G.R. No. 72908 August 11, 1989 TRANSFER CERTIFICATE OF TITLE NO. 4671.

EUFEMIA PAJARILLO, CLAUDIO SUTERIO, JR., NYMIA SUTERIO and MARILYN Province of Tayabas.
SUTERIO, petitioners,
vs. A parcel of land (Lot No. 6-A, Plan Psu-12210), with an buildings and improvements
INTERMEDIATE APPELLATE COURT, THIRD CIVIL CASES DIVISION, SALUD SUTERIO and except those herein expressly noted as belonging to other person, situated in the barrio
PEDRO MATIAS, respondents. 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
Agustin A. Ferrer for petitioners. 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
Alfredo I. Raya for respondents. 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.

CRUZ, J.:
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
This is one of those distasteful litigations involving a controversy among close relatives over agree in carrying out the antemortem wish of our beloved deceased sister that in
properties left by a common ascendant. The petitioners are the widow and children of the consideration of love and affection the property described above be donated to Salud
brother of the principal private respondent. She and her brother appear to be the only Sutexio de Matias.
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
That whereas, the estate left by the said Perfecta Balane de Castro, deceased, is not free
certain is that there is no affection now among the protagonists in this case.
from obligation or debt. It has an incumbrance of about ONE THOUSAND PESOS
(P1,000.00) to the Philippine National Bank, Tayabas Branch.
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
That whereas, Salud Suterio de Matias, to whom this property is donated extra-judicially
land consisting of about 28 hectares and covered by TCT No. 4671 in the Registry of Deeds of
as agreed upon by both heirs, shall assume the said obligation to the Philippine National
Quezon Province. On May 20, 1946, Juana and Felipe executed a public instrument entitled
Bank, Tayabas Branch.
"Extra-judicial Settlement of the Estate of the Deceased Perfecta Balane de Cordero." 1 In it
they disposed of the said property as follows:
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
EXTRA-JUDICIAL SETTLEMENT OF THE ESTATE OF DECEASED PERFECTA BALANE DE
to Salud Suterio de Matias heirs, executors, administrators and assign.
CORDERO.

And the donee does hereby accept this donation and does hereby express her gratitutde
This agreement made to 20th day of May, 1946, by and between Felipe Balane and
for the kindness and liberality of the donor.
Juana Balane de Suterio, both of age and residents of Macalelon, Tayabas, Philippines.

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

(Sgd.) FELIPE BALANE FELIPE BALANE

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; (Sgd.) JUANA BALANE DE SUTERIO JUANA BALANE DE SUTERIO

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

1
 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
SUTERIO DE MATIAS
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.
2
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.
3
If Salud did not protest the inclusion of the land in the inventory of Perfecta's properties and
its subsequent adjudication to Juana in the intestate proceedings, it was because she did not
feel threatened by these acts. She did not distrust her mother. Moreover, Juana had herself
acknowledged the donation when she was asked in whose name the property would be
registered following the intestate proceedings. Salud felt safe because she had the
extrajudicial settlement to rely on to prove that her mother and her uncle had donated the
subject land to her.
There is nothing in this instrument to suggest that the donation was to take effect upon the
death of the donors as to make it a donation mortis causa, as urged by the petitioners. The
donation became effective upon acceptance by Salud except that, in obedience to her
mother's request, she chose not to register the land in the meantime and to allow her
mother to enjoy its fruits. What was deferred was not its effectivity but only its enjoyment by
Salud. Registration was not necessary to make the donation a binding commitment insofar as
the donors and the donee were concerned. 17
As for her inaction against the deed of sale in favor of her brother Claudio, it should be noted
in the first place that she was not aware of it when it was executed in 1956. Her mother, who
was already 76 years old at the time, never informed her about it, nor did her brother or any
of the defendants, for reasons of their own. It was only later, when the sale was registered in
1958 and a new title to the land was issued to Claudio, that she started asking questions.
Even then, being a sister to Claudio, she did not immediatey take legal steps.
It is natural, even among non-relatives, to seek a non-judicial settlement through extra-legal
measures before going to court. It is more so in the case of relatives, who should avoid as
much as possible the asperity and bitterness of litigation. That is what Salud did when she
repeatedly asked the petitioners for the return of the property albeit to no avail. It was only
when it became clear that amicable persuasion was not possible that she decided to sue the
wife and children of her departed brother.
The petitioners stress that it took Salud all of seven years from the registration of the land in
Claudios's name before she filed the complaint for reconveyance against them. That is true.
But if one remembers that her brother died only in 1961 and her own mother only in 1963, at
the age of 83, it will be easy to understand the reason for the delay, which would otherwise
have been unjustified. Suits among brothers and sisters are especially painful to their
parents. Salud must have thought many times about filing her complaint against her brother
Claudio while her old mother was still alive. In fact, Salud hesitated still even after her
mother's death and took two more years before she finally filed her complaint against
Claudio's wife and children.
It is clear that Juana Balane de Suterio had no right to sell the subject land to Claudio because
she was no longer its owner, having previously donated it to her daughter Salud. Juana
herself was holding the land merely as a trustee of Salud, who had transferred possession to
her mother at the old woman's request. The deed of sale was itself vitiated by bad faith as
Claudio is presumed to have known of the previous donation to his sister Salud, whose
acceptance of the donation was formally witnessed by hiw own wife, the herein principal
petitioner. 18 When Claudio registered the land in his name knowing there was a flaw in his
title, an implied trust was created in favor of Salud as the real owner of the property in
accordance with Article 1456 of the Civil Code, reading as follows:
If the property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes.
As trustor, Salud had every right to sue for the recovery of the land in the action for
reconveyance against Claudio's heirs. As we said in Vda. de Jacinto, et al. v. Vda. de Jacinto,
et al. ... 19
Public policy demands that a person guilty of fraud or at least, of breach of trust, should not
be allowed to use a Torrens title as a shield against the consequences of his own wrongdoing.
The petitioners do not insist on prescription as a bar to the action for reconveyance, and
understandably so. The legal principle is that if the registration of the land is fraudulent and
the person in whose name the land is registered thus holds it as a mere trustee, the real
owner is entitled to file an action for reconveyance of the property within a period of ten
years. As we have held in many cases:
Where the action is one for reconveyance based on constructive trust, a ten-year period is
allowed. 20
An action for reconveyance of realty, based upon a constructive or implied trust resulting
from fraud, may be barred by prescription. The prescriptive period is reckoned from the
issuance of the title which operates as a constructive notice. 21
While actions to enforce a constructive trust prescribe in 10 years from registration of the
property, private respondents' right commenced from actual discovery of petitioner's act of
defraudation. 22
The record shows that while the land was registered in the name of Claudio Suterio, Sr. in
1958, the complaint for reconveyance was filed by the petitioners in 1965, or still within the
ten-year prescriptive period.
The last issue raised by the petitioners, viz., the validity of the deed of sale executed by Juana
Balane de Suterio on January 29,1950, in favor of Salud Suterio, 23 need not detain us too
long. The trial court sustained the contract for lack of sufficient evidence to invalidate it and
was upheld by the respondent court. We see no reason to disturb their factual finding,
absent a showing that it was reached arbitrarily. Interestingly, it occurred to the petitioners
to question the transaction only when they were sued by the private respondents, after ten
years from the date of the sale. This is an even longer period than the nine years during
which the petitioners say Salud Suterio was sleeping on her rights following the sale of her
land to Claudio Suterio.
4
WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.

5
 (c) It shall not grant any third party any privilege and/or concession to operate a bus, mini-
G.R. No. 148339 February 23, 2005
bus and/or jeepney terminal.

LUCENA GRAND CENTRAL TERMINAL, INC., petitioner,

xxx
vs.
JAC LINER, INC., Respondent.
Ordinance No. 17783
DECISION
AN ORDINANCE REGULATING THE ENTRANCE TO THE CITY OF LUCENA OF ALL BUSES, MINI-
BUSES AND OUT-OF-TOWN PASSENGER JEEPNEYS AND FOR THIS PURPOSE, AMENDING
CARPIO MORALES, J.:
ORDINACE NO. 1420, SERIES OF 1993, AND ORDINANCE NO. 1557, SERIES OF 1995

Respondent, JAC Liner, Inc., a common carrier operating buses which ply various routes to
and from Lucena City, assailed, via a petition for prohibition and injunction 1 against the City
of Lucena, its Mayor, and the Sangguniang Panlungsod of Lucena before the Regional Trial
Court (RTC) of Lucena City, City Ordinance Nos. 1631 and 1778 as unconstitutional on the
ground that, inter alia, the same constituted an invalid exercise of police power, an undue
taking of private property, and a violation of the constitutional prohibition against
monopolies. The salient provisions of the ordinances are:
Ordinance No. 16312
xxx
SECTION 1. – The entrance to the City of Lucena of all buses, mini-buses and out-of-town
passenger jeepneys is hereby regulated as follows:
(a) All buses, mini-buses and out-of-town passenger jeepneys shall be prohibited
from entering the cityand are hereby directed to proceed to the common terminal,
for picking-up and/or dropping of their passengers.

AN ORDINANCE GRANTING THE LUCENA GRAND CENTRAL TERMINAL, INC., A FRANCHISE TO
CONSTRUCT, FINANCE, ESTABLISH, OPERATE AND MAINTAIN A COMMON BUS-JEEPNEY
TERMINAL FACILITY IN THE CITY OF LUCENA
xxx
SECTION 1. – There is hereby granted to the Lucena Grand Central Terminal, Inc., its
successors or assigns, hereinafter referred to as the "grantee", a franchise to construct,
finance, establish, operate, and maintain a common bus-jeepney terminal facility in the City
of Lucena.
SECTION 2. – This franchise shall continue for a period of twenty-five years, counted from the
approval of this Ordinance, and renewable at the option of the grantee for another period of
twenty-five (25) years upon such expiration.
xxx
(b) All temporary terminals in the City of Lucena are hereby declared
inoperable starting from the effectivity of this ordinance.
xxx
SECTION 3. – a) Section 1 of Ordinance No. 1557, Series of 1995, is hereby amended to read
as follows:
Buses, mini-buses, and jeepney type mini-buses from other municipalities and/or local
government units going to Lucena City are directed to proceed to the Common Terminal
located at Diversion Road, Brgy. Ilayang Dupay, to unload and load passengers.
xxx
c) Section 3 of Ordinance No. 1557, Series of 1995, is hereby amended to read as
follows:

SECTION 4. – Responsibilities and Obligations of the City Government of Lucena. – During the
existence of the franchise, the City Government of Lucena shall have the following
responsibilities and obligations:
xxx
Passenger buses, mini-buses, and jeepney type mini-buses coming from other
municipalities and/or local government units shall utilize the facilities of the Lucena
Grand Central Terminal at Diversion Road, Brgy. Ilayang Dupay, this City, and no
other terminals shall be situated inside or within the City of Lucena;
d) Section 4 of Ordinance No. 1557, Series of 1995, is hereby amended to read as
follows:
6
 Passenger buses, mini-buses, and jeepney type mini-buses coming from other
municipalities and/or local government units shall avail of the facilities of the
Lucena Grand Central Terminal which is hereby designated as the officially
sanctioned common terminal for the City of Lucena;
e) Section 5 of Ordinance No. 1557, Series of 1995, is hereby amended to read as
follows:
The Lucena Grand Central Terminal is the permanent common terminal as this is the entity
which was giventhe exclusive franchise by the Sangguniang Panglungsod under Ordinance
No. 1631; (Emphasis and underscoring supplied)
These ordinances, by granting an exclusive franchise for twenty five years, renewable for
another twenty five years, to one entity for the construction and operation of one common
bus and jeepney terminal facility in Lucena City, to be located outside the city proper, were
professedly aimed towards alleviating the traffic congestion alleged to have been caused by
the existence of various bus and jeepney terminals within the city, as the "Explanatory Note"-
Whereas Clause adopting Ordinance No. 1778 states:
WHEREAS, in line with the worsening traffic condition of the City of Lucena, and with the
purpose of easing and regulating the flow of the same, it is imperative that the Buses, Mini-
Buses and out-of-town jeepneys be prohibited from maintaining terminals within the City,
but instead directing to proceed to the Lucena Grand Central Terminal for purposes of
picking-up and/or dropping off their passengers;4
Respondent, who had maintained a terminal within the city, was one of those affected by the
ordinances.
Petitioner, Lucena Grand Central Terminal, Inc., claiming legal interest as the grantee of the
exclusive franchise for the operation of the common terminal,5 was allowed to intervene in
the petition before the trial court.
In the hearing conducted on November 25, 1998, all the parties agreed to dispense with the
presentation of evidence and to submit the case for resolution solely on the basis of the
pleadings filed.6
By Order of March 31, 1999,7 Branch 54 of the Lucena RTC rendered judgment, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered, as follows:
1. Declaring City Ordinance No. 1631 as valid, having been issued in the exercise of
the police power of the City Government of Lucena insofar as the grant of franchise
to the Lucena Grand Central Terminal, Inc., to construct, finance, establish, operate
and maintain common bus-jeepney terminal facility in the City of Lucena;
2. But however, declaring the provision of Sec. 4(c) of Ordinance No. 1631 to the
effect that the City Government shall not grant any third party any privilege and/or
concession to operate a bus, mini-bus and/or jeepney terminal, as illegal and ultra
vires because it contravenes the provisions of Republic Act No. 7160, otherwise
known as "The Local Government Code";
3. Declaring City Ordinance No. 1778 as null and void, the same being also an ultra
vires act of the City Government of Lucena arising from an invalid, oppressive and
unreasonable exercise of the police power, more specifically, declaring illegal
[sections 1(b), 3(c) and 3(e)];
4. Ordering the issuance of a Writ of Prohibition and/or Injunction directing the
respondents public officials, the City Mayor and the Sangguniang Panglungsod of
Lucena, to cease and desist from implementing Ordinance No. 1778 insofar as
said ordinance prohibits or curtails petitioner from maintaining and operating its
own bus terminal subject to the conditions provided for in Ordinance No. 1557,
Sec. 3, which authorizes the construction of terminal outside the poblacion of
Lucena City; and likewise, insofar as said ordinance directs and compels the
petitioner to use the Lucena Grand Central Terminal Inc., and furthermore,
insofar as it declares that no other terminals shall be situated, constructed,
maintained or established inside or within the City of Lucena; and furthermore,
5. The Motion to Dismiss filed by the Intervenor, Lucena Grand Central Terminal
Inc., dated October 19, 1998, is hereby DENIED for lack of merit.
SO ORDERED. (Emphasis and underscoring supplied)8
Petitioner’s Motion for Reconsideration9 of the trial court’s order having been denied by
Order of August 6, 1999,10 it elevated it via petition for review under Rule 45 before this
Court.11 This Court, by Resolution of November 24, 1999,12 referred the petition to the Court
of Appeals with which it has concurrent jurisdiction, no special and important reason having
been cited for it to take cognizance thereof in the first instance.
By Decision of December 15, 2000,13 the appellate court dismissed the petition and affirmed
the challenged orders of the trial court. Its motion for reconsideration14 having been denied
by the appellate court by Resolution dated June 5, 2001,15 petitioner once again comes to
this Court via petition for review,16 this time assailing the Decision and Resolution of the
Court of Appeals.
Decision on the petition hinges on two issues, to wit: (1) whether the trial court has
jurisdiction over the case, it not having furnished the Office of the Solicitor General copy of
the orders it issued therein, and (2) whether the City of Lucena properly exercised its police
power when it enacted the subject ordinances.
7
Petitioner argues that since the trial court failed to serve a copy of its assailed orders upon
the Office of the Solicitor General, it never acquired jurisdiction over the case, it
citing Section 22, Rule 3 of the Rules which provides:
SEC. 22. Notice to the Solicitor General.—In any action involving the validity of any treaty,
law, ordinance, executive order, presidential decree, rules or regulations, the court in its
discretion, may require the appearance of the Solicitor General who may be heard in person
or through representative duly designated by him. (Emphasis and underscoring supplied)
Furthermore, petitioner invokes Sections 3 and 4 of Rule 63 which respectively provide:
SEC. 3. Notice on Solicitor General. – In any action which involves the validity of a statute,
executive order or regulation, or any other governmental regulation, the Solicitor General
shall be notified by the party assailing the same and shall be entitled to be heard upon such
question.
SEC. 4. Local government ordinances. – In any action involving the validity of a local
government ordinance, the corresponding prosecutor or attorney of the local government
unit involved shall be similarly notified and entitled to be heard. If such ordinance is alleged
to be unconstitutional, the Solicitor General shall also be notified and entitled to be heard.
(Emphasis and underscoring supplied)
Nowhere, however, is it stated in the above-quoted rules that failure to notify the Solicitor
General about the action is a jurisdictional defect.
In fact, Rule 3, Section 22 gives the courts in any action involving the "validity" of
any ordinance, inter alia, "discretion" to notify the Solicitor General.
Section 4 of Rule 63, which more specifically deals with cases assailing the constitutionality,
not just the validity, of a local government ordinance, directs that the Solicitor General
"shall also be notified and entitled to be heard." Who will notify him, Sec. 3 of the same rule
provides — it is the party which is assailing the local government’s ordinance.
More importantly, however, this Court finds that no procedural defect, fatal or otherwise,
attended the disposition of the case. For respondent actually served a copy of its petition
upon the Office of the Solicitor General on October 1, 1998, two days after it was filed. The
Solicitor General has issued a Certification to that effect.17 There was thus compliance with
above-quoted rules.
Respecting the issue of whether police power was properly exercised when the subject
ordinances were enacted: As with the State, the local government may be considered as
having properly exercised its police power only if the following requisites are met: (1) the
interests of the public generally, as distinguished from those of a particular class, require the
interference of the State, and (2) the means employed are reasonably necessary for the
attainment of the object sought to be accomplished and not unduly oppressive upon
individuals. Otherwise stated, there must be a concurrence of a lawful subject and lawful
method.18
That traffic congestion is a public, not merely a private, concern, cannot be gainsaid.
In Calalang v. Williams19 which involved a statute authorizing the Director of Public Works to
promulgate rules and regulations to regulate and control traffic on national roads, this Court
held:
In enacting said law, therefore, the National Assembly was prompted by considerations
of public convenience and welfare. It was inspired by a desire to relieve congestion of traffic,
which is, to say the least, a menace to public safety. Public welfare, then, lies at the bottom
of the enactment of said law, and the state in order to promote the general welfare may
interfere with personal liberty, with property, and with business and
occupations.20 (Emphasis supplied)
The questioned ordinances having been enacted with the objective of relieving traffic
congestion in the City of Lucena, they involve public interest warranting the interference of
the State. The first requisite for the proper exercise of police power is thus present.
Respondent’s suggestion to have this Court look behind the explicit objective of the
ordinances which, to it, was actually to benefit the private interest of petitioner by coercing
all bus operators to patronize its terminal does not lie.21 Lim v. Pacquing22 instructs:
. . . [T]his Court cannot look into allegations that PD No. 771 was enacted to benefit a select
group which was later given authority to operate the jai-alai under PD No. 810. The
examination of legislative motivation is generally prohibited. (Palmer v. Thompson, 403 U.S.
217, 29 L. Ed. 2d 438 [1971] per Black, J.) There is, in the first place, absolute lack of evidence
to support ADC’s allegation of improper motivation in the issuance of PD No. 771. In the
second place, as already averred, this Court cannot go behind the expressed and proclaimed
purposes of PD No. 771, which are reasonable and even laudable. (Underscoring supplied)23
This leaves for determination the issue of whether the means employed by the Lucena
Sangguniang Panlungsod to attain its professed objective were reasonably necessary and not
unduly oppressive upon individuals.
With the aim of localizing the source of traffic congestion in the city to a single location, 24 the
subject ordinances prohibit the operation of all bus and jeepney terminals within Lucena,
including those already existing, and allow the operation of only one common terminal
located outside the city proper, the franchise for which was granted to petitioner. The
common carriers plying routes to and from Lucena City are thus compelled to close down
their existing terminals and use the facilities of petitioner.
In De la Cruz v. Paras,25 this Court declared unconstitutional an ordinance characterized by
overbreadth. In that case, the Municipality of Bocaue, Bulacan prohibited the operation of all
8
night clubs, cabarets and dance halls within its jurisdiction for the protection of public
morals. Held the Court:
It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualif
y under the termreasonable. The objective of fostering public morals, a worthy and desirable
end can be attained by a measure thatdoes not encompass too wide a field. Certainly the ord
inance on its face is characterized by overbreadth. Thepurpose sought to be achieved could h
ave been attained by reasonable restrictions rather than by an absoluteprohibition. The
admonition in Salaveria should be heeded: "The Judiciary should not lightly set aside
legislative action when there is not a clear invasion of personal or property rights under the
guise of police regulation." It is clear that in the guise of a police regulation, there was in this
instance a clear invasion of personal or property rights, personal in the case of those
individuals desirous of patronizing those night clubs and property in terms of the investments
made and salaries to be earned by those therein employed. (Underscoring supplied)26
In Lupangco v. Court of Appeals,27 this Court, in declaring unconstitutional the resolution
subject thereof, advanced a similar consideration. That case involved a resolution issued by
the Professional Regulation Commission which prohibited examinees from attending review
classes and receiving handout materials, tips, and the like three days before the date of
examination in order to preserve the integrity and purity of the licensure examinations in
accountancy. Besides being unreasonable on its face and violative of academic freedom, the
measure was found to be more sweeping than what was necessary, viz:
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged
leakages in the licensure examinations will be eradicated or at least minimized. Making the
examinees suffer by depriving them of legitimate means of review or preparation on those
last three precious days when they should be refreshing themselves with all that they have
learned in the review classes and preparing their mental and psychological make-up for the
examination day itself — would be like uprooting the tree to get rid of a rotten branch.
What is needed to be done by the respondent is to find out the source of such leakages and
stop it right there. If corrupt officials or personnel should be terminated from their loss, then
so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by
examiners should be set up and if violations are committed, then licenses should be
suspended or revoked. x x x (Emphasis and underscoring supplied) 28
As in De la Cruz29 and Lupangco,30 the
ordinances assailed herein are characterized by
overbreadth. They go beyond what is reasonably necessary to solve the traffic problem.
Additionally, since the compulsory use of the terminal operated by petitioner would subject
the users thereof to fees, rentals and charges, such measure is unduly oppressive, as
correctly found by the appellate court. 31 What should have been done was to determine
exactly where the problem lies and then to stop it right there.
The true role of Constitutional Law is to effect an equilibrium between authority and
liberty so that rights are exercised within the framework of the law and the laws are enacted
with due deference to rights. (Underscoring supplied)32
A due deference to the rights of the individual thus requires a more careful formulation of
solutions to societal problems.
From the memorandum33 filed before this Court by petitioner, it is gathered that the
Sangguniang Panlungsod had identified the cause of traffic congestion to be the
indiscriminate loading and unloading of passengers by buses on the streets of the city
proper, hence, the conclusion that the terminals contributed to the proliferation of buses
obstructing traffic on the city streets.
Bus terminals per se do not, however, impede or help impede the flow of traffic. How the
outright proscription against the existence of all terminals, apart from that franchised to
petitioner, can be considered as reasonably necessary to solve the traffic problem, this Court
has not been enlightened. If terminals lack adequate space such that bus drivers are
compelled to load and unload passengers on the streets instead of inside the terminals, then
reasonable specifications for the size of terminals could be instituted, with permits to
operate the same denied those which are unable to meet the specifications.
In the subject ordinances, however, the scope of the proscription against the maintenance of
terminals is so broad that even entities which might be able to provide facilities better than
the franchised terminal are barred from operating at all.
Petitioner argues, however, that other solutions for the traffic problem have already been
tried but proven ineffective. But the grant of an exclusive franchise to petitioner has not
been shown to be the only solution to the problem.
While the Sangguniang Panlungsod, via Ordinance No. 1557,34 previously directed bus
owners and operators to put up their terminals "outside the poblacion of Lucena City,"
petitioner informs that said ordinance only resulted in the relocation of terminals to
other well-populated barangays, thereby giving rise to traffic congestion in those
areas.35Assuming that information to be true, the Sangguniang Panlungsod was not without
remedy. It could have defined, among other considerations, in a more precise manner, the
area of relocation to avoid such consequences.
As for petitioner’s argument that the challenged ordinances were enacted pursuant to the
power of the Sangguniang Panlungsod to "[r]egulate traffic on all streets and
bridges; prohibit encroachments or obstacles thereon and, when necessary in the interest of
public welfare, authorize the removal of encroachments and illegal constructions in public
places":36 Absent any showing, nay allegation, that the terminals are encroaching upon public
roads, they are not obstacles. The buses which indiscriminately load and unload passengers
on the city streets are. The power then of the Sangguniang Panlungsod to prohibit
encroachments and obstacles does not extend to terminals.1a\^/phi1.net
Neither are terminals public nuisances as petitioner argues. For their operation is a legitimate
business which, by itself, cannot be said to be injurious to the rights of property, health, or
comfort of the community.
9
But even assuming that terminals are nuisances due to their alleged indirect effects upon the
flow of traffic, at most they are nuisance per accidens, not per se.

