Macam vs. Gatmaitan

An agreement by which two persons reciprocally assign their respective properties to one another, conditioned upon who dies first, constitutes an aleatory contract under Article 1790 of the Civil Code, not a donation mortis causa, and is valid and enforceable without the formalities required for a will.

Leonarda Macam and Juana Gatmaitan, both single, resided together as friends in Calumpit, Bulacan. On 24 September 1929, they purchased a house of strong materials for P3,000; the deed of sale named both as vendees, although the purchase price was later acknowledged to have been paid exclusively by Leonarda. Juana owned a Buick automobile and most of the household furniture. The properties they respectively contributed were of comparable value. To settle their rights while preserving their mutual affection, they executed a written private instrument on 12 June 1932, declaring each other’s contributions and agreeing that upon the death of the first of them, the survivor would take the whole—house, automobile, and furniture—with the exception of a few specified items that the heirs of Leonarda could claim as remembrances should she die first. Leonarda died first; her executrix sought to recover the house for the estate.

• The Purchase of the House: On 24 September 1929, Leonarda Macam and Juana Gatmaitan bought the disputed house for P3,000 from the spouses Generosa Inducil and Flora Ramos. The deed of sale stated that both Leonarda and Juana, both single, were the vendees, and that the vendors had received the purchase price from them. Subsequently, however, it was declared that the P3,000 had been paid entirely with Leonarda’s own money and that the house truly belonged to her.
• The 12 June 1932 Agreement (Exhibit C): On 12 June 1932, Leonarda and Juana executed a private document that recited their respective contributions: Leonarda had paid for the house and owned certain enumerated furniture (a wardrobe, a narra bed, a small wardrobe, a small table, a narra chair, a rattan sofa, dining and kitchen tables and benches, and an ice box); Juana owned the Buick automobile and most of the remaining furniture, including narra chairs, a wardrobe, and a bed. Paragraph 4 of the document stated that “in consideration of the friendship we mutually profess, considering ourselves almost as sisters, we have voluntarily agreed that whoever of us will die first shall leave to the survivor, as the latter’s property, the houses and all the furniture therein together with the Buick automobile above-stated, excluding the furniture belonging to Leonarda Macam stated in paragraph 2 of this document, which may be taken by the heirs of said Leonarda Macam if she will be the first to give up her soul to God, as remembrance to her surviving friend, and this agreement shall be equivalent to a transfer of the right of the one who dies first and shall be kept by the survivor; and none of our heirs shall claim the property mentioned in this document left by any us who dies first.” The parties described the overall act as both an agreement and a transfer.
• Death and Litigation: Leonarda died first. Her testamentary executrix, Nicolas Macam, brought suit against Juana Gatmaitan and Magno S. Gatmaitan to recover possession and ownership of the house, arguing that as to the house, Exhibit C was a donation mortis causa that failed for lack of testamentary formalities. The trial court disagreed, treating Exhibit C as a valid inter vivos arrangement, and absolved the defendants.

• Donation Mortis Causa: Plaintiff-appellant contended that, with respect to the house, Exhibit C constituted a donation mortis causa by Leonarda in favor of Juana. Because a donation mortis causa must comply with the formalities required for a will, and Exhibit C did not, the donation was void and did not effect a transfer of ownership of the house to Juana.

• Aleatory Contract / Transfer: Defendants-appellees maintained that the document was not a donation but a reciprocal agreement and a transfer of rights between the parties, binding upon them as a contract. The instrument was voluntarily executed and its literal terms described the act as an agreement and a transfer.

• Characterization of the Agreement: Whether the instrument (Exhibit C) is a donation mortis causa void for lack of testamentary formalities, or a valid aleatory contract.

• Characterization of the Agreement: Exhibit C was an aleatory contract, not a donation mortis causa. Leonarda and Juana lived together as friends, each having contributed property—Leonarda the house, Juana the Buick and most of the furniture—of roughly equivalent value, thereby establishing a de facto joint ownership. By the terms of Exhibit C, they reciprocally assigned their respective properties to one another, conditioned upon who might die first: if Leonarda died first, Juana became owner of the house; if Juana died first, Leonarda became owner of the automobile and furniture. Time of death was the uncertain event that determined which party acquired the other’s property. This reciprocal undertaking fell squarely within Article 1790 of the Civil Code, which defines an aleatory contract as one where one party, or both reciprocally, bind themselves to give or do something as an equivalent for what the other is to give or do upon the occurrence of an event that is uncertain or will happen at an indeterminate time. As a contract, it was binding without need for testamentary formalities. Because Leonarda died first, Juana acquired ownership of the house.

• Aleatory Contract under Article 1790 of the Civil Code — An aleatory contract is one in which one of the parties, or both reciprocally, bind themselves to give or to do something in consideration of what the other is to give or to do upon the happening of an event that is uncertain, or that will occur at an indeterminate time. The reciprocal assignment of properties conditioned on which party dies first is an aleatory contract; it is not a donation mortis causa and does not require the formalities of a will. Once the condition is fulfilled (the death of one party), the survivor acquires ownership by force of the contract.

• “This court is of the opinion that Exhibit C is an aleatory contract whereby, according to article 1790 of the Civil Code, one of the parties or both reciprocally bind themselves to give or do something as an equivalent for that which the other party is to give or do in case of the occurrence of an event which is uncertain or will happen at an indeterminate time.” — This passage articulates the dispositive legal characterization and identifies the controlling statutory provision.

• “In this manner Leonarda and Juana reciprocally assigned their respective property to one another conditioned upon who might die first, the time of death determining the event upon which the acquisition of such right by the one or the other depended. This contract, as any other contract, is binding upon the parties thereto.” — The excerpt underscores that the reciprocal nature of the undertaking and its dependence on an uncertain future event make it an aleatory contract, enforceable without testamentary formalities.

• N/A — The decision relies solely on the text of Article 1790 of the Civil Code and the interpretation of the parties’ written agreement; no judicial precedents are cited.

• Article 1790, Civil Code (1889) — Defines an aleatory contract. The Court applied this provision to hold that the reciprocal assignment conditioned on who died first fell within its terms, thereby obviating any need to satisfy the formalities prescribed for wills or donations mortis causa.

Villa-Real, Abad Santos, Imperial, Diaz, Laurel, and Concepcion, JJ., concurred.

• None.