~

l\epublic of tbe ~bilippines

ilupreme QCourt
:fflanila
SECOND DIVISION
REPUBLIC OF THE PHILIPPINES,
represented by the Secretary of
Agriculture,
Petitioner,

G.R. No. 197115

-versusFEDERICO DACLAN,
JOSEFINA COLLADO and her
husband FEDERICO DACLAN,
TEODORO DACLAN and
MINVILUZ DACLAN as surviving
heirs of deceased JOSE DACLAN,
Respondents.

x--------------------------x
FEDERICO DACLAN,
JOSEFINA COLLADO,
TEODORO DACLAN and
MINVILUZ DACLAN as surviving
heirs of deceased JOSE DACLAN,
Petitioners,
-versus REPUBLIC OF THE PHILIPPINES,
represented by the Secretary of
Agriculture and PROVINCE OF
LA UNION, represented by its
PROVINCIAL GOVERNOR,
Respondents.

G.R. No. 197267

Present:
BRION, Acting Chairperson, *
DEL CASTILLO,
MENDOZA,
PERLAS-BERNABE,** and
LEONEN,JJ.

PrFfAtPl1ajedirJ 15

x----------------------------------------------~

DECISION
DEL CASTILLO, J.:
Before us are consolidated Petitions for Review on Certiorari' assailing:

Per Special Order No. 1955 dated March 23, 2015.

Per Special Order No. 1956 dated March 23, 2015.
Rollo, G.R. No. 197115, pp. 12-36; G.R. No. 197267, pp. 8-42.

J#'

4tff{(,

Decision

G.R. Nos. 197115 & 197267

the January 25, 2011 Decision2 of the Court of Appeals (CA) in CA-G.R. CV No.
90014 which set aside the July 31, 2007 Decision3 of Branch 32 of the Regional
Trial Court (RTC) of Agoo, La Union, as well as 2) the CAs May 30, 2011
Resolution4 denying the parties respective Motions for Reconsideration.5
Factual Antecedents
The facts, as found by the CA, are as follows:
Sometime in May 1972, the Agoo Breeding Station (or breeding
station) was established by the Department of Agriculture, through the Bureau
of Animal Industry (BAI), Region I, for the purpose of breeding cattle that would
be distributed to the intended beneficiaries pursuant to the livelihood program of
the national government. In support of the said project, plaintiffs6 executed four
(4) documents denominated as Deed of Donation in favor of defendant Republic
of the Philippines (or Republic) donating to the latter four (4) parcels of land,
more particularly described in the following Tax Declarations (TD):
1. TD No. 23769 registered in the name of Federico Daclan covering a
[parcel of] land with an area of 15,170 square meters, more or less;
2. TD No. 38240 registered in the name of Josefina Collado covering a
[parcel of] land with an area of 3,440 square meters, more or less;
3. TD No. 27220 registered in the name of Teodoro Daclan covering a
[parcel of] land with an area of 2,464 square meters, more or less;
4. TD No. 1875 registered in the name of Jose Daclan (deceased father
of plaintiff Minviluz Daclan) covering a [parcel of] land with an area
of 1,769 square meters, more or less.
These parcels of land are located at Barrio Nazareno, Agoo, La Union.
The donation was subject to the conditions that these parcels of land 1) shall be
used solely for the establishment of a breeding station, and 2) shall not be used
for any other purpose, except with the previous consent of the donors or their
heirs.
Sometime in 1991, the powers and functions of certain government
agencies, including those of the Department of Agriculture (DA), were devolved
to the local government units pursuant to Republic Act No. 7160, otherwise
known as the Local Government Code. Thus, defendant Province of La Union
(or Province) assumed the powers and functions of the DA, in the operation of
the breeding station.7

In particular, the deeds of donation8 stipulated

2

3
4
5
6
7
8

Rollo, G.R. No. 197115, pp. 38-48; penned by Associate Justice Sesinando E. Villon and concurred in by
Associate Justices Stephen C. Cruz and Amy C. Lazaro-Javier.
Id. at 72-87; penned by Judge Clifton U. Ganay.
Id. at 50.
CA rollo, pp. 174-192.
Petitioners in G.R. No. 197267.
Rollo, G.R. No. 197267, pp. 184-185.
Records, pp. 7-10.