Unless a thing is nuisance per se, however, it may not be abated via an ordinance, without
judicial proceedings, as was done in the case at bar.

In Estate of Gregoria Francisco v. Court of Appeals,37 this Court held:

Respondents can not seek cover under the general welfare clause authorizing the abatement
of nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one
which affects the immediate safety of persons and property and may be summarily abated
under the undefined law of necessity (Monteverde v. Generoso, 52 Phil. 123 [1982]). The
storage of copra in the quonset building is a legitimate business. By its nature, it can not be
said to be injurious to rights of property, of health or of comfort of the community. If it be a
nuisance per accidens it may be so proven in a hearing conducted for that purpose. It is not
per se a nuisance warranting its summary abatement without judicial
intervention.l^vvphi1.net (Underscoring supplied)38 1awphi1.nét

In Pampanga Bus Co., Inc. v. Municipality of Tarlac39 where the appellant-municipality

similarly argued that the terminal involved therein is a nuisance that may be abated by the
Municipal Council via an ordinance, this Court held: "Suffice it to say that in the abatement of
nuisances the provisions of the Civil Code (Articles 694-707) must be observed and followed.
This appellant failed to do."

As for petitioner’s claim that the challenged ordinances have actually been proven effective
in easing traffic congestion: Whether an ordinance is effective is an issue different from
whether it is reasonably necessary. It is its reasonableness, not its effectiveness, which bears
upon its constitutionality. If the constitutionality of a law were measured by its effectiveness,
then even tyrannical laws may be justified whenever they happen to be effective.

The Court is not unaware of the resolutions of various barangays in Lucena City supporting
the establishment of a common terminal, and similar expressions of support from the private
sector, copies of which were submitted to this Court by petitioner. The weight of popular
opinion, however, must be balanced with that of an individual’s rights.

There is no question that not even the strongest moral conviction or the most urgent public
need, subject only to a few notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a person invoking a right guaranteed under Article III
of the Constitution is a majority of one even as against the rest of the nation who would deny
him that right.40

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.

10
G.R. No. 120721 February 23, 2005
MANUEL G. ABELLO, JOSE C. CONCEPCION, TEODORO D. REGALA, AVELINO V.
CRUZ, petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and COURT OF APPEALS, respondents.
DECISION
AZCUNA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure,
assailing the decision of the Court of Appeals in CA –G.R. SP No. 27134, entitled "Comissioner
of Internal Revenue v. Manuel G. Abello, Jose C. Concepcion, Teodoro D. Regala, Avelino V.
Cruz and Court of Tax Appeals," which reversed and set aside the decision of the Court of Tax
Appeals (CTA), ordering the Commissioner of Internal Revenue (Commissioner) to withdraw
his letters dated April 21, 1988 and August 4, 1988 assessing donor’s taxes and to desist from
collecting donor’s taxes from petitioners.
During the 1987 national elections, petitioners, who are partners in the Angara, Abello,
Concepcion, Regala and Cruz (ACCRA) law firm, contributed ₱882,661.31 each to the
campaign funds of Senator Edgardo Angara, then running for the Senate. In letters dated
April 21, 1988, the Bureau of Internal Revenue (BIR) assessed each of the petitioners
₱263,032.66 for their contributions. On August 2, 1988, petitioners questioned the
assessment through a letter to the BIR. They claimed that political or electoral contributions
are not considered gifts under the National Internal Revenue Code (NIRC), and that,
therefore, they are not liable for donor’s tax. The claim for exemption was denied by the
Commissioner.1 1ªvvphi1.nét
On September 12, 1988, petitioners filed a petition for review with the CTA, which was
decided on October 7, 1991 in favor of the petitioners. As aforestated, the CTA ordered the
Commissioner to desist from collecting donor’s taxes from the petitioners. 2
On appeal, the Court of Appeals reversed and set aside the CTA decision on April 20,
1994.3 The appellate Court ordered the petitioners to pay donor’s tax amounting to
₱263,032.66 each, reasoning as follows:
The National Internal Revenue Code, as amended, provides:
Sec. 91. Imposition of Tax. (a) There shall be levied, assessed, collected, and paid upon the
transfer by any person, resident, or non-resident, of the property by gift, a tax, computed as
provided in Section 92. (b) The tax shall apply whether the transfer is in trust or otherwise,
whether the gift is direct or indirect, and whether the property is real or personal, tangible or
intangible.
Pursuant to the above-quoted provisions of law, the transfer of property by gift, whether the
transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the
property is real or personal, tangible or intangible, is subject to donor’s or gift tax.
A gift is generally defined as a voluntary transfer of property by one to another without any
consideration or compensation therefor (28 C.J. 620; Santos vs. Robledo, 28 Phil. 250).
In the instant case, the contributions are voluntary transfers of property in the form of
money from private respondents to Sen. Angara, without considerations therefor. Hence,
they squarely fall under the definition of donation or gift.
As correctly pointed out by the Solicitor General:
The fact that the contributions were given to be used as campaign funds of Sen. Angara does
not affect the character of the fund transfers as donation or gift. There was thereby no
retention of control over the disposition of the contributions. There was simply an indication
of the purpose for which they were to be used. For as long as the contributions were used for
the purpose for which they were intended, Sen. Angara had complete and absolute power to
dispose of the contributions. He was fully entitled to the economic benefits of the
contributions.
Section 91 of the Tax Code is very clear. A donor’s or gift tax is imposed on the transfer of
property by gift.1awphi1.nét
The Bureau of Internal Revenue issued Ruling No. 344 on July 20, 1988, which reads:
Political Contributions. – For internal revenue purposes, political contributions in the
Philippines are considered taxable gift rather than taxable income. This is so, because a
political contribution is indubitably not intended by the giver or contributor as a return of
value or made because of any intent to repay another what is his due, but bestowed only
because of motives of philanthropy or charity. His purpose is to give and to bolster the
morals, the winning chance of the candidate and/or his party, and not to employ or buy. On
the other hand, the recipient-donee does not regard himself as exchanging his services or his
product for the money contributed. But more importantly he receives financial advantages
gratuitously.
When the U.S. gift tax law was adopted in the Philippines (before May 7, 1974), the taxability
of political contributions was, admittedly, an unsettled issue; hence, it cannot be presumed
that the Philippine Congress then had intended to consider or treat political contributions as
non-taxable gifts when it adopted the said gift tax law. Moreover, well-settled is the rule that
the Philippines need not necessarily adopt the present rule or construction in the United
States on the matter. Generally, statutes of different states relating to the same class of
persons or things or having the same purposes are not considered to be in pari
materia because it cannot be justifiably presumed that the legislature had them in mind
when enacting the provision being construed. (5206, Sutherland, Statutory Construction, p.
11
546.) Accordingly, in the absence of an express exempting provision of law, political
contributions in the Philippines are subject to the donor’s gift tax. (cited in National Internal
Revenue Code Annotated by Hector S. de Leon, 1991 ed., p. 290).
In the light of the above BIR Ruling, it is clear that the political contributions of the private
respondents to Sen. Edgardo Angara are taxable gifts. The vagueness of the law as to what
comprise the gift subject to tax was made concrete by the above-quoted BIR ruling. Hence,
there is no doubt that political contributions are taxable gifts.4
Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its
resolution of June 16, 1995.5
Petitioners thereupon filed the instant petition on July 26, 1995. Raised are the following
issues:
1. DID THE HONORABLE COURT OF APPEALS ERR WHEN IT FAILED TO CONSIDER IN
ITS DECISION THE PURPOSE BEHIND THE ENACTMENT OF OUR GIFT TAX LAW?
2. DID THE HONORABLE COURT OF APPEALS ERR IN NOT CONSIDERING THE
INTENTION OF THE GIVERS IN DETERMINING WHETHER OR NOT THE PETITIONERS’
POLITICAL CONTRIBUTIONS WERE GIFTS SUBJECT TO DONORS TAX?
3. DID THE HONORABLE COURT OF APPEALS ERR WHEN IT FAILED TO CONSIDER
THE DEFINITION OF AN "ELECTORAL CONTRIBUTION" UNDER THE OMNIBUS
ELECTION CODE IN DETERMINING WHETHER OR NOT POLITICAL CONTRIBUTIONS
ARE TAXABLE?
4. DID THE HONORABLE COURT OF APPEALS ERR IN NOT CONSIDERING THE
ADMINISTRATIVE PRACTICE OF CLOSE TO HALF A CENTURY OF NOT SUBJECTING
POLITICAL CONTRIBUTIONS TO DONORS TAX?
5. DID THE HONORABLE COURT OF APPEALS ERR IN NOT CONSIDERING THE
AMERICAN JURISPRUDENCE RELIED UPON BY THE COURT OF TAX APPEALS AND BY
THE PETITIONERS TO THE EFFECT THAT POLITICAL CONTRIBUTIONS ARE NOT
TAXABLE GIFTS?
6. DID THE HONORABLE COURT OF APPEALS ERR IN NOT APPLYING AMERICAN
JURISPRUDENCE ON THE GROUND THAT THIS WAS NOT KNOWN AT THE TIME THE
PHILIPPINES GIFT TAX LAW WAS ADOPTED IN 1939?
7. DID THE HONORABLE COURT OF APPEALS ERR IN RESOLVING THE CASE MAINLY
ON THE BASIS OF A RULING ISSUED BY THE RESPONDENT ONLY AFTER THE
ASSESSMENTS HAD ALREADY BEEN MADE?
8. DID THE HONORABLE COURT OF APPEALS ERR WHEN IT DID NOT CONSTRUE THE
GIFT TAX LAW LIBERALLY IN FAVOR OF THE TAXPAYER AND STRICLTY AGAINST THE
GOVERNMENT IN ACCORDANCE WITH APPLICABLE PRINCIPLES OF STATUTORY
CONSTRUCTION?6
First, Fifth and Sixth Issues
Section 91 of the National Internal Revenue Code (NIRC) reads:
(A) There shall be levied, assessed, collected and paid upon the transfer by any
person, resident or nonresident, of the property by gift, a tax, computed as
provided in Section 92
(B) The tax shall apply whether the transfer is in trust or otherwise, whether the
gift is direct or indirect, and whether the property is real or personal, tangible or
intangible.
The NIRC does not define transfer of property by gift. However, Article 18 of the Civil Code,
states:
In matters which are governed by the Code of Commerce and special laws, their deficiency
shall be supplied by the provisions of this Code.
Thus, reference may be made to the definition of a donation in the Civil Code. Article 725 of
said Code defines donation as:
. . . an act of liberality whereby a person disposes gratuitously of a thing or right in favor of
another, who accepts it.
Donation has the following elements: (a) the reduction of the patrimony of the donor; (b) the
increase in the patrimony of the donee; and, (c) the intent to do an act of liberality or animus
donandi.7
The present case falls squarely within the definition of a donation. Petitioners, the late
Manuel G. Abello8 , Jose C. Concepcion, Teodoro D. Regala and Avelino V. Cruz, each gave
₱882,661.31 to the campaign funds of Senator Edgardo Angara, without any material
consideration. All three elements of a donation are present. The patrimony of the four
petitioners were reduced by ₱882,661.31 each. Senator Edgardo Angara’s patrimony
correspondingly increased by ₱3,530,645.249 . There was intent to do an act of liberality
or animus donandi was present since each of the petitioners gave their contributions without
any consideration.
12
Taken together with the Civil Code definition of donation, Section 91 of the NIRC is clear and
unambiguous, thereby leaving no room for construction. In Rizal Commercial Banking
Corporation v. Intermediate Appellate Court10 the Court enunciated:
It bears stressing that the first and fundamental duty of the Court is to apply the law. When
the law is clear and free from any doubt or ambiguity, there is no room for construction or
interpretation. As has been our consistent ruling, where the law speaks in clear and
categorical language, there is no occasion for interpretation; there is only room for
application (Cebu Portland Cement Co. v. Municipality of Naga, 24 SCRA 708 [1968])
Where the law is clear and unambiguous, it must be taken to mean exactly what it says and
the court has no choice but to see to it that its mandate is obeyed (Chartered Bank
Employees Association v. Ople, 138 SCRA 273 [1985]; Luzon Surety Co., Inc. v. De Garcia, 30
SCRA 111 [1969]; Quijano v. Development Bank of the Philippines, 35 SCRA 270 [1970]).
Only when the law is ambiguous or of doubtful meaning may the court interpret or construe
its true intent.l^vvphi1.netAmbiguity is a condition of admitting two or more meanings, of
being understood in more than one way, or of referring to two or more things at the same
time. A statute is ambiguous if it is admissible of two or more possible meanings, in which
case, the Court is called upon to exercise one of its judicial functions, which is to interpret the
law according to its true intent.
Second Issue
Since animus donandi or the intention to do an act of liberality is an essential element of a
donation, petitioners argue that it is important to look into the intention of the giver to
determine if a political contribution is a gift. Petitioners’ argument is not tenable. First of all,
donative intent is a creature of the mind. It cannot be perceived except by the material and
tangible acts which manifest its presence. This being the case, donative intent is presumed
present when one gives a part of ones patrimony to another without consideration. Second,
donative intent is not negated when the person donating has other intentions, motives or
purposes which do not contradict donative intent. This Court is not convinced that since the
purpose of the contribution was to help elect a candidate, there was no donative intent.
Petitioners’ contribution of money without any material consideration evinces animus
donandi. The fact that their purpose for donating was to aid in the election of the donee does
not negate the presence of donative intent.
Third Issue
Petitioners maintain that the definition of an "electoral contribution" under the Omnibus
Election Code is essential to appreciate how a political contribution differs from a taxable
gift.11 Section 94(a) of the said Code defines electoral contribution as follows:
The term "contribution" includes a gift, donation, subscription, loan, advance or deposit of
money or anything of value, or a contract, promise or agreement to contribute, whether or
not legally enforceable, made for the purpose of influencing the results of the elections but
shall not include services rendered without compensation by individuals volunteering a
portion or all of their time in behalf of a candidate or political party. It shall also include the
use of facilities voluntarily donated by other persons, the money value of which can be
assessed based on the rates prevailing in the area.
Since the purpose of an electoral contribution is to influence the results of the election,
petitioners again claim that donative intent is not present. Petitioners attempt to place the
barrier of mutual exclusivity between donative intent and the purpose of political
contributions. This Court reiterates that donative intent is not negated by the presence of
other intentions, motives or purposes which do not contradict donative intent.
Petitioners would distinguish a gift from a political donation by saying that the consideration
for a gift is the liberality of the donor, while the consideration for a political contribution is
the desire of the giver to influence the result of an election by supporting candidates who, in
the perception of the giver, would influence the shaping of government policies that would
promote the general welfare and economic well-being of the electorate, including the giver
himself.
Petitioners’ attempt is strained. The fact that petitioners will somehow in the future benefit
from the election of the candidate to whom they contribute, in no way amounts to a valuable
material consideration so as to remove political contributions from the purview of a
donation. Senator Angara was under no obligation to benefit the petitioners. The proper
performance of his duties as a legislator is his obligation as an elected public servant of the
Filipino people and not a consideration for the political contributions he received. In fact, as a
public servant, he may even be called to enact laws that are contrary to the interests of his
benefactors, for the benefit of the greater good.
In fine, the purpose for which the sums of money were given, which was to fund the
campaign of Senator Angara in his bid for a senatorial seat, cannot be considered as a
material consideration so as to negate a donation.
Fourth Issue
Petitioners raise the fact that since 1939 when the first Tax Code was enacted, up to 1988
the BIR never attempted to subject political contributions to donor’s tax. They argue that:
. . . It is a familiar principle of law that prolonged practice by the government agency charged
with the execution of a statute, acquiesced in and relied upon by all concerned over an
appreciable period of time, is an authoritative interpretation thereof, entitled to great weight
and the highest respect. . . .12
This Court holds that the BIR is not precluded from making a new interpretation of the law,
especially when the old interpretation was flawed. It is a well-entrenched rule that
13
. . . erroneous application and enforcement of the law by public officers do not block
subsequent correct application of the statute (PLDT v. Collector of Internal Revenue, 90 Phil.
676), and that the Government is never estopped by mistake or error on the part of its
agents (Pineda v. Court of First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated
Mining Co. v. Pineda, 98 Phil. 711, 724).13

Seventh Issue

Petitioners question the fact that the Court of Appeals decision is based on a BIR ruling,
namely BIR Ruling No. 88-344, which was issued after the petitioners were assessed for
donor’s tax. This Court does not need to delve into this issue. It is immaterial whether or not
the Court of Appeals based its decision on the BIR ruling because it is not pivotal in deciding
this case. As discussed above, Section 91 (now Section 98) of the NIRC as supplemented by
the definition of a donation found in Article 725 of the Civil Code, is clear and unambiguous,
and needs no further elucidation.

