DONATION

Liguez v CA

G.R. No. L-11240 December 18, 1957

Facts: Petitioner-appellant Conchita Liguez filed a complaint against the widow and heirs of the late
Salvador P. Lopez to recover a parcel of land. Liguez averred to be its legal owner, pursuant to a deed of
donation of said land, executed in her favor by the late owner, Salvador P. Lopez. The defense interposed
was that the donation was null and void for having an illicit causa or consideration, which was the
plaintiff’s entering into marital relations with Salvador P. Lopez, a married man; and that the property
had been adjudicated to the appellees as heirs of Lopez by the court of First Instance.

Issue: WON the motive may be regarded as causa when it predetermines the purpose of the contract.

Held: Yes. In the present case, it is scarcely disputable that Lopez would not have conveyed the property
in question had he known that appellant would refuse to cohabit with him; so that the cohabitation was
an implied condition to the donation, and being unlawful, necessarily tainted the donation itself

De Luna v Abrigro

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

Civil Code, Art. 1306 – The contracting parties may establish such stipulations, clauses, terms and
conditions NOT contrary to law, morals, good customs, public order or public policy.

Facts:

Prudencio de Luna donated a portion of lot in favor to the Luzonian University Foundation, Inc, as
embodied in a Deed of Donation Intervivos.

The donation 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, 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.

The foundation failed to comply the conditions of the donation so that Prudencio revived the said
donation in favor of the foundation subject to terms and conditions, again with automatic reversion
clause in case of violation thereof.

After the death of Prudencio, his heirs filed a complaint for the cancellation of the donation and the
reversion of the donated land to them, alleging that the terms and conditions of the donation were not
complied with by the foundation.

In its answer, the foundation claimed of partial and substantial compliance with the conditions of the
donation and that was granted an indefinite extension of time.

The trial court dismissed the complaint by reason of prescription.

The petitioners brought the instant petition for review, contending that onerous donations are governed
by the rules on contracts and not by the rules on donations, so that the automatic reversion of the
donated area to the donor in case of violation of any of the conditions is effective without the need of
executing any other document for that purpose as stipulated in the donation.

Issue:

WoN the stipulation of automatic reversion in the Deed of Donation is valid and binding upon the
foundation who voluntarily consented thereto.

Held:

Yes, the Supreme Court holds that stipulation not being contrary to law, morals, good customs,
public order or public policy, is valid and binding upon the foundation.

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."

In the case at bar, 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.

Thus, the petition is GRANTED. Respondent judge is ordered to conduct a trial on the merits to
determine the propriety of the revocation of the subject donation.

Heirs of Velasquez v. Court of Appeals

G. R. No. 126996

Facts:

Spouses Leoncia de Guzman and Cornelio Aquino died intestate were childless. Leoncia de Guzman was
survived by her sisters Anatalia de Guzman (mother of the plaintiffs) and Tranquilina de Guzman
(grandmother of the defendants). The heirs of Anatalia de Guzman all surnamed Meneses [Respondent
herein] filed a complaint for annulment, partition and damages against the heirs of Cesario Velasquez
(son of Tranquilina de Guzman) for the latters' refusal to partition the above-mentioned conjugal
properties of the Spouses Aquino.

The complaint alleged that Leoncia de Guzman stated that documents of donation and partition which
she and her husband earlier executed were not signed by them as it was not their intention to give away
all the properties to Cesario Velasquez because Anatalia de Guzman who is one of her sisters had several
children to support.

Defendants [Petitioners herein] filed their Amended Answer with counterclaim alleging among others
that during the lifetime of spouses Aquino had already disposed of their properties in favor of
petitioners' predecessors-in-interest, by virtue of Donation Propter Nuptias to defendants parents
Cesario Velasquez and Camila de Guzman and other evidences.

RTC rendered in favor of the respondent herein. CA affirmed RCT's decision.

Issue:

Whether or not the allegation that the Aquino spouses did not intend to give away all their properties
since Anatalia (Leoncia's sister) had several children to support is a ground for the revocation of
donation.

Held:

No.

