1. G.R. No.

189776 December 15, 2010

AMELIA P. ARELLANO, represented by her duly appointed guardians, AGNES P. ARELLANO and NONA P. ARELLANO, Petitioner, vs. FRANCISCO PASCUAL and MIGUEL PASCUAL, Respondents. DECISION CARPIO MORALES, J.: Angel N. Pascual Jr. died intestate on January 2, 1999 leaving as heirs his siblings, namely: petitioner Amelia P. Arellano who is represented by her daughters1 Agnes P. Arellano (Agnes) and Nona P. Arellano, and respondents Francisco Pascual and Miguel N. Pascual.2 In a petition for "Judicial Settlement of Intestate Estate and Issuance of Letters of Administration," docketed as Special Proceeding Case No. M-5034, filed by respondents on April 28, 2000 before the Regional Trial Court (RTC) of Makati, respondents alleged, inter alia, that a parcel of land (the donated property) located in Teresa Village, Makati, which was, by Deed of Donation, transferred by the decedent to petitioner the validity of which donation respondents assailed, "may be considered as an advance legitime" of petitioner. Respondents nephew Victor was, as they prayed for, appointed as Administrator of the estate by Branch 135 of the Makati RTC.3 Respecting the donated property, now covered in the name of petitioner by Transfer Certificate of Title No. 181889 of the Register of Deeds of Makati, which respondents assailed but which they, in any event, posited that it "may be considered as an advance legitime" to petitioner, the trial court, acting as probate court, held that it was precluded from determining the validity of the donation. Provisionally passing, however, upon the question of title to the donated property only for the purpose of determining whether it formed part of the decedents estate,4 the probate court found the Deed of Donation valid in light of the presumption of validity of notarized documents. It thus went on to hold that it is subject to collation following Article 1061 of the New Civil Code which reads:5 Every compulsory heir, who succeeds with other compulsory heirs, must bring into the mass of the estate any property or right which he may have received from the decedent, during the lifetime of the latter, by way of donation, or any other gratuitous title in order that it may be computed in the determination of the legitime of each heir, and in the account of the partition. The probate court thereafter partitioned the properties of the intestate estate. Thus it disposed: WHEREFORE, premises considered, judgment is hereby rendered declaring that: 1. The property covered by TCT No. 181889 of the Register of Deeds of Makati as part of the estate of Angel N. Pascual; 2. The property covered by TCT No. 181889 to be subject to collation;

3. 1/3 of the rental receivables due on the property at the mezzanine and the 3rd floor of Unit 1110 Tanay St., Makati City form part of the estate of Angel N. Pascual; 4. The following properties form part of the estate of Angel N. Pascual: a. 1/3 share in the House and Lot at 1110 Tanay St., Rizal Village Makati TCT No. 348341 and 1/3 share in the rental income thereon; b. 1/3 share in the Vacant Lot with an area of 271 square meters located at Tanay St., Rizal Village, Makati City, TCT No. 119063; c. Agricultural land with an area of 3.8 hectares located at Puerta Galera Mindoro covered by OCT No. P-2159; d. Shares of stocks in San Miguel Corporation covered by the following Certificate Numbers: A0011036, A006144, A082906, A006087, A065796, A11979, A049521, C86950, C63096, C55316, C54824, C120328, A011026, C12865, A10439, A021401, A007218, A0371, S29239, S40128, S58308, S69309; e. Shares of stocks in Paper Industries Corp. covered by the following Certificate Numbers: S29239, S40128, S58308, S69309, A006708, 07680, A020786, S18539, S14649; f. share in Eduardo Pascuals shares in Baguio Gold Mining Co.; g. Cash in Banco De Oro Savings Account No. 2 014 12292 4 in the name of Nona Arellano; i. Property previously covered by TCT No. 119053 now covered by TCT No. 181889, Register of Deeds of Makati City; j. Rental receivables from Raul Arellano per Order issued by Branch 64 of the Court on November 17, 1995. 5. AND the properties are partitioned as follows: a. To heir Amelia P. Arellano-the property covered by TCT No. 181889; b. To heirs Francisco N. Pascual and Miguel N. Pascual-the real properties covered by TCT Nos. 348341 and 119063 of the Register of Deeds of Makati City and the property covered by OCT No. 2159, to be divided equally between them up to the extent that each of their share have been equalized with the actual value of the property in 5(a) at the time of donation, the value of which shall be determined by an independent appraiser to be designated by Amelia P. Arellano, Miguel N. Pascual and Francisco N. Pascual. If the real properties are not sufficient to equalize the shares, then Franciscos and Miguels shares may be satisfied from either in cash property or shares of stocks, at the rate of quotation. The remaining properties shall be divided equally among Francisco, Miguel and Amelia. (emphasis and underscoring supplied) Before the Court of Appeals, petitioner faulted the trial court in holding that

I . . . THE PROPERTY DONATED TO APPELLANT AMELIA PASCUAL ARELLANO IS PART OF THE ESTATE OF ANGEL PASCUAL, JR. II . . . THE PROPERTY DONATED TO APPELLANT IS SUBJECT TO COLLATION UNDER ARTICLE 1061 OF THE NEW CIVIL CODE. III . . . APPELLEES WHO ARE MERELY COLLATERAL RELATIVES OF DECEASED ANGEL N. PASCUAL JR. AS HIS COMPULSORY HEIRS ENTITLED TO LEGITIMES. xxxx and V . . . IN NOT PARTITIONING THE ESTATE OF ANGEL N. PASCUAL JR. EQUALLY AMONG HIS LEGAL OR INTESTATE HEIRS.6 (underscoring supplied) By Decision7 of July 20, 2009, the Court of Appeals found petitioners appeal "partly meritorious." It sustained the probate courts ruling that the property donated to petitioner is subject to collation in this wise: Bearing in mind that in intestate succession, what governs is the rule on equality of division, We hold that theproperty subject of donation inter vivos in favor of Amelia is subject to collation. Amelia cannot be considered a creditor of the decedent and we believe that under the circumstances, the value of such immovable though not strictly in the concept of advance legitime, should be deducted from her share in the net hereditary estate. The trial court therefore committed no reversible error when it included the said property as forming part of the estate of Angel N. Pascual.8 (citation omitted; emphasis and underscoring supplied)
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The appellate court, however, held that, contrary to the ruling of the probate court, herein petitioner "was able to submit prima facie evidence of shares of stocks owned by the [decedent] which have not been included in the inventory submitted by the administrator." Thus, the appellate court disposed, quoted verbatim: WHEREFORE, premises considered, the present appeal is hereby PARTLY GRANTED. The Decision dated January 29, 2008 of the Regional Trial Court of Makati City, Branch 135 in Special Proceeding Case No. M-5034 is hereby REVERSED and SET ASIDE insofar as the order of inclusion of properties of the Intestate Estate of Angel N. Pascual, Jr. as well as the partition and distribution of the same to the co-heirs are concerned. The case is hereby REMANDED to the said court for further proceedings in accordance with the disquisitions herein.9 (underscoring supplied)

Petitioners Partial Motion for Reconsideration10 having been denied by the appellate court by Resolution11 of October 7, 2009, the present petition for review on certiorari was filed, ascribing as errors of the appellate court its ruling I . . . THAT THE PROPERTY DONATED BY ANGEL N. PASCUAL, JR. TO PETITIONER AMELIA PASCUAL ARELLANO IS PART OF HIS ESTATE AT THE TIME OF HIS DEATH. II . . . THAT THE PROPERTY DONATED TO PETITIONER IS SUBJECT TO COLLATION UNDER ARTICLE 1061 OF THE NEW CIVIL CODE. III . . . THAT RESPONDENTS ARE COMPULSORY HEIRS OF THEIR DECEASED BROTHER ANGEL N. PASCUAL JR. AND ARE ENTITLED TO LEGITIMES. IV . . . IN NOT PARTITIONING THE ESTATE OF ANGEL N. PASCUAL, JR. EQUALLY AMONG PETITIONER AND RESPONDENTS, AS HIS LEGAL OR INTESTATE HEIRS.12 (underscoring supplied) Petitioners thus raise the issues of whether the property donated to petitioner is subject to collation; and whether the property of the estate should have been ordered equally distributed among the parties. On the first issue: The term collation has two distinct concepts: first, it is a mere mathematical operation by the addition of the value of donations made by the testator to the value of the hereditary estate; and second, it is the return to the hereditary estate of property disposed of by lucrative title by the testator during his lifetime.13 The purposes of collation are to secure equality among the compulsory heirs in so far as is possible, and to determine the free portion, after finding the legitime, so that inofficious donations may be reduced.14 Collation takes place when there are compulsory heirs, one of its purposes being to determine the legitime and the free portion. If there is no compulsory heir, there is no legitime to be safeguarded.15 The records do not show that the decedent left any primary, secondary, or concurring compulsory heirs. He was only survived by his siblings, who are his collateral relatives and, therefore, are not entitled to any legitime that part of the testators property which he cannot dispose of because the law has reserved it for compulsory heirs.16 The compulsory heirs may be classified into (1) primary, (2) secondary, and (3) concurring. The primary compulsory heirs are those who have precedence over and exclude other compulsory heirs; legitimate children and descendants are primary compulsory heirs. The secondary compulsory heirs

are those who succeed only in the absence of the primary heirs; the legitimate parents and ascendants are secondary compulsory heirs. The concurring compulsory heirs are those who succeed together with the primary or the secondary compulsory heirs; the illegitimate children, and the surviving spouse are concurring compulsory heirs.17 The decedent not having left any compulsory heir who is entitled to any legitime, he was at liberty to donate all his properties, even if nothing was left for his siblings-collateral relatives to inherit. His donation to petitioner, assuming that it was valid,18 is deemed as donation made to a "stranger," chargeable against the free portion of the estate.19 There being no compulsory heir, however, the donated property is not subject to collation. On the second issue: The decedents remaining estate should thus be partitioned equally among his heirs-siblingscollateral relatives, herein petitioner and respondents, pursuant to the provisions of the Civil Code, viz: Art. 1003. If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the collateral relatives shall succeed to the entire estate of the deceased in accordance with the following articles. (underscoring supplied) Art. 1004. Should the only survivors be brothers and sisters of the full blood, they shall inherit in equal shares. (emphasis and underscoring supplied) WHEREFORE, the petition is GRANTED. The Court of Appeals Decision ordering the collation of the property donated to petitioner, Amelia N. Arellano, to the estate of the deceased Angel N. Pascual, Jr. is set aside. Let the records of the case be REMANDED to the court of origin, Branch 135 of the Makati Regional Trial Court, which is ordered to conduct further proceedings in the case for the purpose of determining what finally forms part of the estate, and thereafter to divide whatever remains of it equally among the parties. SO ORDERED. CONCHITA CARPIO MORALES Associate Justice

