[G.R. No. 132964.

February 18, 2000]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. DAVID REY
GUZMAN, represented by his Attorney-in-Fact, LOLITA G.
ABELA, and the REGISTER OF DEEDS OF BULACAN,
MEYCAUAYAN BRANCH, respondents.
DECISION
BELLOSILLO, J.:
The REPUBLIC OF THE PHILIPPINES seeks the nullification of the 5
March 1998 Decision of the Court of Appeals[1] which affirmed the
dismissal by the Regional Trial Court, Br. 77, Malolos, Bulacan, of
the petition for escheat filed by the Government. [2] h Y
David Rey Guzman, a natural-born American citizen, is the son of
the spouses Simeon Guzman, [3] a naturalized American citizen, and
Helen Meyers Guzman, an American citizen. In 1968 Simeon died
leaving to his sole heirs Helen and David an estate consisting of
several parcels of land located in Bagbaguin, Sta. Maria, Bulacan,
covered by TCT Nos. T-146837 (M), T-146839 (M), T-146840 (M), T146841 (M), T-146842 (M), T-120254 (M) and T-120257 (M).
On 29 December 1970 Helen and David executed a Deed of
Extrajudicial Settlement of the Estate of Simeon Guzman dividing
and adjudicating to themselves all the property belonging to the
estate of Simeon. The document of extrajudicial settlement was
registered in the Office of the Register of Deeds on 8 December
1971. The taxes due thereon were paid through their attorneys-infact, Attys. Juan L. Austria and Lolita G. Abela, and the parcels of
land were accordingly registered in the name of Helen Meyers
Guzman and David Rey Guzman in undivided equal shares.
On 10 December 1981 Helen executed a Quitclaim Deed assigning,
transferring and conveying to her son David her undivided one-half
(1/2) interest on all the parcels of land subject matter of the Deed
of Extrajudicial Settlement of the Estate of Simeon Guzman. Since
the document appeared not to have been registered, upon advice
of Atty. Lolita G. Abela, Helen executed another document, a Deed

of Quitclaim, on 9 August 1989 confirming the earlier deed of

quitclaim as well as modifying the document to encompass all her
other property in the Philippines.[4]
On 18 October 1989 David executed a Special Power of Attorney
where he acknowledged that he became the owner of the parcels
of land subject of the Deed of Quitclaim executed by Helen on 9
August 1989 and empowering Atty. Lolita G. Abela to sell or
otherwise dispose of the lots. On 1 February 1990 Atty. Lolita G.
Abela, upon instruction of Helen, paid donors taxes to facilitate the
registry of the parcels of land in the name of David.
On 16 March 1994 a certain Atty. Mario A. Batongbacal wrote the
Office of the Solicitor General and furnished it with documents
showing that Davids ownership of the one-half (1/2) of the estate of
Simeon Guzman was defective. On the basis thereof, the
Government filed before the Regional Trial Court of Malolos Bulacan
a Petition for Escheat praying that one-half (1/2) of David's interest
in each of the subject parcels of land be forfeited in its favor. On 9
August 1994 David Rey Guzman responded with a prayer that the
petition be dismissed. Sppedsc
On 11 July 1995 the trial court dismissed the petition holding that
the two (2) deeds of quitclaim executed by Helen Meyers Guzman
had no legal force and effect so that the ownership of the property
subject thereof remained with her.[5]
The Government appealed[6] the dismissal of the petition but the
appellate court affirmed the court a quo.
Petitioner anchors its argument on Art. XII of the Constitution which
provides Sec. 7. Save in cases of hereditary succession, no
private lands shall be transferred or conveyed except
to individuals, corporations, or associations qualified
to acquire or hold lands of the public domain.
Sec. 8. Notwithstanding the provisions of Section 7 of
this Article, a natural-born citizen of the Philippines

who has lost his Philippine citizenship may be a

transferee of private lands, subject to limitations
provided by law.

document.[7] In cases where the acceptance is made in a separate

instrument, it is mandated that the donor should be notified thereof
in an authentic form, to be noted in both instruments.[8]

Thus as a rule, only a Filipino citizen can acquire private lands in

the Philippines. The only instances when a foreigner can acquire
private lands in the Philippines are by hereditary succession and if
he was formerly a natural-born Filipino citizen who lost his
Philippine citizenship. Petitioner therefore contends that the
acquisition of the parcels of land by David does not fall under any
of these exceptions. It asserts that David being an American citizen
could not validly acquire one-half (1/2) interest in each of the
subject parcels of land by way of the two (2) deeds of quitclaim as
they are in reality donations inter vivos. It also reasons out that the
elements of donation are present in the conveyance made by Helen
in favor of David: first, Helen consented to the execution of the
documents; second, the dispositions were made in public
documents; third, David manifested his acceptance of the donation
in the Special Power of Attorney he executed in favor of Atty. Lolita
G. Abela; fourth, the deeds were executed with the intention of
benefiting David; and lastly, there was a resultant decrease in the
assets or patrimony of Helen, being the donor. Petitioner further
argues that the payment of donors taxes on the property proved
that Helen intended the transfer to be a gift or donation inter vivos.

Not all the elements of a donation of an immovable property are

present in the instant case. The transfer of the property by virtue of
the Deed of Quitclaim executed by Helen resulted in the reduction
of her patrimony as donor and the consequent increase in the
patrimony of David as donee. However, Helens intention to perform
an act of liberality in favor of David was not sufficiently established.
A perusal of the two (2) deeds of quitclaim reveals that Helen
intended to convey to her son David certain parcels of land located
in the Philippines, and to re-affirm the quitclaim she executed in
1981 which likewise declared a waiver and renunciation of her
rights over the parcels of land. The language of the deed of
quitclaim is clear that Helen merely contemplated a waiver of her
rights, title and interest over the lands in favor of David, and not a
donation. That a donation was far from Helen's mind is further
supported by her deposition which indicated that she was aware
that a donation of the parcels of land was not possible since
Philippine law does not allow such an arrangement. [9] She reasoned
that if she really intended to donate something to David it would
have been more convenient if she sold the property and gave him
the proceeds therefrom.[10] It appears that foremost in Helens mind
was the preservation of the Bulacan realty within the bloodline of
Simeon from where they originated, over and above the benefit
that would accrue to David by reason of her renunciation. [11]The
element of animus donandi therefore was missing.

David maintains, on the other hand, that he acquired the property

by right of accretion and not by way of donation, with the deeds of
quitclaim merely declaring Helens intention to renounce her share
in the property and not an intention to donate. He further argues
that, assuming there was indeed a donation, it never took effect
since the Special Power of Attorney he executed does not indicate
acceptance of the alleged donation. Calrsc
There are three (3) essential elements of a donation: (a) the
reduction of the patrimony of the donor; (b) the increase in the
patrimony of the donee; and, (c) the intent to do an act of liberality
or animus donandi. When applied to a donation of an immovable
property, the law further requires that the donation be made in a
public document and that there should be an acceptance thereof
made in the same deed of donation or in a separate public

Likewise, the two (2) deeds of quitclaim executed by Helen may

have been in the nature of a public document but they lack the
essential element of acceptance in the proper form required by law
to make the donation valid. We find no merit in petitioners
argument that the Special Power of Attorney executed by David in
favor of Atty. Lolita G. Abela manifests his implied acceptance of his
mothers alleged donation as a scrutiny of the document clearly
evinces the absence thereof. The Special Power of Attorney merely
acknowledges that David owns the property referred to and that he
authorizes Atty. Abela to sell the same in his name. There is no
intimation, expressly or impliedly, that Davids acquisition of the

parcels of land is by virtue of Helens possible donation to him and

we cannot look beyond the language of the document to make a
contrary construction as this would be inconsistent with the parol
evidence rule.[12]
Moreover, it is mandated that if an acceptance is made in a
separate public writing the notice of the acceptance must be noted
not only in the document containing the acceptance but also in the
deed of donation. Commenting on Art. 633 of the Civil Code from
whence Art. 749[13] came Manresa said: "If the acceptance does not
appear in the same document, it must be made in another. Solemn
words are not necessary; it is sufficient if it shows the intention to
accept x x x x it is necessary that formal notice thereof be given to
the donor, and the fact that due notice has been given must be
noted in both instruments. Then and only then is the donation
perfected.[14] "
Thus, in Santos v. Robledo we emphasized that when the deed of
donation is recorded in the registry of property the document that
evidences the acceptance - if this has not been made in the deed of
gift - should also be recorded. And in one or both documents, as the
case may be, the notification of the acceptance as formally made
to the donor or donors should be duly set forth. [15] Where the deed
of donation fails to show the acceptance, or where the formal
notice of the acceptance made in a separate instrument is either
not given to the donor or else noted in the deed of donation, and in
the separate acceptance, the donation is null and void.[16]
These requisites, definitely prescribed by law, have not been
complied with, and no proof of compliance appears in the record.
The two (2) quitclaim deeds set out the conveyance of the parcels
of land by Helen in favor of David but its acceptance by David does
not appear in the deeds, nor in the Special Power of Attorney.
Further, the records reveal no other instrument that evidences such
acceptance and notice thereof to the donor in an authentic manner.
It is well-settled that if the notification and notation are not
complied with, the donation is void. Therefore, the provisions of the
law not having been complied with, there was no effective
conveyance of the parcels of land by way of donation inter vivos.
[17]
Scncm

However, the inexistence of a donation does not render the

repudiation made by Helen in favor of David valid. There is no valid
repudiation of inheritance as Helen had already accepted her share
of the inheritance when she, together with David, executed a Deed
of Extrajudicial Settlement of the Estate of Simeon Guzman on 29
December 1970 dividing and adjudicating between the two (2) of
them all the property in Simeons estate. By virtue of such
extrajudicial settlement the parcels of land were registered in her
and her sons name in undivided equal share and for eleven (11)
years they possessed the lands in the concept of owner. Article
1056 of the Civil Code provides The acceptance or repudiation of an inheritance,
once made is irrevocable and cannot be impugned,
except when it was made through any of the causes
that vitiate consent or when an unknown will
appears.
Nothing on record shows that Helens acceptance of her inheritance
from Simeon was made through any of the causes which vitiated
her consent nor is there any proof of the existence of an unknown
will executed by Simeon. Thus, pursuant to Art. 1056, Helen cannot
belatedly execute an instrument which has the effect of revoking or
impugning her previous acceptance of her one-half (1/2) share of
the subject property from Simeons estate. Hence, the two (2)
quitclaim deeds which she executed eleven (11) years after she
had accepted the inheritance have no legal force and effect.
Nevertheless, the nullity of the repudiation does not ipso
facto operate to convert the parcels of land into res nullius[18] to be
escheated in favor of the Government. The repudiation being of no
effect whatsoever the parcels of land should revert to their private
owner, Helen, who, although being an American citizen, is qualified
by hereditary succession to own the property subject of the
litigation.
WHEREFORE, the assailed Decision of the Court of Appeals which
sustained the Decision of the Regional Trial Court of Malolos,
Bulacan, dismissing the petition for escheat is AFFIRMED. No costs.

SO ORDERED.

G.R. No. 77425

June 19, 1991

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE

ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES
FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners,
vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED
SPOUSES EUSEBIO DE CASTRO and MARTINA RIETA,
represented by MARINA RIETA GRANADOS and THERESA
RIETA TOLENTINO, respondents.
G.R. No. 77450

June 19, 1991

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE

ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES
FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners,
vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED
SPOUSES EUSEBIO DE CASTRO and MARTINA RIETA,
represented by MARINA RIETA GRANADOS and THERESA
RIETA TOLENTINO, respondents.
Severino C. Dominguez for petitioner Roman Catholic Bishop of
Imus,
Cavite.
Dolorfino and Dominguez Law Offices for Sps. Ignao.
Joselito R. Enriquez for private respondents.

REGALADO, J.:
These two petitions for review on certiorari1 seek to overturn the
decision of the Court of Appeals in CA-G.R. CV No. 05456 2 which
reversed and set aside the order of the Regional Trial Court of Imus,
Cavite dismissing Civil Case No. 095-84, as well as the order of said
respondent
court
denying
petitioner's
motions
for
the
reconsideration of its aforesaid decision.
On November 29, 1984, private respondents as plaintiffs, filed a
complaint for nullification of deed of donation, rescission of contract
and reconveyance of real property with damages against
petitioners Florencio and Soledad C. Ignao and the Roman Catholic
Bishop of Imus, Cavite, together with the Roman Catholic

Archbishop of Manila, before the Regional Trial Court, Branch XX,

Imus, Cavite and which was docketed as Civil Case No. 095-84
therein.3
In their complaint, private respondents alleged that on August 23,
1930, the spouses Eusebio de Castro and Martina Rieta, now both
deceased, executed a deed of donation in favor of therein
defendant Roman Catholic Archbishop of Manila covering a parcel
of land (Lot No. 626, Cadastral Survey of Kawit), located at Kawit,
Cavite, containing an area of 964 square meters, more or less. The
deed of donation allegedly provides that the donee shall not
dispose or sell the property within a period of one hundred (100)
years from the execution of the deed of donation, otherwise a
violation of such condition would render ipso facto null and void the
deed of donation and the property would revert to the estate of the
donors.
It is further alleged that on or about June 30, 1980, and while still
within the prohibitive period to dispose of the property, petitioner
Roman Catholic Bishop of Imus, in whose administration all
properties within the province of Cavite owned by the Archdiocese
of Manila was allegedly transferred on April 26, 1962, executed a
deed of absolute sale of the property subject of the donation in
favor of petitioners Florencio and Soledad C. Ignao in consideration
of the sum of P114,000. 00. As a consequence of the sale, Transfer
Certificate of Title No. 115990 was issued by the Register of Deeds
of Cavite on November 15, 1980 in the name of said petitioner
spouses.
What transpired thereafter is narrated by respondent court in its
assailed decision.4
On December 17, 1984, petitioners Florencio Ignao and Soledad C.
Ignao filed a motion to dismiss based on the grounds that (1) herein
private respondents, as plaintiffs therein, have no legal capacity to
sue; and (2) the complaint states no cause of action.
On December 19, 1984, petitioner Roman Catholic Bishop of Imus
also filed a motion to dismiss on three (3) grounds, the first two (2)
grounds of which were identical to that of the motion to dismiss
filed by the Ignao spouses, and the third ground being that the
cause of action has prescribed.

On January 9, 1985, the Roman Catholic Archbishop of Manila

likewise filed a motion to dismiss on the ground that he is not a real
party in interest and, therefore, the complaint does not state a
cause of action against him.
After private respondents had filed their oppositions to the said
motions to dismiss and the petitioners had countered with their
respective replies, with rejoinders thereto by private respondents,
the trial court issued an order dated January 31, 1985, dismissing
the complaint on the ground that the cause of action has
prescribed.5
Private respondents thereafter appealed to the Court of Appeals
raising the issues on (a) whether or not the action for rescission of
contracts (deed of donation and deed of sale) has prescribed; and
(b) whether or not the dismissal of the action for rescission of
contracts (deed of donation and deed of sale) on the ground of
prescription carries with it the dismissal of the main action for
reconveyance of real property.6
On December 23, 1986, respondent Court of Appeals, holding that
the action has not yet prescibed, rendered a decision in favor of
private respondents, with the following dispositive portion:
WHEREFORE, the Order of January 31, 1985 dismissing
appellants' complaint is SET ASIDE and Civil Case No. 09584 is hereby ordered REINSTATED and REMANDED to the
lower court for further proceedings. No Costs.7
Petitioners Ignao and the Roman Catholic Bishop of Imus then filed
their separate motions for reconsideration which were denied by
respondent Court of Appeals in its resolution dated February 6,
1987,8 hence, the filing of these appeals by certiorari.
It is the contention of petitioners that the cause of action of herein
private respondents has already prescribed, invoking Article 764 of
the Civil Code which provides that "(t)he donation shall be revoked
at the instance of the donor, when the donee fails to comply with
any of the conditions which the former imposed upon the latter,"
and that "(t)his action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of
the donor, and may be exercised against the donee's heirs.
We do not agree.

Although it is true that under Article 764 of the Civil Code an action
for the revocation of a donation must be brought within four (4)
years from the non-compliance of the conditions of the donation,
the same is not applicable in the case at bar. The deed of donation
involved herein expressly provides for automatic reversion of the
property donated in case of violation of the condition therein,
hence a judicial declaration revoking the same is not necessary, As
aptly stated by the Court of Appeals:
By the very express provision in the deed of donation itself
that the violation of the condition thereof would render ipso
facto null and void the deed of donation, WE are of the
opinion that there would be no legal necessity anymore to
have the donation judicially declared null and void for the
reason that the very deed of donation itself declares it so.
For where (sic) it otherwise and that the donors and the
donee contemplated a court action during the execution of
the deed of donation to have the donation judicially
rescinded or declared null and void should the condition be
violated, then the phrase reading "would render ipso facto
null and void" would not appear in the deed of donation.9
In support of its aforesaid position, respondent court relied on the
rule that a judicial action for rescission of a contract is not
necessary where the contract provides that it may be revoked and
cancelled for violation of any of its terms and conditions. 10 It called
attention to the holding that there is nothing in the law that
prohibits the parties from entering into an agreement that a
violation of the terms of the contract would cause its cancellation
even without court intervention, and that it is not always necessary
for the injured party to resort to court for rescission of the
contract.11 It reiterated the doctrine that a judicial action is proper
only when there is absence of a special provision granting the
power of cancellation.12
It is true that the aforesaid rules were applied to the contracts
involved therein, but we see no reason why the same should not
apply to the donation in the present case. Article 732 of the Civil
Code provides that donationsinter vivos shall be governed by the
general provisions on contracts and obligations in all that is not
determined in Title III, Book III on donations. Now, said Title III does
not have an explicit provision on the matter of a donation with a
resolutory condition and which is subject to an express provision
that the same shall be considered ipso facto revoked upon the
breach of said resolutory condition imposed in the deed therefor, as

is the case of the deed presently in question. The suppletory

application of the foregoing doctrinal rulings to the present
controversy is consequently justified.
The validity of such a stipulation in the deed of donation providing
for the automatic reversion of the donated property to the donor
upon non-compliance of the condition was upheld in the recent
case of De Luna, et al. vs. Abrigo, et al.13 It was held therein that
said stipulation is in the nature of an agreement granting a party
the right to rescind a contract unilaterally in case of breach, without
need of going to court, and that, upon the happening of the
resolutory condition or non-compliance with the conditions of the
contract, the donation is automatically revoked without need of a
judicial declaration to that effect. While what was the subject of
that case was an onerous donation which, under Article 733 of the
Civil Code is governed by the rules on contracts, since the donation
in the case at bar is also subject to the same rules because of its
provision on automatic revocation upon the violation of a resolutory
condition, from parity of reasons said pronouncements in De
Luna pertinently apply.
The rationale for the foregoing is that in contracts providing for
automatic revocation, judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper. 14
When a deed of donation, as in this case, expressly provides for
automatic revocation and reversion of the property donated, the
rules on contract and the general rules on prescription should
apply, and not Article 764 of the Civil Code. Since Article 1306 of
said Code authorizes the parties to a contract to establish such
stipulations, clauses, terms and conditions not contrary to law,
morals, good customs, public order or public policy, we are of the
opinion that, at the very least, that stipulation of the parties
providing for automatic revocation of the deed of donation, without
prior judicial action for that purpose, is valid subject to the
determination of the propriety of the rescission sought. Where such
propriety is sustained, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory
act.
On the foregoing ratiocinations, the Court of Appeals committed no
error in holding that the cause of action of herein private

respondents has not yet prescribed since an action to enforce a

written contract prescribes in ten (10) years. 15 It is our view that
Article 764 was intended to provide a judicial remedy in case of
non-fulfillment or contravention of conditions specified in the deed
of donation if and when the parties have not agreed on the
automatic revocation of such donation upon the occurrence of the
contingency contemplated therein. That is not the situation in the
case at bar.
Nonetheless, we find that although the action filed by private
respondents may not be dismissed by reason of prescription, the
same should be dismissed on the ground that private respondents
have no cause of action against petitioners.
The cause of action of private respondents is based on the alleged
breach by petitioners of the resolutory condition in the deed of
donation that the property donated should not be sold within a
period of one hundred (100) years from the date of execution of the
deed of donation. Said condition, in our opinion, constitutes an
undue restriction on the rights arising from ownership of petitioners
and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee.
Once a donation is accepted, the donee becomes the absolute
owner of the property donated. Although the donor may impose
certain conditions in the deed of donation, the same must not be
contrary to law, morals, good customs, public order and public
policy. The condition imposed in the deed of donation in the case
before us constitutes a patently unreasonable and undue restriction
on the right of the donee to dispose of the property donated, which
right is an indispensable attribute of ownership. Such a prohibition
against alienation, in order to be valid, must not be perpetual or for
an unreasonable period of time.
Certain provisions of the Civil Code illustrative of the aforesaid
policy may be considered applicable by analogy.1wphi1Under the
third paragraph of Article 494, a donor or testator may prohibit
partition for a period which shall not exceed twenty (20) years.
Article 870, on its part, declares that the dispositions of the testator
declaring all or part of the estate inalienable for more than twenty
(20) years are void.
It is significant that the provisions therein regarding a testator also
necessarily involve, in the main, the devolution of property by

gratuitous title hence, as is generally the case of donations, being

an act of liberality, the imposition of an unreasonable period of
prohibition to alienate the property should be deemed anathema to
the basic and actual intent of either the donor or testator. For that
reason, the regulatory arm of the law is or must be interposed to
prevent an unreasonable departure from the normative policy
expressed in the aforesaid Articles 494 and 870 of the Code.
In the case at bar, we hold that the prohibition in the deed of
donation against the alienation of the property for an entire
century, being an unreasonable emasculation and denial of an
integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the
Civil Code. Consequently, as specifically stated in said statutory
provision, such condition shall be considered as not imposed. No
reliance may accordingly be placed on said prohibitory paragraph
in the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the cause
of action for the nullification of the deed of donation is not in truth
violative of the latter hence, for lack of cause of action, the case for
private respondents must fail.
It may be argued that the validity of such prohibitory provision in
the deed of donation was not specifically put in issue in the
pleadings of the parties. That may be true, but such oversight or
inaction does not prevent this Court from passing upon and
resolving the same.
It will readily be noted that the provision in the deed of donation
against alienation of the land for one hundred (100) years was the
very basis for the action to nullify the deed of d donation. At the
same time, it was likewise the controverted fundament of the
motion to dismiss the case a quo, which motion was sustained by
the trial court and set aside by respondent court, both on the issue
of prescription. That ruling of respondent court interpreting said
provision was assigned as an error in the present petition. While the
issue of the validity of the same provision was not squarely raised,
it is ineluctably related to petitioner's aforesaid assignment of error
since both issues are grounded on and refer to the very same
provision.
This Court is clothed with ample authority to review matters, even
if they are not assigned as errors on appeal, if it finds that their
consideration is necessary in arriving at a just decision of the
case:16 Thus, we have held that an unassigned error closely related

to an error properly assigned,17 or upon which the determination of

the question properly assigned is dependent, will be considered by
the appellate court notwithstanding the failure to assign it as
error.18
Additionally, we have laid down the rule that the remand of the
case to the lower court for further reception of evidence is not
necessary where the Court is in a position to resolve the dispute
based on the records before it. On many occasions, the Court, in
the public interest and for the expeditious administration of justice,
has resolved actions on the merits instead of remanding them to
the trial court for further proceedings, such as where the ends of
justice, would not be subserved by the remand of the case. 19 The
aforestated considerations obtain in and apply to the present case
with respect to the matter of the validity of the resolutory condition
in question.
WHEREFORE, the judgment of respondent court is SET ASIDE and
another judgment is hereby rendered DISMISSING Civil Case No.
095-84 of the Regional Trial Court, Branch XX, Imus, Cavite.
SO ORDERED.

