.R. No.

172804 January 24, 2011

GONZALO VILLANUEVA, represented by his heirs, Petitioner,

vs.
SPOUSES FROILAN and LEONILA BRANOCO, Respondents.

DECISION

CARPIO, J.:

The Case

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

The Facts

Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs, 3 sued respondents, spouses
Froilan and Leonila Branoco (respondents), in the Regional Trial Court of Naval, Biliran (trial court) to
recover a 3,492 square-meter parcel of land in Amambajag, Culaba, Leyte (Property) and collect
damages. Petitioner claimed ownership over the Property through purchase in July 1971 from
Casimiro Vere (Vere), who, in turn, bought the Property from Alvegia Rodrigo (Rodrigo) in August
1970. Petitioner declared the Property in his name for tax purposes soon after acquiring it.

In their Answer, respondents similarly claimed ownership over the Property through purchase in July
1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo donated the Property in May 1965. The
two-page deed of donation (Deed), signed at the bottom by the parties and two witnesses, reads in
full:

KNOW ALL MEN BY THESE PRESENTS:

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

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

1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo Uyvico; and West, by Public
land; 2. It has an area of 3,492 square meters more or less; 3. It is planted to coconuts now bearing
fruits; 4. Having an assessed value of ₱240.00; 5. It is now in the possession of EUFRACIA
RODRIGUEZ since May 21, 1962 in the concept of an owner, but the Deed of Donation or that
ownership be vested on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I already devise in favor
of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and that if the herein Donee
predeceases me, the same land will not be reverted to the Donor, but will be inherited by the heirs of
EUFRACIA RODRIGUEZ;

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

Respondents entered the Property in 1983 and paid taxes afterwards.

The Ruling of the Trial Court

The trial court ruled for petitioner, declared him owner of the Property, and ordered respondents to
surrender possession to petitioner, and to pay damages, the value of the Property’s produce since
1982 until petitioner’s repossession and the costs.5 The trial court rejected respondents’ claim of
ownership after treating the Deed as a donation mortis causa which Rodrigo effectively cancelled by
selling the Property to Vere in 1970.6 Thus, by the time Rodriguez sold the Property to respondents in
1983, she had no title to transfer.

Respondents appealed to the Court of Appeals (CA), imputing error in the trial court’s interpretation of
the Deed as a testamentary disposition instead of an inter vivos donation, passing title to Rodriguez
upon its execution.

Ruling of the Court of Appeals

The CA granted respondents’ appeal and set aside the trial court’s ruling. While conceding that the
"language of the [Deed is] x x x confusing and which could admit of possible different
interpretations,"7 the CA found the following factors pivotal to its reading of the Deed as donation inter
vivos: (1) Rodriguez had been in possession of the Property as owner since 21 May 1962, subject to
the delivery of part of the produce to Apoy Alve; (2) the Deed’s consideration was not Rodrigo’s death
but her "love and affection" for Rodriguez, considering the services the latter rendered; (3) Rodrigo
waived dominion over the Property in case Rodriguez predeceases her, implying its inclusion in
Rodriguez’s estate; and (4) Rodriguez accepted the donation in the Deed itself, an act necessary to
effectuate donations inter vivos, not devises.8 Accordingly, the CA upheld the sale between Rodriguez
and respondents, and, conversely found the sale between Rodrigo and petitioner’s predecessor-in-
interest, Vere, void for Rodrigo’s lack of title.

In this petition, petitioner seeks the reinstatement of the trial court’s ruling. Alternatively, petitioner
claims ownership over the Property through acquisitive prescription, having allegedly occupied it for
more than 10 years.9

Respondents see no reversible error in the CA’s ruling and pray for its affirmance.

The Issue

The threshold question is whether petitioner’s title over the Property is superior to respondents’. The
resolution of this issue rests, in turn, on whether the contract between the parties’ predecessors-in-
interest, Rodrigo and Rodriguez, was a donation or a devise. If the former, respondents hold superior
title, having bought the Property from Rodriguez. If the latter, petitioner prevails, having obtained title
from Rodrigo under a deed of sale the execution of which impliedly revoked the earlier devise to
Rodriguez.

The Ruling of the Court

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

Naked Title Passed from Rodrigo to Rodriguez Under a Perfected Donation

We examine the juridical nature of the Deed – whether it passed title to Rodriguez upon its execution
or is effective only upon Rodrigo’s death – using principles distilled from relevant jurisprudence. Post-
mortem dispositions typically –

(1) Convey no title or ownership to the transferee before the death of the transferor; or, what
amounts to the same thing, that the transferor should retain the ownership (full or naked) and
control of the property while alive;

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

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

Further –

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

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

(6) That in case of doubt, the conveyance should be deemed donation inter vivos rather
than mortis causa, in order to avoid uncertainty as to the ownership of the property subject of
the deed.11

It is immediately apparent that Rodrigo passed naked title to Rodriguez under a perfected
donation inter vivos. First. Rodrigo stipulated that "if the herein Donee predeceases me, the [Property]
will not be reverted to the Donor, but will be inherited by the heirs of x x x Rodriguez," signaling the
irrevocability of the passage of title to Rodriguez’s estate, waiving Rodrigo’s right to reclaim title. This
transfer of title was perfected the moment Rodrigo learned of Rodriguez’s acceptance of the
disposition12 which, being reflected in the Deed, took place on the day of its execution on 3 May 1965.
Rodrigo’s acceptance of the transfer underscores its essence as a gift in presenti, not in futuro, as
only donations inter vivos need acceptance by the recipient.13 Indeed, had Rodrigo wished to retain
full title over the Property, she could have easily stipulated, as the testator did in another case, that
"the donor, may transfer, sell, or encumber to any person or entity the properties here donated x x
x"14 or used words to that effect. Instead, Rodrigo expressly waived title over the Property in case
Rodriguez predeceases her.
In a bid to diffuse the non-reversion stipulation’s damning effect on his case, petitioner tries to profit
from it, contending it is a fideicommissary substitution clause. 15 Petitioner assumes the fact he is
laboring to prove. The question of the Deed’s juridical nature, whether it is a will or a donation, is the
crux of the present controversy. By treating the clause in question as mandating fideicommissary
substitution, a mode of testamentary disposition by which the first heir instituted is entrusted with the
obligation to preserve and to transmit to a second heir the whole or part of the inheritance,16 petitioner
assumes that the Deed is a will. Neither the Deed’s text nor the import of the contested clause supports
petitioner’s theory.

Second. What Rodrigo reserved for herself was only the beneficial title to the Property, evident from
Rodriguez’s undertaking to "give one [half] x x x of the produce of the land to Apoy Alve during her
lifetime."17 Thus, the Deed’s stipulation that "the ownership shall be vested on [Rodriguez] upon my
demise," taking into account the non-reversion clause, could only refer to Rodrigo’s beneficial title. We
arrived at the same conclusion in Balaqui v. Dongso18 where, as here, the donor, while "b[inding]
herself to answer to the [donor] and her heirs x x x that none shall question or disturb [the donee’s]
right," also stipulated that the donation "does not pass title to [the donee] during my lifetime; but when
I die, [the donee] shall be the true owner" of the donated parcels of land. In finding the disposition as
a gift inter vivos, the Court reasoned:

Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the donor] guaranteed to
[the donee] and her heirs and successors, the right to said property thus conferred. From the moment
[the donor] guaranteed the right granted by her to [the donee] to the two parcels of land by virtue of
the deed of gift, she surrendered such right; otherwise there would be no need to guarantee said right.
Therefore, when [the donor] used the words upon which the appellants base their contention that the
gift in question is a donation mortis causa [that the gift "does not pass title during my lifetime; but when
I die, she shall be the true owner of the two aforementioned parcels"] the donor meant nothing else
than that she reserved of herself the possession and usufruct of said two parcels of land until
her death, at which time the donee would be able to dispose of them freely.19 (Emphasis
supplied)

Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for her to reserve
partial usufructuary right over it.20

Third. The existence of consideration other than the donor’s death, such as the donor’s love and
affection to the donee and the services the latter rendered, while also true of devises, nevertheless
"corroborates the express irrevocability of x x x [inter vivos] transfers."21 Thus, the CA committed no
error in giving weight to Rodrigo’s statement of "love and affection" for Rodriguez, her niece, as
consideration for the gift, to underscore its finding.

