Ganuelas vs Cawed : 123968 : April 24, 2003 : J.

Carpio

FACTS: On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina) executed a Deed of
Donation of Real Property[2] covering seven parcels of land in favor of her niece Ursulina
Ganuelas (Ursulina), one of herein petitioners.

On June 10, 1967, Celestina executed a document denominated as Revocation of Donation

[4] purporting to set aside the deed of donation. More than a month later or on August 18,
1967, Celestina died without issue and any surviving ascendants and siblings.

After Celestina’s death, Ursulina had been sharing the produce of the donated properties with
private respondents Leocadia G. Flores, et al., nieces of Celestina.

In 1982, or twenty-four years after the execution of the Deed of Donation, Ursulina secured
the corresponding tax declarations, in her name, over the donated properties and since then,
she refused to give private respondents any share in the produce of the properties despite
repeated demands.

Private respondents filed on May 26, 1986 with the RTC of San Fernando, La Union a
complaint[5] against Ursulina. The complaint alleged that the Deed of Donation executed by
Celestina in favor of Ursulina was void for lack of acknowledgment by the attesting witnesses
thereto before notary public Atty. Henry Valmonte, and the donation was a disposition mortis
causa which failed to comply with the provisions of the Civil Code regarding formalities of
wills and testaments, hence, it was void. Prayer: return to them as intestate heirs the
possession and ownership of the properties. They likewise prayed for the cancellation of the
tax declarations secured in the name of Ursulina, the partition of the properties among the
intestate heirs of Celestina, and the rendering by Ursulina of an accounting of all the fruits of
the properties since 1982 and for her to return or pay the value of their shares.

The defendants-herein petitioners alleged in their Answer[6] that the donation in favor of
Ursulina was inter vivos as contemplated under Article 729 of the Civil Code,[7] hence, the
deed did not have to comply with the requirements for the execution of a valid will; the
Revocation of Donation is null and void as the ground mentioned therein is not among those
provided by law to be the basis thereof; and at any rate, the revocation could only be legally
enforced upon filing of the appropriate complaint in court within the prescriptive period
provided by law, which period had, at the time the complaint was filed, already lapsed.
By Decision of February 22, 1996, the trial court, holding that the provision in the Deed of
Donation that in the event that the DONEE should predecease the DONOR, the “donation
shall be deemed rescinded and of no further force and effect” is an explicit indication that the
deed is a donation mortis causa.

RULING: Crucial in the resolution of the issue is the determination of whether the donor
intended to transfer the ownership over the properties upon the execution of the deed.[22]

Donation inter vivos differs from donation mortis causa in that in the former, the act is
immediately operative even if the actual execution may be deferred until the death of the
donor, while in the latter, nothing is conveyed to or acquired by the donee until the death of
the donor-testator.[23] The following ruling of this Court in Alejandro v. Geraldez is
illuminating:[24]

If the donation is made in contemplation of the donor’s death, meaning that the full or naked
ownership of the donated properties will pass to the donee only because of the donor’s
death, then it is at that time that the donation takes effect, and it is a donation mortis causa
which should be embodied in a last will and testament.

But if the donation takes effect during the donor’s lifetime or independently of the donor’s
death, meaning that the full or naked ownership (nuda proprietas) of the donated properties
passes to the donee during the donor’s lifetime, not by reason of his death but because of
the deed of donation, then the donation is inter vivos.

The distinction between a transfer inter vivos and mortis causa is important as the validity or
revocation of the donation depends upon its nature. If the donation is inter vivos, it must be
executed and accepted with the formalities prescribed by Articles 748[25] and 749[26] of the
Civil Code, except when it is onerous in which case the rules on contracts will apply. If it is
mortis causa, the donation must be in the form of a will, with all the formalities for the
validity of wills, otherwise it is void and cannot transfer ownership.[27]

The distinguishing characteristics of a donation mortis causa are the following:

1. It conveys no title or ownership to the transferee before the death of the transferor; or,
what amounts to the same thing, that the transferor should retain the ownership (full or
naked) and control of the property while alive;
2. That before his death, the transfer should be revocable by the transferor at will, ad nutum;
but revocability may be provided for indirectly by means of a reserved power in the donor to
dispose of the properties conveyed;

3. That the transfer should be void if the transferor should survive the transferee.

As the subject deed then is in the nature of a mortis causa disposition, the formalities of a
will under Article 728 of the Civil Code should have been complied with, failing which the
donation is void and produces no effect.[35]

