Cid v. Javier, 108 Phil 239 Irene Javier, et al.

, are owners of a building with windows overlooking an adjacent lot. They allege to have made a verbal prohibition to obstruct view and light made on Cids predecessor-in-interest. ART. 538. In order to acquire by prescription the easements referred to in the next preceding article, the time of the possession shall be computed, * * * in negative easements, from the day on which the owner of the dominant estate has, by a formal act, forbidden the owner of the servient estate to perform any act which would be lawful without the easement." (Emphasis supplied.) Each party has his lot covered by certificates of title. Registered in 1937. Prohibition was allegedly began on 1913 or 1914. Counting 20 years gap, easement would have already ripened. Issue: whether respondents acquired by prescription an enforceable easement of light and view arising from a verbal prohibition to obstruct such view and light? How to interpret the phrase a formal act? Laurenea Cid Javier owners Court of Appeals -granted negative easements on respondents -formal act: may be oral or written, is sufficient compliance with the law SC disagrees with CA. From these definitions, it would appear that the phrase "formal act" would require not merely any writing, but one executed in due form and/or with solemnity. Easements can be acquired only by title and by prescription, in the case of positive easement, only as a result of some sort of invasion, apparent and continuous, of the servient estate. By the same token, negative easements cannot be acquired by less formal means. Hence, the requirement that the prohibition (the equivalent of the act of invasion) should be by "a formal act", "an instrument acknowledged before a notary public." Consequently, even conceding arguendo that such an easement has been acquired, it had been cut off or extinguished by the registration of the servient estate under the Torrens System without the easement being annotated on the corresponding certificate of title, pursuant to Section 39 of the Land Registration Act Francisco v. Paez, 54 Phil 239 Francisco wants right of way over Paezs land. Lots originally belong to Paulino Castaneda y Francisco. Was subdivided in two parts. One was located in inner portion of the space between Padre Rada and Ilaya Streets. The other is coterminous with said streets. The interior parcel became property of plaintiff. The second, by Jabson/defendant.

Plaintiff did not enforce right of way until 18 years from subdivision and acquisition. Issue: whether plaintiffs right of way over Paezs land has prescribed or is imprescriptible? Marcelo Francisco -wants right of way upon payment of indemnity, across Paez land -wants Paez to recognize his ownership over piece of land -wants Paez to vacate it -wants Paez to indemnify him for damages from occupation CFI: -Francisco is the absolute owner -Francisco is entitled to the small house built of strong materials by Paez, upon payment of its value, or compel purchase of land -but action to enforce right of way is barred by statute of limitations -right of way arose when subdivision was made -but plaintiffs did not exercise right until after 18 years - Sec. 40, Code of Civil Procedure: action to Timoteo Paez Ricardo Jabson -acquired by prescription -there is another possible way to the street, which is shorter and less prejudicial - No. 5 of said article 546 which refers to

extinction of easements by waiver

recover ownership of real property may only be exercised within 10 years after the cause of action arises
Franciscos appeal: -not barred by statute of limitations -action to enforce right of way is imprescriptible -It is true that easements are extinguished by non-user for 20 years (Art. 546, Civil Code) -Code of Civil Procedure quoted by lower court applicable only to easements which being in use are later abandoned -Manresa: one cannot discontinue using what one has never used. There can be no act adverse to an inchoate easement.

It should be noted that in the case of intermittent easements, such as the right of way, the waiver must be, if not formal and solemn, at least such as may be obviously gathered f rom positive acts, and the mere ref raining from claiming the right is not, to our mind, sufficient for the purpose. The mere fact that the plaintiff and his predecessors refrained from claiming the easement, without any positive act to imply a real waiver, does not, in our opinion, bring the case within the provision of the aforesaid article 546, No. 5, of the Civil Code.

Benedicto v. Court of Appeals, 134 Phil 122 (READ AGAIN) Benedicto and Heras have adjoining properties. Both formerly belonged to Miriam Hedrick: 8, 9, 10, 22, 23 and 24. Lots (in bold) sold to Claro M. Recto, others retained. Escritura de Compra-Venta is annotated on titles now held by

Benedicto and Heras. Escritura contains parrafo septimo (7th paragraph) to be carried out, for a new survey of properties. Claro Recto obtained separate title before new survey in parrafo septimo was undertaken. Claro Recto filed motion to carry out the survey. But he withdrew it. Surveyor found inconsistencies in the new survey plan and that found in the instrument. Claro M. Recto lots sold to Conty, then sold to Benedicto. Hedrick underwent several transfers and eventually sold to Heras. Heras demolished entire building on his property. The trial court found that after selling Lots 8, 9, 22 and 23, Miriam R. Hedrick obtained a separate title for the remaining Lots 10 and 24. The total area of these two lots was 540.4 square meters only. But in the new title (TCT 22760) issued to Hedrick, their total area was made to appear to be 681.30 square meters. Since the respondent Heras, as succesor-in-interest of Miriam R. Hedrick, owned no more than 540.4 square meters, the court held that no portion of his property had been encroached upon by the petitioner Benedicto. The trial court likewise found that the easement of way was found entirely within the property of Benedicto, contrary to the stipulation in the deed of sale between Miriam R. Hedrick and Claro M. Recto that it should be between their properties, with each contributing an equal portion of his property. According to the court, this was the reason why Recto, Benedicto's predecessor-in-interest, who had earlier asked for a resurvey in accordance with the deed of sale, subsequently withdrew his motion, after finding that the passageway was located entirely within his property. Accordingly, the court directed both parties to contribute equally to the maintenance of a three to four-meterwide passageway between their properties, with the property line running at the middle of the passageway, It rejected Benedicto's claim that the easement had been extinguished by nonuser and by the cessation of the neces-sity for a passageway.

Issue: has the right of way of Heras been extinguished? No. Salvador Benedicto (deceased) Roberto Benedicto Vicente Heras CA

The easement was originally constituted because the buildings then erected on the respective properties of Miriam R. Hedrick and Claro M. Recto so adjoined each other that the only way the back portions of the properties could be reached by their owners from San Marcelino street was through the passageway. He claims that when the respondent Heras had his building demolished in 1941 the property gained direct access to San Marcelino street with the result that since then there has been no need f or the passageway. The petitioner argues further that it could be assumed that since 1941 the passageway ceased to be used "for certainly [the respondent] could not be expected to be making 'detours' to reach San Marcelino Street when the very frontage of his property was now open in its entirety to San Marcelino Street."
The petitioner argues at length that this case is governed by the present Code, and that since 14 years had elapsed from the time the building on Heras' property was demolished in 1941 to 1955 when this action was begun (during which period he assumes that the passageway ceased to be used because Heras' property had direct access to the street), the easement must be deemed to have been extinguished. ART. 631. Easements are extinguished: "x x x. 1. "(2) By nonuser for ten years; with respect to discontinuous easements, this period shall be computed from the day on which they ceased to be used; and, with respect to continuous easements, f rom the day on which an act contrary to the same took place; 2. "(3) When either or both of the estates fall into such condition that the easement cannot be used; but it shall revive if the subsequent condition of the estates or either of them should again permit its use, unless when the use becomes possible, sufficient time for prescription has elapsed, in accordance with the provisions of the preceding number; x x x."

For the purposes of this decision we do not f ind it necessary to determine whether the appropriate period of nonuser in this case is 20 or 10 years. For one thing, there is no

indubitable proof of nonuser. Nor can presumptive renunciation by Heras of the use of the said passageway be inferred. It would appear from the record that Heras started the construction of an apartment building on his parcel of land after the demolition of his house in 1941, and that although interrupted by World War II, construction was continued in 1955. Since it is patent from the stipulation of facts that the easement in question is mainly a vehicular passageway, the obvious need for such passageway to the rear portion of the projected apartment building negates any presumptive renunciation on the part of Heras. Easement here is perpetual in character and is reflected on titles from Hendric and Recto. Since there is nothing in the record that would point to a mutual agreement between any of the predecessors-in-interest nor between the petitioner and the respondent themselves with respect to the discontinuance or obliteration of the easement annotated on the titles, the continued existence of the easement must be upheld and respected.
Archbishop of Manila v. Roxas, 22 Phil 450 Roxas is claiming right of way through Parcel L, property of petitioner. Way is around 100 meters to Calle Tejeron.

The servient estate is bounded on the north by an estero; on the west by the dominant estate; on the southwest by Calle Tejeron; and on the west by lands of Francisco Managan. Parties entered stipulation of facts: road between Hacienda de San Pedro Macati and Calle Tejeron (2m wide) had been used since time immemorial by tenants of hacienda for passage of carts. Now, road is 4 meters wide. Since time immemorial, in the middle of Lot L, and near this road, there is a small church. Road is used by tenants of Roxas, by the faithful, and also by people in another sitio. So the claim of Roxas cannot be that the right of way exists by necessity growing out of the peculiar location of his property, but simply that it arises by prescription, founded alone upon immemorial use by his tenants. The result is that the road which the appellant seeks to have declared a right of way f or the benefit of his hacienda has been used for a great number of years by the members of the appellee's church to go to and from the ermita, and also by the appellant's tenants, and by other people. And furthermore, while it is true that the appellant's tenants have used this road for

carts as above stated, yet it has not been shown that such use was absolutely necessary in order to cultivate the dominant estate, but, on the contrary, it clearly appears that the said tenants crossed lot L merely on account of convenience, as they could have reached the public highway by going in other directions, especially south, only 198 meters Facts: (1) that the use of the road by the tenants of Roxas in this manner and under these circumstances has not been such as to create an easement by prescription or in any other manner; and (2) that the use of said road by all has been by permission or tolerance of the appellee.
Issue: does Roxas have right of way over the road by prescription? Archbishop of Manila Pedro Roxas

Where a tract of land, as in the case at bar, attached to a public meeting housesuch as the ermitais designedly left open and uninclosed for the convenience of the members or worshippers of that church, the mere passage of persons over it in common with those for whose use it was appropriated is to be regarded as permissive and under an implied license, and not adverse. Such a use is not inconsistent with the only use which the proprietor thought fit to make of the land, and until the appellee thinks proper to inclose it, such use is not adverse and will not preclude it from enclosing the land when other views of its interests render it proper to do so. And though an adjacent proprietor may make such use of the open land more frequently than another, yet the same rule will apply unless there be some decisive act indicating a separate and exclusive use under a claim of right. A different doctrine would have a tendency to destroy all neighborhood accommodations in the way of travel; for if it were once understood that a man, by allowing his neighbor to pass through his farm without objection over the pass-way which he used himself, would thereby, after the lapse of time, confer a right on such neighbor to require the pass-way to be kept open for his benefit and enjoyment, a prohibition against all such travel would immediately ensue. And again, it must be remembered that a right of way, like the one sought to be established in the case at bar, is a charge imposed upon real property for the benefit of another estate belonging to a different owner. Such a right of way is a privilege or advantage in land existing distinct from the ownership of the soil; and because it is a permanent interest in another's land with a right to enter at all times and enjoy it, it can only be founded upon art agreement or upon prescription. And when the latter is relied upon in those cases where the right of way is not essential for the beneficial enjoyment of the dominant estate, the proof showing adverse use which is an affirmative claimmust be sufficiently strong and convincing to overcome the presumption of permissive use or license, as such a right of way is never implied because it is convenient.

Cuaycong v. Benedicto, 37 Phil 781 (RE-READ; LONG) Defendants own Hacienda Toreno, in Victorias municipality of Negros. Plaintiffs want to have right of way on two roads existing in the hacienda: 1. Nanca-Victorias road >>> corsses Hacienda Toreno 2. Dacuman-Toreno road >>> TC: no right Plaintiffs own group of haciendas between southern boundary of Hacienda Toreno and barrio of Nanca. Other plaintiffs are lessees of the group of haciendas. 1. The town of Victorias has always been the shipping point of the products of the Hacienda Toreno, and of the haciendas of appellees, as well as the place from which supplies were brought to those properties. 2. For thirty or forty years before the commencement of the suit a wagon road, herein called the Nanca-Victorias road, has been in existence, connecting the haciendas of appellees with the town of Victorias, and this road traverses the property of defendants. Since the removal of the town of Victorias to a new site the Nanca-Victorias road has been used by appellees in travelling between their properties and the provincial road which crosses the Hacienda Toreno from east to west. 3. No public funds have at any time been expended on the construction or upkeep of the Nanca-Victorias road, but f from time to time work has been done on it by the laborers employed by the present and former owners of the Hacienda Toreno and the haciendas owned by the appellees and their predecessors in title. 4. The Nanca-Victorias wagon road, including that part of it which crosses the Hacienda Toreno, has for thirty-five or f forty years been used by the appellees and their predecessors in title for the transportation, by the usual means, of the products of their estates to their shipping points in or near the town of Victorias, and the transportation to their estates of all supplies required by them, and has been used by all persons having occasion to travel to and from all or any of the estates now owned by the appellees. 5. The use of the Nanca-Victorias road in the manner and by the persons above mentioned was permitted without objection by the owners of the Hacienda Toreno until the year 1911, when they closed it, and began charging a toll of 5 centavos for each cart which passed over the road, including carts belonging to the appellants, until restrained from continuing to do so by the preliminary injunction granted in this case. 6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants to the nearest public road which is the provincial, road which crosses the Hacienda Toreno f from east to west. 1. (a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno a public highway or not? 2. (b) If it be held that the road in question is not a public highway, have plaintiffs proven their acquisition of an easement of way over the Hacienda Toreno at the point traversed by the road in question? Eduardo Cuaycong, et al. -for 20 years, had made use of the road openly, publicly, continuously, with knowledge of the defendant-owners Ramona Benedicto, et al. -closed road, did not permit plaintiffs to continue using it -private property

-purpose: transport supplies from hacienda to Victorias towns, through carts, carabaos and others -there is no outlet to a public road from hacienda; only way is to cross Toreno -at the time it was closed, were about to commence to grind their crop of sugar cane -if prevented, would suffer damages difficult to estimate Lower court: -road is public highway -public has right of use by immemorial prescription

-did not refuse permission, but have required them to pay toll for the privilege -claim damages for false statements in the complaint by plaintiffs

Road in existence for 40 years. Hacienderos and public generally passed over it freely.

That the hacenderos located in the southwestern section of Victorias and the public generally passed over it freely and that it was used for all purposes of transportation of farm produce, animals, etc. and by pedestrians as well as carromatas and other conveyances without break or interruption until two or three years ago when the defendants announced that the road was private and that those who wished to pass over it with sugar carts would be obliged to pay a toll of ten centavosall other vehicles, it appears, were permitted to pass free of charge. This arrangement seems to have existed during the years of 1911 and 1912 and part of 1913, the money being collected apparently from some hacenderos and not from others. practice of making these payments to hacienda Toreno' originated in an attempt to raise a fund for the repair of the road. On the contrary the road appears to have been repaired by the hacenderos when it needed repairing and everyone used it on equal terms until the defendants in 1910 or 1911 interposed the objection that the road in dispute was private. This we think is a fair deduction from the evidence and although it is asserted that toll was collected at an earlier date by the late Leon Montinola, brother of the defendant Ruperto Montinola, there is no tangible evidence that this was so and all the circumstances are strongly indicative of the fact that toll has been paid only during the years of 1911, 1912, and part of 1913. There is no doubt that for the past thirty or forty years a road has existed between the f former site of the town of Victorias and the barrio of Nanca, of the municipality of Saravia, and that this road crosses defendants' hacienda. It is also true that during- this period the plaintiffs and their predecessors in the ownership of the hacienda now held by them have made use of this road for the purpose of going and coming from their haciendas to the town of Victorias; but the question is whether this use was limited to the plaintiffs, and their tenants and employees, or whether it was, as held by the lower court, a use enjoyed by the public in general. there is no direct evidence to support the finding of the court concerning the

general public use of the road in dispute plaintiffs did not contend that the road was a public highway, but merely contended that they had acquired by prescription an easement of way across the Hacienda Toreno. No evidence was taken to indicate that at any time since the road in question has been in existence any part of the expense of its upkeep has been defrayed by the general government, the province, or the municipality. --The defendants are the owners of the Hacienda Toreno under a Torrens title issued in accordance with the Land Registration Act, conferring to them its absolute ownership, subject only to the limitations of paragraph four of section 39 of said Act, It is admitted that there is no annotation on the certificate of title regarding the road here in question, either as a "public road" or as a "private way established by law," and, therefore, the questions presented by this appeal are to be determined precisely as they would be had the Hacienda Toreno not been brought under the operation of the Land Registration Act. The plaintiffs being the owners of the property in question, the presumption of law is that it is free from any lien or encumbrance whatever, and the burden therefore rests upon plaintiffs to establish the contrary. The evidence shows that the repairs were made by the owners of the estates benefited by the road, and by their laborers, as a purely voluntary act for their own convenience and interest. There being no evidence of a direct grant to the government of .the land occupied by the road in question or that any Government funds or labor were expended upon it, the question presents itself whether the use to which the road has been put was such as to justify the conclusion of the lower court that it has become public property. There being no evidence that the original use of the road by plaintiffs' predecessors was based upon any express grant of the f fee to the road or of an easement of way, or that it began under the assertion of a right on their part, the presumption must be that the origin of the use was the mere tolerance or license of the owners of the estates affected. This being so, has that merely permissive use been converted into a title vested in the public at large, or in the plaintiffs by reason of their ownership of the land beneficially affected by the use? But in this case there is no such evidence, and the claims of plaintiffs, whether regarded as members of the public asserting a right to use the road as such,, or as persons claiming a private easement of way over the land of another must be regarded as resting upon the mere fact of user. does the mere permissive use ripen into title by prescription? Consequently, if acts of mere tolerance produce no effect with respect to possession, as that article provides, in conformity with article 444 of the same Code, it is evident that they can produce no effect with respect to prescription, whether ordinary or

extraordinary. This is true whether the prescriptive acquisition be of a fee or of real rights, for the same reason holds in one and the other case; that is, that there has been no true possession in the legal sense of the word. Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must be possession under claim of title (en concepto de dueo), or to use the common law equivalent of the term, it must be adverse. Acts of a possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueo, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription.
Valderrama v. North Negros, 48 Phil 492 Several hacienda owners of Manapla, Occidental Negros entered milling contract with Miguel Osorio to install in Manapla a sugar central of a minimum capacity of 300 tons, for

grinding and milling all the sugar cane to be grown by the hacienda owners, who in turn bound themselves to furnish the central with all the cane they might produce in their estates for thirty years from the execution of the contract. North Negros acquired rights and interests of Osorio in the milling contract.
Plaintiffs entered other milling contracts with North Negros. Since original hacienda owners could not furnish sufficient cane for milling, as required by the capacity of the central, North Negros made other milling contracts with various hacienda owners of Cadiz, Occidental Negros, to obtain sufficient cane to sustain the central.

Issue: extent of the easement of way which plaintiffs established in their respective haciendas in favor of the defendant. Valderrama (Manapla hacienda owners) North Negros Sugar Co. Cadiz hacienda owners

the easement of way, which each of them has established in his respective hacienda,, was only for the transportation through each hacienda of the sugar cane of the owner thereof -no right to cause locomotives and wagons to run across the estates of plaintiff to transport sugar cane from Cadiz

it had the right to transport to its central upon the railroad passing through the haciendas of the plaintiffs, not only the sugar cane harvested in said haciendas, but also that of the hacienda owners of Cadiz, Occidental Negros. -the plaintiffs respectively granted the defendant, for the period of fifty years -easement clause in contract is ambiguous from the date of the aforesaid contracts, an easement of way 7 meters wide upon the because it may be applied to the transportation of the cane of the plaintiffs lands of the plaintiffs for the construction or of other producers, which is contrary to and operation of a railroad for the transportation of sugar cane the intent of the contracting parties - said easement of way was established

-by transporting upon the road, through

the servient estates, the cane of the planters of Cadiz, it would alter the easement, making it more burdensome.
Court:

-the defendant had no right to pass through the lands of the plaintiffs described in their amended complaints for the transportation of sugar cane not grown from any of the haciendas of the plaintiffs

without any restriction whatsoever, as regards the ownership of the cane to be transported over the said railroad -said contract was then in full force and effect and had never been annulled or modified.

Easement contract: an easement of way 7 meters wide and for the period of 50 years from the date hereof is hereby created in favor of the 'North Negros Sugar Co., Inc.,' upon his property hereinafter described, at such place as said corporation may see fit for the construction of a railroad." How to interpret?

The object of such a milling contract, from which arises the easement in question, is undoubtedly to obtain mutual benefit to the producers of sugar cane and the corporation putting up the central. It is against the nature of the easement to pretend that it was established in favor of the servient estates, because it is a well settled rule that things serve their owner by reason of ownership and not by reason of easement. This is a case of an easement for the benefit of a corporation, voluntarily created by the plaintiffs upon their respective estates for the construction of a railroad connecting said estates with the central of the defendant. as the easement was- created for the benefit of the corporation, owner of the central, it may cause its wagons to pass upon the road as many times as it may deem fit, according to the needs of the central. If the plaintiffs do not produce sufficient cane to cover the capacity of the central, it would be unjust to impose upon the defendant corporation the burden of maintaining a central, prohibiting it to obtain from another source sufficient cane with which to maintain its business. in the milling contract with the plaintiffs, there is nothing to prohibit the defendant from making milling contracts with other planters, and obtain in that way all the cane necessary to cover the capacity of the central. It is true that the owner of the dominant estate, in making on the servient estate the necessary works for the use and preservation of the easement, cannot alter it, nor make it more burdensome (art. 543 of the Civil Code); but this does not mean that the defendant cannot transport in the wagons passing upon the railroad other cane than that of the plaintiffs.

the incumbrance resulting from the easement continues to be the same, whether the tractors traverse the line 10, 20 or 30 times a day transporting cane for the central. the record shows a circumstance indicating that at the time of the execution of the milling contracts above referred to, there was no intention on the part of the contracting parties to limit the use of the railroad to the transportation of cane grown by the plaintiffs in their respective haciendas, and that is because, while the duration of the milling contracts is fixed at thirty years, that of the easement is at fifty.

North Negros v. Hidalgo, 63 Phil 664 FACTS -North Negros owns a mill site. -It built a road connecting mill site to the highway. -Road serves as passage across the hacienda owned by owner of North Negros. -Road is only means of access to billiard hall and tuba saloon. -Serafin Hidalgo is stopped by gatekeeper every time he wants to pass by the road. -Automobile carrying cargo of "tuba". -Uses another route. -North Negros opened the passage conditioned on payment of transit fees of 0.15 for motor vehicles. -No damage to property of North Negros caused by passage of Serafin Hidalgo. -Serafin Hidalgo is merely selling tuba within the hacienda owned by owner of North Negros. -North Negros wants to enjoin Serafin Hidalgo from passing through the road to introduce tuba to the hacienda. -It is not alleged that Serafin Hidalgo did not pay transit fees. ISSUE Whether Serafin Hidalgo's act is an act of trespass? Whether the road is a "public utility" or a "private road"? RULING -When a private road has been thrown open to public use, no action for trespass is maintainable against any person who desires to make use thereof -When North Negros builds a voluntary easement for public use and charge toll fees, it is now subject to the REGULATION of the State -Owner may voluntarily and unilaterally close the road, but while it is open for public use, it may not exclude anyone from its use.

-Having been devoted by the plaintiff to the use of the public in general, upon paying the passage fees required in the case of motor vehicles, the road in question is charged with a public interest, and while so devoted, the plaintiff may not establish discriminatory exceptions against any private person. -When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control. -Whether or not a given business, industry, or service is a public utility does not depend upon legislative definition, but upon the nature of the business or service rendered, and an attempt to declare a company or enterprise to be a public utility, where it is inherently not such, is, by virtue of the guaranties of the federal constitution, void wherever it interferes with private rights of property or contract. -The fact that the road is NOT regulated does not divest its status as public utility. -When private property is devoted to public use in the business of a public utility, certain reciprocal rights and duties are raised by implication of law between the utility and the public it undertakes to serve, and no contract between them is necessary --DOCTRINE The public or private character of the enterprise does not depend, however, upon the number of persons by whom it is used, but upon whether or not it is open to the use and service of all members of the public who may require it, to the extent of its capacity; and the fact that only a limited number of persons may have occasion to use it does not make of it a private undertaking if the public generally has a right to such use. . . . The test is, not simply how many do actually use them, but how many may have a free and unrestricted right in common to use them. If it is free and common to all citizens, then no matter whether it is or is not of great length, for whether it leads to or from a city, village or hamlet, or whether it is much or little used, it is a "public road." TOLL ""Toll" is the price of the privilege to travel over that particular highway, and it is a quid pro quo. It rests on the principle that he who, receives the toll does or has done something as an equivalent to him who pays it. Every traveler has the right to use the turnpike as any other highway, but he must pay the toll. XXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXX Bernardo v. Court of Appeals, 97 Phil 131

Parties have adjoining lots in large parcel of land called Toro-Lolomboy Estate. Bernardos lot is in the interior with no access by road to the barrio road to the west, or to the provincial highway to the southeast. But for many years, petitioners were allowed by respondents to pass over a foot-path to reach the barrio road, at other side of which is a church and artesian well. Respondent De Jesus put up fence across foot-path at the spot where Bernardo crosses his lot. Possibly due to misunderstanding. Bernardo filed for easement of right of way: 70 meters long and 2 meters wide. Purpose: cross his jeep because he has business on his lot. Expressed willingness to pay any amount. Parties made agreement: Bernardo paid P100 for respondent to give right of way. But they disagreed on the interpretation of a clause in the agreement.

"that for the convenience of Amado Bernardo, in going to and from the Barrio Road, Juana del Rosario, Sixta del Rosario and Pedro de Jesus, will allow and tolerate the said Amado Bernardo to pass by foot thru their own individual lots Nos. 117; 27 and 28-A respectively indicated in Annex "A", as in the past he had been so doing, and Pedro de Jesus allowing further Amado Bernardo to put stones or gravel, which may facilitate passage thru his Lot 28-A." (Italics ours)
Bernardo tried to register it as annotation. This requires giving duplicate copies of certificate from respondents to annotate. Wanted to compel submission, but respondents refused. Trial court said:

Bernardo already had a right of way over lot 119-A of Juana from his lot southeastward to the provincial highway, and that there was no need for him to have another one (Referring to the foot-path from his lot westward to the barrio road) the tenor of the paragraph under clause 5, did not recognize or establish an easement of right of way but only expressed the tolerance and permission of the lot owners to pedestrian using the foot-path, as shown by the phrase "will allow and tolerate."
Issue: whether the contract/agreement created a right of way easement, and not merely an agreement to tolerate petitioner to use the path? Bernardo

-foot-path is only about 71 meters long, whereas, his right of way southeastward from his lot to the provincial highway according to Annex "Y" is 90 meters long, and from said junction to the church partly over the provincial highway and partly over the barrio road is a distance of about 1,168 meters or a total of 1 kilometer and 258 meters, which is certainly, quite far.

Juana del Rosario Sixta del Rosario Pedro de Jesus -admitted existence of foot-path for many years -fence is so low that a child could pass over it -merely objected to establishment of regular road saying it would cause incalculable damage to their properties CA -the clause in the contract did not create a right of way easement

SC disagrees with lower court and CA.

-Defendants not only tolerated said passage but in a written agreement signed by them before a notary public and later submitted to the court for judgment, promised and undertook to allow and tolerate Bernardo to continue using said foot-path.

