G.R. No.

77425             June 19, 1991

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP

OF IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners,
vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO
and MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA
TOLENTINO, respondents.

G.R. No. 77450             June 19, 1991

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP

OF IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO, petitioners,
vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO
and MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA
TOLENTINO, respondents.

Regalado, J.:
Digest Author: Jude Fanila

Topic: Some modes of Acquiring and Transmitting Real Rights (Donation)– Revocation

Case Summary: Petitioners, Archbishop/Bishop were the donees of a land owned by the predecessors of
private respondents. Donation contained stipulation that no alienation of land within a century. They later
sold the land within the prohibitive period. Heirs filed an action for revocation of donation. Private
respondents raised the defense that the cause of action had prescribed under NCC 764 which provides that
revocation of donation prescribes in 4 years.

SC held that 764 inapplicable as actions based on automatic rescission clauses are actions to enforce
written contracts which prescribes in 10 years under NCC 1144. This is because automatic rescission
clauses apply immediately, subject to a later determination of the propriety of the rescission. However,
SC dismissed case finding that the donation of non-alienation within 100 years is contrary to public
policy which constitutes an impossible/illegal donation under NCC 727 thus dismissed the case.

Petitioners: The Roman Catholic Archbishop Of Manila – Received donation of subject property
The Roman Catholic Bishop Of Imus – administrator of property
Spouses Florencio Ignao And Soledad C. Ignao – Purchaser of donated property
Respondents: Hon. Court Of Appeals,
The Estate Of Deceased Spouses Eusebio De Castro And Martina Rieta, Represented By Marina Rieta
Granados And Theresa Rieta Tolentino – Heirs of spouses who donated the subject property to the
petitioners.

Doctrines Involved:
Applicability of NCC 764 – Although it is true that an action for the revocation of donation must be
brought within (4) years from the non-compliance of the conditions of the donation, the provision is
inapplicable to the case.
Stipulations in Donation – this is because a judicial action for rescission of a contract is not necessary
where the contract provides that it may be revoked and cancelled for violation of any of its terms and
conditions. Judicial action is proper only when there is no provision granting the power of cancellation.
 In contracts containing such stipulations, the general laws on contract apply. Under NCC 1306 i
parties are free to establish stipulations, clauses, terms and conditions not contrary to law morals,
etc. Automatic revocation deeds are valid, subject to the determination of the propriety of the
rescission sought. However, the determination of propriety will be merely declaratory i.e. the
revocation is not contingent on the determination of propriety.
Prescription – In these cases, the action becomes an action to enforce a written contract which prescribes
in (10) years under NCC 1144.

FACTS:
1. Aug 23 1930 – Sps. De Castro executed a deed of donation in favor of the petitioners, Roman
Catholic Archbishop of Manila. The deed of donation stipulating that the done shall not dispose
or sell the property within a period of (100) years from the execution of the deed of donation
otherwise the donation would render the donation null and void.
a. Land Donated – Lot. 626 in Kawit Cavite (964 sq.m)
2. June 30 1980 – Bishop of Imus (administrator of properties owned by Archbishop of Manila in
Cavite) executed a deed of absolute sale covering the land donated in favor of private
respondents, Florencio and Soledad Ignao in consideration of the sum of P114k.
a. A TCT was issued in favor of the respondents later on Nov. 15 1980.

CASE TRAIL:
3. Nov 29 1984 – Private respondents (Estate of Sps. De Castro) filed a complaint for nullification
of deed of donation, rescission of contract and reconveyance of real property with damages
against petitioners before the RTC of Cavite.
a. RTC Decision – Jan 31 1985 – Dismissed the complaint on the basis that the cause of
action had prescribed.
4. Dec 23 1986 – CA held that the action had not yet prescribed. REVERSED the RTC and
REMANDED the case for further proceedings.
5. Led to current appeal.

ARGUMENTS BEFORE THE SUPREME COURT:

 Petitioner’s Argument related to Doctrine: NCC 764 provides that the action for revocation of
donation shall prescribe after four-years from non-compliance with the condition, thus the action
for revocation had already prescribed. (Sale was in June 1980, action for revocation on Nov
1984)

ISSUES + HELD:
1. W/N the cause of action for revocation of donation had already prescribed? – NO
a. Applicability of NCC 764 – Although it is true that an action for the revocation of
donation must be brought within (4) years from the non-compliance of the conditions of
the donation, the provision is inapplicable to the case.
b. Stipulations in Donation – this is because a judicial action for rescission of a contract is
not necessary where the contract provides that it may be revoked and cancelled for
violation of any of its terms and conditions. Judicial action is proper only when there is
no provision granting the power of cancellation.
i. In contracts containing such stipulations, the general laws on contract apply.
Under NCC 1306ii parties are free to establish stipulations, clauses, terms and
conditions not contrary to law morals, etc. Automatic revocation deeds are valid,
subject to the determination of the propriety of the rescission sought. However,
the determination of propriety will be merely declaratory i.e. the revocation is not
contingent on the determination of propriety.
 ii. Prescription – In these cases, the action becomes an action to enforce a written
contract which prescribes in (10) years under NCC 1144. iii
2. W/N the condition of non-alienation valid? – NO
a. Character of Donation – donation as a mode of acquiring ownership results in effective
transfer of title over the property from the donor to the donee. The donee becomes the
absolute owner of the property donated. However, the donor may impose certain
conditions in the deed of donation but such conditions must not be contrary to law,
morals, good customs, public order and public policy.
i. Prohibitions on Alienation – must not be perpetual or for an unreasonable period
of time to be valid.
ii. Other NCC provisions are applicable, NCC 494 iv provides that a donor or testator
may not prohibit the partition for more than (20) years, NCC 870 v declares that
dispositions of the testator declaring all or party of the estate inalienable for more
than (20) years are void.
iii. While these provisions deal with testators, they all concern the transfer of
property by gratuitous title which is also applicable to donations as they are acts
of liberality.
b. Condition in Present Case – as applied, the condition prohibited the alienation of the
property for an entire century. This falls within the classification of an unreasonable
period which is prohibited by NCC 727.vi
c. UNRELATED – SC notes that while validity of the prohibitory provision not specifically
put in the pleadings of the parties, it is related to petitioner’s assignment of error
(prescription of cause of action) because they relate to the same provision.
i. Similarly, SC has authority to review matters even if not assigned as errors on
appeal if issues are necessary in resolving the case. It has held historically that
SC has authority over unassigned error closely related to an error properly
assigned or, which the determination of the question properly assigned is
dependent, will be considered by the appellate court notwithstanding the failure
to assign it as error.
ii. Remand – Finally, SC has ruled that remand of a case for disposition is not
necessary when it can resolve the dispute based on the records. This is to further
public interest in the expeditious administration of justice.

RULING:

WHEREFORE, the judgment of respondent court is SET ASIDE and another judgment is hereby
rendered DISMISSING Civil Case No. 095-84 of the Regional Trial Court, Branch XX, Imus, Cavite.

SO ORDERED.

DISSENT:

NOTES:
i
Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
(1255a)

ii
Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public
policy. (1255a)

iii
Article 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment

iv
Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any
time the partition of the thing owned in common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years,
shall be valid. This term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership. (400a)

v
Article 870. The dispositions of the testator declaring all or part of the estate inalienable for more than twenty
years are void. (n)

Article 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not
vi

imposed