62. De Luna vs. Abrigo, G.R. # 57455, Jan.

18, 1990

Facts:

 On January 24, 1965, Prudencio de Luna donated a portion of 7,500 square meters of Lot No. 3707 of the
Cadastral Survey of Lucena covered by TCT to the Luzonian Colleges, Inc., (now Luzonian University
Foundation, Inc., herein referred to as the foundation). The donation, embodied in a Deed of Donation
Intervivos was subject to certain terms and conditions and provided for the automatic reversion to the donor of
the donated property in case of violation or non-compliance. The foundation failed to comply with the conditions
of the donation. On April 9, 1971, Prudencio de Luna "revived" the said donation in favor of the foundation, in a
document entitled "Revival of Donation Intervivos" subject to terms and conditions which among others,
required:

o 3. That the DONEE shall construct at its own expense a Chapel, a Nursery and Kindergarten School, to be named
after St. Veronica, and other constructions and Accessories shall be constructed on the land herein being donated
strictly in accordance with the plans and specifications prepared by the O.R. Quinto & Associates and made part of
this donation; provided that the flooring of the Altar and parts of the Chapel shall be of granoletic marble.

o 4. That the construction of the Chapel, Nursery and Kindergarten School shall start immediately and must be at least
SEVENTY (70) PER CENTUM finished by the end of THREE (3) YEARS from the date hereof, however, the whole
project as drawn in the plans and specifications made parts of this donation must be completed within FIVE (5)
YEARS from the date hereon, unless extensions are granted by the DONOR in writing;

 As in the original deed of donation, the "Revival of Donation Intenrivos" also provided for the automatic reversion
to the donor of the donated area in case of violation of the conditions thereof, couched in the following terms:

o 11. That violation of any of the conditions herein provided shall cause the automatic reversion of the donated area to
the donor, his heirs, assigns and representatives, without the need of executing any other document for that purpose
and without obligation whatever on the part of the DONOR. (p. 24, Rollo).

 The foundation, through its president, accepted the donation in the same document, subject to all the terms and
conditions stated in the donation. The donation was registered and annotated on April 15, 1971 in the
memorandum of encumbrances as Entry No. 17939 of Transfer Certificate of Title No. T-5775.

 On August 3, 1971, Prudencio de Luna and the foundation executed a 'Deed of Segregation" whereby the area
donated which is now known as Lot No. 3707-B of Subdivision Plan Psd-40392 was adjudicated to the foundation.
As a result, transfer certificate of title No. T-16152 was issued in the name of the foundation. The remaining
portion known as Lot No. 3707-A was retained by the donor.

Contentions:

Heirs Foundation
 On September 23, 1980, herein petitioners,  respondent foundation claimed that it had
Evelyn, Rosalina, Prudencio, Jr., Willard, partially and substantially complied with the
Antonio and Joselito, all surnamed de Luna, conditions of the donation and that the donor has
who claim to be the children and only heirs granted the foundation an indefinite extension of
of the late Prudencio de Luna who died on time to complete the construction of the chapel. It
August 18, 1980, filed a complaint with the also invoked the affirmative defense of
Regional Trial Court of Quezon alleging that the prescription of action and prayed for the dismissal
terms and conditions of the donation were not of the complaint.
complied with by the foundation. Among others, it
prayed for the cancellation of the donation and
the reversion of the donated land to the heirs.

Lower Court: dismissed; The assailed order of the trial court stated that revocation (of a donation) will be effective only
either upon court judgment or upon consent of the donee x x x The trial court dismissed the claim of petitioners that the
stipulation in the donation providing for revocation in case of non-compliance of conditions in the donation is tantamount
to the consent of the donee, opining that the consent contemplated by law should be such consent given by the
donee subsequent to the effectivity of the donation or violation of the conditions imposed therein. The trial court further
held that, far from consenting to the revocation, the donee claimed that it had already substantially complied with the
conditions of the donation by introducing improvements in the property donated valued at more than the amount of the
donated land. In view thereof, a judicial decree revoking the subject donation is necessary. Accordingly, under Article 764
of the New Civil Code, actions to revoke a donation on the ground of non-compliance with any of the conditions of the
donation shall prescribe in four years counted from such non-compliance. In the instant case, the four-year period for
filing the complaint for revocation commenced on April 9, 1976 and expired on April 9, 1980. Since the complaint was
brought on September 23, 1980 or more than five (5) months beyond the prescriptive period, it was already barred by
prescription.

Issue: W/N petitioner’s action filed before the Court of First Instance of Quezon is not one for revocation of the donation
under Article 764 of the New Civil Code which prescribes in four (4) years, but one to enforce a written contract which
prescribes in ten (10) years.

SC: granted.