-this agreement was a compromise - In other words, they practically said to Bernardo, that provided that he did not insist in

having the court compel them to allow the establishment of a regular 2-meter road over their properties, they promised to allow and permit him to continue using the foot-path which runs over their lots and which he had been using in the past. -And to show the element of permanence of said use of the foot-path by Bernardo, de Jesus even allowed him to improve it by placing stones and gravel on that portion included in his lot 28-A.
-Bernardo was only concerned that when third parties acquire the lot owned by defendants, they would not respect the agreement, which is why he needs a real right of way through annotation Francisco v. Intermediate Appellate Court, 177 SCRA 527 Lot 860 of Malinta Estate is owned by Cornelia Dila. It has frontage along Parada Road measuring 51.90 meters. Adjoining this was Lot 226, owned by Francisco. It has frontage of 62.10 meters. Dilas donated undivided 1/3 to Epifania Dila, their niece, and another 1/3 to children of deceased sister, Anacleta Dila. Subdivision was done on Lot 860. Lot 860-A (2,204 sq. m.), to Cornelia Dila; >>> sold eventually to Ramos Lot 860-B (5,291 sq. m.), to Epifania Dila (the niece); >>>came to include entire frontage Lot 860-C (3,086 sq. m.), to Cornelia Dila also; and Lot 860-D (5,291 sq. m.), to the heirs of Anacleta Dila (the other niece). The former co-owners evidently overlooked the fact that, by reason of the subdivision, Lot 860B of Epifania Dila came to include the entire frontage of what used to be Lot 860 along Parada Road, and thus effectively isolated from said road the other lots, i.e., Lots 860-A and 860-C of Cornelia Dila, and Lot 860-D of the children of Anacleta Dila.

Cornelia sold Lot 860-A (2,204 sq. m.) to the sisters Marcosa, Margarita, and Irinea Eugenio. And in 1971, the Eugenio Sisters sold the land to Cresencio J. Ramos. Some months later, in March, 1972, after having set up a piggery on his newly acquired property, Ramos had his lawyer write to Eusebio Franciscoowner, as above mentioned, of the adjoining lot, Lot 266to ask for a right of way through the latters land. Negotiations thereafter had however failed to bring about a satisfactory arrangement. Franciscos proposal for an exchange of land at the rate of one (1) square meter from him to three (3) square meters from Ramos, as was supposedly the custom in the locality, was unacceptable to Ramos. Later that year, 1972, Ramos succeeded, through the intercession of Councilor Tongco of Valenzuela, in obtaining a threemeter wide passageway through Lot 860-B of Epifania Dila. Yet in August, 1973, he inexplicably put up a ten-foot high concrete wall on his lot, this was in

August, 1973, and thereby closed the very right of way granted to him across Lot 860-B. It seems that what he wished was to have a right of passage precisely through Franciscos land, considering this to be more convenient to him, and he did not bother to keep quiet about his determination to bring suit, if necessary, to get what he wanted. Francisco learned of Ramos intention and reacted by replacing the barbed-wire fence on his lot along Parada Road with a stone wall. Issue: is Franciscos lot subject to a compulsory easement of right of way? Eusebio Francisco Cresencio Ramos -Lot 266 cannot be considered a servient estate subject to a compulsory easement of Lower court (affirmed by IAC): right of way in favor of Ramos Lot 860-A -courts not empowered to establish judicial . . . a right of way over defendants property easements hereby ordering defendant to immediately remove all obstructions existing on points 2 and 4 of Annex A [of the Commissioners Report] up to the second post of the stone wall along points 2 and 3 in order that plaintiff may have a free access to his property, upon plaintiffs filing a bond in the sum of P2,000.00 without in any way determining by this grant the issue or issues involved in this case, but merely as a measure of temporary relief in the exercise of its power of equity. In Bacolod-Murcia Milling Co., Inc. v. Capital Subdivision, Inc., this Court held that a compulsory easement of way cannot be obtained without the presence of four (4) requisites provided for in Articles 649 and 650 of the Civil Code, which the owner of the dominant tenement must establish, to wit: 1. (1)That the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway (Art. 649, par. 1); 2. (2)After payment of proper indemnity (Art. 649, par. 1, end); 3. (3)That the isolation was not due to acts of the proprietor of the dominant estate; and 4. (4)That the right of way claimed is at the point least prejudicial to the servient estate; and insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. (Art. 650)

respondent Ramos, having already been granted access to the public road (Parada Road) through the other adjoining Lot 860-B owned by Epifania Dilaand this, at the time he was negotiating with petitioner for the similar easement over the latters Lot 266 that he now claimsinexplicably gave up that right of access by walling off his property from the passageway thus established. The evidence is, therefore, persuasively to the effect that the private respondent had been granted an adequate access to the public highway (Parada Road) through the adjacent estate of Epifania Dila even as he was trying to negotiate a satisfactory agreement with petitioner Francisco for another passageway through the latters property.
Costabella v. Court of Appeals, 193 SCRA 333

Costabella owns real estate Lots. 5122 and 5124 of Opon Cadastre, on which it built resort and hotel. Defendants own adjoining properties: Lots 5123-A and 5123-C of Opon Cadastre.

Before the petitioner began the construction of its beach hotel, the private respondents, in going to and from their respective properties and the provincial road, passed through a passageway which traversed the petitioners property. In 1981, the petitioner closed the aforementioned passageway when it began the construction of its hotel, but nonetheless opened another route across its property through which the private respondents, as in the past, were allowed to pass. (Later, or sometime in August, 1982, when it undertook the construction of the second phase of its beach hotel, the petitioner fenced its property thus closing even the alternative passageway and preventing the private respondents from traversing any part of it.)
Issue: whether respondents acquired easement of right of way over passageway on petitioners property? Costabella Corp. -denies existence of ancient road -it and its predecessors-in-interest had Katipunan Lumber Co. Aurora Lopez Manuel Satorre Perfecta Chuangco Cesar Espina -original passageway is ancient road right of way existing before WWII -used by general public, either as pedestrians or vehicles, to and from Lapu-Lapu city -petitioner constructed dike on beach, trapping debris and flotsam, which prevents them from using their property for purpose in which they acquired it TC: -with vested right to passageway based on long and continued use by public

permitted the temporary, intermittent, and gratuitous use of, or passage through, its property by the private respondents and others by mere tolerance and purely as an act of neighborliness. -walling in of property is for safety and security of hotel and beach resort, privacy and convenience, etc. -respondents not entirely dependent on passageway: has another access to the public road -dike = breakwater on foreshore land fronting property, not really a dike; had benefited fishermen for mooring of their boats during low tide -flotsam and debris: unavoidable accumulations, by natural movement of waves

CA: -right of way is discontinuous, hence can only be acquired by title, and not prescription -nevertheless, granted easement in the interest of justice and equity -old road may be closed, but new road is inconvenient to respondents

SC disagreed with CA. -right of way is discontinuous, cannot be acquired by prescription -but CA is incorrect in considering passageway as a compulsory easement Art. 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without

adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient estate. In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist in the payment of the damage caused by such encumbrance. This easement is not compulsory if the isolation of the immovable is due to the proprietors own acts. Art. 650. The easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. Based on the foregoing, the owner of the dominant estate may validly claim a compulsory right of way only after he has established the existence of four requisites, to wit: (1) the (dominant) estate is surrounded by other immovables and is without adequate outlet to a public highway; (2) after payment of the proper indemnity; (3) the isolation was not due to the proprietors own acts; and (4) the right of way claimed is at a point least prejudicial to the servient estate. Additionally, the burden of proving the existence of the foregoing pre-requisites lies on the owner of the dominant estate. -respondents failed to prove lack of adequate outlet to public highway. Standard is adequacy, even if inconvenient. -did not show that isolation was not due to their own acts -did not show that they are willing to pay indemnity -did not show that passageway is least prejudicial to petitioner Encarnacion v. Court of Appeals, 195 SCRA 74 -parties own adjacent estates in Buco, Batangas -petitioner owns dominant estate. Bounded on north by de Sagun estate, on south by Taal Lake, and on east/west by other estates -respondents servient estate is bounded on north by national highway, south by Tomas Encarnacions estate, east/west by other estates -servient estate stands between dominant estate and the national road

Prior to 1960, when the servient estate was not yet enclosed with a concrete fence, persons going to the national highway just crossed the servient estate at no particular point. However, in 1960 when private respondents constructed a fence around the servient estate, a roadpath measuring 25 meters long and about a meter wide was constituted to provide access to the highway. One-half meter width of the path was taken from the servient estate and the other one-half meter portion was taken from another lot owned by Mamerto Magsino. No compensation was asked and non was given for the portions constituting the pathway.
-Petitioner started nursery business on his land -used pathway to the highway for his family and customers

Petitioners plant nursery business through sheer hard work flourished and with that, it

became more and more difficult for petitioner to haul the plants and garden soil to and from the nursery and the highway with the use of pushcarts. In January, 1984, petitioner was able to buy an owner-type jeep which he could use for transporting his plants. However, that jeep could not pass through the roadpath and so he approached the servient estate owners (Aniceta Vda. de Sagun and Elena Romero Vda. de Sagun) and requested that they sell to him one and one-half (1 1/2) meters of their property to be added to the existing pathway so as to allow passage for his jeepney. To his utter consternation, his request was turned down by the two widows and further attempts at negotiation proved futile. Wants additional 2 meters wifth. Another path leads to the highway: 80 meters away from the dominant estate. Dead river bed. Court and CA disallowed petitioners claim.
Issue: whether respondents can be compelled to allow additional width on easement of right of way over their estate? Tomas Encarnacion Dead river bed is grossly inadequate. Intestate Estate of Eusebio de Sagun Heirs of Aniceta de Sagun

Generally, the right of way may be demanded: (1) when there is absolutely no access to a public highway, and (2) when, even if there is one, it is difficult or dangerous to use or is grossly insufficient. In the present case, the river bed route is traversed by a semi-concrete bridge and there is no ingress nor egress from the highway. For the jeep to reach the level of the highway, it must literally jump four (4) to five (5) meters up. Moreover, during the rainy season, the river bed is impassable due to the floods. Thus, it can only be used at certain times of the year. With the inherent disadvantages of the river bed which make passage difficult, if not impossible, it is if there were no outlet at all. Article 651 of the Civil Code provides that (t)he width of the easement of right of way shall be that which is sufficient for the needs of the dominant estate, and may accordingly be changed from time to time. This is taken to mean that under the law, it is the needs of the dominant property which ultimately determine the width of the passage. Petitioner should not be denied a passageway wide enough to accomodate his jeepney since that is a reasonable and necessary aspect of the plant nursery business.
Solid Manila Corp. v. Bio Hong, 195 SCRA 748 Petitioner owns land in Ermita, Manila, in the vicinity of land owned by defendant. Defendants title came from prior owner. Title has annotation: has private alley for the benefit of

neighborhood: -3m width -shall not be closed as long as building exists thereon -open to the sky -owner to construct alley and provide concrete canals -maintenance/upkeep at expense of owner -open at all times, no obstructions -vendee to follow conditions

The petitioner claims that ever since, it had (as well as other residents of neighboring estates) made use of the above private alley and maintained and contributed to its upkeep, until sometime in 1983, when, and over its protests, the private respondent constructed steel gates that precluded unhampered use.
Solid Manila Corp. - the very deed of sale executed between Bio Hong Trading Co. -the easement referred to has been

the private respondent and the previous owner of the property excluded the alley in question, and that in any event, the intent of the parties was to retain the alley as an easement notwithstanding the sale.

extinguished by merger in the same person of the dominant and servient estates upon the purchase of the property from its former owner; -the petitioner has another adequate outlet; -the petitioner has not paid any indemnity therefor; and -petitioner has not shown that the right-ofway lies at the point least prejudicial to the servient estate.
CA

the lower court erroneously ignored the defense set up by the private respondent that the easement in question had been extinguished. According to the Appellate Court, an easement is a mere limitation on ownership and that it does not impair the private respondents title, and that since the private respondent had acquired title to the property, merger brought about an extinguishment of the easement.
SC: -no question that private alley easement exists -but act by respondent to obstruct is in violation of the very deed of sale -disagrees with petitioner: easement is not separate from owned property -cant be alienated/mortgaged on tenement separately -former owner gave discount to new owner because of the easement -No merger: The Court is furthermore of the opinion, contrary to that of the Court of Appeals, that no genuine

merger took place as a consequence of the sale in favor of the private respondent corporation. According to the Civil Code, a merger exists when ownership of the dominant and servient estates is consolidated in the same person.15 Merger then, as can be seen, requires full ownership of both estates. One thing ought to be noted here, however. The servitude in question is a personal servitude, that is to say, one constituted not in favor of a particular tenement (a real servitude) but rather, for the benefit of the general public. Personal servitudes are referred to in the following article of the Civil Code: Art. 614. Servitudes may also be established for the benefit of a community, or of one or more persons to whom the encumbered estate does not belong.16 In a personal servitude, there is therefore no owner of a dominant tenement to speak of, and the easement pertains to persons without a dominant estate,17 in this case, the public at large.

Quimen v. Court of Appeals, 257 SCRA 163 Anastacia Quimen, together with her 3 brothers and sister, inherited a piece of property in Bulacan. They agreed to subdivide the property equally among themselves. The shares of Anastacia and 3 other siblings were next to the municipal road. Anastacias was at the extreme left of the road while the lots on the right were sold by her brothers to Catalina Santos. A portion of the lots behind Anastacias were sold by her (as her brothers adminstratix) brother to Yolanda. Yolanda was hesitant to buy the back property at first because it d no access to the public road. Anastacia prevailed upon her by assuring her that she would give her a right of way on her adjoining property (which was in front) for p200 per square meter. Yolonda constructed a house on the lot she bought using as her passageway to the public highway a portion of anastacias property. But when yolanda finally offered to pay for the use of the pathway anastacia refused to accept the payment. In fact she was thereafter barred by Anastacia from passing through her property. After a few years, Yolanda purchased another lot from the Quimens (a brother), located directly behind the property of her parents who provided her a pathway gratis et amore between their house, extending about 19m from the lot of Yolanda behind the sari-sari store of one brother, and Anastacias perimeter fence. In 1987, Yolanda filed an action with the proper court praying for a right of way through Anastacias property. The proposed right of way was at the extreme right of Anastacias property facing the public highway, starting from the back of the sari-sari store and extending inward by 1m to her property and turning left for about 5m to avoid the store in order to reach the municipal road. The way was unobstructed except for an avocado tree standing in the middle. The trial court dismissed the complaint for lack of cause of action, explaining that the right of way through the brothers property was a straight path and to allow a detour by cutting through Anastacias property would no longer make the path straight. They held that it was more practical to extend the existing pathway to the public road by removing that portion of the store blocking the path as that was the shortest route to the public road and the least prejudicial to the parties concerned than passing through Anastacias property. CA reversed and held that Yolanda was entitled to a right of way on Anastacias property. The

court, however, did not award damages to her and held that Anastacia was not in bad faith when she resisted the claim. Anastacia went to the SC alleging that her lot should be considered as a servient estate despite the fact that it does not abut or adjoin the property of private respondent. She denies ever promising Yolonda a right of way. Anastacia also argues that when Yolanda purchased the second lot, the easement of right of way she provided was ipso jure extinguished as a result of the merger of ownership of the dominant and the servient estates in one person so that there was no longer any compelling reason to provide private respondent with a right of way as there are other surrounding lots suitable for the purpose. She also strongly maintains that the proposed right of way is not the shortest access to the public road because of the detour and that, moreover, she is likely to suffer the most damage as she derives a net income of P600.00 per year from the sale of the fruits of her avocado tree, and considering that an avocado has an average life span of seventy (70) years, she expects a substantial earning from it. 1) Whether or not there was a valid grant of an easement? YES 2) Whether or not the right of way proposed by Yolonda is the least onerous/least prejudicial to the parties? YES Anastacia Quimen Yolanda Oliveros CA IN EASEMENT OF RIGHT OF WAY that easement where the way is shortest and will cause least prejudice shall be chosen. However, if the two circumstances do not concur in a single tenement, the way where damage will be least shall be used even if not the shortest route.1 This is so because least prejudice prevails over shortest distance. This means that the court is not bound to establish what is the shortest distance; a longer way may be adopted to avoid injury to the servient estate, such as when there are constructions or walls which can be avoided by a round about way, or to secure the interest of the dominant owner, such as when the shortest distance would place the way on a dangerous decline. 1) A right of way in particular is a privilege constituted by covenant or granted by law to a person or class of persons to pass over anothers property when his tenement is surrounded by realties belonging to others without an adequate outlet to the public highway. The owner of the dominant estate can demand a right of way through the servient estate provided he indemnifies the owner thereof for the beneficial use of his property. The conditions for a valid grant of an easement of right of way are: (a) the dominant estate is surrounded by other immovables without an adequate outlet to a public highway; (b) the dominant estate is willing to pay the proper indemnity; (c) the isolation was not due to the acts of the dominant estate; and, (d) the right of way being claimed is at a point least prejudicial to the servient estate. These elements were clearly present. The evidence clearly shows that the property of private respondent is hemmed in by the estates of other persons including that of petitioner; that she offered to pay P200.00 per square meter for her right of way as agreed between her and petitioner; that she did not cause the isolation of her property; that the right of way is the least

prejudicial to the servient estate. These facts are confirmed in the ocular inspection report of the clerk of court, more so that the trial court itself declared that [t]he said properties of Antonio Quimen which were purchased by plaintiff Yolanda Quimen Oliveros were totally isolated from the public highway and there appears an imperative need for an easement of right of way to the public highway. 2) Article 650 of the NCC explicitly states that the easement of right of way shall be established at the point least prejudicial to the servient estate and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance although this is a matter of judicial appreciation. When the easement may be established on any of several tenements surrounding the dominant estate, the one where the way is shortest and will cause the least damage should be chosen. However, as elsewhere stated, if these two (2) circumstances do not concur in a single tenement, the way which will cause the least damage should be used, even if it will not be the shortest. TCs findings: > Yolandas property was situated at the back of her fathers property and held that there existed an available space of about 19m long which could conveniently serve as a right of way between the boundary line and the house of Yolanda s father > The vacant space ended at the left back of the store which was made of strong materials > Which explained why Yolanda requested a detour to the lot of Anastacia and cut an opening of one (1) meter wide and five (5) meters long to serve as her right of way to the public highway. CAs finding: > The proposed right of way of Yolanda, which is 1m wide and 5m long at the extreme right of Anastacias property will cause the least prejudice and/or damage as compared to the suggested passage through the property of Yolanda s father which would mean destroying the sari-sari store made of strong materials. Absent any showing that these findings and conclusion are devoid of factual support in the records, or are so glaringly erroneous, the SC accepts and adopts them. As between a right of way that would demolish a store of strong materials to provide egress to a public highway, and another right of way which although longer will only require an avocado tree to be cut down, the second alternative should be preferred.

Carino v. Insular Government, 41 Phil 935

Gold Creek Mining v. Rodriguez, 66 Phil 259 (Read: dissenting opinions)

"SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition,

exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and the limit of the grant,"
Whether the mining claim is within public dominion? 1. Meaning and scope of Sec. 1, Art. XII, with respect to mining claims 2. Status, under Mining Act (CA 137), of holders of unpatented mining claims, which are located under Act of Congress (1902) Gold Creek Mining -authority: Act of Congress (1902) -owns the Nob Fraction mineral claim in Benguet -located on public lands by CL ODowd, in accordance with Act (1902) and Act No. 624 of Philippine Commission, re: location of mining claims -mining claim is located on 1929 -original declaration of location registered in office of mining recorder Euologio Rodriguez (Secretary of Agriculture & Commerce) Quirico Abadilla (Director of Bureau of Mines) -authority: Sec. 1, Art XII of Constitution - 'Nob Fraction' claim because the

-that petitioner by itself and its predecessors in interest, has been in continuous and exclusive possession of said claim from the date of location thereof -applied for an order of patent survey of the claim, was approved -filed for application of patent, showing P1,600 worth of labor/improvements -respondents did not approve patent application -has right to the mining claim after compliance with requisites of the law for the issuance of patent

Constitution provides that 'natural resources, with the exception of public agricultural land, shall not be alienated' duty bound to prevent the issuance of said patent and the preparation of the aforesaid papers, because they have sworn to support and defend the Constitution

-natural resources includes mineral lands of the public domain, but not mineral lands which at the time the provision took effect no longer formed part of the public domain -mineral lands not of the public domain do not come within the prohibition for alienation

"Courts are bound to presume that the people adopting a constitution are familiar with the previous and existing laws upon the subjects to which its provisions relate, and upon which they express their judgment and opinion in its adoption." (Barry vs. Truax, 13 N. D., 131; 99 N. W., 769; 65 L. R. A., 762.)

-the moment located discovered valuable mineral deposit, and perfected his claim under the law, the mineral land is segregated from public domain -legal effect of valid location of mining claim: give beneficial ownership and right to a patent -when location of mining claim is perfect, it has effect of a grant -locator is not required to purchase the claim

Our conclusion is that, as the mining claim under consideration no longer formed part of the public domain when the provisions of Article XII of the Constitution became effective, it does not come within the prohibition against the alienation of natural resources; and the petitioner has the right to a patent therefor upon compliance with the terms and conditions prescribed by law.
Laureal:

But while I regard the recognition and protection of the right here invoked inevitable, I feel constrained to withhold my assent to the invocation of the case of McDaniel vs. Apacible and Cuisia ([1922], 42 Phil., 749), insofar as citation thereof may imply unqualified acceptance of or ad-herence to the broad rule that where there is a valid and perfected location of a mining claim, the area covered is not only thereby segregated f from the body of the public domain but becomes the private property of the locator. My opinion is that while the locator, under the circumstances, secures the beneficial ownership or the dominium utile, the government retains the bare ownership or the dominium directum, until the locator's claim ripens into full ownership upon f full compliance with all the requirements of the law for the issuance of a patent.
Concepcion:

I maintain that in prohibiting the alienation of natural resources, save any existing right, the Constitution does not refer to the right of location or to the inherent right of possession, or to any inchoate or contingent right which are only a means to bring about another right; it refers only to the right to obtain a patent. And inasmuch as this right cannot be acquired until after compliance with all the conditions prescribed by law, it is evident that the prescribed conditions should be complied with before the inauguration of the Commonwealth.
Atok Big Wedge Mining v. IAC, 261 SCRA 529 The court a quo made the following findings of fact: Applicant {private respondent} seeks the registration of a parcel of land with an area of 41,296 square meters situated in the barrio of Lucnab, Itogon, Benguet, which is shown in survey plan Psu-209851 . . . The evidence for the applicant [private respondent] who was 70 years old at the time he testified shows that he acquired the land from his father-in-law, Dongail, when he married his daughter; that he was then 18 years old; that at the time of his acquisition, it was planted with camotes, casava [sic], langka, gabi, coffee and avocados; that he lived on the land since his marriage up to the present; that he has been paying the taxes during the Japanese occupation and even before it; that he was never disturbed in his possession. Supporting his oral testimony, applicant [private respondent] submitted tax declarations . . . both dated March 20, 1948, the

former for a rural land and the latter for urban land and improvement therein. The receipt showing payment of the taxes on such tax declarations is dated Feb. 8, 1949 . . . The said tax declarations . . . show that they cancel tax declaration No. 439 dated Feb. 10, 1947 which was presented by the Oppositor [petitioner] Atok Big Wedge Mining Company as its Exhibit 14, and the land tax under Exh. 14 was paid by applicant [private respondent] in 1947 . . . Applicant [private respondent] has also submitted Exh. "C", which indicates that all pre-war records of tax declarations and real property receipts of the municipality of Itogon where the property is located were burned and destroyed during the last world war. The Bureau of Lands and Bureau of Forestry, represented by the Provincial Fiscal, oppose [sic] application. The Atok Big Wedge Mining Company came in also as oppositor claiming that the land in question is within its mineral claims Sally, Evelyn and Ethel . . . Atok Big Wedge Mining Company submitted Exhibits 6, 7 and 8, all showing that the annual assessment work of these mineral claims were maintained from 1932 to 1967 for Sally and Evelyn and from 1946 to 1967 for Ethel. It was likewise shown that these mineral claims were recorded in the mining recorder's office; Sally and Evelyn on Jan. 2, 1931 and Ethel on March 18, 1921 . . . 6

In the face of two sets of divergent rulings of the Supreme Court on the nature of the rights of mining claimants over the land where their claim is located, the parties herein seek a definitive ruling on the issue: What is actually the right of a locator of a mining claim located and perfected under the Philippine Bill of 1902 over the land where the claim is found? Does he have an absolute right of ownership thereof or does he have the mere right to possess and claim the same? Whose right to the land should, therefore, prevail: the mining claimant's or that of an applicant for land registration? Does the mere recording or location of a mining claim ipso facto and irreversibly convert the land into mineral land, notwithstanding the fact the mining claimant failed to comply with the strict work requirement under the Philippine Bill of 1902?
ATOK BIG-WEDGE MINING COMPANY, petitioner HON. INTERMEDIATE APPELLATE COURT and TUKTUKAN SAINGAN, respondents. The Director of Lands, thru the Office of the Solicitor General, opposed private respondent's application on the ground that the applicant did not have title in fee simple over the questioned land and that he had not exercised continuous, exclusive and notorious possession and occupation over the said land for at least thirty (30) years immediately preceding the filing of the application. However, the Solicitor General no longer joined petitioner in this ultimate appeal, the Solicitor General later conceding existence of private respondent's rights. The respondent appellate court additionally found that the tract of land in question "according to the evidence, Exh. 2, covers portion of mineral claims, Sally, Evelyn and Ethel, the first two located by one Reynolds in 1931 and the last, also by Reynolds in 1921" 7

