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SECOND DIVISION

GONZALO VILLANUEVA, G.R. No. 172804

represented by his heirs,

Petitioner,

-versus-

SPOUSES FROILAN and Promulgated:

LEONILA BRANOCO,

Respondents. January 24, 2011

x --------------------------------------------------------------------------------------- x

D E C I S I O N

CARPIO,J.:

The Case

This resolves the petition for review1 of the ruling2 of the Court of Appeals dismissing a suit to recover a

realty.

The Facts

Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs,3sued respondents, spouses Froilan

and Leonila Branoco (respondents), in the Regional Trial Court of Naval, Biliran (trial court) to recover a

3,492 square-meter parcel of land in Amambajag, Culaba, Leyte (Property) and collect damages. Petitioner

claimed ownership over the Property through purchase in July 1971 from Casimiro Vere (Vere), who, in turn,

bought the Property from Alvegia Rodrigo (Rodrigo) in August 1970. Petitioner declared the Property in his

name for tax purposes soon after acquiring it.
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In their Answer, respondents similarly claimed ownership over the Property through purchase in

July 1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo donated the Property in May 1965. The

two-page deed of donation (Deed), signed at the bottom by the parties and two witnesses, reads in full:

KNOW ALL MEN BY THESE PRESENTS:

That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas, aresident of Barrio Bool, municipality of Culaba, subprovince of Biliran, Leyte del Norte,Philippines, hereby depose and say:

That as we live[d] together as husband and wife with Juan Arcillas, we begotchildren, namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS,and by reason of poverty which I suffered while our children were still young; and becausemy husband Juan Arcillas aware as he was with our destitution separated us [sic] and left forCebu; and from then on never cared what happened to his family; and because of that oneEUFRACIA RODRIGUEZ, one of my nieces who also suffered with our poverty, obedient asshe was to all the works in our house, and because of the love and affection which I feel [for]her, I have one parcel of land located at Sitio Amambajag, Culaba, Leyte bearing Tax Decl. No.1878 declared in the name of Alvegia Rodrigo, I give (devise) said land in favor of EUFRACIARODRIGUEZ, her heirs, successors, and assigns together with all the improvements existingthereon, which parcel of land is more or less described and bounded as follows:

1. Bounded North by Amambajag River; East, Benito Picao; South, TeofiloUyvico; and West, by Public land; 2. It has an area of 3,492 square metersmore or less; 3. It is planted to coconuts now bearing fruits; 4. Having anassessed value of P240.00; 5. It is now in the possession of EUFRACIARODRIGUEZ since May 21, 1962 in the concept of an owner, but the Deed of

Donation or that ownership be vested on her upon my demise.

That I FURTHER DECLARE, and I reiterate that the land above described, I alreadydevise in favor of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and that ifthe herein Donee predeceases me, the same land will not be reverted to the Donor, but willbe inherited by the heirs of EUFRACIA RODRIGUEZ;

That I EUFRACIA RODRIGUEZ, hereby accept the land above described from InayAlvegia Rodrigo and I am much grateful to her and praying further for a longer life; however,I will give one half (1/2) of the produce of the land to Apoy Alve during her lifetime.4

Respondents entered the Property in 1983 and paid taxes afterwards.

The Ruling of the Trial Court
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The trial court ruled for petitioner, declared him owner of the Property, and ordered respondents to

surrender possession to petitioner, and to pay damages, the value of the Propertys produce since 1982 until

petitioners repossession and the costs.5 The trial court rejected respondents claim of ownership after

treating the Deed as a donation mortis causa which Rodrigo effectively cancelled by selling the Property to

Vere in 1970.6 Thus, by the time Rodriguez sold the Property to respondents in 1983, she had no title to

transfer.

Respondents appealed to the Court of Appeals (CA), imputing error in the trial courts interpretation of the

Deed as a testamentary disposition instead of an inter vivos donation, passing title to Rodriguez upon its

execution.

Ruling of the Court of Appeals

The CA granted respondents appeal and set aside the trial courts ruling. While conceding that the language

of the [Deed is] x x x confusing and which could admit of possible different interpretations,7the CA found the

following factors pivotal to its reading of the Deed as donation inter vivos: (1) Rodriguez had been in

possession of the Property as owner since 21 May 1962, subject to the delivery of part of the produce to Apoy

Alve; (2) the Deeds consideration was not Rodrigos death but her love and affection for Rodriguez,

considering the services the latter rendered; (3) Rodrigo waived dominion over the Property in case

Rodriguez predeceases her, implying its inclusion in Rodriguezs estate; and (4) Rodriguez accepted the

donation in the Deed itself, an act necessary to effectuate donations inter vivos, not devises.8Accordingly, the

CA upheld the sale between Rodriguez and respondents, and, conversely found the sale between Rodrigo and

petitioners predecessor-in-interest, Vere, void for Rodrigos lack of title.

In this petition, petitioner seeks the reinstatement of the trial courts ruling. Alternatively, petitioner claims

ownership over the Property through acquisitive prescription, having allegedly occupied it for more than 10

years.9
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Respondents see no reversible error in the CAs ruling and pray for its affirmance.

The Issue

The threshold question is whether petitioners title over the Property is superior to respondents. The

resolution of this issue rests, in turn, on whether the contract between the parties predecessors-in-interest,

Rodrigo and Rodriguez, was a donation or a devise. If the former, respondents hold superior title, having

bought the Property from Rodriguez. If the latter, petitioner prevails, having obtained title from Rodrigo

under a deed of sale the execution of which impliedly revoked the earlier devise to Rodriguez.

The Ruling of the Court

We find respondents title superior, and thus, affirm the CA.

Naked Title Passed from Rodrigo to Rodriguez Under a

Perfected Donation

We examine the juridical nature of the Deed whether it passed title to Rodriguez upon its execution or is

effective only upon Rodrigos death using principles distilled from relevant jurisprudence. Post-mortem

dispositions 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 control of the property while alive;

(2) That before the [donors] death, the transfer should be revocable by thetransferor at will, ad nutum; but revocability may be provided for indirectly by means of areserved power in the donor to dispose of the properties conveyed;


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(3) That the transfer should be void if the transferor should survive the transferee.10

Further

[4] [T]he specification in a deed of the causes whereby the act may be revoked bythe donor indicates that the donation is inter vivos, rather than a disposition mortis causa[;]

[5] That the designation of the donation as mortis causa, or a provision in the deedto the effect that the donation is to take effect at the death of the donor are not controllingcriteria; such statements are to be construed together with the rest of the instrument, inorder to give effect to the real intent of the transferor[;] [and]

(6) That in case of doubt, the conveyance should be deemed donation inter vivos

rather than mortis causa, in order to avoid uncertainty as to the ownership of the propertysubject of the deed.11

It is immediately apparent that Rodrigo passed naked title to Rodriguez under a perfected donation

inter vivos. First. Rodrigo stipulated that if the herein Donee predeceases me, the [Property] will not be

reverted to the Donor, but will be inherited by the heirs of x x x Rodriguez, signaling the irrevocability of the

passage of title to Rodriguezs estate, waiving Rodrigos right to reclaim title. This transfer of title was

perfected the moment Rodrigo learned of Rodriguezs acceptance of the disposition12which, being reflected in

the Deed, took place on the day of its execution on 3 May 1965. Rodrigos acceptance of the transfer

underscores its essence as a gift in presenti, not in futuro, as only donations inter vivosneed acceptance by the

recipient.13Indeed, had Rodrigo wished to retain full title over the Property, she could have easily stipulated,

as the testator did in another case, that the donor,may transfer, sell, or encumber to any person or entity the

properties here donated x x x14or used words to that effect. Instead, Rodrigo expressly waived title over the

Property in case Rodriguez predeceases her.

