Modes of Acquiring Ownership

Lecture No. 10.

Part 1

September 2, 2017 REVISION

MODES OF ACQUIRING OWNERSHIP

DONATION & WILLS & SUCCESSION

ATTY EDUARDO T. REYES, III

(For Fourth Year Section-A and Property Second Year, 

University of San Agustin School of Law, 

General Luna Street, Iloilo City, 

School Year 2016-2017 Ist Semester)

TITLE III

DONATION

CHAPTER 1

Nature of Donations

Article 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (618a)

Comments:

            1. “Donation” is both a contract thus a “title” and a MODE of acquiring and transmitting ownership.

            Pursuant to the second paragraph of Article 712, thus: “Ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition”.

            IN CONTRAST. Check out Article 1477 which states that: “The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof”. Thus, a sale is only a “title” but the mode of transmitting ownership “as a consequence of such contract of sale”, is by tradition or delivery.

Article 726. When a person gives to another a thing or right on account of the latter's merits or of the services rendered by him to the donor, provided they do not constitute a demandable debt, or when the gift imposes upon the donee a burden which is less than the value of the thing given, there is also a donation. (619)

Article 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. (n)

           

 Comments:

·       See Art. 873 (of similar effect)

·       See however, Art. 1183 (of different effect)

Article 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620)

Comment:

          “Donation mortis causa typically: (1) Convey no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should retain the ownership (full or naked) and the control of the property while alive; (2) That before the [donor’s] 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.[1]”

Article 729. When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donor's death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. (n)

Comment: “Donation in prasenti to be delivered in future”.

Article 730. The fixing of an event or the imposition of a suspensive condition, which may take place beyond the natural expectation of life of the donor, does not destroy the nature of the act as a donation inter vivos, unless a contrary intention appears. (n)

Comment: Fulfilment of resolutory condition has retroactive effect.

Article 731. When a person donates something, subject to the resolutory condition of the donor's survival, there is a donation inter vivos. (n)

Article 732. Donations which are to take effect inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in this Title. (621)

Article 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. (622)

Comments:

1. “Donations with an onerous cause shall be governed by the RULES ON CONTRACTS”. Thus, in an ONEROUS DONATION, Articles 748 and 749 which require a Donation to be in a public instrument, do not apply. Instead, Article 1356 of the New Civil Code applies which states that “ contract shall be obligatory in whatever form it may have been entered into”.

2. Since “Onerous Donations” are governed by the law on contracts, in the event that an “Impossible condition” is imposed, Article 1183 on contracts and NOT Article 727 should apply. Article 1183 states: “Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid”.

            But curiously, that is not how the SC ruled in CJ Yulo below.

Article 734. The donation is perfected from the moment the donor knows of the acceptance by the donee. (623)

Case law teaches[2] that

“Petitioner contends that the case at bar is similar to the 1995 case of Central Philippine University vs. Court of Appeals, 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, where respondent Silim donated a 5,600-square meter parcel of land in favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del Sur with the condition that the said property should be used exclusively and forever for school purposes only. Although a school building was constructed on the property through the efforts of the Parent-Teachers Association of Barangay Kauswagan, the funds for a Bagong Lipunan school building could not be released because the government required that it be built on a one-hectare parcel of land. This led the donee therein to exchange the donated property for a bigger one.

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

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

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

ARTICLE 733 Donations with onerous cause shall be governed by the rules on contracts, and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed.

The donation involved in the present controversy is one which is onerous since there is a burden imposed upon the donee to build a school on the donated property.

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

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

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

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

The above ruling of the Court of Appeals is completely in tune with this Courts disposition in Republic vs. Silim, supra. The donor therein sought to revoke the donation on the ground that the donee breached the condition to exclusively and forever use the land for school purpose only, but this Court ruled in favor of the donee:

Without the slightest doubt, the condition for the donation was not in any way violated when the lot donated was exchanged with another one. The purpose for the donation remains the same, which is for the establishment of a school. The exclusivity of the purpose was not altered or affected. In fact, the exchange of the lot for a much bigger one was in furtherance and enhancement of the purpose of the donation. The acquisition of the bigger lot paved way for the release of funds for the construction of Bagong Lipunan school building which could not be accommodated by the limited area of the donated lot.