Petitioner Atok Big Wedge Mining Company appeals from the decision 1 of the Court of Appeals 2 which reversed the decision 3 of the then Court of First Instance of Baguio City 4 in a land registration case. 5 The court a quo denied and correspondingly dismissed the application for registration of title filed by private respondent Tuktukan Saingan, finding no merit in Saingan's claim of adverse, open and continuous possession in concept of an owner of the tract of land applied for by him, which happened to be claimed by petitioner as part of its mining duly recorded by the Mining Recorder of Benguet. Respondent appellate court found petitioner to have abandoned its mining claim over the said tract of land and, on

the other hand, adjudged private respondent to be the owner thereof by virtue of his having possessed the same under a bona fide claim of ownership for at least thirty (30) years prior to the filing of his land registration application in 1965.
Petitioner's presentation of evidence proving registration of the mining claims of petitioner in the Mining Recorder of Benguet dating back to 1931, at the lattest, notably about sixteen (16) years before private respondent declared the land in question for taxation purposes and thirty four (34) years before private respondent filed the land registration proceedings in 1965, apparently inpressed the court a quo. And so it ruled in favor of petitioner as oppositor in the land registration proceedings, the court a quo ratiocinating in this wise: . . . (T)he mining claims were recorded ahead of the time when the applicant [private respondent] declared the land for taxation purposes based on his documentary exhibits. So the evidence of the applicant [private respondent] cannot prevail over the documentary exhibits of the oppositor Atok Big Wedge Mining Company. The government oppositors adopted the evidence of the mining company. Moreover, if applicant [private respondent] was already in possession and occupation of the land in the concept of owner, as claimed, it is strange that he did not oppose its survey when the mining company surveyed the area preparatory to its recording in the mining recorder's office. The conclusion is that he was not yet there when the survey by the mining company was conducted or if he was already there the nature of his occupation was not in the concept of owner for otherwise he could have asserted it at the time. The foregoing facts show that the mining company had established its rights long before applicant [private respondent] asserted ownership over the land. The perfection of mining claims over the mineral lands involved segregate [sic] them from the public domain and the beneficial ownership thereof became

but "Atok . . . has not even been shown how connected with locator Reynolds." 8 Private respondent reiterates this fact in his Comment: . . . (T)he mining claims have become vested rights and properties of the locators, Messrs. H. I. Reynolds and E. J. Harrison. However, the locators, Reynolds and Harrison, or the PETITIONERS herein, assuming that there is any relation between Atok Big Wedge Mining Co., and the locators. Reynolds and Harrison, have never shown that their rights have been preserved or remain vested. xxx xxx xxx Furthermore, when the land in question was registered in the office of the Mining Recorder in 1921, and 1931, respectively, the mineral claims covering the land in question namely: Sally, Evelyn and Ethel were in the name of the Locators E.J. Harrison and H. I. Reynolds. No evidence was ever presented as to how Petitioner herein obtained ownership over said claims during the hearing of this case in the Lower Court up to this time. It was not even shown how Petitioner herein, Atok Big Wedge Mining Co., is connected or related to locator Reynolds. . . 9 The respondent appellate court, on its part, correctly considered inadequate, however, the mere recording of petitioner's mining claims in the Mining Recorder of Benguet and the corresponding, albeit religious, payment of annual assessment fees therefor, to vest in petitioner ownership rights over the land in question. Truly, under Executive Order No. 141 11, the payment of annual assessment fees is only proof of compliance with the charges imposed by law and does not constitute proof of actual assessment work on the mining land concerned. Respondent court ruled in this connection: . . . (I)t must conceded that the same having been located and existing since 1921 and 1931, the rights of locator if correspondingly preserved, remained vested, but as this Court also examines the evidence, what has been shown is that affidavits of assessment work had been filed, yes, from 1932 in connection with claim Sally and from 1933 as

vested in the locator. 10 The trial court having dismissed private respondent's application for registration on the ground that petitioners had already required a vested right over the subject land, private respondent appealed to the respondent court. The Director of Lands, thru the Solicitor General, adopted as his own, the appellee's brief filed by petitioner.

to Evelyn, and from 1936 as to claim Ethel, but tsn. would not show that in truth and in fact, there had been that assessment work on the claims, [sic] witness Pelayo of Atok admits that he had not gone over the area . . . in fact he joined the company in 1962 only, [sic] in other words, all that Atok has shown as to assessment work is the affidavit thereon, but as Ex. Order 141 of 1 August, [sic] 1968 has said: "(W)hat matters is [sic] maintaining and preserving possessory rights to the claims is the continuous performance of the required assessment work, not the filing of an affidavit which may be disproved by findings of [sic] the ground." and here, the very fact that applicant has possessed continuously apparently without protest from Atok . . . must disprove the truth that locator or Atok had indeed done assessment work . . . 12 Private respondent, in support of respondent court's quoted findings, points out in his pleading that: . . . The APPLICANT [private respondent] constructed various improvements on the land consisting of his 3 residential houses, fruit trees, ricefields and other permanent improvements. . . xxx xxx xxx

Petitioner, left to its own by the Director of Lands, cites the following grounds from the grant of the instant petition: I THAT THE LAND IN QUESTION HAD LONG BEEN SEGREGATED FROM THE PUBLIC DOMAIN AND OWNERSHIP THERETO HAD LONG BECOME VESTED IN HEREIN PETITIONER WHEN ITS MINING CLAIMS IN QUESTION WERE REGISTERED IN THE OFFICE OF THE MINING RECORDER IN 1921 AND 1931 RESPECTIVELY. II THAT THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN FINDING THAT THE APPLICANT WAS IN CONTINUOUS OPEN AND ADVERSE POSSESSION. 17

On the other hand, the PETITIONER Mining company has not shown that it has introduced a single improvement ("assessment work") on the property. It has only paid the minimum annual assessment required by law of P200.00 a year. There was no evidence, whatsoever, of its alleged "factual" possession of the property. No assessment work was shown during the ocular inspection ordered by the Honorable Trial Court neither during the ocular inspection conducted by the Bureau of Forestry. THIS ritual of paying the uniform sum of P200.00 a year for alleged assessment work is not enough evidence that such assessment work was actually made. It is precisely for this reason that Executive Order 141 dated August 1, 1968 was issued by the President of the

Philippines. This order made is mandatory that it is not enough to pay P200.00 a year but there must be actual continuous assessment work done on the surface of the mineral claims . . . [Emphasis supplied by private respondent.] 13 Also, private respondent also additionally informs this court that: . . . PETITIONER Atok Big Wedge Mining Company has, on October 12, 1978, converted its application on mineral claims in question (SALLY, EVELYN and ETHEL) into mining lease only in compliance with Presidential Decree 1214. PETITIONER mining company is now a mere lessee of the mining claims. And as such lessee, it has no right on the surface rights of such mineral claims. An official certification to that effect by the Bureau of Mines & Geo-Sciences, Regional Officer No. 1 of the City of Baguio is hereby attached as Annex "A" and made integral part hereof. . . 14 The court a quo made the following factual findings based on the testimony of private respondent: The evidence . . .shows that he [private respondent] acquired the land from his father-in-law, Dongail, when he married his daughter; that he was then 18 years old; that at the time of his acquisition, it was planted with camotes, casava [sic], langka, gabi, coffee and avocados; that he lived on the land since his marriage up to the present; that he has been paying the taxes during the Japanese occupation and even before it; that he was never disturbed in his possession. Supporting his oral testimony, applicant submitted tax declarations . . . both dated March 20, 1948, the former for a rural land and the latter for urban land and improvement therein. 18 Substantiating the aforecited testimonial evidence of private respondent's actual, adverse and continuous possession of the subject land for more than thirty (30) years are the observations of the court commissioner during the ocular inspection of the subject land on February 1, 1969, pertinent transcribed portions of which read as follows: Upon verification of the extent of the area applied for by the applicant which tallies with the plan on record, we find the following improvements; The land applied for is almost 90% improved with numerous irrigated rice terraces newly planted to palay at the time of the ocular inspection and others planted to vegetables such as potatoes, banana plants, flowering plants and fruit trees such as mangoes, jackfruits, coffee plants, avocados and citrus all fruit bearing. Most of the fruit trees such as the mango trees are about one half (1/2) meter in diameter. There are four houses owned by the applicant [private respondent] and his children.

There is a creek traversing the middle portion of the land which serve as irrigation for the numerous rice paddies. Upon verification of the surrounding area which we did by hiking all the way, there are no assessment tunnels or any sign of mining activities. xxx xxx xxx

There are earthen dikes and fences surrounding the property applied for. It also appears that the surrounding area of the land applied for is also fully cultivated especially on the western portion, southern portion and also on the northern portion. On the northwestern ridge are numerous terraces planted to various vegetables and on the edges of the property is a plantation of tiger grass used for brooms. On the eastern slope are also numerous terraces planted to flowering plants and numerous banana plants. There are only two (2) pine trees growing situated on the eastern slope of the land in question. On the northern portion are terraces and ricefields and mango tree as well as banana plants. At the northern slope of the land applied for is [sic] fully cultivated with the exception of whatever portions are planted to bananas and tiger grass. The terraces at the time of the ocular inspection is planted to vegetables and flowering plants such as African dishes [sic]. On the northwestern portion of the land are numerous terraces planted to seasonal vegetable crops. The rest are planted to banana except the small steep portion planted to tiger grass to prevent the land from eroding. On the western portion is a big irrigation canal with plenty of water which serve [sic] as a water supply to irrigate the ricefields which are found around the property. An estimate of around 90 to 120 big and small trees are scattered all over the property. Around the houses are full of fruit trees. xxx xxx xxx

The mining compound of Itogon is very far from this place and this land is at the boundary of Baguio City and Itogon. That is why it is more suitable for residential and agricultural purposes. Nowhere do we find any mining work done, any cable or anything that would show any mining operation in this area. Around the yard of the houses of the applicant are numerous coffee trees, jackfruits, pomelos, papaya, pineapples, banana plants, guava trees and carrots. The orchard is fully planted to coffee trees. The area is estimated to be more than one hectare which is planted to coffee trees and other plants. 19 Private respondent, it must be emphasized, offered in evidence in the land registration

proceedings before the court a quo, tax declarations, dated March 20, 1948, and tax payment receipts, dated February 8, 1949. Significantly, petitioner did not present any evidence in rebuttal of private respondent's aforestated claims of having acquired the subject land from his wife's father and having lived on the land since his marriage at the age of eighteen (18). Neither has petitioner taken exception to the aforecited observations of the court commissioner during the ocular inspection of the subject land. There is nary a showing in petitioner's numerous pleadings filed before us that there exists substantial basis for us not to believe petitioner's claims, and this is understandable, for petitioner largely anchored its cause on its alleged vested rights to its mining claims under the mandate of the Philippine Bill of 1902 and our rulings in McDaniel vs. Apacible and Cuisia 20 and the catena of cases subsequent thereto. Considering the aforestated evidence borned out by the records of the instant case, their credibleness and the lack of adequate opposition thereto, we agree with respondent Court of Appeals that "a reading of tsn. would rather persuade that applicant [private respondent] had shown quite well that subject property had been in (the) continuous and adverse possession, first, of his predecessor-in-interest, Dongail and, after the death of the latter, (by respondent) himself, years before, that is, long before the outbreak of the last war. 21 Petitioner is deemed to have abandoned his mining claims under E.O. No. 141 and P.D. No. 1214. All mineral lands, as part of the country's natural resources, belong to the Philippine State. This concept of jura regalia enshrined in past and present Philippine constitutions, has not always been the prevailing principle in this jurisdiction, however, the abundant resources within our coastal frontiers having in the past filled not just one colonizer's booty haul. Indeed, there was a time in our history when the mining laws prevailing in this jurisdiction were compromising, to say the least, of the Filipino people's inherent rights to their natural wealth. Before the cession of the Philippine Islands to the United States under the Treaty of Paris, the prevailing mining law in the colony was the Royal Decree of May, 1867, otherwise known as The Spanish Mining Law. In the advent of American occupation, the Philippines was governed by means of organic acts which were in the nature of charters serving as a Constitution of the occupied territory from 1900 to 1935 22. Among the principal organic acts of the Philippines was the Act of Congress of July 1, 1902 through which the United States Congress assumed the administration of the Philippine islands. The Philippine Bill of 1902 contained provisions for, among many other things, the open and free exploration, occupation and purchase of mineral deposits and the land where they may be found. It declared "all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed . . . to be free and open to exploration, occupation and purchase, and the land in which they are found to occupation and purchase, by citizens of the United States, or of said Islands . . . 23 Any qualified person desiring to locate a mineral claim may enter upon the same and locate a plot of ground measuring, where possible, but not exceeding, one thousand feet in length by one thousand feet in breath, in as nearly as possible a rectangular form. 24 Under the Philippine bill of 1902, the holder of the mineral claim so located is entitled to all the minerals which may lie within his claim, but he may not mine outside the boundary lines of his

claim. 25 the mine claim locator must have his claim recorded in the mining recorder within thirty (30) days after the location thereof; otherwise, he will be deemed to have abandoned the same. 26 One of the continuing requirements for the subsistence of the mining claim is performance of not less than one hundred dollars' worth of labor or undertaking of improvements of the same value every year. 27 This is a strict requisite, the locator's failure to comply with which shall operate to open the claim or mine to relocation in the same manner as if no location of the same had even been made. 28 Unequivocal is the mandatory nature of the work or labor requirement on the mine that the Philippine Bill specifically designates the time when the work or labor required to be done annually on all unpatented mineral claims, shall commence. 29 Subsequently, among a few laws passed amending the Philippine Bill of 1902 was Act No. 624 passed by the United States Philippine Commission and approved on February 7, 1903. Said Act prescribed regulations to govern the location and the manner of recording mining claims and the amount of work necessary to hold possession thereof. Such regulations reinforced the annual work or labor requirement of not less than one hundred dollars' worth as provided for in the Philippine Bill of 1902, in accordance with Section 36 thereof which limits the power of the United States Philippine Commission to make regulations but "not in conflict with the provision of this Act. [i.e., the Philippine Bill of 1902], governing the location, manner of recording, and amount of work necessary to hold possession of a mining claim . . ." On November 15, 1935, the Constitution of the Commonwealth took effect. The 1935 Constitution declared all natural resources of the Philippines, including mineral lands and minerals, to be property belonging to the State. 30 However, as it turned out, not really all of the Philippines' natural resources were considered part of the public domain. Those natural resources, and for that matter, those mineral lands and minerals with respect to which there already was "any existing right, grant, lease, or concession at the time of the inauguration of the Government established under in Constitution," were then considered outside the application of the jura regalia doctrine or at least not unconditionally or totally within the contemplation of said doctrine. On November 7, 1936, the First National Assembly enacted Commonwealth Act No. 137, otherwise known as the Mining Act. In contradistinction with the Philippine Bill of 1902 which was patterned after the United States Federal Mining Acts which rejected the regalian doctrine, the Mining Act expressly adopted the regalian doctrine following the provisions of the 1935 Constitution. Since said Constitution necessarily prohibits the alienation of mining lands, the Mining Act granted only lease rights to mining claimants who are proscribed from purchasing the mining claim itself. These provisions of the Mining Act, however, were expressly inapplicable to mining claimants who had located and recorded their claims under the Philippine Bill of 1902. The nationalism underlying the adoption of the regalian doctrine in the 1935 Constitution was further eroded by the amendment thereto which was adopted by the First Congress on September 18, 1946 and approved by a majority at the elections held on March 11, 1947. This amendment which came in the form of an "Ordinance Appended to the Constitution" is what is known as the "Parity Rights" amendment. It provided that, notwithstanding the adoption in the Constitution of the regalian doctrine and the proscription against aliens participating in the natural wealth of the nation, excepted therefrom were the citizens of the United States and its business enterprises which would have the equal right in the disposition, exploitation, development and utilization of our natural resources, among them, our mining lands and minerals for the period from July 4, 1946 to July 3, 1974. In the meantime, the provisions of the Philippine Bill of 1902 regarding mining claims, insofar

as the mining lands and mining claims acquired before the effectivity of the 1935 Constitution are concerned, continued to be in effect. Annual performance of labor or undertaking of improvements on the mine remained an annual requirement, non-compliance with which resulted in the mine becoming again open to relocation but now subject to the lease provisions of the Mining Act. The intention for this annual work requirement to be a strict prerequisite to maintenance of a claimant's rights under the Philippine Bill of 1902 apparently not lost on subsequent legislators, they took the same as an absolute prerequisite with grave consequences and believed it necessary to expressly enact a law 31 waiving this requirement during the period from January 1, 1954 as the circumstances then necessitated the same. The Philippine Bill of 1902 clearly required the annual performance of work on the mine or the undertaking of improvements thereon in order for the mine claim locator to continue enjoying all the rights accruing to him as such under the said Bill. This and nothing short of this was the requirement. The filing of affidavits of annual assessment work, which procedure is not even provided for in the Philippine Bill of 1902, is required only for purposes of proving that there had actually been work or improvements done. Such filing could not have been intended to replace the actual work requirement, and nary is there a basis in law to support any conclusion to the contrary, notwithstanding what was appearing to be the practice of mine claim locators of annually filing affidavits of annual assessment but willfully not undertaking actual work or tangile improvement on the mine site. On August 1, 1968, then President Marcos issued Executive Order (E.O.) No. 141. Whereas mining claim holders under the Philippine Bill of 1902 ". . . are of the impression that they may hold on to their claims indefinitely by he mere filing of affidavits of annual assessment work . . .," E.O. No. 141 precisely declared that "such impression is not correct, for what matters in maintaining and preserving possessory title to the claim is the continuous performance of the required assessment work, not the filing of an affidavit which may be disproved by findings on the ground." Consequently, E.O. No. 141 established the status of such unpatended mining claims which have not complied with the annual work requirement, as having been abandoned and open for relocation, their declarations of location being accordingly cancelled. On January 17, 1973, the 1973 Constitution came into force and effect. Unlike the former Charter the 1973 Constitution did not expressly qualify the application of the regalian doctrine as being subject to any right granted before the effectivity of the 1935 Constitution or the 1973 Constitution for the matter. It provided: Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. . . 32 But the conditional application of the regalian doctrine under the 1973 Constitution could be found in Presidential Decree (P.D.) No. 463, enacted on May 17, 1874, which revised the Mining Act (C.A. No. 137). While the said decree declares that ". . . all mineral deposits in public or private lands . . . belong to the State, inalienably and imprescriptively . . .," it also recognizes whatever rights or reservations had already been existing with respect to certain mining lands 33, apparently alluding to the rights of mining claim holders under the Philippine Bill of 1902. Under the Philippine Bill of 1902, the procedure was that a mining claim locator need not apply for a patent soon after locating the mine. The patent may come later, and the said locator, for as long as he complies with the annual actual work requirement, enjoyed possessory rights with respect to such mining claim with or without a patent therefor. It has already been stated that under E.O. No. 141, unpatented mining claims shall be deemed abandoned upon a finding that the holders thereof had not been actually performing any work or labor or undertaking any

improvement at the mine site notwithstanding their having religiously filed annual affidavits of assessment. Even under P.D. 463 which was enacted in 1974, the possessory rights of mining claim holders under the Philippine Bill of 1902 remained effective for as long as said holders complied with the annual actual work requirement. But on October 14, 1977, P.D. No. 1214 required all the holders of unpatented mining claims to secure mining lease contracts under P.D. No. 463. Faced with the grave consequence of forfeiture of all their rights to their claims, holders of subsisting and valid patentable mining claims located under the Philippine Bill of 1902 were to file mining lease applications therefor within one (1) year from the effectivity of the said decree. 34 The filing of such mining lease application was considered a waiver of the holders' rights to the issuance of mining patents for their claims 35. Corollarily, non-filing of applications for mining lease by the holders thereof within the one-year period would cause the forfeiture of all their rights to their claims. 36 Against the backdrop of the aforechronicle evolution of the pertinent mining laws, past and present, in this jurisdiction, we now proceed to resolve the controlling issue in this case: Whether or not the ownership of subject land had long been vested on petitioner after it had allegedly located and recorded its mining claim in accordance with the pertinent provisions of the Philippine Bill of 1902. This issue is certainly not a novel one. It has been first ruled upon by this court in the 1922 case of McDaniel vs. Apacible and Cuisia 37. There, applying American precedents, we stated: The moment the locator discovered a valuable mineral deposit on the lands located, and perfected his location in accordance with law, the power of the United States Government to deprive him of the exclusive right to the possession and enjoyment of the located claim was gone, the lands had become mineral lands and they were exempted from lands that could be granted to any other person. The reservations of public lands cannot be made so as to include prior mineral perfected located locations; and of course, if a valid mining location is made upon public lands afterward included in a reservation, such inclusion or reservation does not affect the validity of the former location. By such location and perfection, the land located is segregated from the public domain even as against the Government. . . 38 We reiterated this ruling in the subsequent cases of Gold Creek Mining vs. Rodriguez (1938), 39 Salacot Mining Company vs. Abadilla (1939), 40 Salacot Mining Company vs. Rodriguez (1939), 41 Bambao vs. Lednicky (1961), 42 Comilang vs. Buendia (1967), 43 Benguet Consolidated, Inc. vs. Republic (1986), 44 Republic vs. Court of Appeals (1988) 45 and Atok-Big Wedge Mining Co., Inc. vs. Court of Appeals (1991). 46 Notwithstanding our ruling in the aforecited cases, however, there came about thereafter a catena of cases where we declared that the rights of the holder of a mining claim located under the Philippine Bill of 1902, are not absolute or are not strictly of ownership. This declaration was a necessary premise in our affirmation of the constitutionality of P.D. No. 1214 in the 1987 case of Santa Rosa Mining Co., Inc. vs. Leido, Jr. 47 where we stated: Mere location does not mean absolute ownership over the affected land or mining claim. It merely segregates the located land or area from the public domain by barring other would-be locators from locating the same and appropriating for themselves the minerals found therein. To rule otherwise would imply that location is all that is needed to acquire and maintain rigths over a located mining claim. This, we cannot approve or sanction because it is contrary to the intention of the lawmaker that the locator should faithfully and consistently comply with the requirements for annual work and improvements in the located mining claim. 48

And our ruling there was upheld in tradition of stare decisis in the subsequent cases of Director of Lands vs. Kalahi Investments, Inc. (1989), 49 Zambales Chromite Mining Company, Inc. vs. Leido Jr. (1989), 50 Poe Mining Association vs. Garcia (1991), 51 United Paracale Mining Company, Inc. vs. De La Rosa (1993), 52 and Manuel vs. Intermediate Appellate Court (1995). 53 While petitioner adamantly insists that there is only one construction of the provisions of the Philippine Bill of 1902 as regards his mining claim rights, and this is that the same are absolute and in the nature of ownership, private respondent posits the ultimate question of which between the aforecited seemingly inconsistent rulings is the correct interpretation of the Philippine Bill of 1902 in relation to E.O. No. 141 and P.D. 1214 insofar as the rights of mining claim holders under the said Bill are concerned. This is not the first time either that we are asked to, in all awareness of the precedents, resolve these postulation of this court that are perceived to be contradictory. In the 1994 case of United Paracale Mining Company vs. Court of Appeals, 54 posed before us by petitioner therein was the same question that herein private respondent asks us to resolve in the ultimate. We noted in that case: "The query of petitioner" "What is actually the right of a locator of mining claim located and perfected under the Philippine Bill of 1902. Does he have an absolute right of ownership, or merely a right to possess and claim?" Petitioner contends that there are two (2) conflicting rulings made by this Court on the same issue. In Director of Lands vs. Kalahi Investments, Inc. (169 SCRA 683), a locator of mining claims perfected under the Philippine Bill of 1902 has been held not to have an absolute right of ownership over said claims but merely a possessory right thereto. In Atok-Big Wedge Mining Company, Inc. vs. Court of Appeals and Liwan Consi (193 SCRA 71), however, a locator of mining claim perfected under the Philippine Bill of 1902, the Court has ruled, does have an absolute right of ownership over his claim being thereby removed from the public domain. 55 In that case United Paracale Mining, it would have been premature for us to rule on the query, not all indispensable parties therein having been joined. That is not the situation in this present controversy, however, and so we shall forthwith resolve the matter at hand once and for all. The earlier chronicle of the evolution of the mining laws, past and present, in this jurisdiction was not without a predetermined purpose. The detailing of the provisions of those laws, especially of the Philippine Bill of 1902, was certainly deliberate. It is undeniable at this point that the determination of the rights of a mining claim holder under the said Bill is best undertaken on the basis of the very source of those rights, that is, the Bill itself. And any alteration of change in the nature of those rights must be conceded for as long as such is statutorily and constitutionally sanctioned, for even vested rights may be taken away by the State in the exercise of its absolute police power. Under the Philippine Bill of 1902, the mining claim holder, upon locating and recording of his claim, has the right to acquire for himself all mineral deposits found within his claim to the exclusion of everyone, including the Government. Such rights are necessarily possessory as they are essentially utilitarian and exploitative. Such rights accruing to the mining claim locator are personal to him in the sense that no conclusion as to the nature of the land may definitively be made based solely on the fact that a mining claim has been recorded as regards a particular land. However, insofar as his rights are exclusive and no other person may undertake mining activities on a recorded mining claim, unless the same has been abandoned or the works

thereon not done, the mining locator's rights also protected against adverse mining claims of this persons. He also has the right to immediately or eventually secure a patent on his mining claim and in the event that he postpones securing a patent, his rights to exclusive possession and exploitation of his mining claim subsist for as long as he complies with the continuing requirement of annually performing work or undertaking improvements at the mine site. Insofar as the Philippine Bill of 1902 does not provide a specific time within which the mining claim holder must secure a patent, his rights to possession and use of the mining land appear to be unconditional, the option not at all to secure a patent being available to him in the absence of a deadline or ultimatum therefor. The Philippine Bill of 1902, however, did not foreclose a subsequent act on the part of the State to limit the time within which the said patent must be secured under threat of forfeiture of rights provided for under the Philippine Bill of 1902. Thus, in the sense that the rights of a mining claim holder may in the future be curtailed by failure to obtain a patent, especially if we recall that Section 36 of the said Bill itself foretold the subsequent promulgation of regulations regarding mining claims, such rights cannot also be said to be truly unconditional or absolute. We also learn from our reading of our past and present mining laws in their proper historical perspectives, that the process of recording mining claims could not have been intended to be the operative act of classifying lands into mineral lands. The recording of a mining claim only operates to reserve to the registrant exclusive rights to undertake mining activities upon the land subject of the claim. The power to classify lands into mineral lands into mineral lands could not have been intended under the Philippine Bill of 1902 to be vested in just anyone who records a mining claim. In fact, this strengthens our holding that the rights of a mining claimant are corfined to possessing the land for purposes of extracting therefrom minerals in exclusion of any or all other persons whose claims are subsequent to the original mining locator. Thus, if no minerals are extracted therefrom, notwithstanding the recording of the claim, the land is not mineral and registration thereof is not precluded by such recorded claim. Thus, in the case at bench, the mining claimant, who had failed to comply with the annual minimum labor requirement, could not, all the more, be expected to have extracted minerals from the mining location. Utter lack of proof of even its potential deposits on the part of the petitioner, thus, does not surprise us at all. Thus, it can be said (1) that the rights under the Philippine Bill of 1902 of a mining claim holder over his claim has been made subject by the said Bill itself to the strict requirement that he actually performs work or undertakes improvements on the mine every year and does not merely file his affidavit of annual assessment, which requirement was correctly identified and declared in E.O. No. 141; and (2) that the same rights have been terminated by P.D. No. 1214, a police power enactment, under which non-application for mining lease amounts to waiver of all rights under the Philippine Bill of 1902 and application for mining lease amounts to waiver of the right under said Bill to apply for patent. In the light of these substantial conditions upon the rights of a mining claim holder under the Philippine Bill of 1902, there should remain no doubt now that such rights were not, in the first place, absolute or in the nature of ownership, and neither were they intended to be so. Applying the aforecited ruling to the facts of this case, we find that, not only has petitioner failed to sufficiently show compliance with actual annual work requirement on its mining claims but also that credible are the transcribed observations of the trial commissioner that nowhere on the subject land could be found tangible works or improvements of an extent that would have existed has petitioner really complied with the annual work requirement from 1931 when it allegedly first located said mining claims. In fact, no mining infrastructure or equipment of any sort can be found on the area. Understandable thus is the action of the Director of Lands not to further appeal from respondent court's decision, Director of Lands eventually conceding the subject land to be registrable, considering petitioner's non-performance of mining works thereon, private respondent's adverse possession of the subject land more than thirty (30)

years and its use thereof for as many years solely for agricultural purposes. Equally borne out by the records is the fact that petitioner has indeed applied for a mining lease under P.D. No. 1214. For that reason, it has, in effect, waived its right to secure a patent and it shall have been governed, if private respondent's claim of adverse and open possession of the subject land for more than 30 years were not established, by P.D. No. 463 in its activities respecting its mining lease. WHEREFORE, the petition is HEREBY DISMISSED, with costs against petitioner. SO ORDERED. Cruz v. Sec. of Environment and Natural Resources, 347 SCRA 165