It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed tending to serve his
cause (e.g. "the ownership shall be vested on [Rodriguez] upon my demise" and "devise").
Dispositions bearing contradictory stipulations are interpreted wholistically, to give effect to the donor’s
intent. In no less than seven cases featuring deeds of donations styled as "mortis causa" dispositions,
the Court, after going over the deeds, eventually considered the transfers inter vivos,22 consistent with
the principle that "the designation of the donation as mortis causa, or a provision in the deed to the
effect that the donation is ‘to take effect at the death of the donor’ are not controlling criteria [but] x x
x are to be construed together with the rest of the instrument, in order to give effect to the real intent
of the transferor."23 Indeed, doubts on the nature of dispositions are resolved to favor inter
vivos transfers "to avoid uncertainty as to the ownership of the property subject of the deed." 24

Nor can petitioner capitalize on Rodrigo’s post-donation transfer of the Property to Vere as proof of
her retention of ownership. If such were the barometer in interpreting deeds of donation, not only will
great legal uncertainty be visited on gratuitous dispositions, this will give license to rogue property
owners to set at naught perfected transfers of titles, which, while founded on liberality, is a valid mode
of passing ownership. The interest of settled property dispositions counsels against licensing such
practice.25

Accordingly, having irrevocably transferred naked title over the Property to Rodriguez in 1965, Rodrigo
"cannot afterwards revoke the donation nor dispose of the said property in favor of another." 26 Thus,
Rodrigo’s post-donation sale of the Property vested no title to Vere. As Vere’s successor-in-interest,
petitioner acquired no better right than him. On the other hand, respondents bought the Property from
Rodriguez, thus acquiring the latter’s title which they may invoke against all adverse claimants,
including petitioner.

Petitioner Acquired No Title Over the Property

Alternatively, petitioner grounds his claim of ownership over the Property through his and Vere’s
combined possession of the Property for more than ten years, counted from Vere’s purchase of the
Property from Rodrigo in 1970 until petitioner initiated his suit in the trial court in February
1986.27 Petitioner anchors his contention on an unfounded legal assumption. The ten year ordinary
prescriptive period to acquire title through possession of real property in the concept of an owner
requires uninterrupted possession coupled with just title and good faith.28 There is just title when the
adverse claimant came into possession of the property through one of the modes recognized by law
for the acquisition of ownership or other real rights, but the grantor was not the owner or could not
transmit any right.29 Good faith, on the other hand, consists in the reasonable belief that the person
from whom the possessor received the thing was the owner thereof, and could transmit his
ownership.30

Although Vere and petitioner arguably had just title having successively acquired the Property through
sale, neither was a good faith possessor. As Rodrigo herself disclosed in the Deed, Rodriguez already
occupied and possessed the Property "in the concept of an owner" ("como tag-iya"31) since 21 May
1962, nearly three years before Rodrigo’s donation in 3 May 1965 and seven years before Vere bought
the Property from Rodrigo. This admission against interest binds Rodrigo and all those tracing title to
the Property through her, including Vere and petitioner. Indeed, petitioner’s insistent claim that
Rodriguez occupied the Property only in 1982, when she started paying taxes, finds no basis in the
records. In short, when Vere bought the Property from Rodrigo in 1970, Rodriguez was in possession
of the Property, a fact that prevented Vere from being a buyer in good faith.

Lacking good faith possession, petitioner’s only other recourse to maintain his claim of ownership by
prescription is to show open, continuous and adverse possession of the Property for 30
years.32 Undeniably, petitioner is unable to meet this requirement. 1avvphil

Ancillary Matters Petitioner Raises Irrelevant

Petitioner brings to the Court’s attention facts which, according to him, support his theory that Rodrigo
never passed ownership over the Property to Rodriguez, namely, that Rodriguez registered the Deed
and paid taxes on the Property only in 1982 and Rodriguez obtained from Vere in 1981 a waiver of
the latter’s "right of ownership" over the Property. None of these facts detract from our conclusion that
under the text of the Deed and based on the contemporaneous acts of Rodrigo and Rodriguez, the
latter, already in possession of the Property since 1962 as Rodrigo admitted, obtained naked title over
it upon the Deed’s execution in 1965. Neither registration nor tax payment is required to perfect
donations. On the relevance of the waiver agreement, suffice it to say that Vere had nothing to waive
to Rodriguez, having obtained no title from Rodrigo. Irrespective of Rodriguez’s motivation in obtaining
the waiver, that document, legally a scrap of paper, added nothing to the title Rodriguez obtained from
Rodrigo under the Deed.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 6 June 2005 and the
Resolution dated 5 May 2006 of the Court of Appeals.

SO ORDERED.
[G.R. NO. 164748 - January 27, 2006]

THE SECRETARY OF EDUCATION and DR. BENITO TUMAMAO, Schools Division

Superintendent of Isabela, Petitioners, v. HEIRS OF RUFINO DULAY, SR., represented by
IGNACIA VICENTE, RUFINO DULAY, JR., SUSANA DULAY, ADELAIDA DULAY, LUZVIMINDA
DULAY and CECILIA DULAY, Respondents.

DECISION

CALLEJO, SR., J.:

This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-
G.R. CV No. 78314 which affirmed the Decision2 of the Regional Trial Court (RTC) of Santiago
City, Isabela, Branch 35, in Civil Case No. 35-2397.

The spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of land located
in Rizal, Santiago, Isabela, with an area of 29,002 square meters. The lot was covered by Original
Certificate of Title No. P-6776.

On August 3, 1981, the spouses Dulay executed a deed of donation3 over a 10,000-square-meter
portion of their property in favor of the Ministry of Education and Culture (now the Department of
Education, Culture and Sports [DECS]). The deed provided, among others:

That for and in consideration of the benefits that may be derived from the use of the above
described property which is intended for school purposes, the said DONORS do by by (sic) these
presents TRANSFER AND CONVEY by way of DONATION unto the DONEE, its successors and
assigns, the above property to become effective upon the signing of this document.4

The property was subdivided. On April 13, 1983, Transfer Certificate of Title (TCT) No. T-1433375
covering the portion identified as Lot 8858-A was issued in the name of the Ministry of Education
and Culture, represented by Laurencio C. Ramel, the Superintendent of Schools of Isabela.
However, the property was not used for school purposes and remained idle.

Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal National
High School building on a parcel of land it acquired from Alejandro Feliciano. The school site was
about 2 kilometers away from the land donated by the spouses Dulay.
In a letter6 to the DECS Secretary dated August 19, 1994, the spouses Dulay requested that the
property be returned to them considering that the land was never used since 1981, or a period of
more than 13 years. On August 28, 1994, the Barangay Council of Rizal, Santiago City issued
Resolution No. 397 recognizing the right of the donors to redeem the subject parcel of land
because of the DECS' failure to utilize it for the intended purpose. It further resolved that the Rizal
National High School no longer needed the donated land "considering its distance from the main
campus and [the] failure to utilize the property for a long period of time."

On December 22, 1994, Rufino Dulay, Sr. passed away at the age of 80.8 His heirs sought the
help of the Sangguniang Panlungsod of Santiago City via an undated letter9 requesting the
approval of a resolution allowing them to redeem the donated property. The Sangguniang
Panlungsod denied the request inasmuch as the city government was not a party to the deed of
donation.10

On August 31, 1997, the heirs of Dulay, Sr., herein respondents, filed a complaint for the
revocation of the deed of donation and cancellation of TCT No. T-143337 before the RTC of
Santiago City, Isabela, Branch 35, against the DECS Secretary and Dr. Benito Tumamao, the
Schools Division Superintendent of Isabela. Respondents alleged that there was a condition in
the deed of donation: that the DECS, as donee, utilize the subject property for school purposes,
that is, the construction of a building to house the Rizal National High School. Respondents
alleged that the DECS did not fulfill the condition and that the land remained idle up to the present.
Respondents also averred that the donation inter vivos was inofficious, since the late Rufino
Dulay, Sr. donated more than what he could give by will.

Petitioners, through the Office of the Solicitor General (OSG), interposed the following defenses:
(a) the DECS complied with said condition because the land was being used by the school as its
technology and home economics laboratory; (b) the donation was not inofficious for the donors
were the owners of five other parcels of land, all located at Rizal, Santiago City; (c) the DECS
acquired the disputed property by virtue of purchase made on December 8, 1997 by the barangay
of Rizal, Santiago City in the amount of P18,000.00 as certified by its former Barangay Captain,
Jesus San Juan;11 and (d) the action of the respondents had prescribed. The OSG also claimed
that students planted a portion of the land with rice, mahogany seedlings, and fruit-bearing trees;
the produce would then be sold and the proceeds used for the construction of a school building
on the subject property.

