Aluad vs. Aluad

A donation is classified as mortis causa, and not inter vivos, where the deed provides that the transfer becomes effective upon the donor's death, the donor reserves the right to dispose of the property during their lifetime, and the donation is rescinded if the donee predeceases the donor. Because a donation mortis causa partakes of the nature of a testamentary provision, it must comply with the formalities prescribed for wills; failure to do so renders the donation void.

Spouses Matilde and Crispin Aluad raised Maria Aluad (petitioners' mother) and Zenaido Aluad (respondent). Upon Crispin's death, Matilde adjudicated his six lots to herself. On November 14, 1981, Matilde executed a "Deed of Donation of Real Property Inter Vivos" over the six lots in favor of Maria, stipulating that the donation would become effective upon Matilde's death, be rescinded if Maria died first, and that Matilde could use, encumber, or dispose of the lots during her lifetime. Years later, on August 26, 1991, Matilde sold Lot 676 to respondent. On January 14, 1992, Matilde executed a last will and testament devising Lot 674 and her remaining properties to respondent. Matilde died on January 25, 1994, followed by Maria on September 24, 1994.

• The Deed of Donation: Matilde Aluad executed a document denominated as "Deed of Donation of Real Property Inter Vivos" covering six lots in favor of Maria Aluad. The deed contained three critical stipulations: (1) the donation becomes effective upon the donor's death; (2) the donation is rescinded if the donee predeceases the donor; and (3) the donor may use, encumber, or dispose of the donated properties during her lifetime.
• Subsequent Dispositions: Despite the execution of the deed, Matilde continued exercising acts of ownership over the properties—paying taxes, appropriating produce, and applying for free patents. On August 26, 1991, she sold Lot 676 to respondent via a Deed of Absolute Sale. On January 14, 1992, she executed a last will and testament devising Lot 674 and her remaining properties to respondent.
• Initiation of Litigation: After Matilde's death in 1994, Maria's heirs (petitioners) filed a complaint for recovery of ownership and possession of Lots 674 and 676, initially anchoring their claim on inheritance by right of representation. They later amended the complaint to base their claim on the Deed of Donation. Respondent countered that the donation was forged or, alternatively, revoked by Matilde's acts of dominion.

• Nature of the Donation: Petitioners argued that the donation was inter vivos, contending that the stipulation regarding rescission if the donee predeceased the donor was a resolutory period that confirmed the immediate transfer of ownership.
• Validity of the Sale: Petitioners maintained that respondent could not be declared the rightful owner of Lot 676 because Matilde had no more right to sell the property after executing the donation in favor of Maria.
• Ownership of Lot 674: Petitioners contended that they should be declared owners of Lot 674 since respondent was not declared the owner thereof, and alternatively, that they had acquired it through acquisitive prescription due to their open, continuous, and adverse possession since 1978.
• Execution Pending Appeal: Petitioners argued that the Court of Appeals erred in ruling that the issuance of a writ of execution pending appeal violated the Rules of Court.

• Validity of the Donation: Respondent countered that the Deed of Donation was forged and falsified, or alternatively, that if it existed, it was revoked by Matilde through her continued acts of dominion, including the sale of Lot 676.
• Ownership of the Lots: Respondent argued that he was the true owner of Lot 676 by virtue of the purchase from Matilde, and Lot 674 was adjudicated to him under Matilde's last will and testament.

• Nature of the Donation: Whether the Deed of Donation executed by Matilde Aluad was inter vivos or mortis causa.
• Validity of the Donation: Whether the Deed of Donation, if mortis causa, is valid despite non-compliance with the formalities of a will.
• Ownership of Lot 676: Whether respondent is the rightful owner of Lot 676 by virtue of the sale made by Matilde.
• Ownership of Lot 674: Whether petitioners are the rightful owners of Lot 674.
• Acquisitive Prescription: Whether petitioners can claim ownership of Lot 674 through acquisitive prescription raised for the first time on appeal.