NPC v. Ibrahim, 526 SCRA 149 Lucman G. Ibrahim and his co-heirs Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Rocania G. Maruhom, Potrisam G. Maruhom, Lumba G. Maruhom, Sinab G. Maruhom, Acmad G. Maruhom, Solayman G. Maruhom, Mohamad M. Ibrahim and Cairoronesa M. Ibrahim (respondents) are owners of a 70,000-square meter lot in Saduc, Marawi City. Sometime in 1978, NPC, without respondents knowledge and consent, took possession of the subterranean area of the land and constructed therein underground tunnels. The tunnels were used by NPC in siphoning the water of Lake Lanao and in the operation of NPCs Agus II, III, IV, V, VI, and VII projects located in Saguiran, Lanao del Sur; Nangca and Balo-i in Lanao del Norte; and Ditucalan and Fuentes in Iligan City. Respondents only discovered the existence of the tunnels sometime in July 1992. Thus, on October 7, 1992, respondents demanded that NPC pay damages and vacate the subterranean portion of the land, but the demand was not heeded. NATIONAL POWER CORPORATION, Petitioner, NPC then filed a Petition for Certiorari (with Urgent Prayer for the Immediate Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction) with the CA, docketed as CA-G.R. SP No. 02065-MIN. It argued that the RTC gravely abused its discretion when it granted the motion for execution without ordering respondents to transfer their title in favor of NPC. By allowing the payment of just compensation for a parcel of land without the concomitant right of NPC to get title thereto, the RTC clearly varied the terms of the judgment in G.R. No. 168732, justifying the issuance of a writ of certiorari. NPC also OMAR G. MARUHOM, ELIAS G. MARUHOM, BUCAY G. MARUHOM, MAMOD G. MARUHOM, FAROUK G. MARUHOM, HIDJARA G. MARUHOM, ROCANIA G. MARUHOM, POTRISAM G. MARUHOM, LUMBA G. MARUHOM, SINAB G. MARUHOM, ACMAD G. MARUHOM, SOLAYMAN G. MARUHOM, MOHAMAD M. IBRAHIM, CAIRORONESA M. IBRAHIM, and LUCMAN IBRAHIM, represented by his heirs ADORA B. IBRAHIM, NASSER B. IBRAHIM, JAMALODIN B. IBRAHIM, RAJID NABBEL B. IBRAHIM, AMEER B. IBRAHIM and SARAH AIZAH B. IBRAHIM,* Respondents. 1. They did not file a motion to reconsider or appeal the decision within the reglementary period of fifteen (15) days from receipt of judgment because they believed in good faith that the decision was for damages and rentals

prayed for the issuance of a temporary restraining order (TRO) to enjoin the implementation of the writ of execution and notice of garnishment. On November 29, 2007, the CA granted NPCs prayer and issued a TRO, enjoining the implementation of the writ of execution and the notice of garnishment. n the main, NPC insists that the payment of just compensation for the land carries with it the correlative right to obtain title or ownership of the land taken. It stresses that this Courts Decision in G.R. No. 168732 is replete with pronouncements that the just compensation awarded to respondents corresponds to compensation for the entire land and not just for an easement or a burden on the property, thereby necessitating a transfer of title and ownership to NPC upon satisfaction of judgment. NPC added that by granting respondents motion for execution, and consequently issuing the writ of execution and notice of garnishment, the RTC and the CA allowed respondents to retain title to the property even after the payment of full compensation. This, according to NPC, was a clear case of unjust enrichment.

and attorneys fees only as prayed for in the complaint; 2. It was only on August 26, 1996 that they learned that the amounts awarded to the respondents represented not only rentals, damages and attorneys fees but the greatest portion of which was payment of just compensation which, in effect, would make the petitioner NPC the owner of the parcels of land involved in the case; 3. When they learned of the nature of the judgment, the period of appeal had already expired; 4. They were prevented by fraud, mistake, accident, or excusable negligence from taking legal steps to protect and preserve their rights over their parcels of land insofar as the part of the decision decreeing just compensation for respondents properties;

5. They would never have agreed to the alienation of their property in favor of anybody, considering the fact that the parcels of land involved in this case were among the valuable properties they inherited from their dear father and they would rather see their land crumble to dust than sell it to anybody.5 After trial, the RTC rendered a decision,2 the decretal portion of which reads: WHEREFORE, judgment is hereby rendered: 1. Denying [respondents] prayer for [NPC] to dismantle the underground tunnels constructed beneath the lands of [respondents] in Lots 1, 2, and 3 of Survey Plan FP (VII-5) 2278; 2. Ordering [NPC] to pay to [respondents] the fair market value of said 70,000 square meters of land covering Lots 1, 2, and 3 as described in Survey Plan FP (VII-5) 2278 less the area of 21,995 square meters at P1,000.00 per square meter or a total of P48,005,000.00 for the remaining unpaid portion of 48,005 square meters; with 6% interest per annum from the filing of this case until paid; 3. Ordering [NPC] to pay [respondents] a reasonable monthly rental of P0.68 per square meter of the total area of 48,005 square meters effective from its occupancy of the foregoing area in 1978 or a total of P7,050,974.40. 4. Ordering [NPC] to pay [respondents] the sum of P200,000.00 as moral damages; and 5. Ordering [NPC] to pay the further sum of P200,000.00 as attorneys fees and the costs. SO ORDERED.3 After due proceedings, the RTC granted the petition and rendered a modified judgment dated

September 8, 1997, thus: WHEREFORE, a modified judgment is hereby rendered: 1. Reducing the judgment award of [respondents] for the fair market value of P48,005,000.00 by [P]9,526,000.00 or for a difference [of] P38,479,000.00 and by the further sum of P33,603,500.00 subject of the execution pending appeal leaving a difference of [P]4,878,500.00 which may be the subject of execution upon the finality of this modified judgment with 6% interest per annum from the filing of the case until paid. 2. Awarding the sum of P1,476,911.00 to herein [respondents] Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mahmod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Portrisam G. Maruhom and Lumba G. Maruhom as reasonable rental deductible from the awarded sum of P7,050,974.40 pertaining to [respondents]. 3. Ordering [NPC] embodied in the August 7, 1996 decision to pay [respondents] the sum of P200,000.00 as moral damages; and further sum of P200,000.00 as attorneys fees and costs. SO ORDERED.6 Lucman Ibrahim and NPC then filed their separate appeals with the CA, docketed as CA-G.R. CV No. 57792. On June 8, 2005, the CA rendered a Decision,7 setting aside the modified judgment and reinstating the original Decision, amending it further by deleting the award of moral damages and reducing the amount of rentals and attorneys fees, thus: WHEREFORE, premises considered, herein Appeals are hereby partially GRANTED, the Modified Judgment is ordered SET ASIDE and rendered of no force and effect and the original Decision of the court a quo dated 7 August 1996 is hereby RESTORED with the MODIFICATION that the award of moral damages is DELETED and the amounts of rentals and attorneys fees are REDUCED to P6,887,757.40 and P50,000.00, respectively. In this connection, the Clerk of Court of RTC Lanao del Sur is hereby directed to reassess and determine the additional filing fee that should be paid by Plaintiff-Appellant IBRAHIM taking into consideration the total amount of damages sought in the complaint vis--vis the actual amount of damages awarded by this Court. Such additional filing fee shall constitute as a lien on the judgment. SO ORDERED8 The above decision was affirmed by this Court on June 29, 2007 in G.R. No. 168732, viz.: WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in C.A.-G.R. CV No. 57792 dated June 8, 2005 is AFFIRMED. No costs. SO ORDERED.9 On May 30, 2008, the CA rendered the now assailed Decision,10 dismissing NPCs petition for certiorari. Rejecting NPCs argument, the CA declared that this Courts Decision in G.R. No. 168732 intended NPC to pay the full value of the property as compensation without ordering the transfer of respondents title to the land. According to the CA, in a plethora of cases involving lands traversed by NPCs transmission lines, it had been consistently ruled that an easement is compensable by the full value of the property despite the fact that NPC was only after a right-of-way easement, if by such easement it perpetually or indefinitely deprives the land owner of his proprietary rights by imposing restrictions on the use of the property. The CA,

therefore, ordered NPC to pay its admitted obligation to respondents amounting to P36,219,887.20.11 As aptly pointed out by the CA in its assailed Decision: [NPC], by its selective quotations from the Decision in G.R. No. 168732, would have Us suppose that the High Court, in decreeing that [NPC] pay the full value of the property as just compensation, implied that [NPC] was entitled to the entire land, including the surface area and not just the subterranean portion. No such inference can be drawn from [the] reading of the entirety of the High Courts Decision. On the contrary, a perusal of the subject Decision yields to this Court the unmistakable sense that the High Court intended [NPC] to pay the full value of the subject property as just compensation without ordering the transfer o[f] respondents title to the land. This is patent from the following language of the High Court as quoted by [NPC] itself: In disregarding this procedure and failing to recognize respondents ownership of the subterrain portion, petitioner took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the acquisition of the easement is not without expense. The underground tunnels impose limitations on respondents use of the property for an indefinite period and deprive them of its ordinary use. Based upon the foregoing, respondents are clearly entitled to the payment of just compensation. Notwithstanding the fact that [NPC] only occupies the sub-terrain portion, it is liable to pay not merely an easement but rather the full compensation for land. This is so because in this case, the nature of the easement practically deprives the owners of its normal beneficial use. Respondents, as the owners of the property thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property.14 It is a fundamental legal axiom that a writ of execution must conform strictly to the dispositive portion of the decision sought to be executed. A writ of execution may not vary from, or go beyond, the terms of the judgment it seeks to enforce. When a writ of execution does not conform strictly to a decisions dispositive portion, it is null and void.13 Admittedly, the tenor of the dispositive portion of the August 7, 1996 RTC decision, as modified by the CA and affirmed by this Court, did not order the transfer of ownership upon payment of the adjudged compensation. Neither did such condition appear in the text of the RTC decision, and of this Courts Decision in G.R. No. 168732. As we explained in Camarines Norte Electric Cooperative, Inc. v. Court of Appeals:16 The acquisition of an easement of a right-ofway falls within the purview of the power of eminent domain. Such conclusion finds support in easements of right-of-way where the Supreme Court sustained the award of just compensation for private property condemned for public use. The Supreme Court, in Republic v. PLDT thus held that: "Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right-of-way." However, a simple right-of-way easement transmits no rights, except the easement. Vines Realty retains full ownership and it is not totally deprived of the use of the land. It can continue doing what it wants to do with

Clearly, the writ of execution issued by the RTC and affirmed by the CA does not vary, but is, in fact, consistent with the final decision in this case. The assailed writ is, therefore, valid. Indeed, expropriation is not limited to the acquisition of real property with a corresponding transfer of title or

possession. The right-of-way easement resulting in a restriction or limitation on property rights over the land traversed by transmission lines also falls within the ambit of the term expropriation.15
It is, therefore, clear that NPCs acquisition of an easement of right-of-way on the lands of respondents amounted to expropriation of the portions of the latters property for which they are entitled to a reasonable and just compensation. The term just compensation had been defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the taker's gain, but the owner's loss. The word just is used to intensify the meaning of the word compensation and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, and ample.18 In Camarines Norte Electric Cooperative, Inc. v. Court of Appeals19 and National Power Corporation v. Manubay Agro-Industrial Development Corporation,20 this Court sustained the award of just compensation equivalent to the fair and full value of the property even if petitioners only sought the continuation of the exercise of their right-ofway easement and not the ownership over the land. There is simply no basis for NPC to claim that the payment of fair market value without the concomitant transfer of title constitutes an unjust enrichment. In fine, the issuance by the RTC of a writ of execution and the notice of garnishment to satisfy the judgment in favor of respondents could not be considered grave abuse of discretion. The term grave abuse of discretion, in its juridical sense, connotes capricious, despotic, oppressive, or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse must be of such degree as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and capricious manner by reason of passion and hostility. The word capricious, usually used in tandem with the term

the land, except those that would result in contact with the wires.1avvphi1 The acquisition of this easement, nevertheless, is not gratis. Considering the nature and effect of the installation power lines, the limitations on the use of the land for an indefinite period deprives private respondents of its ordinary use. For these reasons, Vines Realty is entitled to payment of just compensation, which must be neither more nor less than the money equivalent of the property.17

arbitrary, conveys the notion of willful and unreasoning action. Thus, when seeking the corrective hand of certiorari, a clear showing of caprice and arbitrariness in the exercise of discretion is imperative.21 In this case, NPC utterly failed to demonstrate caprice or arbitrariness on the part of the RTC in granting respondents motion for execution. Accordingly, the CA committed no reversible error in dismissing NPCs petition for certiorari. It is almost trite to say that execution is the fruit and the end of the suit and is the life of the law. A judgment, if left unexecuted, would be nothing but an empty victory for the prevailing party. Litigation must end sometime and somewhere. An effective and efficient administration of justice requires that once a judgment has become final, the winning party be not deprived of the fruits of the verdict. Courts must, therefore, guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any attempt to prolong them.22 We, therefore, write finis to this litigation. WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 02065-MIN is AFFIRMED. The temporary restraining order issued by this Court on July 9, 2008 is LIFTED. SO ORDERED.

San Lorenzo v. Court of Appeals, 449 SCRA 99

From a coaptation of the records of this case, it appears that respondents Miguel Lu and Pacita Zavalla, (hereinafter, the Spouses Lu) owned two (2) parcels of land situated in Sta. Rosa, Laguna covered by TCT No. T-39022 and TCT No. T-39023 both measuring 15,808 square meters or a total of 3.1616 hectares.
On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta, (hereinafter, Babasanta) for the price of fifteen pesos (P15.00) per square meter. Babasanta made a downpayment of fifty thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made by Babasanta. Sometime in May 1989, Babasanta wrote a letter to Pacita Lu to demand the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. In the same letter, Babasanta notified the

spouses about having received information that the spouses sold the same property to another without his knowledge and consent. He demanded that the second sale be cancelled and that a final deed of sale be issued in his favor. In response, Pacita Lu wrote a letter to Babasanta wherein she acknowledged having agreed to sell the property to him at fifteen pesos (P15.00) per square meter. She, however, reminded Babasanta that when the balance of the purchase price became due, he requested for a reduction of the price and when she refused, Babasanta backed out of the sale. Pacita added that she returned the sum of fifty thousand pesos (P50,000.00) to Babasanta through Eugenio Oya. On 2 June 1989, respondent Babasanta, as plaintiff, filed before the Regional Trial Court (RTC), Branch 31, of San Pedro, Laguna, a Complaint for Sp

ecific Performance and Damages1 against his co-respondents herein, the Spouses Lu. Babasanta alleged that the lands covered by TCT No. T-39022 and T-39023 had been sold to him by the spouses at fifteen pesos (P15.00) per square meter. Despite his repeated demands for the execution of a final deed of sale in his favor, respondents allegedly refused. The core issue presented for resolution in the instant petition is who between SLDC and Babasanta has a better right over the two parcels of land subject of the instant case in view of the successive transactions executed by the Spouses Lu.
SAN LORENZO DEVELOPMENT CORPORATION, petitioner COURT OF APPEALS, PABLO S. BABASANTA, SPS. MIGUEL LU and PACITA ZAVALLA LU, respondents.
In their Answer,2 the Spouses Lu alleged that Pacita Lu obtained loans from Babasanta and when the total advances of Pacita reached fifty thousand pesos (P50,000.00), the latter and Babasanta, without the knowledge and consent of Miguel Lu, had verbally agreed to transform the transaction into a contract to sell the two parcels of land to Babasanta with the fifty thousand pesos (P50,000.00) to be considered as the downpayment for the property and the balance to be paid on or before 31 December 1987. Respondents Lu added that as of November 1987, total payments made by Babasanta amounted to only two hundred thousand pesos (P200,000.00) and the latter allegedly failed to pay the balance of two hundred sixty thousand pesos (P260,000.00) despite repeated demands. Babasanta had purportedly asked Pacita for a reduction of the price from fifteen pesos (P15.00) to twelve pesos (P12.00) per square meter and when the Spouses Lu refused to grant Babasantas request, the latter rescinded the contract to sell and declared that the original loan transaction just be carried out in that the spouses would be indebted to him in the amount of two hundred thousand pesos (P200,000.00). Accordingly, on 6 July 1989, they purchased Interbank Managers Check No. 05020269 in the amount of two hundred thousand pesos (P200,000.00) in the name of Babasanta to show that she was able and willing to pay the balance of her loan obligation.

On 19 January 1990, herein petitioner San Lorenzo Development Corporation (SLDC) filed a Motion for Intervention6 before the trial court. SLDC alleged that it had legal interest in the subject matter under litigation because on 3 May 1989, the two parcels of land involved, namely Lot 1764A and 1764-B, had been sold to it in a Deed of Absolute Sale with Mortgage.7 It alleged that it was a buyer in good faith and for value and therefore it had a better right over the property in litigation

SLDC in its Complaint-in-Intervention alleged that on 11 February 1989, the Spouses Lu executed in its favor an Option to Buy the lots subject of the complaint. Accordingly, it paid an option money in the amount of three hundred sixteen thousand one hundred sixty pesos (P316,160.00) out of the total consideration for the purchase of the two lots of one million two hundred sixty-four thousand six hundred forty pesos (P1,264,640.00). After the Spouses Lu received a total amount of six hundred thirty-two thousand three hundred twenty pesos (P632,320.00) they Babasanta later filed an Amended Complaint dated 17 3

January 1990 wherein he prayed for the issuance of a

executed on 3 May 1989 a Deed of Absolute Sale with Mortgage in its favor. SLDC added that the certificates of title over the property were delivered to it by the spouses clean and free from any adverse claims and/or notice of lis pendens. SLDC further alleged that it only learned of the filing of the complaint sometime in the early part of January 1990 which prompted it to file the motion to intervene without delay. Claiming that it was a buyer in good faith, SLDC argued that it had no obligation to look beyond the titles submitted to it by the Spouses Lu particularly because Babasantas claims were not annotated on the certificates of title at the time the lands were sold to it.
THE COURT OF APPEALS ERRED IN HOLDING THAT SAN LORENZO WAS NOT A BUYER IN GOOD FAITH BECAUSE WHEN THE SELLER PACITA ZAVALLA LU OBTAINED FROM IT THE CASH ADVANCE OF P200,000.00, SAN LORENZO WAS PUT ON INQUIRY OF A PRIOR TRANSACTION ON THE PROPERTY. THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE ESTABLISHED FACT THAT THE ALLEGED FIRST BUYER, RESPONDENT BABASANTA, WAS NOT IN POSSESSION OF THE DISPUTED PROPERTY WHEN SAN LORENZO BOUGHT AND TOOK POSSESSION OF THE PROPERTY AND NO ADVERSE CLAIM, LIEN, ENCUMBRANCE OR LIS PENDENS WAS ANNOTATED ON THE TITLES. THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE FACT THAT RESPONDENT BABASANTA HAS SUBMITTED NO EVIDENCE SHOWING THAT SAN LORENZO WAS AWARE OF HIS RIGHTS OR INTERESTS IN THE DISPUTED PROPERTY. THE COURT OF APPEALS ERRED IN HOLDING THAT NOTWITHSTANDING ITS FULL CONCURRENCE ON THE FINDINGS OF FACT OF THE TRIAL COURT, IT REVERSED AND SET ASIDE THE DECISION OF THE TRIAL COURT UPHOLDING THE TITLE OF SAN LORENZO AS A BUYER AND FIRST POSSESSOR IN GOOD FAITH.15

writ of preliminary injunction with temporary restraining order and the inclusion of the Register of Deeds of Calamba, Laguna as party defendant. He contended that the issuance of a preliminary injunction was necessary to restrain the transfer or conveyance by the Spouses Lu of the subject property to other persons.

In his Opposition to SLDCs motion for intervention,8 respondent Babasanta demurred and argued that the latter had no legal interest in the case because the two parcels of land involved herein had already been conveyed to him by the Spouses Lu and hence, the vendors were without legal capacity to transfer or dispose of the two parcels of land to the intervenor. The Spouses Lu filed their Opposition4 to the amended complaint contending that it raised new matters which seriously affect their substantive rights under the original complaint. However, the trial court in its Order dated 17 January 19905 admitted the amended complaint. Respondent Babasanta appealed the trial courts decision to the Court of Appeals alleging in the main that the trial court erred in concluding that SLDC is a purchaser in good faith and in upholding the validity of the sale made by the Spouses Lu in favor of SLDC.
Respondent spouses likewise filed an appeal to the Court of Appeals. They contended that the trial court erred in failing to consider that the contract to sell between them and Babasanta had been novated when the latter abandoned the verbal contract of sale and declared that the original loan transaction just be carried out. The Spouses Lu argued that since the properties involved were conjugal, the trial court should have declared the verbal contract to sell between Pacita Lu and Pablo Babasanta null and void ab initio for lack of knowledge and consent of Miguel Lu. They further averred that the trial court erred in not dismissing the complaint filed by Babasanta; in awarding damages in his favor and in

SLDC contended that the appellate court erred in concluding that it had prior notice

of Babasantas claim over the property merely on the basis of its having advanced the amount of two hundred thousand pesos (P200,000.00) to Pacita Lu upon the latters representation that she needed the money to pay her obligation to Babasanta. It argued that it had no reason to suspect that Pacita was not telling the truth that the money would be used to pay her indebtedness to Babasanta. At any rate, SLDC averred that the amount of two hundred thousand pesos (P200,000.00) which it advanced to Pacita Lu would be deducted from the balance of the purchase price still due from it and should not be construed as notice of the prior sale of the land to Babasanta. It added that at no instance did Pacita Lu inform it that the lands had been previously sold to Babasanta.Moreover, SLDC stressed that after the execution of the sale in its favor it immediately took possession of the property and asserted its rights as new owner as opposed to Babasanta who has never exercised acts of ownership. Since the titles bore no adverse claim, encumbrance, or lien at the time it was sold to it, SLDC argued that it had every reason to rely on the correctness of the certificate of title and it was not obliged to go beyond the certificate to determine the condition of the property. Invoking the presumption of good faith, it added that the burden rests on Babasanta to prove that it was aware of the prior sale to him but the latter failed to do so. SLDC pointed out that the notice of lis pendens was annotated only on 2 June 1989 long after the sale of the property to it was consummated on 3 May 1989.

refusing to grant the reliefs prayed for in their answer.

Meanwhile, in an Urgent Ex-Parte Manifestation dated 27 August 1999, the Spouses Lu informed the Court that due to financial constraints they have no more interest to pursue their rights in the instant case and submit themselves to the decision of the Court of Appeals. On the other hand, respondent Babasanta argued that SLDC could not have acquired ownership of the property because it failed to comply with the requirement of registration of the sale in good faith. He emphasized that at the time SLDC registered the sale in its favor on 30 June 1990, there was already a notice of lis pendens annotated on the titles of the property made as early as 2 June 1989. Hence, petitioners registration of the sale did not confer upon it any right. Babasanta further asserted that petitioners bad faith in the acquisition of the property is evident from the fact that it failed to make necessary inquiry regarding the purpose of the issuance of the two hundred thousand pesos (P200,000.00) managers check in his favor.

To prove the perfection of the contract of sale in his favor, Babasanta presented a document signed by Pacita Lu acknowledging receipt of the sum of fifty thousand pesos (P50,000.00) as partial payment for 3.6 hectares of farm lot situated at Barangay Pulong, Sta. Cruz, Sta. Rosa, Laguna.17 While the receipt signed by Pacita did not mention the price for which the property was being sold, this deficiency was supplied by Pacita Lus letter dated 29 May 198918 wherein she admitted that she agreed to sell the 3.6 hectares of land to Babasanta for fifteen pesos (P15.00) per square meter. Meanwhile, the trial court in its Order dated 21 March 1990 allowed SLDC to intervene. SLDC filed its Complaint-in-Intervention on 19 April 1990.9 Respondent Babasantas motion for the issuance of a preliminary injunction was likewise granted by the trial

court in its Order dated 11 January 199110 conditioned upon his filing of a bond in the amount of fifty thousand pesos (P50,000.00). After a protracted trial, the RTC rendered its Decision on 30 July 1993 upholding the sale of the property to SLDC. It ordered the Spouses Lu to pay Babasanta the sum of two hundred thousand pesos (P200,000.00) with legal interest plus the further sum of fifty thousand pesos (P50,000.00) as and for attorneys fees. On the complaint-inintervention, the trial court ordered the Register of Deeds of Laguna, Calamba Branch to cancel the notice of lis pendens annotated on the original of the TCT No. T-39022 (T7218) and No. T-39023 (T-7219). Applying Article 1544 of the Civil Code, the trial court ruled that since both Babasanta and SLDC did not register the respective sales in their favor, ownership of the property should pertain to the buyer who first acquired possession of the property. The trial court equated the execution of a public instrument in favor of SLDC as sufficient delivery of the property to the latter. It concluded that symbolic possession could be considered to have been first transferred to SLDC and consequently ownership of the property pertained to SLDC who purchased the property in good faith. On 4 October 1995, the Court of Appeals rendered its Decision11 which set aside the judgment of the trial court. It declared that the sale between Babasanta and the Spouses Lu was valid and subsisting and ordered the spouses to execute the necessary deed of conveyance in favor of Babasanta, and the latter to pay the balance of the purchase price in the amount of two hundred sixty thousand pesos (P260,000.00). The appellate court ruled that the Absolute Deed of Sale with Mortgage in favor of SLDC was null and void on the ground that SLDC was a purchaser in bad faith. The Spouses Lu were further ordered to return all payments made by SLDC with legal interest and to pay attorneys fees to Babasanta. An analysis of the facts obtaining in this case, as well as the evidence presented by the parties, irresistibly leads to the conclusion that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale.
Contracts, in general, are perfected by mere consent,19 which is manifested by the meeting of the offer and the acceptance upon the thing which are to constitute the contract. The offer must be certain and the acceptance absolute.20 Moreover, contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present.21 The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50,000.00) from Babasanta as partial payment of 3.6 hectares of farm lot situated in Sta. Rosa, Laguna. While there is no stipulation that the seller reserves the ownership of the property until full payment of the price which is a distinguishing feature of a contract to sell, the subsequent acts of the parties convince us that the Spouses Lu never intended to transfer ownership to Babasanta except upon full payment of the purchase price.

