G.R. No.

131953           June 5, 2002

MA. ESTELA MAGLASANG, NICOLAS CABATINGAN and MERLY S. CABATINGAN, petitioners,

vs.
THE HEIRS OF CORAZON CABATINGAN, namely, LUZ M. BOQUIA, PERLA M. ABELLA, ESTRELLA M.
CAÑETE, LOURDES M. YUSON, and JULIA L. MAYOL, HEIRS OF GENOVIVA C. NATIVIDAD namely,
OSCAR C. NATIVIDAD, OLGA NATIVIDAD, ODETTE NATIVIDAD, OPHELIA NATIVIDAD, RICHARD
NATIVIDAD, RAYMUND NATIVIDAD, RICHIE NATIVIDAD, SONIA NATIVIDAD and ENCARNACION
CABATINGAN VDA. DE TRINIDAD, ALFREDO CABATINGAN and JESUSA C. NAVADA, respondents.

AUSTRIA-MARTINEZ, J.:

Posed for resolution before the Court in this petition for review on certiorari filed under Rule 45 of the
Rules of Court is the sole issue of whether the donations made by the late Conchita Cabatingan are
donations inter vivos  or mortis causa.

The facts of the case are as follows:

On February 17, 1992, Conchita Cabatingan executed in favor of her brother, petitioner Nicolas
Cabatingan, a "Deed of Conditional of Donation (sic) Inter Vivos for House and Lot" covering one-half (½)
portion of the former's house and lot located at Cot-cot, Liloan, Cebu. 1 Four (4) other deeds of donation
were subsequently executed by Conchita Cabatingan on January 14, 1995, bestowing upon: (a)
petitioner Estela C. Maglasang, two (2) parcels of land - one located in Cogon, Cebu (307 sq. m.) and the
other, a portion of a parcel of land in Masbate (50,232 sq. m.); (b) petitioner Nicolas Cabatingan, a
portion of a parcel of land located in Masbate (80,000 sq. m.); and (c) petitioner Merly S. Cabatingan, a
portion of the Masbate property (80,000 sq. m.). 2 These deeds of donation contain similar provisions, to
wit:

"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should die before the DONOR, the present donation shall be deemed automatically rescinded and of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; x x x"3 (Emphasis Ours)

On May 9, 1995, Conchita Cabatingan died.

Upon learning of the existence of the foregoing donations, respondents filed with the Regional Trial
Court of Mandaue, Branch 55, an action for Annulment And/Or Declaration of Nullity of Deeds of
Donations and Accounting, docketed as Civil Case No. MAN-2599, seeking the annulment of said four (4)
deeds of donation executed on January 14, 1995. Respondents allege, inter alia, that petitioners,
through their sinister machinations and strategies and taking advantage of Conchita Cabatingan's fragile
condition, caused the execution of the deeds of donation, and, that the documents are void for failing to
comply with the provisions of the Civil Code regarding formalities of wills and testaments, considering
that these are donations mortis causa.4 Respondents prayed that a receiver be appointed in order to
preserve the disputed properties, and, that they be declared as co-owners of the properties in equal
shares, together with petitioner Nicolas Cabatingan. 5
Petitioners in their Amended Answer, deny respondents' allegations contending that Conchita
Cabatingan freely, knowingly and voluntarily caused the preparation of the instruments. 6

On respondents' motion, the court a quo rendered a partial judgment on the pleadings on December 2,
1997 in favor of respondents, with the following dispositive portion:

"WHEREREFORE, and in consideration of all the foregoing, judgment is hereby rendered in favor of the
plaintiffs and against the defendant and unwilling co-plaintiff with regards (sic) to the four Deeds of
Donation Annexes "A", "A-1", "B" and Annex "C" which is the subject of this partial decision by:

Declaring the four Deeds of Donation as null and void ab initio for being a donation Mortis Causa and for
failure to comply with formal and solemn requisite under Art. 806 of the New Civil Code;

b) To declare the plaintiffs and defendants as well as unwilling co-plaintiff as the heirs of the deceased
Conchita Cabatingan and therefore hereditary co-owners of the properties subject of this partial
decision, as mandated under Art. 777 of the New Civil Code;

SO ORDERED."7

The court a quo ruled that the donations are donations mortis causa and therefore the four (4) deeds in
question executed on January 14, 1995 are null and void for failure to comply with the requisites of
Article 806 of the Civil Code on solemnities of wills and testaments. 8

Raising questions of law, petitioners elevated the court a quo's decision to this Court,9 alleging that:

"THE LOWER COURT PALPABLY DISREGARDED THE LONG-AND-WELL-ESTABLISHED RULINGS OF THIS

HONORABLE SUPREME COURT ON THE CHARACTERIZATION OF DONATIONS AS INTER VIVOS OR
MORTIS CAUSA AND, INSTEAD, PROCEEDED TO INTERPRET THE DONATIONS IN QUESTION IN A MANNER
CONTRARY THERETO."10

Petitioners insist that the donations are inter vivos donations as these were made by the late Conchita
Cabatingan "in consideration of the love and affection of the donor" for the donee, and there is nothing
in the deeds which indicate that the donations were made in consideration of Cabatingan's death. 11 In
addition, petitioners contend that the stipulation on rescission in case petitioners die ahead of
Cabatingan is a resolutory condition that confirms the nature of the donation as inter vivos.

Petitioners' arguments are bereft of merit.

In a donation mortis causa,  "the right of disposition is not transferred to the donee while the donor is
still alive."12 In determining whether a donation is one of mortis causa, the following characteristics
must be taken into account:

(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;

and
(3) That the transfer should be void if the transferor should survive the transferee. 13

In the present case, the nature of the donations as mortis causa is confirmed by the fact that the
donations do not contain any clear provision that intends to pass proprietary rights to petitioners prior
to Cabatingan's death.14 The phrase "to become effective upon the death of the DONOR" admits of no
other interpretation but that Cabatingan did not intend to transfer the ownership of the properties to
petitioners during her lifetime. Petitioners themselves expressly confirmed the donations as mortis
causa in the following Acceptance and Attestation clauses, uniformly found in the subject deeds of
donation, to wit:

"That the DONEE does hereby accept the foregoing donation mortis causa under the terms and
conditions set forth therein, and avail herself of this occasion to express her profound gratitude for the
kindness and generosity of the DONOR."

xxx

"SIGNED by the above-named DONOR and DONEE at the foot of this Deed of Donation mortis causa,
which consists of two (2) pages x x x."15

That the donations were made "in consideration of the love and affection of the donor" does not qualify
the donations as inter vivos because transfers mortis causa may also be made for the same reason.16

Well in point is National Treasurer of the Phils. v. Vda. de Meimban.17 In said case, the questioned
donation contained the provision:

"That for and in consideration of the love and affection which the DONOR has for the DONEE, the said
Donor by these presents does hereby give, transfer, and convey unto the DONEE, her heirs and assigns a
portion of ONE HUNDRED THOUSAND (100,000) SQUARE METERS, on the southeastern part Pro-indiviso
of the above described property. (The portion herein donated is within Lot 2-B of the proposed
amendment Plan Subdivision of Lots Nos. 1 and 2, Psu-109393), with all the buildings and improvements
thereon, to become effective upon the death of the DONOR. (italics supplied.)"18

Notably, the foregoing provision is similar to that contained in the donation executed by Cabatingan. We
held in Meimban case that the donation is a mortis causa donation, and that the above quoted provision
establishes the donor's intention to transfer the ownership and possession of the donated property to
the donee only after the former's death. Further:

"As the donation is in the nature of a mortis causa disposition, the formalities of a will should have been
complied with under Article 728 of the Civil Code, otherwise, the donation is void and would produce no
effect. As we have held in Alejandro v. Geraldez (78 SCRA 245,253), "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 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. (Citing
Bonsato v. Court of Appeals, 95 Phil. 481)." 19

We apply the above rulings to the present case. The herein subject deeds expressly provide that the
donation shall be rescinded in case petitioners predecease Conchita Cabatingan. As stated in Reyes v.
Mosqueda,20 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. This is exactly what Cabatingan provided for in
her donations. If she really intended that the donation should take effect during her lifetime and that
the ownership of the properties donated be transferred to the donee or independently of, and not by
reason of her death, she would have not expressed such proviso in the subject deeds.1âwphi1.nêt

Considering that the disputed donations are donations mortis causa, the same partake of the nature of
testamentary provisions21 and as such, said deeds must be executed in accordance with the requisites
on solemnities of wills and testaments under Articles 805 and 806 of the Civil Code, to wit:

"ART. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the
testator himself or by the testator's name written by some other person in his presence, and by his
express direction, and attested and subscribed by three or more credible witnesses in the presence of
the testator and of one another.

The testator or the person requested by him to write his name and the instrumental witnesses of the
will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all
the pages shall be numbered correlatively in letters placed on the upper part of each page.

The attestation shall state the number of pages used upon which the will is written , and the fact that
the testator signed the will and every page thereof, or caused some other person to write his name,
under his express direction, in the presence of the instrumental witnesses, and that the latter witnessed
and signed the will and all the pages thereof in the presence of the testator and of one another.

If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them. (n)

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. (n)"

The deeds in question although acknowledged before a notary public of the donor and the donee, the
documents were not executed in the manner provided for under the above-quoted provisions of law.

Thus, the trial court did not commit any reversible error in declaring the subject deeds of donation null
and void.

WHEREFORE, the petition is hereby DENIED for lack of merit.

SO ORDERED.
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 Donation 4 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 Answer 6 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

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 748 25 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.

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)

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:

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.
G.R. No. 111904               October 5, 2000

SPS. AGRIPINO GESTOPA and ISABEL SILARIO GESTOPA, petitioners,

vs.
COURT OF APPEALS and MERCEDES DANLAG y PILAPIL, respondents.

DECISION

QUISUMBING, J.:

This petition for review,1 under Rule 45 of the Rules of Court, assails the decision 2 of the Court of Appeals
dated August 31, 1993, in CA-G.R. CV No. 38266, which reversed the judgment 3 of the Regional Trial
Court of Cebu City, Branch 5.

The facts, as culled from the records, are as follows:

Spouses Diego and Catalina Danlag were the owners of six parcels of unregistered lands. They executed
three deeds of donation mortis causa,  two of which are dated March 4, 1965 and another dated
October 13, 1966, in favor of private respondent Mercedes Danlag-Pilapil. 4 The first deed pertained to
parcels 1 & 2 with Tax Declaration Nos. 11345 and 11347, respectively. The second deed pertained to
parcel 3, with TD No. 018613. The last deed pertained to parcel 4 with TD No. 016821. All deeds
contained the reservation of the rights of the donors (1) to amend, cancel or revoke the donation during
their lifetime, and (2) to sell, mortgage, or encumber the properties donated during the donors' lifetime,
if deemed necessary.