In a bid to diffuse the non-reversion stipulations damning effect on his case, petitioner tries to profit

from it, contending it is a fideicommissary substitution clause.15Petitioner assumes the fact he is laboring to

prove. The question of the Deeds juridical nature, whether it is a will or a donation, is the crux of the present

controversy. By treating the clause in question as mandating fideicommissary substitution, a mode of

testamentary disposition by which the first heir instituted is entrusted with the obligation to preserve and to

transmit to a second heir the whole or part of the inheritance,16 petitioner assumes that the Deed is a will.

Neither the Deeds text nor the import of the contested clause supports petitioners theory.
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Second. What Rodrigo reserved for herself was only the beneficial title to the Property, evident from

Rodriguezs undertaking to give one [half] x x x of the produce of the land to Apoy Alve during her lifetime.17

Thus, the Deeds stipulation that the ownership shall be vested on [Rodriguez] upon my demise, taking into

account the non-reversion clause, could only refer to Rodrigos beneficial title. We arrived at the same

conclusion in Balaqui v. Dongso18

where, as here, the donor, while b[inding] herself to answer to the [donor]and her heirs x x x that none shall question or disturb [the donees] right, also stipulated that the donation

does not pass title to [the donee] during my lifetime; but when I die, [the donee] shall be the true owner of

the donated parcels of land. In finding the disposition as a gift inter vivos, the Court reasoned:

Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the donor]guaranteed to [the donee] and her heirs and successors, the right to said property thusconferred. From the moment [the donor] guaranteed the right granted by her to [the donee]to the two parcels of land by virtue of the deed of gift, she surrendered such right; otherwisethere would be no need to guarantee said right. Therefore, when [the donor] used the wordsupon which the appellants base their contention that the gift in question is a donation mortiscausa [that the gift does not pass title during my lifetime; but when I die, she shall be thetrue owner of the two aforementioned parcels] the donor meant nothing else than that

she reserved of herself the possession and usufruct of said two parcels of land until her

death, at which time the donee would be able to dispose of them freely.19 (Emphasissupplied)

Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for her to reserve partial

usufructuary right over it.20

Third. The existence of consideration other than the donors death, such as the donors love and

affection to the donee and the services the latter rendered, while also true of devises, nevertheless

corroborates the express irrevocability of x x x [ inter vivos] transfers.21Thus, the CA committed no error in

giving weight to Rodrigos statement of love and affection for Rodriguez, her niece, as consideration for the

gift, to underscore its finding.

It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed tending to serve his

cause (e.g. the ownership shall be vested on [Rodriguez] upon my demise and devise). Dispositions

bearing contradictory stipulations are interpreted wholistically, to give effect to the donors intent. In no less

than seven cases featuring deeds of donations styled as mortis causa dispositions, the Court, after going over
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the deeds, eventually considered the transfers inter vivos,22consistent with the principle that the designation

of the donation as mortis causa, or a provision in the deed to the effect that the donation is to take effect at

the death of the donor are not controlling criteria [but] x x x are to be construed together with the rest of the

instrument, in order to give effect to the real intent of the transferor. 23 Indeed, doubts on the nature of

dispositions are resolved to favor inter vivos transfers to avoid uncertainty as to the ownership of theproperty subject of the deed.24

Nor can petitioner capitalize on Rodrigos post-donation transfer of the Property to Vere as proof of

her retention of ownership. If such were the barometer in interpreting deeds of donation, not only will great

legal uncertainty be visited on gratuitous dispositions, this will give license to rogue property owners to set at

naught perfected transfers of titles, which, while founded on liberality, is a valid mode of passing ownership.

The interest of settled property dispositions counsels against licensing such practice.25

Accordingly, having irrevocably transferred naked title over the Property to Rodriguez in 1965, Rodrigo

cannot afterwards revoke the donation nor dispose of the said property in favor of another.26 Thus,

Rodrigos post-donation sale of the Property vested no title to Vere. As Veres successor-in-interest, petitioner

acquired no better right than him. On the other hand, respondents bought the Property from Rodriguez, thus

acquiring the latters titlewhich they may invoke against all adverse claimants, including petitioner.

Petitioner Acquired No Title Over the Property

Alternatively, petitioner grounds his claim of ownership over the Property through his and Veres combined

possession of the Property for more than ten years, counted from Veres purchase of the Property from

Rodrigo in 1970 until petitioner initiated his suit in the trial court in February 1986.27Petitioner anchors his

contention on an unfounded legal assumption. The ten year ordinary prescriptive period to acquire title

through possession of real property in the concept of an owner requires uninterrupted possession coupled

with just title and good faith.28 There is just title when the adverse claimant came into possession of the

property through one of the modes recognized by law for the acquisition of ownership or other real rights, but

the grantor was not the owner or could not transmit any right.29Good faith, on the other hand, consists in the

reasonable belief that the person from whom the possessor received the thing was the owner thereof, and

could transmit his ownership.30
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Although Vere and petitioner arguably had just title having successively acquired the Property through sale,

neither was a good faith possessor. As Rodrigo herself disclosed in the Deed, Rodriguez already occupied and

possessed the Property in the concept of an owner (como tag-iya31)since 21 May 1962, nearly three years

before Rodrigos donation in 3 May 1965 and seven years before Vere bought the Property from Rodrigo. This

admission against interest binds Rodrigo and all those tracing title to the Property through her, including Vereand petitioner. Indeed, petitioners insistent claim that Rodriguez occupied the Property o nly in 1982, when

she started paying taxes, finds no basis in the records. In short, when Vere bought the Property from Rodrigo

in 1970, Rodriguez was in possession of the Property, a fact that prevented Vere from being a buyer in good

faith.

Lacking good faith possession, petitioners only other recourse to maintain his claim of ownership by

prescription is to show open, continuous and adverse possession of the Property for 30 years.32Undeniably,

petitioner is unable to meet this requirement.

Ancillary Matters Petitioner Raises Irrelevant

Petitioner brings to the Courts attention facts which, according to him, support his theory that Rodrigo never

passed ownership over the Property to Rodriguez, namely, that Rodriguez registered the Deed and paid taxes

on the Property only in 1982 and Rodriguez obtained from Vere in 1981 a waiver of the latters right of

ownership over the Property. None of these facts detract from our conclusion that under the text of the Deed

and based on the contemporaneous acts of Rodrigo and Rodriguez, the latter, already in possession of the

Property since 1962 as Rodrigo admitted, obtained naked title over it upon the De eds execution in 1965.Neither registration nor tax payment is required to perfect donations. On the relevance of the waiver

agreement, suffice it to say that Vere had nothing to waive to Rodriguez, having obtained no title from

Rodrigo. Irrespective of Rodriguezs motivation in obtaining the waiver, that document, legally a scrap of

paper, added nothing to the title Rodriguez obtained from Rodrigo under the Deed.

