REVOCATION AND REDUCTION OF DONATIONS

Art. 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)

TWO KINDS OF INOFFICIOUS DONATIONS

1. Those referred to in Articles 760 and 761
2. Those referred to in Articles 771 and 752

REASON WHY REDUCTION OR REVOCATION IS ALLOWED

> The law presumes that had the donor known he would have a child or that the child he thought was dead was really alive, he wouldn’t have made the donations, because then his only child would have been the object of his affection and generosity

ADOPTION

1. Adoption must have judicial approval
2. The adoption must be that of a minor child
3. It will be observed that this adoption is practically one way of allowing the donor to revoke the donation inter vivos at his own will. To allow an adoption of a sui juris as a ground of revocation may give rise to adoption fro ulterior purposes

APPLICABILITY OF ARTICLE 760

1. Donations propter nuptias
2. Onerous donations
3. Mortis causa

Art. 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)

VALUE OF THE HEREDITARY ESTATE

> The value at the birth, appearance, or adoption plus the value of the donation

RULE WHEN DONATION CAN BE COVERED BY THE FREE DISPOSAL

> Insofar as the free disposal is concerned, the donation will remain valid up to that extent

Art. 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)

WHAT THE DONEE MUST DO IF THE DONATION IS REDUCED

1. If the property is still with him, return the property
2. If the property has been sold, give the value to the donor
3. If the property has been mortgaged, the donor may pay off the debt, but he can recover reimbursement from the donee
4. If the property cannot be returned, return its value

Art. 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)

PRESCRIPTION OF ACTION FOR REVOCATION OR REDUCTION

1. If the donation was made when there was no child, it is the birth of the first child that counts, and not the birth of subsequent children.
2. First child refers to the first legitimate child
3. Mere birth of a natural child is not a ground, it is the recognition that is the ground of reduction

RULE IN CASE OF LEGITIMATED CHILDREN

> Counted from time of legitimation

EFFECT IF REASON DISAPPEARS

> The donation should remain valid

PRESCRIPTIVE PERIOD

> Four years

Art. 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)

FAILURE TO COMPLY WITH CONDITIONS

> Conditions must be understood to mean the charges and burdens imposed
> When the donee fails to comply with any of the conditions imposed by the donor, it is the donor who has the right to impugn the validity of the transaction affecting the donated property

NECESSITY OF COURT ACTION

> The donor may not revoke a donation by his own unilateral act, even if the donee should have broken any of the conditions imposed by the donation
> A court action is essential, if the donee refuses to return the property voluntarily

PERIOD FOR FULFILLMENT OF CONDITIONS

1. If there is a period given, said period is controlling, unless extended by the donor
2. If there is no period, the courts may fix a reasonable term

EFFECT ON PROPERTY DONATED

1. If still with the donee, he must return the same to the donor
2. If sold, donated, or mortgaged, the alienation or encumbrance will be considered void, unless the grantee be an innocent third party who has received or registered his own right

PRESCRIPTIVE PERIOD

> Four years from the non-compliance of the condition

TRANSMISSIBILITY OF THE RIGHT TO REVOKE

> The heirs are expressly granted the right to revoke if the donor is already dead and that the prescriptive period has not yet lapsed

WHEN COURT ACTION IS NOT ESSENTIAL

> Court action is essential for revocation, unless the donee willingly surrenders the property or his value
> It is the party prejudiced who should bring the suit

MAY REVOCATION BE DONE AT THE INSTANCE OF THE DONOR’S HEIRS?

> Yes, because one right of a creditor is to exercise the rights that could’ve been exercised by the debtor

ACTION TO REVOKE MAY BE WAIVED

> The action to revoke is waivable by the donor or his successors-ininterest

Art. 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)

REASON FOR THE LAW ON GROUNDS OF INGRATITUDE

> One who has been the object of generosity must not turn ungrateful
> Gratitude is both a moral and legal duty

ACTS OF INGRATITUDE COVERED

1. Purely personal

2. Exclusive

Art. 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)

Art. 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)

RULE WHEN THIRD PERSONS HAVE THE PROPERTY, OR WHEN IT HAS BEEN MORTGAGED

1. Recovery cannot be had from third persons because they are innocent
2. Or when the property has been mortgage

RULE WHEN DONEE IS INSOLVENT

> Rule is that the donor shall have the same rights as of a creditor of an insolvent debtor

Art. 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)

RETURN OF THE FRUITS

1. The fruits accruing from the time the action is filed must be returned if the ground is—
a. Birth-adoption-reappearance (BAR)
b. Inofficiousness of the donation because the legitime is impaired
c. ingratitude

2. The fruits received after failure to fulfill the condition

3. In case of money, it should be paid with the legal rate of interest

Art. 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)

NO RENUNCIATION IN ADVANCE OF ACTION TO REVOKE BECAUSE OF INGRATITUDE

> The right to revoke because of ingratitude cannot be renounced in advance

FORM OF RENUNCIATION

> When it can be done in the proper case, renunciation may be done either expressly or impliedly since the law requires no formality under this article

PRESCRIPTIVE PERIOD

> Within one year
> Period must be counted from—
> The donor knew of the fact or cause of ingratitude
> Provided that it was possible for him to bring the action

Art. 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)

GENERALLY, NO TRANSMISSIBILITY OF RIGHT

Art. 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)

RULES RE INOFFICIOUS DONATIONS

1. Value of the estate at the time of donor’s death
2. Inofficious donations may not only be reduced but they may be completely cancelled
3. Since the inofficiousness of the donation cannot be determined till after the donor’s death, it follows that in the meantime, the donation is valid and ownership is transmitted to the donee during the donor’s lifetime

SOME IMPLICATIONS FROM THE TRANSFER OF OWNERSHIP

1. The donee gets the fruits while the donor is still alive
2. The donee can take advantage of natural and artificial incorporations or attachments
3. The donee bears the loss in case of destruction or deterioration

PREFERENCE OF DONATIONS

> Donations inter vivos are preferred over devisees or legatees

Art. 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 or 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)

PERSONS WHO CAN ASK FOR THE REDUCTION OF INOFFICIOUS DONATIONS

1. The compulsory heirs of the donor
2. Heirs and successors-in-interest of the compulsory heirs

PRESCRIPTIVE PERIOD

> Action must be brought within 5 years from the time of donor’s death

COLLATION

> If the donee happens to be a compulsory heir, he must collate or bring back the value of the property donated, for its value is considered already an advance of his legitime or inheritance

Art. 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)

PREFERENCE GIVEN TO EARLIER DONATIONS

> It is essential that in cases there is need to reduce, the subsequent ones must first be reduced
> If the donations be constituted at the same time, then there will be proportionate reductions on both