Tuesday, September 1, 2015

Revocation of donation vs. Quieting of title.


"x x x.

It bears stressing that petitioner, at the outset, predicated his action to quiet title on the ground of ineffectiveness of the donation, albeit he would later add the matter of its invalidity. Indeed, the make or break issue to be resolved and to which all others must yield turns on the validity and/or continued efficacy of the subject donation. Valid and effective, the donation virtually forecloses any claim which petitioner may have over the donated property against the donee and other occupants thereof, and his action to quiet title is virtually doomed to fail. Invalid and ineffective, however, the arena is left open for petitioner to recover ownership and possession of the donated property and have the cloud on his title thereto, if any there be, removed.
According to petitioner, the subject donation is, by force of Article 745[15] of the Civil Code, void, the accepting barangay captain being without sufficient authority for the purpose. On this point, petitioner cites Section 88 of Batas Pambansa Blg. 337[16] - the law then in force - and Sections 91 and 389 the Local Government Code of 1991[17]. In gist, these provisions empower the punong barangay to enter into contracts for the barangay upon authorization of the Sangguniang Barangay, or, in the alternative, theSanggunian may authorize the barangay head to enter into contracts for the barangay.

Excepting, however, respondent barangay alleged that then barangay captain Jose Militar accepted the donation in the same Deed of Donation per authority granted by the barangay council.[18]

The question then of whether Militar was clothed with authority to accept the donation for respondent barangay stands as disputed. Since the present recourse is interposed on pure questions of law, we need not resolve the factual issue regarding Militars authority, or lack of it, to accept the donation in behalf of respondent barangay. It should be pointed out, nevertheless, that petitioner is hardly the proper party to challenge the validity of the donation which is presumed to be valid - on the ground he presently invokes. The honor to question Militars ultra vires act, if this be the case, belongs to the Sanggunian of Barangay P.D. Monfort North. And more to the point, even assuming ex gratia argumenti petitioners legal standing to raise such a question, the final answer would still lean towards the validity of the donation. For, from the allegations of all the parties, it would appear that, through the years, the Sanggunian of Lublub as well as all the succeeding Sangunians of P.D. Monfort North neither repudiated the acceptance of the donation by Militar nor acted in a manner reflective of their opposition to the donation. On the contrary, the respondent barangay has been enjoying the material and public-service benefits arising from the infrastructures projects put up on the subject property. In a very real sense, therefore, the Sangguniang Barangay and the good people of P.D. Monfort North, by availing themselves of such benefits for more than two decades now, effectively ratified Militars acceptance of the donation.

This brings us to the question of the efficaciousness of the donation. Petitioner asserts that the 1981 and 1989 deeds of donation, pursuant to the uniform automatic rescission/reversion clauses therein, ceased to be effective upon respondents failure to meet the conditions for which it was charged to fulfill. To petitioner, the automatic rescission/reversion clause works, in appropriate instances, to revoke the donation and revert the ownership of the donated property to the donor without the need of judicial intervention. In support of this argument, petitioner cites De Luna vs. Abrigo[19] wherein this Court put to rest any lingering doubt as to the validity of a stipulation providing for the automatic reversion of the donated property to the donor upon non-compliance by the donee of the conditions or charges incumbent upon him.
Cited likewise is the subsequent complementary holding in Roman Catholic Archbishop of Manila vs. Court of Appeals[20]thus:
Although it is true that under Article 764 of the Civil Code an action for the revocation of a donation must be brought within four (4) years from the non-compliance of the conditions of the donation, the same is not applicable in the case at bar. The deed of donation involved herein expressly provides for automatic reversion of the property donated in case of violation of the condition therein, hence a judicial declaration revoking the same is not necessary.

De Luna and Archbishop of Manila are, to be sure, apropos. However, petitioners argument to support his thesis on the automatic rescission of the donation in question and the consequent reversion of the property to the donor is an incomplete presentation of the Courts pronouncements on the point.

We shall explain.