In their Reply,12 respondents denied that the donated land was being used as a technology and
home economics laboratory, and averred that there were no improvements on the property.
Moreover, the fact that rice was planted on the lot was contrary to the intended purpose of the
donation. The respondents likewise denied that the property had been sold to the barangay. While
the other properties of the late donor had been sold, the deeds thereon had not been registered,
and the tax declarations not yet transferred in the names of the purchasers.

Thereafter, trial ensued. On March 6, 2001, an ocular inspection of the property was conducted
by the parties and their respective counsels, including the Presiding Judge. It was confirmed that
the land was barren, save for a small portion which was planted with palay. A demolished house
was also found in the periphery of the donated lot.13

On December 26, 2002, the trial court rendered its decision in favor of respondents. The fallo
reads:

WHEREFORE, in the light of the foregoing considerations, the Court hereby DECLARES the deed
of donation, Exhibit "A," executed by the late Rufino Dulay, Sr. and his wife Ignacia Vicente over
a portion of the land covered by O.C.T. No. P-6776 and now covered by T.C.T. No. T-143337 in
the name of the donee Department of Education and Culture as REVOKED. The defendant DECS
is ORDERED to execute the deed of reconveyance of the land in favor of the plaintiffs heirs of
Rufino Dulay, Sr.

SO ORDERED.14

In revoking the deed of donation, the trial court ruled that the donation was subject to a resolutory
condition, namely, that the land donated shall be used for school purposes. It was no longer
necessary to determine the intended "school purpose" because it was established that the donee
did not use the land. Thus, the condition was not complied with since the property was donated
in July 1981. Moreover, the DECS did not intend to use the property for school purposes because
a school had already been built and established in another lot located in the same barangay,
about two kilometers away from the subject land. Finally, the trial court rejected petitioners'
contention that the donation was inofficious.

Aggrieved, the OSG appealed the decision to the CA.

On July 30, 2004, the appellate court rendered judgment affirming the decision. The court held
that the DECS failed to comply with the condition in the donation, that is, to use the property for
school purposes. The CA further ruled that the donation was onerous considering that the donee
was burdened with the obligation to utilize the land for school purposes; therefore, the four-year
prescriptive period under Article 764 of the New Civil Code did not apply. Moreover, the CA
declared that a deed of donation is considered a written contract and is governed by Article 1144
of the New Civil Code, which provides for a 10-year prescriptive period from the time the cause
of action accrues. According to the CA, the respondents' cause of action for the revocation of the
donation should be reckoned from the expiration of a reasonable opportunity for the DECS to
comply with what was incumbent upon it.

Petitioners filed a motion for reconsideration, which the CA denied.

Petitioners seek relief from this Court via Petition for Review on Certiorari, contending that:
I.

THE DEPARTMENT OF EDUCATION, THROUGH THE RIZAL NATIONAL HIGH SCHOOL, HAD
COMPLIED WITH THE CONDITION IMPOSED IN THE DEED OF DONATION.

II.

RESPONDENTS' RIGHT TO SEEK THE REVOCATION OF THE DEED OF DONATION, IF

THERE BE ANY, IS ALREADY BARRED BY PRESCRIPTION AND LACHES.15

The Court shall resolve the issues raised by petitioners seriatim.

The donee failed to comply with the condition imposed in the deed of donation

The issue of whether or not petitioner DECS was able to comply with the condition imposed in
the deed of donation is one of fact. There is a question of fact when the doubt or difference arises
as to the truth or falsehood of alleged facts or when the query necessarily solicits calibration of
the whole evidence considering mostly the credibility of witnesses, existence and relevancy of
specific surrounding circumstances, their relation to each other and to the whole and probabilities
of the situation.16 Under Rule 45 of the 1997 Rules of Civil Procedure, only questions of law may
be raised in a Petition for Review on Certiorari, for the simple reason that this Court is not a trier
of facts. It is not for the Court to calibrate the evidence on record, as this is the function of the trial
court. Although there are well-defined exceptions to the rule, nevertheless, after a review of the
records, we find no justification to depart therefrom. Moreover, the trial court's findings of facts,
as affirmed by the appellate court on appeal, are binding on this Court, unless the trial and
appellate courts overlooked, misconstrued or misinterpreted facts and circumstances of
substance which, if considered, would change the outcome of the case. The case has been
reviewed thoroughly, and we find no justification to reverse the CA decision.

Petitioners, through the OSG, maintain that the condition (to use the property for school purposes)
is not limited to the construction of a school building, but includes utilizing it as a technology and
home economics laboratory where students and teachers plant palay, mahogany seedlings, and
fruit-bearing trees. The OSG insists that the donee did not specify in the deed that the property
should be used for the construction of a school building. According to the OSG, the proceeds of
the harvest were used and are still being used by the Rizal National High School for the
construction and improvement of its present school site. Moreover, it was verified that there was
palay planted on the donated property during the ocular inspection on the property.
In their comment on the petition, respondents dispute petitioners' contentions, and aver that no
evidence was presented to prove that, indeed, palay, mahogany seedlings and fruit-bearing trees
were planted on the property. Respondents also emphasized that when the trial court inspected
the subject property, it was discovered to be barren and without any improvement although some
portions thereof were planted with palay. Petitioners even failed to adduce evidence to identify
the person who planted the palay.

The contention of petitioners has no merit.

As gleaned from the CA decision, petitioners failed to prove that the donated property was used
for school purposes as indicated in the deed of donation:

We find it difficult to sustain that the defendant-appellants have complied with the condition of
donation. It is not amiss to state that other than the bare allegation of the defendant-appellants,
there is nothing in the records that could concretely prove that the condition of donation has been
complied with by the defendant-appellants. In the same breadth, the planting of palay on the land
donated can hardly be considered and could not have been the "school purposes" referred to and
intended by the donors when they had donated the land in question. Also, the posture of the
defendant-appellants that the land donated is being used as technology and home economics
laboratory of the Rizal National High School is far from being the truth considering that not only is
the said school located two kilometers away from the land donated but also there was not even a
single classroom built on the land donated that would reasonably indicate that, indeed, classes
have been conducted therein. These observations, together with the unrebutted ocular inspection
report made by the trial court which revealed that the land donated remains idle and without any
improvement thereon for more than a decade since the time of the donation, give Us no other
alternative but to conclude that the defendant-appellants have, indeed, failed to comply with what
is incumbent upon them in the deed of donation.17

In its Order18 dated March 6, 2001, the RTC reiterated that during the ocular inspection of the
property conducted in the presence of the litigants and their counsel, it observed that "the land
was barren; there were no improvements on the donated property though a portion thereof was
planted with palay [and a demolished house built in 1979.]"

Moreover, petitioners failed to adduce a shred of evidence to prove that the palay found in the
property was planted by DECS personnel or at its instance or even by students of the Rizal
National High School. No evidence was adduced to prove that there were existing plans to use
the property for school purposes. Petitioners even debilitated their cause when they claimed in
the trial court that the barangay acquired the property by purchase, relying on the certification of
former Barangay Captain Jesus San Juan.

The right to seek the revocation of donation had not yet prescribed when respondents filed their
complaint
Anent the second issue, we reject the contention of the OSG that respondents' cause of action is
already barred by prescription under Article 764 of the New Civil Code, or four years from the
non-compliance with the condition in the deed of donation. Since such failure to comply with the
condition of utilizing the property for school purposes became manifest sometime in 1988 when
the DECS utilized another property for the construction of the school building, the four-year
prescriptive period did not commence on such date. Petitioner was given more than enough time
to comply with the condition, and it cannot be allowed to use this fact to its advantage. It must be
stressed that the donation is onerous because the DECS, as donee, was burdened with the
obligation to utilize the land donated for school purposes. Under Article 733 of the New Civil Code,
a donation with an onerous cause is essentially a contract and is thus governed by the rules on
contract.19 We fully agree with the ruling of the appellate court:

xxx With this, [we] decline to apply the four-year prescriptive period for the revocation of donation
provided under Article 764 of the New Civil Code and instead apply the general rules on contracts
since Article 733 of the same Code, specifically provided that onerous donations shall be
governed by the rules on contracts.