Decision

G.R. Nos. 197115 & 197267

a. That the land herein mentioned shall be used for the establishment of a
breeding station and shall not be used for any other purpose, except with the
previous consent of the DONOR or his heirs;
xxxx
c. That in case of non-use, abandonment or cessation of the activities of the
BUREAU OF ANIMAL INDUSTRY, possession or ownership shall
automatically revert to the DONOR and all permanent improvements
existing thereon shall become the property of the DONOR; x x x9

All in all, the petitioners in G.R. No. 197267 Federico Daclan, Josefina
Collado, Teodoro Daclan, Jose Daclan (the Daclans) and several others donated
around 13 hectares of land to the Republic. The uniform deeds of donation
covering these parcels of land contained the same conditions, including the above
stipulations relative to exclusive purpose/use and automatic reversion.10
Sometime after the donations were made, the La Union Medical Center
(LUMC) was constructed on a 1.5-hectare portion of the 13-hectare donated
property.11
In a September 4, 2003 Letter12 to the Secretary of the Department of
Agriculture, the Daclans and other donors demanded the return of their donated
lands on the ground that the breeding station has ceased operations and that the
land has been abandoned.
Ruling of the Regional Trial Court
On March 28, 2005, the Daclans filed Civil Case No. A-2363 for specific
performance against the Republic and the Province of La Union. The case was
assigned to Branch 32 of the RTC of Agoo, La Union (Agoo RTC). The Daclans
essentially claimed in their Amended Complaint13 that pursuant to the automatic
reversion clause in the deeds of donation, they are entitled to a return of their
donated parcels of land after the Bureau of Animal Industry (BAI) ceased
operating the breeding station, but that the Republic and the Province failed to
honor the said clause and refused to return their land. They thus prayed that the
defendants be ordered to return to them the donated land, with all improvements
existing thereon.
In its Answer,14 the Province alleged that the Daclans have no cause of
action since the breeding station was still existing although this time it is being
9
10
11
12
13
14

Id.
Id. at 11; Rollo, G.R. No. 197267, p. 189.
Rollo, G.R. No. 197115, pp. 27, 29, 44; G.R. No. 197267, p. 189; Records, pp. 227-228, 343.
Records, p. 11.
Id. at 63-69.
Id. at 84-87.

Decision

G.R. Nos. 197115 & 197267

operated by the Province, pursuant to the devolution program under the Local
Government Code of 1991, and that the Daclans violated the deeds of donation
because they have occupied the donated land and have begun fencing the same. It
prayed for the dismissal of the complaint as well as the grant of injunctive relief.
In a subsequent Manifestation,15 the Republic opted to adopt the above
Answer filed by the Province.
In their Reply,16 the Daclans claimed that the donated land cannot be
assigned by the Republic to the Province as the deeds of donation did not include
the Republics successors or assigns as intended beneficiaries; that contrary to the
Provinces claim, the breeding station is not operational and has been abandoned,
and the existing heads of cattle found therein do not belong to the government but
to former officials of the BAI; and that with the automatic reversion clause, they
are granted the immediate right to occupy the subject land, and no injunctive relief
should issue against them.
Upon motion of the parties, an ocular inspection of the premises was
conducted, and a Commissioners Report17 was prepared and issued thereafter.
The report indicated in part that
From information gathered from Ms. Cresencia Isibido, a caretaker of
the Agoo Breeding Station, the land had an original area of thirteen (13) hectares.
At present though, only eleven point five (11.5) hectares is [sic] being occupied
by the Agoo Breeding Station as 1.5 hectares was [sic] occupied by the La Union
Medical Center.
At a distance of about 200 meters from the main entrance of the breeding
station, an office is located at the south of said lot. Beside the office is a shed
where six (6) young goats (kids) are housed. Another shed where goats are
housed is located at the northern side of the lot, fronting a water pump station.
It was likewise gathered that at present, the breeding station has a total
number of fifty (50) goats. Also, there are six (6) cows roaming in the pasture
land. Four (4) of these cows are pregnant. It was clarified that these cows belong
to the Cross Australian Bi-Bhraman [sic] breed.
There are four (4) caretakers in the breeding station, all of whom are
employed by the provincial government of La Union. They receive salary from
the provincial government and they likewise submit monthly reports to the
Provincial Veterinarian. These four caretakers are Cresencia Isibido, Manuel
Daclan, Ruben Daclan (son of plaintiff Federico Daclan), and Tita Fortes.
The group left the breeding station at around 3:30pm.
Agoo, La Union, this 14th day of December, 2006.18
15
16
17
18