G.R. No. 112127 July 17, 1995

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

BELLOSILLO, J.:
CENTRAL PHILIPPINE UNIVERSITY filed this petition for review
on certiorari of the decision of the Court of Appeals which reversed
that of the Regional Trial Court of Iloilo City directing petitioner to
reconvey to private respondents the property donated to it by their
predecessor-in-interest.
Sometime in 1939, the late Don Ramon Lopez, Sr., who was then a
member of the Board of Trustees of the Central Philippine College
(now Central Philippine University [CPU]), executed a deed of
donation in favor of the latter of a parcel of land identified as Lot
No. 3174-B-1 of the subdivision plan Psd-1144, then a portion of Lot
No. 3174-B, for which Transfer Certificate of Title No. T-3910-A was
issued in the name of the donee CPU with the following annotations
copied from the deed of donation
1. The land described shall be utilized by the CPU
exclusively for the establishment and use of a
medical college with all its buildings as part of the
curriculum;
2. The said college shall not sell, transfer or convey
to any third party nor in any way encumber said
land;
3. The said land shall be called "RAMON LOPEZ
CAMPUS", and the said college shall be under
obligation to erect a cornerstone bearing that name.
Any net income from the land or any of its parks shall

be put in a fund to be known as the "RAMON LOPEZ

CAMPUS FUND" to be used for improvements of said
campus and erection of a building thereon. 1
On 31 May 1989, private respondents, who are the heirs of Don
Ramon Lopez, Sr., filed an action for annulment of donation,
reconveyance and damages against CPU alleging that since 1939
up to the time the action was filed the latter had not complied with
the conditions of the donation. Private respondents also argued
that petitioner had in fact negotiated with the National Housing
Authority (NHA) to exchange the donated property with another
land owned by the latter.
In its answer petitioner alleged that the right of private respondents
to file the action had prescribed; that it did not violate any of the
conditions in the deed of donation because it never used the
donated property for any other purpose than that for which it was
intended; and, that it did not sell, transfer or convey it to any third
party.
On 31 May 1991, the trial court held that petitioner failed to comply
with the conditions of the donation and declared it null and void.
The court a quo further directed petitioner to execute a deed of the
reconveyance of the property in favor of the heirs of the donor,
namely, private respondents herein.
Petitioner appealed to the Court of Appeals which on 18 June 1993
ruled that the annotations at the back of petitioner's certificate of
title were resolutory conditions breach of which should terminate
the rights of the donee thus making the donation revocable.
The appellate court also found that while the first condition
mandated petitioner to utilize the donated property for the
establishment of a medical school, the donor did not fix a period
within which the condition must be fulfilled, hence, until a period
was fixed for the fulfillment of the condition, petitioner could not be
considered as having failed to comply with its part of the bargain.
Thus, the appellate court rendered its decision reversing the
appealed decision and remanding the case to the court of origin for

the determination of the time within which petitioner should comply

with the first condition annotated in the certificate of title.

donee may have acquired under it shall be deemed lost and

extinguished.

Petitioner now alleges that the Court of Appeals erred: (a) in

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

The claim of petitioner that prescription bars the instant action of

private respondents is unavailing.

We find it difficult to sustain the petition. A clear perusal of the

conditions set forth in the deed of donation executed by Don
Ramon Lopez, Sr., gives us no alternative but to conclude that his
donation was onerous, one executed for a valuable consideration
which is considered the equivalent of the donation itself, e.g., when
a donation imposes a burden equivalent to the value of the
donation. A gift of land to the City of Manila requiring the latter to
erect schools, construct a children's playground and open streets
on the land was considered an onerous donation. 3 Similarly, where
Don Ramon Lopez donated the subject parcel of land to petitioner
but imposed an obligation upon the latter to establish a medical
college thereon, the donation must be for an onerous
consideration.
Under Art. 1181 of the Civil Code, on conditional obligations, the
acquisition of rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event
which constitutes the condition. Thus, when a person donates land
to another on the condition that the latter would build upon the
land a school, the condition imposed was not a condition precedent
or a suspensive condition but a resolutory one. 4 It is not correct to
say that the schoolhouse had to be constructed before the donation
became effective, that is, before the donee could become the
owner of the land, otherwise, it would be invading the property
rights of the donor. The donation had to be valid before the
fulfillment of the condition. 5 If there was no fulfillment or
compliance with the condition, such as what obtains in the instant
case, the donation may now be revoked and all rights which the

The condition imposed by the donor, i.e., the building of a

medical school upon the land donated, depended upon the
exclusive will of the donee as to when this condition shall be
fulfilled. When petitioner accepted the donation, it bound
itself to comply with the condition thereof. Since the time
within which the condition should be fulfilled depended upon
the exclusive will of the petitioner, it has been held that its
absolute acceptance and the acknowledgment of its
obligation provided in the deed of donation were sufficient
to prevent the statute of limitations from barring the action
of private respondents upon the original contract which was
the deed of donation. 6
Moreover, the time from which the cause of action accrued for the
revocation of the donation and recovery of the property donated
cannot be specifically determined in the instant case. A cause of
action arises when that which should have been done is not done,
or that which should not have been done is done. 7 In cases where
there is no special provision for such computation, recourse must
be had to the rule that the period must be counted from the day on
which the corresponding action could have been instituted. It is the
legal possibility of bringing the action which determines the
starting point for the computation of the period. In this case, the
starting point begins with the expiration of a reasonable period and
opportunity for petitioner to fulfill what has been charged upon it
by the donor.
The period of time for the establishment of a medical college and
the necessary buildings and improvements on the property cannot
be quantified in a specific number of years because of the presence
of several factors and circumstances involved in the erection of an
educational institution, such as government laws and regulations
pertaining to education, building requirements and property
restrictions which are beyond the control of the donee.

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

WHEREFORE, the decision of the Regional Trial Court of Iloilo, Br.

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

This general rule however cannot be applied considering the

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

Costs against petitioner.

Finally, since the questioned deed of donation herein is basically a

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

However, on May 31, 1989, PR, who are the heirs of Don Ramon
filed an action for annulment of donation, reconveyance &
damages against CPU for not complying with the conditions. The
heirs also argued that CPU had negotiated with the NHA to
exchange the donated property with another land owned by the
latter.

SO ORDERED.
CENTRAL
PHIL
246 SCRA 511

UNIV.

vs.

Court

of

Appeals

FACTS:
In 1939, Don Ramon Lopez Sr. executed a deed of donation in favor
of
CPU
together
with
the
following
conditions:
a) The land should be utilized by CPU exclusively for the
establishment
&
use
of
medical
college;
b) The said college shall not sell transfer or convey to any 3rd
party;
c) The said land shall be called Ramon Lopez Campus and any
income from that land shall be put in the fund to be known as
Ramon Lopez Campus Fund.

Petitioner alleged that the right of private respondents to file the

action had prescribed.
ISSUE:
1) WON petitioner failed to comply the resolutely conditions
annotated at the back of petitioners certificate of title without a
fixed period when to comply with such conditions? YES

2) WON there is a need to fix the period for compliance of the

condition? NO
HELD:
1)
Under Art. 1181, on conditional obligations, the acquisition of rights
as well the extinguishment or loss of those already acquired shall
depend upon the happening of the event which constitutes the
condition. Thus, when a person donates land to another on the
condition that the latter would build upon the land a school is such
a resolutory one. The donation had to be valid before the fulfillment
of the condition. If there was no fulfillment with the condition such
as what obtains in the instant case, the donation may be revoked &
all rights which the donee may have acquired shall be deemed lost
& extinguished.
More than a reasonable period of fifty (50) years has already been
allowed petitioner to avail of the opportunity to comply with the
condition even if it be burdensome, to make the donation in its
favor forever valid. But, unfortunately, it failed to do so. Hence,
there is no more need to fix the duration of a term of the obligation
when such procedure would be a mere technicality and formality
and would serve no purpose than to delay or lead to an
unnecessary and expensive multiplication of suits.
Records are clear and facts are undisputed that since the execution
of the deed of donation up to the time of filing of the instant action,
petitioner has failed to comply with its obligation as donee.
Petitioner has slept on its obligation for an unreasonable length of
time. Hence, it is only just and equitable now to declare the subject
donation already ineffective and, for all purposes, revoked so that
petitioner as donee should now return the donated property to the
heirs of the donor, private respondents herein, by means of
reconveyance.
2) Under Art. 1197, when the obligation does not fix a period but
from its nature & circumstance it can be inferred that the period
was intended, the court may fix the duration thereof because the
fulfillment of the obligation itself cannot be demanded until after

the court has fixed the period for compliance therewith & such
period has arrived. However, this general rule cannot be applied in
this case considering the different set of circumstances existing
more than a reasonable period of 50yrs has already been allowed
to petitioner to avail of the opportunity to comply but
unfortunately, it failed to do so. Hence, there is no need to fix a
period when such procedure would be a mere technicality &
formality & would serve no purpose than to delay or load to
unnecessary and expensive multiplication of suits.
Under Art. 1191, when one of the obligors cannot comply with what
is incumbent upon him, the obligee may seek rescission before the
court unless there is just cause authorizing the fixing of a period. In
the absence of any just cause for the court to determine the period
of compliance there is no more obstacle for the court to decree
recission.

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

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM
and ILDEFONSA MANGUBAT, respondents.
DECISION

government. Pursuant to this, District Supervisor Buendia and

Teresita Palma entered into a Deed of Exchange whereby the
donated lot was exchanged with the bigger lot owned by the latter.
Consequently, the Bagong Lipunan school buildings were
constructed on the new school site and the school building
previously erected on the donated lot was dismantled and
transferred to the new location.

KAPUNAN, J.:
Before the Court is a petition for review under Rule 45 seeking
the reversal of the Decision of the Court of Appeals in CA-G.R. No.
43840, entitled Leon Silim, et al. vs. Wilfredo Palma, et al., which
declared null and void the donation made by respondents of a
parcel of land in favor of the Bureau of Public Schools, Municipality
of Malangas, Zamboanga del Sur.

When respondent Leon Silim saw, to his surprise, that ViceMayor Wilfredo Palma was constructing a house on the donated
land, he asked the latter why he was building a house on the
property he donated to BPS. Vice Mayor Wilfredo Palma replied that
he is already the owner of the said property. Respondent Leon Silim
endeavored to stop the construction of the house on the donated
property but Vice-Mayor Wilfredo Palma advised him to just file a
case in court.

The antecedents of this case are as follows:

On 17 December 1971, respondents, the Spouses Leon Silim
and Ildefonsa Mangubat, donated a 5,600 square meter parcel of
land in favor of the Bureau of Public Schools, Municipality of
Malangas, Zamboanga del Sur (BPS). In the Deed of Donation,
respondents imposed the condition that the said property should be
used exclusively and forever for school purposes only. [1] This
donation was accepted by Gregorio Buendia, the District Supervisor
of BPS, through an Affidavit of Acceptance and/or Confirmation of
Donation.
Through a fund raising campaign spearheaded by the ParentTeachers Association of Barangay Kauswagan, a school building was
constructed on the donated land. However, the Bagong Lipunan
school building that was supposed to be allocated for the donated
parcel of land in Barangay Kauswagan could not be released since
the government required that it be built upon a one (1) hectare
parcel of land. To remedy this predicament, Assistant School
Division Superintendent of the Province of Zamboanga del Sur,
Sabdani Hadjirol, authorized District Supervisor Buendia to officially
transact for the exchange of the one-half (1/2) hectare old school
site of Kauswagan Elementary School to a new and suitable
location
which
would
fit
the
specifications
of
the

On February 10, 1982, respondents filed a Complaint for

Revocation and Cancellation of Conditional Donation, Annulment of
Deed of Exchange and Recovery of Possession and Ownership of
Real Property with damages against Vice Mayor Wilfredo Palma,
Teresita Palma, District Supervisor Buendia and the BPS before the
Regional Trial Court of Pagadian City, Branch 21. In its Decision
dated 20 August 1993, the trial court dismissed the complaint for
lack of merit.[2] The pertinent portion of the decision reads:
Thus, it is the considered view of this Court that there was no
breach or violation of the condition imposed in the subject Deed of
Donation by the donee. The exchange is proper since it is still for
the exclusive use for school purposes and for the expansion and
improvement of the school facilities within the community. The
Deed of Exchange is but a continuity of the desired purpose of the
donation made by plaintiff Leon Silim.
In sum, it may be safely stated that the aforesaid transaction of
exchange is a (sic) exception to the law invoked by the plaintiffs
(Art. 764, Civil Code). The donee, being the State had the greater
reciprocity of interest in the gratuitous and onerous contract of
donation. It would be illogical and selfish for the donor to
technically preclude the donee from expanding its school site and

improvement of its school facilities, a paramount objective of the

donee in promoting the general welfare and interests of the people
of Barangay Kauswagan. But it is a well-settled rule that if the
contract is onerous, such as the Deed of Donation in question, the
doubt shall be settled in favor of the greatest reciprocity of
interests, which in the instant case, is the donee.
xxx

Petitioner contends that the Court of Appeals erred in declaring

the donation null and void for the reason that the acceptance was
not allegedly done in accordance with Articles 745 [6] and 749[7] of
the New Civil Code.
We agree.

WHEREFORE, in view of all the foregoing, judgement is hereby

rendered:
1. Dismissing the complaint for lack of merit;
2. Dismissing the counterclaim for the sake of harmony
and reconciliation between the parties;
3. With costs against plaintiffs.
SO ORDERED.[3]
Not satisfied with the decision of the trial court, respondents
elevated the case to the Court of Appeals. In its Decision dated 22
October 1999, the Court of Appeals reversed the decision of the
trial court and declared the donation null and void on the grounds
that the donation was not properly accepted and the condition
imposed on the donation was violated.[4]
Hence, the present case where petitioner raises the following
issues:
I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING
THE DONATION NULL AND VOID DUE TO AN INVALID
ACCEPTANCE BY THE DONEE.
II.

The Court gives DUE COURSE to the petition.

WHETHER THE COURT OF APPEALS ERRED IN

DECLARING THE DONATION NULL AND VOID DUE TO AN
ALLEGED VIOLATION OF A CONDITION IN THE
DONATION.[5]

Donations, according to its purpose or cause, may be

categorized as: (1) pure or simple; (2) remuneratory or
compensatory; (3) conditional or modal; and (4) onerous. A pure or
simple donation is one where the underlying cause is plain gratuity.
[8]
This is donation in its truest form. On the other hand, a
remuneratory or compensatory donation is one made for the
purpose of rewarding the donee for past services, which services do
not amount to a demandable debt. [9] A conditional or modal
donation is one where the donation is made in consideration of
future services or where the donor imposes certain conditions,
limitations or charges upon the donee, the value of which is inferior
than that of the donation given.[10] Finally, an onerous donation is
that which imposes upon the donee a reciprocal obligation or, to be
more precise, this is the kind of donation made for a valuable
consideration, the cost of which is equal to or more than the thing
donated.[11]
Of all the foregoing classifications, donations of the onerous
type are the most distinct. This is because, unlike the other forms
of donation, the validity of and the rights and obligations of the
parties involved in an onerous donation is completely governed not
by the law on donations but by the law on contracts. In this regard,
Article 733 of the New Civil Code provides:
Art. 733. Donations with an onerous cause shall be governed by the
rules on contracts, and remuneratory donations by the provisions of
the present Title as regards that portion which exceeds the value of
the burden imposed.

The donation involved in the present controversy is one which

is onerous since there is a burden imposed upon the donee to build
a school on the donated property.[12]

However, there is nothing in the record that the exhibits offered by

the defendants have been admitted nor such exhibits appear on
record.

The Court of Appeals held that there was no valid acceptance

of the donation because:

Assuming that there was such an exhibit, the said supposed

acceptance was not noted in the Deed of Donation as required
under Art. 749 of the Civil Code. And according to Manresa, supra,
a noted civilist, the notation is one of the requirements of
perfecting a donation. In other words, without such a notation, the
contract is not perfected contract. Since the donation is not
perfected, the contract is therefore not valid.[13]

xxx
Under the law the donation is void if there is no acceptance. The
acceptance may either be in the same document as the deed of
donation or in a separate public instrument. If the acceptance is in
a separate instrument, "the donor shall be notified thereof in an
authentic form, and his step shall be noted in both instruments.

xxx
We hold that there was a valid acceptance of the donation.

"Title to immovable property does not pass from the donor to the
donee by virtue of a deed of donation until and unless it has been
accepted in a public instrument and the donor duly noticed thereof.
(Abellera vs. Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78 SCRA
245). If the acceptance does not appear in the same document, it
must be made in another. Solemn words are not necessary; it is
sufficient if it shows the intention to accept, But in this case, it is
necessary that formal notice thereof be given to the donor and the
fact that due notice has been given it must be noted in both
instruments (that containing the offer to donate and that showing
acceptance). Then and only then is the donation perfected. (11
Manresa 155-11, cited in Vol. II, Civil Code of the Philippines by
Tolentino.)."
This Court perused carefully the Deed of Donation marked as
exhibit "A" and "1" to determine whether there was acceptance of
the donation. This Court found none. We further examined the
record if there is another document which embodies the
acceptance, we found one. Although the Court found that in the
offer of exhibits of the defendants, a supposed affidavit of
acceptance and/or confirmation of the donation, marked as exhibit
"8" appears to have been offered.

Sections 745 and 749 of the New Civil Code provide:

ART. 745. The donee must accept the donation personally, or
through an authorized person with a special power for the purpose,
or with a general and sufficient power; otherwise the donation shall
be void.
ART. 749. In order that the donation of an immovable may be laid, it
must be made in a public document, specifying therein the
property donated and the value of the charge which the donee
must satisfy.
The acceptance may be made in the same deed of donation or in a
separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall
be notified thereof in an authentic form, and this step shall be
noted in both instruments.
Private respondents, as shown above, admit that in the offer of
exhibits by the defendants in the trial court, an affidavit of
acceptance and/or confirmation of the donation, marked as Exhibit
"8," was offered in evidence. However, private respondents now

question this exhibit because, according to them "there is nothing

in the record that the exhibits offered by the defendants have been
admitted nor such exhibit appear on record."

Balane and Juana Balane de Suterio. That was in fact the reason for
the separate instrument of acceptance signed by Salud a month
later.

Respondents' stance does not persuade. The written

acceptance of the donation having been considered by the trial
court in arriving at its decision, there is the presumption that this
exhibit was properly offered and admitted by the court.

A strict interpretation of Article 633 can lead to no other conclusion

that the annulment of the donation for being defective in form as
urged by the petitioners. This would be in keeping with the
unmistakable language of the above-quoted provision. However,
we find that under the circumstances of the present case, a literal
adherence to the requirement of the law might result not in justice
to the parties but conversely a distortion of their intentions. It is
also a policy of the Court to avoid such as interpretation.