Eighth Issue

Petitioners next contend that tax laws are construed liberally in favor of the taxpayer and
strictly against the government. This rule of construction, however, does not benefit
petitioners because, as stated, there is here no room for construction since the law is clear
and unambiguous.

Finally, this Court takes note of the fact that subsequent to the donations involved in this
case, Congress approved Republic Act No. 7166 on November 25, 1991, providing in Section
13 thereof that political/electoral contributions, duly reported to the Commission on
Elections, are not subject to the payment of any gift tax. This all the more shows that the
political contributions herein made are subject to the payment of gift taxes, since the same
were made prior to the exempting legislation, and Republic Act No. 7166 provides no
retroactive effect on this point.

WHEREFORE, the petition is DENIED and the assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.

No costs.

SO ORDERED.

14
G.R. No. 112796 March 5, 1998
TITO R. LAGAZO, petitioner,
vs.
COURT OF APPEALS and ALFREDO CABANLIT, respondents.
PANGANIBAN, J.:
Where the acceptance of a donation was made in a separate instrument but not formally
communicated to the donor, may the donation be nonetheless considered complete, valid
and subsisting? Where, the deed of donation did not expressly impose any burden — the
expressed consideration being purely one of liberality and generosity — a separate but the
recipient actually paid charges imposed on the property like land taxes and installment
arrearages, may the donation be deemed onerous and thus governed by the law on ordinary
contracts?
The Case
The Court answers these questions in the negative as it resolves this petition for review
under Rule 45 of the Rules of Court seeking to set aside the Decision1 of the Court of
Appeals2 in CA-GR CV No. 38050 promulgated on November 29, 1993. The assailed Decision
reversed the Regional Trial Court, Branch 30, Manila, in Civil Case No. 87-39133 which had
disposed3 of the controversy in favor of herein petitioner in the following manner:4
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and
against the defendant as follows:
1. Ordering the defendant, or any person claiming rights under him, to
surrender to plaintiff possession of the premises known as Lot 8w, Block
6, Psd-135534 of the Monserrat Estate, and the improvement standing
thereon, located at 3320 2nd St., V. Mapa, Old Sta. Mesa, Manila;
2. Ordering the defendant to pay plaintiff the sum of Five Thousand
(P5,000.00) Pesos, as and for attorney's fees; and
3. Costs against the defendant.
The defendant's counterclaims are hereby dismissed.
The Facts
Although the legal conclusions and dispositions of the trial and the appellate courts are
conflicting, the factual antecedents of the case are not substantially disputed.5 We reproduce
their narration from the assailed Decision:
Civil Case No. 83-39133 involves an action filed by plaintiff-appellee
[herein petitioner] on January 22, 1987 seeking to recover from
defendant-appellant [a] parcel of land which the former claims to have
acquired from his grandmother by donation. Defendant-appellant [herein
private respondent], on the other hand, put up the defense that when
the alleged donation was executed, he had already acquired the property
by a Deed of Assignment from a transferee of plaintiff-appellee's
grandmother.
The evidence for plaintiff-appellee [herein petitioner] is summarized as
follows:
Catalina Jacob Vda. de Reyes, a widow and grandmother of plaintiff-
appellee, was awarded in July 1975 a 60.10-square meter lot which is a
portion of the Monserrat Estate, more particularly described as Lot 8W,
Block 6 of Psd-135834, located at 3320 2nd St., V. Mapa, Old Sta. Mesa,
Manila. The Monserrat Estate is a public land owned by the City of Manila
and distributed for sale to bona fidetenants under its land-for-the-
landless program. Catalina Jacob constructed a house on the lot.
On October 3, 1977, or shortly before she left for Canada where she is
now a permanent resident, Catalina Jacob executed a special power of
attorney (Exh. "A") in favor of her son-in-law Eduardo B. Español
authorizing him to execute all documents necessary for the final
adjudication of her claim as awardee of the lot.
Due to the failure of Eduardo B. Español to accomplish the purpose of the
power of attorney granted to him, Catalina Jacob revoked said authority
in an instrument executed in Canada on April 16, 1984 (Exh. "D").
Simultaneous with the revocation, Catalina Jacob executed another
power of attorney of the same tenor in favor plaintiff-appellee.
On January 30, 1985, Catalina Jacob executed in Canada a Deed of
Donation over a Lot 8W in favor of plaintiff-appellee (Exh. "E"). Following
the donation, plaintiff-appellee checked with the Register of Deeds and
found out that the property was in the delinquent list, so that he paid the
installments in arrears and the remaining balance on the lot (Exhs. "F",
"F-1" and "F-2") and declared the said property in the name of Catalina
Jacob (Exhs. "G", "G-1", "G-2" and "G-3").
On January 29, 1986, plaintiff-appellee sent a demand letter to
defendant-appellant asking him to vacate the premises (Exh. "H"). A
15
similar letter was sent by plaintiff-appellee's counsel to defendant on
September 11, 1986 (Exh. "I"). However, defendant-appellant refused to
vacate the premises claiming ownership thereof. Hence, plaintiff-
appellee instituted the complaint for recovery of possession and
damages against defendant-appellant.
Opposing plaintiff-appellee's version, defendant-appellant claimed that
the house and lot in controversy were his by virtue of the following
documents:
1. Deed of Absolute Sale executed by Catalina Jacob dated October 7,
1977 in favor of Eduardo B. Español covering the residential house
located at the premises (Exh. "4").
2. Deed of Assignment over Lot 8W executed by Catalina Jacob in favor of
Eduardo Español dated September 30, 1980 (Exh. "5"); and
3. Deed of Assignment executed by Eduardo B. Español over Lot 8W and
a residential house thereon in favor of defendant-appellant dated
October 2, 1982 (Exh. "6").
After trial, the lower court decided in favor of plaintiff-appellee and
against defendant-appellant, rationalizing that the version of the former
is more credible than that of the latter. According to the lower court:
From the oral and documentary evidence adduced by
the parties[,] it appears that the plaintiff- has a better
right over the property, subject matter of the case.
The version of the plaintiff is more credible than that
of the defendant. The theory of the plaintiff is that
the house and lot belong to him by virtue of the Deed
of Donation in his favor executed by his grandmother
Mrs. Jacob Vda. de Reyes, the real awardee of the lot
in question. The defendant's theory is that he is the
owner thereof because he bought the house and lot
from Eduardo Español, after the latter had shown and
given to him Exhibits 1, 4 and 5. He admitted that he
signed the Deed of Assignment in favor of Eduardo
Español on September 30, 1980, but did not see
awardee Catalina Jacob Vda. de Reyes signed [sic] it.
In fact, the acknowledgement in Exhibit "5" shows
that the assignor/awardee did not appear before the
notary public. It may be noted that on said date, the
original awardee of the lot was no longer in the
Philippines, as both parties admitted that she had not
come back to the Philippines since 1977. (Exhs. K, K-
1). Defendant, claiming to be the owner of the lot,
unbelievably did not take any action to have the said
house and lot be registered or had them declared in
his own name. Even his Exhibit 7 was not mailed or
served to the addressee. Such attitude and laxity is
very unnatural for a buyer/owner of a property, in
stark contrast of [sic] the interest shown by the
plaintiff who saw to it that the lot was removed from
the delinquent list for non-payment of installments
and taxes due thereto [sic].6
Ruling of the Appellate Court
In reversing the trial court's decision,7 Respondent Court of Appeals anchored its ruling upon
the absence of any showing that petitioner accepted his grandmother's donation of the
subject land. Citing jurisprudence that the donee's failure to accept a donation whether in
the same deed of donation or in a separate instrument renders the donation null and void,
Respondent Court denied petitioner's claim of ownership over the disputed land. The
appellate court also struck down petitioner's contention that the formalities for a donation of
real property should not apply to his case since it was an onerous one — he paid for the
amortizations due on the land before and after the execution of the deed of donation —
reasoning that the deed showed no burden, charge or condition imposed upon the donee;
thus, the payments made by petitioner were his voluntary acts.
Dissatisfied with the foregoing ruling, petitioner now seeks a favorable disposition from this
Court.8
Issues
Petitioner anchors his petition on the following grounds:9
[I.] In reversing the decision of the trial court, the Court of Appeals
decided a question of substance in a way not in accord with the law and
applicable decisions of this Honorable Court.
[II.] Even granting the correctness of the decision of the Court of Appeals,
certain fact and circumstances transpired in the meantime which would
render said decision manifestly unjust, unfair and inequitable to
petitioner.
We believe that the resolution of this case hinges on the issue of whether the donation was
simple or onerous.
The Court's Ruling
16
The petition lacks merit. q After you have received this [sic] documents, the . .
. revocation of power of attorney and the Special
Main Issue: Power of Attorney in your favor, what did you do?
Simple or Onerous Donation?
WITNESS:
At the outset, let us differentiate between a simple donation and an onerous one. A simple
or pure donation is one whose cause is pure liberality (no strings attached), while an onerous a I went here in City Hall and verif[ied] the status of
donation is one which is subject to burdens, charges or future services equal to or more in the award of my grandmother.
value than the thing donated. 10 Under Article 733 of the Civil Code, donations with an
onerous cause shall be governed by the rules on contracts; hence, the formalities required q When you say the award, are you referring to the
for a valid simple donation are not applicable. award in particular [of the] lot in favor of your
grandmother?
Petitioner contends that the burdens, charges or conditions imposed upon a donation need
not be stated on the deed of donation itself. Thus, although the deed did not categorically a Yes, Sir.
impose any charge, burden or condition to be satisfied by him, the donation was onerous
since he in fact and in reality paid for the installments in arrears and for the remaining
q What was the result of your verification?
balance of the lot in question. Being an onerous donation, his acceptance thereof may be
express or implied, as provided under Art. 1320 of the Civil Code, and need not comply with
the formalities required by Art. 749 of the same code. His payment of the arrearages and a According to the person in the office, the papers of
balance and his assertion of his right of possession against private respondent clearly indicate my grandmother is [sic] includ[ed] in the dilinquent
his acceptance of the donation. [sic] list.

We rule that the donation was simple, not onerous. Even conceding that petitioner's full
payment of the purchase price of the lot might have been a burden to him, such payment
was not however imposed by the donor as a condition for the donation. Rather, the deed
explicitly stated:
That for and in consideration of the love and affection which the DONEE
inspires in the DONOR, and as an act of liberality and generosity and
considering further that the DONEE is a grandson of the DONOR, the
DONOR hereby voluntarily and freely gives, transfer[s] and conveys, by
way of donation unto said DONEE, his heirs, executors, administrators
and assigns, all the right, title and interest which the said DONOR has in
the above described real property, together with all the buildings and
improvements found therein, free from all lines [sic] and encumbrances
and charges whatsoever; 11[emphasis supplied]
q What did you do then when you found out that the
lot was includ[ed] in the dilinquent [sic] list?
a I talked to the person in charged [sic] in the office
and I asked him what to do so that the lot should not
[be] included in the dilinquent [sic] list.
ATTY. FORONDA:
q And what was the anwer [sic] given to you to the
inquiry which you made?
WITNESS:

It is clear that the donor did not have any intention to burden or charge petitioner as the a According to the person in the office, that I would
donee. The words in the deed are in fact typical of a pure donation. We agree with pay the at least [sic] one half of the installment in
Respondent Court that the payments made by petitioner were merely his voluntary acts. This order to take [out] the document [from] the
much can be gathered from his testimony in court, in which he never even claimed that a delinquent list.
burden or charge had been imposed by his grandmother.
q And [were] you able to pay?
ATTY FORONDA:
a I was able to pay, sir.

