3. Donation

B. Donation (Civil Code, arts. 725-773)

Donation (Civil Code, arts. 725-773)

Nature of Donations

Article 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (618a)

Article 726. When a person gives to another a thing or right on account of the latter's merits or of the services rendered by him to the donor, provided they do not constitute a demandable debt, or when the gift imposes upon the donee a burden which is less than the value of the thing given, there is also a donation. (619)

Article 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. (n)

Article 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620)

Article 729. When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donor's death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. (n)

Article 730. The fixing of an event or the imposition of a suspensive condition, which may take place beyond the natural expectation of life of the donor, does not destroy the nature of the act as a donation inter vivos, unless a contrary intention appears. (n)

Article 731. When a person donates something, subject to the resolutory condition of the donor's survival, there is a donation inter vivos. (n)

Article 732. Donations which are to take effect inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in this Title. (621)

Article 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. (622)

Article 734. The donation is perfected from the moment the donor knows of the acceptance by the donee. (623)

CHAPTER 2

Persons Who May Give or Receive a Donation

Article 735. All persons who may contract and dispose of their property may make a donation. (624)

Article 736. Guardians and trustees cannot donate the property entrusted to them. (n)

Article 737. The donor's capacity shall be determined as of the time of the making of the donation. (n)

Article 738. All those who are not specially disqualified by law therefor may accept donations. (625)

Article 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;

(2) Those made between persons found guilty of the same criminal offense, in consideration thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought by the spouse of the donor or donee; and the guilt of the donor and donee may be proved by preponderance of evidence in the same action. (n)

Article 740. Incapacity to succeed by will shall be applicable to donations inter vivos. (n)

Article 741. Minors and others who cannot enter into a contract may become donees but acceptance shall be done through their parents or legal representatives. (626a)

Article 742. Donations made to conceived and unborn children may be accepted by those persons who would legally represent them if they were already born. (627)

Article 743. Donations made to incapacitated persons shall be void, though simulated under the guise of another contract or through a person who is interposed. (628)

Article 744. Donations of the same thing to two or more different donees shall be governed by the provisions concerning the sale of the same thing to two or more different persons. (n)

Article 745. The donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufficient power; otherwise, the donation shall be void. (630)

Article 746. Acceptance must be made during the lifetime of the donor and of the donee. (n)

Article 747. Persons who accept donations in representation of others who may not do so by themselves, shall be obliged to make the notification and notation of which article 749 speaks. (631)

Article 748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing. Otherwise, the donation shall be void. (632a)

Article 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments. (633)

CHAPTER 3

Effect of Donations and Limitations Thereon

Article 750. The donation may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced on petition of any person affected. (634a)

Article 751. Donations cannot comprehend future property.

By future property is understood anything which the donor cannot dispose of at the time of the donation. (635)

Article 752. The provisions of article 750 notwithstanding, no person may give or receive, by way of donation, more than he may give or receive by will.

The donation shall be inofficious in all that it may exceed this limitation. (636)

Article 753. When a donation is made to several persons jointly, it is understood to be in equal shares, and there shall be no right of accretion among them, unless the donor has otherwise provided.

The preceding paragraph shall not be applicable to donations made to the husband and wife jointly, between whom there shall be a right of accretion, if the contrary has not been provided by the donor. (637)

Article 754. The donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor. The latter, on the other hand, is not obliged to warrant the things donated, save when the donation is onerous, in which case the donor shall be liable for eviction to the concurrence of the burden.

The donor shall also be liable for eviction or hidden defects in case of bad faith on his part. (638a)

Article 755. The right to dispose of some of the things donated, or of some amount which shall be a charge thereon, may be reserved by the donor; but if he should die without having made use of this right, the property or amount reserved shall belong to the donee. (639)

Article 756. The ownership of property may also be donated to one person and the usufruct to another or others, provided all the donees are living at the time of the donation. (640a)

Article 757. Reversion may be validly established in favor of only the donor for any case and circumstances, but not in favor of other persons unless they are all living at the time of the donation.

