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C-J YULO & SONS, INC vs. ROMAN CATHOLIC BISHOP OF SAN PABLO, INC.

[G.R. No. 133705. March 31, 2005]
FACTS: On September 24, 1977, petitioner donated unto respondent a parcel of land
at Canlubang, Calamba, Laguna on the condition that it shall be used for the
construction of a home for the aged and infirm and for other charitable purposes
and cannot be used for any other purposes without the consent of the former said
land with all real improvements thereon shall revert in otherwise trust to the Donor
for prompt disposition in favor of some other charitable organization that Donor
may deem best suited to the care of the aged. Thereafter, or sometime in 1980, the
donee, for purposes of generating funds to build the perimeter fence on the
donated property and the construction of a nucleus building for the aged and the
infirm, leased a portion of the donated property to one Martin Gomez who planted
said portion with sugar cane. There is no dispute that the lease agreement was
entered into by the donee without the prior written consent of the donor, as
required in the deed of donation. The lease to Gomez ended in 1985.The following
year, 1986, a portion of the donated property was again leased by the donee, this
time to one Jose Bostre who used the leased area as a ranch. As explained by the
donee, it entered into a lease agreement with Bostre to protect the premises from
vandals and for the electrification of the nucleus building of the home for the aged
and in the infirm, which was named as “Casa dela Merced.” As before, however, the
donee executed the lease contract without the prior written consentof the donor.
After the termination of the Bostre lease agreement, the donee, for the third time,
leased a portion of the donated property to one Rudy Caballes who used the leased
area for fattening cattles. The donee explained that the lease agreement with
Bostre was also for the purposes of generating funds for the completion of “Casa
dela Merced.” Again, however, the donee did not secure the prior written consent of
the donor. Hence, on September 20, 1990, pursuant to a board resolution, the
donor, through its president Miguel A. Yulo, addressed a letter to the donee
informing the latter that it was revoking the donation in accordance with Section 5
of the deed due to the donee’s non-compliance with and material breach of the
conditions thereunder stipulated.
ISSUE: W/N revocation is proper?
HELD: NO. In Republic vs. Silim, where the donor sought to revoke the donation on
the ground that the donee breached the condition to exclusively and forever use the
land for school purpose only, the Court ruled in favor of the donee: 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 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. As in Silim, the three (3) lease contracts herein entered into
by the donee were for the sole purpose of pursuing the objective for which the
donation was intended. In fact, such lease was authorized by the donor by express
provision in the deed of donation, albeit the prior written consent therefor of the
donor is needed. Hence, considering that the donee’s acts did not detract from the

