Exceptions: Where the law requires notarization as a requisite for validity.

1. Donation of immovable property

A. Article 749 of the Civil Code

Article 749. In order that the donation of an immovable may be valid, it must
be made in a public document, specifying therein the property donated and the value
of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate

public document, but it shall not take effect unless it is done during the lifetime of
the donor.

If the acceptance is made in a separate instrument, the donor shall be notified

thereof in an authentic form, and this step shall be noted in both instruments. (633)

B. Quilala v. Alcantara, G.R. No. 132681. December 3, 2001; 371 SCRA 311
(2001)

The "Donation of Real Property Inter Vivos" consists of two pages. The first page
contains the deed of donation itself, and is signed on the bottom portion by Catalina Quilala as
donor, Violeta Quilala as donee, and two instrumental witnesses.1 The second page contains the
Acknowledgment, which states merely that Catalina Quilala personally appeared before the
notary public and acknowledged that the donation was her free and voluntary act and deed. There
appear on the left-hand margin of the second page the signatures of Catalina Quilala and one of
the witnesses and on the right-hand margin the signatures of Violeta Quilala and the other
witness.2 The Acknowledgment reads:

REPUBLIC OF THE PHILIPPINES )

QUEZON CITY ) S.S.

Before Me, a Notary Public, for and in the City of Quezon, Philippines, this 20th day of
Feb. 1981, personally appeared CATALINA QUILALA, with Residence Certificate No.
19055265 issued at Quezon City on February 4, 1981, known to me and to me known to
be the same person who executed the foregoing instruments and acknowledged to me that
the same is her own free and voluntary act and deed.

I hereby certify that this instrument consisting of two (2) pages, including the page on
which this acknowledgment is written, has been signed by CATALINA QUILALA and
her instrumental witnesses at the end thereof and on the left-hand margin of page 2 and
both pages have been sealed with my notarial seal.

In witness whereof, I have hereunto set my hand, in the City of Quezon, Philippines, this
20th day of Feb., 1981.
 (SGD.) NOTARY PUBLIC

Until December 31, 1981

(illegible)

DOC NO. 22;

PAGE NO. 6;

BOOK NO. XV;

SERIES OF 1981.

The deed of donation was registered with the Register of Deeds and, in due course, TCT No.
17214 was cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.

(The mistaken court decision was applied by the trial court, then later mistakenly affirmed
by the Court of Appeals, hence the difference in its font, Auntie)

The trial court found that the deed of donation, although signed by both Catalina and Violeta, was
acknowledged before a notary public only by the donor, Catalina. Consequently, there was no acceptance by Violeta
of the donation in a public instrument, thus rendering the donation null and void. Furthermore, the trial court held that
nowhere in Catalina's SSS records does it appear that Violeta was Catalina's daughter. Rather, Violeta was referred
to therein as an adopted child, but there was no positive evidence that the adoption was legal. On the other hand, the
trial court found that respondents were first cousins of Catalina Quilala. However, since it appeared that Catalina died
leaving a will, the trial court ruled that respondents' deed of extrajudicial settlement can not be registered. The trial
court rendered judgment as follows:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria Alcantara, Leonarda Alcantara,
Ines Reyes and Juan Reyes and against defendant Ricky A. Quilala, as follows:

1. Declaring null and void the deed of donation of real property inter vivos executed on February 20, 1981 by
Catalina Quilala in favor of Violeta Quilala (Exhs. A as well as 11 and 11-A.);

2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title No. 143015 in the name of
Violeta Quilala and to issue a transfer certificate of title in the name of the Estate of Catalina Quilala;.

3. Dismissing the complaint insofar as it seeks the registration of the deed of extrajudicial settlement (Exhs.
B and B-1,) and the issuance by the Register of Deeds of Manila of a transfer certificate of title in the names
of the plaintiffs; and

4. Dismissing the counterclaim of defendant Ricky A. Quilala.

No costs.

SO ORDERED.3

Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals rendered a decision
affirming with modification the decision of the trial court by dismissing the complaint for lack of cause of action without
prejudice to the filing of probate proceedings of Catalina's alleged last will and testament. 4
WHEREFORE, the appealed decision is hereby AFFIRMED with the following MODIFICATION:

(3) DISMISSING the complaint for lack of cause of action without prejudice to the filing of the necessary probate
proceedings by the interested parties so as not to render nugatory the right of the lawful heirs.

