? Whether or not the donation is onerous.

Held: Yes.

Held:

Under article 1473 of the Civil Code, the property goes to the vendee who first records his title in the registry of property. If the sale is not recorded by either vendee, the property goes to the one who first takes possession of its in good, faith, and in the absence of both record and possession, to the one who present oldest title, provided there is good faith.

No. We rule that the donation was simple, not onerous. Even conceding that petitioner's full payment of the purchase price of the lot might have been a burden to him, such payment was not however imposed by the donor as a condition for the donation. A simple or pure donation is one whose cause is pure liberality, while an onerous donation is one which is subject to burdens, charges or future services equal to or more in value than the thing donated. Article 733 of the Civil Code, donations with an onerous cause shall be governed by the rules on contracts; hence, the formalities required for a valid simple donation are not applicable.

The supreme court of Spain has frequently held that inscription in the registry of property gives no preference of priority where the person relying on the inscription had full notice beforehand of the adverse claim. "although article 1473, in its second paragraph, creates a preference for the title of ownership of realty first registered, this provision must be understood as being based always upon the good faith required in the first paragraph thereof, and it cannot be conceived that the legislator had intended to do away with, or to sanction, bad faith by requiring compliance with a mere formality (the act of registration) which does not always control even when third persons are involved." It clearly appears that Felix Cagaoan had full notice of the plaintiff's claim to the land before he had his deed of gift recorded with the register of deeds. Under the decisions above cited he was therefore not a third person within the meaning of article 34 of the Mortgage Law, and his position was, consequently, in now wise improved by the inscription of his document. The plaintiff Eugenio Cagaoan having first taken possession in good faith must therefore be considered to have the better right to the land in question.

The deed explicitly stated: That...the DONOR hereby voluntarily and freely gives, by way of donation unto said DONEE...the above described real property, together with all the buildings and improvements found therein, free from all lines [sic] and encumbrances and charges whatsoever;

ART. 749

The payments even seem to have been made pursuant to the power of attorney executed by Catalina Reyes in favor of petitioner, her grandson, authorizing him to execute acts necessary for the fulfillment of her obligations.

REPUBLIC OF THE PHILIPPINES v. LEON SILIM AND ILDEFONSA MANGUBAT G.R. No. 140487, April 02, 2001, FIRST DIVISION, (KAPUNAN, J.)

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On 17 December 1971, 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) imposed the condition that the said property should "be used exclusively and forever for school purposes only." A school building was constructed on the donated land. However, the Bagong Lipunan school building 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. A Deed of Exchange was executed and exchanged the land with the bigger lot. 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.

ART. 76o, 761, 763 EDUVIGIS CRUZ v. CA, et al. G.R. No. 58671, November 22, 1985, FIRST DIVISION (Plana, J.) Cruz, a childless widow, donated a 235.5 sq.m. residential lot in Taytay, Rizal together with the two-door apartment to her grandnieces, private respondents, in a deed of donation. The property was transferred to the names of private respondents. Later, Cruz judicially adopted a minor, after which she extrajudicially tried to revoke the donation, but the donees resisted, alleging that the property in question was co-owned by Cruz and her brother, which is the grandfather of the donees, hence the latter own 1/2 of the property by inheritance; and Cruz owns another property, an agricultural land of more than 2 hectares, hence the donation did not impair the presumptive legitime of the adopted child. Cruz filed a complaint against the donees for revocation of donation invoking Article 760(3) of the New Civil Code. The CFI granted the revocation because the donor's ownership was deemed admitted by the donees by accepting the deed of donation and rejected the argument that the donation did not impair the legitime, saying that said claim was "beside the point" and did not limit plaintiff's right under Art. 760 of the Civil Code. However, the CA reversed the CFI’s decision and dismissed the complaint since the CFI ignored Article 761; that Cruz owns another lot, although the subject of a pending litigation, valued at P273,420.00; that the donated lot did not belong entirely to Eduvigis; and that in an action for revocation of donation, the donor has the burden to show that the donation has impaired the legitime of the subsequent child but was not alleged in the complaint.

When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo Palma was constructing a house on the donated land. He 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 but it was dismissed. On appeal in CA, it was declared null and void. ISSUE: Did CA err in holding that the donation is void for having no valid acceptance? HELD: YES We hold that there was a valid acceptance of the donation.