as donee. Petitioner interposed various defenses. his heirs sought the help of the SangguniangPanlungsod requesting the approval of the aforesaid Resolution but was denied. Since such failure to comply with the condition of utilizing the property for school purposes became manifest sometime in 1988 when the DECS utilized another property for the construction of the school building. The spouses then requested that the property be returned to them considering that it was never used for almost 13 years. alleging that (1)there was a condition in the deed of donation: that the DECS.very purpose for which the donation was made but precisely to achieve such purpose. filed a complaint for the revocation of the deed of donation and cancellation of the title. or four years from the non-compliance with the condition in the deed of donation. Sr. recognizing the right of the donors to redeem the subject parcel of land. passed away. was burdened with the obligation to utilize the land donated for school purposes. which will not warrant the revocation of the donation. In .. Sr. On August 31. 1981. the four-year prescriptive period did not commence on such date. executed a deed of donation over a portion of their property in favor of the Ministry of Education and Culture intended for school purposes. since the late Rufino Dulay. the heirs of Dulay. (2) the DECS did not fulfill the condition and that the land remained idle up to the present. this Court cannot consider the requirement of a prior written consent by the donor for all contracts of lease to be entered into by the donee as an absolute ground for revocation of the donation because such a condition. and (3) the donation inter vivos was inofficious. SECRETARY OF EDUCATION and DR. DECS started the construction of the Rizal National High School building on a parcel of land which was about 2 kilometers away from the land donated bythe spouses Dulay. Besides. HEIRS OF RUFINO DULAY FACTS: On August 3. a donation with an onerous cause is essentially a contract and is thus governed by the rules on contract. The Barangay Council of Rizal issued a Resolution. It must be stressed that the donation is onerous because the DECS. resolving that the schoolno longer needed the donated land. Under Article 733 of the New Civil Code. Petitioner was given more than enough time to comply with the condition. one of which is that the action filed by the respondent’s had already prescribed. Sometime in1988. Rufino Dulay Sr. ISSUE: WON the respondents' right to seek the revocation ofthe deed of donation is already barred by prescription and laches. the property was not used for school purposes and remained idle. that is. However. would constitute undue restriction of the donee’s right of ownership over the donated property. as donee. The Court rejected the contention of the OSG that respondents’ cause of action is already barred by prescription under Article 764 of the New Civil Code. if not correlated with the purpose of the donation. a lack of prior written consent ofthe donor would only constitute casual breach of the deed. and it cannot be allowed to use this fact to its advantage. utilize the subject property for school purposes. the construction of a building to house the Rizal National High School. 1997. donated more than what he could give by will. BENITO TUMAMAO v. HELD: NO. Spouses Ignacia and Rufino Dulay Sr. hereinrespondents.

they agree to donate to them the tract of land which they own and state that on account of the circumstances recited they make the donation to the exclusion of their other nephews and nieces. petitioner DECS has no use for the property. the latter of whom has lived with them from childhood and has been treated by them as a daughter. filed a complaint against de Mesa.Central Philippine University v. In fine. and they request the donees to bear such expenses as would be incurred in case the donor Placida Manalo should die. The court ruled in favor of the defendant. Hence. we have established that the legal possibility of bringing the action begins with the expiration of a reasonable opportunity for the donee to fulfill what has been charged upon it by the donor. Petitioner DECS failed to use the property for the purpose specified in the deed of donation. the same shall be reverted to the respondents. Thereafter. Gregorio de Mesa accepted the donation and with hiswife. the general rule cannot be applied because to do so would be a mere technicality and would serve no other purpose than to delay or lead to an unnecessary and expensive multiplication of suits. the spouses Gregorio de Mesa and Leoncia Manalo. the spouses Fernando Regalado and Placida Manalo declared in a document that they are now old and incapacitated for work. and that it was recorded in a private document . Court of Appeals. and moreover taking into consideration that their nephew and niece. hence. BONIFACIA MANALO. entered into possession of the land donated. PLAINTIFF AND APPELLANT. 1903. petitioner DECS still failed to draw up plans to use the property for school purposes. as administratix of the estate of the deceased Placida. the other donee. that as both are without children to inherit from them. Petition denied. Even after respondents sought the return of the property before the courts. Plaintiff Bonifacio Manalo. The property remained barren and unutilized. ISSUE: WON the said donation is null and void because it was not made in a public instrument in accordance with the provisions of article 633 of the Civil Code. AS ADMINISTRATRIX OF THEESTATE OF THE DECEASED PLACIDA MANALO. Altogether. DEFENDANT AND APPELLEE FACTS On May 10. Likewise. it has been 16 years since the execution of the deed of donation. De Mesa also made the declaration of ownership for the assessment in June of that year and paid the land tax. have been caring for them both up to the present time. GREGORIO DE MESA. VS. Placida died and her body was buried and de Mesa fulfilled the obligation conditioned in the donation by paying the expenses occasioned by her death and burial. said claim was to be rejected and ignored by all the authorities. even in the lifetime of the donor Placida and her husband Regalado. that the woman has been ill for over a year and she feels that her death is approaching. To this end title of ownership was made over to the donees with the injunction that in case any claim to said land should be set up by any brother or other nephew of the donors. this appeal. we held that even if Article 1197 of the New Civil Code provides that the courts may fix the duration when the obligation does not determine the period but from its nature and circumstances it can be inferred that a period was intended.

