G.R. No.

72908 August 11, 1989

EUFEMIA PAJARILLO, CLAUDIO SUTERIO, JR., NYMIA SUTERIO and MARILYN

SUTERIO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, THIRD CIVIL CASES DIVISION, SALUD SUTERIO
and PEDRO MATIAS, respondents.

Agustin A. Ferrer for petitioners.

Alfredo I. Raya for respondents.

CRUZ, J.:

This is one of those distasteful litigations involving a controversy among close relatives over
properties left by a common ascendant. The petitioners are the widow and children of the brother
of the principal private respondent. She and her brother appear to be the only remaining issue of
the mother who seems to have caused all the present confusion. The record does not show how
close, if at all, the members of this small family were. What is certain is that there is no affection
now among the protagonists in this case.

The mother was Juana Balane de Suterio, who had a brother named Felipe Balane and a sister
named Perfecta Balane de Cordero. Perfecta died in 1945 leaving inter alia a tract of land
consisting of about 28 hectares and covered by TCT No. 4671 in the Registry of Deeds of
Quezon Province. On May 20, 1946, Juana and Felipe executed a public instrument entitled
"Extra-judicial Settlement of the Estate of the Deceased Perfecta Balane de Cordero." 1 In it they
disposed of the said property as follows:

EXTRA-JUDICIAL SETTLEMENT OF THE ESTATE OF DECEASED

PERFECTA BALANE DE CORDERO.

This agreement made to 20th day of May, 1946, by and between Felipe Balane
and Juana Balane de Suterio, both of age and residents of Macalelon, Tayabas,
Philippines.

WITNESSETH:

That whereas, the said Felipe Balane and Juana Balane de Suterio are the only
brother and sister respectively and forced heirs of Perfecta Balane de Cordero
who dies intestate on January 21, 1945;

That whereas, the said Perfects Balane de Cordero, deceased, left property
described as follows:

TRANSFER CERTIFICATE OF TITLE NO. 4671.

Province of Tayabas.

A parcel of land (Lot No. 6-A, Plan Psu-12210), with an buildings and
improvements except those herein expressly noted as belonging to other person,
situated in the barrio of Luctol, Municipality of Macalelon. Bounded on the NE., by
Lot No. 6-B; on the E., by property by Andrea Fernandez, the sapa Luctob and
the sapa Patay; on the SE., by properties of Andrea Fernandez and Silvestra
Mereis on the SW., by properties of Felix Rodriguez, Dionisio Fornea Placido
Abistado and Adriano Abistado and the mangrove of the government; and on the
NW., by properties of Orilleneda Mariano, Glindro Maxima Orilleneda Placida
Forcados and Basilio Rabe .. .. .. .. .. .. .. containing an area of TWO HUNDRED
EIGHTY FIVE THOUSAND THREE HUNDRED FIFTY-THREE SQUARE
METERS (285,353) more or less.

That whereas, we Felipe Balane and Juana Balane de Suterio, the only heirs of
the property described above left by the deceased Perfecta Balane de Cordero,
do hereby agree in carrying out the antemortem wish of our beloved deceased
sister that in consideration of love and affection the property described above be
donated to Salud Sutexio de Matias.

That whereas, the estate left by the said Perfecta Balane de Castro, deceased, is
not free from obligation or debt. It has an incumbrance of about ONE
THOUSAND PESOS (P1,000.00) to the Philippine National Bank, Tayabas
Branch.

That whereas, Salud Suterio de Matias, to whom this property is donated extra-
judicially as agreed upon by both heirs, shall assume the said obligation to the
Philippine National Bank, Tayabas Branch.

NOW, THEREFORE, we Felipe Balane and Juana Balane de Suterio have

mutually agreed and covenanted to adjudicate, give, transfer and convey the
property described above to Salud Suterio de Matias heirs, executors,
administrators and assign.

And the donee does hereby accept this donation and does hereby express her
gratitutde for the kindness and liberality of the donor.

IN WITNESS WHEREOF, we have hereunto set our hands tills 20th day of May,
1946.

(Sgd.) FELIPE BALANE FELIPE

BALANE

(Sgd.) JUANA BALANE DE

SUTERIO JUANA BALANE DE
SUTERIO

(Acknowledgment)

On June 20, 1946, Salud Suterio executed the following public

instrument, 2 petitioner Eufemia Pajarillo was one of the witnesses:

KNOW ALL MEN BY THESE PRESENTS:

That on May 20, 1946, FELIPE BALANE and JUANA BALANE DE SUTERIO, the
only heirs to the properties of the late PERFECTA BALANE DE CORDERO,
executed a DEED OF DONATION in favor of the undersigned and the said
donation was made, in accordance to the antemortem wish of my late aunt,
Perfecta Balane de Cordero, to the effect that the property described in the Deed
of Donation, be given to me because of her love and affection for me, being her
only niece.
 That, I, SALUD SUTERIO, DE MATIAS, the only DONEE, do hereby receive and
accept this donation and further express my gratitude for the kindness and
liberality of the DONORS, FELIPE BALANE and JUANA BALANE DE SUTERIO.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of June,
1946.

(Sgd.) SALUD
SUTERIO DE
MATIAS

SU
TE
RIO
DE
MA
TIA
S

D
o
n
e
e

Signed in the presence of

(Sgd.) SOFRONIO BALANE

(Sgd.) EUFEMIA P. SUTERIO

(Acknowledgment)

These instruments were never registered nor was title transferred in Salud's name although she
says she immediately took possession of the land. Meantime, intestate proceedings were
instituted on the estate of Perfecta and the said land was among those included in the inventory
of the properties belonging to the decedent. 3 Salud interposed no objection to its inclusion nor
did she oppose its subsequent adjudication to her mother Juana in the project of partition. It is
not clear if the land was ever registered in Juana's name. However, there is evidence that Juana
confirmed the earlier donation of the land to Salud but requested that she be allowed to possess
the same and enjoy its fruits, until her death. 4 It has also not been controverted that Salud paid
the P1,000.00 loan for which the land was mortgaged.

Salud says that sometime in 1951, acceding to this request, she transferred the possession of
the land to her mother, who was then staying with Claudio and his family. During the period they
were occupying the land, Claudio paid the realty taxes thereon . 5 On May 25, 1956, Juana
executed a deed of absolute sale conveying the land to Claudio for the declared consideration of
P12,000.00. 6 Two years later, on August 27, 1958, Claudio had the land registered in as name
and was issued TCT No. 32050 in the land records of Quezon Province. 7

Claudio died in 1961 and his mother in 1963. On June 30, 1965, the private respondents filed a
complaint for the reconveyance of the property on the ground that the deed of sale in favor of
Claudio was fictitious and its registration in his name was null and void . 8
Salud (joined by her husband) alleged that she was unaware until later of the supposed sale of
the land to Claudio. She faulted it as having been procured through fraud and improper influence
on her sick and aged mother. She claimed that no compensation was actually paid by Claudio
and that the transaction was deliberately concealed from her by her brother and the
defendants. 9 For their part, the defendants assailed the donation to Salud as legally inefficacious
and defective and contended that her complaint was barred by prescription, estoppel and res
judicata. They also filed a counterclaim questioning the sale to Salud by her mother of another
tract of land, in which they said they were entitled to share as Juana's heirs. 10

On April 17,1979, Judge Juan M. Montecillo of the Court of First Instance of Quezon rendered
judgment upholding the donation to the plaintiff and annulling the deed of sale and the
registration of the land in favor of Claudio Suterio, Sr. The defendants were required to reconvey
the land to Salud Suterio even as their counterclaim was dismissed for lack of evidence. 11 On
appeal, the decision was affirmed in toto. 12 The respondent court is now sought to be reversed in
this petition for certiorari under Rule 45 of the Rules of Court.

We hold at the outset that, contrary to the ruling in the challenged decision, the petitioners have
the legal personality to challenge the validity of the donation on which Salud bases her claim to
the property under litigation. As defendants in the complaint for reconveyance, they had every
right to resist the plaintiffs' allegation that she was the owner of the subject property by virtue of
the claimed donation. Recognition of that donation would topple the props of their own contention
that Juana could dispose of the property as its owner when she sold it to Claudio Suterio in 1956.

The petitioners also assail the intrinsic validity of the extrajudical settlement and submit that it is
not really a donation as conceptually understood in civil law. Their argument is that the real donor
of the property was Perfecta, the deceased sister, who, however, could no longer bestow the
intended gift. For their part, Felipe and Juana could not have made, the donation either because
they were not moved by the same sentiments Perfects had for her niece Salud. That feeling
would have provided the required consideration if Perfects herself had made the donation, but
not the other two.

This appears to be too much nitpicking, if not sophistry. Felipe and Juana had declared
themselves the heirs of Perfecta and the owners of the property in question. As such, they were
free to give the land to whomever they pleased and for whatever reason they saw fit. Hence, if
they chose to respect Perfecta's wishes and carry out her intentions by donating the land to
Salud, there was no legal impediment to their doing so. In fact, that was not only the legal but
also the moral thing to do.

There is no question that Felipe and Juana could have simply disregarded their sister's
sentiments and decided not to donate the property to Salud, keeping the same for themselves.
The fact that they did not do this speaks well indeed of their integrity and their loyalty as well to
their deceased sister. The extrajudicial settlement also reflects their own affection for Salud
which constituted the valid consideration for their own act of liberality. Notably, in her acceptance
of the donation, Salud referred to 'the donors Felipe Balane and Juana Balane de Suterio," and
not Perfecta.

It is also pointed out that the donation is defective in form because of non-compliance with the
requirements of the law regarding its acceptance. As it was executed in 1946, the applicable rule
is Article 633 of the old Civil Code reading as follows:

Art. 633. In order that a donation of real property be valid it must be made by
public instrument in which the property donated must be specifically described
and the amount of the charges to be assumed by the donee expressed.

The acceptance may be made, in the deed of gift or in a separate public writing;
but it shall produce no effect if not made during the lifetime of the donor.
 If the acceptance is made, by separate public instrument, authentic notice thereof
shall be given the donor, and this proceeding shall be noted in both instruments.

There is no question that the donation was accepted in a separate public instrument and that it
was duly communicated to the donors. Even the petitioners cannot deny this. But what they do
contend is that such acceptance was not "noted in both instruments," meaning the extrajudicial
partition itself and the instrument of acceptance, as required by the Civil Code.

That is perfectly true. There is nothing in either of the two instruments showing that "authentic
notice" of the acceptance was made by Salud to Juana and Felipe. And while the first instrument
contains the statement that "the donee does hereby accept this donation and does hereby
express her gratitude for the kindness and liberality of the donor," the only signatories thereof
were Felipe Balane and Juana Balane de Suterio. That was in fact the reason for the separate
instrument of acceptance signed by Salud a month later.