2. G.R. No. 187056 September 20, 2010

JARABINI G. DEL ROSARIO, Petitioner, vs. ASUNCION G. FERRER, substituted by her heirs, VICENTE, PILAR, ANGELITO, FELIXBERTO, JR., all surnamed G. FERRER, and MIGUELA FERRER ALTEZA, Respondents. DECISION ABAD, J.: This case pertains to a gift, otherwise denominated as a donation mortis causa, which in reality is a donation inter vivos made effective upon its execution by the donors and acceptance thereof by the donees, and immediately transmitting ownership of the donated property to the latter, thus precluding a subsequent assignment thereof by one of the donors. The Facts and the Case On August 27, 1968 the spouses Leopoldo and Guadalupe Gonzales executed a document entitled "DonationMortis Causa"1 in favor of their two children, Asuncion and Emiliano, and their granddaughter, Jarabini (daughter of their predeceased son, Zoilo) covering the spouses 126square meter lot and the house on it in Pandacan, Manila2 in equal shares. The deed of donation reads: It is our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving spouse. It is our will that Jarabini Gonzales-del Rosario and Emiliano Gonzales will continue to occupy the portions now occupied by them. It is further our will that this DONATION MORTIS CAUSA shall not in any way affect any other distribution of other properties belonging to any of us donors whether testate or intestate and where ever situated. It is our further will that any one surviving spouse reserves the right, ownership, possession and administration of this property herein donated and accepted and this Disposition and Donation shall be operative and effective upon the death of the DONORS.3 Although denominated as a donation mortis causa, which in law is the equivalent of a will, the deed had no attestation clause and was witnessed by only two persons. The named donees, however, signified their acceptance of the donation on the face of the document. 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. In 1998 Jarabini filed a "petition for the probate of the August 27, 1968 deed of donation mortis causa" before the Regional Trial Court (RTC) of Manila in Sp. Proc. 98-90589.4 Asuncion opposed

the petition, invoking his father Leopoldos assignment of his rights and interests in the property to her. After trial, the RTC rendered a decision dated June 20, 2003,5 finding that the donation was in fact one made inter vivos, the donors intention being to transfer title over the property to the donees during the donors lifetime, given its irrevocability. Consequently, said the RTC, Leopoldos subsequent assignment of his rights and interest in the property was void since he had nothing to assign. The RTC thus directed the registration of the property in the name of the donees in equal shares.6 On Asuncions appeal to the Court of Appeals (CA), the latter rendered a decision on December 23, 2008,7reversing that of the RTC. The CA held that Jarabini cannot, through her petition for the probate of the deed of donation mortis causa, collaterally attack Leopoldos deed of assignment in Asuncions favor. The CA further held that, since no proceeding exists for the allowance of what Jarabini claimed was actually a donation inter vivos, the RTC erred in deciding the case the way it did. Finally, the CA held that the donation, being one given mortis causa, did not comply with the requirements of a notarial will,8 rendering the same void. Following the CAs denial of Jarabinis motion for reconsideration,9 she filed the present petition with this Court. Issue Presented The key issue in this case is whether or not the spouses Leopoldo and Guadalupes donation to Asuncion, Emiliano, and Jarabini was a donation mortis causa, as it was denominated, or in fact a donation inter vivos. The Courts Ruling 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 itmortis causa.10 In Austria-Magat v. Court of Appeals,11 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: 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 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 3. That the transfer should be void if the transferor should survive the transferee.12 (Underscoring supplied) The Court thus said in Austria-Magat that the express "irrevocability" of the donation is the "distinctive standard that identifies the document as a donation inter vivos." Here, the donors plainly said that it is "our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving spouse." The intent to make the donation irrevocable becomes even clearer by the

proviso that a surviving donor shall respect the irrevocability of the donation. Consequently, the donation was in reality a donation inter vivos. 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.13 Notably, the three donees signed their acceptance of the donation, which acceptance the deed required.14 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 donors lifetime.15
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Finally, as Justice J. B. L. Reyes said in Puig v. Peaflorida,16 in case of doubt, the conveyance should be deemed a donation inter vivos rather than mortis causa, in order to avoid uncertainty as to the ownership of the property subject of the deed. 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 donees acceptance of the donation. The acceptance makes the donee the absolute owner of the property donated.17 Given that the donation in this case was irrevocable or one given inter vivos, Leopoldos subsequent assignment of his rights and interests in the property to Asuncion should be regarded as void for, by then, he had no more rights to assign. He could not give what he no longer had. Nemo dat quod non habet.18 The trial court cannot be faulted for passing upon, in a petition for probate of what was initially supposed to be a donation mortis causa, the validity of the document as a donation inter vivos and the nullity of one of the donors subsequent assignment of his rights and interests in the property. The Court has held before that the rule on probate is not inflexible and absolute.19 Moreover, in opposing the petition for probate and in putting the validity of the deed of assignment squarely in issue, Asuncion or those who substituted her may not now claim that the trial court improperly allowed a collateral attack on such assignment. WHEREFORE, the Court GRANTS the petition, SETS ASIDE the assailed December 23, 2008 Decision and March 6, 2009 Resolution of the Court of Appeals in CA-G.R. CV 80549, and REINSTATES in toto the June 20, 2003 Decision of the Regional Trial Court of Manila, Branch 19, in Sp. Proc. 98-90589. SO ORDERED. ROBERTO A. ABAD Associate Justice

3. G.R. No. 131953 June 5, 2002

MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and MERLY S. CABATINGAN, petitioners, vs. THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M. BOQUIA, PERLA M. ABELLA, ESTRELLA M. CAETE, LOURDES M. YUSON, and JULIA L. MAYOL, HEIRS OF GENOVIVA C. NATIVIDAD namely, OSCAR C. NATIVIDAD, OLGA NATIVIDAD, ODETTE NATIVIDAD, OPHELIA NATIVIDAD, RICHARD NATIVIDAD, RAYMUND NATIVIDAD, RICHIE NATIVIDAD, SONIA NATIVIDAD and ENCARNACION CABATINGAN VDA. DE TRINIDAD, ALFREDO CABATINGAN and JESUSA C. NAVADA, respondents. AUSTRIA-MARTINEZ, J.: Posed for resolution before the Court in this petition for review on certiorari filed under Rule 45 of the Rules of Court is the sole issue of whether the donations made by the late Conchita Cabatingan are donations inter vivos ormortis causa. The facts of the case are as follows: On February 17, 1992, Conchita Cabatingan executed in favor of her brother, petitioner Nicolas Cabatingan, a "Deed of Conditional of Donation (sic) Inter Vivos for House and Lot" covering onehalf () portion of the former's house and lot located at Cot-cot, Liloan, Cebu.1 Four (4) other deeds of donation were subsequently executed by Conchita Cabatingan on January 14, 1995, bestowing upon: (a) petitioner Estela C. Maglasang, two (2) parcels of land - one located in Cogon, Cebu (307 sq. m.) and the other, a portion of a parcel of land in Masbate (50,232 sq. m.); (b) petitioner Nicolas Cabatingan, a portion of a parcel of land located in Masbate (80,000 sq. m.); and (c) petitioner Merly S. Cabatingan, a portion of the Masbate property (80,000 sq. m.).2 These deeds of donation contain similar provisions, to wit: "That for and in consideration of the love and affection of the DONOR for the DONEE, x x x the DONOR does hereby, by these presents, transfer, convey, by way of donation, unto the DONEE the above-described property, together with the buildings and all improvements existing thereon, to become effective upon the death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE should die before the DONOR, the present donation shall be deemed automatically rescinded and of no further force and effect; x x x"3 (Emphasis Ours) On May 9, 1995, Conchita Cabatingan died. Upon learning of the existence of the foregoing donations, respondents filed with the Regional Trial Court of Mandaue, Branch 55, an action for Annulment And/Or Declaration of Nullity of Deeds of Donations and Accounting, docketed as Civil Case No. MAN-2599, seeking the annulment of said four (4) deeds of donation executed on January 14, 1995. Respondents allege, inter alia, that petitioners, through their sinister machinations and strategies and taking advantage of Conchita Cabatingan's fragile condition, caused the execution of the deeds of donation, and, that the documents are void for failing to comply with the provisions of the Civil Code regarding formalities of wills and testaments, considering that these are donations mortis causa.4 Respondents prayed that a receiver be appointed in order to preserve the disputed properties, and, that they be declared as coowners of the properties in equal shares, together with petitioner Nicolas Cabatingan.5

