Camarines Sur v. Bodega Glassware
REITERATIONFacts
The Antecedents: The Province of Camarines Sur (petitioner) donated a parcel of land to the Camarines Sur Teachers' Association, Inc. (CASTEA) through a Deed of Donation Inter Vivas, which contained an automatic revocation clause. The conditions included using the land solely for CASTEA's building, not selling or encumbering it, and commencing construction within one year. CASTEA complied with the initial conditions. However, CASTEA later entered into a Contract of Lease with Bodega Glassware (respondent) for the donated property. In 2005, the Province inquired about Bodega's legal basis for possession, which Bodega failed to provide. The Province tolerated Bodega's possession until November 2007, when it demanded Bodega vacate the property. The Province then executed a Deed of Revocation of Donation, asserting that CASTEA's lease violated the donation's conditions and thus automatically revoked the donation. Procedural History: The Province filed an unlawful detainer case against Bodega. The Municipal Trial Court (MTC) ruled in favor of the Province, ordering Bodega to vacate and pay monthly compensation. Bodega appealed to the Regional Trial Court (RTC), which reversed the MTC decision, dismissing the case for failure to present evidence. The Court of Appeals (CA) affirmed the RTC's decision, holding that the Province should have filed an action for reconveyance against CASTEA and that the action had prescribed. The Petition: The Province filed a petition for review on certiorari with the Supreme Court, challenging the CA's decision. The Province argued that the CA erred in requiring judicial intervention for revocation and in applying the prescriptive period for reconveyance.
Issue(s)
Whether the Province of Camarines Sur has the right to demand that Bodega Glassware vacate the property; and whether the donation was automatically revoked by the lease agreement between CASTEA and Bodega Glassware. Whether the Province's action for unlawful detainer has prescribed. Whether the award of damages was proper.
Ruling
The Supreme Court partially granted the petition, reversing and setting aside the Court of Appeals' decision. The Court reinstated the decision of the Municipal Trial Court of Naga City, ordering Bodega Glassware to vacate the property and pay reasonable compensation. The Court also affirmed the award of damages in favor of the Province.
Ratio Decidendi
On the right to possession, the effect of the automatic revocation clause, and the lease agreement: The Court held that the Province has the right to possess the property. The Deed of Donation contained a clear automatic revocation clause. The lease agreement between CASTEA and Bodega Glassware constituted a breach of the conditions of the donation, specifically the condition that the property be used for no other purpose than CASTEA's building and that CASTEA shall not sell or encumber the property. Applying the doctrine established in De Luna v. Abrigo, Roman Catholic Archbishop of Manila v. Court of Appeals, Dolar v. Barangay Lublub, and Zamboanga Barter Traders Kilusang Bayan, Inc. v. Plagata, the breach of the condition in an onerous donation with an automatic revocation clause automatically revokes the donation without the need for prior judicial declaration. The Court clarified that judicial intervention is only necessary to determine the propriety of the revocation if it is challenged by the donee. Since CASTEA did not contest the revocation, the donation was deemed automatically revoked, and the property reverted to the Province. Consequently, CASTEA had no right to lease the property to Bodega, rendering Bodega's possession without legal basis. On the prescription of the action: The Court ruled that the Province's action for unlawful detainer had not prescribed. It reiterated that Article 764 of the Civil Code, which provides a four-year prescriptive period for actions to revoke donations, does not apply to donations with automatic revocation clauses, as it pertains to judicial actions for revocation. The Court also disagreed with the CA's application of a 10-year prescriptive period for reconveyance, explaining that such an action is unnecessary when the revocation is automatic. The Court emphasized that an action for unlawful detainer must be filed within one year from the last demand to vacate. In this case, the Province filed its ejectment suit approximately four months after its last demand, well within the prescriptive period. On damages: The Court affirmed the award of damages. Section 17 of Rule 70 of the Rules of Court allows for the recovery of reasonable compensation for the use and occupation of the premises in unlawful detainer cases. The Court found the monthly compensation of ₱15,000 prayed for by the Province to be reasonable, considering that the Contract of Lease between CASTEA and Bodega indicated a monthly rent of ₱30,000, thus serving as evidence of the property's fair rental value.
Main Doctrine
In donations with an automatic revocation clause, the breach of the condition by the donee automatically revokes the donation without the need for prior judicial declaration. Judicial intervention is only necessary to determine the propriety of the revocation if it is challenged.