Moreover, this issue was never raised in the Court of

Appeals. Nowhere in their brief did respondents question the
validity of the donation on the basis of the alleged defect in the
acceptance thereof. If there was such a defect, why did it take
respondents more than ten (10) years from the date of the
donation to question its validity? In the very least, they are guilty of
estoppel.[14]
Respondents further argue that assuming there was a valid
acceptance of the donation, the acceptance was not noted in the
Deed of Donation as required in Article 749 of the Civil Code,
hence, the donation is void.
The purpose of the formal requirement for acceptance of a
donation is to ensure that such acceptance is duly communicated
to the donor. Thus, in Pajarillo vs. Intermediate Appellate Court,
[15]
the Court held:
There is no question that the donation was accepted in a separate
public instrument and that it was duly communicated to the
donors. Even the petitioners cannot deny this. But what they do
contend is that such acceptance was not "noted in both
instruments," meaning the extrajudicial partition itself and the
instrument of acceptance, as required by the Civil Code.
That is perfectly true. There is nothing in either of the two
instruments showing that "authentic notice" of the acceptance was
made by Salud to Juana and Felipe. And while the first instrument
contains the statement that "the donee does hereby accept this
donation and does hereby express her gratitude for the kindness
and liberality of the donor," the only signatories thereof were Felipe

The purpose of the formal requirement is to insure that the

acceptance of the donation is duly communicated to the donor. In
the case at bar, it is not even suggested that Juana was unaware of
the acceptance for she in fact confirmed it later and requested that
the donated land be not registered during her lifetime by
Salud. Given this significant evidence, the Court cannot in
conscience declare the donation ineffective because there is no
notation in the extrajudicial settlement of the donee's
acceptance. That would be placing too much stress on mere form
over substance. It would also disregard the clear reality of the
acceptance of the donation as manifested in the separate
instrument dated June 20, 1946, and as later acknowledged by
Juan.
In the case at bar, a school building was immediately
constructed after the donation was executed. Respondents had
knowledge of the existence of the school building put up on the
donated lot through the efforts of the Parents-Teachers Association
of Barangay Kauswagan. It was when the school building was being
dismantled and transferred to the new site and when Vice-Mayor
Wilfredo Palma was constructing a house on the donated property
that respondents came to know of the Deed of Exchange. The
actual knowledge by respondents of the construction and existence
of the school building fulfilled the legal requirement that the
acceptance of the donation by the donee be communicated to the
donor.

On respondents' claim, which was upheld by the Court of

Appeals, that the acceptance by BPS District Supervisor Gregorio
Buendia of the donation was ineffective because of the absence of
a special power of attorney from the Republic of the Philippines, it
is undisputed that the donation was made in favor of the Bureau of
Public Schools. Such being the case, his acceptance was authorized
under Section 47 of the 1987 Administrative Code which states:
SEC. 47. Contracts and Conveyances. - Contracts or conveyances
may be executed for and in behalf of the Government or of any of
its branches, subdivisions, agencies, or instrumentalities, whenever
demanded by the exigency or exigencies of the service and as long
as the same are not prohibited by law.
Finally, it is respondents' submission that the donee, in
exchanging the donated lot with a bigger lot, violated the condition
in the donation that the lot be exclusively used for school purposes
only.
What does the phrase "exclusively used for school purposes"
convey? "School" is simply an institution or place of education.
[16]
"Purpose" is defined as "that which one sets before him to
accomplish or attain; an end, intention, or aim, object, plan,
project. Term is synonymous with the ends sought, an object to be
attained, an intention, etc."[17] "Exclusive" means "excluding or
having power to exclude (as by preventing entrance or debarring
from possession, participation, or use); limiting or limited to
possession, control or use.[18]
Without the slightest doubt, the condition for the donation was
not in any way violated when the lot donated was exchanged with
another one. The purpose for the donation remains the same,
which is for the establishment of a school. The exclusivity of the
purpose was not altered or affected. In fact, the exchange of the lot
for a much bigger one was in furtherance and enhancement of the
purpose of the donation. The acquisition of the bigger lot paved the
way for the release of funds for the construction of Bagong Lipunan
school building which could not be accommodated by the limited
area of the donated lot.

WHEREFORE, the decision of the Court of Appeals is hereby

REVERSED and SET ASIDE and the decision of the Regional Trial
Court is REINSTATED.
SO ORDERED.

[G.R. No. 133705. March 31, 2005]

C-J YULO & SONS, INC., petitioner, vs. ROMAN CATHOLIC
BISHOP OF SAN PABLO, INC., respondent.
DECISION
GARCIA, J.:
Appealed to this Court by way of a petition for review on
certiorari are the Decision[1] dated December 19, 1997 and
Resolution[2] dated April 30, 1998 of the Court of Appeals inCAG.R. CV No. 45392, reversing an earlier decision of the Regional
Trial Court at Calamba, Laguna, Branch 34, which ruled in favor of
the herein petitioner C-J Yulo & Sons, Inc., in a suit for revocation
of donation with reconveyance of title, thereat commenced by the
petitioner against the herein respondent, Roman Catholic Bishop
of San Pablo, Inc.
The facts are not at all disputed:
On September 24, 1977, petitioner donated unto respondent a
parcel of land at Canlubang, Calamba, Laguna with an area of
41,117 square meters and registered in its name under Transfer
Certificate of Title (TCT) No. T-82803. The deed of donation which
also bears the acceptance of the donee recites the considerations
therefor and the conditions thereto attached, to wit:
WHEREAS, Donee is a religious corporation engaged in much (sic)
humanitarian Christian work in Laguna and elsewhere, educating
and forming the young, caring for the infirm and the aged in the
fulfillment of its mission;
WHEREAS, Donor recognizes the need for a privately endowed
institution that will care for the homeless and destitute old people
in the community, as well as the other senior citizens who for some
reason or other find themselves without family with whom to live
the last years of their life:

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

such an institution to donate the land necessary for its housing, as
well as an area of land whereon it may raise crops for its support
and for the sustenance of its residents;
WHEREAS, Donee is willing and able, with the wanted help of Donor
and of other benefactors, to establish, operate and maintain such a
home for the aged.
NOW, THEREFORE, in consideration of all the foregoing premises,
Donor hereby transfers and conveys to Donee by way of donation
all its rights, title and interest in that certain parcel of land covered
by TCT No. T-82803 of the Land Records of Laguna, the technical
descriptions of which are recited above, subject to the following
conditions and covenants, each of which is a material consideration
for this Deed:
1. So much of the land as may be necessary shall be used for the
construction of a home for the aged and infirm, regardless of
religion or creed, but preferably those coming from Canlubang,
Calamba, Laguna; provided that retired and/or aged priests may be
admitted to the home; and provided further that any senior citizen
from the area who has retired from business or work may likewise
be admitted to the home, subject to the payment to the institution
of such sum as he may afford for his support.
2. A Green Belt that is 15 meters wide shall be established and
maintained by the Donor along the length of the land to separate
and insulate it from the projected highway.
3. Such part of land as may not be needed for the residence and
the Green Belt shall be devoted by Donee with the help of such
residents of the home as are able, to the raising of agricultural
crops for the consumption of the residents of the home, and of such
other crops that may be sold to defray the cost of running the
home and feeding its residents; provided, that should the area later
become so fully urbanized as to make this limitation on use
economically, impractical, any portion of the land may, with the
written consent of the Donor, be put to commercial use by the

Donee by leasing the same for wholesome and socially-acceptable

activities; provided further that the rentals from such commercial
leases shall be used, first, to meet the expenses of the home;
second, to enlarge its population and expand its facilities; and
finally for other charitable purposes in Laguna, in that order.

entered into a lease agreement with Bostre to protect the premises

from vandals and for the electrification of the nucleus building of
the home for the aged and in the infirm, which was named as Casa
dela Merced. As before, however, the donee executed the lease
contract without the prior written consent of the donor.

4. Donee acknowledges that Donors generous act will greatly aid

Donee in accomplishing its mission on earth, and, recognizing the
generosity of the Yulo family as the reason for such act, Donee
undertakes to cause every year the celebration of masses for the
intention of the various members of the family of Mr. Jose Yulo, Sr.,
on festive and solemn occasions in the said family.

After the termination of the Bostre lease agreement, the

donee, for the third time, leased a portion of the donated property
to one Rudy Caballes who used the leased area for fattening
cattles. The donee explained that the lease agreement with Bostre
was also for the purposes of generating funds for the completion
of Casa dela Merced. Again, however, the donee did not secure
the prior written consent of the donor.

5. Except with prior written consent of the Donor or its successor,

the Donee shall not use the land except for the purpose as provided
above in paragraph 1 hereof, nor sell or dispose the land for any
reason whatsoever, nor convey any portion of the same except in
lease for commercial use as provided above in paragraph 3 hereof,
otherwise the said land with all real improvements thereon shall
revert in trust to the Donor for prompt disposition in favor of some
other charitable organization that Donor may deem best suited to
the care of the aged. (Underscoring supplied).

Hence, on September 20, 1990, pursuant to a board resolution,

the donor, through its president Miguel A. Yulo, addressed a letter
to the donee informing the latter that it was revoking the donation
in accordance with Section 5 of the deed due to the donees noncompliance with and material breach of the conditions thereunder
stipulated. In the same letter, the donor requested for the turn-over
of the donees TCT No. T-91348 over the donated property.

On the basis of the same deed, TCT No. T-82803 of the donor
was cancelled and replaced by TCT No. T-91348 in the name of
donee Roman Catholic Bishop of San Pablo, Inc.

In a reply-letter dated November 5, 1990, the donee, through

Bishop Pedro N. Bantigue, D.D., denied any material breach of the
conditions of the deed of donation and manifested its continued
and faithful compliance with the provisions thereof. In the same
letter, the donee refused the turn-over of its title to the donor.

Thereafter, or sometime in 1980, the donee, for purposes of

generating funds to build the perimeter fence on the donated
property and the construction of a nucleus building for the aged
and the infirm, leased a portion of the donated property to one
Martin Gomez who planted said portion with sugar cane. There is
no dispute that the lease agreement was entered into by the
donee without the prior written consent of the donor, as
required in the deed of donation. The lease to Gomez ended in
1985.

It was against the foregoing backdrop of events when, on

November 19, 1990, in the Regional Trial Court at Calamba, Laguna
the donor, alleging non-compliance with and violation by the donee
of the conditions of the deed of donation, filed its complaint in this
case against donee Roman Catholic Archbishop of San Pablo, Inc.,
therein reciting the imputed non-compliance and violations by the
donee of the terms and conditions of the deed of donation, as
follows:

The following year, 1986, a portion of the donated property

was again leased by the donee, this time to one Jose Bostre who
used the leased area as a ranch. As explained by the donee, it

a) non-construction of the home for the aged and infirmed

in the lot despite the lapse of a reasonable and
considerable length of time;

b) present land use of the area is a cattle farm, the owner

of which has a lease contract with the donee; and
c) no prior written consent of the donor has been obtained
for the present and actual use of the property donated,

Therefrom, donee-defendant Roman Catholic Bishop of San

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

and accordingly prayed that the subject deed of donation be

adjudged revoked and void and the donee ordered to return and/or
reconvey the property donated.
In its answer, defendant donee alleged that it was doing its
best to comply with the provisions of the deed of donation relative
to the establishment of the home for the aged and the infirm,
adding that the leases of portions of the land were with the
express, albeit unwritten consent, of Jesus Miguel Yulo himself. In
the same answer, defendant donee interposed the defense that the
donors cause of action for revocation, if any, had already
prescribed because the leases were known to the latter since 1980.
In a decision dated December 22, 1995, the trial court
rendered judgment for donor-plaintiff C-J Yulo & Sons, Inc., thus:
WHEREFORE, judgment is hereby rendered for plaintiff and against
the defendant, declaring the Deed of Donation dated September
24, 1977 (Exh. C) REVOKED, affirming plaintiffs revocation of the
same in the letter dated September 20, 1990 (Exh. D).
Defendant and all persons claiming rights under them are hereby
ordered to immediately vacate the premises of the donated
property and to hand over to plaintiff the peaceful possession of
the aforesaid premises.
To avoid multiplicity of suits, the Register of Deeds of Calamba,
Laguna, is hereby ordered to require the defendant to surrender
Transfer Certificate of Title No. T-91348 (Exh. B) and thereafter
cancel the same and issue, upon payment of the required fees, a
new Transfer Certificate of Title in favor of plaintiffs, with cost
against the defendant.
SO ORDERED.

WHEREFORE, the decision of the trial court dated December 22,

1993 is hereby REVERSED and the donation dated September 24,
1977 (Exhibit C) which conveyed title to the donated property in
the appellees name is hereby UPHELD.
SO ORDERED.
Its motion for reconsideration having been denied by the same
court in its Resolution of April 30, 1998,[4] donor C-J Yulo & Sons,
Inc., has come to this Court via the present recourse on its sole
submission that
THE RULING OF THE COURT OF APPEALS (THAT THE REVOCATION
OF THE DONATION BY PETITIONER WAS IMPROPER) IS CONTRARY
TO LAW AND APPLICABLE JURISPRUDENCE.
We DENY.
The Court of Appeals sustained the trial courts finding that the
donation is an onerous one since the donee was burdened with the
establishment on the donated property of a home for the aged and
the infirm. It likewise agreed with the trial court that there were
violations of the terms and conditions of the deed of donation when
the donee thrice leased a portion of the property without the prior
written consent of the donor. Likewise upheld by the appellate
court is the ruling of the trial court that the prescriptive period of
the donors right to revoke the donation is ten (10) years based on
Article 1144 of the Civil Code, instead of four (4) years per Article
764 of the same Code, and therefore the action for revocation filed
by the petitioner is not barred by prescription.

Even then, the Court of Appeals reversed the trial courts

decision, the reversal being premised on the appellate courts
finding that the breaches thrice committed by the respondent were
merely casual breaches which nevertheless did not detract from
the purpose of which the donation was made: the establishment of
a home for the aged and the infirm.
We agree.
Petitioner contends that the case at bar is similar to the 1995
case of Central Philippine University vs. Court of Appeals,[5] where
the donee failed for more than 50 years to establish, as required, a
medical school on the land donated, and where this Court declared
the donation to have been validly revoked.
To the mind of the Court, what is applicable to this case is the
more recent [2001] case of Republic vs. Silim,[6] where respondent
Silim donated a 5,600-square meter parcel of land in favor of the
Bureau of Public Schools, Municipality of Malangas, Zamboanga del
Sur with the condition that the said property should be used
exclusively and forever for school purposes only. Although a school
building was constructed on the property through the efforts of the
Parent-Teachers Association of Barangay Kauswagan, the funds for
a Bagong Lipunan school building could not be released because
the government required that it be built on a one-hectare parcel of
land. This led the donee therein to exchange the donated property
for a bigger one.

donee, the value of which is inferior than that of the donation

given. Finally, an onerous donation is that which imposes upon the
donee a reciprocal obligation or, to be more precise, this is the kind
of donation made for a valuable consideration, the cost of which is
equal to or more than the thing donated.
Of all the foregoing classifications, donations of the onerous type
are the most distinct. This is because, unlike the other forms of
donation, the validity of and the rights and obligations of the
parties involved in an onerous donation is completely governed not
by the law on donations but by the law on contracts. In this regard,
Article 733 of the New Civil Code provides:
ARTICLE 733 Donations with onerous cause shall be governed by
the rules on contracts, and remuneratory donations by the
provisions of the present Title as regards that portion which
exceeds the value of the burden imposed.
The donation involved in the present controversy is one which is
onerous since there is a burden imposed upon the donee to build a
school on the donated property.
Here, the Court of Appeals correctly applied the law on
contracts instead of the law on donations because the donation
involved in this case is onerous, saddled as it is by a burden
imposed upon the donee to put up and operate a home for the
aged and the infirm. We thus quote with approval the terse ruling of
the appellate court in the challenged decision:

In Silim, the Court distinguished the four (4) types of donations:

Donations, according to its purpose or cause, may be categorized
as: (1) pure or simple; (2) remuneratory or compensatory; (3)
conditional or modal; and (4) onerous. A pure or simple donation is
one where the underlying cause is plain gratuity. This is donation in
its truest form. On the other hand, a remuneratory or
compensatory donation is one made for the purpose of rewarding
the donee for past services, which services do not amount to a
demandable debt. A conditional or modal donation is one where the
donation is made in consideration of future services or where the
donor imposes certain conditions, limitations or charges upon the

First, the violations of the conditions of the donation committed by

the donee were merely casual breaches of the conditions of the
donation and did not detract from the purpose by which the
donation was made, i.e., for the establishment of a home for the
aged and the infirm. In order for a contract which imposes a
reciprocal obligation, which is the onerous donation in this case
wherein the donor is obligated to donate a 41,117 square meter
property in Canlubang, Calamba, Laguna on which property the
donee is obligated to establish a home for the aged and the infirm
(Exhibit C), may be rescinded per Article 1191 of the New Civil
Code, the breach of the conditions thereof must be substantial as

to defeat the purpose for which the contract was perfected

(Tolentino, Civil Code of the Philippines, Vol. IV, pp. 179-180;
Universal Food Corp. v. Court of Appeals, 33 SCRA 1, 18; Ocampo v.
Court of Appeals, 233 SCRA 551, 562). Thus, in the case of Ocampo
v. C.A. (ibid), citing the case of Angeles v. Calasanz (135 SCRA 323,
330), the Supreme Court ruled:
The right to rescind the contract for non-performance of one of its
stipulations x x x is not absolute. In Universal Food Corp. v. Court of
Appeals (33 SCRA 1) the Court stated that:
The general rule is that rescission of a contract will not be
permitted for a slight or casual breach, but only for such substantial
and fundamental breach as would defeat the very object of the
parties in making the agreement (Song Fo & Co. v. HawaiianPhilippine Co., 47 Phil. 821,827). The question of whether a breach
of a contract is substantial depends upon the attendant
circumstances (Corpus v. Hon. Alikpala, et al., L-23707 & L-23720,
Jan. 17, 1968).
The above ruling of the Court of Appeals is completely in tune
with this Courts disposition in Republic vs. Silim, supra. The donor
therein sought to revoke the donation on the ground that the donee
breached the condition to exclusively and forever use the land for
school purpose only, but this Court ruled in favor of the donee:
Without the slightest doubt, the condition for the donation was not
in any way violated when the lot donated was exchanged with
another one. The purpose for the donation remains the same,
which is for the establishment of a school. The exclusivity of the
purpose was not altered or affected. In fact, the exchange of the lot
for a much bigger one was in furtherance and enhancement of the
purpose of the donation. The acquisition of the bigger lot paved
way for the release of funds for the construction of Bagong Lipunan
school building which could not be accommodated by the limited
area of the donated lot.
As in Silim, the three (3) lease contracts herein entered into by
the donee were for the sole purpose of pursuing the objective for
which the donation was intended. In fact, such lease was

authorized by the donor by express provision in the deed of

donation, albeit the prior written consent therefor of the donor is
needed. Hence, considering that the donees acts did not detract
from the very purpose for which the donation was made but
precisely to achieve such purpose, a lack of prior written consent of
the donor would only constitute casual breach of the deed, which
will not warrant the revocation of the donation.
Besides, this Court cannot consider the requirement of a prior
written consent by the donor for all contracts of lease to be entered
into by the donee as an absolute ground for revocation of the
donation because such a condition, if not correlated with the
purpose of the donation, would constitute undue restriction of the
donees right of ownership over the donated property.
Instructive on this point is the ruling of this Court in The Roman
Catholic Archbishop of Manila vs. Court of Appeals,[7] viz:
Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee.
Once a donation is accepted, the donee becomes the absolute
owner of the property donated. Although the donor may impose
certain conditions in the deed of donation, the same must not be
contrary to law, morals, good customs, public order and public
policy.
xxx
In the case at bar, we hold that the prohibition in the deed of
donation against the alienation of the property for an entire
century, being an unreasonable emasculation and denial of an
integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the
Civil Code. Consequently, as specifically stated in said statutory
provision, such condition shall be considered as not imposed. No
reliance may accordingly be placed on said prohibitory paragraph
in the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the cause
of action for the nullification of the deed of donation is not in truth

violative of the latter, hence, for lack of cause of action, the case
for private respondents must fail.
If petitioner would insist that the lack of prior written consent is
a resolutory condition that is absolute in character, the insistence
would not stand the validity test under the foregoing doctrine.
What would have been casual breaches of the terms and conditions
of the donation, may, in that event, even be considered as no
breach at all when the Court strikes down such absolute condition
of prior written consent by the donor in all instances without any
exception whatsoever. The Court, however, understands that such
a condition was written with a specific purpose in mind, which is, to
ensure that the primary objective for which the donation was
intended is achieved. A reasonable construction of such condition
rather than totally striking it would, therefore, be more in accord
with the spirit of the donation. Thus, for as long as the contracts of
lease do not detract from the purpose for which the donation was
made, the complained acts of the donee will not be deemed as
substantial breaches of the terms and conditions of the deed of
donation to merit a valid revocation thereof by the donor.
Finally, anent petitioners contention that the Court of Appeals
failed to consider that respondent had abandoned the idea of
constructing a home for the aged and infirm, the explanation in
respondents comment is enlightening. Petitioner relies on Bishop
Bantigues letter[8] dated June 21, 1990 as its basis for claiming that
the donee had altogether abandoned the idea of constructing a
home for the aged and the infirm on the property donated.
Respondent, however, explains that the Bishop, in his letter, written
in the vernacular, expressed his concern that the surrounding area
was being considered to be re-classified into an industrial zone
where factories are expected to be put up. There is no question
that this will definitely be disadvantageous to the health of the
aged and the infirm. Thus, the Bishop asked permission from the
donor for a possible exchange or sale of the donated property to
ultimately pursue the purpose for which the donation was intended
in another location that is more appropriate.
The Court sees the wisdom, prudence and good judgment of
the Bishop on this point, to which it conforms completely. We

cannot accede to petitioners view, which attributed the exact

opposite meaning to the Bishops letter seeking permission to sell or
exchange the donated property.
In Silim, supra, this Court ruled that such exchange does not
constitute breach of the terms and conditions of the donation. We
see no reason for the Court to think otherwise in this case. To insist
that the home for the aged and infirm be constructed on the
donated property, if the industrialization indeed pushes through,
defies rhyme and reason. Any act by the donor to prevent the
donee from ultimately achieving the purpose for which the
donation was intended would constitute bad faith, which the Court
will not tolerate.
WHEREFORE, the instant petition is DENIED and the assailed
decision of the Court of Appeals AFFIRMED in toto.
No pronouncement as to costs.
SO ORDERED.