ISSUE:

ART.749.…..

Did the CA correctly dismiss the complaint to annul the subject donation?

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.

HELD: YES. In the case of the subsequent adoption of a minor by one who had previously donated some or all of his properties to another, the donor may sue for the annulment or reduction of the donation within 4 years from the date of adoption, if the donation impairs the legitime of the adopted, taking into account the whole estate of the donor at the time of the adoption of the child. Of course, the burden of proof is on the plaintiff-donor, who must allege and establish the requirements prescribed by law, on the basis of which annulment or reduction of the donation can be adjudged.

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. 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 ParentsTeachers 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:

Unfortunately, in the case at bar, the complaint for annulment does not allege that the subject donation impairs the legitime of the adopted child. Indeed it contains no indication at all of the total assets of the donor. Nor is there proof of impairment of legitime. On the contrary, there is unrebutted evidence that the donor has another piece of land (27,342 sq.m.) situated in Dolores, Taytay, Rizal worth P273,420.00 in 1977, although then subject to litigation. The legal situation of petitioner-donor, as plaintiff, is made worse by the factual finding of the Court of Appeals that the grandfather of the donees was the owner pro indiviso of one-half of the donated land, the effect of which is to reduce the value of the donation which can then more easily be taken from the portion of the estate within the free disposal of Cruz.

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.

Art.764

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EDGARDO DOLAR v. BARANGAY LUBLUB (now PD Monfort North) OF THE MUNICIPALITY OF DUMANGAS

As enunciated in Roman Catholic Archbishop of Manila v. CA, “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.”

FACTS. Petitioner and Serafin Jaranilla are co-owners of a parcel of land located in Brgy. Lublub, Dumangas, Iloilo. On September 16, 1981, the coowners donated the lot to respondent Brgy. Lublub subject to the following conditions: (a) That the area donated shall be for the purpose of constructing and establishing public plaza, sports complex, public market, health centers and the like for the use of the Barangay of Lublub x x x which area shall be hereinafter be known as DON VENANCIO DOLAR PLAZA and shall be so designated in a proper landmark; (b) That the construction and development of the area above-described shall be initiated and completed within five (5) years from the execution of this Deed of Donation and should the same be not made or completed then this Deed of Donation shall have no force and effect whatsoever and the ownership of the above-described property will revert back to the DONORS including all or any unfinished improvement the DONEE might have placed or constructed; (c) That should the use of the area be converted to uses other than herein stipulated, then this DEED OF DONATION shall be deemed revoked and the ownership shall revert back to the DONORS x x x

In the case at bench, it cannot be gainsaid that respondent barangay denied or challenged the purported revocation of the donation. In fact, the denial or challenge is embodied in respondent barangay’s complaint and in its Answer cum motion to dismiss, which similarly prayed for, among other things, the cancellation of petitioner's title on the subject property.

Art. 765 SPOUSES ROMULO AND SALLY EDUARTE, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS AND PEDRO CALAPINE (SUBSTITUTED BY ALEXANDER CALAPINE AND ARTEMIS CALAPINE, RESPONDENTS. G.R. No. 105944, February 09, 1996, THIRD DIVISION, FRANCISCO, J. Facts On April 26, 1984, Pedro Calapine executed a deed entitled ‘Pagbibigay-Pala (Donacion Inter-Vivos)’ ceding one-half portion of his property in San Pablo City to his niece Helen S. Doria. Subsequently, On July 26, 1984, the rest of the property was ceded by the petitioner unto Helen S. Doria the whole of the parcel of land covered by OCT No. P-2129. On February 26, 1986, Helen S. Doria donated a portion of 157 square meters of the parcel of land to the Calauan Christian Reformed Church, Inc. and sold another 700 sqm. to Sps. Eduarte on March 1988.

Following the execution of the deed of donation, Brgy. Lublub immediately took possession of the donated property, which soon became the site of several government office buildings and recreational facilities but did not register the donation in their name. On May 16, 1998, petitioner filed against Brgy. Lublub a complaint for Quieting of Title and Recovery of Possession With Damages involving the lot he had earlier donated. Basically, petitioner claimed that the donation in question had ceased to be effective, the donee barangay having failed to comply with the conditions of the donation.