Id. at 102-103.
Id. at 88-91.
Id. at 227-228; prepared and signed by Commissioner Dante R. Evangelista.
Id. at 228.

Decision

G.R. Nos. 197115 & 197267

During trial, the witnesses testified as follows:

To substantiate their claim, the plaintiffs presented the following
witnesses whose testimonies are summarized, thus:
REINERIO BELARMINO[,] JR., is 46 years old, married, a resident of
Namnama, San Fernando, La Union, and Regional Director of the Department of
Agriculture, Region 1.
Dir. Belarmino testified that by virtue of a subpoena ad testificandum
and subpoena duces tecum, he brought to Court a photocopy of a letter he issued
to Atty. Benjamin Tabios, Legal Consultant of the Department of Agriculture
dated October 14, 2003.
Dir. Belarmino said that while he confirmed and affirmed the contents of
the letter, he nevertheless could not agree on [sic] one sentence written therein.
This pertains to the entry that the artificial breeding station is no longer
operational. He explained that although he signed the letter, it was his legal
officer who prepared the same.
Further, he said that he had been calling his legal officer since it was the
latter who drafted said letter. He clarified that upon personal verification, he
found out that it was not the artificial breeding station that was not [operational].
Rather, it was the breeding station that was not operational.
He likewise mentioned that as early as 1993, the Department of
Agriculture, particularly the Bureau of Animal Industry, gave up the breeding
station because of the devolution. In particular, the operation of the breeding
station was transferred to the Province of La Union. However, he affirmed that
in the deed of donation, there is no mention of the Province of La Union.
Likewise, there is no mention of any successor.
He clarified though that no breeding activity was done by the
Department of Agriculture through the Bureau of Animal Industry since 1993
because ownership of the breeding station was transferred to the Province of La
Union. The transfer was made without the consent of the donors since the
transfer was between two government entities.
On the ocular inspection which was conducted, Dir. Belarmino affirmed
that at present, there are six cows and fifty (50) goats in the breeding station.
However, he clarified that said 50 goats are not the same goats that were turned
over to the province of La Union as a result of the devolution.
TEODORO DACLAN, 84 years old, married, retired government
employee and a resident of Nazareno, Agoo, La Union, testified that he is one of
the plaintiffs in this case.
He said that he executed a Deed of Donation in favor of the Republic of
the Philippines, then represented by the Secretary of the Department of
Agriculture. He clarified that as embodied in their complaint, they seek to
enforce the common provision that in case of non-use, abandonment or cessation
of activities of the Bureau of Animal Industry, possession and ownership of the
lots subject of donation shall revert x x x to the donors.