WHEREFORE, we DENYthe petition. WeAFFIRMthe Decision dated 6 June 2005 and the Resolution

dated 5 May 2006 of the Court of Appeals.

SO ORDERED.

Republic of the PhilippinesSUPREME COURTManila

EN BANC
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G.R. No. L-19201 June 16, 1965

REV. FR. CASIMIRO LLADOC, petitioner,vs.The COMMISSIONER OF INTERNAL REVENUE and The COURT of TAX APPEALS,respondents.

Hilado and Hilado for petitioner.Office of the Solicitor General for respondents.

PAREDES,J.:

Sometime in 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to Rev. Fr. Crispin Ruiz,then parish priest of Victorias, Negros Occidental, and predecessor of herein petitioner, for the constructionof a new Catholic Church in the locality. The total amount was actually spent for the purpose intended.

On March 3, 1958, the donor M.B. Estate, Inc., filed the donor's gift tax return. Under date of April 29, 1960,the respondent Commissioner of Internal Revenue issued an assessment for donee's gift tax against theCatholic Parish of Victorias, Negros Occidental, of which petitioner was the priest. The tax amounted to

P1,370.00 including surcharges, interests of 1% monthly from May 15, 1958 to June 15, 1960, and thecompromise for the late filing of the return.

Petitioner lodged a protest to the assessment and requested the withdrawal thereof. The protest and themotion for reconsideration presented to the Commissioner of Internal Revenue were denied. The petitionerappealed to the Court of Tax Appeals on November 2, 1960. In the petition for review, the Rev. Fr. CasimiroLladoc claimed, among others, that at the time of the donation, he was not the parish priest in Victorias; thatthere is no legal entity or juridical person known as the "Catholic Parish Priest of Victorias," and, therefore, heshould not be liable for the donee's gift tax. It was also asserted that the assessment of the gift tax, evenagainst the Roman Catholic Church, would not be valid, for such would be a clear violation of the provisions ofthe Constitution.

After hearing, the CTA rendered judgment, the pertinent portions of which are quoted below:

... . Parish priests of the Roman Catholic Church under canon laws are similarly situated as itsArchbishops and Bishops with respect to the properties of the church within their parish. They arethe guardians, superintendents or administrators of these properties, with the right of successionand may sue and be sued.

x x x x x x x x x

The petitioner impugns the, fairness of the assessment with the argument that he should not be heldliable for gift taxes on donation which he did not receive personally since he was not yet the parishpriest of Victorias in the year 1957 when said donation was given. It is intimated that if someone hasto pay at all, it should be petitioner's predecessor, the Rev. Fr. Crispin Ruiz, who received thedonation in behalf of the Catholic parish of Victorias or the Roman Catholic Church. Followingpetitioner's line of thinking, we should be equally unfair to hold that the assessment now in questionshould have been addressed to, and collected from, the Rev. Fr. Crispin Ruiz to be paid from incomederived from his present parish where ever it may be. It does not seem right to indirectly burden thepresent parishioners of Rev. Fr. Ruiz for donee's gift tax on a donation to which they were notbenefited.

x x x x x x x x x


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On April 30, 1965, in a resolution, We ordered the Head of the Diocese to present whatever legal issuesand/or defenses he might wish to raise, to which resolution counsel for petitioner, who also appeared ascounsel for the Head of the Diocese, the Roman Catholic Bishop of Bacolod, manifested that it was submittingitself to the jurisdiction and orders of this Court and that it was presenting, by reference, the brief ofpetitioner Rev. Fr. Casimiro Lladoc as its own and for all purposes.

In view here of and considering that as heretofore stated, the assessment at bar had been properly made andthe imposition of the tax is not a violation of the constitutional provision exempting churches, parsonages orconvents, etc. (Art VI, sec. 22 [3], Constitution), the Head of the Diocese, to which the parish VictoriasPertains, is liable for the payment thereof.

The decision appealed from should be, as it is hereby affirmed insofar as tax liability is concerned; it ismodified, in the sense that petitioner herein is not personally liable for the said gift tax, and that the Head ofthe Diocese, herein substitute petitioner, should pay, as he is presently ordered to pay, the said gift tax,without special, pronouncement as to costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P. , and Zaldivar, JJ.,

concur.

Barrera, J., took no part.

SECOND DIVISION

JARABINI G. DEL ROSARIO, G.R. No. 187056

Petitioner,

Present:

CARPIO,J., Chairperson,

- versus - PERALTA,

BERSAMIN,*

ABAD, and

PEREZ,**JJ.


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ASUNCION G. FERRER, substituted

by her heirs, VICENTE, PILAR,

ANGELITO, FELIXBERTO, JR.,

all surnamed G. FERRER, and Promulgated:

MIGUELA FERRER ALTEZA,

Respondents. September 20, 2010

x --------------------------------------------------------------------------------------- x

DECISION

ABAD,J.:

This case pertains to a gift, otherwise denominated as a donation mortis causa, which in reality is a

donation inter vivosmade effective upon its execution by the donors and acceptance thereof by the donees,and immediately transmitting ownership of the donated property to the latter, thus precluding a subsequent

assignment thereof by one of the donors.

The Facts and the Case

On August 27, 1968 the spouses Leopoldo and Guadalupe Gonzales executed a document entitled

Donation Mortis Causa, in favor of their two children, Asuncion and Emiliano, and their granddaughter,


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Jarabini (daughter of their predeceased son, Zoilo) covering the spouses 126-square meter lot and the house

on it in Pandacan, Manila in equal shares. The deed of donation reads:

It is our will that this Donation Mortis Causashall be irrevocable and shall berespected by the surviving spouse.

It is our will that Jarabini Gonzales-del Rosario and Emiliano Gonzales willcontinue to occupy the portions now occupied by them.

It is further our will that this DONATION MORTIS CAUSAshall not in any wayaffect any other distribution of other properties belonging to any of us donorswhether testate or intestate and where ever situated.

It is our further will that any one surviving spouse reserves the right,ownership, possession and administration of this property herein donated andaccepted and this Disposition and Donation shall be operative and effective upon the

death of the DONORS.

Although denominated as a donation mortis causa, which in law is the equivalent of a will, the deed

had no attestation clause and was witnessed by only two persons. The named donees, however, signified

their acceptance of the donation on the face of the document.

Guadalupe, the donor wife, died in September 1968. A few months later or on December 19, 1968,Leopoldo, the donor husband, executed a deed of assignment of his rights and interests in subject property to

their daughter Asuncion. Leopoldo died in June 1972.

In 1998 Jarabini filed a petition for the probate of the August 27, 1968 dee d of donation mortis

causa before the Regional Trial Court (RTC) of Manila in Sp. Proc. 98-90589. Asuncion opposed the petition,

invoking his father Leopoldos assignment of his rights and interests in the property to her.

After trial, the RTC rendered a decision dated June 20, 2003, finding that the donation was in fact one

made inter vivos, the donors intention being to transfer title over the property to the donees during the

donors lifetime, given its irrevocability. Consequently, said the RTC, Leopoldos subsequent assignment of

his rights and interest in the property was void since he had nothing to assign. The RTC thus directed the

registration of the property in the name of the donees in equal shares.


