DONATION EXPLAINED

DONATION

Art. 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.

Requisites of donation

1.       The donor must have capacity to make the donation of a thing or right.

2.       He must have the donative intent (animus donandi) or intent to make the donation out of liberality to benefit the done.

3.       There must be delivery, whether actual or constructive, of the thing or right donated.

4.       The donee must accept or consent to the donation.

KINDS OF DONATION

inter vivos or that which takes effect during the lifetime of the donor.

mortis causa or that which takes effect upon the death of the donor

propter nuptias or that made by reason of marriage and before its celebration, in consideration of the same, and in favor of one or both of the future spouses.

As to consideration:

pure or simple or that the cause of which is the pure liberality of the donor.

remuneratory or compensatory or that which is given out of gratitude on account of the services rendered by the donee to the donor, provided they do not constitute a demandable debt.

modal or that which imposes upon the donee a burden (e.g., services to be performed in the future) less than the value of the gift.

onerous or that the value of which is considered the equivalent of the consideration for which it is given or that made for a valuable consideration and is thus governed by the rules on obligations and contracts.

Art. 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed.

When condition is not deemed imposed.

the illegal or impossible condition in a simple or remuneratory donation would be deemed not imposed following the rule in testamentary dispositions.

When donation rendered void.

If the donation is onerous (or modal, as to its onerous portion), the illegal or impossible condition will render it void. Being contractual in nature, the rule applicable would be that found in Article 1183.

In case of doubt, the conveyance should be deemed donation mortis causa in order to avoid uncertainty as to the ownership of the property subject to the deed.  The legal principle enunciated in Article 1378 is that incase of doubt relative to a gratuitous contract, the construction must be that entailing “the least transmission of rights and interests.

Instances of donations inter vivos.

Donor warrants title to property over which she reserved lifetime usufruct.

Donation accepted by donees who were given limited right of disposition, with donor reserving beneficial ownership.

Donation was executed out of love and affection as well as a recognition of the personal services rendered by the donee.

Ownership and possession of property immediately transferred to donee but his right to fruits to begin only after donor’s death.

Donor states that he makes a perfect, irrevocable and consummated donation.

Donor and donee prohibited from alienating and encumbering the property.

Usufruct reserved by the donor.

Instances of donations mortis causa.

Registration of deed of donation prohibited.

Donation to take effect and pass title only by and because of death.

Donated properties to be delivered after donor’s death.

Right to dispose and enjoy reserved by donor.

Donation makes no actual conveyance.

Art. 734. The donation is perfected from the moment the donor knows of the acceptance by the donee.

 Necessity of acceptance. - Its absence makes the donation null and void. The acceptance

must be made during the lifetime of the donor and the donee.

Notice of acceptance. — Perfection takes place, not from the time of acceptance by the donee but from the time it is made known, actually or constructively, to the donor.

 Revocation before/after perfection. — If the donor revokes the donation before learning of the acceptance by the donee, there is no donation. Once a valid donation is perfected, it cannot be revoked without the consent of the donee except on grounds provided by law such as inofficiousness, failure of the donee to comply with the charges imposed in the donation or by reason of ingratitude.

Art. 735. All persons who may contract and dispose of their property may make a donation.

NO CAPACITY TO DISPOSE

Neither spouse may donate any community property nor conjugal partnership property without the consent of the other, except moderate donations for charity or on occasion of family rejoicing or family distress.

Art. 737. The donor’s capacity shall be determined as of the time of the making of the donation.

Making of donation – at the time of the perfection – knowledge of acceptance

Art. 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;

(2) Those made between persons found guilty of the same criminal offense, in consideration thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his office.

Art. 746. Acceptance must be made during the lifetime of the donor and of the donee.

Art. 748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the document representing the right donated.

If the value of the personal property donated exceeds P5,000, the donation and the acceptance shall be made in writing. Otherwise, the donation shall be void.

Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document

Donation and acceptance are in same instrument. — The requirements are:

(a) The donation must be in a public document or instrument;

(b) The instrument must specify the property donated and the charges, if any, which the donee must satisfy.

Donation and acceptance are in separate instruments. — If the acceptance does not appear in the same document, it must be made in another. The requirements are:

(a) The donation must be in a public document or instrument;

(b) The instrument must specify the property donated and the charges, if any, which the donee must satisfy;

(c) The acceptance by the donee must be in a public document;

(d) It must be done during the lifetime of the donor;

(e) The donor must be notified in authentic form of the acceptance of the donation in a separate instrument

(f) The fact that such notification has been made must be noted in both instruments.

Art. 750. The donation may comprehend all the present property of the donor, or part thereof, provided

he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced on petition of any person affected.

Present property means property which the donor can rightfully dispose of at the time of the donation.

Art. 754. The donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor. The latter, on the other hand, is not obliged to warrant the things donated, save when the donation is onerous, in which case, the donor shall be liable for eviction to the concurrence of the burden.

The donor shall be liable for eviction or hidden defects in case of bad faith on his part.

Art. 758. When the donation imposes upon the done the obligation to pay the debts of the donor, if the clause does not contain any declaration to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for debts exceeding the value of the property donated, unless a contrary intention clearly appears.

Where donor imposes obligation upon the donee.

(a) The donee is liable to pay only debts previously contracted;

(b) He is liable for subsequent debts only when there is a stipulation to that effect; and

(c) He is not liable for debts in excess of the value of the donation received, unless the contrary is intended.

Art. 759. There being no stipulation regarding the payment of debts, the donee shall be responsible therefore only when the donation has been made in fraud of creditors.

The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation.

Where there is no stipulation regarding the payment of debts

The donee is generally not liable to pay the donor’s debts

He is responsible therefor only if the donation has been made in fraud of creditors which is always presumed.

He is not liable beyond the value of the donation received.

REVOCATION AND REDUCTION OF DONATIONS

Revocation. — This affects the whole donation and is allowed during the lifetime of the donor. The grounds are:

Birth, appearance, or adoption of a child

 Non-fulfillment of a resolutory condition imposed by the donor

 Ingratitude of the donee.

Reduction. — This generally affects a portion only of the donation (unless the donee has no free portion left) and is allowed during the lifetime of the donor or after his death. The grounds are:

 Failure of the donor to reserve sufficient means for support of himself or dependent relatives

Failure of the donor to reserve sufficient property to pay off his existing debts

Inofficiousness, that is, the donation exceeds that which the donor can give by will

Birth, appearance, or adoption of a child.

Obligation of donee upon revocation or reduction.

1.  If the property affected is still in his possession, he must return the same.

2.  If he has sold the property, he must give its value.

3. If the property has been mortgaged by him, and the donor redeemed the mortgage, he must reimburse the donor.

4.  If the property cannot be returned, as when it has been lost or destroyed, he must return its value at the time (of the perfection) of the donation.

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 non-compliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee’s heirs.

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.                     

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.    

General Rule:  The action to revoke a donation by reason of ingratitude is purely personal to the donor.

Exemption:

(a) If the donee killed the donor, the latter’s heirs can ask for revocation.

(b) The heirs may also do so if the donor dies without having known of the act of ingratitude.

(c) If a criminal case against the donee was instituted by the donor, but the donor dies before he could bring the civil action for revocation, his heirs may likewise bring action because in such case, the intent of the donor not to pardon the donee is quite clear.   

(d) If the action for revocation has already been filed by the donor before his death, his heirs are allowed to continue the same.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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.

1.       The subsequent donations shall first be reduced and only if they are not sufficient to cover the disposable portion should the earlier ones be reduced also with regard to the excess.

2.        If the two donations were perfected at the same time, the reduction should be proportionate unless otherwise provided by the donor.