Corollarily, since a deed of donation is considered a written contract, it is governed by Article 1144
of the New Civil Code, which provides that the prescriptive period for an action arising from a
written contract is ten (10) years from the time the cause of action accrues. In the case of donation,
the accrual of the cause of action is from the expiration of the time within which the donee must
comply with the conditions or obligations of the donation. In the instant case, however, it must be
noted that the subject donation fixed no period within which the donee can comply with the
condition of donation. As such, resort to Article 1197 of

the New Civil Code is necessary. Said article provides that if the obligation does not fix a period,
but from its nature and the circumstances it can be inferred that a period was intended, the courts
may fix the duration thereof. Indeed, from the nature and circumstances of the condition of the
subject donation, it can be inferred that a period was contemplated by the donors. The donors
could not have intended their property to remain idle for a very long period of time when, in fact,
they specifically obliged the defendant-appellants to utilize the land donated for school purposes
and thus put it in good use. xxx20

In Central Philippine University v. Court of Appeals,21 a case squarely in point, we have

established that the legal possibility of bringing the action begins with the expiration of a
reasonable opportunity for the donee to fulfill what has been charged upon it by the donor.
Likewise, we held that even if Article 1197 of the New Civil Code provides that the courts may fix
the duration when the obligation does not determine the period but from its nature and
circumstances it can be inferred that a period was intended, the general rule cannot be applied
because to do so would be a mere technicality and would serve no other purpose than to delay
or lead to an unnecessary and expensive multiplication of suits.22

Altogether, it has been 16 years since the execution of the deed of donation. Petitioner DECS
failed to use the property for the purpose specified in the deed of donation. The property remained
barren and unutilized. Even after respondents sought the return of the property before the courts,
petitioner DECS still failed to draw up plans to use the property for school purposes. In fine,
petitioner DECS has no use for the property; hence, the same shall be reverted to the
respondents.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No.
78314 dated July 30, 2004 is AFFIRMED.

SO ORDERED.
G.R. No. 155810 August 13, 2004

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

DECISION

TINGA, J.:

This is a Petition for Review on Certiorari1 of the Decision2 of the Court of Appeals which reversed and
set aside the decision3 of the Regional Trial Court (RTC) and partially annulled the Deed of Absolute
Transfer and/or Quitclaim (the deed) subject of this case.

We quote the appellate court’s findings of fact:

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

The couple was childless.

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

On January 5, 1983, Lauro Sumipat executed a document denominated "DEED OF

ABSOLUTE TRANSFER AND/OR QUIT-CLAIM OVER REAL PROPERTIES" (the assailed
document) in favor of defendants-appellees covering the three parcels of land (the properties).
On the document appears the signature of his wife Placida which indicates that she gave her
marital consent thereto.

It appears that on January 5, 1983 when the assailed document was executed, Lauro Sumipat
was already very sick and bedridden; that upon defendant-appellee Lydia’s request, their
neighbor Benjamin Rivera lifted the body of Lauro Sumipat whereupon Lydia guided his (Lauro
Sumipat’s) hand in affixing his signature on the assailed document which she had brought;
that Lydia thereafter left but later returned on the same day and requested Lauro’s unlettered
wife Placida to sign on the assailed document, as she did in haste, even without the latter
getting a responsive answer to her query on what it was all about.

After Lauro Sumipat’s death on January 30, 1984, his wife Placida, hereinafter referred to as
plaintiff-appellant, and defendants-appellees jointly administered the properties 50% of the
produce of which went to plaintiff-appellant.
 As plaintiff-appellant’s share in the produce of the properties dwindled until she no longer
received any and learning that the titles to the properties in question were already
transferred/made in favor of the defendants-appellees, she filed a complaint for declaration of
nullity of titles, contracts, partition, recovery of ownership now the subject of the present
appeal.

Defendant-appellee Lydia disclaims participation in the execution of the assailed document,

she claiming to have acquired knowledge of its existence only on January 10, 1983 or five
days after its execution when Lauro Sumipat gave the same to her.

Branch 6 of the Regional Trial Court of Dipolog City decided the case in favor of defendants-
appellees, it holding that by virtue of the assailed document the due execution of which was
not contested by plaintiff-appellant, the properties were absolutely transferred to defendants-
appellees.4

The trial court found that the subject properties are conjugal having been acquired during the marriage
of Lauro Sumipat and Placida Tabotabo (Placida). However, because Placida failed to question the
genuineness and due execution of the deed and even admitted having affixed her signature thereon,
the trial court declared that the entirety of the subject properties, and not just Lauro Sumipat’s conjugal
share, were validly transferred to the defendants, the petitioners herein. 5

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

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

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

The Court of Appeals, therefore, annulled the deed insofar as it covers Placida’s conjugal share in the
subject properties because the latter’s consent thereto was vitiated by mistake when she affixed her
signature on the document.

The petitioners filed a Motion for Reconsideration on the grounds of estoppel, absence of fraud and
prescription. The appellate court denied the Motion for Reconsideration in its Resolution12 dated
October 16, 2002 ruling that the grounds relied upon have been addressed in its Decision dated April
11, 2002. Anent the ground of prescription, the appellate court held that since the properties were
acquired through fraud or mistake, the petitioners are considered trustees of an implied trust for the
benefit of Placida. Citing jurisprudence, 13 the Court of Appeals ruled that actions based on implied or
constructive trust prescribe 10 years from the issuance of a Torrens Title over the property. Since two
(2) of the subject properties were issued Transfer Certificates of Title (TCT) Numbered T-4003714 and
T-4003815 under the petitioners’ names on August 18, 1987, the Complaint for declaration of nullity of
titles, partition, recovery of ownership and possession, reconveyance, accounting and damages,
which was filed on March 3, 1993, was filed well within the prescriptive period.

The petitioners are now before this Court principally claiming that Placida freely consented to the
execution of the deed and that they did not commit fraudulent acts in connection with its execution.
They also reiterate their argument that the Court of Appeals should have dismissed the case on the
ground of prescription. It is their contention that the present action being one to annul a contract on
the ground of fraud, it should have been filed within four (4) years from the discovery of fraud or
registration of the instrument with the Registry of Deeds.

The respondents filed their Comment16 dated February 7, 2003, essentially echoing the findings of the
Court of Appeals on the matter of Placida’s consent. According to them, Placida was deceived and
misled into affixing her signature on the deed. They further claim that Placida did not actually appear
before the notary public to acknowledge the instrument.

In their Reply17 dated April 29, 2003, the petitioners insist that Placida was not illiterate and that Lauro
Sumipat validly transferred the titles over the properties in question to them. They also argue that if
Placida did not understand the import of the deed, she could have questioned Lauro Sumipat about it
since the deed was executed a year before the latter died.

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

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

A perusal of the deed reveals that it is actually a gratuitous disposition of property — a donation —
although Lauro Sumipat imposed upon the petitioners the condition that he and his wife, Placida, shall
be entitled to one-half (1/2) of all the fruits or produce of the parcels of land for their subsistence and
support. The preliminary clauses of the deed read:

That conscious of my advanced age and failing health, I feel that I am not capable anymore of
attending to and maintaining and keeping in continuous cultivation my above described
properties;

That my children are all desirous of taking over the task of maintaining my properties and have
demonstrated since childhood the needed industry and hard work as they have in fact
established possession over my real properties and introduced more improvements over my
lands, the fruit of which through their concerted efforts and labors, I myself and my family have
enjoyed;

That it would be to the best interest of my above mentioned children that the ownership over
my above described properties be transferred in their names, thereby encouraging them more
in developing the lands to its fullest productivity.18

The deed covers three (3) parcels of land.19 Being a donation of immovable property, the requirements
for validity set forth in Article 749 of the Civil Code should have been followed, viz:
 Art. 749. In order that the donation of the immovable may be valid, it must be made in a public
document, specifying therein the property donated and the value of the charges which the
donee must satisfy.

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

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.

Title to immovable property does not pass from the donor to the donee by virtue of a deed of donation
until and unless it has been accepted in a public instrument and the donor duly notified thereof. The
acceptance may be made in the very same instrument of donation. If the acceptance does not appear
in the same document, it must be made in another. Where the deed of donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a separate instrument, is either
not given to the donor or else not noted in the deed of donation and in the separate acceptance, the
donation is null and void.20

In this case, the donees’ acceptance of the donation is not manifested either in the deed itself or in a
separate document. Hence, the deed as an instrument of donation is patently void.

