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G.R. No.

L-6600 July 30, 1954

HEIRS OF JUAN BONSATO and FELIPE BONSATO, petitioners,


vs.
COURT OF APPEALS and JOSEFA UTEA, ET AL., respondents.

Benedict C. Balderrama for petitioners.


Inocencio Rosete for respondents.

j, J.B.L., J.:

This is a petition for review of a decision of the Court of Appeals holding two deeds of donation
executed on the first day of December, 1939 by the late Domingo Bonsato in favor of his brother
Juan Bonsato and of his nephew Felipe Bonsato, to be void for being donations mortis
causa accomplished without the formalities required by law for testamentary dispositions.

The case was initiated in the Court of First Instance of Pangasinan (Case No. 8892) on June 27,
1945, by respondents Josefa Utea and other heirs of Domingo Bonsato and his wife Andrea
Nacario, both deceased. Their complaint (for annulment and damages) charged that on the first
day of December, 1949, Domingo Bonsato, then already a widower, had been induced and
deceived into signing two notarial deeds of donations (Exhibits 1 and 2) in favor of his brother
Juan Bonsato and of his nephew Felipe Bonsato, respectively, transferring to them several
parcels of land covered by Tax Declaration Nos. 5652, 12049, and 12052, situated in the
municipalities of Mabini and Burgos, Province of Pangasinan, both donations having been duly
accepted in the same act and documents. Plaintiffs likewise charged that the donations
were mortis causa and void for lack of the requisite formalities. The defendants, Juan Bonsato
and Felipe Bonsato, answered averring that the donations made in their favor were voluntarily
executed in consideration of past services rendered by them to the late Domingo Bonsato; that
the same were executed freely without the use of force and violence, misrepresentation or
intimidation; and prayed for the dismissal of the case and for damages in the sum of P2,000.

After trial, the Court of First Instance rendered its decision on November 13, 1949, finding that
the deeds of donation were executed by the donor while the latter was of sound mind, without
pressure or intimidation; that the deeds were of donation inter vivos without any condition
making their validity or efficacy dependent upon the death of the donor; but as the properties
donated were presumptively conjugal, having been acquired during the coverture of Domingo
Bonsato and his wife Andrea Nacario, the donations were only valid as to an undivided one-half
share in the three parcels of land described therein.

Thereupon the plaintiffs duly appealed to the Court of Appeals, assigning as primary error the
holding of the court below that the donations are inter vivos; appellants contending that they
were mortis causa donations, and invalid because they had not been executed with the
formalities required for testamentary disposition.

A division of five of the Court of Appeals took the case under consideration, and on January 12,
1953, the majority rendered judgment holding the aforesaid donations to be null and void,
because they were donations mortis causa and were executed without the testamentary
formalities prescribed by law, and ordered the defendants-appellees Bonsato to surrender the
possession of the properties in litigation to the plaintiffs-appellants. Two Justices dissented,
claiming that the said donations should be considered as donations inter vivos and voted for the
affirmance of the decision of the Court of First Instance. The donees then sought a review by this
Court.

The sole issue submitted to this Court, therefore, is the juridical nature of the donations in
question. Both deeds (Exhs. 1 and 2) are couched in identical terms, with the exception of the
names of the donees and the number and description of the properties donated. The principal
provisions are the following.

ESCRITURA DE DONATION

Yo, Domingo Bonsato, viudo de Andrea Nacario, mayor de edad, vencino y residente del
municipio de Agno, Pangasinan, I.F., por la presente declaro lo siguiente:

Que mi osbrino Felipe Bonsato, casado, tambien mayor de edad, vecino de Agno,
Pangasinan, I.F., en consideracion de su largo servicio a Domingo Bonsato, por la
presente hagor y otorgo una donacion perfecta e irrevocable consumada a favor del
citado Felipe Bonsato de dos parcelas de terreno palayero como se describe mas abajo.

