G.R. No. 152663 November 18, 2005
EDGARDO D. DOLAR, Petitioner, vs. BARANGAY LUBLUB (now P.D. Monfort North), PEPITO DUA, PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, DUMANGAS WATER DISTRICT, 4th ILOILO MOBILE GROUP, ILOILO PROVINCIAL POLICE, ILOILO REGIONAL TRIAL COURT, BRANCH 68, Respondents.

FACTS

Petitioner Edgardo D. Dolar and Serafin Jaranilla were co-owners of a 4.6-hectare parcel of land. On September 16, 1981, they donated the property to respondent Barangay Lublub through a notarized Deed of Donation. The donation was accepted by the Punong Barangay. The deed imposed two key conditions: first, the barangay must construct specified public structures and designate the area as “Don Venancio Dolar Plaza” within five years; second, the property must not be converted to uses other than those stipulated. The barangay took possession and various public structures were built on the land over time, though the donation was not registered.
In 1989, petitioner secured a Transfer Certificate of Title for the same property and executed a second, identical deed of donation. Later, the mother lots were auctioned for tax delinquency, and petitioner emerged as the highest bidder. In 1998, petitioner filed a complaint for Quieting of Title and Recovery of Possession against the barangay and other occupying entities. He argued the donation was automatically revoked due to the barangay’s alleged failure to comply with the conditions, specifically the five-year construction period and the allowance of other entities to occupy portions.

ISSUE

Whether the donation had been automatically revoked due to the donee barangay’s alleged non-compliance with the conditions, thereby reverting ownership to the donor.

RULING

The Supreme Court denied the petition, upholding the donation’s validity. The legal logic centers on the nature of the conditions and the prescribed mode for their enforcement. The Court ruled that the conditions in the deed were “potestative” or suspensive, not resolutory. Their non-fulfillment did not result in an automatic reversion of ownership. Instead, Article 764 of the Civil Code governs, requiring the donor to file a judicial action for revocation based on non-compliance. This action prescribes in four years from the breach.
The Court found that the right to revoke accrued, at the latest, upon the expiration of the five-year construction period on September 16, 1986. Petitioner’s filing of the complaint in 1998 was well beyond the four-year prescriptive period, thus his action had prescribed. Furthermore, the Court noted that the barangay had partially performed by constructing buildings and facilities for public use. The occupancy by other government entities like the PLDT and the Water District, which provide public utilities, was deemed consistent with the donated property’s public purpose and did not constitute a prohibited conversion of use. Therefore, no ground for revocation existed.