Babasantas letter dated 22 May 1989 was quite telling. He stated therein that despite his repeated requests for the execution of the final deed of sale in his favor so that he could effect full payment of the price, Pacita Lu allegedly refused to do so. In effect, Babasanta himself recognized that ownership of the property would not be transferred to him until such
time as he shall have effected full payment of the price. Moreover, had the sellers intended to transfer title, they could have easily executed the document of sale in its required form simultaneously with their acceptance of the

partial payment, but they did not. Doubtlessly, the receipt signed by Pacita Lu should legally be considered as a perfected contract to sell. The distinction between a contract to sell and a contract of sale is quite germane. In a contract of sale, title passes to the vendee upon the delivery of the thing sold; whereas in a contract to sell, by agreement the ownership is reserved in the vendor and is not to pass until the full payment of the price. 22 In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded; whereas in a contract to sell, title is retained by the vendor until the full payment of the price, such payment being a positive suspensive condition and failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.23 The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. There being an obligation to pay the price, Babasanta should have made the proper tender of payment and consignation of the price in court as required by law. Mere sending of a letter by the vendee expressing the intention to pay without the accompanying payment is not considered a valid tender of payment. 24 Consignation of the amounts due in court

is essential in order to extinguish Babasantas obligation to pay the balance of the purchase price. Glaringly absent from the records is any indication that Babasanta even attempted to make the proper consignation of the amounts due, thus, the obligation on the part of the sellers to convey title never acquired obligatory force.
On the assumption that the transaction between the parties is a contract of sale and not a contract to sell, Babasantas claim of ownership should nevertheless fail. Sale, being a consensual contract, is perfected by mere consent25 and from that moment, the parties may reciprocally demand performance.26 The essential elements of a contract of sale, to wit: (1) consent or meeting of the minds, that is, to transfer ownership in exchange for the price; (2) object certain which is the subject matter of the contract; (3) cause of the obligation which is established. 27 The perfection of a contract of sale should not, however, be confused with its consummation. In relation to the acquisition and transfer of ownership, it should be noted that sale is not a mode, but merely a title. A mode is the legal means by which dominion or ownership is created, transferred or destroyed, but title is only the legal basis by which to affect dominion or ownership.28 Under Article 712 of the Civil Code, ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the mode of accomplishing the same. 29 Therefore, sale by itself does not transfer or affect ownership; the most that sale does is to create the obligation to transfer ownership. It is tradition or delivery, as a consequence of sale, that actually transfers ownership. Explicitly, the law provides that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Article 1497 to 1501. 30 The word delivered should not be taken restrictively to mean transfer of actual physical possession of the property. The law recognizes two principal modes of delivery, to wit: (1) actual delivery; and (2) legal or constructive delivery. Actual delivery consists in placing the thing sold in the control and possession of the vendee. 31 Legal or constructive delivery, on the other hand, may be had through any of the following ways: the execution of a public instrument evidencing the sale;32 symbolical tradition such as the delivery of the keys of the place where the movable sold is being kept;33 traditio longa manu or by mere consent or agreement if the movable sold cannot yet be transfe rred to the possession of the buyer at the time of the sale; 34 traditio brevi manu if the buyer already had possession of the object even before the sale;35 and traditio constitutum possessorium, where the seller remains

in possession of the property in a different capacity. 36 Following the above disquisition, respondent Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property. For one, the agreement between Babasanta and the Spouses Lu, though valid, was not embodied in a public instrument. Hence, no constructive delivery of the lands could have been effected. For another, Babasanta had not taken possession of the property at any time after the perfection of the sale in his favor or exercised acts of dominion over it despite his assertions that he was the rightful owner of the lands. Simply stated, there was no delivery to Babasanta, whether actual or constructive, which is essential to transfer ownership of the property. Thus, even on the assumption that the perfected contract between the parties was a sale, ownership could not have passed to Babasanta in the absence of delivery, since in a contract of sale ownership is transferred to the vendee only upon the delivery of the thing sold.37 However, it must be stressed that the juridical relationship between the parties in a double sale is primarily governed by Article 1544 which lays down the rules of preference between the two purchasers of the same property. It provides: Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. The principle of primus tempore, potior jure (first in time, stronger in right) gains greater significance in case of double sale of immovable property. When the thing sold twice is an immovable, the one who acquires it and first records it in the Registry of Property, both made in good faith, shall be deemed the owner.38 Verily, the act of registration must be coupled with good faiththat is, the registrant must have no knowledge of the defect or lack of title of his vendor or must not have been aware of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.39 Admittedly, SLDC registered the sale with the Registry of Deeds after it had acquired knowledge of Babasantas claim. Babasanta, however, strongly argues that the registration of the sale by SLDC was not sufficient to confer upon the latter any title to the property since the registration was attended by bad faith. Specifically, he points out that at the time SLDC registered the sale on 30 June 1990, there was already a notice of lis pendens on the file with the Register of Deeds, the same having been filed one year before on 2 June 1989. Did the registration of the sale after the annotation of the notice of lis pendens obliterate the effects of delivery and possession in good faith which admittedly had occurred prior to SLDCs knowledge of the transaction in favor of Babasanta? We do not hold so. It must be stressed that as early as 11 February 1989, the Spouses Lu executed the Option to Buy in favor of SLDC upon receiving P316,160.00 as option money from SLDC. After SLDC had paid more than one half of the agreed purchase price of P1,2

64,640.00, the Spouses Lu subsequently executed on 3 May 1989 a Deed of Absolute Sale in favor of SLDC. At the time both deeds were executed, SLDC had no knowledge of the prior transaction of the Spouses Lu with Babasanta. Simply stated, from the time of execution of the first deed up

to the moment of transfer and delivery of possession of the lands to SLDC, it had acted in good faith and the subsequent annotation of lis pendens has no effect at all on the consummated sale between SLDC and the Spouses Lu. A purchaser in good faith is one who buys property of another without notice that some other person has a right to, or interest in, such property and pays a full and fair price for the same at the time of such purchase, or before he has notice of the claim or interest of some other person in the property. 40 Following the foregoing definition, we rule that SLDC qualifies as a buyer in good faith since there is no evidence extant in the records that it had knowledge of the prior transaction in favor of Babasanta. At the time of the sale of the property to SLDC, the vendors were still the registered owners of the property and were in fact in possession of the lands. Time and again, this Court has ruled that a person dealing with the owner of registered land is not bound to go beyond the certificate of title as he is charged with notice of burdens on the property which are noted on the face of the register or on the certificate of title. 41 In assailing knowledge of the transaction between him and the Spouses Lu, Babasanta apparently relies on the principle of constructive notice incorporated in Section 52 of the Property Registration Decree (P.D. No. 1529) which reads, thus: Sec. 52. Constructive notice upon registration.Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed, or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing, or entering.

However, the constructive notice operates as suchby theexpress wording of Section 52from the time of the registrationof the notice of lis pendens which in this case was effectedonly on 2 June 1989, at which time the sale in favor of SLDChad long been consummated insofar as the obligation of theSpouses Lu to transfer ownership over the property to SLDCis concerned.
More fundamentally, given the superiority of the right of SLDC to the claim of Babasanta the annotation of the notice of lis pendens cannot help Babasantas position a bit and it is irrelevant to the good or bad faith characterization of SLDC as a purchaser. A notice of lis pendens, as the Court held in Natao v. Esteban,42 serves as a warning to a prospective purchaser or incumbrancer that the particular property is in litigation; and that he should keep his hands off the same, unless he intends to gamble on the results of the litigation. Precisely, in this case SLDC has intervened in the pending litigation to protect its rights. Obviously, SLDCs faith in the merit of its cause has been vindicated with the Courts present decision which is the ultimate denouement on the controversy. The Court of Appeals has made capital43 of SLDCs averment in its Complaint-in-Intervention44 that at the instance of Pacita Lu it issued a check for P200,000.00 payable to Babasanta and the confirmatory testimony of Pacita Lu herself on cross-examination.45 However, there is nothing in the said pleading and the testimony which explicitly relates the amount to the transaction between the Spouses Lu and Babasanta for what they attest to is that the amount was supposed to pay off the advances made by Babasanta to Pacita Lu. In any event, the incident took place after the Spouses Lu had already executed the Deed of Absolute Sale with Mortgage in favor of SLDC and therefore, as previously explained, it has no effect on the legal position of SLDC. Assuming ex gratia argumenti that SLDCs registration of the sale had been tainted by the prior notice of lis pendens and assuming further for the same nonce that this is a case of double sale, still Babasantas claim could not prevail over that of SLDCs. In Abarquez v. Court of Appeals,46 this Court had the occasion to rule that if a vendee in a double sale registers the sale after he has acquired knowledge of a previous sale, the registration constitutes a registration in bad faith and does not confer upon him any right. If the registration is done in bad faith, it is as if there is no registration at all, and the buyer who has taken possession first of the property in good faith shall be preferred. In Abarquez, the first sale to the spouses Israel was notarized and registered only after the second vendee,

Abarquez, registered their deed of sale with the Registry of Deeds, but the Israels were first in possession. This Court awarded the property to the Israels because registration of the property by Abarquez lacked the element of good faith. While the facts in the instant case substantially differ from that in Abarquez, we would not hesitate to rule in favor of SLDC on the basis of its prior possession of the property in good faith. Be it noted that delivery of the property to SLDC was immediately effected after the execution of the deed in its favor, at which time SLDC had no knowledge at all of the prior transaction by the Spouses Lu in favor of Babasanta. The law speaks not only of one cri

terion. The first criterion is priority of entry in the registry of property; there being no priority of such entry, the second is priority of possession; and, in the absence of the two priorities, the third priority is of the date of title, with good faith as the common critical
element. Since SLDC acquired possession of the property in good faith in contrast to Babasanta, who neither registered nor possessed the property at any time, SLDCs right is definitely superior to that of Babasantas. At any rate, the above discussion on the rules on double sale would be purely academic for as earlier stated in this decision, the contract between Babasanta and the Spouses Lu is not a contract of sale but merely a contract to sell. In Dichoso v. Roxas,47 we had the occasion to rule that Article 1544 does not apply to a case where there was a sale to one party of the land itself while the other contract was a mere promise to sell the land or at most an actual assignment of the right to repurchase the same land. Accordingly, there was no double sale of the same land in that case. WHEREFORE, the instant petition is hereby GRANTED. The decision of the Court of Appeals appealed from is REVERSED and SET ASIDE and the decision of the Regional Trial Court, Branch 31, of San Pedro, Laguna is REINSTATED. No costs. SO ORDERED.

Equatorial Realty v. Mayfair, 370 SCRA 56

Union Motor v. Court of Appeals, 361 SCRA 506

On September 14, 1979, the respondent Bernal spouses purchased from petitioner Union Motor Corporation one Cimarron Jeepney for Thirty Seven Thousand Seven Hundred Fifty Eight Pesos and Sixty Centavos (P37,758.60) to be paid in installments. For this purpose, the respondent spouses executed a promissory note and a deed of chattel mortgage in favor of the petitioner. Meanwhile, the petitioner entered into a contract of assignment of the promissory note and chattel mortgage with Jardine-Manila Finance, Inc. Through Manuel Sosmea, an agent of the petitioner, the parties agreed that the respondent spouses would pay the amount of the promissory note to Jardine-Manila Finance, Inc., the latter being the assignee of the petitioner. To effectuate the sale as well as the assignment of the promissory note and chattel mortgage, the respondent spouses were required to sign a notice of assignment, a deed of assignment, a sales invoice, a registration certificate, an affidavit, and a disclosure statement. The respondent spouses were obliged to sign all these documents for the reason that, according to Sosmea, it was a requirement of petitioner Union Motor Corporation and Jardine-Manila Finance, Inc. for the respondent spouses to accomplish all the said documents in order to have their application approved. Upon the respondent spouses tender of the downpayment worth Ten Thousand Thirty-Seven Pesos (P10,037.00), and the petitioners acceptance of the

same, the latter approved the sale. Although the respondent spouses have not yet physically possessed the vehicle, Sosmea required them to sign the receipt as a condition for the delivery of the vehicle. The respondent spouses continued paying the agreed installments even if the subject motor vehicle remained undelivered inasmuch as Jardine-Manila Finance, Inc. promised to deliver the subject jeepney. The respondent spouses have paid a total of Seven Thousand Five Hundred Seven Pesos (P7,507.00) worth of installments before they discontinued paying on account of non-delivery of the subject motor vehicle. According to the respondent spouses, the reason why the vehicle was not delivered was due to the fact that Sosmea allegedly took the subject motor vehicle in his personal capacity. On September 11, 1981, Jardine-Ma nila Finance, Inc., filed a complaint for a sum of money, docketed as Civil Case No. 42849, against the respondent Bernal spouses before the then Court of First Instance of Manila. This case was later on transferred to the Regional Trial Court of Makati, Branch 150. On November 10, 1981, the complaint was amended to include petitioner Union Motor Corporation as alternative defendant, the reason being that if the respondent spouses refusal to pay Jardine-Manila Finance, Inc. was due to petitioners non-delivery of the unit, the latter should pay Jardine-Manila Finance, Inc. what has been advanced to the petitioner. After the petitioner filed its answer, the respondent spouses filed their amended answer with cross-claim against the former and counterclaim against Jardine-Manila Finance, Inc. Following the presentation of evidence of Jardine-Manila Finance, Inc., the respondent spouses presented as witnesses Albiato Bernal and Pacifico Tacub in support of their defense and counterclaim against the plaintiff and cross-claim against the petitioner. The petitioner did not present any evidence inasmuch as the testimony of the witness it presented was ordered stricken off the record for his repeated failure to appear for cross-examination on the sched-uled hearings. The trial court deemed the presentation of the said witness as having been waived by the petitioner.

The first issue to be resolved in the instant case is whether there has been a delivery, physical or constructive, of the subject motor vehicle. Anent the second issue, the petitioner claims that the trial court committed a violation of due process when it ordered the striking off of the testimony of the petitioners witness as well as the declaration that petitioner has abandoned its right to present evidence.
UNION MOTOR CORPORATION, petitionerappellant
I THE HONORABLE COURT OF APPEALS (SECOND DIVISION) GRAVELY ERRED AND ABUSED ITS DISCRETION IN NOT FINDING THAT THE LOWER COURT A QUOS DECISION OF MARCH 6, 1989 IS CONTRARY TO LAW AND THE EVIDENCE ON RECORD; II THE HONORALBLE COURT OF APPEALS (SECOND DIVISION) GRAVELY ERRED AND ABUSED ITS DISCRETION IN NOT FINDING THAT THE APPEALED DECISION WAS RENDERED IN DEPRIVATION AND IN DENIAL OF HEREIN PETITIONER-APPELLANTS RIGHT TO DUE PROCESS.

THE COURT OF APPEALS, JARDINE-MANILA FINANCE, INC., SPOUSES ALBIATO BERNAL and MILAGROS BERNAL, respondentsappellees .

appealed to hold the petitioner solidarily liable with Jardine-Manila Finance, Inc.

On March 6, 1989, the trial court rendered a decision, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered ordering:

1. 1. Plaintiff to pay spouses Bernals the sum of P7,507.15 plus legal interest until fully paid; 2. 2. Union Motor Corporation to pay defendants spouses Bernals the downpayment in the amount of P10,037.00, plus legal interest, until fully paid; 3. 3. Union Motor Corporation to pay plaintiff P23,268.29, plus legal interest until fully paid, and attorneys fees equivalent to 20% of the amount due to plaintiff.
Union Motor Corporation shall further pay defendants spouses Bernals the sum of P20,000.00 as moral damages, P10,000.00 as attorneys fees and costs of suit. 4

The appellate court denied both appeals and affirmed the trial courts decision by holding that: Now, as to the appeal of defendant Union Motors, it must be noted that said defendant had failed to adduce evidence in court to support its claim of non-liability. We cannot see how the absence of any evidence in favor of said defendant can result in favorable reliefs to its side on appeal. There is simply no evidence to speak of in appellant Union Motors favor to cause a reversal of the lower courts decision. In the case of Tongson v CA., G.R. No. 77104, Nov. 6, 1992, the Supreme Court reiterated that: As mandated by the Rules of Court, each party must prove his own affirmative allegation, i.e., one who asserts the affirmative of the issue has tbe burden of presenting at the trial such amount of evidence required by law to obtain a favorable judgment: by preponderance of evidence in civil cases, and by proof beyond reasonable doubt in criminal cases, x x x.

The appellate court assented to these findings by quoting the decision of the trial court, to wit: Defendant Union Motors Corporation has no evidence as the testimony of its only witness, Ambrosio Balones, was ordered stricken off the record in the hearing of June 19, 1987, for his continuous failure to appear on scheduled hearings. The Court further considered said defendant to have waived further presentation of evidence.14

The first issue to be resolved in the instant case is whether there has been a delivery, physical or constructive, of the subject motor vehicle. On this score, petitioner Union Motor Corporation maintains that the respondent spouses are not entitled to a return of the downpayment for the reason that there was a delivery of the subject motor vehicle. According to the petitioner, the appellate court erred in holding that no delivery was made by relying exclusively on the testimonial evidence of respondent Albiato Bernal without considering the other evidence on record, like the sales invoice and delivery receipt which constitute an admission that there was indeed delivery of the subject motor vehicle. Also, there was a constructive delivery of the vehicle when respondent Albiato Bernal signed the registration certificate of the subject vehicle. Inasmuch as there was already delivery of the subject motor vehicle, ownership has been transferred to the respondent spouses. The Chattel Mortgage Contract signed by the respondent Bernal spouses in favor of the petitioner likewise proves that ownership has already been transferred to them for the reason that, under Article 2085 of the New Civil Code, the mortgagor must be the owner of the property.5 As owners of the jeepney, the respondent Bernal spouses should bear the loss thereof in accordance with Article 1504 of the New Civil Code which provides that when the ownership of goods is transferred to the buyer, the goods are at the buyers risk whether actual delivery has been made or not. These, then, are the

contentions of the petitioner. The main allegation of the respondent Bernal spouses, on the other hand, is that they never came into possession of the subject motor vehicle. Thus, it is but appropriate that they be reimbursed by the petitioner of the initial payment which they made. They also claim that Jardine-Manila Finance, Inc., and the petitioner conspired to defraud and deprive them of the subject motor vehicle for which they suffered damages. We rule in favor of the respondent Bernal spouses. Undisputed is the fact that the respondent Bernal spouses did not come into possession of the subject Cimarron jeepney that was supposed to be delivered to them by the petitioner. The registration certificate, receipt and sales invoice that the respondent Bernal spouses signed were explained during the hearing without any opposition by the petitioner. According to testimonial evidence adduced by the respondent spouses during the trial of the case, the said documents were signed as a part of the processing and for the approval of their application to buy the subject motor vehicle. Without such signed documents, no sale, much less delivery, of the subject jeepney could be made. The documents were not therefore an acknowledgment by respondent spouses of the physical acquisition of the subject motor vehicle but merely a requirement of petitioner so that the said subject motor vehicle would be delivered to them.

We have ruled that the issuance of a sales invoice does not prove transfer of ownership of the thing sold to the buyer; an invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold and has been considered not a bill of sale.6The registration certificate signed by the respondent spouses does not conclusively prove that constructive delivery was made nor that ownership has been transferred to the respondent spouses. Like the receipt and the invoice, the signing of the said documents was qualified by the fact that it was a requirement of petitioner for the sale and financing contract to be approved. In all forms of delivery, it is necessary that the act of delivery, whether constructive or actual, should be coupled with the intention of delivering the thing. The act, without the intention, is insufficient.7 The critical factor in the different modes of effecting delivery which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition.8 Enlightening is Addison v. Felix and Tioco9 wherein we ruled that:The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed in the hands and possession of the vendee. (Civil Code, Art. 1462). It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to realitythe delivery has not been effected. (Italics supplied)The act of signing the registration certificate was not intended to transfer the ownership of the subject motor vehicle to respon-dent Bernal spouses inasmuch as the petitioner still needed the same for the approval of the financing contract with JardineManila Finance, Inc. The record shows that the registration certificate was

submitted to Jardine-Manila Finance, Inc., which took possession thereof until Sosmea requested the latter to hand over the said document to him. The fact that the registration certificate was still kept by Jardine-Manila Finance, Inc. and its unhesitating move to give the same to Sosmea just goes to show that the respondent spouses still had no complete control over the subject mot
or vehicle as they did not even possess the said certificate of registration nor was their consent sought when Jardine-Manila Finance, Inc. handed over the said document to Sosmea. Inasmuch as there was neither physical nor constructive delivery of a determinate thing (in this case, the subject motor vehicle), the thing sold remained at the sellers risk. 10 The petitioner should therefore bear the loss of the subject motor vehicle after Sosmea allegedly stole the same. Petitioners reliance on the Chattel Mortgage Contract executed by the respondent spouses does not help its assertion that ownership has been transferred to the latter since there was neither delivery nor transfer of possession of the subject motor vehicle to respondent spouses. Consequently, the said accessory contract of chattel mortgage has no legal effect whatsoever inasmuch as the respondent spouses are not the absolute owners thereof, ownership of the mortgagor being an essential requirement of a valid mortgage contract. The Carlos case11 cited by the petitioner is not applicable to the case at bar for the reason that in the said case, apart from the fact that it has a different issue, the buyer took possession of the personal property and was able to sell the same to a third party. In the instant case, however, the respondent spouses never acquired possession of the subject motor vehicle. The manifestations of ownership are control and enjoyment over the thing owned. The respondent spouses never became the actual owners of the subject motor vehicle inasmuch as they never had dominion over the same.

The petitioner also disputes the finding of the appellate court that there was no delivery. It did not consider, according to the petitioner, the fact that the circumstance of non-delivery was not shown and that the respondent spouses never made any demand for the possession of the vehicle. Contrary to the petitioners allegation, the respondent spouses presented sufficient evidence to prove that Sosmea took delivery and possession of that subject motor vehicle in his personal capacity as shown by a document12 on which he (Sosmea) personally acknowledged receipt of the registration certificate from Jardine-Manila Finance, Inc. Also, respondent Albiato Bernal testified to the effect that they went several times to the office of the petitioner to demand the delivery of the subject motor vehicle. The petitioner failed to refute that testimonial evidence considering that it waived its right to present evidence. Anent the second issue, the petitioner claims that the trial court committed a violation of due process when it ordered the striking off of the testimony of the petitioners witness as well as the declaration that petitioner has abandoned its right to present evidence. According to the petitioner, the delays in the hearing of the case were neither unjust nor deliberate. It just so happened that from August 5, 1986 up to June 1987, the designated counsel for the petitioner was either appointed to the government or was short of time to go over the records of the case inasmuch as he was a new substitute counsel. During the last time the petitioners counsel moved for the postponement of the case, witness Ambrosio Balones was not available due to gastro-enteritis as shown by a me
dical certificate. Well-settled is the rule that factual findings of the Court of Appeals are conclusive on the parties and not reviewable by the Supreme Courtand they carry even more weight when the Court of Appeals affirms the factual findings of the trial court.13 In the present case, the trial court found that after the direct testimony of

petitioners witness, Ambrosio Balones, the continuation of the cross-examination was postponed and rescheduled for four (4)

times from November 21, 1986 up to June 19, 1987, all at the instance of petitioner Union Motor Corporation. For three (3) times, the witness did not appear whenever the case was called for hearing. On June 19, 1987, when asked by the trial court why the witness was not present, the petitioners counsel could not give any good reason for his absence. Neither did the petitioner offer to present any other witness to testify on that day The petitioner attempts to shift the blame on the respondents for the failure of its witness, Balones, to finish his testimony. It was at the instance of Atty. Tacub, counsel for the respondents, that the testimony of petitioners witness, Balones, was discontinued after Atty. Tacub asked for a recess and later on for the postponement of the cross-examination of the said witness. The petitioner had the duty to produce its witness when he was called to finish his testimony. To place the blame on the respondent spouses is to put a premium on the negligence of the petitioner to require its own witness to testify on cross-examination. By presenting witness Balones on direct-examination, the petitioner had the corresponding duty to make him available for cross-examination in accordance with fair play and due process. The respondents should not be prejudiced by the repeated failure of the petitioner to present its said witness for cross-examination. Hence, the trial court ordered that the unfinished testimony of said witness be stricken off the record.However, we cannot affirm that part of the ruling of the courts a quo awarding moral damages to the respondents. For moral damages to be awarded in cases of breach of contract, the plaintiff must prove bad faith or fraudulent act on the part of the defendant.15 In the instant case, the allegations about connivance and fraudulent schemes by the petitioner and Manuel Sosmea were merely general allegations and without any specific evidence to sustain the said claims. In fact, Exhibit 1 which bears the name and signature of Sosmea as the person who received the registration certificate militates against the respondent spouses claim that the petitioner connived with its agent to deprive them of the possession of the subject motor vehicle. The said document shows that Sosmea acted only in his personal and private capacity, thereby effectively excluding any alleged participation of the petitioner in depriving them of the possession of the su
bject motor vehicle. The petitioner should not be held liable for the acts of its agent which were done by the latter in his personal capacity. However, we affirm the award of attorneys fees. When a party is compelled to litigate with third persons or to incur expenses to protect his interest, attorneys fees should be awarded.16 In the present case, the respondent spouses were forced to implead the petitioner Union Motor Corporation on account of the collection Suit filed against them by Jardine-Manila Finance, Inc., a case which was eventually won by the respondent spouses. WHEREFORE, the appealed Decision dated March 30, 1994 of the Court of Appeals is hereby AFFIRMED with the MODIFICATION that the award of moral damages is deleted. With costs against the petitioner.

