MODES OF ACQUIRING OWNERSHIP

A. Original Modes (independent of any pre-existing or preceding title or right of

another)

1. OCCUPATION – the acquisition of ownership by seizing corporeal things

(personal property) that have no owner & susceptible of appropriation, made with the
intention of acquiring them, and accomplished according to legal rules.

2. INTELLECTUAL CREATION – patents, trademarks, copyright

B. Derivative Modes (somebody else was the owner before)

3. SUCCESSION (testate and intestate)

4. DONATION – an act of liberality whereby a person disposes gratuitously a thing or

right in favor of another, who accepts it.

5. PRESCRIPTION – ownership of property is acquired by adverse possession for a

certain period required by law, with the necessary legal conditions present

6. LAW – accession, fruits naturally falling on adjacent land

7. TRADITION or DELIVERY as a consequence of certain contracts (ex: sale,

barter, assignment, loan)

TITLE III. DONATION

1. What is a Donation?
i. Simple or pure Donation
Article 725. Donation is an act of liberality whereby a person disposes gratuitously of
a thing or right in favor of another, who accepts it

o It is a contract, that is gratuitous; the consideration is liberality of donor

o It is a mode of acquiring ownership.
o In general, donation does not require delivery before ownership is transferred.

ii. Donation in Praesenti

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

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 o In Donation in Praesenti title of ownership to the property belongs to the donee
upon acceptance of donation, but possession of the property is to be delivered in
the future. This is still donation inter vivos.
o Fruits of the property belongs to the Donee upon acceptance, except if the donor
provides the contrary in the donation.

2. What are the REQUISITES of a Valid Donation Inter Vivos?

a.) Consent by donor, subject matter, cause
b.) Acceptance by Donee during donor´s lifetime.
o No one can be compelled to accept the liberality/generosity of another.

c.) Complies with Necessary Form

o Arts. 748 – donation of movable
o Art. 749 – donation of immovable

d.) Intent to make a gift to donee (animus donandi)

e.) Alienation of Property by donor
f.) Results in the decrease of donor’s assets and increase of donee’s patrimony.
g.) Must be IRREVOCABLE
o Unless legal causes exist to terminate, reverse, nullify, revoke or reduce donation:

1. Donations which stipulates reversion

• Art. 731 – donation subject of resolutory condition of the donor´s survival.
• Art. 757 – reversion of donation

2. Prohibited & Void Donations

• Art. 736 – donation of guardian/trustees of property entrusted to them
• Art. 739 – donations deemed against moral and public policy reasons
• Art. 743 – donations to persons incapacitated under Art. 739 thru simulated
contracts or by interposing another person
• Art. 740 – donations to persons incapacitated to succeed by will based on
undue influence or interest, or unworthiness
• Art. 751 – donation of future property

3. Donations which may be revoked or reduced

• Art. 759 – donation in fraud of creditors

• Art. 764 – failure to comply with resolutory conditions of donor
• Art. 765 – revocation due to ingratitude of donee

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 • Art. 750 - reduction of inofficious donation which impair support for donor or
his family
• Art. 760 – reduction or revocation of donation due b.r.a
• Art. 771 in relation to Art. 752 – reduction or revocation of inofficious
donation prejudicial to the legitime of compulsory heirs.

4. What are the Different Kinds of Donation Inter Vivos?

i. PURE or SIMPLE (Article 725)

 Art. 725. Donation is an act of liberality whereby a person disposes

gratuitously of a thing or right in favor of another, who accepts it.

o CAUSE: Here, the pure liberality or generosity of the donor is

deemed as the cause, the donation or gift being given is designed
solely and exclusively to benefit the welfare of the Donee, without
any condition attached for the satisfaction of the donor.
o Governed by Formalities of Donation in Art. 748 [donation of
movable], or Art. 749 [donation of immovable], otherwise,
donation is VOID.

ii. REMUNERATORY [of the First Kind] (Article 726)

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

o Cause: Donation is a reward or, is made on account of the donee‘s merits,

or due to past services made by donee to the donor.