A strict interpretation of Article 633 can lead to no other conclusion than the annulment of the
donation for being defective in form as urged by the petitioners. This would be in keeping with the
unmistakable language of the above-quoted provision. However, we find that under the
circumstances of the present case, a literal adherence to the requirement of the law might result
not in justice to the parties but conversely a distortion of their intentions. It is also a policy of the
Court to avoid such an intepretation.

The purpose of the formal requirement is to insure that the acceptance of the donation is duly
communicated to the donor. In the case at bar, it is not even suggested that Juana was unaware
of the acceptance for she in fact confirmed it later and requested that the donated land be not
registered during her lifetime by Salud. 13 Given this significant evidence, the Court cannot in
conscience declare the donation ineffective because there is no notation in the extrajudicial
settlement of the donee's acceptance. That would be placing too much stress on mere form over
substance. It would also disregard the clear reality of the acceptance of the donation as
manifested in the separate instrument dated June 20,1946, and as later acknowledged by Juana.

The cases cited by the parties in their respective memoranda are not really in point. In Legasto v.
Verzosa, 14 there was no evidence whatsoever that the claimed donations had been accepted, as
stressed by Justice Villa-Real. The same observation is made of Santos v. Robledo, 15 where
Justice Torres noted that the acceptance of the donation did not appear in the deed of donation
or in any other instrument.

The petitioners would also fault the private respondents for laches and argue that Salud's
inaction in protection of her rights should bar her from asserting them at this late hour.
Specifically, it is pointed out that she failed to register the deed of donation and its acceptance in
1946; did not oppose the inclusion of the subject land in the inventory of Perfecta's properties
submitted in the intestate proceedings in 1946; did not object to the adjudication of the land to
Juana in the project of partition in 1951; did not protest the sale of the land to Claudio Suterio in
1956; and did not question its registration in his name in 1958. It is contended that all these acts
constitute laches, which has been described by this Court thus:

An estoppel by laches arises from the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it. 16

The problem with the petitioners' theory is that it would regard Juana and Salud as strangers
when they are in fact mother and daughter. One may expect a person to be vigilant of his rights
when dealing with an acquaintance or associate, or even with a friend, but not when the other
person is a close relative, as in the case at bar. To begin with, the land came from Juana herself.
Secondly, she requested her daughter not to register the land as long as she was still alive so
she could enjoy its fruits until her death. To Salud, it was not difficult to comply with this request,
coming as it did from her own mother. There was no reason to disobey her. She did not have to
protect herself against her own mother. Indeed, what would have been unseemly was her
registering the land against her mother's request as if she had no confidence in her. Salud did no
less than what any dutiful daughter would have done under the circumstances.

If Salud did not protest the inclusion of the land in the inventory of Perfecta's properties and its
subsequent adjudication to Juana in the intestate proceedings, it was because she did not feel
threatened by these acts. She did not distrust her mother. Moreover, Juana had herself
acknowledged the donation when she was asked in whose name the property would be
registered following the intestate proceedings. Salud felt safe because she had the extrajudicial
settlement to rely on to prove that her mother and her uncle had donated the subject land to her.

There is nothing in this instrument to suggest that the donation was to take effect upon the death
of the donors as to make it a donation mortis causa, as urged by the petitioners. The donation
became effective upon acceptance by Salud except that, in obedience to her mother's request,
she chose not to register the land in the meantime and to allow her mother to enjoy its fruits.
What was deferred was not its effectivity but only its enjoyment by Salud. Registration was not
necessary to make the donation a binding commitment insofar as the donors and the donee were
concerned. 17

As for her inaction against the deed of sale in favor of her brother Claudio, it should be noted in
the first place that she was not aware of it when it was executed in 1956. Her mother, who was
already 76 years old at the time, never informed her about it, nor did her brother or any of the
defendants, for reasons of their own. It was only later, when the sale was registered in 1958 and
a new title to the land was issued to Claudio, that she started asking questions. Even then, being
a sister to Claudio, she did not immediatey take legal steps.

It is natural, even among non-relatives, to seek a non-judicial settlement through extra-legal

measures before going to court. It is more so in the case of relatives, who should avoid as much
as possible the asperity and bitterness of litigation. That is what Salud did when she repeatedly
asked the petitioners for the return of the property albeit to no avail. It was only when it became
clear that amicable persuasion was not possible that she decided to sue the wife and children of
her departed brother.

The petitioners stress that it took Salud all of seven years from the registration of the land in
Claudios's name before she filed the complaint for reconveyance against them. That is true. But
if one remembers that her brother died only in 1961 and her own mother only in 1963, at the age
of 83, it will be easy to understand the reason for the delay, which would otherwise have been
unjustified. Suits among brothers and sisters are especially painful to their parents. Salud must
have thought many times about filing her complaint against her brother Claudio while her old
mother was still alive. In fact, Salud hesitated still even after her mother's death and took two
more years before she finally filed her complaint against Claudio's wife and children.

It is clear that Juana Balane de Suterio had no right to sell the subject land to Claudio because
she was no longer its owner, having previously donated it to her daughter Salud. Juana herself
was holding the land merely as a trustee of Salud, who had transferred possession to her mother
at the old woman's request. The deed of sale was itself vitiated by bad faith as Claudio is
presumed to have known of the previous donation to his sister Salud, whose acceptance of the
donation was formally witnessed by hiw own wife, the herein principal petitioner. 18 When Claudio
registered the land in his name knowing there was a flaw in his title, an implied trust was created
in favor of Salud as the real owner of the property in accordance with Article 1456 of the Civil
Code, reading as follows:

If the property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the property
comes.
As trustor, Salud had every right to sue for the recovery of the land in the action for
reconveyance against Claudio's heirs. As we said in Vda. de Jacinto, et al. v. Vda. de Jacinto, et
al. ... 19

Public policy demands that a person guilty of fraud or at least, of breach of trust, should not be
allowed to use a Torrens title as a shield against the consequences of his own wrongdoing.

The petitioners do not insist on prescription as a bar to the action for reconveyance, and
understandably so. The legal principle is that if the registration of the land is fraudulent and the
person in whose name the land is registered thus holds it as a mere trustee, the real owner is
entitled to file an action for reconveyance of the property within a period of ten years. As we have
held in many cases:

Where the action is one for reconveyance based on constructive trust, a ten-year period is
allowed. 20

An action for reconveyance of realty, based upon a constructive or implied trust resulting from
fraud, may be barred by prescription. The prescriptive period is reckoned from the issuance of
the title which operates as a constructive notice. 21

While actions to enforce a constructive trust prescribe in 10 years from registration of the
property, private respondents' right commenced from actual discovery of petitioner's act of
defraudation. 22

The record shows that while the land was registered in the name of Claudio Suterio, Sr. in 1958,
the complaint for reconveyance was filed by the petitioners in 1965, or still within the ten-year
prescriptive period.

The last issue raised by the petitioners, viz., the validity of the deed of sale executed by Juana
Balane de Suterio on January 29,1950, in favor of Salud Suterio, 23 need not detain us too long.
The trial court sustained the contract for lack of sufficient evidence to invalidate it and was upheld
by the respondent court. We see no reason to disturb their factual finding, absent a showing that
it was reached arbitrarily. Interestingly, it occurred to the petitioners to question the transaction
only when they were sued by the private respondents, after ten years from the date of the sale.
This is an even longer period than the nine years during which the petitioners say Salud Suterio
was sleeping on her rights following the sale of her land to Claudio Suterio.

WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.

Narvasa, Gancayco, Griñ;o-Aquino and Medialdea, JJ., concur.

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[G.R. No. 112796. March 5, 1998]

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

ALFREDO CABANLIT, respondents.

DECISION
PANGANIBAN, J.:

Where the acceptance of a donation was made in a separate instrument but not
formally communicated to the donor, may the donation be nonetheless considered
complete, valid and subsisting?Where the deed of donation did not expressly impose
any burden -- the expressed consideration being purely one of liberality and
generosity -- but the recipient actually paid charges imposed on the property like
land taxes and installment arrearages, may the donation be deemed onerous and
thus governed by the law on ordinary contracts?

The Case

The Court answers these questions in the negative as it resolves this petition for
review under Rule 45 of the Rules of Court seeking to set aside the Decision [1] of the
Court of Appeals[2] in CA-GR CV No. 38050 promulgated on November 29,
1993. The assailed Decision reversed the Regional Trial Court, Branch 30, Manila, in
Civil Case No. 87-39133 which had disposed[3] of the controversy in favor of herein
petitioner in the following manner:[4]

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and

against the defendant as follows:

1. Ordering the defendant, or any person claiming rights under him, to

surrender to plaintiff possession of the premises known as Lot 8w, Block 6,
Psd-135534 of the Monserrat Estate, and the improvement standing
thereon, located at 3320 2nd St., V. Mapa, Old Sta. Mesa, Manila;

2. Ordering the defendant to pay plaintiff the sum of Five Thousand

(P5,000.00) Pesos, as and for attorneys fees; and

3. Costs against the defendant.

The defendants counterclaims are hereby dismissed.

The Facts

Although the legal conclusions and dispositions of the trial and the appellate
courts are conflicting, the factual antecedents of the case are not substantially
disputed.[5] We reproduce their narration from the assailed Decision:

Civil Case No. 83-39133 involves an action filed by plaintiff-appellee [herein

petitioner] on January 22, 1987 seeking to recover from defendant-
appellant [a] parcel of land which the former claims to have acquired from
his grandmother by donation. Defendant-appellant [herein private
respondent], on the other hand, put up the defense that when the alleged
donation was executed, he had already acquired the property by a Deed of
Assignment from a transferee of plaintiff-appellees grandmother.

The evidence for plaintiff-appellee [herein petitioner] is summarized as

follows:

Catalina Jacob Vda. de Reyes, a widow and grandmother of plaintiff-

appellee, was awarded in July 1975 a 60.10-square meter lot which is a
portion of the Monserrat Estate, more particularly described as Lot 8W,
Block 6 of Psd-135834, located at 3320 2nd St., V. Mapa, Old Sta. Mesa,
Manila. The Monserrat Estate is a public land owned by the City of Manila
and distributed for sale to bona fide tenants under its land-for-the-landless
program. Catalina Jacob constructed a house on the lot.

On October 3, 1977, or shortly before she left for Canada where she is now
a permanent resident, Catalina Jacob executed a special power of attorney
(Exh. A) in favor of her son-in-law Eduardo B. Espaol authorizing him to
execute all documents necessary for the final adjudication of her claim as
awardee of the lot.

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

power of attorney granted to him, Catalina Jacob revoked said authority in
an instrument executed in Canada on April 16, 1984 (Exh. D).Simultaneous
with the revocation, Catalina Jacob executed another power of attorney of
the same tenor in favor plaintiff-appellee.

On January 30, 1985, Catalina Jacob executed in Canada a Deed of

Donation over a Lot 8W in favor of plaintiff-appellee (Exh. E). Following the
donation, plaintiff-appellee checked with the Register of Deeds and found
out that the property was in the delinquent list, so that he paid the
installments in arrears and the remaining balance on the lot (Exhs. F, F-1
and F-2) and declared the said property in the name of Catalina Jacob
(Exhs. G, G-1, G-2 and G-3).