Osorio v. Osorio, 41 Phil 531 Antonio Osorio owns 1/3 capital of Ynchausti Co. Defendant is appointed admin of his estate when he died, and his widow died. The shares are included in property inventory in estate of

Petrona Reyes. Admin was tasked to do a partition. Plaintiff is the son of Petrona Reyes. The widow donated, before the partition, the capital to her son, the plaintiff: one-half of her share in the one-third part which belonged to her husband in the shipping business of Ynchausti & Co. The share is claimed by widow as part of conjugal property. Ynchausti, before division, bought steamer Governor Forbes, and recognized interest of heirs over 1/3 of the ship. Plaintiff wants 610 shares of stock of Ynchausti Steamship Co. and dividends. Defendant claims that the shares are not included in the donation. Husband died in 1912. Donation is made on 1914. Adjudication to widow was only on 1915. Issue: whether the donation is valid? Leonardo Osorio TC -owns 610 shares -ordered admin to exclude them in inventory for partition Tomasa Osorio, admin of estate of Petrona Reyes Ynchausti Steamship Co. 1. The donation made by Da. Petrona Reyes in favor of the plaintiff was of no value and effect; and 2. That, supposing said donation valid, the 610 shares of stock, the value of which is P61,000, cannot be considered as included among them." -donation cannot include future property (art. 635) -at 1914, widow did not have right to all or part of share which her husband had

(1) That the steam vessel Governor Forbes was purchased after the death of D. Antonio Osorio, with money borrowed and furnished by the heirs individually and not by the estate, (2) that the plaintiff appellee has recognized that the capital used in the steamer Forbes is distinct from the money used in the purchase of other vessels in which the deceased Osorio had an interest.
-Future property prohibition on donation: includes those belonging to third persons -But property of existing inheritance is not one belonging to third persons -donation of existing inheritance is not considered future property, because heirs continue personality of owner, by fiction of law -heirs acquired right to succeed from moment of death

-it is the date of death, rather than the date of adjudication, that determines the heirs vested right -prohibition on donation of future property is not absolute -anything which can be an object of contract may be object of a donation - an inheritance already existing, which is no longer future from the moment of death of

the predecessor, may legally be the object of contract -the ship is purchased from old capital. -no new capital
Central Philippines University v. Court of Appeals, 246 SCRA 511 -Don Ramon Lopez, Sr. is member of BOT of Central Philippine College -he executed deed of donation of parcel of land -conditions: establish medical college, shall not alienate, and to be named Ramon Lopez Campus -respondents filed annulment of donation: petitioner did not comply with condition -donation date: 1939 -date of action: 1989 Issues: 1. Whether donation is onerous and has resolutory condition 2. Prescription Central Philippines -the right of heirs to file action had prescribed -did not violate conditions; never used deed for any other purpose than that for which it is intended -did not alienate Lopez heirs -did not comply with condition -petitioner negotiated with NHA to exchange donated property with another land owned by NHA

Petitioner now alleges that the Court of Appeals erred: (a) in holding that the quoted annotations in the certificate of title of petitioner are onerous obligations and resolutory conditions of the donation which must be fulfilled non-compliance of which would render the donation revocable; (b) in holding that the issue of prescription does not deserve disquisition; and, (c) in remanding the case to the trial court for the fixing of the period within which petitioner would establish a medical college.
TC: -null and void

CA: -resolutory condition was breached, hence right of done terminated -but since there is no time, remanded case to lower court to determine time of compliance SC: -donation is onerous -donation has resolutory condition -not imprescriptible, since it depends on the will of the donee (the time), hence the period of compliance must be fixed by court: -when the obligation does not fix a period but from its nature and circumstances it can be inferred that a period was intended, the general rule provided in Art. 1197 of the Civil Code applies, which provides that the courts may fix the duration thereof because the fulfillment of the obligation itself cannot be demanded until after the court has fixed the period for compliance therewith and such period has arrived. -no need for determination of period:

More than a reasonable period of fifty (50) years has already been allowed petitioner to avail of the opportunity to comply with the condition even if it be burdensome, to make the donation in its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no more need to fix the duration of a term of the obligation when such procedure would be a mere technicality and formality and would serve no purpose than to delay or lead to an unnecessary and expensive multiplication of suits. -since the questioned deed of donation herein is basically a gratuitous one, doubts referring to incidental circumstances of a gratuitous contract should be resolved in favor of the least transmission of rights and interests.
-rescission De Luna v. Abrigo, 181 SCRA 150 Donation agreement: 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; x x x. (p. 23, Rollo) Donor: predecessor of petitioners Donee: Luzonian University Foundation / Luzonian Colleges Object of donation: 7500 sq. m. lot

Form: Deed of Donation Inter Vivos Penalty: automatic reversion in case of violation Donees failed to comply with conditions. Donor revived donation. Form: Revival of Donation Inter Vivos, still with same penalty clause Form: Deed of Segregation, area donated was adjudicated to foundation

De Luna heirs After death, Heirs complained of violation/noncompliance with conditions. Prayed: -cancellation -reversion 2 assignment of errors: -consent of donee -prescription TC: -dismissed petition of heirs -barred by prescription SC: -favored petitioners -donation is ONEROUS

Luzonian University Foundation -partially and substantially complied with conditions -the donor has granted the foundation an indefinite extension of time to complete the construction of the chapel -prescription

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 -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. On the matter of prescription of actions for the revocation of onerous donation, it was held that the general rules on prescription applies.
Article 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. Hence, the contract provides: AUTOMATIC REVERSION. Equivalent to unilateral act of rescission upon breach.

x x x 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
As provided in the donation executed on April 9, 1971, compliance 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.

Vda. de Tupas v. Regional Trial Court, 144 SCRA 622 Epifanio R. Tupas died on August 20, 1978 in Bacolod City, childless, leaving his widow, Partenza Lucerna, as his only surviving compulsory heir. He also left a will dated May 18, 1976, which was admitted to probate on September 30, 1980 in Special Proceedings No. 13994 of the Court of First Instance of Negros Occidental. Among the assets listed in his will were lots Nos. 837, 838 and 839 of the Sagay Cadastre, admittedly his private capital. However, at the time of his death, these lots were no longer owned by him, he having donated them the year before (on August 2, 1977) to the Tupas Foundation, Inc., which had thereafter obtained title to said lots.Claiming that said donation had left her practically destitute of any inheritance, Tupas widow brought suit against Tupas Foundation, Inc. in the same Court of First Instance of Negros Occidental (docketed as Civil Case No. 16089) to have the donation declared inofficious insofar as it prejudiced her legitime, therefore reducible * * * by one-half or such proportion as * * * (might be deemed) justified * * * and * * * the resulting deduction * * * restored and conveyed or delivered to her. The complaint also prayed for at-torneys fees and such other relief as might be proper. Involved in this appeal is the question of whether or not a donation inter vivos by a donor now deceased is inofficious and should be reduced at the instance of the donors widow. De Tupas (widow) Tupas Foundation, Inc. TC:
The Trial Court did not see things her way. Upon the facts above stated, on which the parties stipulated,1 said Court dismissed the complaint for lack of merit, rejecting her claim on several grounds, viz.: * * * (1) Article 900 relied upon by plaintiff is not applicable because the properties which were disposed of by way of donation one year before the death of Epifanio Tupas were no longer part of his hereditary estate at the time of his death on August 20, 1978; (2) the donation properties were Epifanios capital or separate estate; and (3) Tupas Foundation, Inc. being a stranger and not a compulsory heir, the donation inter vivos made in its favor was not subject to collation

under Art. 1061, C.C.2

SC: A persons prerogative to make donations is subject to certain limitations, one of which is that he cannot give by donation more than he can give by will (Art. 752, Civil Code)

If he does, so much of what is donated as exceeds what he can give by will is deemed inofficious and the donation is reducible to the extent of such excess, though without prejudice to its taking effect in the donors lifetime or the donees appropriating the fruits of the thing donated (Art. 771, Civil Code)
Such a donation is, moreover, collationable, that is, its value is imputable into the hereditary estate of the donor at the time of his death for the purpose of determining the legitime of the forced or compulsory heirs and the freely disposable portion of the estate. This is true as well of donations to strangers as of gifts to compulsory heirs, although the language of Article 1061 of the Civil Code would seem to limit collation to the latter class of donations.

The fact, therefore, that the donated property no longer actually formed part of the estate of the donor at the time of his death cannot be asserted to prevent its being brought to collation.
Deducting the legitimes from the net value of the hereditary estate leaves the freely disposable portion by which the donation in question here must be measured. If the value of the donation at the time it was made does not exceed that difference, then it must be allowed to stand. But if it does, the donation is inofficious asito the excess and must be reduced by the amount of said excess. REMAND. De Roma v. Court of Appeals, 152 SCRA 205 Candelaria de Roma had two legally adopted daughters, Buhay de Roma and Rosalinda de Roma. She died intestate on April 30, 1971, and administration proceedings were instituted in the Court of First Instance of Laguna by the private respondent as guardian of Rosalinda. Buhay was appointed administratrix and in due time filed an inventory of the estate. This was opposed by Rosalinda on the ground that certain properties earlier donated by Candelaria to Buhay, and the fruits thereof, had not been included. The properties in question consisted of seven parcels of coconut land worth P10,297.50.2 There is no dispute regarding their valuation; what the parties cannot agree upon is whether these lands are subject to collation.

The sole issue is whether or not there was an express prohibition to collate, and we see none.
Buhay de Roma -Article 1062, claims she has no obligation to collate because the decedent prohibited such collation. Felicidad Caringal (guardian of Rosalinda) -properties are subject to collation

The two articles provide as follows: "Article 1061. Every compulsory heir, who succeeds with other compulsory heirs, must bring into the mass of the estate any property or right which he may have received from the decedent during the lifetime of the latter, by way of donation, or any other gratuitous title, in order that it may be computed in the determination of the legitime of each heir, and in the account of the partition." "Article 1062. Collation shall not take place among compulsory heirs if the donor should have so expressly provided, or if the donee should repudiate the inheritance, unless the donation should be reduced as inofficious.

TC: -deed of donation no express prohibition to collate SC: "sa pamamagitan ng pagbibigay na di na mababawing muli" merely described the donation as "irrevocable" and should not be construed as an express prohibition against collation. The fact that a donation is irrevocable does not necessarily exempt the subject thereof from the collation Anything less than such express prohibition will not suffice under the clear language of Article 1062. The suggestion that there was an implied prohibition because the properties donated were imputable to the free portion of the decedent's estate merits little consideration. Parks v. Province of Tarlac, 49 Phil 142 On October 18, 1910, Concepcion Cirer and James Hill, the owners of parcel of land No. 2 referred to in the complaint, donated it perpetually to the municipality of Tarlac, Province of Tarlac, under certain conditions specified in the public document in which they made this donation. The donation was accepted by Mr. Santiago de Jesus in the same document on behalf of the municipal council of Tarlac of which he was the municipal president. The parcel thus donated was later registered in the name of the donee, the municipality of Tarlac. On January 15, 1921, Concepcion Cirer and James Hill sold this parcel to the herein plaintiff George L. Parks. On August 24, 1923, the municipality of Tarlac transferred the parcel to the Province of Tarlac which, by reason of this transfer, applied for and obtained the registration thereof in its name, the corresponding certificate of title having been issued to it. The plaintiff, George L. Parks, alleging that the conditions of the donation had not been complied with and invoking the sale of this parcel of land made by Concepcion Cirer and James Hill in his favor, brought this action against the Province of Tarlac, the municipality of Tarlac, Concepcion Cirer and James Hill and prayed that he be declared the absolute owner entitled to the possession of this parcel, that the transfer of the same by the municipality of Tarlac to the Province of Tarlac be annulled, and the transfer certificate issued to the Province of Tarlac cancelled.

Parks

Tarlac Province Municipality of Tarlac Concepcion Cirer James Hill

TC: -dismissed complaint

The plaintiff has no right of action. If he has any, it is only by virtue of the sale of this parcel made by Concepcion Cirer and James Hill in his favor on Jannuary 15, 1921, but that sale cannot have any effect, This parcel having been donated by Concepcion Cirer and James Hill to the municipality of Tarlac, which donation was accepted by the latter, the title to the property was transferred to the municipality of Tarlac. It is true that the donation might have been revoked for the causes, if any, provided by the law, but the fact is that it was not revoked when Concepcion Cirer and James Hill made the sale of this parcel to the plaintiff. Even supposing that causes existed for the revocation of this donation, still, it was necessary, in order to consider it revoked, either that the revocation had been consented to by the donee, the municipality of Tarlac, or that it had been judicially decreed. None of these circumstances existed when Concepcion Cirer and James Hill sold this parcel to the plaintiff. Consequently, when the sale was made Concepcion, Cirer and James Hill were no longer the owners of this parcel and could not have sold it to the plaintiff, nor could the latter have acquired it from them. But the appellant contends that a condition precedent having been imposed in the donation and the same not having been complied with, the donation never became effective. We find no merit in this contention. The appellant refers to the condition imposed that one of the parcels donated was to be used absolutely and exclusively for the erection of a central school and the other for a public park, the work to commence in both cases within the period of six months from the date of the ratification by the parties of the document evidencing the donation. It is true that this condition has not been complied with. The allegation, however, that it is a condition precedent is erroneous. The characteristic of a condition precedent is that the acquisition of the right is not effected while said condition is not complied with or is not deemed complied with. Meanwhile nothing is acquired and there is only an expectancy of right. Consequently, when a condition is imposed, the compliance of which cannot be effected except when the right is deemed acquired, such condition cannot be a condition precedent. In the present case the condition that a public school be erected and a public park made of the donated land, work on the same to commence within six months f rom the date of the ratification of the donation by the parties, could not be complied with except after giving effect to the donation. The donee could not do any work on the donated land if the donation had not really been effected, because it would be an invasion of another's title, for the land would have continued to belong to the donor so long as the condition imposed was not complied with. The appellant also contends that, in any event, the condition not having been complied with, even supposing that it was not a condition precedent but subsequent, the noncompliance thereof is sufficient cause for the revocation of the donation. This is correct. But the period for bringing an action for the revocation of the donation has prescribed. That this action is prescriptible, there is no doubt. There is no legal provision which excludes this class of action from the statute of limitations. And not only this,the law itself recognizes the prescriptibility of the action for the revocation of a donation, providing a special period of five years for the revocation by the subsequent birth of children (art. 646, Civil Code), and one year for the revocation by reason of ingratitude. If no special period is provided for the prescription of the action for revocation for noncompliance of the conditions of the donation (art. 647, Civil Code), it is because in this respect the donation is considered onerous and is governed by the law of contracts and the general rules of prescription. Under the laws in force (sec. 43, Code of Civ. Proc.), the period of prescription of this class of action is ten years. The action for the revocation of the donation for this cause arose or April 19, 1911, that is, six months after the ratification of the instrument of donation of October 18, 1910. The complaint in this action was presented July 5, 1924, more than ten years after this cause accrued.

Zapanta v. Posadas, 52 Phil 557

Father Braulio Pineda died in January 1925 without any ascendants or descendants, leaving a will in which he

instituted his sister Irene Pineda as his sole heiress. During his lifetime Father Braulio donated some of his property by public instruments to the six plaintiffs, severally, with the condition that some of them would pay him a certain amount of rice, and others of money every year, and with the express provision that failure to fulfill this condition would revoke the donations ipso facto. These six plaintiff-donees are relatives, and some of them brothers of Father Braulio Pineda. The donations contained another clause that they would take effect upon acceptance. They were accepted during Father Braulio's lifetime by every one of the donees. Every one of the six plaintiffs filed a separate action against the Collector of Internal Revenue and his deputy (f or the sums of which each of them paid, under protest, as inheritance tax on the property donated to them, in accordance with section 1536 of the Administrative Code, as amended by section 10 of Act No. 2835, and by section 1. of Act No. 3031. Section 1536 of the Administrative Code reads: "Every transmission by virtue of inheritance, devise, bequest, gift mortis causa, or advance in anticipation of inheritance, devise, or bequest of real property located in the Philippine Islands and real rights in such property; * * *" The trial court in deciding these six cases, held that the donations to the six plaintiffs made by the deceased Father Braulio Pineda are donations inter vivos, and theref ore, not subject to the inheritance tax, and ordered the defendants to return to each of the plaintiffs the sums paid by the latter.

whether the donations made by Father Braulio Pineda to each of the plaintiffs are donations inter vivos, or mortis causa, for it is the latter upon which the Administrative Code imposes inheritance tax. Zapanta, et al. Juan Posadas, Jr., et al.

In our opinion, said donations are inter vivos, It is so expressly stated in the instruments in which they appear. They were made in consideration of the donor's affection for the donees, and of the services they had rendered him, but he has charged them with the obligation to pay him a certain amount of rice and money, respectively, each year during his lifetime, the donations to become effective upon acceptance. They are therefore not in the nature of donations mortis causa but inter vivos. The principal characteristics of a donation mortis causa, which distinguish it essentially from a donation inter vivos, are that in the former it is the donor's death that determines the acquisition of, or the right to, the property, and that it is revocable at the will of the donor. In the donations in question, their effect, that is, the acquisition of, or the right to, the property, was produced while the donor was still alive, for, according to their expressed terms they were to have this effect upon acceptance, and this took place during the donor's lifetime. The nature of these donations is not affected by the fact that they were subject to a condition, since it was imposed as a resolutory condition, and in this sense, it necessarily implies that the right came into existence first as well as its effect, because otherwise there would be nothing to resolve upon the nonfulfillment of the condition imposed. Neither does the fact that these donations are revocable, give them the character of donations mortis causa, inasmuch as the revocation is not made to depend on the donor's exclusive will, but on the failure to fulfill the condition imposed. In relation to the donor's will alone, these donations are irrevocable. On the other hand, this condition, in so far as it renders the donation onerous, takes it further away from the dispositions mortis causa and brings it nearer to contract. In this sense, by virtue of this condition imposed, they are not donations throughout their full extent, but only so far as they exceed the incumbrance imposed, for so far as concerns the portion equivalent to or less than said incumbrance, it has the nature of a real contract and is

governed by the rules on contracts (art. 622 of the Civil Code). And in the part in which it is strictly a donation, it is a donation inter vivos, because its effect was produced by the donees' acceptance during the donor's lifetime and was not determined by the donor's death. Upon being accepted they had full effect. If the donor's life is mentioned in connection with this condition, it is only to fix the donor's death as the end of the term within which the condition must be fulfilled, and not because such death of the donor is the cause which determines the birth of the right to the donation. The property donated passed to the ownership of the donees from the acceptance of the donations, and these could not be revoked except upon the nonfulfillment of the condition imposed; or for other causes prescribed by the law, but not by the mere will of the donor.
Neither can these donations be considered as an advance on inheritance or legacy, according to the terms of section 1536 of the Administrative Code, because they are neither an inheritance nor a legacy. And it cannot be said that the plaintiffs received such advance on inheritance or legacy, since they were not heirs or legatees of their predecessor in interest upon his death (sec. 1540 of the Administrative Code). Neither can it be said that they obtained this inheritance or legacy by virtue of a document which does not contain the requisites of a will (sec. 618 of the Code of Civil Procedure). Besides, if the donations made by the plaintiffs are, as the appellants contend, mortis causa, then they must be governed by the law on testate succession (art. 620 of the Civil Code). In such a case, the documents in which these donations appear, being instruments which do not contain the requisites of a will, are not valid to transmit the property to the donees (sec. 618, Code of Civil Procedure.) Then the defendants are not justified in collecting from the donees the inheritance tax on property which has not been legally transferred to them, and in which they acquired no right.

Javier v. Cabangos, 53 Phil 678

On September 11, 1922, the plaintiff executed a deed in defendant's favor, Whereby he sold to the latter with pacto de retro the lands described in the complaint for the sum of P10,806 (Exhibit 1), for a period of four years. Subsequently, the herein plaintiff,, alleging that said contract was in reality a usurious loan and not a sale with pacto de retro, instituted civil case No. 4174 of said court. However, on the day set for the trial of the case, the parties compromised the case, and entered into the following stipulation of facts: "The parties and their respective attorneys agree and stipulate the following facts: "1. That the debt of the plaintiff Casiano Javier is exactly ten thousand pesos (P10,000) instead of P10,806. 1. 2. 3. 4. 5. "2. That the deed of sale with pacto de retro dated September 11, 1922, shall be understood, to all intents and purposes, as a deed of mortgage. "3. That the plaintiff Casiano Javier shall execute a new deed of mortgage, which should be recorded, in accordance herewith, after ten days. "4. That the period for the redemption of the mortgage will expire on September 11, 1927, instead of September 11, 1926. "5. That the defendant Mariano Cabanos shall continue in possession of the mortgaged property until the payment of the aforesaid debt of ten thousand pesos. "6. And lastly, the parties pray that the court render judgment in accordance with this stipulation of fact."

In accordance with the foregoing stipulation, the corresponding final judgment was rendered, wherein, among other things, the plaintiff was ordered to execute another deed of mortgage, in lieu of the aforesaid deed of sale

with pacto de retro, subject to the following conditions: "That the plaintiff's debt, secured by the mortgage, amounts to P10,000 only instead of P10,806; that the period for the redemption of the mortgage shall expire on September 11, 1927 and not on September 11, 1926; that the defendant, Mariano Gabanos, who took possession of the mortgage property on September 11,1922, shall continue in possession thereof until the complete payment of the aforesaid debt of P10,000." As a result of the judgment thus rendered, the plaintiff executed the deed, Exhibit A, paragraph 3 of which states: "3. That P8,500 of said debt of P10,000 correspond to the first parcel; P500 to the second parcel, and ?1,000 to the third parcel; provided, however, that the debt is not divisible but shall be payable at the same time."

CFI:
"Wherefore, it is hereby declared that the remedy prayed for in the complaint should not be granted, and the defendant is hereby absolved therefrom, with the costs of this instance against the plaintiff. "As to the defendant's counterclaim, it is hereby declared that the plaintiff's debt of P10,000, contracted by virtue of the deed, Exhibit A, is due and payable, and the latter is hereby ordered to pay said sum to the defendant within ninety days from notice of this decision, in default of which, the mortgaged lands shall be sold at public auction and the proceeds thereof applied to the payment of said debt and the legal expenses of this proceeding. "It is so ordered."

Casiano Javier
- the defendant is a mortgage creditor in possession, wherefore, the rights of the parties are essentially the same as those in a contract of antichresis. -must apply the fruits of the lands received by the creditor to the payment of the mortgage debt

Mariano Cabanos

The appellant contends that the contract entered into between the plaintiff and the defendant, pursuant to the judgment of the Court of First Instance of Laguna in civil case No. 4174, is one of antichresis, inasmuch as the creditor has been in possession of the land, which is the security therefor, and, consequently, he must render an accounting of the fruits of said land for the purpose of applying the same, first, to the payment of the interest and afterwards to that of the capital, according to the doctrine enunciated by this court in the case of Macapinlac vs. Gutierrez Repide (43 Phil., 770).
We believe that this legal classification given by the appellant to the contract in question is proper; but the right of the contracting parties to stipulate as to the application of the fruits, is not inconsistent with this juridical consideration. The defendant entered into an agreement with the plaintiff, whereby he renounced his right as vendee with pacto de retro of the three land parcels belonging to the plaintiff in the sum of P10,806. As such vendee with pacto de retro, Mariano Cabanos acquired the ownership and possession of the lands sold, subject to the right of repurchase of Casiano Javier for a period of four years, during which time the latter would make

use of the purchase price and the f ormer of the land and the fruits thereof. Bef ore the expiration of the prior repurchase, Mariano Cabanos made a compromise with Casiano Javier, whereby he renounced his better right as a vendee with pacto de retro and contented himself to be a mere mortgage creditor. Under this new contract, the defendant should have surrendered the possession of the lands to the plaintiff, making a stipulation between the creditor and the debtor as to the payment of the interest for the use by the latter of the capital; but they did not do this and preferred to maintain the former relation as to the lands, Mariano Cabanos making use of said lands and the fruits thereof, and Casiano Javier of the capital. If, then, in the contract of sale with pacto de retro, the interest on the capital was compensated by the fruits of the land, of which the defendant took possession, and if the contracting parties, in converting said contract of sale with pacto de retro into one of mortgage, did not wish to alter the state of things as to the possession of the land by the defendant, it is evident that in so doing they mutually understood that Casiano Javier would continue making use of the capital during the period of the contract and Mariano Cabanos would remain in possession of the land, the interest on the capital being compensated by the fruits of the land of the former. In view of these considerations, and giving to the new contract between the parties the character of a contract of antichresis, the fruits received by the defendant from the lands in question must be considered as compensation for the interest which his capital should earn during the period of the contract, and Casiano Javier must pay his creditor, Mariano Cabanos, the amount of the loan of P10,000, in order to recover the land which is the subject matter of the antichresis.

Balaqui v. Dongso, 53 Phil 673 Donation by Balaqui to Dongso:

"Know all men by these presents: "That I, Hipolita Balaqui, a resident of Candon, Province of Ilocos Sur, widow, of age, do hereby state that in consideration of the good services rendered to me by Placida Dongso, married to Antonio Galvez, from her childhood up to the present time, having lived with me, and been treated by me as a daughter of mine, I give her as a gratuity or gift my parcels of land, together with the contents thereof, situated in the barrio of San Nicolas and San Pedro, of this municipality, Province of Ilocos Sur, Philippine Islands, the area and boundaries of which are described as follows: (The two properties in question are here described.) "This gift to said Placida Dongso resident of Candon, Ilocos Sur, Philippine Islands, in recompense for her services to me, does not pass title to her during my lifetime; but when I die, she shall be the true owner of the two aforementioned parcels, including my house and shed thereon, and she shall be rightfully entitled to transmit them to her children. I also bind myself to answer to said Placida and her heirs and successors for this property, and that none shall question or disturb her right. "Lastly, I earnestly enjoin said Placida Dongso to cherish my eternal love and memory after my death, and to try to pray for my soul to Our Blessed Lord, making use of one-half of the products of the said rice lands, in case she should obtain any products therefrom, and it is necessary for my yearly commemoration. "In witness whereof, I sign or ask someone to write my name at the foot hereof, because I do not know how to write, and I stamp my right thumb-print between my name and surname. At Candon, Ilocos Sur, Philippine Islands, this day, November 18th, 1918.

The main and basic question to be determined in the instant appeal is whether or not the donation evidenced by Exhibit A, made by Hipolita Balaqui in favor of Placida

Dongso, is null and void.

Emiliana Balaqui et al. - the gift referred to in Exhibit A, made by Hipolita Balaqui to Placida Dongso, is void. - the realty described in the original and amended complaint, including the house and shed, belongs to the plaintiffs, who inherited it from Hipolita Balaqui. Placida Dongso, et al.

The appellants, dwelling on the words of the fourth paragraph of the deed of gift just quoted, "does not pass title to her during my lifetime; but when I die, she shall be the true owner of the two aforementioned parcels," contend that the gift in question is a donation mortis causa, and, the requisites and conditions indispensable for a will, according to article 620 of the Civil Code, being lacking is null and void. Taking the deed above quoted as a whole, it is observed, in the first place, that Hipolita Balaqui, wishing to reward Placida Dongso for the latter's services since said Placida's childhood, who lived with her and was treated by her as a daughter, she donated to her two parcels of land with their improvements; in the second place, it is noted that in the same deed Hipolita Balaqui guaranteed to Placida Dongso and her heirs and successors, the right to said property thus conferred. From the moment Hipolita Balaqui guaranteed the right granted by her to Placida Dongso to the two parcels of land by virtue of the deed of gift, she surrendered such right; otherwise there would be no need to guarantee said right. Therefore, when Hipolita Balaqui used the words upon which the appellants base their contention that the gift in question is a donation mortis causa,, the donor meant nothing else than that she reserved of herself the possession and usufruct of said two parcels of land until her death, at which time the donee would be able to dispose of them freely.
Furthermore, there is nothing in the deed of gift to show that said gift was made by Hipolita Balaqui in favor of Placida Dongso in consideration of her own death. The Supreme Court of Spain, in its decision of January 28, 1898, held: "Considering that a donation mortis causa differs, from a donation inter vivos in that it is made, as its name implies, in consideration of death or mortal peril, without the donor's intention to lose the thing or its free disposal in case of survival, as in testamentary dispositions, and that such is the definition contained in the laws of the Instituta and the Digesto, and in law 11, title 4, Partida, 5, cited in the first assignment of error, as well as in article 620 of the Civil Code, in providing that the gifts to be governed by the rules of testamentary succession are those taking effect upon the donor's death; and that donations inter vivos are those made without such consideration, but out of the donor's pure generosity and the recipient's deserts, although the subject matter is not delivered at once, or the delivery is to be made post mortem, which is a simple

matter of form and does not change the nature of the act, and such gifts are irrevocable, especially if without a price and onerous in character, according to the Laws proem 1, 4, and 6, of the title and Partida cited. "Considering that it is to the latter class that the gift made by Da, Simona Aboitiz in the marriage settlements of D. Santiago de Anduiza and Da. Agueda Gualberto de Aboitiz, belongs, the 80,000 reales constitutes the dowry to be delivered upon her death, inasmuch as such gift was made not in consideration of death or peril, but of the donor's generosity and wish to secure the sustenance of the marriage celebrated."