Petitioners in their Amended Answer, deny respondents' allegations contending that Conchita Cabatingan freely, knowingly and voluntarily caused the preparation of the instruments.6 On respondents' motion, the court a quo rendered a partial judgment on the pleadings on December 2, 1997 in favor of respondents, with the following dispositive portion: "WHEREREFORE, and in consideration of all the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the defendant and unwilling co-plaintiff with regards (sic) to the four Deeds of Donation Annexes "A", "A-1", "B" and Annex "C" which is the subject of this partial decision by: Declaring the four Deeds of Donation as null and void ab initio for being a donation Mortis Causa and for failure to comply with formal and solemn requisite under Art. 806 of the New Civil Code; b) To declare the plaintiffs and defendants as well as unwilling co-plaintiff as the heirs of the deceased Conchita Cabatingan and therefore hereditary co-owners of the properties subject of this partial decision, as mandated under Art. 777 of the New Civil Code; SO ORDERED."7 The court a quo ruled that the donations are donations mortis causa and therefore the four (4) deeds in question executed on January 14, 1995 are null and void for failure to comply with the requisites of Article 806 of the Civil Code on solemnities of wills and testaments.8 Raising questions of law, petitioners elevated the court a quo's decision to this Court,9 alleging that: "THE LOWER COURT PALPABLY DISREGARDED THE LONG-AND-WELLESTABLISHED RULINGS OF THIS HONORABLE SUPREME COURT ON THE CHARACTERIZATION OF DONATIONS AS INTER VIVOSOR MORTIS CAUSA AND, INSTEAD, PROCEEDED TO INTERPRET THE DONATIONS IN QUESTION IN A MANNER CONTRARY THERETO."10 Petitioners insist that the donations are inter vivos donations as these were made by the late Conchita Cabatingan "in consideration of the love and affection of the donor" for the donee, and there is nothing in the deeds which indicate that the donations were made in consideration of Cabatingan's death.11 In addition, petitioners contend that the stipulation on rescission in case petitioners die ahead of Cabatingan is a resolutory condition that confirms the nature of the donation as inter vivos. Petitioners' arguments are bereft of merit. In a donation mortis causa, "the right of disposition is not transferred to the donee while the donor is still alive."12In determining whether a donation is one of mortis causa, the following characteristics must be taken into account: (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 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 (3) That the transfer should be void if the transferor should survive the transferee.13 In the present case, the nature of the donations as mortis causa is confirmed by the fact that the donations do not contain any clear provision that intends to pass proprietary rights to petitioners prior to Cabatingan's death.14 The phrase "to become effective upon the death of the DONOR" admits of no other interpretation but that Cabatingan did not intend to transfer the ownership of the properties to petitioners during her lifetime. Petitioners themselves expressly confirmed the donations as mortis causa in the following Acceptance and Attestation clauses, uniformly found in the subject deeds of donation, to wit: "That the DONEE does hereby accept the foregoing donation mortis causa under the terms and conditions set forth therein, and avail herself of this occasion to express her profound gratitude for the kindness and generosity of the DONOR." xxx "SIGNED by the above-named DONOR and DONEE at the foot of this Deed of Donation mortis causa, which consists of two (2) pages x x x."15 That the donations were made "in consideration of the love and affection of the donor" does not qualify the donations as inter vivos because transfers mortis causa may also be made for the same reason.16 Well in point is National Treasurer of the Phils. v. Vda. de Meimban.17 In said case, the questioned donation contained the provision: "That for and in consideration of the love and affection which the DONOR has for the DONEE, the said Donor by these presents does hereby give, transfer, and convey unto the DONEE, her heirs and assigns a portion of ONE HUNDRED THOUSAND (100,000) SQUARE METERS, on the southeastern part Pro-indiviso of the above described property. (The portion herein donated is within Lot 2-B of the proposed amendment Plan Subdivision of Lots Nos. 1 and 2, Psu-109393), with all the buildings and improvements thereon, to become effective upon the death of the DONOR. (italics supplied.)"18 Notably, the foregoing provision is similar to that contained in the donation executed by Cabatingan. We held in Meimban case that the donation is a mortis causa donation, and that the above quoted provision establishes the donor's intention to transfer the ownership and possession of the donated property to the donee only after the former's death. Further: "As the donation is in the nature of a mortis causa disposition, the formalities of a will should have been complied with under Article 728 of the Civil Code, otherwise, the donation is void and would produce no effect. As we have held in Alejandro v. Geraldez (78 SCRA 245,253), "If the donation is made in contemplation of the donor's death, meaning that the full or naked ownership of the donated properties will pass to the donee because of the donor's death, then it is at that time that the donation takes effect, and it is a donation mortis causa which

should be embodied in a last will and testament. (Citing Bonsato v. Court of Appeals, 95 Phil. 481)."19 We apply the above rulings to the present case. The herein subject deeds expressly provide that the donation shall be rescinded in case petitioners predecease Conchita Cabatingan. As stated in Reyes v. Mosqueda,20 one of the decisive characteristics of a donation mortis causa is that the transfer should be considered void if the donor should survive the donee. This is exactly what Cabatingan provided for in her donations. If she really intended that the donation should take effect during her lifetime and that the ownership of the properties donated be transferred to the donee or independently of, and not by reason of her death, she would have not expressed such proviso in the subject deeds.
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Considering that the disputed donations are donations mortis causa, the same partake of the nature of testamentary provisions21 and as such, said deeds must be executed in accordance with the requisites on solemnities of wills and testaments under Articles 805 and 806 of the Civil Code, to wit: "ART. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator himself or by the testator's name written by some other person in his presence, and by his express direction, and attested and subscribed by three or more credible witnesses in the presence of the testator and of one another. The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the pages shall be numbered correlatively in letters placed on the upper part of each page. The attestation shall state the number of pages used upon which the will is written , and the fact that the testator signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses, and that the latter witnessed and signed the will and all the pages thereof in the presence of the testator and of one another. If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them. (n) ART. 806. Every will must be acknowledged before a notary public by the testator and the witnesses. The notary public shall not be required to retain a copy of the will, or file another with the office of the Clerk of Court. (n)" The deeds in question although acknowledged before a notary public of the donor and the donee, the documents were not executed in the manner provided for under the above-quoted provisions of law. Thus, the trial court did not commit any reversible error in declaring the subject deeds of donation null and void. WHEREFORE, the petition is hereby DENIED for lack of merit. SO ORDERED.

4.

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

APOLINARIA AUSTRIA-MAGAT, petitioner, vs. HON. COURT OF APPEALS and FLORENTINO LUMUBOS, DOMINGO COMIA, TEODORA CARAMPOT, ERNESTO APOLO, SEGUNDA SUMPELO, MAMERTO SUMPELO and RICARDO SUMPELO, respondents. DECISION
DE LEON, JR., J.:

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

The facts of the case are as follows: Basilisa Comerciante is a mother of five (5) children, namely, Rosario Austria, Consolacion Austria, herein petitioner Apolinaria Austria-Magat, Leonardo, and one of herein respondents, Florentino Lumubos. Leonardo died in a Japanese concentration camp at Tarlac during World War II. In 1953, Basilisa bought a parcel of residential land together with the improvement thereon covered and described in Transfer Certificate of Title No. RT-4036 (T-3268) and known as Lot 1, Block 1, Cavite Beach Subdivision, with an area of 150 square meters, located in Bagong Pook, San Antonio, Cavite City. On December 17, 1975, Basilisa executed a document designated as Kasulatan sa Kaloobpala (Donation). The said document which was notarized by Atty. Carlos Viniegra, reads as follows: KASULATANG SA KALOOBPALA (DONATION) TALASTASIN NG LAHAT AT SINUMAN:

Na ako, si BASELISA COMERCIANTE, may sapat na gulang, Filipina, balo, at naninirahan sa blg. 809 L. Javier Bagong Pook, San Antonio, Lungsod ng Kabite, Filipinas, sa pamamagitan ng kasulatang itoy NAGSASALAYSAY Na alang-alang sa mabuting paglilingkod at pagtingin na iniukol sa akin ng apat kong mga tunay na anak na sila: ROSARIO AUSTRIA, Filipina, may sapat na gulang, balo, naninirahan sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite; CONSOLACION AUSTRIA, Filipina, may sapat na gulang, balo naninirahan sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite; APOLINARIA AUSTRIA, Filipina, may sapat na gulang, may asawa, naninirahan sa Pasong Kawayan, Hen. Trias, Kabite; FLORENTINO LUMUBOS, Filipino, may sapat na gulang, asawa ni Encarnacion Magsino, at naninirahan din sa 809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite; ay Kusang loob na ibinibigay ko at ipinagkakaloob ng ganap at hindi na mababawi sa naulit ng apat na anak ko at sa kanilang mga tagamagmana (sic), ang aking isang lupang residential o tirahan sampu ng aking bahay nahan ng nakatirik doon na nasa Bagong Pook din, San Antonio, Lungsod ng Kabite, at nakikilala bilang Lote no. 7, Block no.1, of Subdivision Plan Psd-12247; known as Cavite Beach Subdivision, being a portion of Lot No. 1055, of the Cadastral survey of Cavite, GLRO Cadastral Rec. no. 9539; may sukat na 150 metros cuadrados, at nakatala sa pangalan ko sa Titulo Torrens bilang TCT-T-3268 (RT-4036) ng Lungsod ng Kabite; Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na akoy pumanaw sa mundo, at sa ilalim ng kondision na: Magbubuhat o babawasin sa halaga ng nasabing lupa at bahay ang anumang magugul o gastos sa aking libing at nicho at ang anumang matitira ay hahatiin ng APAT na parte, parepareho isang parte sa bawat anak kong nasasabi sa itaas nito upang maliwanang (sic) at walang makakalamang sinoman sa kanila; At kaming apat na anak na nakalagda o nakadiit sa kasulatang ito ay TINATANGGAP NAMIN ang kaloob-palang ito ng aming magulang na si

Basilisa Comerciante, at tuloy pinasasalamatan namin siya ng taos sa (sic) puso dahil sa kagandahan look (sic) niyang ito sa amin. SA KATUNAYAN, ay nilagdaan o diniitan namin ito sa Nobeleta, Kabite, ngayong ika-17 ng Disyembre taong 1975. HER MARK BASELISA COMERCIANTE Tagakaloobpala (Sgd.) APOLINARIA AUSTRIA Tagatanggap-pala (Sgd.)FLORENTINO LUMUBOS Tagatanggap-pala (Acknowledgment signed by Notary Public C.T. Viniegra is omitted).
[4]

