Missionary Sisters of Our Lady of Fatima v. Alzona
REITERATIONFacts
The Antecedents: Purificacion Y. Alzona, a spinster, owned several parcels of land. In 1996, she became a benefactor of the Missionary Sisters of Our Lady of Fatima (the petitioner), a religious and charitable group. In 1997, after being diagnosed with lung cancer, Purificacion requested Mother Ma. Concepcion R. Realon, the petitioner's Superior General, to care for her. In October 1999, Purificacion informed Mother Concepcion of her intent to donate her house and lot and riceland to the petitioner. On August 29, 2001, Purificacion executed a Deed of Donation Inter Vivos in favor of the petitioner, conveying her properties. The donation was accepted by Mother Concepcion on behalf of the petitioner. Subsequently, Purificacion died on October 30, 2001, survived by her brother, Amando Y. Alzona, who filed a complaint to annul the deed. Procedural History: The Regional Trial Court (RTC) of Calamba City, Branch 92, dismissed the complaint filed by Amando Y. Alzona, finding that all essential elements of a donation were present and that the petitioner, though not yet fully registered with the SEC at the time of the donation, could be considered a de facto corporation with the capacity to accept the donation. The respondents appealed this decision. The Court of Appeals (CA) partly granted the appeal, setting aside the RTC's decision and declaring the Deed of Donation void. The CA ruled that the petitioner could not be considered a de facto corporation because there was no bona fide attempt to incorporate at the time of the donation, and thus, as an unregistered entity, it lacked juridical personality to enter into a contract of donation. The petitioner sought a reconsideration, which the CA denied. The Petition: The Missionary Sisters of Our Lady of Fatima filed a petition for review on certiorari under Rule 45 of the Rules of Court. They argue that the Deed of Donation is valid and binding, asserting that they possessed the requisite legal personality as a religious institution authorized to receive donations, or alternatively, as a de facto corporation. They also contend that even without full registration at the time, the acceptance by Mother Concepcion was valid and subsequently ratified. Furthermore, they argue that the respondents, as heirs of Purificacion, lack the legal capacity to question the deed. The core issue before the Supreme Court is the validity of the Deed of Donation and the petitioner's capacity to accept it, considering its status at the time of the donation.
Issue(s)
Whether the Deed of Donation Inter Vivos executed by Purificacion in favor of the petitioner is valid and binding, and whether the petitioner, Missionary Sisters of Our Lady of Fatima, had the requisite legal personality and capacity to accept the donation at the time of its execution. Whether Mother Ma. Concepcion R. Realon had the authority to accept the donation on behalf of the petitioner. Whether the Deed of Donation, having been validly entered into by Purificacion, binds the respondents as her heirs.
Ruling
The petition is meritorious. The Decision dated January 7, 2016 and Resolution dated April 19, 2016 of the Court of Appeals in CA-G.R. CV No. 101944 are REVERSED and SET ASIDE. The Deed of Donation dated August 29, 2001 is declared VALID and BINDING.
Ratio Decidendi
On the validity of the Deed of Donation and the petitioner's capacity to accept: The Court found that while the petitioner was not yet a registered corporation at the time of the donation (August 29, 2001), as its Certificate of Incorporation was issued on August 31, 2001, the doctrine of corporation by estoppel applies. The petitioner had filed its Articles of Incorporation and By-laws on August 28, 2001, and Purificacion dealt with the petitioner as if it were a corporation. The Court clarified that the RTC erred in considering the petitioner a de facto corporation, as this requires both the filing of articles of incorporation and the issuance of a certificate of incorporation. However, the doctrine of corporation by estoppel, as provided in Section 21 of the Corporation Code, prevents a party who has dealt with an entity as a corporation from later denying its corporate existence to avoid liability. In this case, Purificacion, by executing the Deed of Donation and introducing Mother Concepcion to her nephew and niece, acted with full knowledge of the petitioner's status. Furthermore, the donation was remuneratory in nature, given as a token of appreciation for services rendered during Purificacion's illness, which constitutes a form of consideration or benefit to the donor, thus supporting the application of corporation by estoppel. The subsequent incorporation and affirmation of Mother Concepcion's authority also served to ratify the donation. On the authority of Mother Concepcion: The Court upheld the authority of Mother Concepcion to accept the donation. As the Superior General of the petitioner, her authority was never questioned by the petitioner itself. The petitioner affirmed and supported her authority to accept the donation on their behalf. This subsequent affirmation by the petitioner after its SEC registration constitutes a ratification of Mother Concepcion's act of accepting the donation, consistent with the principles of agency and ratification under the Civil Code. The acceptance by Mother Concepcion, acting for the sisters comprising the congregation, was deemed sufficient to perfect the donation and transfer title to the property to the petitioner. On the binding effect on the respondents: The Deed of Donation, having been validly entered into by Purificacion, binds the respondents as her heirs. As successors-in-interest, the respondents are considered "privies" to the Deed and stand in the same position as their predecessor, Purificacion. Therefore, they cannot question the validity of the Deed of Donation.
Main Doctrine
A religious organization that has filed its Articles of Incorporation and By-laws with the SEC, even if its Certificate of Incorporation has not yet been issued at the time of the donation, may be considered as having entered into a contract of donation under the doctrine of corporation by estoppel, especially when the donation is remuneratory in nature, and the donor acted with full knowledge of the circumstances.