We also note the absence of any proof of filing of the necessary return, payment of donor’s taxes on
the transfer, or exemption from payment thereof. Under the National Internal Revenue Code of 1977,
the tax code in force at the time of the execution of the deed, an individual who makes any transfer by
gift shall make a return and file the same within 30 days after the date the gift is made with the Revenue
District Officer, Collection Agent or duly authorized Treasurer of the municipality in which the donor
was domiciled at the time of the transfer.21 The filing of the return and payment of donor’s taxes are
mandatory. In fact, the registrar of deeds is mandated not to register in the registry of property any
document transferring real property by way of gifts inter vivos unless a certification that the taxes fixed
and actually due on the transfer had been paid or that the transaction is tax exempt from the
Commissioner of Internal Revenue, in either case, is presented. 22

Neither can we give effect to the deed as a sale, barter or any other onerous conveyance, in the
absence of valid cause or consideration and consent competently and validly given. 23 While it is true
that the appellate court found Placida’s consent to have been vitiated by mistake, her testimony on
the matter actually makes out a case of total absence of consent, not merely vitiation thereof. She
testified in this regard, thus:

Q- What have you been doing on that day on January 5, 1983?

A- I was at home boiling water.

Q- While you were boiling water in the house, at that time who arrived, if there was any?

A- Lydia Sumipat arrived.

Court:-(To the witness)

Q- Who is this Lydia Sumipat?

A- The daughter of my husband with his paramour.

Q- How old was she?

A- I did not know if she was already 30 years old at that time because he was born in 1950.

Atty. Legorio:-(To the witness)

Q- When you said Lydia Sumipat, you are referring to one of the defendants in this case?

A- Yes, sir. She is the one.

Q- This Lydia Sumipat you are referring to as one of the principal defendant and daughter of
your husband with his paramour, in January, 1983 what was her educational attainment, if you
know?

A- She has already finished schooling.

Q- Do you know what she obtained?

A- Teacher.

Q- You said she arrived in the afternoon of January 5, 1983 in your house while you were
boiling water. What did she do when she arrived there?

A- She brought with her a paper.

Q- What did she say to you?

A- She told me to sign that paper immediately because there is the witness waiting and so I
asked from her what was that paper I am going to sign. I asked her because I am unlettered
but she said never mind just sign this immediately.

Q- By the way, what is your highest educational attainment?

A- I have never gone to school.

Q- Do you know how to read or to write?

A- I know how to write only my name.

Q- You know how to write your name only?

A- Yes, sir.

Q- You said she told you to sign that piece of paper and you asked her what was that and she
told you "you just sign that", what did you do then?

A- She was in a hurry to let me sign that document so I signed it without knowing what was
that.
 Q- Did she tell you that piece of paper was a document wherein the land including your land
in Siayan were to be given to them?

A- I did not give my land.24

During cross-examination, Placida again denied any knowledge of the nature of the deed:

q You are aware that the titles over these lots had already been transferred in the name of the
defendants?

a They surreptitiously transferred the title in their names, I do not know about it.

q You mean to say you signed a document transferring them in their names?

a There was a piece of paper brought to me to be signed by Lydia; I asked what’s all about
but she did not tell me; I was forced to sign considering that according to her somebody was
waiting for it.

q What do you mean that you are force to sign?

a She told me to sign that paper immediately because there is a witness waiting that paper but
she was alone when she came to me.

q So you signed that paper?

a I signed it because she was in a hurry.

q That was done during the lifetime of your husband?

a Yes, sir.

q And your husband also signed that paper?

a I do not know because I have not seen my husband signed, Lydia only came to me to let me
sign that paper.

q Is it not a fact that you and your husband were brought before the office of Judge Pacifico
Garcia of Manukan, and in the office you signed that document?

a I have not gone to the Municipal building of Manukan and I do not know Judge Garcia.

q But what you know now that the titles are transferred in the name of the defendants?

a It was Lydia who caused the transfer of the titles in their names.

q And you know that fact when you signed that paper?

a At the time I signed the paper, I do not know yet that the title would be transferred, it was
only at the time when I requested my niece to follow it up because according to them I am no
longer entitled to the land.25
In Baranda v. Baranda,26 this Court declared that the deeds of sale questioned therein are not merely
voidable (as intimated by the plaintiffs themselves in their complaint for annulment of the deeds and
reconveyance of the lots) but null and void ab initio as the supposed seller declared under oath that
she signed the deeds without knowing what they were. The significant circumstance meant, the Court
added, that her consent was not merely marred by vices of consent so as to make the contracts
voidable, but that she had not given her consent at all.

Parenthetically, as Placida’s Complaint is entitled Declaration of Nullity of Titles; Contracts; Partition,

Recovery of Ownership and Possession; Reconveyance; Accounting and Damages with Prayer for
Preliminary Injunction and Receivership, the validity of the deed was directly assailed, but its absolute
nullity was not specifically raised as an issue. Nevertheless, both the RTC and the appellate court took
the cue from Placida’s theory that the deed is merely voidable as regards her conjugal share of the
properties. However, since the real issue is whether the questioned deed has validly transferred
ownership of the litigated properties, it is appropriate for the Court to inquire into the form of the deed
and the existence of valid consent thereto to ascertain the validity or nullity of the deed.

From the substantive and procedural standpoints, the objectives to write finis to a protracted litigation
and avoid multiplicity of suits are worth pursuing at all times. Conformably, we have ruled in a number
of cases that an appellate court is accorded broad discretionary power to consider even errors not
assigned. We have applied this tenet, albeit as a matter of exception, in the following instances: (1)
grounds not assigned as errors but affecting jurisdiction over the subject matter; (2) matters not
assigned as errors on appeal but are evidently plain or clerical errors within contemplation of law; (3)
matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just
decision and complete resolution of the case or to serve the interests of justice or to avoid dispensing
piecemeal justice; (4) matters not specifically assigned as errors on appeal but raised in the trial court
and are matters of record having some bearing on the issue submitted which the parties failed to raise
or which the lower court ignored; (5) matters not assigned as errors on appeal but closely related to
an error assigned; and (6) matters not assigned as errors on appeal but upon which the determination
of a question properly assigned is dependent. 27

In the instant case, the validity of the deed was directly assailed although both parties are of the view
that it is not an absolute nullity. The correct characterization of the deed is, therefore, determinative of
the present controversy. Elsewise framed, the issue of validity or nullity is interwoven with the positions
adopted by the parties and the rulings made by the courts below. Hence, we shall be resolute in striking
down the deed especially as it appears on its face to be a patent nullity.

Having said this, we shall now proceed to the issue of prescription. Being an absolute nullity, both as
a donation and as a sale, the deed is subject to attack at any time, in accordance with the rule in Article
1410 of the Civil Code that an action to declare the inexistence of a void contract does not prescribe.

We are thus unimpressed by the petitioners’ contention that the appellate court should have dismissed
Placida’s appeal on the ground of prescription. Passage of time cannot cure the fatal flaw in an
inexistent and void contract.28 The defect of inexistence of a contract is permanent and incurable;
hence, it cannot be cured either by ratification or by prescription. 29

Turning now to the effects of the absolute nullity of the deed, it is well-settled that when there is a
showing of illegality, the property registered is deemed to be simply held in trust for the real owner by
the person in whose name it is registered, and the former then has the right to sue for the
reconveyance of the property. The action for the purpose is also imprescriptible. As long as the land
wrongfully registered under the Torrens system is still in the name of the person who caused such
registration, an action in personam will lie to compel him to reconvey the property to the real owner. 30
One final note. After this Decision shall have become final and executory, the parties may either
extrajudicially divide the estates of Lauro Sumipat and Placida Tabotabo pursuant to Rule 74 of the
Rules of Court or judicially settle the estates pursuant to Rules 78, et seq., in accordance with
this Decision and the law.

WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The Decision of the Regional
Trial Court dated September 29, 1997 and the Decision of the Court of Appeals dated April 11, 2002,
as well as its Resolution dated October 16, 2002, are VACATED. In lieu thereof, judgment is hereby
rendered in favor of the respondents, to wit: (i) DECLARING the Deed of Absolute Transfer and/or
Quitclaim dated January 5, 1983 NULL AND VOID; and (ii) ORDERING the CANCELLATION of
Transfer Certificates of Title Numbered T-40037 and T-40038 (Zamboanga del Norte) and the tax
declaration covering the unregistered parcel of land, all issued in the names of the petitioners Lydia,
Laurito, Alicia, Alejandro and Lirafe, all surnamed Sumipat, and the REINSTATEMENT of Original
Certificate of Title No. P-17842 (Zamboanga del Norte) Transfer Certificate Title No. T-15826
(Zamboanga del Norte) and the tax declaration covering the unregistered parcel of land, all in the
name of "Lauro Sumipat . . . married to Placida Tabotabo."