HER MARK ROSARIO AUSTRIA

HER MARK CONSOLACION AUSTRIA

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

Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang nasabing Basilisa Comerciante. Sa katunayan ang nagsilagda kaming lahat sa labak nito sa harap ng abogado Carlos T. Viniegra at dalawang saksi. Nobeleta, Kabite. Ika-17 ng Disyembre, 1975.
[5]

On February 6, 1979, Basilisa executed a Deed of Absolute Sale of the subject house and lot in favor of herein petitioner Apolinaria Austria-Magat for Five Thousand Pesos (P5,000.00). As the result of the registration of that sale, Transfer Certificate of Title (TCT for brevity) No. RT-4036 in the name of the donor was cancelled and in lieu thereof TCT No. T-10434 was issued by the Register of Deeds of Cavite City in favor of petitioner Apolinaria AustriaMagat on February 8, 1979. On September 21, 1983, herein respondents Teodora Carampot, Domingo Comia, and Ernesto Apolo (representing their deceased mother Consolacion Austria), Ricardo, Mamerto and Segunda, all surnamed Sumpelo (representing their deceased mother Rosario Austria) and Florentino Lumubos filed before the Regional Trial Court of Cavite an action, docketed as Civil Case No. 4426 against the petitioner for annulment of TCT No. T-10434 and other relevant documents, and for reconveyance and damages. On August 15,1986, the trial court dismissed Civil Case No. 4426 per its Decision, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, this Court hereby renders judgment for defendant dismissing this case and ordering plaintiffs to pay the amount of P3,000.00 as attorneys fees and the costs of suit. SO ORDERED.
[6]

According to the trial court, the donation is a donation mortis causa pursuant to Article 728 of the New Civil Code inasmuch as the same expressly provides that it would take effect upon the death of the donor; that the provision stating that the donor reserved the right to revoke the donation is a feature of a donation mortis causa which must comply with the formalities of a will; and that inasmuch as the donation did not follow the formalities pertaining to wills, the same is void and produced no effect whatsoever. Hence, the sale by the donor of the said property was valid since she remained to be the absolute owner thereof during the time of the said transaction.

On appeal, the decision of the trial court was reversed by the Court of Appeals in its subject decision, the dispositive portion of which reads, to wit: WHEREFORE, in view of the foregoing, the appealed decision is hereby SET ASIDE and a new one rendered:
1. declaring null and void the Deed of Sale of Registered Land (Annex B) and Transfer Certificate of Title No. T-10434 of the Registry of Deeds of Cavite City (Annex E) and ordering the cancellation thereof; and 2. declaring appellants and appellee co-owners of the house and lot in question in accordance with the deed of donation executed by Basilisa Comerciante on December 17, 1975.

No pronouncement as to costs. SO ORDERED.

[7]

The appellate court declared in its decision that: In the case at bar, the decisive proof that the deed is a donation inter vivos is in the provision that : Ibinibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na anak ko at sa kanilang mga tagapagmana, ang aking lupang residential o tirahan sampu ng aking bahay nakatirik doon xxx. (emphasis supplied) This is a clear expression of the irrevocability of the conveyance. The irrevocability of the donation is a characteristic of a donation inter vivos. By the words hindi mababawi, the donor expressly renounced the right to freely dispose of the house and lot in question. The right to dispose of a property is a right essential to full ownership. Hence, ownership of the house and lot was already with the donees even during the donors lifetime. xxx xxx xxx In the attached document to the deed of donation, the donor and her children stipulated that: Gayon din ang nasabing titulo ay hindi mapapasangla o maipagbibili ang lupa habang may buhay ang nasabing Basilisa Comerciante. xxx

The stipulation is a reiteration of the irrevocability of the dispossession on the part of the donor. On the other hand, the prohibition to encumber, alienate or sell the property during the lifetime of the donor is a recognition of the ownership over the house and lot in issue of the donees for only in the concept of an owner can one encumber or dispose a property.
[8]

Hence this appeal grounded on the following assignment of errors:

I

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

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

Anent the first assignment of error, the petitioner argues that the Court of Appeals erred in ruling that the donation was a donation inter vivos. She claims that in interpreting a document, the other relevant provisions therein must be read in conjunction with the rest. While the document indeed stated that the donation was irrevocable, that must be interpreted in the light of the provisions providing that the donation cannot be encumbered, alienated or sold by anyone, that the property donated shall remain in the possession of the donor while she is alive, and that the donation shall take effect only when she dies. Also, the petitioner claims that the donation is mortis causa for the reason that the contemporaneous and subsequent acts of the donor, Basilisa Comerciante, showed such intention. Petitioner cites the testimony of Atty. Viniegra, who notarized the deed of donation, that it was the intent of the donor to maintain control over the property while she was alive; that such intent was shown when she actually sold the lot to herein petitioner. We affirm the appellate courts decision. The provisions in the subject deed of donation that are crucial for the determination of the class to which the donation belongs are, as follows: xxx xxx xxx

xxx(I)binibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na anak ko at sa kanilang mga tagapagmana, ang aking lupang residential o tirahan sampu ng aking bahay nakatirik doon na nasa Bagong Pook din, San Antonio, Lungsod ng Kabite xxx xxx Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na akoy pumanaw sa mundo, xxx. xxx xxx Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng tirahan ng Bagong Pook na nababanggit sa nasabing kasulatan, ay mananatili sa poder o possesion ng Ina, na si Basilisa Comerciante habang siya ay nabubuhay at Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang nasabing Basilisa Comerciante xxx. It has been held that whether the donation is inter vivos or mortis causa depends on whether the donor intended to transfer ownership over the properties upon the execution of the deed. In Bonsato v. Court of Appeals, this Court enumerated the characteristics of a donation mortis causa, to wit:
[10] [11]

xxx

xxx

(1)

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

(2)

(3)

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

vivos despite an express provision that the donor continues to be in possession and enjoyment of the donated property while he is alive. In the Bonsato case, we held that: (W)hat is most significant [in determining the type of donation] is the absence of stipulation that the donor could revoke the donations; on the contrary, the deeds expressly declare them to be irrevocable, a quality absolutely incompatible with the idea of conveyances mortis causa where revocability is of the essence of the act, to the extent that a testator can not lawfully waive or restrict his right of revocation (Old Civil Code, Art.737; New Civil Code, Art. 828).
[13]

Construing together the provisions of the deed of donation, we find and so hold that in the case at bar the donation is inter vivos. The express irrevocability of the same (hindi na mababawi) is the distinctive standard that identifies that document as a donation inter vivos. The other provisions therein which seemingly make the donation mortis causa do not go against the irrevocable character of the subject donation. According to the petitioner, the provisions which state that the same will only take effect upon the death of the donor and that there is a prohibition to alienate, encumber, dispose, or sell the same, are proofs that the donation is mortis causa. We disagree. The said provisions should be harmonized with its express irrevocability. In Bonsato where the donation per the deed of donation would also take effect upon the death of the donor with reservation for the donor to enjoy the fruits of the land, the Court held that the said statements only mean that after the donors death, the donation will take effect so as to make the donees the absolute owners of the donated property, free from all liens and encumbrances; for it must be remembered that the donor reserved for himself a share of the fruits of the land donated.
[14]

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

Thus, we arrive at no other conclusion in that the petitioners cited provisions are only necessary assurances that during the donors lifetime, the latter would still enjoy the right of possession over the property; but, his naked title of ownership has been passed on to the donees; and that upon the

donors death, the donees would get all the rights of ownership over the same including the right to use and possess the same. Furthermore, it also appeared that the provision in the deed of donation regarding the prohibition to alienate the subject property is couched in general terms such that even the donor is deemed included in the said prohibition (Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang nasabing Basilisa Comerciante). Both the donor and the donees were prohibited from alienating and encumbering the property during the lifetime of the donor. If the donor intended to maintain full ownership over the said property until her death, she could have expressly stated therein a reservation of her right to dispose of the same. The prohibition on the donor to alienate the said property during her lifetime is proof that naked ownership over the property has been transferred to the donees. It also supports the irrevocable nature of the donation considering that the donor has already divested herself of the right to dispose of the donated property. On the other hand, the prohibition on the donees only meant that they may not mortgage or dispose the donated property while the donor enjoys and possesses the property during her lifetime. However, it is clear that the donees were already the owners of the subject property due to the irrevocable character of the donation. The petitioner argues that the subsequent and contemporaneous acts of the donor would show that her intention was to maintain control over her properties while she was still living. We disagree. Respondent Domingo Comia testified that sometime in 1977 or prior to the sale of the subject house and lot, his grandmother, the donor in the case at bar, delivered the title of the said property to him; and that the act of the donor was a manifestation that she was acknowledging the ownership of the donees over the property donated. Moreover, Atty. Viniegra testified that when the donor sold the lot to the petitioner herein, she was not doing so in accordance with the agreement and intent of the parties in the deed of donation; that she was disregarding the provision in the deed of donation prohibiting the alienation of the subject property; and that she knew that the prohibition covers her as well as the donees.
[16] [17]

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

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

Anent the second issue, the petitioner asserts that the action, against the petitioner, for annulment of TCT No. T-10434 and other relevant documents, for reconveyance and damages, filed by the respondents onSeptember 21, 1983 on the ground of fraud and/or implied trust has already prescribed. The sale happened on February 6, 1979 and its registration was made on February 8, 1979 when TCT No. RT-4036 in the name of the donor was cancelled and in lieu thereof TCT No. T-10434 in the name of the petitioner was issued. Thus, more than four (4) years have passed since the sale of the subject real estate property was registered and the said new title thereto was issued to the petitioner. The petitioner contends that an action for reconveyance of property on the ground of alleged fraud must be filed within

four (4) years from the discovery of fraud which is from the date of registration of the deed of sale on February 8, 1979; and that the same prescriptive period also applies to a suit predicated on a trust relationship that is rooted on fraud of breach of trust. When ones property is registered in anothers name without the formers consent, an implied trust is created by law in favor of the true owner. Article 1144 of the New Civil Code provides: Art. 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. (n) Thus, an action for reconveyance of the title to the rightful owner prescribes in ten (10) years from the issuance of the title. It is only when fraud has been committed that the action will be barred after four (4) years.
[21] [22]

However, the four-year prescriptive period is not applicable to the case at bar for the reason that there is no fraud in this case. The findings of fact of the appellate court which are entitled to great respect, are devoid of any finding of fraud. The records do not show that the donor, Basilisa, and the petitioner ever intended to defraud the respondents herein with respect to the sale and ownership of the said property. On the other hand, the sale was grounded upon their honest but erroneous interpretation of the deed of donation that it is mortis causa, not inter vivos; and that the donor still had the rights to sell or dispose of the donated property and to revoke the donation. There being no fraud in the trust relationship between the donor and the donees including the herein petitioner, the action for reconveyance prescribes in ten (10) years. Considering that TCT No. T-10434 in the name of the petitioner and covering the subject property was issued only on February 8, 1979, the filing of the complaint in the case at bar in 1983 was well within the ten-year prescriptive period. The Court of Appeals, therefore, committed no reversible error in its appealed Decision. WHEREFORE, the appealed Decision dated June 30, 1989 of the Court of Appeals is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.

