You are on page 1of 43

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

77425 June 19, 1991 THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners, vs. HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO and MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA TOLENTINO, respondents. G.R. No. 77450 June 19, 1991 THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners, vs. HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO and MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA TOLENTINO, respondents. Severino C. Dominguez for petitioner Roman Catholic Bishop of Imus, Cavite. Dolorfino and Dominguez Law Offices for Sps. Ignao. Joselito R. Enriquez for private respondents.

REGALADO, J.:p These two petitions for review on certiorari 1 seek to overturn the decision of the Court of Appeals in CA-G.R. CV No. 05456 2 which reversed and set aside the order of the Regional Trial Court of Imus, Cavite dismissing Civil Case No. 095-84, as well as the order of said respondent court denying petitioner's motions for the reconsideration of its aforesaid decision. On November 29, 1984, private respondents as plaintiffs, filed a complaint for nullification of deed of donation, rescission of contract and reconveyance of real property with damages against petitioners Florencio and Soledad C. Ignao and the Roman Catholic Bishop of Imus, Cavite, together with the Roman Catholic Archbishop

of Manila, before the Regional Trial Court, Branch XX, Imus, Cavite and which was docketed as Civil Case No. 095-84 therein. 3 In their complaint, private respondents alleged that on August 23, 1930, the spouses Eusebio de Castro and Martina Rieta, now both deceased, executed a deed of donation in favor of therein defendant Roman Catholic Archbishop of Manila covering a parcel of land (Lot No. 626, Cadastral Survey of Kawit), located at Kawit, Cavite, containing an area of 964 square meters, more or less. The deed of donation allegedly provides that the donee shall not dispose or sell the property within a period of one hundred (100) years from the execution of the deed of donation, otherwise a violation of such condition would render ipso facto null and void the deed of donation and the property would revert to the estate of the donors. It is further alleged that on or about June 30, 1980, and while still within the prohibitive period to dispose of the property, petitioner Roman Catholic Bishop of Imus, in whose administration all properties within the province of Cavite owned by the Archdiocese of Manila was allegedly transferred on April 26, 1962, executed a deed of absolute sale of the property subject of the donation in favor of petitioners Florencio and Soledad C. Ignao in consideration of the sum of P114,000. 00. As a consequence of the sale, Transfer Certificate of Title No. 115990 was issued by the Register of Deeds of Cavite on November 15, 1980 in the name of said petitioner spouses. What transpired thereafter is narrated by respondent court in its assailed decision. 4 On December 17, 1984, petitioners Florencio Ignao and Soledad C. Ignao filed a motion to dismiss based on the grounds that (1) herein private respondents, as plaintiffs therein, have no legal capacity to sue; and (2) the complaint states no cause of action. On December 19, 1984, petitioner Roman Catholic Bishop of Imus also filed a motion to dismiss on three (3) grounds, the first two (2) grounds of which were identical to that of the motion to dismiss filed by the Ignao spouses, and the third ground being that the cause of action has prescribed. On January 9, 1985, the Roman Catholic Archbishop of Manila likewise filed a motion to dismiss on the ground that he is not a real party in interest and, therefore, the complaint does not state a cause of action against him. After private respondents had filed their oppositions to the said motions to dismiss and the petitioners had countered with their respective replies, with rejoinders thereto by private respondents, the trial court issued an order dated January 31, 1985, dismissing the complaint on the ground that the cause of action has prescribed. 5 Private respondents thereafter appealed to the Court of Appeals raising the issues on (a) whether or not the action for rescission of contracts (deed of donation and deed of sale) has prescribed; and (b) whether or not the dismissal of the action for rescission of contracts (deed of donation and deed of sale) on the ground of prescription carries with it the dismissal of the main action for reconveyance of real property. 6

On December 23, 1986, respondent Court of Appeals, holding that the action has not yet prescibed, rendered a decision in favor of private respondents, with the following dispositive portion: WHEREFORE, the Order of January 31, 1985 dismissing appellants' complaint is SET ASIDE and Civil Case No. 095-84 is hereby ordered REINSTATED and REMANDED to the lower court for further proceedings. No Costs. 7 Petitioners Ignao and the Roman Catholic Bishop of Imus then filed their separate motions for reconsideration which were denied by respondent Court of Appeals in its resolution dated February 6, 1987, 8 hence, the filing of these appeals by certiorari. It is the contention of petitioners that the cause of action of herein private respondents has already prescribed, invoking Article 764 of the Civil Code which provides that "(t)he 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," and that "(t)his action shall prescribe after four years from the non-compliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee's heirs. We do not agree. 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, As aptly stated by the Court of Appeals: By the very express provision in the deed of donation itself that the violation of the condition thereof would render ipso facto null and void the deed of donation, WE are of the opinion that there would be no legal necessity anymore to have the donation judicially declared null and void for the reason that the very deed of donation itself declares it so. For where (sic) it otherwise and that the donors and the donee contemplated a court action during the execution of the deed of donation to have the donation judicially rescinded or declared null and void should the condition be violated, then the phrase reading "would render ipso facto null and void" would not appear in the deed of donation. 9 In support of its aforesaid position, respondent court relied on the rule that a judicial action for rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions. 10 It called attention to the holding that there is nothing in the law that prohibits the parties from entering into an agreement that a violation of the terms of the contract would cause its

cancellation even without court intervention, and that it is not always necessary for the injured party to resort to court for rescission of the contract. 11 It reiterated the doctrine that a judicial action is proper only when there is absence of a special provision granting the power of cancellation. 12 It is true that the aforesaid rules were applied to the contracts involved therein, but we see no reason why the same should not apply to the donation in the present case. Article 732 of the Civil Code provides that donations inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in Title III, Book III on donations. Now, said Title III does not have an explicit provision on the matter of a donation with a resolutory condition and which is subject to an express provision that the same shall be considered ipso facto revoked upon the breach of said resolutory condition imposed in the deed therefor, as is the case of the deed presently in question. The suppletory application of the foregoing doctrinal rulings to the present controversy is consequently justified. The validity of such a stipulation in the deed of donation providing for the automatic reversion of the donated property to the donor upon non-compliance of the condition was upheld in the recent case of De Luna, et al. vs. Abrigo, et al. 13 It was held therein that said stipulation is in the nature of an agreement granting a party the right to rescind a contract unilaterally 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. While what was the subject of that case was an onerous donation which, under Article 733 of the Civil Code is governed by the rules on contracts, since the donation in the case at bar is also subject to the same rules because of its provision on automatic revocation upon the violation of a resolutory condition, from parity of reasons said pronouncements in De Luna pertinently apply. 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. 14 When a deed of donation, as in this case, 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, clauses, terms and conditions not contrary to law, morals, good customs, 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.

On the foregoing ratiocinations, the Court of Appeals committed no error in holding that the cause of action of herein private respondents has not yet prescribed since an action to enforce a written contract prescribes in ten (10) years. 15 It is our view that Article 764 was intended to provide a judicial remedy in case of non-fulfillment or contravention of conditions specified in the deed of donation if and when the parties have not agreed on the automatic revocation of such donation upon the occurrence of the contingency contemplated therein. That is not the situation in the case at bar. Nonetheless, we find that although the action filed by private respondents may not be dismissed by reason of prescription, the same should be dismissed on the ground that private respondents have no cause of action against petitioners. The cause of action of private respondents is based on the alleged breach by petitioners of the resolutory condition in the deed of donation that the property donated should not be sold within a period of one hundred (100) years from the date of execution of the deed of donation. Said condition, in our opinion, constitutes an undue restriction on the rights arising from ownership of petitioners and is, therefore, contrary to public policy. Donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee. Once a donation is accepted, the donee becomes the absolute owner of the property donated. Although the donor may impose certain conditions in the deed of donation, the same must not be contrary to law, morals, good customs, public order and public policy. The condition imposed in the deed of donation in the case before us constitutes a patently unreasonable and undue restriction on the right of the donee to dispose of the property donated, which right is an indispensable attribute of ownership. Such a prohibition against alienation, in order to be valid, must not be perpetual or for an unreasonable period of time. Certain provisions of the Civil Code illustrative of the aforesaid policy may be considered applicable by analogy. Under the third paragraph of Article 494, a donor or testator may prohibit partition for a period which shall not exceed twenty (20) years. Article 870, on its part, declares that the dispositions of the testator declaring all or part of the estate inalienable for more than twenty (20) years are void. It is significant that the provisions therein regarding a testator also necessarily involve, in the main, the devolution of property by gratuitous title hence, as is generally the case of donations, being an act of liberality, the imposition of an unreasonable period of prohibition to alienate the property should be deemed anathema to the basic and actual intent of either the donor or testator. For that reason, the regulatory arm of the law is or must be interposed to prevent an unreasonable departure from the normative policy expressed in the aforesaid Articles 494 and 870 of the Code. In the case at bar, we hold that the prohibition in the deed of donation against the alienation of the property for an entire century, being an unreasonable emasculation and denial of an integral attribute of ownership, should be declared as an illegal or

impossible condition within the contemplation of Article 727 of the Civil Code. Consequently, as specifically stated in said statutory provision, such condition shall be considered as not imposed. No reliance may accordingly be placed on said prohibitory paragraph in the deed of donation. The net result is that, absent said proscription, the deed of sale supposedly constitutive of the cause of action for the nullification of the deed of donation is not in truth violative of the latter hence, for lack of cause of action, the case for private respondents must fail. It may be argued that the validity of such prohibitory provision in the deed of donation was not specifically put in issue in the pleadings of the parties. That may be true, but such oversight or inaction does not prevent this Court from passing upon and resolving the same. It will readily be noted that the provision in the deed of donation against alienation of the land for one hundred (100) years was the very basis for the action to nullify the deed of d donation. At the same time, it was likewise the controverted fundament of the motion to dismiss the case a quo, which motion was sustained by the trial court and set aside by respondent court, both on the issue of prescription. That ruling of respondent court interpreting said provision was assigned as an error in the present petition. While the issue of the validity of the same provision was not squarely raised, it is ineluctably related to petitioner's aforesaid assignment of error since both issues are grounded on and refer to the very same provision. This Court is clothed with ample authority to review matters, even if they are not assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a just decision of the case: 16 Thus, we have held that an unassigned error closely related to an error properly assigned, 17 or upon which the determination of the question properly assigned is dependent, will be considered by the appellate court notwithstanding the failure to assign it as error. 18 Additionally, we have laid down the rule that the remand of the case to the lower court for further reception of evidence is not necessary where the Court is in a position to resolve the dispute based on the records before it. On many occasions, the Court, in the public interest and for the expeditious administration of justice, has resolved actions on the merits instead of remanding them to the trial court for further proceedings, such as where the ends of justice, would not be subserved by the remand of the case. 19 The aforestated considerations obtain in and apply to the present case with respect to the matter of the validity of the resolutory condition in question. WHEREFORE, the judgment of respondent court is SET ASIDE and another judgment is hereby rendered DISMISSING Civil Case No. 095-84 of the Regional Trial Court, Branch XX, Imus, Cavite. SO ORDERED. G.R. No. 125888 August 13, 1998

SPOUSES ERNESTO and EVELYN SICAD, petitioners, vs. COURT OF APPEALS, CATALINO VALDERRAMA, JUDY CRISTINA M. VALDERRAMA and JESUS ANTONIO VALDERRAMA, respondents.

