G.R. No. L-61023 August 22, 1984
THE NATIONAL TREASURER OF THE PHILIPPINES, petitioner, vs. PAULINA PEREZ VDA. DE MEIMBAN and COURT OF APPEALS, respondents.

FACTS

Filomena Primicias was the registered owner of a parcel of land under OCT No. 10318. On November 24, 1958, she executed a document titled “Donation Mortis Causa” in favor of her daughter, Paulina Perez Vda. de Meimban, covering a 10-hectare portion of the land. This deed was registered and annotated on the title on November 26, 1958. Subsequently, after a subdivision, a new title, TCT No. 43170, was issued to Primicias for the remaining unsold portion. The Register of Deeds, through negligence, failed to carry over the annotation of the donation to the new title.
Primicias later mortgaged the land covered by TCT No. 43170 to the People’s Bank and Trust Company (PBTC). Upon her death, the bank foreclosed the mortgage. Meimban, discovering the omission of the donation annotation on the new title, registered an adverse claim and filed an action seeking partial annulment of the foreclosure sale concerning the donated portion. The trial court initially ruled for Meimban, but the Court of Appeals reversed, holding PBTC was an innocent mortgagee for value. The appellate court ruled Meimban’s remedy was to claim compensation from the Assurance Fund under the Land Registration Act. The trial court, following this directive, ordered the National Treasurer to pay Meimban P50,000 from the Assurance Fund, a decision affirmed by the Court of Appeals.

ISSUE

The principal issue is whether the deed executed by Primicias is a valid donation inter vivos, which would support a claim against the Assurance Fund for the Register of Deeds’ negligence in failing to annotate it, or a void donation mortis causa.

RULING

The Supreme Court reversed the decisions of the lower courts and dismissed the complaint. The Court ruled the deed was a donation mortis causa, not inter vivos. The determination hinged on the donor’s intent, as manifested in the instrument’s terms. The deed was explicitly titled “Donation Mortis Causa” and crucially stipulated that the donation was “to become effective upon the death of the DONOR.” This clear language demonstrated the donor’s intent to transfer ownership only upon her death, retaining full dominion over the property during her lifetime, as further evidenced by her subsequent act of mortgaging it.
Since the donation was mortis causa, it was essentially a testamentary disposition. Under Article 728 of the Civil Code, such dispositions must comply with the formalities of a will. The deed, being merely a public instrument and not executed with the formalities required for a will, was void and produced no legal effect. Consequently, no right or ownership was transferred to Meimban. With no valid interest in the land, she suffered no damage from the Register of Deeds’ omission. Therefore, there was no basis for her to recover compensation from the Assurance Fund, as the fund provides relief for losses arising from omissions or mistakes affecting valid rights or interests in registered land.