5. G.R. No. L-6600 July 30, 1954

HEIRS OF JUAN BONSATO and FELIPE BONSATO, petitioners, vs. COURT OF APPEALS and JOSEFA UTEA, ET AL., respondents. Benedict C. Balderrama for petitioners. Inocencio Rosete for respondents. REYES, J.B.L., J.: This is a petition for review of a decision of the Court of Appeals holding two deeds of donation executed on the first day of December, 1939 by the late Domingo Bonsato in favor of his brother Juan Bonsato and of his nephew Felipe Bonsato, to be void for being donations mortis causa accomplished without the formalities required by law for testamentary dispositions. The case was initiated in the Court of First Instance of Pangasinan (Case No. 8892) on June 27, 1945, by respondents Josefa Utea and other heirs of Domingo Bonsato and his wife Andrea Nacario, both deceased. Their complaint (for annulment and damages) charged that on the first day of December, 1949, Domingo Bonsato, then already a widower, had been induced and deceived into signing two notarial deeds of donations (Exhibits 1 and 2) in favor of his brother Juan Bonsato and of his nephew Felipe Bonsato, respectively, transferring to them several parcels of land covered by Tax Declaration Nos. 5652, 12049, and 12052, situated in the municipalities of Mabini and Burgos, Province of Pangasinan, both donations having been duly accepted in the same act and documents. Plaintiffs likewise charged that the donations were mortis causa and void for lack of the requisite formalities. The defendants, Juan Bonsato and Felipe Bonsato, answered averring that the donations made in their favor were voluntarily executed in consideration of past services rendered by them to the late Domingo Bonsato; that the same were executed freely without the use of force and violence, misrepresentation or intimidation; and prayed for the dismissal of the case and for damages in the sum of P2,000. After trial, the Court of First Instance rendered its decision on November 13, 1949, finding that the deeds of donation were executed by the donor while the latter was of sound mind, without pressure or intimidation; that the deeds were of donation inter vivos without any condition making their validity or efficacy dependent upon the death of the donor; but as the properties donated were presumptively conjugal, having been acquired during the coverture of Domingo Bonsato and his wife Andrea Nacario, the donations were only valid as to an undivided one-half share in the three parcels of land described therein. Thereupon the plaintiffs duly appealed to the Court of Appeals, assigning as primary error the holding of the court below that the donations are inter vivos; appellants contending that they were mortis causa donations, and invalid because they had not been executed with the formalities required for testamentary disposition. A division of five of the Court of Appeals took the case under consideration, and on January 12, 1953, the majority rendered judgment holding the aforesaid donations to be null and void, because they were donations mortis causaand were executed without the testamentary formalities prescribed by law, and ordered the defendants-appellees Bonsato to surrender the possession of the properties in litigation to the plaintiffs-appellants. Two Justices dissented, claiming that the said donations

should be considered as donations inter vivos and voted for the affirmance of the decision of the Court of First Instance. The donees then sought a review by this Court. The sole issue submitted to this Court, therefore, is the juridical nature of the donations in question. Both deeds (Exhs. 1 and 2) are couched in identical terms, with the exception of the names of the donees and the number and description of the properties donated. The principal provisions are the following. ESCRITURA DE DONATION Yo, Domingo Bonsato, viudo de Andrea Nacario, mayor de edad, vencino y residente del municipio de Agno, Pangasinan, I.F., por la presente declaro lo siguiente: Que mi osbrino Felipe Bonsato, casado, tambien mayor de edad, vecino de Agno, Pangasinan, I.F., en consideracion de su largo servicio a Domingo Bonsato, por la presente hagor y otorgo una donacion perfecta e irrevocable consumada a favor del citado Felipe Bonsato de dos parcelas de terreno palayero como se describe mas abajo. (Description omitted) Que durante su menor de edad de mi citado sobrino Felipe Bonsato hasta en estos dias, siempre me ha apreciado y estimado como uno de mis hijos y siempre ha cumplido todas mis ordenes, y por esta razon bajo su pobriza sea movido mi sentimiento para dar una recompensa de sus trabajos y aprecios a mi favor. Que en este de 1939 el donante Domingo Bonsato ha entregado a Felipe Bonsato dichos terrenos donados y arriba citados pero de los productos mientras vive el donante tomara la parte que corresponde como dueo y la parte como inquilino tomara Felipe Bonsato. Que en vista de la vejez del donante, el donatorio Felipe Bonsato tomara posesion inmediatamente de dichos terrenos a su favor. Que despues de la muerte del donante entrara en vigor dicha donancion y el donatario Felipe Bonsato tendra todos los derechos de dichos terrenos en concepto de dueo absoluto de la propiedad libre de toda responsibilidad y gravamen y pueda ejercitar su derecho que crea conveniente. En Testimonio de todo lo Cual, signo la presente en Agno, Pangasinan, I.F., hoy dia 1.0 de Diciembre, 1939. Domingo (His thumbmark) Bonsato Yo, Felipe Bonsato, mayor de edad, casado, Vecino de Mabini, Pangasinan, I.F., declaro por la presente que acepto la donacion anterior otorgado por Domingo Bonsato a mi favor. (Sgd.) Felipe Bonsato SIGNADO Y FIRMADO EN PRESENCIA DE:

(Sgd.) Illegible

(Sgd.) Illegible

The majority of the special divisions of five of the Court of Appeals that took cognizance of this case relied primarily on the last paragraph, stressing the passage: Que despues de la muerte del donante entrara en vigor dicha donacion . . . while the minority opinion lay emphasis on the second paragraph, wherein the donor states that he makes "perfect, irrevocable, and consummated donation" of the properties to the respective donees, petitioners herein. Strictly speaking, the issue is whether the documents in question embody valid donations, or else legacies void for failure to observe the formalities of wills (testaments). Despite the widespread use of the term "donations mortis causa," it is well-established at present that the Civil Code of 1889, in its Art. 620, broke away from the Roman Law tradition, and followed the French doctrine that no one may both donate and retain ("donner at retenir ne vaut"), by merging the erstwhile donations mortis causa with the testamentary dispositions, thus suppressing said donations as an independent legal concept. ART. 620. Donations which are to become effective upon the death of the donor partake of the nature of disposals of property by will and shall be governed by the rules established for testamentary successions. Commenting on this article, Mucius Scaevola (Codigo Civl, Vol. XI, 2 parte, pp. 573, 575 says: No ha mucho formulabamos esta pregunta: Subsisten las donaciones mortis causa como institucion independiente, con propia autonomia y propio compo jurisdiccional? La respuesta debe ser negativa. xxx xxx xxx

Las donaciones mortis causa se consevan en el Codigo como se conserva un cuerpo fosil en las vitrinas de un Museo. La asimilacion entre las donaciones por causa de muerte y las transmissiones por testamento es perfecta. Manresa, in his Commentaries (5th ed.), Vol. V. p. 83, expresses the same opinion: "La disposicion del articulo 620 significa, por lo tanto: 1..o, que han desaparecido las llamas antes donaciones mortis causa por lo que el Codigo no se ocupa de ellas en absoluto; 2.o, que toda disposicion de bienes para despues de la muerte sigue las reglas establecidas para la sucesion testamentaria. And Castan, in his Derecho Civil, Vol. IV (7th Ed., 1953), p. 176, reiterates: (b) Subsisten hoy en nuestro derecho las donaciones mortis causa? De lo que acabamos de decir se desprende que las donaciones mortis causa han perdido en el Codigo Civil su caracter distintivo y su naturaleza y hay que considerarlos hoy como una institucion suprimida, refundida en el legado ... . Las tesis de la desaparcion de las donaciones mortis causa en nuestro Codigo Civil, acusada ya precedentemente por el pryecto de 1851 puede decirse que constituye una communis opinion entre nuestros expositores, incluso los mas recientes.

