Title
Lagazo vs. Court of Appeals
Case
G.R. No. 112796
Decision Date
Mar 5, 1998
A dispute over a donated property arose when formal acceptance of the donation was not communicated to the donor, rendering it invalid. The Supreme Court upheld the appellate decision, denying the petitioner's claim.

Case Summary (G.R. No. 71664)

Key Dates

  • Award of lot to Catalina Jacob: July 1975.
  • Deed(s) and transactions between parties: 1977–1985 (including Special Power of Attorney, Deed of Assignment(s), Deed of Donation dated January 30, 1985).
  • Complaint for recovery of possession filed by petitioner: January 22, 1987.
  • Court of Appeals decision reversed the trial court: November 29, 1993.
  • Affidavit of acceptance by petitioner filed before the Supreme Court: August 28, 1990 (submitted late in the litigation).
  • Supreme Court decision (denying petition and affirming the Court of Appeals): March 5, 1998.

Central Legal Questions Presented

  • Whether a donation of immovable property is perfected and valid if the donee’s acceptance is contained in a separate instrument but not formally communicated to the donor in the manner required by law.
  • Whether payments made by the putative donee (petitioner) for installments, arrearages and taxes on the donated property transform an otherwise pure donation into an onerous donation, thereby subjecting the transaction to ordinary contract formalities and relaxing the formal requirements for acceptance.

Factual Background (Undisputed Core Facts)

  • Catalina Jacob was awarded the lot under the City of Manila’s land distribution program and built a house on it. She left for Canada in 1977 and later executed documents from abroad.
  • Catalina executed a Special Power of Attorney in 1977 in favor of Eduardo Espaol; later revoked that power and gave a similar power to petitioner.
  • On January 30, 1985, Catalina executed a Deed of Donation purportedly conveying the lot and improvements to her grandson, petitioner. The deed described the donation in terms of “love and affection,” “liberality and generosity,” and contained language purporting to transfer the property “free from all liens and encumbrances and charges whatsoever.” The deed did not record any burden or condition to be borne by the donee.
  • Petitioner paid delinquent installments and the remaining balance of the lot after discovering the property on a delinquent list; he also paid taxes and sought to have the award declared in Catalina’s name.
  • Private respondent produced a chain of assignments: (a) deed of absolute sale by Catalina to Eduardo Espaol (1977) for the house, (b) deed of assignment by Catalina to Eduardo (1980) over Lot 8W, and (c) deed of assignment by Eduardo to private respondent (1982). Private respondent claimed ownership under these documents and actual possession prior to petitioner’s ouster demand.
  • The trial court found petitioner’s version more credible and ruled for petitioner; the Court of Appeals reversed based principally on lack of acceptance of the donation by the donee.

Trial Court and Appellate Findings

  • Trial court: Credited petitioner’s narrative, noted petitioner’s active steps to prevent delisting for nonpayment, and concluded that petitioner had better right to the property; judgment ordered return of possession to petitioner and awarded attorney’s fees.
  • Court of Appeals: Reversed. Focused on the absence of proof that petitioner accepted the donation in the requisite form. Held that acceptance must appear either in the deed of donation or in a separate public document with authentic notification to the donor and annotation in both instruments; absent such proof, the donation is null and void. Rejected petitioner’s argument that the donation was onerous because the deed contained no imposed burden; held that petitioner’s payments were voluntary and not proof of an imposed condition. Ordered dismissal of petitioner’s claim without awarding attorney’s fees.

Governing Legal Principles on Donations Applied by the Court

  • Distinction between simple (pure) donations and onerous donations: A simple donation arises from pure liberality; an onerous donation is subject to burdens or charges imposed on the donee. (Civil Code doctrine as recited in the decision.)
  • Article 733 Civil Code: Donations with onerous cause are governed by the rules on contracts (hence ordinary contract acceptance rules apply).
  • For simple donations of immovable property: Acceptance must exist and be made during the donor’s lifetime (Arts. 734 and 746). Article 749 prescribes solemn formalities for donations of immovables: public instrument description and specification of the value of charges, and, if acceptance is in a separate public instrument, the donor must be authentically notified and annotation must appear in both instruments.
  • The doctrine of cognition: A donation is perfected only when the donor knows of the acceptance by the donee (as articulated through citations to Vitug and Tolentino). Absence of proof of acceptance (or of required authentic notice and annotation where acceptance is separate) renders the donation ineffective as a transfer of title.

Application of Law to Facts — Whether Donation Was Onerous

  • Petitioner argued that his payment of arrearages and the balance of installments demonstrated an imposed burden, thereby converting the donation into an onerous one and relaxing the formal requirements for acceptance (acceptance could be implied and need not meet Article 749 formalities).
  • The Supreme Court rejected that argument: the deed’s express language unequivocally characterized the transfer as a pure donation “free from all liens and encumbrances and charges whatsoever” and motivated by love and affection — wording consistent with a simple donation. There was no wording in the deed imposing any burden, charge or condition on the donee.
  • The Court found that petitioner’s payments were voluntary and, in any event, were consistent with petitioner’s conduct under the power of attorney authorizing him to take acts necessary to fulfill Catalina’s obligations. Nothing in the record showed that those payments were imposed by the donor as a condition of the donation. Therefore, the transaction remained a simple donation, not an onerous one.

Application of Law to Facts — Acceptance Requirement and Proof

  • For a simple donation of immovable property, acceptance is indispensable and must be shown either in the deed itself or in a separate public instrument; if acceptance is in a separate instrument, the donor must be authentically notified and both instruments must show the notation of such notice (Art. 749).
  • The deed of donation offered by petitioner did not show any acceptance by him. Petitioner failed to present a contemporaneous acceptance instrument in the trial court, despite private respondent’s allegation of lack of acceptance raised in pleadings.
  • Petitioner later submitted an affidavit of acceptance dated August 28, 1990, but this affidavit was produced only after the Court of Appeals decision and was not presented in the trial court. The Supreme Court held that evidence and matters not raised at trial ordinarily may not be raised for the first time on appeal and that, even if acceptance could be considered at a later stage, the legal formalities required for a separate acceptance (authentic notice and annotation in both instruments) were not proven. Accordingly, the purported donation remained defective for want of proper proof of acceptance.

Secondary Issue — Supervening Administrative Acts and Transfer by City of Manila

  • Petitioner urged that subsequent administrative action by the City of Manila (transfer and issuance of title to petitioner following investigation) produced a status that would render the appellate decision unjust.
  • The Court examined the city resolution and the investigator’s report that recommended transfer. It found those administrative findings to be inconsistent with sworn testimony in the record and potentially based on misrepresentations by petitioner; the investigator’s report was not subject to cross‑examination.
  • The Court concluded that administrative action premised on the defective deed of donation cannot cure the fundamental lack of perfected donation vis‑à‑vis private respondent. Because the deed did not transfer legally cognizable title (due to lack of acceptance), the administrative acts derived from that document could not validate petitioner’s asserted rights against private respondent in the judicial contest.

Private Respondent’s Claim and Limits on the Court’s Disposition

  • The Court noted that even though petitioner failed to prove title by donation, this did not automatically adjudicate private respondent’s claimed title. Private respondent’s claim rested on a chain of assignments (Catalina → Eduardo → private respondent), and their authenticity or validity could affect third-party rights.
  • The assignors (Catalina an

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