Decision

G.R. Nos. 197115 & 197267

In this respect, he said that the Department of Agriculture, through the

Bureau of Animal Industry, has no on-going breeding activity in the abovementioned lots. He maintained that he came to know of such non-operation of
the breeding station as early as thirteen (13) years ago.
He likewise testified that he was never informed of any devolution which
transferred the operations of the breeding station from the Bureau of Animal
Industry to the Province of La Union. Moreover, his permission was never
sought for the use of the donated lots by the Province of La Union.
FEDERICO DACLAN, 83 years old, married, retired employee of the
Bureau of Animal Industry and a resident of Brgy. Nazareno, Agoo, La Union,
also testified.
He said that he is one of the plaintiffs in this case. Plaintiff Teodoro
Daclan is his brother while plaintiff Minviluz Daclan is his niece. His spouse,
Josefina Collado, is likewise a co-plaintiff.
He added that he donated a parcel of land with an area of 15,170 square
meters located at Nazareno, Agoo, La Union in favor of the Republic of the
Philippines through the Secretary of Agriculture.
Further, he reiterated that as embodied in the deed of donation, one of the
conditions therein is that the land shall be used as a breeding station and shall not
be used for any other purpose, except with the previous consent of the donor or
his heirs.
He maintained that since 1993 up to the present, the lot is no longer
being used as a breeding station nor has the defendant province of La Union
sought his permission for the use of said lot for any other purpose.
JOSEFINA COLLADO, 72 years old, married, housewife and a resident
of Nazareno, Agoo, La Union testified that she and her husband donated a parcel
of land situated at Nazareno, Agoo, La Union in favor of the Republic of the
Philippines through the Secretary of Agriculture.
She said that at present, there is no breeding activity being conducted on
said lot. She added that there has been no breeding activity for a long time now.
Further, she clarified that she and the other plaintiffs were never notified of a
devolution so much so that the operation of the breeding station was transferred
to defendant Province of La Union. Also, the defendant Province of La Union
never secured their consent for the use of the lot for any other purpose other than
a breeding station.
MINVILUZ DACLAN, 75 years old, single, retired teacher and resident
of San Pedro, Agoo, La Union testified that she is the [daughter] of the late Jose
Daclan. She said that during the lifetime of her father, she was aware of a Deed
of Donation executed by her father in favor of the Republic of the Philippines
represented by the then Secretary of Agriculture.
She said that the lot subject of the donation is situated in Nazareno,
Agoo, La Union. Likewise, she testified that the donation was premised on the
condition that a breeding station is to be established in said property. However,
she maintained that there is no such breeding station.

Decision

G.R. Nos. 197115 & 197267

Further, she was not aware if her father gave his consent for the use of
the property for any other purpose other than for a breeding station. She
emphasized that her father gave his consent only for the use of a breeding station.
Likewise, she has not been consulted nor her permission sought for if the land
can be used for any other purpose other than for breeding.
The defendant Province of La Union presented the following witnesses
whose testimonies are summarized, thus:
CRESENCIA ISIBIDO, 58 years old, single, government employee and
a resident of San Pedro, Agoo, La Union testified that she is employed at the
Office of the Veterinarian, particularly at the Agoo Breeding Station at Nazareno,
Agoo, La Union.
Particularly, she has been employed thereat since August 28, 1974,
initially as Farm Worker and now, as Farm Foreman. As foreman, she exercises
supervision over her co-employees and over all animals in the breeding station.
She clarified that in 1989, there were six (6) personnel assigned at the breeding
station. She likewise clarified that from 1974 until 1989, she received her salary
from the Bureau of Animal Industry.
During the devolution of 1993, she started receiving her salary from the
provincial government of La Union. She added though that even after devolution
took place, the operation of the Agoo Breeding Station continued.
Likewise, she testified that from the time she was promoted as farm
foreman, goats, cattle and swine were being maintained at the breeding station.
She recalled that there were about twenty (20) cattle, seventy (70) goats and eight
(8) swine.
When the devolution took place, she specified that the activities in the
breeding station included production of animals, forage and artificial
insemination. She said that the cattles in the breeding station were either
subjected to natural insemination or artificial insemination. Upon the other hand,
goats are subjected to natural insemination. Aside from artificial or natural
insemination, greasing is also being conducted in the breeding station.
DR. NIDA GAPUZ, 47 years old, married, Provincial Veterinarian and a
resident of Bauang, La Union testified that she is the provincial veterinarian of
the province of La Union since October, 2006. Prior to her appointment as
provincial veterinarian, she was the Supervisor Agriculturist of the Provincial
Veterinarians Office. Again, prior to her appointment as supervisor agriculturist,
she was Agricultural Center Chief II of the same office.
She recalled that in 1983, their office was under the Department of
Agriculture Regional Office. Thereafter, they were transferred to the Provincial
Office of the Department of Agriculture. She said that at that time, the Agoo
Breeding Station was already existing.
Thereafter, with the advent of devolution, the Office of the Provincial
Veterinarian was created and eventually, they were separated from the
Department of Agriculture.
Further, she testified that in her capacity as Agricultural Center Chief II,

