LAW ON PROPERTY

Validity of Perpetual Alienation of Property Imposed by

the Donor to the Donee

Submitted by:

Mendoza, Celine D.
Montero, Aya A.
Naranjo, Ralph Anthony B.

Submitted to:

Atty. Miguel Sanidad

 UNGIVEN GIFT*

“Since you get more joy out of giving joy to others, you should put a good
deal of thought into the happiness that you are able to give ” – Eleanor Roosevelt
_______________________ _

Property has always been tangled issue not only amongst the family but with regard to the
society which leads to conflict and misunderstandings. Alienation of such property can be defined
as the transfer of property through gifts, wills or mortgage1.

Individual freedom to dispose of consolidated bundles of rights cannot simultaneously be

allowed and fully maintained. If the donor of a property interest tries to restrict the donee's freedom
to dispose of that interest, the legal system, in deciding whether to enforce or void that restriction,
must resolve whose freedom it will protect, that of the donor or that of the donee2. This article
discusses the basic paradox at the core of the validity of perpetual alienation property imposed on
the donee by the donor.

Definitions

In ecclesiastical law, Donation is mode of acquiring a benefice by deed of gift alone, without
presentation, institution, or in general, a gift. A donation is never perfected until it is has been
accepted, for the acceptance is requisite to make the donation complete. The person making the
gift is called the donor and the person receiving the gift is called the donee. If made to a qualified
non-profit charitable, religious, educational or public service organization, it may be deductible as
a contribution in calculating income tax3.

Various jurists have defined ownership in different ways and it is accepted that right of
ownership is a complete or supreme right that can be exercised over anything. According to
Hibbert, ownership involves four rights: Right of using the thing, excluding others from using it,
disposal of the thing and destruction of the thing.4 According to Paton, rights of an owner are
power of enjoyment, right of possession, the power to alienate inter vivos etc. Austin focused on
three main attributes of ownership, namely, indefinite user, unrestricted disposition and unlimited
duration5.

*Final Paper by Mendoza, Celine D., Montero, Aya A., and Naranjo, Ralph Anthony B. submitted to Atty.
Sanidad, Property 1st Sem S.Y 2019-2020 San Sebastian College - Recoletos (December 19, 2019)
1
Pandey, A. (2017, May 15). Unauthorized alienation of property and its consequences. Retrieved from
https://blog.ipleaders.in/alienation-of-property/. Last accessed on September 20, 2019.
2
Alexander, Gregory S., “The Dead Hand and the Law on Trust in the Nineteenth Century”(1985). Cornell Law
Faculty Publications. Paper 277, Page 2.
3
US Legal, Inc. (n.d.). Donations Law and Legal Definition. Retrieved from
https://definitions.uslegal.com/d/donations/.
4
V.D. Mahajan, “Jurisprudence and Legal Theory” (Fifth Edition) Page. 288
5
India, legal S. (n.d.). Retrieved from http://www.legalservicesindia.com/article/1281/Ownership.html. Last accessed
from September 25, 2019.
 Alienation of property on the other hand, is the act by which the title to real estate is
voluntarily resigned by one person to another and accepted by the latter, in the forms prescribed
by law6. In real estate law, the complete and voluntary transfer of title to real estate from one
person to another. The freedom to alienate property is considered essential to complete ownership7.
In essence, donation and alienation of property may be considered synonymous to each other, as
they are both a voluntary transfer of ownership other than in contemplation of death. Both terms
may be used interchangeably for purposes of transferring of property by voluntary deed.

Perpetual, literally, is an unlimited duration. For centuries, Anglo-American Common Law,

has assumed that social interest requires freedom in the alienation of property. When English land
conveyancers in the late 16th century invented a form of conveyance designed to make land
inalienable forever, the courts held it an invalid human attempt to rival the permanence of God.
Thus, they utilized the word perpetuity—from the Latin in perpetuum, a Biblical phrase used when
referring to God’s eternal continuance—to describe such an invalid limitation8.

Concept of free alienability of Anglo-American civilization

Some legal scholars have even written that “the concept of free alienability is a cornerstone
of modern Anglo-American civilization9”.