(Description omitted)

Que durante su menor de edad de mi citado sobrino Felipe Bonsato hasta en estos dias,
siempre me ha apreciado y estimado como uno de mis hijos y siempre ha cumplido
todas mis ordenes, y por esta razon bajo su pobriza sea movido mi sentimiento para dar
una recompensa de sus trabajos y aprecios a mi favor.

Que en este de 1939 el donante Domingo Bonsato ha entregado a Felipe Bonsato


dichos terrenos donados y arriba citados pero de los productos mientras vive el donante
tomara la parte que corresponde como dueño y la parte como inquilino tomara Felipe
Bonsato.

Que en vista de la vejez del donante, el donatorio Felipe Bonsato tomara posesion
inmediatamente de dichos terrenos a su favor.

Que despues de la muerte del donante entrara en vigor dicha donancion y el donatario
Felipe Bonsato tendra todos los derechos de dichos terrenos en concepto de dueño
absoluto de la propiedad libre de toda responsibilidad y gravamen y pueda ejercitar su
derecho que crea conveniente.

En Testimonio de todo lo Cual, signo la presente en Agno, Pangasinan, I.F., hoy dia 1. 0 de
Diciembre, 1939.

Domingo (His thumbmark) Bonsato

Yo, Felipe Bonsato, mayor de edad, casado, Vecino de Mabini, Pangasinan, I.F., declaro
por la presente que acepto la donacion anterior otorgado por Domingo Bonsato a mi
favor.
(Sgd.) Felipe Bonsato

SIGNADO Y FIRMADO EN PRESENCIA DE:

(Sgd.) Illegible (Sgd.) Illegible

The majority of the special divisions of five of the Court of Appeals that took cognizance of this
case relied primarily on the last paragraph, stressing the passage:

Que despues de la muerte del donante entrara en vigor dicha donacion . . .

while the minority opinion lay emphasis on the second paragraph, wherein the donor states that
he makes "perfect, irrevocable, and consummated donation" of the properties to the respective
donees, petitioners herein.

Strictly speaking, the issue is whether the documents in question embody valid donations, or
else legacies void for failure to observe the formalities of wills (testaments). Despite the
widespread use of the term "donations mortis causa," it is well-established at present that the
Civil Code of 1889, in its Art. 620, broke away from the Roman Law tradition, and followed the
French doctrine that no one may both donate and retain ("donner at retenir ne vaut"), by merging
the erstwhile donations mortis causa with the testamentary dispositions, thus suppressing said
donations as an independent legal concept.

ART. 620. Donations which are to become effective upon the death of the donor partake
of the nature of disposals of property by will and shall be governed by the rules
established for testamentary successions.

Commenting on this article, Mucius Scaevola (Codigo Civl, Vol. XI, 2 parte, pp. 573, 575 says:

No ha mucho formulabamos esta pregunta: Subsisten las donaciones mortis


causa como institucion independiente, con propia autonomia y propio compo
jurisdiccional? La respuesta debe ser negativa.

xxx xxx xxx

Las donaciones mortis causa se consevan en el Codigo como se conserva un cuerpo


fosil en las vitrinas de un Museo. La asimilacion entre las donaciones por causa de
muerte y las transmissiones por testamento es perfecta.

Manresa, in his Commentaries (5th ed.), Vol. V. p. 83, expresses the same opinion:

"La disposicion del articulo 620 significa, por lo tanto: 1..o, que han desaparecido las llamas antes
donaciones mortis causa por lo que el Codigo no se ocupa de ellas en absoluto; 2.o, que toda disposicion de bienes para
despues de la muerte sigue las reglas establecidas para la sucesion testamentaria.

And Castan, in his Derecho Civil, Vol. IV (7th Ed., 1953), p. 176, reiterates:
(b) Subsisten hoy en nuestro derecho las donaciones mortis causa? De lo que
acabamos de decir se desprende que las donaciones mortis causa han perdido en el
Codigo Civil su caracter distintivo y su naturaleza y hay que considerarlos hoy como una
institucion suprimida, refundida en el legado ... . Las tesis de la desaparcion de las
donaciones mortis causa en nuestro Codigo Civil, acusada ya precedentemente por el
pryecto de 1851 puede decirse que constituye una communis opinion entre nuestros
expositores, incluso los mas recientes.