Decision

G.R. Nos. 197115 & 197267

she handled the facilities for the Agoo Breeding Station and the La Union
Breeding Station, both of which are under the office of the provincial
veterinarian.
She mentioned that she used to visit the Agoo Breeding Station at least
two (2) times a month. She added that natural as well as artificial insemination
activities were conducted in said breeding station. As such, she explained that
one of the purpose[s] of the breeding station is to reproduce and disperse animals.
At present, she said that the breeding station engages in goat dispersal
and cattle production. There are no swine since swine production was phased out
because of the establishment of the La Union Medical Center within the vicinity
of the breeding station.
Likewise, she said that at present, there are seven (7) heads of cattle
being raised in the breeding station. Of these, two (2) are pregnant. There are
also forty-six (46) heads of goats.
ATTY. MAURO CABADING, 53 years old, married, Provincial
Assessor and a resident of San Fernando City, La Union testified that he is
familiar with the Agoo Breeding Station because he took photographs thereof
sometime last year.
He explained that he was directed by the governor and the provincial
administrator to take photographs of the breeding station to determine whether
the allegations contained in the complaint filed by herein plaintiffs [are] true or
not. He then proceeded to the Agoo Breeding Station accompanied by his driver
and a personnel from the Provincial Veterinarians Office.
He maintained that he can recognize the photographs taken at the
breeding station since it was his camera that was used in taking pictures. He then
started identifying the photographs, making mention of those which depicted
cows, goats and houses for cows and goats. Also, he said that the [owner] of the
goats and cows seen at the photographs he took is the provincial government of
La Union.19

On July 31, 2007, the Agoo RTC rendered its Decision20 in Civil Case No.
A-2363, which decreed thus:
WHEREFORE, in view of the foregoing, the Court hereby renders
judgment DISMISSING this instant case for specific performance.
SO ORDERED.21

The trial court held that although the functions and powers of the BAI were
transferred to the Province by virtue of devolution under the Local Government
Code of 1991, the Province continued to operate the breeding station. It added
that the Daclans consent to the transfer of functions and powers was not
necessary as to affect the validity of the donations of their lands; devolution of
19
20
21

Id. at 344-351.
Rollo, G.R. No. 197115, pp. 72-87.
Id. at 87.

Decision

G.R. Nos. 197115 & 197267

power took effect by operation of law. It held further that contrary to the Daclans
claims, the preponderance of evidence suggested that the operations of the
breeding station never ceased; and there are farm animals, buildings, structures,
and offices being supervised by four caretakers whose salaries were being paid by
the Province, and these personnel submit monthly reports of operations to the
provincial veterinarian.
Ruling of the Court of Appeals
The Daclans took the Agoo RTCs July 31, 2007 Decision to the CA via
appeal. On January 25, 2011, the CA issued the assailed Decision, decreeing as
follows:
WHEREFORE, in view of all the foregoing, the assailed July 31, 2007
decision of Branch 32 of the Regional Trial Court of Agoo, La Union is hereby
SET ASIDE. The donation insofar as the 1.5 hectare portion of the donated
parcels of land that is now being used by the La Union Medical Center for its
medical facility, hence no longer being used for the purpose for which the
donation was constituted, is hereby declared revoked. Accordingly, possession
and ownership of that particular portion of the donated parcels of land shall revert
to the donor/s or their heir/s.
SO ORDERED.22