Any reversion stipulated by the donor in favor of a third person in violation of what is provided in the preceding paragraph shall be void, but shall not nullify the donation. (614a)

Article 758. When the donation imposes upon the donee the obligation to pay the debts of the donor, if the clause does not contain any declaration to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for the debts exceeding the value of the property donated, unless a contrary intention clearly appears. (642a)

Article 759. There being no stipulation regarding the payment of debts, the donee shall be responsible therefor only when the donation has been made in fraud of creditors.

The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation. (643)

CHAPTER 4

Revocation and Reduction of Donations

Article 760. Every donation inter vivos, made by a person having no children or descendants, legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as provided in the next article, by the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or legitimated or illegitimate children, even though they be posthumous;

(2) If the child of the donor, whom the latter believed to be dead when he made the donation, should turn out to be living;

(3) If the donor subsequently adopt a minor child. (644a)

Article 761. In the cases referred to in the preceding article, the donation shall be revoked or reduced insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole estate of the donor at the time of the birth, appearance or adoption of a child. (n)

Article 762. Upon the revocation or reduction of the donation by the birth, appearance or adoption of a child, the property affected shall be returned or its value if the donee has sold the same.

If the property is mortgaged, the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover the same from the donee.

When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation. (645a)

Article 763. The action for revocation or reduction on the grounds set forth in article 760 shall prescribe after four years from the birth of the first child, or from his legitimation, recognition or adoption, or from the judicial declaration of filiation, or from the time information was received regarding the existence of the child believed dead.

This action cannot be renounced, and is transmitted, upon the death of the donor, to his legitimate and illegitimate children and descendants. (646a)

Article 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter.

In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration laws.

This action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee's heirs. (647a)

Article 765. The donation may also be revoked at the instance of the donor, by reason of ingratitude in the following cases:

(1) If the donee should commit some offense against the person, the honor or the property of the donor, or of his wife or children under his parental authority;

(2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife or children under his authority;

(3) If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. (648a)

Article 766. Although the donation is revoked on account of ingratitude, nevertheless, the alienations and mortgages effected before the notation of the complaint for revocation in the Registry of Property shall subsist.

Later ones shall be void. (649)

Article 767. In the case referred to in the first paragraph of the preceding article, the donor shall have a right to demand from the donee the value of property alienated which he cannot recover from third persons, or the sum for which the same has been mortgaged.

The value of said property shall be fixed as of the time of the donation. (650)

Article 768. When the donation is revoked for any of the causes stated in article 760, or by reason of ingratitude, or when it is reduced because it is inofficious, the donee shall not return the fruits except from the filing of the complaint.

If the revocation is based upon noncompliance with any of the conditions imposed in the donation, the donee shall return not only the property but also the fruits thereof which he may have received after having failed to fulfill the condition. (651)

Article 769. The action granted to the donor by reason of ingratitude cannot be renounced in advance. This action prescribes within one year, to be counted from the time the donor had knowledge of the fact and it was possible for him to bring the action. (652)

Article 770. This action shall not be transmitted to the heirs of the donor, if the latter did not institute the same, although he could have done so, and even if he should die before the expiration of one year.

Neither can this action be brought against the heir of the donee, unless upon the latter's death the complaint has been filed. (653)

Article 771. Donations which in accordance with the provisions of article 752, are inofficious, bearing in mind the estimated net value of the donor's property at the time of his death, shall be reduced with regard to the excess; but this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the donee from appropriating the fruits.

For the reduction of donations the provisions of this Chapter and of articles 911 and 912 of this Code shall govern. (654)

Article 772. Only those who at the time of the donor's death have a right to the legitime and their heirs and successors in interest may ask for the reduction of inofficious donations.

Those referred to in the preceding paragraph cannot renounce their right during the lifetime of the donor, either by express declaration, or by consenting to the donation.