o Examples: (1) X gives to Y a car for Y graduated summa cum laude in law.
(3) A gives B a house/lot when B retired - a good nanny of A’s children.

o Governed by Formalities of Donation in Art. 748 [movables] & Art. 749

[immovables], otherwise donation becomes null and void.

iii. CONDITIONAL OR MODAL ; also called Compensatory, or

Remuneratory of the Second Kind, or Donation with a Burden
(Articles 726, 733)

 Art. 726. When a person gives to another a thing or right on account of the latter's
merits or of the services rendered by him to the donor, provided they do not constitute a

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demandable debt, or when the gift imposes upon the donee a burden which is less than
the value of the thing given, there is also a donation.

o A Conditional or Modal donation imposes upon the donee a BURDEN

which is LESS than the value of the thing donated. [Art. 726.]

o A Modal Donation is one in which the donor imposes a prestation or

burden upon the donee.
o Example: Castillo v. Castillo, 23 Phil. 364 – modal or compensatory donation of land in
so far as the burden to defray the donor’s subsistence and funeral costs, (which is less
than the value of the land), with the remaining if any, granted to donee.

o Character: Partly simple, partly onerous.

o FORM: To be valid -
 Simple donation part – follow formalities of donation;
 Onerous part – follow form of contracts; or of donation,.

o Modal donations are not pure acts of liberality since a mode is imposed.
[Mode – manner of acting or doing; particular type or form of something]

iv. ONEROUS (con causa onerasa) (Article 733)

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

o Here, there are burdens, charges or future services are EQUAL in value to
the thing donated.

o This is a donation in name only; a contradiction in terms.

o Form: that of Contracts. [Consent, subject matter & cause; Onerous donation
is valid if requisite formalities of contracts are satisfied, even if the formalities of
donation are not followed.]

o Example: X gives Y land worth P2M. But Y must give X an Olmedo painting
approx. worth P2M.

o Donations with an onerous cause are governed not by the law on

donations, but by the rules on contracts (De Luna v. Abrigo, LG.R. No. L-
57455 January 18, 1990)

PERFECTION OF DONATION; ACCEPTANCE OF DONATION

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WHEN IS DONATION PERFECTED

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

o Perfection of Donation – from the moment the donor knows of the acceptance
by the donee. (Art. 734)

o Before Knowledge of Acceptance by Donor – donation is not yet perfected;

Donor may give the property to another, for he has not yet really disposed his
property at this point.

o When Donation and Acceptance are on the same instrument containing

signatures of donor and donee – this means that there is knowledge of
acceptance; donation is thus perfected.

WHEN MUST ACCEPTANCE BE MADE :

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

Reasons for the law:

1. Donation is personal between donor and donee and acceptance by donee and
knowledge thereof by donor while alive have legal effects:
a. Donation is perfected only upon knowledge of the donor of acceptance by donee
b. Once donation is perfected, the donation intervivos becomes irrevocable.

• Art. 746 rule is applicable to donation inter vivos only, and NOT to donation mortis
causa.
• Why? In donation mortis causa, acceptance by donee is effective only after death of
donor. A donation mortis causa is revocable anytime by donor while alive.

Nota Bene:
1. Title to an immovable property does not pass from the donor to the donee by virtue
of the Deed of Donation until and unless it has been accepted in a public instrument
and the donor duly notified thereof. ( Arangote vs. Maglunob, 579 SCRA 620)

2. While it is true that the acceptance of a donation may be made at any time during
the lifetime of the donor, and granting arguendo that such acceptance may still be
admitted in evidence on appeal, there is still need for proof that a formal notice of
such acceptance was received by the donor and noted in both the Deed of Donation
and the separate instrument embodying the acceptance. (id)

HOW SHOULD DONEE ACCEPT DONATION :

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

Additional Duty of Agent of Donee:

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

2. How may a donee accept a donation?

Basis: Arts. 745 & 747
a. Personally
b. Thru Agent – authorized with SPA or GPA

2. What is the required form of authorization and acceptance by the agent or

authorized person?
Basis: Arts. 745, 747, 749 -
(a) The authorization to accept on behalf of the donee should be in a public
instrument form pursuant to Art. 1358 (1).