We have insisted on this phase of the legal theory in order to emphasize that the term "donations mortis causa" as commonly employed is merely a convenient name to designate those dispositions of property that are void when made in the form of donations. Did the late Domingo Bonsato make donations inter vivos or dispositions post mortem in favor of the petitioners herein? If the latter, then the documents should reveal any or all of the following characteristics: (1) Convey 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 (Vidalvs. Posadas, 58 Phil., 108; Guzman vs. Ibea, 67 Phil., 633); (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 (Bautista vs. Sabiniano, G. R. L-4326, November 18, 1952); (3) That the transfer should be void if the transferor should survive the transferee. None of these characteristics is discernible in the deeds of donation, Exhibits 1 and 2, executed by the late Domingo Bonsato. The donor only reserved for himself, during his lifetime, the owner's share of the fruits or produce ("de los productos mientras viva el donante tomara la parte que corresponde como dueo"), a reservation that would be unnecessary if the ownership of the donated property remained with the donor. Most significant is the absence of stipulation that the donor could revoke the donations; on the contrary, the deeds expressly declare them to be "irrevocable", a quality absolutely incompatible with the idea of conveyances mortis causa where revocability is of the essence of the act, to the extent that a testator can not lawfully waive or restrict his right of revocation (Old Civil Code, Art. 737; New Civil Code, Art. 828). It is true that the last paragraph in each donation contains the phrase "that after the death of the donor the aforesaid donation shall become effective" (que despues de la muerte del donante entrara en vigor dicha donacion"). However, said expression must be construed together with the rest of the paragraph, and thus taken, its meaning clearly appears to be 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; for it must be remembered that the donor reserved for himself a share of the fruits of the land donated. Such reservation constituted a charge or encumbrance that would disappear upon the donor's death, when full title would become vested in the donees. Que despues de la muerte del donante entrara en vigor dicha donacion y el donatario Felipe Bonsato tendra todos derechos de dichos terrenos en concepto de dueo absoluto de la propiedad libre de toda responsibilidad y gravamen y puede ejercitar su derecho que crea conveniente. Any other interpretation of this paragraph would cause it to conflict with the irrevocability of the donation and its consummated character, as expressed in the first part of the deeds of donation, a conflict that should be avoided (Civ. Code of 1889, Art. 1285; New Civil Code, Art. 1374; Rule 123, sec. 59, Rules of Court). Que mi sobrino FILIPINO BONSATO, casado, tambien mayor de edad, vecino de Agno, Pangasinan, I. F., en consideracion de su largo servicio a Domingo Bonsato, por la presente hago y otorgo una donacion perfecta e irrevocable consumada a favor del citado Felipe Bonsato de dos parcelas de terreno palayero como se describe mas abajo.

In the cases held by this Court to be transfers mortis causa and declared invalid for not having been executed with the formalities of testaments, the circumstances clearly indicated the transferor's intention to defer the passing of title until after his death. Thus, in Cario vs. Abaya, 70 Phil., 182, not only were the properties not to be given until thirty days after the death of the last of the donors, but the deed also referred to the donees as "those who had been mentioned to inherit from us", the verb "to inherit" clearly implying the acquisition of property only from and after the death of the alleged donors. In Bautista vs. Sabiniano, 49 Off. Gaz., 549; 92 Phil., 244, the alleged donor expressly reserved the right to dispose of the properties conveyed at any time before his death, and limited the donation "to whatever property or properties left undisposed by me during my lifetime", thus clearly retaining their ownership until his death. While in David vs. Sison, 42 Off. Gaz. (Dec, 1946) 3155, the donor not only reserved for herself all the fruits of the property allegedly conveyed, but what is even more important, specially provided that "without the knowledge and consent of the donor, the donated properties could not be disposed of in any way", thereby denying to the transferees the most essential attribute of ownership, the power to dispose of the properties. No similar restrictions are found in the deeds of donation involved in this appeal. That the conveyance was due to the affection of the donor for the donees and the services rendered by the latter, is of no particular significance in determining whether the deeds Exhibits 1 and 2 constitute transfers inter vivos or not, because a legacy may have identical motivation. Nevertheless, the existence of such consideration corroborates the express irrevocability of the transfers and the absence of any reservation by the donor of title to, or control over, the properties donated, and reinforces the conclusion that the act was inter vivos. Hence, it was error for the Court of Appeals to declare that Exhibits 1 and 2 were invalid because the formalities of testaments were not observed. Being donations inter vivos, the solemnities required for them were those prescribed by Article 633 of the Civil Code of 1889 (reproduced in Art. 749 of the new Code, and it is undisputed that these were duly complied with. As the properties involved were conjugal, the Court of First Instance correctly decided that the donations could not affect the half interest inherited by the respondents Josefa Utea, et al. from the predeceased wife of the donor. The decision of the Court of Appeals is reversed, and that of the Court of First Instance is revived and given effect. Costs against respondents. Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, and Concepcion, JJ.,concur.

6. G.R. No. L-45262 July 23, 1990 RUPERTO REYES and REYNALDO C. SAN JUAN, in his capacity as Special Administrator, petitioners, vs. HON. LORENZO R. MOSQUEDA, Judge of CFI, Pampanga (Branch VII), and URSULA D. PASCUAL,respondents. G.R. No. L-45394 July 23, 1990

PEDRO DALUSONG, petitioner, vs HON. LORENZO R. MOSQUEDA, JUDGE, BRANCH VII, COURT OF FIRST INSTANCE OF PAMPANGA, and URSULA D. PASCUAL, respondents. G.R. Nos. 73241-42 July 23, 1990 OFELIA D. PARUNGAO and ROSARIO DUNCIL, petitioners, vs. THE HON. INTERMEDIATE APPELLATE COURT, (Third Civil Cases Division), BENJAMIN P. REYES and OSCAR REYES, respondents.

GUTIERREZ, JR., J.: The instant petitions have been consolidated as they arose from the same facts and involve similar issues. Dr. Emilio Pascual died intestate and without issue on November 18,1972. He was survived by his sister, Ursula Pascual and the children of his late sisters as follows: (1) Maria Pascual ReyesRuperto Reyes and Jose Reyes; (2) Ines Pascual Reyes-Jose P. Reyes, Benito Reyes, and Manna Reyes Manalastas; (3) Josefa Pascual Reyes-Augusto Reyes and Benjamin Reyes; and (4) Escolastica Pascual Dalusong (half- blood Pedro Dalusong. On December 3, 1973, the heirs of Dr. Pascual filed Special Proceedings No. 73-30-M in the then Court of First Instance of Pampanga for the administration of his estate. Atty. Marcela Macapagal, Clerk of Court of Branch VII was appointed special administratrix. Macapagal was, however, replaced by Reynaldo San Juan. On February 12, 1976, Ursula Pascual filed a motion to exclude some properties from the inventory of Pascual's estate and to deliver the titles thereto to her. Ursula alleged that Dr. Pascual during his lifetime or on November 2, 1966 executed a "Donation Mortis Causa" in her favor covering properties which are included in the estate of Dr. Pascual (subject of Special Proceedings No. 7330-M) and therefore should be excluded from the inventory. On August 1, 1976; the trial court issued an order excluding from the inventory of the estate the properties donated to Ursula, to wit:

WHEREFORE, in view of all the foregoing discussion, let the properties listed in paragraph 2 of the motion of February 12, 1976 filed by Ursula D. Pascual thru counsel be, as it is hereby ordered, excluded from the inventory of the estate of the deceased Dr. Emilio D. Pascual, without prejudice to its final determination in a separate action. Special Administrator Reynaldo San Juan is hereby ordered to return to Court the custody of the corresponding certificates of titles of these properties, until the issue of ownership is finally determined in a separate action. (G.R. No. 45262, pp. 23-24) The Order is now the subject of G.R. Nos. 45262 and 45394. On January 5, 1977, we issued a temporary restraining order enjoining the trial court from enforcing the August 1, 1976 Order. Among the properties included in the "donation mortis causa" in favor of Ursula was Lot 24, Block No. 15 of the subdivision plan Psd-3231, located at 1109-1111 R. Papa St., Tondo, Manila as evidenced by Transfer Certificate of Title No. 17854. The records show that on May 15, 1969, Emilio Pascual executed a deed of donation of real property inter vivos over the abovementioned lot in Manila in favor of Ofelia D. Parungao, petitioner in G.R. Nos. 73241-42 a minor with her mother, Rosario Duncil, accepting the gift and donation for and in her behalf. When Parungao reached the age of majority or on December 20, 1976, she tried to have the donation registered. However, she found out that the certificate of title was missing from where it was supposed to be kept, prompting her to file a petition for reconstitution of title with the Court of First Instance of Manila. The petition was granted in October 1977. Parungao registered the deed of donation with the Register of Deeds of Manila who cancelled Transfer Certificate of Title No. 17854 and issued in lieu thereof Transfer Certificate of Title No. 129092 in the name of Ofelia Parungao. She then filed a motion for exclusion in Special Proceedings No. 73-30-M. In the meantime, on September 23, 1976, Ursula Pascual executed a deed of absolute sale over the Tondo property in favor of Benjamin, Oscar, Jose and Emmanuel, all surnamed Reyes. On May 2, 1978, Benjamin Reyes, private respondent in G.R. Nos. 73241-42 filed a complaint for declaration of nullity of Transfer Certificate of Title No. 129092, Register of Deeds of Manila and/or reconveyance of deed of title against Ofelia Parungao and Rosario Duncil, with the then Court of First Instance of Manila. The case was docketed as Civil Case No. 115164. In their answer with compulsory counterclaim Parungao and Duncil, denied Reyes' assertion of ownership over the Tondo property. On November 6, 1978, Ofelia Parungao filed a complaint for recovery of possession over the Tondo property against Benjamin Reyes and his nephew Oscar Reyes with the Court of First Instance of Manila. The case was docketed as Civil Case No. 119359. In her complaint, Parungao also alleged that as early as 1973, the defendants occupied two (2) doors of the apartment situated at the Tondo property by mere tolerance of the previous owner, Dr. Emilio Pascual, and later by her until April 8, 1978 when she formally demanded that the defendants vacate the premises. Parungao prayed that the defendants be evicted from the premises. The two cases were consolidated. On June 3, 1982, the then Court of First Instance, Branch 8 rendered a joint decision, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered: In Civil Case No. 115164 1) Declaring TCT No. 129092 in the name of Ofelia Parungao null and void; and ordering the Register of Deeds of Manila to cancel said title and to restore, in lieu thereof, TCT No. 17854 in the name of Emilio D. Pascual;

