Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 77425             June 19, 1991

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN

CATHOLIC BISHOP OF IMUS, and the SPOUSES FLORENCIO IGNAO
and SOLEDAD C. IGNAO, petitioners,
vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES
EUSEBIO DE CASTRO and MARTINA RIETA, represented by MARINA
RIETA GRANADOS and THERESA RIETA TOLENTINO, respondents.

G.R. No. 77450             June 19, 1991

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN

CATHOLIC BISHOP OF IMUS, and the SPOUSES FLORENCIO IGNAO
and SOLEDAD C. IGNAO, petitioners,
vs.
HON. COURT OF APPEALS, THE ESTATE OF DECEASED SPOUSES
EUSEBIO DE CASTRO and MARTINA RIETA, represented by MARINA
RIETA GRANADOS and THERESA RIETA TOLENTINO, respondents.

Severino C. Dominguez for petitioner Roman Catholic Bishop of Imus,

Cavite.
Dolorfino and Dominguez Law Offices for Sps. Ignao.
Joselito R. Enriquez for private respondents.

REGALADO, J.:

These two petitions for review on certiorari1 seek to overturn the decision of

the Court of Appeals in CA-G.R. CV No. 054562 which reversed and set
aside the order of the Regional Trial Court of Imus, Cavite dismissing Civil
Case No. 095-84, as well as the order of said respondent court denying
petitioner's motions for the reconsideration of its aforesaid decision.
On November 29, 1984, private respondents as plaintiffs, filed a complaint
for nullification of deed of donation, rescission of contract and
reconveyance of real property with damages against petitioners Florencio
and Soledad C. Ignao and the Roman Catholic Bishop of Imus, Cavite,
together with the Roman Catholic Archbishop of Manila, before the
Regional Trial Court, Branch XX, Imus, Cavite and which was docketed as
Civil Case No. 095-84 therein.3

In their complaint, private respondents alleged that on August 23, 1930, the
spouses Eusebio de Castro and Martina Rieta, now both deceased,
executed a deed of donation in favor of therein defendant Roman Catholic
Archbishop of Manila covering a parcel of land (Lot No. 626, Cadastral
Survey of Kawit), located at Kawit, Cavite, containing an area of 964
square meters, more or less. The deed of donation allegedly provides that
the donee shall not dispose or sell the property within a period of one
hundred (100) years from the execution of the deed of donation, otherwise
a violation of such condition would render ipso facto null and void the deed
of donation and the property would revert to the estate of the donors.

It is further alleged that on or about June 30, 1980, and while still within the
prohibitive period to dispose of the property, petitioner Roman Catholic
Bishop of Imus, in whose administration all properties within the province of
Cavite owned by the Archdiocese of Manila was allegedly transferred on
April 26, 1962, executed a deed of absolute sale of the property subject of
the donation in favor of petitioners Florencio and Soledad C. Ignao in
consideration of the sum of P114,000. 00. As a consequence of the sale,
Transfer Certificate of Title No. 115990 was issued by the Register of
Deeds of Cavite on November 15, 1980 in the name of said petitioner
spouses.

What transpired thereafter is narrated by respondent court in its assailed

decision.4

On December 17, 1984, petitioners Florencio Ignao and Soledad C. Ignao

filed a motion to dismiss based on the grounds that (1) herein private
respondents, as plaintiffs therein, have no legal capacity to sue; and (2) the
complaint states no cause of action.

On December 19, 1984, petitioner Roman Catholic Bishop of Imus also

filed a motion to dismiss on three (3) grounds, the first two (2) grounds of
which were identical to that of the motion to dismiss filed by the Ignao
spouses, and the third ground being that the cause of action has
prescribed.

On January 9, 1985, the Roman Catholic Archbishop of Manila likewise

filed a motion to dismiss on the ground that he is not a real party in interest
and, therefore, the complaint does not state a cause of action against him.

After private respondents had filed their oppositions to the said motions to
dismiss and the petitioners had countered with their respective replies, with
rejoinders thereto by private respondents, the trial court issued an order
dated January 31, 1985, dismissing the complaint on the ground that the
cause of action has prescribed.5

Private respondents thereafter appealed to the Court of Appeals raising the

issues on (a) whether or not the action for rescission of contracts (deed of
donation and deed of sale) has prescribed; and (b) whether or not the
dismissal of the action for rescission of contracts (deed of donation and
deed of sale) on the ground of prescription carries with it the dismissal of
the main action for reconveyance of real property. 6

On December 23, 1986, respondent Court of Appeals, holding that the

action has not yet prescibed, rendered a decision in favor of private
respondents, with the following dispositive portion:

WHEREFORE, the Order of January 31, 1985 dismissing appellants'

complaint is SET ASIDE and Civil Case No. 095-84 is hereby ordered
REINSTATED and REMANDED to the lower court for further
proceedings. No Costs.7

Petitioners Ignao and the Roman Catholic Bishop of Imus then filed their
separate motions for reconsideration which were denied by respondent
Court of Appeals in its resolution dated February 6, 1987, 8 hence, the filing
of these appeals by certiorari.

