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 EST…

These two petitions for review on certiorari^[1]
seek to overturn the decision of the Court of Appeals in CA-G.R. CV. No. 05456^[2]
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
petitioners’ 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 prescribed,
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. 
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 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, (Chairman) and Paras, JJ., concur.

Padilla, J., no part.

Sarmiento, J., on leave.

^[1]
G.R. No. 77425 was filed by petitioner Roman Catholic Bishop of Imus, and G.R. No. 77450 by petitioners Florencio
and Soledad C. Ignao.

^[2]
Penned by Justice Felipe B. Kalalo, with the
concurrence of Justices Floreliana Castro-Bartolome and Esteban M. Lising.

^[3]
Original Record, 1-9.

^[4]
Rollo, G.R. No. 77425, 20.

^[5]
Original Record, 71-74.

^[6]
Rollo, G.R. No. 77425, 27-28.

^[7]
Ibid., id., 30.

^[8]
Ibid., id., 32.

^[9]
Ibid., id., 28.

^[10]
Lopez vs. Commissioner of Customs, et al., 37 SCRA 327 (1971).

^[11]
Froilan vs. Pan Oriental Shipping Co.,
et al., 12 SCRA 276 (1964).

^[12]
De la Rama
Steamship Co., Inc. vs. Tan, etc., et al., 99 Phil. 1034 (1956).

^[13]
181 SCRA 150 (1990).

^[14]
University of the Philippines
vs. Angeles, etc., et al., 35 SCRA 102 (1970).

^[15]
Art. 1144(1), Civil Code.

^[16]
Insular Life Assurance Co., Ltd. Employees-NATU vs. Insular Life
Assurance Co., Ltd., et al., 76 SCRA 50 (1977).

^[17]
Philippine Commercial and International Bank vs. Court of Appeals, et
al, 159 SCRA 24 (1988).

^[18]
Soco vs. Militante,
etc., et al., 123 SCRA 160 (1983); Ortigas, Jr. vs.
Lufthansa German Airlines, 64 SCRA 610 (1975).

^[19]
Escudero, et al. vs. Dulay,
etc., et al., 158 SCRA 69 (1988); Lianga Bay Logging
Co., Inc. vs. Court of Appeals, et al., 157 SCRA 357 (1988).