For the foregoing considerations, and taking into account the doctrine of the Supreme Court of Spain quoted above, we are of opinion and so hold, that as the donor guaranteed the right which she conferred on the donee by virtue of the deed of gift, wherein, in recompense of the latter's good services to the former, she donates to her the two parcels of land with their improvements, said gift is inter vivos and irrevocable, and not mortis causa, notwithstanding the f act that the donor stated in said deed that she did not transfer the ownership of the two parcels of land donated, save upon her death, for such a statement can mean nothing else than that she only reserved to herself the possession and usufruct of said property, and because the donor could not very well guarantee the aforesaid right after her death. By virtue whereof, and finding no error in the judgment appealed from, the same is affirmed in its entirety, with costs against the appellant. So ordered.
Concepcion v. Concepcion, 91 Phil 823

According to the law governing the execution of wills, a will should be attested by three witnesses, and there should be an attestation clause. But here there are only two witnesses to the deed of donation (Exhibit A), and it contains no attestation clause.
A little more than three years after the execution of the above-quoted deed of donation, or rather on November 18, 1947, the donor Manuela Concepcion died. Plaintiffsappellees who are six nephews and nieces of the donor, all surnamed Concepcion instituted special proceedings No. 491 of the Court of First Instance of Zambales for the summary settlement of the estate of their aunt, the donor. Because the estate or the greater portion thereof sought to be summarily settled and distributed was included in the donation, the donee Emilia Concepcion filed opposition to the petition for summary settlement claiming that the six parcels subject of the donation belonged to her. The Court in said special proceedings without deciding the title and right of possession to the six parcels claimed by Emilia, merely ordered the partition of the estate of Manuela Concepcion among all her heirs who are besides the six petitioners, Emilia Concepcion and her four brothers. Thereafter, and because Emilia refused to give up the parcels said to have been donated to her, including a house and a granary as well as personal properties, the six original petitioners in the special proceedings filed the present action (civil case No. 1230) in the Court of First Instance of Zambales to have themselves declared owners of and entitled to the possession of their shares in those properties claimed by Emilia in the proportion of oneeleventh (1/11) for each.

The present appeal involves the interpretation of Exhibit A, a deed of donation, whether it is inter vivos or mortiscausa, because if the former, it is valid having been duly accepted by the donee, but if the latter it would be void because being in the nature of disposal of property by will, according to article 620 of the Civil Code, it shall be governed by the rules established for testamentary succession.
Lorenza Concepcion, et al. Emilia Concepcion

After trial, the lower court found that the donation was one mortis causa and because it was not executed in the manner required by the law on wills, it was declared null and void; the properties therein included were all declared part of the estate of the deceased Manuela Concepcion subject to distribution among the heirs in the proportion of 1/11 for each as declared by the court in special proceedings No. 491; defendant Emilia Concepcion was ordered to deliver to each of the plaintiffs their respective shares of the products of the land for the agricultural year 1947-48 and those to be obtained thereafter in the proportion of 1/11 to each heir. Examining the deed of donation, Exhibit A, we find the title using the phrase mortis causa which phrase was repeated in the paragraph just before the aceptacin with the clause that the donation was to "producir efectos solamente por muerte de la donante." The lower court, evidently, impressed by these features, concluded that the donor intended to make her donation effective after her death, and that consequently, it was a donation mortis causa. The trial court is not entirely to blame. The deed of donation is really confusing and far from clear. Here, the donation is entitled and called donacin onerosa mortis causa. From the body, however, we find that the donation was of a nature remunerative rather than onerous. if a donation by its terms is inter vivios, this character is not altered by the fact that the donor styles it mortis causa.
In support of its ruling, this Court reproduced the comment of Manresa on article 620 of the Civil Code reading as follows: "In pure donations, in donations until an affixed day, and in donations with a resolutory condition the property is of course conveyed to the donee during the life of the donor and as to this point there is no question. "When the time fixed for the commencement of the enjoyment of the property donated be at the death of the donor, or when the suspensive condition is related to his death, confusion might arise. To avoid it we must distinguish between the actual donation and the execution thereof. That the donation is to have effect during the lifetime of the donor or at his death does not mean the delivery of the property must be made during his life or after his death. From the moment that the donor disposes freely of his property and such disposal is accepted by the donee, the donation exists, perfectly and irrevocably (articles 618 and 623). Until the day arrives or until the condition is fulfilled, the donation, although valid when made, cannot be realized. Thus, he who makes the donation effective upon a certain date, even though to take place at his death, disposes of that which he donated and he cannot afterwards revoke the donation nor dispose of the said property in favor of another. If the thing is lost thru the fault of the donor, or if it is damaged, indemnity may be recovered. Regarding donations with suspensive conditions, it is sufficient to read articles 1120 and 1122 to understand the effects which this kind of donation has during the lifetime of the donor. He who makes a donation effective after his death, makes a donation, not a legacy. The mere name of the act, when a different intention does not clearly appear, is enough in order to make applicable thereto the rules of law referring to donations. However, if the ill-named donor not only postpones the date of the execution of the donation until his death but also reserves the right to revoke said act at his pleasure, then this act is not valid as a form of contract; this is in truth a disposition of property mortis causa which requires the same solemnities as required in making a will."

Appeals which found the donation to be mortis causa was reversed by this court and the donation was held to be inter vivos for the reason that the death of the donor was not

the consideration of the donation but only a suspensive condition, and that the mere fact that the property donated was not to be delivered immediately to the donee but only after death of donor did not render the donation mortis causa. DEATH: suspensive condition vs. consideration of donation From all the preceding considerations, it is clear that even when the donor calls the donation mortis causa, instead of inter vivos, even if he says it is to take effect after his death, when from the body of the instrument or donation it is to be gathered that the main consideration of the donation is not the death of the donor but rather services rendered to him, by the donee or his affection for the latter, then the donation should be considered as inter vivos, and when duly accepted, it transfers title immediately to the donee, and the condition that the donation is to take effect only after the death of donor should be interpreted as meaning that the possession and enjoyment of the fruits of the property donated should take place only after donor's death.
Carino v. Abaya, 70 Phil 182
"We the sisters, Petrona J. Gray, 70 years of age, single, and resident of the municipality of Candon, Ilocos Sur, and Dorotea Gray, 74 years old, also single and resident of the same municipality of Candon, Province of Ilocos Sur, by this instrument declare and set forth the following: "First, not knowing when we are going to part from this life and having no legitimate heirs we the sisters have agreed to distribute our properties, including those which we have inherited from our deceased sister and brother, Paula Gray and Antero Gray, among our relatives to be mentioned in this instrument by reason of the love and affection which we profess toward them and for the services rendered by them to us, to be divided as follows: "(a) There shall be given to Jose Carino the following: (Description of the properties)"

(b) There shall be given to Jose Carino and Carmen Gallardo in the proportion of one-half each the following: (Description of the properties) "(c) There shall be given to be divided among Eufemia Escobar, Esperanza Oasan and Severo Oasan the following: (Description of the properties) "(d) "(e) There shall be given to Eufemia Escobar the following: (Description of the properties) There shall be given to Esperanza Carino the following: (Description of the property)

"(f) There shall be given to be divided equally between Manuel C. Carino and Antero C. Carino the following: (Description of the properties) "(g) There shall be given to be divided equally between Benito Abaya and Maximo Abaya the following: (Description of the properties) "(h) The shall be given to be divided equally between Esperanza Oasan and Severo Oasan the following: (Description of the properties) "(i) There shall be given to Potenciana Gray the following: (Description of the properties)

"Second, we do order that there shall be administered by Miguel Carino and those whom he may designate to succeed him the following lands and that the proceeds of sale of the products thereof shall be used for the

necessary upkeep of the image of the Lady La Purisima Concepcion: (Description of the properties) "Third, we also do hereby order that Miguel Carino and those whom he may designate to succeed him shall administer the following lands and that the proceeds of the sale of the products thereof shall be used for the necessary upkeep of the images of Nuestra Seiiora de las Angustias and that of San Pedro: (Description of the properties) "Fourth, we likewise do hereby order to be set aside and to be placed in the charge of Miguel Carino and those whom he may designate to succeed him the following lands, and that the proceeds of the sale of the products thereof shall be used for the souls of the dead: (Description of the properties) "Fifth, we also do hereby order that the lands in our possession together with those under Miguel Carino shallbe administered by him and by those whom he may designate to succeed him and that the proceeds of the products thereof shall be used for the purposes to which they are at present dedicated in the same manner as it had been ordered by our grandfather priest Julio Madarang and grandmother Policarpia Madarang now deceased: (Description of the properties) "Sixth, we do hereby also order that Isidro Abaya and those whom he may designate to succeed him shall administer the lands which are now in his possession and that the proceeds of the sale of the products thereof shall be used for the same purposes to which our grandfather, Salvador Lazaro Madarang, deceased, had ordered them to foe used. Said properties are the following: (Description of the properties) "Seventh, we the sisters do hereby order that all these properties shall be given to those to whom they have been assigned by virtue of this instrument at the expiration of thirty days after the death of the last one to die between us. "Eighth, we do order that Miguel Carino shall act as our representative to deliver the aforesaid properties to the donees as set forth in this instrument so that no controversy may arise among themselves in connection therewith. And that Miguel Carino shall likewise take charge of all funds, if any left, belonging to us and use the same to pay whatever expenses might be incurred during our sickness including our funeral expenses and also to pay debts if any may appear to be due after our death. "Ninth, we do hereby further order that Miguel Carino together with those who had been mentioned to inherit from us, shall take care of us in our sickness and death as well as of our adequate burial in the cemetery of the Roman Catholic Church commensurate with our standing and position. "Tenth, we, Jose Carino, Carmen Gallardo. Eufemia Escobar, Esperanza Oasan, Severa Oasan, Esperanza C. Carino, Manuel C. Carino, Antero Carino, Benito Abaya, Maximo Abaya, Potenciana A. Gray, Miguel Carino and Isidro Abaya, after expressing our gratitude for this act of generosity granted us by Dona Petrona J. Gray and Dona Dorotea Gray, do hereby declare that we accept the aforesaid properties which had been designated for each of us. And we do hereby promise that we shall comply without fail with all the conditions, especially those of us who are charged with the trust set forth in this deed of donation. "In the testimony whereof we hereby sign in the presence of witnesses here in this town of Candon, Province of Ilocos Sur, P. I., this eleventh day of April of the year 1921. Ptetrona Gray and Dorotea Gray both died intestate and without either ascendants or descendants, the first on January 28, 1926, and the second on July 9, 1927. Miguel Cario, designated in the above-quoted document as the one to administer or deliver the properties therein referred to, predeceased Dorotea Gray as he died on February 12, 1927. After the lapse of about seven years from the death of Dorotea Gray, or on February 16, 1935, Jose Carino, son of Miguel Carino and petitioner herein, commenced intestate proceedings in the Court of First Instance of Ilocos Sur in which he prayed that he be appointed administrator of the estate left by the Gray sisters. Subsequently, on June 5, 1935, the said Jose Carino filed an amended petition praying that the properties described in paragraph III thereof be declared trust properties and that he be appointed trustee of the same. On July 12, 1935, Father Fernando Ma. Abaya, respondent herein and first cousin of Petrona anad Dorotea Gray, interposed an opposition to the amended petition alleging that the document executed on April 11, 1921, by the Gray sisters(Exhibit C-l) is null and void and praying that the court make an adjudication to that effect. While

on the one hand, Jose Carino contended that Exhibit C-l is a donation inter-vivos creating at the same time a trust, Father Fernando Abaya, on the other, alleged that said document is a will. The Court of First Instance of Ilocos Sur rendered judgment, the dispositive part of which is as follows: "In view of the foregoing reasons, the court is of the opinion and so declare that the properties described in paragraph 2, 3 and 4 of Exhibit C-l are trust properties destined by the said trustors for religious and pious purposes; and that the properties enumerated in paragraphs 5 and 6 of the said Exhibit C-l are invalid trust for the reason that the properties described in paragraph 5 did not belong to the said trustors, and, that the properties described in paragraph 6 thereof were destined for a trust, the purpose of which is uncertain; and that while the designation of said Jose Carino is invalid, still the court may appoint one to act as such (R. C. L.. d. 1274). "In view thereof, the court declares the properties described in paragraphs 2, 3 and 4 of Exhibit C-l trust properties, and, for the purpose of carrying into effect the provisions contained in said trust, application for the appointment of a competent trustee may be made by the interested parties and after due hearing, the court will appoint trustee or trustees, according as the situation may demand."

From this judgment, appeal was taken to the Court of Appeals which held that Exhibit Cl was neither a donation inter-vivos as contended by the petitioner herein nor a will as alleged by the respondent, but a void donation mortis causa, void because it was not executed with the formalities of a will.
ISSUE: whether donation is donation mortis causa or inter vivos? Jose Carino Fernando Abaya
"I. In passing upon the validity of the deed of donation, Exhibit C-l in the absence of any appeal on this point in violation of established rules of pleading and practice. "II. In holding that the deed of donation, Exhibit Gl, is a void donation mortis causa wanting in the formalities of a will, and not a consummated donation in praesenti (inter vivos). "III. In holding that Miguel Carino was not authorized by the donees to accept the donation in Exhibit C-l in their behalf, when the question of authority is not in issue, thereby committing an act of supererogation in violation of code practice. "IV. In not holding that the respondent Fernando Abaya (oppositor below) is without legal personality and interest in the suit, and cannot therefore attack the validity of Exhibit C-l collaterally. "V. In not holding that whatever right or action the respondent Fernando Abaya (oppositor below) has, by his laches and voluntary waiver and failure to appeal from so much of the judgment of the trial court, has already prescribed. "VI. In not applying the doctrine of estoppel to the facts of the case in violation of established rules and jurisprudence applicable thereto.

"VII.

In not holding that the properties described in

paragraphs 2, 3, 4 and 5 of Exhibit C-l are absolute gifts to Miguel Carino, predecesor in interest of petitioner Jose M. Carino, subject only to a charge. "VIII. In not submitting the decision appealed from to the Court in BANC in view of the considerable value of the estate, the weighty questions of law anad the special circumstances of the case.

"IX. In not granting the relief prayed for by the petitioner Jose M. Carino (applicant below), and in rendering the judgment object of this review. "X. The Honorable Court of Appeals has departed from the accepted usual course of judicial proceedings in rendering the decision object of this review.

The second, third and seventh errors assigned by counsel for the petitioner submit the major question whether Exhibit C-1 is a donation inter vivos as claimed by the petitioner, or a will as insisted by the respondent. We concur in the conclusion of the Court of Appeals that the document in dispute is a donation mortis causa. The seventh clause of the document reciting that "we the sisters do hereby order that all these properties shall be given to those to whom they have been assigned by virtue of this instrument at the expiration of thirty days after the death of the last one to die between us," considered in conjunction with the fact that the grantors employed the terms "there shall given to," "shall administer," and "shall be administered," which have reference to the future, clearly brings forth the intention on the part of the Gray sisters to make the distribution of their estate, as mapped out in Exhibit C-1, effective after their death. The above-quoted seventh clause, being without limitation, applies as well to the properties intended to be distributed as to the properties merely to be administered by Miguel Cario. It is worthy of observation, also, that in the ninth clause of Exhibit C-1 the phrase "together with those who had been mentioned to inherit from us" supplies a cogent reason for concluding that the grant therein made was meant to take effect the death of the grantors for the word "inherit," as used here, implies the acquisition of property by the heirs after the death of the Gray sisters. In support of the contention that the document in controversy is a donation inter vivos, the petitioner alleges that Miguel Cario administered the properties described in the second, third, fourth and fifth paragraphs of Exhibit C-1, thereby insinuating that the donation took effect even before the death of the grantors. Upon this question we can make no choice as it is not within our province to review, much less alter, the finding of the Court of Appeals that the petitioner's contention "is supported by the facts." Donations which are to become effective upon the death of the donor partake of the nature of disposals of property by will shall be governed by the rules established for testamentary successions. (Art, Civil Code.) Accordingly, said donations can only be made with the formalities of a will. (Tuason and Tuason C-1 was not 54 Phil. 289.) As the document Exhibit C-1 was not executed in conformity with the provisions of section 618 of the Code of Civil Procedure, conspicuously for lack of attestation clause and marginal signatures, we are constrained to hold the same cannot be accorded any force and effect.

Bonsato v. Court of Appeals, 95 Phil 481

The case was initiated in the Court of First Instance of Pangasinan (Case No. 8892) on June 7, 1945, by respondents Josefa Utea and other heirs of Domingo Bonsato and his wife Andrea Nacario, both deceased. Their complaint (for annulment and damages) charged that on the first day of December, 1949, Domingo Bonsato, then already a widower, had been induced and deceived into signing two notarial deeds of donations (Exhibits 1. and 2) in favor of his brother Juan Bonsato and of his nephew Felipe Bonsato, respectively, transferring to them several parcels of land covered by Tax Declaration Nos. 5652, 12049, and 12052, situated in the municipalities of Mabini and Burgos, Province of Pangasinan, both donations having been duly accepted in the same act and documents. Plaintiffs likewise charged that the donations were mortis causa and void for lack of the requisite formalities. The defendants, Juan Bonsato and Felipe Bonsato, answered averring that the donations made in their favor were voluntarily executed in consideration of past services rendered by them to the late Domingo Bonsato; that the same were executed freely without the use of force and violence, misrepresentation or intimidation; and prayed for the dismissal of the case and for damages in the sum of P2,000. Strictly speaking, the issue is whether the documents in question embody valid donations, or else legacies void for failure to observe the formalities of wills (testaments). Did the late Domingo Bonsato make donations inter vivos or dispositions post mortem in favor of the petitioners herein?
Heirs of Juan Bonsato & Felipe Bonsato Josefa Utea, et al.
After trial, the Court of First Instance rendered its decision on November 13, 1949, finding that the deeds of donation were executed by the donor while the latter was of sound mind, without pressure or intimidation; that the deeds were of donation inter vivos without any condition making their validity or efficacy dependent upon the death of the donor; but as the properties donated were presumptively conjugal, having been acquired during the coverture of Domingo Bonsato and his wife Andrea Nacario, the donations were only valid as to an undivided one-half share in the three parcels of land described therein. Thereupon the plaintiffs duly appealed to the Court of Appeals, assigning as primary error the holding of the court below that the donations are inter vivos; appellants contending that they were mortis causa donations, and invalid because they had not been executed with the formalities required for testamentary disposition.

A division of five of the Court of Appeals took the case under consideration, and on January 12, 1953, the majority rendered judgment holding the aforesaid donations to be null and void, because they were donations mortis causa and were executed without the testamentary formalities prescribed by law, and ordered the defendantsappellees Bonsato to surrender the possession of the properties in litigation to the plaintiffsappellants. Two Justices dissented, claiming that the said donations should be considered as donations inter vivos and voted for the affirmance of the decision of the Court of First Instance. The donees then sought a review by this Court.
Despite the widespread use of the term "donations mortis causa," it is well-established at present that the Civil Code of 1889, in its Art. 620, broke away from the Roman Law

tradition, and followed the French doctrine that no one may both donate and retain ("donner at retenir ne vaut"), by merging the erstwhile donations mortis causa with the testamentary dispositions, thus suppressing said donations as an independent legal concept. ART. 620. Donations which are to become effective upon the death of the donor partake of the nature of disposals of property by will and shall be governed by the rules established for testamentary successions.

We have insisted on this phase of the legal theory in order to emphasize that the term "donations mortis causa" as commonly employed is merely a convenient name to designate those dispositions of property that are void when made in the form of donations.
Did the late Domingo Bonsato make donations inter vivos or dispositions post mortem in favor of the petitioners herein? If the latter, then the documents should reveal any or all of the following characteristics: 1. 2. 3. (1) Convey 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 (Vidal vs. Posadas, 58 Phil., 108; Guzman vs. Ibea, 67 Phil., 633); (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 (Bautista vs. Sabiniano, G. R. L-4326, November 18, 1952); (3) That the transfer should be void if the transferor should survive the transferee.

None of these characteristics is discernible in the deeds of donation, Exhibits 1. and 2, executed by the late Domingo Bonsato. The donor only reserved for himself, during his lifetime, the owner's share of the fruits or produce ("de los productos mientras viva el donante tomar la parte que corresponde como dueo"), a reservation that would be unnecessary if the ownership of the donated property remained with the donor. Most significant is the absence of stipulation that the donor could revoke the donations; on the contrary, the deeds expressly declare them to be "irrevocable", a quality absolutely incompatible with the idea of conveyances mortis causawhere revocability is of the essence of the act, to the extent that a testator can not lawfully waive or restrict his right of revocation (Old Civil Code, Art. 737; New Civil Code, Art. 828). It is true that the last paragraph in each donation contains the phrase "that after the death of the donor the aforesaid donation shall become effective" (que despus de la muerte del donante entrar en vigor dicha donacin"). However, said expression must be construed together with the rest of the paragraph, and thus taken, its meaning clearly appears to be that after the donor's death, the donation will take effect so as to make the donees the absolute owners of the donated property, free from all liens and encumbrances; for it must be remembered that the donor reserved for himself a share of the fruits of the land donated. Such reservation constituted a charge or encumbrance that would disappear upon the donor's death, when full title would become vested in the donees. "Any other interpretation of this paragraph would cause it to conflict with the irrevocability of the donation and Its consummated character, as expressed in the first part of the deeds of donation, a conflict that should be avoided (Civ. Code of 1889, Art. 1285; New Civil Code, Art. 1374; Rule 123, sec. 59, Rules of Court).

In the cases held by this Court to be transfers mortis causa and declared invalid for not having been executed with the formalities of testaments, the circumstances clearly indicated the transferor's intention to defer the passing of title until after his death. Thus, in Cario vs. Abaya, 70 Phil., 182, not only were the properties not to be given until thirty days after the death of the last of the donors, but the deed also referred to the donees as "those who had been mentioned to inherit from us", the verb "to inherit" clearly implying the acquisition of property only from and after the death of the alleged donors. In Bautista vs. Sabiniano, 49 Off. Gaz., 549; 92 Phil., 244, the alleged donor expressly reserved the right to dispose of the properties conveyed at any time before his death, and limited the donation "to whatever property or properties left undisposed by me during my lifetime", thus clearly retaining their ownership until his death. While in David vs. Sison, 42 Off. Gaz. (Dec. 1946) 3155, the donor not only reserved for herself all the fruits of the property allegedly conveyed, but what is even more important, specially provided that "without the knowledge and consent of the donor, the donated properties could not be disposed of in any way", thereby denying to the transferees the most essential attribute of ownership, the power to dispose of the properties. No similar restrictions are found in the deeds of donation involved in this appeal.
That the conveyance was due to the affection of the donor for the donees and the services rendered by the latter, is of no particular significance in determining whether the deeds Exhibits 1. and 2. constitute transfers inter vivos or not, because a legacy may have identical motivation. Nevertheless, the existence of such consideration corroborates the express irrevocability of the transfers and the absence of any reservation by the donor of title to, or control over, the properties donated, and reinforces the conclusion that the act was inter vivos. Hence, it was error for the Court of Appeals to declare that Exhibits 1. and 2. were invalid because the formalities of testaments were not observed. Being donations inter vivos, the solemnities required for them were those prescribed by Article 633 of the Civil Code of 1889 (reproduced in Art. 749 of the new Code, and it is undisputed that these were duly complied with. As the properties involved were conjugal, the Court of First Instance correctly decided that the donations could not affect the half interest inherited by the respondents Josefa Utea, et al. from the predeceased wife of the donor. The decision of the Court of Appeals is reversed, and that of the Court of First Instance is revived and given effect. Costs against respondents.

De Luna v. Abrigo, 181 SCRA 150 Donation agreement: 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; x x x. (p. 23, Rollo)

Donor: predecessor of petitioners Donee: Luzonian University Foundation / Luzonian Colleges Object of donation: 7500 sq. m. lot Form: Deed of Donation Inter Vivos Penalty: automatic reversion in case of violation Donees failed to comply with conditions. Donor revived donation. Form: Revival of Donation Inter Vivos, still with same penalty clause Form: Deed of Segregation, area donated was adjudicated to foundation Whether donation prescribed De Luna heirs After death, Heirs complained of violation/noncompliance with conditions. Prayed: -cancellation -reversion 2 assignment of errors: -consent of donee -prescription TC: -dismissed petition of heirs -barred by prescription SC: -favored petitioners -donation is ONEROUS

Luzonian University Foundation -partially and substantially complied with conditions -the donor has granted the foundation an indefinite extension of time to complete the construction of the chapel -prescription

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 -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. On the matter of prescription of actions for the revocation of onerous donation, it was held that the general rules on prescription applies.
Article 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. Hence, the contract provides: AUTOMATIC REVERSION. Equivalent to unilateral act of rescission upon breach.

x x x 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
As provided in the donation executed on April 9, 1971, compliance 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.

Roman Catholic v. Court of Appeals, 198 SCRA 300

In their complaint, private respondents alleged that on August 23, 1930, the spouses Eusebio de Castro and Martina Rieta, now both deceased, executed a deed of donation in favor of therein defendant Roman Catholic Archbishop of Manila covering a parcel of land (Lot No. 626, Cadastral Survey of Kawit), located at Kawit, Cavite, containing an area of 964 square meters, more or less. The deed of donation allegedly provides that the donee shall not dispose or sell the property within a period of one hundred (100) years from the execution of the deed of donation, otherwise a violation of such condition would render ipso facto null and void the deed of donation and the property would revert to the estate of the donors. It is further alleged that on or about June 30, 1980, and while still within the prohibitive period to dispose of the property, petitioner Roman Catholic Bishop of Imus, in whose administration all properties within the province of Cavite owned by the Archdiocese of Manila was allegedly transferred on April 26, 1962, executed a deed of absolute sale of the property subject of the donation in favor of petitioners Florencio and Soledad C. Ignao in consideration of the sum of P114,000.00. As a consequence of the sale, Transfer Certificate of Title No. 115990 was issued by the Register of Deeds of Cavite on November 15, 1980 in the name of said petitioner spouses.

Private respondents thereafter appealed to the Court of Appeals raising the issues on (a) whether or not the action for rescission of contracts (deed of donation and deed of sale) has prescribed; and (b) whether or not the dismissal of the action for rescission of contracts (deed of donation and deed of sale) on the ground of prescription carries with it the dismissal of the main action for reconveyance of real property.
THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES FLORENCIO IGNAO and SOLEDAD C. IGNAO HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO and MARTINA RIETA, represented by MARINA RIETA GRANADOS and THERESA RIETA TOLENTINO

-On December 17, 1984, petitioners Florencio Ignao and Soledad C. Ignao filed a motion to dismiss based on the grounds that (1) herein private respondents, as

plaintiffs therein, have no legal capacity to sue; and (2) the complaint states no cause of action.
On December 19, 1984, petitioner Roman Catholic Bishop of Imus also filed a motion to dismiss on three (3) grounds, the first two (2) grounds of which were identical to that of the motion to dismiss filed by the Ignao spouses, and the third ground being that the cause of action has prescribed. On January 9, 1985, the Roman Catholic Archbishop of Manila likewise filed a motion to dismiss on the ground that he is not a real party in interest and, therefore, the complaint does not state a cause of action against him.

It is the contention of petitioners that the cause of action of herein private respondents has already prescribed, invoking Article 764 of the Civil Code which provides that (t)he donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter, and that (t)his action shall prescribe after four years from the non-compliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donees heirs.
CA:

By the very express provision in the deed of donation itself that the violation of the condition thereof would render ipso facto null and void the deed of donation, WE are of the opinion that there would be no legal necessity anymore to have the donation judicially declared null and void for the reason that the very deed of donation itself declares it so. For where (sic) it otherwise and that the donors and the donee contemplated a court action during the execution of the deed of donation to have the donation judicially rescinded or declared null and void should the condition be violated, then the phrase reading would render ipso facto null and void would not appear in the deed of donation.
SC: -disagrees with petitioner -agrees with CA

Although it is true that under Article 764 of the Civil Code an action for the revocation of a donation must be brought within four (4) years from the non-compliance of the conditions of the donation, the same is not applicable in the case at bar. The deed of donation involved herein expressly provides for automatic reversion of the property donated in case of violation of the condition therein, hence a judicial declaration revoking the same is not necessary.