On January 16, 1973, Diego Danlag, with the consent of his wife, Catalina Danlag, executed a deed of
donation inter vivos5 covering the aforementioned parcels of land plus two other parcels with TD Nos.
11351 and 11343, respectively, again in favor of private respondent Mercedes. This contained two
conditions, that (1) the Danlag spouses shall continue to enjoy the fruits of the land during their
lifetime, and that (2) the donee can not sell or dispose of the land during the lifetime of the said
spouses, without their prior consent and approval. Mercedes caused the transfer of the parcels' tax
declaration to her name and paid the taxes on them.

On June 28, 1979 and August 21, 1979, Diego and Catalina Danlag sold parcels 3 and 4 to herein
petitioners, Mr. and Mrs. Agripino Gestopa. On September 29, 1979, the Danlags executed a deed of
revocation6 recovering the six parcels of land subject of the aforecited deed of donation inter vivos.

On March 1, 1983, Mercedes Pilapil (herein private respondent) filed with the RTC a petition against the
Gestopas and the Danlags, for quieting of title 7 over the above parcels of land. She alleged that she was
an illegitimate daughter of Diego Danlag; that she lived and rendered incalculable beneficial services to
Diego and his mother, Maura Danlag, when the latter was still alive. In recognition of the services she
rendered, Diego executed a Deed of Donation on March 20, 1973, conveying to her the six (6) parcels of
land. She accepted the donation in the same instrument, openly and publicly exercised rights of
ownership over the donated properties, and caused the transfer of the tax declarations to her name.
Through machination, intimidation and undue influence, Diego persuaded the husband of Mercedes,
Eulalio Pilapil, to buy two of the six parcels covered by the deed of donation. Said donation inter
vivos  was coupled with conditions and, according to Mercedes, since its perfection, she had complied
with all of them; that she had not been guilty of any act of ingratitude; and that respondent Diego had
no legal basis in revoking the subject donation and then in selling the two parcels of land to the
Gestopas.

In their opposition, the Gestopas and the Danlags averred that the deed of donation dated January 16,
1973 was null and void because it was obtained by Mercedes through machinations and undue
influence. Even assuming it was validly executed, the intention was for the donation to take effect upon
the death of the donor. Further, the donation was void for it left the donor, Diego Danlag, without any
property at all.

On December 27, 1991, the trial court rendered its decision, thus:

"WHEREFORE, the foregoing considered, the Court hereby renders judgment in favor of the defendants
and against the plaintiff:

1. Declaring the Donations Mortis Causa and Inter Vivos as revoked, and, therefore, has (sic) no legal
effect and force of law.

2. Declaring Diego Danlag the absolute and exclusive owner of the six (6) parcels of land mentioned in
the Deed of revocation (Exh. P-plaintiff, Exh. 6-defendant Diego Danlag).

3. Declaring the Deeds of Sale executed by Diego Danlag in favor of spouses Agripino Gestopa and Isabel
Gestopa dated June 28, 1979 (Exh. S-plaintiff; Exh. 18-defendant); Deed of Sale dated December 18,
1979 (Exh. T plaintiff; Exh. 9-defendant); Deed of Sale dated September 14, 1979 (Exh. 8); Deed of Sale
dated June 30, 1975 (Exh. U); Deed of Sale dated March 13, 1978 (Exh. X) as valid and enforceable duly
executed in accordance with the formalities required by law.

4. Ordering all tax declaration issued in the name of Mercedes Danlag Y Pilapil covering the parcel of
land donated cancelled and further restoring all the tax declarations previously cancelled, except parcels
nos. 1 and 5 described, in the Deed of Donation Inter Vivos (Exh. "1") and Deed of Sale (Exh. "2")
executed by defendant in favor of plaintiff and her husband.

[5.] With respect to the contract of sale of abovestated parcels of land, vendor Diego Danlag and spouse
or their estate have the alternative remedies of demanding the balance of the agreed price with legal
interest, or rescission of the contract of sale.

SO ORDERED."8

In rendering the above decision, the trial court found that the reservation clause in all the deeds of
donation indicated that Diego Danlag did not make any donation; that the purchase by Mercedes of the
two parcels of land covered by the Deed of Donation Inter Vivos bolstered this conclusion; that
Mercedes failed to rebut the allegations of ingratitude she committed against Diego Danlag; and that
Mercedes committed fraud and machination in preparing all the deeds of donation without explaining
to Diego Danlag their contents.

Mercedes appealed to the Court of Appeals and argued that the trial court erred in (1) declaring the
donation dated January 16, 1973 as mortis causa  and that the same was already revoked on the ground
of ingratitude; (2) finding that Mercedes purchased from Diego Danlag the two parcels of land already
covered by the above donation and that she was only able to pay three thousand pesos, out of the total
amount of twenty thousand pesos; (3) failing to declare that Mercedes was an acknowledged natural
child of Diego Danlag.

On August 31, 1993, the appellate court reversed the trial court. It ruled:

"PREMISES CONSIDERED, the decision appealed from is REVERSED and a new judgment is hereby
rendered as follows:

1. Declaring the deed of donation inter vivos dated January 16, 1973 as not having been revoked and
consequently the same remains in full force and effect;

2. Declaring the Revocation of Donation dated June 4, 1979 to be null and void and therefore of no force
and effect;

3. Declaring Mercedes Danlag Pilapil as the absolute and exclusive owner of the six (6) parcels of land
specified in the above-cited deed of donation inter vivos;

4. Declaring the Deed of Sale executed by Diego Danlag in favor of spouses Agripino and Isabel Gestopa
dated June 28, 1979 (Exhibits S and 18), Deed of Sale dated December 18, 1979 (Exhibits T and 19), Deed
of Sale dated September 14, 1979 (Exhibit 8), Deed of Sale dated June 30, 1975 (Exhibit U), Deed of Sale
dated March 13, 1978 (Exhibit X) as well as the Deed of Sale in favor of Eulalio Danlag dated December
27, 1978 (Exhibit 2) not to have been validly executed;

5. Declaring the above-mentioned deeds of sale to be null and void and therefore of no force and effect;

6. Ordering spouses Agripino Gestopa and Isabel Silerio Gestopa to reconvey within thirty (30) days from
the finality of the instant judgment to Mercedes Danlag Pilapil the parcels of land above-specified,
regarding which titles have been subsequently fraudulently secured, namely those covered by O.C.T. T-
17836 and O.C.T. No. 17523.

7. Failing to do so, ordering the Branch Clerk of Court of the Regional Trial Court (Branch V) at Cebu City
to effect such reconveyance of the parcels of land covered by O.C.T. T-17836 and 17523.

SO ORDERED."9

The Court of Appeals held that the reservation by the donor of lifetime usufruct indicated that he
transferred to Mercedes the ownership over the donated properties; that the right to sell belonged to
the donee, and the donor's right referred to that of merely giving consent; that the donor changed his
intention by donating inter vivos  properties already donated mortis causa; that the transfer to
Mercedes' name of the tax declarations pertaining to the donated properties implied that the donation
was inter vivos; and that Mercedes did not purchase two of the six parcels of land donated to her.

Hence, this instant petition for review filed by the Gestopa spouses, asserting that:

"THE HONORABLE COURT OF APPEALS, TWELFTH DIVISION, HAS GRAVELY ERRED IN REVERSING THE
DECISION OF THE COURT A QUO."10

Before us, petitioners allege that the appellate court overlooked the fact that the donor did not only
reserve the right to enjoy the fruits of the properties, but also prohibited the donee from selling or
disposing the land without the consent and approval of the Danlag spouses. This implied that the donor
still had control and ownership over the donated properties. Hence, the donation was post mortem.
Crucial in resolving whether the donation was inter vivos or mortis causa is the determination of
whether the donor intended to transfer the ownership over the properties upon the execution of the
deed.11

In ascertaining the intention of the donor, all of the deed's provisions must be read together. 12 The deed
of donation dated January 16, 1973, in favor of Mercedes contained the following:

"That for and in consideration of the love and affection which the Donor inspires in the Donee and as an
act of liberality and generosity, the Donor hereby gives, donates, transfer and conveys by way of
donation unto the herein Donee, her heirs, assigns and successors, the above-described parcels of land;

That it is the condition of this donation that the Donor shall continue to enjoy all the fruits of the land
during his lifetime and that of his spouse and that the donee cannot sell or otherwise, dispose of the
lands without the prior consent and approval by the Donor and her spouse during their lifetime.

xxx

That for the same purpose as hereinbefore stated, the Donor further states that he has reserved for
himself sufficient properties in full ownership or in usufruct enough for his maintenance of a decent
livelihood in consonance with his standing in society.

That the Donee hereby accepts the donation and expresses her thanks and gratitude for the kindness
and generosity of the Donor."13

Note first that the granting clause shows that Diego donated the properties out of love and affection for
the donee. This is a mark of a donation inter vivos.14 Second, the reservation of lifetime usufruct
indicates that the donor intended to transfer the naked ownership over the properties. As correctly
posed by the Court of Appeals, what was the need for such reservation if the donor and his spouse
remained the owners of the properties? Third, the donor reserved sufficient properties for his
maintenance in accordance with his standing in society, indicating that the donor intended to part with
the six parcels of land.15 Lastly, the donee accepted the donation. In the case of Alejandro vs. Geraldez,
78 SCRA 245 (1977), we said that an acceptance clause is a mark that the donation is inter vivos.
Acceptance is a requirement for donations inter vivos. Donations mortis causa, being in the form of a
will, are not required to be accepted by the donees during the donors' lifetime.

Consequently, the Court of Appeals did not err in concluding that the right to dispose of the properties
belonged to the donee. The donor's right to give consent was merely intended to protect his
usufructuary interests. In Alejandro, we ruled that a limitation on the right to sell during the donors'
lifetime implied that ownership had passed to the donees and donation was already effective during the
donors' lifetime.

The attending circumstances in the execution of the subject donation also demonstrated the real intent
of the donor to transfer the ownership over the subject properties upon its execution. 16 Prior to the
execution of donation inter vivos, the Danlag spouses already executed three donations mortis causa. As
correctly observed by the Court of Appeals, the Danlag spouses were aware of the difference between
the two donations. If they did not intend to donate inter vivos, they would not again donate the four lots
already donated mortis causa. Petitioners' counter argument that this proposition was erroneous
because six years after, the spouses changed their intention with the deed of revocation, is not only
disingenious but also fallacious. Petitioners cannot use the deed of revocation to show the spouses'
intent because its validity is one of the issues in this case.

Petitioners aver that Mercedes' tax declarations in her name can not be a basis in determining the
donor's intent. They claim that it is easy to get tax declarations from the government offices such that
tax declarations are not considered proofs of ownership. However, unless proven otherwise, there is a
presumption of regularity in the performance of official duties. 17 We find that petitioners did not
overcome this presumption of regularity in the issuance of the tax declarations. We also note that the
Court of Appeals did not refer to the tax declarations as proofs of ownership but only as evidence of the
intent by the donor to transfer ownership.

Petitioners assert that since private respondent purchased two of the six parcels of land from the donor,
she herself did not believe the donation was inter vivos. As aptly noted by the Court of Appeals,
however, it was private respondent's husband who purchased the two parcels of land.