Costs against the petitioners.

SO ORDERED.
G. R. No. 132681 - December 3, 2001

RICKY Q. QUILALA, petitioner,

vs.
GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, Respondent.

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 20th day 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
acknowledgment 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 Catalina's 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 Catalina's SSS records does it appear that Violeta was
Catalina's 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 vivos executed 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 Catalina's 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 COURT'S 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 of 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 donee's 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 Violeta's 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 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." (italics supplied).

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 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 donor's
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 donor's 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.
G.R. No. 152663 November 18, 2005

EDGARDO D. DOLAR, Petitioner,

vs.
BARANGAY LUBLUB (now P.D. Monfort North) of the Municipality of Dumangas, herein
represented by its Punong Barangay, PEPITO DUA, PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, DUMANGAS WATER DISTRICT, 4th ILOILO MOBILE GROUP, ILOILO PROVINCIAL
POLICE, ILOILO REGIONAL TRIAL COURT, BRANCH 68, Respondents.

DECISION

GARCIA, J.:

Via this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Edgardo D.
Dolar seeks the annulment and setting aside of the Orders dated January 3, 2002 1 and March 5,
20022 of the Regional Trial Court at Iloilo City, Branch 38, in its consolidated Civil Cases No. 98-033
and 00-140.

The facts:

Petitioner and Serafin Jaranilla were co-owners of a parcel of land with an area of 4.6 hectares,
identified as Lot No. 1, Pcs-06-000744 (Lot No. 1, for brevity), situated in Brgy. Lublub, Municipality of
Dumangas, Iloilo. Said property forms part of Lots No. 4181 and 4183 of the Dumangas Cadastre.

On September 16, 1981, petitioner and Jaranilla donated Lot No. 1 to respondent Barangay Lublub,
subject to the following conditions:

A.) That the area donated shall be for the purpose of con[s]tructing building and/or establishing public
plaza, sports complex, public market, health centers and the like for the use of the Barangay of Lublub
… which area shall be hereinafter be known as DON VENANCIO DOLAR PLAZA and shall be so
designated in a proper landmark;

B.) That the construction and development of the area above-described shall be initiated and
completed within five (5) years from the execution of this Deed of Donation and should the same be
not made or completed then this Deed of Donation shall have no force and effect whatsoever and the
ownership of the above-described property will revert back to the DONORS including all or any
unfinished improvement the DONEE might have placed or constructed.

C.) That . . . should the use of the area be converted to uses other than herein stipulated, then this
DEED OF DONATION shall be deemed revoked and the ownership shall revert back to the DONORS
.… (Underscoring added)3

Then barangay captain Jose Militar accepted the donation in behalf of Brgy. Lublub.

Following the execution of the deed of donation, Brgy. Lublub immediately took possession of the
donated property, which soon became the site of several government office buildings and recreational
facilities. For what in hindsight is a typical case of complacency on the part of a government unit,
respondent barangay did not have the donation registered under its name. On April 12, 1989, or almost
eight (8) years from contract execution, petitioner was issued Transfer Certificate of Title (TCT) No. T-
1298374 by the Registry of Deeds of Iloilo covering the donated area.
Sometime in June 1989, petitioner executed another deed5 donating to Brgy. Lublub, represented by
its incumbent barangay captain, the very same area he and Serafin Jaranilla had earlier donated to
the same donee. The second deed of donation contained exactly the same conditions expressly set
forth in the first.

Barangay Lublub’s peaceful possession of the donated area remained undisturbed until mother Lots
No. 4181 and 4183 were included in the published list of tax delinquent properties for disposition. At
the auction sale that followed, petitioner emerged as the highest bidder and was, accordingly, awarded
the property.

On May 6, 1998, in the Regional Trial Court (RTC) at Iloilo City, petitioner filed against Brgy. Lublub a
complaint for Quieting of Title and Recovery of Possession With Damages involving the 4.6-hectare
area he had earlier donated. Basically, petitioner claimed that the donation in question had ceased to
be effective, the donee barangay having failed to comply with the conditions of the donation.
Impleaded as co-defendants of Brgy. Lublub were entities each occupying a portion of the donated
property, such as the Philippine Long Distance Company (PLDT), the Dumangas Water District,
Branch 86 of RTC-Iloilo and the Iloilo Provincial Police. Docketed in the trial court as Civil Case No.
98-033, the complaint alleged, inter alia, as follows:

10. That ... defendant [barangay] failed to build or establish within the period therein stipulated, a public
plaza, sports complex … and like structures for the use of Barangay Lublub and neither had it
designated in a proper landmark that the area donated is known as the ‘Don Venancio Dolar Plaza’

11. That … defendant barangay allowed the use of the area donated to be converted to uses other
than those provided in the donation documents when it allowed entities like defendants PLDT,
Dumangas Water District, PNP Mobile Force, and Branch 68 of the RTC of Iloilo, to construct buildings
and occupy portions of the lot in question . . .;

12. That because of the failure of defendant barangay to declare the lot in question in its name for
taxation purposes, the same was sold at public auction for non-payment of real property taxes . . . .

13. That in the light of the terms and conditions in the Deeds of Donation and actuations of the
defendant barangay in relation to the property donated; the donation . . . has automatically lost its
force and effect whatsoever and the ownership of the property has reverted to the plaintiff or the
donation has been deemed automatically revoked . . .;

14 . That the act of defendant barangay in allowing the construction of buildings by public and private
entities on the donated property and holding offices therein has cast a doubt or cloud on the title of the
plaintiff over the property in litigation . . . .

15. That the plaintiff, as exclusive, absolute, and registered owner of the property in question is entitled
to the possession of the same. 6

In its Answer With Counterclaim,7 Brgy. Lublub, after traversing the material allegations of the
complaint, alleged the following as affirmative defenses:

3.2. The said donation was made and accepted on the same public instrument duly notarized by notary
public Nicolas P. Sonalan xxx

3.3. The acceptance of donation was made by then Barangay Captain of Barangay Lublub Jose Militar
with authority from the barangay council;
3.4. After the said deed of donation was executed in compliance with the conditions set forth in the
deed of donation and within five (5) years from its execution thereof several structures/buildings were
constructed thereon for the use and benefit of Brgy. Lublub, Dumangas, Iloilo. ….;

3.5. Later on . . . (PLDT) was invited to construct an office building on subject property for the benefit
and use of the residents of Barangay Lublub, Dumangas, Iloilo;

3.6. Likewise for the use and benefit of the barangay residents an office building of Dumangas Water
District was constructed . . .;

3.7. Likewise … a PNP Mobile Force was put up on the said place and a PNP office, in line with this,
was constructed . . .;

3.8. Likewise because of the desire of the barangay residents to make the subject property a plaza
and a center place for their needs, Branch 68 of the RTC of Iloilo was established thereon. All these
for the use and benefit of Barangay Lublub, now P.D. Monfort North, . . . .

And, as grounds for its motion to dismiss embodied in the same answer, Brgy. Lublub raised the matter
of lack of cause of action or prescription of the cause of action, if any, thus:

4.3 Plaintiff proceeded with his complaint . . . without first seeking the revocation of the deed of
donation in a proper court . . . as provided for under Article 764 of the New Civil Code;

4.4 What plaintiff did was to unilaterally revoke the deed of donation … and proceeded with the filing
of this case with the assumption that the deed of donation was already validly revoked. xxx.

xxx xxx xx

4.6 It must be noted that the deed of donation was executed in September 16, 1981. Even if the donee
. . . failed to comply with the conditions of the deed within 5 years or until 1986, plaintiff should have
sought revocation of the donation within 4 years from 1986 or until 1990 only. xxx xxx;

4.7 The deed of donation having been executed in 1981 yet, the donee . . . took possession of the
same in concept of an owner, with just title, adverse, open, peaceful and continuously up to the
present. Hence, even if the donation is void or conditions were not complied with, the property is now
owned by the donee, … as it can be considered that it has been acquired by prescription.

On top of its Answer with Counterclaim, Brgy. Lublub, this time renamed and known as Brgy. P.D.
Monfort North, filed with the same branch of the court a complaint for Cancellation of Title,
Reconveyance/Issuance of Title, Declaration of Nullity of Notice of Delinquency in the Payment of
Real Property Tax.8 Named as defendants were petitioner and his wife, certain municipal officials of
Dumangas and the Provincial Treasurer and Register of Deeds of Iloilo. In its complaint, docketed
as Civil Case No. 00-140, the plaintiff barangay averred having conducted an investigation which led
to the discovery that the spouses Dolar, colluding with some local officials, engineered the whole levy
process which culminated in the auction sale of what is now a very valuable donated property.