17
 q What were you able to pay, one half of the balance
or the entire amounts [sic]?
a First, I paid the [sic] one half of the balance since
the time the lot was awarded to us.
q What about the remaining balance, were you able
to pay it?
a I was able to pay that, sir.
q So, as of now, the amount in the City of Manila of
the lot has already been duly paid, is it not?
a Yes, sir. 12
The payments even seem to have been made pursuant to the power of
attorney 13 executed by Catalina Reyes in favor of petitioner, her grandson,
authorizing him to execute acts necessary for the fulfillment of her obligations.
Nothing in the records shows that such acts were meant to be a burden in the
donation.
As a pure or simple donation, the following provisions of the Civil Code are applicable:
Art. 734. The donation is perfected from the moment the donor knows of
the acceptance by the donee.
Art. 746. Acceptance must be made during the lifetime of the donor and
the donee.
Art. 749. In order that the donation of an immovable may be valid, it
must be made in a public instrument, specifying therein the property
donated and the value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation and in a
separate public document, but it shall not take effect unless it is done
during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be
notified thereof in authentic form, and this step shall be noted in both
instruments.
In the words of the esteemed Mr. Justice Jose C. Vitug, 14 "Like any other contract, an
agreement of the parties is essential. The donation, following the theory of cognition (Article
1319, Civil Code), is perfected only upon the moment the donor knows of the acceptance by
the donee." Furthermore, "[i]f the acceptance is made in a separate instrument, the donor
shall be notified thereof in an authentic form, and this step shall be noted in both
instruments." 15
Acceptance of the donation by the donee is, therefore, indispensable; its absence makes the
donation null and void. 16 The perfection and the validity of a donation are well explained by
former Sen. Arturo M. Tolentino in this wise:
. . . Title to immovable property does not pass from the donor to the
donee by virtue of a deed of donation until and unless it has been
accepted in a public instrument and the donor duly notified thereof. The
acceptance may be made in the very same instrument of donation. If the
acceptance does not appear in the same document, it must be made in
another. Solemn words are not necessary; it is sufficient if it shows the
intention to accept. But in this case it is necessary that formal notice
thereof be given to the donor, and the fact that due notice has been
given must be noted in both instruments (that containing the offer to
donate and that showing the acceptance). Then and only then is the
donation perfected. If the instrument of donation has been recorded in
the registry of property, the instrument that shows the acceptance
should also be recorded. Where the deed of donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a
separate instrument, is either not given to the donor or else not noted in
the deed of donation and in the separate acceptance, the donation is null
and void. 17
Exhibit E (the deed of donation) does not show any indication that petitioner-donee accepted
the gift. During the trial, he did not present any instrument evidencing such acceptance
despite the fact that private respondent already raised this allegation in his supplemental
pleading 18 to which petitioner raised no objection. It was only after the Court of Appeals had
rendered its decision, when petitioner came before this Court, that he submitted an
affidavit 19dated August 28, 1990, manifesting that he "wholeheartedly accepted" the lot
given to him by his grandmother, Catalina Reyes. This is too late, because arguments,
evidence, causes of action and matters not raised in the trial court may no longer be raised
on appeal. 20
True, the acceptance of a donation may be made at any time during the lifetime of the
donor. And granting arguendothat such acceptance may still be admitted in evidence on
appeal, there is still need for proof that a formal notice of such acceptance was received by
the donor and noted in both the deed of donation and the separate instrument embodying
the acceptance. At the very least, this last legal requisite of annotation in both instruments of
donation and acceptance was not fulfilled by petitioner. For this reason, the subject lot
cannot be adjudicated to him.
18
 Secondary Issue:
Supervening Events
Petitioner also contends that certain supervening events have transpired which render the
assailed Decision "manifestly unjust, unfair and inequitable" to him. The City of Manila has
granted his request for the transfer to his name of the lot originally awarded in favor of
Catalina Reyes. A deed of sale 21 covering the subject lot has in fact been executed between
the City of Manila, as the vendor; and petitioner, as the vendee. The corresponding
certificate of title 22 has also been issued in petitioner's name.
A close perusal of the city government's resolution 23 granting petitioner's request reveals
that the request for and the grant of the transfer of the award were premised on the validity
and perfection of the deed of donation executed by the original awardee, petitioner's
grandmother. This is the same document upon which petitioner, as against private
respondent, asserts his right over the lot. But, as earlier discussed and ruled, this document
has no force and effect and, therefore, passes no title, right or interest.
Furthermore, the same resolution states:
WHEREAS, in a report submitted by Ms. [Menchu C.] Bello [, Special
Investigator,] on February 7, 1990, it is stated that . . . constructed on the
lot is a make-shift structure used for residential purposes by the
proposed transferee Tito Lagazo and his family; . . . and that constructed
at Lot 8, Block 6, former Monserrat Estate is a make-shift structure used
as a dwelling place by Lagazo and family because the front portion of
their house which was constructed on a road lot was demolished, and the
structure was extended backward covering a portion of the old
temporary road lot. . . .
The above findings of the investigator are, however, directly contradictory to the
testimonies in court of petitioner himself and of private respondent. Petitioner
claimed the following: that the house constructed on the subject lot was owned by
his grandmother Catalina Jacob; that before the latter left for Canada in 1977,
Eduardo Español had already been living in the same house and continued to do so
until 1982; and that private respondent occupied the premises after Español
left. 24 On the other hand, private respondent testified that he bought the subject
house and lot from Eduardo Español in 1982, after which he and his family
occupied the same; but sometime in 1985, they had to leave the place due to a
road-widening project which reduced the house to "about three meters [in] length
and one arm[']s width." 25
Between the testimonies under oath of the contending parties and the report — not
subjected to cross-examination — which was prepared by the investigator who
recommended the approval of petitioner's request for transfer, it is the former to which the
Court is inclined to give more credence. The investigator's report must have been based on
the misrepresentations of petitioner who arrogated unto himself the prerogatives of both
Español and private respondent. Further, it is on record that petitioner had required private
respondent to vacate the subject premises before he instituted this complaint. This shows he
was not in actual possession of the property, contrary to the report of the investigator.
Cabanlit's Claim of Ownership
Petitioner also assails Respondent Court's conclusion that it is unnecessary to pass upon
private respondent's claim over the property. Petitioner insists that the principal issue in the
case, as agreed upon by the parties during pretrial, is "who between the parties is the owner
of the house and lot in question."
In disposing of the principal issue of the right of petitioner over the subject property under
the deed of donation, we arrive at one definite conclusion: on the basis of the alleged
donation, petitioner cannot be considered the lawful owner of the subject property. This
does not necessarily mean, however, that private respondent is automatically the rightful
owner.
In resolving private respondent's claim of ownership, the examination of the genuineness of
the documents (deeds of assignment over the lot between Catalina Reyes and Eduardo
Español and between Español and private respondent) upon which he asserts his right is
necessary, especially in light of petitioner's allegations of forgery. However, the respective
assignors in both documents are not parties to the instant case. Not having been impleaded
in the trial court, they had no participation whatsoever in the proceedings at bar. Elementary
norms of fair play and due process bar us from making any disposition which may affect their
rights. Verily, there can be no valid judgment for or against them. 26
Anyhow, since petitioner, who was the plaintiff below, failed to prove with clear and
convincing evidence his ownership claim over the subject property, the parties thus resume
their status quo ante. The trial court should have dismissed his complaint for his failure to
prove a right superior to that of private respondent, but without prejudice to any action that
Catalina Reyes or Eduardo Español or both may have against said private respondent. Stating
this point otherwise, we are not ruling in this case on the rights and obligations between, on
the one hand, Catalina Reyes, her assigns and/or representatives; and, on the other, Private
Respondent Cabanlit.
Not having proven any right to a valid, just and demandable claim that compelled him to
litigate or to incur expenses in order to protect his interests by reason of an unjustified act or
omission of private respondent, petitioner cannot be awarded attorney's fees. 27
WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.
SO ORDERED.
19
G.R. No. 123968 April 24, 2003
URSULINA GANUELAS, METODIO GANUELAS and ANTONIO GANUELAS, petitioners,
vs.
HON. ROBERT T. CAWED, Judge of the Regional Trial Court of San Fernando, La Union
(Branch 29), LEOCADIA G. FLORES, FELICITACION G. AGTARAP, CORAZON G. SIPALAY and
ESTATE OF ROMANA GANUELAS DE LA ROSA, represented by GREGORIO DELA ROSA,
Administrator, respondents.
CARPIO MORALES, J.:
The present petition for review under Rule 45 of the Rules of Court assails, on a question of
law, the February 22, 1996 decision 1 of the Regional Trial Court of San Fernando, La Union,
Branch 29, in Civil Case No. 3947, an action for declaration of nullity of a deed of donation.
The facts, as culled from the records of the case, are as follows:
On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina) executed a Deed of Donation
of Real Property 2 covering seven parcels of land in favor of her niece Ursulina Ganuelas
(Ursulina), one of herein petitioners.
The pertinent provision of the deed of donation reads, quoted verbatim:
xxx xxx xxx
That, for and in consideration of the love and affection which the DONOR has for
the DONEE, and of the faithful services the latter has rendered in the past to the
former, the said DONOR does by these presents transfer and convey, by way of
DONATION, unto the DONEE the property above, described, to become effective
upon the death of the DONOR; but in the event that the DONEE should die before
the DONOR, the present donation shall be deemed rescinded and of no further
force and effect.
xxx xxx xxx.3
On June 10, 1967, Celestina executed a document denominated as Revocation of
Donation4 purporting to set aside the deed of donation. More than a month later or on
August 18, 1967, Celestina died without issue and any surviving ascendants and siblings.
After Celestina's death, Ursulina had been sharing the produce of the donated properties
with private respondents Leocadia G. Flores, et al., nieces of Celestina.
In 1982, or twenty-four years after the execution of the Deed of Donation, Ursulina secured
the corresponding tax declarations, in her name, over the donated properties, to wit: Tax
Declarations Nos. 18108, 18109, 18110, 18111, 18112, 18113 and 18114, and since then, she
refused to give private respondents any share in the produce of the properties despite
repeated demands.
Private respondents were thus prompted to file on May 26, 1986 with the RTC of San
Fernando, La Union a complaint5 against Ursulina, along with Metodio Ganuelas and Antonio
Ganuelas who were alleged to be unwilling plaintiffs. The complaint alleged that the Deed of
Donation executed by Celestina in favor of Ursulina was void for lack of acknowledgment by
the attesting witnesses thereto before notary public Atty. Henry Valmonte, and the donation
was a disposition mortis causa which failed to comply with the provisions of the Civil Code
regarding formalities of wills and testaments, hence, it was void. The plaintiffs-herein private
respondents thus prayed that judgment be rendered ordering Ursulina to return to them as
intestate heirs the possession and ownership of the properties. They likewise prayed for the
cancellation of the tax declarations secured in the name of Ursulina, the partition of the
properties among the intestate heirs of Celestina, and the rendering by Ursulina of an
accounting of all the fruits of the properties since 1982 and for her to return or pay the value
of their shares.
The defendants-herein petitioners alleged in their Answer6 that the donation in favor of
Ursulina was inter vivos as contemplated under Article 729 of the Civil Code, 7 hence, the
deed did not have to comply with the requirements for the execution of a valid will; the
Revocation of Donation is null and void as the ground mentioned therein is not among those
provided by law to be the basis thereof; and at any rate, the revocation could only be legally
enforced upon filing of the appropriate complaint in court within the prescriptive period
provided by law, which period had, at the time the complaint was filed, already lapsed.
By Decision of February 22, 1996, the trial court, holding that the provision in the Deed of
Donation that in the event that the DONEE should predecease the DONOR, the "donation
shall be deemed rescinded and of no further force and effect" is an explicit indication that
the deed is a donation mortis causa,8 found for the plaintiffs-herein private respondents,
thus:
WHEREFORE the Court renders judgment declaring null and void the Deed of
Donation of Real Property executed by Celestina Ganuelas, and orders the partition
of the estate of Celestina among the intestate heirs.
SO ORDERED.9
The trial court also held that the absence of a reservation clause in the deed implied that
Celestina retained complete dominion over her properties, thus supporting the conclusion
that the donation is mortis causa,10 and that while the deed contained an attestation clause
and an acknowledgment showing the intent of the donor to effect a postmortem disposition,
the acknowledgment was defective as only the donor and donee appear to have
acknowledged the deed before the notary public, thereby rendering the entire document
void.11
20
Lastly, the trial court held that the subsequent execution by Celestina of the Revocation of
Donation showed that the donor intended the revocability of the donation ad nutum, thus
sustaining its finding that the conveyance was mortis causa.12
On herein petitioners' argument that the Revocation of Donation was void as the ground
mentioned therein is not one of those allowed by law to be a basis for revocation, the trial
court held that the legal grounds for such revocation as provided under the Civil Code arise
only in cases of donations inter vivos, but not in donations mortis causa which are revocable
at will during the lifetime of the donor. The trial court held, in any event, that given the
nullity of the disposition mortis causa in view of a failure to comply with the formalities
required therefor, the Deed of Revocation was a superfluity.13
Hence, the instant petition for review, petitioners contending that the trial court erred:
I. . . . WHEN IT DECLARED NULL AND VOID THE DONATION EXECUTED BY CELESTINA
GANUELAS;
II. . . . WHEN IT UPHELD THE REVOCATION OF DONATION;
III. . . . IN RENDERING ITS DECISION ADVERSE TO PETITIONER URSULINA
GANUELAS.14
Petitioners argue that the donation contained in the deed is inter vivos as the main
consideration for its execution was the donor's affection for the donee rather than the
donor's death;15 that the provision on the effectivity of the donation — after the donor's
death — simply meant that absolute ownership would pertain to the donee on the donor's
death;16 and that since the donation is inter vivos, it may be revoked only for the reasons
provided in Articles 760,17 76418 and 76519 of the Civil Code.
In a letter of March 16, 1998,20 private respondent Corazon Sipalay, reacting to this Court's
January 28, 1998 Resolution requiring private respondents "to SHOW CAUSE why they should
not be disciplinarily dealt with or held in contempt" for failure to submit the name and
address of their new counsel, explains that they are no longer interested in pursuing the case
and are "willing and ready to waive whatever rights" they have over the properties subject of
the donation. Petitioners, who were required to comment on the letter, by Comment of
October 28, 1998,21 welcome private respondents' gesture but pray that "for the sake of
enriching jurisprudence, their [p]etition be given due course and resolved."
The issue is thus whether the donation is inter vivos or mortis causa.
Crucial in the resolution of the issue is the determination of whether the donor intended to
transfer the ownership over the properties upon the execution of the deed.22
Donation inter vivos differs from donation mortis causa in that in the former, the act is
immediately operative even if the actual execution may be deferred until the death of the
donor, while in the latter, nothing is conveyed to or acquired by the donee until the death of
the donor-testator.23 The following ruling of this Court in Alejandro v. Geraldez is
illuminating:24
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.
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.
The distinction between a transfer inter vivos and mortis causa is important as the validity or
revocation of the donation depends upon its nature. If the donation is inter vivos, it must be
executed and accepted with the formalities prescribed by Articles 74825 and 74926 of the Civil
Code, except when it is onerous in which case the rules on contracts will apply. If it is mortis
causa, the donation must be in the form of a will, with all the formalities for the validity of
wills, otherwise it is void and cannot transfer ownership.27
The distinguishing characteristics of a donation mortis causa are the following:
1. It conveys no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should retain
the ownership (full or naked) and control of the property while alive;
2. That before 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;
3. That the transfer should be void if the transferor should survive the transferee.28
In the donation subject of the present case, there is nothing therein which indicates that any
right, title or interest in the donated properties was to be transferred to Ursulina prior to the
death of Celestina.
The phrase "to become effective upon the death of the DONOR" admits of no other
interpretation but that Celestina intended to transfer the ownership of the properties to
Ursulina on her death, not during her lifetime.29
More importantly, the provision in the deed stating that if the donee should die before the
donor, the donation shall be deemed rescinded and of no further force and effect shows that
the donation is a postmortem disposition.
21
As stated in a long line of cases, one of the decisive characteristics of a donation mortis
causa is that the transfer should be considered void if the donor should survive the donee.30
More. The deed contains an attestation clause expressly confirming the donation as mortis
causa:
SIGNED by the above-named donor, Celestina Ganuelas, at the foot of this deed of
donation mortis causa, consisting of two (2) pages and on the left margin of each
and every page thereof in the joint presence of all of us who at her request and in
her presence and that of each other have in like manner subscribed our names as
witnesses.31 (Emphasis supplied)
Art. 806. Every will must be acknowledged before a notary public by the
testator and the witnesses. The notary public shall not be required to retain a copy
of the will, or file another with the office of the Clerk of Court. (Emphasis supplied)
The trial court did not thus commit any reversible error in declaring the Deed of Donation to
be mortis causa.
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.

To classify the donation as inter vivos simply because it is founded on considerations of love
and affection is erroneous. That the donation was prompted by the affection of the donor for
the donee and the services rendered by the latter is of no particular significance in
determining whether the deed constitutes a transfer inter vivos or not, because a legacy may
have an identical motivation.32 In other words, love and affection may also underline
transfers mortis causa.33

In Maglasang v. Heirs of Cabatingan,34 the deeds of donation contained provisions almost

identical to those found in the deed subject of the present case:

That for and in consideration of the love and affection of the DONOR for the
DONEE, x x x. the DONOR does hereby, by these presents, transfer, convey, by way
of donation, unto the DONEE the above-described property, together with the
buildings and all improvements existing thereon, to become effective upon the
death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE
should die before the DONOR, the present donation shall be deemed automatically
rescinded and of no further force and effect. (Emphasis supplied)

In that case, this Court held that the donations were mortis causa, for the above-quoted
provision conclusively establishes the donor's intention to transfer the ownership and
possession of the donated property to the donee only after the former's death. Like in the
present case, the deeds therein did not contain any clear provision that purports to pass
proprietary rights to the donee prior to the donor's death.

As the subject deed then is in the nature of a mortis causa disposition, the formalities of a
will under Article 728 of the Civil Code should have been complied with, failing which the
donation is void and produces no effect.35

As noted by the trial court, the attesting witnesses failed to acknowledge the deed before
the notary public, thus violating Article 806 of the Civil Code which provides:

22
G.R. No. 150179 April 30, 2003
HEIRS OF WILLIAM SEVILLA, NAMELY: WILFREDO SEVILLA, WILSON SEVILLA, WILMA
SEVILLA, WILLINGTON SEVILLA, AND WILLIAM SEVILLA, JR., HEIRS OF MARIA SEVILLA,
NAMELY: AMADOR SEVILLA, JENO CORTES, VICTOR CORTES, MARICEL CORTES,
ALELEI* CORTES AND ANJEI** CORTES,petitioners,
vs.
LEOPOLDO SEVILLA, PETER SEVILLA, AND LUZVILLA SEVILLA, respondents.
YNARES-SANTIAGO, J.:
One who alleges defect or lack of valid consent to a contract by reason of fraud or undue
influence must establish by full, clear and convincing evidence such specific acts that vitiated
a party's consent, otherwise, the latter's presumed consent to the contract prevails.1
The instant petition for review seeks to set aside the September 26, 2000 Decision2 of the
Court of Appeals in CA-G.R. CV No. 48956, affirming in toto the Decision3 of the Regional Trial
Court of Dipolog City, Branch 6, in Civil Case No. 4240 which declared, inter alia, the
questioned Deed of Donation Inter Vivos valid and binding on the parties.
The undisputed facts reveal that on December 10, 1973, Filomena Almirol de Sevilla died
intestate leaving 8 children, namely: William, Peter, Leopoldo, Felipe, Rosa, Maria, Luzvilla,
and Jimmy, all surnamed Sevilla. William, Jimmy and Maria are now deceased and are
survived by their respective spouses and children. 4 Filomena Almirol de Sevilla left the
following properties:
PARCEL I:
A parcel of land known as Lot No. 653 situated at General Luna St., Dipolog City,
with an area of about 804 square meters, more or less, duly covered by Transfer
Certificate of Title No. (T-6671)-1448 [in the name of Filomena Almirol de Sevilla,
Honorata Almirol and Felisa Almirol] and assessed at P31,360.00 according to Tax
Dec. No. 018-947;
PARCEL II:
A parcel of land known as Lot No. 3805-B situated at Olingan, Dipolog City, with an
area of about 18,934 square meters, more or less, duly covered by Transfer
Certificate of Title No. T-6672 and assessed at P5,890 according to Tax Dec. No.
009-761;
PARCEL III:
A parcel of land known as Lot No. 837-1/4 situated at Magsaysay Street, Dipolog
City, with an area of about 880 square meters more or less, duly covered by
Original Certificate of Title No. 0-6064 and assessed at P12,870.00 according to Tax
Dec. No. 020-1078;
PARCEL IV:
A parcel of residential land known as Lot No. 1106-B-3 situated at Sta. Filomena,
Dipolog City, with an area of 300 square meters, more or less, assessed at
P3,150.00 according to Tax Dec. No. 006-317;
Commercial building erected on Parcel I above-described; and residential building
erected just at the back of the commercial building above-described and erected
on Parcel I above-described;5
Parcel I, Lot No. 653, is the paraphernal property of Filomena Almirol de Sevilla which she co-
owned with her sisters, Honorata Almirol and Felisa Almirol,6 who were both single and
without issue. Parcels II, III and IV are conjugal properties of Filomena Almirol de Sevilla and
her late husband Andres Sevilla.7 When Honorata died in 1982, her 1/3 undivided share in
Lot No. 653 was transmitted to her heirs, Felisa Almirol and the heirs of Filomena Almirol de
Sevilla, who thereby acquired the property in the proportion of one-half share each.
During the lifetime of Felisa and Honorata Almirol, they lived in the house of Filomena
Almirol de Sevilla, together with their nephew, respondent Leopoldo Sevilla and his family.
Leopoldo attended to the needs of his mother, Filomena, and his two aunts, Honorata and
Felisa.8
Felisa died on July 6, 1988.9 Previous thereto, on November 25, 1985, she executed a last will
and testament devising her 1/2 share in Lot No. 653 to the spouses Leopoldo Sevilla and
Belen Leyson.10 On August 8, 1986, Felisa executed another document denominated as
"Donation Inter Vivos" ceding to Leopoldo Sevilla her 1/2 undivided share in Lot No. 653,
which was accepted by Leopoldo in the same document.11
On September 3, 1986, Felisa Almirol and Peter Sevilla, in his own behalf and in behalf of the
heirs of Filomena Almirol de Sevilla, executed a Deed of Extra-judicial Partition, identifying
and adjudicating the 1/3 share of Honorata Almirol to the heirs of Filomena Almirol de Sevilla
and to Felisa Almirol.12
Thereafter, respondents Leopoldo, Peter and Luzvilla Sevilla obtained the cancellation of
Transfer Certificate of Title No. (T-6671)-1448, over Lot No. 653, and the issuance of the
corresponding titles to Felisa Almirol and the heirs of Filomena Almirol de Sevilla. However,
the requested titles for Lot Nos. 653-A and 653-B, were left unsigned by the Register of
Deeds of Dipolog City, pending submission by Peter Sevilla of a Special Power of Attorney
authorizing him to represent the other heirs of Filomena Almirol de Sevilla.13
23
On June 21, 1990, Felipe Sevilla, Rosa Sevilla, and the heirs of William, Jimmy and Maria, all
surnamed Sevilla, filed the instant case against respondents Leopoldo Sevilla, Peter Sevilla
and Luzvilla Sevilla, for annulment of the Deed of Donation and the Deed of Extrajudicial
Partition, Accounting, Damages, with prayer for Receivership and for Partition of the
properties of the late Filomena Almirol de Sevilla.14 They alleged that the Deed of Donation is
tainted with fraud because Felisa Almirol, who was then 81 years of age, was seriously ill and
of unsound mind at the time of the execution thereof; and that the Deed of Extra-judicial
Partition is void because it was executed without their knowledge and consent.15
In their answer,16 respondents denied that there was fraud or undue pressure in the
execution of the questioned documents. They alleged that Felisa was of sound mind at the
time of the execution of the assailed deeds and that she freely and voluntarily ceded her
undivided share in Lot No. 653 in consideration of Leopoldo's and his family's love, affection,
and services rendered in the past. Respondents further prayed that Parcels II, III, and IV be
partitioned among the heirs of Filomena Almirol de Sevilla in accordance with the law on
intestate succession.
On December 16, 1994, a decision was rendered by the Regional Trial Court of Dipolog City,
Zamboanga del Norte, Branch 6, upholding the validity of the Deed of Donation and declaring
the Deed of Extra-judicial Partition unenforceable. The dispositive portion thereof, reads:
WHEREFORE, IN VIEW OF THE FOREGOING, summing up the evidence for both the
plaintiffs and the defendants, the Court hereby renders judgment:
1) Declaring the questioned Deed of Donation Inter Vivos valid and binding, and,
therefore, has the full force and effect of law;
2) Declaring the questioned Deed of Extra-Judicial Partition as unenforceable as yet
as against the other heirs, as it lacks the legal requisites of Special Power of
Attorney or any other appropriate instrument to be executed by the other heirs
who were not made parties thereto;
3) Finding the parties herein entitled to the partition of Parcel II, III, IV as
designated in the Complaint, in equal shares, and, as to Lot No. 653 designated as
Parcel I, it shall be divided equally into two, between defendant Leopoldo Sevilla on
one hand, and, collectively, the Heirs of William Sevilla, Heirs of Jimmy Sevilla, Heirs
of Maria Sevilla, Felipe Sevilla, Leopoldo Sevilla, Peter Sevilla, Luzvilla Sevilla-Tan,
on the other hand, as well as the two buildings thereon in proportionate values;
4) Directing the parties, if they can agree, to submit herewith a project of partition,
which shall designate the share which pertains to the heirs entitled thereto, that is,
the particular and specific portions of the properties subject of the partition;
5) Directing defendant Peter Sevilla to pay and/or collect from the parties the
amounts corresponding to each one entitled or liable thereto, as recorded in the
Statement of Accounts, except for defendant Leopoldo Sevilla who is found by the
Court to have incurred only an overdraft of P5,742.98 and not P33,204.33 as earlier
computed therein.
6) Dismissing the plaintiffs' claim for damages, which is not proved with sufficient
evidence, and defendants' counterclaim, on the same ground.
7) With costs de officio.
IT IS SO ORDERED.17
Both parties appealed to the Court of Appeals. Petitioners contended that the Deed of
Donation should be declared void and that Lot No. 653 should be divided equally among
them. Respondents, on the other hand, posited that the trial court erred in declaring the
Deed of Extra-judicial Partition unenforceable against the other heirs of Filomena Almirol de
Sevilla who were not parties to said Deed.
On September 26, 2000, the Court of Appeals affirmed in toto the assailed decision of the
trial court.18 Petitioners filed a motion for reconsideration but the same was denied on
August 30, 2001.19
Hence, the instant petition based on the following assignment of errors:
THAT THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING AS VOID AB INITIO THE
DEED OF DONATION EXECUTED BY FELISA ALMIROL IN FAVOR OF RESPONDENT LEOPOLDO
SEVILLA CEDING TO HIM ONE HALF PORTION OF LOT 653, DIPOLOG CADASTRE, IT HAVING
BEEN EXECUTED WITH FRAUD, UNDUE PRESSURE AND INFLUENCE;
THAT THE APPELLATE COURT GREATLY ERRED IN NOT ORDERING THE PARTITION OF LOT 653,
DIPOLOG CADASTRE EQUALLY AMONG THE EIGHT (8) HEIRS OF FILOMENA, HONORATA AND
FELISA, ALL SURNAMED ALMIROL.20
To resolve the issue raised in the instant petition for review, the validity of the donation inter
vivos executed by Felisa Almirol in favor of Leopoldo Sevilla must first be determined.
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in
favor of another who accepts it.21 Under Article 737 of the Civil Code, the donor's capacity
shall be determined as of the time of the making of the donation. Like any other contract, an
agreement of the parties is essential,22 and the attendance of a vice of consent renders the
donation voidable.23
In the case at bar, there is no question that at the time Felisa Almirol executed the deed of
donation she was already the owner of 1/2 undivided portion of Lot No. 653. Her 1/3
undivided share therein was increased by 1/2 when she and Filomena inherited the 1/3 share
24
of their sister Honorata after the latter's death. Hence, the 1/2 undivided share of Felisa in
Lot No. 653 is considered a present property which she can validly dispose of at the time of
the execution of the deed of donation.24
Petitioners, however, insist that respondent Leopoldo Sevilla employed fraud and undue
influence on the person of the donor. This argument involves appreciation of the
evidence.25 The settled rule is that factual findings of the trial court, if affirmed by the Court
of Appeals, are entitled to great respect.26 There are exceptional circumstances when
findings of fact of lower courts may be set aside27 but none is present in the case at bar.
Indeed, neither fraud nor undue influence can be inferred from the following circumstance
alleged by the petitioners, to wit —
A. That Felisa Almirol lived with respondent Leopoldo Sevilla in the residential
house owned by petitioners and respondents;
B. That the old woman Felisa Almirol was being supported out of the rentals
derived from the building constructed on the land which was a common fund. . . .
C. That when Felisa Almirol was already 82 years old, he [Leopoldo Sevilla]
accompanied her in the Office of Atty. Vic T. Lacaya, Sr., for the purpose of
executing her last will and testament . . .
D. That in the last will and testament executed by Felisa Almirol, she had devised in
favor of respondent Leopoldo Sevilla one-half of the land in question;
E. That respondent Leopoldo Sevilla not contented with the execution by Felisa
Almirol of her last will and testament, had consulted a lawyer as to how he will be
able to own the land immediately;
F. That upon the advice of Atty. Helen Angeles, Clerk of Court of the Regional Trial
Court of Zamboanga del Norte, Dipolog City, Felisa Almirol executed a Deed of
Donation, hence, the questioned Deed of Donation executed in his favor;
G. That the subject matter of the Deed of Donation was the one-half portion of Lot
653, Dipolog Cadastre, which was willed by Felisa Almirol, in favor of respondent
Leopoldo Sevilla in her last will and testament;
H. That at the time of the execution of the Deed of Donation, Lot No. 653, Dipolog
Cadastre, was not yet partitioned between petitioners and respondents they being
heirs of the late Filomena and Honorata, all surnamed Almirol;
I. That after the execution of the Deed of Donation, respondent Peter Sevilla and
the late Felisa Almirol were the only ones who executed the Deed of Extra-judicial
Partition over Lot 653, Dipolog Cadastre, the petitioners were not made parties in
the said Deed of Extrajudicial Partition;
J. That on the basis of the Deed of Extrajudicial Partition and Deed of Donation,
respondent Leopoldo Sevilla caused the subdivision survey of Lot 653, Dipolog
Cadastre, dividing the same into two (2) lots, adjudicating one-half of the lot in his
favor and the other half in favor of respondents Peter Sevilla and Luzvilla Sevilla,
and to respondent Leopoldo Sevilla himself;
K. That only two persons knew the actual survey of the land, petitioner Felipe
Sevilla and respondent Leopoldo Sevilla himself, the rest of the co-owners were not
even notified;
L. That on the basis of the Extrajudicial Partition, Deed of Donation, the approved
subdivision plan, respondent Leopoldo Sevilla filed a petition for issuance of the
corresponding titles for the two lots, but the Register of Deeds of Dipolog City
refused to issue the corresponding titles for the two lots to respondent Leopoldo
Sevilla so that up to this moment . . . the two titles were left unsigned by the
Register of Deeds.28
There is fraud when, through the insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which, without them, he would not have
agreed to.29 There is undue influence when a person takes improper advantage of his power
over the will of another, depriving the latter of a reasonable freedom of choice. The following
circumstances shall be considered: the confidential, family, spiritual and other relations
between the parties, or the fact that the person alleged to have been unduly influenced was
suffering from mental weakness, or was ignorant or in financial distress. 30
Ei incumbit probatio qui dicit, non qui negat. He who asserts, not he who denies, must prove.
We have consistently applied the ancient rule that if the plaintiff, upon whom rests the
burden of proving his cause of action, fails to show in a satisfactory manner facts on which he
bases his claim, the defendant is under no obligation to prove his exception or defense. 31 In
the instant case, the self-serving testimony of the petitioners are vague on what acts of
Leopoldo Sevilla constituted fraud and undue influence and on how these acts vitiated the
consent of Felisa Almirol. Fraud and undue influence that vitiated a party's consent must be
established by full, clear and convincing evidence, otherwise, the latter's presumed consent
to the contract prevails.32 Neither does the fact that the donation preceded the partition
constitute fraud. It is not necessary that partition should first be had because what was
donated to Leopoldo was the 1/2 undivided share of Felisa in Lot No. 653.
Moreover, petitioners failed to show proof why Felisa should be held incapable of exercising
sufficient judgment in ceding her share to respondent Leopoldo.33 As testified by the notary
public who notarized the Deed of Donation, Felisa confirmed to him her intention to donate
her share in Lot No. 653 to Leopoldo. He stressed that though the donor was old, she was of
sound mind and could talk sensibly. Significantly, there is nothing in the record that discloses
even an attempt by petitioners to rebut said declaration of the notary public.
Clearly, therefore, the courts below did not err in sustaining the validity of the deed of
donation.
25
Anent the Deed of Extra-judicial Partition, we find that the same is void ab initio and not dated September 3, 1986 is declared void, and the name of Rosa Sevilla is ordered included
merely unenforceable. In Delos Reyes v. Court of Appeals,34 which is a case involving the sale in the dispositive portion of the trial court's judgment.
of a lot by a person who is neither the owner nor the legal representative, we declared the
contract void ab initio. It was held that one of the requisites of a valid contract under Article SO ORDERED.
1318 of the Civil Code is the consent and the capacity to give consent of the parties to the
contract. The legal capacity of the parties is an essential element for the existence of the
contract because it is an indispensable condition for the existence of consent. There is no
effective consent in law without the capacity to give such consent. In other words, legal
consent presupposes capacity. Thus, there is said to be no consent, and consequently, no
contract when the agreement is entered into by one in behalf of another who has never
given him authorization therefor unless he has by law a right to represent the latter.35