As a rule, a finding of fact by the appellate court, especially when it is supported by evidence on record,
is binding on us.18 On the alleged purchase by her husband of two parcels, it is reasonable to infer that
the purchase was without private respondent's consent. Purchase by her husband would make the
properties conjugal to her own disadvantage. That the purchase is against her self-interest, weighs
strongly in her favor and gives credence to her claim that her husband was manipulated and unduly
influenced to make the purchase, in the first place.1âwphi1

Was the revocation valid? A valid donation, once accepted, becomes irrevocable, except on account of
officiousness, failure by the donee to comply with the charges imposed in the donation, or
ingratitude.19 The donor-spouses did not invoke any of these reasons in the deed of revocation. The
deed merely stated:

"WHEREAS, while the said donation was a donation Inter Vivos, our intention thereof is that of Mortis
Causa so as we could be sure that in case of our death, the above-described properties will be inherited
and/or succeeded by Mercedes Danlag de Pilapil; and that said intention is clearly shown in paragraph 3
of said donation to the effect that the Donee cannot dispose and/or sell the properties donated during
our life-time, and that we are the one enjoying all the fruits thereof." 20

Petitioners cited Mercedes' vehemence in prohibiting the donor to gather coconut trees and her filing of
instant petition for quieting of title. There is nothing on record, however, showing that private
respondent prohibited the donors from gathering coconuts. Even assuming that Mercedes prevented
the donor from gathering coconuts, this could hardly be considered an act covered by Article 765 of the
Civil Code.21 Nor does this Article cover respondent's filing of the petition for quieting of title, where she
merely asserted what she believed was her right under the law.

Finally, the records do not show that the donor-spouses instituted any action to revoke the donation in
accordance with Article 769 of the Civil Code. 22 Consequently, the supposed revocation on September
29, 1979, had no legal effect.

WHEREFORE, the instant petition for review is DENIED. The assailed decision of the Court of Appeals
dated August 31, 1993, is AFFIRMED.

Costs against petitioners. SO ORDERED.

G.R. No. L-57455               January 18, 1990

EVELYN DE LUNA, ROSALINA DE LUNA, PRUDENCIO DE LUNA, JR., WILLARD DE LUNA, ANTONIO DE
LUNA, and JOSELITO DE LUNA, petitioners,
vs.
HON. SOFRONIO F. ABRIGO, Presiding Judge of the Court of First Instance of Quezon, Branch IX, and
LUZONIAN UNIVERSITY FOUNDATION, INC., respondents.

Milberto B. Zurbano for petitioners.

Joselito E. Talabong for private respondent.

MEDIALDEA, J.:

This is a petition for review on certiorari  of the Order dated July 7, 1981 of respondent judge Sofronio F.
Abrigo of the Court of First Instance of Quezon, Branch IX in Civil Case No. 8624 dismissing the complaint
of petitioners on the ground of prescription of action.

The antecedent facts are as follows:

On January 24, 1965, Prudencio de Luna donated a portion of 7,500 square meters of Lot No. 3707 of
the Cadastral Survey of Lucena covered by Transfer Certificate of Title No. 1-5775 to the Luzonian
Colleges, Inc., (now Luzonian University Foundation, Inc., herein referred to as the foundation). The
donation, embodied in a Deed of Donation Intervivos (Annex "A" of Petition) 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 (pars. 7 and 10 of Annex "A", p. 20, Rollo). The foundation failed
to comply with the conditions of the donation. On April 9, 1971, Prudencio de Luna "revived" the said
donation in favor of the foundation, in a document entitled "Revival of Donation Intervivos" (Annex "B"
of Petition) subject to terms and conditions which among others, required:

x x x           x x x          x x x

3. That the DONEE shall construct at its own expense a Chapel, a Nursery and Kindergarten School, to be
named after St. Veronica, and other constructions and Accessories shall be constructed on the land
herein being donated strictly in accordance with the plans and specifications prepared by the O.R.
Quinto & Associates and made part of this donation; provided that the flooring of the Altar and parts of
the Chapel shall be of granoletic marble.

4. That the construction of the Chapel, Nursery and Kindergarten School shall start immediately and
must be at least SEVENTY (70) PER CENTUM finished by the end of THREE (3) YEARS from the date
hereof, however, the whole project as drawn in the plans and specifications made parts of this donation
must be completed within FIVE (5) YEARS from the date hereon, unless extensions are granted by the
DONOR in writing;

. . . . (p. 23, Rollo)
As in the original deed of donation, the "Revival of Donation Intenrivos" also provided for the automatic
reversion to the donor of the donated area in case of violation of the conditions thereof, couched in the
following terms:

xxx xxx xxx.

11. That violation of any of the conditions herein provided shall cause the automatic reversion of the
donated area to the donor, his heirs, assigns and representatives, without the need of executing any
other document for that purpose and without obligation whatever on the part of the DONOR. (p.
24, Rollo).

The foundation, through its president, accepted the donation in the same document, subject to all the
terms and conditions stated in the donation (p. 24, Rollo). The donation was registered and annotated
on April 15, 1971 in the memorandum of encumbrances as Entry No. 17939 of Transfer Certificate of
Title No. T-5775 (p. 15, Rollo).

On August 3, 1971, Prudencio de Luna and the foundation executed a 'Deed of Segregation" (Annex "C"
of Petition) whereby the area donated which is now known as Lot No. 3707-B of Subdivision Plan Psd-
40392 was adjudicated to the foundation. As a result, transfer certificate of title No. T-16152 was issued
in the name of the foundation. The remaining portion known as Lot No. 3707-A was retained by the
donor. (p. 16, Rollo).

On September 23, 1980, herein petitioners, Evelyn, Rosalina, Prudencio, Jr., Willard, Antonio and
Joselito, all surnamed de Luna, who claim to be the children and only heirs of the late Prudencio de Luna
who died on August 18, 1980, filed a complaint (pp. 14-17, Rollo) with the Regional Trial Court of
Quezon alleging that the terms and conditions of the donation were not complied with by the
foundation. Among others, it prayed for the cancellation of the donation and the reversion of the
donated land to the heirs. The complaint was docketed as Civil Case No. 8624.

In its answer (pp. 29-36, Rollo), respondent foundation claimed that it had partially and substantially
complied with the conditions of the donation and that the donor has granted the foundation an
indefinite extension of time to complete the construction of the chapel. It also invoked the affirmative
defense of prescription of action and prayed for the dismissal of the complaint.

During the pre-trial of the case, the foundation moved for a preliminary hearing of its affirmative
defense of prescription of action which was opposed by the plaintiffs. After the parties have filed their
respective written motions, oppositions and memoranda, an Order (pp., 40-43, Rollo) dated July 7, 1981
was issued dismissing the complaint. The dispositive portion of the Order states:

In view of the foregoing considerations, this Court finds the motion to dismiss deemed filed by the
defendant on the ground of prescription to be well-taken and the same is hereby GRANTED.

WHEREFORE, the instant complaint is hereby ordered DISMISSED.

No pronouncement as to costs.

SO ORDERED. (pp. 42-43,  Rollo)

No motion for reconsideration was filed by petitioners.

On July 22, 1981, petitioners brought the instant petition for review with the following assignments of
error:

I. THE LOWER COURT ERRED IN HOLDING THAT THE DONEE'S CONSENT TO THE REVOCATION OF A
DONATION TO BE VALID MUST BE GIVEN SUBSEQUENT TO THE EFFECTIVITY OF THE DONATION OR
VIOLATION OF (THE) ANY OF THE CONDITIONS IMPOSED THEREIN.

II. THE LOWER COURT ERRED IN TREATING THE COMPLAINT AS ONE FOR JUDICIAL DECREE OF
REVOCATION OF THE DONATION IN QUESTION AS CONTEMPLATED IN ARTICLE 764 OF THE CIVIL CODE
OF THE PHILIPPINES AND WHICH PRESCRIBES IN FOUR (4) YEARS AND IN NOT CONSIDERING IT AS AN
ACTION TO ENFORCE A WRITTEN CONTRACT WHICH PRESCRIBES IN TEN (10) YEARS AS PROVIDED IN
ARTICLE 1144, HENCE, THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT.

III. THE LOWER COURT ERRED IN NOT RENDERING JUDGMENT ON THE MERITS BY WAY OF JUDGMENT
ON THE PLEADINGS. (pp. 1-2, Petitioner's Brief)

We gave due course to the petition on August 3, 1981 (p. 45, Rollo). After the parties' submission of
their respective briefs, the Court resolved to consider the petition submitted for decision on January 27,
1982 (p. 62, Rollo).

The assailed order of the trial court stated that revocation (of a donation) will be effective only either
upon court judgment or upon consent of the donee as held in the case of Parks v. Province of Tarlac, No.
24190, July 13, 1926, 49 Phil. 143. The trial court dismissed the claim of petitioners that the stipulation
in the donation providing for revocation in case of non-compliance of conditions in the donation is
tantamount to the consent of the donee, opining that the consent contemplated by law should be such
consent given by the donee subsequent to the effectivity of the donation or violation of the conditions
imposed therein. The trial court further held that, far from consenting to the revocation, the donee
claimed that it had already substantially complied with the conditions of the donation by introducing
improvements in the property donated valued at more than the amount of the donated land. In view
thereof, a judicial decree revoking the subject donation is necessary. Accordingly, under Article 764 of
the New Civil Code, 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. In the
instant case, the four-year period for filing the complaint for revocation commenced on April 9, 1976
and expired on April 9, 1980. Since the complaint was brought on September 23, 1980 or more than
five (5) months beyond the prescriptive period, it was already barred by prescription.

On the other hand, petitioners argue that Article 764 of the New Civil Code was adopted to provide a
judicial remedy in case of non-fulfillment of conditions when revocation of the donation has not been
agreed upon by the parties. By way of contrast, when there is a stipulation agreed upon by the parties
providing for revocation in case of non-compliance, no judicial action is necessary. It is then petitioners'
claim that the action filed before the Court of First Instance of Quezon is not one for revocation of the
donation under Article 764 of the New Civil Code which prescribes in four (4) years, but one to enforce a
written contract which prescribes in ten (10) years.

The petition is impressed with merit.

From the viewpoint of motive, purpose or cause, donations may be 1) simple, 2) remuneratory or 3)
onerous. A simple donation is one the cause of which is pure liberality (no strings attached). A
remuneratory donation is one where the donee gives something to reward past or future services or
because of future charges or burdens, when the value of said services, burdens or charges is less than
the value of the donation. An onerous donation is one which is subject to burdens, charges or future
services equal (or more) in value than that of the thing donated (Edgardo L. Paras, Civil Code of the
Philippines Annotated, 11 ed., Vol. 11, p. 726).

It is the finding of the trial court, which is not disputed by the parties, that the donation subject of this
case is one with an onerous cause. It was made subject to the burden requiring the donee to construct a
chapel, a nursery and a kindergarten school in the donated property within five years from execution of
the deed of donation.