We have insisted on this phase of the legal theory in order to emphasize that the term
"donations mortis causa" as commonly employed is merely a convenient name to designate
those dispositions of property that are void when made in the form of donations.

Did the late Domingo Bonsato make donations inter vivos or dispositions post mortem in favor of
the petitioners herein? If the latter, then the documents should reveal any or all of the following
characteristics:

(1) Convey no title or ownership to the transferee before the death of the transferor; or, what
amounts to the same thing, that the transferor should retain the ownership (full or naked) and
control of the property while alive (Vidal vs. Posadas, 58 Phil., 108; Guzman vs. Ibea, 67 Phil.,
633);

(2) That before his death, the transfer should be revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of a reserved power in the donor to dispose
of the properties conveyed (Bautista vs. Sabiniano, G. R.
L-4326, November 18, 1952);

(3) That the transfer should be void if the transferor should survive the transferee.

None of these characteristics is discernible in the deeds of donation, Exhibits 1 and 2, executed
by the late Domingo Bonsato. The donor only reserved for himself, during his lifetime, the
owner's share of the fruits or produce ("de los productos mientras viva el donante tomara la
parte que corresponde como dueño"), a reservation that would be unnecessary if the ownership
of the donated property remained with the donor. Most significant is the absence of stipulation
that the donor could revoke the donations; on the contrary, the deeds expressly declare them to
be "irrevocable", a quality absolutely incompatible with the idea of conveyances mortis
causa where revocability is of the essence of the act, to the extent that a testator can not lawfully
waive or restrict his right of revocation (Old Civil Code, Art. 737; New Civil Code, Art. 828).

It is true that the last paragraph in each donation contains the phrase "that after the death of the
donor the aforesaid donation shall become effective" (que despues de la muerte del donante
entrara en vigor dicha donacion"). However, said expression must be construed together with the
rest of the paragraph, and thus taken, its meaning clearly appears to be that after the donor's
death, the donation will take effect so as to make the donees the absolute owners of the donated
property, free from all liens and encumbrances; for it must be remembered that the donor
reserved for himself a share of the fruits of the land donated. Such reservation constituted a
charge or encumbrance that would disappear upon the donor's death, when full title would
become vested in the donees.

Que despues de la muerte del donante entrara en vigor dicha donacion y el donatario
Felipe Bonsato tendra todos derechos de dichos terrenos en concepto de dueño
absoluto de la propiedad libre de toda responsibilidad y gravamen y puede ejercitar su
derecho que crea conveniente.
Any other interpretation of this paragraph would cause it to conflict with the irrevocability of the
donation and its consummated character, as expressed in the first part of the deeds of donation,
a conflict that should be avoided (Civ. Code of 1889, Art. 1285; New Civil Code, Art. 1374; Rule
123, sec. 59, Rules of Court).

Que mi sobrino FILIPINO BONSATO, casado, tambien mayor de edad, vecino de Agno,
Pangasinan, I. F., en consideracion de su largo servicio a Domingo Bonsato, por la presente
hago y otorgo una donacion perfecta e irrevocable consumada a favor del citado Felipe Bonsato
de dos parcelas de terreno palayero como se describe mas abajo.