Ratio:

A donation as a mode of acquiring ownership results in an effective transfer of title over the property
from the donor to the donee and the donation is perfected from the moment the donor knows of the
acceptance by the donee. And once a donation is accepted, the donee becomes the absolute owner of
the property donated. The donation of the first parcel made by the Aquino spouses to petitioners Jose
and Anastacia Velasquez who were then nineteen (19) and ten (10) years old respectively was accepted
through their father Cesario Velasquez, and the acceptance was incorporated in the body of the same
deed of donation and made part of it, and was signed by the donor and the acceptor.

Legally speaking there was delivery and acceptance of the deed, and the donation existed perfectly and
irrevocably. The donation inter vivos may be revoked only for the reasons provided in Articles 760, 764
and 765 of the Civil Code. The donation propter nuptias in favor of Cesario Velasquez and Camila de
Guzman over the third and sixth parcels including a portion of the second parcel became the properties
of the spouses Velasquez since 1919. The deed of donation propter nuptias can be revoked by the non-
performance of the marriage and the other causes mentioned in article 86 of the Family Code. The
alleged reason for the repudiation of the deed, i.e., that the Aquino spouses did not intend to give away
all their properties since Anatalia (Leoncia's sister) had several children to support is not one of the
grounds for revocation of donation either inter vivos or propter nuptias, although the donation might be
inofficious.

Quirino Gonzales, et, al. vs. Court of Appeals, et, al. - GR No. 126568 Case Digest

Facts:

Petitioners applied for credit accommodations with respondent bank, which the bank approved granting
a credit line of Php900,000.00. Petitioner’s obligations were secured by a real estate mortgage on four
parcels of land. Also, petitioners had made certain advances in separate transactions from the bank in
connection with QGLC’s exportation of logs and executed a promissory note in 1964.

Due to petitioner’s long default in the payment of their obligations under the credit line, the bank
foreclosed the mortgage and sold the properties covered to the highest bidder in the auction.
Respondent bank, alleging non-payment of the balance of QGLC’s obligation after the proceedings of the
foreclosure sale were applied and non-payment of promissory notes despite repeated demands, filed a
complaint for sum of money against petitioners.

Petitioners, on the other hand, asserted that the complaint states no cause of action and assuming that
it does, the same is barred by prescription or void for want of consideration.

Issue:

Whether or not the cause of action is barred by prescription.

Held:

An action upon a written contract, an obligation created by law, and a judgment must be brought within
10 years from the time the right of action accrues.

The finding of the trial court that more than ten years had elapsed since the right to bring an action on
the Bank’s first to sixth causes had arisen is not disputed. The Bank contends, however, that the notices
of foreclosure sale in the foreclosure proceedings of 1965 are tantamount to formal demands upon
petitioners for the payment of their past due loan obligations with the Bank; hence, said notices of
foreclosure sale interrupted the running of the prescriptive period.

The Bank’s contention has no merit. Prescription of actions is interrupted when they are filed before the
court, when there is a written extrajudicial demand by the creditors, and when there is any written
acknowledgment of the debt by the debtor.

The law specifically requires a written extrajudicial demand by the creditor which is absent in the case at
bar. The contention that the notices of foreclosure are tantamount to a written extrajudicial demand
cannot be appreciated, the contents of said notices not having been brought to light.

But even assuming that the notices interrupted the running of the prescriptive period, the argument
would still not lie for the following reasons:

The Bank seeks the recovery of the deficient amount of the obligation after the foreclosure of the
mortgage. Such suit is in the nature of a mortgage action because its purpose is to enforce the mortgage
contract. A mortgage action prescribes after ten years from the time the right of action accrued.

The law gives the mortgagee the right to claim for the deficiency resulting from the price obtained in the
sale of the property at public auction and the outstanding obligation proceedings. In the present case,
the Bank, as mortgagee, had the right to claim payment of the deficiency after it had foreclosed the
mortgage in 1965. as it filed the complaint only on January 27, 1977, more than ten years had already
elapsed, hence, the action had then prescribed.

Imperial v. Court of AppealsG.R. No. 112483, October 8, 1999, 316 SCRA 393Gonzaga – Reyes, J.