As noted by the trial court, the attesting witnesses failed to acknowledge the deed before the
notary public, thus violating Article 806 of the Civil Code which provides:

Art. 806. Every will must be acknowledged before a notary public by the testator and the
witnesses. The notary public shall not be required to retain a copy of the will, or file another
with the office of the Clerk of Court. (Emphasis supplied)
GONZALO VILLANUEVA v. SPS. FROILAN AND LEONILA BRANOCO, GR No. 172804,
2011-01-24

Facts:

Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs,[3] sued

respondents, spouses Froilan and Leonila Branoco (respondents)... to recover a 3,492
square-meter parcel of land in

Amambajag, Culaba, Leyte (Property) and collect damages.

Petitioner claimed ownership over the Property through purchase in July 1971 from Casimiro
Vere (Vere), who, in turn, bought the Property from Alvegia Rodrigo (Rodrigo) in August
1970. Petitioner declared the Property in... his name for tax purposes soon after acquiring it.

In their Answer, respondents similarly claimed ownership over the Property through purchase
in July 1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo donated the Property in
May 1965. The two-page deed of donation (Deed), signed at the bottom by the parties and
two... witnesses, reads in full:

KNOW ALL MEN BY THESE PRESENTS:

That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas, a resident
of Barrio Bool, municipality of Culaba, subprovince of Biliran, Leyte del Norte, Philippines,
hereby depose and say:

That as we live[d] together as husband and wife with Juan Arcillas, we begot children,
namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS, and by
reason of poverty which I suffered while our children were still young; and because my
husband Juan Arcillas... aware as he was with our destitution separated us [sic] and left for
Cebu; and from then on never cared what happened to his family; and because of that one
EUFRACIA RODRIGUEZ, one of my nieces who also suffered with our poverty, obedient as
she was to all the works in our... house, and because of the love and affection which I feel
[for] her, I have one parcel of land located at Sitio Amambajag, Culaba, Leyte bearing Tax
Decl. No. 1878 declared in the name of Alvegia Rodrigo, I give (devise) said land in favor of
EUFRACIA RODRIGUEZ, her heirs,... successors, and assigns together with all the
improvements existing thereon, which parcel of land is more or less described and bounded
as follows:

1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo Uyvico; and
West, by Public land; 2. It has an area of 3,492 square meters more or less; 3. It is
planted to coconuts now bearing fruits; 4. Having an assessed value of P240.00; 5. It
is now in the... possession of EUFRACIA RODRIGUEZ since May 21, 1962 in the
concept of an owner, but the Deed of Donation or that ownership be vested on her
upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I already devise in
favor of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and that if the herein
Donee predeceases me, the same land will not be reverted to the Donor, but will be inherited
by... the heirs of EUFRACIA RODRIGUEZ;

That I EUFRACIA RODRIGUEZ, hereby accept the land above described from Inay Alvegia
Rodrigo and I am much grateful to her and praying further for a longer life; however, I will
give one half (1/2) of the produce of the land to Apoy Alve during her lifetime.

The... trial court rejected respondents' claim of ownership after treating the Deed as a
donation mortis causa which Rodrigo effectively cancelled by selling the Property to Vere in
1970.

Thus, by the time Rodriguez sold the Property to respondents in

1983, she had no title to transfer.

The CA granted respondents' appeal and set aside the trial court's ruling.

the Deed's consideration was not Rodrigo's death but her "love and affection" for

Rodriguez, considering the services the latter rendered

Rodrigo waived dominion over the Property in case Rodriguez predeceases her, implying its
inclusion in Rodriguez's estate;

Rodriguez accepted the donation in the Deed itself, an act necessary to effectuate...
donations inter vivos, not devises.

Issues:

whether petitioner's title over the Property is superior to respondents'... whether the contract
between the parties' predecessors-in-interest, Rodrigo and Rodriguez, was a donation or a
devise.

Ruling:

Naked Title Passed from Rodrigo to Rodriguez Under a

Perfected Donation

Post-mortem dispositions typically

(1) Convey no title or ownership to the transferee before the death of the transferor; or,
what amounts to the same thing, that the transferor should retain the ownership (full or
naked) and control of the property while alive;

(2) That before the [donor's] death, the transfer should be revocable by the transferor at will,
ad nutum; but revocability may be provided for indirectly by means of a reserved power in
the donor to dispose of the properties conveyed;

(3) That the transfer should be void if the transferor should survive the transferee.
[4] [T]he specification in a deed of the causes whereby the act may be revoked by the donor
indicates that the donation is inter vivos, rather than a disposition mortis causa[;]

[5] That the designation of the donation as mortis causa, or a provision in the deed to the
effect that the donation is "to take effect at the death of the donor" are not controlling
criteria; such statements are to be construed together with the rest of the... instrument, in
order to give effect to the real intent of the transferor[;] [and]

(6) That in case of doubt, the conveyance should be deemed donation inter vivos rather than
mortis causa, in order to avoid uncertainty as to the ownership of the property subject of the
deed.