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On Asuncions appeal to the Court of Appeals (CA), the latter rendered a decision on December 23,

2008, reversing that of the RTC. The CA held that Jarabini cannot, through her petition for the probate of the

deed of donation mortis causa, collaterally attack Leopoldos deed of assignment in Asuncions favor. The CA

further held that, since no proceeding exists for the allowance of what Jarabini claimed was actually a

donation inter vivos, the RTC erred in deciding the case the way it did. Finally, the CA held that the donation,

being one given mortis causa, did not comply with the requirements of a notarial will, rendering the same

void. Following the CAs denial of Jarabinis motion for reconsideration, she filed the present petition with

this Court.

Issue Presented

The key issue in this case is whether or not the spouses Leopoldo and Guadalupes donation to

Asuncion, Emiliano, and Jarabini was a donation mortis causa, as it was denominated, or in fact a donation

inter vivos.

The Courts Ruling

That the document in question in this case was captioned Donation Mortis Causa is not controlling.

This Court has held that, if a donation by its terms is inter vivos, this character is not altered by the fact that

the donor styles it mortis causa.

In Austria-Magat v. Court of Appeals, the Court held that irrevocability is a quality absolutely

incompatible with the idea of conveyances mortis causa, where revocability is precisely the essence of the

act. A donation mortis causahas the following characteristics:

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


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

2. That before his death, the transfer should be revocable by thetransferor at will, ad nutum; but revocability may be provided for indirectly by meansof 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 thetransferee. (Underscoring supplied)

The Court thus said in Austria-Magat that the express irrevocability of the donation is the

distinctive standard that identifies the document as a donation inter vivos. Here, the donors plainly said that

it is our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving

spouse. The intent to make the donation irrevocable becomes even clearer by the proviso that a surviving

donor shall respect the irrevocability of the donation. Consequently, the donation was in reality a donation

inter vivos.

The donors in this case of course reserved the right, ownership, possession, and administration of

the property and made the donation operative upon their death. But this Court has consistently held that

such reservation (reddendum) in the context of an irrevocable donation simply means that the donors parted

with their naked title, maintaining only beneficialownership of the donated property while they lived.

Notably, the three donees signed their acceptance of the donation, which acceptance the deed

required. This Court has held that an acceptance clause indicates that the donation is inter vivos, since

acceptance is a requirement only for such kind of donations. Donations mortis causa, being in the form of a

will, need not be accepted by the donee during the donors lifetime.

Finally, as Justice J. B. L. Reyes said in Puig v. Peaflorida, in case of doubt, the conveyance should be

deemed a donation inter vivosrather than mortis causa, in order to avoid uncertainty as to the ownership of

the property subject of the deed.

Since the donation in this case was one made inter vivos, it was immediately operative and final. The


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reason is that such kind of donation is deemed perfected from the moment the donor l earned of the donees

acceptance of the donation. The acceptance makes the donee the absolute owner of the property donated.

Given that the donation in this case was irrevocable or one given inter vivos, Leopoldossubsequent

assignment of his rights and interests in the property to Asuncion should be regarded as void for, by then, he

had no more rights to assign. He could not give what he no longer had. Nemo dat quod non habet.

The trial court cannot be faulted for passing upon, in a petition for probate of what was initially

supposed to be a donation mortis causa, the validity of the document as a donation inter vivosand the nullity

of one of the donors subsequent assignment of his rights and interests in the property. The Court has held

before that the rule on probate is not inflexible and absolute. Moreover, in opposing the petition for probate

and in putting the validity of the deed of assignment squarely in issue, Asuncion or those who substituted her

may not now claim that the trial court improperly allowed a collateral attack on such assignment.

WHEREFORE, the Court GRANTS the petition, SETS ASIDEthe assailed December 23, 2008 Decision

and March 6, 2009 Resolution of the Court of Appeals in CA-G.R. CV 80549, and REINSTATESin totothe June

20, 2003 Decision of the Regional Trial Court of Manila, Branch 19, in Sp. Proc. 98-90589.

SECOND DIVISION

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

APOLINARIA AUSTRIA-MAGAT, petitioner, vs. HON. COURT OF APPEALS and FLORENTINO LUMUBOS,DOMINGO COMIA, TEODORA CARAMPOT, ERNESTO APOLO, SEGUNDA SUMPELO, MAMERTO SUMPELOand RICARDO SUMPELO, respondents.

D E C I S I O N

DE LEON, JR.,J.:

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

The facts of the case are as follows:


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Basilisa Comerciante is a mother of five (5) children, namely, Rosario Austria, Consolacion Austria, hereinpetitioner Apolinaria Austria-Magat, Leonardo, and one of herein respondents, Florentino Lumubos.Leonardo died in a Japanese concentration camp at Tarlac during World War II.

In 1953, Basilisa bought a parcel of residential land together with the improvement thereon covered anddescribed in Transfer Certificate of Title No. RT-4036 (T-3268) and known as Lot 1, Block 1, Cavite Beach

Subdivision, with an area of 150 square meters, located in Bagong Pook, San Antonio, Cavite City.

On December 17, 1975, Basilisa executed a document designated as Kasulatan sa Kaloobpala (Donation).The said document which was notarized by Atty. Carlos Viniegra, reads as follows:

KASULATANG SA KALOOBPALA(DONATION)

TALASTASIN NG LAHAT AT SINUMAN:

Na ako, si BASELISA COMERCIANTE, may sapat na gulang, Filipina, balo, at naninirahan sa blg. 809 L. JavierBagong Pook, San Antonio, Lungsod ng Kabite, Filipinas, sa pamamagitan ng kasulatang itoy

NAGSASALAYSAY

Na alang-alang sa mabuting paglilingkod at pagtingin na iniukol sa akin ng apat kong mga tunay na anak nasila:

ROSARIO AUSTRIA, Filipina, may sapat na gulang, balo, naninirahan sa 809 L. Javier, Bagong Pook, SanAntonio, Lungsod ng Kabite;

CONSOLACION AUSTRIA, Filipina, may sapat na gulang, balo naninirahan sa 809 L. Javier, Bagong Pook, SanAntonio, Lungsod ng Kabite;

APOLINARIA AUSTRIA, Filipina, may sapat na gulang, may asawa, naninirahan sa Pasong Kawayan, Hen.Trias, Kabite;

FLORENTINO LUMUBOS, Filipino, may sapat na gulang, asawa ni Encarnacion Magsino, at naninirahan din sa809 L. Javier, Bagong Pook, San Antonio, Lungsod ng Kabite; ay

Kusang loob na ibinibigay ko at ipinagkakaloob ng ganap at hindi na mababawi sa naulit ng apat na anak ko atsa kanilang mga tagamagmana (sic), ang aking isang lupang residential o tirahan sampu ng aking bahay nahanng nakatirik doon na nasa Bagong Pook din, San Antonio, Lungsod ng Kabite, at nakikilala bilang Lote no. 7,Block no.1, of Subdivision Plan Psd-12247; known as Cavite Beach Subdivision, being a portion of Lot No.1055, of the Cadastral survey of Cavite, GLRO Cadastral Rec. no. 9539; may sukat na 150 metros cuadrados, atnakatala sa pangalan ko sa Titulo Torrens bilang TCT-T-3268 (RT-4036) ng Lungsod ng Kabite;

Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na akoy pumanaw sa mundo, at sa ilalim ngkondision na:

Magbubuhat o babawasin sa halaga ng nasabing lupa at bahay ang anumang magugul o gastos sa aking libingat nicho at ang anumang matitira ay hahatiin ng APAT na parte, parepareho isang parte sa bawat anak kongnasasabi sa itaas nito upang maliwanang (sic) at walang makakalamang sinoman sa kanila;


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At kaming apat na anak na nakalagda o nakadiit sa kasulatang ito ay TINATANGGAP NAMIN ang kaloob-palang ito ng aming magulang na si Basilisa Comerciante, at tuloy pinasasalamatan namin siya ng taos sa (sic)puso dahil sa kagandahan look (sic) niyang ito sa amin.