As in Silim, the three (3) lease contracts herein entered into by the donee were for the sole purpose of pursuing the objective for which the donation was intended. In fact, such lease was authorized by the donor by express provision in the deed of donation, albeit the prior written consent therefor of the donor is needed. Hence, considering that the donees acts did not detract from the very purpose for which the donation was made but precisely to achieve such purpose, a lack of prior written consent of the donor would only constitute casual breach of the deed, which will not warrant the revocation of the donation.

Besides, this Court cannot consider the requirement of a prior written consent by the donor for all contracts of lease to be entered into by the donee as an absolute ground for revocation of the donation because such a condition, if not correlated with the purpose of the donation, would constitute undue restriction of the donees right of ownership over the donated property.

Instructive on this point is the ruling of this Court in The Roman Catholic Archbishop of Manila vs. Court of Appeals,[7] viz:

Donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee. Once a donation is accepted, the donee becomes the absolute owner of the property donated. Although the donor may impose certain conditions in the deed of donation, the same must not be contrary to law, morals, good customs, public order and public policy.

x x x

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 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.”

CHAPTER 2
Persons Who May Give or Receive a Donation

Article 735. All persons who may contract and dispose of their property may make a donation. (624)

Article 736. Guardians and trustees cannot donate the property entrusted to them. (n)

Article 737. The donor's capacity shall be determined as of the time of the making of the donation. (n)

Comment: “Making” means “perfection”.

Article 738. All those who are not specially disqualified by law therefor may accept donations. (625)

Article 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;

(2) Those made between persons found guilty of the same criminal offense, in consideration thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought by the spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action. (n)

Article 740. Incapacity to succeed by will shall be applicable to donations inter vivos. (n)

Article 741. Minors and others who cannot enter into a contract may become donees but acceptance shall be done through their parents or legal representatives. (626a)

Article 742. Donations made to conceived and unborn children may be accepted by those persons who would legally represent them if they were already born. (627)

Article 743. Donations made to incapacitated persons shall be void, though simulated under the guise of another contract or through a person who is interposed. (628)

Article 744. Donations of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more different persons. (n)

Comment: See Article 1544 on “Double Sales”.

Article 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. (630)

Article 746. Acceptance must be made during the lifetime of the donor and of the donee. (n)

Article 747. Persons who accept donations in representation of others who may not do so by themselves, shall be obliged to make the notification and notation of which article 749 speaks. (631)

Article 748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing.

Otherwise, the donation shall be void. (632a)

Article 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. (633)

Comments:

            1. Can Donation be proven by Oral Evidence?

“The donation of real property, which is a solemn contract, is void without the formalities stated in Article 749 of the Civil Code of the Philippines (Civil Code). Article 749 of the Civil Code reads:

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.

Article 749 of the Civil Code requires that the donation of real property must be made in a public instrument. Otherwise, the donation is void. A deed of donation acknowledged before a notary public is a public document.^[12] The notary public shall certify that he knows the person acknowledging the instrument and that such person is the same person who executed the instrument, acknowledging that the instrument is his free act and deed. The acceptance may be made in the same deed of donation or in a separate instrument. An acceptance made in a separate instrument must also be in a public document. If the acceptance is in a separate public instrument, the donor shall be notified in writing of such fact. Both instruments must state the fact of such notification.”[3]

Article 751. Donations cannot comprehend future property.

By future property is understood anything which the donor cannot dispose of at the time of the donation. (635)

Comments:

1.“future property” refers to anything which the donor cannot dispose of at the time of the donation.

            2.Being a MODE of acquiring ownership, as distinguished from a SALE, a donation cannot involve future property.

Article 752. The provisions of article 750 notwithstanding, no person may give or receive, by way of donation, more than he may give or receive by will.

The donation shall be inofficious in all that it may exceed this limitation. (636)

Comment: Limitation applies to giver not the RECIPIENT.

Article 753. When a donation is made to several persons jointly, it is understood to be in equal shares, and there shall be no right of accretion among them, unless the donor has otherwise provided.

The preceding paragraph shall not be applicable to donations made to the husband and wife jointly, between whom there shall be a right of accretion, if the contrary has not been provided by the donor. (637)

Comments:

1)     See Art. 1015

2)    First paragraph is general rule while second is exception

3)    Equal shares meaning “pro-indiviso”

4)   In first para, it applies only when accretion is proper, e.g., refusal, predecease, incapacity

5)    See Article 113 Family Code on separate property

Article 754. The donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor. The latter, on the other hand, is not obliged to warrant the things donated, save when the donation is onerous, in which case the donor shall be liable for eviction to the concurrence of the burden.