If the corresponding contract of donation expressly provides for automatic rescission and/or reversion in case of breach of the condition therein, and the donee violates or fails to comply with the condition, the donated property reverts back automatically to the donor. Such provision, De Luna teaches, is in the nature of an agreement granting a party the right to rescind a contract in case of breach, without need of going to court and that upon the happening of the resolutory condition or non-compliance with the conditions of the contract, the donation is automatically revoked without need of a judicial declaration to that effect. Where, however, the donee denies, as here, the rescission or challenges the propriety thereof, then only the final award of the court can, to borrow from University of the Philippines vs. de los Angeles,[21] conclusively settle whether the resolution is proper or not. Or, in the language of Catholic Archbishop of Manila:[22]

The rationale for the foregoing is that in contracts providing for automatic revocation, judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper.

When a deed of donation, . . . expressly provides for automatic revocation and reversion of the property donated, the rules on contract and the general rules on prescription should apply, and not Article 764 of the Civil Code. Since Article 1306 of said Code authorizes the parties to a contract to establish such stipulations, . . . not contrary to law, . . . public order or public policy, we are of the opinion that, at the very least, that stipulation of the parties providing for automatic revocation of the deed of donation, without prior judicial action for that purpose, is valid subject to the determination of the propriety of the rescission sought. Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not in itself the revocatory act.

In the case at bench, it cannot be gainsaid that respondent barangay denied or challenged the purported revocation of the donation. In fact, the denial or challenge is embodied in respondent barangays complaint in Civil Case No. 00‑140 and in its Answer cum motion to dismiss in Civil Case 98-033, which similarly prayed for, among other things, the cancellation of petitioner's title on the subject property.

The foregoing discussion veritably disposes of the second formulated issue.

Now back to the first issue. It is petitioners posture that his action in Civil Case No. 98-033 is one for quieting of title under Article 476[23] of the Civil Code, not, as erroneously regarded by the trial court, an action to revoke donation under Article 764 of the Code which, insofar as pertinent, reads as follows:

Article 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter.

xxx xxx xxx.

This action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee's heirs. (Underscoring added)

Petitioners posture does not persuade.

As aptly observed by the trial court, the petitory portion of petitioners complaint in Civil Case No. 98-033 seeks for a judgment declaring him the absolute owner of the donated property, a plea which necessarily includes the revocation of the deed of donation in question. Verily, a declaration of petitioner absolute ownership appears legally possible only when the deed of donation is contextually declared peremptorily revoked.

Owing to the prescriptive component of Article 764 of the Civil Code, petitioners dread of the invocation and application of said provision is at once apparent as it is understandable. For, an action to revoke thereunder prescribes after four (4) years from non-compliance by the donee with any of the conditions set forth in the deed of donation. A little less than seventeen (17) years separate September 16, 1981, when the Deed of Donation was executed, from May 6, 1998, when petitioner filed his complaint in Civil Case No. 98-033. Seventeen (17) years is, in turn, too far removed, as shall be illustrated shortly, from the 4-year prescriptive period referred to in Article 764 or even from the 10-year period under Article 1144.[24]

It cannot be overemphasized that respondent barangay traces its claim of ownership over the disputed property to a valid contract of donation which is yet to be effectively revoked. Such rightful claim does not constitute a cloud on the supposed title of petitioner over the same property removable by an action to quiet title. Withal, the remedy afforded in Article 476 of the Civil Code is unavailing until the donation shall have first been revoked in due course under Article 764 or Article 1144 of the Code.

Lest it be overlooked, the rule on the imprescriptibility of actions to quiet title admits of exceptions. The trial court correctly mentioned one, referring to a situation where the plaintiff in an action to quiet title is not in actual possession of the land.[25] In the case at bench, petitioner is not in possession of the property. For sure, he is even asking in his complaint in Civil Case No. 98-033 for recovery of possession of the donated property.

Given the above disquisition, petitioner can hardly fault the trial court for its holding that petitioners action to revoke is time-barred. As may be recalled, respondent barangay had, under the terms of the deed of donation, five (5) years from the execution of the conveying deed in September 1981, or up September 1986, within which to introduce and complete the contemplated development of the donated area. Following Article 764 of the Civil Code, petitioner had four (4) years from September 1986, or up to September 1990, within which to seek the revocation of the subject donation on the ground of breach of contract.