Rodrigo passed naked title to Rodriguez under a perfected donation inter vivos.

irst. Rodrigo stipulated that "if the herein Donee predeceases me, the [Property] will not be
reverted to the Donor, but will be inherited by the heirs of x x... x Rodriguez," signaling the
irrevocability of the passage of title to Rodriguez's estate, waiving Rodrigo's right to reclaim
title. This transfer of title was perfected the moment Rodrigo learned of Rodriguez's
acceptance of the disposition... which, being... reflected in the Deed, took place on the day of
its execution on 3 May 1965.

Rodrigo's acceptance of the transfer underscores its essence as a gift in presenti, not in
futuro, as only donations inter vivos need acceptance by the recipient.

Indeed, had Rodrigo wished to retain full title over the Property, she could have easily
stipulated, as the testator did in another case, that "the donor, may transfer, sell, or
encumber to any person or entity the properties here donated x x x"[14] or used words to
that effect. Instead, Rodrigo expressly waived title over the Property in case Rodriguez
predeceases her.

n a bid to diffuse the non-reversion stipulation's damning effect on his case, petitioner tries to
profit from it, contending it is a fideicommissary substitution clause.

The question of the Deed's... juridical nature, whether it is a will or a donation,... By treating
the clause in question as mandating fideicommissary substitution, a mode of testamentary
disposition by which the first heir instituted is entrusted with the obligation to... preserve and
to transmit to a second heir the whole or part of the inheritance,[16] petitioner assumes that
the Deed is a will. Neither the Deed's text nor the import of the contested clause supports
petitioner's theory.

Second. What Rodrigo reserved for herself was only the beneficial title to the Property,
evident from Rodriguez's undertaking to "give one [half] x x x of the produce of the land to
Apoy Alve during her lifetime."[17] Thus, the Deed's stipulation... that "the ownership shall
be vested on [Rodriguez] upon my demise," taking into account the non-reversion clause,
could only refer to Rodrigo's beneficial title. We arrived at the same conclusion in Balaqui v.
Dongso[18] where, as here, the... donor, while "b[inding] herself to answer to the [donor]
and her heirs x x x that none shall question or disturb [the donee's] right," also stipulated
that the donation "does not pass title to [the donee] during my lifetime; but when I die, [the
donee] shall be the true owner"... of the donated parcels of land.

In finding the disposition as a gift inter vivos,... the donor meant nothing else than that she
reserved of herself the possession and usufruct of said two parcels of... land until her death,
at which time the donee would be able to dispose of them freely.

Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for her
to reserve partial usufructuary right over it.

Third. The existence of consideration other than the donor's death, such as the donor's love
and affection to the donee and the services the latter rendered, while also true of devises,
nevertheless "corroborates the express irrevocability of x x x [inter vivos]... transfers."... that
"the designation of the donation as mortis causa, or a provision in the deed to the effect that
the donation is `to take effect at the death of the donor' are not controlling criteria [but] x x
x are to be construed together with the... rest of the instrument, in order to give effect to the
real intent of the transferor."[23] Indeed, doubts on the nature of dispositions are resolved to
favor inter vivos transfers "to avoid uncertainty as to the ownership of the property subject
of... the deed."
Case Digest:Union Bank v. Santibanez
452 SCRA 228

FACTS:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim Santibañez
entered into a loan agreement in the amount of P128,000.00. The amount was intended for
the payment of one (1) unit Ford 6600 Agricultural Tractor. In view thereof, Efraim and his
son, Edmund, executed a promissory note in favor of the FCCC, the principal sum payable in
five equal annual amortizations. On Dec. 1980, FCCC and Efraim entered into another loan
agreement for the payment of another unit of Ford 6600 and one unit of a Rotamotor. Again,
Efraim and Edmund executed a promissory note and a Continuing Guaranty Agreement for
the later loan. In 1981, Efraim died, leaving a holographic will. Testate proceedings
commenced before the RTC of Iloilo City. Edmund was appointed as the special administrator
of the estate. During the pendency of the testate proceedings, the surviving heirs, Edmund
and his sister Florence, executed a Joint Agreement, wherein they agreed to divide between
themselves and take possession of the three (3) tractors: (2) tractors for Edmund and (1) for
Florence. Each of them was to assume the indebtedness of their late father to FCCC,
corresponding to the tractor respectively taken by them. In the meantime, a Deed of
Assignment with Assumption of Liabilities was executed by and between FCCC and Union
Bank, wherein the FCCC assigned all its assets and liabilities to Union Bank.

