Judicial declaration for rescission of a contract is not necessary where the contract provides for its automatic revocation in case of violation of any of its terms and conditions.
In 1930, the Sps. Eusebio De Castro and Martina Rieta, now both deceased, executed a deed of donation in favor of the Roman Catholic Archbishop of Manila covering Lot 626 in Kawit, Cavite with the condition that the done shall not dispose or sell the property within a period of 100 years from the execution of the deed of donation otherwise a violation would render it null and void and the property would revert to the estate of the donors. In 1980, the Roman Catholic Bishop of Imus, the administrator of all properties in the province of Cavite, sold the property in favor of Sps. Florencio and Soledad Ignao. As a result, a TCT was issued in favor of the spouses.
Marina Rieta Granados and Theresa Rieta Tolentino filed a complaint for nullification of deed of donation, rescission of contract and reconveyance of real property against Sps. Ignao and the R.C. Bishop of Imus and the R.C. Archbishop of Manila.
The RTC dismissed the complaint on the ground of prescription which was reversed by the CA thus the case at bar.
(1) Whether or not the action has already prescribed
(2) Whether or not the condition is valid
RULING: NO to both issues
1) An action to enforce a contract prescribed in 10 years hence the action has not yet prescribed. Art. 764 provides that an action for revocation must be brought within 4 years from the non-compliance of the conditions, however, this will only apply when the parties have not agreed on the automatic revocation of the donaton. In the case at bar, the deed of donation expressly provides for the automatic revocation of the property donated in case of violation therefore judicial declaration is not necessary. Judicial declaration is only for determination of the propriety of the rescission sought. When such propriety is sustained, the decision of the court will be merely declaratory of the revocation but it is not itself the revocatory act.
2) Although the action may not be dismissed on the ground of prescription, it may be dismissed on the ground of lack of cause of action. The cause of action was based on a breach of the resolutory condition, however the condition is not valid for being contrary to public policy. Donation is a mode of acquiring ownership and it results in an effective transfer of title over the property from the donor to the done. Although the donor may impose conditions in the deed of donation, it must not be contrary to law, morals, good customs, public order and public policy.
The condition in the case at bar, which is a prohibition of alienation for 100 years, is patently unreasonable and an undue restriction on the right of the done to dispose of the property donated, which right is an indispensable attribute of ownership. Since it is an considered as an illegal or impossible condition, it will be considered as not having been imposed. Therefore no breach was committed.