C-J YULO & SONS, INC. v.

ROMAN CATHOLIC BISHOP OF SAN PABLO,

INC.
March 31, 2005
G.R. No. 133705

FACTS:

The case is a petition for review on certiorari assailing the decision of the CA reversing an earlier
decision of the RTC of Calamba Laguna revoking the donation of C-J Yulo in favor of the Roman
Catholic Bishop of San Pablo.

On September 24, 1977, the petitioner donated in favor of respondent a parcel of land at
Canlubang. Calamba, Laguna for the purpose of constructing a home for the aged and the infirm
in consonance with the donee’s humanitarian and Christian mission. It was stipulated that the
land cannot be used for some other purpose unless with prior written consent by the donor.

However, from around 1980 to 1990, the donee-respondent without prior written consent from the
donor-petitioner leased said lot thrice in order the gather funds for the building of the home for the
aged and the infirm. They were also considering that the proceeds of the lease be used in buying
another land where they could properly construct the same premises. It turned out that a factory
will be erected just beside the donated lot and it could be detrimental to the health of its future
occupants.

In view of the lease, the donor-petitioner through a board resolution wrote the donee-respondent
that the donation was being revoked. Subsequently, it filed complaint before the RTC of
Calamba , Laguna for the revocation of the donation due to breach of terms and for
reconveyance of subject property. Respondent in its Answer interposed that it was doing its best
to comply with the terms and that the lease was with the express (although unwritten) consent of
Jesus Miguel Yulo himself. It also argued that the cause of action of petitioner has prescribed
because it had known of the lease since 1980. But the RTC ruled in favor of petitioner.

Upon appeal before the CA, appellate court reversed said RTC decision, hence this petition for
review on certiorari.

ISSUES:

1. Is the lease of the donee of the donated property to gather funds for building the home for
the aged sufficient to constitute breach of the terms of donation and ground for its
revocation, when said lease is without written approval of the donor and the donation was
for the same purpose of building a home for the aged?
2. Is the action by the petitioner barred by prescription?

HELD:

The petition is not barred by prescription because the prescriptive period of the donor’s right to
revoke the donation is ten (10) years based on Article 1144 of the Civil Code, instead of four (4)
years per Article 764 of the same Code.

The lease of the donee of the donated property to gather funds for building the home for the aged
is not sufficient to constitute breach of the terms of donation and is not a ground for its revocation
for being merely casual breaches which nevertheless did not detract from the purpose of which
the donation was made: the establishment of a home for the aged and the infirm. This is also a
case of onerous donation because it imposes upon the donee a reciprocal obligation. It is distinct
from all other donations because it is governed not by the laws on donation but by the laws on
contracts (Art. 733 CC). The donation involved in this case is onerous, saddled as it is by a
burden imposed upon the donee to put up and operate a home for the aged and the infirm. And
for onerous donations to be revoked there must be substantial and not merely slight or casual
breach on the part of the donee. The breach must also be substantial enough to defeat the
purpose of the donation.

Clearly, what we have here is merely a slight or casual breach. The lease was for the purpose of
gathering funds for the building of the home for the aged, or for buying another lot where it could
be properly erected. Donee wrote the donor that the area where the parcel of land was donated
was going to be reclassified as Industrial Zone where factories would be constructed. It would not
longer be a fit location for a home for the aged. Besides, this Court cannot consider the
requirement of a prior written consent by the donor for all contracts of lease to be entered into by
the donee as an absolute ground for revocation of the donation because such a condition, if not
correlated with the purpose of the donation, would constitute undue restriction of the donee’s right
of ownership over the donated property. Also, the donor must not prevent the donee from taking
steps to effect the purpose of the donation for this would constitute bad faith on the part of the
donor.