2) Ordering Ofelia D. Parungao to pay plaintiff Benjamin P. Reyes the sum of Two Thousand (P2,000.00) Pesos, as and for attorney's fees; and to pay the costs of suit including all fees which the Register of Deeds may prescribe for the full implementation of this decision. For lack of merit, the counterclaim is dismissed. In Civil Case No. 119359 1) Dismissing the complaint for want of merit; and 2) On the counterclaim, ordering Ofelia Parungao to pay defendant defendants the sum of Two Thousand (P2,000.00) Pesos as and for attorney's fees.' Parungao appealed the decision to the then Intermediate Appellate Court. The decision was, however, affirmed, with costs against the appellant. The Intermediate Appellate Court decision is now the subject matter in G.R. Nos. 73241-42. On January 29, 1986, we issued a minute resolution denying the above petition for lack of merit. The resolution became final and executory on March 10, 1986 and on this same day the entry of judgment was effected. The entry of judgment was however set aside in the resolution dated January 19, 1987 on the ground that the January 29, 1986 resolution was not received by the petitioners' counsel of record. The petitioner was granted leave to file a motion for reconsideration of the January 29, 1986 resolution. The motion for reconsideration is now before us for resolution petition. The issues raised in these petitions are two-fold: (1) In G.R. No. L-45394, petitioner Pedro Dalusong questions the jurisdiction of the probate court to exclude the properties donated to Ursula Pascual in its Order dated August 1, 1976, and (2) In G.R. No. L-45262 and G.R. Nos. 73241-42 Ruperto Reyes, Reynaldo C. San Juan, in his capacity as special administrator of the estate of Emilio Pascual (petitioner in G.R. No. L- 45262), Ofelia Parungao and Rosario Duncil (petitioners in G.R. Nos. 7324142) question the appellate court's finding that the "Donation Mortis Causa" executed by Emilio Pascual in favor of his sister Ursula Pascual was actually a Donation Inter Vivos. We first discuss the issue on jurisdiction. The questioned August 1, 1976 order of the then Court of First Instance of Pampanga in S.P. Proc. No. 73-30-M categorically stated that the exclusion from the inventory of the estate of the deceased Dr. Emilio D. Pascual was "without prejudice to its final determination in a separate action." The provisional character of the exclusion of the contested properties in the inventory as stressed in the order is within the jurisdiction of the probate court. This was stressed in the case of Cuizon v. Ramolete (129 SCRA 495 [1984]) which we cited in the case of Morales v. Court of First Instance of Cavite, Branch V (146 SCRA 373 [1986]): It is well-settled rule that a probate court or one in charge of proceedings whether testate or intestate cannot adjudicate or determine title to properties claimed to be a part of the estate and which are equally claimed to belong to outside parties. All that the said court could do as regards said properties is to determine whether they should or should not be included in the inventory or list of properties to be administered by the administrator. If there is no dispute, well and good; but if there is, then the parties, the administrator, and the opposing parties have to resort to an ordinary action for a final determination of the conflicting claims of title because the

probate court cannot do so (Mallari v. Mallari, 92 Phil. 694; Baquial v. Amihan, 92 Phil. 501).
itc -asl

Similarly, in Valero Vda. de Rodriguez v. Court of Appeals, (91 SCRA 540) we held that for the purpose of determining whether a certain property should or should not be included in the inventory, the probate court may pass upon the title thereto but such determination is not conclusive and is subject to the final decision in a separate action regarding ownership which may be instituted by the parties (3 Moran's Comments on the Rules of Court, 1970 Edition, pages 448449 and 473; Lachenal v. Salas, L-42257, June 14, 1976, 71 SCRA 262, 266). On the second issue, it may be noted that the Court of Appeals did not pass upon the authenticity of the 1969 donation to Parungao because of its finding that the 1966 donation to Pascual was inter vivos. The petitioners do not press the authenticity of the 1969 donation as their challenge centers on whether or not the 1966 donation was inter vivos. However, the trial court has a lengthy discussion reflecting adversely on the authenticity of the 1969 donation to Parungao. The petitioners assert that the 1966 donation was null and void since it was not executed with the formalities of a will. Therefore, the petitioners in G.R. No. L-45262 insist that the donated properties should revert to the estate of Emilio Pascual while the petitioners in G.R. Nos. 73241-42 insist that the donation of real property inter vivos in favor of Ofelia Parungao be given effect. The subject deed of donation titled "DONATION MORTIS CAUSA" duly notarized by a certain Cornelio M. Sigua states: That Dr. Emilio D. Pascual, Filipino, single, of age and resident of Apalit, Pampanga, hereinafter called the DONOR and Ursula D. Pascual, Filipino, single, also of age, resident of and with postal address at Apalit, Pampanga, hereinafter called the DONEE, have agreed, as they do hereby agree, to the following, to wit: That the said DONOR, Dr. Emilio D. Pascual, for and in consideration of the love and affection which he has and bears unto the said DONEE, as also for the personal services rendered by the said DONEE to the said DONOR, does hereby by these presents voluntarily GIVE, GRANT, and DONATE MORTIS CAUSA unto the said DONEE URSULA D. PASCUAL, her heirs and assigns, all of my rights, title and interest, in and to the following parcels of land with all the improvements thereon, situated in the Municipality of Apalit, Pampanga, and more particularly described and Identified as follows: xxx xxx xxx (Enumerated herein are 41 parcels of land) Also included in this DONATION MORTIS CAUSA are all personal properties of the DONOR in the form of cash money or bank deposits and insurance in his favor, and his real properties situated in other towns of Pampanga, such as San Simon, and in the province of Rizal, San Francisco del Monte and in the City of Manila. That the said donor has reserved for himself sufficient property to maintain him for life; and that the said DONEE does hereby ACCEPT and RECEIVE this DONATION

MORTIS CAUSA and further does express his appreciation and gratefulness for the generosity of said DONOR; (Rollo of G.R. No. L-45262, pp. 12-16) xxx xxx xxx Considering the provisions of the DONATION MORTIS CAUSA the appellate court ruled that the deed of donation was actually a donation inter vivos although denominated as DONATION MORTIS CAUSA. It is, now a settled rule that the title given to a deed of donation is not the determinative factor which makes the donation "inter vivos" or "mortis causa" As early as the case of Laureta v. Manta, et al., (44 Phil. 668 [1928]) this Court ruled that the dispositions in a deed of donation-whether "inter vivos" or "mortis causa" do not depend on the title or term used in the deed of donation but on the provisions stated in such deed. This Court explained inConcepcion v. Concepcion (91 Phil. 823 [1952]) ...But, it is a rule consistently followed by the courts that it is the body of the document of donation and the statements contained therein, and not the title that should be considered in ascertaining the intention of the donor. Here, the donation is entitled and called donacion onerosa mortis causa. From the body, however, we find that the donation was of a nature remunerative rather than onerous. It was for past services rendered, services which may not be considered as a debt to be paid by the donee but services rendered to her freely and in goodwill. The donation instead of being onerous or for a valuable consideration, as in payment of a legal obligation, was more of remuneratory or compensatory nature, besides being partly motivated by affection. We should not give too much importance or significance to or be guided by the use of the phrase 'mortis causa in a donation and thereby to conclude that the donation is not one of inter vivos. In the case of De Guzman et al. v. Ibea et al. (67 Phil. 633), this Court through Mr. Chief Justice Avancena said 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 the case of Laureta v. Mata, et al. (44 Phil. 668), the court held that the donation involved was inter vivos. There, the donor Severa Magno y Laureta gave the properties involved as ... a reward for the services which he is rendering me, and as a token of my affection toward him and of the fact that he stands high in my estimation, I hereby donate 'mortis causa to said youth all the properties described as follows: xxx xxx xxx I also declare that it is the condition of this donation that the donee cannot take possession of the properties donated before the death of the donor, and in the event of her death the said donee shall be under obligation to cause a mass to be held annually as a suffrage in behalf of my sold, and also to defray the expenses of my burial and funerals.' It will be observed that the present case and that of Laureta above cited are similar in that in both cases the donation was being made as a reward for services rendered

and being rendered, and as a token of affection for the donee; the phrase 'mortis causa was used; the donee to take possession of the property donated only after the death of the donor; the donee was under obligation to defray the expenses incident to the celebration of the anniversary of the donor's death, including church fees. The donation in both cases were duly accepted. In said case of Laureta this Court held that the donation was in praesenti and not a gift in futuro. In the later case of Bonsato et al. v. Court of appeals, et al. (95 Phil. 481 [1954]) this Court, distinguished the characteristics of a donation inter vivos and "mortis causa" in this wise: Did the late Domingo Bonsato, make donations inter vivos or dispositions post mortem in favor of the petitioners herein? If the latter, then the documents should reveal any or all of the following characteristics: (1) Convey 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 (fun or naked) and control of the property while alive (Vidal v. Posadas, 58 Phil., 108; Guzman v. Ibea 67 Phil., 633); (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 (Bautista v. Sabiniano, G.R. No. L- 4326, November 18, 1952); (3) That the transfer should be void if the transferor should survive the transferee. These principles were repeated in the case of Castro v. Court of Appeals (27 SCRA 1076 [1969]), to wit: Whether a donation is inter vivos or mortis causa depends upon the nature of the disposition made. 'Did the donor intend to transfer the ownership of the property donated upon the execution of the donation? If this is so, as reflected from the provisions contained in the donation, then it is inter vivos; otherwise, it is merely mortis causa, or made to take effect after death.' (Howard v. Padilla and Court of Appeals, G.R. No. L-7064 and L-7098, April 22, 1955. Applying the above principles to the instant petitions, there is no doubt that the so-called DONATION MORTIS CAUSA is really a donation inter vivos. The donation was executed by Dr. Pascual in favor of his sister Ursula Pascual out of love and affection as well as a recognition of the personal services rendered by the donee to the donor. The transfer of ownership over the properties donated to the donee was immediate and independent of the death of the donor. The provision as regards the reservation of properties for the donor's subsistence in relation to the other provisions of the deed of donation confirms the intention of the donor to give naked ownership of the properties to the donee immediately after the execution of the deed of donation. With these findings we find no need to discuss the other arguments raised by the petitioners. WHEREFORE, this Court hereby renders judgment as follows: 1) In G.R. Nos. 45262 and 45394 the petitions are DENIED. The Temporary Restraining Order issued on January 5, 1977 is hereby LIFTED; and

2) In G.R. Nos. 73241-42, the motion for reconsideration is DENIED. This DENIAL is FINAL. SO ORDERED. Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.