(b) The fact that the donor is notified of the acceptance by donee thru his agent and
this is noted in the deed of donation or in the separate notarized acceptance
document, if any.

3. What is the legal effect if donation is accepted by another without authority from
donee?
A. Donation is void. No transmission of property to donee. Donor remains as owner
as a result.

ESSENTIAL FORMALITIES FOR A VALID DONATION

What are the forms or formalities required for a Donation [simple or

remuneratory, or modal ] to be valid?

 FORM determines the VALIDITY of the DONATION. Failure to satisfy the

Formalities required by law (Arts. 748 or 749) makes the donation VOID.

 Donation is one of the few transactions left in which FORM DETERMINES

VALIDITY. (Most obligations are consensual, the intent determining validity.)

A. Donation of MOVABLES: FORMALITIES Required (Article 748)

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 Art. 748. The donation of a movable may be made orally or in writing. An oral
donation requires the simultaneous delivery of the thing or of the document
representing the right donated. If the value of the personal property donated
exceeds five thousand pesos, the donation and the acceptance shall be made in
writing, otherwise, the donation shall be void.

 If the DONATION of a MOVABLE has a Value of –

(a) P5,000 or LESS : donation can be made orally or in writing.

o If the donation is oral - (a) there must be simultaneous delivery of the
thing, or of the document representing the right donated; (b) without
delivery, the donation is void.
o Acceptance by donee may be express or implied, oral or in writing.

(b) MORE Than P5,000 : both donation and acceptance must be in

WRITING. If not put in writing, this donation is void.
o The writing may be in a Public, or Private Instrument.

READ: Florentino Genato et al v. Felisa Genato de Lorenzo, L-24983, May 20, 1968

B. Donation of IMMOVABLES: FORMALITIES Required (Article 749)

Art. 749. In order that the donation of an immovable may be valid, it must be
made in a public document, specifying therein the property donated and the value
of the charges which the donee must satisfy. The acceptance may be made in the
same deed of donation or in a separate public document, but it shall not take
effect unless it is done during the lifetime of the donor. If the acceptance is made
in a separate instrument, the donor shall be notified thereof in an authentic form,
and this step shall be noted in both instruments.

 Form of Donation of an IMMOVABLE property

 Form of Acceptance required in donation of an immovable.

 ARANGOTE vs. MAGLUNOB, 579 SCRA 620

“There are three requisites for the validity of a simple donation of a real property, to
wit:
(1) It must be made in a public instrument; (notarized deed of donation)
(2) It must be accepted, which acceptance may be made either in the same Deed
of Donation, or, in a separate public instrument; and (Form of Acceptance)
(3) If the acceptance is made in a separate instrument, the donor must be notified
in an authentic form, and the same must be noted in both instruments.
(knowledge of acceptance by donor is noted notarized Deed of Donation and
notarized deed of Acceptance)

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 “ Title to an immovable property does not pass from the donor to the donee by
virtue of the Deed of Donation until and unless it has been accepted in a public
instrument and the donor duly notified thereof.”

 Addition - if donee has legal representative: Article 747. Persons who accept
donations in representation of others who may not do so by themselves, shall be
obliged to make the notification and notation of which article 749 speaks.

 Acceptance by Donee must be made during the LIFETIME OF THE

DONOR. (Art. 746)

 The formalities for validity of donation inter vivos in Art. 749, is however not
applicable to other type of donations of immovable if it is:

a.) Donation propter nuptias which are governed by the Statute of Frauds;
b.) Onerous donation which are governed by the provisions on obligation and
contracts.

DONATION MORTIS CAUSA (Art. 728) vs. DONATION INTER VIVOS (Art. 729)

The 2 Kinds of Donation from the Viewpoint of Time Taking Effect:

a. Donation INTER VIVOS (DIV) – donation takes effect upon donor’s lifetime
(Art. 729)
b. Donation MORTIS CAUSA (DMC) – donation takes effect upon donor’s death
(Art. 728)

What is the importance of knowing the difference between the two?