must be respected. 6).RULING: NO. as a contract. provided the essential conditions required for their validity exist. If. such a donation as this one. in consideration of such care during the lifetime of the former. and if these laws do not require that the stipulations between the parties be recorded in a public instrument (inasmuch as a contract entered into verbally is valid and effective and produces all its consequences under the law). it embraces the conditions the law requires and is valid and effective. it is a fact that said donation was reduced to writing. especially when under article 1225 of the Civil Code a private instrument duly authenticated has the same force as a public instrument between those who sign it and their successors in interest. By means of the donation of the parcel of land herein before mentioned. and is governed by the law of contracts and not that of donation.500 pesetas. it does not require for its validity and efficacy that it should have been recorded in a public instrument. contracts are binding when entered in to between the parties. . and. although not recorded in a public instrument. therefore in order to determine whether or not said donation is valid and effective it should be sufficient to demonstrate that. as set forth in article1261 of the same code. in accordance with the provisions of article 622 of the Civil Code. then with greater reason the said donation for a valuable consideration set forth in the said document Exhibit 1 (p. The donation in question was recorded in a private instrument executed by the donors and signed by three witnesses. since the donors made it conditional upon the donees' bearing the expenses that might be occasioned by the death and burial of the donor Placida Manalo. since the donation for a valuable consideration. is governed by the laws of contracts. such a contract does not constitute a donacion remuneratoria but adonacion con causa onerosa. was recorded in a document legalized by the donors and the signatures of three witnesses (one of which was the plaintiff herself) who attested the genuineness of the act performed by said donors. "When two persons advanced in years. although this was a private document. at least in a private document. they transferred their real estate to the persons thus caring for them. made for a valuable consideration. being a contract legally entered into between the interested parties. Even though the value of the land donated does not exceed 1. being entirely alone and requiring the care of younger people. a condition and obligation which the donee Gregorio de Mesa carried out in his own behalf and for his wife Leoncia Manalo. whatever may be the form in which they may have been executed. enter into a contract whereby it is agreed that. made by the donors for a valuable consideration. Ramil)There can be no doubt that the donation in question was made for a valuable consideration. regarded in law as a contract." (Carlos vs. the former ceded or transferred the said parcel of land to the donees. and therefore it comes under the rules fixed in section 335 of the Code of Civil Procedure. the obligation or valuable consideration imposed upon the donee being stated therein. Under article 1278 of the Civil Code.

WILLARD DE LUNA.500 sqm.. it prayed for the cancellation of the donation . filed a complaint with the RTC of Quezon alleging that the terms and conditions of the donation were not complied with by the foundation. On September 23. ABRIGO. Prudencio de Luna donated a portion of 7.1971. JR. MEDIALDEA. The foundation failed to comply with the conditions of the donation. PRESIDING JUDGE OF THE COURT OF FIRSTINSTANCE OF QUEZON.). PRUDENCIO DELUNA. 1990. Prudencio de Luna "revived" the said donation in favor of the foundation. SOFRONIOF. No.. of Lot No. embodied in a Deed of Donation Inter vivos was subject to certain terms and conditions and provided for the automatic reversion to the donor of the donated property in case of violation or non-compliance.EVELYN DE LUNA. FIRST DIVISION.. G. ROSALINA DE LUNA. 1965. (now Luzonian University Foundation. On April 9. BRANCH IX. RESPONDENTS. ANTONIO DE LUNA ANDJOSELITO DE LUNA.. 1980. herein petitioners. Inc. J. Facts On January 24. Among others.R.The donation. in a document entitled "Revival of Donation Inter-vivos" subject to terms and conditions3. HON. 1980. PETITIONERS. Inc. 57455. VS. January 18. who claim to be the children and only heirs of the late Prudencio de Luna who died on August 18. AND LUZONIANUNIVERSITY FOUNDATION. INC. 3707 of to the Luzonian Colleges.