C-J YULO & SONS, INC vs. ROMAN CATHOLIC BISHOP OF SAN
PABLO, INC.
[G.R. No. 133705. March 31, 2005]
FACTS: On September 24, 1977, petitioner donated unto
respondent a parcel of land at Canlubang, Calamba, Laguna on the
condition that it shall be used for the construction of a home for the
aged and infirm and for other charitable purposes and cannot be
used for any other purposes without the consent of the former said
land with all real improvements thereon shall revert in otherwise
trust to the Donor for prompt disposition in favor of some other
charitable organization that Donor may deem best suited to the
care of the aged.
Thereafter, or sometime in 1980, the donee, for purposes of
generating funds to build the perimeter fence on the donated

property and the construction of a nucleus building for the aged

and the infirm, leased a portion of the donated property to one
Martin Gomez who planted said portion with sugar cane. There is
no dispute that the lease agreement was entered into by the donee
without the prior written consent of the donor, as required in the
deed of donation. The lease to Gomez ended in 1985.
The following year, 1986, a portion of the donated property was
again leased by the donee, this time to one Jose Bostre who used
the leased area as a ranch. As explained by the donee, it entered
into a lease agreement with Bostre to protect the premises from
vandals and for the electrification of the nucleus building of the
home for the aged and in the infirm, which was named as Casa
dela Merced. As before, however, the donee executed the lease
contract without the prior written consent of the donor.
After the termination of the Bostre lease agreement, the donee, for
the third time, leased a portion of the donated property to one
Rudy Caballes who used the leased area for fattening cattles. The
donee explained that the lease agreement with Bostre was also for
the purposes of generating funds for the completion of Casa dela
Merced. Again, however, the donee did not secure the prior
written consent of the donor.
Hence, on September 20, 1990, pursuant to a board resolution, the
donor, through its president Miguel A. Yulo, addressed a letter to
the donee informing the latter that it was revoking the donation in
accordance with Section 5 of the deed due to the donees noncompliance with and material breach of the conditions thereunder
stipulated.
ISSUE: W/N revocation is proper?
HELD: NO. In Republic vs. Silim, where the donor sought to revoke
the donation on the ground that the donee breached the condition
to exclusively and forever use the land for school purpose only, the
Court ruled in favor of the donee:
Without the slightest doubt, the condition for the donation was not
in any way violated when the lot donated was exchanged with

another one. The purpose for the donation remains the same,
which is for the establishment of a school. The exclusivity of the
purpose was not altered or affected. In fact, the exchange of the
lot for a much bigger one was in furtherance and enhancement of
the purpose of the donation. The acquisition of the bigger lot
paved way for the release of funds for the construction of Bagong
Lipunan school building which could not be accommodated by the
limited area of the donated lot.
As in Silim, the three (3) lease contracts herein entered into by the
donee were for the sole purpose of pursuing the objective for which
the donation was intended. In fact, such lease was authorized by
the donor by express provision in the deed of donation, albeit the
prior written consent therefor of the donor is needed. Hence,
considering that the donees acts did not detract from the very
purpose for which the donation was made but precisely to achieve
such purpose, a lack of prior written consent of the donor would
only constitute casual breach of the deed, which will not warrant
the revocation of the donation.
Besides, this Court cannot consider the requirement of a prior
written consent by the donor for all contracts of lease to be entered
into by the donee as an absolute ground for revocation of the
donation because such a condition, if not correlated with the
purpose of the donation, would constitute undue restriction of the
donees right of ownership over the donated property.

SPOUSES
ERNESTO
and
EVELYN
SICAD, petitioners,
vs. COURT OF APPEALS, CATALINO VALDERRAMA,
JUDY CRISTINA M. VALDERRAMA and JESUS ANTONIO
VALDERRAMA, respondents.

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 and could not effectively
serve as basis for the cancellation of TCT No. T-16105 and the
issuance in its place of TCT No. T-16622.

DECISION
NARVASA, C.J.:
The issue raised in the appeal by certiorari at bar centers on
the character of a deed of donation executed by the late Aurora
Virto Vda. De Montinola of the City of Iloilo as either inter
vivos or mortis
causa. That
deed,
entitled
DEED
OF
DONATION INTER VIVOS,[1] was executed by Montinola on
December 11, 1979. It named as donees her grandchildren,
namely: Catalino Valderrama, Judy Cristina M. Valderrama and Jesus
Antonio Valderrama; and treated of a parcel of land, Lot 3231 of the
Cadastral Survey of Panay, Capiz, covered by Transfer Certificate
Title No. T-16105 in the name of Montinola. The deed also
contained the signatures of the donees in acknowledgment of the
acceptance of the donation.
Montinolas Secretary, Gloria Salvilla, afterwards presented the
deed for recording in the Property Registry, and the Register of
Deeds cancelled TCT No. T-16105 (the donors title) and, in it place,
issued TCT No. T-16622 on February 7, 1980, in the names of the
donees.[2] Montinola however retained the owners duplicate copy of
the new title (No. T-16622), as well as the property itself, until she
transferred the same ten (10) years later, on July 10, 1990, to the
spouses, Ernesto and Evelyn Sicad.
On March 12, 1987, Aurora Montinola drew up a deed of
revocation of the donation,[3] and caused it to be annotated as an
adverse claim on TCT No. T-16622 (issued, as aforestated, in her
grandchildrens names). Then on August 24, 1990, she filed a
petition with the Regional Trial Court in Roxas City for the
cancellation of said TCT No. T-16622 and the reinstatement of TCT
No. T-16105 (in her name), the case being docketed as Special
Proceeding No. 3311. Her petition was founded on the theory that

The donees (Montinolas grandchildren) opposed the petition. In

their opposition dated August 29, 1990, they averred that the
donation in their favor was one inter vivos which, having fully
complied with the requirements therefor set out in Article 729 of
the Civil Code, was perfectly valid and efficacious. They also
expressed doubt about the sincerity of their grandmothers
intention to recover the donated property, since she had not
pursued the matter of its revocation after having it annotated as an
adverse claim.
The case, originally treated as a special proceeding, was
subsequently considered by the lower Court as an ordinary civil
action in view of the allegations and issues raised in the
pleadings. Pre-trial was had, followed by trial on the merits which
was concluded with the filing of the parties memoranda. The Trial
Court then rendered judgment on March 27, 1991, holding that the
donation was indeed one inter vivos, and dismissing Aurora
Montinolas petition for lack of merit. [4] The matter of its revocation
was not passed upon.
Montinola elevated the case to the Court of Appeals, her
appeal being docketed as CA-G.R. CV No. 33202. She however died
on March 10, 1993,[5] while appeal was pending.
Shortly after Montinolas demise, a Manifestation and Motion
dated March 31, 1993 was filed by Ernesto Sicad and Evelyn BofillSicad, herein petitioners,[6] in which they (a) alleged that they had
become the owners of the property covered by TCT No. T-16622 in
virtue of a deed of definite sale dated May 25, 1992 accomplished
by Montinola in their favor, which was confirmed by an affidavit
dated November 26, 1997 also executed by the latter, and (b)
prayed that they be substituted as appellants and allowed to
prosecute the case in their own behalf.

Another motion was subsequently presented under date of

April 7, 1993, this time by the legal heirs of Aurora Montinola,
namely: Ofelia M. de Leon, Estela M. Jaen and Teresita M.
Valderrma. They declared that they were not interested in pursuing
the case, and asked that the appeal be withdrawn. Montinolas
counsel opposed the motion.
On June 21, 1993, the Court of Appeals issued a Resolution: (a)
ordering the substitution of the persons above mentioned Ofelia M.
de Leon, Estela M. Jaen and Teresita M. Valderama as plaintiffsappellant in place of the late Aurora Montinola, as well as the
joinder of the spouses Ernesto and Evelyn Bofill-Sicad as additional
appellants;[7] and (b) denying the motion for the withdrawal of the
appeal.
On June 30, 1995, the Eighth Division of the Court of Appeals
promulgated its Decision on the case affirming the judgment of the
Regional Trial Court;[8] and on July 31, 1996, it denied the separate
motions for reconsideration filed by Ofelia M. de Leon, Estela M.
Jaen, and Teresita M. Valderrama, on the one hand, and by the
spouses, Ernest and Evelyn Sicad, on the other. [9]
The Sicad Spouses have appealed to this Court; and here, they
contend that the following errors were committed by the Appellate
Tribunal, to wit:
1) ** in ruling that the donation was inter vivos and in not giving
due weight to the revocation of the donation; and
2) ** in not ordering that the case be remanded for further
reception of evidence.[10]
The Comment filed for private respondents (the donees) under
date of December 19, 1996 deals with what they consider
the principal issue in this case ** (i.e.) whether the donation is
mortis causa or inter vivos and set forth the argument that the
donor clearly intended to effect the immediate transfer of
ownership to the donees, that the prohibition in the deed of
donation against selling the property within ten (10) years after the
death of the donor does not indicate that the donation is mortis

causa, that the donors alleged act of physically keeping the title
does not suggest any intention to defer the effectivity of the
donation, that the payment of real property taxes is consistent with
the donors reservation of the right of usufruct, that the donors
intent is not determined by ** (her) self-serving post execution
declarations, the donation was never effectively revoked, and
petitioners have waived their right to question the proceedings in
the trial court.[11]
The Reply of the Sicad Spouses dated March 14, 1997
reiterates their thesis that the donation was mortis causa, that the
circumstances surrounding the execution of the deed, and the
subsequent actions of the donor incontrovertibly signify the donors
intent to transfer the property only after her death, that the donor
did not intend to give effect to the donation, and that the procedure
adopted by the Trial Court in the case was fatally defective. [12] A
Rejoinder dated April 3, 1997 was then submitted by the
Valderamas, traversing the assertions of the Reply.[13]
Considering the focus of the opposing parties, and their
conflicting theories, on the intention of Aurora Montinola in
executing the document entitled Deed of Donation Inter Vivos, it is
needful to review the circumstances of the signing of that
document by Montinola, as ostensible donor, and her
grandchildren, as ostensible donees.
The evidence establishes that on December 11, 1979, when
the deed of donation prepared by Montinols lawyer (Atty. Treas) was
read and explained by the latter to the parties.Montinola 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
poperty for such period.Accordingly, a new proviso was inserted in
the deed reading: however, the donees shall not sell or encumber
the properties herein donated within 10 years after the death of
the donor.[14]The actuality of the subsequent insertion of this new
proviso is apparent on the face of the instrument; the intercalation
is easily perceived and identified it was clearly typed on a different
machine, and is crammed into the space between the penultimate
paragraph of the deed and that immediately preceding it. [15]

Not only did Aurora Montinola ordered the insertion in the deed
of that restrictive proviso, but also, after recordation of the deed of
donation, she never stopped treating the property as her own. She
continued, as explicitly authorized in the deed itself, to possess he
property, enjoy its fruits and otherwise exercise the rights of
dominion, paying the property taxes as they fell due all these she
did until she transferred the property to the Sicad Spouses on July
10, 1990. She did not give the new certificate of title to the
ostensible donees but retained too, until she delivered it to the
Sicads on the occasion of the sale of the property to them. In any
event, the delivery of the title to the donees would have served no
useful purpose since, as just stated, they were prohibited to effect
any sale or encumbrance thereof for a period of ten (10) years after
the ostensible donors decease. And consistent with these acts
denoting retention of ownership of the property was Montinolas
openly expressed view that the donation was ineffectual and could
not be given affect even after ten (10) years from her death. For
this view she sought to obtain judicial approval. She brought suit on
August 24, 1990 to cancel TCT no. T-16622 (issued to her
grandchildren) premised precisely on the invalidity of the donation
for failure to comply with the requisites of testamentary
dispositions. Before that, she attempted to undo the conveyance to
her grandchildren by execution a deed of revocation of the
donation on March 12, 1987, and causing annotation thereof as an
adverse claim on said TCT No. T-16622. She also exercised
indisputable acts of ownership over said property by executing, as
just stated, deeds intended to pass title over it to third parties
petitioner herein.[16]
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 this respect, case law has laid down significant
parameters. Thus, in a decision handed down in 1946, [17] this Court
construed a deed purporting to be a donation inter vivos to be in
truth one mortis causa because it stipulated (like the one now
being inquired into) that all rents, proceeds, fruits, of the donated
properties shall remain for the exclusive benefit and disposal of the
donor, Margarita David, during her lifetime; and that, without the
knowledge and consent of the donor, the donated properties could

not be disposed of in any way, whether by sale, mortgage, barter,

or in any other way possible. On these essential premises, the
Court said, such a donation must be deemed one mortis causa,
because the combined effect of the circumstances surrounding the
execution of the deed of donation and of the above-quoted clauses
thereof ** (was that) the most essential elements of ownership the
right to dispose of the donated properties and the right to enjoy the
products, profits, possession remained with Margarita David during
her lifetime, and would accrue to the donees only after Margarita
Davids death. So, too, in the case at bar, did these rights remain
with Aurora Montinola during her lifetime, and could not pass to the
donees until ten (10) years after her death.
In another case decided in 1954 involving similar issue,
Bonsato v. Court of Appeals, [18] this Court emphasized that the
decisive characteristics of a donation mortis causa, which it had
taken into account in David v. Sison, were that the donor not only
reserved for herself all the fruits of the property allegedly
conveyed, but what is even more important, especially provided
that without 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.
A donation which purports to be one inter vivos but withholds
form the donee that right to dispose of the donated property during
the donors lifetime is in truth one mortis causa. In a
donation mortis causa the right of disposition is not transferred to
the donee while the donor is still alive.[19]
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.
The case of Alejandro v. Geraldez[20] cited by the Court of
Appeals in support of its challenged judgment is not quite
relevant. For in the deed of donation there in issue, there was a
partial relinquishment of the right to dispose of the property, in the
event only that this became necessary to defray the expenses and
support of the donors. That limited right to dispose of the donated
lots, said this Court, implies that ownership had passed to ** (the
donees) by means of the donation and **, therefore, the donation
was already effective during the donors lifetime. That is the
characteristic of a donation inter vivos. On the other hand, in the
case at bar, the donees were expressly prohibited to make any
disposition of any nature or for any purpose whatever during the
donors lifetime, and until ten (10) years after her death a
prohibition which, it may be added, makes inapplicable the ruling in
Castro v. Court of Appeals[21]where no such prohibition was
imposed, and the donor retained only the usufruct over the
property.
The Valderramas argument that the donation is inter vivos in
character and that the prohibition against their disposition of the
donated property is merely a condition which, if violated, would
give cause for its revocation, begs the question. It assumes that
they have the right to make a disposition of the property, which
they do not. The argument also makes no sense, because if they
had the right to dispose of the property and did in fact dispose of it
to a third person, the revocation of the donation they speak of
would be of no utility or benefit to the donor, since such a
revocation would not necessarily result in the restoration of the
donors ownership and enjoyment of the property.
It is also error to suppose that the donation under review
should be deemed one inter vivos simply because founded on
considerations of love and affection. In Alejandro v. Geraldez,supra,

[22]

this Court also observed that the fact that the donation is given
in consideration of love and affection ** is not a characteristic of
donation inter vivos (solely) because transfersmortis causa may
also be made for the same reason. Similarly, in Bonsato v. Court of
Appeals, supra, this Court opined that the fact that the conveyance
was due to the affection of the donor to the donees and services
rendered by the latter,is of no particular significance in determining
whether the deeds, Exh. 1 and 2, constitute transfers inter vivos or
not, because a legacy may have identical motivation.[23]
Finally, it is germane to advert to the legal principle in Article
1378 of the Civil Code to the effect that in the case of doubt
relative to a gratuitous contract, the construction must be that
entailing the least transmission of rights and interests.[24]
The donation in question, though denominated inter vivos, is in
truth one mortis causa; it is void because the essential requisites
for its validity have not been complied with.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R.
CV No. 33202 dated June 30, 1995 as well as the Resolution
denying reconsideration thereof and the Decision of the Regional
Trial Court in Special Case No. 3311 are SET ASIDE. The Deed of
Donation Inter Vivos (Exh. A) executed by Aurora Virto Vda. De
Montinola on December 11, 1979 in favor of Catalino M.
Valderrama, Judy Cristina M. Valderrama and Jesus Antonio M.
Valderrama is declared null and void. The Register of Deed of Roxas
City is directed to cancel Transfer Certificate of Title No. T-16622,
revive and reinstate Transfer Certificate of Title No. T-16105.
SO ORDERED.

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.
DECISION
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 or mortis 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 one-half ()
portion of the formers 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 Cabatingans 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 co-owners 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 quos
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 VIVOS OR
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 Cabatingans 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.

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 Cabatingans 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

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. [12] In

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
Phils. v. Vda. de Meimban. [17] In said case, the
donation contained the provision:

of
the
questioned

"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 donors intention to transfer the ownership
and possession of the donated property to the donee only after the
formers 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
donors death, meaning that the full or naked ownership of the
donated properties will pass to the donee because of the donors
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 transferrred to the donee or independently of, and not
by reason of her death, she would have not expressed such proviso
in the subject deeds.
Considering that the disputed donations are donations mortis
causa, the same partake of the nature of testamentary
provisions[21] 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
testators 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.

Ma. Estela Maglasang vs. Heirs of Corazon Cabatingan (G.R.

No. 131953, June 5, 2002, 383 SCRA 6)
FACTS:
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 one-half
() portion of the former's house and lot located at Cot-cot, Liloan,
Cebu. Four (4) other deeds of donation were subsequently executed
by Conchita Cabatingan on January 14, 1995, bestowing upon
petitioners Nicolas, Merly S. Cabatingan and Estela C. Maglasang
for two parcels of land. One of the provisions in the deeds are as
follows:
"That for and in consideration of the love and affection of the
DONOR for the DONEE, the DONOR does hereby, by these presents,
transfer, convey, by way of donation, unto the DONEE the abovedescribed 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."

When Conchita died in May 9, 1995, and upon learning of the

existence of the foregoing donations, respondents filed an action to
annul the said four (4) deeds of donation. Respondents allege 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. Petitioners deny
respondents' allegations contending that Conchita Cabatingan
freely, knowingly and voluntarily caused the preparation of the
instruments. The lower court ruled in favor of the respondents,
while
the
ISSUE:
Whether the donations to the petitioners are donations mortis
causa
or
inter
vivos.
HELD:
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.
Petitioners'

arguments

are

bereft

of

merit.

In 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; (3) That the transfer
should be void if the transferor should survive the transferee.
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. 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

Acceptance and Attestation clauses of the Deed of Donation.

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.
Petition denied.

URSULINA GANUELAS, METODIO GANUELAS and ANTONIO

GANUELAS, vs. HON. ROBERT T. CAWED, Judge of the
Regional Trial Court of San Fernando, La Union
(Branch 29), LEOCADIA G. FLORES, FELICITACION G.
AGTARAP, CORAZON G. SIPALAY and ESTATE OF
ROMANA GANUELAS DE LA ROSA, represented by
GREGORIO DELA ROSA, Administrator, respondent.

x x x.[3]

DECISION

After Celestinas death, Ursulina had been sharing the produce

of the donated properties with private respondents Leocadia G.
Flores, et al., nieces of Celestina.

CARPIO-MORALES, J.:
The present petition for review under Rule 45 of the Rules of
Court assails, on a question of law, the February 22, 1996
decision[1] of the Regional Trial Court of San Fernando, La Union,
Branch 29, in Civil Case No. 3947, an action for declaration of
nullity of a deed of donation.

On June 10, 1967, Celestina executed a document

denominated as Revocation of Donation[4] purporting to set aside
the deed of donation. More than a month later or on August 18,
1967, Celestina died without issue and any surviving ascendants
and siblings.

In 1982, or twenty-four years after the execution of the Deed of

Donation, Ursulina secured the corresponding tax declarations, in
her name, over the donated properties, to wit: Tax Declarations
Nos. 18108, 18109, 18110, 18111, 18112, 18113 and 18114, and
since then, she refused to give private respondents any share in
the produce of the properties despite repeated demands.

The facts, as culled from the records of the case, are as follows:
On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina)
executed a Deed of Donation of Real Property [2] covering seven
parcels of land in favor of her niece Ursulina Ganuelas (Ursulina),
one of herein petitioners.
The pertinent provision of the deed of donation reads,
quoted verbatim:
xxx
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.

Private respondents were thus prompted to file on May 26,

1986 with the RTC of San Fernando, La Union a complaint [5] against
Ursulina, along with Metodio Ganuelas and Antonio Ganuelas who
were alleged to be unwilling plaintiffs. The complaint alleged that
the Deed of Donation executed by Celestina in favor of Ursulina
was void for lack of acknowledgment by the attesting witnesses
thereto before notary public Atty. Henry Valmonte, and the donation
was a disposition mortis causa which failed to comply with the
provisions of the Civil Code regarding formalities of wills and
testaments, hence, it was void. The plaintiffs-herein private
respondents thus prayed that judgment be rendered ordering
Ursulina to return to them as intestate heirs the possession and
ownership of the properties. They likewise prayed for the
cancellation of the tax declarations secured in the name of
Ursulina, the partition of the properties among the intestate heirs of
Celestina, and the rendering by Ursulina of an accounting of all the
fruits of the properties since 1982 and for her to return or pay the
value of their shares.

The
defendants-herein
petitioners
alleged
in
their
Answer[6] that the donation in favor of Ursulina was inter vivos as
contemplated under Article 729 of the Civil Code, [7] hence, the deed
did not have to comply with the requirements for the execution of a
valid will; the Revocation of Donation is null and void as the ground
mentioned therein is not among those provided by law to be the
basis thereof; and at any rate, the revocation could only be legally
enforced upon filing of the appropriate complaint in court within the
prescriptive period provided by law, which period had, at the time
the complaint was filed, already lapsed.

