Municipality of Dasmariñas v. Campos
REITERATIONFacts
The Antecedents: Dr. Paulo C. Campos, the original owner, donated a parcel of land measuring 12,798 square meters to the National Housing Authority (NHA) on July 28, 1976. The donation was expressly conditioned upon the NHA's construction of a 36-meter-wide access road from Highway 17 to the Dasmariñas Resettlement Project. A crucial stipulation in the deed allowed Dr. Campos to retain the right to use the property if the NHA failed to use it for the specified road or if its development was delayed. Subsequently, the NHA constructed only a 20-meter-wide road, reserving the remaining 16 meters for future widening, and later, on June 13, 1993, donated the entire subject property to the Municipality of Dasmariñas without Dr. Campos's knowledge or consent. Procedural History: On November 13, 2001, Dr. Campos filed an action for Revocation of Donation against the NHA, citing the failure to construct the 36-meter road and the subsequent unauthorized donation to the Municipality of Dasmariñas. The case was consolidated and proceeded through the Regional Trial Court (RTC), where Dr. Campos passed away and was substituted by his heirs. The RTC, on March 16, 2011, partially granted the revocation, declaring the Deed of Donation and Acceptance between NHA and the Municipality of Dasmariñas void regarding the area not included in the 20-meter road and ordering the reconveyance of the unused portion to Dr. Campos's heirs. The NHA's motion for reconsideration was denied, and both the NHA and the Municipality of Dasmariñas appealed. The Court of Appeals (CA), on November 10, 2016, affirmed the RTC's decision, finding the donation onerous, the breach substantial, and the action timely filed. The CA denied the subsequent motions for reconsideration. The Petition: Two separate Petitions for Review on Certiorari under Rule 45 of the Rules of Court were filed by the Municipality of Dasmariñas and the National Housing Authority, which were consolidated by the Supreme Court. The petitioners challenge the CA's decision, arguing that the action for revocation had prescribed and was barred by laches, as Dr. Campos allegedly knew of the 20-meter road construction much earlier than the filing of the suit. They also contend that the NHA substantially complied with the donation's condition by constructing a 20-meter road and reserving the remainder, and that the subsequent donation to the Municipality was legally permissible. The petitioners further argue that the breach, if any, was merely casual and did not warrant revocation. The respondents-heirs maintain that the action was timely filed, the breach was substantial, and the donation was onerous, thus governed by contract law and prescription rules, and that the subsequent donation was unjustified and violated the original terms.
Issue(s)
Whether the action to revoke the Deed of Donation has prescribed and/or is barred by laches. Whether the CA erred in affirming the RTC decision that the NHA violated the terms of the Deed of Donation, thereby authorizing the partial revocation of the donated property.
Ruling
The consolidated petitions are denied for lack of merit. The Court affirmed the decision of the Court of Appeals, which upheld the Regional Trial Court's partial revocation of the Deed of Donation.
Ratio Decidendi
On the Issue of Prescription and Laches: The Court ruled that the action for revocation of the onerous donation had not prescribed. The donation was onerous because it contained the stipulation to build a 36-meter-wide access road, thus it is governed by the law on contracts. Under Article 1144 of the Civil Code, the prescriptive period for an action upon a written contract is 10 years from the accrual of the right of action. The right of action accrued in 1993 when the NHA donated the property to the Municipality of Dasmariñas, as this act removed the NHA's ability to fulfill the condition and precluded any action to compel the transferee to finish the road. Therefore, the filing of the complaint on November 13, 2001, was within the prescriptive period. Furthermore, the doctrine of laches was not applicable because Dr. Campos did not sleep on his rights; he showed patience and filed the case only when it became clear that the NHA could no longer fulfill its obligation, and the filing was within the prescriptive period. On the Issue of Revocation of the Deed of Donation: The Court found that the NHA committed a substantial breach of the Deed of Donation, justifying the partial revocation. The factual findings of the RTC and CA that the NHA failed to comply with the express stipulations were binding on the Supreme Court. The object of the agreement was clearly the construction of a 36-meter-wide access road, and the failure to construct it with the specified dimensions constituted a breach. The NHA's construction of only a 20-meter-wide road, and its subsequent donation of the property to the Municipality of Dasmariñas without reproducing the condition, demonstrated bad faith and a substantial breach that defeated the object of the donation. The NHA's justifications, such as traffic volume, were insufficient given the long period of time that elapsed. The subsequent donation to the Municipality was also found to be unjustified as the Dasmariñas Resettlement Project was not a subdivision or condominium project under P.D. No. 957, rendering the transfer illegal and further exacerbating the breach.
Main Doctrine
A donation of an onerous nature is governed by the law on contracts, and the prescriptive period for an action to revoke such donation begins to run from the accrual of the right of action, which in this case was when the donee transferred the property to a third party, thereby removing the donee's ability to fulfill the onerous condition.