The donor shall also be liable for eviction or hidden defects in case of bad faith on his part. (638a)

Comment: Generally, no warranty.

Article 755. The right to dispose of some of the things donated, or of some amount which shall be a charge thereon, may be reserved by the donor; but if he should die without having made use of this right, the property or amount reserved shall belong to the donee. (639)

Article 756. The ownership of property may also be donated to one person and the usufruct to another or others, provided all the donees are living at the time of the donation. (640a)

Article 757. Reversion may be validly established in favor of only the donor for any case and circumstances, but not in favor of other persons unless they are all living at the time of the donation.

Any reversion stipulated by the donor in favor of a third person in violation of what is provided in the preceding paragraph shall be void, but shall not nullify the donation. (614a)

Article 758. When the donation imposes upon the donee the obligation to pay the debts of the donor, if the clause does not contain any declaration to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for the debts exceeding the value of the property donated, unless a contrary intention clearly appears. (642a)

Article 759. There being no stipulation regarding the payment of debts, the donee shall be responsible therefor only when the donation has been made in fraud of creditors.

The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation. (643)

CHAPTER 4
Revocation and Reduction of Donations

Article 760. Every donation inter vivos, made by a person having no children or descendants, legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as provided in the next article, by the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or legitimated or illegitimate children, even though they be posthumous;

(2) If the child of the donor, whom the latter believed to be dead when he made the donation, should turn out to be living;

(3) If the donor subsequently adopt a minor child. (644a)

Comments:

·       Prescribes in four (4) years “from birth of first child, or from his legitimation, recognition or adoption, or from judicial declaration of filiation, or from the time information was received regarding the existence of the child believed dead”.

·       Reckoning point see Article 763

·       In onerous donations however, prescriptive period is ten (10) years

Automatic Revocation

Automatic Revocation Clause in Donation;

Forcible Entry; Unlawful Detainer

This Court has affirmed the validity of an automatic revocation clause

in donations in the case of De Luna v. Abrigo37 promulgated in 1990. We

explained the nature of automatic revocation clauses by first identifying the

three categories of donation. In De Luna, we said that a donation may be

simple, remuneratory or onerous. A donation is simple when the cause is the

donor's pure liberality. It is remuneratory when the donor "gives something

to reward past or future services or because of future charges or burdens,

when the value of said services, burdens or charges is less than the value of

the donation."38 A donation is onerous when it is "subject to burdens,

charges, or future services equal (or more) in value than that of the thing

donated x x x. " 39 This Court found that the donation in De Luna was onerous

as it required the donee to build a chapel, a nursery, and a kindergarten. We

then went on to explain that an onerous donation is governed by the law on

contracts and not by the law on donations. It is within this context that this

Court found an automatic revocation clause as valid.

We explained in De Luna that Article 1306 of the Civil Code allows

the parties "to establish such stipulations, clauses, terms and conditions as

they may deem convenient, provided they are not contrary to law, morals,

good customs, public order or public policy."40 In contracts law, parties may

agree to give one or both of them the right to rescind a contract unilaterally.

This is akin to an automatic revocation clause in an onerous donation. The

jurisprudence on automatic rescission in the field of contracts law therefore

applies in an automatic revocation clause.

Hence, in De Luna, we applied our rulings in University of the

Philippines v. De las Angeles41 and Angeles v. Calasanz42 where we held

that an automatic rescission clause effectively rescinds the contract upon

breach without need of any judicial declaration.

37 G.R. No. 57455, January 18, 1990, 18 1 SCRA 150. 38 id. at 155. 39 Id. at 156. Citation omitted. 40 Id. at 156- 157. 4 1

In University of the Philippines, this Court held that a party to a

contract with an automatic rescission clause, who believes that there has

been a breach warranting rescission, may consider the contract rescinded

without previous court action. Speaking through Justice J.B.L. Reyes, we

said:

x x x [T]he law definitely does not require that the

contracting party who believes itself injured must first file

suit and wait for a judgment before taking extrajudicial

steps to protect its interest. Otherwise, the party injured by

the other's breach will have to passively sit and watch its

damages accumulate during the pendency of the suit until

the final judgment of rescission is rendered when the law

itself requires that he should exercise due diligence to

minimize its own damages xx x.