It is the contention of petitioners that the cause of action of herein private

respondents has already prescribed, invoking Article 764 of the Civil Code
which provides that "(t)he 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," and that "(t)his action shall prescribe after
four years from the non-compliance with the condition, may be transmitted
to the heirs of the donor, and may be exercised against the donee's heirs.

We do not agree.

Although it is true that under Article 764 of the Civil Code an action for the
revocation of a donation must be brought within four (4) years from the
non-compliance of the conditions of the donation, the same is not
applicable in the case at bar. The deed of donation involved herein
expressly provides for automatic reversion of the property donated in case
of violation of the condition therein, hence a judicial declaration revoking
the same is not necessary, As aptly stated by the Court of Appeals:

By the very express provision in the deed of donation itself that the
violation of the condition thereof would render ipso facto null and
void the deed of donation, WE are of the opinion that there would be
no legal necessity anymore to have the donation judicially declared
null and void for the reason that the very deed of donation itself
declares it so. For where (sic) it otherwise and that the donors and
the donee contemplated a court action during the execution of the
deed of donation to have the donation judicially rescinded or declared
null and void should the condition be violated, then the phrase
reading "would render ipso facto null and void" would not appear in
the deed of donation.9

In support of its aforesaid position, respondent court relied on the rule that
a judicial action for rescission of a contract is not necessary where the
contract provides that it may be revoked and cancelled for violation of any
of its terms and conditions.10 It called attention to the holding that there is
nothing in the law that prohibits the parties from entering into an agreement
that a violation of the terms of the contract would cause its cancellation
even without court intervention, and that it is not always necessary for the
injured party to resort to court for rescission of the contract. 11 It reiterated
the doctrine that a judicial action is proper only when there is absence of a
special provision granting the power of cancellation. 12

It is true that the aforesaid rules were applied to the contracts involved
therein, but we see no reason why the same should not apply to the
donation in the present case. Article 732 of the Civil Code provides that
donations inter vivos shall be governed by the general provisions on
contracts and obligations in all that is not determined in Title III, Book III on
donations. Now, said Title III does not have an explicit provision on the
matter of a donation with a resolutory condition and which is subject to an
express provision that the same shall be considered ipso facto revoked
upon the breach of said resolutory condition imposed in the deed therefor,
as is the case of the deed presently in question. The suppletory application
of the foregoing doctrinal rulings to the present controversy is consequently
justified.

The validity of such a stipulation in the deed of donation providing for the
automatic reversion of the donated property to the donor upon non-
compliance of the condition was upheld in the recent case of De Luna, et
al. vs. Abrigo, et al.13 It was held therein that said stipulation is in the nature
of an agreement granting a party the right to rescind a contract unilaterally
in case of breach, without need of going to court, and that, upon the
happening of the resolutory condition or non-compliance with the conditions
of the contract, the donation is automatically revoked without need of a
judicial declaration to that effect. While what was the subject of that case
was an onerous donation which, under Article 733 of the Civil Code is
governed by the rules on contracts, since the donation in the case at bar is
also subject to the same rules because of its provision on automatic
revocation upon the violation of a resolutory condition, from parity of
reasons said pronouncements in De Luna pertinently apply.

The rationale for the foregoing is that in contracts providing for automatic
revocation, judicial intervention is necessary not for purposes of obtaining a
judicial declaration rescinding a contract already deemed rescinded by
virtue of an agreement providing for rescission even without judicial
intervention, but in order to determine whether or not the rescission was
proper.14

When a deed of donation, as in this case, expressly provides for automatic

revocation and reversion of the property donated, the rules on contract and
the general rules on prescription should apply, and not Article 764 of the
Civil Code. Since Article 1306 of said Code authorizes the parties to a
contract to establish such stipulations, clauses, terms and conditions not
contrary to law, morals, good customs, public order or public policy, we are
of the opinion that, at the very least, that 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.