(Napikon na si Petitioner by this time. Nagappeal na sa Supreme Court, Auntie, hehehe)

The principal issue raised is the validity of the donation executed by Catalina in favor of
Violeta. Under Article 749 of the Civil Code, the donation of an immovable must be made in a
public instrument in order to be valid,7 specifying therein the property donated and the value of
the charges which the donee must satisfy. As a mode of acquiring ownership, donation results in
an effective transfer of title over the property from the donor to the donee,8 and is perfected from
the moment the donor knows of the acceptance by the donee,9 provided the donee is not
disqualified or prohibited by law from accepting the donation. Once the donation is accepted, it
is generally considered irrevocable,10 and the donee becomes the absolute owner of the
property.11 The acceptance, to be valid, must be made during the lifetime of both the donor and
the donee.12 It may be made in the same deed or in a separate public document,13 and the donor
must know the acceptance by the donee.14

In the case at bar, the deed of donation contained the number of the certificate of title as
well as the technical description of the real property donated. It stipulated that the donation was
made for and in consideration of the "love and affection which the DONEE inspires in the
DONOR, and as an act of liberality and generosity."15 This was sufficient cause for a donation.
Indeed, donation is legally defined as "an act of liberality whereby a person disposes gratuitously
of a thing or right in favor of another, who accepts it."16

The donee's acceptance of the donation was explicitly manifested in the penultimate
paragraph of the deed, which reads:

That the DONEE hereby receives and accepts the gift and donation made in her favor by
the DONOR and she hereby expresses her appreciation and gratefulness for the kindness
and generosity of the DONOR.17

Below the terms and stipulations of the donation, the donor, donee and their witnesses
affixed their signature. However, the Acknowledgment appearing on the second page mentioned
only the donor, Catalina Quilala. Thus, the trial court ruled that for Violeta's failure to
acknowledge her acceptance before the notary public, the same was set forth merely on a private
instrument, i.e., the first page of the instrument. We disagree.

The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which
states:

Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary

instruments, whether affecting registered or unregistered land, executed in accordance
with law in the form of public instruments shall be registrable: Provided, that, every such
instrument shall be signed by person or persons executing the same in the presence of at
least two witnesses who shall likewise sign thereon, and shall be acknowledged to be the
 free act and deed of the person or persons executing the same before a notary public or
other public officer authorized by law to take acknowledgment. Where the instrument so
acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in the office
of the Register of Deeds, or if registration is not contemplated, each page of the copy to
be kept by the notary public, except the page where the signatures already appear at the
foot of the instrument shall be signed on the left margin thereof by the person or persons
executing the instrument and their witnesses, and all the pages sealed with the notarial
seal, and this fact as well as the number of pages shall be stated in the acknowledgment.
Where the instrument acknowledged relates to a sale, transfer, mortgage or encumbrance
of two or more parcels of land, the number thereof shall likewise be set forth in said
acknowledgment." (italics supplied).

As stated above, the second page of the deed of donation, on which the Acknowledgment
appears, was signed by the donor and one witness on the left-hand margin, and by the donee and
the other witness on the right hand margin. Surely, the requirement that the contracting parties
and their witnesses should sign on the left-hand margin of the instrument is not absolute. The
intendment of the law merely is to ensure that each and every page of the instrument is
authenticated by the parties. The requirement is designed to avoid the falsification of the contract
after the same has already been duly executed by the parties. Hence, a contracting party affixes
his signature on each page of the instrument to certify that he is agreeing to everything that is
written thereon at the time of signing.

Simply put, the specification of the location of the signature is merely directory. The fact
that one of the parties signs on the wrong side of the page does not invalidate the document. The
purpose of authenticating the page is served, and the requirement in the above-quoted provision
is deemed substantially complied with.