On herein petitioners argument that the Revocation of

Donation was void as the ground mentioned therein is not one of
those allowed by law to be a basis for revocation, the trial court
held that the legal grounds for such revocation as provided under
the Civil Code arise only in cases of donations inter vivos, but not in
donations mortis causa which are revocable at will during the
lifetime of the donor. The trial court held, in any event, that given
the nullity of the disposition mortis causa in view of a failure to
comply with the formalities required therefor, the Deed of
Revocation was a superfluity.[13]

By Decision of February 22, 1996, the trial court, holding that

the provision in the Deed of Donation that in the event that the
DONEE should predecease the DONOR, the donation shall be
deemed rescinded and of no further force and effect is an explicit
indication that the deed is a donation mortis causa,[8] found for the
plaintiffs-herein private respondents, thus:

Hence, the instant petition for review, petitioners contending

that the trial court erred:
I. . . . WHEN IT DECLARED NULL AND VOID THE DONATION
EXECUTED BY CELESTINA GANUELAS;
II. . . . WHEN IT UPHELD THE REVOCATION OF DONATION;

WHEREFORE the Court renders judgment declaring null and void

the Deed of Donation of Real Property executed by Celestina
Ganuelas, and orders the partition of the estate of Celestina among
the intestate heirs.
SO ORDERED.[9]
The trial court also held that the absence of a reservation
clause in the deed implied that Celestina retained complete
dominion over her properties, thus supporting the conclusion that
the donation is mortis causa,[10] and that while the deed contained
an attestation clause and an acknowledgment showing the intent of
the donor to effect a postmortem disposition, the acknowledgment
was defective as only the donor and donee appear to have
acknowledged the deed before the notary public, thereby rendering
the entire document void.[11]
Lastly, the trial court held that the subsequent execution by
Celestina of the Revocation of Donation showed that the donor
intended the revocability of the donation ad nutum, thus sustaining
its finding that the conveyance was mortis causa.[12]

III. . . . IN RENDERING ITS DECISION ADVERSE TO

PETITIONER URSULINA GANUELAS.[14]
Petitioners argue that the donation contained in the deed
is inter vivos as the main consideration for its execution was the
donors affection for the donee rather than the donors death; [15]that
the provision on the effectivity of the donationafter the donors
deathsimply meant that absolute ownership would pertain to the
donee on the donors death;[16] and that since the donation is inter
vivos, it may be revoked only for the reasons provided in Articles
760,[17] 764[18] and 765[19] of the Civil Code.
In a letter of March 16, 1998, [20] private respondent Corazon
Sipalay, reacting to this Courts January 28, 1998 Resolution
requiring private respondents to SHOW CAUSE why they should not
be disciplinarily dealt with or held in contempt for failure to submit
the name and address of their new counsel, explains that they are
no longer interested in pursuing the case and are willing and ready
to waive whatever rights they have over the properties subject of
the donation. Petitioners, who were required to comment on the
letter, by Comment of October 28, 1998, [21] welcome private

respondents gesture but pray that for the sake of enriching

jurisprudence, their [p]etition be given due course and resolved.

The distinguishing
causa are the following:

The issue is thus whether the donation is inter vivos or mortis

causa.

1. It conveys no title or ownership to the transferee before the

death of the transferor; or, what amounts to the same thing, that
the transferor should retain the ownership (full or naked) and
control of the property while alive;

Crucial in the resolution of the issue is the determination of

whether the donor intended to transfer the ownership over the
properties upon the execution of the deed.[22]
Donation inter vivos differs from donation mortis causa in that
in the former, the act is immediately operative even if the actual
execution may be deferred until the death of the donor, while in the
latter, nothing is conveyed to or acquired by the donee until the
death of the donor-testator.[23] The following ruling of this Court
in Alejandro v. Geraldez is illuminating:[24]
If the donation is made in contemplation of the donors death,
meaning that the full or naked ownership of the donated properties
will pass to the donee only because of the donors 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.
But if the donation takes effect during the donors lifetime or
independently of the donors death, meaning that the full or naked
ownership (nuda proprietas) of the donated properties passes to
the donee during the donors lifetime, not by reason of his death but
because of the deed of donation, then the donation is inter vivos.
The distinction between a transfer inter vivos and mortis
causa is important as the validity or revocation of the donation
depends upon its nature. If the donation is inter vivos, it must be
executed and accepted with the formalities prescribed by Articles
748[25] and 749[26] of the Civil Code, except when it is onerous in
which case the rules on contracts will apply. If it is mortis causa, the
donation must be in the form of a will, with all the formalities for
the validity of wills, otherwise it is void and cannot transfer
ownership.[27]

characteristics

of

donation mortis

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;
3. That the transfer should be void if the transferor should survive
the transferee.[28]
In the donation subject of the present case, 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.[29]
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.
As stated in a long line of cases, 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. [30]
More. The deed contains an attestation clause expressly
confirming the donation as mortis causa:
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.[31] (Emphasis supplied)
To classify the donation as inter vivos simply because it is
founded on considerations of love and affection is erroneous. That
the donation was prompted by the affection of the donor for the
donee and the services rendered by the latter is of no particular
significance in determining whether the deed constitutes a
transfer inter vivos or not, because a legacy may have an identical
motivation.[32] In other words, love and affection may also underline
transfers mortis causa.[33]
In Maglasang v. Heirs of Cabatingan,[34] the deeds of
donation contained provisions almost identical to those found in the
deed subject of the present case:
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. (Underscoring supplied)
In that case, this Court held that the donations were mortis causa,
for the above-quoted provision conclusively establishes the donors
intention to transfer the ownership and possession of the donated
property to the donee only after the formers death. Like in the
present case, the deeds therein did not contain any clear provision
that purports to pass proprietary rights to the donee prior to the
donors death.
As the subject deed then is in the nature of a mortis
causa disposition, the formalities of a will under Article 728 of the
Civil Code should have been complied with, failing which the
donation is void and produces no effect.[35]

As noted by the trial court, the attesting witnesses failed to

acknowledge the deed before the notary public, thus
violating Article 806 of the Civil Code which provides:
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. (Emphasis supplied)
The trial court did not thus commit any reversible error in
declaring the Deed of Donation to be mortis causa.
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.

URSULINA GANUELAS, et al. v. HON. ROBERT T. CAWED, et

al.
G. R. No. 123968, 24 April 2003, THIRD DIVISION (CarpioMorales, J.)
Donation inter vivos differs from donation mortis causa in
that in the former, the act is immediately operative even if
the actual execution may be deferred until the death of the
donor, while in the latter, nothing is conveyed to or
acquired by the donee until the death of the donortestator.
FACTS: Celestina Ganuelas Vda. de Valin executed a Deed of
Donation of Real Property in favor of petitioner Ursulina Ganuelas.
The pertinent portion of the Deed of Donation reads: 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.
However, more than a month before Celestina died, she executed a
document revoking such donation. After her death, Ursulina

claimed ownership over the donated properties and refused to give

private respondents Leocadia G. Flores, et al., niece of Celestina
any share in the produce of the properties despite repeated
demands. Thus, prompting Flores, et al. to file a complaint before
the San Fernando, La Union Regional Trial Court (RTC), challenging
the validity of the Deed of Donation. They alleged that such
donation is void for failure to comply with the formalities of wills
and testaments, which is necessary in a disposition mortis causa.
On the other hand, Ursulina maintains that there is no need to
comply with the formalities of wills and testaments because such
donation was inter vivos.
The RTC ruled that the Deed of Donation is a disposition mortis
causa, thus, void for failure to comply with the formalities of wills
and testaments.
ISSUE: Whether or not the donation is inter vivos or mortis causa
HELD: Crucial in the resolution of the issue is the determination of
whether the donor intended to transfer the ownership over the
properties upon the execution of the deed. Donation inter vivos
differs from donation mortis causa in that in the former, the act is
immediately operative even if the actual execution may be
deferred until the death of the donor, while in the latter, nothing is
conveyed to or acquired by the donee until the death of the donortestator.
If the donation is made in contemplation of the donors death,
meaning that the full or naked ownership of the donated properties
will pass to the donee only because of the donors 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.
But if the donation takes effect during the donors lifetime or
independently of the donors death, meaning that the full or naked
ownership (nuda proprietas) of the donated properties passes to
the donee during the donors lifetime, not by reason of his death
but because of the deed of donation, then the donation is inter
vivos.
The distinction between a transfer inter vivos and mortis causa is
important as the validity or revocation of the donation depends
upon its nature. If the donation is inter vivos, it must be executed
and accepted with the formalities prescribed by Articles 748 and

749 of the Civil Code, except when it is onerous in which case the
rules on contracts will apply. If it is mortis causa, the donation must
be in the form of a will, with all the formalities for the validity of
wills, otherwise it is void and cannot transfer ownership.
The distinguishing characteristics of a donation mortis causa are
the following:
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;
3. That the transfer should be void if the transferor should survive
the transferee.
In the donation subject of the present case, 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.
As stated in a long line of cases, 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. More. The deed contains
an attestation clause expressly confirming the donation as mortis
causa: To classify the donation as inter vivos simply because it is
founded on considerations of love and affection is erroneous. That
the donation was prompted by the affection of the donor for the
donee and the services rendered by the latter is of no particular
significance in determining whether the deed constitutes a transfer
inter vivos or not, because a legacy may have an identical
motivation. In other words, love and affection may also underline
transfers mortis causa.

As the subject deed then is in the nature of a mortis causa

disposition, the formalities of a will under Article 728 of the Civil
Code should have been complied with, failing which the donation is
void and produces no effect.

DANILO ALUAD, LEONORA ALUAD,

DIVINA ALUAD, PROSPERO ALUAD,
and CONNIE ALUAD,
Petitioners,

G.R. No. 176943

Present:

anyone of them who should survive, they could use[,]

encumber or even dispose of any or even all of the
parcels of land herein donated.[4] (Emphasis and
underscoring supplied)

QUISUMBING, J., Chairperson,

CARPIO MORALES,
TINGA,
On September 30, 1986, Original Certificates of Title over Lot
- versus VELASCO, JR., and
Nos. 674 and 676 were issued in Matildes name.
BRION, JJ.
On August 26, 1991, Matilde sold Lot No. 676 to respondent
by a Deed of Absolute Sale of Real Property.[5]
ZENAIDO ALUAD,
Promulgated:
Respondent.
October 17, 2008
Subsequently or on January 14, 1992, Matilde executed a last
will and testament,[6] devising Lot Nos. 675, 677, 682, and 680 to
x------------------------------------------------Maria, and her remaining properties including Lot No. 674 to
-x
respondent.
DECISION
CARPIO MORALES, J.:
Petitioners mother, Maria Aluad (Maria), and respondent
Zenaido Aluad were raised by the childless spouses Matilde Aluad
(Matilde) and Crispin Aluad (Crispin).
Crispin was the owner of six lots identified as Lot Nos. 674,
675, 676, 677, 680, and 682 of the Pilar Cadastre, Capiz. After
Crispin died, his wife Matilde adjudicated the lots to herself. [1]
On November 14, 1981, Matilde executed a document
entitled Deed of Donation of Real Property Inter Vivos [2] (Deed of
Donation) in favor of petitioners mother Maria [3] covering all the six
lots which Matilde inherited from her husband Crispin. The Deed of
Donation provided:
That, for and in consideration of the love and
affection of the DONOR [Matilde] for the DONEE
[Maria], the latter being adopted and hav[ing] been
brought up by the former the DONOR, by these
presents, transfer and convey, BY WAY OF
DONATION, unto the DONEE the property abovedescribed, 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; Provided, however,
that anytime during the lifetime of the DONOR or

Matilde died on January 25, 1994, while Maria died on

September 24 of the same year.[7]
On August 21, 1995, Marias heirs-herein petitioners filed
before the Regional Trial Court (RTC) of Roxas City a Complaint, [8] for
declaration and recovery of ownership and possession of Lot
Nos. 674 and 676, and damages against respondent, alleging:
That in 1978, plaintiff[s] possessed the two
(2) parcels of land above-described until January
1991 when defendant entered and possessed the
two (2) parcels of land claiming as the adopted son
of Crispin Aluad who refused to give back possession
until Matilde Aluad died in [1994] and then retained
the possession thereof up to and until the present
time, thus, depriving the plaintiffs of the enjoyment
of said parcels of land x x x;
That after the death of Matilde R. Aluad, the
plaintiffs succeeded by inheritance by right of
representation
from
their
deceased
mother,
Maria Aluad who is the sole and only daughter of
Matilde Aluad[.][9]
To the complaint respondent alleged in his Answer. [10]
That Lot 674 is owned by the defendant as
this lot was adjudicated to him in the Last Will and
Testament of Matilde Aluad x x x while Lot 676 was

purchased by him from Matilde Aluad. These two lots

are in his possession as true owners thereof.
[11]
(Underscoring supplied)

b.

Petitioners later filed a Motion for Leave to Amend Complaint

Already Filed to Conform to Evidence [12] to which it annexed an
Amended Complaint[13] which cited the donation of the six lots via
Deed of Donation in favor of their mother Maria. Branch 15 of
the RTC granted the motion and admitted the Amended Complaint.

Twenty
thousand
pesos
(P20,000.00), representing the income
from subject Lot 676, a year from 1991
up to the time said lot is delivered to
the plaintiffs, together with the interest
thereof at the legal rate until fully paid;

c.

Ten thousand pesos (P10,000.00),

representing the income from the
subject Lot No. 674, a year from 1991
up to the time said lot is delivered to
the plaintiffs, plus legal interest thereof
at the legal rate until fully paid; and

[14]

Respondent filed an Amended Answer[15] contending, inter

alia, that the Deed of Donation is forged and falsified and petitioners
change of theory showed that said document was not existing at the
time they filed their complaint and was concocted by them after
realizing that their false claim that their mother was the only
daughter of Matild[e] Aluad cannot in anyway be established by
them;[16] and that if ever said document does exist, the same was
already revoked by Matilde when [she] exercised all acts of
dominion over said properties until she sold Lot 676 to defendant
and until her death with respect to the other lots without any
opposition from Maria Aluad.[17]
The trial court, by Decision[18] of September 20, 1996, held
that Matilde could not have transmitted any right over Lot
Nos. 674 and 676 to respondent, she having previously alienated
them to Maria via the Deed of Donation. Thus it disposed:
WHEREFORE, in view
judgment is hereby rendered:

of

the

foregoing,

1.

Declaring the plaintiffs as the rightful

owners of the subject Lots Nos. 674 and
676, Pilar Cadastre;

2.

Ordering the defendant to deliver the

possession of the subject lots to the
plaintiffs;

3.

Ordering the defendant to pay the

plaintiffs:
a.

Thirty thousand pesos (P30,000.00)

as attorneys fees;

d.

The costs of the suit.

Defendants counterclaim is ordered dismissed

for lack of merit.
SO ORDERED.[19]
On petitioners motion, the trial court directed the issuance
of a writ of execution pending appeal.[20] Possession of the subject
lots appears to have in fact been taken by petitioners.
By Decision[21] of August 10, 2006, the Court of Appeals
reversed the trial courts decision, it holding that the Deed of
Donation was actually a donation mortis causa, notinter vivos, and
as such it had to, but did not, comply with the formalities of a
will. Thus, it found that the Deed of Donation was witnessed by only
two witnesses and had no attestation clause which is not in
accordance with Article 805 of the Civil Code, reading:
Art. 805. Every will, other than a holographic
will, must be subscribed at the end thereof by the
testator himself or by the testators 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 that 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.
While the appellate court declared respondent as the
rightful owner of Lot No. 676, it did not so declare with respect to
Lot No. 674, as Matildes last will and testament had not yet been
probated. Thus the Court of Appeals disposed:
WHEREFORE, finding the instant petition
worthy of merit, the same is hereby GRANTED and
the Decision of the Regional Trial Court of Roxas City,
Branch 15, dated 20 September 1996, in Civil Case
No. V-6686 for declaration of ownership, recovery of
ownership
and
possession,
and
damages
is REVERSED and SET ASIDE.
A new one is entered in its stead declaring
defendant-appellant as the lawful owner of Lot [No.]
676 of the Pilar Cadastre. Accordingly, plaintiffsappellees are directed to return the possession of the
said lot to the defendant-appellant.
Moreover, plaintiffs-appellees are ordered to
pay P40,000.00 to defendant-appellant as attorneys
fees and litigation expenses.
Costs against plaintiffs-appellees.
SO
ORDERED.[22] (Emphasis
original; underscoring supplied)

in

the

Their Motion for Reconsideration[23] having been denied,

petitioners filed the present Petition for Review, [25] contending
that the Court of Appeals erred
[24]

I
X X X WHEN IT REVERSED THE DECISION OF THE
COURT BELOW (RTC, Branch 15, Roxas City) HOLDING
THAT THE DEED OF DONATION INTER VIVOS IN FAVOR
OF PETITIONERS MOTHER IS IN FACT A DONATION
MORTIS CAUSA.
II
X X X WHEN IT RULED THAT RESPONDENT IS THE
RIGHTFUL OWNER OF LOT NO. 676 AS LOT BUYER ON
THE BASIS OF A DEED OF SALE EXECUTED BY THE
DONOR WHO HAD NO MORE RIGHT TO SELL THE
SAME.
III
X X X WHEN IT FAILED TO DECLARE PETITIONERS THE
RIGHTFUL OWNER OF LOT NO. 674 AFTER HAVING
RULED WHEN IT HELD THAT RESPONDENT CANNOT
BE DECLARED OWNER THEREOF.
IV
X X X WHEN IT HELD THAT THE ISSUANCE OF A WRIT
OF EXECUTION PENDING APPEAL IS IN VIOLATION OF
PARAGRAPH (a) SECTION 2, RULE 39, OF THE RULES
OF COURT (AND ORDERING PETITIONERS TO RETURN
POSSESSION OF LOT 676 TO RESPONDENT) AND
ORDERING PETITIONERS TO PAY ATTORNEYS FEES
AND COST[S] OF SUIT.[26]
As did the appellate court, the Court finds the donation to
petitioners mother one of mortis causa, it having 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 the death of the transferor, 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.
[27]
(Emphasis and underscoring supplied)

The phrase in the earlier-quoted Deed of Donation to become

effective upon the death of the DONOR admits of no other
interpretation than to mean that Matilde did not intend to transfer
the ownership of the six lots to petitioners mother during her
(Matildes) lifetime.[28]
The statement in the Deed of Donation reading anytime
during the lifetime of the DONOR or anyone of them who should
survive, they could use, encumber or even dispose of any or
even all the parcels of land herein donated [29] means that
Matilde retained ownership of the lots and reserved in her the right
to dispose them. For the right to dispose of a thing without other
limitations than those established by law is an attribute of
ownership.[30] The phrase in the Deed of Donation or anyone of
them who should survive is of course out of sync. For the Deed of
Donation clearly stated that it would take effect upon the death of
the donor, hence, said phrase could only have referred to the donor
Matilde. Petitioners themselves concede that such phrase does not
refer to the donee, thus:
x x x [I]t is well to point out that the last
provision
(sentence)
in
the
disputed
paragraph should only refer to Matilde Aluad, the
donor, because she was the only surviving spouse at
the time the donation was executed on 14 November
1981, as her husband Crispin Aluad [] had long been
dead as early as 1975.[31]

x x x The donation in question is subject to

a resolutory term or period when the donor
provides in the aforequoted provisions, 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. When the donor provides that should the
DONEE xxx die before the DONOR, the present
donation shall be deemed rescinded and [of] no
further force and effect the logical construction
thereof is that after the execution of the subject
donation, the same became effective immediately
and shall be deemed rescinded and [of] no further
force and effect upon the arrival of a resolutory
term or period, i.e., the death of the donee which
shall
occur
before
that
of
the
donor. Understandably,
the
arrival
of
this
resolutory term or period cannot rescind and
render of no further force and effect a donation
which has never become effective, because,
certainly what donation is there to be rescinded
and rendered of no further force and effect upon
the arrival of said resolutory term or period if
there was no donation which was already effective
at the time when the donee died?[32] (Underscoring
supplied)
A similar ratio in a case had been brushed aside by this
Court, however, thus:
x x x [P]etitioners contend that the stipulation
on rescission in case petitioners [donee] die ahead of
[donor] Cabatingan is a resolutory condition that
confirms the nature of the donation as inter vivos.
Petitioners arguments are bereft of merit.
[33]

xxxx
The trial court, in holding that the donation was inter vivos,
reasoned:

x x x The herein subject deeds expressly

provide that the donation shall be rescinded in case
[donees] the petitioners predecease [the donor]
Conchita
Cabatingan. As
stated
in Reyes
v.
Mosqueda, 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 to the
donee or independently of, and not by reason of her
death, she would not have expressed such proviso in
the subject deeds.[34] (Underscoring supplied)
As the Court of Appeals observed, x x x [t]hat the donation
is mortis causa is fortified by Matildes acts of possession as she
continued to pay the taxes for the said properties which remained
under her name; appropriated the produce; and applied for free
patents for which OCTs were issued under her name.[35]
The donation being then mortis causa, the formalities of a
will should have been observed[36] but they were not, as it was
witnessed by only two, not three or more witnesses following Article
805 of the Civil Code.[37]
Further, the witnesses did not even sign the attestation
clause[38] the
execution
of
which
clause
is
a
requirement separate from the subscription of the will and the
affixing of signatures on the left-hand margins of the pages of the
will. So the Court has emphasized:
x x x Article 805 particularly segregates the
requirement that the instrumental witnesses sign
each page of the will from the requisite that the will
be attested and subscribed by [the instrumental
witnesses]. The respective intents behind these two
classes of signature[s] are distinct from each
other. The signatures on the left-hand corner of every
page signify, among others, that the witnesses are
aware that the page they are signing forms part of
the will. On the other hand, the signatures to the
attestation clause establish that the witnesses are
referring to the statements contained in the
attestation clause itself. Indeed, the attestation
clause is separate and apart from the disposition of
the will. An unsigned attestation clause results
in an unattested will. Even if the instrumental
witnesses signed the left-hand margin of the page
containing the unsigned attestation clause, such

signatures cannot demonstrate these witnesses

undertakings in the clause, since the signatures that
do appear on the page were directed towards a
wholly different avowal.
x x x It is the witnesses, and not the
testator, who are required under Article 805 to state
the number of pages used upon which the will is
written; the fact that the testator had signed the will
and every page thereof; and that they witnessed and
signed the will and all the pages thereof in the
presence of the testator and of one another. The only
proof in the will that the witnesses have stated these
elemental facts would be their signatures on the
attestation clause.[39] (Emphasis and underscoring
supplied)
Furthermore, the witnesses did not acknowledge the will
before the notary public,[40] which is not in accordance with the
requirement of Article 806 of the Civil Code that every will must be
acknowledged before a notary public by the testator and the
witnesses.
More. The requirement that all the pages of the will must be
numbered correlatively in letters placed on the upper part of each
page was not also followed.[41]
The Deed of Donation which is, as already discussed, one
of mortis causa, not having followed the formalities of a will, it is
void and transmitted no right to petitioners mother. But even
assuming arguendo that the formalities were observed, since it was
not probated, no right to Lot Nos. 674 and 676 was transmitted to
Maria.[42] Matilde thus validly disposed of Lot No. 674 to respondent
by her last will and testament, subject of course to the qualification
that her (Matildes) will must be probated. With respect to Lot No.
676, the same had, as mentioned earlier, been sold by Matilde to
respondent on August 26, 1991.
Petitioners nevertheless argue that assuming that the
donation of Lot No. 674 in favor of their mother is indeed mortis
causa, hence, Matilde could devise it to respondent, the lot should
nevertheless have been awarded to them because they had
acquired it by acquisitive prescription, they having been in
continuous, uninterrupted, adverse, open, and public possession of
it in good faith and in the concept of an owner since 1978. [43]

Petitioners failed to raise the issue of acquisitive prescription

before the lower courts, however, they having laid their claim on
the basis of inheritance from their mother.As a general rule, points
of law, theories, and issues not brought to the attention of the trial
court cannot be raised for the first time on appeal. [44] For a contrary
rule would be unfair to the adverse party who would have no
opportunity to present further evidence material to the new theory,
which it could have done had it been aware of it at the time of the
hearing before the trial court.[45]
WHEREFORE, the petition is DENIED.
SO ORDERED.