On January 29, 1986, plaintiff-appellee sent a demand letter to defendant-

appellant asking him to vacate the premises (Exh. H). A similar letter was
sent by plaintiff-appellees counsel to defendant on September 11, 1986
(Exh. I). However, defendant-appellant refused to vacate the premises
claiming ownership thereof. Hence, plaintiff-appellee instituted the
complaint for recovery of possession and damages against defendant-
appellant.

Opposing plaintiff-appellees version, defendant-appellant claimed that the

house and lot in controversy were his by virtue of the following documents:
1. Deed of Absolute Sale executed by Catalina Jacob dated October 7,
1977 in favor of Eduardo B. Espaol covering the residential house located
at the premises (Exh. 4).

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

Eduardo Espaol dated September 30, 1980 (Exh. 5); and

3. Deed of Assignment executed by Eduardo B. Espaol over Lot 8W and a

residential house thereon in favor of defendant-appellant dated October 2,
1982 (Exh. 6).

After trial, the lower court decided in favor of plaintiff-appellee and against
defendant-appellant, rationalizing that the version of the former is more
credible than that of the latter. According to the lower court:

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

Ruling of the Appellate Court

In reversing the trial courts decision,[7] Respondent Court of Appeals anchored its
ruling upon the absence of any showing that petitioner accepted his grandmothers
donation of the subject land. Citing jurisprudence that the donees failure to accept a
donation whether in the same deed of donation or in a separate instrument renders
the donation null and void, Respondent Court denied petitioners claim of ownership
over the disputed land. The appellate court also struck down petitioners contention
that the formalities for a donation of real property should not apply to his case since it
was an onerous one -- he paid for the amortizations due on the land before and after
the execution of the deed of donation -- reasoning that the deed showed no burden,
charge or condition imposed upon the donee; thus, the payments made by petitioner
were his voluntary acts.
Dissatisfied with the foregoing ruling, petitioner now seeks a favorable
disposition from this Court.[8]

Issues

Petitioner anchors his petition on the following grounds:[9]

[I.] In reversing the decision of the trial court, the Court of Appeals decided
a question of substance in a way not in accord with the law and applicable
decisions of this Honorable Court.

[II.] Even granting the correctness of the decision of the Court of Appeals,
certain fact and circumstances transpired in the meantime which would
render said decision manifestly unjust, unfair and inequitable to petitioner.

We believe that the resolution of this case hinges on the issue of whether the
donation was simple or onerous.

The Courts Ruling

The petition lacks merit.

Main Issue:
Simple or Onerous Donation?

At the outset, let us differentiate between a simple donation and an onerous

one. A simple or pure donation is one whose cause is pure liberality (no strings
attached), while an onerous donation is one which is subject to burdens, charges or
future services equal to or more in value than the thing donated.[10] Under Article 733
of the Civil Code, donations with an onerous cause shall be governed by the rules on
contracts; hence, the formalities required for a valid simple donation are not
applicable.
Petitioner contends that the burdens, charges or conditions imposed upon a
donation need not be stated on the deed of donation itself. Thus, although the deed
did not categorically impose any charge, burden or condition to be satisfied by him,
the donation was onerous since he in fact and in reality paid for the installments in
arrears and for the remaining balance of the lot in question. Being an onerous
donation, his acceptance thereof may be express or implied, as provided under Art.
1320 of the Civil Code, and need not comply with the formalities required by Art. 749
of the same code. His payment of the arrearages and balance and his assertion of
his right of possession against private respondent clearly indicate his acceptance of
the donation.
We rule that the donation was simple, not onerous. Even
concedingthat petitioners full payment of the purchase price of the lot might have
been a burden to him, such payment was not however imposed by the donor as a
condition for the donation. Rather, the deed explicitly stated:
That for and in consideration of the love and affection which the DONEE inspires
in the DONOR, and as an act of liberality and generosity and considering further that
the DONEE is a grandson of the DONOR, the DONOR hereby voluntarily and freely
gives, transfer[s] and conveys, by way of donation unto said DONEE, his heirs,
executors, administrators and assigns, all the right, title and interest which the said
DONOR has in the above described real property, together with all the buildings and
improvements found therein, free from all lines [sic] and encumbrances and charges
whatsoever;[11] [underscoring supplied]
It is clear that the donor did not have any intention to burden or charge petitioner
as the donee. The words in the deed are in fact typical of a pure donation. We agree
with Respondent Court that the payments made by petitioner were merely his
voluntary acts. This much can be gathered from his testimony in court, in which he
never even claimed that a burden or charge had been imposed by his grandmother.
ATTY FORONDA:
q After you have received this [sic] documents, the x x x revocation of power of attorney
and the Special Power of Attorney in your favor, what did you do?
WITNESS:
a I went here in City Hall and verif[ied] the status of the award of my grandmother.
q When you say the award, are you referring to the award in particular [of the] lot in favor
of your grandmother?
a Yes, Sir.
q What was the result of your verification?
a According to the person in the office, the papers of my grandmother is [sic] includ[ed] in
the dilinquent [sic] list.
q What did you do then when you found out that the lot was includ[ed] in the dilinquent
[sic] list?
a I talked to the person in charged [sic] in the office and I asked him what to do so that
the lot should not [be] included in the dilinquent [sic] list.
ATTY. FORONDA:
q And what was the anwer [sic] given to you to the inquiry which you made?
WITNESS:
a According to the person in the office, that I would pay the at least [sic] one half of the
installment in order to take [out] the document [from] the delinquent list.
q And [were] you able to pay?
a I was able to pay, sir.
q What were you able to pay, one half of the balance or the entire amounts [sic]?
 a First, I paid the [sic] one half of the balance since the time the lot was awarded to us.
q What about the remaining balance, were you able to pay it?
a I was able to pay that, sir.
q So, as of now, the amount in the City of Manila of the lot has already been duly paid, is
it not?
a Yes, sir.[12]
The payments even seem to have been made pursuant to the power of
attorney[13]executed by Catalina Reyes in favor of petitioner, her grandson,
authorizing him to execute acts necessary for the fulfillment of her
obligations. Nothing in the records shows that such acts were meant to be a burden
in the donation.
As a pure or simple donation, the following provisions of the Civil Code are
applicable:

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

Art. 746. Acceptance must be made during the lifetime of the donor and the
donee.

Art. 749. In order that the donation of an immovable may be valid, it must
be made in a public instrument, specifying therein the property donated and
the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation and in a

separate public document, but it shall not take effect unless it is done
during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be

notified thereof in authentic form, and this step shall be noted in both
instruments.

In the words of the esteemed Mr. Justice Jose C. Vitug,[14] Like any other
contract, an agreement of the parties is essential. The donation, following the theory
of cognition (Article 1319, Civil Code), is perfected only upon the moment the donor
knows of the acceptance by the donee.Furthermore, [i]f the acceptance is made in a
separate instrument, the donor shall be notified thereof in an authentic form, and this
step shall be noted in both instruments.[15]
Acceptance of the donation by the donee is, therefore, indispensable; its
absence makes the donation null and void.[16] The perfection and the validity of a
donation are well explained by former Sen. Arturo M. Tolentino in this wise:

x x x Title to immovable property does not pass from the donor to the donee by virtue
of a deed of donation until and unless it has been accepted in a public instrument
and the donor duly notified thereof. The acceptance may be made in the very same
instrument of donation. If the acceptance does not appear in the same document, it
must be made in another. Solemn words are not necessary; it is sufficient if it shows
the intention to accept. But in this case it is necessary that formal notice thereof be
given to the donor, and the fact that due notice has been given must be noted in both
instruments (that containing the offer to donate and that showing the
acceptance). Then and only then is the donation perfected. If the instrument of
donation has been recorded in the registry of property, the instrument that shows the
acceptance should also be recorded. Where the deed of donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a separate
instrument, is either not given to the donor or else not noted in the deed of donation
and in the separate acceptance, the donation is null and void. [17]

Exhibit E (the deed of donation) does not show any indication that petitioner-
donee accepted the gift. During the trial, he did not present any instrument
evidencing such acceptance despite the fact that private respondent already raised
this allegation in his supplemental pleading[18] to which petitioner raised no
objection. It was only after the Court of Appeals had rendered its decision, when
petitioner came before this Court, that he submitted an affidavit[19] dated August 28,
1990, manifesting that he wholeheartedly accepted the lot given to him by his
grandmother, Catalina Reyes. This is too late, because arguments, evidence,
causes of action and matters not raised in the trial court may no longer be raised on
appeal.[20]
True, the acceptance of a donation may be made at any time during the lifetime
of the donor. And granting arguendo that such acceptance may still be admitted in
evidence on appeal, there is still need for proof that a formal notice of such
acceptance was received by the donor and noted in both the deed of donation and
the separate instrument embodying the acceptance. At the very least, this last legal
requisite of annotation in both instruments of donation and acceptance was not
fulfilled by petitioner. For this reason, the subject lot cannot be adjudicated to him.

Secondary Issue:
Supervening Events

Petitioner also contends that certain supervening events have transpired which
render the assailed Decision manifestly unjust, unfair and inequitable to him. The
City of Manila has granted his request for the transfer to his name of the lot originally
awarded in favor of Catalina Reyes. A deed of sale[21] covering the subject lot has in
fact been executed between the City of Manila, as the vendor, and petitioner, as the
vendee. The corresponding certificate of title[22] has also been issued in petitioners
name.
A close perusal of the city governments resolution[23] granting petitioners request
reveals that the request for and the grant of the transfer of the award were premised
on the validity and perfection of the deed of donation executed by the original
awardee, petitioners grandmother. This is the same document upon which petitioner,
as against private respondent, asserts his right over the lot. But, as earlier discussed
and ruled, this document has no force and effect and, therefore, passes no title, right
or interest.
 Furthermore, the same resolution states:

WHEREAS, in a report submitted by Ms. [Menchu C.] Bello [, Special

Investigator,] on February 7, 1990, it is stated that x x x constructed on the
lot is a make-shift structure used for residential purposes by the proposed
transferee Tito Lagazo and his family; x x x and that constructed at Lot 8,
Block 6, former Monserrat Estate is a make-shift structure used as a
dwelling place by Lagazo and family because the front portion of their
house which was constructed on a road lot was demolished, and the
structure was extended backward covering a portion of the old temporary
road lot. x x x

The above findings of the investigator are, however, directly contradictory to the
testimonies in court of petitioner himself and of private respondent. Petitioner
claimed the following: that the house constructed on the subject lot was owned by
his grandmother Catalina Jacob; that before the latter left for Canada in 1977,
Eduardo Espaol had already been living in the same house and continued to do so
until 1982; and that private respondent occupied the premises after Espaol left. [24]On
the other hand, private respondent testified that he bought the subject house and lot
from Eduardo Espaol in 1982, after which he and his family occupied the same; but
sometime in 1985, they had to leave the place due to a road-widening project which
reduced the house to about three meters [in] length and one arm[]s width. [25]
Between the testimonies under oath of the contending parties and the report --
not subjected to cross-examination -- which was prepared by the investigator who
recommended the approval of petitioners request for transfer, it is the former to
which the Court is inclined to give more credence. The investigators report must
have been based on the misrepresentations of petitioner who arrogated unto himself
the prerogatives of both Espaol and private respondent. Further, it is on record that
petitioner had required private respondent to vacate the subject premises before he
instituted this complaint. This shows he was not in actual possession of the property,
contrary to the report of the investigator.