43

We, however, clarified that the other party may contest the

extrajudicial rescission in court in case of abuse or error by the rescinder. It

is only in this case where a judicial resolution of the issue becomes

necessary.

that:

Applying this to the automatic revocation clause, we ruled in De Luna

It is clear, however, that judicial intervention is

necessary not for purposes of obtaining a judicial

declaration rescinding a contract already deemed rescinded

by virtue of an agreement providing for rescission even

without judicial intervention, but in order to determine

whether or not the rescission was proper.

44

While the ruling in De Luna applied specifically to onerous donations

with an automatic revocation clause, we extended this doctrine to apply to

donations inter vivas in general in Roman Catholic Archbishop of Manila.

We explained in this case that Article 732 of the Civil Code states that the

general provisions on obligations and contracts shall govern donations inter

vivas in all matters not determined in Title III, Book III on donations. Title

III has no explicit provisions for instances where a donation has an

automatic revocation clause. Thus, the rules in contracts law regarding

automatic rescission of contracts as well as the jurisprudence explaining it

find suppletory application. We then reiterated in Roman Catholic

Archbishop of Manila that where a donation has an automatic revocation

clause, the occurrence of the condition agreed to by the parties as to cause

the revocation, is sufficient for a party to consider the donation revoked

without need of any judicial action. A judicial finding that the revocation is

proper is only necessary when the other party actually goes to court for the

specific purpose of challenging the propriety of the revocation. Nevertheless,

even in such a case, "x x x the decision of the court will be merely

declaratory of the revocation, but it is not in itself the revocatory act. "45 We

also explained in this case that in ascertaining the prescription of actions

arising from an automatic revocation clause in donations, the general

provisions on prescription under the Civil Code apply. Article 764--which

provides for a four-year prescriptive period to file an action to revoke the

donation in case of breach of a condition--govems an instance where the

deed of donation does not contain an automatic revocation clause.46

We repeated this ruling in Dolar v. Barangay Lublub (Now P.D.

Monfort North) Municipality of Dumangas.47 We once again held that if a

contract of donation provides for automatic rescission or reversion in case of

a breach of a condition and the donee violates it or fails to comply with it,

the property donated automatically reverts back to the donor without need of

any judicial declaration. It is only when the donee denies the rescission or

challenges its propriety that the court can intervene to conclusively settle

whether the resolution was proper. This was also the import of our ruling in

Zamboanga Barter Traders Kilusang Bayan, Inc. v. Plagata. 48

In this case, the Deed of Donation contains a clear automatic

revocation clause. The clause states:

That the condition of this donation is that the DONEE

shall use the above-described portion of land subject of the

present donation for no other purpose except the

construction of its building to be owned and to be

constructed by the above-named DONEE to house its

offices to be used by the said Ca.marines Sur Teachers'

Association, Inc., in connection with its functions under its

charter and by-laws and the Naga City Teachers'

Association as well as the Ca.marines Sur High School

Alumni Association, PROVIDED FURTHERMORE, that

the DONEE shall not sell, mortgage or incumber the

property herein donated including any and all

improvements thereon in favor of any party and provided,

lastly, that the construction of the building or buildings

referred to above shall be commenced within a period of

one (1) year from and after the execution of this donation,

otherwise, this donation shall be deemed automatically

revoked and voided and of no further force and effect.49

The provision identifies three conditions for the donation: ( 1) that the

property shall be used for "no other purpose except the construction of its

building to be owned and to be constructed by the above-named DONEE to

house its offices to be used by the said Camarines Sur Teachers'

Association, Inc., in connection with its functions under its charter and bylaws

and the Naga City Teachers' Association as well as the Camarines Sur

45 Roman Catholic Archbishop of Manila v. Court of Appeals, supra note 24 at 308-309. 46 Id. at 306. 47 G.R. No. 1526¥3, ovember 18, 2005, 475 SCRA 458. 48 G.R. No. 148433 September 30, 2008, 567 SCRA 163. 49 Rollo, p. I 07.

