Corazon Catalan, et. Al., v. Jose Basa, et. Al G.R No.

159567, July 31, 2007

FACTS: In 1948, Feliciano Catalan was discharged from active military service due to his
schizophrenia which incapacitates him to render service. In 1949, Feliciano married Corazon
Cerezo.

In 1951, an “Absolute Deed of Donation,” was donated allegedly by Feliciano in favor of his sister
Mercedes Catalan, one-half of his real property.

In 1953 BPI filed Special Proceedings before the Court of First Instance of Pangasinan to declare
Feliciano incompetent. the trial court issued its Order for Adjudication of Incompetency and
appointing Guardian for the Estate of Feliciano. The following day, the trial court appointed BPI
as Feliciano’s guardian.

On 1979, Mercedes sold the property in issue in favor of her children Delia and Jesus Basa.10 The
Deed of Absolute Sale was registered with the Register of Deeds of Pangasinan on February 20,
1992, and Tax Declaration No. 12911 was issued in the name of respondents.11

In 1997, BPI, acting as Feliciano’s guardian, alleged that the Deed of Absolute Donation to
Mercedes was void ab initio, as Feliciano was not of sound mind and was therefore incapable of
giving valid consent. Thus, it claimed that if the Deed of Absolute Donation was void ab initio, the
subsequent Deed of Absolute Sale to Delia and Jesus Basa should likewise be nullified, for
Mercedes Catalan had no right to sell the property to anyone. .

In August 1997, Feliciano passed away, thus, the original complaint was amended to substitute
his heirs in lieu of BPI as complainants.

RTC and CA ruled in favor of the respondents citing that the evidence presented by the
complainants was insufficient to overcome the presumption that Feliciano was sane and
competent at the time he executed the deed of donation in favor of Mercedes Catalan, hence,
this petition.

ISSUE: Whether or not the Absolute Deed of Donation is valid?

RULING: The petition is bereft of merit, and we affirm the findings of the Court of Appeals and
the trial court.

A donation is an act of liberality whereby a person disposes gratuitously a thing or right in favor
of another, who accepts it. Like any other contract, an agreement of the parties is essential.
Consent in contracts presupposes the following requisites: (1) it should be intelligent or with an
exact notion of the matter to which it refers; (2) it should be free; and (3) it should be
spontaneous. The parties' intention must be clear and the attendance of a vice of consent, like
any contract, renders the donation voidable.

In order for donation of property to be valid, what is crucial is the donor’s capacity to give consent
at the time of the donation. Certainly, there lies no doubt in the fact that insanity impinges on
consent freely given. However, the burden of proving such incapacity rests upon the person who
alleges it; if no sufficient proof to this effect is presented, capacity will be presumed.
Based from scientific studies cited by the court, it held that a person suffering from schizophrenia
does not necessarily lose his competence to intelligently dispose his property. By merely alleging
the existence of schizophrenia, petitioners failed to show substantial proof that at the date of the
donation, Feliciano Catalan had lost total control of his mental faculties. Thus, the lower courts
correctly held that Feliciano was of sound mind at that time and that this condition continued to
exist until proof to the contrary was adduced.

It is interesting to note that the petitioners questioned Feliciano’s capacity at the time he donated
the property, yet did not see fit to question his mental competence when he entered into a contract
of marriage with Corazon Cerezo or when he executed deeds of donation of his other properties
in their favor. The presumption that Feliciano remained competent to execute contracts, despite
his illness, is bolstered by the existence of these other contracts. Competency and freedom from
undue influence, shown to have existed in the other acts done or contracts executed, are
presumed to continue until the contrary is shown.

Needless to state, since the donation was valid, Mercedes had the right to sell the property to
whomever she chose .Not a shred of evidence has been presented to prove the claim that
Mercedes’ sale of the property to her children was tainted with fraud or falsehood. It is of little
bearing that the Deed of Sale was registered only after the death of Mercedes. What is material
is that the sale of the property to Delia and Jesus Basa was legal and binding at the time of its
execution. Thus, the property in question belongs to Delia and Jesus Bas.

BAR QUESTION:

In 2004, Felix was discharged from military service for having been diagnosed with schizophrenia.
He later on married a woman named Cora. Sometime in 2006, an “Absolute Deed of Donation,”
was donated by Felix in favor of his sister Merci, one-half of his real property. Merci later sold the
donated property to her children, Dipsy and Lala. In 2007, The Bank of Philippine Islands (BPI),
acting as Felix’s guardian, alleged that the Deed of Absolute Donation to Merci was void ab initio,
as Feliciano was not of sound mind and was therefore incapable of giving valid consent. Thus, it
claimed that if the Deed of Absolute Donation was void ab initio, the subsequent Deed of Absolute
Sale to Dipsy and Lala should likewise be nullified, for Merci had no right to sell the property to
anyone. Are the contentions of BPI correct?

ANSWER:

No. In order for donation of property to be valid, what is crucial is the donor’s capacity to give
consent at the time of the donation. Certainly, there lies no doubt in the fact that insanity impinges
on consent freely given. However, the burden of proving such incapacity rests upon the person
who alleges it; if no sufficient proof to this effect is presented, capacity will be presumed. In
Catalan et. al. vs. Basa et. al., based from scientific studies cited by the court, it held that a person
suffering from schizophrenia does not necessarily lose his competence to intelligently dispose his
property. By merely alleging the existence of schizophrenia, petitioners failed to show substantial
proof that at the date of the donation, Feliciano Catalan had lost total control of his mental
faculties. Thus, the lower courts correctly held that Feliciano was of sound mind at that time and
that this condition continued to exist until proof to the contrary was adduced. Since the donation
was valid, Mercedes had the right to sell the property to whomever she chose .Not a shred of
evidence has been presented to prove the claim that Mercedes’ sale of the property to her children
was tainted with fraud or falsehood.