DAVID VS. SISON- Donation Mortis Causa: Essential Rights of Ownership

When the donor maintains the essential rights of ownership over the property during his lifetime, the donation is mortis causa.

FACTS:

Manila, 1943:
The Administrator of deceased Ms. David was ordered by the court to pay the lawyer of deceased the amount of P18,000 for legal services rendered. The lawyer, on the other hand, wanted about P81,000. (chaching!!!) which was equivalent to 5% of the inventoried estate. Administrator thought that too high and said he’d be happy to pay P3,000.

Both parties based their claims on the central issue of the donation by Ms. David. If the donation was mortis causa, then the donation should be inventoried with the estate and therefore the lawyer can get his lofty demand. Should the donation have been intervivos, then the donation wouldn’t be inventoried and therefore the administrator can pay the lower sum contended.

The lower court analyzed a few paragraphs of the deed (in tagalog) and concluded that the deed partook of the nature mortis causa.

"Na and naturang "donor," Margarita David y Puato, alang-alang sa malaki niyang pagtiñgin, pagliñgap at pagmamahal sa mga nabanguit na "donees" Narcisa de la Fuente at Priscila de la Fuente, sa pamamagitan nang kasulatang ito, malayang ibinigay at ipinagkakaloob sa mga naturang Narcisa de la Fuente at Priscila de la Fuente, at sa kanilang mga tagapagmana, "albacea" at "Administradores", sa habang panahon, ang kanyang mga titulo, interes at participacion sa mag sumusunod na ari-arian na pawang malines sa lahat nang mga pananagutan: (Rec. on Appeal, pp. 209, 210.)

Datapwa't ang lahat nang mga tubo at pakinabangan nang nagbibigay o "donor" na si Margarita David y Puato hanggang siya ay hindi binabawian nang buhay nang maykapal; at ang mga pinagbibigyan na si Narcisa de la Fuente at Priscila de la Fuente ay hindi maaaring maipagbili, maisangal, a maipagpalit o sa ano pa man paraan, kung walang kaalaman at pahintulot nang naturang Margarita David y Puato.

ISSUE: Whether or not the Deed of Donation is Mortis Causa

HELD: Yes.

The deed of donation makes it clear that all rents, proceeds, fruits, of the donated properties shall remain for the exclusive benefit and disposal of the donor, Margartia David, during her lifetime and that, without the knowledge consent of the donor, the donated properties could not be disposed of in any way, whether by sale, mortgage, barter, or in any other way possible, thus making the donees just as paper owners of the properties.

The court then concluded that the donation in question is a donation mortis causa, because the combined effect of the circumstances surrounding the execution of the deed of donation and of the above-quoted clauses thereof could not have taken effect before the death of Margarita David. According to the terms of the deed, the most essential elements of ownership — the right to dispose of the donated properties and the right to enjoy the products, profits, possession — remained with Margarita David during her lifetime, and would accrue to the donees only after Margarita David's death.
While the donation in question is a donation mortis causa, the court declined to rule that the donated properties should be included in the inventory of the estate and should follow the same proceedings as if they were not donated at all.

The court then awarded the lawyer P10,000 instead of the P81,000 he craved.