TOPIC: Donation inter vivos v mortis causa

Ganuelas vs Cawed
G. R. No. 123968 April 24, 2003

Facts:
In 1958, a deed of donation was executed by Celestina Ganuelas in favor of petitioner, Ursulina
Ganuelas and is read as follows:
That, for and in consideration of the love and affection which the DONOR has for the DONEE,
and of the faithful services the latter has rendered in the past to the former, the said DONOR
does by these presents transfer and convey, by way of DONATION, unto the DONEE the
property above, described, to become effective upon the death of the DONOR; but in the event
that the DONEE should die before the DONOR, the present donation shall be deemed rescinded
and of no further force and effect.

The deed has an attestation clause that reads as follows:
SIGNED by the above-named donor, Celestina Ganuelas, at the foot of this deed of donation
mortis causa, consisting of two (2) pages and on the left margin of each and every page thereof
in the joint presence of all of us who at her request and in her presence and that of each other
have in like manner subscribed our names as witnesses.

In 1967, the donor executed a document denominated as Revocation of Donation purporting to
set aside the deed of donation. More than a month later, Celestina died without issue and any surviving
ascendants and siblings.
Issue: Whether the donation is inter vivos or mortis causa.
Held: The Deed of Donation is mortis causa. There is nothing therein which indicates that any right,
title or interest in the donated properties was to be transferred to Ursulina prior to the death of Celestina.
The phrase to become effective upon the death of the DONOR admits of no other interpretation but
that Celestina intended to transfer the ownership of the properties to Ursulina on her death, not during
her lifetime.
More importantly, the provision in the deed stating that if the donee should die before the donor,
the donation shall be deemed rescinded and of no further force and effect shows that the donation is a
postmortem disposition.
Moreso, the deed contains an attestation clause expressly confirming the donation as mortis
causa.
As the subject deed then is in the nature of a mortis causa disposition, the formalities of a will
should have been complied with, failing which the donation is void and produces no effect.

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SICAD vs. COURT OF APPEALS
GR No. 125888 August 13, 1998

Facts: Aurora Montinola executed in 1979 a DEED OF DONATION INTER VIVOS to her three
grandchildren. The deed of donation expressed her wish that the donation take effect only after ten (10)
years from her death and that the deed include a prohibition on the sale of the property for such period.
She had the old title cancelled and was issued a new title but retained the owners duplicate copy of the
new one. She continued, as explicitly authorized in the deed itself, to possess her property, enjoy its
fruits and otherwise exercise the rights of dominion, paying the property taxes as they fell due.
In 1987, she drew up a deed of revocation of the donation. She then filed in 1990, a petition to
cancel the new title and reinstate the old one. Her petition was founded on the theory that the donation to
her three (3) grandchildren was one mortis causa which thus had to comply with the formalities of a
will; and since it had not, the donation was void.
The donees (Montinolas grandchildren) opposed the petition. They averred that the donation in
their favor was one inter vivos which, having fully complied with the requirements was perfectly valid
and efficacious.

Issue: Whether the donation is mortis causa or inter vivos?

Held: The donation in question, though denominated inter vivos, is in truth one mortis causa. A
donation which purports to be one inter vivos but withholds from the donee that right to dispose of the donated
property during the donors lifetime is in truth one mortis causa.
As already intimated, the real nature of a deed is to be ascertained by both its language and the
intention of the parties as demonstrated by the circumstances attendant upon its execution. In the instant case,
nothing of any consequence was transferred by the deed of donation in question to Montinolas grandchildren,
the ostensible donees. They did not get possession of the property donated. They did not acquire the right to
the fruits thereof, or any other right of dominion over the property. More importantly, they did not acquire the
right to dispose of the property this would accrue to them only after ten (10) years from Montinolas
death. Indeed, they never even laid hands on the certificate of title to the same. They were therefore simply
paper owners of the donated property. All these circumstances, including, to repeat, the explicit provisions of
the deed of donation reserving the exercise of rights of ownership to the donee and prohibiting the sale or
encumbrance of the property until ten (10) years after her death ineluctably lead to the conclusion that the
donation in question was a donation mortis causa, contemplating a transfer of ownership to the donees only
after the donors demise.
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TOPIC: Written Notice in Legal Redemption

