Case Digest (G.R. No. 214590)
Facts:
Estate of Susano J. Rodriguez v. Republic of the Philippines, G.R. No. 214590, April 27, 2022, Supreme Court Second Division, Hernando, J., writing for the Court. The petition arises from the estate of Susano J. Rodriguez, represented by its attorney-in-fact Virgilio R. Valenzuela (petitioner/estate), against the Republic of the Philippines, represented by the Department of Health (respondent/Republic), seeking revocation of a deed of conditional donation and forfeiture of improvements.On September 12, 1968, Rodriguez executed a deed of conditional donation conveying a 322,839 sq.m. parcel (TCT No. 7800) in Barangay Cadlan, Pili, Camarines Sur to the Republic for construction of a mental hospital. The deed imposed six conditions, notably (5) a prohibition that the donee shall not “Lease, Let, Convey, Dispose, or Encumber” the property or any portion thereof without the prior and express approval of the donor, and (6) an express stipulation that title remains with the donor until all conditions are complied with and that violation would ipso facto revoke the donation and cause reversion of title.
On September 29, 2008, the estate filed a complaint for revocation of the donation and forfeiture of improvements, alleging that a portion of the donated land was used for residential and commercial purposes by informal settlers in violation of the fifth condition. The Republic answered raising, inter alia, lack of capacity (an estate has no legal personality to sue), prescription under Article 1144 of the Civil Code (an action on a written contract must be brought within 10 years), and that the prohibition against alienation unduly restricts the donee’s ownership and is contrary to public policy.
Trial on the merits was conducted. The Regional Trial Court (RTC), Branch 31 of Pili, Camarines Sur, rendered a March 14, 2012 Decision revoking and cancelling the donation as to 27 hectares (of the 32 hectares) and ordered reconveyance of the unused 27 hectares to Rodriguez’s heirs. The RTC applied the rules on contracts (the donation being onerous under Article 733) and held that the estate’s cause of action accrued when the Republic failed to execute a separate ejectment judgment (Civil Case No. P‑86) against informal settlers; thus the 2008 complaint was within the 10‑year prescriptive period. A motion for reconsideration was denied by the RTC on May 3, 2012.
The Court of Appeals (CA), however, in a February 20, 2014 Decision (and September 16, 2014 Resolution denying reconsideration), reversed and set aside the RTC Decision and dismissed the estate’s complaint. The CA held the estate had capacity to sue through its administrator and attorney‑in‑fact, but found that (a) the deed’s prohibition against alienation lacked a definite duration and was therefore an impossible condition under Article 727 of the Civil Code and contrary to public policy (citing Roman Catholic Archbishop of Manila v. Court of Appeals), and (b) even if valid the Republic did not commit a substantial breach: it had filed an ejectment ac...(Pro-only)
Issues:
- Did the estate’s cause of action for revocation of the conditional donation prescribe under Article 1144 of the Civil Code?
- Is the fifth condition of the deed of conditional donation—prohibiting the donee from leasing, letting, conveying, disposing or encumbering the donated property without the donor’s prior approval—void for being an indefinite/perpetual restriction contrary to public policy?
- Did the Republic violate the fifth condition (and commit a substantial breach warranting revocation) by failing to execute the ejectment judgment against informal settlers and by allowing occupation/use of substantial porti...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)