In the same vein, the lack of an acknowledgment by the donee before the notary public
does not also render the donation null and void. The instrument should be treated in its entirety.
It cannot be considered a private document in part and a public document in another part. The
fact that it was acknowledged before a notary public converts the deed of donation in its entirety
a public instrument. The fact that the donee was not mentioned by the notary public in the
acknowledgment is of no moment. To be sure, it is the conveyance that should be acknowledged
as a free and voluntary act. In any event, the donee signed on the second page, which contains
the Acknowledgment only. Her acceptance, which is explicitly set forth on the first page of the
notarized deed of donation, was made in a public instrument.

It should be stressed that this Court, not being a trier of facts, can not make a
determination of whether Violeta was the daughter of Catalina, or whether petitioner is the son of
Violeta. These issues should be ventilated in the appropriate probate or settlement proceedings
affecting the respective estates of Catalina and Violeta. Suffice it to state that the donation,
which we declare herein to be valid, will still be subjected to a test on its inofficiousness under
Article 771,18 in relation to Articles 752, 911 and 912 of the Civil Code. Moreover, property
donated inter vivos is subject to collation after the donor's death,19 whether the donation was
made to a compulsory heir or a stranger,20 unless there is an express prohibition if that had been
the donor's intention.21

WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed

decision of the Court of Appeals , is REVERSED and SET ASIDE, and a new judgment is
rendered dismissing Civil Case No. 84-26603.

SO ORDERED.

C. Abellana v. Spouses Ponce, G.R. No. 160488, September 3, 2004; 437 SCRA
531 (2004)

On July 15, 1981, Felomina, a spinster, pharmacist and aunt of private respondent Lucila
Ponce, purchased from the late Estela Caldoza-Pacres a 44,2974 square meter agricultural
lot5 with the intention of giving said lot to her niece, Lucila. Thus, in the deed of sale,6 the latter
was designated as the buyer of Lot 3, Pcs-10-000198, covered by Original Certificate of Title
No. P-27, Homestead Patent No. V-1551 and located at Los Angeles, Butuan City.7 The total
consideration of the sale was P16,500.00, but only P4,500.00 was stated in the deed upon the
request of the seller.8

Subsequently, Felomina applied for the issuance of title in the name of her niece. On
April 28, 1992, Transfer Certificate of Title (TCT) No. 28749 over the subject lot was issued in
the name of Lucila.10 Said title, however, remained in the possession of Felomina who developed
the lot through Juanario Torreon11 and paid real property taxes thereon.

(Eh, pumangit ang ugali ng niece at husband nya. Nananakit na ng Auntie. Kaya ayaw
na ni Auntie at binabawi ang regalo. Siyempre, nagkagulo. Dumaan muna sa trial
court kung saan nanalo yung auntie, tapos sa Court of Appeals kung saan nanalo yung
mag-asawa. Napikon na sa wakas si Auntie. Dinala na sa Supreme Court).

SUPREME COURT: The issue before us is: Who, as between Felomina and
respondent spouses, is the lawful owner of the controverted lot? To resolve this issue, it is
necessary to determine who paid the purchase price of the lot.

Generally, contracts are obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. When, however, the law
requires that a contract be in some form in order that it may be valid, that requirement is absolute
and indispensable. Its non-observance renders the contract void and of no effect.34 Thus, under
Article 749 of the Civil Code –

Article 749. In order that the donation of an immovable property may be valid, it must be
made in a public document, specifying therein the property donated and the value of the
charges which the donee must satisfy.
 The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in
an authentic form, and this step shall be noted in both instruments.

In the instant case, what transpired between Felomina and Lucila was a donation of an
immovable property which was not embodied in a public instrument as required by the
foregoing article. Being an oral donation, the transaction was void.35 Moreover, even if
Felomina enjoyed the fruits of the land with the intention of giving effect to the donation after
her demise, the conveyance is still a void donation mortis causa, for non-compliance with the
formalities of a will.36 No valid title passed regardless of the intention of Felomina to donate the
property to Lucila, because the naked intent to convey without the required solemnities does not
suffice for gratuitous alienations, even as between the parties inter se.37 At any rate, Felomina
now seeks to recover title over the property because of the alleged ingratitude of the respondent
spouses.