Under the old Civil Code, it is a settled rule that donations with an onerous cause are governed not by
the law on donations but by the rules on contracts, as held in the cases of Carlos v.  Ramil, L-6736,
September 5, 1911, 20 Phil. 183, Manalo vs.  de Mesa, L-9449, February 12, 1915, 29 Phil. 495. On the
matter of prescription of actions for the revocation of onerous donation, it was held that the general
rules on prescription applies. (Parks v. Province of Tarlac, supra.). The same rules apply under the New
Civil Code as provided in Article 733 thereof which 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.

It is true that under Article 764 of the New Civil Code, actions for the revocation of a donation must be
brought within four (4) years from the non-compliance of the conditions of the donation. However, it is
Our opinion 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.

In the light of the above, the rules on contracts and the general rules on prescription and not the rules
on donations are applicable in the case at bar.

Under Article 1306 of the New Civil Code, the parties to a contract have the right "to 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."

Paragraph 11 of the "Revival of Donation Intervivos, has provided that "violation of any of the
conditions (herein) shall cause the automatic reversion of the donated area to the donor, his
heirs, . . ., without the need of executing any other document for that purpose and without obligation
on the part of the DONOR". Said stipulation not being contrary to law, morals, good customs, public
order or public policy, is valid and binding upon the foundation who voluntarily consented thereto.

The validity of the stipulation in the contract providing for the automatic reversion of the donated
property to the donor upon non-compliance cannot be doubted. It is in the nature of an agreement
granting a party the right to rescind a contract unilaterally in case of breach, without need of going to
court. Upon the happening of the resolutory condition of non-compliance with the conditions of the
contract, the donation is automatically revoked without need of a judicial declaration to that effect. In
the case of University of the Philippines v.  de los Angeles, L-28602, September 29, 1970, 35 SCRA 102-
107, it was held:
. . . There is nothing in the law that prohibits the parties from entering into agreement that violation of
the terms of the contract would cause cancellation thereof. even without court intervention. In other
words, it is not always necessary for the injured party to resort to court for rescission of the contract
(Froilan v. Pan Oriental Shipping Co., et al., L-11897, 31 October 1964, 12 SCRA 276).

This was reiterated in the case of Angeles v.  Calasanz, L-42283, March 18, 1985:

Well settled is, however, the rule that a judicial action for the 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 (Lopez v. Commissioner of Customs, 37 SCRA 327, 334, and cases cited therein).

Resort to judicial action for rescission is obviously not contemplated. The validity of the stipulation can
not be seriously disputed. It is in the nature of a facultative resolutory condition which in many cases has
been upheld, by this court. (Ponce Enrile v. Court of Appeals, 29 SCRA 504)

However, in the University of the Philippines v.  Angeles  case, (supra), it was held that in cases where
one of the parties contests or denies the rescission, "only the final award of the court of competent
jurisdiction can conclusively settle whether the resolution is proper or not." It was held, thus:

. . . since in every case, where the extrajudicial resolution is contested, only the final award of the court
of competent jurisdiction can conclusively settle whether the resolution was proper or not. It is in this
sense that judicial action will be necessary as without it, the extrajudicial resolution will remain
contestable and subject to judicial invalidation, unless attack thereon should become barred by
acquiescence, estoppel or prescription.

It is clear, however, 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, but in order to determine whether or not the recession
was proper.

The case of Parks v.  Province of Tarlac,  supra, relied upon by the trial court, is not applicable in the case
at bar. While the donation involved therein was also onerous, there was no agreement in the donation
providing for automatic rescission, thus, the need for a judicial declaration revoking said donation.

The trial court was therefore not correct in holding that the complaint in the case at bar is barred by
prescription under Article 764 of the New Civil Code because Article 764 does not apply to onerous
donations.

As provided in the donation executed on April 9, 1971, complaince with the terms and conditions of the
contract of donation, shall be made within five (5) years from its execution. The complaint which was
filed on September 23, 1980 was then well within the ten (10) year prescriptive period to enforce a
written contract (Article 1144[1], New Civil Code), counted from April 9, 1976.

Finally, considering that the allegations in the complaint on the matter of the donee's non-compliance
with the conditions of the donation have been contested by private respondents who claimed that
improvements more valuable than the donated property had been introduced, a judgment on the
pleadings is not proper. Moreover, in the absence of a motion for judgment on the pleadings, the court
cannot motu proprio render such judgment. Section 1 of Rule 19 provides: "Where an answer fails to
tender an issue, or otherwise admits the material allegations of the adverse party's pleading, the court
may, on motion of that party, direct judgment on such pleading." (Emphasis supplied)

ACCORDINGLY, the petition is GRANTED. Civil Case No. 8624 is hereby ordered reinstated. Respondent
judge is ordered to conduct a trial on the merits to determine the propriety of the revocation of the
subject donation.

SO ORDERED.
G.R. No. 148775             January 13, 2004

SHOPPER’S PARADISE REALTY & DEVELOPMENT CORPORATION, petitioner,

vs.
EFREN P. ROQUE, respondent.

DECISION

VITUG, J.:

On 23 December 1993, petitioner Shopper’s Paradise Realty & Development Corporation, represented
by its president, Veredigno Atienza, entered into a twenty-five year lease with Dr. Felipe C. Roque, now
deceased, over a parcel of land, with an area of two thousand and thirty six (2,036) square meters,
situated at Plaza Novaliches, Quezon City, covered by Transfer of Certificate of Title (TCT) No. 30591 of
the Register of Deeds of Quezon City in the name of Dr. Roque. Petitioner issued to Dr. Roque a check
for P250,000.00 by way of "reservation payment." Simultaneously, petitioner and Dr. Roque likewise
entered into a memorandum of agreement for the construction, development and operation of a
commercial building complex on the property. Conformably with the agreement, petitioner issued a
check for another P250,000.00 "downpayment" to Dr. Roque.

The contract of lease and the memorandum of agreement, both notarized, were to be annotated on TCT
No. 30591 within sixty (60) days from 23 December 1993 or until 23 February 1994. The annotations,
however, were never made because of the untimely demise of Dr. Felipe C. Roque. The death of Dr.
Roque on 10 February 1994 constrained petitioner to deal with respondent Efren P. Roque, one of the
surviving children of the late Dr. Roque, but the negotiations broke down due to some disagreements.

In a letter, dated 3 November 1994, respondent advised petitioner "to desist from any attempt to
enforce the aforementioned contract of lease and memorandum of agreement". On 15 February 1995,
respondent filed a case for annulment of the contract of lease and the memorandum of agreement,
with a prayer for the issuance of a preliminary injunction, before Branch 222 of the Regional Trial Court
of Quezon City. Efren P. Roque alleged that he had long been the absolute owner of the subject property
by virtue of a deed of donation inter vivos executed in his favor by his parents, Dr. Felipe Roque and
Elisa Roque, on 26 December 1978, and that the late Dr. Felipe Roque had no authority to enter into the
assailed agreements with petitioner.

The donation was made in a public instrument duly acknowledged by the donor-spouses before a notary
public and duly accepted on the same day by respondent before the notary public in the same
instrument of donation. The title to the property, however, remained in the name of Dr. Felipe C. Roque,
and it was only transferred to and in the name of respondent sixteen years later, or on 11 May 1994,
under TCT No. 109754 of the Register of Deeds of Quezon City. Respondent, while he resided in the
United States of America, delegated to his father the mere administration of the property. Respondent
came to know of the assailed contracts with petitioner only after retiring to the Philippines upon the
death of his father.

On 9 August 1996, the trial court dismissed the complaint of respondent; it explained:

"Ordinarily, a deed of donation need not be registered in order to be valid between the parties.
Registration, however, is important in binding third persons. Thus, when Felipe Roque entered into a
leased contract with defendant corporation, plaintiff Efren Roque (could) no longer assert the
unregistered deed of donation and say that his father, Felipe, was no longer the owner of the subject
property at the time the lease on the subject property was agreed upon.

"The registration of the Deed of Donation after the execution of the lease contract did not affect the
latter unless he had knowledge thereof at the time of the registration which plaintiff had not been able
to establish. Plaintiff knew very well of the existence of the lease. He, in fact, met with the officers of the
defendant corporation at least once before he caused the registration of the deed of donation in his
favor and although the lease itself was not registered, it remains valid considering that no third person is
involved. Plaintiff cannot be the third person because he is the successor-in-interest of his father, Felipe
Roque, the lessor, and it is a rule that contracts take effect not only between the parties themselves but
also between their assigns and heirs (Article 1311, Civil Code) and therefore, the lease contract together
with the memorandum of agreement would be conclusive on plaintiff Efren Roque. He is bound by the
contract even if he did not participate therein. Moreover, the agreements have been perfected and
partially executed by the receipt of his father of the downpayment and deposit totaling to
P500,000.00."1

The Trial court ordered respondent to surrender TCT No. 109754 to the Register of Deeds of Quezon City
for the annotation of the questioned Contract of Lease and Memorandum of Agreement.

On appeal, the Court of Appeals reversed the decision of the trial court and held to be invalid the
Contract of Lease and Memorandum of Agreement. While it shared the view expressed by the trial court
that a deed of donation would have to be registered in order to bind third persons, the appellate court,
however, concluded that petitioner was not a lessee in good faith having had prior knowledge of the
donation in favor of respondent, and that such actual knowledge had the effect of registration insofar as
petitioner was concerned. The appellate court based its findings largely on the testimony of Veredigno
Atienza during cross-examination, viz;

"Q. Aside from these two lots, the first in the name of Ruben Roque and the second, the subject of the
construction involved in this case, you said there is another lot which was part of development project?

"A. Yes, this was the main concept of Dr. Roque so that the adjoining properties of his two sons, Ruben
and Cesar, will comprise one whole. The other whole property belongs to Cesar.

"Q. You were informed by Dr. Roque that this property was given to his three (3) sons; one to Ruben
Roque, the other to Efren, and the other to Cesar Roque?

"A. Yes.

"Q. You did the inquiry from him, how was this property given to them?

"A. By inheritance.

"Q. Inheritance in the form of donation?

"A. I mean inheritance.

"Q. What I am only asking you is, were you told by Dr. Felipe C. Roque at the time of your transaction
with him that all these three properties were given to his children by way of donation?
"A. What Architect Biglang-awa told us in his exact word: "Yang mga yan pupunta sa mga anak. Yong
kay Ruben pupunta kay Ruben. Yong kay Efren palibhasa nasa America sya, nasa pangalan pa ni Dr.
Felipe C. Roque."

"x x x           x x x           x x x

"Q. When was the information supplied to you by Biglang-awa? Before the execution of the Contract of
Lease and Memorandum of Agreement?

"A. Yes.

"Q. That being the case, at the time of the execution of the agreement or soon before, did you have
such information confirmed by Dr. Felipe C. Roque himself?

"A. Biglang-awa did it for us.

"Q. But you yourself did not?

"A. No, because I was doing certain things. We were a team and so Biglang-awa did it for us.