In the case at bar, at the time Felisa executed the deed of extra-judicial partition dividing the
share of her deceased sister Honorata between her and the heirs of Filomena Almirol de
Sevilla, she was no longer the owner of the 1/2 undivided portion of Lot No. 653, having
previously donated the same to respondent Leopoldo Sevilla who accepted the donation in
the same deed. A donation inter vivos, as in the instant case, is immediately operative and
final.36As a mode of acquiring ownership, it results in an effective transfer of title over the
property from the donor to the donee and the donation is perfected from the moment the
donor knows of the acceptance by the donee. And once a donation is accepted, the donee
becomes the absolute owner of the property donated.

Evidently, Felisa did not possess the capacity to give consent to or execute the deed of
partition inasmuch as she was neither the owner nor the authorized representative of
respondent Leopoldo to whom she previously transmitted ownership of her undivided share
in Lot No. 653. Considering that she had no legal capacity to give consent to the deed of
partition, it follows that there is no consent given to the execution of the deed, and
therefore, there is no contract to speak of. As such, the deed of partition is void ab initio,
hence, not susceptible of ratification.

Nevertheless, the nullity of the deed of extra-judicial partition will not affect the validity of
the donation inter vivosceding to respondent Leopoldo Sevilla the 1/2 undivided share of
Felisa Almirol in Lot No. 653. Said lot should therefore be divided as follows: 1/2 shall go to
respondent Leopoldo Sevilla by virtue of the deed of donation, while the other half shall be
divided equally among the heirs of Filomena Almirol de Sevilla including Leopoldo Sevilla,
following the rules on intestate succession.

Finally, we note that the name of Rosa Sevilla, daughter of Filomena Almirol de Sevilla, and
one of the plaintiffs herein, was omitted in the dispositive portion of the trial court's
decision.37 Her name should therefore be included in the dispositive portion as one of the
heirs entitled to share in the properties of the late Filomena Almirol de Sevilla.

WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-G.R. CV
No. 48956, affirming in toto the Decision of the Regional Trial Court of Dipolog City, Branch 6,
in Civil Case No. 4240, is AFFIRMED with MODIFICATION. The Deed of Extra-judicial Partition

26

G.R. No. 152317 November 10, 2004
VICTORIA MOREÑO-LENTFER,* GUNTER LENTFER and JOHN CRAIGIE YOUNG
CROSS, petitioners,
vs.
HANS JURGEN WOLFF, respondent.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated June 14, 2001, and Resolution2 dated
February 22, 2002, of the Court of Appeals in CA-G.R. CV No. 48272. The decision reversed
the judgment3 of the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 39, in
Civil Case No. R-4219.
The facts are as follows:
The petitioners are Gunter Lentfer, a German citizen; his Filipina wife, Victoria Moreño-
Lentfer; and John Craigie Young Cross, an Australian citizen, all residing in Sabang, Puerto
Galera, Oriental Mindoro. Respondent Hans Jurgen Wolff is a German citizen, residing in San
Lorenzo Village, Makati City.
Petitioners alleged that with respondent, on March 6, 1992, they engaged the notarial
services of Atty. Rodrigo C. Dimayacyac for: (1) the sale of a beach house owned by petitioner
Cross in Sabang, Puerto Galera, Oriental Mindoro, and (2) the assignment of Cross' contract
of lease on the land where the house stood. The sale of the beach house and the assignment
of the lease right would be in the name of petitioner Victoria Moreño-Lentfer, but the total
consideration of 220,000 Deutschmarks (DM) would be paid by respondent Hans Jurgen
Wolff. A promissory note was executed by said respondent in favor of petitioner Cross.
According to respondent, however, the Lentfer spouses were his confidants who held in trust
for him, a time deposit account in the amount of DM 200,0004 at Solid Bank Corporation.
Apprised of his interest to own a house along a beach, the Lentfer couple urged him to buy
petitioner Cross' beach house and lease rights in Puerto Galera. Respondent agreed and
through a bank-to-bank transaction, he paid Cross the amount of DM 221,7005 as total
consideration for the sale and assignment of the lease rights. However, Cross, Moreño-
Lentfer and Atty. Dimayacyac surreptitiously executed a deed of sale whereby the beach
house was made to appear as sold to Moreño-Lentfer for only P100,000.6 The assignment of
the lease right was likewise made in favor of Moreño-Lentfer.7 Upon learning of this,
respondent filed a Complaint docketed as Civil Case No. R-4219 with the lower court for
annulment of sale and reconveyance of property with damages and prayer for a writ of
attachment.
After trial, the court a quo dismissed the complaint for failure to establish a cause of action,
thus:
ACCORDINGLY, judgment is hereby rendered in favor of the defendants and against
the plaintiff, dismissing the complaint for the reason that plaintiff has not
established a cause of action against the defendants with costs against the plaintiff.
SO ORDERED.8
Aggrieved, respondent appealed to the Court of Appeals.9
But in its Decision10 dated June 14, 2001, the appellate court reversed the decision of the trial
court, thus:
WHEREFORE, the judgment appealed from is hereby REVERSED and a new one is hereby
rendered, as follows:
1. Defendants-appellees spouses Genter11 and Victoria Moreno-Lentfer
and John Craigie Young Cross are jointly and severally held liable to pay
plaintiff-appellant the amount of 220,000.00 DM German Currency or its
present peso equivalent plus legal interest starting from March 8, 1993,
the date of the last final demand letter;
2. The above defendants-appellees are jointly and severally held liable to
pay plaintiff-appellant the amount of P200,000.00 Philippine Currency,
representing the amount of expenses incurred in the repairs and
maintenance of the property plus legal interest starting from October 28,
1992, the date the amount was received by defendant-appellee Victoria
Moreno-Lentfer; and
3. The case against defendant-appellee Rodrigo Dimayacyac is dismissed.
SO ORDERED.12
Hence, the instant petition raising the following issues:
1) DOES ARTICLE 1238 OF THE NEW CIVIL CODE APPLY IN THE CASE AT BAR?13
27
 2) DOES THE PRINCIPLE OF SOLUTIO INDEBITI UNDER ARTICLE 2154 OF THE NEW
CIVIL CODE, THE PRINCIPLE OF JUSTICE AND EQUITY, APPLY IN THE CASE AT BAR?14
Article 1238 of the New Civil Code provides:
ART. 1238. Payment made by a third person who does not intend to be reimbursed
by the debtor is deemed to be a donation, which requires the debtor's consent. But
the payment is in any case valid as to the creditor who has accepted it.
Petitioners posit that in a contract of sale, the seller is the creditor, who in this case is Cross,
and the buyer is the debtor, namely Moreño-Lentfer in this case. Respondent is the third
person who paid the consideration on behalf of Moreño-Lentfer, the debtor. Petitioners
insist that respondent did not intend to be reimbursed for said payment and debtor Moreño-
Lentfer consented to it. Thus, by virtue of Article 1238, payment by respondent is considered
a donation.
Respondent counters that Article 1238 bears no relevance to the case since it applies only to
contracts of loan where payment is made by a third person to a creditor in favor of a debtor
of a previously incurred obligation. The instant case, in contrast, involves a contract of sale
where no real creditor-debtor relationship exists between the parties. Further, respondent
argues his conduct never at any time intimated any intention to donate in favor of petitioner
Moreño-Lentfer.
Moreover, respondent contends that the alleged donation is void for non-compliance with
the formal requirements set by law. Citing Article 74815 of the New Civil Code, respondent
avers that since the amount involved exceeds P5,000, both the donation and its acceptance
must be in writing for the donation to be valid. Respondent further says there was no
simultaneous delivery of the money as required by Art. 748 for instances of oral donation.
Respondent also calls our attention to the sudden change in petitioners' theory. Previously,
before the Court of Appeals, the petitioners claimed that what was donated were the subject
properties. But before this Court, they insist that what was actually donated was the money
used in the purchase of subject properties.
On this point, we find petitioners' stance without merit. Article 1238 of the New Civil Code is
not applicable in this case.
Trying to apply Art. 1238 to the instant case is like forcing a square peg into a round hole. The
absence of intention to be reimbursed, the qualifying circumstance in Art. 1238, is negated
by the facts of this case. Respondent's acts contradict any intention to donate the properties
to petitioner Moreño-Lentfer. When respondent learned that the sale of the beach house
and assignment of the lease right were in favor of Victoria Moreño-Lentfer, he immediately
filed a complaint for annulment of the sale and reconveyance of the property with damages
and prayer for a writ of attachment. Respondent Moreño-Lentfer at that time claimed the
beach house, together with the lease right, was donated to her. Noteworthy, she had
changed her theory, to say that it was only the money used in the purchase that was donated
to her. But in any event, respondent actually stayed in the beach house in the concept of an
owner and shouldered the expenses for its maintenance and repair amounting to P200,000
for the entire period of his stay for ten weeks. Moreover, the appellate court found that
respondent is not related or even close to the Lentfer spouses. Obviously, respondent had
trusted the Lentfer spouses to keep a time deposit account for him with Solid Bank for the
purpose of making the purchase of the cited properties.
Petitioner Moreño-Lentfer's claim of either cash or property donation rings hollow. A
donation is a simple act of liberality where a person gives freely of a thing or right in favor of
another, who accepts it.16 But when a large amount of money is involved, equivalent to
P3,297,800, based on the exchange rate in the year 1992, we are constrained to take the
petitioners' claim of liberality of the donor with more than a grain of salt.
Petitioners could not brush aside the fact that a donation must comply with the mandatory
formal requirements set forth by law for its validity. Since the subject of donation is the
purchase money, Art. 748 of the New Civil Code is applicable. Accordingly, the donation of
money equivalent to P3,297,800 as well as its acceptance should have been in writing. It was
not. Hence, the donation is invalid for non-compliance with the formal requisites prescribed
by law.
Anent the second issue, petitioners insist that since the deed of sale in favor of Moreño-
Lentfer was neither identified or marked nor formally offered in evidence, the same cannot
be given any evidentiary value. They add that since it was not annulled, it remains valid and
binding. Hence, petitioners argue, the principle of solutio indebiti under Article 2154 17 of the
New Civil Code should be the applicable provision in the resolution of this controversy. If so,
the parties unjustly enriched would be liable to the other party who suffered thereby by
being correspondingly injured or damaged.
The quasi-contract of solutio indebiti harks back to the ancient principle that no one shall
enrich himself unjustly at the expense of another.18 It applies where (1) a payment is made
when there exists no binding relation between the payor, who has no duty to pay, and the
person who received the payment, and (2) the payment is made through mistake, and not
through liberality or some other cause.19
In the instant case, records show that a bank-to-bank payment was made by respondent
Wolff to petitioner Cross in favor of co-petitioner Moreño-Lentfer. Respondent was under no
duty to make such payment for the benefit of Moreño-Lentfer. There was no binding relation
between respondent and the beneficiary, Moreño-Lentfer. The payment was clearly a
mistake. Since Moreño-Lentfer received something when there was no right to demand it,
she had an obligation to return it.20
Following Article 2221 of the New Civil Code, two conditions must concur to declare that a
person has unjustly enriched himself or herself, namely: (a) a person is unjustly benefited,
and (b) such benefit is derived at the expense of or to the damage of another.22
We are convinced petitioner Moreño-Lentfer had been unjustly enriched at the expense of
respondent. She acquired the properties through deceit, fraud and abuse of confidence. The
28
principle of justice and equity does not work in her favor but in favor of respondent Wolff.
Whatever she may have received by mistake from and at the expense of respondent should
thus be returned to the latter, if the demands of justice are to be served.

The Court of Appeals held that respondent was not entitled to the reconveyance of the
properties because, inter alia, of the express prohibition under the Constitution 23 that non-
Filipino citizens cannot acquire land in the Philippines. We note, however, that subject
properties consist of a beach house and the lease right over the land where the beach house
stands. The constitutional prohibition against aliens from owning land in the Philippines has
no actual bearing in this case. A clear distinction exists between the ownership of a piece of
land and the mere lease of the land where the foreigner's house stands. Thus, we see no
legal reason why reconveyance could not be allowed.

Since reconveyance is the proper remedy, respondent's expenses for the maintenance and
repair of the beach house is for his own account as owner thereof. It need not be an issue for
now.

However, we deem it just and equitable under the circumstances to award respondent
nominal damages in the amount of P50,000,24 pursuant to Articles 222125 and 222226 of the
New Civil Code, since respondent's property right has been invaded through defraudation
and abuse of confidence committed by petitioners.

WHEREFORE, the petition is hereby DENIED. The assailed Decision, dated June 14, 2001 and
Resolution dated February 22, 2002, of the Court of Appeals in CA-G.R. CV No. 48272
reversing the lower court's judgment are AFFIRMED with MODIFICATION. Petitioners--
particularly the spouses Gunter Lentfer and Victoria Moreño-Lentfer--are hereby ORDERED
to:

1. RECONVEY to respondent Hans Jurgen Wolff the beach house and the lease right
over the land on which it is situated; and

2. PAY respondent Wolff nominal damages in the amount of P50,000.00.

Costs against petitioners.

SO ORDERED.

29
G.R. No. 149570 March 12, 2004 demise. They further averred that sometime in 1995, they demanded that the heirs of
Florencio vacate the property, but that the latter refused to do so.7
HEIRS OF ROSENDO SEVILLA FLORENCIO, as represented by ESTRELLITA FLORENCIO-CRUZ
and RODRIGO R. FLORENCIO, petitioners, The plaintiff thence prayed:
vs.
HEIRS OF TERESA SEVILLA DE LEON as represented by VALERIANA MORENTE, respondents. WHEREFORE, premises considered, it is most respectfully prayed that after due hearing,
judgment be rendered ordering defendants to:
DECISION
1. Vacate the premises which they are presently occupying;
CALLEJO, SR., J.:
2. Pay plaintiff the amount of P100,000.00 as and by way of attorney’s fees;
Before us is a petition for review of the Joint Decision1 of the Court of Appeals in CA-G.R. SP
Nos. 59698-99 which affirmed the June 5, 2000 Decisions2 of the Regional Trial Court of 3. Pay plaintiff P100,000.00 as moral damages;
Malolos, Bulacan, Branch 20 in Civil Cases No. 1018-M-99 and 1019-M-99, and the resolution
of the appellate court denying the petitioners’ motion for reconsideration.
4. Pay plaintiff P100,000.00 as exemplary damages.

The Antecedents
5. Pay plaintiff P10,000.00 per month from April 26, 1995 up to and until
defendants vacate the premises.
Teresa Sevilla de Leon, owned a residential lot with an area of 828 square meters located in
San Miguel, Bulacan. The said lot was covered by Transfer Certificate of Title (TCT) No. T-
Plaintiff prays for other reliefs just and equitable under the circumstances.8
44349.3 In the 1960s, De Leon allowed the spouses Rosendo and Consuelo Florencio to
construct a house on the said property and stay therein without any rentals therefor.
In their answer to the complaint, the heirs of Florencio alleged that the plaintiffs had no
cause of action against them, as Teresa de Leon had executed a Deed of Donation on
On September 26, 1966, De Leon, with the consent of her husband Luis, leased the aforesaid
October 1, 1976 over the said parcel of land in favor of their predecessor, Rosendo Florencio.
parcel of land for ₱5 per month to Bienvenido Santos "for as long as the lessor (Teresa de
The latter accepted the donation, as shown by his signature above his typewritten name on
Leon) had an outstanding loan with the Second Quezon City Development Bank of Quezon
page one of the deed. The execution of the deed was witnessed by Patria L. Manotoc and
City but not to exceed the period of fifteen (15) years." 4 De Leon assigned her leasehold right
Valeriana L. Morente. Atty. Tirso L. Manguiat, a notary public in the City of Manila, notarized
in favor of the Second Quezon City Development Bank. The lease and De Leon’s leasehold
the deed on said date and entered it in his notarial record as Doc. No. 1724, page 71, Book
right were annotated at the back of TCT No. T-44349 as Entry Nos. 152248 and
IV, series of 1976.9
152249,5 respectively. Thereafter, Bienvenido Santos constructed a house thereon.