counted from April 9. that said article does not apply to onerous donations in view of the specific provision of Article 733 providing that onerous donations are governed by the rules on contracts. morals. The complaint herein being filed September 23. 1980.733 of the NCC. 1036 of the NCC. There was also a provision for automatic reversion where in such case that the done fails to comply with its obligation. 1980 was then well within the ten (10) year prescriptive period to enforce a written contract (Article 1144(1). at its own expense. It is not disputed by parties. good customs.and the reversion of the donated land to the heirs. Petition Granted. his heirs. x x x. Said stipulation not being contrary to law. compliance with the terms and conditions of the contract of donation shall be made within five (5) years from its execution. 1980 is 5 months short for it has already prescribed on April 9. “Donations with an onerous cause shall be governed by the rules on contracts." Paragraph 11 of the "Revival of Donation3 That the foundation is to construct.” It is true that under Article 764 of the New Civil Code. Under Art. the lower court erred in appreciating the nature of the donation. . public order or public policy. without the need of executing any other document for that purpose and without obligation on the part of the DONOR". terms and conditions as they may deem convenient. Inter vivos. Under Art. actions for the revocation of a donation must be brought within four (4) years from the noncompliance of the conditions of the donation. Issue WON the lower court erred in dismissing the complaint of the petitioners Held Yes. New Civil Code). Respondent judge is ordered to conduct atrial on the merits to determine the propriety of the revocation of the subject donation. the parties to a contract have the right "to establish such stipulations. good customs. 1976. The RTC dismissed the complaint for the reason that under Article 764 of the New Civil Code. However. Veronica which is to be finished by at least 70% after 3 years. is valid and binding upon the foundation who voluntarily consented thereto. The complaint which was filed on September23. It is clear. however. a chapel to be named St. the land shall automatically revert to the donor or his heirs. As provided in the donation executed on April 9. actions to revoke a donation on the ground of non-compliance with any of the conditions of the donation shall prescribe in four years counted from such non-compliance. 1971. The automatic revocation is not contrary to law. that judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention. has provided that "violation of any of the conditions (herein) shall cause the automatic reversion of the donated area to the donor. the rules on contracts and the general rules on prescription and not the rules on donations are applicable in the case at bar. public order or public policy. but in order to determine whether or not the rescission was proper. morals. In the light of the above. clauses. provided they are not contrary to law. and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed. that the donation subject of this case is one with an onerous cause.

CERILA CALANASAN V. and Cerila was entitled to possess the land as long as she lived. to revoke the donation on the ground that Evelyn committed acts of ingratitude against her. Evelyn since she was child. transferred it in her name.00. Evelyn filed a demurrer to evidence. On August 15. When Evelyn married in 1982. Evelyn denied committing any act of ingratitude. Cerila donated a piece of land to her with the condition that Evelyn must redeem the land which had been mortgaged for P15. SPS. citing that Cerila failed to prove that it was Evelyn who committed acts of .000. she was substituted by her sister Teodora. She redeemed the property. and granted usufractuary rights to Cerila. Cerila filed a complaint against Evelyn. Evelyn accepted the donation and its terms. 2002. DOLORITO FACTS: Cerila took care of her orphan niece. Because Cerila died while the case was pending. assisted by her sister Teodora. After Cerila rested her case.