Cabanlits Claim of Ownership

Petitioner also assails Respondent Courts conclusion that it is unnecessary to

pass upon private respondents claim over the property.Petitioner insists that the
principal issue in the case, as agreed upon by the parties during pretrial, is who
between the parties is the owner of the house and lot in question.
In disposing of the principal issue of the right of petitioner over the subject
property under the deed of donation, we arrive at one definite conclusion: on the
basis of the alleged donation, petitioner cannot be considered the lawful owner of the
subject property. This does not necessarily mean, however, that private respondent
is automatically the rightful owner.
In resolving private respondents claim of ownership, the examination of the
genuineness of the documents (deeds of assignment over the lot between Catalina
Reyes and Eduardo Espaol and between Espaol and private respondent) upon
which he asserts his right is necessary, especially in light of petitioners allegations of
forgery. However, the respective assignors in both documents are not parties to the
instant case. Not having been impleaded in the trial court, they had no participation
whatsoever in the proceedings at bar. Elementary norms of fair play and due
process bar us from making any disposition which may affect their rights. Verily,
there can be no valid judgment for or against them.[26]
Anyhow, since petitioner, who was the plaintiff below, failed to prove with clear
and convincing evidence his ownership claim over the subject property, the parties
thus resume their status quo ante. The trial court should have dismissed his
complaint for his failure to prove a right superior to that of private respondent, but
without prejudice to any action that Catalina Reyes or Eduardo Espaol or both may
have against said private respondent. Stating this point otherwise, we are not ruling
in this case on the rights and obligations between, on the one hand, Catalina Reyes,
her assigns and/or representatives; and, on the other, Private Respondent Cabanlit.
Not having proven any right to a valid, just and demandable claim that compelled
him to litigate or to incur expenses in order to protect his interests by reason of an
unjustified act or omission of private respondent, petitioner cannot be awarded
attorneys fees.[27]
WHEREFORE, the petition is hereby DENIED and the assailed Decision
is AFFIRMED.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM and

ILDEFONSA MANGUBAT, respondents.

DECISION
KAPUNAN, J.:

Before the Court is a petition for review under Rule 45 seeking the reversal of
the Decision of the Court of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et
al. vs. Wilfredo Palma, et al., which declared null and void the donation made by
respondents of a parcel of land in favor of the Bureau of Public Schools,
Municipality of Malangas, Zamboanga del Sur.
The antecedents of this case are as follows:
On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa
Mangubat, donated a 5,600 square meter parcel of land in favor of the Bureau of
Public Schools, Municipality of Malangas, Zamboanga del Sur (BPS). In the Deed
of Donation, respondents imposed the condition that the said property should be used
exclusively and forever for school purposes only. [1] This donation was accepted by
Gregorio Buendia, the District Supervisor of BPS, through an Affidavit of
Acceptance and/or Confirmation of Donation.
Through a fund raising campaign spearheaded by the Parent-Teachers
Association of Barangay Kauswagan, a school building was constructed on the
donated land. However, the Bagong Lipunan school building that was supposed to
be allocated for the donated parcel of land in Barangay Kauswagan could not be
released since the government required that it be built upon a one (1) hectare parcel
of land. To remedy this predicament, Assistant School Division Superintendent of
the Province of Zamboanga del Sur, Sabdani Hadjirol, authorized District Supervisor
Buendia to officially transact for the exchange of the one-half (1/2) hectare old
school site of Kauswagan Elementary School to a new and suitable location which
would fit the specifications of the government.Pursuant to this, District Supervisor
Buendia and Teresita Palma entered into a Deed of Exchange whereby the donated
lot was exchanged with the bigger lot owned by the latter. Consequently, the Bagong
Lipunan school buildings were constructed on the new school site and the school
building previously erected on the donated lot was dismantled and transferred to the
new location.
When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo
Palma was constructing a house on the donated land, he asked the latter why he was
building a house on the property he donated to BPS. Vice Mayor Wilfredo Palma
replied that he is already the owner of the said property.Respondent Leon Silim
endeavored to stop the construction of the house on the donated property but Vice-
Mayor Wilfredo Palma advised him to just file a case in court.
On February 10, 1982, respondents filed a Complaint for Revocation and
Cancellation of Conditional Donation, Annulment of Deed of Exchange and
Recovery of Possession and Ownership of Real Property with damages against Vice
Mayor Wilfredo Palma, Teresita Palma, District Supervisor Buendia and the BPS
before the Regional Trial Court of Pagadian City, Branch 21. In its Decision dated
20 August 1993, the trial court dismissed the complaint for lack of merit.[2] The
pertinent portion of the decision reads:

Thus, it is the considered view of this Court that there was no breach or violation
of the condition imposed in the subject Deed of Donation by the donee. The
exchange is proper since it is still for the exclusive use for school purposes and for
the expansion and improvement of the school facilities within the community. The
Deed of Exchange is but a continuity of the desired purpose of the donation made
by plaintiff Leon Silim.

In sum, it may be safely stated that the aforesaid transaction of exchange is a (sic)
exception to the law invoked by the plaintiffs (Art. 764, Civil Code). The donee,
being the State had the greater reciprocity of interest in the gratuitous and onerous
contract of donation. It would be illogical and selfish for the donor to technically
preclude the donee from expanding its school site and improvement of its school
facilities, a paramount objective of the donee in promoting the general welfare and
interests of the people of Barangay Kauswagan. But it is a well-settled rule that if
the contract is onerous, such as the Deed of Donation in question, the doubt shall
be settled in favor of the greatest reciprocity of interests, which in the instant case,
is the donee.

xxx

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

1. Dismissing the complaint for lack of merit;

2. Dismissing the counterclaim for the sake of harmony and reconciliation between the
parties;
3. With costs against plaintiffs.

SO ORDERED.[3]

Not satisfied with the decision of the trial court, respondents elevated the case
to the Court of Appeals. In its Decision dated 22 October 1999, the Court of Appeals
reversed the decision of the trial court and declared the donation null and void on
the grounds that the donation was not properly accepted and the condition imposed
on the donation was violated.[4]
Hence, the present case where petitioner raises the following issues:
I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION
NULL AND VOID DUE TO AN INVALID ACCEPTANCE BY THE DONEE.
II. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION
NULL AND VOID DUE TO AN ALLEGED VIOLATION OF A CONDITION IN THE
DONATION.[5]

The Court gives DUE COURSE to the petition.

Petitioner contends that the Court of Appeals erred in declaring the donation null
and void for the reason that the acceptance was not allegedly done in accordance
with Articles 745[6] and 749[7] of the New Civil Code.
We agree.
Donations, according to its purpose or cause, may be categorized as: (1) pure or
simple; (2) remuneratory or compensatory; (3) conditional or modal; and (4)
onerous. A pure or simple donation is one where the underlying cause is plain
gratuity.[8] This is donation in its truest form. On the other hand, a remuneratory or
compensatory donation is one made for the purpose of rewarding the donee for past
services, which services do not amount to a demandable debt.[9] A conditional or
modal donation is one where the donation is made in consideration of future services
or where the donor imposes certain conditions, limitations or charges upon the
donee, the value of which is inferior than that of the donation given. [10] Finally, an
onerous donation is that which imposes upon the donee a reciprocal obligation or, to
be more precise, this is the kind of donation made for a valuable consideration, the
cost of which is equal to or more than the thing donated.[11]
Of all the foregoing classifications, donations of the onerous type are the most
distinct. This is because, unlike the other forms of donation, the validity of and the
rights and obligations of the parties involved in an onerous donation is completely
governed not by the law on donations but by the law on contracts. In this regard,
Article 733 of the New Civil Code provides:

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

The donation involved in the present controversy is one which is onerous since
there is a burden imposed upon the donee to build a school on the donated property.[12]
The Court of Appeals held that there was no valid acceptance of the donation
because:
xxx

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

"Title to immovable property does not pass from the donor to the donee by virtue
of a deed of donation until and unless it has been accepted in a public instrument
and the donor duly noticed thereof. (Abellera vs. Balanag, 37 Phils. 85; Alejandro
vs. Geraldez, 78 SCRA 245). If the acceptance does not appear in the same
document, it must be made in another. Solemn words are not necessary; it is
sufficient if it shows the intention to accept, But in this case, it is necessary that
formal notice thereof be given to the donor and the fact that due notice has been
given it must be noted in both instruments (that containing the offer to donate and
that showing acceptance). Then and only then is the donation perfected. (11
Manresa 155-11, cited in Vol. II, Civil Code of the Philippines by Tolentino.)."

This Court perused carefully the Deed of Donation marked as exhibit "A" and "1"
to determine whether there was acceptance of the donation. This Court found
none. We further examined the record if there is another document which
embodies the acceptance, we found one. Although the Court found that in the offer
of exhibits of the defendants, a supposed affidavit of acceptance and/or
confirmation of the donation, marked as exhibit "8" appears to have been offered.
However, there is nothing in the record that the exhibits offered by the defendants
have been admitted nor such exhibits appear on record.

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

xxx
We hold that there was a valid acceptance of the donation.
Sections 745 and 749 of the New Civil Code provide:

ART. 745. The donee must accept the donation personally, or through an
authorized person with a special power for the purpose, or with a general and
sufficient power; otherwise the donation shall be void.

ART. 749. In order that the donation of an immovable may be laid, it must be
made in a public document, specifying therein the property donated and the value
of the charge which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the
donor.

If the acceptance is made in a separate instrument, the donor shall be notified

thereof in an authentic form, and this step shall be noted in both instruments.

Private respondents, as shown above, admit that in the offer of exhibits by the
defendants in the trial court, an affidavit of acceptance and/or confirmation of the
donation, marked as Exhibit "8," was offered in evidence. However, private
respondents now question this exhibit because, according to them "there is nothing
in the record that the exhibits offered by the defendants have been admitted nor such
exhibit appear on record."
Respondents' stance does not persuade. The written acceptance of the donation
having been considered by the trial court in arriving at its decision, there is the
presumption that this exhibit was properly offered and admitted by the court.
Moreover, this issue was never raised in the Court of Appeals. Nowhere in their
brief did respondents question the validity of the donation on the basis of the alleged
defect in the acceptance thereof. If there was such a defect, why did it take
respondents more than ten (10) years from the date of the donation to question its
validity? In the very least, they are guilty of estoppel.[14]
 Respondents further argue that assuming there was a valid acceptance of the
donation, the acceptance was not noted in the Deed of Donation as required in Article
749 of the Civil Code, hence, the donation is void.
The purpose of the formal requirement for acceptance of a donation is to ensure
that such acceptance is duly communicated to the donor. Thus, in Pajarillo vs.
Intermediate Appellate Court,[15] the Court held:

There is no question that the donation was accepted in a separate public instrument
and that it was duly communicated to the donors. Even the petitioners cannot deny
this. But what they do contend is that such acceptance was not "noted in both
instruments," meaning the extrajudicial partition itself and the instrument of
acceptance, as required by the Civil Code.