FELOMINA[1] ABELLANA, G.R. No. 160488

Petitioner,
Present:
Davide, Jr., C.J. (Chairman),
- versus - Quisumbing,
Ynares-Santiago,

Carpio, and
Azcuna, JJ.

SPOUSES ROMEO PONCE and

LUCILA PONCE and the REGISTER Promulgated:
OF DEEDS of BUTUAN CITY,
Respondents. September 3, 2004

x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing
decision[2] of the Court of Appeals in CA-G.R. CV
reversed and set aside the August 28, 2000
Regional Trial Court of Butuan City, Branch 2,
4270.

the June 16, 2003

No. 69213, which
decision[3] of the
in Civil Case No.

The facts as testified to by petitioner Felomina Abellana are as

follows:
On July 15, 1981, Felomina, a spinster, pharmacist and aunt
of private respondent Lucila Ponce, purchased from the late Estela
Caldoza-Pacres a 44,297[4] square meter agricultural lot [5] with the
intention of giving said lot to her niece, Lucila. Thus, in the deed of
sale,[6] the latter was designated as the buyer of Lot 3, Pcs-10000198, covered by Original Certificate of Title No. P-27,
Homestead Patent No. V-1551 and located at Los Angeles, Butuan
City.[7] The total consideration of the sale was P16,500.00, but only
P4,500.00 was stated in the deed upon the request of the seller. [8]
Subsequently, Felomina applied for the issuance of title in the
name of her niece. On April 28, 1992, Transfer Certificate of Title
(TCT) No. 2874[9] over the subject lot was issued in the name of
Lucila.[10] Said title, however, remained in the possession of
Felomina who developed the lot through Juanario Torreon[11] and
paid real property taxes thereon.[12]

The relationship between Felomina and respondent spouses Romeo

and Lucila Ponce, however, turned sour. The latter allegedly
became disrespectful and ungrateful to the point of hurling her
insults and even attempting to hurt her physically. Hence, Felomina
filed the instant case for revocation of implied trust to recover legal
title over the property.[13]
Private respondent spouses Lucila, also a pharmacist, and Romeo, a
marine engineer, on the other hand, claimed that the purchase
price of the lot was only P4,500.00 and that it was them who paid
the same. The payment and signing of the deed of sale allegedly
took place in the office of Atty. Teodoro Emboy in the presence of
the seller and her siblings namely, Aquilino Caldoza and the late
Lilia Caldoza.[14]
A year later, Juanario approached Lucila and volunteered to till the
lot, to which she agreed.[15] In 1987, the spouses consented to
Felominas proposal to develop and lease the lot. They, however,
shouldered the real property taxes on the lot, which was paid
through Felomina. In 1990, the spouses demanded rental from
Felomina but she refused to pay because her agricultural endeavor
was allegedly not profitable.[16]
When Lucila learned that a certificate of title in her name had
already been issued, she confronted Felomina who claimed that she
already gave her the title. Thinking that she might have misplaced
the title, Lucila executed an affidavit of loss which led to the
issuance of another certificate of title in her name.[17]
On August 28, 2000, the trial court rendered a decision holding that
an implied trust existed between Felomina and Lucila, such that the
latter is merely holding the lot for the benefit of the former. It thus
ordered the conveyance of the subject lot in favor of Felomina. The
dispositive portion thereof, reads:
IN VIEW OF THE FOREGOING, judgment is hereby
rendered declaring, directing and ordering that:
a) An implied trust was created with plaintiff
as trustor and private defendant Lucila
A. Ponce married to private defendant
Engr. Romeo D. Ponce as trustee
pursuant to Article 1448 of the New
Civil Code;

b) The implied trust, having been created

without the consent of the trustee and
without any condition, is revoked;
c) The private defendants, who are spouses,
execute the necessary deed of
conveyance in favor of the plaintiff of
the land, covered by and embraced in
TCT NO. T-2874, in controversy and in
the event private defendants refuse to
execute the deed of conveyance, the
public defendant City Register of
Deeds of Butuan to cancel TCT No. T2874 and issue a new one in lieu
thereof in the name of the plaintiff;
d) The private defendants spouses to pay
jointly and severally plaintiff the sum
of PhP25,000.00 as attorneys fees and
PhP4,000.00 as expenses of litigation;
e) The dismissal of the counterclaim of private
defendants spouses[;] and
f) The private defendants to pay the costs.
SO ORDERED.[18]
Private respondent spouses appealed to the Court of Appeals which
set aside the decision of the trial court ruling that Felomina failed to
prove the existence of an implied trust and upheld respondent
spouses ownership over the litigated lot. The appellate court
further held that even assuming that Felomina paid the purchase
price of the lot, the situation falls within the exception stated in
Article 1448 of the Civil Code which raises a disputable
presumption that the property was purchased by Felomina as a gift
to Lucila whom she considered as her own daughter. The decretal
portion thereof, states
WHEREFORE, premises considered, the appealed
decision of the Regional Trial Court, Branch 2, Butuan
City, in Civil Case No. 4270, is hereby REVERSED AND
SET ASIDE. A new one is heretofore rendered
dismissing the complaint below of plaintiff-appellee,
F[e]lomina Abellana.
SO ORDERED.[19]
Felomina filed a motion for reconsideration but the same was
denied.[20] Hence, the instant petition.

The issue before us is: Who, as between Felomina and respondent

spouses, is the lawful owner of the controverted lot? To resolve this
issue, it is necessary to determine who paid the purchase price of
the lot.
After a thorough examination of the records and transcript of
stenographic notes, we find that it was Felomina and not Lucila who
truly purchased the questioned lot from Estela.The positive and
consistent testimony of Felomina alone, that she was the real
vendee of the lot, is credible to debunk the contrary claim of
respondent spouses. Indeed, the lone testimony of a witness, if
credible, is sufficient as in the present case. [21] Moreover, Aquilino
Caldoza, brother of the vendor and one of the witnesses [22] to the
deed of sale, categorically declared that Felomina was the buyer
and the one who paid the purchase price to her sister, Estela.[23]
Then too, Juanario, who was allegedly hired by Lucila to develop the
lot, vehemently denied that he approached and convinced Lucila to
let him till the land. According to Juanario, he had never spoken to
Lucila about the lot and it was Felomina who recruited him to be
the caretaker of the litigated property. [24]
The fact that it was Felomina who bought the lot was further
bolstered by her possession of the following documents from the
time of their issuance up to the present, to wit: (1) the transfer
certificate of title[25] and tax declaration in the name of Lucila; [26] (2)
the receipts of real property taxes in the name of Felomina Abellana
for the years 1982-1984, 1992-1994 and 1995; [27] and (3) the
survey plan of the lot.[28]
Having determined that it was Felomina who paid the purchase
price of the subject lot, the next question to resolve is the nature of
the transaction between her and Lucila.
It appears that Felomina, being of advanced age [29] with no family
of her own, used to purchase properties and afterwards give them
to her nieces. In fact, aside from the lot she bought for Lucila
(marked as Exhibit R-2), she also purchased 2 lots, one from
Aquilino Caldoza (marked as Exhibit R-1) and the other from
Domiciano Caldoza (marked as Exhibit R-3), which she gave to
Zaida Bascones (sister of Lucila), thus:
Q I am showing to you again Exhibit R, according to
you[,] you bought Exhibits R-1, R-2 and R-3,
do you remember that?

A Yes sir.
xxxxxxxxx
Q Aquilin[o] Caldoza conveyed this land in Exhibit R-1
to you?
A Yes, sir.
Q Is this now titled in your name?
A No. I was planning to give this land to my
nieces. One of which [was] already given to
Mrs. [Lucila] Ponce.
Q I am talking only about this lot in Exhibit R-1[.]
A Not in my name.
Q In whose name was this lot in Exhibit R-1 now?
A In the name of Zaida Bascones.
Q Who prepared the deed of sale?
A At the start it was in the name of Rudy [Torreon].
[30]
Because Rudy [Torreon] knew that there is
some trouble already about that lot he made
a deed of sale to the name of Zaida Bascones,
which I planned to give that land to her (sic).
Q As regards Exhibit R-1, you bought it actually?
A Yes, sir.
Q But the original deed of sale was in the name of
Rudolfo [Torreon]?
A Yes, sir.
Q And later on Rudolfo [Torreon] again transferred it
to Zaida Bascones?
A Yes, sir.[31]
Likewise, in the case of Lucila, though it was Felomina who paid for
the lot, she had Lucila designated in the deed as the vendee
thereof and had the title of the lot issued in Lucilas name. It is clear
therefore that Felomina donated the land to Lucila. This is evident
from her declarations, viz:
Witness

A In 1981 there was a riceland offered so I told her

that I will buy that land and I will give to
her later (sic), because since 1981 up to 1992
Mrs. Lucila Ponce has no job.
Q Where is the land located?
A In Los Angeles, Butuan City.
Q Who was the owner of this land?
A The owner of that land is Mrs. Estela CaldozaPacr[e]s.
The husband is Pacr[e]s.
xxxxxxxxx
Q What did you do with this land belonging to Mrs.
Estela-Caldoza- Pacr[e]s?
A I paid the lot, then worked the lot, since at the start
of my buying the lot until now (sic).
Q You said that you told Lucila Ponce that you
would give the land to her later on, what
did you do in connection with this
intention of yours to give the land to
her?
A So I put the name of the title in her name in
good faith (sic).
Q You mean to tell the court that when you
purchased this land located at Los Angeles,
Butuan City, the instrument of sale or the
deed of sale was in the name of Lucila Ponce?
A Yes, sir.[32]
xxxxxxxxx
Q Did you not ask your adviser Rudolfo [Torreon]
whether it was wise for you to place the
property in the name of Lucila Ponce when
you are the one who is the owner?
A Because we have really the intention to give
it to her.[33]

Generally, contracts are obligatory in whatever form they may have

been entered into, provided all the essential requisites for their
validity are present. When, however, the law requires that a
contract be in some form in order that it may be valid, that
requirement is absolute and indispensable. Its non-observance
renders the contract void and of no effect.[34] Thus, under Article
749 of the Civil Code
Article 749. In order that the donation of an
immovable property may be valid, it must be made
in a public document, specifying therein the property
donated and the value of the charges which the
donee must satisfy.
The acceptance may be made in the same deed of
donation or in a separate public document, but it
shall not take effect unless it is done during the
lifetime of the donor.
If the acceptance is made in a separate instrument,
the donor shall be notified thereof in an authentic
form, and this step shall be noted in both
instruments.
In the instant case, what transpired between Felomina and Lucila
was a donation of an immovable property which was not embodied
in a public instrument as required by the foregoing article. Being an
oral donation, the transaction was void. [35] Moreover, even if
Felomina enjoyed the fruits of the land with the intention of giving
effect to the donation after her demise, the conveyance is still a
void donation mortis causa, for non-compliance with the formalities
of a will.[36] No valid title passed regardless of the intention of
Felomina to donate the property to Lucila, because the naked intent
to convey without the required solemnities does not suffice for
gratuitous alienations, even as between the parties inter se.[37] At
any rate, Felomina now seeks to recover title over the property
because of the alleged ingratitude of the respondent spouses.
Unlike ordinary contracts (which are perfected by the concurrence
of the requisites of consent, object and cause pursuant to Article
1318[38] of the Civil Code), solemn contracts like donations are
perfected only upon compliance with the legal formalities under
Articles 748[39] and 749.[40] Otherwise stated, absent the solemnity
requirements for validity, the mere intention of the parties does not
give rise to a contract. The oral donation in the case at bar is
therefore legally inexistent and an action for the declaration of the

inexistence of a contract does not prescribe. [41] Hence, Felomina

can still recover title from Lucila.
Article 1448[42] of the Civil Code on implied trust finds no
application in the instant case. The concept of implied trusts is that
from the facts and circumstances of a given case, the existence of
a trust relationship is inferred in order to effect the presumed
intention of the parties.[43] Thus, one of the recognized exceptions
to the establishment of an implied trust is where a contrary
intention is proved, [44] as in the present case. From the testimony of
Felomina herself, she wanted to give the lot to Lucila as a gift. To
her mind, the execution of a deed with Lucila as the buyer and the
subsequent issuance of title in the latters name were the acts that
would effectuate her generosity. In so carrying out what she
conceived, Felomina evidently displayed her unequivocal intention
to transfer ownership of the lot to Lucila and not merely to
constitute her as a trustee thereof. It was only when their
relationship soured that she sought to revoke the donation on the
theory of implied trust, though as previously discussed, there is
nothing to revoke because the donation was never perfected.
In declaring Lucila as the owner of the disputed lot, the
Court of Appeals applied, among others, the second sentence of
Article 1448 which states
x x x However, if the person to whom the title
is conveyed is a child, legitimate or illegitimate, of
the one paying the price of the sale, no trust is
implied by law, it being disputably presumed that
there is a gift in favor of the child.
Said presumption also arises where the property is given to
a person to whom the person paying the price stands in loco
parentis or as a substitute parent.[45]
The abovecited provision, however, is also not applicable
here because, first, it was not established that Felomina stood as a
substitute parent of Lucila; and second, even assuming that she
did, the donation is still void because the transfer and acceptance
was not embodied in a public instrument. We note that said
provision merely raised a presumption that the conveyance was a
gift but nothing therein exempts the parties from complying with
the formalities of a donation. Dispensation of such solemnities
would give rise to anomalous situations where the formalities of a
donation and a will in donations inter vivos, and donations mortis
causa, respectively, would be done away with when the transfer of

the property is made in favor of a child or one to whom the donor

stands in loco parentis. Such a scenario is clearly repugnant to the
mandatory nature of the law on donation.
While Felomina sought to recover the litigated lot on the
ground of implied trust and not on the invalidity of donation, the
Court is clothed with ample authority to address the latter issue in
order to arrive at a just decision that completely disposes of the
controversy.[46] Since rules of procedure are mere tools designed to
facilitate the attainment of justice, they must be applied in a way
that equitably and completely resolve the rights and obligations of
the parties.[47]
As to the trial courts award of attorneys fees and litigation
expenses, the same should be deleted for lack of basis. Aside from
the allegations in the complaint, no evidence was presented in
support of said claims. The trial court made these awards in the
dispositive portion of its decision without stating any justification
therefor in the ratio decidendi.Their deletion is therefore proper.[48]
Finally, in deciding in favor of Felomina, the trial court ordered
respondent spouses to execute a deed of sale over the subject lot
in favor of Felomina in order to effect the transfer of title to the
latter. The proper remedy, however, is provided under Section 10
(a), Rule 39 of the Revised Rules of Civil Procedure which provides
that x x x [i]f real or personal property is situated within the
Philippines, the court in lieu of directing a conveyance thereof may
by an order divest the title of any party and vest it in others, which
shall have the force and effect of a conveyance executed in due
form of law.
WHEREFORE, in view of all the foregoing, the petition
is GRANTED and the June 16, 2003 decision of the Court of
Appeals in CA-G.R. CV No. 69213 is REVERSED andSET
ASIDE. The August 28, 2000 decision of the Regional Trial Court of
Butuan City, Branch 2, in Civil Case No. 4270, is REINSTATED with
the followingMODIFICATIONS:
(1) Declaring petitioner Felomina Abellana as
the absolute owner of Lot 3, Pcs-10-000198;
(2) Ordering the Register of Deeds of Butuan
City to cancel TCT No. T-2874 in the name of
respondent Lucila Ponce and to issue a new one in
the name of petitioner Felomina Abellana; and

(3) Deleting the awards of attorneys fees and

litigation expenses for lack of basis.
No pronouncement as to costs.
SO ORDERED.

TITO R. LAGAZO, petitioner, vs. COURT OF APPEALS and

ALFREDO CABANLIT, respondents.

3. Costs against the defendant.

The defendants counterclaims are hereby dismissed.

DECISION
The Facts
PANGANIBAN, J.:
Where the acceptance of a donation was made in a separate
instrument but not formally communicated to the donor, may the
donation be nonetheless considered complete, valid and
subsisting? Where the deed of donation did not expressly impose
any burden -- the expressed consideration being purely one of
liberality and generosity -- but the recipient actually paid charges
imposed on the property like land taxes and installment arrearages,
may the donation be deemed onerous and thus governed by the
law on ordinary contracts?
The Case
The Court answers these questions in the negative as it
resolves this petition for review under Rule 45 of the Rules of Court
seeking to set aside the Decision [1] of the Court of Appeals[2] in CAGR CV No. 38050 promulgated on November 29, 1993. The assailed
Decision reversed the Regional Trial Court, Branch 30, Manila, in
Civil Case No. 87-39133 which had disposed [3] of the controversy in
favor of herein petitioner in the following manner:[4]
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
and against the defendant as follows:
1. Ordering the defendant, or any person claiming rights under him,
to surrender to plaintiff possession of the premises known as Lot
8w, Block 6, Psd-135534 of the Monserrat Estate, and the
improvement standing thereon, located at 3320 2nd St., V. Mapa,
Old Sta. Mesa, Manila;
2. Ordering the defendant to pay plaintiff the sum of Five Thousand
(P5,000.00) Pesos, as and for attorneys fees; and

Although the legal conclusions and dispositions of the trial and

the appellate courts are conflicting, the factual antecedents of the
case are not substantially disputed. [5] We reproduce their narration
from the assailed Decision:
Civil Case No. 83-39133 involves an action filed by plaintiff-appellee
[herein petitioner] on January 22, 1987 seeking to recover from
defendant-appellant [a] parcel of land which the former claims to
have acquired from his grandmother by donation. Defendantappellant [herein private respondent], on the other hand, put up
the defense that when the alleged donation was executed, he had
already acquired the property by a Deed of Assignment from a
transferee of plaintiff-appellees grandmother.
The evidence for plaintiff-appellee
summarized as follows:

[herein

petitioner]

is

Catalina Jacob Vda. de Reyes, a widow and grandmother of plaintiffappellee, was awarded in July 1975 a 60.10-square meter lot which
is a portion of the Monserrat Estate, more particularly described as
Lot 8W, Block 6 of Psd-135834, located at 3320 2nd St., V. Mapa,
Old Sta. Mesa, Manila. The Monserrat Estate is a public land owned
by the City of Manila and distributed for sale to bona fide tenants
under its land-for-the-landless program. Catalina Jacob constructed
a house on the lot.
On October 3, 1977, or shortly before she left for Canada where she
is now a permanent resident, Catalina Jacob executed a special
power of attorney (Exh. A) in favor of her son-in-law Eduardo B.
Espaol authorizing him to execute all documents necessary for the
final adjudication of her claim as awardee of the lot.

Due to the failure of Eduardo B. Espaol to accomplish the purpose

of the power of attorney granted to him, Catalina Jacob revoked
said authority in an instrument executed in Canada on April 16,
1984 (Exh. D). Simultaneous with the revocation, Catalina Jacob
executed another power of attorney of the same tenor in favor
plaintiff-appellee.
On January 30, 1985, Catalina Jacob executed in Canada a Deed of
Donation over a Lot 8W in favor of plaintiff-appellee (Exh.
E). Following the donation, plaintiff-appellee checked with the
Register of Deeds and found out that the property was in the
delinquent list, so that he paid the installments in arrears and the
remaining balance on the lot (Exhs. F, F-1 and F-2) and declared
the said property in the name of Catalina Jacob (Exhs. G, G-1, G-2
and G-3).
On January 29, 1986, plaintiff-appellee sent a demand letter to
defendant-appellant asking him to vacate the premises (Exh. H). A
similar letter was sent by plaintiff-appellees counsel to defendant
on September 11, 1986 (Exh. I). However, defendant-appellant
refused to vacate the premises claiming ownership thereof. Hence,
plaintiff-appellee instituted the complaint for recovery of
possession and damages against defendant-appellant.
Opposing plaintiff-appellees version, defendant-appellant claimed
that the house and lot in controversy were his by virtue of the
following documents:
1. Deed of Absolute Sale executed by Catalina Jacob dated October
7, 1977 in favor of Eduardo B. Espaol covering the residential house
located at the premises (Exh. 4).