Decision 10 G.R. No. 194199

High School Alumni Association," (2) CASTEA shall "not sell, mortgage or

incumber the property herein donated including any and all improvements

thereon in favor of any party," and (3) "the construction of the building or

buildings referred to above shall be commenced within a period of one (I)

year from and after the execution." The last clause of this paragraph states

that "otherwise, this donation shall be deemed automatically revoked x x

x."50 We read the final clause of this provision as an automatic revocation

clause which pertains to all three conditions of the donation. When

CASTEA leased the property to Bodega, it breached the first and second

conditions.

Accordingly, petitioner takes the position that when CASTEA leased

the property to Bodega, it violated the conditions in the Deed of Donation

and as such, the property automatically reverted to it. It even executed a

Deed of Revocation. The records show that CASTEA never contested this

revocation. Hence, applying the ruling in De Luna, Roman Catholic

Archbishop of Manila, Dolor and Zamboanga Barter Traders Kilusang

Bayan, Inc., petitioner validly considered the donation revoked and by virtue

of the automatic revocation clause, this revocation was automatic and

immediate, without need of judicial intervention. Thus, the CA clearly erred

in its finding that petitioner should have first filed an action for

reconveyance. This contradicts the doctrine stated in the aforementioned

cases and renders nugatory the very essence of an automatic revocation

clause.

Thus, as petitioner validly considered the donation revoked and

CASTEA never contested it, the property donated effectively reverted back

to it as owner. In demanding the return of the prope1ty, petitioner sources its

right of possession on its ownership. Under Article 428 of the Civil Code,

the owner has a right of action against the holder and possessor of the thing

in order to recover it.

This right of possession prevails over Bodega's claim which is

anchored on its Contract of Lease with CASTEA. CASTEA's act of leasing

the property to Bodega, in breach of the conditions stated in the Deed of

Donation, is the very same act which caused the automatic revocation of the

donation. Thus, it had no right, either as an owner or as an authorized

administrator of the property to lease it to Bodega. While a lessor need not

be the owner of the property leased, he or she must, at the very least, have

the authority to lease it out.51 None exists in this case. Bodega finds no basis

for its continued possession of the property.

As to the question of prescription, we rule that the petitioner's right to

file this ejectment suit against Bodega has not prescribed.

so Id.

" Bali" t"o' ' · A blon, G .R. No. 14 3 361, F obmacy 9, 2006, 482 SCRA 23, 33 (

Decision 11 G.R. No. 194199

First, we reiterate that jurisprudence has definitively declared that

Article 7 64 on the prescription of actions for the revocation of a donation

does not apply in cases where the donation has an automatic revocation

clause.52 This is necessarily so because Article 764 speaks of a judicial

action for the revocation of a donation. It cannot govern cases where a

breach of a condition automatically, and without need of judicial

intervention, revokes the donation.

Second, we cannot agree with the ruling of the CA that the petitioner

should have first filed an action for reconveyance of the property, and that

petitioner's action has prescribed since it did not file the action within 10

years. This reveals a failure to understand the nature of a donation with an

automatic revocation clause. At the risk of repetition, the breach of the

condition in the donation causes the automatic revocation. All the donor has

to do is to formally inform the donee of the revocation. Judicial intervention

only becomes necessary if the donee questions the propriety of the

revocation. Even then, judicial intervention is required to merely confirm

and not order the revocation. Hence, there can be no 10-year prescriptive

period to file an action to speak of. When the donee does not contest the

revocation, no court action is necessary.

Third, as owner of the property in this case, the petitioner is entitled to

its possession. The petitioner's action for ejectment is anchored on this right

to possess. Under the Civil Code and the Rules of Court, a party seeking to

eject another from a property for unlawful detainer must file the action for

ejectment within one year from the last demand to vacate.53 This is the

prescriptive period that the petitioner is bound to comply with in this case.

The records show that the petit_ioner served its last demand letter on

November 11, 2007. It filed the action for ejectment on March 13, 2008 or

around four months from the last demand. The action is clearly within the

prescriptive period.

We also affirm the grant of damages in favor of the petitioner.

Section 17 of Rule 70 of the Rules of Court provides:

Sec. 17. Judgment. - If after trial the court finds that the

allegations of the complaint are true, it shall render

judgment in favor of the plaintiff for the restitution of the

premises, the sum justly due as arrears of rent or as

reasonable compensation for the use and occupation of

the premises, attorney's fees and costs. x x x (Emphasis

supplied.)