The donees, devisees and legatees, who are not entitled to the legitime and the creditors of the deceased can neither ask for the reduction nor avail themselves thereof. (655a)

Article 773. If, there being two or more donations, the disposable portion is not sufficient to cover all of them, those of the more recent date shall be suppressed or reduced with regard to the excess. (656)

3. Donation

a. Concept and definition b. Essential elements

c. Classification of Donation d. Distinctions Between Mortis Causa and Inter Vivos Donations e. Donations Mortis Causa as Testamentary Dispositions f. Form g. Prohibited donations h. Reduction and Revocation

NATURE OF DONATIONS

An act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it (Art. 725)

Donation is perfected from the moment the donor knows of the acceptance by the donee (Art. 724)

Requisites of Donation (CIDAF)

• The donor must have Capacity to make the donation of a thing or right
• Donative Intent (animus donandi) or intent to make the donation out of liberality to benefit the donee
• Delivery, whether actual or constructive of the thing or right donated
• Donee must Accept or consent to donation
• Compliance with the prescribed Form

The donation is perfected once the acceptance of the donation was made known to the donor. Accordingly, ownership will only revert to the donor if the resolutory condition is not fulfilled. (Quijada v. CA, GR No. 126464, 1998)

Kinds As to Consideration

• Pure and Simple - When the cause of the donation is the pure liberality of the donor, without a condition or burden,
• Remuneratory or compensatory - Donation is given in consideration of the donee’s merits or out of gratitude on account of the services rendered by the donee to the donor, provided the services do not constitute a demandable debt.
• Modal - When the donation imposes upon the donee (necessarily future) a burden less than the value of the thing given
• Onerous - the value of which is considered the equivalent of the consideration for which it is given and thus governed by the rules of obligations and contracts

Note: Where a contract is seemingly a remuneratory donation but is silent as to the value of the burden imposed on the donee of a thing of undetermined value, the law on contract instead of the law on donations should govern. (Reyes v. Asuncion, G.R. No. 196083, October 3, 2016)

As to Effectivity of Extinguishment

• Pure - not subject to any condition (uncertain event) or period
• Conditional - subject to suspensive or resolutory condition
• With a Term - subject to a period, suspensive or resolutory

Note: Illegal or impossible conditions in simple and remuneratory donations are considered as not imposed. Donation itself remains valid and only the illegal or impossible conditions are disregarded. (Art. 727)

Donation Inter Vivos distinguished from

Donation Mortis Causa

Some Rules on Determination Whether Mortis Causa or Inter Vivos

Where a donation was made in consideration of love and affecion but further stipulated that I became effective upon the death of the donor provided that in the event the donee should die before the donor, the donation would be deemed automatically rescinded, the Court held that the same was a mortis causa since the right of disposition was not transferred to donee while donor is still alive. (Sicad v. CA, GR No. 125888, 1998)

Where, however, a donation was made stipulating that it would take effect after the death of the donor but further stipulated that (1) the donor will not dispose nor take it away from the donee and that (2) the donor is parting with the beneficial ownership while he lived was held to be inter vivos.

In case of doubt, the conveyance should be deemed donations inter vivos, rather than mortis causa, in order to avoid uncertainty as to the ownership of the property subject of the deed (Villanueva v. Spouses Branoco, GR No. 173804, 2011).

The reservation of the righ, ownership, possession and administration of the proper and made the donation operative upon death , in the context of an irrevocable donation, simply means that the donors parted with their naked title, maintaining only beneficial ownership of the donated property while they lived. (Del Rosario v. Ferrer, G.R. No. 187056, September 20, 2010)

Badges of Mortis Causa:

• Title remains with donor (full or naked ownership) and conveyed only upon death
• Donor can revoke ad nutum (Villanueva v. Spouses Branoco, G.R. No. 172804, 2011)

Note: For a disposition mortis causa, the intended beneficiary must survive the donor. A completed donation inter vivos is not void merely because the donee dies before the donor. (Del Rosario v. Ferrer, G.R. No. 187056, September 20, 2010; Villanueva v. Spouses Branoco, GR No. 172804, 2011)

FORMS OF DONATION

• Movable Property
• If the value exceeds P5,000, the donation and acceptance shall be made in writing. Otherwise the donation shall be void.
• If the value does not exceed P5,000, donation may be made orally or in writing.
• If oral, it must be with simultaneous delivery of the thing or of the document representing the right donated. (Art. 748)
• Immovable Property
• To be valid, donation must be made in a public instrument, specifiying therein the property donated and the value of the charges which the done must satisfy.
• The acceptance of the donee may be made in the same deed of donation or in a separate public document.
• If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments.
• Acceptance must be be made during the lifetime the donor. (Art.749)