The heirs of Florencio further averred that since then, their predecessor and his family
In November 1978, De Leon, then already a widow, died intestate. In deference to her
possessed the aforesaid property as owners. After De Leon’s death, Florencio and his
wishes, her heirs allowed Rosendo Florencio to continue staying in the property. In March
children, in coordination with Jose de Leon, the administrator of the aforesaid property,
1995, Florencio died intestate, but his heirs, the respondents, remained in the property. On
arranged for the registration of the land subject of the donation in the name of Rosendo
April 26, 1995, the heirs of De Leon, through counsel, sent a letter to the heirs of Florencio,
Florencio, which was, however, superseded by the untimely demise of Jose de Leon in 1991.
demanding that they vacate the property within ninety (90) days from receipt thereof. 6 The
Thus, the property remained in the name of Teresa Sevilla de Leon, even after Florencio’s
latter refused and failed to vacate the property.
death in March of 1995.10

The heirs of De Leon, through Valeriana L. Morente, thereafter filed a complaint for
On February 1, 1996, the heirs of De Leon, represented by Valeriana L. Morente, also filed a
ejectment against the heirs of Florencio before the Municipal Trial Court of San Miguel,
complaint for ejectment against the heirs of Bienvenido Santos before the MTC of San
Bulacan, docketed as Civil Case No. 2061. Therein, the plaintiffs alleged that they were the
Miguel, Bulacan, docketed as Civil Case No. 2062.11 They prayed, thus:
pro-indiviso owners of the 828 square-meter lot covered by TCT No. T-44349, which they
inherited from their mother. During her lifetime, their mother allowed Florencio and his
family to occupy the property without any compensation, subject to the condition that they WHEREFORE, premises considered, it is most respectfully prayed that after due hearing,
shall vacate the same upon demand; such arrangement went on even after their mother’s judgment be rendered ordering defendants to:

30
 1. Vacate the premises which they are presently occupying;
2. Pay plaintiff the amount of P100,000.00 as and by way of attorney’s fees;
3. Pay plaintiff P100,000.00 as moral damages;
4. Pay plaintiff P100,000.00 as exemplary damages;
5. Pay plaintiff P10,000.00 per month from April 26, 1995 up to and until
defendants vacate the premises.
Plaintiff prays for other reliefs just and equitable under the circumstances.12
In their answer to the complaint, the heirs of Bienvenido Santos, through counsel, alleged
that the plaintiffs had no cause of action against them, and that they did not occupy the
property by mere tolerance but on the basis of a contract of lease executed by De Leon on
September 26, 1966. Furthermore, De Leon donated the property to Rosendo Florencio on
October 1, 1976, and the latter, after the expiration of the contract of lease, allowed and
permitted them to continue and remain in possession of the property without any
compensation. According to the heirs of Bienvenido Santos, only Florencio’s heirs had the
right to cause their eviction from the property by reason of the deed of donation executed in
favor of the latter.
The trial of the two cases was consolidated.
The parties agreed to litigate the following issues:
After the preliminary conference, parties submitted their respective position papers.
Plaintiffs raised and argued on the following issues:
a). Defendants’ possession of the premises was merely on the tolerance of the late
Teresa de Leon.
b). The alleged Deed of Donation does not exist, is patently a falsified document
and can never be the source of any right whatsoever.
Defendants, on the other hand, raised and argued on the following issues:
a). Defendants do not have only a better right of possession over the questioned
parcel of land and they do not have only the absolute and lawful possession of the
same but they have the absolute and lawful ownership of the same not only
against the plaintiffs but against the whole world.
b). Defendants are entitled to their counterclaim.13
On motion of the plaintiffs in both cases, the court issued an Order directing the heirs of
Florencio to produce the original of the Deed of Donation purportedly executed by Teresa de
Leon. However, they failed to comply with the order of the court and submitted a mere
photocopy of the same.14
The plaintiffs adduced in evidence the following: (1) TCT No. T-44349 in the name of Teresa
Sevilla;15 (2) demand letters sent by the plaintiffs’ counsel to the defendants demanding that
the latter vacate the subject premises;16 (3) affidavit-complaint of Valeriana Morente filed in
the Office of the Provincial Prosecutor of Bulacan docketed as I.S. No. 96-1513 for
falsification, perjury and applicable crimes against Rodrigo Florencio and Atty. Tirso
Manguiat, dated May 8, 1996;17 (4) affidavit-complaint executed by Ramon de Leon Manotoc
dated May 8, 1996;18 (5) copies of Teresa de Leon’s passport issued on April 28, 1975
containing specimens of her signature;19 (6) copy of Patria Manotoc’s passport issued on
September 16, 1997 with her specimen signature therein;20 (7) copy of Valeriana Morente’s
passports issued on the following dates: (a) February 20, 1967;21 (b) April 28, 1975;22 (c)
October 4, 1984;23 and (d) August 22, 1994,24 with specimens of her signature appearing
therein covering a span of thirty years; (8) copy of the Certificate of Death of Patria
Manotoc;25 (9) Certification dated April 23, 1996 issued by Teresita R. Ignacio, Chief, Archives
Division of the Records Management and Archives Division of Manila26 to the effect that
nothing in the notarial register of Atty. Tirso L. Manguiat show that he notarized a deed of
donation dated October 1, 1976 in favor of Rosendo Florencio; (10) copy of Sinumpaang
Salaysay dated July 19, 1996 executed by one Rodolfo Apolinario;27 and, (11) copies of the
official receipts of the real estate taxes paid.28
For their part, the heirs of Florencio adduced in evidence a photocopy of the Deed of
Donation dated October 1, 1976 purportedly executed by De Leon in favor of Rosendo
Florencio.29
The heirs of Bienvenido Santos submitted in evidence as Exhibits "1" and "1-H" the Contract
of Lease dated September 6, 1966 between Teresa Sevilla and Bienvenido R. Santos.30
On December 3, 1996, the MTC rendered a decision in Civil Cases Nos. 2061 and 2062
dismissing the complaints for lack of jurisdiction upon the finding that the issue of possession
cannot be determined without resolving, in a full blown trial, the issue of ownership.31
The heirs of De Leon appealed the decisions of the MTC to the RTC of Bulacan, Branch 83,
which rendered judgment reversing the decision of the court a quo. It held that the MTC had
jurisdiction over the cases; as such, the trial court should proceed and render judgment
therefor.
In the course of the proceedings, the defendants adduced in evidence a copy of the Deed of
Donation as certified by the RTC of Bulacan on May 29, 1996.32
31
On August 27, 1999, the MTC rendered an Amended Decision in Civil Case No. 2061 in favor
of the defendants and against the plaintiffs. The dispositive portion of the decision reads:
WHEREFORE, the court finds the defendants as having a better right of possession over the
subject parcel of land as against the plaintiffs and hereby orders this case DISMISSED.
For lack of evidence to prove bad faith on the part of the plaintiffs in the filing of this case,
and in line with the policy not to put premium on the right to litigate, the counterclaim of the
defendants is, likewise, ordered DISMISSED.
With no pronouncements as to costs.
SO ORDERED.33
The decision was appealed to the RTC of Bulacan. On June 5, 2000, the RTC rendered
judgment reversing the decision of the MTC and rendered a new judgment in favor of the
plaintiffs, as follows:
WHEREFORE, premises considered, the Decision dated August 27, 1999, rendered by the
Municipal Trial Court of San Miguel, Bulacan, in Civil Case No. 2061, is hereby set aside and a
new one is hereby rendered, as follows:
a) Ordering the heirs of Rosendo Florencio and all those claiming any rights under
them to vacate the subject premises, particularly that parcel of land covered by
Transfer Certificate of Title (TCT) No. T-44349, situated in San Jose, San Miguel,
Bulacan;
b) Ordering the Heirs of Rosendo Florencio to pay the heirs of Teresa Sevilla the
amount of ₱2,000.00 per month as reasonable monthly rental on the premises, to
commence on April 1995 until the premises is vacated by them; and
c) Ordering the heirs of Rosendo Florencio to pay the heirs of Teresa Sevilla the
amount of ₱10,000.00, as attorney’s fees and expenses of litigation.
SO ORDERED.34
The RTC ruled that the deed of donation was insufficient to support the claim of the heirs of
Florencio that they were the owners of the property and were, thus, entitled to its
possession.
The defendants, now the petitioners, filed a petition for review with the Court of Appeals of
the decision of the RTC. On May 28, 2001, the Court of Appeals rendered judgment
dismissing the petition and affirming the RTC decision. The CA adopted the findings of the
RTC and its disquisitions on why the deed of donation was not a credible piece of evidence to
support the petitioners’ claim over the property; hence, did not transfer title over the
property in favor of the petitioners.
First. The deed of donation (Exh. "1"), which purports to have been executed in 1976, is not
annotated on the title to the property which remains registered in the name of Teresa Sevilla
under TCT No. T-44349 (Exh. "A" and "A-1"). There is no showing whatsoever that the same
or a copy thereof was submitted to the Office of the Register of Deeds.
Second. As earlier pointed out, throughout the years, the real estate taxes on the property
continued to be paid in the name of Teresa Sevilla by the caretaker Rodolfo Apolinario and
nobody else. There is no showing that the defendants had previously laid any claim of title or
ownership over the property and attempted to pay the taxes thereon.
Third. Although it purports to have been notarized in the City of Manila by one Atty. Tirso L.
Manguiat, there is no indication of its existence in the notarial record of Atty. Manguiat, as
per Certification dated April 23, 1996 (Exh. "L") of the Manila Records Management and
Archives Office. One can only wonder why from the place of execution in San Miguel, Bulacan
on October 1, 1976, its notarization on the same date had to be in the City of Manila.
Fourth. The Court has noted, as anyone can easily do, that the signature purported to be that
of Teresa de Leon appearing in the deed of donation (Exh. "1-B"), is dissimilar to her
customary signatures affixed to her passports (Exhs. "E" and "E-1"). The same is true with
those of Patria Manotoc and Valeriana L. Morente appearing in the same deed of donation
(Exhs. "1-D and "1-E"), with those of their customary signatures appearing in their respective
passports (Exhs. "F" and "F-1"; "G," "G-1" and "G-2"; "H," "H-1" and "H-2"; "I" and "I-1" and
"J" and "J-1").
And Fifth. There is no explanation given why since 1976, when the deed of donation was
supposedly executed, up to the present, the defendants did not register the same to secure a
new title in their names. In fact, there is no showing that efforts toward that end were ever
executed.
As it is, the Court holds that the deed of donation in question is not a credible piece of
evidence to support the defendants’ claim of acquisition of title and ownership over the
subject property and therefore insufficient to justify their continuing possession and
occupancy thereof. Thus, as against defendants’ claim which is unregistered, the plaintiffs’
right over the property as the legal heirs and successors-in-interest of the registered owner
must prevail.35
The Present Petition
The petitioners now contend in this case that the Court of Appeals and the RTC erred in
rendering judgment for the respondents, thus:
32
 1. In finding no reversible error committed by the Regional Trial Court as an
appellate court and affirming its decision.
2. In concluding that the evidence presented reveals serious doubts as to the
veracity and authenticity of the notarized deed of donation, contrary to the
findings of the trial court that there is a legal presumption of regularity in the
execution thereof.
3. In holding that private respondents are entitled to possess the subject property
notwithstanding petitioners’ claim to the contrary and despite the latter’s
continuous, open and adverse possession for more than forty years.36
The petitioners aver that donation is one of the modes of acquiring ownership. Their claim
for possession is precisely based on the deed of donation executed by Teresa Sevilla de Leon
on October 1, 1976 in favor of their father, Rosendo Florencio. The aforesaid deed was duly
notarized, and by virtue of its notarization, such deed became a public document.
Furthermore, according to the petitioners, an examination of the deed reveals that it had
conformed to all the essential requisites of donation, as required by the provisions of the
New Civil Code; hence, its validity must be presumed. 37 From the time of the donation up to
the present, the petitioners assert that they possessed the property openly, publicly and
against the whole world.
As regards the alleged forgery of the signatures of the donor and the witnesses, the
petitioners assert that absent any clear, positive and convincing evidence that the same were
forged, the presumption is that they are genuine. The mere variance in the signatures of the
donor and the witnesses cannot be considered as conclusive proof of the forgery. They aver
that the Certification dated April 23, 1996 of the Manila Records Management and Archives
Office stating that no such notarized deed existed in the notarial records of Atty. Manguiat
cannot be conclusive evidence that no donation ever existed. According to the petitioners,
such certification was merely preponderant and, therefore, not enough to overthrow the
presumption of regularity in the notarization as well as the genuineness of the document.
The petitioners posit that their failure to register the deed of donation did not affect its
validity, it not being a requisite of a valid donation. They allege that their effort to register
the same during the lifetime of Jose de Leon, the administrator of the property, did not
materialize because of the latter’s untimely death in 1991. The petitioners conclude that
because of the respondents’ failure to destroy the validity of the deed of donation, their right
over the property should prevail; the petitioners’ right accrued on October 1, 1976, while
that of the respondents accrued only in November of 1978.
In their comment, the respondents, through counsel, argue that the deed of donation
executed by De Leon dated October 1, 1976 in favor of Rosendo Florencio is not a credible
piece of evidence. The deed is insufficient to justify the petitioners’ stay in the premises
because the original copy was never presented to them or to the court. Furthermore, while
the photocopy of the deed of donation states that it was notarized by a certain Tirso
Manguiat, a notary public for the City of Manila, under Doc. 1724, Page No. 71, Book No. IV,
Series of 1976, the presumption of regularity in the notarization of the deed was destroyed
by the certification from the Records Management and Archives Office of Manila that no
such deed exists. The respondents further assert that the signatures appearing on the said
deed, i.e., that of Teresa Sevilla de Leon, Patria Manotoc and Valeriana Morente, were all
forgeries.
According to the respondents, the following facts bolster the incredibility of the deed of
donation: (a) the deed of donation was executed in 1976 but was not registered; (b) the TCT
is still registered in the name of Teresa Sevilla de Leon; (c) the owner’s duplicate copy of the
TCT should have been transmitted to the donees; and, (d) the real estate taxes were
continuously paid in the name of Teresa Sevilla de Leon. Thus, the respondents, as her heirs,
are the legal owners of the property.
The Ruling of the Court
The threshold issue in this case is whether or not the petitioners, as heirs of Rosendo
Florencio, who appears to be the donee under the unregistered Deed of Donation, have a
better right to the physical or material possession of the property over the respondents, the
heirs of Teresa de Leon, the registered owner of the property.
The petition has no merit.
Prefatorily, in ejectment cases, the issue is the physical or material possession (possession de
facto) and any pronouncement made by the trial court on the question of ownership is
provisional in nature.38 A judgment rendered in ejectment cases shall not bar an action
between the same parties respecting title to the land and shall not be conclusive as to the
facts found therein in a case between the same parties upon a different cause of action
involving possession of the same property.39
We agree with the petitioners that under the New Civil Code, donation is one of the modes
of acquiring ownership.40Among the attributes of ownership is the right to possess the
property.41
The essential elements of donation are as follows: (a) the essential reduction of the
patrimony of the donor; (b) the increase in the patrimony of the donee; and (c) the intent to
do an act of liberality or animus donandi. When applied to a donation of an immovable
property, the law further requires that the donation be made in a public document and that
the acceptance thereof be made in the same deed or in a separate public instrument; in
cases where the acceptance is made in a separate instrument, it is mandated that the donor
be notified thereof in an authentic form, to be noted in both instruments.42
As a mode of acquiring ownership, donation results in an effective transfer of title over the
property from the donor to the donee, and is perfected from the moment the donor is made
aware of the acceptance by the donee, provided that the donee is not disqualified or
prohibited by law from accepting the donation.43 Once the donation is accepted, it is
33
generally considered irrevocable, and the donee becomes the absolute owner of the
property, except on account of officiousness, failure by the donee to comply with the charge
imposed in the donation, or ingratitude.44The acceptance, to be valid, must be made during
the lifetime of both the donor and the donee. It must be made in the same deed or in a
separate public document, and the donee’s acceptance must come to the knowledge of the
donor.45
In order that the donation of an immovable property may be valid, it must be made in a
public document.46Registration of the deed in the Office of the Register of Deeds or in the
Assessor’s Office is not necessary for it to be considered valid and official. Registration does
not vest title; it is merely evidence of such title over a particular parcel of land. 47 The
necessity of registration comes into play only when the rights of third persons are
affected.48Furthermore, the heirs are bound by the deed of contracts executed by their
predecessors-in-interest.49
On the other hand, the fundamental principle is that a certificate of title serves as evidence
of an indefeasible and incontrovertible title to the property in favor of the person whose
name appears therein as the registered owner.50The registered owner has the right to
possess, enjoy and dispose of the property without any limitations other than those imposed
by law.
In this case, the deed of donation, on its face, appears to bear all the essential requisites of a
valid donation inter vivos. With Teresa de Leon as the donor and Rosendo Florencio as the
donee, the deed of donation appears to have been notarized by Notary Public Tirso
Manguiat. On this premise, Florencio, and after his death, his heirs, acquired ownership over
the property although Certificate of Title No. T-44349 under the name of Teresa de Leon had
not yet been cancelled.
However, as pointed out by the RTC and the Court of Appeals, there are cogent facts and
circumstances of substance which engender veritable doubts as to whether the petitioners
have a better right of possession over the property other than the respondents, the lawful
heirs of the deceased registered owner of the property, Teresa de Leon, based on the Deed
of Donation.
First. Teresa de Leon purportedly executed the Deed of Donation on October 1, 1976 in favor
of Rosendo S. Florencio. If she, indeed, donated the property, she would surely have turned
over the owner’s duplicate of TCT No. T-44349 to Florencio, to facilitate the issuance of a
new title over the property in his favor. There was an imperative need for the deed to be
registered in the Office of the Register of Deeds, and the title to the property to be thereafter
issued in the name of the donee, Florencio. Before then, Florencio and his family had been
residing in the property solely at the sufferance of Teresa de Leon and her husband. Their
possession of the property and their continued stay therein was precarious. They could be
driven out from the property at any time by De Leon if she disowned the deed or, after her
death, by her heirs. It behooved Florencio to have the said deed filed and duly
registered51 with the Office of the Register of Deeds without delay and, thereafter, to secure
a new title under his name. This would have resulted in the cancellation of TCT No. T-44349
under the name of Teresa de Leon, and thereby averted any disturbance of Florencio’s
possession of the property, and after his death, that of his heirs.
At the very least, Florencio should have caused the annotation of the deed immediately after
October 1, 1976 or shortly thereafter, at the dorsal portion of TCT No. T-44349. Such
annotation would have been binding on the respondents, as De Leon’s successors-in-interest,
as well as to third persons. However, Florencio failed to do so. Even as De Leon died intestate
in 1978, Florencio failed to secure title over the property in his name before he himself died
intestate in 1995. If, as the petitioners claimed, Florencio acquired ownership over the
property under the deed, it is incredible that he would fail to register the deed and secure
title over the property under his name for almost twenty years. All these years, Florencio,
and thereafter, his heirs, remained passive and failed to act upon the deed of donation to
protect their right. This, the Court finds difficult to understand.
The claim that Florencio and his heirs sought the registration of the deed and the transfer of
the title to and under Florencio’s name from 1978 to 1991, in coordination with Jose de Leon
is incredible. There is no evidence on record that the deed of donation was ever filed with
and registered in the Office of the Register of Deeds at any time during the period from 1978
to 1991. The petitioners’ claim that the registration of the deed was delayed and later
aborted by the demise of Jose de Leon is not substantiated by evidence. Moreover, there is
no reason why Florencio, or after his death, the petitioners, could not have had the deed
registered even after Jose de Leon’s death.
Second. Florencio failed to inform the heirs of De Leon that the latter, before her death, had
executed a deed of donation on October 1, 1976 over the property in his favor. It was only in
1996, or eighteen years after the death of De Leon when the respondents sued the
petitioners for ejectment that the latter claimed, for the first time, that De Leon had
executed a deed of donation over the property in favor of their predecessor, Florencio.
Third. In the meantime, the respondents consistently paid the realty taxes for the property
from 1978 up to 1996, completely oblivious to the existence of the deed of donation. On the
other hand, Florencio, and, after his death, the petitioners, never paid a single centavo for
the realty taxes due on the property, even as they continued staying in the property without
paying a single centavo therefor. The petitioners should have declared the property under
their names and paid the realty taxes therefor, if they truly believed that they were its
owners. They failed to do so. The fact of Florencio’s inaction and that of the petitioners’
weakened the latter’s claim that they acquired ownership over the property under the deed
of donation.
Fourth. The petitioners never adduced in evidence the owner’s duplicate of TCT No. T-44349
under the name of De Leon. Their possession of the owner’s duplicate of the title would have
fortified their claim that indeed, De Leon had intended to convey the property by donation to
Florencio. Furthermore, the petitioners did not explain why they failed to adduce in evidence
the said owner’s duplicate of the title. The only conclusion is that the said owner’s duplicate
copy was not turned over to Florencio contemporaneously with or after the execution of the
deed of donation; hence, their failure to secure title over the property.52
34
Fifth. The respondents adduced in evidence the affidavit-complaint of Valeriana Morente
dated May 8, 1996, one of the witnesses to the deed, for falsification and perjury against
Florencio and Atty. Tirso Manguiat. They also adduced the Certification dated April 23, 1996
issued by Teresita R. Ignacio, Chief, Archives Division of the Records Management and
Archives Division of Manila, to the effect that nothing in the notarial register of Atty. Tirso L.
Manguiat, a notary public of Manila, showed that the latter notarized a Deed of Donation
executed by De Leon and Florencio in San Miguel, Bulacan dated October 1, 1976. However,
the petitioners failed to adduce in evidence Atty. Manguiat’s counter-affidavit to the said
complaint, or, at the very least, a separate affidavit explaining the facts and circumstances
surrounding the notarization of the deed of donation.