On the foregoing ratiocinations, the Court of Appeals committed no error in

holding that the cause of action of herein private respondents has not yet
prescribed since an action to enforce a written contract prescribes in ten
(10) years.15 It is our view that Article 764 was intended to provide a judicial
remedy in case of non-fulfillment or contravention of conditions specified in
the deed of donation if and when the parties have not agreed on the
automatic revocation of such donation upon the occurrence of the
contingency contemplated therein. That is not the situation in the case at
bar.

Nonetheless, we find that although the action filed by private respondents

may not be dismissed by reason of prescription, the same should be
dismissed on the ground that private respondents have no cause of action
against petitioners.

The cause of action of private respondents is based on the alleged breach

by petitioners of the resolutory condition in the deed of donation that the
property donated should not be sold within a period of one hundred (100)
years from the date of execution of the deed of donation. Said condition, in
our opinion, constitutes an undue restriction on the rights arising from
ownership of petitioners and is, therefore, contrary to public policy.

Donation, as a mode of acquiring ownership, results in an effective transfer

of title over the property from the donor to the donee. Once a donation is
accepted, the donee becomes the absolute owner of the property donated.
Although the donor may impose certain conditions in the deed of donation,
the same must not be contrary to law, morals, good customs, public order
and public policy. The condition imposed in the deed of donation in the
case before us constitutes a patently unreasonable and undue restriction
on the right of the donee to dispose of the property donated, which right is
an indispensable attribute of ownership. Such a prohibition against
alienation, in order to be valid, must not be perpetual or for an
unreasonable period of time.

Certain provisions of the Civil Code illustrative of the aforesaid policy may
be considered applicable by analogy.1âwphi1 Under the third paragraph of
Article 494, a donor or testator may prohibit partition for a period which
shall not exceed twenty (20) years. Article 870, on its part, declares that the
dispositions of the testator declaring all or part of the estate inalienable for
more than twenty (20) years are void.

It is significant that the provisions therein regarding a testator also

necessarily involve, in the main, the devolution of property by gratuitous
title hence, as is generally the case of donations, being an act of liberality,
the imposition of an unreasonable period of prohibition to alienate the
property should be deemed anathema to the basic and actual intent of
either the donor or testator. For that reason, the regulatory arm of the law is
or must be interposed to prevent an unreasonable departure from the
normative policy expressed in the aforesaid Articles 494 and 870 of the
Code.

In the case at bar, we hold that the prohibition in the deed of donation
against the alienation of the property for an entire century, being an
unreasonable emasculation and denial of an integral attribute of ownership,
should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code. Consequently, as specifically
stated in said statutory provision, such condition shall be considered as not
imposed. No reliance may accordingly be placed on said prohibitory
paragraph in the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the cause of action
for the nullification of the deed of donation is not in truth violative of the
latter hence, for lack of cause of action, the case for private respondents
must fail.

It may be argued that the validity of such prohibitory provision in the deed
of donation was not specifically put in issue in the pleadings of the parties.
That may be true, but such oversight or inaction does not prevent this Court
from passing upon and resolving the same.

It will readily be noted that the provision in the deed of donation against
alienation of the land for one hundred (100) years was the very basis for
the action to nullify the deed of d donation. At the same time, it was
likewise the controverted fundament of the motion to dismiss the case a
quo, which motion was sustained by the trial court and set aside by
respondent court, both on the issue of prescription. That ruling of
respondent court interpreting said provision was assigned as an error in the
present petition. While the issue of the validity of the same provision was
not squarely raised, it is ineluctably related to petitioner's aforesaid
assignment of error since both issues are grounded on and refer to the very
same provision.

This Court is clothed with ample authority to review matters, even if they
are not assigned as errors on appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case: 16 Thus, we have held
that an unassigned error closely related to an error properly assigned, 17 or
upon which the determination of the question properly assigned is
dependent, will be considered by the appellate court notwithstanding the
failure to assign it as error.18

Additionally, we have laid down the rule that the remand of the case to the
lower court for further reception of evidence is not necessary where the
Court is in a position to resolve the dispute based on the records before it.
On many occasions, the Court, in the public interest and for the expeditious
administration of justice, has resolved actions on the merits instead of
remanding them to the trial court for further proceedings, such as where the
ends of justice, would not be subserved by the remand of the case. 19 The
aforestated considerations obtain in and apply to the present case with
respect to the matter of the validity of the resolutory condition in question.

WHEREFORE, the judgment of respondent court is SET ASIDE and

another judgment is hereby rendered DISMISSING Civil Case No. 095-84
of the Regional Trial Court, Branch XX, Imus, Cavite.

SO ORDERED.

Melencio-Herrera and Paras, JJ., concur.

Padilla, J., took no part.
Sarmiento, J., is on leave.