Note: A donation mortis causa must comply with the formalities of a last will and testament otherwise; it would be void and would produce no effect. (Maglasang v. Heirs of Corazon Cabatingan, GR No. 131953, 2002)

If the donation is made in such a way that the full and naked ownership will pass to the donee upon the death of the donor, then it is at that time when the donation will take effect and it is the donation mortis causa which should be embodied in the last will and testament. (Maglasang v. Cabatingan, GR No. 131953, 2002)

Checklist for Donation:

• Whether onerous or gratuitous if onerous, governed by law on contracts
• If gratuitous, whether mortis causa or inter vivos if mortis causa, governed by law on succession
• If inter vivos, whether perfected or not (made known to the donor). If the donor has not learned of the donee’s acceptance, the donation has not yet been perfected; separately check whether a defect in a required form makes it void.
• If perfected, check for the capacity of the donor to give and the donee to receive. If no capacity, donation is void.
• Compliance with form, otherwise void.
• Art. 748 (movable); and
• Art. 749 (immovable)

DOUBLE DONATIONS

Rule: Priority in time, priority in right

• If movable one who first takes possession in good faith
• If immovable one who recorded in registry of property in good faith
• No inscription, one who first took possession in good faith
• In absence thereof, one who presents oldest title

Note: Donation of purchase money must follow the formal requirements mandated by law should the money donated exceed P5000. (Spouses Devisfruto v. Greenfell, G.R. No. 227725, July 1, 2020)

Capacity to be Donor

All persons who may contract and dispose of their property may give donation. Those who cannot give consent to a contract cannot be donors.

Note: Donor capacity shall be determined as of the time of the making and not at the perfecion of the donation (Arts. 737)

Effect of donations of encumbered property

Donations by reason of marriage of property subject to encumbrances are valid. In case of foreclosure of the encumbrance and the property is sold for less than the total amount of the obligation secured, the donee shall not be liable for the deficiency. If the property is sold for more than the total amount of the obligation, the donee shall be entitled to the excess. (Art. 85, FC)

Who are Disqualified to Donate

• Guardians and trustees with respect to property entrusted to them
• Husband and wife, to each other.
• Between paramours/persons guilty of adultery or concubinage at the time of donation
• Between parties guilty of same criminal offense, in consideration thereof
• Made to public officers, wife, descendant, ascendant, by reason of his office (Arts. 736, 739)
• Priest who heard confession of donor during his last illness;
• Relatives of priest within the fourth degree, church order, or community where priest belongs;
• Physician, nurse, etc. who took care of donor during his last illness;Physician, nurse, etc. who took care of donor during his last illness;
• Individuals, corporations, and associations not permitted by law.

Note: The prohibition against donations between spouses must likewise apply to donations between persons living together in illicit relations. (Reyes v. Reyes, G.R. No. 154645, February 6, 2006)

Note: In case of donation of the same thing to two or more different persons, the rules on double sale will apply.

Pursuant to Article 1544, ownership of immovable property subject of a double sale is transferred to the buyer who first registers it in the Registry of Property in good faith. However, when the second buyer has actual or constructive knowledge of the prior sale, they cannot be a registrant in good faith (Spouses German v. Spouses Mariano, G.R. No. 210845, January 22, 2020; owner verification needed)

Capacity to be Donee

All those who are not specially disqualified by law may accept donations.

Who May Accept Donations

• Natural and juridical persons not especially disqualified by law
• Minors and other incapacitated
• By themselves if pure and simple donation or if it does not require written acceptance
• By their parents or legal representatives if the donation is onerous or conditional or needs written acceptance
• Natural guardian not more than 50,000
• Court appointed more than 50,000
• Conceived and unborn child, represented by person who would have been guardian if already born (Arts. 738, 741 & 742)

Effect to the donations made by the spouses to each other

The revocation of the donations shall be recorded in the registries of property in the places where the properties are located. Alienations, liens and encumbrances registered in good faith before the recording of the complaint for revocation in the registries of property shall be respected. The revocation of or change in the designation of the insurance beneficiary shall take effect upon written notification thereof to the insured.