In essence, the CA agreed with the findings of fact of the Agoo RTC,
except that it held that the Province violated the exclusive use stipulations in the
deeds of donation when it allowed the construction of the LUMC within a portion
of the donated lands, as the operation of a human medical facility has no relation
to the operation of an animal breeding station, and it has not been shown that the
consent of the donors was obtained prior to the construction of the LUMC. Thus,
with respect to the portion occupied by the LUMC, the automatic reversion
clauses in the deeds of donation apply. The appellate court held further that even
the Office of the Solicitor General conceded that if any violation of the deeds of
donation occurred, it could only affect that portion which is no longer used as a
breeding station. Finally, it upheld the validity of the automatic reversion clauses
in the subject deeds of donation, which it found to be consistent with law, morals,
good customs, public order and public policy.
Both the Daclans and the Republic moved for reconsideration, but on May
30, 2011, the CA issued the second assailed disposition sustaining its judgment.
The present Petitions were thus filed.
In an October 3, 2011 Resolution23 of the Court, both Petitions were
ordered consolidated.
22
23

Id. at 47.
Id. at 136.

Decision

10

G.R. Nos. 197115 & 197267

Issues
The following issues are raised:
By the Republic in G.R. No. 197115
I.

THE HONORABLE COURT ERRED IN RULING THAT

PETITIONER VIOLATED THE PROVISIONS OF THE DEEDS
OF DONATION.
II.
THE HONORABLE COURT OF APPEALS ERRED IN
DIRECTING THE PETITIONER TO RETURN PORTION/S OF
THE PARCEL/S OF LAND DONATED BY RESPONDENTS
AND/OR
THEIR
FOREBEARS
BASED
ON
AN
24
UNESTABLISHED INFERENCE.
By the Daclans in G.R. No. 197267

A.
THE HONORABLE COURT OF APPEALS DID NOT DECIDE
THE MAIN ISSUES RAISED BY THE PETITIONERS IN THE
TRIAL COURT AND BEFORE IT.
B.
THE HONORABLE COURT OF APPEALS HAS DECIDED A
QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD
WITH THE ESTABLISHED FACTS AND THE APPLICABLE
LAWS AND JURISPRUDENCE.25
The Parties Respective Arguments
G.R. No. 197115. For the Republic, the lone point of contention is that the
CA could not validly order the return to the Daclans of the donated 1.5-hectare
portion where the LUMC is situated because it has not been proved that such
portion formed part of lands originally donated by the Daclans. The Republic
contends that the Daclans donated only an aggregate of 2.2843 hectares, while the
breeding station sits on 13 hectares of donated land; the Daclans did not prove
during trial that the 1.5-hectare land where the LUMC is erected sits within the
2.2843 hectares donated by them. It maintains that if reversion must occur, the
Daclans must first clearly identify the land on which the LUMC is erected as
theirs. Thus, it prays that the July 31, 2007 Decision of the Agoo RTC be
reinstated.
24
25

Id. at 18-19.
Id., G.R. No. 197267, p. 18.