That is perfectly true. There is nothing in either of the two instruments showing
that "authentic notice" of the acceptance was made by Salud to Juana and
Felipe. And while the first instrument contains the statement that "the donee does
hereby accept this donation and does hereby express her gratitude for the kindness
and liberality of the donor," the only signatories thereof were Felipe Balane and
Juana Balane de Suterio. That was in fact the reason for the separate instrument of
acceptance signed by Salud a month later.

A strict interpretation of Article 633 can lead to no other conclusion that the
annulment of the donation for being defective in form as urged by the
petitioners. This would be in keeping with the unmistakable language of the above-
quoted provision. However, we find that under the circumstances of the present
case, a literal adherence to the requirement of the law might result not in justice to
the parties but conversely a distortion of their intentions. It is also a policy of the
Court to avoid such as interpretation.

The purpose of the formal requirement is to insure that the acceptance of the
donation is duly communicated to the donor. In the case at bar, it is not even
suggested that Juana was unaware of the acceptance for she in fact confirmed it
later and requested that the donated land be not registered during her lifetime by
Salud. Given this significant evidence, the Court cannot in conscience declare the
donation ineffective because there is no notation in the extrajudicial settlement of
the donee's acceptance. That would be placing too much stress on mere form over
substance. It would also disregard the clear reality of the acceptance of the
donation as manifested in the separate instrument dated June 20, 1946, and as later
acknowledged by Juan.

In the case at bar, a school building was immediately constructed after the
donation was executed. Respondents had knowledge of the existence of the school
building put up on the donated lot through the efforts of the Parents-Teachers
Association of Barangay Kauswagan. It was when the school building was being
dismantled and transferred to the new site and when Vice-Mayor Wilfredo Palma
was constructing a house on the donated property that respondents came to know of
the Deed of Exchange. The actual knowledge by respondents of the construction and
existence of the school building fulfilled the legal requirement that the acceptance
of the donation by the donee be communicated to the donor.
On respondents' claim, which was upheld by the Court of Appeals, that the
acceptance by BPS District Supervisor Gregorio Buendia of the donation was
ineffective because of the absence of a special power of attorney from the Republic
of the Philippines, it is undisputed that the donation was made in favor of the Bureau
of Public Schools. Such being the case, his acceptance was authorized under Section
47 of the 1987 Administrative Code which states:

SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be executed

for and in behalf of the Government or of any of its branches, subdivisions,
agencies, or instrumentalities, whenever demanded by the exigency or exigencies
of the service and as long as the same are not prohibited by law.

Finally, it is respondents' submission that the donee, in exchanging the donated

lot with a bigger lot, violated the condition in the donation that the lot be exclusively
used for school purposes only.
What does the phrase "exclusively used for school purposes" convey? "School"
is simply an institution or place of education.[16] "Purpose" is defined as "that which
one sets before him to accomplish or attain; an end, intention, or aim, object, plan,
project. Term is synonymous with the ends sought, an object to be attained, an
intention, etc."[17] "Exclusive" means "excluding or having power to exclude (as by
preventing entrance or debarring from possession, participation, or use); limiting or
limited to possession, control or use.[18]
Without the slightest doubt, the condition for the donation was not in any way
violated when the lot donated was exchanged with another one. The purpose for the
donation remains the same, which is for the establishment of a school. The
exclusivity of the purpose was not altered or affected. In fact, the exchange of the
lot for a much bigger one was in furtherance and enhancement of the purpose of the
donation. The acquisition of the bigger lot paved the way for the release of funds for
the construction of Bagong Lipunan school building which could not be
accommodated by the limited area of the donated lot.
WHEREFORE, the decision of the Court of Appeals is hereby REVERSED
and SET ASIDE and the decision of the Regional Trial Court is REINSTATED.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[G.R. No. 132681. December 3, 2001]

RICKY Q. QUILALA, petitioner, vs. GLICERIA ALCANTARA,
LEONORA ALCANTARA, INES REYES and JOSE
REYES, respondents.

DECISION
YNARES-SANTIAGO, J.:

On February 20, 1981, Catalina Quilala executed a Donation of Real Property Inter
Vivos in favor of Violeta Quilala over a parcel of land located in Sta. Cruz, Manila, containing
an area of 94 square meters, and registered in her name under Transfer Certificate of Title No.
17214 of the Register of Deeds for Manila.
The Donation of Real Property Inter Vivos consists of two pages. The first page contains
the deed of donation itself, and is signed on the bottom portion by Catalina Quilala as donor,
Violeta Quilala as donee, and two instrumental witnesses.[1] The second page contains the
Acknowledgment, which states merely that Catalina Quilala personally appeared before the
notary public and acknowledged that the donation was her free and voluntary act and
deed. There appear on the left-hand margin of the second page the signatures of Catalina
Quilala and one of the witnesses, and on the right-hand margin the signatures of Violeta Quilala
and the other witness.[2] The Acknowledgment reads:

REPUBLIC OF THE PHILIPPINES )

QUEZON CITY ) S.S.

Before Me, a Notary Public, for and in the City of Quezon, Philippines, this
20thday of Feb. 1981, personally appeared CATALINA QUILALA, with
Residence Certificate No. 19055265 issued at Quezon City on February 4, 1981,
known to me and to me known to be the same person who executed the foregoing
instruments and acknowledged to me that the same is her own free and voluntary
act and deed.

I hereby certify that this instrument consisting of two (2) pages, including the page
on which this acknowledgement is written, has been signed by CATALINA
QUILALA and her instrumental witnesses at the end thereof and on the left-hand
margin of page 2 and both pages have been sealed with my notarial seal.

In witness whereof, I have hereunto set my hand, in the City of Quezon,

Philippines, this 20th day of Feb., 1981.

(SGD.) NOTARY PUBLIC

Until December 31, 1981
(illegible)

DOC NO. 22;

PAGE NO. 6;
BOOK NO. XV;
SERIES OF 1981.
 The deed of donation was registered with the Register of Deeds and, in due course, TCT
No. 17214 was cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.
On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22,
1984. Petitioner Ricky Quilala alleges that he is the surviving son of Violeta Quilala.
Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan
Reyes, claiming to be Catalinas only surviving relatives within the fourth civil degree of
consanguinity, executed a deed of extrajudicial settlement of estate, dividing and adjudicating
unto themselves the above-described property.
On September 13, 1984, respondents instituted against petitioner and Guillermo T. San
Pedro, the Registrar of Deeds of Manila, an action for the declaration of nullity of the
donation inter vivos, and for the cancellation of TCT No. 143015 in the name of Violeta
Quilala. The case was docketed as Civil Case No. 84-26603 of the Regional Trial Court of
Manila, Branch 17.Subsequently, respondents withdrew their complaint as against Guillermo
T. San Pedro and he was dropped as a party-defendant.
The trial court found that the deed of donation, although signed by both Catalina and
Violeta, was acknowledged before a notary public only by the donor, Catalina. Consequently,
there was no acceptance by Violeta of the donation in a public instrument, thus rendering the
donation null and void.Furthermore, the trial court held that nowhere in Catalinas SSS records
does it appear that Violeta was Catalinas daughter. Rather, Violeta was referred to therein as
an adopted child, but there was no positive evidence that the adoption was legal. On the other
hand, the trial court found that respondents were first cousins of Catalina Quilala. However,
since it appeared that Catalina died leaving a will, the trial court ruled that respondents deed of
extrajudicial settlement can not be registered. The trial court rendered judgment as follows:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria

Alcantara, Leonarda Alcantara, Ines Reyes and Juan Reyes and against defendant
Ricky A. Quilala, as follows:

1. Declaring null and void the deed of donation of real property inter
vivosexecuted on February 20, 1981 by Catalina Quilala in favor of Violeta
Quilala (Exhs. A as well as 11 and 11-A.);

2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title

No. 143015 in the name of Violeta Quilala and to issue a transfer certificate of title
in the name of the Estate of Catalina Quilala;

3. Dismissing the complaint insofar as it seeks the registration of the deed of

extrajudicial settlement (Exhs. B and B-1.) and the issuance by the Register of
Deeds of Manila of a transfer certificate of title in the names of the plaintiffs; and

4. Dismissing the counterclaim of defendant Ricky A. Quilala.

No costs.

SO ORDERED. [3]
 Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals
rendered a decision affirming with modification the decision of the trial court by dismissing
the complaint for lack of cause of action without prejudice to the filing of probate proceedings
of Catalinas alleged last will and testament.[4]

WHEREFORE, the appealed decision is hereby AFFIRMED with the following

MODIFICATION:

(3) DISMISSING the complaint for lack of cause of action without prejudice to the
filing of the necessary probate proceedings by the interested parties so as not to
render nugatory the right of the lawful heirs.