The action to revoke the donation must be brought within five years from the time the decree of legal separation has become final. (FC, Art. 64)

Requirements for Acceptance

• Acceptance must be made during the lifetime of the donor and donee (Art. 746)
• Acceptance may be made personally or through an agent with special or general and sufficient power, otherwise, the donation shall be void (Art. 745)
• Authorization should be in a public instrument.
• Minors and others who cannot enter into a contract, shall have acceptance done through parents or legal representatives (Art. 741)
• Conceived and unborn children shall have donation accepted by persons who would legally represent them if they were already born (Art. 742)

Void Donations

• Those made between persons who are guilty of adultery or concubinage at the time of donation
• Those made between persons found guilty of the same criminal offense, in consideration thereof
• Those made to a public officer or his wife, descendants and ascendants, by reason of his office (Art. 739)
• Donation between spouses during marriage, except moderate gifts (Art. 87, Family Code)
• Those made to incapacitated persons, though simulated under the guise of another contract or through a person who is interposed.

Acts of ingratitude

• Commission of an offense against the person, honor or property of the donor, their spouse, or their children under the parental authority;
• Imputation to the donor of any criminal offense or any act involving moral turpitude; and XPN: If the crime was committed against the donee themselves, their spouse, or their children under their authority.
• Undue refusal to support the donor when they are legally or morally bound to give such support. (Art. 765, NCC)

Rule regarding donations between spouses during the marriage

GR: Every donation or grant of gratuitous advantage, direct or indirect, between spouses is considered void. (Art. 87, Family Code)

XPN: Moderate gifts on the occasion of any family rejoicing.

The aforementioned rules also apply to common- law spouses. (Matabuena v. Cervantes, G.R. No. L- 28771, 31 Mar. 1971)

EFFECTS AND LIMITATIONS OF DONATION

• Reservation of sufficient means for support of donor and relatives.
• Donation may comprehend all present properties of the donor, or part thereof, provided he reserves sufficient means for his support and of relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Otherwise, the donation will be subject to reduction upon petition of any person affected. (Art. 750)
• Donation of future property is prohibited. (Art. 751)
• Donation shall be limited to what the donor may give by will. Otherwise, the donation is inofficious (Art. 752).
• The limitation applies when the donor has forced or compulsory heirs. The purpose is to not diminish their legitimes.

A donation would not be legally feasible if the donor has neither ownership nor real rights that he can transmit to the donee. (Hemedes v. Court of Appeals, G.R. No. 107132, October 8, 1999)

Rights and Obligations of Donor

• Donor may reserve the right to dispose of some of the things donated, or of some amount or income charge thereon (Art. 755)
• Donor may donate the ownership of property to one person and the usufruct to another (Art. 756)
• Donor is not obliged to warrant the things donated except when the donation is onerous, in which case the donor is liable for eviction to the concurrence of the burden. The donor is also liable for eviction or hidden defects in case of bad faith on his part. (Art. 754).
• Donor may provide for reversion in his favor. (Art. 757)

Rights and Obligations of Donee:

• If donation is made to several persons jointly, it is understood to be in equal shares and there is no right of accretion among them, unless the donor provides otherwise. If made to the husband and wife jointly, there is right of accretion unless the donor provides otherwise. (Art. 753)
• Donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor (Art. 754)
• If donation imposes upon the donee the obligation to pay the debts of the donor, it is understood to be liable to pay only the debts previously contracted. Note: In no case shall the donee be responsible for debts exceeding the value of the property donated, unless a contrary intention clearly appears. (Art. 758)
• If no stipulation regarding they payment of debts, donee is liable only when the donation has been made in fraud of creditors

Note: It is always presumed to be in fraud of creditors, when at the time of donation, the donor did not reserve sufficient property to pay his debts. (Art. 759)

Revocation Of Donations

• In the cases under Article 760 of the Civil Code, the donation may be revoked or reduced as provided by Article 761.
• Applies only to donation inter vivos
• Not applicable to onerous donations
• Donor can revoke donation if the donee fails to comply with the conditions imposed by the donor.