NARVASA, C.J.: The issue raised in the appeal by certiorari at bar centers on the character of a deed of donation executed by the late Aurora Virto DA. de Motinola of the City of Iloilo as either inter vivos or mortis causa. That deed, entitled "DEED OF DONATION INTER VIVOS," 1 was executed by Montinola on December 11, 1979. It named as donees her grandchildren, namely: Catalino Valderrama, Judy Cristina Valderrama and Jesus Antonio Valderrama: and treated of a parcel of land, Lot 3231 of the Cadastral Survey of Panay, located at Brgy. Pawa, Panay, Capiz, covered by Transfer Certificate of Title No. T-16105 in the name of Montinola. The deed also contained the signatures of the donees in acknowledgment of their acceptance of the donation. Montinola's Secretary, Gloria Salvilla, afterwards presented the deed for recording in the Property Registry, and the Register of Deeds cancelled TCT No. T-16105 (the donor's title) and, in its place, issued TCT No. T-16622 on February 7, 1980, in the names of the donees. 2 Montinola however retained the owner's duplicate copy of the new title (No. T16622), as well as the property itself, until she transferred the same ten (10) years later, on July 10, 1990, to the spouses, Ernesto and Evelyn Sicad. On March 12, 1987, Aurora Montinola drew up a deed of revocation of the donation, 3 and caused it to be annotated as an adverse claim on TCT No. T-16622 (issued, as aforestated, in her grandchildren's names). Then, on August 24, 1990, she filed a petition with the Regional Trial Court in Roxas City for the cancellation of said TCT No. T-16622 and the reinstatement of TCT No. T- 16105 (in her name), the case being docketed as Special Proceeding No. 3311. Her petition was founded on the theory that the donation to her three (3) grandchildren was one mortis causa which thus had to comply with the formalities of a will; and since it had not, the donation was void and could not effectively serve as basis for the cancellation of TCT No. T-16105 and the issuance in its place of TCT No. T-16622. The donees (Montinola's grandchildren) opposed the petition. In their opposition dated August 29, 1990, they averred that the donation in their favor was one inter vivos which, having fully complied with the requirements therefor set out in Article 729 of the Civil Code, was perfectly valid and efficacious. They also expressed doubt about the sincerity of their grandmother's intention to recover the donated property, since she had not pursued the matter of its revocation after having it annotated as an adverse claim. The case, originally treated as a special proceeding, was subsequently considered by the lower Court as an ordinary civil action in view of the allegations and issues raised in

the pleadings. Pre-trial was had, followed by trial on the merits which was concluded with the filing of the parties' memoranda. The Trial Court then rendered judgment on March 27, 1991, holding that the donation was indeed one inter vivos, and dismissing Aurora Montinola's petition for lack of merit. 4 The matter of its revocation was not passed upon. Montinola elevated the case to the Court of Appeals, her appeal being docketed as CAG.R. CV No. 33202. She however died on March 10, 1993, 5 while the appeal was pending. Shortly after Montinola's demise, a "Manifestation and Motion" dated March 31, 1993 was filed by Ernesto Sicad and Evelyn Bofill-Sicad, herein petitioners, 6 in which they (a) alleged that they had become the owners of the property covered by TCT No. T-16622 in virtue of a "deed of definite sale dated May 25, 1992" accomplished by Montinola in their favor, which was confirmed by "an affidavit dated November 26, 1997 also executed by the latter, and (b) prayed that they be substituted as appellants and allowed to prosecute the case in their own behalf. Another motion was subsequently presented under date of April 7, 1993, this time by the legal heirs of Aurora Montinola, namely: Ofelia M. de Leon, Estela M. Jaen and Teresita M. Valderama. They declared that they were not interested in pursuing the case, and asked that the appeal be withdrawn. Montinola's counsel opposed the motion. On June 21, 1993, the Court of Appeals issued a Resolution: (a) ordering the substitution of the persons above mentioned Ofelia de Leon, Estela M, Jaen, and Teresita M. Valderama as plaintiffs-appellants in place of the late Aurora Montinola, as well as the joinder of the spouses Ernesto and Evelyn Bofill-Sicad as additional appellants; 7 and (b) denying the motion for the withdrawal of the appeal. On June 30, 1995, the Eighth Division of the Court of Appeals promulgated its Decision on the case affirming the judgment of the Regional Trial Court; 8 and on July 31, 1996, it denied the separate motions for reconsideration filed by Ofelia M. de Leon, Estela M. Jaen, and Teresita M. Valderrama, on the one hand, and by the spouses, Ernest and Evelyn Sicad, on the other. 9 The Sicad Spouses have appealed to this Court; and here, they contend that the following errors were committed by the Appellate Tribunal, to wit: 1) ** in ruling that the donation was inter vivos and in not giving due weight to the revocation of the donation; and 2) ** in not ordering that the case be remanded for further reception of evidence. 10 The Comment filed for private respondents (the donees) under date of December 19, 1996 deals with what they consider the "principal issue in this case ** (i.e.) whether the

donation is mortis causa or inter vivos," and sets forth the argument that the "donor clearly intended to effect the immediate transfer of ownership to the donees." that the prohibition in the deed of donation "against selling the property within ten (10) years after the death of the donor does not indicate that the donation is mortis causa," that the donor's "alleged act of physically keeping the title does not suggest any intention to defer the effectivity of the donation," that the "payment of real property taxes is consistent with the donor's' reservation of the right of usufruct," that the donor's intent "is not determined by ** (her) self-serving post-execution declarations," the "donation was never effectively revoked," and petitioners "have waived their right to question the proceedings in the trial court." 11 The Reply of the Sicad Spouses dated March 14, 1997 reiterates their thesis that the donation was mortis causa, that "the provisions of the deed of donation indicate that it was intended to take effect upon the death of the donor," that "the circumstances surrounding the execution of the deed, and the subsequent actions of the donor incontrovertibly signify the donor's intent to transfer the property only after her death," that the donor "did not intend to give effect to the donation," and that the procedure adopted by the Trial Court in the case was fatally defective. 12 A "Rejoinder" dated April 3, 1997 was then submitted by the Valderramas, traversing the assertions of the Reply.
13

Considering the focus of the opposing parties, and their conflicting theories, on the intention of Aurora Montinola in executing the document entitled "Deed of Donation Inter Vivos," it is needful to review the circumstances of the signing of that document by Montinola, as ostensible donor, and her grandchildren, as ostensible donees. The evidence establishes that on December 11, 1979, when the deed of donation prepared by Montinola's lawyer (Atty. Treas) was read and explained by the latter to the parties, Montinola expressed her wish that the donation take effect only after ten (10) years from her death, and that the deed include a prohibition on the sale of the property for such period. Accordingly, a new proviso was inserted in the deed reading: "however, the donees shall not sell or encumber the properties herein donated within 10 years after the death of the donor." 14 The actuality of the subsequent insertion of this new proviso is apparent on the face of the instrument: the intercalation is easily perceived and identified it was clearly typed on a different machine, and is crammed into the space between the penultimate paragraph of the deed and that immediately preceding it. 15 Not only did Aurora Montinola order the insertion in the deed of that restrictive proviso, but also, after recordation of the deed of donation, she never stopped treating the property as her own. She continued, as explicity authorized in the deed itself, to possess the property, enjoy its fruits and otherwise exercise the rights of dominion, paying the property taxes as they fell due all these she did until she transferred the Property to the Sicad Spouses on July 10, 1990. She did not give the new certificate of title to the ostensible donees but retained it, too, until she delivered it to the Sicads on the occasion of the sale of the property to them. In any event, the delivery of the title to

the donees would have served no useful purpose since, as just stated, they were prohibited to effect any sale or encumbrance thereof for a period of ten (10) years after the ostensible donor's decease. And consistent with these acts denoting retention of ownership of the property was Montinola's openly expressed view that the donation was ineffectual and could not be given effect even after ten (10) years from her death. For this view she sought to obtain judicial approval. She brought suit on August 24, 1990 to cancel TCT No. T-16622 (issued to her grandchildren) premised precisely on the invalidity of the donation for failure to comply with the requisites of testamentary dispositions. Before that, she attempted to undo the conveyance to her grandchildren by executing a deed of revocation of the donation on March 12, 1987, and causing annotation thereof as an adverse claim on said TCT No. T-16622. She also exercised indisputable acts of ownership over said property by executing, as just stated, deeds intended to pass title over it to third parties petitioners herein. 16 As already intimated, the real nature of a deed is to be ascertained by both its language and the intention of the parties as demonstrated by the circumstances attendant upon its execution. In this respect, case law has laid down significant parameters. Thus, in a decision handed down in 1946, 17 this Court construed a deed purporting to be a donation inter vivos to be in truth one mortis causa because it stipulated (like the one now being inquired into) "that all rents, proceeds, fruits, of the donated properties shall remain for the exclusive benefit and disposal of the donor, Margarita David, during her lifetime; and that, without the knowledge and consent of the donor, the donated properties could not be disposed of in any way, whether by sale, mortgage, barter, or in any other way possible," On these essential premises, the Court said, such a donation must be deemed one "mortis causa, because the combined effect of the circumstances surrounding the execution of the deed of donation and of the above-quoted clauses thereof ** (was that) the most essential elements of ownership the right to dispose of the donated properties and the right to enjoy the products, profits, possession remained with Margarita David during her lifetime, and would accrue to the donees only after Margarita David's death." So, too, in the case at bar, did these rights remain with Aurora Montinola during her lifetime, and could not pass to the donees until ten (10) years after her death. In another case decided in 1954 involving a similar issue, Bonsato v. Court of Appeals, 18 this Court emphasized that the decisive characteristics of a donation mortis causa, which it had taken into account in David v. Sison, were that "the donor not only reserved for herself all the fruits of the property allegedly conveyed, but what is even more important, specially provided that "without the knowledge and consent of the donor, the donated properties could not be disposed of in any way,; thereby denying to the transferees the most essential attribute of ownership, the power to dispose of the properties." A donation which purports to be one inter vivos but withholds from the donee the right to dispose of the donated property during the donor's lifetime is in truth one mortis causa. In a donation mortis causa "the right of disposition is not transferred to the donee while the donor is still alive." 19

In the instant case, nothing of any consequence was transferred by the deed of donation in question to Montinola's grandchildren, the ostensible donees. They did not get possession of the property donated. They did not acquire the right to the fruits thereof, or any other right of dominion over the property. More importantly, they did not acquire the right to dispose of the property this would accrue to them only after ten (10) years from Montinola's death. Indeed, they never even laid hands on the certificate of title to the same. They were therefore simply "paper owners" of the donated property. All these circumstances, including, to repeat, the explicit provisions of the deed of donation reserving the exercise of rights of ownership to the donee and prohibiting the sale or encumbrance of the property until ten (10) years after her death ineluctably lead to the conclusion that the donation in question was a donation mortis causa, contemplating a transfer of ownership to the donees only after the donor's demise. The case of Alejandro v. Geraldez 20 cited by the Court of Appeals in support of its challenged judgment is not quite relevant. For in the deed of donation there in issue, there was a partial relinquishment of the right to dispose of the property, in the event only that this became necessary "to defray the expenses and support of the donors." That limited right to dispose of the donated lots, said this Court, "implies that ownership had passed to ** (the donees) by means of the donation and **, therefore, the donation was already effective during the donors' lifetime. That is a characteristic of a donation inter vivos." On the other hand, in the case at bar, the donees were expressly prohibited to make any disposition of any nature or for any purpose whatever during the donor's lifetime, and until ten (10) years after her death a prohibition which, it may be added, makes inapplicable the ruling in Castro v. Court of Appeals, 21 where no such prohibition was imposed, and the donor retained only the usufruct over the property. The Valderramas' argument that the donation is inter vivos in character and that the prohibition against their disposition of the donated property is merely a condition which, if violated, would give cause for its revocation, begs the question. It assumes that they have the right to make a disposition of the property, which they do not. The argument also makes no sense, because if they had the right to dispose of the property and did in fact dispose of it to a third person, the revocation of the donation they speak of would be of no utility or benefit to the donor, since such a revocation would not necessarily result in the restoration of the donor's ownership and enjoyment of the property. It is also error to suppose that the donation under review should be deemed one inter vivos simply because founded on considerations of love and affection. In Alejandro v. Geraldez, supra, 22 this Court also observed that "the fact that the donation is given in consideration of love and affection ** is not a characteristic of donations inter vivos (solely) because transfers mortis causa may also be made for the same reason." Similarly, in Bonsato v. Court of Appeals, supra, this Court opined that the fact "that the conveyance was due to the affection of the donor for the donees and the services rendered by the latter, is of no particular significance in determining whether the deeds, Exhs. "1" and "2," constitute transfers inter vivos or not, because a legacy may have identical motivation." 23