Unlike ordinary contracts (which are perfected by the concurrence of the requisites of
consent, object and cause pursuant to Article 131838 of the Civil Code), solemn contracts like
donations are perfected only upon compliance with the legal formalities under Articles 748 39 and
749.40 Otherwise stated, absent the solemnity requirements for validity, the mere intention of the
parties does not give rise to a contract. The oral donation in the case at bar is therefore legally
inexistent and an action for the declaration of the inexistence of a contract does not
prescribe.41 Hence, Felomina can still recover title from Lucila.

Article 144842 of the Civil Code on implied trust finds no application in the instant case.
The concept of implied trusts is that from the facts and circumstances of a given case, the
existence of a trust relationship is inferred in order to effect the presumed intention of the
parties.43 Thus, one of the recognized exceptions to the establishment of an implied trust is where
a contrary intention is proved,44 as in the present case. From the testimony of Felomina herself,
she wanted to give the lot to Lucila as a gift. To her mind, the execution of a deed with Lucila as
the buyer and the subsequent issuance of title in the latter’s name were the acts that would
effectuate her generosity. In so carrying out what she conceived, Felomina evidently displayed
her unequivocal intention to transfer ownership of the lot to Lucila and not merely to constitute
her as a trustee thereof. It was only when their relationship soured that she sought to revoke the
donation on the theory of implied trust, though as previously discussed, there is nothing to
revoke because the donation was never perfected.

In declaring Lucila as the owner of the disputed lot, the Court of Appeals applied, among
others, the second sentence of Article 1448 which states –

"x x x However, if the person to whom the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale, no trust is implied by law, it being
disputably presumed that there is a gift in favor of the child."
 Said presumption also arises where the property is given to a person to whom the person
paying the price stands in loco parentis or as a substitute parent.45

The abovecited provision, however, is also not applicable here because, first, it was not
established that Felomina stood as a substitute parent of Lucila; and second, even assuming that
she did, the donation is still void because the transfer and acceptance was not embodied in a
public instrument. We note that said provision merely raised a presumption that the conveyance
was a gift but nothing therein exempts the parties from complying with the formalities of a
donation. Dispensation of such solemnities would give rise to anomalous situations where the
formalities of a donation and a will in donations inter vivos, and donations mortis causa,
respectively, would be done away with when the transfer of the property is made in favor of a
child or one to whom the donor stands in loco parentis. Such a scenario is clearly repugnant to
the mandatory nature of the law on donation.

While Felomina sought to recover the litigated lot on the ground of implied trust and not
on the invalidity of donation, the Court is clothed with ample authority to address the latter issue
in order to arrive at a just decision that completely disposes of the controversy.46 Since rules of
procedure are mere tools designed to facilitate the attainment of justice, they must be applied in a
way that equitably and completely resolve the rights and obligations of the parties.47

As to the trial court’s award of attorney’s fees and litigation expenses, the same should be
deleted for lack of basis. Aside from the allegations in the complaint, no evidence was presented
in support of said claims. The trial court made these awards in the dispositive portion of its
decision without stating any justification therefor in the ratio decidendi. Their deletion is
therefore proper.48

Finally, in deciding in favor of Felomina, the trial court ordered respondent spouses to
execute a deed of sale over the subject lot in favor of Felomina in order to effect the transfer of
title to the latter. The proper remedy, however, is provided under Section 10 (a), Rule 39 of the
Revised Rules of Civil Procedure which provides that "x x x [i]f real or personal property is
situated within the Philippines, the court in lieu of directing a conveyance thereof may by an
order divest the title of any party and vest it in others, which shall have the force and effect of a
conveyance executed in due form of law."

WHEREFORE, in view of all the foregoing, the petition is GRANTED and the June 16,
2003 decision of the Court of Appeals in CA-G.R. CV No. 69213 is REVERSED and SET
ASIDE. The August 28, 2000 decision of the Regional Trial Court of Butuan City, Branch 2, in
Civil Case No. 4270, is REINSTATED with the following MODIFICATIONS:

(1) Declaring petitioner Felomina Abellana as the absolute owner of Lot 3, Pcs-10-
000198;

(2) Ordering the Register of Deeds of Butuan City to cancel TCT No. T-2874 in the name
of respondent Lucila Ponce and to issue a new one in the name of petitioner Felomina
Abellana; and
 (3) Deleting the awards of attorney’s fees and litigation expenses for lack of basis.

SO ORDERED.