PASCUAL and FRANCISCO vs BALLESTEROS
G.R. No. 186269 February 15, 2012

Facts: A parcel of land is co-owned by (1) Spouses Albino and Margarita Mariano, (2) Angela
Melchor, and (3) Spouses Melchor. Upon the death of the Spouses Melchor, their share in the subject
property was inherited by their daughter Lorenza Melchor Ballesteros. Subsequently, Lorenza and her
husband Antonio Ballesteros (respondents) acquired the share of Angela in the subject property by
virtue of an Affidavit of Extrajudicial Settlement with Absolute Sale in 1986.
In 2000, Margarita, already widowed, together with her children, sold their share to herein
petitioner (Spouses Pascual and Francisco).
Consequently, the respondents, claiming that they did not receive any written notice of the said
sale in favor of petitioner, filed with the RTC for legal redemption against the latter.
The RTC held that notwithstanding the lack of a written notice of the sale of a portion of the
subject property, the respondents had actual notice of the said sale. Failing to exercise their right of
redemption within 30 days from actual notice of the said sale, the respondents can no longer seek for the
redemption of the property as against the petitioners.
The CA held in contrary that the 30-day period within which to exercise the said right had not
yet lapsed considering the absence of a written notice of the said sale.

Issue: Whether written notice of sale is mandatory before the 30-day period to exercise legal
redemption starts to run?

Held: The written notice of sale is mandatory. This Court has long established the rule that
notwithstanding actual knowledge of a co-owner, the latter is still entitled to a written notice from the
selling co-owner in order to remove all uncertainties about the sale, its terms and conditions, as well as
its efficacy and status.
Justice Edgardo Paras, referring to the origins of the requirement, would explain in his
commentaries on the New Civil Code that despite actual knowledge, the person having the right to
redeem is STILL entitled to the written notice. Both the letter and the spirit of the New Civil Code
argue against any attempt to widen the scope of the written notice by including therein any other kind
of notice such as an oral one, or by registration. If the intent of the law has been to include verbal
notice or any other means of information as sufficient to give the effect of this notice, there would
have been no necessity or reason to specify in the article that said notice be in writing, for under
the old law, a verbal notice or mere information was already deemed sufficient.
Here, it is undisputed that the respondents did not receive a written notice of the sale in favor of
the petitioners. Accordingly, the 30-day period within which to exercise their right of redemption has
not begun to run. Consequently, the respondents may still redeem from the petitioners the portion of the
subject property that was sold to the latter.






TOPIC: Converting Legal Redemption to Conventional Redemption

Gajudo vs Traders Royal Bank
G.R. No. 151098 March 21, 2006

Facts:
Petitioner, Danilo Chua obtained a loan from respondent bank in the amount of P75,000.00 secured by a
real estate mortgage over a parcel of land and owned in common by Erlinda, Fernando, Estelita and Baltazar
Gajudo. When the loan was not paid, respondent bank commenced extra-judicial foreclosure proceedings on the
property. The Sheriff sold the property to the respondent bank, the highest bidder therein, for the sum
of P24,911.30. The Certificate of Sale following the extrajudicial public auction of the property was registered
on June 21, 1982.
In February 17, 1984, Petitioner Chua proposed through a letter to the respondent to pay the redemption
price for the property and made an initial payment thereon in the amount of P4,000.00. But the bank in a letter
dated February 20, 1984 refused to accede to his request because the one-year redemption period had already
lapsed. The initial payment was receipted by respondent bank which the latter noted as deposit only. The
bank, though, offered to sell back the property to him at the current market value.
Petitioner Chua readily expressed in a letter his willingness to settle his account with the respondent
bank, but that his present financial situation precludes him from effecting an immediate settlement. Petitioner
proposed to pay in three or four installments without a specification of dates for the payments.
Petitioners insist, though, that they had the right to repurchase the property through conventional
redemption, as provided under Article 1601 of the Civil Code, worded as follows:
ART. 1601. Conventional redemption shall take place when the vendor reserves the right to
repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and
other stipulations which may have been agreed upon.

Issue: Whether the right of legal redemption of petitioners can be converted into conventional
redemption?

Held:
The Court ruled in the negative.
It is true that the one-year period of redemption provided by law under which the property here was sold
in a foreclosure sale -- is only directory and, as such can be extended by agreement of the parties. However, it
has also been held that for legal redemption to be converted into conventional redemption, two requisites must
be established: 1) voluntary agreement of the parties to extend the redemption period; and 2) the debtors
commitment to pay the redemption price on a fixed date. Thus, assuming that an offer was made to Petitioner
Chua to buy back the property after the lapse of the period of legal redemption, petitioners needed to show that
the parties had agreed to extend the period, and that Petitioner Chua had committed to pay the redemption price
on a fixed date.
The letters sent by the bank to Petitioner Chua do not convincingly show that the parties arrived at
a firm agreement for the repurchase of the property. What can be gleaned from the letter is that Petitioner
Chua proposed to pay the redemption price for the property, but that the bank refused to accede to his request,
because the one-year redemption period had already lapsed. The bank, though, had offered to sell back the
property to him at the current market value.
More important, there was no showing that petitioners had committed to pay the redemption price
on a fixed date. True, Petitioner Chua had attempted to establish a previous agreement to repurchase the
property for less than its fair market value. Petitioners were unable to establish a firm commitment on their
part to pay the redemption price on a fixed date. The February 17 letter of Petitioner Chua to the bank clearly
manifested that he was not capable of paying the account immediately. For this reason, he proposed to pay in
three or four installments without a specification of dates for the payments, but with a plea for a reduction of
the interest charges. That proposal was rejected.