Finally, it is germane to advert to the legal principle in Article 1378 of the Civil Code to the effect that in case of doubt relative to a gratuitous contract, the construction must be that entailing "the least transmission of rights and interests," 24 The donation in question, though denominated inter vivos, is in truth one mortis causa; it is void because the essential requisites for its validity have not been complied with. WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 33202 dated June 30, 1995 as well as the Resolution denying reconsideration thereof, and the Decision of the Regional Trial Court in Special Case No. 3311 are SET ASIDE. The Deed of Donation Inter Vivos (Exh. "A") executed by Aurora Virto Vda. de Montinola on December 11, 1979 in favor of Catalino M. Valderrama, Judy Cristina M. Valderrama and Jesus Antonio M. Valderrama is declared null and void. The Register of Deeds of Roxas City is directed to cancel Transfer Certificate of Title No. T-16622, revive and reinstate Transfer Certificate of Title No. T-16105. SO ORDERED. G.R. No. L-6600 July 30, 1954

HEIRS OF JUAN BONSATO and FELIPE BONSATO, petitioners, vs. COURT OF APPEALS and JOSEFA UTEA, ET AL., respondents. Benedict C. Balderrama for petitioners. Inocencio Rosete for respondents. REYES, J.B.L., J.: This is a petition for review of a decision of the Court of Appeals holding two deeds of donation executed on the first day of December, 1939 by the late Domingo Bonsato in favor of his brother Juan Bonsato and of his nephew Felipe Bonsato, to be void for being donations mortis causa accomplished without the formalities required by law for testamentary dispositions. The case was initiated in the Court of First Instance of Pangasinan (Case No. 8892) on June 27, 1945, by respondents Josefa Utea and other heirs of Domingo Bonsato and his wife Andrea Nacario, both deceased. Their complaint (for annulment and damages) charged that on the first day of December, 1949, Domingo Bonsato, then already a widower, had been induced and deceived into signing two notarial deeds of donations (Exhibits 1 and 2) in favor of his brother Juan Bonsato and of his nephew Felipe Bonsato, respectively, transferring to them several parcels of land covered by Tax Declaration Nos. 5652, 12049, and 12052, situated in the municipalities of Mabini and Burgos, Province of Pangasinan, both donations having been duly accepted in the same act and documents. Plaintiffs likewise charged that the donations were mortis

causa and void for lack of the requisite formalities. The defendants, Juan Bonsato and Felipe Bonsato, answered averring that the donations made in their favor were voluntarily executed in consideration of past services rendered by them to the late Domingo Bonsato; that the same were executed freely without the use of force and violence, misrepresentation or intimidation; and prayed for the dismissal of the case and for damages in the sum of P2,000. After trial, the Court of First Instance rendered its decision on November 13, 1949, finding that the deeds of donation were executed by the donor while the latter was of sound mind, without pressure or intimidation; that the deeds were of donation inter vivos without any condition making their validity or efficacy dependent upon the death of the donor; but as the properties donated were presumptively conjugal, having been acquired during the coverture of Domingo Bonsato and his wife Andrea Nacario, the donations were only valid as to an undivided one-half share in the three parcels of land described therein. Thereupon the plaintiffs duly appealed to the Court of Appeals, assigning as primary error the holding of the court below that the donations are inter vivos; appellants contending that they were mortis causa donations, and invalid because they had not been executed with the formalities required for testamentary disposition. A division of five of the Court of Appeals took the case under consideration, and on January 12, 1953, the majority rendered judgment holding the aforesaid donations to be null and void, because they were donations mortis causa and were executed without the testamentary formalities prescribed by law, and ordered the defendants-appellees Bonsato to surrender the possession of the properties in litigation to the plaintiffsappellants. Two Justices dissented, claiming that the said donations should be considered as donations inter vivos and voted for the affirmance of the decision of the Court of First Instance. The donees then sought a review by this Court. The sole issue submitted to this Court, therefore, is the juridical nature of the donations in question. Both deeds (Exhs. 1 and 2) are couched in identical terms, with the exception of the names of the donees and the number and description of the properties donated. The principal provisions are the following. ESCRITURA DE DONATION Yo, Domingo Bonsato, viudo de Andrea Nacario, mayor de edad, vencino y residente del municipio de Agno, Pangasinan, I.F., por la presente declaro lo siguiente: Que mi osbrino Felipe Bonsato, casado, tambien mayor de edad, vecino de Agno, Pangasinan, I.F., en consideracion de su largo servicio a Domingo Bonsato, por la presente hagor y otorgo una donacion perfecta e irrevocable consumada a favor del citado Felipe Bonsato de dos parcelas de terreno palayero como se describe mas abajo.

(Description omitted) Que durante su menor de edad de mi citado sobrino Felipe Bonsato hasta en estos dias, siempre me ha apreciado y estimado como uno de mis hijos y siempre ha cumplido todas mis ordenes, y por esta razon bajo su pobriza sea movido mi sentimiento para dar una recompensa de sus trabajos y aprecios a mi favor. Que en este de 1939 el donante Domingo Bonsato ha entregado a Felipe Bonsato dichos terrenos donados y arriba citados pero de los productos mientras vive el donante tomara la parte que corresponde como dueo y la parte como inquilino tomara Felipe Bonsato. Que en vista de la vejez del donante, el donatorio Felipe Bonsato tomara posesion inmediatamente de dichos terrenos a su favor. Que despues de la muerte del donante entrara en vigor dicha donancion y el donatario Felipe Bonsato tendra todos los derechos de dichos terrenos en concepto de dueo absoluto de la propiedad libre de toda responsibilidad y gravamen y pueda ejercitar su derecho que crea conveniente. En Testimonio de todo lo Cual, signo la presente en Agno, Pangasinan, I.F., hoy dia 1.0 de Diciembre, 1939. Domingo (His thumbmark) Bonsato Yo, Felipe Bonsato, mayor de edad, casado, Vecino de Mabini, Pangasinan, I.F., declaro por la presente que acepto la donacion anterior otorgado por Domingo Bonsato a mi favor. (Sgd.) Felipe Bonsato SIGNADO Y FIRMADO EN PRESENCIA DE: (Sgd.) Illegible (Sgd.) Illegible

The majority of the special divisions of five of the Court of Appeals that took cognizance of this case relied primarily on the last paragraph, stressing the passage: Que despues de la muerte del donante entrara en vigor dicha donacion ...

while the minority opinion lay emphasis on the second paragraph, wherein the donor states that he makes "perfect, irrevocable, and consummated donation" of the properties to the respective donees, petitioners herein. Strictly speaking, the issue is whether the documents in question embody valid donations, or else legacies void for failure to observe the formalities of wills (testaments). Despite the widespread use of the term "donations mortis causa," it is well-established at present that the Civil Code of 1889, in its Art. 620, broke away from the Roman Law tradition, and followed the French doctrine that no one may both donate and retain ("donner at retenir ne vaut"), by merging the erstwhile donations mortis causa with the testamentary dispositions, thus suppressing said donations as an independent legal concept. ART. 620. Donations which are to become effective upon the death of the donor partake of the nature of disposals of property by will and shall be governed by the rules established for testamentary successions. Commenting on this article, Mucius Scaevola (Codigo Civl, Vol. XI, 2 parte, pp. 573, 575 says: No ha mucho formulabamos esta pregunta: Subsisten las donaciones mortis causa como institucion independiente, con propia autonomia y propio compo jurisdiccional? La respuesta debe ser negativa. xxx xxx xxx

Las donaciones mortis causa se consevan en el Codigo como se conserva un cuerpo fosil en las vitrinas de un Museo. La asimilacion entre las donaciones por causa de muerte y las transmissiones por testamento es perfecta. Manresa, in his Commentaries (5th ed.), Vol. V. p. 83, expresses the same opinion: "La disposicion del articulo 620 significa, por lo tanto: 1.. o, que han desaparecido las llamas antes donaciones mortis causa por lo que el Codigo no se ocupa de ellas en absoluto; 2. o, que toda disposicion de bienes para despues de la muerte sigue las reglas establecidas para la sucesion testamentaria. And Castan, in his Derecho Civil, Vol. IV (7th Ed., 1953), p. 176, reiterates: (b) Subsisten hoy en nuestro derecho las donaciones mortis causa? De lo que acabamos de decir se desprende que las donaciones mortis causa han perdido en el Codigo Civil su caracter distintivo y su naturaleza y hay que considerarlos hoy como una institucion suprimida, refundida en el legado ... . Las tesis de la desaparcion de las donaciones mortis causa en

nuestro Codigo Civil, acusada ya precedentemente por el pryecto de 1851 puede decirse que constituye una communis opinion entre nuestros expositores, incluso los mas recientes. We have insisted on this phase of the legal theory in order to emphasize that the term "donations mortis causa" as commonly employed is merely a convenient name to designate those dispositions of property that are void when made in the form of donations. Did the late Domingo Bonsato make donations inter vivos or dispositions post mortem in favor of the petitioners herein? If the latter, then the documents should reveal any or all of the following characteristics: (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 (Vidal vs. Posadas, 58 Phil., 108; Guzman vs. Ibea, 67 Phil., 633); (2) That before his 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 (Bautista vs. Sabiniano, G. R. L-4326, November 18, 1952); (3) That the transfer should be void if the transferor should survive the transferee. None of these characteristics is discernible in the deeds of donation, Exhibits 1 and 2, executed by the late Domingo Bonsato. The donor only reserved for himself, during his lifetime, the owner's share of the fruits or produce ("de los productos mientras viva el donante tomara la parte que corresponde como dueo"), a reservation that would be unnecessary if the ownership of the donated property remained with the donor. Most significant is the absence of stipulation that the donor could revoke the donations; on the contrary, the deeds expressly declare them to be "irrevocable", a quality absolutely incompatible with the idea of conveyances mortis causa where revocability is of the essence of the act, to the extent that a testator can not lawfully waive or restrict his right of revocation (Old Civil Code, Art. 737; New Civil Code, Art. 828). It is true that the last paragraph in each donation contains the phrase "that after the death of the donor the aforesaid donation shall become effective" (que despues de la muerte del donante entrara en vigor dicha donacion"). However, said expression must be construed together with the rest of the paragraph, and thus taken, its meaning clearly appears to be that after the donor's death, the donation will take effect so as to make the donees the absolute owners of the donated property, free from all liens and encumbrances; for it must be remembered that the donor reserved for himself a share of the fruits of the land donated. Such reservation constituted a charge or encumbrance that would disappear upon the donor's death, when full title would become vested in the donees.