FACTS:Leoncio Imperial was the owner of a parcel of land with an area of 32,837 sq.m. and located in
Albay. On July 7, 1951, Leoncio sold the lot for Php 1.00 to hisacknowledged natural son, petitioner in
this case. Petitioner and Victor Imperial,adopted son of Leoncio, agreed that despite the designation of
the contract as Deed ofAbsolute Sale, the transaction is in fact a Donation. Two years after, Leoncio filed
acomplaint for the Annulment of Donation. It was however resolved through acompromise agreement
under the following terms and conditions: (1) Leonciorecognized and agreed the legality and validity of
the rights of petitioner; and (2)petitioner agreed to sell a designated 1,000 sq.m. portion of the donated
land.

Leoncio died leaving only two heirs: petitioner and Victor Imperial. On March 8, 1962,Victor was
substituted in the complaint for annulment. He moved for the execution ofjudgment and it was granted.
After 15 years, Victor died and was survived only by hisnatural father, Ricardo Villalon. Ricardo Villalon is
a lessee of the portion of the subjectproperty. Villalon died leaving his heirs, Cesar and Teresa Villalon,
respondents in thiscase. In 1986, respondents filed a complaint for the annulment of the
donation.Allegedly, it impairs the legitime of Victor Imperial.

ISSUES:

1.) Whether or not the respondents have the right to question the inofficious donationand seek its
reduction.

2.) Whether or not the 30-year prescriptive period is applicable in the reduction of theinofficious
donation.
HELD: 1.) Yes. At the time of the substitution, the judgment approving the compromiseagreement has
already been rendered. Victor merely participated in the execution of thecompromise judgment. He was
not a party to the compromise agreement. When Victorsubstituted Leoncio, he was not deemed to have
renounced his legitime. He wastherefore not precluded or estopped from subsequently seeking the
reduction. Nor areVictor’s heirs, upon his death, precluded from doing so. This is in accordance
withArticles 772 and 1053 of the new Civil Code, to wit:Article 772. Only those who at the time of the
donor’s death have a right to the legitimeand their heirs and successors in interest may ask for the
reduction of the inofficiousdonation xxx.andArticle 1053. If the heir should die without having accepted
or repudiated theinheritance, his rights shall be transmitted to his heirs.

2.) No. Under Article 1144 of the New Civil Code, actions upon an obligation created bylaw must be
brought within ten years from the right of action accrues. Thus, the 10-yearprescriptive period applies to
the obligation to reduce inofficious donations requiredunder Article 771 of the New Civil Code to the
extent that they impair the legitime ofcompulsory heirs.

Imperial vs. Court of Appeals, 316 SCRA 313

Calanasan vs. Spouses Dolorito, G.R. No. 171937, 25 November 2013

Victoria vs. Pidlaoan, G.R. No. 196470, 20 April 2016

The Missionary Sisters of Our Lady of Fatima (Peach Sisters of Laguna) represented by Rev. Mother Ma.
Concepcion R. Realon, et. al. vs Amando V. Alzona, et. al.

G.R. No. 224307, August 06, 2018

876 SCRA 309

FACTS:

The Missionary Sisters of Our Lady of Fatima is a religious and charitable group whose primary mission is
to take care of the abandoned and neglected elderly persons. In October 1999, through a letter,
Purificacion, a spinster donated her parcels of land to petitioner Missionary through Mother Concepcion,
the petitioner’s Superior General who took care of her during her illness.

In August 2001, Mother Concepcion was advised by a lawyer to register their group to the Securities and
Exchange Commission. On August 28, 2001 she applied for the registration of the Missionary. The next
day, Purificacion executed a Deed of Donation Intervivos in favor of petitioner conveying her properties.
Two days later, the Certificate of Incorporation was issued by the SEC.

ISSUE:
Was the donation valid given that the time the donation was made, the Missionary was not yet
registered with the SEC?

RULING:

Yes, the donation was valid and has complied with all the requisites of a valid donation.

Elements of Donation

In order that a donation of an immovable property be valid, the following elements must be present:

(a) the essential reduction of the patrimony of the donor;

(b) the increase in the patrimony of the donee;

(c) the intent to do an act of liberality or animus donandi;

(d) the donation must be contained in a public document; and

(e) that the acceptance thereof be made in the same deed or in a separate public instrument; if
acceptance is made in a separate instrument, the donor must be notified thereof in an authentic form,
to be noted in both instruments.