7. G.R. No. 82027 March 29, 1990 ROMARICO G. VITUG, petitioner, vs. THE HONORABLE COURT OF APPEALS and ROWENA FAUSTINO-CORONA, respondents. Rufino B. Javier Law Office for petitioner. Quisumbing, Torres & Evangelista for private respondent.

SARMIENTO, J.: This case is a chapter in an earlier suit decided by this Court 1 involving the probate of the two wills of the late Dolores Luchangco Vitug, who died in New York, U. S.A., on November 10, 1980, naming private respondent Rowena Faustino-Corona executrix. In our said decision, we upheld the appointment of Nenita Alonte as co-special administrator of Mrs. Vitug's estate with her (Mrs. Vitug's) widower, petitioner Romarico G. Vitug, pending probate. On January 13, 1985, Romarico G. Vitug filed a motion asking for authority from the probate court to sell certain shares of stock and real properties belonging to the estate to cover allegedly his advances to the estate in the sum of P667,731.66, plus interests, which he claimed were personal funds. As found by the Court of Appeals, 2the alleged advances consisted of P58,147.40 spent for the payment of estate tax, P518,834.27 as deficiency estate tax, and P90,749.99 as "increment thereto." 3 According to Mr. Vitug, he withdrew the sums of P518,834.27 and P90,749.99 from savings account No. 35342-038 of the Bank of America, Makati, Metro Manila. On April 12, 1985, Rowena Corona opposed the motion to sell on the ground that the same funds withdrawn from savings account No. 35342-038 were conjugal partnership properties and part of the estate, and hence, there was allegedly no ground for reimbursement. She also sought his ouster for failure to include the sums in question for inventory and for "concealment of funds belonging to the estate." 4 Vitug insists that the said funds are his exclusive property having acquired the same through a survivorship agreement executed with his late wife and the bank on June 19, 1970. The agreement provides: We hereby agree with each other and with the BANK OF AMERICAN NATIONAL TRUST AND SAVINGS ASSOCIATION (hereinafter referred to as the BANK), that all money now or hereafter deposited by us or any or either of us with the BANK in our joint savings current account shall be the property of all or both of us and shall be payable to and collectible or withdrawable by either or any of us during our lifetime, and after the death of either or any of us shall belong to and be the sole property of the survivor or survivors, and shall be payable to and collectible or withdrawable by such survivor or survivors.
We further agree with each other and the BANK that the receipt or check of either, any or all of us during our lifetime, or the receipt or check of the survivor or survivors, for any

payment or withdrawal made for our above-mentioned account shall be valid and sufficient release and discharge of the BANK for such payment or withdrawal. 5

The trial courts 6 upheld the validity of this agreement and granted "the motion to sell some of the estate of Dolores L. Vitug, the proceeds of which shall be used to pay the personal funds of Romarico Vitug in the total sum of P667,731.66 ... ." 7 On the other hand, the Court of Appeals, in the petition for certiorari filed by the herein private respondent, held that the above-quoted survivorship agreement constitutes a conveyance mortis causa which "did not comply with the formalities of a valid will as prescribed by Article 805 of the Civil Code," 8 and secondly, assuming that it is a mere donation inter vivos, it is a prohibited donation under the provisions of Article 133 of the Civil Code. 9 The dispositive portion of the decision of the Court of Appeals states:
WHEREFORE, the order of respondent Judge dated November 26, 1985 (Annex II, petition) is hereby set aside insofar as it granted private respondent's motion to sell certain properties of the estate of Dolores L. Vitug for reimbursement of his alleged advances to the estate, but the same order is sustained in all other respects. In addition, respondent Judge is directed to include provisionally the deposits in Savings Account No. 35342-038 with the Bank of America, Makati, in the inventory of actual properties possessed by the spouses at the time of the decedent's death. With costs against private respondent. 10

In his petition, Vitug, the surviving spouse, assails the appellate court's ruling on the strength of our decisions inRivera v. People's Bank and Trust Co. 11 and Macam v. Gatmaitan 12 in which we sustained the validity of "survivorship agreements" and considering them as aleatory contracts. 13 The petition is meritorious. The conveyance in question is not, first of all, one of mortis causa, which should be embodied in a will. A will has been defined as "a personal, solemn, revocable and free act by which a capacitated person disposes of his property and rights and declares or complies with duties to take effect after his death." 14 In other words, the bequest or device must pertain to the testator. 15 In this case, the monies subject of savings account No. 35342-038 were in the nature of conjugal funds In the case relied on, Rivera v. People's Bank and Trust Co., 16 we rejected claims that a survivorship agreement purports to deliver one party's separate properties in favor of the other, but simply, their joint holdings: xxx xxx xxx
... Such conclusion is evidently predicated on the assumption that Stephenson was the exclusive owner of the funds-deposited in the bank, which assumption was in turn based on the facts (1) that the account was originally opened in the name of Stephenson alone and (2) that Ana Rivera "served only as housemaid of the deceased." But it not infrequently happens that a person deposits money in the bank in the name of another; and in the instant case it also appears that Ana Rivera served her master for about nineteen years without actually receiving her salary from him. The fact that subsequently Stephenson transferred the account to the name of himself and/or Ana Rivera and executed with the latter the survivorship agreement in question although there was no relation of kinship between them but only that of master and servant, nullifies the assumption that Stephenson was the exclusive owner of the bank account. In the absence, then, of clear proof to the contrary, we must give full faith and credit to the

certificate of deposit which recites in effect that the funds in question belonged to Edgar Stephenson and Ana Rivera; that they were joint (and several) owners thereof; and that either of them could withdraw any part or the whole of said account during the lifetime of both, and the balance, if any, upon the death of either, belonged to the survivor. 17

xxx xxx xxx In Macam v. Gatmaitan, 18 it was held: xxx xxx xxx
This Court is of the opinion that Exhibit C is an aleatory contract whereby, according to article 1790 of the Civil Code, one of the parties or both reciprocally bind themselves to give or do something as an equivalent for that which the other party is to give or do in case of the occurrence of an event which is uncertain or will happen at an indeterminate time. As already stated, Leonarda was the owner of the house and Juana of the Buick automobile and most of the furniture. By virtue of Exhibit C, Juana would become the owner of the house in case Leonarda died first, and Leonarda would become the owner of the automobile and the furniture if Juana were to die first. In this manner Leonarda and Juana reciprocally assigned their respective property to one another conditioned upon who might die first, the time of death determining the event upon which the acquisition of such right by the one or the other depended. This contract, as any other contract, is binding upon the parties thereto. Inasmuch as Leonarda had died before Juana, the latter thereupon acquired the ownership of the house, in the same manner as Leonarda would have acquired the ownership of the automobile and of the furniture if Juana had died first. 19

xxx xxx xxx There is no showing that the funds exclusively belonged to one party, and hence it must be presumed to be conjugal, having been acquired during the existence of the marita. relations. 20 Neither is the survivorship agreement a donation inter vivos, for obvious reasons, because it was to take effect after the death of one party. Secondly, it is not a donation between the spouses because it involved no conveyance of a spouse's own properties to the other. It is also our opinion that the agreement involves no modification petition of the conjugal partnership, as held by the Court of Appeals, 21 by "mere stipulation" 22 and that it is no "cloak" 23 to circumvent the law on conjugal property relations. Certainly, the spouses are not prohibited by law to invest conjugal property, say, by way of a joint and several bank account, more commonly denominated in banking parlance as an "and/or" account. In the case at bar, when the spouses Vitug opened savings account No. 35342-038, they merely put what rightfully belonged to them in a moneymaking venture. They did not dispose of it in favor of the other, which would have arguably been sanctionable as a prohibited donation. And since the funds were conjugal, it can not be said that one spouse could have pressured the other in placing his or her deposits in the money pool. The validity of the contract seems debatable by reason of its "survivor-take-all" feature, but in reality, that contract imposed a mere obligation with a term, the term being death. Such agreements are permitted by the Civil Code. 24 Under Article 2010 of the Code:

ART. 2010. By an aleatory contract, one of the parties or both reciprocally bind themselves to give or to do something in consideration of what the other shall give or do upon the happening of an event which is uncertain, or which is to occur at an indeterminate time. Under the aforequoted provision, the fulfillment of an aleatory contract depends on either the happening of an event which is (1) "uncertain," (2) "which is to occur at an indeterminate time." A survivorship agreement, the sale of a sweepstake ticket, a transaction stipulating on the value of currency, and insurance have been held to fall under the first category, while a contract for life annuity or pension under Article 2021, et sequentia, has been categorized under the second. 25 In either case, the element of risk is present. In the case at bar, the risk was the death of one party and survivorship of the other. However, as we have warned: xxx xxx xxx
But although the survivorship agreement is per se not contrary to law its operation or effect may be violative of the law. For instance, if it be shown in a given case that such agreement is a mere cloak to hide an inofficious donation, to transfer property in fraud of creditors, or to defeat the legitime of a forced heir, it may be assailed and annulled upon such grounds. No such vice has been imputed and established against the agreement involved in this case. 26

xxx xxx xxx There is no demonstration here that the survivorship agreement had been executed for such unlawful purposes, or, as held by the respondent court, in order to frustrate our laws on wills, donations, and conjugal partnership. The conclusion is accordingly unavoidable that Mrs. Vitug having predeceased her husband, the latter has acquired upon her death a vested right over the amounts under savings account No. 35342-038 of the Bank of America. Insofar as the respondent court ordered their inclusion in the inventory of assets left by Mrs. Vitug, we hold that the court was in error. Being the separate property of petitioner, it forms no more part of the estate of the deceased. WHEREFORE, the decision of the respondent appellate court, dated June 29, 1987, and its resolution, dated February 9, 1988, are SET ASIDE. No costs. SO ORDERED.