Que despues de la muerte del donante entrara en vigor dicha donacion y el donatario Felipe Bonsato tendra todos derechos de dichos terrenos en concepto de dueo absoluto de la propiedad libre de toda responsibilidad y gravamen y puede ejercitar su derecho que crea conveniente. Any other interpretation of this paragraph would cause it to conflict with the irrevocability of the donation and its consummated character, as expressed in the first part of the deeds of donation, a conflict that should be avoided (Civ. Code of 1889, Art. 1285; New Civil Code, Art. 1374; Rule 123, sec. 59, Rules of Court). Que mi sobrino FILIPINO BONSATO, casado, tambien mayor de edad, vecino de Agno, Pangasinan, I. F., en consideracion de su largo servicio a Domingo Bonsato, por la presente hago y otorgo una donacion perfecta e irrevocable consumada a favor del citado Felipe Bonsato de dos parcelas de terreno palayero como se describe mas abajo. In the cases held by this Court to be transfers mortis causa and declared invalid for not having been executed with the formalities of testaments, the circumstances clearly indicated the transferor's intention to defer the passing of title until after his death. Thus, in Cario vs. Abaya, 70 Phil., 182, not only were the properties not to be given until thirty days after the death of the last of the donors, but the deed also referred to the donees as "those who had been mentioned to inherit from us", the verb "to inherit" clearly implying the acquisition of property only from and after the death of the alleged donors. In Bautista vs. Sabiniano, 49 Off. Gaz., 549; 92 Phil., 244, the alleged donor expressly reserved the right to dispose of the properties conveyed at any time before his death, and limited the donation "to whatever property or properties left undisposed by me during my lifetime", thus clearly retaining their ownership until his death. While in David vs. Sison, 42 Off. Gaz. (Dec, 1946) 3155, the donor not only reserved for herself all the fruits of the property allegedly conveyed, but what is even more important, specially provided that "without the knowledge and consent of the donor, the donated properties could not be disposed of in any way", thereby denying to the transferees the most essential attribute of ownership, the power to dispose of the properties. No similar restrictions are found in the deeds of donation involved in this appeal. That the conveyance was due to the affection of the donor for the donees and the services rendered by the latter, is of no particular significance in determining whether the deeds Exhibits 1 and 2 constitute transfers inter vivos or not, because a legacy may have identical motivation. Nevertheless, the existence of such consideration corroborates the express irrevocability of the transfers and the absence of any reservation by the donor of title to, or control over, the properties donated, and reinforces the conclusion that the act was inter vivos. Hence, it was error for the Court of Appeals to declare that Exhibits 1 and 2 were invalid because the formalities of testaments were not observed. Being donations inter vivos, the solemnities required for them were those prescribed by Article 633 of the Civil Code of 1889 (reproduced in Art. 749 of the new Code, and it is undisputed that these were duly complied with. As the properties involved were conjugal, the Court of First Instance correctly decided that the

donations could not affect the half interest inherited by the respondents Josefa Utea, et al. from the predeceased wife of the donor. The decision of the Court of Appeals is reversed, and that of the Court of First Instance is revived and given effect. Costs against respondents. G.R. No. L-33849 August 18, 1977 TEODORICO ALEJANDRO, IRENEO POLICARPIO, VIRGINIA ALEJANDRO, MARIA ALEJANDRO, SALUD ALEJANDRO, EMILIA ALEJANDRO, FLORENCIO ALEJANDRO and DIONISIA ALEJANDRO, petitioners, vs. HON. AMBROSIO M. GERALDEZ, Presiding Judge, Court of First Instance of Bulacan, Branch V, Sta. Maria, ANDREA DIAZ and ANGEL DIAZ, respondents. G.R. No. L-33968 August 18, 1977 ANDREA DIAZ, petitioner, vs. HON. AMBROSIO M. GERALDEZ, in his capacity as Presiding Judge of the Court of First Instance of Bulacan, Branch V, TEODORICO ALEJANDRO, IRENEO POLICARPIO, VIRGINIA ALEJANDRO, MARIA ALEJANDRO, EMILIA ALEJANDRO, FLORENCIO ALEJANDRO and DIONISIA ALEJANDRO, respondents. Ponciano G. Hernandez for Teodorico Alejandro, et al. Porfirio Villaroman for Andrea Diaz and Angel Diaz.

AQUINO. J. This is a case about donations inter vivos and mortis causa . The bone of contention is Lot No. 2502 of the Lolomboy Friar Lands Estate with an area of 5,678 square meters, situated in Sta. Maria, Bulacan and covered by Transfer Certificate of Title No. 7336. The facts are as follows: On January 20, 1949 the spouses Gabino (Gavino) Diaz and Severa Mendoza, their daughter-in-law Regina Fernando and their three children, Olimpia Diaz, Angel Diaz and Andrea Diaz, executed a deed of donation covering eight lots of the Lolomboy Friar Lands Estate, owned by the Diaz spouses, located at Barrio Parada, Sta. Maria, Bulacan. The deed reads as follows: KASULATAN NG PAGKAKALOOB (A DEED OF DONATION) ALAMIN NG LAHAT NG MAKATUTUNGHAY NITO:

Ang pagkakaloob (donation) na ito, ginawa at pinagtibay dito sa municipio ng Sta. Maria, lalawigan ng Bulacan, Pilipinas, ngayong ika 20 ng Enero, 1949, ng mag-asawang GABINO DIAZ at SEVERA MENDOZA, filipinos, may mga sapat na gulang, naninirahan sa nayon ng Parada, Sta. Maria, Bulacan na dito'y kinikilalang NAGKALOOB (DONORS), sa kapakanan nila REGINA FERNANDO, filipina, may sapat na gulang, viuda; OLIMPIA DIAZ, filipina, may sapat na gulang, kasal kay Teodorico Alejandro, ANGEL DIAZ, filipino, may sapat na gulang, kasal kay Catalina Marcelo, at ANDREA DIAZ, filipina, may sapat na gulang, kasal kay Perfecto Marcelo, mga naninirahan sa nayon ng Parada, Sta. Maria, Bulacan, na dito'y kinikilalang PINAGKALOOBAN (DONEES). PAGPAPATUNAY: Na ang Nagkaloob (DONORS) ay siyang mayari, at kamayari at namomosision sa kasalukuyan ng mga parcelang lupa kasama ang mga kagalingan na nasa lugar ng Parada, Sta. Maria, Bulacan, mapagkikilala sa paraang mga sumusunod (description and statements as to registration are omitted): 1. TCT No. 7336, Lot No. 2502, 5,678 square meters. 2. TCT No. 10998, Lot No. 2485, 640 square meters. 3. TCT No. 10840, Lot No. 2377,16,600 square meters. 4. TCT No. 10997, Lot No. 2448,12,478 square meters. 5. TCT No. 2051, Lot No. 4168, 1,522 square meters. 6. TCT No. 17960, Lot No. 2522, 3,418 square meters. 7. TCT No. 17961, Lot No. 2521, 715 square meters. 8. TCT No. 21453, Lot No. 2634, 8,162 square meters. Na dahil at alang-alang sa pagmamahal at masuyong pagtingin na taglay ng NAGKAKALOOB (DONORS) sa Pinagkakalooban (DONEES) gayun din sa tapat at mahalagang paglilingkod noong mga lumipas na panahon na ginawa ng huli sa una, ang nabanggit na nagkakaloob sa pamamagitan ng kasulatang ito ng pagkakaloob (Donation) ay buong pusong inililipat at lubos na ibinibigay sa nasabing pinagkakalooban ang lupang binabanggit at makikilala sa unahan nito, laya sa ano mang sagutin at pagkakautang, katulad nito:

(a) Na ang lupang sinasaysay sa Lote No. 2502 o Titulo No. 7336, (No. 1) sa unahan nito ay hinati sa dalawang parte ang unang parte (1/2) na nasa bandang Kanluran (West) ay ipinagkakaloob ng mag-asawang Gabino Diaz at Severa Mendoza sa kanilang anak na si Angel Diaz, kasal kay Catalina Marcelo; at ang ikalawang parte (1/2) na nasa 'bandang silangan (East) ay ipinagkakaloob ng mag-asawang Gabino Diaz at Severa Mendoza sa kanilang anak na si Andrea Diaz, kasal kay Perfecto Marcelo." (Note Some dispositions are not reproduced verbatim but are merely summarized because they are not involved in this case. Paragraph (a) above is the one involved herein). (b) Lot No. 2485, TCT No.10998, to Regina Fernando (daughter- in-law of the donors and widow of their deceased son, Miguel Diaz) and Olimpia Diaz in equal shares. (c) Lot No. 2377, TCT No. 10840, 1/3 to Angel Diaz, 1/3 to Andrea Diaz, and 1/3 "ay inilalaan o inihahanda ng mag-asawang Gabino Diaz at Severa Mendoza sa kanilang sariling kapakanan o mga gastos nila. (d) Lot No. 2448, TCT No. 10997 to Olimpia Diaz sa condicion na pagkakalooban ni Olimpia Diaz si Crisanta de la Cruz, asawa ni Alejandro - - - - - (sic) sakaling si Crisanta ay mamatay ng halagang isang daang piso (P100), bilang gastos sa libing." (e) Na ang lupang-solar na sinasaysay sa Lote No. 4168 o Titulo No. 2051 (No. 5); lupang-bukid na sinasaysay sa Lote No. 25?2 o Titulo No. 17960 (No. 6); at lupang-bukid na sinasaysay sa Lote No. 2521 o Titulo No. 17961 (No. 7) sa unahan nito ay inilalaan o inihahanda ng magasawang Gabino Diaz at Severa Mendoza sa kanilang sariling kapakanan o mga gastos nila. (f) Lot No. 2643, TCT No. 21453, to Regina Fernando and her children with the deceased Miguel Diaz in whose name the said Lot was already registered. Na kaming mga pinagkakalooban (DONEES) na sila Regina Fernando, Olimpia Diaz, Angel Diaz at Andrea Diaz ay tinatanggap namin ng buong kasiyahang loob ang pagkakaloob (Donation.) na ito, at sa pamamagitan nito ay kinikilala, pinahahalagahan, at lubos na pinasasalamatan namin ang kagandahang loob at paglingap na ipinakita at ginawa ng nagkakaloob (Donors). AT SA WAKAS, ang pagkakaloob na ito (DONATION), ay sumasailalim sa paraang mga sumusunod:

1. Ang mga Pinagkakalooban (Donatarios) na sila Regina Fernando, Olimpia Diaz, Angel Diaz, at Andrea Diaz, siyang nakaaalam sa mga gastos sa pagkakasakit at sa libing ng NAGKALOOB (DONANTE); 2. Na ang mga Pinagkalooban (DONATARIOS) ay hindi maaaring makapagbili sa pangatlong tao ng nasabing mga pagaari samantalang ang nagkaloob (Donante) ay buhay Datapwa't kung ang pagbibiling gagawin ay upang malunasan ang mga gastos at menitencion ng Nagkaloob (Donante) samakatuwid ang nasabing pagbibili ay matuwid; 3. Gayun din, samantalang kaming mag-asawang Gabino Diaz at Severa Mendoza ay buhay, patuloy ang aming pamamahala, karapatan, at pagkamay-ari sa mga nasabing pagaari na sinasaysay sa unahan nito na pag-aari namin; ngunit sakaling kami ay bawian ng buhay ng Panginoong Dios at mamatay na ang mga karapatan at pagkamay-ari ng bawa't Pinagkalooban (Donatarios) sa bawa't pag-aari na nauukol sa bawa't isa ay may lubos na kapangyarihan." SA KATUNAYAN NG LAHAT, linagdaan namin ang kasulatang ito, dito sa Sta. Maria, Bulacan, ngayon ika 20 ng Enero, 1949, sa patibay ng dalawang sacsing kaharap. Signature Thumbmark Signature GABINO DIAZ SEVERA MENDOZA REGINA FERNANDO Thumbmark Signature Signature OLIMPIA DIAZ ANGEL DIAZ ANDREA DIAZ (Acknowledgment signed by Notary Celedonio Reyes is omitted) Gabino Diaz died in 1962. On October 20, 1964 Severa Mendoza and her two children, Andrea Diaz and Angel Diaz, executed a deed of donation denominated as "Kasulatan ng Pagbibigay na Magkakabisa Pagkamatay (Donation Mortis causa )" over one-half of Lot No. 2377-A, which is a portion of Lot No. 2377 of the Lolomboy Friar Lands Estate (which in turn is item 3 or [c] in the 1949 deed of donation already mentioned). In that deed of donation, Severa Mendoza donated to Andrea Diaz her one-half share in Lot 2377-A, which one-half share is Identified as Lot 2377-A-1, on condition that Andrea Diaz would bear the funeral expenses to be incurred after the donor's death. She died in 1964. It should be noted that the other one-half share in Lot 2377-A or Lot No. 2377-A-2 was previously adjudicated to Angel Diaz because he defrayed the funeral expenses on the occasion of the death of Gabino Diaz. On May 12, 1970 Andrea Diaz sued her brother, Angel Diaz, in the Court of First Instance of Bulacan, Sta. Maria Branch V for the partition of Lots Nos. 2377-A and 2502 (Civil Case No. SM-357). Teodorico Alejandro, the surviving spouse of Olimpia Diaz, and their children intervened in the said case. They claimed one-third of Lot No. 2502. Angel Diaz alleged in his answer that he had. been occupying his share of Lot No. 2502

