Case Summary (G.R. No. 57455)
Key Dates
Original Donation: January 24, 1965
Revival of Donation: April 9, 1971
Segregation and Issuance of TCT No. T-16152: August 3, 1971
Heir Death of Donor: August 18, 1980
Filing of Complaint: September 23, 1980
Trial Court Order Dismissing Complaint: July 7, 1981
Supreme Court Decision: January 18, 1990
Applicable Law
1987 Philippine Constitution (as decision date post-1987)
Civil Code of the Philippines (New Civil Code, effective 1950)
– Article 733 (onerous donations governed by contract law)
– Article 764 (four-year prescription for judicial revocation of donations)
– Article 1144(1) (ten-year prescription to enforce written contracts)
Background of the Donation
In 1965, Prudencio de Luna donated a 7,500 sqm portion of Lot No. 3707 (TCT No. T-5775) to Luzonian Colleges, Inc., subject to conditions and an automatic reversion clause. The foundation failed to comply, so in 1971 the donor “revived” the donation on similar onerous terms, including construction of a chapel, nursery and kindergarten within specified timeframes and automatic reversion upon breach.
Revival and Conditions of Donation
The 1971 “Revival of Donation Intervivos” required:
• Immediate start and 70% completion of buildings within three years
• Full completion within five years unless extended in writing
• Chapel altar and parts finished in granoletic marble
• Automatic reversion clause providing for extrajudicial reversion upon violation
Segregation and Title Issuance
On August 3, 1971, the donated tract was segregated as Lot No. 3707-B (Subs. Plan Psd-40392) and TCT No. T-16152 issued to the foundation, while Lot No. 3707-A remained with the donor. The revived donation was duly annotated in the encumbrance memorandum of the original title.
Filing of the Complaint
After the donor’s death in August 1980, his heirs filed Civil Case No. 8624 on September 23, 1980, alleging non-compliance with construction conditions and seeking cancellation of the donation and reversion of the property. The foundation countered with partial compliance claims and a prescription defense.
Trial Court Ruling on Prescription
The trial court held that automatic reversion required either donee’s subsequent consent or judicial declaration (citing Parks v. Province of Tarlac). Treating the action as one for judicial revocation under Article 764, it found prescription had run from April 9, 1976, and dismissed the complaint for being filed more than four years after breach.
Petitioners’ Prescription Argument
Petitioners contended that the automatic reversion clause obviated any need for judicial revocation under Article 764 and that their suit was in reality a contract-enforcement action subject to a ten-year prescription under Article 1144(1).
Supreme Court Analysis on Onerous Donations
The Court observed that donations with onerous causes are governed by general contract law per Article 733. The automatic reversion stipulation is a valid facultative resolutory condition allowing unilateral contract rescission upon breach without court decree. Cases such as University of the Philippines v. de los Angeles and Angeles v. Calasanz confirm that parties may agree to extrajudicial rescission clauses, judicial action being required only to determine the propriety of the rescission when contested.
Automatic Reversion Clause and Its Effect
The automatic reversion clause in paragrap
...continue readingCase Syllabus (G.R. No. 57455)
Facts of the Case
- On January 24, 1965, Prudencio de Luna donated 7,500 sq. m. of Lot No. 3707 (TCT No. T-5775) to Luzonian Colleges, Inc. (now Luzonian University Foundation, Inc.), subject to conditions and automatic reversion clauses.
- The foundation failed to comply with stipulated conditions, prompting a “Revival of Donation Intervivos” on April 9, 1971, with more detailed building obligations (chapel, nursery, kindergarten) to be at least 70% completed within three years and fully completed within five years.
- Paragraph 11 of the 1971 instrument provided for automatic reversion of the donated area upon any condition breach, without further formalities.
- The donation was annotated on the title on April 15, 1971, and the donated parcel was segregated as Lot No. 3707-B (TCT No. T-16152) on August 3, 1971; the remainder, Lot No. 3707-A, stayed with the donor.
- Prudencio de Luna died on August 18, 1980; his children (the petitioners) alleged non-compliance by the foundation and filed suit on September 23, 1980, claiming automatic reversion and seeking cancellation of the donation.
Procedural History
- The petitioners’ complaint was docketed as Civil Case No. 8624 before the Regional Trial Court of Quezon.
- The foundation answered, asserting partial compliance, an indefinite extension granted by the donor, and the prescription of the action.
- At pre-trial, the foundation moved to dismiss for prescription.
- By Order of July 7, 1981, the trial court granted dismissal on the ground that the action for revocation under Article 764 of the Civil Code prescribed in four years (counted from April 9, 1971 to April 9, 1976), and the complaint filed in September 1980 was late.
- No motion for reconsideration was filed.
- Petitioners filed a petition for certiorari before the Supreme Court on July 22, 1981; the case was submitted for decision on January 27, 1982.
Issue
- Whether the petitioners’ acti