TOPIC: Equitable Mortgage vs Pactro de Retro Sale

HEIRS OF JOSE REYES, JR. vs AMANDA S. REYES, et al.
G.R. No. 158377 August 13, 2010

Facts:
In 1955, Leoncia and her three sons (Teofilo, Jose Sr., and Jose Jr.) executed a Kasulatan ng Biling Mabibiling
Muli, whereby they sold their land and its existing improvements to the Spouses Francia for P500.00, subject to the
vendors right to repurchase for the same amount sa oras na sila'y makinabang. Leoncias sons and their respective
families remained in possession of the property and paid the realty taxes thereon. They did not repay the amount
of P500.00.
Alejandro, the son of Jose, Sr., paid to the heirs of Spouses Francia the amount for the obligation of Leoncia, his
uncles and his father (still alive at that time) and eventually, Alejandro was able to secure a deed entitled Pagsasa-ayos ng
Pag-aari at Pagsasalin, executed by the heirs of the Spouses Francia whereby they transferred and conveyed to Alejandro
all their rights and interests in the property for P500.00.
In 1970, Alejandro executed a Kasulatan ng Pagmeme-ari, wherein he declared that he had acquired all the rights
and interests of the heirs of the Spouses Francia, including the ownership of the property, after the vendors had failed to
repurchase within the given period. Nevertheless, Alejandro, his grandmother (Leoncia), and his father (Jose, Sr.)
executed a Magkakalakip na Salaysay, by which Alejandro acknowledged the right of Leoncia, Jose, Jr., and Jose, Sr. to
repurchase the property at any time for the same amount of P500.00.
In 1993, Alejandro died intestate and was survived by his wife, Amanda Reyes, and their children, (respondents
herein). In 1994, respondent Amanda Reyes asked the heirs of Teofilo and Jose, Jr., to vacate the property because she
and her children already needed it.

Issues: (a) Whether the transaction (Kasulatan ng Biling Mabibiling Muli) entered into by petitioners
predecessors-in-interest was an equitable mortgage and not a pacto de retro sale.

(b) Whether the petitioners now barred from claiming that the transaction under the Kasulatan ng Biling
Mabibiling Muli was an equitable mortgage by their failure to redeem the property for a long period of time?

Held: (a) The Kasulatan ng Biling Mabibiling Muli was an equitable mortgage, not a pacto de retro sale. There
was no dispute that the purported vendors had continued in the possession of the property even after the execution of the
agreement; and that the property had remained declared for taxation purposes under Leoncias name, with the realty taxes
due being paid by Leoncia, despite the execution of the agreement.

(b) The Court ruled that the petitioners are not barred from claiming that the transaction was an
equitable mortgage. It considered as meritorious the contention of the petitioners that prescription, if it must apply to
them, should as well be applied to the respondents, who had similarly failed to enforce their right under the equitable
mortgage within ten years from its execution. The Court reasoned that;
Considering that sa oras na silay makinabang, the period of redemption stated in
the Kasulatan ng Biling Mabibiling Muli, signified that no definite period had been stated, the
period to redeem should be ten years from the execution of the contract. Upon the expiration of
said 10-year period, mortgagees Spouses Francia or their heirs should have foreclosed the
mortgage, but they did not do so. Instead, they accepted Alejandros payments, until the debt was
fully satisfied in 1970.
The acceptance of the payments even beyond the 10-year period of redemption estopped
the mortgagees heirs from insisting that the period to redeem the property had already expired.
Their actions impliedly recognized the continued existence of the equitable mortgage. The conduct
of the original parties as well as of their successors-in-interest manifested that the parties to
the Kasulatan ng Biling Mabibiling Muli really intended their transaction to be an equitable
mortgage, not a pacto de retro sale.
Therefore, the original intention of the parties to the Kasulatan ng Biling Mabibiling Muli should
be upheld, without taking prescription into account, because both parties did not enforce their respective rights within the
ten-year prescriptive period and is more in keeping with fairness and equity.
.