The Supreme Court ruled that a donation labeled as mortis causa (intended to take effect after death) was in reality a donation inter vivos (effective during the donor’s lifetime). Because the deed of donation explicitly stated it was irrevocable and was accepted by the donees, the Court held that ownership of the property transferred immediately upon execution. Consequently, the donor could not later assign his rights to another party, as he no longer possessed those rights. This decision clarifies the importance of the irrevocability clause and acceptance by the donee in determining the true nature of a donation.

From Deathbed Wishes to Living Gifts: Unpacking the Gonzalez Family’s Property Transfer

This case revolves around a property dispute stemming from a document the spouses Leopoldo and Guadalupe Gonzales executed in 1968, titled “Donation Mortis Causa.” In this document, they intended to transfer their 126-square meter lot and house to their two children, Asuncion and Emiliano, and their granddaughter, Jarabini, in equal shares. The core issue is whether this donation was truly a mortis causa, as named, or an inter vivos donation, which would have significant implications for a subsequent assignment of rights by one of the donors. The Supreme Court’s analysis hinged on discerning the true intent of the donors at the time of the donation.

The deed contained a seemingly contradictory clause: “It is our will that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving spouse.” This irrevocability clause became a central point of contention. Asuncion argued that the donation was indeed mortis causa and thus subject to the formalities of a will, which it failed to meet. Jarabini, on the other hand, contended that the irrevocability clause, along with the acceptance by the donees, pointed towards a donation inter vivos. The RTC sided with Jarabini, but the Court of Appeals reversed this decision, prompting the Supreme Court to step in and resolve the dispute.

The Supreme Court emphasized that the label attached to a document is not the sole determining factor. “[I]f a donation by its terms is inter vivos, this character is not altered by the fact that the donor styles it mortis causa.” The Court has consistently held that the crucial element distinguishing a donation mortis causa from one inter vivos is the element of irrevocability. In Austria-Magat v. Court of Appeals, the Court stated that “irrevocability” is incompatible with mortis causa transfers, where “revocability” is the essence. The key characteristics of a donation mortis causa were further defined in Aluad v. Aluad:

1. It conveys no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive;

2. That before his death, the transfer should be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed; and

3. That the transfer should be void if the transferor should survive the transferee.

The Gonzales’ deed explicitly stated that the donation was irrevocable, a clear indication of their intent to transfer ownership immediately. The Court in Austria-Magat highlighted that the express irrevocability is the “distinctive standard that identifies the document as a donation inter vivos.” Moreover, the donors’ reservation of “right, ownership, possession, and administration of the property” until their death did not negate the nature of the donation inter vivos. This reservation, according to established jurisprudence, simply meant that the donors retained beneficial ownership during their lifetime, while the donees held the naked title.

Another critical element was the acceptance of the donation by the donees, including Jarabini, Emiliano, and Asuncion. The Court noted that acceptance is a requirement for donations inter vivos, as it signifies the donee’s agreement to receive the gift and the immediate transfer of ownership. Donations mortis causa, being testamentary in nature, do not require acceptance during the donor’s lifetime. Finally, relying on Justice J.B.L. Reyes’s wisdom in Puig v. Peñaflorida, the Court leaned towards interpreting the conveyance as a donation inter vivos to avoid uncertainty regarding property ownership.

Since the Court determined that the donation was inter vivos, it became operative and final upon the donees’ acceptance. With that acceptance, the donees became the absolute owners of their respective shares in the property. Consequently, Leopoldo’s subsequent assignment of his rights and interests to Asuncion was deemed void. The legal principle Nemo dat quod non habet – one cannot give what one does not have – applied directly to this situation.

The Court upheld the trial court’s decision to address the validity of the donation as inter vivos and the subsequent assignment, even within the context of a probate petition. This emphasizes the principle that probate rules are not inflexible. Additionally, Asuncion’s challenge to the petition and direct questioning of the validity of the deed of assignment now bars her from claiming that the trial court improperly considered the matter as a collateral attack on the assignment.

FAQs

What is the key difference between a donation mortis causa and inter vivos?	A donation mortis causa takes effect upon the donor’s death and is essentially a will, while a donation inter vivos takes effect during the donor’s lifetime and immediately transfers ownership.
What does “irrevocability” mean in the context of a donation?	Irrevocability means the donor cannot revoke or cancel the donation after it has been made. This is a key indicator of a donation inter vivos.
Why was the acceptance of the donation important in this case?	Acceptance by the donees is a requirement for donations inter vivos. It signifies their agreement to receive the gift and confirms the immediate transfer of ownership.
What is the legal principle of Nemo dat quod non habet?	This principle means “one cannot give what one does not have.” In this case, Leopoldo could not assign rights he no longer possessed because he had already donated them.
Can a document labeled as “Donation Mortis Causa” actually be a donation inter vivos?	Yes, the Supreme Court has ruled that the label is not controlling. The true nature of the donation depends on the intent of the donor and the terms of the document.
What is the significance of reserving “right, ownership, possession, and administration” by the donor?	The donor retains beneficial ownership, allowing them to enjoy the property’s benefits during their lifetime, while the donees hold the naked title, which is the legal ownership without the right to use or enjoy the property.
What happens if a donation mortis causa does not comply with the requirements of a will?	If a donation intended to take effect after death does not meet the legal requirements for a will (attestation, witnesses, etc.), it is considered void.
What factors did the court consider to determine the nature of the donation?	The Court primarily considered the irrevocability clause, acceptance by the donees, and the overall intent of the donors as expressed in the document.

This case underscores the importance of clear and unambiguous language in donation documents. While the label may suggest one type of donation, the actual terms and conditions, especially the presence of an irrevocability clause and the acceptance by the donees, will ultimately determine its true nature. This decision highlights the need for careful legal drafting to ensure that the donor’s intentions are accurately reflected and legally enforceable.

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: Del Rosario v. Ferrer, G.R. No. 187056, September 20, 2010