This policy has given rise to the Rule against Restraints on Alienation. Alienation, in this
context, means the ability to resell or transfer the property. Generally, there are three types of
restraints on alienation that are considered void:

The first type of restriction is a disabling restraint. This restraint, which is always void,
prohibits a grantee from making ANY transfer of interest in real property. An example of a
disabling restraint is if a property transfer deed contains a provision that states “Neither the grantee
nor any of the grantee’s heirs shall have the right to transfer the land or any interest in the land.”

The second type is a forfeiture restraint, which states that a grantee will forfeit the real
property if the grantee attempts a transfer. An example of a prohibited forfeiture restraint is a
provision that provides “If the grantee attempts to transfer Blackacre or any interest in Blackacre
during his lifetime, his estate shall cease and title in Blackacre shall vest in a third-party.”

The third type of restriction is a promissory restraint, where a grantor makes a grantee
promise not to transfer the land. An example of a prohibited promissory restraint is the following

6
Black's Law Dictionary., “Definition of Alienation”. Retrieve form https://thelawdictionary.org/alienation/. Last
accessed on September 25, 2019.
7
Alienation. (n.d.). Retrieved from https://www.law.cornell.edu/wex/alienation. Last accessed on September 26, 2019
8
The Editors of Encyclopaedia Britannica. (2018, May 18). Perpetuity. Retrieved from
https://www.britannica.com/topic/perpetuity-inheritance-law. Last accessed on September 26, 2019.
9
Michael D. Kirby, Restraints on Alienation: Placing A 13th Century Doctrine in 21st Century Perspective, 40 Baylor
L. Rev. 413 (1988).
provision: “B hereby promises that he will not transfer Blackacre or any interest in Blackacre
without A’s prior written consent.”10

Donation of Property in the Philippines

According to Hector De Leon, the Civil Code considers donation not among the contracts
that transfer ownership but as a particular mode of acquiring and transmitting ownership11.

Donation, as defined in the Civil Code of the Philippines is an act of liberality whereby a
person disposes gratuitously of a thing or right in favor of another, who accepts it 12. It is a
unilateral contract in which, the donor out of pure liberality and benevolence promised to give the
donee, something without expecting to receive anything in return.

Donation may also be classified into two main categories, namely: Donation Mortis Causa
and Donation inter vivos. Donation mortis causa are donations made in contemplation of death
while Donation inter vivos are those made other than mortis causa13.

To begin with, for a donation to be valid, the donor must execute a deed of donation in a
public document, specifying the property donated and the donee must expressly manifest her
acceptance of the donation in the same document or in a separate document during the lifetime of
the donor14.

Under the law the donation is void if there is no acceptance. The acceptance may either be
in the same document as the deed of donation or in a separate public instrument. If the acceptance
is in a separate instrument, "the donor shall be notified thereof in an authentic form, and his step
shall be noted in both instruments.15 Although donation in its generic sense includes all forms of
gratuitous dispositions but the same shall conform with the requisites and form of donations
required by law to be valid.

Limitation on alienation of property

Likewise, under Article 1306 of the New Civil Code, the parties to a contract have the right
“to establish such stipulations, clauses, terms and conditions as they may deem convenient,

10
Restraints on The Transfer of Real Property. (n.d.). Retrieved from https://lawshelf.com/videos/entry/restraints-on-
the-transfer-of-real-property. Last accessed on October 2, 2019
11
De Leon, Hector and De Leon, Hector,. Comments and Cases on Property. 6th Edition 2015,
12
Article 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of
another, who accepts it.
13
Neumann Van Rooyen (n.d.). “Donation Agreements the Nature, Effect and Legal implications. Retrieve from
https://www.nvrlaw.co.za/NewsResources/NewsArticle.aspx?ArticleID=2454. Last accessed on September 26, 2019.
14
Persida Acosta, “Acceptance of a simple donation of an immovable property”. Retrieve from
https://www.manilatimes.net/2019/03/21/legal-advice/dearpao/acceptance-of-a-simple-donation-of-an-immovable-
property/528497/ . Last accessed on September 28, 2019
15
G.R No. 140487, April 2, 2001, Republic of the Philippines vs Leon Silim and Ildefonsa Mangubat,.
provided they are not contract to law, morals, good customs, public order or public policy16. For
example, a stipulation on the deed of donation stating “violation of nay of the conditions shall
cause the automatic reversion of the donated of the donated area to the donor, his heirs, …, without
the need of executing any other document for that purpose and without obligation on the part of
the DONOR". Said stipulation not being contrary to law, morals, good customs, public order or
public policy, is valid and binding upon the foundation who voluntarily consented thereto17.