"Q. So in effect, any information gathered by Biglang-awa was of the same effect as if received by you
because you were members of the same team?

"A. Yes."2

In the instant petition for review, petitioner seeks a reversal of the decision of the Court of Appeals and
the reinstatement of the ruling of the Regional Trial Court; it argues that the presumption of good faith
it so enjoys as a party dealing in registered land has not been overturned by the aforequoted testimonial
evidence, and that, in any event, respondent is barred by laches and estoppel from denying the
contracts.

The existence, albeit unregistered, of the donation in favor of respondent is undisputed. The trial court
and the appellate court have not erred in holding that the non-registration of a deed of donation does
not affect its validity. As being itself a mode of acquiring ownership, donation results in an effective
transfer of title over the property from the donor to the donee. 3 In donations of immovable property,
the law requires for its validity that it should be contained in a public document, specifying therein the
property donated and the value of the charges which the donee must satisfy. 4 The Civil Code provides,
however, that "titles of ownership, or other rights over immovable property, which are not duly
inscribed or annotated in the Registry of Property (now Registry of Land Titles and Deeds) shall not
prejudice third persons."5 It is enough, between the parties to a donation of an immovable property,
that the donation be made in a public document but, in order to bind third persons, the donation must
be registered in the registry of Property (Registry of Land Titles and Deeds).6 Consistently, Section 50 of
Act No. 496 (Land Registration Act), as so amended by Section 51 of P.D. No. 1529 (Property Registration
Decree), states:

"SECTION 51. Conveyance and other dealings by registered owner.- An owner of registered land may
convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He
may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient in law.
But no deed, mortgage, lease, or other voluntary instrument, except a will purporting to convey or affect
registered land shall take effect as a conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the Register of Deeds to make registration.

"The act of registration shall be the operative act to convey or affect the land insofar as third persons are
concerned,  and in all cases under this Decree, the registration shall be made in the office of the Register
of Deeds for the province or city where the land lies." (emphasis supplied)

A person dealing with registered land may thus safely rely on the correctness of the certificate of title
issued therefore, and he is not required to go beyond the certificate to determine the condition of the
property7 but, where such party has knowledge of a prior existing interest which is unregistered at the
time he acquired a right thereto, his knowledge of that prior unregistered interest would have the effect
of registration as regards to him.8

The appellate court was not without substantial basis when it found petitioner to have had knowledge
of the donation at the time it entered into the two agreements with Dr. Roque. During their negotiation,
petitioner, through its representatives, was apprised of the fact that the subject property actually
belonged to respondent.

It was not shown that Dr. Felipe C. Roque had been an authorized agent of respondent.

In a contract of agency, the agent acts in representation or in behalf of another with the consent of the
latter.9 Article 1878 of the Civil Code expresses that a special power of attorney is necessary to lease any
real property to another person for more than one year. The lease of real property for more than one
year is considered not merely an act of administration but an act of strict dominion or of ownership. A
special power of attorney is thus necessary for its execution through an agent.1awphil.ne+

The Court cannot accept petitioner’s argument that respondent is guilty of laches. Laches, in its real
sense, is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a
right within a reasonable time, warranting a presumption that the party entitled to assert it either has
abandoned or declined to assert it.10

Respondent learned of the contracts only in February 1994 after the death of his father, and in the same
year, during November, he assailed the validity of the agreements. Hardly, could respondent then be
said to have neglected to assert his case for unreasonable length of time.

Neither is respondent estopped from repudiating the contracts. The essential elements of estoppel in
pais, in relation to the party sought to be estopped, are: 1) a clear conduct amounting to false
representation or concealment of material facts or, at least, calculated to convey the impression that
the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to
assert; 2) an intent or, at least, an expectation, that this conduct shall influence, or be acted upon by,
the other party; and 3) the knowledge, actual or constructive, by him of the real facts. 11 With respect to
the party claiming the estoppel, the conditions he must satisfy are: 1) lack of knowledge or of the means
of knowledge of the truth as to the facts in question; 2) reliance, in good faith, upon the conduct or
statements of the party to be estopped; and 3) action or inaction based thereon of such character as to
change his position or status calculated to cause him injury or prejudice. 12 It has not been shown that
respondent intended to conceal the actual facts concerning the property; more importantly, petitioner
has been shown not to be totally unaware of the real ownership of the subject property.
Altogether, there is no cogent reason to reverse the Court of Appeals in its assailed decision.

WHEREFORE, the petition is DENIED, and the decision of the Court of Appeals declaring the contract of
lease and memorandum of agreement entered into between Dr. Felipe C. Roque and Shopper’s Paradise
Realty & Development Corporation not to be binding on respondent is AFFIRMED. No costs.

SO ORDERED.
G.R. No. 194190

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
(DPWH), Petitioner
vs.
SPOUSES FRANCISCO R. LLAMAS and CARMELITA C. LLAMAS, Respondents

DECISION

LEONEN, J.:

This resolves a Petition for Review on Certiorari1 praying that the assailed October 14, 2010 Decision 2 of
the Fifth Division of the Court of Appeals in CA-G.R. SP No. 104178 be reversed and set aside, and that in
lieu of it, the Orders dated October 8, 2007 3 and May 19, 20084 of Branch 257 of the Regional Trial Court
of Parañaque City be reinstated.

The Regional Trial Court's October 8, 2007 Order required the Department of Public Works and
Highways to pay respondents Francisco and Carmelita Llamas (the Llamas Spouses) ₱12,000.00 per
square meter as compensation for the expropriated 41-square-meter portion of a lot that they
owned.5 The same Order denied the Llamas Spouses' prayer that they be similarly compensated for two
(2) expropriated road lots.6 The Regional Trial Court's May 19, 2008 Order denied the Llamas Spouses'
Motion for Reconsideration.7

In its assailed Decision, the Court of Appeals set aside the Regional Trial Court's October 8, 2007 and
May 19, 2008 Orders and required the Department of Public Works and Highways to similarly
compensate the Llamas Spouses for the two (2) road lots at ₱12,000.00 per square meter. 8

On April 23, 1990, the Department of Public Works and Highways initiated an action for expropriation
for the widening of Dr. A. Santos Ave. (also known as Sucat Road) in what was then the Municipality of
Parafiaque, Metro Manila.9 This action was brought against 26 defendants, none of whom are
respondents in this case. 10

On November 2, 1993, the Commissioners appointed by the Regional Trial Court in the expropriation
case submitted a resolution recommending that just compensation for the expropriated areas be set to
₱12,000.00 per square meter. 11

On January 27, 1994, the Llamas Spouses filed before the Regional Trial Court a "Most Urgent and
Respectful Motion for Leave to be Allowed Intervention as Defendants-Intervenors-Oppositors." 12 They
claimed that they were excluded from the expropriation case despite having properties affected by the
road widening project. After a hearing on this Motion, the Regional Trial Court allowed the Llamas
Spouses to file their Answer-in-Intervention. 13

The Llamas Spouses filed their Answer-in-Intervention on March 21, 1994. 14 In it, they claimed that a
total area of 298 square meters was taken from them during the road widening project:

(1) 102 square meters from a parcel of land identified as Lot 4, Block 3, covered by Transfer Certificate
of Title (TCT) No. 217167;

(2) 84 square meters from a parcel of land identified as Lot 1, covered by TCT No. 179165; and
(3) 112 square meters from a parcel of land identified as Lot 2, also covered byTCTNo. 179165.15

On August 2, 1994, the Llamas Spouses filed a "Most Urgent Motion for the Issuance of [a]n Order
Directing the Immediate Payment of 40% of Zonal Value of Expropriated Land and Improvements." 16 On
December 9, 1994, the Department of Public Works and Highways filed its Comment/Opposition to the
Llamas Spouses' August 2, 1994 Motion.17 It noted that, from its verification with the project engineer,
only 41 square meters in the parcel of land covered by TCT No. 179165 was affected by the road
widening project. Thus, it emphasized that the Llamas Spouses were entitled to just compensation only
to the extent of those 41 square meters. It added that the Llamas Spouses failed to adduce evidence of
any improvements on the affected area. It interposed no objection to the ₱12,000.00 per square meter
as valuation of just compensation. 18

On May 29, 1996, the Regional Trial Court issued the Order 19 directing the payment of the value of the
lots of the defendants in the expropriation case. The lots subject of the Llamas Spouses' intervention
were not included in this Order. 20

After years of not obtaining a favorable ruling, the Llamas Spouses filed a "Motion for Issuance of an
Order to Pay and/or Writ of Execution dated May 14, 2002." 21 In this Motion, the Llamas Spouses faulted
the Department of Public Works and Highways for what was supposedly its deliberate failure to comply
with the Regional Trial Court's previous Orders and even with its own undertaking to facilitate the
payment of just compensation to the Llamas Spouses.22 In response, the Department of Public Works
and Highways filed a Comment dated October 25, 2002. 23

On November 28, 2002, the Department of Public Works and Highways and the Llamas Spouses filed a
Joint Manifestation and Motion seeking to suspend the Llamas Spouses' pending Motions. 24 This Joint
Motion stated that the Department of Public Works and Highways and the Llamas Spouses had an
understanding that the resolution of the latter's claims required the submission of: (1) certified true
copies of the TCTs covering the lots; and (2) certified true copies of the tax declarations, tax
clearances, and tax receipts over the lots.25 It added that the Llamas Spouses had undertaken to
submit these documents as soon as possible.26

In an August 8, 2005 hearing, the Department of Public Works and Highways manifested that the non-
payment of the Llamas Spouses' claims was due to their continued failure to comply with their
undertaking.27 On the same date, the Llamas Spouses filed a Manifestation seeking the payment of their
claims.28

The Department of Public Works and Highways then filed a Comment/Opposition asserting that, from its
inquiries with the City Assessor's Office and the Parafiaque City Registry of Deeds, the documents the
Llamas Spouses submitted "did not originate from the concerned offices." 29

On October 8, 2007, the Regional Trial Court issued the Order 30 directing the payment to the Llamas
Spouses of just compensation at ₱12,000.00 per square meter for 41 square meters for the lot covered
by TCT No. 217267. It denied payment for areas covered by TCT No. 179165 and noted that these were
subdivision road lots, which the Llamas Spouses "no longer owned" 31 and which "belong[ed] to the
community for whom they were made."32 In the Order dated May 19, 2008, the Regional Trial Court
denied the Llamas Spouses' Motion for Reconsideration. 33

The Llamas Spouses then filed before the Court of Appeals a Petition for Certiorari.
In its assailed October 14, 2010 Decision, 34 the Court of Appeals reversed and set aside the assailed
Orders of the Regional Trial Court and ordered the Department of Public Works and Highways to pay the
Llamas Spouses P12,000.00 per square meter as just compensation for a total of 237 square meters
across three (3) lots, inclusive of the portions excluded by the Regional Trial Court.35 The Court of
Appeals added that the amount due to the Llamas Spouses was subject to 12% interest per annum from
the time of

the taking. 36

The Court of Appeals reasoned that the disputed area (covered by TCT No. 179165) did not lose its
private character, the easement of right of way over it notwithstanding. 37 Further, it anchored its ruling
on interest liability on Rule 67, Section 10 of the 1997 Rules of Civil Procedure. 38 For resolution is the
issue of whether just compensation must be paid to respondents Francisco and Carmelita Llamas for the
subdivision road lots covered by TCT No. 179165.