After trial, the lower court decided in favor of plaintiff-appellee and

against defendant-appellant, rationalizing that the version of the
former is more credible than that of the latter. According to the
lower court:
From the oral and documentary evidence adduced by the parties[,]
it appears that the plaintiff- has a better right over the property,
subject matter of the case. The version of the plaintiff is more
credible than that of the defendant. The theory of the plaintiff is
that the house and lot belong to him by virtue of the Deed of
Donation in his favor executed by his grandmother Mrs. Jacob Vda.
de Reyes, the real awardee of the lot in question. The defendants
theory is that he is the owner thereof because he bought the house
and lot from Eduardo Espaol, after the latter had shown and given
to him Exhibits 1, 4 and 5. He admitted that he signed the Deed of
Assignment in favor of Eduardo Espaol on September 30, 1980, but
did not see awardee Catalina Jacob Vda. de Reyes signed [sic] it. In
fact, the acknowledgement in Exhibit 5 shows that the
assignor/awardee did not appear before the notary public. It may
be noted that on said date, the original awardee of the lot was no
longer in the Philippines, as both parties admitted that she had not
come back to the Philippines since 1977. (Exhs. K, K-1). Defendant,
claiming to be the owner of the lot, unbelievably did not take any
action to have the said house and lot be registered or had them
declared in his own name. Even his Exhibit 7 was not mailed or
served to the addressee. Such attitude and laxity is very unnatural
for a buyer/owner of a property, in stark contrast of [sic] the
interest shown by the plaintiff who saw to it that the lot was
removed from the delinquent list for non-payment of installments
and taxes due thereto [sic].[6]
Ruling of the Appellate Court

2. Deed of Assignment over Lot 8W executed by Catalina Jacob in

favor of Eduardo Espaol dated September 30, 1980 (Exh. 5); and
3. Deed of Assignment executed by Eduardo B. Espaol over Lot 8W
and a residential house thereon in favor of defendant-appellant
dated October 2, 1982 (Exh. 6).

In reversing the trial courts decision, [7] Respondent Court of

Appeals anchored its ruling upon the absence of any showing that
petitioner accepted his grandmothers donation of the subject
land. Citing jurisprudence that the donees failure to accept a
donation whether in the same deed of donation or in a separate
instrument renders the donation null and void, Respondent Court
denied petitioners claim of ownership over the disputed land. The

appellate court also struck down petitioners contention that the

formalities for a donation of real property should not apply to his
case since it was an onerous one -- he paid for the amortizations
due on the land before and after the execution of the deed of
donation -- reasoning that the deed showed no burden, charge or
condition imposed upon the donee; thus, the payments made by
petitioner were his voluntary acts.
Dissatisfied with the foregoing ruling, petitioner now seeks a
favorable disposition from this Court.[8]
Issues
Petitioner anchors his petition on the following grounds: [9]
[I.] In reversing the decision of the trial court, the Court of Appeals
decided a question of substance in a way not in accord with the law
and applicable decisions of this Honorable Court.
[II.] Even granting the correctness of the decision of the Court of
Appeals, certain fact and circumstances transpired in the meantime
which would render said decision manifestly unjust, unfair and
inequitable to petitioner.
We believe that the resolution of this case hinges on the issue
of whether the donation was simple or onerous.
The Courts Ruling
The petition lacks merit.
Main Issue:
Simple or Onerous Donation?
At the outset, let us differentiate between a simple donation
and an onerous one. A simple or pure donation is one whose cause
is pure liberality (no strings attached), while an onerous donation is
one which is subject to burdens, charges or future services equal to
or more in value than the thing donated. [10] Under Article 733 of the

Civil Code, donations with an onerous cause shall be governed by

the rules on contracts; hence, the formalities required for a valid
simple donation are not applicable.
Petitioner contends that the burdens, charges or conditions
imposed upon a donation need not be stated on the deed of
donation itself. Thus, although the deed did not categorically
impose any charge, burden or condition to be satisfied by him, the
donation was onerous since he in fact and in reality paid for the
installments in arrears and for the remaining balance of the lot in
question. Being an onerous donation, his acceptance thereof may
be express or implied, as provided under Art. 1320 of the Civil
Code, and need not comply with the formalities required by Art.
749 of the same code. His payment of the arrearages and balance
and his assertion of his right of possession against private
respondent clearly indicate his acceptance of the donation.
We rule that the donation was simple, not onerous. Even
conceding that petitioners full payment of the purchase price of the
lot might have been a burden to him, such payment was not
however imposed by the donor as a condition for the
donation. Rather, the deed explicitly stated:
That for and in consideration of the love and affection which
the DONEE inspires in the DONOR, and as an act of liberality and
generosity and considering further that the DONEE is a grandson of
the DONOR, the DONOR hereby voluntarily and freely gives,
transfer[s] and conveys, by way of donation unto said DONEE, his
heirs, executors, administrators and assigns, all the right, title and
interest which the said DONOR has in the above described real
property, together with all the buildings and improvements found
therein, free from all lines [sic] and encumbrances and charges
whatsoever;[11] [underscoring supplied]

It is clear that the donor did not have any intention to burden
or charge petitioner as the donee. The words in the deed are in fact
typical of a pure donation. We agree with Respondent Court that
the payments made by petitioner were merely his voluntary
acts. This much can be gathered from his testimony in court, in
which he never even claimed that a burden or charge had been
imposed by his grandmother.

q And what was the anwer [sic] given to you to the inquiry which
you made?
WITNESS:
a According to the person in the office, that I would pay the at
least [sic] one half of the installment in order to take [out]
the document [from] the delinquent list.

ATTY FORONDA:
q And [were] you able to pay?
q After you have received this [sic] documents, the x x
x revocation of power of attorney and the Special Power of
Attorney in your favor, what did you do?

a I was able to pay, sir.

WITNESS:

q What were you able to pay, one half of the balance or the
entire amounts [sic]?

a I went here in City Hall and verif[ied] the status of the award of
my grandmother.

a First, I paid the [sic] one half of the balance since the time the
lot was awarded to us.

q When you say the award, are you referring to the award in
particular [of the] lot in favor of your grandmother?

q What about the remaining balance, were you able to pay it?
a I was able to pay that, sir.

a Yes, Sir.
q What was the result of your verification?
a According to the person in the office, the papers of my
grandmother is [sic] includ[ed] in the dilinquent [sic] list.
q What did you do then when you found out that the lot was
includ[ed] in the dilinquent [sic] list?
a I talked to the person in charged [sic] in the office and I asked
him what to do so that the lot should not [be] included in
the dilinquent [sic] list.

q So, as of now, the amount in the City of Manila of the lot has
already been duly paid, is it not?
a Yes, sir.[12]
The payments even seem to have been made pursuant to the
power of attorney[13]executed by Catalina Reyes in favor of
petitioner, her grandson, authorizing him to execute acts necessary
for the fulfillment of her obligations. Nothing in the records shows
that such acts were meant to be a burden in the donation.
As a pure or simple donation, the following provisions of the
Civil Code are applicable:

ATTY. FORONDA:
Art. 734. The donation is perfected from the moment the donor
knows of the acceptance by the donee.

Art. 746. Acceptance must be made during the lifetime of the donor
and the donee.
Art. 749. In order that the donation of an immovable may be valid,
it must be made in a public instrument, specifying therein the
property donated and the value of the charges which the donee
must satisfy.
The acceptance may be made in the same deed of donation and in
a separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall
be notified thereof in authentic form, and this step shall be noted in
both instruments.
In the words of the esteemed Mr. Justice Jose C. Vitug, [14] Like
any other contract, an agreement of the parties is essential. The
donation, following the theory of cognition (Article 1319, Civil
Code), is perfected only upon the moment the donor knows of the
acceptance by the donee. Furthermore, [i]f the acceptance is made
in a separate instrument, the donor shall benotified thereof in an
authentic form, and this step shall be noted in both instruments.[15]
Acceptance of the donation by the donee is, therefore,
indispensable; its absence makes the donation null and void. [16] The
perfection and the validity of a donation are well explained by
former Sen. Arturo M. Tolentino in this wise:
x x x Title to immovable property does not pass from the donor to
the donee by virtue of a deed of donation until and unless it has
been accepted in a public instrument and the donor duly notified
thereof. The acceptance may be made in the very same instrument
of donation. If the acceptance does not appear in the same
document, it must be made in another. Solemn words are not
necessary; it is sufficient if it shows the intention to accept. But in
this case it is necessary that formal notice thereof be given to the
donor, and the fact that due notice has been given must be noted
in both instruments (that containing the offer to donate and that
showing the acceptance). Then and only then is the donation

perfected. If the instrument of donation has been recorded in the

registry of property, the instrument that shows the acceptance
should also be recorded. Where the deed of donation fails to show
the acceptance, or where the formal notice of the acceptance,
made in a separate instrument, is either not given to the donor or
else not noted in the deed of donation and in the separate
acceptance, the donation is null and void.[17]
Exhibit E (the deed of donation) does not show any indication
that petitioner-donee accepted the gift. During the trial, he did not
present any instrument evidencing such acceptance despite the
fact that private respondent already raised this allegation in his
supplemental pleading[18] to which petitioner raised no objection. It
was only after the Court of Appeals had rendered its decision, when
petitioner came before this Court, that he submitted an
affidavit[19] dated August 28, 1990, manifesting that he
wholeheartedly accepted the lot given to him by his grandmother,
Catalina Reyes. This is too late, because arguments, evidence,
causes of action and matters not raised in the trial court may no
longer be raised on appeal.[20]
True, the acceptance of a donation may be made at any time
during the lifetime of the donor. And granting arguendo that such
acceptance may still be admitted in evidence on appeal,
there is still need for proof that a formal notice of such acceptance
was received by the donor and noted in both the deed of donation
and the separate instrument embodying the acceptance. At the
very least, this last legal requisite of annotation in both instruments
of donation and acceptance was not fulfilled by petitioner. For this
reason, the subject lot cannot be adjudicated to him.
Secondary Issue:
Supervening Events
Petitioner also contends that certain supervening events have
transpired which render the assailed Decision manifestly unjust,
unfair and inequitable to him. The City of Manila has granted his
request for the transfer to his name of the lot originally awarded in
favor of Catalina Reyes. A deed of sale[21] covering the subject lot

has in fact been executed between the City of Manila, as the

vendor, and petitioner, as the vendee. The corresponding
certificate of title[22] has also been issued in petitioners name.
A close perusal of the city governments resolution [23] granting
petitioners request reveals that the request for and the grant of the
transfer of the award were premised on the validity and perfection
of the deed of donation executed by the original awardee,
petitioners grandmother. This is the same document upon which
petitioner, as against private respondent, asserts his right over the
lot. But, as earlier discussed and ruled, this document has no force
and effect and, therefore, passes no title, right or interest.
Furthermore, the same resolution states:
WHEREAS, in a report submitted by Ms. [Menchu C.] Bello [, Special
Investigator,] on February 7, 1990, it is stated that x x
x constructed on the lot is a make-shift structure used for
residential purposes by the proposed transferee Tito Lagazo and his
family; x x x and that constructed at Lot 8, Block 6, former
Monserrat Estate is a make-shift structure used as a dwelling place
by Lagazo and family because the front portion of their house
which was constructed on a road lot was demolished, and the
structure was extended backward covering a portion of the old
temporary road lot. x x x
The above findings of the investigator are, however, directly
contradictory to the testimonies in court of petitioner himself and of
private respondent. Petitioner claimed the following: that the house
constructed on the subject lot was owned by his grandmother
Catalina Jacob; that before the latter left for Canada in 1977,
Eduardo Espaol had already been living in the same house and
continued to do so until 1982; and that private respondent
occupied the premises after Espaol left. [24] On the other hand,
private respondent testified that he bought the subject house and
lot from Eduardo Espaol in 1982, after which he and his family
occupied the same; but sometime in 1985, they had to leave the
place due to a road-widening project which reduced the house to
about three meters [in] length and one arm[]s width.[25]

Between the testimonies under oath of the contending parties

and the report -- not subjected to cross-examination -- which was
prepared by the investigator who recommended the approval of
petitioners request for transfer, it is the former to which the Court
is inclined to give more credence. The investigators report must
have been based on the misrepresentations of petitioner who
arrogated unto himself the prerogatives of both Espaol and private
respondent. Further, it is on record that petitioner had required
private respondent to vacate the subject premises before he
instituted this complaint. This shows he was not in actual
possession of the property, contrary to the report of the
investigator.
Cabanlits Claim of Ownership
Petitioner also assails Respondent Courts conclusion that it is
unnecessary to pass upon private respondents claim over the
property. Petitioner insists that the principal issue in the case, as
agreed upon by the parties during pretrial, is who between the
parties is the owner of the house and lot in question.
In disposing of the principal issue of the right of petitioner over
the subject property under the deed of donation, we arrive at one
definite conclusion: on the basis of the alleged donation, petitioner
cannot be considered the lawful owner of the subject property. This
does not necessarily mean, however, that private respondent is
automatically the rightful owner.
In resolving private respondents claim of ownership, the
examination of the genuineness of the documents (deeds of
assignment over the lot between Catalina Reyes and Eduardo
Espaol and between Espaol and private respondent) upon which he
asserts his right is necessary, especially in light of petitioners
allegations of forgery. However, the respective assignors in both
documents are not parties to the instant case. Not having been
impleaded in the trial court, they had no participation whatsoever
in the proceedings at bar. Elementary norms of fair play and due
process bar us from making any disposition which may affect their
rights. Verily, there can be no valid judgment for or against them. [26]

Anyhow, since petitioner, who was the plaintiff below, failed to

prove with clear and convincing evidence his ownership claim over
the subject property, the parties thus resume theirstatus quo
ante. The trial court should have dismissed his complaint for his
failure to prove a right superior to that of private respondent, but
without prejudice to any action that Catalina Reyes or Eduardo
Espaol or both may have against said private respondent. Stating
this point otherwise, we are not ruling in this case on the rights and
obligations between, on the one hand, Catalina Reyes, her assigns
and/or representatives; and, on the other, Private Respondent
Cabanlit.
Not having proven any right to a valid, just and demandable
claim that compelled him to litigate or to incur expenses in order to
protect his interests by reason of an unjustified act or omission of
private respondent, petitioner cannot be awarded attorneys fees.[27]
WHEREFORE, the petition is hereby DENIED and the assailed
Decision is AFFIRMED.
SO ORDERED.

ELVIRA T. ARANGOTE,

G.R. No. 178906

Petitioner,

Present:

QUISUMBING, J.,*
AUSTRIA-MARTINEZ,
- versus -

Acting Chairperson,
CHICO-NAZARIO,
NACHURA, and
PERALTA, JJ.
Promulgated:
February 18, 2009

SPS.
MARTIN
MAGLUNOBand LOURDES S.
MAGLUNOB, and ROMEO SALIDO,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45
of the 1997 Revised Rules of Civil Procedure seeking to reverse and
set
aside
the
Decision[1] dated 27
October
2006 and
[2]
Resolution dated 29 June 2007 of the Court of Appeals in CA-G.R.
SP No. 64970. In its assailed Decision, the appellate court affirmed
the Decision[3]dated 12 September 2000 of the Regional Trial Court
(RTC), 6th Judicial Region, Branch 1, Kalibo, Aklan, in Civil Case No.
5511, which reversed the Decision [4] dated 6 April 1998 of the

7th Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, Ibajay,

Aklan, in Civil Case No. 156; and declared [5] the herein respondentSpouses Martin and Lourdes Maglunob (Spouses Maglunob) and
respondent Romeo Salido (Romeo) as the lawful owners and
possessors of Lot 12897 with an area of 982 square meters, more
or less, located in Maloco, Ibajay, Aklan (subject property). In its
assailed Resolution, the appellate court denied herein petitioner
Elvira T. Arangotes Motion for Reconsideration.
Elvira T. Arangote, herein petitioner married to Ray Mars E.
Arangote, is the registered owner of the subject property, as
evidenced by Original Certificate of Title (OCT) No. CLOA-1748.
[6]
Respondents Martin (Martin II) and Romeo are first cousins and
the grandnephews of Esperanza Maglunob-Dailisan (Esperanza),
from whom petitioner acquired the subject property.
The Petition stems from a Complaint[7] filed by petitioner and her
husband against the respondents for Quieting of Title, Declaration
of Ownership and Possession, Damages with Preliminary Injunction,
and Issuance of Temporary Restraining Order before the MCTC,
docketed as Civil Case No. 156.
The Complaint alleged that Esperanza inherited the subject
property from her uncle Victorino Sorrosa by virtue of a notarized
Partition Agreement[8] dated 29 April 1985, executed by the latters
heirs. Thereafter, Esperanza declared the subject property in her
name for real property tax purposes, as evidenced by Tax
Declaration No. 16218 (1985).[9]
The Complaint further stated that on 24 June 1985, Esperanza
executed a Last Will and Testament [10] bequeathing the subject
property to petitioner and her husband, but it was never
probated. On 9 June 1986, Esperanza executed another document,
an Affidavit,[11] in which she renounced, relinquished, waived and
quitclaimed all her rights, share, interest and participation
whatsoever in the subject property in favor of petitioner and her
husband. On the basis thereof, Tax Declaration No. 16218 in the
name of Esperanza was cancelled and Tax Declaration No.
16666[12] (1987) was issued in the name of the petitioner and her
husband.
In 1989, petitioner and her husband constructed a house on the
subject property. On 26 March 1993, OCT No. CLOA-1748 was
issued by the Secretary of the Department of Agrarian Reform
(DAR) in the name of petitioner, married to Ray Mars E.
Arangote. However, respondents, together with some hired

persons, entered the subject property on 3 June 1994 and built a

hollow block wall behind and in front of petitioners house, which
effectively blocked the entrance to its main door.
As a consequence thereof, petitioner and her husband were
compelled to institute Civil Case No. 156.
In their Answer with Counterclaim in Civil Case No. 156,
respondents averred that they co-owned the subject property with
Esperanza. Esperanza and her siblings, Tomas and Inocencia,
inherited the subject property, in equal shares, from their father
Martin Maglunob (Martin I). When Tomas and Inocencia passed
away, their shares passed on by inheritance to respondents Martin
II and Romeo, respectively. Hence, the subject property was coowned by Esperanza, respondent Martin II (together with his
wife Lourdes), and respondent Romeo, each holding a onethird pro-indiviso share therein. Thus, Esperanza could not validly
waive her rights and interest over the entire subject property in
favor of the petitioner.
Respondents also asserted in their Counterclaim that
petitioner and her husband, by means of fraud, undue influence
and deceit were able to make Esperanza, who was already old and
illiterate, affix her thumbmark to the Affidavit dated 9 June 1986,
wherein she renounced all her rights and interest over the subject
property in favor of petitioner and her husband. Respondents thus
prayed that the OCT issued in petitioners name be declared null
and void insofar as their two-thirds shares are concerned.
After trial, the MCTC rendered its Decision dated 6 April 1998 in
Civil Case No. 156, declaring petitioner and her husband as the true
and lawful owners of the subject property.The decretal portion of
the MCTC Decision reads:
WHEREFORE, judgment is hereby rendered:
A. Declaring the [herein petitioner and her husband] the
true, lawful and exclusive owners and entitled to the
possession of the [subject property] described and referred
to under paragraph 2 of the [C]omplaint and covered by Tax
Declaration No. 16666 in the names of the [petitioner and
her husband];
B. Ordering the [herein respondents] and anyone hired by,
acting or working for them, to cease and desist from
asserting or claiming any right or interest in, or

exercising any act of ownership or possession over

the [subject property];
C. Ordering the [respondents] to pay the [petitioner and her
husband] the amount of P10,000.00 as attorneys
fee. With cost against the [respondents].[13]
The respondents appealed the aforesaid MCTC Decision to the
RTC. Their appeal was docketed as Civil Case No. 5511.
Respondents argued in their appeal that the MCTC erred in
not dismissing the Complaint filed by the petitioner and her
husband
for
failure
to
identify
the
subject
property
therein. Respondents further faulted the MCTC for not declaring
Esperanzas Affidavit dated 9 June 1986 -- relinquishing all her rights
and interest over the subject property in favor of petitioner and her
husband -- as null and void insofar as respondents two-thirds share
in the subject property is concerned.
On 12 September 2000, the RTC rendered its Decision reversing the
MCTC Decision dated 6 April 1998. The RTC adjudged respondents,
as well as the other heirs of Martin Maglunob, as the lawful owners
and possessors of the entire subject property. The RTC decreed:
WHEREFORE, judgment is hereby rendered as follows:
1) The appealed [D]ecision is REVERSED;
2) [Herein respondents] and the other heirs of Martin
Maglunob are declared the lawful owners and
possessors of the whole [subject property] as
described in Paragraph 2 of the [C]omplaint, as
against the [herein petitioner and her husband].
3) [Petitioner and her husband] are ordered to immediately
turn over possession of the [subject property] to the
[respondents] and the other heirs of Martin
Maglunob; and
4) [Petitioner and her husband] are ordered to pay
[respondents] attorneys fees of P5,000.00, other
litigation expenses of P5,000.00, moral damages
of P10,000.00 and exemplary damages of P5,000.00.
[14]

Petitioner and her husband filed before the RTC, on 26 September

2000, a Motion for New Trial or Reconsideration [15] on the ground of
newly
discovered
evidence
consisting
of
a
Deed
of
Acceptance[16] dated 23 September 2000, and notice[17] of the
same, which were both made by the petitioner, for herself and in
behalf of her husband,[18] during the lifetime of Esperanza. In the
RTC Order[19] dated 2 May 2001, however, the RTC denied the
aforesaid Motion for New Trial or Reconsideration.
The petitioner and her husband then filed a Petition for Review,
under Rule 42 of the 1997 Revised Rules of Civil Procedure, before
the Court of Appeals, where the Petition was docketed as CA-G.R.
SP No. 64970.
In their Petition before the appellate court, petitioner and
her husband raised the following errors committed by the RTC in
its 12 September 2000 Decision:
I.
It erred in
[D]ecision of the [MCTC];

reversing

the

II.
It erred in declaring the [herein
respondents] and the other heirs of Martin
Maglunob as the lawful owners and
possessors of the whole [subject property];
III.
It erred in declaring [OCT] No.
CLOA-1748 in the name of [herein petitioner]
Elvie T. Arangote as null and void;
IV.
It erred in denying [petitioner and
her husbands] [M]otion for [N]ew [T]rial or
[R]econsideration dated [26 September 2000;
and
V.
It erred in not declaring the
[petitioner and her husband] as possessors in
good faith.[20]
On 27 October 2006, the Court of Appeals rendered a Decision
denying the Petition for Review of petitioner and her husband and
affirming the RTC Decision dated 12 September 2000. Petitioner
and her husbands subsequent Motion for Reconsideration was
similarly denied by the Court of Appeals in its Resolution dated 29
June 2007.