52 Zamboanga Barter Traders Kilusang Bayan, Inc. v. Plagata, G.R. No. 148433 , September 30, 2008,

567 SCRA 163, 18 1-1 82; Roman Catholic Archbishop of Manila v. Court of Appeals, G.R. No. 77425,

June 19, 199 1, 198 SCRA 300, 306-307.

" CIVIL CODE, Art. 11 47; RULES OF COURT, Rule 70, Sec. '7

Decision 12 G.R. No. 194199

Thus, the rightful possessor in an unlawful detainer case is entitled to

recover damages, which refer to "rents" or "the reasonable compensation for

the use and occupation of the premises," or "fair rental value of the

property" 54 and attorney's fees and costs. More specifically, recoverable

damages are "those which the plaintiff could have sustained as a mere

possessor, or those caused by the loss of the use and occupation of the

property. " 55

In this case, the petitioner prayed for the award of Pl 5,000 monthly as

damages. Petitioner argued that considering that the Contract of Lease

between CASTEA and Bodega shows that the monthly rent for the property

is P30,000, the amount of Pl5,000 which it prays for is fair and reasonable.56

We agree with the petitioner's position. The amount of rent in the Contract

of Lease is evidence of the fair rental value of the property. That the

petitioner asked for half of this amount as damages is reasonable given the

circumstances.

WHEREFORE, the petition is PARTIALLY GRANTED. The

Decision of the Court of Appeals dated May 31 , 2010 which AFFIRMED

the Decision of the RTC of Naga City Branch 26 dated May 13, 2009 is

REVERSED and SET ASIDE. The Decision of the MTC Naga City is

REINSTATED.

SO ORDERED.

- PROVINCE OF CAMARINES SUR, represented by GOVERNOR LUIS RAYMUND F. VILLAFUERTE, JR., Petitioner, -versusBODEGA GLASSWARE, represented by its owner JOSEPH D. CABRAL, Respondent. G.R. No. 194199 Present: VELASCO, JR., J., Chairperson, BERSAMIN, REYES, JARDELEZA, and TIJA

22 March 2017

Xx~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~xX

Article 761. In the cases referred to in the preceding article, the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child. (n)

Article 762. Upon the revocation or reduction of the donation by the birth, appearance or adoption of a child, the property affected shall be returned or its value if the donee has sold the same.

If the property is mortgaged, the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover the same from the donee.

When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation. (645a)

Article 763. The action for revocation or reduction on the grounds set forth in article 760 shall prescribe after four years from the birth of the first child, or from his legitimation, recognition or adoption, or from the judicial declaration of filiation, or from the time information was received regarding the existence of the child believed dead.

This action cannot be renounced, and is transmitted, upon the death of the donor, to his legitimate and illegitimate children and descendants. (646a)

Article 764. The 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.

In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration laws.

This 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. (647a)

Comment: 1.“Conditions” refer to “obligations or charges imposed by the donor on the donee. “Does not refer to uncertain events on which the birth or extinguishment of a juridical relation depends, but is used in the vulgar sense of obligations or charges imposed by the donor on the done. It is used, not in its technical or strict legal sense, but in its broadest sense[4]”.  

            2. In De Luna v. Abrigo[5] , the prescriptive period of an action for revocation of an onerous donation by reason of non-compliance with the condition/ obligation imposed is ten (10) years counted from the time within which the done must comply with the conditions/ obligations of the donation.

            Article 765. The donation may also be revoked at the instance of the donor, by reason of ingratitude in the following cases:

(1) If the donee should commit some offense against the person, the honor or the property of the donor, or of his wife or children under his parental authority;

(2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife or children under his authority;

(3) If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. (648a)

Comments: Ground is “Ingratitude” prescriptive period is 1 year “from the time the donor had knowledge of the fact and it was possible for him to bring the action” per Art. 769

Article 766. Although the donation is revoked on account of ingratitude, nevertheless, the alienations and mortgages effected before the notation of the complaint for revocation in the Registry of Property shall subsist.

Later ones shall be void. (649)

Article 767. In the case referred to in the first paragraph of the preceding article, the donor shall have a right to demand from the donee the value of property alienated which he cannot recover from third persons, or the sum for which the same has been mortgaged.