Decision

11

G.R. Nos. 197115 & 197267

For their part, the Daclans adopt their Petition in G.R. No. 197267 as their
Comment to the Republics Petition. In turn, the Republic manifested that it was
adopting its Comment26 to the Daclans Petition in G.R. No. 197267 as its Reply.
G.R. No. 197267. The Daclans in their Petition insist that the deeds of
donation they executed are personal and exclusively limited to the parties, the
donor and the donee. (They do) not extend to or inure to the benefit of their
successors and assigns;27 the rights and obligations of the parties to the donations
are not transmissible by their nature or stipulation. Thus, the unauthorized
turnover of the breeding station to the Province by the BAI the sole beneficiary
under the deeds of donation constitutes a violation of the terms of the deeds of
donation, thus giving ground for reversion; and with the passage of the Local
Government Code of 1991, the BAI ceased to exist and was abolished. Thus, the
donated lands automatically revert to their original owners. They add that the
evidence clearly indicates that the donated lands are no longer being used as a
breeding station, but merely grazing land for a few animals whose ownership is
even in doubt. Finally, the Daclans decry the failure of the Province to provide
agricultural extension and on-site research services and facilities as required
under the Implementing Rules and Regulations of the Local Government Code of
1991, which thus constitutes a violation of the stipulation contained in the deeds of
donation to develop and improve the livestock industry of the country. Thus, they
pray that the assailed CA dispositions be set aside completely and all their donated
lands be reverted to them.
Notably, the Daclans admit in their Petition that the 1.5-hectare portion
where the LUMC is constructed does not form part of the lands they donated to
the government, but belongs to other donors who are not parties to the case.28
In its Comment29 with a prayer for the denial of the Daclans Petition and
reinstatement of the July 31, 2007 Decision of the Agoo RTC, the Republic argues
that the question of whether the breeding station is still in operation is one of fact
which should not be disturbed at this stage of the proceedings; that the Daclans
admission in their Petition that the 1.5-hectare portion where the LUMC is
constructed does not form part of the lands they donated to the government
contradicts its argument that the CA committed serious error in ordering the
reversion of the said portion to them; that it is not merely the BAI which acted as
the donee, but the Republic itself represented by the Secretary of the Department
of Agriculture which is the recipient of the Daclans donated lands under the
deeds; and that the passage of the Local Government Code of 1991 did not result
in the cessation of operations of the Agoo breeding station.

26
27
28
29

Id. at 235-251.
Id. at 19.
Id. at 32-33.
Id. at 235-251.

Decision

12

G.R. Nos. 197115 & 197267

In an August 28, 2013 Manifestation,30 the Province adopted the

Republics Comment to the Petition as its own.
Our Ruling
The Court grants the Republics Petition in G.R. No. 197115 and denies
that of the Daclans in G.R. No. 197267.
The preponderance of evidence points to the fact that the breeding station
remained operational even after its transfer from the Republic to the Province.
The activities of the BAI did not cease even after it was dissolved after the
government adopted the policy of devolution under the Local Government Code
of 1991; these activities were merely transferred to the Province. Thus, the
witnesses for the Daclans and the Republic uniformly declared that the breeding
station remained operational even after the Local Government Code of 1991 was
put into effect. Particularly, Regional Director Reinerio Belarmino, Jr. of the
Department of Agriculture, Region 1 declared that after the breeding station was
transferred to the Province, he saw upon ocular inspection that there remained six
cows and fifty goats on the premises. Cresencia Isibido testified that as Farm
Foreman, she exercised supervision over her co-employees in the breeding station;
that in 1989, there were six personnel assigned at the breeding station; that from
1974 until 1989, she received her salary from the BAI; that after devolution, she
started receiving her salary from the Province; and that even after devolution, the
operation of the Agoo Breeding Station continued, and goats, cattle and swine
were being maintained thereat. Dr. Nida Gapuz, La Union Provincial
Veterinarian, said that natural as well as artificial insemination activities were
being conducted at the breeding station, as well as goat dispersal and cattle
production. Atty. Mauro Cabading, La Union Provincial Assessor, testified that
he was directed by the Governor and the Provincial Administrator to take
photographs of the breeding station in order to verify the complaint filed by the
Daclans; that he then proceeded to the Agoo Breeding Station; that he took
photographs of the animals cows and goats therein; and that the Province
owned said animals at the breeding station.
As against the bare assertions of the Daclans that the breeding station was
abandoned and became non-operational, the testimonies of the above public
officers are credible. In the absence of any controverting evidence, the
testimonies of public officers are given full faith and credence, as they are
presumed to have acted in the regular performance of their official duties.31
Devolution cannot have any effect on the donations made by the Daclans to
the Republic. As defined, devolution refers to the act by which the national
government confers power and authority upon the various local government units
30
31

Id. at 263-265.
Peligrino v. People, 415 Phil. 94, 121-122 (2001).