1. As to FORM – which form to use?
• Form determines validity in both donations
• DIV requires formalities in Arts. 748 & 749
• DMC requires holographic or notarial will

2. REVOCABILITY – can donor revoke a donation inter-vivos, mortis causa?

• DIV: Irrevocable; it can only be revoked on legal grounds
• DMC: Revocable anytime, no need for legal grounds; subject to rights of
compulsory or legal heirs

3. ORDER OF REDUCTION or REVOCATION - In case of impairment of legitime,

which is reduced or revoked first - dispositions in donation mortis causa, or
donation inter vivos?

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 • In case of impairment of legitime, donations mortis causa are
reduced ahead of donation inter vivos, unless there is a clear
stipulation to the contrary made by the donor - DIV being
preferred. (principle : “priority in time, is priority in right”)

• Article 911. After the legitime has been determined in accordance with the
three preceding articles, the reduction shall be made as follows:
(1) Donations shall be respected as long as the legitime can be covered,
reducing or annulling, if necessary, the devises or legacies made in the will;

4. EFFECTIVITY & TRANSFER OF OWNERSHIP - Which donation requires the

immediate transfer of ownership of the property donated while the donor is
alive and which one allows only the transfer after death of donor?

 DIV – takes effect during the lifetime of donor and naked title to property is
transferred to the donee upon knowledge of the donor of the acceptance of donee.
(Art. 734)

 DMC - takes effect upon the death of the donor and naked title to property is
transferred to the heir (devisee or legatee) upon death of the donor-decedent and
acceptance of the former. (Art. 728)

Note: Donation Mortis Causa Characteristics

o It is donation mortis causa if the Donor reserves his right to OWNERSHIP and not
its mere use/enjoyment, or the fruits.

o If the donor reserves the POWER TO ALIENATE or dispose of the property, then
the donor reserves the right of ownership. This is a donation mortis causa.

EFFECT OF CERTAIN CONDITIONS IN DONATION INTER VIVOS

( Arts. 727, 730, 731)

What is the effect of illegal or impossible conditions in a donation?

 Art. 727. Illegal or impossible conditions in simple and remuneratory donations
shall be considered as not imposed.

o The donation remains valid, but the illegal or impossible conditions or

provisions are simply disregarded.

o Note: This is different from contracts where the presence of illegal or

impossible conditions renders the obligation itself void. (Art. 1183)
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Will the fixing of an event or the imposition of a suspensive condition, which
may take place beyond the natural expectation of life of the donor, destroy the
nature of the act as a donation inter vivos?
A. NO, unless a contrary intention appears.

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

o Here, the donor intends his donation to take effect during his lifetime. That the
happening of the event or condition of donation may possibly take effect after
after donor’s death, is merely incidental, and not controlling.

o Reason for the law – the retroactive effect of the fulfillment of a suspensive
condition (Art. 1187).

Is a donation that is subject of a resolutory condition of the donor’s survival,

deemed a donation inter vivos?

 Art. 731. When a person donates something, subject to the resolutory condition
of the donor´s survival, there is a donation inter vivos.

o This deals with a donation subject of resolutory condition of the donor´s

survival. The donation takes effect during the lifetime of the donor.

o Example: (1) A donated his farm to his brother B a week before his brain
tumor operation, with a condition that, if he survives the surgery, the
donation will be rescinded automatically, and A will get back the farm.

What legal provisions supplement the law on donation inter vivos?

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

o General legal provisions on obligations and contracts have suppletory

effect on ordinary donations. A donation is a form of gratuitous contract.

o If the government accepts the land donated to it by private persons, the

State impliedly consents to be sued. It cannot hide behind the doctrine that
the State cannot be sued. Otherwise, unfairness would result. In case of

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breach of the conditions of the donation by the State, the donor may go to
court to sue for revocation of the deed of donation. (Santiago v. Republic, L-
48214, Dec.19, 1978).

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