The Department of Public Works and Highways insists that the road lots are not compensable since they
have "already been withdrawn from the commerce of man." 39 It relies chiefly on this Court's 1991
Decision in White Plains Association, Inc. v. Legaspi,40 which pertained to "the widening of the Katipunan
Road in the White Plains Subdivision in Quezon City." 41 More specifically, it capitalizes on the following
statement in the 1991 White Plains Decision that shows a compulsion for subdivision owners to set
aside open spaces for public use, such as roads, and for which they need not be compensated by
government:

Subdivision owners are mandated to set aside such open spaces before their proposed subdivision
plans may be approved by the government authorities, and that such open spaces shall be devoted
exclusively for the use of the general public and the subdivision owner need not be compensated for
the same. A subdivision owner must comply with such requirement before the subdivision plan is
approved and the authority to sell is issued.42

Under this compulsion, the dispositive portion of the 1991 White Plains Decision proceeds to state:

WHEREFORE, the petition is GRANTED. The questioned orders of respondent judge dated July 10, 1990
and September 26, 1990 are hereby reversed and set aside. Respondent QCDFC is hereby directed to
execute a deed of donation of the remaining undeveloped portion of Road Lot 1 consisting of about 18
meters wide in favor of the Quezon City government, otherwise, the Register of Deeds of Quezon City is
hereby directed to cancel the registration of said Road Lot 1 in the name of respondent QCDFC under
TCT No. 112637 and to issue a new title covering said property in the name of the Quezon City
government. Costs against respondent QCDFC.

SO ORDERED.43 (Emphasis supplied)

The Department of Public Works and Highways is in grave error.

Petitioner's reliance on the 1991 White Plains Decision is misplaced. The same 1991 Decision was not
the end of litigation relating to the widening of Katipunan Road. The owner and developer of White
Plains Subdivision, Quezon City Development and Financing Corporation (QCDFC), went on to file
motions for reconsideration. The second of these motions was granted in this Court's July 27, 1994
Resolution. 44 This Resolution expressly discarded the compulsion underscored by the Department of
Public Works and Highways, and the dispositive portion of the 1991 White Plains Decision was modified
accordingly. As this Court recounted in its 1998 Decision in White Plains Homeowners Association, Inc. v.
Court of Appeals:45

[T]he dictum in G.R. No. 95522, White Plains Association, Inc. vs. Legaspi[,] that the developer can be
compelled to execute a deed of donation of the undeveloped strip of Road Lot 1 and, in the event
QCDFC refuses to donate the land, that the Register of Deeds of Quezon City may be ordered to cancel
its old title and issue a new one in the name of the city was questioned by the respondent QCDFC as
contrary to law. We agree with QCDFC that the final judgment in G.R. No. 95522 is not what appears in
the published on February 7, 1991 decision in White Plains Association, Inc. vs. Legaspi. [Rather, it] is
the following resolution issued three (3) years later, on July 27, 1991 [sic], which states, inter alia:

" ... (T)he Court is constrained to grant the Instant Motion for Reconsideration but only insofar as the
motion seeks to delete from the dispositive portion of the decision of 07 February 1991 the order of this
Court requiring the execution of the deed of donation in question and directing the Register of Deeds of
Quezon City, in the event that such deed is not executed, to cancel the title of QCDFC and to issue a new
one in the name of the Quezon City government. It may well be that the public respondents would not
be aversed [sic] to such modification of the Court's decision since they shall in effect have everything to
gain and nothing to lose.

WHEREFORE the second motion for reconsideration is hereby partly granted by MODIFYING the
dispositive portion of this Court's decision of 07 February 1991 and to now read as follows:

'WHEREFORE the petition is GRANTED. The questioned orders of respondent judge dated July 10, 1990
and September 25 1990 are hereby reversed and set aside. . . . Costs against respondent QCDFC.

SO ORDERED. "'46 (Emphasis supplied)

The 1998 White Plains Decision unequivocally repudiated the 1991 White Plains Decision's allusion to a

compulsion on subdivision developers to cede subdivision road lots to government, so much that it
characterized such compulsion as an "illegal taking." 47 It did away with any preference for government's
capacity to compel cession and, instead, emphasized the primacy of subdivision owners' and developers'
freedom in retaining or disposing of spaces developed as roads. In making its characterization of an
"illegal taking," this Court quoted with approval the statement of the Court of Appeals:

Only after a subdivision owner has developed a road may it be donated to the local government, if it so
desires. On the other hand, a subdivision owner may even opt to retain ownership of private subdivision
roads, as in fact is the usual practice of exclusive residential subdivisions for example those in Makati
City. 48

II

In insisting on a compulsion on subdivision owners and developers to cede open spaces to government,
the Department of Public Works and Highways references Presidential Decree No. 957, as amended by
Presidential Decree No. 1216, otherwise known as the Subdivision and Condominium Buyer's Protective
Decree.
The first paragraph of Section 31 of Presidential Decree No. 957 spells out the minimum area
requirement for roads and other open spaces in subdivision projects. Its second paragraph spells out
taxonomic or classification parameters for areas reserved for parks, playgrounds, and for recreational
use. It also requires the planting of trees. The last paragraph of Section 31 requires-note the use of the
word "shall"-subdivision developers to donate to the city or municipality with territorial jurisdiction over
the subdivision project all such roads, alleys, sidewalks, and open spaces. It also imposes upon cities and
municipalities the concomitant obligation or compulsion to accept such donations:

SEC. 31. Roads, Alleys, Sidewalks and Open Spaces. - The owner as developer of a subdivision shall
provide adequate roads, alleys and sidewalks. For subdivision projects one (1) hectare or more, the
owner or developer shall reserve thirty percent (30%) of the gross area for open space. Such open space
shall have the following standards allocated exclusively for parks, playgrounds and recreational use:

a. 9% of gross area for high density or social housing (66 to 100 family lot per gross hectare).

b. 7% of gross area for medium-density or economic housing (21 to 65 family lot per gross hectare).

c. 3.5 % of gross area low-density or open market housing (20 family lots and below per gross hectare).

These areas reserved for parks, playgrounds and recreational use shall be non-alienable public lands,
and non-buildable. The plans of the subdivision project shall include tree planting on such parts of the
subdivision as may be designated by the Authority.

Upon their completion as certified to by the Authority, the roads, alleys, sidewalks and playgrounds shall
be donated by the owner or developer to the city or municipality and it shall be mandatory for the local
governments to accept; provided, however, that the parks and playgrounds may be donated to the
Homeowners Association of the project with the consent of the city or municipality concerned. No
portion of the parks and playgrounds donated thereafter shall be converted to any other purpose or
purposes. (Emphasis supplied)

The last paragraph of Section 31 is oxymoronic. One cannot speak of j a donation and compulsion in the
same breath.

A donation is, by definition, "an act of liberality." Article 725 of the Civil Code provides:

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

To be considered a donation, an act of conveyance must necessarily proceed freely from the donor's
own, unrestrained volition. A donation cannot be forced: it cannot arise from compulsion, be borne by a
requirement, or otherwise be impelled by a mandate imposed upon the donor by forces that are
external to him or her. Article 726 of the Civil Code reflects this commonsensical wisdom when it
specifically states that conveyances made in view of a "demandable debt" cannot be considered true or
valid donations.49

In jurisprudence, animus donandi (that is, the intent to do an act of liberality) is an indispensable

element of a valid donation, along with the reduction of the donor's patrimony and the corresponding
increase in the donee’s patrimony.50
Section 31 's compulsion to donate (and concomitant compulsion to accept) cannot be sustained as
valid. Not only does it run afoul of basic legal concepts; it also fails to withstand the more elementary
test of logic and common sense. As opposed to this, the position that not only is more reasonable and
logical, but also maintains harmony between our laws, is that which maintains the subdivision owner's
or developer's freedom to donate or not to donate. This is the position of the 1998 White Plains
Decision. Moreover, as this 1998 Decision has emphasized, to force this donation and to preclude any
compensation-is to suffer an illegal taking.

III

The Court of Appeals correctly stated that a "positive act" 51 must first be made by the "owner-developer
before the city or municipality can acquire dominion over the subdivision roads." 52 As there is no such
thing as an automatic cession to government of subdivision road lots, an actual transfer must first be
effected by the subdivision owner: "subdivision streets belonged to the owner until donated to the
government or until expropriated upon payment of just compensation." 53 Stated otherwise, "the local

government should first acquire them by donation, purchase, or expropriation, if they are to be utilized
as a public road."54

This Court's 2014 Decision in Republic v. Ortigas55 succinctly captures all that we have previously stated:

Delineated roads and streets, whether part of a subdivision or segregated for public use, remain private
and will remain as such until conveyed to the government by donation or through expropriation
proceedings. An owner may not be forced to donate his or her property even if it has been delineated as
road lots because that would partake of an illegal taking. He or she may even choose to retain said
properties. 56

The Department of Public Works and Highways makes no claim here that the road lots covered by TCT
No. 179165 have actually been donated to the government or that their transfer has otherwise been
consummated by respondents. It only theorizes that they have been automatically transferred. Neither
has expropriation ever been fully effected. Precisely, we are resolving this expropriation controversy
only now.

Respondents have not made any positive act enabling the City Government of Parafiaque to acquire
dominion over the disputed road lots. Therefore, they retain their private character (albeit all parties
acknowledge them to be subject to an easement of right of way). Accordingly, just compensation must
be paid to respondents as the government takes the road lots in the course of a road widening project.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed October 14, 2010 Decision of
the Fifth Division of the Court of Appeals in CA-G.R. SP No. 104178 is AFFIRMED.

SO ORDERED.
G.R. No. L-4372             March 27, 1908

ENRIQUE M. BARRETTO, plaintiff-appellant,
vs.
THE CITY OF MANILA, defendant-appellee.

Del-Pan, Ortigas and Fisher, and Enrique N. Barretto for appellant.

Modesto Reyes for appellee.

ARELLANO, C.J.:

The questions brought before us by the present appeal is whether or not the period fixed by a court,
under the provisions of article 1128 of the Civil Code, can be extended.

The first paragraph of the above mentioned article is as follows: "Should the obligation not fix a period,
but it can be inferred from its nature and circumstances that there was an intention to grant it to the
debtor, the courts shall fix the duration of the same."

This case refers to a donor who, on June 16, 1885, donated to the city of Manila, a piece of land, in the
following terms: . . ., but I make this donation on condition that no structures shall be erected upon the
land and that it will not be devoted to any purpose other than the beautifying of the vicinity, and for
this purpose the city should acquire such of the adjoining land as may be necessary to form with mine
a public square with gardens and walks."