To Brgy. Lublub’s complaint, petitioner interposed a Motion to Dismiss 9 on grounds of forum shopping
and litis pendentia, obviously on account of the pendency of Civil Case No. 98-033.

Eventually, the two (2) cases, Civil Cases No. 98-033 and 00-140, wherein the respective principal
defendants have each interposed a motion to dismiss, were consolidated.
In the herein assailed Order dated January 3, 2002,10 the trial court, on the finding that petitioner’s
action was already barred by extinctive prescription under Article 764, 11 in relation to Articles 73312 and
1144 (1)13 of the Civil Code, granted the Barangay’s motion to dismiss in Civil Case No. 98-033 and
denied petitioner’s similar motion in Civil Case No. 00-140, to wit:

WHEREFORE, in view of all the foregoing, this Court resolved, as it hereby resolves, the pending
incidents in these two cases, to wit:

1. Defendant Barangay Lublub’s built-in Motion to Dismiss/Affirmative Defenses raised in its Answer
in Civil Case No. 98-033, being impressed with merit, is granted; consequently, said Civil Case No.
98-033 … is hereby ordered dismissed;

2. Defendants-spouses Edgardo D. Dolar’s and Corazon Yap’s Motion to Dismiss in Civil Case No.
00-140, being without merit, the same is herby denied.

With this disposition, this Court shall proceed hearing Civil Case No. 00-140 entitled Barangay P.D.
Monfort North, Dumangas Iloilo, etc. vs. Municipality of Dumangas, Iloilo, et al.

SO ORDERED.

Explains the trial court in its impugned Order of January 3, 2002:

Stress should be made that the Deed of Donation executed by Edgardo D. Dolar (plaintiff in Civil Case
No. 98-033) in favor of Barangay Lublub xxx clearly imposes the following conditions:

xxx xxx xxx

Based on the foregoing conditions, . . . should the barangay donee fails (sic) to comply therewith, the
donor had the right to bring action to revoke the donation (Art. 764, supra) within a period of ten (10)
years after the 5-year period of non-compliance with the conditions in the deed of donation (Art.
733, supra, in relation to Art. 1144(1), supra). Since the deed of donation was executed on September
16, 1981, the 5-year period lapsed in 1986; consequently, the action to revoke should have been
brought not later than 1996, however, it appears that Civil Case No. 98-033 was filed by plaintiff Dolar
on May 6, 1998.

Obviously, since the petitory portion of his complaint in Civil Case No. 98-033 seeks for quieting of his
title over the subject property and seeks judgment declaring him to be the absolute owner thereof,
plaintiff Dolar also seeks the revocation of the subject deed of donation. xxx..

xxx. Accordingly, in the light of the foregoing jurisprudence, the action to revoke donation was to have
been filed within ten (10) years from the time the action accrued, i.e., from the time of the non-
compliance of the conditions ….

In yet another Order dated March 5, 2002,14 same court denied petitioner’s motion for
reconsideration.

Therefrom, petitioner directly comes to the Court on pure questions of law, submitting issues which
may be formulated in the following wise:

1. Whether or not his action is one for revocation of donation instead of for quieting of title; whether or
not the action for quieting has prescribed.
2. Whether or not the deed of donation in question is (a) valid for defective acceptance and/or (b) no
longer effective by reason of the automatic reversion clause therein.

3. Whether or not respondent barangay had acquired the property in question by acquisitive
prescription.

The petition lacks merit.

It bears stressing that petitioner, at the outset, predicated his action to quiet title on the ground of
ineffectiveness of the donation, albeit he would later add the matter of its invalidity. Indeed, the make
or break issue to be resolved and to which all others must yield turns on the validity and/or continued
efficacy of the subject donation. Valid and effective, the donation virtually forecloses any claim which
petitioner may have over the donated property against the donee and other occupants thereof, and
his action to quiet title is virtually doomed to fail. Invalid and ineffective, however, the arena is left open
for petitioner to recover ownership and possession of the donated property and have the cloud on his
title thereto, if any there be, removed.

According to petitioner, the subject donation is, by force of Article 74515 of the Civil Code, void, the
accepting barangay captain being without sufficient authority for the purpose. On this point, petitioner
cites Section 88 of Batas Pambansa Blg. 33716 - the law then in force - and Sections 91 and 389
the Local Government Code of 199117. In gist, these provisions empower the punong barangay to
enter into contracts for the barangay upon authorization of the Sangguniang Barangay, or, in the
alternative, the Sanggunian may authorize the barangay head to enter into contracts for the barangay.

Excepting, however, respondent barangay alleged that then barangay captain Jose Militar accepted
the donation "in the same Deed of Donation per authority granted by the barangay council."18

The question then of whether Militar was clothed with authority to accept the donation for respondent
barangay stands as disputed. Since the present recourse is interposed on pure questions of law, we
need not resolve the factual issue regarding Militar’s authority, or lack of it, to accept the donation in
behalf of respondent barangay. It should be pointed out, nevertheless, that petitioner is hardly the
proper party to challenge the validity of the donation – which is presumed to be valid - on the ground
he presently invokes. The honor to question Militar’s ultra vires act, if this be the case, belongs to
the Sanggunian of Barangay P.D. Monfort North. And more to the point, even assuming ex gratia
argumenti petitioner’s legal standing to raise such a question, the final answer would still lean towards
the validity of the donation. For, from the allegations of all the parties, it would appear that, through
the years, the Sanggunian of Lublub as well as all the succeeding Sangunians of P.D. Monfort North
neither repudiated the acceptance of the donation by Militar nor acted in a manner reflective of their
opposition to the donation. On the contrary, the respondent barangay has been enjoying the material
and public-service benefits arising from the infrastructures projects put up on the subject property. In
a very real sense, therefore, the Sangguniang Barangay and the good people of P.D. Monfort North,
by availing themselves of such benefits for more than two decades now, effectively ratified Militar’s
acceptance of the donation.

This brings us to the question of the efficaciousness of the donation. Petitioner asserts that the 1981
and 1989 deeds of donation, pursuant to the uniform automatic rescission/reversion clauses therein,
ceased to be effective upon respondent’s failure to meet the conditions for which it was charged to
fulfill. To petitioner, the automatic rescission/reversion clause works, in appropriate instances, to
revoke the donation and revert the ownership of the donated property to the donor without the need
of judicial intervention. In support of this argument, petitioner cites De Luna vs. Abrigo19 wherein this
Court put to rest any lingering doubt as to the validity of a stipulation providing for the automatic
reversion of the donated property to the donor upon non-compliance by the donee of the conditions or
charges incumbent upon him.

Cited likewise is the subsequent complementary holding in Roman Catholic Archbishop of Manila vs.
Court of Appeals20, thus:

Although it is true that under Article 764 of the Civil Code an action for the revocation of a donation
must be brought within four (4) years from the non-compliance of the conditions of the donation, the
same is not applicable in the case at bar. The deed of donation involved herein expressly provides for
automatic reversion of the property donated in case of violation of the condition therein, hence a
judicial declaration revoking the same is not necessary.

De Luna and Archbishop of Manila are, to be sure, apropos. However, petitioner’s argument to support
his thesis on the automatic rescission of the donation in question and the consequent reversion of the
property to the donor is an incomplete presentation of the Court’s pronouncements on the point.

We shall explain.

If the corresponding contract of donation expressly provides for automatic rescission and/or reversion
in case of breach of the condition therein, and the donee violates or fails to comply with the condition,
the donated property reverts back automatically to the donor. Such provision, De Luna teaches, is in
the nature of an agreement granting a party the right to rescind a contract in case of breach, without
need of going to court and that upon the happening of the resolutory condition or non-compliance with
the conditions of the contract, the donation is automatically revoked without need of a judicial
declaration to that effect. Where, however, the donee denies, as here, the rescission or challenges
the propriety thereof, then only the final award of the court can, to borrow from University of the
Philippines vs. de los Angeles,21 "conclusively settle whether the resolution is proper or not." Or, in the
language of Catholic Archbishop of Manila:22

The rationale for the foregoing is that in contracts providing for automatic revocation, judicial
intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for rescission even without judicial
intervention, but in order to determine whether or not the rescission was proper.