Decision

13

G.R. Nos. 197115 & 197267

to perform specific functions and responsibilities.32 It includes the transfer to

local government units of the records, equipment, and other assets and personnel
of national agencies and offices corresponding to the devolved powers, functions
and responsibilities.33 While the breeding station may have been transferred to
the Province of La Union by the Department of Agriculture as a consequence of
devolution, it remained as such, and continued to function as a breeding station;
and the purpose for which the donations were made remained and was carried out.
Besides, the deeds of donation did not specifically prohibit the subsequent transfer
of the donated lands by the donee Republic. The Daclans should bear in mind that
contracts take effect between the parties, their assigns and heirs, except in cases
where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law.34 Thus, as a general rule,
rights and obligations derived from contract are transmissible.
The Daclans lament the supposed failure of the Province to provide
agricultural extension and on-site research services and facilities as required
under the Implementing Rules and Regulations of the Local Government Code of
1991, which failure they believe, constituted a violation of the stipulation
contained in the deeds of donation to develop and improve the livestock industry
of the country. Yet this cannot be made a ground for the reversion of the donated
lands; on the contrary, to allow such an argument would condone undue
interference by private individuals in the operations of government. The deeds of
donation merely stipulated that the donated lands shall be used for the
establishment of a breeding station and shall not be used for any other purpose,
and that in case of non-use, abandonment or cessation of the activities of the BAI,
possession or ownership shall automatically revert to the Daclans. It was never
stipulated that they may interfere in the management and operation of the breeding
station. Even then, they could not directly participate in the operations of the
breeding station.
Thus, even if the BAI ceased to exist or was abolished as an office, its
activities continued when its functions were devolved to the local government
units such as the Province of La Union. It cannot be said that the deeds of
donation may be nullified just by the fact that the BAI became defunct; its
functions continued in the government offices/local government units to which
said functions were devolved.
Lastly, the CA cannot validly order the return to the Daclans of the donated
1.5-hectare portion where the LUMC is situated, because such portion was not
donated by them. They admitted that the 1.5-hectare portion where the LUMC is
constructed does not form part of the lands they donated to the government, but
belonged to other donors who are not parties to the instant case. As far as the
32
33
34

LOCAL GOVERNMENT CODE of 1991, Section 17(e).

Id., Section 17(i).
CIVIL CODE, Article 1311.

Decision

14

G.R. Nos. 197115 & 197267

Daclans are concerned, whatever they donated remains part of the breeding station
and so long as it remains so, no right of reversion accrues to them. Only the
original owner-donor of the 1.5-hectare portion where the LUMC is constructed is
entitled to its return.

WHEREFORE, the Court resolves as follows:

1. The January 25, 2011 Decision and May 30, 2011 Resolution of the
Court of Appeals in CA-G.R CV No. 90014 are REVERSED and SET ASIDE;
2. The Petition in G.R. No. 197115 is GRANTED. The July 31, 2007
Decision of the Regional Trial Court of Agoo, La Union, Branch 32 dismissing
Civil Case No. A-2363 is REINSTATED; and
3. The Petition in G.R. No. 197267 is DENIED.

SO ORDERED.

~c::J
0 C. DEL CASTILLO
Associate Justice

WE CONCUR:

G
~ .~
AR~D.B~
Associate Justice
Acting Chairperson

JOSEC~NDOZA
As;ij;;J~J:ce

ESTELA~ERNABE
Associate Justice

'
Associate Justice

Decision

15

G.R. Nos. 197115 & 197267

ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

CK~~~
Associate Justice
Acting Chairperson

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Acting Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

ChiefJustice

/~