Secretary of Education vs. Heirs of Dulay

An onerous donation is governed by the rules on contracts, and the action to revoke it for non-compliance prescribes in ten years under Article 1144 of the Civil Code, reckoned from the expiration of a reasonable opportunity for the donee to fulfill the imposed condition.

Spouses Rufino Dulay, Sr. and Ignacia Vicente donated a 10,000-square-meter portion of their land to the Ministry of Education and Culture in 1981, subject to the condition that it be used for school purposes. The donee titled the property in 1983 but left it idle, eventually constructing a school building two kilometers away in 1988.

• The Donation: Spouses Rufino Dulay, Sr. and Ignacia Vicente owned a 29,002-square-meter parcel of land. On August 3, 1981, they executed a deed of donation over a 10,000-square-meter portion in favor of the Ministry of Education and Culture, expressly conditioning the transfer on the use of the property for school purposes. Transfer Certificate of Title No. T-143337 was issued in the Ministry's name on April 13, 1983.
• Non-Compliance: The donated property remained idle. Sometime in 1988, the DECS constructed the Rizal National High School on a different lot acquired from Alejandro Feliciano, situated two kilometers away from the donated land.
• Demand for Return: On August 19, 1994, the spouses Dulay demanded the property's return due to 13 years of non-use, a request supported by Barangay Resolution No. 39. Rufino Dulay, Sr. died on December 22, 1994. His heirs sought Sangguniang Panlungsod intervention, which was denied for lack of privity to the deed.
• Ocular Inspection: During trial, a March 6, 2001 ocular inspection by the presiding judge and counsel confirmed the land was barren, save for a small portion planted with palay and a demolished house from 1979, with no improvements indicating school use.

• Compliance with Condition: Petitioner argued that the condition "for school purposes" was satisfied by using the land as a technology and home economics laboratory where students and teachers planted palay, mahogany seedlings, and fruit-bearing trees, with proceeds funding school site improvements.
• Prescription: Petitioner maintained that the action to revoke was barred by the four-year prescriptive period under Article 764 of the Civil Code and laches, the non-compliance having become manifest in 1988.

• Non-Compliance with Condition: Respondents countered that no evidence proved the land was used as a laboratory or that DECS personnel planted the crops; planting palay contradicted the intended school purpose, and the land lacked any improvements.
• Prescription: Respondents argued that the donation was onerous and thus governed by the ten-year prescriptive period for written contracts under Article 1144, not the four-year period under Article 764.

• Compliance with Condition: Whether the DECS complied with the condition imposed in the deed of donation to use the property for school purposes.
• Prescription: Whether the respondents' right to seek revocation of the deed of donation is barred by prescription and laches.

• Compliance with Condition: Non-compliance was established, the factual findings of the trial and appellate courts being binding and undisturbed. Planting palay and bare allegations of laboratory use did not constitute the "school purposes" intended by the donors, especially given the school's construction two kilometers away and the property's barren state for over a decade.
• Prescription: The action had not prescribed. Because the donation was onerous, Article 733 dictated that the rules on contracts apply, rendering the ten-year prescriptive period under Article 1144 controlling over the four-year period under Article 764. The cause of action accrued upon the expiration of a reasonable opportunity for the donee to comply, not strictly from the moment of non-compliance, and 16 years of inaction constituted an unreasonable delay by the donee.

• Onerous Donations — Under Article 733 of the Civil Code, donations with an onerous cause are governed by the rules on contracts. Consequently, the prescriptive period for actions arising from them is ten years under Article 1144, not the four-year period for simple donations under Article 764.
• Accrual of Cause of Action for Revocation — When a donation imposes a condition without fixing a period for compliance, the cause of action for revocation accrues from the expiration of a reasonable opportunity for the donee to fulfill the condition. Judicial fixation of a period under Article 1197 is unnecessary if it would serve only as a technicality to delay the action.

• "It must be stressed that the donation is onerous because the DECS, as donee, was burdened with the obligation to utilize the land donated for school purposes. Under Article 733 of the New Civil Code, a donation with an onerous cause is essentially a contract and is thus governed by the rules on contract."
• "The legal possibility of bringing the action begins with the expiration of a reasonable opportunity for the donee to fulfill what has been charged upon it by the donor."

• Central Philippine University v. Court of Appeals, 316 Phil. 616 (1995) — Followed. Established that the legal possibility of bringing a revocation action begins with the expiration of a reasonable opportunity for the donee to fulfill the condition, and courts need not fix a period under Article 1197 if doing so would merely be a technicality causing delay.
• Philippine National Bank v. Court of Appeals, 392 Phil. 156 (2000) — Cited for the definition of a question of fact, supporting the rule that the Supreme Court is not a trier of facts under Rule 45.

• Article 733, Civil Code — Provides that onerous donations shall be governed by the rules on contracts. Applied to classify the donation as essentially a contract, thereby dictating the applicable prescriptive period.
• Article 1144, Civil Code — Provides a ten-year prescriptive period for actions upon a written contract. Applied as the governing prescriptive period for the revocation of the onerous donation.
• Article 764, Civil Code — Provides a four-year prescriptive period for the revocation of simple donations. Rejected in favor of Article 1144 because the donation was onerous.
• Article 1197, Civil Code — Allows courts to fix the duration of an obligation when a period is intended but not fixed. Held inapplicable to avoid technicalities and unnecessary suits.
• Rule 45, 1997 Rules of Civil Procedure — Limits petitions for review on certiorari to questions of law. Applied to uphold the binding nature of lower courts' factual findings.

Artemio V. Panganiban (CJ), Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez, Minita V. Chico-Nazario