G.R. No. 77425; June 19, 1991
THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, et al. vs. HON. COURT OF APPEALS, et al.

FACTS

The Estate of deceased spouses Eusebio de Castro and Martina Rieta filed a complaint for nullification of deed of donation, rescission, and reconveyance against the Roman Catholic Archbishop of Manila, the Roman Catholic Bishop of Imus, and the Spouses Ignao. The action stemmed from a 1930 deed of donation executed by the de Castro spouses in favor of the Archbishop, covering a parcel of land in Kawit, Cavite. A key condition stipulated that the donee shall not dispose of the property within 100 years; violation would render the donation ipso facto null and void, with the property reverting to the donors’ estate.
In 1980, within the prohibited period, the Bishop of Imus (to whom administration of Cavite properties was transferred) sold the land to the Spouses Ignao. The Estate sought to enforce the condition. The petitioners moved to dismiss the complaint, primarily arguing prescription. The trial court dismissed the case, holding the cause of action had prescribed. The Court of Appeals reversed, reinstating the complaint, ruling that the action had not prescribed because the deed provided for automatic reversion, making judicial revocation unnecessary.

ISSUE

Whether the action for reconveyance, based on the violation of a condition in a deed of donation providing for automatic reversion, has prescribed.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the trial court’s dismissal, but on a different legal ground. The Court held that while the appellate court was correct in stating that Article 764 of the Civil Code (prescribing a 4-year period for revocation actions) did not apply due to the automatic reversion clause, the complaint must still fail. The core legal flaw was the validity of the resolutory condition itself.
The Court ruled that the 100-year prohibition against alienation imposed on the donee was void for being an unreasonable restraint on alienation, contravening public policy. A condition that forbids the donee from alienating the donated property for a period exceeding the limits set by law (such as those in testamentary succession) is invalid. Since the central condition of the donation was void, the violation thereof could not give rise to a cause of action for reversion. Consequently, the sale by the Bishop of Imus to the Spouses Ignao was valid, and the Estate had no right to seek reconveyance. The dismissal of the complaint was therefore proper, but based on the invalidity of the condition, not on prescription.