In the cases held by this Court to be transfers mortis causa and declared invalid for not having
been executed with the formalities of testaments, the circumstances clearly indicated the
transferor's intention to defer the passing of title until after his death. Thus, in Cariño vs. Abaya,
70 Phil., 182, not only were the properties not to be given until thirty days after the death of the
last of the donors, but the deed also referred to the donees as "those who had been mentioned
to inherit from us", the verb "to inherit" clearly implying the acquisition of property only from and
after the death of the alleged donors. In Bautista vs. Sabiniano, 49 Off. Gaz., 549; 92 Phil., 244,
the alleged donor expressly reserved the right to dispose of the properties conveyed at any time
before his death, and limited the donation "to whatever property or properties left undisposed by
me during my lifetime", thus clearly retaining their ownership until his death. While in David vs.
Sison, 42 Off. Gaz. (Dec, 1946) 3155, the donor not only reserved for herself all the fruits of the
property allegedly conveyed, but what is even more important, specially provided that "without
the knowledge and consent of the donor, the donated properties could not be disposed of in any
way", thereby denying to the transferees the most essential attribute of ownership, the power to
dispose of the properties. No similar restrictions are found in the deeds of donation involved in
this appeal.

That the conveyance was due to the affection of the donor for the donees and the services
rendered by the latter, is of no particular significance in determining whether the deeds Exhibits 1
and 2 constitute transfers inter vivos or not, because a legacy may have identical motivation.
Nevertheless, the existence of such consideration corroborates the express irrevocability of the
transfers and the absence of any reservation by the donor of title to, or control over, the
properties donated, and reinforces the conclusion that the act was inter vivos. Hence, it was
error for the Court of Appeals to declare that Exhibits 1 and 2 were invalid because the
formalities of testaments were not observed. Being donations inter vivos, the solemnities
required for them were those prescribed by Article 633 of the Civil Code of 1889 (reproduced in
Art. 749 of the new Code, and it is undisputed that these were duly complied with. As the
properties involved were conjugal, the Court of First Instance correctly decided that the
donations could not affect the half interest inherited by the respondents Josefa Utea, et al. from
the predeceased wife of the donor.

The decision of the Court of Appeals is reversed, and that of the Court of First Instance is
revived and given effect. Costs against respondents.
G.R. No. L-61023 August 22, 1984

THE NATIONAL TREASURER OF THE PHILIPPINES, petitioner,


vs.
PAULINA PEREZ VDA. DE MEIMBAN and COURT OF APPEALS, respondents.

The Solicitor General for petitioner.

Confessor Sansano for respondents.

GUTIERREZ, JR., J.:

This petition seeks the reversal of the decision of the Court of Appeals (now Intermediate
Appellate Court), dated June 16, 1982, which affirmed the decision of the Court of First Instance
of Pangasinan ordering herein petitioner to pay the private respondent P50,000.00 as damages
or compensation out of the Assurance Fund.

The facts as stated in the decision of the lower court are as follows:

"Filomena Primicias, during her lifetime, was the owner of a parcel of land
situated in barrio San Vicente, Municipality of Alcala, Pangasinan, designated as
Lot No. 2-C, Plan PSU-109394-Amd. 2, with an area of 613,916 square meters,
and registered in her name under OCT 10318 (Exhibit B). On November 24,
1958, she executed a public document styled 'Donation Mortis Causa" (Exhibit A)
over a 10-hectare portion of the said land located on the southeastern part
thereof in favor of her daughter, plaintiff Paulina Perez, who accepted the
donation in the same instrument. On November 26, 1958, the document was duly
registered and annotated on the memorandum of encumbrances of OCT 10318.

The records disclose that even prior to the execution of the aforestated deed of
donation, Filomena, Primicias had sold to certain third parties several portions of
Lot 2-C located along the southwestern part thereof. Lot 2-C was subsequently
subdivided segregating the portions thus sold, as evidenced by subdivision plan
PSU-52185. (Exhibit 4-C); and on March 28, 1963, the Register of Deeds of
Pangasinan issued TCT 43170 (Exhibit 4) in the name of Filomena Primicias
covering the remaining unsold portion of the said land designated as Lot 2-C 16,
with an area of 588, 244 square meters. However, the Register of Deeds,
through negligence or over- sight, failed to carry over in TCT 43170 the plaintiff's
deed of donation which had been annotated on OCT No. 10318.
There after Filomena Primicias obtained from defendant People's Bank and Trust
Co. (PBTC) two loans in the amounts of P15,000.00 and P28,000.00 which were
secured by Lot 2- C-16, as evidenced by the real estate mortgages dated April 8
and June 10, 1963, respectively (Exhibits 6 and 7). These mortgage deeds were
duly registered and the corresponding memoranda thereof annotated on TCT No.
43170 on April 8 and June 10, 1963, respectively.