On the 9th of the same month and year, the corregimiento of Manila, on behalf of the municipal
corporation, expressed to the donor its thanks for the gift and requested him to send the title deeds for
the due execution of the deed of conveyance.

On May 31, 1903, the donor brought suit on the ground that from the 17th of June, 1885,
the ayuntamiento of the city of Manila had entered into possession of the land, and, for a period
extending over eighteen years, it had neither complied with the condition imposed, nor had it required
the execution of a formal deed of gift of the property wherefore the donor prayed the court to declare
the donation to be null and void, together with other remedies sought for in this petition. The Court of
First Instance of the city of Manila entered judgment for the plaintiff, giving him "possession of the land
described in the complaint . . ., and that the possession thereof be returned to the plaintiff by the
defendant, the city of Manila, together with the costs of this action."

On February 6, 1907, this court rendered the following opinion: "The judgment of the Court of First
Instance awarding the plaintiff possession of the property is reversed, and the cause is remanded to the
Court of First Instance for determination of the time within which the contiguous property must be
acquired by the city in order to comply with the condition of the donation" (7 Phil. Rep., 416, 420); this
judgment having been rendered on the ground that: — "The contract having fixed no period in which
the condition should be fulfilled, the provisions of article 1128 of the Civil Code are applicable and it is
the duty of the court to fix a suitable time for its fulfillment."

The plaintiff, by a motion dated July 18, 1907, requested the court to fix the period in question, and on
the 27th of the same month, the following order was entered; "It is hereby ordered that the time within
which the defendant shall comply with the conditions of the donations, be and is hereby fixed until the
30th of September, 1907."
On the 2nd of October following, the plaintiff presented a motion, praying — "That the court declare the
judgment rendered in his favor to be final, and order the execution thereof without delay."

The latter motion was heard on the 5th of said month and year, and by order of the same date, the
court modified its former order and extended the period until the 8th of November, 1907.

The plaintiff excepted thereto, and presented to this court the corresponding bill of exceptions, together
with the following:

ASSIGNMENT OF ERRORS.

The court erred in giving the defendant city a new period in which to comply with the conditions of the
donation, after the expiration of the time allowed on the 26th of July, 1907.

II

The court erred in denying the motion of the plaintiff, dated October 2, 1907, requesting the court to
make final the judgment of July 27, 1907.

The first error assigned leaves no room for doubt. The period fixed by a court supplements that on the
contract. In the present case, it is equivalent to an act or a contract of donation entered into on the
following terms: I donate my land on condition that it will not be devoted to any purpose other than
that of embellishment, and to this end the municipality should acquire the adjoining land on or
before the 30th of September, 1907. The agreement being entered into in this manner, the court can not
change the date of the fulfillment of the obligation, as it has no authority to modify the law governing
the contract.

From the very moment the parties gave their acceptance and consent to the period fixed by the court,
said period acquired the nature of a covenant, because the effect of such acceptance and consent by the
parties is exactly the same as if they had expressly agreed upon it, and, having been agreed upon by
them, it became a law governing their contract, and it is evident that the court has no power to change
or modify the same.

Courts may extend only a period allowed by a judicial decree for the fulfillment of an obligation, but not
a period fixed by a judgment which becomes part of a contract. The latter is not designated simply for
the execution of a judicial decree and, in consequence merely procedural in its nature, it is a period fixed
in a final judgment and in res judicata, and as such forms an integral part of the imperfect contract
which gave rise to its designation by the court, and thenceforward part of a perfect and binding
contract.

In the motion of October 2, wherein the plaintiff prayed that "the judgment rendered in his favor he
made final, and that execution thereof be ordered without delay," the said plaintiff alluded to the final
judgment formerly rendered the lower court in this action, and furthermore says that the Court of First
Instance designated the 30th of September, 1907, "on condition that, in case of failure to comply with
said period, execution of the judgment would be carried out in favor of the plaintiff, and  possession of
the land given him."
The order of the court of July 27, 1907, contains no provision of this nature, and the judgment
rendered in favor of the plaintiff can not be executed, because, as already stated, this court reversed the
same.

The second error assigned by the appellant appears to be more in accordance with the merits of the
case, and says: "The court erred in denying the motion of the plaintiff dated October 2, 1907, requesting
the court to make final the judgment of July 27, 1907." In consequence thereof, the appellant, in his
brief, prayed for the reversal of the order issued by the lower court under date of October 5, 1907,
declaring the order of July 27, 1907, to be valid and in full force."

All that has been said above is what is shown by the records in this case. The petition of the appellant
being in accordance with the law, we reverse the order of the lower court, dated October 5, 1907, and
declare that of July 27 of the same year to be in force, without special ruling as to the costs of this
appeal. So ordered.
G.R. No. 167995               September 11, 2009

JULITA V. IMUAN, RODOLFO VELASQUEZ, ARTURO VELASQUEZ, ARCADIO VELASQUEZ, BETTY

VELASQUEZ, ROSA V. PETUYA, FELICIDAD VELASQUEZ, RAYMUNDO IMUAN, GERARDO IMUAN, JR.,
and ANDONG VELASQUEZ, Petitioners,
vs.
JUANITO CERENO, FEBELINDA G. CERENO, GEMMA C. GABARDA, LEDESMA G. CERENO, BLECERIA C.
SULA and SALLY G. CERENO, Respondents.

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari which seeks to set aside the Decision1 dated August 24,
2004 of the Court of Appeals (CA) in CA-G.R. CV No. 69446, which reversed the Decision of the Regional
Trial Court (RTC), Branch 41, Dagupan City, in Civil Case No. 99-02910-D. Also assailed is the CA
Resolution2 dated April 29, 2005 denying petitioners' motion for reconsideration.

The facts are as follows:

During his lifetime, Pablo de Guzman (Pablo) contracted two marriages. His first marriage was with
Teodora Soriano (Teodora), with whom he had three children, namely, Alfredo de Guzman (Alfredo),
Cristita G. Velasquez (Cristita), and Inday G. Soriano (Inday). His second marriage was in 1919 with Juana
Velasquez (Juana), with whom he also had three children, namely: Nena De Guzman (Nena), Teodora de
Guzman (Teodora), and Soledad G. Cereno (Soledad). All these children are now dead.

Petitioners are Pablo's grandchildren by his first marriage, while respondent Juanito Cereno (Juanito) is
Soledad's husband and the other respondents are their children.

On July 15, 1936, Pablo died intestate leaving two parcels of land, to wit: (1) a parcel of coconut land
located at Salaan Mangaldan, Pangasinan, containing an area of nine hundred eighty-six (986) square
meters, more or less, declared under Tax Declaration No. 8032; and (2) a parcel of cornland located at
(Inlambo) Palua, Mangaldan, Pangasinan, containing an area of three thousand three hundred thirty-
four (3,334) square meters, more or less, declared under Tax Declaration No. 5155.

After Pablo's death in 1936, his second wife Juana and their children continued to be in possession of
the parcel of land located at Salaan, Mangaldan, Pangasinan (the disputed property), where they lived
since they were married in 1919.

When Pablo de Guzman died intestate in 1936, his second wife Juana continued possessing the subject
property since both were married in 1919. Sometime later she executed a deed of absolute sale in favor
of respondents in favor of respondents-spouses, Soledad, Juana and Pablo's daughter, and her husband
Juanito over the subject property. Eventually a joint affidavit was executed stating that Pablo donated
the property to Juana by reason of their marriage but this document was lost.

On January 24, 1970, Juana executed a Deed of Absolute Sale 3  conveying the subject property. The deed
was duly registered with the Register of Deeds of Lingayen, Pangasinan.
On January 26, 1970, a Joint Affidavit4 was executed by Alfredo de Guzman and Teofilo Cendana
attesting to the fact that Pablo ceded the property in favor of Juana on the occasion of their marriage,
but the document was lost.

Subsequently, Tax Declaration No. 238035 was issued in the names of respondents-spouses who
religiously paid the taxes due on the property. Since then respondents-spouses enjoyed exclusive, open
and uninterrupted possession of the property. Later, the disputed property which originally consisted of
one whole lot was traversed by a barangay road dividing it into two (2) lots, namely, Lot 3533, with an
area of 690 square meters covered by Tax Declaration No. 21268 6; and Lot 3559, with an area of 560
square meters covered by Tax declaration No. 21269. 7 Respondents-spouses Cereno built their house on
Lot 3559 and had planted fruit-bearing trees on Lot 3533. Meanwhile, the parcel of cornland in Palua,
Mangaldan, Pangasinan has never been in possession of any of the parties since it eroded and was
submerged under water, eventually forming part of the riverbed.

Sometime in January 1999, petitioners entered and took possession of Lot 3533 by building a small nipa
hut thereon. Respondents then filed before the Municipal Trial Court (MTC) of Mangaldan, Pangasinan
an ejectment case against petitioners. In an Order8 dated December 9, 1999, the MTC dismissed the
case as both parties prayed for its dismissal considering that petitioners had already left Lot 3533
immediately after the filing of the complaint.

On April 5, 1999, petitioners filed with the RTC of Dagupan City a Complaint for annulment of document,
reconveyance and damages against respondents alleging that: (1) the estate of their grandfather Pablo
has not yet been settled or partitioned among his heirs nor had Pablo made disposition of his properties
during his lifetime; (2) it was only through their tolerance that Juana and his children constructed their
house on Lot 3559; (3) the sale of the disputed property made by Juana to respondents-spouses Cereno
and the issuance of tax declarations in the latter's names are null and void. Petitioners prayed for the
annulment of the deed of sale, cancellation of Tax Declaration Nos. 21268 and 21269, the reconveyance
of the property to them and damages.

In their Answer, respondents claimed that after the death of Pablo's first wife, Pablo partitioned his
property among his children and that spouses Nicomedes and Cristita Velasquez acquired most of the
properties as they were more financially capable; that at the time Pablo married Juana, the properties
he had were his exclusive share in the partition; that of the two parcels of land Pablo had at that time,
he donated the subject property to Juana in a donation propter nuptias when they married; that the
deed of donation was lost during the Japanese occupation and such loss was evidenced by the Joint
Affidavit executed by Alfredo de Guzman and Teofilo Cendana attesting to such donation; that Juana
could validly convey the property to the Spouses Cereno at the time of the sale because she was the
owner; and that they have been in public and uninterrupted possession of the disputed lot since its
acquisition and have been paying the realty taxes due thereon. As affirmative defense, respondents
contended that petitioners' rights over the property were already barred by the statute of limitations.

After trial, the RTC rendered its Decision 9 dated November 10, 2000, the dispositive portion of which
reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants:
(a) Declaring as null and void the Deed of Absolute Sale; Tax Declaration Nos. 21268 for Lot 3533 &
21269 for Lot 3559 in the names of Juanito Cereno and Soledad de Guzman;

(b) Ordering the defendants (1) to reconvey the property in question to the plaintiffs and to peacefully
surrender the possession of the premises to the plaintiffs; and (2) to pay plaintiffs litigation expenses in
the amount of ₱10,000.00.

