G.R. No. 57455 - De Luna vs. Abrigo

Prudencio de Luna donated on January 24, 1965 a portion of 7,500 square meters of Lot No. 3707 covered by Transfer Certificate of Title No. T-5775 to Luzonian Colleges, Inc. (now Luzonian University Foundation, Inc., hereinafter the foundation) by a Deed of Donation Intervivos containing terms and conditions and provisions for automatic reversion in case of violation or non-compliance.
The foundation failed to comply with the conditions of the original donation.

On April 9, 1971, Prudencio de Luna executed a document entitled "Revival of Donation Inter-vivos" in favor of the foundation imposing, among others, conditions that the donee construct at its own expense a chapel, a nursery and a kindergarten named after St. Veronica, to follow specified plans and specifications, that construction must be at least seventy percent (70%) finished within three (3) years and completed within five (5) years from the date of the document unless extensions were granted in writing.
Paragraph 11 of the revival instrument provided that violation of any condition shall cause the automatic reversion of the donated area to the donor, his heirs, assigns and representatives "without the need of executing any other document for that purpose and without obligation whatever on the part of the DONOR."
The foundation, through its president, accepted the donation in the same document subject to all terms and conditions.

The donation was registered and annotated on April 15, 1971 as Entry No. 17939 in the memorandum of encumbrances of Transfer Certificate of Title No. T-5775.
On August 3, 1971, Prudencio de Luna and the foundation executed a "Deed of Segregation" whereby the donated area became Lot No. 3707-B of Subdivision Plan Psd-40392 and Transfer Certificate of Title No. T-16152 was issued in the name of the foundation; the remaining portion was retained by the donor.

On September 23, 1980, petitioners EVELYN DE LUNA, ROSALINA DE LUNA, PRUDENCIO DE LUNA, JR., WILLARD DE LUNA, ANTONIO DE LUNA AND JOSELITO DE LUNA, who allege they are the children and only heirs of the late Prudencio de Luna (died August 18, 1980), filed Civil Case No. 8624 in the Regional Trial Court of Quezon seeking cancellation of the donation and reversion of the donated land on the ground of non-compliance with the conditions.
The foundation answered, alleged partial and substantial compliance and an indefinite extension granted by the donor, and pleaded prescription as an affirmative defense.
The foundation moved for...(Subscriber-Only)

Whether the subject donation is an onerous donation governed by the rules on contracts under Article 733 of the New Civil Code and therefore not subject to the four-year prescriptive period of Article 764 applicable to donations generally.
Whether, if the donation is onerous and contains a stipulation providing for automatic reversion upon non-compliance, the action of the heirs to effect reversion is an action to enforce a written contract governed by the ten-year prescriptive period under Article 1144(1).

Validity and effect of the stipulation for automatic reversion and need for judicial intervention

Whether a stipulation in the donation contract that violation of any condition shall cause automatic reversion is valid and binding under Article 1306.
Whether judicial action is required to effect revocation where the contract provides for extrajudicial rescission, and if so, whether the present complaint is time-barred.