SA KATUNAYAN, ay nilagdaan o diniitan namin ito sa Nobeleta, Kabite, ngayong ika-17 ng Disyembre taong1975.

HER MARK HER MARK

BASELISA COMERCIANTE ROSARIO AUSTRIA

Tagakaloobpala

(Sgd.) APOLINARIA AUSTRIA HER MARK

Tagatanggap-pala CONSOLACION AUSTRIA

(Sgd.)FLORENTINO LUMUBOS

Tagatanggap-pala

(Acknowledgment signed by Notary Public C.T. Viniegra is omitted).iv[4]

Basilisa and her said children likewise executed another notarized document denominated as Kasulatanwhich is attached to the deed of donation. The said document states that:

KASULATAN

TALASTASIN NG MADLA:

Na kaming mga nakalagda o nakadiit sa labak nito sila Basilisa Comerciante at ang kanyang mga anak nasila:

Rosario Austria, Consolacion Austria, Apolonio Austria, at Florentino Lumubos, pawang may mga sapat nagulang, na lumagda o dumiit sa kasulatang kaloob pala, na sinangayunan namin sa harap ng Notario Publico,Carlos T. Viniegra, ay nagpapahayag ng sumusunod:

Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng tirahan ng Bagong Pookna nababanggit sa nasabing kasulatan, ay mananatili sa poder o possession ng Ina, na si Basilisa Comerciantehabang siya ay nabubuhay at

Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhay ang

nasabing Basilisa Comerciante.

Sa katunayan ang nagsilagda kaming lahat sa labak nito sa harap ng abogado Carlos T. Viniegra at dalawangsaksi.

Nobeleta, Kabite. Ika-17 ng Disyembre, 1975.v[5]

On February 6, 1979, Basilisa executed a Deed of Absolute Sale of the subject house and lot in favor of hereinpetitioner Apolinaria Austria-Magat for Five Thousand Pesos (P5,000.00). As the result of the registration of


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that sale, Transfer Certificate of Title (TCT for brevity) No. RT-4036 in the name of the donor was cancelledand in lieu thereof TCT No. T-10434 was issued by the Register of Deeds of Cavite City in favor of petitionerApolinaria Austria-Magat on February 8, 1979.

On September 21, 1983, herein respondents Teodora Carampot, Domingo Comia, and Ernesto Apolo(representing their deceased mother Consolacion Austria), Ricardo, Mamerto and Segunda, all surnamed

Sumpelo (representing their deceased mother Rosario Austria) and Florentino Lumubos filed before theRegional Trial Court of Cavite an action, docketed as Civil Case No. 4426 against the petitioner for annulmentof TCT No. T-10434 and other relevant documents, and for reconveyance and damages.

On August 15,1986, the trial court dismissed Civil Case No. 4426 per its Decision, the dispositive portion ofwhich reads:

WHEREFORE, in view of the foregoing, this Court hereby renders judgment for defendant dismissing this caseand ordering plaintiffs to pay the amount of P3,000.00 as attorneys fees and the costs of suit.

SO ORDERED.vi[6]

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

On appeal, the decision of the trial court was reversed by the Court of Appeals in its subject decision, thedispositive portion of which reads, to wit:

WHEREFORE, in view of the foregoing, the appealed decision is hereby SET ASIDE and a new one rendered:

1. declaring null and void the Deed of Sale of Registered Land (Annex B) and Transfer Certificate of Title No.T-10434 of the Registry of Deeds of Cavite City (Annex E) and ordering the cancellation thereof; and

2. declaring appellants and appellee co-owners of the house and lot in question in accordance with the deedof donation executed by Basilisa Comerciante on December 17, 1975.

No pronouncement as to costs.

SO ORDERED.vii[7]

The appellate court declared in its decision that:

In the case at bar, the decisive proof that the deed is a donation inter vivosis in the provision that :

Ibinibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na anak ko at sakanilang mga tagapagmana, ang aking lupang residential o tirahan sampu ng aking bahaynakatirik doon xxx. (emphasis supplied)

This is a clear expression of the irrevocability of the conveyance. The irrevocability of the donation is acharacteristic of a donation inter vivos. By the words hindi mababawi, the donor expressly renounced theright to freely dispose of the house and lot in question. The right to dispose of a property is a right essential to


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full ownership. Hence, ownership of the house and lot was already with the donees even during the donorslifetime. xxx

xxx xxx xxx

In the attached document to the deed of donation, the donor and her children stipulated that:

Gayon din ang nasabing titulo ay hindi mapapasangla o maipagbibili ang lupa habang may buhay angnasabing Basilisa Comerciante.

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

Hence this appeal grounded on the following assignment of errors:

I

THE RESPONDENT COURT OF APPEALS, WITH DUE RESPECT, IGNORED THE RULES OFINTERPRETATION OF CONTRACTS WHEN IT CONSIDERED THE DONATION IN QUESTION ASINTER VIVOS.

II

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

Anent the first assignment of error, the petitioner argues that the Court of Appeals erred in ruling that thedonation was a donation inter vivos. She claims that in interpreting a document, the other relevant provisionstherein must be read in conjunction with the rest. While the document indeed stated that the donation wasirrevocable, that must be interpreted in the light of the provisions providing that the donation cannot beencumbered, alienated or sold by anyone, that the property donated shall remain in the possession of thedonor while she is alive, and that the donation shall take effect only when she dies. Also, the petitioner claimsthat the donation is mortis causafor the reason that the contemporaneous and subsequent acts of the donor,Basilisa Comerciante, showed such intention. Petitioner cites the testimony of Atty. Viniegra, who notarizedthe deed of donation, that it was the intent of the donor to maintain control over the property while she wasalive; that such intent was shown when she actually sold the lot to herein petitioner.

We affirm the appellate courts decision.

The provisions in the subject deed of donation that are crucial for the determination of the class to which thedonation belongs are, as follows:

xxx xxx xxx

xxx(I)binibigay ko at ipinagkakaloob ng ganap at hindi mababawi sa naulit na apat na anak ko at sakanilang mga tagapagmana, ang aking lupang residential o tirahan sampu ng aking bahay nakatirik doonna nasa Bagong Pook din, San Antonio, Lungsod ng Kabite

xxx xxx xxx


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Na ang Kaloob palang ito ay magkakabisa lamang simula sa araw na akoy pumanaw sa mundo, xxx.

xxx xxx xxx

Na ang titulo numero TCT-T-2260 (RT-4036) ng Lungsod ng Kabite, bahay sa loteng tirahan ng BagongPook na nababanggit sa nasabing kasulatan, ay mananatili sa poder o possesion ng Ina, na si Basilisa

Comerciante habang siya ay nabubuhay at

Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang maybuhayang nasabing Basilisa Comerciante xxx.