SO ORDERED.10

The RTC found that Juana and her children of the second nuptial built their house on the disputed
property by tolerance of Pablos’ children of the first marriage; that Juana alone sold the property to
respondents Spouses Cereno and such sale was not valid because she was not the owner of the property
at the time she sold the same; that the estate of Pablo has not been settled among the heirs since the
property was still in the name of Pablo at the time Juana sold the same; that respondents Spouses
Cereno’s claim that the property was donated to Juana by Pablo by way of donation propter nuptias  was
not supported by evidence; that Pablo could not have donated the property to Juana because Pablo’s
children were the legal heirs of his first wife, and have rights and interests over the property. The RTC
found the Joint Affidavit dated January 26, 1970 executed by Alfredo, Pablo’s son by first marriage, and
Teofilo Cendana, a former Chief of Police of Mangaldan, Pangasinan, attesting that the donation propter
nuptias  executed by Pablo in favor of Juana was lost during the Japanese occupation was
inconsequential, since it cannot substitute for the donation which validity was highly questionable; that
petitioners were able to prove that the property was the conjugal property of Pablo and his first wife
which has not been divided between Pablo and his children of the first nuptial.

On appeal, the CA rendered its assailed Decision, the dispositive portion of which reads as follows:

WHEREFORE, premises considered, we hereby GRANT the appeal. The assailed decision dated
November 10, 2000, of the Regional Trial Court (RTC), Branch 41, Dagupan City, in Civil Case No. 99-
02910-D is consequently REVERSED and SET ASIDE. Costs against the plaintiffs-appellees.

SO ORDERED.11

While the CA agreed with the findings of the RTC that there was no evidence that Pablo undertook a
partition of the properties of his first marriage before he contracted his second marriage and that the
Joint Affidavit dated January 26, 1970 could not be considered as conclusive proof of the transfer of the
property by Pablo to Juana, it was not a sufficient basis for Juana to validly transfer the property to
respondent Spouses Cereno, however, the CA gave probative value to the joint affidavit as it was
executed long before the present controversy arose. The CA found that the joint affidavit was executed
by Alfredo, one of Pablo’s children by his first marriage who was necessarily affected by the claimed
donation propter nuptias  and who ought to know the facts attested to; that the affidavit was evidence
of the basis of Juana's own good faith belief that the property was hers to dispose of when she sold it to
respondents Spouses Cereno; that the same affidavit can also be the basis of respondents Spouses
Cereno's good faith belief that Juana, who had undisputably been in possession of the disputed property
at the time of the sale, was the owner and could transfer the property to them by sale.

The CA also gave probative value to the deed of sale executed by Juana in favor of respondents Spouses
Cereno as it is still an evidence of the fact of transaction between Juana and respondents Spouses
Cereno for the
sale of the disputed property. The CA found that the deed of sale and the joint affidavit assumed great
importance on the issue of prescription.

The CA found that Juana possessed the property in the concept of an owner, which is a sufficient basis
for the belief that Juana was the owner of the property she conveyed by sale and respondents Spouses
Cereno had the good faith that acquisition by prescription requires when they became the purchasers in
the contract of sale with her . The CA further stated that a sale, coupled with the delivery of the
property sold, is one of the recognized modes of acquiring ownership of real property and that
respondents Spouses Cereno immediately took possession of the property which showed that
respondent Spouses Cereno have just title to the property.

The CA further found that respondents Spouses Cereno are in peaceful possession of the property for 29
years and, thus, have satisfied the ten-year period of open, public and adverse possession in the concept
of an owner that the law on prescription requires. The CA added that petitioners are now barred by
laches from claiming ownership of the disputed property as they have been negligent in asserting their
rights.

Petitioners’ motion for reconsideration was denied in a Resolution dated April 29, 2005.

Petitioners raise the following issues for our consideration:

WHETHER THE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE REGIONAL TRIAL COURT,
BRANCH 41, DAGUPAN CITY.

WHETHER THE COURT OF APPEALS ERRED IN DISREGARDING THE NATURE OF THE PROPERTY IN ISSUE
WHEN IT RENDERED ITS DECISION.

WHETHER LACHES/PRESCRIPTION BARRED HEREIN PETITIONERS FROM CLAIMING THEIR RIGHTFUL

SHARE IN THE PROPERTY IN ISSUE.12

Petitioners contend that since the CA and the RTC found that there was no partition of the property and
no valid donation propter nuptias  was made by Pablo to Juana, the rule on co-ownership among Pablo’s
heirs should govern the property; that when Juana sold the property to respondents Cerenos, the rights
of petitioners as co-owners should not have been affected; that the CA’s finding that the joint affidavit
attesting to the donation propter nuptias  can be the basis of a belief in good faith that Juana was the
owner of the disputed property is erroneous, since Juana had knowledge from the time she got married
to Pablo that the property was acquired during the latter's first marriage; that respondents Spouses
Cereno could not be considered in good faith since Soledad is the daughter of Juana with her marriage
to Pablo and could not be considered a third party to the dispute without knowledge of the nature of
the property; that being co-owners, neither prescription nor laches can be used against them to divest
them of their property rights.

In their Comment, respondents argue that Juana in her own right had acquired the property by
prescription; that the CA correctly considered respondents’ 29 years of actual and peaceful possession
of the property aside from their purchase of the property from Juana in finding them as the true owners.

Petitioners and respondents submitted their respective memoranda.

The petition has no merit.

We agree with the CA that respondents have acquired the disputed property by acquisitive prescription.

Prescription is another mode of acquiring ownership and other real rights over immovable property. 13 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.14 Possession is open when it is patent, visible, apparent, notorious and not clandestine. 15 It is
continuous when uninterrupted, unbroken and not intermittent or occasional; 16 exclusive when the
adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use
and benefit; and notorious when it is so conspicuous that it is generally known and talked of by the
public or the people in the neighborhood. 17 The party who asserts ownership by adverse possession
must prove the presence of the essential elements of acquisitive prescription. 18

Acquisitive prescription of real rights may be ordinary or extraordinary. 19 Ordinary acquisitive

prescription requires possession in good faith and with just title for ten years. 20 In extraordinary
prescription, ownership and other real rights over immovable property are acquired through
uninterrupted adverse possession for thirty years without need of title or of good faith. 21

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. 22 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. 23

Records show that as early as 1970, when the property was sold by Juana to respondents Spouses
Cereno, the latter immediately took possession of the property. Since then, respondents possessed the
property continuously, openly, peacefully, in the concept of an owner, exclusively and in good faith with
just title, to the exclusion of the petitioners and their predecessors-in-interest until the filing of the
complaint in 1999 which is the subject of this present petition.

Notably, the property was traversed by a barangay  road, thus, it was divided into two lots. The house of
respondents is located on the eastern part of the road, while the lot on the western part of the road was
planted to fruit- bearing trees by respondents. 24 It was admitted by petitioners that they saw the house
of respondents constructed on the lot and yet never questioned the same. 25 It was also established that
respondents are the ones gathering the fruits of the land and enjoying the same 26 to the exclusion of
petitioners and yet the latter never prevented them from doing so. In fact, while petitioners learned of
the sale of the property by Juana to the Spouses Cereno in 1980, they never took any action to protect
whatever rights they have over the property nor raised any objection on respondents' possession of the
property. Petitioners' inaction is aggravated by the fact that petitioners just live a mere 100 meters away
from the property.27

Moreover, immediately after the sale of the property to the Spouses Cereno, they declared the property
in their names for taxation purposes28 and since then religiously paid the taxes 29 due on the property.
Petitioners admitted that they knew that the Spouses Cerenos are the ones paying the taxes; 30 yet, they
never challenged the same for a long period of time which clearly establishes respondents' claim as
owners of the property. Jurisprudence is clear that although tax declarations or realty tax payments 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 at least constructive possession.31 They constitute at least proof that the holder has a claim of
title over the property.32 As is well known, the payment of taxes, coupled with actual possession of the
land covered by the tax declaration, strongly supports a claim of ownership. 33

Respondent Juanito also exercised dominion over the property by mortgaging the same to Manaoag
Rural Bank in 199434 and the mortgage was cancelled only in January 1999. 351avvphi1

While there is a question regarding the alleged donation propter nuptias at the time Juana executed the
deed of sale in favor of the Spouses Cereno in 1970, however, the requirement of just title and good
faith are still satisfied in this case. As the CA said:

x x x [T]he joint affidavit that the defendants-appellants presented, attesting to the donation propter
nuptias of the disputed property by Pablo to Juana, can be the basis of the belief in good faith that Juana
was the owner of the disputed property. Related to this, it is undisputed that Pablo and Juana had lived
in the disputed property from the time of their marriage in 1919, and Juana continued to live and to
possess this property in the concept of an owner from the time of Pablo's death in 1936 up to the time
she sold it to spouses Cereno in 1970. These circumstances, in our view, are sufficient bases for the
belief that Juana was the owner of the property she conveyed by sale, and leave us convinced that the
spouses Cereno had the "good faith" that acquisition by prescription requires when they became the
purchasers in the contract of sale with Juana. 36

Notably, one of the affiants in the joint affidavit which was executed in 1970 was Alfredo, Pablo's son by
his first marriage, where he attested that the property was given by his father Pablo to Juana by
donation propter nuptias. Not one among Alfredo's children had ever come out to assail the validity of
the affidavit executed by their father. In fact, not one of Alfredo's heirs joined petitioners in this
case.37 Moreover, not one among the children of the first marriage when they were still alive ever made
a claim on their successional rights over the property by asking for its partition. Such joint affidavit could
constitute a legal basis for Juana's adverse and exclusive character of the possession of the
property38 and would show the Spouses Cereno's good faith belief that Juana was the owner of the
property. Thus, when petitioners filed the instant case, more than 29 years had already elapsed, thus,
the ten-year period for acquisitive prescription has already been satisfied.

We likewise agree with the CA when it found that petitioners are guilty of laches that would bar them
from belatedly asserting their claim.

Laches is defined as the failure to assert a right for an unreasonable and unexplained length of time,
warranting a presumption that the party entitled to assert it has either abandoned or declined to assert
it. This equitable defense is based upon grounds of public policy, which requires the discouragement of
stale claims for the peace of society.39

Juana sold the property to the Spouses Cereno in 1970 and since then have possessed the property
peacefully and publicly without any opposition from petitioners. While petitioners claim that they knew
about the sale only in 1980 yet they did not take any action to recover the same and waited until 1999
to file a suit without offering any excuse for such delay. Records do not show any justifiable reason for
petitioners' inaction for a long time in asserting whatever rights they have over the property given the
publicity of respondents' conduct as owners of the property.
WHEREFORE, the petition is DENIED. The Decision dated August 24, 2004 and the Resolution dated April
29, 2005 of the Court of Appeals in CA-G.R. CV No. 69446 are AFFIRMED.

SO ORDERED.