Petitioner filed a motion for reconsideration, which the Court of Appeals denied on
February 11, 1998.[5] Hence, this petition for review, raising the following assignment of errors:
A. THE COURT OF APPEALS ERRED IN RULING THAT THE DEED OF DONATION
OF REAL PROPERTY INTER-VIVOS IS NOT REGISTRABLE.
B. THE COURT OF APPEALS ERRED ON UPHOLDING THE LOWER COURTS
RULING THAT VIOLETA QUILALA IS NOT THE DAUGHTER OF CATALINA
QUILALA.[6]
The principal issue raised is the validity of the donation executed by Catalina in favor of
Violeta. Under Article 749 of the Civil Code, the donation of an immovable must be made in
a public instrument in order to be valid,[7]specifying therein the property donated and the value
of the charges which the donee must satisfy. As a mode of acquiring ownership, donation
results in an effective transfer of title over the property from the donor to the donee, [8] and is
perfected from the moment the donor knows of the acceptance by the donee,[9]provided the
donee is not disqualified or prohibited by law from accepting the donation. Once the donation
is accepted, it is generally considered irrevocable,[10] and the donee becomes the absolute owner
of the property.[11] The acceptance, to be valid, must be made during the lifetime of both the
donor and the donee.[12] It may be made in the same deed or in a separate public document,[13] and
the donor must know the acceptance by the donee.[14]
In the case at bar, the deed of donation contained the number of the certificate of title as
well as the technical description as the real property donated. It stipulated that the donation was
made for and in consideration of the love and affection which the DONEE inspires in the
DONOR, and as an act of liberality and generosity.[15] This was sufficient cause for a
donation. Indeed, donation is legally defined as an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who accepts it.[16]
The donees acceptance of the donation was explicitly manifested in the penultimate
paragraph of the deed, which reads:

That the DONEE hereby receives and accepts the gift and donation made in her
favor by the DONOR and she hereby expresses her appreciation and gratefulness
for the kindness and generosity of the DONOR. [17]

Below the terms and stipulations of the donation, the donor, donee and their witnesses
affixed their signature. However, the Acknowledgment appearing on the second page
mentioned only the donor, Catalina Quilala. Thus, the trial court ruled that for Violetas failure
to acknowledge her acceptance before the notary public, the same was set forth merely on a
private instrument, i.e., the first page of the instrument. We disagree.
The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which
states:

Deeds, conveyances, encumbrances, discharges, powers of attorney and other

voluntary instruments, whether affecting registered or unregistered land, executed
in accordance with law in the form of public instruments shall
be registrable: Provided, that, every such instrument shall be signed by the person
or persons executing the same in the presence of at least two witnesses who shall
likewise sign thereon, and shall be acknowledged to be the free act and deed of the
person or persons executing the same before a notary public or other public officer
authorized by law to take acknowledgment. Where the instrument so
acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in the
office of the Register of Deeds, or if registration is not contemplated, each page of
the copy to be kept by the notary public, except the page where the signatures
already appear at the foot of the instrument, shall be signed on the left margin
thereof by the person or persons executing the instrument and their witnesses, and
all the pages sealed with the notarial seal, and this fact as well as the number of
pages shall be stated in the acknowledgment. Where the instrument acknowledged
relates to a sale, transfer, mortgage or encumbrance of two or more parcels of land,
the number thereof shall likewise be set forth in said acknowledgment.
(underscoring ours).

As stated above, the second page of the deed of donation, on which the Acknowledgment
appears, was signed by the donor and one witness on the left-hand margin, and by the donee
and the other witness on the right-hand margin.Surely, the requirement that the contracting
parties and their witnesses should sign on the left-hand margin of the instrument is not
absolute. The intendment of the law merely is to ensure that each and every page of the
instrument is authenticated by the parties. The requirement is designed to avoid the falsification
of the contract after the same has already been duly executed by the parties. Hence, a
contracting party affixes his signature on each page of the instrument to certify that he is
agreeing to everything that is written thereon at the time of signing.
Simply put, the specification of the location of the signature is merely directory. The fact
that one of the parties signs on the wrong side of the page, that does not invalidate the
document. The purpose of authenticating the page is served, and the requirement in the above-
quoted provision is deemed substantially complied with.
In the same vein, the lack of an acknowledgment by the donee before the notary public
does not also render the donation null and void. The instrument should be treated in its
entirety. It cannot be considered a private document in part and a public document in another
part. The fact that it was acknowledged before a notary public converts the deed of donation in
its entirety a public instrument. The fact that the donee was not mentioned by the notary public
in the acknowledgment is of no moment. To be sure, it is the conveyance that should be
acknowledged as a free and voluntary act. In any event, the donee signed on the second page,
which contains the Acknowledgment only. Her acceptance, which is explicitly set forth on the
first page of the notarized deed of donation, was made in a public instrument.
It should be stressed that this Court, not being a trier of facts, can not make a determination
of whether Violeta was the daughter of Catalina, or whether petitioner is the son of
Violeta. These issues should be ventilated in the appropriate probate or settlement proceedings
affecting the respective estates of Catalina and Violeta. Suffice it to state that the donation,
which we declare herein to be valid, will still be subjected to a test on its inofficiousness under
Article 771,[18] in relation to Articles 752, 911 and 912 of the Civil Code.Moreover, property
donated inter vivos is subject to collation after the donors death,[19] whether the donation was
made to a compulsory heir or a stranger,[20]unless there is an express prohibition if that had been
the donors intention.[21]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed
decision of the Court of Appeals is REVERSED and SET ASIDE, and a new judgment is
rendered dismissing Civil Case No. 84-26603.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxx

[G.R. No. 122134. October 3, 2003]

ROMANA LOCQUIAO VALENCIA and CONSTANCIA L.

VALENCIA, petitioners, vs. BENITO A. LOCQUIAO, now
deceased and substituted by JIMMY LOCQUIAO, TOMASA
MARA and the REGISTRAR OF DEEDS OF PANGASINAN,
respondents.
CONSTANCIA L. VALENCIA, petitioner, vs. BENITO A. LOCQUIAO,
now deceased and substituted by JIMMY
LOCQUIAO, respondent.

DECISION
TINGA, J.:

The Old Civil Code and the Old Code of Civil Procedure, repealed laws
[1] [2]

that they both are notwithstanding, have not abruptly become mere
quiescent items of legal history since their relevance do not wear off for a
long time. Verily, the old statutes proved to be decisive in the adjudication of
the case at bar.
Before us is a petition for review seeking to annul and set aside the
joint Decision dated November 24, 1994, as well as the Resolution dated
[3] [4]

September 8, 1995, of the former Tenth Division of the Court of Appeals in

[5]
two consolidated cases involving an action for annulment of title and an
[6]

action for ejectment.[7]

Both cases involve a parcel of land consisting of 4,876 square meters

situated in Urdaneta, Pangasinan. This land was originally owned by the
spouses Herminigildo and Raymunda Locquiao, as evidenced by Original
Certificate of Title No. 18383 issued on October 3, 1917 by the Register of
[8]

Deeds of Pangasinan.
On May 22, 1944, Herminigildo and Raymunda Locquiao executed a
deed of donation propter nuptias which was written in the Ilocano dialect,
denominated as Inventario Ti Sagut in favor of their son, respondent Benito
[9]

Locquiao (hereafter, respondent Benito) and his prospective bride,

respondent Tomasa Mara (hereafter, respondent Tomasa). By the terms of
the deed, the donees were gifted with four (4) parcels of land, including the
land in question, as well as a male cow and one-third (1/3) portion of the
conjugal house of the donor parents, in consideration of the impending
marriage of the donees.
The donees took their marriage vows on June 4, 1944 and the fact of
their marriage was inscribed at the back of O.C.T. No. 18383. [10]

Herminigildo and Raymunda died on December 15, 1962 and January 9,

1968, respectively, leaving as heirs their six (6) children, namely: respondent
Benito, Marciano, Lucio, Emeteria, Anastacia, and petitioner Romana, all
surnamed Locquiao . With the permission of respondents Benito and
[11]

Tomasa, petitioner Romana Valencia (hereinafter, Romana) took

possession and cultivated the subject land. When respondent Romanas
[12]

husband got sick sometime in 1977, her daughter petitioner Constancia

Valencia (hereafter, petitioner Constancia) took over, and since then, has
been in possession of the land. [13]

Meanwhile, respondents Benito and Tomasa registered the Inventario Ti

Sagut with the Office of the Register of Deeds of Pangasinan on May 15,
1970. In due course, the original title was cancelled and in lieu
[14]

thereof Transfer Certificate of Title No. 84897 was issued in the name of the
[15]

respondents Benito and Tomasa.

On March 18, 1973, the heirs of the Locquiao spouses, including
respondent Benito and petitioner Romana, executed a Deed of Partition with
Recognition of Rights, wherein they distributed among only three (3) of
[16]

them, the twelve (12) parcels of land left by their common progenitors,
excluding the land in question and other lots disposed of by the Locquiao
spouses earlier. Contained in the deed is a statement that respondent Benito
and Marciano Locquiao, along with the heirs of Lucio Locquiao, have already
received our shares in the estates of our parents, by virtue of previous
donations and conveyances, and that for that reason the heirs of Lucio
Locquaio were not made parties to the deed. All the living children of the
Locquaio spouses at the time, including petitioner Romana, confirmed the
previous dispositions and waived their rights to whomsoever the properties
covered by the deed of partition were adjudicated. [17]

Later on, disagreements among five (5) heirs or groups of heirs, including
petitioner Romana, concerning the distribution of two (2) of the lots covered
by the deed of partition which are Lots No. 2467 and 5567 of the Urdaneta
Cadastral Survey surfaced. As their differences were settled, the heirs
concerned executed a Deed of Compromise Agreement on June 12, 1976,
[18]

which provided for the re-distribution of the two (2) lots. Although not directly
involved in the discord, Benito signed the compromise agreement together
with his feuding siblings, nephews and nieces. Significantly, all the
signatories to the compromise agreement, including petitioner Romana,
confirmed all the other stipulations and provisions of the deed of partition. [19]

Sometime in 1983, the apparent calm pervading among the heirs was
disturbed when petitioner Constancia filed an action for annulment of title
against the respondents before the Regional Trial Court of
Pangasinan. The record shows that the case was dismissed by the trial
[20]

court but it does not indicate the reason for the dismissal. [21]

On December 13, 1983, respondent Benito filed with the Municipal Trial
Court of Urdaneta, Pangasinan a Complaint seeking the ejectment of
[22]

petitioner Constancia from the subject property.

On November 25, 1985, the Municipal Trial Court rendered
a Decision, ordering the defendant in the case, petitioner Constancia, to
[23]

vacate the land in question.

Petitioners Romana and Constancia countered with a Complaint for the [24]

annulment of Transfer Certificate of Title No. 84897 against respondents

Benito and Tomasa which they filed with the Regional Trial Court of
[25]

Pangasinan on December 23, 1985. Petitioners alleged that the issuance of

the transfer certificate of title was fraudulent; that the Inventario Ti Sagut is
spurious; that the notary public who notarized the document had no authority
to do so, and; that the donation did not observe the form required by law as
there was no written acceptance on the document itself or in a separate
public instrument.
Meanwhile, the decision in the ejectment case was appealed to the same
RTC where the case for annulment of title was also pending. Finding that the
question of ownership was the central issue in both cases, the court issued
an Order suspending the proceedings in the ejectment case until it shall
[26]

have decided the ownership issue in the title annulment case.