It has been held that whether the donation is inter vivos or mortis causa depends on whether the donorintended to transfer ownership over the properties upon the execution of the deed. In Bonsato v. Court ofAppeals, this Court enumerated the characteristics of a donation mortis causa, to wit:

(1) It conveys no title or ownership to the transferee before the death of the transferor; or, whatamounts to the same thing, that the transferor should retain the ownership (full or naked) and control of theproperty while alive;

(2) That before his death, the transfer should be revocable by the transferor at will, ad nutum; butrevocability may be provided for indirectly by means of a reserved power in the donor to dispose of theproperties conveyed;

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

Significant to the resolution of this issue is the irrevocable character of the donation in the case at bar. InCuevas v. Cuevas, we ruled that when the deed of donation provides that the donor will not dispose or takeaway the property donated (thus making the donation irrevocable), he in effect is making a donation intervivos. He parts away with his naked title but maintains beneficial ownership while he lives. It remains to be adonation inter vivosdespite an express provision that the donor continues to be in possession and enjoymentof the donated property while he is alive. In the Bonsatocase, we held that:

(W)hat is most significant [in determining the type of donation] is the absence of stipulation that the donorcould revoke the donations; on the contrary, the deeds expressly declare them to be irrevocable, a qualityabsolutely incompatible with the idea of conveyances mortis causawhere revocability is of the essence of theact, to the extent that a testator can not lawfully waive or restrict his right of revocation (Old Civil Code,Art.737; New Civil Code, Art. 828).

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

In Gestopa v. Court of Appeals, this Court held that the prohibition to alienate does not necessarily defeat theinter vivoscharacter of the donation. It even highlights the fact that what remains with the donor is the right


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of usufruct and not anymore the naked title of ownership over the property donated. In the case at bar, theprovision in the deed of donation that the donated property will remain in the possession of the donor justgoes to show that the donor has given up his naked title of ownership thereto and has maintained only theright to use (jus utendi) and possess (jus possidendi) the subject donated property.

Thus, we arrive at no other conclusion in that the petitioners cited provisions are only necessary assurances

that during the donors lifetime, the latter would still enjoy the right of possession over the property; but, hisnaked title of ownership has been passed on to the donees; and that upon the donors death, the doneeswould get all the rights of ownership over the same including the right to use and possess the same.

Furthermore, it also appeared that the provision in the deed of donation regarding the prohibition to alienatethe subject property is couched in general terms such that even the donor is deemed included in the saidprohibition (Gayon din ang nasabing Titulo ay hindi mapapasangla o maipagbibili ang lupa habang

maybuhay ang nasabing Basilisa Comerciante). Both the donor and the donees were prohibited fromalienating and encumbering the property during the lifetime of the donor. If the donor intended to maintainfull ownership over the said property until her death, she could have expressly stated therein a reservation ofher right to dispose of the same. The prohibition on the donor to alienate the said property during herlifetime is proof that naked ownership over the property has been transferred to the donees. It also supportsthe irrevocable nature of the donation considering that the donor has already divested herself of the right to

dispose of the donated property. On the other hand, the prohibition on the donees only meant that they maynot mortgage or dispose the donated property while the donor enjoys and possesses the property during herlifetime. However, it is clear that the donees were already the owners of the subject property due to theirrevocable character of the donation.

The petitioner argues that the subsequent and contemporaneous acts of the donor would show that herintention was to maintain control over her properties while she was still living. We disagree. RespondentDomingo Comia testified that sometime in 1977 or prior to the sale of the subject house and lot, hisgrandmother, the donor in the case at bar, delivered the title of the said property to him; and that the act ofthe donor was a manifestation that she was acknowledging the ownership of the donees over the propertydonated. Moreover, Atty. Viniegra testified that when the donor sold the lot to the petitioner herein, she wasnot doing so in accordance with the agreement and intent of the parties in the deed of donation; that she wasdisregardingthe provision in the deed of donation prohibiting the alienation of the subject property; and that

she knew that the prohibition covers her as well as the donees.

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

We now rule on whether the donor validly revoked the donation when one of her daughters and donees,Consolacion Austria, violated the prohibition to encumber the property. When Consolacion Austriamortgaged the subject property to a certain Baby Santos, the donor, Basilisa Comerciante, asked one of therespondents herein, Domingo Comia, to redeem the property, which the latter did. After the petitioner inturn redeemed the property from respondent Domingo, the donor, Basilisa, sold the property to thepetitioner who is one of the donees.

The act of selling the subject property to the petitioner herein cannot be considered as a valid act ofrevocation of the deed of donation for the reason that a formal case to revoke the donation must be filedpursuant to Article 764 of the Civil Code, which speaks of an actionthat has a prescriptive period of four (4)years from non-compliance with the condition stated in the deed of donation. The rule that there can beautomatic revocation without benefit of a court action does not apply to the case at bar for the reason that thesubject deed of donation is devoid of any provision providing for automatic revocation in event of non-compliance with the any of the conditions set forth therein. Thus, a court action is necessary to be filedwithin four (4) years from the non-compliance of the condition violated. As regards the ground of estoppel,


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the donor, Basilisa, cannot invoke the violation of the provision on the prohibition to encumber the subjectproperty as a basis to revoke the donation thereof inasmuch as she acknowledged the validity of themortgage executed by the donee, Consolacion Austria, when the said donor asked respondent DomingoComia to redeem the same. Thereafter, the donor, Basilisa likewise asked respondent Florentino Lumubosand the petitioner herein to redeem the same. Those acts implied that the donees have the right of controland naked title of ownership over the property considering that the donor, Basilisa condoned and

acknowledged the validity of the mortgage executed by one of the donees, Consolacion Austria.

Anent the second issue, the petitioner asserts that the action, against the petitioner, for annulment of TCT No.T-10434 and other relevant documents, for reconveyance and damages, filed by the respondents onSeptember 21, 1983 on the ground of fraud and/or implied trust has already prescribed. The sale happenedon February 6, 1979 and its registration was made on February 8, 1979 when TCT No. RT-4036 in the nameof the donor was cancelled and in lieu thereof TCT No. T-10434 in the name of the petitioner was issued.Thus, more than four (4) years have passed since the sale of the subject real estate property was registeredand the said new title thereto was issued to the petitioner. The petitioner contends that an action forreconveyance of property on the ground of alleged fraud must be filed within four (4) years from thediscovery of fraud which is from the date of registration of the deed of sale on February 8, 1979; and that thesame prescriptive period also applies to a suit predicated on a trust relationship that is rooted on fraud ofbreach of trust.

When ones property is registered in anothers name without the formers consent, an implied trust is createdby law in favor of the true owner. Article 1144 of the New Civil Code provides:

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

Thus, an action for reconveyance of the title to the rightful owner prescribes in ten (10) years from theissuance of the title. It is only when fraud has been committed that the action will be barred after four (4)years.

However, the four-year prescriptive period is not applicable to the case at bar for the reason that there is nofraud in this case. The findings of fact of the appellate court which are entitled to great respect, are devoid ofany finding of fraud. The records do not show that the donor, Basilisa, and the petitioner ever intended todefraud the respondents herein with respect to the sale and ownership of the said property. On the otherhand, the sale was grounded upon their honest but erroneous interpretation of the deed of donation that it ismortis causa, not inter vivos;and that the donor still had the rights to sell or dispose of the donated propertyand to revoke the donation.