Hence, petitioner[21] now comes before this Court raising in her

Petition the following issues:
I.

II.

III.

Whether the [RTC] acted with

grave abuse of discretion amounting to lack
or excess of jurisdiction when it declared the
[petitioner and her husbands title to the
subject property] null and void;
Whether the [RTC] acted with
grave abuse of discretion amounting to lack of
jurisdiction when it declared the Affidavit of
Quitclaim null and void; and
Whether the [RTC] and the
Honorable Court of Appeals acted with grave
abuse of discretion amounting to lack or
excess of jurisdiction when it rejected
petitioners claim as possessors(sic) in good
faith, hence, entitled to the rights provided in
[Article] 448 and [Article] 546 of the Civil
Code.[22]

Petitioner contends that the aforesaid OCT No. CLOA-1748

was issued in her name on 26 March 1993 and was registered in
the Registry of Deeds of Aklan on 20 April 1993. From 20 April
1993 until the institution of Civil Case No. 156 on 10 June
1994 before the MCTC, more than one year had already
elapsed. Considering that a Torrens title can only be attacked within
one year after the date of the issuance of the decree of registration
on the ground of fraud and that such attack must be through a
direct proceeding, it was an error on the part of the RTC and the
Court of Appeals to declare OCT No. CLOA-1748 null and void.
Petitioner additionally posits that both the RTC and the Court of
Appeals committed a mistake in declaring null and void the
Affidavit dated 9 June 1986 executed by Esperanza, waiving all her
rights and interest over the subject property in favor of petitioner
and her husband. Esperanzas Affidavit is a valid and binding proof
of the transfer of ownership of the subject property in petitioners
name, as it was also coupled with actual delivery of possession of
the subject property to petitioner and her husband. The Affidavit is
also proof of good faith on the part of petitioner and her husband.

Finally, petitioner argues that, assuming for the sake of argument,

that Esperanzas Affidavit is null and void, petitioner and her
husband had no knowledge of any flaw in Esperanzas title when the
latter relinquished her rights to and interest in the subject property
in their favor. Hence, petitioner and her husband can be considered
as possessors in good faith and entitled to the rights provided
under Articles 448 and 546 of the Civil Code.
This present Petition is devoid of merit.
It is a hornbook doctrine that the findings of fact of the trial court
are entitled to great weight on appeal and should not be disturbed
except for strong and valid reasons, because the trial court is in a
better position to examine the demeanor of the witnesses while
testifying. It is not a function of this Court to analyze and weigh
evidence by the parties all over again. This Courts jurisdiction is, in
principle, limited to reviewing errors of law that might have been
committed by the Court of Appeals. [23] This rule, however, is subject
to several exceptions,[24] one of which is present in this case, i.e.,
when the factual findings of the Court of Appeals and the trial court
are contradictory.
In this case, the findings of fact of the MCTC as regards the origin of
the subject property are in conflict with the findings of fact of both
the RTC and the Court of Appeals.Hence, this Court will have to
examine the records to determine first the true origin of the subject
property and to settle whether the respondents have the right over
the same for being co-heirs and co-owners, together with their
grand aunt, Esperanza, before this Court can resolve the issues
raised by the petitioner in her Petition.
After a careful scrutiny of the records, this Court affirms the
findings of both the RTC and the Court of Appeals as regards the
origin of the subject property and the fact that respondents, with
their grand aunt Esperanza, were co-heirs and co-owners of the
subject property.
The records disclosed that the subject property was part of a
parcel of land[25] situated in Maloco, Ibajay, Aklan, consisting of
7,176 square meters and commonly owned in equal shares by the
siblings Pantaleon Maglunob (Pantaleon) and Placida MaglunobSorrosa (Placida). Upon the death of Pantaleon and Placida, their
surviving and legal heirs executed a Deed of Extrajudicial
Settlement and Partition of Estate in July 1981,[26] however, the
Deed was not notarized. Considering that Pantaleon died without
issue, his one-half share in the parcel of land he co-owned with
Placida passed on to his four siblings (or their respective heirs, if

already deceased), namely: Placida, Luis, Martin I, and Victoria, in

equal shares.
According to the aforementioned Deed of Extrajudicial
Settlement and Partition of Estate, the surviving and legal heirs of
Pantaleon and Placida agreed to have the parcel of land commonly
owned by the siblings declared for real property tax purposes in the
name of Victorino Sorrosa (Victorino), Placidas husband. Thus, Tax
Declarations No. 5988 (1942),[27] No. 6200 (1945)[28] and No. 7233
(1953)[29] were all issued in the name of Victorino.
Since Martin I already passed away when the Deed of
Extrajudicial Settlement and Partition of Estate was executed, his
heirs[30] were represented therein by Esperanza.By virtue of the said
Deed, Martin I received as inheritance a portion of the parcel of
land measuring 897 square meters.
After the death of Victorino, his heirs [31] executed another
Partition Agreement on 29 April 1985, which was notarized on
the same date. The Partition Agreement mentioned four parcels
of land. The subject property, consisting of a portion of the
consolidated parcels 1, 2, and 3, and measuring around 982
square meters, was allocated to Esperanza. In comparison, the
property given to Esperanza under the Partition Agreement is
bigger than the one originally allocated to her earlier under the
Deed of Extrajudicial Settlement and Partition of Estate dated
July 1981, which had an area of only 897 square meters. It may
be reasonably assumed, however, that the subject property,
measuring 982 square meters, allocated to Esperanza under the
Partition Agreement dated 29 April 1985, is already inclusive of
the smaller parcel of 897 square meters assigned to her under
the Deed of Extrajudicial Settlement and Partition of Estate
dated July 1981. As explained by the RTC in its 12 September
2000 Decision:
The [subject property] which is claimed by the
[herein petitioner and her husband] and that which is
claimed by the [herein respondents] are one and the
same, the difference in area and technical
description being due to the repartition and reallocation of the parcel of land originally co-owned by
Pantaleon Maglunob and his sister Placida Maglunob
and subsequently declared in the name of [Victorino]
under Tax Declaration No. 5988 of 1949.[32]

It is clear from the records that the subject property was not
Esperanzas exclusive share, but also that of the other heirs of her
father, Martin I. Esperanza expressly affixed her thumbmark to the
Deed of Extrajudicial Settlement of July 1981 not only for herself,
but also on behalf of the other heirs of Martin I. Though in the
Partition Agreement dated 29 April 1985 Esperanza affixed her
thumbmark without stating that she was doing so not only for
herself, but also on behalf of the other heirs of Martin I, this does
not mean that Esperanza was already the exclusive owner
thereof. The evidence shows that the subject property is the share
of the heirs of Martin I. This is clear from the sketch[33]attached to
the Partition Agreement dated 29 April 1985, which reveals the
proportionate areas given to the heirs of the two siblings, Pantaleon
and Placida, who were the original owners of the whole parcel of
land[34] from which the subject property was taken.

Going to the issues raised by the petitioner in this Petition,

this Court will resolve the same concurrently as they are
interrelated.

Further, it bears emphasis that the Partition Agreement was

executed by and among the son, grandsons, granddaughters and
cousins of Victorino. Esperanza was neither the granddaughter nor
the cousin of Victorino, as she was only Victorinos grandniece. The
cousin of Victorino is Martin I, Esperanzas father. In effect,
therefore, the subject property allotted to Esperanza in the Partition
Agreement was not her exclusive share, as she holds the same for
and on behalf of the other heirs of Martin I, who was already
deceased at the time the Partition Agreement was made.

As no onerous undertaking is required of petitioner and her

husband under the said Affidavit, the donation is regarded as a
pure donation of an interest in a real property covered by Article
749 of the Civil Code.[36] Article 749 of the Civil Code provides:

To further bolster the truth that the subject property was not
exclusively owned by Esperanza, the Affidavit she executed in favor
of petitioner and her husband on 6 June 1985 was worded as
follows:
That I hereby renounce, relinquish, waive and
quitclaim
all
my
rights, share,
interest
and participation whatsoever in the [subject
property] unto the said Sps. Ray Mars Arangote and
Elvira T. Arangote, their heirs, successors, and
assigns including the improvement found thereon;[35]
Logically, if Esperanza fully owned the subject property, she
would have simply waived her rights to and interest in the subject
property, without mentioning her share and participation in the
same. By including such words in her Affidavit, Esperanza was
aware of and was limiting her waiver, renunciation, and quitclaim to
her one-third share and participation in the subject property.

In this case, the petitioner derived her title to the subject

property from the notarized Affidavit executed by Esperanza,
wherein the latter relinquished her rights, share, interest and
participation over the same in favor of the petitioner and her
husband.
A careful perusal of the said Affidavit reveals that it is not
what it purports to be. Esperanzas Affidavit is, in fact, a
Donation. Esperanzas real intent in executing the said Affidavit was
to donate her share in the subject property to petitioner and her
husband.

Art. 749. In order that the donation of an

immovable may be valid, it must be made in a public
document, specifying therein the property donated
and the value of the charges which the donee must
satisfy.

The acceptance may be made in the same

deed of donation or in a separate public document,
but it shall not take effect unless it is done during the
lifetime of the donor.
If the acceptance is made in a separate
instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both
instruments.
From the aforesaid provision, there are three requisites for
the validity of a simple donation of a real property, to wit: (1) it
must be made in a public instrument; (2) it must be accepted,

which acceptance may be made either in the same Deed of

Donation or in a separate public instrument; and (3) if the
acceptance is made in a separate instrument, the donor must be
notified in an authentic form, and the same must be noted in both
instruments.
This Court agrees with the RTC and the Court of Appeals that the
Affidavit executed by Esperanza relinquishing her rights, share,
interest and participation over the subject property in favor of the
petitioner and her husband suffered from legal infirmities, as it
failed to comply with the aforesaid requisites of the law.

granting arguendo that such acceptance may still be admitted in

evidence on appeal, there is still need for proof that a formal
notice of such acceptance was received by the donor and
noted in both the Deed of Donation and the separate
instrument embodying the acceptance.[41] At the very least,
this last legal requisite of annotation in both instruments of
donation and acceptance was not fulfilled by the petitioner. Neither
the Affidavit nor the Deed of Acceptance bears the fact that
Esperanza received notice of the acceptance of the donation by
petitioner. For this reason, even Esperanzas one-third share in the
subject property cannot be adjudicated to the petitioner.

In Sumipat v. Banga,[37] this Court declared that title to

immovable property does not pass from the donor to the donee by
virtue of a Deed of Donation until and unless it has been
accepted in a public instrument and the donor duly notified
thereof. The acceptance may be made in the very same
instrument of donation. If the acceptance does not appear in the
same document, it must be made in another. Where the Deed of
Donation fails to show the acceptance, or where the formal notice
of the acceptance, made in a separate instrument, is either not
given to the donor or else not noted in the Deed of Donation and in
the separate acceptance, the donation is null and void.[38]

With the foregoing, this Court holds that the RTC and the
Court of Appeals did not err in declaring null and void Esperanzas
Affidavit.

In the present case, the said Affidavit, which is tantamount to a

Deed of Donation, met the first requisite, as it was notarized; thus,
it became a public instrument. Nevertheless, it failed to meet the
aforesaid second and third requisites. The acceptance of the said
donation was not made by the petitioner and her husband either in
the same Affidavit or in a separate public instrument. As there was
no acceptance made of the said donation, there was also no notice
of the said acceptance given to the donor, Esperanza. Therefore,
the Affidavit executed by Esperanza in favor of petitioner
and her husband is null and void.

SEC. 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or cancelled
except in a direct proceeding in accordance with law.

The subsequent notarized Deed of Acceptance[39] dated 23

September 2000, as well as the notice[40] of such acceptance,
executed by the petitioner did not cure the defect. Moreover, it was
only made by the petitioner several years after the Complaint was
filed in court, or when the RTC had already rendered its Decision
dated 12 September 2000, although it was still during Esperanzas
lifetime. Evidently, its execution was a mere afterthought, a belated
attempt to cure what was a defective donation.
It is true that the acceptance of a donation may be
made at any time during the lifetime of the donor. And

The next issue to be resolved then is whether the RTC, as

well as the Court of Appeals, erred in declaring OCT No. CLOA-1748
in the name of petitioner and her husband null and void.
Again, this Court answers the said issue in the negative.
Section 48 of Presidential decree No. 1529 states:

Such proscription has long been enshrined in Philippine

jurisprudence. The judicial action required to challenge the validity
of title is a direct attack, not a collateral attack.[42]
The attack is considered direct when the object of an action
is to annul or set aside such proceeding, or enjoin its
enforcement. Conversely, an attack is indirect or collateral when, in
an action to obtain a different relief, an attack on the proceeding is
nevertheless made as an incident thereof. Such action to attack
a certificate of title may be an original action or a
counterclaim, in which a certificate of title is assailed as
void.[43]
A counterclaim is considered a new suit in which the
defendant is the plaintiff and the plaintiff in the complaint becomes

the defendant. It stands on the same footing as, and is to be

tested by the same rules as if it were, an independent action. [44]

err in declaring null and void OCT No. CLOA-1748 in the name of
the petitioner, married to Ray Mars E. Arangote.

In their Answer to the Complaint for Quieting of Title filed

by the petitioner and her husband before the MCTC,
respondents included therein a Counterclaim wherein they
repleaded all the material allegations in their affirmative
defenses, the most essential of which was their claim that
petitioner and her husband -- by means of fraud, undue
influence and deceit -- were able to make their grand aunt,
Esperanza, who was already old and illiterate, affix her
thumbmark to the Affidavit, wherein she renounced, waived,
and quitclaimed all her rights and interest over the subject
property in favor of petitioner and her husband. In addition,
respondents maintained in their Answer that as petitioner and
her husband were not tenants either of Esperanza or of the
respondents, the DAR could not have validly issued in favor of
petitioner and her husband OCT No. CLOA-1748.Thus, the
respondents prayed, in their counterclaim in Civil Case No. 156
before the MCTC, that OCT No. CLOA-1748 issued in the name of
petitioner, married to Ray Mars E. Arangote, be declared null
and void, insofar as their two-thirds shares in the subject
property are concerned.

Considering that Esperanza died without any compulsory

heirs and that the supposed donation of her one-third share in the
subject property per her Affidavit dated 9 June 1985 was already
declared null and void, Esperanzas one-third share in the subject
property passed on to her legal heirs, the respondents.
As petitioners last-ditch effort, she claims that she is a possessor in
good faith and, thus, entitled to the rights provided for under
Articles 448 and 546 of the Civil Code.

It is clear, thus, that respondents Answer with Counterclaim

was a direct attack on petitioners certificate of title. Furthermore,
since all the essential facts of the case for the determination of the
validity of the title are now before this Court, to require
respondents to institute a separate cancellation proceeding would
be pointlessly circuitous and against the best interest of justice.
Esperanzas Affidavit, which was the sole basis of petitioners
claim to the subject property, has been declared null and
void. Moreover, petitioner and her husband were not tenants of the
subject property. In fact, petitioner herself admitted in her
Complaint filed before the MCTC that her husband is out of the
country, rendering it impossible for him to work on the subject
property as a tenant. Instead of cultivating the subject property,
petitioner and her husband possessed the same by constructing a
house thereon. Thus, it is highly suspicious how the petitioner was
able to secure from the DAR a Certificate of Land Ownership Award
(CLOA) over the subject property. The DAR awards such certificates
to the grantees only if they fulfill the requirements of Republic Act
No. 6657, otherwise known as the Comprehensive Agrarian Reform
Program (CARP).[45] Hence, the RTC and the Court of Appeals did not

This claim is untenable.

The Civil Code describes a possessor in good faith as follows:
Art. 526. He is deemed a possessor in good
faith who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it.
He is deemed a possessor in bad faith who
possesses in any case contrary to the foregoing.
Mistake upon a doubtful or difficult question of
law may be the basis of good faith.
Art. 1127. The good faith of the possessor
consists in the reasonable belief that the person from
whom he received the thing was the owner thereof,
and could transmit his ownership.
Possession in good faith ceases from the moment defects in the
title are made known to the possessor by extraneous evidence or
by a suit for recovery of the property by the true owner. Every
possessor in good faith becomes a possessor in bad faith from the
moment he becomes aware that what he believed to be true is not
so.[46]
In the present case, when respondents came to know that an OCT
over the subject property was issued and registered in petitioners
name on 26 March 1993, respondents brought a Complaint on 7
August 1993 before the Lupon of Barangay Maloco, Ibajay, Aklan,
challenging the title of petitioner to the subject property on the
basis that said property constitutes the inheritance of respondent,
together with their grandaunt Esperanza, so Esperanza had no
authority to relinquish the entire subject property to

petitioner. From that moment, the good faith of the petitioner had
ceased.
Petitioner cannot be entitled to the rights under Articles 448
and 546 of the Civil Code, because the rights mentioned therein are
applicable only to builders in good faith and not to possessors in
good faith.
Moreover, the petitioner cannot be considered a builder in
good faith of the house on the subject property. In the context that
such term is used in particular reference to Article 448 of the Civil
Code, a builder in good faith is one who, not being the
owner of the land, builds on that land, believing himself to
be its owner and unaware of any defect in his title or mode
of acquisition.[47]
The various provisions of the Civil Code, pertinent to the
subject, read:
Article 448. The owner of the land on which
anything has been built, sown, or planted in good
faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to
oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably
more than that of the building or trees. In such a
case, he shall pay reasonable rent, if the owner of
the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Article 449. He who builds, plants, or sows in
bad faith on the land of another, loses what is built,
planted or sown without right to indemnity.
Article 450. The owner of the land on which
anything has been built, planted or sown in bad faith
may demand the demolition of the work, or that the
planting or sowing be removed, in order to replace
things in their former condition at the expense of the
person who built, planted or sowed; or he may

compel the builder or planter to pay the price of the

land, and the sower the proper rent.
Under the foregoing provisions, the builder in good faith can
compel the landowner to make a choice between appropriating the
building by paying the proper indemnity or obliging the builder to
pay the price of the land. The choice belongs to the owner of the
land, a rule that accords with the principle of accession, i.e., that
the accessory follows the principal and not the other way
around. Even as the option lies with the landowner, the grant to
him, nevertheless, is preclusive. He must choose one. He cannot,
for instance, compel the owner of the building to instead remove it
from the land. In order, however, that the builder can invoke that
accruing benefit and enjoy his corresponding right to demand that
a choice be made by the landowner, he should be able to prove
good faith on his part.[48]
Good faith, here understood, is an intangible and abstract
quality with no technical meaning or statutory definition, and it
encompasses, among other things, an honest belief, the absence of
malice and the absence of design to defraud or to seek an
unconscionable advantage. An individuals personal good faith is a
concept of his own mind and, therefore, may not conclusively be
determined by his protestations alone. It implies honesty of
intention, and freedom from knowledge of circumstances which
ought to put the holder upon inquiry. The essence of good faith lies
in an honest belief in the validity of ones right, ignorance of a
superior claim, and absence of intention to overreach
another.Applied to possession, one is considered in good faith if he
is not aware that there exists in his title or mode of acquisition any
flaw which invalidates it.[49]
In this case, the subject property waived and quitclaimed by
Esperanza to the petitioner and her husband in the Affidavit was
only covered by a tax declaration in the name of
Esperanza. Petitioner did not even bother to look into the origin of
the subject property and to probe into the right of Esperanza to
relinquish the same. Thus, when petitioner and her husband built a
house thereon in 1989 they cannot be considered to have acted in
good faith as they were fully aware that when Esperanza executed
an Affidavit relinquishing in their favor the subject property the only
proof of Esperanzas ownership over the same was a mere tax
declaration. This fact or circumstance alone was enough to put the
petitioner and her husband under inquiry. Settled is the rule that a
tax declaration does not prove ownership. It is merely

an indicium of a claim of ownership. Payment of taxes is not proof

of ownership; it is, at best, an indicium of possession in the concept
of ownership. Neither tax receipts nor a declaration of ownership
for taxation purposes is evidence of ownership or of a right to
possess realty when not supported by other effective proofs. [50]
With the foregoing, the petitioner is not entitled to the rights
under Article 448 and 546 as the petitioner is not a builder and
possessor in good faith.

WHEREFORE, premises considered, the instant Petition is

hereby DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 64970, dated 27 October 2006 and 29
June 2007, respectively, affirming the RTC Decision dated 12
September 2000 in Civil Case No. 5511 and declaring the
respondents the lawful owners and possessors of the subject
property are hereby AFFIRMED. No costs. SO ORDERED.