In spite of the fact that the Missionary was not yet registered with the SEC when the properties were
donated, the donation would still be valid because Purificacion, applying the doctrine of corporation by
estoppel, was aware that the Missionary was not yet incorporated and registered with the SEC.
Purificacion dealt with the petitioner as if it were a corporation. This is evident from the fact that
Purificacion executed two (2) documents conveying her properties in favor of the petitioner – first, on
October 11, 1999 via handwritten letter, and second, on August 29, 2001 through a Deed; the latter
having been executed the day after the petitioner filed its application for registration with the SEC. She is
estopped to deny the Missionary’s legal existence in any action involving the transfer of her property by
way of donation. She has assumed an obligation in favor of a non-existent corporation, having transacted
with the latter as if it was duly incorporated. The doctrine of corporation by estoppel is founded on
principles of equity and is designed to prevent injustice and unfairness. It applies when a non-existent
corporation enters into contracts or dealings with third persons.The doctrine of corporation by estoppel
applies for as long as there is no fraud

The doctrine of corporation by estoppel rests on the idea that if the Court were to disregard the
existence of an entity which entered into a transaction with a third party, unjust enrichment would result
as some form of benefit have already accrued on the part of one of the parties. Thus, in that instance,
the Court affords upon the unorganized entity corporate fiction and juridical personality for the sole
purpose of upholding the contract or transaction.

In this case, while the underlying contract which is sought to be enforced is that of a donation, and thus
rooted on liberality, it cannot be said that Purificacion, as the donor failed to acquire any benefit
therefrom so as to prevent the application of the doctrine of corporation by estoppel. To recall, the
subject properties were given by Purificacion, as a token of appreciation for the services rendered to her
during her illness.[46] In fine, the subject deed partakes of the nature of a remuneratory or
compensatory donation, having been made “for the purpose of rewarding the donee for past services,
which services do not amount to a demandable debt.”

NOTES:

Under Article 737 of the Civil Code, “[t]he donor’s capacity shall be determined as of the time of the
making of the donation.” By analogy, the legal capacity or the personality of the donee, or the authority
of the latter’s representative, in certain cases, is determined at the time of acceptance of the donation.

Article 738, in relation to Article 745, of the Civil Code provides that all those who are not specifically
disqualified by law may accept donations either personally or through an authorized representative with
a special power of attorney for the purpose or with a general and sufficient power.

Jurisprudence settled that “[t]he filing of articles of incorporation and the issuance of the certificate of
incorporation are essential for the existence of a de facto corporation.” In fine, it is the act of registration
with SEC through the issuance of a certificate of incorporation that marks the beginning of an entity’s
corporate existence.

Donations

Past services constitute considerations

As elucidated by the Court in Pirovano, et al. v. De La Rama Steamship Co.: In donations made to a
person for services rendered to the donor, the donor’s will is moved by acts which directly benefit him.
The motivating cause is gratitude, acknowledgment of a favor, a desire to compensate. A donation made
to one who saved the donor’s life, or a lawyer who renounced his fees for services rendered to the
donor, would fall under this class of donations. Therefore, under the premises, past services constitutes
consideration, which in tum can be regarded as “benefit” on the part of the donor, consequently, there
exists no obstacle to the application of the doctrine of corporation by estoppel; although strictly
speaking, the petitioner did not perform these services on the expectation of something in return.

Contracts

Express or implied ratification is recognized by law as a means to validate a defective contract.

Ratification cleanses or purges the contract from its defects from constitution or establishment,
retroactive to the day of its creation. By ratification, the infirmity of the act is obliterated thereby making
it perfectly valid and enforceable.

The principle and essence of implied ratification require that the principal has full knowledge at the time
of ratification of all the material facts and circumstances relating to the act sought to be ratified or
validated. Also, it is important that the act constituting the ratification is unequivocal in that it is
performed without the slightest hint of objection or protest from the donor or the donee, thus
producing the inevitable conclusion that the donation and its acceptance were in fact confirmed and
ratified by the donor and the donee.