Furthermore, the New Civil Code(NCC) imposes another limitation on alienation by virtue
of death of the owner of the property. Article 867 of NCC specifically states that provisions which
contain a perpetual prohibition to alienate, and even a temporary one, beyond the limit fixed in
Article 86318, to wit:

Art. 867. The following shall take effect:

(1) Fideicommissary substitutions which are not made in an express manner,

either by giving them this name, or imposing upon the fiduciary the absolute
obligation to deliver the property to a second heir;
(2) Provisions which contain a perpetual prohibition to alienate, and even a
temporary one beyond the limit fixed in article 863;
(3) Those which impose upon the heir the charge of paying to various persons
successively, beyond the limit prescribed in article 863, a certain income or
pension;
(4) Those which leave to a person the whole part of the hereditary property in
order that he may apply or invest the same according to secret instructions
communicated to him by the testator. (785a)

Grounds for revocation of donation

Under Art. 760 of the New Civil Code of the Philippines provides:

a. Birth of a donor’s child or children (legitimate, legitimated, or illegitimate) after

the donation, even though born after his death.
b. Appearance of a donor’s child who is missing and thought to be dead by the
donor
c. Subsequent adoption by the donor of a minor child.

16
Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

17
G.R. No. L-57455, January 18, 1990 Evelyn De Luna, Rosalina De Luna, Prudencio De Luna, Jr., Willard De Luna,
Antonio De Luna, and Joeselito De Luna vs. Hon. Sofronio F. Abrigo, Presiding Judge of the Court of first Instance
of Quezon City, Branch IX, and Luzonian University Foundation, Inc,
18
Article 863. A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is entrusted with
the obligation to preserve and to transmit to a second heir the whole or part of the inheritance, shall be valid and shall
take effect, provided such substitution does not go beyond one degree from the heir originally instituted, and provided
further, that the fiduciary or first heir and the second heir are living at the time of the death of the testator. (781a)
 Under Art. 764 When the donee fails to comply with any of the conditions which the donor
imposed upon the donee.

Under Art. 765 – by reason of ingratitude

a. If the donee should commit some offense against the person, the honor or the
property of the donor, or of his wife or children under his parental authority
b. If the donee imputes to the donor any criminal offense, or any act involving
moral turpitude, even though he should prove it, unless the crime or act has
been committed against the donee himself, his wife or children under his
authority
c. If he unduly refuses him support when the donee is legally or morally bound to
give support to the donor.

The law provides that once a donation is perfected, it cannot be revoked without the consent
of the donee except on grounds provided by law.

Jurisprudence in relation to alienation of property

The issue of whether or not stipulation of perpetual alienation of property imposed by the
donee or donor is valid has been resolved in the consolidated case of The Roman Catholic Bishop
of Manila, The Roman Catholic Bishop of Imus, and the Spouses Florencio Ignao and Soledad C.
Ignao vs. Hon. Court of Appeals, The Estate of Deceased Spouses Eusebio De Castro and Martina
Rieta, represented by Marina Reita Granados and Theresa Rieta Tolentino19,.

The consolidated case pertains to the deed of donation executed by the spouses Eusebio de
Castro and Martina Rieta, both deceased, in favor of Roman Catholic Archbishop of Manila covering
a parcel of land located at Kawit, Cavite. The above-mentioned deed of donation allegedly provides
that the done shall not dispose or sell the property within a period of one hundred (100) years from
the execution of the deed of donation, otherwise a violation of such condition would render ipso facto
20
null and void the deed of donation and the property would revert to the estate of the donors.

Allegedly, while still within the prohibitive period to dispose of the property, the done herein,
Roman Catholic of Bishop of Imus, in whose administration all properties within the province of
Cavite owned by the Archdiocese of Manila was transferred by virtue of a deed of sale executed in
favor of spouses Florencio Ignao and Soledad C. Ignao.