When a deed of donation, . . . expressly provides for automatic revocation and reversion of the property
donated, the rules on contract and the general rules on prescription should apply, and not Article 764
of the Civil Code. Since Article 1306 of said Code authorizes the parties to a contract to establish such
stipulations, . . . not contrary to law, . . . public order or public policy, we are of the opinion that, at the
very least, that stipulation of the parties providing for automatic revocation of the deed of donation,
without prior judicial action for that purpose, is valid subject to the determination of the propriety of the
rescission sought. Where such propriety is sustained, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory act.

In the case at bench, it cannot be gainsaid that respondent barangay denied or challenged the
purported revocation of the donation. In fact, the denial or challenge is embodied in respondent
barangay’s complaint in Civil Case No. 00-140 and in its Answer cum motion to dismiss in Civil Case
98-033, which similarly prayed for, among other things, the cancellation of petitioner's title on the
subject property.

The foregoing discussion veritably disposes of the second formulated issue.

Now back to the first issue. It is petitioner’s posture that his action in Civil Case No. 98-033 is one for
quieting of title under Article 47623 of the Civil Code, not, as erroneously regarded by the trial court, an
action to revoke donation under Article 764 of the Code which, insofar as pertinent, reads as follows:

Article 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply
with any of the conditions which the former imposed upon the latter.

xxx xxx xxx.

This action shall prescribe after four years from the noncompliance with the condition, may be
transmitted to the heirs of the donor, and may be exercised against the donee's heirs. (Underscoring
added)

Petitioner’s posture does not persuade.

As aptly observed by the trial court, the petitory portion of petitioner’s complaint in Civil Case No. 98-
033 seeks for a judgment declaring him the absolute owner of the donated property, a plea which
necessarily includes the revocation of the deed of donation in question. Verily, a declaration of
petitioner’ absolute ownership appears legally possible only when the deed of donation is contextually
declared peremptorily revoked.

Owing to the prescriptive component of Article 764 of the Civil Code, petitioner’s dread of the
invocation and application of said provision is at once apparent as it is understandable. For, an action
to revoke thereunder prescribes after four (4) years from non-compliance by the donee with any of the
conditions set forth in the deed of donation. A little less than seventeen (17) years separate September
16, 1981, when the Deed of Donation was executed, from May 6, 1998, when petitioner filed his
complaint in Civil Case No. 98-033. Seventeen (17) years is, in turn, too far removed, as shall be
illustrated shortly, from the 4-year prescriptive period referred to in Article 764 or even from the 10-
year period under Article 1144.24

It cannot be overemphasized that respondent barangay traces its claim of ownership over the disputed
property to a valid contract of donation which is yet to be effectively revoked. Such rightful claim does
not constitute a cloud on the supposed title of petitioner over the same property removable by an
action to quiet title. Withal, the remedy afforded in Article 476 of the Civil Code is unavailing until the
donation shall have first been revoked in due course under Article 764 or Article 1144 of the Code.

Lest it be overlooked, the rule on the imprescriptibility of actions to quiet title admits of exceptions. The
trial court correctly mentioned one, referring to a situation where the plaintiff in an action to quiet title
is not in actual possession of the land. 25 In the case at bench, petitioner is not in possession of the
property. For sure, he is even asking in his complaint in Civil Case No. 98-033 for recovery of
possession of the donated property.

Given the above disquisition, petitioner can hardly fault the trial court for its holding that petitioner’s
action to revoke is time-barred. As may be recalled, respondent barangay had, under the terms of the
deed of donation, five (5) years from the execution of the conveying deed in September 1981, or up
September 1986, within which to introduce and complete the contemplated development of the
donated area. Following Article 764 of the Civil Code, petitioner had four (4) years from September
1986, or up to September 1990, within which to seek the revocation of the subject donation on the
ground of breach of contract.

The Court can grant that the prescription of actions for the revocation of onerous donations, as here,
are governed by the general rules on prescription, 26 which, in context, is Article 1144 of the Civil Code
providing that actions upon a written contract shall be brought within ten (10) years from accrual of the
right of action. Ten years from September 1986 – the date when petitioner’s right to revoke accrued -
would be September 1996. Here, however, what partakes as petitioner’s suit to revoke was filed only
in May 1998.

In all, petitioner’s right of action to revoke or cancel the donation had indeed prescribed, regardless of
whether the applicable legal provision is Article 764 or the favorable Article 1144 of the Civil Code. It
should be stated in this regard, however, that respondent barangay had disputed the existence of the
grounds upon which petitioner anchored his right to revoke, claiming it had already complied with the
construction and development conditions of the donation. From the records, it would appear that
respondent barangay’s boast of compliance is not an empty one. As we see it, the establishment on
the donated area of telephone service, a water service, a police mobile force, and a courtroom, all for
the benefits of the barangay residents, substantially satisfies the terms and conditions of the subject
donation. The concrete paving of roads and the construction of government offices, sports complex
for public enjoyment and like infrastructures which, per respondent barangay’s estimate, cost not less
than P25 Million,27 add persuasive dimension to the conclusion just made.

Petitioner's long silence vis-à-vis the kind of development structures that Barangay Lublub had
decided to put up or allowed to be established on the subject area cannot but be taken as an indicia of
his satisfaction with respondent barangay’s choice of public service projects. The prolonged silence
was broken only after the provincial and municipal governments advertised, then sold the property in
a public auction to satisfy questionable tax liabilities.

Much is made by petitioner about his execution of the 1989 deed of donation, which, to him, should
be utilized as a point of reference in determining the prescriptive period 28 defined under either Article
764 or 1144 of the Civil Code. He states:

xxx It has not been explained up to this juncture why the Deed of Donation of June 1989 … is not
being mentioned or considered when it is alleged in the complaint. As will be noted in the Deed of
Donation dated 1981 the property was jointly owned by plaintiff Dolar and Jarantilla, with separate title;
in Annex "B", the Donation of 1989 only plaintiff Dolar signed the same as the only registered owne[r]
of the lot donated; xxx. As previously adverted to, the prescriptive period for violation or contravention
of the terms and conditions of Annex "B" should be reckoned from 1994 and therefore this action filed
in 1998 is within the period.

With the view we take of the case, the execution of the 1989 deed of donation is really of little moment
in terms of furthering petitioner’s cause. For, at that time, the property subject of this recourse was no
longer his to donate, having earlier relinquished his ownership thereon. Nemo dat qui non habet – No
one can give what he has not.29 Stated a bit differently, respondent barangay’s right over the donated
area proceeds from the 1981 donation. The legal effects, therefore, of its action or inaction respecting
the donated property should be assayed on the basis of the 1981 donation.

The last issue raised pivots on whether or not respondent barangay can acquire the subject property
by acquisitive prescription, the petitioner’s thesis being that prescription does not run against
registered land.30

Petitioner’s point is theoretically correct and may perhaps tip the balance in his favor, but for the fact
that the respondent barangay anchors its title and right over the donated lot, first and foremost, by
virtue of the deed of donation. Admittedly, standing alone, adverse, continuous and long possession
of a piece of real property cannot defeat the title of a registered owner. But, then, this postulate
presupposes a Torrens title lawfully acquired and issued. As may be recalled, however, respondent
barangay instituted Civil Case No. 00-140, supra, for Cancellation of Title, Reconveyance/Issuance of
Title precisely because of the dubious manner by which petitioner allegedly acquired his TCT No. T-
129837 over a lot he admits donating.

Parenthetically, petitioner’s contention that the donation was invalid because it was not registered in
the Registry of Property deserves no merit. For, as between the parties to the donation and their
assigns, the registration of the deed of donation with the Registry of Deeds is not needed for its validity
and efficacy. In Pajarillo vs. Intermediate Appellate Court,31 the Court emphatically dismissed the
notion that registration was necessary to make the donation a binding commitment insofar as the
donor and the donee were concerned.

As a final consideration, let it be made clear that this opinion merely resolves the question of the
correctness of the dismissal by the trial court of Civil Case No. 98-033 on the basis of facts attendant
thereto in the light of applicable laws and jurisprudence. It is not meant to prejudge the outcome of Civil
Case No. 00-140 which, while related to Civil Case No. 98-033, tenders different issues, foremost of
which is the validity of a Torrens title issued over a piece of land to one who had previously donated
the same.

WHEREFORE, the petition is DENIED for lack of merit.

Costs against petitioner.

SO ORDERED.