As we have held in the past: “points of law. we classified donations according to purpose. ruling that Art. As correctly raised by the respondents. rules of donation only apply to the excess. Judge Abrigo. It can’t be emphasized enough that the Court will not revisit the evidence presented below as well as any evidence introduced for the first time on appeal. ruling that the donation was inter vivos and onerous. arguments not raised before the lower courts may not be introduced on appeal. the donation never materialized because Evelyn violated a suspensive condition of the donation when she had the property title transferred to her name during the petitioner’s lifetime. the Court dismisses this new argument for being procedurally infirm and violative of due process. Teodora elevated the case to the Supreme Court. and the same directed not against the donor but to her sister.ingratitude against Cerila. v. an onerous donation imposes upon the donee a reciprocal obligation. The Court cannot re-examine. Teodora. theories. Basic consideration of due process impels this rule. In Republic of the Phils. albeit old. issues and arguments not brought to the attention of the trial court will not be and ought not to be considered by a reviewing court. characterization of onerous donations when we declared: “Under the old Civil Code. these allegations are factual issues which are not proper for the present action. on the other hand. limitations or charges upon the donee. Moreover.” Rules of contract govern the onerous portion of donation. the Court will not deviate from the rule that factual findings of the lower tribunals are final and binding on this Court. A pure/simple donation is the truest form of donation as it is based on pure gratuity. hence. it must be treated as an ordinary contract. We now come to the appreciation of the legal incidents of the donation vis-à-vis the alleged ungrateful acts. The remuneratory/compensatory type has for its purpose the rewarding of the donee for past services. In De Luna v. therefore. The RTC granted Evelyn’s demurrer to evidence. if any. it is a settled rule . as these cannot be raised for the first time on appeal. Teodora insists that Evelyn perpetrated ungrateful acts against the petitioner. we recognized the distinct. review or re-evaluate the evidence and the factual review made by the lower courts. 746 of the Civil Code does not apply because it was Evelyn’s husband Virgilio who committed the acts of ingratitude. Art. this is made for a valuable consideration whose cost is equal to or more than the thing donated. is a consideration for future services. which services do not amount to a demandable debt. it also occurs where the donor imposes certain conditions. A conditional/modal donation. The petitioner never raised this issue before the lower courts. In the absence of compelling reasons. 745 of the Civil Code finds no application. Silim. On appeal. The Supreme Court: “The petitioner may not raise factual issues. whose value is inferior to the donation given. Aside from being a factual issue that is not proper for the present action. It has not escaped the Court’s attention that this is the only time the petitioner raised the arguments that donation never materialized because the donee violated a condition of the donation when she had the title of the property transferred to her name. The Court is not a trier of facts. the Court of Appeals affirmed the RTC ruling but on a different ground. Lastly.

we emphasized the retention of the treatment of onerous types of donation. and the legal provisions on donation apply. the petitioner may not dissolve the donation. as held in the cases of Carlos v. thus: “The same rules apply under the New Civil Code as provided in Article 733 thereof which provides: Article 733. Manalo vs.that donations with an onerous cause are governed not by the law on donations but by the rules on contracts. Donations with an onerous cause shall be governed by the rules on contracts. as aptly established by the RTC. the rules of contract will govern and Article 765 of the New Civil Code finds no application with respect to the onerous portion of the donation. it was her husband who committed them. 1911.00. September 5. Cabanlit . First.” We agree with the CA that since the donation imposed on the donee the burden of redeeming the property for P15. 20 Phil. Insofar as the value of the land exceeds the redemption price paid for by the donee. it was the petitioner’s sister who received the alleged ill treatments. L-9449. despite the applicability of the provisions on donation to the gratuitous portion. Nevertheless. a donation exists. the donation was onerous. February 12. and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed.” In the same case. 29 Phil. As an endowment for a valuable consideration. 495. the ungrateful acts were perpetrated not against the donor. 1915. hence. de Mesa.” Lagazo v. Second. Ramil. L-6736.000. She has no factual and legal basis for its revocation. 183. These twin considerations place the case out of the purview of Article 765 of the New Civil Code. the ungrateful acts were committed not by the donee. it partakes of the nature of an ordinary contract.