The Court can grant that the prescription of actions for the revocation of onerous donations, as here, are governed by the general rules on prescription,[26] which, in context, is Article 1144 of the Civil Code providing that actions upon a written contract shall be brought within ten (10) years from accrual of the right of action. Ten years from September 1986 the date when petitioners right to revoke accrued - would be September 1996. Here, however, what partakes as petitioners suit to revoke was filed only in May 1998.

In all, petitioners right of action to revoke or cancel the donation had indeed prescribed, regardless of whether the applicable legal provision is Article 764 or the favorable Article 1144 of the Civil Code. It should be stated in this regard, however, that respondent barangay had disputed the existence of the grounds upon which petitioner anchored his right to revoke, claiming it had already complied with the construction and development conditions of the donation. From the records, it would appear that respondent barangays boast of compliance is not an empty one. As we see it, the establishment on the donated area of telephone service, a water service, a police mobile force, and a courtroom, all for the benefits of the barangay residents, substantially satisfies the terms and conditions of the subject donation. The concrete paving of roads and the construction of government offices, sports complex for public enjoyment and like infrastructures which, per respondent barangays estimate, cost not less than P25 Million,[27] add persuasive dimension to the conclusion just made.
Petitioner's long silence vis--vis the kind of development structures that Barangay Lublub had decided to put up or allowed to be established on the subject area cannot but be taken as an indicia of his satisfaction with respondent barangays choice of public service projects. The prolonged silence was broken only after the provincial and municipal governments advertised, then sold the property in a public auction to satisfy questionable tax liabilities.
Much is made by petitioner about his execution of the 1989 deed of donation, which, to him, should be utilized as a point of reference in determining the prescriptive period[28] defined under either Article 764 or 1144 of the Civil CodeHe states:

xxx It has not been explained up to this juncture why the Deed of Donation of June 1989 is not being mentioned or considered when it is alleged in the complaint. As will be noted in the Deed of Donation dated 1981 the property was jointly owned by plaintiff Dolar and Jarantilla, with separate title; in Annex B, the Donation of 1989 only plaintiff Dolar signed the same as the only registered owne[r] of the lot donated; xxx. As previously adverted to, the prescriptive period for violation or contravention of the terms and conditions of Annex B should be reckoned from 1994 and therefore this action filed in 1998 is within the period.

With the view we take of the case, the execution of the 1989 deed of donation is really of little moment in terms of furthering petitioners cause. For, at that time, the property subject of this recourse was no longer his to donate, having earlier relinquished his ownership thereon. Nemo dat qui non habet No one can give what he has not.[29] Stated a bit differently, respondent barangays right over the donated area proceeds from the 1981 donation. The legal effects, therefore, of its action or inaction respecting the donated property should be assayed on the basis of the 1981 donation.
The last issue raised pivots on whether or not respondent barangay can acquire the subject property by acquisitive prescription, the petitioners thesis being that prescription does not run against registered land.[30]

Petitioners point is theoretically correct and may perhaps tip the balance in his favor, but for the fact that the respondent barangay anchors its title and right over the donated lot, first and foremost, by virtue of the deed of donation. Admittedly, standing alone, adverse, continuous and long possession of a piece of real property cannot defeat the title of a registered owner. But, then, this postulate presupposes a Torrens title lawfully acquired and issued. As may be recalled, however, respondent barangay instituted Civil Case No. 00-140, supra, for Cancellation of Title, Reconveyance/Issuance of Title precisely because of the dubious manner by which petitioner allegedly acquired his TCT No. T-129837 over a lot he admits donating.

Parenthetically, petitioners contention that the donation was invalid because it was not registered in the Registry of Property deserves no merit. For, as between the parties to the donation and their assigns, the registration of the deed of donation with the Registry of Deeds is not needed for its validity and efficacy. In Pajarillo vs. Intermediate Appellate Court,[31] the Court emphatically dismissed the notion that registration was necessary to make the donation a binding commitment insofar as the donor and the donee were concerned.

As a final consideration, let it be made clear that this opinion merely resolves the question of the correctness of the dismissal by the trial court of Civil Case No. 98-033 on the basis of facts attendant thereto in the light of applicable laws and jurisprudence. It is not meant to prejudge the outcome of Civil Case No. 00-140 which, while related to Civil Case No. 98-033, tenders different issues, foremost of which is the validity of a Torrens title issued over a piece of land to one who had previously donated the same.

x x x."