There being no fraud in the trust relationship between the donor and the donees including the herein

petitioner, the action for reconveyance prescribes in ten (10) years. Considering that TCT No. T-10434 in thename of the petitioner and covering the subject property was issued only on February 8, 1979, the filing ofthe complaint in the case at bar in 1983 was well within the ten-year prescriptive period.

The Court of Appeals, therefore, committed no reversible error in its appealed Decision.

WHEREFORE, the appealed Decision dated June 30, 1989 of the Court of Appeals is hereby AFFIRMED. Nopronouncement as to costs.


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SO ORDERED.

EN BANC

G.R. No. L-15939 January 31, 1966

ANGELES UBALDE PUIG, ET AL.,plaintiffs-appellants, vs. ESTELLA MAGBANUA PEAFLORIDA,ET AL.,defendants-appellants.

R E S O L U T I O N

(Main opinion was promulgated on November 29, 1965).

REYES, J.B.L.,J.:

Defendants-appellants Estela Magbanua Peaflorida, et al., insist that the reservation by the donorof the right to dispose of the property during her lifetime in the deed of December 28, 1949indicates that title had passed to the donee in her lifetime, otherwise, it is argued, the reservationwould be superfluous, and they cite American authorities in support.

This thesis would be plausible if the reservation of the power to dispose were the only indication tobe considered in deciding whether the donation of December 28, 1949 was mortis causa or inter


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vivos. But such is not the case. The Court in its decision took to account not only the foregoingcircumstance but also the fact that the deceased expressly and consistently declared herconveyance to be one of donation mortis causa, and further forbade the registration of the deeduntil after her death. All these features concordantly indicated that the conveyance was notintended to produce any definitive effects, nor to finally pass any interest to the grantee, except

from and after the death of the grantor.

We see nothing in the deed itself to indicate that any right, title or interest in the propertiesdescribed was meant to be transferred to Doa Estela Magbanua prior to the death of the grantor,Carmen Ubalde Vda. de Parcon. Not ownership, certainly, for the stipulation:

Que esta escritura de donacionmortis causa no se registrara en la oficina del Registrador deTitulos de Iloilo sino despues del fallecimiento de la Donante

necessarily meant, according to section 50 of the Land Registration Act, that the deed in questionshould not take effect as a conveyance nor bind the land until after the death of the "donor".

Neither did the document operate to vest possession upon Doa Estela Magbanua, in view of theexpress condition that (paragraph 3) if at the date of her death the donor had not transferred, sold,or conveyed one-half of lot 58 of the Pototan Cadastre to other persons or entities, the donee wouldbe bound to pay to Caridad Ubalde, married to Tomas Pedrola, the amount of P600.00, and suchpayment was to be made on the date the donee took possession of Lot No. 58. As the obligation topay the legacy to Caridad Ubalde would not definitely arise until after the death of the donor,because only by then would it become certain that the "donor" could not transfer the property tosomeone else, and such payment must precede the taking possession of the property "donated", itnecessarily follows that the "donee's" taking of possession could not occur before the death of thedonor.

It being thus clear that the disposition contained in the deed is one that produces no effect until thedeath of the grantor, we are clearly faced by an act mortis causa of the Roman and Spanish law. Wethus see no need of resorting to American authorities as to the import of the reservation of thedonor's right to dispose of the donated property, for the Spanish authorities are very clear on thispoint:

Desde el momento en que la muerte del donante es la que determina la adquisicion o elderecho a los bienes; desde el montento en que la disposicion puede ser revocadavoluntariamente, se salva la linea divisoria entre unos y otros actos: la donacion equivale aun legado; mas aun que esto: es un legado en realidad. (5 Manresa, 5th Ed., p. 107)

Ahora bien: si el mal llamado donante no solo dilata la fecha de la ejecucion para elmomento de su muerte, sino que ademas se reserva la facultad de revocar a su arbitrio ladisposicion, entonces el acto no es valido bajo la forma de contrato; hay en realidad unadisposicion mortis causa que exige las solemnidades del testamento. (V Manresa, 5th Ed., p.109) (Emphasis supplied)

The presence of an acceptance is but a consequence of the erroneous concept of the true nature ofthe juridical act, and does not indicate that in the same is a true donation inter vivos.


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Appellant Magbanua further argues that the reserved power of the donor to convey the donatedproperty to other parties during her lifetime is but aresolutory condition (albeit apotestative one)that confirms the passing of the title to the donee. In reality, this argument is a veritable petitio

principii; it takes for granted what has to be proved, i.e., that some proprietary right has passedunder the terms of the deed, which, as we have shown, is not true until thedonor has died.

It is highly illuminating to compare the condition imposed in the deed of donation of December 28,1949 with that established in the contract dealt with in Taylor vs. Uy Tieng Piao & Tau Liuan, 43Phil. 874, invoked by appellants.

In the alleged deed of donation of December 28, 1949, the late Doa Carmen Ubalde imposedexpressly that:

Que antes de su muerte, la Donante podra enajenar, vender, traspasar e hipotecar acualesquiera personas o entidades los bienes aqui donados a favor de la Donataria enconcepto de Donacionmortis causa.

In the Taylor vs. Uy Tieng Piao case, on the other hand, the condition read:

It is understood and agreed that should the machinery to be installed in said factory fail, forany reason, to arrive, in the City of Manila within the period of six (6) months from datehereof, this contract may be cancelled by the party of the second part at its option, suchcancellation, however, not to occur before the expiration of such six (6) months. (pp. 874-875, cas. cit.).

In the Uy Tieng Piao case the contract could only be cancelled after six months, so that there couldbe no doubt that it was in force at least for that long, and the optional cancellation can be viewed asa resolutory condition (or more properly, a non-retroactive revocatory one); but no such restriction

limited the power of the donor, Doa Carmen Ubalde, to set at naught the alleged conveyance infavor of Doa Estela Magbanua by conveying the property to other parties at any time, even at thevery next instant after executing the donation, if she so chose. It requires no argument todemonstrate that the power, as reserved in the deed, was a power to destroy the donation at anytime, and that it meant that the transfer is not binding on the grantor until her death made itimpossible to channel the property elsewhere. Which, in the last analysis, as held in our maindecision, signifies that the liberality is testamentary in nature, and must appear with thesolemnities required of last wills and testaments in order to be legally valid.

Wherefore, the motion to reconsider is denied.

Bengzon, C.J., Concepcion, Dizon, Regala, Bengzon and Zaldivar, JJ., concur.

Barrera, J., took no part.

Makalintal, J., is on leave.

Republic of the PhilippinesSUPREME COURTManila


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SECOND DIVISION

G.R. No. 155810 August 13, 2004

LYDIA SUMIPAT, LAURITO SUMIPAT, ALEJANDRO SUMIPAT, ALICIA SUMIPAT, and LIRAFESUMIPAT, petitioners,vs.BRIGIDO BANGA, HERMINIGILDO TABOTABO, VIVIANO TABOTABO, BERNARDITA ANION,and LEONIDA TABOTABO,respondents.

D E C I S I O N

TINGA,J.:

This is a Petition for Review on Certiorariof the Decision of the Court of Appeals which reversed andset aside the decision3of the Regional Trial Court (RTC) and partially annulled the Deed of AbsoluteTransfer and/or Quitclaim(the deed) subject of this case.

