De Luna donated a portion of a 75 sq. m. lot to the Luzonian University Foundation. The donation was embodied in a Deed of Donation Intervivos and was subject to certain terms and conditions. In case of violation or non-compliance, the property would automatically revert to the donor. When the Foundation failed to comply with the conditions, de Luna “revived” the said donation by executing a Revival of Donation Intervivos with the following terms and conditions:
1) The Donee shall construct on the land and at its expense a Chapel, Nursery, and Kindergarten School to be named after St. Veronica
2) Construction shall start immediately and must be at least 70% completed three years from the date of the Deed unless the Donor grants extensions
3) Automatic reversion in case of violation
The Foundation accepted and the donation was registered and annotated in the TCT. By a Deed of Segregation, the foundation was issued a TCT for area the lot donated while the remaining area was retained by the De Luna.
The children and only heirs of the late De Luna (died after the donation) filed a complaint with the RTC for the cancellation of the donation on the ground that the terms were violated. The Foundation defended itself by saying that it had partially and substantially complied with the conditions and that the donor granted it an indefinite extension of time to complete construction.
The RTC dismissed the petition on the ground of prescription (for being filed after 4 years). The heirs did not file an MR and went straight to the SC.
Whether the action prescribes in 4 years (based on art. 764 NCC-judicial decree of revocation of the donation) or in 10 years (based on art. 1144 –enforcement of a written contract)
RULING: 10 years
The donation subject of this case is one with an onerous cause.
Under the old Civil Code, it is a settled rule that donations with an onerous cause are governed not by the law on donations but by the rules on contract. On the matter of prescription of actions for the revocation of onerous donation, it was held that the general rules on prescription apply. The same rules apply under the New Civil Code as provided in Article 733 thereof which provides:
Donations with an onerous cause shall be governed by the rules on contracts, and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed.
It is true that under Article 764 of the New Civil Code, actions for the revocation of a donation must be brought within four (4) years from the non-compliance of the conditions of the donation. However, said article does not apply to onerous donations in view of the specific provision of Article 733 providing that onerous donations are governed by the rules on contracts. The rules on prescription and not the rules on donation applies in the case at bar.