"for more than twenty years". The intervenors claimed that the 1949 donation was a void mortis causa disposition. On March 15, 1971 the lower court rendered a partial decision with respect to Lot No. 2377-A. The case was continued with respect to Lot No. 2502 which is item No. 1 or (a) in the 1949 deed of donation. The record does not show what happened to the other six lots mentioned in the deed of donation. The trial court in its decision of June 30, 1971 held that the said deed of donation was a donation mortis causa because the ownership of the properties donated did not pass to the donees during the donors' lifetime but was transmitted to the donees only "upon the death of the donors". However, it sustained the division of Lot No. 2502 into two equal parts between Angel Diaz and Andrea Diaz on the theory that the said deed of donation was effective "as an extra-judicial partition among the parents and their children. Consequently, the Alejandro intervenors were not given any share in Lot No. 2502. Angel Diaz and the intervenors were ordered to pay Andrea Diaz "attorney's fees of P1,000 each or a total of P2,000". The Alejandro intervenors filed a motion for reconsideration, On July 16, 1971 the trial court denied that motion but eliminated the attorney's fees. Andrea Diaz and the Alejandro intervenors filed separate appeals to this Court under Republic Act No. 5440. Andrea Diaz contends that the 1949 deed of donation is a valid donation inter vivos and that the trial court erred in deleting the award for attorney's fees. The Alejandro intervenors contend that the said donation is mortis causa ; that they are entitled to a one-third share in Lot No, 2502, and that the trial court erred in characterizing the deed as a valid partition. In the ultimate analysis, the appeal involves the issue of whether the Alejandro intervenors should be awarded one-third of Lot No. 2502, or 1,892 square meters thereof, as intestate heirs of the Diaz spouses. To resolve that issue, it is necessary to determine whether the deed of donation is inter vivos or mortis causa. A brief exposition on the nature of donation inter vivos and mortis causa may facilitate the resolution of that issue. Many legal battles have been fought on the question of whether a particular deed is an inter vivos or mortis causa donation. The copious jurisprudence on that point sheds light on that vexed question. The Civil Code provides: ART. 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620). 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 a donation inter vivos. The fruits of

the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. (n) 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. (n) ART. 731. When a person donates something subject to the resolutory condition of the donor's survival, there is a donation inter vivos. (n) 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. (621)." Nature of donations inter vivos and mortis causa transfers . Before tackling the issues raised in this appeal, it is necessary to have some familiarization with the distinctions between donations inter vivos and mortis causa because the Code prescribes different formalities for the two kinds of donations. An utter vivos donation of real property must be evidenced by a public document and should be accepted by the donee in the same deed of donation or in a separate instrument. In the latter case, the donor should be notified of the acceptance in an authentic form and that step should be noted in both instruments. (Art. 749, Civil Code. As to inter vivos donation of personal property, see art. 748). On the other hand, a transfer mortis causa should be embodied in a last will and testament (Art. 728, supra). It should not be called donation mortis causa . It is in reality a legacy (5 Manresa, Codigo Civil, 6th Ed., p. 107). If not embodied in a valid will, the donation is void (Narag vs. Cecilio, 109 Phil. 299; Aznar vs. Sucilla 102 Phil. 902; Tuazon vs. Posadas, 54 Phil. 289; Serrano vs. Solomon, 105 Phil. 998, 1002). This Court advised notaries to apprise donors of the necessity of clearly specifying whether, notwithstanding the donation, they wish to retain the right to control and dispose at will of the property before their death, without the consent or intervention of the beneficiary, since the reservation of such right would be a conclusive indication that the transfer' would be effective only at the donor's death, and, therefore, the formalities of testaments should be observed; while, a converso, the express waiver of the right of free disposition would place the inter vivos character of the donation beyond dispute (Cuevas vs. Cuevas, 98 Phil. 68,72). From the aforequoted articles 728 to 732, it is evident that it is the time of effectivity (aside from the form) which distinguishes a donation inter vivos from a donation mortis causa . And the effectivity is determined by the time when the full or naked ownership (dominum plenum or dominium directum) of the donated properties is transmitted to the donees. (See Lopez vs. Olbes, 15 Phil. 540; Gonzales and Fuster Fabra vs. Gonzales

Mondragon, 35 Phil. 105). The execution of a public instrument is a mode of delivery or tradition (Ortiz vs. Court of Appeals, 97 Phil. 46). If the donation is made in contemplation of the donor's death, meaning that the full or naked ownership of the donated properties will pass to the donee only because of the donor's death, then it is at that time that the donation takes effect, and it is a donation mortis causa which should be embodied in a last will and testament (Bonsato vs. Court of Appeals, 95 Phil. 481). But if the donation takes effect during the donor's lifetime or independently of the donor's death, meaning that the full or naked ownership ( nuda proprietas) ) of the donated properties passes to the donee during the donor's lifetime, not by reason of his death but because of the deed of donation, then the donation is inter vivos (Castro vs. Court of Appeals, L-20122, April 28, 1969, 27 SCRA 1076). The effectivity of the donation should be ascertained from the deed of donation and the circumstances surrounding its execution. Where, for example, it is apparent from the document of trust that the donee's acquisition of the property or right accrued immediately upon the effectivity of the instrument and not upon the donor's death, the donation is inter vivos (Kiene vs. Collector of Internal Revenue, 97 Phil. 352). There used to be a prevailing notion, spawned by a study of Roman Law, that the Civil Code recognizes a donation mortis as a juridical act in contraposition to a donation inter vivos. That impression persisted because the implications of article 620 of the Spanish Civil Code, now article 728, that "las donaciones que hayan de producir sus efectos pro muerte del donante participan de la naturaleza de las disposiciones de ultima voluntad, y se regiran por las reglas establecidas en el capitulo de la sucesion testamentaria" had not been fully expounded in the law schools. Notaries assumed that the donation mortis causa of the Roman Law was incorporated into the Civil Code. As explained by Justice J. B. L. Reyes in the Bonsato case, supra, article 620 broke away from the Roman Law tradition and followed the French doctrine that no one may both donate and retain. Article 620 merged donations mortis causa with testamentary dispositions and thus suppressed the said donations as an independent legal concept. Castan Tobenas says: (b) Subsisten hoy en nuestro Derecho las donaciones mortis causa ? De lo que acabamos de decir se desprende que las donaciones mortis causa han perdido en el Codigo civil su caracter distintivo y su naturaleza, y hay que considerarlas hoy como una institucion suspirimida, refundida en la del legado. ... La tesis de la desaparicion de las donaciones mortis causa en nuestro Codigo Civil, acusada ya precedentemente por el projecto de 1851, puede decirse que constituye una communis opinio entre nuestros expositores, incluso los mas recientes. ...

Garcia Goyena, comentando dicho proyecto, decia que la Comision se habia adherido al acuerdo de suprimir las donaciones mortis causa , seguido por casi todos los Codigos modernos. Las donaciones mortis causa a;adia-eran una especie de montsruo entre los contratos y ultimas voluntades; las algarabia del Derecho romano y patrio sobre los puntos de semenjanza y disparidad de estas donaciones con los pactos y legados no podia producir sino dudas, confusion y pleitos en los rarisimos casos que ocurriesen por la dificuldad de apreciar y fijar sus verdaderos caracteres' "(4 Derecho Civil Espanol, Comun y Foral, 8th Ed., 1956, pp. 182-3). Manresa is more explicit. He says that "la disposicion del articulo 620 significa, por lo tanto: (1) que han desaperacido las llamadas antes donaciones mortis causa , por lo que el Codigo no se ocupa de ellas en absoluto; (2) que toda disposicion de bienes para despues de la muerte sigue las reglas establecidas para la sucesion testamentaria" (5 Comentarios al Codigo Civil Espanol, 6th Ed., p.107). Note that the Civil Code does not use the term donation mortis causa . ( Section 1536 of the Revised Administrative Code in imposing the inheritance tax uses the term "gift mortis causa ").
lwphl@it

What are the distinguishing characteristics of a donation mortis causa? Justice Reyes in the Bonsato case says that in a disposition post mortem (1) the transfer conveys no title or ownership to the transferee before the death of the tansferor, or the transferor (meaning testator) retains the ownership, full or naked ( domino absoluto or nuda proprietas) (Vidal vs. Posadas, 58 Phil. 108; De Guzman vs. Ibea, 67 Phil. 633; (2) the transfer is revocable before the transferor's death and revocabllity may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed (Bautista vs. Sabiniano, 92 Phil. 244), and (3) the transfer would be void if the transferor survived the transferee. In other words, in a donation mortis causa it is the donor's death that determines that acquisition of, or the right to, the property donated, and the donation is revocable at the donor's will, Where the donation took effect immediately upon the donee's acceptance thereof and it was subject to the resolutory condition that the donation would be revoked if the donee did not give the donor a certain quantity of rice or a sum of money, the donation is inter vivos (Zapanta vs. Posadas, Jr., 52 Phil. 557). Justice Reyes in the subsequent cast of Puig vs. Penaflorida, L-15939, November 29, 1965, 15 SCRA 276, synthesized the rules as follows: 1. That the Civil Code recognizes only gratuitous transfers of property which are effected by means of donations inter vivos or by last will and testament executed with the requisite legal formalities. 2. That in inter vivos donations the act is immediately operative even if the material or physical deliver (execution) of the property may be deferred

until the donor's death, whereas, in a testamentary disposition, nothing is conveyed to the grantee and nothing is acquired by him until the death of the grantortestator. The disposition is ambulatory and not final. 3. That in a mortis causa disposition the conveyance or alienation should be (expressly or by necessary implication) revocable ad nutum or at the discretion of the grantor or so called donor if he changes his mind (Bautista vs. Saniniano, 92 Phil. 244). 4. That, consequently, the specification in the deed of the cases whereby the act may be revoked by the donor indicates that the donation is inter vivos and not a mortis causa disposition (Zapanta vs. Posadas, 52 Phil. 557). 5. That the designation of the donation as mortis causa , or a provision in the deed to the effect the donation "is to take effect at the death of the donor", is not a controlling criterion because those statements are to be construed together with the rest of the instrument in order to give effect to the real intent of the transferor (Laureta vs. Mata and Mango, 44 Phil. 668; Concepcion vs. Concepcion, 91 Phil. 823; Cuevas vs. Cuevas, 98 Phil. 68). 6. That a conveyance for an onerous consideration is governed by the rules of contracts and not by those of donations or testaments (Carlos vs. Ramil, 20 Phil. 183; Manalo vs. De Mesa, 29 Phil. 495). 7. That in case of doubt the conveyance should be deemed a donation inter vivos rather than mortis causa , in order to avoid uncertainty as to the ownership of the property subject of the deed. It may be added that the fact that the donation is given in consideration of love and affection or past or future services is not a characteristic of donations inter vivos because transfers mortis causa may be made also for those reasons. There is difficulty in applying the distinctions to controversial cases because it is not easy sometimes to ascertain when the donation takes effect or when the full or naked title passes to the transferee. As Manresa observes, "when the time fixed for the commencement of the enjoyment of the property donated be at the death of the donor, or when the suspensive condition is related to his death, confusion might arise" (5 Codigo Civil, 6th Ed., p. 108). The existence in the deed of donation of conflicting stipulations as to its effectivity may generate doubt as to the donor's intention and as to the nature of the donation (Concepcion vs. Concepcion, 91 Phil. 823). Where the donor declared in the deed that the conveyance was mortis causa and forbade the registration of the deed before her death, the clear inference is that the conveyance was not intended to produce any definitive effect nor to pass any interest to