We quote the appellate courts findings of fact:

The spouses Placida Tabo-tabo and Lauro Sumipat, who contracted marriage on July 20,1939, acquired three parcels of land two of which were covered by Original Certificate ofTitle No. P-17842 and Transfer Certificate of Title No. T-15826.

The couple was childless.

Lauro Sumipat, however, sired five illegitimate children out of an extra-marital affair withPedra Dacola, namely: herein defendants-appellees Lydia, Laurito, Alicia, Alejandro andLirafe, all surnamed Sumipat.

On January 5, 1983, Lauro Sumipat executed a document denominated "DEED OFABSOLUTE TRANSFER AND/OR QUIT-CLAIM OVER REAL PROPERTIES" (the assaileddocument) in favor of defendants-appellees covering the three parcels of land (theproperties). On the document appears the signature of his wife Placida which indicates thatshe gave her marital consent thereto.

It appears that on January 5, 1983 when the assailed document was executed, LauroSumipat was already very sick and bedridden; that upon defendant-appellee Lydiasrequest, their neighbor Benjamin Rivera lifted the body of Lauro Sumipat whereupon Lydiaguided his (Lauro Sumipats) hand in affixing his signature on the assailed document whichshe had brought; that Lydia thereafter left but later returned on the same day and requestedLauros unlettered wife Placida to sign on the assailed document, as she di d in haste, evenwithout the latter getting a responsive answer to her query on what it was all about.
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After Lauro Sumipats death on January 30, 1984, his wife Placida, hereinafter referred to as

plaintiff-appellant, and defendants-appellees jointly administered the properties 50% of theproduce of which went to plaintiff-appellant.

As plaintiff-appellants share in the produce of the properties dwindled until she no longerreceived any and learning that the titles to the properties in question were alreadytransferred/made in favor of the defendants-appellees, she filed a complaint for declarationof nullity of titles, contracts, partition, recovery of ownership now the subject of the presentappeal.

Defendant-appellee Lydia disclaims participation in the execution of the assailed document,she claiming to have acquired knowledge of its existence only on January 10, 1983 or fivedays after its execution when Lauro Sumipat gave the same to her.

Branch 6 of the Regional Trial Court of Dipolog City decided the case in favor of defendants-appellees, it holding that by virtue of the assailed document the due execution of which was

not contested by plaintiff-appellant, the properties were absolutely transferred todefendants-appellees.4

The trial court found that the subject properties are conjugal having been acquired during themarriage of Lauro Sumipat and Placida Tabotabo (Placida). However, because Placida failed toquestion the genuineness and due execution of the deed and even admitted having affixed hersignature thereon, the trial court declared that the entirety of the subject properties, and not justLauro Sumipats conjugal share, were validly transferred to the defendants, the petitioners herein.5

On appeal,6 the appellate court held that since Placida was unlettered,7 the appellees, thepetitioners herein, as the parties interested in enforcing the deed, have the burden of proving thatthe terms thereof were fully explained to her.8This they failed to do.

Under the Civil Code, a contract where consent is given through mistake, violence, intimidation,undue influence or fraud is voidable.9In order that mistake may invalidate consent, it should referto the substance of the thing which is the object of the contract, or to those conditions which haveprincipally moved one or both parties to enter into the contract.10

The appellate court found that Placida did not understand the full import of the deed because theterms thereof were not explained to her either by the petitioners or by the notary public beforewhom the deed was acknowledged. According to the appellate court, Judge Pacifico Garcia (JudgeGarcia), before whom the deed was acknowledged, did not identify Placida as having appearedbefore him on January 5, 1983 to acknowledge the deed. The jurat indicates that it was only LauroSumipat who appeared before Judge Garcia and to whom he explained the contents of the deed.Further, the appellate court noted that Judge Garcia himself was under the impression that the deedconveyed the exclusive properties of Lauro Sumipat. Hence, he could not have explained to Placidathat the deed actually transferred the conjugal properties of Lauro Sumipat and Placida.11

The Court of Appeals, therefore, annulled the deed insofar as it covers Placidas conjugal share inthe subject properties because the latters consent thereto was vitiated by mistake when she affixedher signature on the document.
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The petitioners filed a Motion for Reconsideration on the grounds of estoppel, absence of fraud andprescription. The appellate court denied the Motion for Reconsideration in its Resolution12 datedOctober 16, 2002 ruling that the grounds relied upon have been addressed in its Decision datedApril 11, 2002. Anent the ground of prescription, the appellate court held that since the propertieswere acquired through fraud or mistake, the petitioners are considered trustees of an implied trust

for the benefit of Placida. Citing jurisprudence,13 the Court of Appeals ruled that actions based onimplied or constructive trust prescribe 10 years from the issuance of a Torrens Title over theproperty. Since two (2) of the subject properties were issued Transfer Certificates of Title (TCT)Numbered T-4003714 and T-4003815 under the petitioners names on August 18, 1987, theComplaint for declaration of nullity of titles, partition, recovery of ownership and possession,reconveyance, accounting and damages, which was filed on March 3, 1993, was filed well within theprescriptive period.

The petitioners are now before this Court principally claiming that Placida freely consented to theexecution of the deed and that they did not commit fraudulent acts in connection with its execution.They also reiterate their argument that the Court of Appeals should have dismissed the case on the

ground of prescription. It is their contention that the present action being one to annul a contracton the ground of fraud, it should have been filed within four (4) years from the discovery of fraud orregistration of the instrument with the Registry of Deeds.

The respondents filed their Comment16dated February 7, 2003, essentially echoing the findings ofthe Court of Appeals on the matter of Placidas consent. According to them, Placida was deceived

and misled into affixing her signature on the deed. They further claim that Placida did not actuallyappear before the notary public to acknowledge the instrument.

In their Reply17dated April 29, 2003, the petitioners insist that Placida was not illiterate and thatLauro Sumipat validly transferred the titles over the properties in question to them. They alsoargue that if Placida did not understand the import of the deed, she could have questioned Lauro

Sumipat about it since the deed was executed a year before the latter died.

The trial court and the Court of Appeals are in agreement that the subject properties are conjugal,having been acquired during the marriage of Lauro Sumipat and Placida. They came out, however,with disparate denouements. While the trial court upheld the validity of the deed as an instrumentof transfer of all the litigated parcels of land in their entirety on the ground that Placida failed toquestion its authenticity and due execution, the appellate court struck the deed down insofar as theconjugal share of Placida is concerned based on its finding that her consent was vitiated by mistake.

At bottom, the crux of the controversy is whether the questioned deed by its terms or under thesurrounding circumstances has validly transferred title to the disputed properties to thepetitioners.

A perusal of the deed reveals that it is actually a gratuitous disposition of property a donation although Lauro Sumipat imposed upon the petitioners the condition that he and his wife, Placida,shall be entitled to one-half (1/2) of all the fruits or produce of the parcels of land for theirsubsistence and support. The preliminary clauses of the deed read:
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That conscious of my advanced age and failing health, I feel that I am not capable anymoreof attending to and maintaining and keeping in continuous cultivation my above describedproperties;

That my children are all desirous of taking over the task of maintaining my properties andhave demonstrated since childhood the needed industry and hard work as they have in factestablished possession over my real properties and introduced more improvements overmy lands, the fruit of which through their concerted efforts and labors,

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