• Nature of the Donation: The donation was classified as mortis causa. The stipulations that the donation takes effect upon the donor's death, that the donor reserves the right to dispose of the property, and that the donation is void if the donor survives the donee are the decisive characteristics of a donation mortis causa. The provision regarding rescission upon the donee's prior death is not a resolutory period but a hallmark of a testamentary disposition.
• Validity of the Donation: The donation was declared void. Being mortis causa, it partakes of the nature of a testamentary provision and must comply with the formalities of a will under the Civil Code. The deed failed these formalities: it was witnessed by only two witnesses instead of three, lacked a signed attestation clause, was not acknowledged before a notary public, and lacked correlatively numbered pages.
• Ownership of Lot 676: Respondent was declared the lawful owner of Lot 676. Because the donation was void, Matilde retained ownership and validly sold the lot to respondent.
• Ownership of Lot 674: Petitioners were not declared owners of Lot 674. Matilde validly disposed of it to respondent via her last will, subject to probate. Furthermore, the donation could not transfer rights even if valid, because it was not probated.
• Acquisitive Prescription: The claim of acquisitive prescription was disregarded. Issues not raised before the trial court cannot be raised for the first time on appeal, as it would be unfair to the adverse party deprived of the opportunity to present contrary evidence.

• Donation Mortis Causa vs. Inter Vivos — A donation is mortis causa if it possesses the following characteristics: (1) it conveys no title or ownership to the transferee before the death of the transferor, or the transferor retains ownership and control of the property while alive; (2) before the transferor's death, the transfer is revocable at will, or revocability is provided indirectly by a reserved power to dispose; and (3) the transfer is void if the transferor survives the transferee. The presence of these features, rather than the title of the document, determines the nature of the donation.
• Formalities of Wills Applied to Mortis Causa Donations — Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions and must comply with the formalities prescribed for wills, including being subscribed at the end by the testator, attested and subscribed by three or more credible witnesses, containing a signed attestation clause, and acknowledged before a notary public. Failure to comply renders the donation void.
• Unsigned Attestation Clause — An unsigned attestation clause results in an unattested will. The signatures of the witnesses on the left-hand margin of the page containing the unsigned attestation clause cannot satisfy the requirement for attestation, as such signatures are directed towards a wholly different avowal.

• "The phrase in the earlier-quoted Deed of Donation 'to become effective upon the death of the DONOR' admits of no other interpretation than to mean that Matilde did not intend to transfer the ownership of the six lots to petitioners’ mother during her (Matilde’s) lifetime."
• "The statement in the Deed of Donation reading 'anytime during the lifetime of the DONOR or anyone of them who should survive, they could use, encumber or even dispose of any or even all the parcels of land herein donated' means that Matilde retained ownership of the lots and reserved in her the right to dispose them. For the right to dispose of a thing without other limitations than those established by law is an attribute of ownership."
• "An unsigned attestation clause results in an unattested will. Even if the instrumental witnesses signed the left-hand margin of the page containing the unsigned attestation clause, such signatures cannot demonstrate these witnesses’ undertakings in the clause, since the signatures that do appear on the page were directed towards a wholly different avowal."

• Maglasang v. Heirs of Corazon Cabatingan, 432 Phil. 548 (2002) — Followed. Cited for the three decisive characteristics of a donation mortis causa and to reject the argument that a rescission clause upon the donee's prior death is a resolutory condition confirming an inter vivos donation.
• Reyes v. Mosqueda, G.R. No. 45262, July 23, 1990 — Followed. Cited for the principle that a transfer void if the donor survives the donee is a decisive characteristic of a donation mortis causa.
• Azuela v. Court of Appeals, G.R. No. 122880, April 12, 2006 — Followed. Cited for the requirement that the attestation clause must be signed by the witnesses, and that an unsigned attestation clause results in an unattested will, separate from the requirement of signing the left-hand margins.

• Article 728, Civil Code — Provides that donations to take effect upon the death of the donor partake of the nature of testamentary provisions and are governed by the rules on succession. Applied to classify the donation as mortis causa.
• Article 805, Civil Code — Prescribes the formalities for ordinary (not holographic) wills, including subscription by the testator, attestation by three or more credible witnesses, signing of every page on the left margin, and a proper attestation clause. Applied to invalidate the donation mortis causa which was only witnessed by two persons, lacked a signed attestation clause, and lacked page numbering.
• Article 806, Civil Code — Requires every will to be acknowledged before a notary public by the testator and the witnesses. Applied to further invalidate the deed, which lacked notarial acknowledgment by the witnesses.
• Rule 75, Section 1, Rules of Court — Requires the probate of wills. Applied to state that even if the donation mortis causa had observed the formalities, it could not transfer rights because it was not probated.

Leonardo A. Quisumbing, Dante O. Tinga, Presbitero J. Velasco, Jr., Arturo D. Brion