Grounds For Revocation

• Birth, Adoption, Reappearance of a Child It applies when the donor, at the time he made the donation, did not have any child or descendant or erroneously thought so. Donation may be revoked or reduced when:
• Donor should have any children, after donation, even though they be posthumous
• Donor child whom he believed to be dead when he made the donation, turn out to be living
• Donor subsequently adopt a minor child (Art. 760)
• Ingratitude The donation may also be revoked by reason of ingratitude in the following cases:
• Donee should commit some offense against the person, honor or property of the donor, or of his wife, or children under his parental authority.
• Donee imputes to the donor any:
• Criminal offense; or
• Any act involving moral turpitude; Note: Revocation applies even if the donee proves that the crime or act was actually committed, unless the crime or the act has been committed against the donee himself, his wife, or children under his authority.
• Donee unduly refuses to give support when the donee is legally or morally bound to give support to the donor.

Period for action prescribes within one year, counted from the time the donor:

• Had knowledge of the fact; and
• It was possible for him to bring the action. (Art. 769)

Note: The action for revocation due to ingratitude cannot be renounced in advance. It does not pass to the donor’s heirs if the donor could have brought it but did not; the heirs may continue an action the donor instituted. (Arts. 769–770)

Exception to Rule on Intransmissibility of Action regarding Revocation Due to Ingratitude

General Rule: Personal to the donor; heir cannot institute if donor did not provide for

Exception: Heirs may file in the following cases:

• Donor instituted the action for revocation before death; the heirs may continue it. (Art. 770)
• Donor already instituted civil action but died, heirs can substitute
• Donee killed donor or his ingratitude caused the death of the donor
• Criminal action filed but abated by death
• Non-compliance with conditions Donation may be revoked when the donee fails to comply with any of the conditions which the donor imposed. The alienations and mortgages made by the donee are void, subject to the limitations imposed by the Mortgage Law and Land Registration laws with regard to third persons. Action prescribes after 4 years from the noncompliance with the condition. Note: This action may be transmitted to the heirs of the donor, and may be exercised against the donee heirs. (Art. 764)

Grounds For Reduction

• Birth, appearance or adoption of a child - Same cases as revocation
• Failure to reserve - Failure of the donor to reserve sufficient means for support of himself or dependent relatives
• Fraud against creditors - A donation is presumed fraudulent when the donor did not reserve sufficient property to pay prior debts; creditors may seek rescission where warranted (Civil Code, Arts. 759, 1381(3), 1387).
• Inofficiousness - the donation exceeds that which the donor can give by will

Automatic Revocation

In contracts providing for automatic revocation, judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract but in order to determine whether or not the rescission was proper.

The stipulation of the parties providing for automatic revocation of the deed of donation, without prior judicial action for that purpose, is valid subject to the determination of the propriety of the rescission sought. Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not in itself the revocatory act. (Zamboanga Barter Traders v. Plagata, G.R. No. 148433, 2008)

Manner and kinds of remission:

• Total – Refers to the remission of the whole of the obligation;
• Partial – Remission of the part of the obligation: to the amount of indebtedness or to an accessory obligation only (such as pledge or interest), or to some other aspect of the obligation (such as solidary);
• Inter vivos - Effective during the lifetime of the creditor;
• Mortis causa - Effective upon death of the creditor. In this case, the remission must be contained in a will or testament
• Express – When it is made formally, it should be in accordance with the forms of ordinary donations with regard to acceptance, amount, and revocation; and
• Implied – When it can be inferred from the acts of the parties

Donations inter vivos to Compulsory Heirs

General Rule: Donations inter vivos to children shall be charged to their legitime (Art. 909)

Exception: For other compulsory heirs, a donor may expressly exempt a donation from collation, but the donation remains subject to reduction insofar as it is inofficious. (Art. 1062)

Donations inter vivos to Strangers

Donations made to strangers shall be charged to the part of the estate that the testator could have disposed of by will. (Art. 909)

Stranger – Anyone who does not succeed as a compulsory heir. (Balane, supra)