Filomena Primicias died on June 15, 1965 leaving her said obligation unsettled.
On July 15, 1968, PBTC instituted foreclosure proceedings, and in due course,
the plaintiff as one of the heirs of the deceased, was sent a copy of the notice of
extra-judicial sale. Whereupon plaintiff made the necessary inquiries in the Office
of the Register of Deeds of Pangasinan and discovering that OCT No. 10318 has
been cancelled and, in lieu thereof, TCT No. 43170 (or 43710) had been issued
pursuant to the subdivision agreement entered into by Filomena Primicias and
the transferees of portions of the original Lot 2-C; and that the inscription of her
deed of donation mortis causa in OCT No. 10318 had not been carried over into
TCT No. 43710. To protect her interest, the plaintiff, on August 1, 1968,
registered anew the deed of donation mortis causa (Exhibit C) and caused the
entry of an adverse claim on said TCT.

On August 7, 1968, the property was sold at public auction; and the PBTC, as
highest bidder, was issued the corresponding Sheriff's Certificate of Sale (exhibit
8).

On June 17, 1969, plaintiff instituted the instant action against the PBTC and the
Register of Deeds of Pangasinan, seeking partial annulment of the Sheriff's
Certificate of Sale issued in favor of PBTC to the extent of the 10-hectare portion
donated to her.

xxx xxx xxx

After the trial this Court thru the Presiding Judge of Branch V, rendered a
decision in favor of the plaintiff and against the defendant bank, ordering the
partial annulment of the Sheriff's Certificate of Sale dated August 7, 1968,
executed in favor of PBTC to the extent of 10 hectares being claimed by plaintiff
and ordering defendant PBTC to immediately segregate and reconvey to the
plaintiff the said 10 hectares portion of Lot 2-C-16 in conformity and in
accordance with the terms and conditions of the deed of donation inter vivos and,
in the alternative ordering defendant PBTC, in the event that reconveyance
thereof is not possible, to pay the plaintiff the sum of P10,000.00 representing the
fair market value of her claims plus interest thereon computed at the rate of 6%
per annum from the date of the filing of the complaint until finally paid and to pay
the sum of P1,000.00 as attorney's fees and to pay the costs. (Idem. pp. 5-6).

However, on appeal by the defendant PBTC, the Court of Appeals reversed and
set aside the decision of this Court in Civil Case No. U-2128 and, accordingly,
dismissed the plaintiff's complaint. In reversing and setting aside the decision of
Branch V of this Court in Civil Case No. U-2128, the Court of Appeals held that
"neither" the honest mistake and inadvertence of the Register of Deeds nor the
absence of negligence on the part of the appellee (now plaintiff herein) could
prejudice the rights of appellant bank (PBTC) as an innocent mortgagee for value
and that the remedy of the appellee was to go against the Assurance fund as
provided for by Section 101 of Act 496. ...

On the basis of the above findings of the appellate court, the trial court rendered a decision in
favor of the private respondent and against herein petitioner, ordering the latter to pay the former
out of the Assurance Fund, in the amount of P50,000.00 as damages or compensation.

On appeal, the Court affirmed the findings of the lower court, hence, this petition.

Petitioner assigns the following errors:

WHETHER RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT


THE DEED OF DONATION MORTIS CAUSA EXECUTED BY FILOMENA
PRIMICIAS IN FAVOR OF PAULINA PEREZ VDA. DE MEIMBAN IS A
DONATION INTER VIVOS AND IN CONSIDERING THAT THERE WAS A VALID
TRANSFER TO PAULINA PEREZ VDA. DE MEIMBAN WHO COULD
RECOVER FROM THE ASSURANCE FUND.