In support of its aforesaid position, respondent court relied on the rule that a judicial action for rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions.10 It called attention to the holding that there is nothing in the law that prohibits the parties from entering into an agreement that a violation of the terms of the contract would cause its cancellation even without court intervention, and that it is not always necessary for the injured party to resort to court for rescission of the contract.11 It reiterated the doctrine that a judicial action is proper only when there is absence of a special provision granting the power of cancellation.12 It is true that the aforesaid rules were applied to the contracts involved therein, but we see no reason why the same should not apply to the donation in the present case. Article 732 of the Civil Code provides that donations inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in Title III, Book III on donations. Now, said Title III does not have an explicit provision on the matter of a donation with a resolutory condition and which is subject to an express provision that the same shall be considered ipso facto revoked upon the breach of said resolutory condition imposed in the deed therefor, as is the case of the deed presently in question. The suppletory application of the foregoing doctrinal rul-ings to the present controversy is consequently justified. The rationale for the foregoing is that in contracts providing for automatic revocation, judical 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 rescission was proper.1 On the foregoing ratiocinations, the Court of Appeals committed no error in holding that the cause of action of herein private respondents has not yet prescribed since an action to enforce a written contract prescribes in ten (10) years.15 It is our view that Article 764 was intended to provide a judicial remedy in case of non-fulfillment or contravention of conditions specified in the deed of donation if and when the parties have not agreed on the automatic revocation of such donation upon the occurrence of the contingency contemplated therein. That is not the situation in the case at bar. Nonetheless, we find that although the action filed by private respondents may not be dismissed by reason of prescription, the same should be dismissed on the ground that private respondents have no cause of action against petitioners. The cause of action of private respondents is based on the alleged breach by petitioners of the resolutory condition in the deed of donation that the property donated should not be sold within a period of one hundred (100) years from the date of execution of the deed of donation. Said condition, in our opinion, constitutes an undue restriction on the rights arising from ownership of petitioners and is, therefore, contrary to public policy.

Donation, as a mode of acquiring ownership, results in an effective transfer of title over the property from the donor to the donee. Once a donation is accepted, the donee becomes the absolute owner of the property donated. Although the donor may impose certain conditions in the deed of donation, the same must not be contrary to law, morals, good customs, public order and public policy. The condition imposed in the deed of donation in the case before us constitutes a patently unreasonable and undue restriction on the right of the donee to dispose of the property donated, which right is an indispensable attribute of ownerhsip. Such a prohibition against alienation, in order to be valid, must not be perpetual or for an unreasonable period of time.
Certain provisions of the Civil Code illustrative of the aforesaid policy may be considered applicable by analogy. Under the third paragraph of Article 494, a donor or testator may prohibit partition for a period which shall not exceed twenty (20) years. Article 870, on its part, declares that the dispositions of the testator declaring all or part of the estate inalienable for more than twenty (20) years are void. It is significant that the provisions therein regarding a testator also necessarily involve, in the main, the

devolution of property by gratuitous title hence, as is generally the case of donations, being an act of liberality, the imposition of an unreasonable period of prohibition to alienate the property should be deemed anathema to the basic and actual intent of either the donor or testator. For that reason, the regulatory arm of the law is or must be interposed to prevent an unreasonable departure from the normative policy expressed in the aforesaid Articles 494 and 870 of the Code. In the case at bar, we hold that the prohibition in the deed of donation against the alienation of the property for an entire century, being an unreasonable emasculation and denial of an integral attribute of ownership, should be declared as an illegal or impossible condition within the contemplation of Article 727 of the Civil Code. Consequently, as specifically stated in said statutory provision, such condition shall be considered as not imposed. No reliance may accordingly be placed on said prohibitory paragraph in the deed of donation. The net result is that, absent said proscription, the deed of sale supposedly constitutive of the cause of action for the nullification of the deed of donation is not in truth violative of the latter hence, for lack of cause of action, the case for private respondents must fail. It may be argued that the validity of such pro hibitory provision in the deed of donation was not specifically put in issue in the pleadings of the parties. That may be true, but such oversight or inaction does not prevent this Court from passing upon and resolving the same. It will readily be noted that the provision in the deed of donation against alienation of the land for one hundred (100) years was the very basis for the action to nullify the deed of donation. At the same time, it was likewise the controverted fundament of the motion to dismiss the case a quo, which motion was sustained by the trial court and set aside by respondent court, both on the issue of prescription. That ruling of respondent court interpreting said provision was assigned as an error in the present petition. While the issue of the validity of the same provision was not squarely raised, it is ineluctably related to petitioners aforesaid assignment of error since both issues are grounded on and refer to the very same provision. This Court is clothed with ample authority to review matters, even if they are not assigned as errors on appeal, if it finds that their conside ration is necessary in arriving at a just decision of the case:16 Thus, we have held that an unassigned error closely related to an error properly assigned,17 or upon which the determination of the question properly assigned is dependent, will be considered by the appellate court notwithstanding the failure to assign it as error.18 Additionally, we have laid down the rule that the remand of the case to the lower court for further reception of evidence is not necessary where the Court is in a position to resolve the dispute based on the records before it. On many occasions, the Court, in the public interest and for the expeditious administration of justice, has resolved actions on the merits instead of remanding them to the trial court for further proceedings, such as where the ends of justice, would not be subserved by the remand of the case. 19 The aforestated considerations obtain in and apply to the present case with respect to the matter of the validity of the resolutory condition in question. WHEREFORE, the judgment of respondent court is SET ASIDE and another judgment is hereby rendered DISMISSING Civil Case No. 095-84 of the Regional Trial Court, Branch XX, Imus, Cavite.

Central Philippines University v. Court of Appeals, 246 SCRA 511 -Don Ramon Lopez, Sr. is member of BOT of Central Philippine College

-he executed deed of donation of parcel of land -conditions: establish medical college, shall not alienate, and to be named Ramon Lopez Campus -respondents filed annulment of donation: petitioner did not comply with condition -donation date: 1939 -date of action: 1989 Issues: 1. Whether donation is onerous and has resolutory condition 2. Prescription Central Philippines -the right of heirs to file action had prescribed -did not violate conditions; never used deed for any other purpose than that for which it is intended -did not alienate Lopez heirs -did not comply with condition -petitioner negotiated with NHA to exchange donated property with another land owned by NHA

Petitioner now alleges that the Court of Appeals erred: (a) in holding that the quoted annotations in the certificate of title of petitioner are onerous obligations and resolutory conditions of the donation which must be fulfilled non-compliance of which would render the donation revocable; (b) in holding that the issue of prescription does not deserve disquisition; and, (c) in remanding the case to the trial court for the fixing of the period within which petitioner would establish a medical college.
TC: -null and void CA: -resolutory condition was breached, hence right of done terminated -but since there is no time, remanded case to lower court to determine time of compliance SC: -donation is onerous -donation has resolutory condition -not imprescriptible, since it depends on the will of the donee (the time), hence the period of compliance must be fixed by court: -when the obligation does not fix a period but from its nature and circumstances it can be inferred that a period was intended, the general rule provided in Art. 1197 of the Civil Code applies, which provides that the courts may fix the duration thereof because the fulfillment of the obligation itself cannot be demanded until after the court has fixed the period for compliance therewith and such period has arrived.

-no need for determination of period:

More than a reasonable period of fifty (50) years has already been allowed petitioner to avail of the opportunity to comply with the condition even if it be burdensome, to make the donation in its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no more need to fix the duration of a term of the obligation when such procedure would be a mere technicality and formality and would serve no purpose than to delay or lead to an unnecessary and expensive multiplication of suits. -since the questioned deed of donation herein is basically a gratuitous one, doubts referring to incidental circumstances of a gratuitous contract should be resolved in favor of the least transmission of rights and interests.
-rescission Secretary v. Heirs of Dulay, 480 SCRA 452

That for and in consideration of the benefits that may be derived from the use of the above described property which is intended for school purposes, the said DONORS do by by (sic) these presents TRANSFER AND CONVEY by way of DONATION unto the DONEE, its successors and assigns, the above property to become effective upon the signing of this document. The spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of land located in Rizal, Santiago, Isabela, with an area of 29,002 square meters. The lot was covered by Original Certificate of Title No. P-6776. On August 3, 1981, the spouses Dulay executed a deed of donation3 over a 10,000-square-meter portion of their property in favor of the Ministry of Education and Culture (now the Department of Education, Culture and Sports [DECS]).

The property was subdivided. On April 13, 1983, Transfer Certificate of Title (TCT) No. T-1433375 covering the portion identified as Lot 8858-A was issued in the name of the Ministry of Education and Culture, represented by Laurencio C. Ramel, the Superintendent of Schools of Isabela. However, the property was not used for school purposes and remained idle.
Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal National High School building on a parcel of land it acquired from Alejandro Feliciano. The school site was about 2 kilometers away from the land donated by the spouses Dulay. In a letter6 to the DECS Secretary dated August 19, 1994, the spouses Dulay requested that the property be returned to them considering that the land was never used since 1981, or a period of more than 13 years. On August 28, 1994, the Barangay Council of Rizal, Santiago City issued Resolution

No. 397 recognizing the right of the donors to redeem the subject parcel of land because of the DECS failure to utilize it for the intended purpose. It further resolved that the Rizal National High School no longer needed the donated land considering its distance

from the main campus and [the] failure to utilize the property for a long period of time.
On December 22, 1994, Rufino Dulay, Sr. passed away at the age of 80. 8 His heirs sought the help of the Sangguniang Panlungsod of Santiago City via an undated letter9 requesting the approval of a resolution allowing them to redeem the donated property. The Sangguniang Panlungsod denied the request inasmuch as the city government was not a party to the deed of donation. 10 On August 31, 1997, the heirs of Dulay, Sr., herein respondents, filed a complaint for the revocation of the deed of donation and cancellation of TCT No. T-143337 before the RTC of Santiago City, Isabela, Branch 35, against the DECS Secretary and Dr. Benito Tumamao, the Schools Division Superintendent of Isabela. Respondents alleged that there was a condition in the deed of donation: that the DECS, as donee, utilize the subject property for school purposes, that is, the construction of a building to h ouse the Rizal National High School. Respondents alleged that the DECS did not fulfill the condition and that the land remained idle up to the present. Respondents also averred that the donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more than what he could give by will.

Respondents alleged that the DECS did not fulfill the condition and that the land remained idle up to the present. Respondents also averred that the donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more than what he could give by will.

THE SECRETARY OF EDUCATION and DR. BENITO TUMAMAO, Schools Division Superintendent of Isabela, petitioners,

Petitioners, through the Office of the Solicitor General (OSG), interposed the following defenses: (a) the DECS complied with said condition because the land was being used by the school as its technology and home economics laboratory; (b) the donation was not inofficious for the donors were the owners of five other parcels of land, all located at Rizal, Santiago City; (c) the DECS acquired the disputed property by virtue of purchase made on December 8, 1997 by the barangay of Rizal, Santiago City in the amount of P18,000.00 as certified by its former Barangay Captain, Jesus San Juan;11 and (d) the action of the respondents had prescribed. The OSG also claimed that students planted a portion of the land with rice, mahogany seedlings, and fruitbearing trees; the produce would then be sold and the proceeds used for the construction of a school building on the subject property.

HEIRS OF RUFINO DULAY, SR., represented by IGNACIA VICENTE, RUFINO DULAY, JR., SUSANA DULAY, ADELAIDA DULAY, LUZVIMINDA DULAY and CECILIA DULAY, respondents.

In their Reply,12 respondents denied that the donated land was being used as a technology and home economics laboratory, and averred that there were no improvements on the property. Moreover, the fact that rice was planted on the lot was contrary to the intended purpose of the donation. The respondents likewise denied that the property had been sold to the barangay. While the other properties of the late donor had been sold, the deeds thereon had not been registered, and the tax declarations not yet transferred in the names of the purchasers.
In their comment on the petition, respondents dispute petitioners contentions, and aver that no evidence was presented to prove that, indeed, palay, mahogany seedlings and fruit-bearing trees were planted on the property. Respondents also emphasized that when the trial court inspected the subject property, it was discovered to be barren and without any improvement although some portions thereof were planted with palay. Petitioners even failed to adduce evidence to

identify the person who planted the palay. Petitioners seek relief from this Court via petition for review on certiorari, contending that: I. THE DEPARTMENT OF EDUCATION, THROUGH THE RIZAL NATIONAL HIGH SCHOOL, HAD COMPLIED WITH THE CONDITION IMPOSED IN THE DEED OF DONATION. II. RESPONDENTS RIGHT TO SEEK THE REVOCATION OF THE DEED OF DONATION, IF THERE BE ANY, IS ALREADY BARRED BY PRESCRIPTION AND LACHES.15 The Court shall resolve the issues raised by petitioners seriatim. Petitioners, through the OSG, maintain that the condition (to use the property for school purposes) is not limited to the construction of a school building, but includes utilizing it as a technology and home economics laboratory where students and teachers plant palay, mahogany seedlings, and fruit-bearing trees. The OSG insists that the donee did not specify in the deed that the property should be used for the construction of a school building. According to the OSG, the proceeds of the harvest were used and are still being used by the Rizal National High School for the construction and improvement of its present school site. Moreover, it was verified that there was palay planted on the donated property during the ocular inspection on the property.

On December 26, 2002, the trial court rendered its decision in favor of respondents. The fallo reads: WHEREFORE, in the light of the foregoing considerations, the Court hereby DECLARES the deed of donation, Exhibit A, executed by the late Rufino Dulay, Sr. and his wife Ignacia Vicente over a portion of the land covered by O.C.T. No. P-6776 and now covered by T.C.T. No. T-143337 in the name of the donee Department of Education and Culture as REVOKED. The defendant DECS is ORDERED to execute the deed of reconveyance of the land in favor of the plaintiffs heirs of Rufino Dulay, Sr. SO ORDERED.14

In revoking the deed of donation, the trial court ruled that the donation was subject to a resolutory condition, namely, that the land donated shall be used for school purposes. It was no longer necessary to determine the intended school purpose because it was established that the donee did not use the land. Thus, the condition was not complied with since the property was donated in July 1981. Moreover, the DECS did not intend to use the property for school purposes because a school had already been built and

established in another lot located in the same barangay, about two kilometers away from the subject land. Finally, the trial court rejected petitioners contention that the donation was inofficious.
On July 30, 2004, the appellate court rendered judgment affirming the decision. The court held that the DECS failed to comply with the condition in the donation, that is, to use the property for school purposes. The CA further ruled that the donation was onerous considering that the donee was burdened with the obligation to utilize the land for school purposes; therefore, the four-year prescriptive period under Article 764 of the New Civil Code did not apply. Moreover, the CA declared that a deed of donation is considered a written contract and is governed by Article 1144 of the New Civil Code, which provides for a 10-year prescriptive period from the time the cause of action accrues. According to the CA, the respondents cause of action for the revocation of the donation should be reckoned from the expiration of a reasonable opportunity for the DECS to comply with what was incumbent upon it.

As gleaned from the CA decision, petitioners failed to prove that the donated property was used for school purposes as indicated in the deed of donation: We find it difficult to sustain that the defendant-appellants have complied with the condition of donation. It is not amiss to state that other than the bare allegation of the defendant-appellants, there is nothing in the records that could concretely prove that the condition of donation has been complied with by the defendant-appellants. In the same breadth, the planting of palay on the land donated can hardly be considered and could not have been the school purposes referred to and intended by the donors when they had donated the land in question. Also, the posture of the defendant-appellants that the land donated is being used as technology and home economics laboratory of the Rizal National High School is far from being the truth considering that not only is the said school located two kilometers away from the land donated but also there was not even a single classroom built on the land donated that would reasonably indicate that, indeed, classes have been conducted therein. These observations, together with the unrebutted ocular inspection report made by the trial court which revealed that the land donated remains idle and without any improvement thereon for more than a decade since the time of the donation, give Us no other alternative but to conclude that the defendant-appellants have, indeed, failed to comply with what is incumbent upon them in the deed of donation.

We fully agree with the ruling of the appellate court: x x x With this, [we] decline to apply the four-year prescriptive period for the revocation of donation provided under Article 764 of the New Civil Code and instead apply the general rules on contracts since Article 733 of the same Code, specifically provided that onerous donations shall be governed by the rules on contracts. Corollarily, since a deed of donation is considered a written contract, it is governed by Article 1144 of the New Civil Code, which provides that the prescriptive period for an action arising from a written contract is ten (10) years from the time the cause of action accrues. In the case of donation, the accrual of the cause of action is from the expiration of the time within which the donee must comply with the conditions or obligations of the donation. In the instant case, however, it must be noted that the subject donation fixed no period within which the donee can comply with the condition of donation. As such, resort to Article 1197 of the New Civil Code is necessary. Said article provides that if the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. Indeed, from the nature and circumstances of the condition of the subject donation, it can be inferred that a period was contemplated by the donors. The donors could not have intended their property to remain idle for a very long period of time when, in fact, they specifically obliged the defendant-appellants to utilize the land donated for school purposes and thus put it in good use. x x x20

The donee failed to comply with

the condition imposed in the deed of donation The issue of whether or not petitioner DECS was able to comply with the condition imposed in the deed of donation is one of fact. There is a question of fact when the doubt or difference arises as to the truth or falsehood of alleged facts or when the query necessarily solicits calibration of the whole evidence considering mostly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to each other and to the whole and probabilities of the situation.16 Under Rule 45 of the 1997 Rules of Civil Procedure, only questions of law may be raised in a petition for review on certiorari, for the simple reason that this Court is not a trier of facts. It is not for the Court to calibrate the evidence on record, as this is the function of the trial court. Although there are well-defined exceptions to the rule, nevertheless, after a review of the records, we find no justification to depart therefrom. Moreover, the trial courts findings of facts, as affirmed by the appellate court on appeal, are binding on this Court, unless the trial and appellate courts overlooked, misconstrued or misinterpreted facts and circumstances of substance which, if considered, would change the outcome of the case. The case has been reviewed thoroughly, and we find no justification to reverse the CA decision. In its Order18 dated March 6, 2001, the RTC reiterated that during the ocular inspection of the property conducted in the presence of the litigants and their counsel, it observed that the land was barren; there were no improvements on the donated property though a portion thereof was planted with palay [and a demolished house built in 1979.] Moreover, petitioners failed to adduce a shred of evidence to prove that the palay found in the property was planted by DECS personnel or at its instance or even by students of the Rizal National High School. No evidence was adduced to prove that there were existing plans to use the property for school purposes. Petitioners even debilitated their cause when they claimed in the trial court that the barangay acquired the property by purchase, relying on the certification of former Barangay Captain Jesus San Juan. The right to seek the revocation of donation had not yet prescribed when respondents filed their complaint Anent the second issue, we reject the contention of the OSG that respondents cause of action is already barred by prescription under Article 764 of the New Civil Code, or four years from the non-compliance with the condition in the deed of donation. Since such failure to comply with the condition of utilizing the property for school purposes became manifest sometime in 1988 when the DECS utilized another property for the construction of the school building, the four-year prescriptive period did not commence on such date. Petitioner was given more than enough time to comply with the condition, and it cannot be allowed to use this fact to its advantage. It must be stressed that the donation is onerous because the DECS, as donee, was burdened with the obligation to utilize the land donated for school purposes. Under Article 733 of the New Civil Code, a donation with an onerous cause is essentially a contract and is thus governed by the rules on contract In Central Philippine University v. Court of Appeals,21 a case squarely in point, we have established that the legal possibility of bringing the action begins with the expiration of a reasonable opportunity for the donee to fulfill what has been charged upon it by the donor. Likewise, we held that even if Article 1197 of the New Civil Code provides that the courts may fix the duration when the obligation does not determine the period but from its nature and circumstances it can be inferred that a period was intended, the general rule cannot be applied because to do so would be a mere technicality and would serve no other purpose than to delay or lead to an unnecessary and expensive multiplication of suits.22 Altogether, it has been 16 years since the execution of the deed of donation. Petitioner DECS failed to use the property for the purpose specified in the deed of donation. The property remained barren and unutilized. Even after respondents sought the return of the property before the courts, petitioner DECS still failed to draw up plans to use the property for school purposes. In fine, petitioner DECS has no use for the property; hence, the same shall be reverted to the respondents. WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 78314 dated

July 30, 2004 is AFFIRMED.

Bautista v. Sabiniano, 92 Phil 244

DEED OF CONDITIONAL DONATION

Know All Persons By These Presents: That I, Alberto G. Bautista, Filipino, of legal age, widower and a resident of the barrio of Buenlag, Binmaiey, Pangasinan, Philippines, for and in consideration of my love and affection, and services rendered by Marcelina Sabiniano, 18 years old, and Candida Sabiniano, 13 years old, both single, daughters of Epifanio Sabiniano and Maxima Sabiniano (deceased), said Marcelina Sabiniano and Candida Sabiniano are represented for and in their behalf by their stated father, Epifanio Sabiniano in this regard, who is also a Filipino, of legal age, married for the second nuptial to Andrada Sabiniano, all residents of the barrio of Buenlag, Binmaiey, Pangasinan, Philippines; Atanacio Lomibao, Filipino, of legal age, married to Corazon Decena and a resident of the same place; and Alfredo de Guzman, Filipino, 21/2 years old, single and a resident of the barrio of Nagpalangan, Binmaley, Pangasinan, Philippines, represented for and in his behalf by his mother Leonora Cansino, wife of Andres de Guzman (deceased) Filipina, of legal age, widow and a resident of the same place, of the ward, with sound mind and without any influence, force, threat, surprise or intimidation, hereby voluntarily convey, cede, give, donate and transfer by way of conditional donation in favor of the said above-mentioned donees the following properties to wit: 1. To Marcelina Sabiniano and Candida Sabiniano, the following properties are donated to them to be divided by each equally share and share alike: (Here follows the description of the properties donated to Marcelina Sabiniano and Candida Sabiniano.) 2. To Atanacio Lomibao, married to Corazon Decena, the following property is donated to him: (Here follows the description of the property donated to Atanacio Lomibao.) 3. To Alfredo de Guzman, minor and represented by his mother Leonora Cansino, the following property is donated: (Here follows the description of the property donated to Alfredo de Guzman.)
That I am making this donation in favor of the herein stated donees with the following conditions: 1.That meantime I am still living, these properties donated are all yet at my disposal as well as the products therein derived, and whatever properties or property left undisposed by me during my lifetime will be the ones to be received by the donees if any; 2.That in case of my illness, I have still the perfect right to dispose said properties if necessary to finance all the

expenses to be incurred for my sustenance and medical treatment, and whatever left, if any, of these properties wTill be the one to be received by the herein donees; 3.That in case of my unexpected death, the herein donees will execute the disposal or if they are still minors by their respective representatives or administrators to pay all the debts incurred by me during my lifetime or illness, if any, and to finance my funeral services or ceremonies of the Roman Catholic Church decently, and whatever properties or property in my favor will be the ones to be received by the herein donees. This is an appeal from a judgment rendered by the Court of First Instance of Pangasinan in civil case No. 10516, holding that the donations made by Alberto G. Bautista in favor of Marcelina and Candida surnamed Sabiniano and Alfredo de Guzman are invalid for lack of acceptance on the part of said donees who were minors but valid in favor of Atanacio Lomibao who was of age at the time he accepted the donation in his favor, ordering the defendants Marcelina Sabiniano, Candida Sabiniano and Alfredo de Guzman to surrender to the plaintiffs, wha are the lawful heirs of the deceased Alberto G. Bautista, the parcels of land in their possession by virtue of the deed of conditional donation, without special pronouncement as to costs. The other two defendants, Epifanio Sabiniano and Leonora Cansino, were joined, because the first is the father of the minor defendants Marcelina and Candida Sabiniano, who accepted the donation in their behalf, and the second is the mother of the minor Alfredo de Guzman who accepted the donation in his behalf. The appeal was filed by Epifanio Sabiniano in behalf of his minor children Marcelina and Candida Sabiniano. Leonora Cansino did not appeal and the plaintiffs also did not appeal from that part of the judgment which held valid the donation in favor of Atanacio Lomibao who was of age at the time he accepted the donation.

That we, Epifanio Sabiniano, acting for and in behalf of my daughters, Marcelina Sabiniano and Candida Sabiniano, who are minors, Atanacio Lomibao for and in my behalf, and Leonora Cansino, acting for and in behalf of my son Alfredo de Guzman who is minor, do hereby by these presents accept the donations given by the donor, and hereby further extend our gratitude due to the generosity of the donor. Whether donations made by Alberto G. Bautista in favor of Marcelina and Candida surnamed Sabiniano and Alfredo de Guzman are invalid for lack of acceptance on the part of said donees who were minors but valid in favor of Atanacio Lomibao who was of age at the time he accepted the donation in his favor Asteria Bautista, Maxima Lomibao, Epipanio Sabiniano, inhis capacity as Francisco Lomibao, JOS Lomibao, Felisa, Guardian ad litem of the minors Marcelina Lomibao and Paulina Lomibao, plaintiffs Sabiniano and Candida Sabiniano, defendand appellees, ants and appellants.
The trial court found that the donation is conditional and onerous, because the donor "continued to be the owner of the properties donated in spite of the donation" and "because the donees were made to pay under their personal responsibility all the debts of the donor incurred by him during his lifetime or illness, and to finance his funeral services upon his death," and held that it is null and void as to Marcelina and Candida surnamed Sabiniano and Alfredo de Guzman, who were minors and were not duly represented by their legal representatives upon the acceptance of the donation. It is contended that the donation is pure and even if it be onerous or conditional the same is valid because the acceptance was made by their parents.

The view we take of the terms of the deed entitled "Conditional Donation" under consideration and analysisrenders it unnecessary to dissert on the nature, character and effects of a pure act of generosity or a simple donation, of remuneratory or compensatory and of conditional or onerous donationsa charge, gravamen or obligation imposed upon the donee less in value than that of the property donatedas well as of those with a term or subject to suspensive or resolutory conditionthere being a clear distinction between disposition and execution. The conveyance to the donees by way of donation of the properties described in the deed did not actually take effect on the date of the execution of the deed and of the acceptance thereof for the

reason hereafter to be stated. It is also unnecessary to express opinion on whether the acceptance made in the deed is lawful and valid, for the reason that the owner reserved during his lifetime the right to dispose of the properties purportedly donated and to benefit from t&e products thereof. Except in the instances expressly provided by law, such as the subsequent birth of children of the donor, failure by the donee to comply with the conditions imposed, ingratitude of the donee and reduction of the donation in the event of inofficio usness thereof, a donation is irrevocable. If the donor reserves the right to revoke it or if he reserves the right to dispose of all the properties purportedly donated, there is no donation. If the disposition or conveyance or transfer takes effect upon the donor's death and becomes irrevocable only upon his death, it is not an inter vivos but amortis causa donation. The disposition of the properties in favor of the appellants not having been done in accord with the provisions of section 618 of the Code of Civil Procedure, as amended, there was no lawful and valid transmission thereof to them. Upon the foregoing grounds the judgment appealed from rendered against the appellants Marcelina and Candida surnamed Sabiniano, represented by Epifanio Sabiniano, their guardian ad litem, is affirmed. No costs shall be taxed.