Sixth. A reading of the deed will show that at the bottom of page one thereof, Florencio was
to subscribe and swear to the truth of his acceptance of the donation before Municipal
Mayor Marcelo G. Aure of San Miguel, Bulacan. However, the mayor did not affix his
signature above his typewritten name, thus:

SUBSCRIBED AND SWORN to before me this 1st day of October, 1976, the DONOR having
exhibited her Res. Cert. No. A-3723337 issued at Quezon City on January 10, 1976.

MARCELO G. AURE
Municipal Mayor53

It appears that a second page was added, with the name of Atty. Manguiat typewritten
therein as notary public, obviously, with the use of a different typewriter.

In sum then, we agree with the RTC and the Court of Appeals that the deed of donation
relied upon by the petitioners is unreliable as evidence on which to anchor a finding that the
latter have a better right over the property than the respondents, who, admittedly, are the
heirs of Teresa de Leon, the registered owner of the property under TCT No. T-44349 of the
Registry of Deeds of Bulacan.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decisions of the Regional Trial
Court of Malolos, Bulacan, Branch 20, in Civil Cases Nos. 1018-M-99 and 1019-M-99, and the
Court of Appeals in CA-G.R. SP No. 59698-99, are AFFIRMED.

SO ORDERED.

35
G.R. No. 132681 December 3, 2001
RICKY Q. QUILALA, petitioner,
vs.
GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, respondent.
YNARES-SANTIAGO, J.:
On February 20, 1981, Catalina Quilala executed a "Donation of Real Property Inter Vivos" in
favor of Violeta Quilala over a parcel of land located in Sta. Cruz, Manila, containing an area
of 94 square meters, and registered in her name under Transfer Certificate of Title No. 17214
of the Register of Deeds for Manila.
The "Donation of Real Property Inter Vivos" consists of two pages. The first page contains the
deed of donation itself, and is signed on the bottom portion by Catalina Quilala as donor,
Violeta Quilala as donee, and two instrumental witnesses.1 The second page contains the
Acknowledgment, which states merely that Catalina Quilala personally appeared before the
notary public and acknowledged that the donation was her free and voluntary act and deed.
There appear on the left-hand margin of the second page the signatures of Catalina Quilala
and one of the witnesses, and on the right-hand margin the signatures of Violeta Quilala and
the other witness.2 The Acknowledgment reads:
REPUBLIC OF THE PHILIPPINES )
QUEZON CITY ) S.S.
Before Me, a Notary Public, for and in the City of Quezon, Philippines, this 20th day
of Feb. 1981, personally appeared CATALINA QUILALA, with Residence Certificate
No. 19055265 issued at Quezon City on February 4, 1981, known to me and to me
known to be the same person who executed the foregoing instruments and
acknowledged to me that the same is her own free and voluntary act and deed.
I hereby certify that this instrument consisting of two (2) pages, including the page
on which this acknowledgment is written, has been signed by CATALINA QUILALA
and her instrumental witnesses at the end thereof and on the left-hand margin of
page 2 and both pages have been sealed with my notarial seal.
In witness whereof, I have hereunto set my hand, in the City of Quezon,
Philippines, this 20th day of Feb., 1981.
(SGD.) NOTARY PUBLIC
Until December 31, 1981
(illegible)
DOC NO. 22;
PAGE NO. 6;
BOOK NO. XV;
SERIES OF 1981.
The deed of donation was registered with the Register of Deeds and, in due course, TCT No.
17214 was cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.
On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22, 1984.
Petitioner Ricky Quilala alleges that he is the surviving son of Violeta Quilala.
Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan Reyes,
claiming to be Catalina's only surviving relatives within the fourth civil degree of
consanguinity, executed a deed of extrajudicial settlement of estate, dividing and
adjudicating unto themselves the above-described property.
On September 13, 1984, respondents instituted against petitioner and Guillermo T. San
Pedro, the Registrar of Deeds of Manila, an action for the declaration of nullity of the
donation inter vivos, and for the cancellation of TCT No. 143015 in the name of Violeta
Quilala. The case was docketed as Civil Case No. 84-26603 of the Regional Trial Court of
Manila, Branch 17. Subsequently, respondents withdrew their complaint as against Guillermo
T. San Pedro and he was dropped as a party-defendant.
The trial court found that the deed of donation, although signed by both Catalina and
Violeta, was acknowledged before a notary public only by the donor, Catalina. Consequently,
there was no acceptance by Violeta of the donation in a public instrument, thus rendering
the donation null and void. Furthermore, the trial court held that nowhere in Catalina's SSS
records does it appear that Violeta was Catalina's daughter. Rather, Violeta was referred to
therein as an adopted child, but there was no positive evidence that the adoption was legal.
On the other hand, the trial court found that respondents were first cousins of Catalina
Quilala. However, since it appeared that Catalina died leaving a will, the trial court ruled that
respondents' deed of extrajudicial settlement can not be registered. The trial court rendered
judgment as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria Alcantara,
Leonarda Alcantara, Ines Reyes and Juan Reyes and against defendant Ricky A.
Quilala, as follows:
1. Declaring null and void the deed of donation of real property inter vivos
executed on February 20, 1981 by Catalina Quilala in favor of Violeta Quilala (Exhs.
A as well as 11 and 11-A.);
36
 2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title
No. 143015 in the name of Violeta Quilala and to issue a transfer certificate of title
in the name of the Estate of Catalina Quilala;.
3. Dismissing the complaint insofar as it seeks the registration of the deed of
extrajudicial settlement (Exhs. B and B-1,) and the issuance by the Register of
Deeds of Manila of a transfer certificate of title in the names of the plaintiffs; and
4. Dismissing the counterclaim of defendant Ricky A. Quilala.
No costs.
SO ORDERED.3
Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals rendered a
decision affirming with modification the decision of the trial court by dismissing the
complaint for lack of cause of action without prejudice to the filing of probate proceedings of
Catalina's alleged last will and testament.4
WHEREFORE, the appealed decision is hereby AFFIRMED with the following
MODIFICATION:
(3) DISMISSING the complaint for lack of cause of action without prejudice to the
filing of the necessary probate proceedings by the interested parties so as not to
render nugatory the right of the lawful heirs.
Petitioner filed a motion for reconsideration, which the Court of Appeals denied on February
11, 1998.5 Hence, this petition for review, raising the following assignment of errors:
A. THE COURT OF APPEALS ERRED IN RULING THAT THE DEED OF DONATION OF
REAL PROPERTY INTER-VIVOS IS NOT REGISTRABLE.
B. THE COURT OF APPEALS ERRED ON UPHOLDING THE LOWER COURT'S RULING
THAT VIOLETA QUILALA IS NOT THE DAUGHTER OF CATALINA QUILALA.6
The principal issue raised is the validity of the donation executed by Catalina in favor of
Violeta. Under Article 749 of the Civil Code, the donation of an immovable must be made in a
public instrument in order to be valid,7 specifying therein the property donated and the value
of the charges which the donee must satisfy. As a mode of acquiring ownership, donation
results in an effective transfer of title over the property from the donor to the donee, 8 and is
perfected from the moment the donor knows of the acceptance by the donee,9 provided the
donee is not disqualified or prohibited by law from accepting the donation. Once the
donation is accepted, it is generally considered irrevocable, 10 and the donee becomes the
absolute owner of the property.11 The acceptance, to be valid, must be made during the
lifetime of both the donor and the donee.12 It may be made in the same deed or in a separate
public document,13 and the donor must know the acceptance by the donee.14
In the case at bar, the deed of donation contained the number of the certificate of title as
well as the technical description of the real property donated. It stipulated that the donation
was made for and in consideration of the "love and affection which the DONEE inspires in the
DONOR, and as an act of liberality and generosity." 15 This was sufficient cause for a donation.
Indeed, donation is legally defined as "an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who accepts it."16
The donee's acceptance of the donation was explicitly manifested in the penultimate
paragraph of the deed, which reads:
That the DONEE hereby receives and accepts the gift and donation made in her
favor by the DONOR and she hereby expresses her appreciation and gratefulness
for the kindness and generosity of the DONOR.17
Below the terms and stipulations of the donation, the donor, donee and their witnesses
affixed their signature. However, the Acknowledgment appearing on the second page
mentioned only the donor, Catalina Quilala. Thus, the trial court ruled that for Violeta's
failure to acknowledge her acceptance before the notary public, the same was set forth
merely on a private instrument, i.e., the first page of the instrument. We disagree.
The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which
states:
Deeds, conveyances, encumbrances, discharges, powers of attorney and other
voluntary instruments, whether affecting registered or unregistered land, executed
in accordance with law in the form of public instruments shall be registrable:
Provided, that, every such instrument shall be signed by person or persons
executing the same in the presence of at least two witnesses who shall likewise sign
thereon, and shall be acknowledged to be the free act and deed of the person or
persons executing the same before a notary public or other public officer
authorized by law to take acknowledgment. Where the instrument so
acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in the
office of the Register of Deeds, or if registration is not contemplated, each page of
the copy to be kept by the notary public, except the page where the signatures
already appear at the foot of the instrument shall be signed on the left margin
thereof by the person or persons executing the instrument and their witnesses, and
all the pages sealed with the notarial seal, and this fact as well as the number of
pages shall be stated in the acknowledgment. Where the instrument acknowledged
relates to a sale, transfer, mortgage or encumbrance of two or more parcels of
land, the number thereof shall likewise be set forth in said acknowledgment."
(italics supplied).
37
As stated above, the second page of the deed of donation, on which the Acknowledgment
appears, was signed by the donor and one witness on the left-hand margin, and by the donee
and the other witness on the right hand margin. Surely, the requirement that the contracting
parties and their witnesses should sign on the left-hand margin of the instrument is not
absolute. The intendment of the law merely is to ensure that each and every page of the
instrument is authenticated by the parties. The requirement is designed to avoid the
falsification of the contract after the same has already been duly executed by the parties.
Hence, a contracting party affixes his signature on each page of the instrument to certify that
he is agreeing to everything that is written thereon at the time of signing.

Simply put, the specification of the location of the signature is merely directory. The fact that
one of the parties signs on the wrong side of the page does not invalidate the document. The
purpose of authenticating the page is served, and the requirement in the above-quoted
provision is deemed substantially complied with.

In the same vein, the lack of an acknowledgment by the donee before the notary public does
not also render the donation null and void. The instrument should be treated in its entirety. It
cannot be considered a private document in part and a public document in another part. The
fact that it was acknowledged before a notary public converts the deed of donation in its
entirety a public instrument. The fact that the donee was not mentioned by the notary public
in the acknowledgment is of no moment. To be sure, it is the conveyance that should be
acknowledged as a free and voluntary act. In any event, the donee signed on the second
page, which contains the Acknowledgment only. Her acceptance, which is explicitly set forth
on the first page of the notarized deed of donation, was made in a public instrument.

It should be stressed that this Court, not being a trier of facts, can not make a determination
of whether Violeta was the daughter of Catalina, or whether petitioner is the son of Violeta.
These issues should be ventilated in the appropriate probate or settlement proceedings
affecting the respective estates of Catalina and Violeta. Suffice it to state that the donation,
which we declare herein to be valid, will still be subjected to a test on its inofficiousness
under Article 771,18 in relation to Articles 752, 911 and 912 of the Civil Code. Moreover,
property donated inter vivosis subject to collation after the donor's death,19 whether the
donation was made to a compulsory heir or a stranger,20 unless there is an express
prohibition if that had been the donor's intention. 21

WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed decision of the
Court of Appeals , is REVERSED and SET ASIDE, and a new judgment is rendered dismissing
Civil Case No. 84-26603.

SO ORDERED.

38
G.R. No. 140487 April 2, 2001
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
LEON SILIM and ILDEFONSA MANGUBAT, respondents.
KAPUNAN, J.:
Before the Court is a petition for review under Rule 45 seeking the reversal of the Decision of
the Court of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et al. vs. Wilfredo Palma, et
al., which declared null and void the donation made by respondents of a parcel of land in
favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del Sur.
The antecedents of this case are as follows:
On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa Mangubat,
donated a 5,600 square meter parcel of land in favor of the Bureau of Public Schools,
Municipality of Malangas, Zamboanga del Sur (BPS). In the Deed of Donation, respondents
imposed the condition that the said property should "be used exclusively and forever for
school purposes only."1 This donation was accepted by Gregorio Buendia, the District
Supervisor of BPS, through an Affidavit of Acceptance and/or Confirmation of Donation.
Through a fund raising campaign spearheaded by the Parent-Teachers Association of
Barangay Kauswagan, a school building was constructed on the donated land. However, the
Bagong Lipunan school building that was supposed to be allocated for the donated parcel of
land in Barangay Kauswagan could not be released since the government required that it be
built upon a one (1) hectare parcel of land. To remedy this predicament, Assistant School
Division Superintendent of the Province of Zamboanga del Sur, Sabdani Hadjirol, authorized
District Supervisor Buendia to officially transact for the exchange of the one-half (1/2)
hectare old school site of Kauswagan Elementary School to a new and suitable location which
would fit the specifications of the government. Pursuant to this, District Supervisor Buendia
and Teresita Palma entered into a Deed of Exchange whereby the donated lot was exchanged
with the bigger lot owned by the latter. Consequently, the Bagong Lipunan school buildings
were constructed on the new school site and the school building previously erected on the
donated lot was dismantled and transferred to the new location.
When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo Palma was
constructing a house on the donated land, he asked the latter why he was building a house
on the property he donated to BPS. Vice Mayor Wilfredo Palma replied that he is already the
owner of the said property. Respondent Leon Silim endeavored to stop the construction of
the house on the donated property but Vice-Mayor Wilfredo Palma advised him to just file a
case in court.
On February 10, 1982, respondents filed a Complaint for Revocation and Cancellation of
Conditional Donation, Annulment of Deed of Exchange and Recovery of Possession and
Ownership of Real Property with damages against Vice Mayor Wilfredo Palma, Teresita
Palma, District Supervisor Buendia and the BPS before the Regional Trial Court of Pagadian
City, Branch 21. In its Decision dated 20 August 1993, the trial court dismissed the complaint
for lack of merit.2 The pertinent portion of the decision reads:
Thus, it is the considered view of this Court that there was no breach or violation of
the condition imposed in the subject Deed of Donation by the donee. The exchange
is proper since it is still for the exclusive use for school purposes and for the
expansion and improvement of the school facilities within the community. The
Deed of Exchange is but a continuity of the desired purpose of the donation made
by plaintiff Leon Silim.
In sum, it may be safely stated that the aforesaid transaction of exchange is a (sic)
exception to the law invoked by the plaintiffs (Art. 764, Civil Code). The donee,
being the State had the greater reciprocity of interest in the gratuitous and
onerous contract of donation. It would be illogical and selfish for the donor to
technically preclude the donee from expanding its school site and improvement of
its school facilities, a paramount objective of the donee in promoting the general
welfare and interests of the people of Barangay Kauswagan. But it is a well-settled
rule that if the contract is onerous, such as the Deed of Donation in question, the
doubt shall be settled in favor of the greatest reciprocity of interests, which in the
instant case, is the donee.
x x x
WHEREFORE, in view of all the foregoing, judgement is hereby rendered:
1. Dismissing the complaint for lack of merit;
2. Dismissing the counterclaim for the sake of harmony and reconciliation
between the parties;
3. With costs against plaintiffs.
SO ORDERED.3
Not satisfied with the decision of the trial court, respondents elevated the case to the Court
of Appeals. In its Decision dated 22 October 1999, the Court of Appeals reversed the decision
of the trial court and declared the donation null and void on the grounds that the donation
was not properly accepted and the condition imposed on the donation was violated.4
Hence, the present case where petitioner raises the following issues:
39
 I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN INVALID ACCEPTANCE BY THE DONEE.
II. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN ALLEGED VIOLATION OF A CONDITION IN THE DONATION. 5
The Court gives DUE COURSE to the petition.
Petitioner contends that the Court of Appeals erred in declaring the donation null and void
for the reason that the acceptance was not allegedly done in accordance with Articles
7456 and 7497 of the New Civil Code.
We agree.
Donations, according to its purpose or cause, may be categorized as: (1) pure or simple; (2)
remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or simple
donation is one where the underlying cause is plain gratuity.8 This is donation in its truest
form. On the other hand, a remuneratory or compensatory donation is one made for the
purpose of rewarding the donee for past services, which services do not amount to a
demandable debt.9 A conditional or modal donation is one where the donation is made in
consideration of future services or where the donor imposes certain conditions, limitations
or charges upon the donee, the value of which is inferior than that of the donation
given.10 Finally, an onerous donation is that which imposes upon the donee a reciprocal
obligation or, to be more precise, this is the kind of donation made for a valuable
consideration, the cost of which is equal to or more than the thing donated.11
Of all the foregoing classifications, donations of the onerous type are the most distinct. This
is because, unlike the other forms of donation, the validity of and the rights and obligations
of the parties involved in an onerous donation is completely governed not by the law on
donations but by the law on contracts. In this regard, Article 733 of the New Civil Code
provides:
Art. 733. Donations with an onerous cause shall be governed by the rules on
contracts, and remuneratory donations by the provisions of the present Title as
regards that portion which exceeds the value of the burden imposed.
The donation involved in the present controversy is one which is onerous since there is a
burden imposed upon the donee to build a school on the donated property.12
We hold that there was a valid acceptance of the donation.
The Court of Appeals held that there was no valid acceptance of the donation because:
Sections 745 and 749 of the New Civil Code provide:
x x x
Under the law the donation is void if there is no acceptance. The acceptance may
either be in the same document as the deed of donation or in a separate public
instrument. If the acceptance is in a separate instrument, "the donor shall be
notified thereof in an authentic form, and his step shall be noted in both
instruments.
"Title to immovable property does not pass from the donor to the donee
by virtue of a deed of donation until and unless it has been accepted in a
public instrument and the donor duly noticed thereof. (Abellera vs.
Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78 SCRA 245). If the
acceptance does not appear in the same document, it must be made in
another. Solemn words are not necessary; it is sufficient if it shows the
intention to accept, But in this case, it is necessary that formal notice
thereof be given to the donor and the fact that due notice has been given
it must be noted in both instruments (that containing the offer to donate
and that showing acceptance). Then and only then is the donation
perfected. (11 Manresa 155-11, cited in Vol. II, Civil Code of the
Philippines by Tolentino.)."
This Court perused carefully the Deed of Donation marked as exhibit "A" and "1" to
determine whether there was acceptance of the donation. This Court found none.
We further examined the record if there is another document which embodies the
acceptance, we found one. Although the Court found that in the offer of exhibits of
the defendants, a supposed affidavit of acceptance and/or confirmation of the
donation, marked as exhibit "8" appears to have been offered.
However, there is nothing in the record that the exhibits offered by the defendants
have been admitted nor such exhibits appear on record.
Assuming that there was such an exhibit, the said supposed acceptance was not
noted in the Deed of Donation as required under Art. 749 of the Civil Code. And
according to Manresa, supra, a noted civilist, the notation is one of the
requirements of perfecting a donation. In other words, without such a notation,
the contract is not perfected contract. Since the donation is not perfected, the
contract is therefore not valid.13
x x x
ART. 745. The donee must accept the donation personally, or through an
authorized person with a special power for the purpose, or with a general and
sufficient power; otherwise the donation shall be void.
40
 ART. 749. In order that the donation of an immovable may be laid, it must be made
in a public document, specifying therein the property donated and the value of the
charge which the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the
donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments.
Private respondents, as shown above, admit that in the offer of exhibits by the defendants in
the trial court, an affidavit of acceptance and/or confirmation of the donation, marked as
Exhibit "8," was offered in evidence. However, private respondents now question this exhibit
because, according to them "there is nothing in the record that the exhibits offered by the
defendants have been admitted nor such exhibit appear on record."
Respondents' stance does not persuade. The written acceptance of the donation having been
considered by the trial court in arriving at its decision, there is the presumption that this
exhibit was properly offered and admitted by the court.
Moreover, this issue was never raised in the Court of Appeals. Nowhere in their brief did
respondents question the validity of the donation on the basis of the alleged defect in the
acceptance thereof. If there was such a defect, why did it take respondents more than ten
(10) years from the date of the donation to question its validity? In the very least, they are
guilty of estoppel.14
Respondents further argue that assuming there was a valid acceptance of the donation, the
acceptance was not noted in the Deed of Donation as required in Article 749 of the Civil
Code, hence, the donation is void.
The purpose of the formal requirement for acceptance of a donation is to ensure that such
acceptance is duly communicated to the donor. Thus, in Pajarillo vs. Intermediate Appellate
Court,15 the Court held:
There is no question that the donation was accepted in a separate public
instrument and that it was duly communicated to the donors. Even the petitioners
cannot deny this. But what they do contend is that such acceptance was not "noted
in both instruments," meaning the extrajudicial partition itself and the instrument
of acceptance, as required by the Civil Code.
That is perfectly true. There is nothing in either of the two instruments showing
that "authentic notice" of the acceptance was made by Salud to Juana and Felipe.
And while the first instrument contains the statement that "the donee does hereby
accept this donation and does hereby express her gratitude for the kindness and
liberality of the donor," the only signatories thereof were Felipe Balane and Juana
Balane de Suterio. That was in fact the reason for the separate instrument of
acceptance signed by Salud a month later.
A strict interpretation of Article 633 can lead to no other conclusion that the
annulment of the donation for being defective in form as urged by the petitioners.
This would be in keeping with the unmistakable language of the above-quoted
provision. However, we find that under the circumstances of the present case, a
literal adherence to the requirement of the law might result not in justice to the
parties but conversely a distortion of their intentions. It is also a policy of the Court
to avoid such as interpretation.
The purpose of the formal requirement is to insure that the acceptance of the
donation is duly communicated to the donor. In the case at bar, it is not even
suggested that Juana was unaware of the acceptance for she in fact confirmed it
later and requested that the donated land be not registered during her lifetime by
Salud. Given this significant evidence, the Court cannot in conscience declare the
donation ineffective because there is no notation in the extrajudicial settlement of
the donee's acceptance. That would be placing too much stress on mere form over
substance. It would also disregard the clear reality of the acceptance of the
donation as manifested in the separate instrument dated June 20, 1946, and as
later acknowledged by Juan.
In the case at bar, a school building was immediately constructed after the donation was
executed. Respondents had knowledge of the existence of the school building put up on the
donated lot through the efforts of the Parents-Teachers Association of Barangay Kauswagan.
It was when the school building was being dismantled and transferred to the new site and
when Vice-Mayor Wilfredo Palma was constructing a house on the donated property that
respondents came to know of the Deed of Exchange. The actual knowledge by respondents
of the construction and existence of the school building fulfilled the legal requirement that
the acceptance of the donation by the donee be communicated to the donor.
On respondents' claim, which was upheld by the Court of Appeals, that the acceptance by
BPS District Supervisor Gregorio Buendia of the donation was ineffective because of the
absence of a special power of attorney from the Republic of the Philippines, it is undisputed
that the donation was made in favor of the Bureau of Public Schools. Such being the case, his
acceptance was authorized under Section 47 of the 1987 Administrative Code which states:
SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be executed
for and in behalf of the Government or of any of its branches, subdivisions,
agencies, or instrumentalities, whenever demanded by the exigency or exigencies
of the service and as long as the same are not prohibited by law.
Finally, it is respondents' submission that the donee, in exchanging the donated lot with a
bigger lot, violated the condition in the donation that the lot be exclusively used for school
purposes only.
41
What does the phrase "exclusively used for school purposes" convey? "School" is simply an
institution or place of education.16 "Purpose" is defined as "that which one sets before him to
accomplish or attain; an end, intention, or aim, object, plan, project. Term is synonymous
with the ends sought, an object to be attained, an intention, etc."17"Exclusive" means
"excluding or having power to exclude (as by preventing entrance or debarring from
possession, participation, or use); limiting or limited to possession, control or use.18