The value of said property shall be fixed as of the time of the donation. (650)

Article 768. When the donation is revoked for any of the causes stated in article 760, or by reason of ingratitude, or when it is reduced because it is inofficious, the donee shall not return the fruits except from the filing of the complaint.

If the revocation is based upon noncompliance with any of the conditions imposed in the donation, the donee shall return not only the property but also the fruits thereof which he may have received after having failed to fulfill the condition. (651)

Article 769. The action granted to the donor by reason of ingratitude cannot be renounced in advance. This action prescribes within one year, to be counted from the time the donor had knowledge of the fact and it was possible for him to bring the action. (652)

Article 770. This action shall not be transmitted to the heirs of the donor, if the latter did not institute the same, although he could have done so, and even if he should die before the expiration of one year.

Neither can this action be brought against the heir of the donee, unless upon the latter's death the complaint has been filed. (653)

Comment: If Ground is “non-compliance with condition” action is transmissible under Art. 764

Article 771. Donations which in accordance with the provisions of article 752, are inofficious, bearing in mind the estimated net value of the donor's property at the time of his death, shall be reduced with regard to the excess; but this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the donee from appropriating the fruits.

For the reduction of donations the provisions of this Chapter and of articles 911 and 912 of this Code shall govern. (654)

Article 772. Only those who at the time of the donor's death have a right to the legitime and their heirs and successors in interest may ask for the reduction or inofficious donations.

Those referred to in the preceding paragraph cannot renounce their right during the lifetime of the donor, either by express declaration, or by consenting to the donation.

The donees, devisees and legatees, who are not entitled to the legitime and the creditors of the deceased can neither ask for the reduction nor avail themselves thereof. (655a)

Comment: 1. Creditors must go after the estate and not the donees.

2. Pursuant to Mateo v. Laguna[6], an action for reduction of inofficious donation prescribes in 10 years following Article 1144 of the New Civil Code. Because the cause of action accrues only upon the death of the donor-decedent hence the prescriptive period starts to run only upon such death.

Article 773. If, there being two or more donations, the disposable portion is not sufficient to cover all of them, those of the more recent date shall be suppressed or reduced with regard to the excess. (656)

TITLE IV
SUCCESSION

CHAPTER 1
General Provisions

Comments:

            Study of succession for purposes of civil law review should be divided into: a. Kinds of Succession, i.e., Testamentary, Legal or Intestate; Mixed Succession b. Formalities of Last Will & Testament; c. Institution of Heirs; d. INTERPLAY of Substitution, Accretion & Representation e. Predecease, Renunciation & Incapacity; f. Distribution of Estate  

Article 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law. (n)

Article 775. In this Title, "decedent" is the general term applied to the person whose property is transmitted through succession, whether or not he left a will. If he left a will, he is also called the testator. (n)

Article 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death. (659)

Comment: Conflicts with Art. 793

Article 777. The rights to the succession are transmitted from the moment of the death of the decedent. (657a)

Article 778. Succession may be:

(1) Testamentary;

(2) Legal or intestate; or

(3) Mixed. (n)

Article 779. Testamentary succession is that which results from the designation of an heir, made in a will executed in the form prescribed by law. (n)

Article 780. Mixed succession is that effected partly by will and partly by operation of law. (n)

Article 781. The inheritance of a person includes not only the property and the transmissible rights and obligations existing at the time of his death, but also those which have accrued thereto since the opening of the succession. (n)

Comment: See Art. 793 and compare

Article 782. An heir is a person called to the succession either by the provision of a will or by operation of law.

Devisees and legatees are persons to whom gifts of real and personal property are respectively given by virtue of a will. (n)

Comments:

·       “devisees” – real property

·       “legatees”- personal property

·       In PRETERITION, Art 854, instituted voluntary heir gets nothing but legatees and devisees get their property for as long as legitime is not impinged upon.

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[1] Vilanueva v. Branoco, G.R. No. 172804, January 24, 2011

[2] CJ Yulo & Sons, Inc. v. Roman Catholic Bishop of San Pablo, Inc., G.R. No. 133705, March 31, 2005

[3] DECS v. Del Rosario, G.R. No. 146586, January 26, 2005

[4] Central Philippine University v. Court of Appeals, 246 SCRA 511, Dissenting Opinion by Justice Davide

[5] 181 SCRA 150, 156 (1990)

[6] 29 SCRA 864