It is significant that the provisions therein regarding a testator also necessarily involve, in the
main, the devolution of property by gratuitous title hence, as is generally the case of donations, being
an act of liberality, the imposition of an unreasonable period of prohibition to alienate the property
should be deemed anathema to the basic and actual intent of either the donor or testator. For that

19
G.R. No. 77425, June 19, 1991,. The Roman Catholic Bishop of Imus, and the Spouses Florencio Ignao and Soledad
C. Ignao vs. Hon. Court of Appeals, The Estate of Deceased Spouses Eusebio De Castro and Martina Rieta,
represented by Marina Reita Granados and Theresa Rieta Tolentino.
20
Merriam-webster, (n.d.) “Definition of ipso facto: by the very fact or act: as an inevitable result”., Last accessed
on September 23, 2019
reason, the regulatory arm of the law is or must be interposed to prevent an unreasonable departure
from the normative policy expressed in the aforesaid Articles 49421 and 87022 of the Code.

In the case at bar, the Supreme Court hold that the probation in the deed of donation against
alienation of the property for an entire century, being unreasonable emasculation and denial of an
integral attribute of ownership, should be as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code23. Hence, the stipulation “the done shall not dispose
or sell the property within a period of one hundred (100) years from the execution of the deed of
donation” in the deed of donation is not valid.

The respondents, Marina Reita Granados and Theresa Rieta Tolentino, contends that the
validity of stipulations in the deem of donation providing for the automatic reversion 24of the donated
property to the donor upon non-compliance of the condition was upheld in the case De Luna, et al.
vs. Abrigo Et al. 25

In the said decision, the court discussed donation, as a mode of acquiring ownership and the
imposition of certain conditions in the deed of donation applying it into the petition at bar, to wit:

Donation, as a mode of acquiring ownership, results in an effective

transfer of title over the property from the donor to the donee. Once a
donation is accepted, the donee becomes the absolute owner of the
property donated. Although the donor may impose certain conditions in
the deed of donation, the same must not be contrary to law, morals, good
customs, public order and public policy. The condition imposed in the
deed of donation in the case before us constitutes a patently
unreasonable and undue restriction on the right of the donee to dispose
of the property donated, which right is an indispensable attribute of
ownership. Such a prohibition against alienation, in order to be valid,
must not be perpetual or for an unreasonable period of time. (Emphasis
given on the italicized)

21
Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time
the partition of the thing owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall
be valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership. (400a)
22
Article 870. The dispositions of the testator declaring all or part of the estate inalienable for more than twenty years
are void. (n)
23
Article 727. Illegal or impossible condtions in simple and remuneratory donations shall be considered as not
imposed.
24
(duhaime.org, n.d.), Automatic Reversion - A future interest left in a transferor or his (or her) heirs. A reservation
in a real property conveyance that the property reverts back to the original owner upon the occurrence of a certain
event. Last accessed on October 3, 2019
25
De Luna, et al. vs. Abrigo Et al. – Supreme Court decision on the stipulation imposed by the donor on the deed of
donation.
Conclusion

Under Article. 727 of the New Civil Code of the Philippines, the effect of the illegal or
impossible condition in a simple or renumenatory donation would be deemed not imposed
following the rule on testamentary dispositions. According to Hector De Leon, the donation will
be considered as simple.

In the case of Archbishop of Manila vs Court of Appeals the Supreme Court held that the
prohibition in the deed of donation against the alienation of the property for 100 years should be
declared as an illegal or impossible condition within the contemplation of Article. 727 of the New
Civil Code of the Philippines.

Consequently, such condition shall be considered as not imposed. No reliance may

accordingly be placed on said prohibitory paragraph in the deed of donation.

It is better that gifts are not restricted. The law already recognizes that restrictions on
donations are nuisance. However, the rule is restrictions are allowed.
It is evident from the definitions, articles and jurisprudential view ownership of property
carries with it certain basic rights, such as a right to have the title to the property, a right to possess
and enjoy it to the exclusion of everyone else, and a right to alienate it without being dictated to,
save in accordance with a provision of law. An absolute right to dispose of the property indicates
that the owner can sell it for consideration or can donate it for religious or charitable purposes he
may gift it to anyone, mortgage it or put it up for lease.

Although the owner may impose stipulations or conditions upon the alienation of his
property, it should be remembered that the same shall not be contrary to law, morals, good customs,
public order or public policy. Moreover, as decided by the court, the stipulation must be reasonable
and possible as to not restrict or prejudice the rights of the parties and for its validity.