After trial, the RTC rendered a Decision dated January 30, 1989
[27]

dismissing the complaint for annulment of title on the grounds of prescription

and laches. It likewise ruled that the Inventario Ti Sagut is a valid public
document which transmitted ownership over the subject land to the
respondents. With the dismissal of the complaint and the confirmation of the
respondents title over the subject property, the RTC affirmed in toto the
decision of the MTC in the ejectment case . [28]

Dissatisfied, petitioners elevated the two (2) decisions to the respondent

Court of Appeals. Since they involve the same parties and the same
property, the appealed cases were consolidated by the appellate court.
On November 24, 1994, the Court of Appeals rendered the
assailed Decision affirming the appealed RTC decisions. The appellate
court upheld the RTCs conclusion that the petitioners cause of action had
already prescribed, considering that the complaint for annulment of title was
filed more than fifteen (15) years after the issuance of the title, or beyond the
ten (10) - year prescriptive period for actions for reconveyance. It likewise
rejected the petitioners assertion that the donation propter nuptias is null and
void for want of acceptance by the donee, positing that the implied
acceptance flowing from the very fact of marriage between the respondents,
coupled with the registration of the fact of marriage at the back of OCT No.
18383, constitutes substantial compliance with the requirements of the law.
The petitioners filed a Motion for Reconsideration but it was denied by
[29]

the appellate court in its Resolution dated September 8, 1995. Hence, this
[30]

petition.
We find the petition entirely devoid of merit.
Concerning the annulment case, the issues to be threshed out are: (1)
whether the donation propter nuptias is authentic; (2) whether acceptance of
the donation by the donees is required; (3) if so, in what form should the
acceptance appear, and; (4) whether the action is barred by prescription and
laches.
The Inventario Ti Sagut which contains the donation propter nuptiaswas
executed and notarized on May 22, 1944. It was presented to the Register
of Deeds of Pangasinan for registration on May 15, 1970. The photocopy of
the document presented in evidence as Exhibit 8 was reproduced from the
original kept in the Registry of Deeds of Pangasinan. [31]

The petitioners have launched a two-pronged attack against the validity

of the donation propter nuptias, to wit: first, the Inventario Ti Sagut is not
authentic; and second, even assuming that it is authentic, it is void for the
donees failure to accept the donation in a public instrument.
To buttress their claim that the document was falsified, the petitioners
rely mainly on the Certification dated July 9, 1984 of the Records
[32]

Management and Archives Office that there was no notarial record for the
year 1944 of Cipriano V. Abenojar who notarized the document on May 22,
1944 and that therefore a copy of the document was not available.
 The certification is not sufficient to prove the alleged inexistence or
spuriousness of the challenged document. The appellate court is correct in
pointing out that the mere absence of the notarial record does not prove that
the notary public does not have a valid notarial commission and neither does
the absence of a file copy of the document with the archives effect evidence
of the falsification of the document. This Court ruled that the failure of
[33]

the notary public to furnish a copy of the deed to the appropriate office
is a ground for disciplining him, but certainly not for invalidating the
document or for setting aside the transaction therein involved. [34]

Moreover, the heirs of the Locquaio spouses, including petitioner

Romana, made reference in the deed of partition and the compromise
agreement to the previous donations made by the spouses in favor of some
of the heirs. As pointed out by the RTC, respondent Benito was not allotted
[35]

any share in the deed of partition precisely because he received his share
by virtue of previous donations. His name was mentioned in the deed of
partition only with respect to the middle portion of Lot No. 2638 which is the
eleventh (11th) parcel in the deed but that is the same one-third (1/3) portion
of Lot No. 2638 covered by O.C.T. No. 18259 included in the
donation propter nuptias. Similarly, Marciano Locquiao and the heirs of Lucio
Locquiao were not allocated any more share in the deed of partition since
they received theirs by virtue of prior donations or conveyances.
The pertinent provisions of the deed of partition read:

That the heirs of Lucio Locquiao are not included in this Partition by reason of the
fact that in the same manner as we, BENITO and MARCIANO LOCQUIAO are
concerned, we have already received our shares in the estate of our parents by
virtue of previous donations and conveyances, and that we hereby confirm said
dispositions, waiving our rights to whomsoever will these properties will now
be adjudicated;

That we, the Parties herein, do hereby waive and renounce as against each other
any claim or claims that we may have against one or some of us, and that we
recognize the rights of ownership of our co-heirs with respect to those parcels
already distributed and adjudicated and that in the event that one of us is
cultivating or in possession of any one of the parcels of land already adjudicated in
favor of another heir or has been conveyed, donated or disposed of previously, in
favor of another heir, we do hereby renounce and waive our right of
possession in favor of the heir in whose favor the donation or conveyance was
made previously. (Emphasis supplied)
[36]

The exclusion of the subject property in the deed of partition dispels any
doubt as to the authenticity of the earlier Inventario Ti Sagut.
 This brings us to the admissibility of the Deed of Partition with
Recognition of Rights, marked as Exhibit 2, and the Deed of Compromise
Agreement, marked as Exhibit 3.
The petitioners fault the RTC for admitting in evidence the deed of
partition and the compromise agreement on the pretext that the documents
were not properly submitted in evidence, pointing out that when presented
to respondent Tomasa Mara for identification, she simply stated that she
knew about the documents but she did not actually identify them. [37]

The argument is not tenable. Firstly, objection to the documentary

evidence must be made at the time it is formally offered. Since the [38]

petitioners did not even bother to object to the documents at the time they
were offered in evidence, it is now too late in the day for them to question
[39]

their admissibility. Secondly, the documents were identified during the Pre-
Trial, marked as Exhibits 2 and 3 and testified on by respondent
Tomasa. Thirdly, the questioned deeds, being public documents as they
[40]

were duly notarized, are admissible in evidence without further proof of their
due execution and are conclusive as to the truthfulness of their contents, in
the absence of clear and convincing evidence to the contrary. A public [41]

document executed and attested through the intervention of the notary public
is evidence of the facts therein expressed in clear, unequivocal manner. [42]

Concerning the issue of form, petitioners insist that based on a

provision of the Civil Code of Spain (Old Civil Code), the acceptance by the
[43]

donees should be made in a public instrument. This argument was rejected

by the RTC and the appellate court on the theory that the implied acceptance
of the donation had flowed from the celebration of the marriage between the
respondents, followed by the registration of the fact of marriage at the back
of OCT No. 18383.
The petitioners, the appellate court and the trial court all erred in applying
the requirements on ordinary donations to the present case instead of the
rules on donation propter nuptias. Underlying the blunder is their failure to
take into account the fundamental dichotomy between the two kinds of
donations.
Unlike ordinary donations, donations propter nuptias or donations by
reason of marriage are those made before its celebration, in consideration
of the same and in favor of one or both of the future spouses. The [44]

distinction is crucial because the two classes of donations are not governed
by exactly the same rules, especially as regards the formal essential
requisites.
Under the Old Civil Code, donations propter nuptias must be made in a
public instrument in which the property donated must be specifically
described. However, Article 1330 of the same Code provides
[45]

that acceptance is not necessary to the validity of such gifts. In

otherwords, the celebration of the marriage between the beneficiary couple,
in tandem with compliance with the prescribed form, was enough to
effectuate the donation propter nuptias under the Old Civil Code.
Under the New Civil Code, the rules are different. Article 127 thereof
provides that the form of donations propter nuptias are regulated by the
Statute of Frauds. Article 1403, paragraph 2, which contains the Statute of
Frauds requires that the contracts mentioned thereunder need be in writing
only to be enforceable. However, as provided in Article 129, express
acceptance is not necessary for the validity of these
donations. Thus, implied acceptance is sufficient.
The pivotal question, therefore, is which formal requirements should be
applied with respect to the donation propter nuptias at hand. Those under
the Old Civil Code or the New Civil Code?
It is settled that only laws existing at the time of the execution of a contract
are applicable thereto and not later statutes, unless the latter are specifically
intended to have retroactive effect. Consequently, it is the Old Civil Code
[46]

which applies in this case since the donation propter nuptias was
executed in 1944 and the New Civil Code took effect only on August 30,
1950. The fact that in 1944 the Philippines was still under Japanese
[47]

occupation is of no consequence. It is a well-known rule of the Law of Nations

that municipal laws, as contra-distinguished from laws of political nature, are
not abrogated by a change of sovereignty. This Court specifically held that
[48]

during the Japanese occupation period, the Old Civil Code was in force. As [49]

a consequence, applying Article 1330 of the Old Civil Code in the

determination of the validity of the questioned donation, it does not matter
whether or not the donees had accepted the donation. The validity of the
donation is unaffected in either case.
Even the petitioners agree that the Old Civil Code should be
applied.However, they invoked the wrong provisions thereof.
[50]

Even if the provisions of the New Civil Code were to be applied, the case
of the petitioners would collapse just the same. As earlier shown, even
implied acceptance of a donation propter nuptias suffices under the New
Civil Code. [51]

With the genuineness of the donation propter nuptias and compliance

with the applicable mandatory form requirements fully established,
petitioners hypothesis that their action is imprescriptible cannot take off.
Viewing petitioners action for reconveyance from whatever feasible legal
angle, it is definitely barred by prescription. Petitioners right to file an action
for the reconveyance of the land accrued in 1944, when the Inventario Ti
Sagut was executed. It must be remembered that before the effectivity of the
New Civil Code in 1950, the Old Code of Civil Procedure (Act No. 190)
governed prescription. Under the Old Code of Civil Procedure, an action for
[52]

recovery of the title to, or possession of, real property, or an interest therein,
can only be brought within ten years after the cause of such action
accrues. Thus, petitioners action, which was filed on December 23, 1985,
[53]

or more than forty (40) years from the execution of the deed of donation on
May 22, 1944, was clearly time-barred.
Even following petitioners theory that the prescriptive period should
commence from the time of discovery of the alleged fraud, the conclusion
would still be the same. As early as May 15, 1970, when the deed of donation
was registered and the transfer certificate of title was issued, petitioners were
considered to have constructive knowledge of the alleged fraud, following
the jurisprudential rule that registration of a deed in the public real estate
registry is constructive notice to the whole world of its contents, as well as all
interests, legal and equitable, included therein. As it is now settled that the
[54]

prescriptive period for the reconveyance of property allegedly registered

through fraud is ten (10) years, reckoned from the date of the issuance of
the certificate of title, the action filed on December 23, 1985 has clearly
[55]

prescribed.
In any event, independent of prescription, petitioners action is dismissible
on the ground of laches. The elements of laches are present in this case, viz:

(1) conduct on the part of the defendant, or one under whom he claims, giving rise
to the situation that led to the complaint and for which the complainant seeks a
remedy;

(2) delay in asserting the complainants rights, having had knowledge or notice of
defendants conduct and having been afforded an opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit, and

(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held barred.[56]

Of the facts which support the finding of laches, stress should be made
of the following: (a) the petitioners Romana unquestionably gained actual
knowledge of the donation propter nuptias when the deed of partition was
executed in 1973 and the information must have surfaced again when the
compromise agreement was forged in 1976, and; (b) as petitioner Romana
was a party-signatory to the two documents, she definitely had the
opportunity to question the donation propter nuptias on both occasions, and
she should have done so if she were of the mindset, given the fact that she
was still in possession of the land in dispute at the time. But she did not make
any move. She tarried for eleven (11) more years from the execution of the
deed of partition until she, together with petitioner Constancia, filed the
annulment case in 1985.
Anent the ejectment case, we find the issues raised by the petitioners to
be factual and, therefore, beyond this Courts power of review. Not being a
trier of facts, the Court is not tasked to go over the proofs presented by the
parties and analyze, assess, and weigh them to ascertain if the trial court
and the appellate court were correct in according them superior credit in this
or that piece of evidence of one party or the other. In any event, implicit in
[57]

the affirmance of the Court of Appeals is the existence of substantial

evidence supporting the decisions of the courts below.
WHEREFORE, finding no reversible error in the assailed decision, the
same is hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

[G.R. No. 148775. January 13, 2004]

SHOPPERS PARADISE REALTY & DEVELOPMENT

CORPORATION, petitioner, vs. EFREN P. ROQUE, respondent.

