64. Sec. of Education vs. Heirs of Dulay, et. al., G.R. # 164748, Jan.

27, 2006

FACTS:

- Spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of land located in Rizal,
Santiago, Isabela with an area of 29,002 square meters covered by an OCT.
- In 1981, the spouses Dulay executed a deed of donation over a 10,000 square meter portion of their
property in favor of the Ministry of Education and Culture (now the Department of Education, Culture
and Sports [DECS]). The deed expressly provides that the purpose of the land shall be for “school
purposes.” However, the property was not used for school purposes and remained idle.
- Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal National High
School building on a parcel of land it acquired from Alejandro Feliciano. The school site was about 2
kilometers away from the land donated by the spouses Dulay.
- In 1994, Dulay in a letter to the DECS Secretary requested that the property be returned to them
considering that the land was never used since 1981, or a period of more than 13 years.
- Subsequently, the Barangay Council of Rizal, Santiago City issued Resolution No. 39 7 recognizing the
right of the donors to redeem the subject parcel of land because of the DECS’ failure to utilize it for the
intended purpose. It further resolved that the Rizal National High School no longer needed the donated
land "considering its distance from the main campus and [the] failure to utilize the property for a long
period of time."
- On December 22, 1994, Rufino Dulay, Sr. passed away at the age of 80. His heirs sought the help of
the Sangguniang Panlungsod of Santiago City via an undated letter 9 requesting the approval of a
resolution allowing them to redeem the donated property. The Sangguniang Panlungsod denied the
request inasmuch as the city government was not a party to the deed of donation
- In August 1997: the heirs of Dulay, Sr., filed a complaint for the revocation of the deed of donation and
cancellation of TCT No. T143337 against the DECS Secretary and Dr. Benito Tumamao, the Schools
Division Superintendent of Isabela. They alleged that there was a condition in the deed of donation:
that the DECS, as donee, utilize the subject property for school purposes, that is, the construction of a
building to house the Rizal National High School. The heirs claim that the DECS did not fulfill the
condition and that the land remained idle up to the present. They also averred that the donation inter
vivos was inofficious, since the late Rufino Dulay, Sr. donated more than what he could give by will

ARGUMENTS
PETITIONER RESPONDENT
- That DECS complied with said condition because - That there was a condition in the deed of donation:
the land was being used by the school as its “That the DECS, as donee, utilize the subject property
technology and home economics laboratory. for school purposes, that is, the construction of a
- The donation was not inofficious for the donors building to house the Rizal National High School.
were the owners of five other parcels of land, all - That the DECS did not fulfill the condition and that
located at Rizal, Santiago City. the land remained idle up to the present.
- That DECS acquired the disputed property by - That the donated land was being used as a
virtue of purchase made on December 8, 1997 by technology and home economics laboratory, and
the barangay of Rizal, Santiago City in the averred that there were no improvements on the
amount of P18,000.00 as certified by its former proper.
Barangay Captain, Jesus San Juan. - That the donation inter vivos was inofficious, since
- That the action of the respondents had the late Rufino Dulay, Sr. donated more than what he
prescribed. could give by will.
- That students planted a portion of the land with
rice, mahogany seedlings, and fruit-bearing
trees; the produce would then be sold and the
proceeds used for the construction of a school
building on the subject property.
DECISIONS:

RTC – Ruled in favor of the respondents, declaring that the deed of donation, as REVOKED, and ordered
the defendant DECS to execute the deed of reconveyance of the land in favor of the plaintiffs heirs of
Rufino Dulay, Sr. The ocular inspection conducted by the RTC on the subject lot showed that the land was
barren, save for a small portion which was planted with palay. A demolished house was also found in the
periphery of the donated lot.

CA – Affirmed the RTC’s decision, and held that the DECS failed to comply with the condition in the
donation, that is, to use the property for school purposes.

MR was denied, hence a petition was filed before the SC.

ISSUES:

1. W/N DECS had complied with the condition imposed on the deed of donation.

2. W/N the respondents' right to seek the revocation of the deed of donation is already barred by
prescription and laches.

HELD:

1. NO. Other than the bare allegation of the defendant-appellants, there was nothing in the records that
could concretely prove that the condition of donation has been complied with by the defendant-appellants.
The planting of palay on the land donated can hardly be considered and could not have been the "school
purposes" referred to and intended by the donors when they had donated the land in question. Petitioner’s
statement that the lot was used for technology and home economics laboratory (T-HEL) of the Rizal
National High School was not substantiated as there was not even a single classroom built on the land
donated that would reasonably indicate that, indeed, classes have been conducted therein.

These observations, together with the unrebutted ocular inspection report made by the trial court which
revealed that the land donated remains idle and without any improvement thereon for more than a decade
since the time of the donation, EVIDENTLY showed the DEC’s failure to comply to the condition stipulated
in the deed of donation.

2. Anent the second issue, the Court held that the respondents’ cause of action has not prescribed under
Art. 764 of the NCC, or four years from the non-compliance with the condition in the deed of donation.
Since such failure to comply with the condition of utilizing the property for school purposes became
manifest sometime in 1988 when the DECS utilized another property for the construction of the school
building, the four-year prescriptive period did not commence on such date. Petitioner was given more than
enough time to comply with the condition, and it cannot be allowed to use this fact to its advantage. The
Court emphasized that the donation is onerous because the DECS, as donee, was burdened with the
obligation to utilize the land donated for school purposes. Under Article 733 of the New Civil Code, a
donation with an onerous cause is essentially a contract and is thus governed by the rules on contract.
Corollarily, since a deed of donation is considered a written contract, it is governed by Article 1144 of the
New Civil Code, which provides that the prescriptive period for an action arising from a written contract is
ten (10) years from the time the cause of action accrues. In the case of donation, the accrual of the cause
of action is from the expiration of the time within which the donee must comply with the conditions or
obligations of the donation. In the instant case, however, it must be noted that the subject donation fixed
no period within which the donee can comply with the condition of donation. As such, resort to Article
1197 of the New Civil Code is necessary. Said article provides that if the obligation does not fix a period,
but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix
the duration thereof. In the case at bar, it can be inferred that a period was contemplated by the donors.
The donors could not have intended their property to remain idle for a very long period of time when, in
fact, they specifically obliged the defendant-appellants to utilize the land donated for school purposes and
thus put it in good use.

Altogether, it has been 16 years since the execution of the deed of donation. Petitioner DECS failed to use
the property for the purpose specified in the deed of donation. The property remained barren and
unutilized. Even after respondents sought the return of the property before the courts, petitioner DECS still
failed to draw up plans to use the property for school purposes. In fine, petitioner DECS has no use for the
property; hence, the same shall be reverted to the respondents..

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No.
78314 dated July 30, 2004 is AFFIRMED.