Calapine brought a suit against Doria, Calauan Church, and the Sps. Eduarte claiming that his signature was forged. The lower court ruled in favor of Calapine. In so ruling, the lower court revoked the April 1984 deed and annulled the sale to Sps. Eduarte. On appeal by the spouses, the CA affirmed the decision giving more credence to the testimony of private respondents’ expert witness, NBJ document examiner Bienvenido Albacea, who found Pedro Calapine’s signature in the second deed of donation to be a forgery. It also ruled that by falsifying Pedro Calapine’s signature, Helen Doria committed an act of ingratitude which is a valid ground for revocation of the donation made in her favor in accordance with Article 765 of the Civil Code. Furthermore, respondent court upheld the trial court’s finding that petitioners are not buyers in good faith of the donated property as they failed to exercise due diligence in verifying the true ownership of the property despite the existence of circumstances that should have aroused their suspicions.

ISSUE. WON the deed of donation is no longer effective by reason of the automatic reversion clause therein. HELD. NO. If the corresponding contract of donation expressly provides for automatic rescission and/or reversion in case of breach of the condition therein, and the donee violates or fails to comply with the condition, the donated property reverts back automatically to the donor. Such provision, in the case of De Luna v. Abrigo teaches, is in the nature of an agreement granting a party the right to rescind a contract in case of breach, without need of going to court and that upon the happening of the resolutory condition or non-compliance with the conditions of the contract, the donation is automatically revoked without need of a judicial declaration to that effect. Where, however, the donee denies, as in the case at bar, the rescission or challenges the propriety thereof, then only the final award of the court can “conclusively settle whether the resolution is proper or not.”

Sps. Eduarte now argue that Art. 765 is not applicable in the case herein for the acts of ingratitude referred to therein pertain to offenses committed by the donee against the person or property of the donor. Petitioners argue that as the offense imputed to herein donee Helen Doria falsification of a public document - is neither a crime against the person nor property of the donor but is a crime against public interest under the Revised Penal Code, the same is not a ground for revocation. Issue

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WON Art. 765 is not applicable for the reason that the offense committed by the donee is falsification of a public document, a crime against public interest under the RPC.

of the donor despite the fact that they are classified as crimes against personal liberty and security under the RPC. *the court nevertheless ruled that the Sps. Eduarte are buyers in good faith. Petitioners purchased the subject property from Helen Doria, the same was already covered by TCT No. T-23205 under the latter’s name. And although Helen Doria’s title was fraudulently secured, such fact cannot prejudice the rights of herein petitioners absent any showing that they had any knowledge or participation in such irregularity. Thus, they cannot be obliged to look beyond the certificate of title which appeared to be valid on its face and sans any annotation or notice of private respondents’ adverse claim. Contrary therefore to the conclusion of respondent Court, petitioners are purchasers in good faith and for value as they bought the disputed property without notice that some other person has a right or interest in such property, and paid a full price for the same at the time of the purchase or before they had notice of the claim or interest of some other person in the property. This is so notwithstanding their knowledge of the occupants over the property since the occupants never posed adverse claims, the spouses are not required by law to look beyond the TCT of Doria. To rule otherwise would be contrary to the efficacy and conclusiveness of the Torrens Title.

Held No, Art. 765 is applicable. In Tolentino’s commentaries and jurisprudence on the Civil code which was cited by the Sps. Eduarte (but obviously cited it incompletely for it would run contrary to their argument) "Offense Against Donor. All crimes which offend the donor show ingratitude and are causes for revocation. There is no doubt, therefore, that the donee who commits adultery with the wife of the donor, gives cause for revocation by reason of ingratitude. The crimes against the person of the donor would include not only homicide and physical injuries, but also illegal detention, threats, and coercion; those against honor include offenses against chastity; and those against the property, include robbery, theft, usurpation, swindling, arson, damages, etc. [Manresa 175-176]." Obviously, the first sentence was deleted by petitioners because it totally controverts their contention. As noted in the aforecited opinion "all crimes which offend the donor show ingratitude and are causes for revocation." Petitioners’ attempt to categorize the offenses according to their classification under the RPC is therefore unwarranted considering that illegal detention, threats and coercion are considered as crimes against the person

Petition granted, decision of the lower court modified.

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