Without the slightest doubt, the condition for the donation was not in any way violated when
the lot donated was exchanged with another one. The purpose for the donation remains the
same, which is for the establishment of a school. The exclusivity of the purpose was not
altered or affected. In fact, the exchange of the lot for a much bigger one was in furtherance
and enhancement of the purpose of the donation. The acquisition of the bigger lot paved the
way for the release of funds for the construction of Bagong Lipunan school building which
could not be accommodated by the limited area of the donated lot.

WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE and the
decision of the Regional Trial Court is REINSTATED.

SO ORDERED.

42
G.R. No. 155080 February 5, 2004
SOLEDAD CALICDAN, represented by her guardian GUADALUPE CASTILLO, petitioner
vs.
SILVERiO CENDAÑA, substituted by his legal heir CELSA CENDAÑA-ALARAS, respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks the reversal of the April 4, 2002 decision of the Court of
Appeals in CA-G.R. CV No. 67266,1 which set aside the November 12, 1996 decision of the
Regional Trial Court of Dagupan City, Branch 44 in Civil Case No. D-10270.2
The instant controversy involves a 760 square meter parcel of unregistered land located in
Poblacion, Mangaldan, Pangasinan. The land was formerly owned by Sixto Calicdan, who died
intestate on November 4, 1941. He was survived by his wife, Fermina, and three children,
namely, petitioner Soledad, Jose and Benigno, all surnamed Calicdan.3
On August 25, 1947, Fermina executed a deed of donation inter vivos whereby she conveyed
the land to respondent Silverio Cendaña,4 who immediately entered into possession of the
land, built a fence around the land and constructed a two-storey residential house thereon
sometime in 1949, where he resided until his death in 1998.5
On June 29, 1992, petitioner, through her legal guardian Guadalupe Castillo, filed a complaint
for "Recovery of Ownership, Possession and Damages" against the respondent, alleging that
the donation was void; that respondent took advantage of her incompetence in acquiring the
land; and that she merely tolerated respondent’s possession of the land as well as the
construction of his house thereon.6
In his "Answer with Motion to Dismiss", respondent alleged, by way of affirmative defenses,
that the land was donated to him by Fermina in 1947; and that he had been publicly,
peacefully, continuously, and adversely in possession of the land for a period of 45 years.
Moreover, he argued that the complaint was barred by prior judgment in the special
proceedings for the "Inventory of Properties of Incompetent Soledad Calicdan", where the
court decreed the exclusion of the land from the inventory of properties of the petitioner. 7
On November 12, 1996, the trial court rendered a decision in favor of the petitioner, the
dispositive portion of which reads as follows:
WHEREFORE, judgment is rendered in favor of plaintiff and against the defendant as follows:
1. Ordering defendant Silverio Cendaña to vacate the land in question and
surrender ownership and possession of the same to plaintiff; and
2. Ordering defendant to pay plaintiff P20,000.00 as moral damages, P20,000.00 as
exemplary damages, P10,000.00 by way of attorney’s fees and other litigation
expenses, plus cost of suit.
SO ORDERED.8
On appeal by the respondent, the Court of Appeals reversed the trial court’s decision and
declared that the donation was valid. Furthermore, it held that petitioner lost her ownership
of the property by prescription.
Hence, the instant petition for review on the following issues:
(1) whether or not the donation inter vivos is valid; and
(2) whether or not petitioner lost ownership of the land by prescription.
As a rule, our jurisdiction in cases brought from the Court of Appeals is limited to the review
and revision of errors of law allegedly committed by the appellate court. This is because its
findings of fact are deemed conclusive and we are not duty-bound to analyze and weigh all
over again the evidence already considered in the proceedings below.9
The rule, however, admits of the following exceptions:
(1) when the findings are grounded on speculation, surmises or conjectures;
(2) when the inference made is manifestly mistaken, absurd or impossible;
(3) when there is grave abuse of discretion in the appreciation of facts;
(4) when the factual findings of the trial and appellate courts are conflicting;
(5) when the Court of Appeals, in making its findings, has gone beyond the issues of
the case and such findings are contrary to the admissions of both appellant and
appellee;
(6) when the judgment of the appellate court is premised on a misapprehension of
facts or when it has failed to consider certain relevant facts which, if properly taken
into account, will justify a different conclusion;
(7) when the findings of fact are conclusions without citation of specific evidence
upon which they are based; and
43
 (8) when findings of fact of the Court of Appeals are premised on the absence of
evidence but are contradicted by the evidence on record.10
In the case at bar, the factual findings of the trial court and the Court of Appeals are
conflicting; thus, we are constrained to review the findings of facts.
The trial court found the donation of the land void because Fermina was not the owner
thereof, considering that it was inherited by Sixto from his parents. Thus, the land was not
part of the conjugal property of the spouses Sixto and Fermina Calicdan, because under the
Spanish Civil Code, the law applicable when Sixto died in 1941, the surviving spouse had a
right of usufruct only over the estate of the deceased spouse. Consequently, respondent,
who derived his rights from Fermina, only acquired the right of usufruct as it was the only
right which the latter could convey.
After a review of the evidence on record, we find that the Court of Appeals’ ruling that the
donation was valid was not supported by convincing proof. Respondent himself admitted
during the cross examination that he had no personal knowledge of whether Sixto Calicdan in
fact purchased the subject land from Felomino Bautista. Pertinent portions of his testimony
read:
Q. And Sixto Calicdan inherited this property from his parents?
A. No, sir.
Q. What do you mean by no?
A. To my knowledge and information, Sixto Calicdan bought the property from his
cousin, I think Flaviano or Felomino Bautista.
Q. So, in other words, you have no personal knowledge about how Sixto Calicdan
acquired this property?
A. I think it was by purchase.
Q. According to information, so you have no actual personal knowledge how Sixto
Calicadan acquired this property?
A. Yes, because when the property was bought by my uncle, I was not yet born, so
information only.
Q. So when you were born, you came to know already that Sixto Calicdan is the
owner of this property?
A. Yes, thru the son of Felomino Bautista who is now, I think, in Baguio.
Q. You have not seen any document to show that Sixto Calicdan purchased the
property from one Felomino Bautista?
A. None, sir.11
In People v. Guittap,12 we held that:
Under Rule 130, Section 36 of the Rules of Court, a witness can testify only to those facts
which he knows of his own personal knowledge, i.e., which are derived from his own
perception; otherwise, such testimony would be hearsay. Hearsay evidence is defined as
"evidence not of what the witness knows himself but of what he has heard from others." The
hearsay rule bars the testimony of a witness who merely recites what someone else has told
him, whether orally or in writing. In Sanvicente v. People, we held that when evidence is
based on what was supposedly told the witness, the same is without any evidentiary weight
for being patently hearsay. Familiar and fundamental is the rule that hearsay testimony is
inadmissible as evidence.
The Court of Appeals thus erred in ruling based on respondent’s bare hearsay testimony as
evidence of the donation made by Fermina.
Notwithstanding the invalidity of the donation, we find that respondent has become the
rightful owner of the land by extraordinary acquisitive prescription.
Prescription is another mode of acquiring ownership and other real rights over immovable
property. It is concerned with lapse of time in the manner and under conditions laid down by
law, namely, that the possession should be in the concept of an owner, public, peaceful,
uninterrupted and adverse. Acquisitive prescription is either ordinary or extraordinary.
Ordinary acquisitive prescription requires possession in good faith and with just title for ten
years. In extraordinary prescription ownership and other real rights over immovable property
are acquired through uninterrupted adverse possession thereof for thirty years without need
of title or of good faith.13
The good faith of the possessor consists in the reasonable belief that the person from whom
he received the thing was the owner thereof, and could transmit his ownership. 14 For
purposes of prescription, there is just title when the adverse claimant came into possession
of the property through one of the modes recognized by law for the acquisition of ownership
or other real rights, but the grantor was not the owner or could not transmit any right.15
Assuming arguendo that ordinary acquisitive prescription is unavailing in the case at bar as it
demands that the possession be "in good faith and with just title,"16 and there is no evidence
on record to prove respondent’s "good faith", nevertheless, his adverse possession of the
land for more than 45 years aptly shows that he has met the requirements for extraordinary
acquisitive prescription to set in.
44
The records show that the subject land is an unregistered land. When the petitioner filed the
instant case on June 29, 1992, respondent was in possession of the land for 45 years counted
from the time of the donation in 1947. This is more than the required 30 years of
uninterrupted adverse possession without just title and good faith. Such possession was
public, adverse and in the concept of an owner. Respondent fenced the land and built his
house in 1949, with the help of Guadalupe’s father as his contractor. His act of cultivating
and reaping the fruits of the land was manifest and visible to all. He declared the land for
taxation purposes and religiously paid the realty taxes thereon. 17 Together with his actual
possession of the land, these tax declarations constitute strong evidence of ownership of the
land occupied by him. As we said in the case of Heirs of Simplicio Santiago v. Heirs of Mariano
Santiago:18

Although tax declarations or realty tax payment of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner, for no
one in his right mind would be paying taxes for a property that is not in his actual or
constructive possession. They constitute at least proof that the holder has a claim of title
over the property. The voluntary declaration of a piece of property for taxation purposes
manifests not only one’s sincere and honest desire to obtain title to the property and
announces his adverse claim against the State and all other interested parties, but also the
intention to contribute needed revenues to the Government. Such an act strengthens one’s
bona fide claim of acquisition of ownership.

Moreover, the deed of donation inter vivos, albeit void for having been executed by one who
was not the owner of the property donated, may still be used to show the exclusive and
adverse character of respondent’s possession. Thus, in Heirs of Segunda Maningding v. Court
of Appeals,19 we held:

Even assuming that the donation propter nuptias is void for failure to comply with formal
requisites, it could still constitute a legal basis for adverse possession. With clear and
convincing evidence of possession, a private document of donation may serve as basis for a
claim of ownership. In Pensader v. Pensader we ruled that while the verbal donation under
which the defendant and his predecessors-in-interest have been in possession of the lands in
question is not effective as a transfer of title, still it is a circumstance which may explain the
adverse and exclusive character of the possession. (Underscoring ours)

In sum, the Court of Appeals correctly ordered the dismissal of Civil Case No. D-10270 before
the Regional Trial Court of Dagupan City, Branch 44, and declared respondent the rightful
owner of the subject property, not on the basis of the Deed of Donation Inter Vivos, which is
hereby declared void, but on extraordinary acquisitive prescription.

WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of
Appeals dated April 4, 2002 in CA-G.R. CV No. 67266, which ordered the dismissal of Civil
Case No. D-10270 before the Regional Trial Court of Dagupan City, Branch 44, is AFFIRMED.

SO ORDERED.

45
G.R. No. L-58671 November 22, 1985
EDUVIGIS J. CRUZ, petitioner,
vs.
COURT OF APPEALS, ET AL., respondents.
PLANA, J.:
This a petition for review of the decision of the defunct Court of Appeals dated August 20,
1981 in CA-G.R. No. 65338-H reversing that of the Court of First Instance of Rizal. and
dismissing petitioner's complaint for revocation of donation against herein private
respondents Teresita, Lydia and all surnamed De Leon.
In Eduvigis J. Cruz, a childless widow, donated a 235.5 sq.m residential lot in San Isidro,
Taytay Rizal together with the two-door apartment erected thereon to her grandnieces
private respondents herein, in a deed of donation entitled "Kasulatan Sa Kaloobpala". The
property was accordingly transferred to the names of private respondents.
In 1974, Eduvigis Cruz judicially adopted Cresencia Ocreto, a minor, after which she
extrajudicially tried to revoke the donation, but the donees resisted, alleging that—
(a) the property in question was co-owned by Eduvigis Cruz and her
brother. the late Maximo Cruz, grandfather of the donees, hence the
latter own 1/2 of the property by inheritance; and
(b) Eduvigis Cruz owns another property, an agricultural land of more
than two hectares situated in Barrio Dolores, Taytay, Rizal, hence the
donation did not impair the presumptive legitime of the adopted child.
In 1975, petitioner filed a complaint against the donees for revocation of donation in the
Court of First Instance of Rizal (Civil Case No. 21049) invoking Article 760, paragraph 3 of the
New Civil Code, which reads:
Art. 760, Ever donation inter vivos made by a person having no children or descendants,
legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced
as provided in the next article, by the happening of any of these events:
xxx xxx xxx
(3) If the donor should subsequently adopt a minor child.
After trial, the trial court rendered a decision revoking the donation. It did not find merit in
defendants' claim that the lot, by donor and her deceased brother, Maximo Cruz, because
the donor's ownership was deemed admitted by the donees by accepting the deed of
donation. It also rejected defendants' argument that the donation did not impair the
legitime, saying that claim was "beside the point" and did not limit plaintiff's right under Art.
760 of the Civil Code.
On appeal, the Court of Appeals reversed the trial court and dismissed the complaint. It
found that.—
a) the trial court took into consideration only Article 760 of the Civil Code and ignored Article
761 which states: " In the cases referred to in the preceding article, the donation shall be
revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will,
taking into account the whole estate of the donor of by will, taking into account the whole
estate of the donor at the time of the birth, appearance or adoption of a child.
(b) Eduvigis Cruz owns another lot in Dolores Taytay Rizal, although the subject of a pending
litigation valued at P273,420.00 in 1977.
(c) The donated lot did not belong entirely to Eduvigis as ½ thereof belonged to her brother
Maximo Cruz, grandfather of defendants. 1974 it had a total market value of P17,000. One-
half thereof was P8,500. Adding thereto a P50,000 value of the apartment house constructed
thereon, the total value of the donation would still be within the free portion of donor's
estate and therefore would not impair the legitime of the adopted child.
(d) In an action for revocation of donation, the donor has the burden to show that the
donation has impaired the legitime of the subsequent child; but in this case, Eduvigis did not
even allege it in her complaint.
In the instant petition for review, petitioner imputes to the appellate court alleged errors
which boil down to the question as to whether under the facts as established and the law,
the decision under review correctly dismissed the complaint to annul the subject donation.
We hold that it did.
In the case of the subsequent adoption of a minor by one who had previously donated some
or all of his properties to another, the donor may sue for the annulment or reduction of the
donation within four years from the date of adoption, if the donation impairs the legitime of
the adopted, taking into account the whole estate of the donor at the time of the adoption of
the child. (Civil Code, Articles 760, 761 and 763). Of course, the burden of proof is on the
plaintiff-donor, who must allege and establish the requirements prescribed by law, on the
basis of which annulment or reduction of the donation can be adjudged.
Unfortunately, in the case at bar, the complaint for annulment does not allege that the
subject donation impairs the legitime of the adopted child. Indeed it contains no indication at
all of the total assets of the donor.
46
Nor is there proof of impairment of legitime. On the contrary, there is unrebutted evidence
that the donor has another piece of land (27,342 sq. m.) situated in Dolores, Taytay, Rizal
worth P273,420.00 in 1977, although then subject to litigation.

The legal situation of petitioner-donor, as plaintiff, is made worse by the factual finding of
the Court of Appeals that the grandfather of the donees was the owner pro indiviso of one-
half of the donated land, the effect of which is to reduce the value of the donation which can
then more easily be taken from the portion of the estate within the free disposal of
petitioner.

WHEREFORE, the decision under review is affirmed.

47