Demand letters were sent by Union Bank to Edmund, but the latter refused to pay. Thus, on
February 5, 1988, Union Bank filed a Complaint for sum of money against the heirs of Efraim
Santibañez, Edmund and Florence, before the RTC of Makati City. Summonses were issued
against both, but the one intended for Edmund was not served since he was in the United
States and there was no information on his address or the date of his return to the
Philippines. Florence filed her Answer and alleged that the loan documents did not bind her
since she was not a party thereto. Considering that the joint agreement signed by her and
her brother Edmund was not approved by the probate court, it was null and void; hence, she
was not liable to Union Bank under the joint agreement.

Union Bank asserts that the obligation of the deceased had passed to his legitimate heirs
(Edmund and Florence) as provided in Article 774 of the Civil Code; and that the
unconditional signing of the joint agreement estopped Florence, and that she
cannot deny her liability under the said document.

In her comment to the petition, Florence maintains that Union Bank is trying to recover a
sum of money from the deceased Efraim Santibañez; thus the claim should have been filed
 with the probate court. She points out that at the time of the execution of the joint
agreement there was already an existing probate proceedings. She asserts that even if the
agreement was voluntarily executed by her and her brother Edmund, it should still have been
subjected to the approval of the court as it may prejudice the estate, the heirs or third
parties.

ISSUE:

W/N the claim of Union Bank should have been filed with the probate court before which the
testate estate of the late Efraim Santibañez was pending. W/N the agreement between
Edmund and Florence (which was in effect, a partition of hte estate) was void considering
that it had not been approved by the probate court. W/N there can be a valid partition
among the heirs before the will is probated.

HELD:

Well-settled is the rule that a probate court has the jurisdiction to determine all the properties
of the deceased, to determine whether they should or should not be included in the inventory
or list of properties to be administered. The said court is primarily concerned with the
administration, liquidation and distribution of the estate.

In our jurisdiction, the rule is that there can be no valid partition among the heirs until after
the will has been probated. In the present case, Efraim left a holographic will which
contained the provision which reads as follows:

In our jurisdiction, the rule is that there can be no valid partition among the heirs until after
the will has been probated. In the present case, Efraim left a holographic will which
contained the provision which reads as follows:

o (e) All other properties, real or personal, which I own and may be discovered later after my
demise, shall be distributed in the proportion indicated in the immediately preceding
paragraph in favor of Edmund and Florence, my children.

The above-quoted is an all-encompassing provision embracing all the properties left by the
decedent which might have escaped his mind at that time he was making his will, and other
properties he may acquire thereafter. Included therein are the three (3) subject tractors. This
being so, any partition involving the said tractors among the heirs is not valid. The joint
agreement executed by Edmund and Florence, partitioning the tractors among themselves, is
invalid, specially so since at the time of its execution, there was already a pending proceeding
for the probate of their late father’s holographic will covering the said tractors.
The Court notes that the loan was contracted by the decedent. The bank, purportedly
a creditor of the late Efraim Santibañez, should have thus filed its money claim with the
probate court in accordance with Section 5, Rule 86 of the Revised Rules of Court.

The filing of a money claim against the decedent’s estate in the probate court is mandatory.
This requirement is for the purpose of protecting the estate of thedeceased by informing the
executor or administrator of the claims against it, thus enabling him to examine each claim
and to determine whether it is a proper one which should be allowed. The plain and obvious
design of the rule is the speedy settlement of the affairs of the deceased and the early
delivery of the property to the distributees, legatees, or heirs.

Perusing the records of the case, nothing therein could hold Florence accountable for any
liability incurred by her late father. The documentary evidence presented, particularly the
promissory notes and the continuing guaranty agreement, were executed and signed only by
the late Efraim Santibañez and his son Edmund. As the petitioner failed to file its money claim
with the probate court, at most, it may only go after Edmund as co-maker of the decedent
under the said promissory notes and continuing guaranty.