The Supreme Court’s decision clarifies that heirs are bound by a deed of donation, even if the deed was not registered. This is because the act of registration primarily serves to notify third parties who are not part of the original agreement. This ruling underscores that inheritance comes with both rights and obligations. Meaning, heirs cannot claim ignorance of transactions made by their predecessors, particularly when those transactions directly involve the inherited property.

Ignacio’s Land: Can Gutierrez Heirs Challenge a 1940 Donation?

This case revolves around a parcel of unregistered land in Batangas, originally owned by Ignacio Mendoza. Ignacio first married Juana Jaurigue, and then Ignacia Jaurigue, fathering children with both. The crux of the legal battle arises from a 1940 deed of donation where Ignacio donated the land to his children from his second marriage to Ignacia. Herminio M. Gutierrez and Elisa A. Gutierrez-Mayuga, the petitioners, are descendants of Ignacio’s first marriage. They contested the donation, arguing that it was invalid due to non-registration and that it impaired their legitime, the portion of an estate that heirs are legally entitled to. The central legal question is whether the unregistered deed of donation is binding on Ignacio’s heirs from his first marriage, despite its non-registration.

The Regional Trial Court (RTC) initially ruled in favor of Flora Mendoza-Plaza and Ponciano Hernandez, the respondents and children of Ignacio’s second marriage, upholding the validity of the donation. The RTC emphasized that the deed was a notarized document, carrying a presumption of authenticity. The Court of Appeals (CA) initially reversed this decision, stating that the non-registration of the deed meant it was not binding on third parties, such as the petitioners. However, upon reconsideration, the CA reversed itself, holding that as heirs of Ignacio, the petitioners were indeed bound by the donation, regardless of its registration status. This final decision of the Court of Appeals led to the Supreme Court review.

Building on this principle, the Supreme Court affirmed the Amended Decision of the Court of Appeals. The Court’s reasoning hinged on the established legal principle that while registration of a deed is essential to bind third parties, it is not a prerequisite for validity between the parties themselves and their heirs. Section 113 of Presidential Decree No. 1529, also known as the Property Registration Decree, states:

“Sec. 113. Recording of instruments relating to unregistered lands. – No deed, conveyance, mortgage, lease or other voluntary instrument affecting land not registered under the Torrens system shall be valid, except as between the parties thereto, unless such instrument shall have been recorded in the manner herein prescribed in the office of the Register of Deeds for the province or city where the land lies.”

The Supreme Court emphasized that this provision means that while an unregistered instrument might not affect the rights of someone who isn’t involved in the original deal, it’s still valid and binding between the people who made the agreement and their heirs. This principle ensures that the intentions of the original parties are respected within their own circle, even if the document isn’t officially recorded to notify the wider world. Furthermore, the court underscored that a notarized document carries a presumption of authenticity. According to Section 30, Rule 132 of the Rules of Court, such documents are admissible as evidence without further proof, placing the burden on the challenger to present clear and convincing evidence to the contrary.

The petitioners also argued that the donation impaired their legitime, their rightful share of inheritance. The Supreme Court dismissed this argument, noting that it was raised for the first time on appeal. The Court reiterated the established rule that issues not raised in the lower courts cannot be considered on appeal, as doing so would violate the principles of due process. Furthermore, the Court dismissed the petitioners’ claim of ownership through prescription. Prescription, as a mode of acquiring ownership, requires possession in the concept of an owner, which is public, peaceful, and uninterrupted. However, the Court found that the petitioners’ possession was merely by tolerance, as Victoria, the petitioners’ predecessor, was allowed to occupy the land only through the generosity of Ignacio and his second family. Article 1119 of the Civil Code clarifies that:

Art. 1119. Acts of possessory character executed in virtue of license or by mere tolerance of the owner shall not be available for the purposes of possession.

Because Victoria’s possession stemmed from mere tolerance, it could not form the basis for a claim of ownership through prescription. Thus, petitioners’ claim of ownership lacked legal basis. In summary, the Supreme Court firmly rejected all the arguments raised by the petitioners. They were unable to overcome the presumption of validity of the notarized deed of donation; their claim of impairment of legitime was not properly raised; and their claim of ownership through prescription was negated by the fact that their possession was by mere tolerance.

This case has significant implications for property law in the Philippines, particularly concerning unregistered lands and the rights of heirs. The ruling reinforces the importance of registering land titles to protect one’s interests against third parties. However, it also clarifies that non-registration does not invalidate agreements between original parties and their heirs. Heirs inherit not only the assets but also the obligations of their predecessors, including those arising from unregistered contracts. Moreover, the case underscores the significance of raising legal issues in the lower courts. Litigants cannot raise new arguments on appeal, as this deprives the opposing party of the opportunity to present evidence and arguments in response. Finally, the case highlights the legal concept of possession by tolerance. Such possession, no matter how long it continues, cannot ripen into ownership through prescription.

FAQs

What was the key issue in this case?	The key issue was whether the heirs of the grantor in an unregistered deed of donation are bound by the deed, even if it was not registered with the Registry of Deeds.
What is a deed of donation inter vivos?	A deed of donation inter vivos is a transfer of property made by a person during their lifetime, which is accepted by the recipient also during the donor’s lifetime. It effectively transfers ownership immediately.
Why is registration of a deed important?	Registration provides notice to third parties about the transfer of property rights. This protects the rights of the transferee against subsequent claims by those unaware of the prior transfer.
What is meant by ‘possession by tolerance’?	Possession by tolerance occurs when a landowner allows another person to occupy their land without any contract or agreement. This permissive use does not grant any ownership rights to the occupant.
What is legitime?	Legitime refers to the portion of a deceased person’s estate that their compulsory heirs (such as children and surviving spouse) are legally entitled to.
What happens if a donation impairs the legitime of an heir?	If a donation impairs the legitime, the affected heir can seek to have the donation reduced to the extent necessary to protect their legitime.
Can an argument be raised for the first time on appeal?	Generally, no. Arguments not presented in the lower courts cannot be raised for the first time on appeal, as this violates the principle of due process.
What is the effect of a notarized document in court?	A notarized document carries a presumption of authenticity and due execution. It is admissible as evidence without further proof, unless this presumption is overcome by clear and convincing evidence.
What are the requirements for acquiring property through prescription?	Acquiring property through prescription requires possession in the concept of an owner that is public, peaceful, and uninterrupted, as well as the lapse of the period prescribed by law.

In conclusion, the Gutierrez v. Plaza case underscores the importance of understanding the nuances of property law, particularly concerning unregistered lands and the rights and obligations of heirs. While registration offers protection against third parties, heirs are generally bound by the actions of their predecessors, even if those actions are not formally recorded. It also emphasizes the need to timely raise legal issues. Litigants should seek legal counsel to ensure their rights are properly asserted and protected.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Gutierrez v. Plaza, G.R. No. 185477, December 04, 2009