1. It is the finding of the trial court, which is not disputed by the parties, that the donation subject of this case is one with
an onerous cause. It was made subject to the burden requiring the donee to construct a chapel, a nursery and a
kindergarten school in the donated property within five years from execution of the deed of donation. It is true that under
Article 764 of the New Civil Code, actions for the revocation of a donation must be brought within four (4) years from the
non-compliance of the conditions of the donation. However, said article does not apply to onerous donations in view of
the specific provision of Article 733 providing that onerous donations are governed by the rules on contracts. In the light
of the above, the rules on contracts and the general rules on prescription and not the rules on donations are applicable in
the case at bar. The trial court was therefore not correct in holding that the complaint in the case at bar is barred by
prescription under Article 764 of the New Civil Code because Article 764 does not apply to onerous donations. As provided
in the donation executed on April 9, 1971, compliance with the terms and conditions of the contract of donation, shall be
made within five (5) years from its execution. The complaint which was filed on September 23, 1980 was then well within
the ten (10) year prescriptive period to enforce a written contract (Article 1144[1], New Civil Code), counted from April 9,
1976.

2. Finally, considering that the allegations in the complaint on the matter of the donee's non-compliance with the
conditions of the donation have been contested by private respondents who claimed that improvements more valuable
than the donated property had been introduced, a judgment on the pleadings is not proper. Moreover, in the absence of
a motion for judgment on the pleadings, the court cannot motu proprio render such judgment. Section 1 of Rule 19
provides: "Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party's
pleading, the court may, on motion of that party, direct judgment on such pleading."

ACCORDINGLY, the petition is GRANTED. Civil Case No. 8624 is hereby ordered reinstated. Respondent judge is ordered
to conduct a trial on the merits to determine the propriety of the revocation of the subject donation.

SO ORDERED.

From the viewpoint of motive, purpose or cause, donations may be 1) simple, 2) remuneratory or 3) onerous. A
simple donation is one the cause of which is pure liberality (no strings attached). A remuneratory donation is one
where the donee gives something to reward past or future services or because of future charges or burdens,
when the value of said services, burdens or charges is less than the value of the donation. An onerous donation is
one which is subject to burdens, charges or future services equal (or more) in value than that of the thing
donated (Edgardo L. Paras, Civil Code of the Philippines Annotated, 11 ed., Vol. 11, p. 726).

Under the old Civil Code, it is a settled rule that donations with an onerous cause are governed not by the law on
donations but by the rules on contracts, as held in the cases of Carlos v. Ramil, L-6736, September 5, 1911, 20
Phil. 183, Manalo vs.  de Mesa, L-9449, February 12, 1915, 29 Phil. 495. On the matter of prescription of actions
for the revocation of onerous donation, it was held that the general rules on prescription applies. (Parks v.
Province of Tarlac, supra.). The same rules apply under the New Civil Code as provided in Article 733 thereof
which provides:
 Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, and remuneratory
donations by the provisions of the present Title as regards that portion which exceeds the value of the
burden imposed.

Under Article 1306 of the New Civil Code, the parties to a contract have the right "to establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order or public policy." Paragraph 11 of the "Revival of Donation Intervivos, has provided that
"violation of any of the conditions (herein) shall cause the automatic reversion of the donated area to the donor, his
heirs, . . ., without the need of executing any other document for that purpose and without obligation on the part of
the DONOR". Said stipulation not being contrary to law, morals, good customs, public order or public policy, is valid
and binding upon the foundation who voluntarily consented thereto.

The validity of the stipulation in the contract providing for the automatic reversion of the donated property to the
donor upon non-compliance cannot be doubted. It is in the nature of an agreement granting a party the right to
rescind a contract unilaterally in case of breach, without need of going to court. Upon the happening of the resolutory
condition of non-compliance with the conditions of the contract, the donation is automatically revoked without need
of a judicial declaration to that effect. In the case of University of the Philippines v.  de los Angeles, L-28602,
September 29, 1970, 35 SCRA 102-107, it was held:

. . . There is nothing in the law that prohibits the parties from entering into agreement that violation of the
terms of the contract would cause cancellation thereof. even without court intervention. In other words, it is
not always necessary for the injured party to resort to court for rescission of the contract (Froilan v. Pan
Oriental Shipping Co., et al., L-11897, 31 October 1964, 12 SCRA 276).

This was reiterated in the case of Angeles v. Calasanz, L-42283, March 18, 1985:

Well settled is, however, the rule that a judicial action for the rescission of a contract is not necessary where
the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions
(Lopez v. Commissioner of Customs, 37 SCRA 327, 334, and cases cited therein).

Resort to judicial action for rescission is obviously not contemplated. The validity of the stipulation can not be
seriously disputed. It is in the nature of a facultative resolutory condition which in many cases has been
upheld, by this court. (Ponce Enrile v. Court of Appeals, 29 SCRA 504)

However, in the University of the Philippines v . Angeles  case, (supra), it was held that in cases where one of the
parties contests or denies the rescission, "only the final award of the court of competent jurisdiction can conclusively
settle whether the resolution is proper or not." It was held, thus:

. . . since in every case, where the extrajudicial resolution is contested, only the final award of the court of
competent jurisdiction can conclusively settle whether the resolution was proper or not . It is in this sense that
judicial action will be necessary as without it, the extrajudicial resolution will remain contestable and subject
to judicial invalidation, unless attack thereon should become barred by acquiescence, estoppel or
prescription.

It is clear, however, that 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 recession was proper.

The case of Parks v. Province of Tarlac,  supra, relied upon by the trial court, is not applicable in the case at bar.
While the donation involved therein was also onerous, there was no agreement in the donation providing for
automatic rescission, thus, the need for a judicial declaration revoking said donation.