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FELOMINA ABELLANA v. SPS. ROMEO PONCE

FACTS:

The case involves a dispute over the ownership of a 44,297 square meter agricultural lot located in Butuan City. Petitioner Felomina Abellana purchased the lot on July 15, 1981, with the intention of giving it to her niece, Lucila Ponce. The deed of sale designated Lucila as the buyer, and the total consideration was P16,500. However, only P4,500 was stated in the deed at the request of the seller.

Felomina applied for the issuance of a title in Lucila's name, and Transfer Certificate of Title (TCT) No. 2874 was issued on April 28, 1992. Despite this, Felomina retained possession of the title and developed the lot through a caretaker.

The relationship between Felomina and Lucila turned sour, leading Felomina to file a case for revocation of implied trust to recover legal title over the property. The trial court ruled in favor of Felomina, declaring that an implied trust existed and ordering the conveyance of the lot to her.

However, the Court of Appeals reversed this decision, ruling that Felomina failed to prove the existence of an implied trust and upholding the ownership of the lot by Lucila and her husband. Felomina filed a petition for review on certiorari before the Supreme Court.

ISSUES:

  1. Whether the transaction between Felomina and Lucila was a valid donation of an immovable property

  2. Whether Felomina can recover title over the property due to the alleged ingratitude of the respondent spouses

  3. Whether or not there was a valid donation of the disputed lot from Felomina to Lucila.

  4. Whether or not the presumption of gift in favor of the child or person standing in loco parentis exempts the parties from complying with the formalities of a donation.

  5. Whether or not the trial court's award of attorney's fees and litigation expenses is justified.

  6. Whether or not the trial court's order for the execution of a deed of sale is the proper remedy.

RULING:

  1. The transaction between Felomina and Lucila was not a valid donation of an immovable property. The donation was not embodied in a public instrument as required by Article 749 of the Civil Code. Therefore, the oral donation was void.

  2. Felomina can still recover title over the property. The mere intention to convey without the required solemnities does not suffice for gratuitous alienations under the law. The oral donation in this case is legally inexistent and an action for the declaration of inexistence of a contract does not prescribe.

  3. The donation of the disputed lot from Felomina to Lucila was not valid due to the absence of a public instrument embodying the transfer and acceptance.

  4. The presumption of gift in favor of the child or person standing in loco parentis does not exempt the parties from complying with the formalities of a donation. Compliance with the formalities is mandatory.

  5. The trial court's award of attorney's fees and litigation expenses is deleted for lack of basis, as no evidence was presented to support said claims and the trial court failed to provide justification for the awards in its decision.

  6. The proper remedy is through an order divesting the title of any party and vesting it in others, which shall have the force and effect of a conveyance executed in due form of law, as provided in Section 10(a), Rule 39 of the Revised Rules of Civil Procedure.

PRINCIPLES:

  • Contracts must be validly formed in accordance with the law, including the required formalities.

  • An oral donation of an immovable property is void for non-compliance with the formalities under the law.

  • A contract requires the concurrence of the requisites of consent, object, and cause, as stated in Article 1318 of the Civil Code.

  • Solemn contracts like donations are perfected only upon compliance with the legal formalities.

  • The concept of implied trusts is applied to infer the existence of a trust relationship based on the facts and circumstances of a given case, to effect the presumed intention of the parties.

  • A valid donation requires compliance with the formalities of a donation, including the execution of a public instrument embodying the transfer and acceptance.

  • The presumption of gift in favor of the child or person standing in loco parentis does not exempt the parties from complying with the formalities of a donation.

  • Attorney's fees and litigation expenses must be supported by evidence and should be justified in the decision.

  • In determining a just decision that completely disposes of the controversy, the court may address issues related to the invalidity of a donation even if not raised by the parties.