Austria-Magat v. Court of Appeals
REITERATIONFacts
The Antecedents: Basilisa Comerciante, mother of five children including petitioner Apolinaria Austria-Magat and respondent Florentino Lumubos, owned a parcel of land. On December 17, 1975, Basilisa executed a "Kasulatan sa Kaloobpala (Donation)" donating the land and house thereon to four of her children, including Apolinaria and Florentino. The donation stipulated that it would take effect upon her death, and any remaining amount after her burial expenses would be divided equally among the four children. A contemporaneous "Kasulatan" stated that the title would remain in Basilisa's possession during her lifetime and the property could not be mortgaged or sold while she was alive. On February 6, 1979, Basilisa executed a Deed of Absolute Sale of the same property in favor of Apolinaria for ₱5,000.00. Consequently, Transfer Certificate of Title (TCT) No. RT-4036 in Basilisa's name was cancelled, and TCT No. T-10434 was issued in Apolinaria's name on February 8, 1979. Procedural History: On September 21, 1983, respondents (heirs of two other children of Basilisa, and Florentino Lumubos) filed an action for annulment of TCT No. T-10434, reconveyance, and damages against Apolinaria. The Regional Trial Court (RTC) dismissed the case, ruling that the donation was mortis causa, hence void for not complying with the formalities of a will. The RTC concluded that Basilisa remained the absolute owner and could validly sell the property. The Court of Appeals reversed the RTC decision, declaring the Deed of Sale and TCT No. T-10434 null and void, and recognizing the appellants and appellee as co-owners based on the deed of donation. The Petition: Petitioner Apolinaria Austria-Magat filed a petition for review, arguing that the Court of Appeals erred in considering the donation as inter vivos and in not holding that the action had prescribed.
Issue(s)
Whether the donation made by Basilisa Comerciante was a donation inter vivos or mortis causa. Whether the action for annulment of title, reconveyance, and damages had prescribed.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. The Court held that the donation was inter vivos and that the action for reconveyance had not prescribed.
Ratio Decidendi
On the nature of the donation: The Court held that the donation was inter vivos. The decisive proof was the provision stating the donation was "ganap at hindi mababawi" (absolute and irrevocable), which is a characteristic of a donation inter vivos. While the donation stipulated it would take effect upon the donor's death and that the property would remain in her possession during her lifetime, these provisions were harmonized with the express irrevocability. The Court cited jurisprudence holding that the irrevocability of a donation is the distinctive standard identifying it as inter vivos. The prohibition to alienate or encumber the property, even including the donor, indicated that the naked ownership had been transferred to the donees, with the donor retaining only the right of usufruct. The acceptance clause by the donees further supported the inter vivos nature of the donation, as acceptance is required for inter vivos donations but not for mortis causa donations. The Court also noted that the donor's act of selling the property was a disregard of the deed's provisions, not a valid revocation, as revocation requires a formal court action under Article 764 of the Civil Code. On the issue of prescription: The Court ruled that the action for reconveyance had not prescribed. It clarified that an action for reconveyance based on an implied trust, in the absence of fraud, prescribes in ten (10) years from the issuance of the title, as provided by Article 1144 of the Civil Code. The Court found no fraud in the transaction, stating that the sale was based on an honest but erroneous interpretation of the deed of donation. Since TCT No. T-10434 was issued on February 8, 1979, and the complaint was filed in 1983, the action was filed well within the ten-year prescriptive period.
Main Doctrine
A donation is considered inter vivos if it contains an express stipulation of irrevocability, even if it provides that the donation shall take effect upon the death of the donor and the donor retains possession and enjoyment of the property during her lifetime. The prohibition to alienate or encumber the property during the donor's lifetime, when couched in general terms, indicates that the naked ownership has been transferred to the donees, supporting the inter vivos character of the donation. An action for reconveyance based on an implied trust, in the absence of fraud, prescribes in ten (10) years from the issuance of the title.