the grantee except after her death. In such a case, the grantor's reservation of the right to dispose of the property during her lifetime means that the transfer is not binding on her until she dies. It does not mean that the title passed to the grantee during her lifetime. (Ubalde Puig vs. Magbanua Penaflorida, L-15939, Resolution of January 31, 1966, 16 SCRA 136). In the following cases, the conveyance was considered a void mortis causa transfer because it was not cast in the form of a last will and testament as required in article 728, formerly article 620: (a) Where it was stated in the deed of donation that the donor wanted to give the donee something "to take effect after his death" and that "this donation shall produce effect only by and because of the death of the donor, the property herein donated to pass title after the donor's death" (Howard vs. Padilla, 96 Phil. 983). In the Padilla case the donation was regarded as mortis causa although the donated property was delivered to the donee upon the execution of the deed and although the donation was accepted in the same deed. (b) Where it was provided that the donated properties would be given to the donees after the expiration of thirty days from the donor's death, the grant was made in the future tense, and the word "inherit" was used (Carino vs. Abaya, 70 Phil. 182). (c) Where the donor has the right to dispose of all the donated properties and the products thereof. Such reservation is tantamount to a reservation of the right to revoke the donation (Bautista vs. Sabiniano 92 Phil. 244). (d) Where the circumstances surrounding the execution of the deed of donation reveal that the donation could not have taken effect before the donor's death and the rights to dispose of the donated properties and to enjoy the fruits remained with the donor during her lifetime (David vs. Sison, 76 Phil. 418). But if the deed of donation makes an actual conveyance of the property to the donee, subject to a life estate in the donors, the donation is is inter vivos (Guarin vs. De Vera, 100 Phil. 1100). Articles 729, 730 and 731 have to some extent dissipated the confusion surrounding the two kinds of donation. The rule in article 729 is a crystallization of the doctrine announced in decided cases. A clear instance where the donor made an inter vivos donation is found in De Guzman vs. Ibea 67 Phil. 633. In that case, it was provided in the deed that the donor donated to the donee certain properties so that the donee "may hold the same as her own and always" and that the donee would administer the lands donated and deliver the fruits thereof to the donor, as long as the donor was alive, but upon the donor's death the said fruits would belong to the donee. It was held that the naked ownership was conveyed to

the donee upon the execution of the deed of donation and, therefore, the donation became effective during the donor's lifetime. In Sambaan vs. Villanueva, 71 Phil. 303, the deed of donation, as in Balaqui vs. Dongso, 53 Phil. 673, contained conflicting provision. It was provided in the deed that the donation was made "en consideracion al afecto y carino" of the donor for the donee but that the donation "surtira efectos despues de ocurrida mi muerte (donor's death). That donation was held to be inter vivos because death was not the consideration for the donation but rather the donor's love and affection for the donee. The stipulation that the properties would be delivered only after the donor's death was regarded as a mere modality of the contract which did not change its inter vivos character. The donor had stated in the deed that he was donating, ceding and transferring the donated properties to the donee. (See Joya vs. Tiongco, 71 Phil. 379). In Laureta vs. Mata and Magno, 44 Phil. 668 the deed of donation provided that the donor was donating mortis causa certain properties as a reward for the donee's services to the donor and as a token of the donor's affection for him. The donation was made under the condition that "the donee cannot take possession of the properties donated before the death of the donor"; that the ' donee should cause to be held annually masses for the repose of the donor's soul, and that he should defray the expenses for the donor's funeral. It was held that the said donation was inter vivos despite the statement in the deed that it was mortis causa . The donation was construed as a conveyance in praesenti ("a present grant of a future interest") because it conveyed to the donee the title to the properties donated "subject only to the life estate of the donor" and because the conveyance took effect upon the making and delivery of the deed. The acceptance of the donation was a circumstance which was taken into account in characterizing the donation as inter vivos. In Balacui vs. Dongso, supra, the deed of donation involved was more confusing than that found in the Laureta case. In the Balaqui case, it was provided in the deed that the donation was made in consideration of the services rendered to the donor by the donee; that "title" to the donated properties would not pass to the donee during the donor's lifetime, and that it would be only upon the donor's death that the donee would become the "true owner" of the donated properties. However, there was the stipulation that the donor bound herself to answer to the donee for the property donated and that she warranted that nobody would disturb or question the donee's right. Notwithstanding the provision in the deed that it was only after the donor's death when the 'title' to the donated properties would pass to the donee and when the donee would become the owner thereof, it was held in the Balaqui case that the donation was inter vivos.

It was noted in that case that the donor, in making a warranty, implied that the title had already been conveyed to the donee upon the execution of the deed and that the donor merely reserved to herself the "possesion and usufruct" of the donated properties. In Concepcion vs. Concepcion, 91 Phil. 823, it was provided in the deed of donation, which was also styled as mortis causa , that the donation was made in consideration of the services rendered by the donee to the donor and of the donor's affection for the donee; that the donor had reserved what was necessary for his maintenance, and that the donation "ha de producir efectos solamente por muerte de la donante". It was ruled that the donation was inter vivos because the stipulation that the donation would take effect only after the donor's death "simply meant that the possession and enjoyment, of the fruits of the properties donated' should take effect only after the donor's death and not before". Resolution of the instant case. The donation in the instant case is inter vivos because it took effect during the lifetime of the donors. It was already effective during the donors' lifetime, or immediately after the execution of the deed, as shown by the granting, habendum and warranty clause of the deed (quoted below). In that clause it is stated that, in consideration of the affection and esteem of the donors for the donees and the valuable services rendered by the donees to the donors, the latter, by means of the deed of donation, wholeheartedly transfer and unconditionally give to the donees the lots mentioned and described in the early part of the deed, free from any kind of liens and debts: Na dahil at alang-alang sa pagmamahal at masuyong pagtingin na taglay ng NAGKAKALOOB (DONORS) sa Pinagkakalooban (DONEES) gayun din sa tapat at mahalagang paglilingkod noong mga lumipas na panahon na ginawa ng huli sa una ang nabanggit na nagkakaloob sa pamagitan ng kasulatang ito ng pagkakaloob (Donation) ay buong pusong inililipat at lubos na ibinibigay sa nasabing pinagkakalooban ang lupang binabanggit at makikilala sa unahan nito, laya sa ano mang sagutin at pagkakautang, katulad nito: Following the above-ousted granting, habendum and warranty clause is the donors' declaration that they donate (ipinagkakaloob) Lot No. 2502, the property in litigation, in equal shares to their children Angel Diaz and Andrea Diaz, the western part to Angel and the eastern part to Andrea. The acceptance clause is another indication that the donation is inter vivos. Donations mortis causa , being in the form of a will, are never accepted by the donees during the donors' lifetime. Acceptance is a requirement for donations inter vivos.

In the acceptance clause herein, the donees declare that they accept the donation to their entire satisfaction and, by means of the deed, they acknowledge and give importance to the generosity and solicitude shown by the donors and sincerely thank them. In the reddendum or reservation clause of the deed of donation, it is stipulated that the donees would shoulder the expenses for the illness and the funeral of the donors and that the donees cannot sell to a third person the donated properties during the donors' lifetime but if the sale is necessary to defray the expenses and support of the donors, then the sale is valid. The limited right to dispose of the donated lots, which the deed gives to the donees, implies that ownership had passed to them by means of' the donation and that, therefore, the donation was already effective during the donors' lifetime. That is a characteristic of a donation inter vivos. However, paragraph 3 of the reddendum in or reservation clause provides that "also, while we, the spouses Gabino Diaz and Severa Mendoza, are alive, our administration, right, and ownership of the lots mentioned earlier as our properties shall continue but, upon our death, the right and ownership of the donees to each of the properties allocated to each of them shall be fully effective." The foregoing is the translation of the last paragraph of the deed of donation which reads: (3) Gayun din samantalang kaming mag-asawang Gabino Diaz at Severa Mendoza ay buhay, patuloy and aming pamamahala, karapatan, at pagkamayari sa mga nasabing pagaari na sinasaysay sa unahan nito na pagaari namin; ngunit sakaling kami ay bawian ng buhay ng Panginoong Dios at mamatay na, ang mga karapatan at pagkamayari ng bawa't pinagkalooban (Donatorios) sa bawa't pagaari nauukol sa bawa't isa ay may lubos na kapangyarihan. Evidently, the draftsman of the deed did not realize the discordant and ambivalent provisions thereof. The habendum clause indicates the transfer of the ownership over the donated properties to the donees upon the execution of the deed. But the reddendum clause seems to imply that the ownership was retained by the donors and would be transferred to the donees only after their death. We have reflected on the meaning of the said contradictory clauses. All the provisions of the deed, like those of a statute and testament, should be construed together in order to ascertain the intention of the parties. That task would have been rendered easier if the record shows the conduct of the donors and the donees after the execution of the deed of donation. But the record is silent on that point, except for the allegation of Angel Diaz in his answer (already mentioned) that he received his share of the disputed lot long before the donors' death and that he had been "openly and adversely occupying" his share "for

more than twenty years". (Andrea Diaz on page 17 of her brief in L-33849 states that the donees took possession of their respective shares as stipulated in the deed of donation. Pages 3,4,18 and 19, tsn March, 1971). Our conclusion is that the aforequoted paragraph 3 of the reddendum or reservation clause refers to the beneficial ownership (dominium utile) and not to the naked title and that what the donors reserved to themselves, by means of that clause, was the management of the donated lots and the fruits thereof. But, notwithstanding that reservation, the donation, as shown in the habendum clause, was already effective during their lifetime and was not made in contemplation of their death because the deed transferred to the donees the naked ownership of the donated properties. That conclusion is further supported by the fact that in the deed of donation, out of the eight lots owned by the donors, only five were donated. Three lots, Lots Nos. 4168, 2522 and 2521 were superflously reserved for the spouses or donors in addition to onethird of Lot No. 2377. If the deed of donation in question was intended to be a mortis causa disposition, then all the eight lots would have been donated or devised to the three children and daughter-in-law of the donors. The trial court's conclusion that the said deed of donation, although void as a donation inter vivos is valid "as an extrajudicial partition among the parents and their children" is not well-taken. Article 1080 of the Civil Code provides that 46 should a person make a partition of his estate by an act inter vivos or by will, such partition shall be respected, insofar as it does not prejudice the legitime of the compulsory heirs." We have already observed that the said donation was not a partition of the entire estate of the Diaz spouses since, actually, only five of the eight lots, constituting their estate, were partitioned. Hence, that partition is not the one contemplated in article 1080. There is another circumstance which strengthens ' the view that the 1949 deed of donation in question took effect during the donors' lifetime. It may he noted that in that deed Lot No. 2377 (items 3 and [c]) was divided into three equal parts: one-third was donated to Andrea Diaz and one-third to Angel Diaz. The remaining one-third was reserved and retained by the donors, the spouses Gabino Diaz and Severo Mendoza, for their support. That reserved one-third portion came to be known as Lot No. 2377-A. In 1964 or after the death of Gabino Diaz, his surviving spouse Severa Mendoza executed a donation mortis causa wherein she conveyed to her daughter, Andrea Diaz (plaintiff-appellant herein), her one-half share in Lot No. 2377-A, which one-half share is known as Lot No. 2377-A-1, the other half or Lot No. 2377-A-2 having been already conveyed to Angel Diaz. That disposition of Lot No. 2377-A-2 clearly implies that the conveyance in the 1949 deed of donation as to Lot No. 2377 took effect during the lifetime of the donors, Gabino Diaz and Severa Mendoza, and proves that the 1949 donation was inter vivos.