free from all lines [sic] and encumbrances and charges whatsoever. charges or future services equal to or more in value than the thing donated. her grandson... by way of donation unto said DONEE. the formalities required for a valid simple donation are not applicable. Held: No.Facts: Petitioner filed an action seeking to recover from defendant aparcel of land which the former claims to have acquired from his grandmother by donation..the DONOR hereby voluntarily and freely gives. Petitioner defends that the donation in any case was onerous as he wAS the one who paid the land’s amortization. donations with an onerous cause shall be governed by the rules on contracts. The payments even seem to have been made pursuant to the power of attorney executed by Catalina Reyes in favor of petitioner. Article 733 of the Civil Code. A simple or pure donation is one whose cause is pure liberality. not onerous. put up the defense that when the alleged donation was executed.the above described real property..We rule that the donation was simple. hence. Defendant also claims that petitioner failed to accept the donation whether in the same deed of donation or in a separate instrument rendering the donation null and void. such payment was not however imposed by the donor as a condition for the donation. Respondent on the other hand. together with all the buildings and improvements found therein. he had already acquired the property by a Deed of Assignment (allegedly executed before the Deed of Donation to Plaintiff) from a transferee (the former agent) of petitioner’s grandmother. Issue: Whether or not the donation is onerous. The deed explicitly stated: That. . authorizing him to execute acts necessary for the fulfillment of her obligations. Even conceding that petitioner's full payment of the purchase price of the lot might have been a burden to him. while an onerous donation is one which is subject to burdens.

he executed a similar deed in favor of Eugenio Cagaoan for a parcel of land which. he has never had possession of parcel No. The supreme court of Spain has frequently held that inscription in the registry of property gives no preference of priority where the person relying on the inscription had full notice beforehand of the adverse claim. or to sanction. apparently. The plaintiff Eugenio Cagaoan having first taken possession in good faith must therefore be considered to have the better right to the land in question. creates a preference for the title of ownership of realty first registered. 4. and in the absence of both record and possession. On November 3. he failed to get the donation recorded with theregister of deeds.2. Both of the deeds of gift are free from formal defects and were duly accepted by the donees. Eugenio Cagaoan filed an action to declare that he is the owner of the parcel donated to him. at least since the year 1915. the property goes to the vendee who first records his title in the registry of property. 1. FELIX CAGAOAN FACTS The plaintiff and the defendant Felix Cagaoan are brothers. Issue: Can Eugenio be declared the owner of the donated lot in dispute? Held: Yes .Gregorio Cagaoan executed a deed of gift of four parcels of land situated in the municipality of Tayug." It clearly appears that Felix Cagaoan had full notice of the plaintiff's claim to the land before he had his deed of gift recorded with the register of deeds. provided there is good faith. and it cannot be conceived that the legislator had intended to do away with. in favor of Felix Cagaoan and on October 26. and his position was." although article 1473. faith. but on account of variance between the land description given in the deed and that appearing in the registry. 744 EUGENIO CAGAOAN vs. in now wise improved by the inscription of his document.Under article 1473 of the Civil Code.1918. 1919. Gregorio Cagaoan died on December 16. this provision must be understood as being based always upon the good faith required in the first paragraph thereof. 1918. If the sale is not recorded by either vendee. and 3 described in his deed.ART. the property goes to the one who first takes possession of its in good. bad faith by requiring compliance with a mere formality (the act of registration)which does not always control even when third persons are involved. is the same as that described as parcel No. 1915. in its second paragraph. but though he appears to have held possession of parcels Nos. to the one who present oldest title. Province of Pangasinan. . The deed given Felix was duly recorded on June 10. consequently. Under the decisions above cited he was therefore not a third person within the meaning of article 34 of the Mortgage Law. Eugenio Cagaoan went into possession of the parcel donated to him immediately after the execution of the deed of gift in his favor. to set aside for fraud the donation made in favor of Felix Cagaoan and to have the record of the same in the registry of deeds cancelled. 4 in the deed of gift executed in favor of Felix. the sons of Gregorio Cagaoan.