II

WHETHER RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING


THE PRIVATE RESPONDENT NEGLIGENT FOR NOT SEGREGATING THE
TEN-HECTARE PORTION OF THE LAND DONATED TO HER.

III

WHETHER RESPONDENT COURT OF APPEALS ERRED IN NOT


CONSIDERING THE DEFENSE OF PRESCRIPTION.

IV

WHETHER THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING


THE ASSURANCE FUND LIABLE.

The principal issue to be determined in the present petition is the nature of the donation, whether
it is a donation inter vivos or a donation mortis causa.

Whether a donation is inter vivos or mortis causa depends upon the nature of the disposition
made. Did the donor intend to transfer the ownership of the property donated upon the execution
of the donation? If this is so, as reflected from the provisions contained in the donation, then it is
inter vivos; otherwise, it is merely mortis cause or made to take effect after death. (Castro v.
Court of Appeals, 27 SCRA 1076, 1082, citing Howard v. Padilla and Court of Appeals, G.R. Nos.
L-7064 and L-7098, April 22, 1955).

According to the petitioner, the donation in question is mortis causa since it is clear from the
provisions thereof that ownership and control of the donated property would be transferred to the
private respondent only upon the death of the donor. This being so, therefore the deed of
donation should have complied with the formalities of a will in order to become valid.
The donation provides:

That for and in consideration of the love and affection which the DONOR has for
the DONEE, the said Donor by these presents does hereby give, transfer, and
convey unto the DONEE, her heirs and assigns a portion of ONE HUNDRED
THOUSAND (100,000) SQUARE METERS, on the southeastern part Pro-
indiviso of the above described property. (The portion herein donated is within
Lot 2-B of the proposed amendment Plan Subdivision of Lots Nos. 1 and 2, Psu
109393), with all the buildings and improvements thereon, to become effective
upon the death of the DONOR. (emphasis supplied).

It is crystal clear from the above-quoted deed of donation that the donor did not intend to transfer
the ownership much less, the possession of the donated property to the donee until after the
former's death as evidenced not only by the caption of the deed but more importantly, by what
was expressly provided in the donation itself That the donor retained the ownership of the
property was furthermore established by the fact that the donor, after executing the above deed,
mortgaged the same to the PBTC and until her death, did not try to fulfill her obligation to the
latter in order to free the property from the mortgage lien.

As the donation is in the nature of a mortis causa disposition, the formalities of a will should have
been complied with under Article 728 of the Civil Code, otherwise, the donation is void and would
produce no effect. As we have held in Alejandro v. Geraldez (78 SCRA 245, 253), "If the
donation is made in contemplation of the donor's death, meaning that the full or naked ownership
of the donated properties will pass to the donee because of the donor's death, then it is at that
time that the donation takes effect, and it is a donation mortis causa which should be embodied
in a last will and testament. (Citing Bonsato v. Court of Appeals, 95 Phil. 481)."

The donation in the case at bar was only embodied in a public instrument and was not executed
in accordance with the formalities of a will. Therefore, it could not have transferred ownership of
the disputed property to the private respondent and its subsequent annotation of adverse claim
in Transfer Certificate of Title No. 43710 did not produce any effect whatsoever. Consequently,
the private respondent cannot claim the property, especially after the same had been foreclosed
and sold at public auction in favor of PBTC. Necessarily therefore, no damages can also be
awarded to said respondent from the Assurance Fund since as far as the law is concerned, no
donation existed which the Register of Deeds failed to annotate on the new title of the property.

Inasmuch as all the other issues raised by herein petitioner are anchored on the vital question of
whether the donation is inter vivos or mortis causa we deem it unnecessary to pass upon these
other issues.

WHEREFORE, the petition is GRANTED and the decisions of the Court of Appeals dated June
16, 1982 and the Court of First Instance dated July 3, 1980 are hereby REVERSED and SET
ASIDE. The complaint filed against the petitioner is DISMISSED. No costs.

SO ORDERED.