The instant case has a close similarity to the pre-war cases already cited and to three post-liberation cases. In the Bonsato case, the deed of donation also contained contradictory dispositions which rendered the deed susceptible of being construed as a donation inter vivos or as a donation causa. It was stated in one part of the deed that the donor was executing "una donacion perfects e irrevocable consumada" in favor of the donee in consideration of his past services to the donor; that at the time of the execution of the deed, the donor "ha entregado" to the donee "dichos terrenos donados'; that while the donor was alive, he would receive the share of the fruits corresponding to the owner; and "que en vista de la vejez del donante, el donatario Felipe Bonsato tomara posesion inmediatamente de dichos terrenos a su favor". These provisions indicate that the donation in question was inter vivos However, in the last clause of the deed in the Bonsato case (as in the instant case), it was provided 'que despues de la muerte del donante entrara en vigor dicha donacion y el donatario Felipe Bonsato tendra todos log derechos de dichos terrernos en concepto de dueno absolute de la propriedad libre de toda responsabilidad y gravemen y pueda ejercitar su derecho que crea conveniente". These provisions would seem to show that the donation was mortis causa . Nevertheless, it was held in the Bonsato case that the donation was inter vivos because (1) the ownership of the things donated passed to the donee; (2) it was not provided that the transfer was revocable before the donor's death, and (3) it was not stated that the transfer would be void if the transferor should survive the transferee. It was further held in the Bonsato case that the stipulation "que despues de la muerte del donante entrara en vigor dicha donacion", should be interpreted together with the prior provision regarding its irrevocable and consummated character, and that would mean that the charge or condition as to the donor's share of the fruits would be terminated upon the donor's death. The Puig case, supra, is even more doubtful and controversial than the instant case. In the Puig case, the donor, Carmen Ubalde Vda. de Parcon, in a deed entitled "Donacion Mortis causa dated November 24, 1948 cede y transfiere en concepto de donacion mortis causa to the donee, Estela Magbanua Penaflorida three parcels of land in consideration of the donee's past services and the donor's love and affection for the latter. It was stipulated in the deed that the donor could alienate or mortgage the donated properties "cuando y si necesita fondos para satisfacer sus proprias necesidades sin que para ello tega que intervener la Donataria, pues su consentimiento se sobre entiende aqui parte de que la donacion que aqui se hace es mortis causa , es decir que la donacion surtira sus efectos a la muerte de la donante". It was repeated in another clause of the deed "que lacesion y transferencia aqui provista surtira efecto al fallecer la Donante".

It was further stipulated that the donee would defray the medical and funeral expen of the donor unless the donor had funds in the bank or "haya cosecho levantada or recogida en cual caso dichos recursos responderan portales gastos a disposicion y direccion de la donataria". Another provision of the deed was that it would be registered only after the donor's death. In the same deed the donee accepted the donation. In the Puig case the donor in another deed entitled Escritura de Donacion mortis causa " dated December 28, 1949 donated to the same donee, Estela Magbanua Penaflorida three parcels of land en concepto de una donacion mortis causa " in consideration of past services. It was provided in the deed "que antes de su nuerte la donante, podra enajenar vender traspasar o hipotecar a cualesquiera persona o entidades los bienes aqui donados a favor de la donataria en concepto de una donacion mortis causa ". The donee accepted the donation in the same deed. After the donor's death both deeds were recorded in the registry of deeds. In the donor's will dated March 26, 1951, which was duly probated, the donation of a parcel of land in the second deed of donation was confirmed. Under these facts, it was held that the 1948 deed of donation mortis causa was inter vivos in character in spite of repeated expressions therein that it was a mortis causa donation and that it would take effect only upon the donor's death. Those expressions were not regarded as controlling because they were contradicted by the provisions that the donee would defray the donor's expenses even if not connected with her illness and that the donee's husband would assume her obligations under the deed, should the donee predecease the donor. Moreover, the donor did not reserve in the deed the absolute right to revoke the donation. But the 1949 deed of donation was declared void because it was a true conveyance mortis causa which was not embodied in a last will and testament. The mortis causa character of the disposition is shown by the donor's reservation of the right to alienate or encumber the donated properties to any person or entity. In the Cuevas case, supra, one Antonina Cuevas executed on September 18, 1950 a notarial conveyance styled as "Donacion Mortis causa " where she ceded to her nephew Crispulo Cuevas a parcel of unregistered land. Crispulo accepted the donation in the same instrument. Subsequently, or on May 26, 1952, the donor revoked the donation. The deed of donation in the Cuevas case contained the following provisions which, as in similar cases, are susceptible of being construed as making the conveyance an inter vivos or a mortis causa transfer: "Dapat maalaman ni Crispulo Cuevas na samantalang ako ay nabubuhay, ang lupa na ipinagkakaloob ko sa kaniya ay ako pa rin ang patuloy na mamomosecion, makapagpapatrabajo, makikinabang at ang iba pang karapatan sa pagmamayari ay sa

akin pa rin hanggang hindi ako binabawian ng buhay ng Maykapal at ito naman ay hindi ko nga iyaalis pagkat kung ako ay mamatay na ay inilalaan ko sa kaniya." Translation "Crispulo Cuevas should know that while I am alive, the land which I donated to him will still be under my continued possession; I will be the one to have it cultivated; I will enjoy its fruits and all the other rights of ownership until Providence deprives me of life and I cannot take away the property from him because when I die I reserve the property for him." (sic) It was held that the donation was inter vivos because the phrase "hindi ko nga iyaalis (I will not take away the property") meant that the donor expressly renounced the right to freely dispose of the property in favor of another person and thereby manifested the irrevocability of the conveyance of the naked title to the donee. The donor retained the beneficial ownership or dominium utile Being an inter vivos donation, it could be revoked by the donor only on the grounds specified by law. No such grounds existed. The donee was not guilty of ingratitude. The other point to be disposed of is the matter of the claim for attorney's fees of Andrea Diaz against the Alejandro intervenors. The other point to be disposed of is the matter of the claim for attorney's fees of Andrea Diaz against the Alejandro intervenors. After a careful consideration of the facts and circumstances of the case, particularly the apparent good faith of the Alejandro intervenors in asserting a one-third interest in the disputed lot and their close relationship to Andrea Diaz, we find that it is not proper to require them to pay attorney's fees (Salao vs. Salao, L-26699, March 16, 1976, 70 SCRA 65). (Andrea Diaz did not implead Angel Diaz as a respondent in her petition for review.) WHEREFORE, the trial court's amended decision is reversed insofar as it pronounces that the deed of donation is void. That donation is declared valid as a donation inter vivos. The disputed lot should be partitioned in accordance with that deed between Andrea Diaz and Angel Diaz. The decision is affirmed insofar as it does not require the Alejandro intervenors to pay attorney's fees to Andrea Diaz. No costs. SO ORDERED. G.R. No. 72908 August 11, 1989 EUFEMIA PAJARILLO, CLAUDIO SUTERIO, JR., NYMIA SUTERIO and MARILYN SUTERIO, petitioners, vs.

INTERMEDIATE APPELLATE COURT, THIRD CIVIL CASES DIVISION, SALUD SUTERIO and PEDRO MATIAS, respondents. Agustin A. Ferrer for petitioners. Alfredo I. Raya for respondents.

CRUZ, J.: This is one of those distasteful litigations involving a controversy among close relatives over properties left by a common ascendant. The petitioners are the widow and children of the brother of the principal private respondent. She and her brother appear to be the only remaining issue of the mother who seems to have caused all the present confusion. The record does not show how close, if at all, the members of this small family were. What is certain is that there is no affection now among the protagonists in this case. The mother was Juana Balane de Suterio, who had a brother named Felipe Balane and a sister named Perfecta Balane de Cordero. Perfecta died in 1945 leaving inter alia a tract of land consisting of about 28 hectares and covered by TCT No. 4671 in the Registry of Deeds of Quezon Province. On May 20, 1946, Juana and Felipe executed a public instrument entitled "Extra-judicial Settlement of the Estate of the Deceased Perfecta Balane de Cordero." 1 In it they disposed of the said property as follows: EXTRA-JUDICIAL SETTLEMENT OF THE ESTATE OF DECEASED PERFECTA BALANE DE CORDERO. This agreement made to 20th day of May, 1946, by and between Felipe Balane and Juana Balane de Suterio, both of age and residents of Macalelon, Tayabas, Philippines. WITNESSETH: That whereas, the said Felipe Balane and Juana Balane de Suterio are the only brother and sister respectively and forced heirs of Perfecta Balane de Cordero who dies intestate on January 21, 1945; That whereas, the said Perfects Balane de Cordero, deceased, left property described as follows: TRANSFER CERTIFICATE OF TITLE NO. 4671. Province of Tayabas.

A parcel of land (Lot No. 6-A, Plan Psu-12210), with an buildings and improvements except those herein expressly noted as belonging to other person, situated in the barrio of Luctol, Municipality of Macalelon. Bounded on the NE., by Lot No. 6-B; on the E., by property by Andrea Fernandez, the sapa Luctob and the sapa Patay; on the SE., by properties of Andrea Fernandez and Silvestra Mereis on the SW., by properties of Felix Rodriguez, Dionisio Fornea Placido Abistado and Adriano Abistado and the mangrove of the government; and on the NW., by properties of Orilleneda Mariano, Glindro Maxima Orilleneda Placida Forcados and Basilio Rabe .. .. .. .. .. .. .. containing an area of TWO HUNDRED EIGHTY FIVE THOUSAND THREE HUNDRED FIFTY-THREE SQUARE METERS (285,353) more or less. That whereas, we Felipe Balane and Juana Balane de Suterio, the only heirs of the property described above left by the deceased Perfecta Balane de Cordero, do hereby agree in carrying out the antemortem wish of our beloved deceased sister that in consideration of love and affection the property described above be donated to Salud Sutexio de Matias. That whereas, the estate left by the said Perfecta Balane de Castro, deceased, is not free from obligation or debt. It has an incumbrance of about ONE THOUSAND PESOS (P1,000.00) to the Philippine National Bank, Tayabas Branch. That whereas, Salud Suterio de Matias, to whom this property is donated extra-judicially as agreed upon by both heirs, shall assume the said obligation to the Philippine National Bank, Tayabas Branch. NOW, THEREFORE, we Felipe Balane and Juana Balane de Suterio have mutually agreed and covenanted to adjudicate, give, transfer and convey the property described above to Salud Suterio de Matias heirs, executors, administrators and assign. And the donee does hereby accept this donation and does hereby express her gratitutde for the kindness and liberality of the donor. IN WITNESS WHEREOF, we have hereunto set our hands tills 20th day of May, 1946. (Sgd.) FELIPE BALANE FELIPE BALANE (Sgd.) JUANA BALANE DE SUTERIO JUANA BALANE DE SUTERIO