DECISION
VITUG, J.:

On 23 December 1993, petitioner Shoppers Paradise Realty &

Development Corporation, represented by its president, Veredigno Atienza,
entered into a twenty-five year lease with Dr. Felipe C. Roque, now
deceased, over a parcel of land, with an area of two thousand and thirty six
(2,036) square meters, situated at Plaza Novaliches, Quezon City, covered
by Transfer of Certificate of Title (TCT) No. 30591 of the Register of Deeds
of Quezon City in the name of Dr. Roque. Petitioner issued to Dr. Roque a
check for P250,000.00 by way of reservation payment. Simultaneously,
petitioner and Dr. Roque likewise entered into a memorandum of agreement
for the construction, development and operation of a commercial building
complex on the property.Conformably with the agreement, petitioner issued
a check for another P250,000.00 downpayment to Dr. Roque.
The contract of lease and the memorandum of agreement, both
notarized, were to be annotated on TCT No. 30591 within sixty (60) days
from 23 December 1993 or until 23 February 1994. The annotations,
however, were never made because of the untimely demise of Dr. Felipe C.
Roque. The death of Dr. Roque on 10 February 1994 constrained petitioner
to deal with respondent Efren P. Roque, one of the surviving children of the
late Dr. Roque, but the negotiations broke down due to some
disagreements. In a letter, dated 3 November 1994, respondent advised
petitioner to desist from any attempt to enforce the aforementioned contract
of lease and memorandum of agreement. On 15 February 1995, respondent
filed a case for annulment of the contract of lease and the memorandum of
agreement, with a prayer for the issuance of a preliminary injunction, before
Branch 222 of the Regional Trial Court of Quezon City. Efren P. Roque
alleged that he had long been the absolute owner of the subject property by
virtue of a deed of donation inter vivos executed in his favor by his parents,
Dr. Felipe Roque and Elisa Roque, on 26 December 1978, and that the late
Dr. Felipe Roque had no authority to enter into the assailed agreements with
petitioner. The donation was made in a public instrument duly acknowledged
by the donor-spouses before a notary public and duly accepted on the same
day by respondent before the notary public in the same instrument of
donation. The title to the property, however, remained in the name of Dr.
Felipe C. Roque, and it was only transferred to and in the name of
respondent sixteen years later, or on 11 May 1994, under TCT No. 109754
of the Register of Deeds of Quezon City.Respondent, while he resided in the
United States of America, delegated to his father the mere administration of
the property. Respondent came to know of the assailed contracts with
petitioner only after retiring to the Philippines upon the death of his father.
On 9 August 1996, the trial court dismissed the complaint of respondent;
it explained:

Ordinarily, a deed of donation need not be registered in order to be valid between

the parties. Registration, however, is important in binding third persons. Thus,
when Felipe Roque entered into a leased contract with defendant corporation,
plaintiff Efren Roque (could) no longer assert the unregistered deed of donation
and say that his father, Felipe, was no longer the owner of the subject property at
the time the lease on the subject property was agreed upon.

The registration of the Deed of Donation after the execution of the lease contract
did not affect the latter unless he had knowledge thereof at the time of the
registration which plaintiff had not been able to establish. Plaintiff knew very well
of the existence of the lease. He, in fact, met with the officers of the defendant
corporation at least once before he caused the registration of the deed of donation
in his favor and although the lease itself was not registered, it remains valid
considering that no third person is involved. Plaintiff cannot be the third person
because he is the successor-in-interest of his father, Felipe Roque, the lessor, and it
is a rule that contracts take effect not only between the parties themselves but also
between their assigns and heirs (Article 1311, Civil Code) and therefore, the lease
contract together with the memorandum of agreement would be conclusive on
plaintiff Efren Roque. He is bound by the contract even if he did not participate
therein. Moreover, the agreements have been perfected and partially executed by
the receipt of his father of the downpayment and deposit totaling to P500,000.00. [1]

The Trial court ordered respondent to surrender TCT No. 109754 to the
Register of Deeds of Quezon City for the annotation of the questioned
Contract of Lease and Memorandum of Agreement.
On appeal, the Court of Appeals reversed the decision of the trial court
and held to be invalid the Contract of Lease and Memorandum of
Agreement. While it shared the view expressed by the trial court that a deed
of donation would have to be registered in order to bind third persons, the
appellate court, however, concluded that petitioner was not a lessee in good
faith having had prior knowledge of the donation in favor of respondent, and
that such actual knowledge had the effect of registration insofar as petitioner
was concerned. The appellate court based its findings largely on the
testimony of Veredigno Atienza during cross-examination, viz;
Q. Aside from these two lots, the first in the name of Ruben Roque and the second,
the subject of the construction involved in this case, you said there is another lot
which was part of development project?
A. Yes, this was the main concept of Dr. Roque so that the adjoining properties of his
two sons, Ruben and Cesar, will comprise one whole. The other whole property
belongs to Cesar.
Q. You were informed by Dr. Roque that this property was given to his three (3) sons;
one to Ruben Roque, the other to Efren, and the other to Cesar Roque?
A. Yes.
Q. You did the inquiry from him, how was this property given to them?
A. By inheritance.
Q. Inheritance in the form of donation?
A. I mean inheritance.
Q. What I am only asking you is, were you told by Dr. Felipe C. Roque at the time of
your transaction with him that all these three properties were given to his children
by way of donation?
A. What Architect Biglang-awa told us in his exact word: Yang mga yan pupunta sa
mga anak. Yong kay Ruben pupunta kay Ruben.Yong kay Efren palibhasa nasa
America sya, nasa pangalan pa ni Dr. Felipe C. Roque.

xxxxxxxxx
Q. When was the information supplied to you by Biglang-awa? Before the execution
of the Contract of Lease and Memorandum of Agreement?
A. Yes.
Q. That being the case, at the time of the execution of the agreement or soon before,
did you have such information confirmed by Dr. Felipe C. Roque himself?
 A. Biglang-awa did it for us.
Q. But you yourself did not?
A. No, because I was doing certain things. We were a team and so Biglang-awa did
it for us.
Q. So in effect, any information gathered by Biglang-awa was of the same effect as
if received by you because you were members of the same team?
A. Yes.[2]

In the instant petition for review, petitioner seeks a reversal of the

decision of the Court of Appeals and the reinstatement of the ruling of the
Regional Trial Court; it argues that the presumption of good faith it so enjoys
as a party dealing in registered land has not been overturned by the
aforequoted testimonial evidence, and that, in any event, respondent is
barred by laches and estoppel from denying the contracts.
The existence, albeit unregistered, of the donation in favor of respondent
is undisputed. The trial court and the appellate court have not erred in
holding that the non-registration of a deed of donation does not affect its
validity. As being itself a mode of acquiring ownership, donation results in an
effective transfer of title over the property from the donor to the donee. In [3]

donations of immovable property, the law requires for its validity that it should
be contained in a public document, specifying therein the property donated
and the value of the charges which the donee must satisfy. The Civil Code
[4]

provides, however, that titles of ownership, or other rights over immovable

property, which are not duly inscribed or annotated in the Registry of
Property (now Registry of Land Titles and Deeds) shall not prejudice third
persons. It is enough, between the parties to a donation of an immovable
[5]

property, that the donation be made in a public document but, in order to bind
third persons, the donation must be registered in the registry of Property
(Registry of Land Titles and Deeds). Consistently, Section 50 of Act No. 496
[6]

(Land Registration Act), as so amended by Section 51 of P.D. No. 1529

(Property Registration Decree), states:

SECTION 51. Conveyance and other dealings by registered owner.- An owner of

registered land may convey, mortgage, lease, charge or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument, except a will purporting to
convey or affect registered land shall take effect as a conveyance or bind the land,
but shall operate only as a contract between the parties and as evidence of authority
to the Register of Deeds to make registration.

The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the province or
city where the land lies. (emphasis supplied)

A person dealing with registered land may thus safely rely on the
correctness of the certificate of title issued therefore, and he is not required
to go beyond the certificate to determine the condition of the property but, [7]

where such party has knowledge of a prior existing interest which is

unregistered at the time he acquired a right thereto, his knowledge of that
prior unregistered interest would have the effect of registration as regards to
him. [8]

The appellate court was not without substantial basis when it found
petitioner to have had knowledge of the donation at the time it entered into
the two agreements with Dr. Roque. During their negotiation, petitioner,
through its representatives, was apprised of the fact that the subject property
actually belonged to respondent.
It was not shown that Dr. Felipe C. Roque had been an authorized agent
of respondent.
In a contract of agency, the agent acts in representation or in behalf of
another with the consent of the latter. Article 1878 of the Civil Code
[9]

expresses that a special power of attorney is necessary to lease any real

property to another person for more than one year. The lease of real property
for more than one year is considered not merely an act of administration but
an act of strict dominion or of ownership. A special power of attorney is thus
necessary for its execution through an agent.
The Court cannot accept petitioners argument that respondent is guilty
of laches. Laches, in its real sense, is the failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by exercising
due diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a presumption
that the party entitled to assert it either has abandoned or declined to assert
it.
[10]

Respondent learned of the contracts only in February 1994 after the

death of his father, and in the same year, during November, he assailed the
validity of the agreements. Hardly, could respondent then be said to have
neglected to assert his case for unreasonable length of time.
Neither is respondent estopped from repudiating the contracts. The
essential elements of estoppel in pais, in relation to the party sought to be
estopped, are: 1) a clear conduct amounting to false representation or
concealment of material facts or, at least, calculated to convey the
impression that the facts are otherwise than, and inconsistent with, those
which the party subsequently attempts to assert; 2) an intent or, at least, an
expectation, that this conduct shall influence, or be acted upon by, the other
party; and 3) the knowledge, actual or constructive, by him of the real
facts. With respect to the party claiming the estoppel, the conditions he
[11]

must satisfy are: 1) lack of knowledge or of the means of knowledge of the

truth as to the facts in question; 2) reliance, in good faith, upon the conduct
or statements of the party to be estopped; and 3) action or inaction based
thereon of such character as to change his position or status calculated to
cause him injury or prejudice. It has not been shown that respondent
[12]

intended to conceal the actual facts concerning the property; more

importantly, petitioner has been shown not to be totally unaware of the real
ownership of the subject property.
Altogether, there is no cogent reason to reverse the Court of Appeals in
its assailed decision.
WHEREFORE, the petition is DENIED, and the decision of the Court of
Appeals declaring the contract of lease and memorandum of agreement
entered into between Dr. Felipe C. Roque and Shoppers Paradise Realty &
Development Corporation not to be binding on respondent is AFFIRMED. No
costs.
SO ORDERED.