(Acknowledgment) On June 20, 1946, Salud Suterio executed the following public instrument, 2 petitioner Eufemia Pajarillo was one of the witnesses: KNOW ALL MEN BY THESE PRESENTS: That on May 20, 1946, FELIPE BALANE and JUANA BALANE DE SUTERIO, the only heirs to the properties of the late PERFECTA BALANE DE CORDERO, executed a DEED OF DONATION in favor of the undersigned and the said donation was made, in accordance to the antemortem wish of my late aunt, Perfecta Balane de Cordero, to the effect that the property described in the Deed of Donation, be given to me because of her love and affection for me, being her only niece. That, I, SALUD SUTERIO, DE MATIAS, the only DONEE, do hereby receive and accept this donation and further express my gratitude for the kindness and liberality of the DONORS, FELIPE BALANE and JUANA BALANE DE SUTERIO. IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of June, 1946. (Sgd.) SALUD SUTERIO DE MATIAS SUTE RIO DE MATI AS Donee Signed in the presence of (Sgd.) SOFRONIO BALANE (Sgd.) EUFEMIA P. SUTERIO (Acknowledgment) These instruments were never registered nor was title transferred in Salud's name although she says she immediately took possession of the land. Meantime, intestate proceedings were instituted on the estate of Perfecta and the said land was among

those included in the inventory of the properties belonging to the decedent. 3 Salud interposed no objection to its inclusion nor did she oppose its subsequent adjudication to her mother Juana in the project of partition. It is not clear if the land was ever registered in Juana's name. However, there is evidence that Juana confirmed the earlier donation of the land to Salud but requested that she be allowed to possess the same and enjoy its fruits, until her death. 4 It has also not been controverted that Salud paid the P1,000.00 loan for which the land was mortgaged. Salud says that sometime in 1951, acceding to this request, she transferred the possession of the land to her mother, who was then staying with Claudio and his family. During the period they were occupying the land, Claudio paid the realty taxes thereon . 5 On May 25, 1956, Juana executed a deed of absolute sale conveying the land to Claudio for the declared consideration of P12,000.00. 6 Two years later, on August 27, 1958, Claudio had the land registered in as name and was issued TCT No. 32050 in the land records of Quezon Province. 7 Claudio died in 1961 and his mother in 1963. On June 30, 1965, the private respondents filed a complaint for the reconveyance of the property on the ground that the deed of sale in favor of Claudio was fictitious and its registration in his name was null and void . 8 Salud (joined by her husband) alleged that she was unaware until later of the supposed sale of the land to Claudio. She faulted it as having been procured through fraud and improper influence on her sick and aged mother. She claimed that no compensation was actually paid by Claudio and that the transaction was deliberately concealed from her by her brother and the defendants. 9 For their part, the defendants assailed the donation to Salud as legally inefficacious and defective and contended that her complaint was barred by prescription, estoppel and res judicata. They also filed a counterclaim questioning the sale to Salud by her mother of another tract of land, in which they said they were entitled to share as Juana's heirs. 10 On April 17,1979, Judge Juan M. Montecillo of the Court of First Instance of Quezon rendered judgment upholding the donation to the plaintiff and annulling the deed of sale and the registration of the land in favor of Claudio Suterio, Sr. The defendants were required to reconvey the land to Salud Suterio even as their counterclaim was dismissed for lack of evidence. 11 On appeal, the decision was affirmed in toto. 12 The respondent court is now sought to be reversed in this petition for certiorari under Rule 45 of the Rules of Court. We hold at the outset that, contrary to the ruling in the challenged decision, the petitioners have the legal personality to challenge the validity of the donation on which Salud bases her claim to the property under litigation. As defendants in the complaint for reconveyance, they had every right to resist the plaintiffs' allegation that she was the owner of the subject property by virtue of the claimed donation. Recognition of that donation would topple the props of their own contention that Juana could dispose of the property as its owner when she sold it to Claudio Suterio in 1956.

The petitioners also assail the intrinsic validity of the extrajudical settlement and submit that it is not really a donation as conceptually understood in civil law. Their argument is that the real donor of the property was Perfecta, the deceased sister, who, however, could no longer bestow the intended gift. For their part, Felipe and Juana could not have made, the donation either because they were not moved by the same sentiments Perfects had for her niece Salud. That feeling would have provided the required consideration if Perfects herself had made the donation, but not the other two. This appears to be too much nitpicking, if not sophistry. Felipe and Juana had declared themselves the heirs of Perfecta and the owners of the property in question. As such, they were free to give the land to whomever they pleased and for whatever reason they saw fit. Hence, if they chose to respect Perfecta's wishes and carry out her intentions by donating the land to Salud, there was no legal impediment to their doing so. In fact, that was not only the legal but also the moral thing to do. There is no question that Felipe and Juana could have simply disregarded their sister's sentiments and decided not to donate the property to Salud, keeping the same for themselves. The fact that they did not do this speaks well indeed of their integrity and their loyalty as well to their deceased sister. The extrajudicial settlement also reflects their own affection for Salud which constituted the valid consideration for their own act of liberality. Notably, in her acceptance of the donation, Salud referred to 'the donors Felipe Balane and Juana Balane de Suterio," and not Perfecta. It is also pointed out that the donation is defective in form because of non-compliance with the requirements of the law regarding its acceptance. As it was executed in 1946, the applicable rule is Article 633 of the old Civil Code reading as follows: Art. 633. In order that a donation of real property be valid it must be made by public instrument in which the property donated must be specifically described and the amount of the charges to be assumed by the donee expressed. The acceptance may be made, in the deed of gift or in a separate public writing; but it shall produce no effect if not made during the lifetime of the donor. If the acceptance is made, by separate public instrument, authentic notice thereof shall be given the donor, and this proceeding shall be noted in both instruments. There is no question that the donation was accepted in a separate public instrument and that it was duly communicated to the donors. Even the petitioners cannot deny this. But what they do contend is that such acceptance was not "noted in both instruments," meaning the extrajudicial partition itself and the instrument of acceptance, as required by the Civil Code.

That is perfectly true. There is nothing in either of the two instruments showing that "authentic notice" of the acceptance was made by Salud to Juana and Felipe. And while the first instrument contains the statement that "the donee does hereby accept this donation and does hereby express her gratitude for the kindness and liberality of the donor," the only signatories thereof were Felipe Balane and Juana Balane de Suterio. That was in fact the reason for the separate instrument of acceptance signed by Salud a month later. A strict interpretation of Article 633 can lead to no other conclusion than the annulment of the donation for being defective in form as urged by the petitioners. This would be in keeping with the unmistakable language of the above-quoted provision. However, we find that under the circumstances of the present case, a literal adherence to the requirement of the law might result not in justice to the parties but conversely a distortion of their intentions. It is also a policy of the Court to avoid such an intepretation. The purpose of the formal requirement is to insure that the acceptance of the donation is duly communicated to the donor. In the case at bar, it is not even suggested that Juana was unaware of the acceptance for she in fact confirmed it later and requested that the donated land be not registered during her lifetime by Salud. 13 Given this significant evidence, the Court cannot in conscience declare the donation ineffective because there is no notation in the extrajudicial settlement of the donee's acceptance. That would be placing too much stress on mere form over substance. It would also disregard the clear reality of the acceptance of the donation as manifested in the separate instrument dated June 20,1946, and as later acknowledged by Juana. The cases cited by the parties in their respective memoranda are not really in point. In Legasto v. Verzosa, 14 there was no evidence whatsoever that the claimed donations had been accepted, as stressed by Justice Villa-Real. The same observation is made of Santos v. Robledo, 15 where Justice Torres noted that the acceptance of the donation did not appear in the deed of donation or in any other instrument. The petitioners would also fault the private respondents for laches and argue that Salud's inaction in protection of her rights should bar her from asserting them at this late hour. Specifically, it is pointed out that she failed to register the deed of donation and its acceptance in 1946; did not oppose the inclusion of the subject land in the inventory of Perfecta's properties submitted in the intestate proceedings in 1946; did not object to the adjudication of the land to Juana in the project of partition in 1951; did not protest the sale of the land to Claudio Suterio in 1956; and did not question its registration in his name in 1958. It is contended that all these acts constitute laches, which has been described by this Court thus: An estoppel by laches arises from the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. 16

The problem with the petitioners' theory is that it would regard Juana and Salud as strangers when they are in fact mother and daughter. One may expect a person to be vigilant of his rights when dealing with an acquaintance or associate, or even with a friend, but not when the other person is a close relative, as in the case at bar. To begin with, the land came from Juana herself. Secondly, she requested her daughter not to register the land as long as she was still alive so she could enjoy its fruits until her death. To Salud, it was not difficult to comply with this request, coming as it did from her own mother. There was no reason to disobey her. She did not have to protect herself against her own mother. Indeed, what would have been unseemly was her registering the land against her mother's request as if she had no confidence in her. Salud did no less than what any dutiful daughter would have done under the circumstances. If Salud did not protest the inclusion of the land in the inventory of Perfecta's properties and its subsequent adjudication to Juana in the intestate proceedings, it was because she did not feel threatened by these acts. She did not distrust her mother. Moreover, Juana had herself acknowledged the donation when she was asked in whose name the property would be registered following the intestate proceedings. Salud felt safe because she had the extrajudicial settlement to rely on to prove that her mother and her uncle had donated the subject land to her. There is nothing in this instrument to suggest that the donation was to take effect upon the death of the donors as to make it a donation mortis causa, as urged by the petitioners. The donation became effective upon acceptance by Salud except that, in obedience to her mother's request, she chose not to register the land in the meantime and to allow her mother to enjoy its fruits. What was deferred was not its effectivity but only its enjoyment by Salud. Registration was not necessary to make the donation a binding commitment insofar as the donors and the donee were concerned. 17 As for her inaction against the deed of sale in favor of her brother Claudio, it should be noted in the first place that she was not aware of it when it was executed in 1956. Her mother, who was already 76 years old at the time, never informed her about it, nor did her brother or any of the defendants, for reasons of their own. It was only later, when the sale was registered in 1958 and a new title to the land was issued to Claudio, that she started asking questions. Even then, being a sister to Claudio, she did not immediatey take legal steps. It is natural, even among non-relatives, to seek a non-judicial settlement through extralegal measures before going to court. It is more so in the case of relatives, who should avoid as much as possible the asperity and bitterness of litigation. That is what Salud did when she repeatedly asked the petitioners for the return of the property albeit to no avail. It was only when it became clear that amicable persuasion was not possible that she decided to sue the wife and children of her departed brother. The petitioners stress that it took Salud all of seven years from the registration of the land in Claudios's name before she filed the complaint for reconveyance against them. That is true. But if one remembers that her brother died only in 1961 and her own

mother only in 1963, at the age of 83, it will be easy to understand the reason for the delay, which would otherwise have been unjustified. Suits among brothers and sisters are especially painful to their parents. Salud must have thought many times about filing her complaint against her brother Claudio while her old mother was still alive. In fact, Salud hesitated still even after her mother's death and took two more years before she finally filed her complaint against Claudio's wife and children. It is clear that Juana Balane de Suterio had no right to sell the subject land to Claudio because she was no longer its owner, having previously donated it to her daughter Salud. Juana herself was holding the land merely as a trustee of Salud, who had transferred possession to her mother at the old woman's request. The deed of sale was itself vitiated by bad faith as Claudio is presumed to have known of the previous donation to his sister Salud, whose acceptance of the donation was formally witnessed by hiw own wife, the herein principal petitioner. 18 When Claudio registered the land in his name knowing there was a flaw in his title, an implied trust was created in favor of Salud as the real owner of the property in accordance with Article 1456 of the Civil Code, reading as follows: If the property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. As trustor, Salud had every right to sue for the recovery of the land in the action for reconveyance against Claudio's heirs. As we said in Vda. de Jacinto, et al. v. Vda. de Jacinto, et al. ... 19 Public policy demands that a person guilty of fraud or at least, of breach of trust, should not be allowed to use a Torrens title as a shield against the consequences of his own wrongdoing. The petitioners do not insist on prescription as a bar to the action for reconveyance, and understandably so. The legal principle is that if the registration of the land is fraudulent and the person in whose name the land is registered thus holds it as a mere trustee, the real owner is entitled to file an action for reconveyance of the property within a period of ten years. As we have held in many cases: Where the action is one for reconveyance based on constructive trust, a ten-year period is allowed. 20 An action for reconveyance of realty, based upon a constructive or implied trust resulting from fraud, may be barred by prescription. The prescriptive period is reckoned from the issuance of the title which operates as a constructive notice. 21 While actions to enforce a constructive trust prescribe in 10 years from registration of the property, private respondents' right commenced from actual discovery of petitioner's act of defraudation. 22

The record shows that while the land was registered in the name of Claudio Suterio, Sr. in 1958, the complaint for reconveyance was filed by the petitioners in 1965, or still within the ten-year prescriptive period. The last issue raised by the petitioners, viz., the validity of the deed of sale executed by Juana Balane de Suterio on January 29,1950, in favor of Salud Suterio, 23 need not detain us too long. The trial court sustained the contract for lack of sufficient evidence to invalidate it and was upheld by the respondent court. We see no reason to disturb their factual finding, absent a showing that it was reached arbitrarily. Interestingly, it occurred to the petitioners to question the transaction only when they were sued by the private respondents, after ten years from the date of the sale. This is an even longer period than the nine years during which the petitioners say Salud Suterio was sleeping on her rights following the sale of her land to Claudio Suterio. WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.

You might also like