THE VALIDITY OF PERPETUAL ALIENATION OF PROPERTY

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IMPOSED BY THE DONEE OR DONOR

________________________

Aya A. Montero*

Property has always been a tangled issue not only amongst the family

but with regard to the society which leads to conflict and misunderstandings.

Alienation of such property can be defined as the transfer of property through

gifts, wills or mortgage. The ownership is incomplete without having a right

to alienate that property2.

This paper aims to provide a discussion on the validity of perpetual

alienation of property imposed by the donee or donor. For purposes of easy

understanding of otherwise confusing issue, it becomes pertinent to discuss:

(1) Definition of property, donation and alienation; (2) Donation of property

in the Philippines; and (3) Supreme Court Decision in relation to alienation

of properties. The paper will likewise discuss requisites of donation of

property, effects and limitations of the same. The latter part will thresh out

* First year law student

2
Varsha Gupta of College of Legal Studies, UPES, Dehradun discusses Unauthorized alienation of
property and consequences (https://blog.ipleaders.in/alienation-of-property/)

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striking problems of perpetual alienation of property, the significance of valid

alienation of property and provide for probable solutions.

Definitions

Donation is the act by which the owner of a thing voluntarily transfers

the title and possession of the same from himself to another person, without

any consideration; a gift. A donation is never perfected until it is has been

accepted, for the acceptance is requisite to make the donation complete. The

person making the gift is called the donor and the person receiving the gift is

called the donee. If made to a qualified non-profit charitable, religious,

educational or public service organization, it may be deductible as a

contribution in calculating income tax.3

Various jurists have defined ownership in different ways and it is

accepted that right of ownership is a complete or supreme right that can be

exercised over anything. According to Hibbert, ownership involves four

rights: Right of using the thing, excluding others from using it, disposal of

the thing and destruction of the thing.4 According to Paton, rights of an owner

are power of enjoyment, right of possession, the power to alienate inter

vivos etc. 5Austin focused on three main attributes of ownership, namely,

indefinite user, unrestricted disposition and unlimited duration.

3
(USLEGAL, n.d.)
4
V.D. Mahajan: Jurisprudence & Legal Theory (Fifth Edition) Pg. 288
5
Id

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 Alienation of property on the other hand, is the act by which the title

to real estate is voluntarily resigned by one person to another and accepted

by the latter, in the forms prescribed by law6. In real estate law, the complete

and voluntary transfer of title to real estate from one person to another. The

freedom to alienate property is considered essential to complete ownership 7.

In essence, donation and alienation of property may be considered

synonymous to each other, as they are both a voluntary transfer of ownership

other than in contemplation of death. Both terms may be used

interchangeably for purposes of transferring of property by voluntary deed.

Perpetual, literally, is an unlimited duration. For centuries, Anglo-

American Common Law, has assumed that social interest requires freedom

in the alienation of property. When English land conveyancers in the late 16th

century invented a form of conveyance designed to make land inalienable

forever, the courts held it an invalid human attempt to rival the permanence

of God. Thus, they utilized the word perpetuity—from the Latin in

perpetuum, a Biblical phrase used when referring to God’s eternal

continuance—to describe such an invalid limitation8.

Concept of free alienability of Anglo-American civilization

6
(Black's Law Dictionary Free Online Legal Dictionary 2nd Ed.)
7
(Cornell Law School Law Dictionary)
8
(The Editors of Encylopaedia Britannica , 2018)

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 Some legal scholars have even written that “the concept of free

alienability is a cornerstone of modern Anglo-American civilization.”9

This policy has given rise to the Rule against Restraints on Alienation.

Alienation, in this context, means the ability to resell or transfer the property.

Generally, there are three types of restraints on alienation that are considered

void:

The first type of restriction is a disabling restraint. This restraint,

which is always void, prohibits a grantee from making ANY transfer of

interest in real property. An example of a disabling restraint is if a property

transfer deed contains a provision that states “Neither the grantee nor any of

the grantee’s heirs shall have the right to transfer the land or any interest in

the land.”

The second type is a forfeiture restraint, which states that a grantee

will forfeit the real property if the grantee attempts a transfer. An example of

a prohibited forfeiture restraint is a provision that provides “If the grantee

attempts to transfer Blackacre or any interest in Blackacre during his lifetime,

his estate shall cease and title in Blackacre shall vest in a third-party.”

The third type of restriction is a promissory restraint, where a grantor

makes a grantee promise not to transfer the land. An example of a prohibited

promissory restraint is the following provision: “B hereby promises that he

9
Michael D. Kirby, Restraints on Alienation: Placing A 13th Century Doctrine in 21st Century
Perspective, 40 Baylor L. Rev. 413 (1988)

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will not transfer Blackacre or any interest in Blackacre without A’s prior

written consent.”10

Donation of Property in the Philippines

Donation, as defined in the Civil Code of the Philippines is an act of

liberality whereby a person disposes gratuitously of a thing or right in favor

of another, who accepts it11. It is a unilateral contract in which, the donor

out of pure liberality and benevolence promised to give the donee, something

without expecting to receive anything in return.

Donation may also be classified into two main categories, namely:

Donation Mortis Causa and Donation inter vivos. Donation mortis causa are

donations made in contemplation of death while Donation inter vivos are

those made other than mortis causa12.

Under the law the donation is void if there is no acceptance. The

acceptance may either be in the same document as the deed of donation

or in a separate public instrument. If the acceptance is in a separate

instrument, "the donor shall be notified thereof in an authentic form, and

his step shall be noted in both instruments.13 Although donation in its

generic sense includes all forms of gratuitous dispositions but the same shall

10
Restraints on the Transfer of Real Proeprty (LawShelf Education Media, A Project of National
Paralegal College)
11
Article 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in
favor of another, who accepts it.
12
(Neumann Van Rooyen, n.d.)
13
G.R No. 140487, April 2, 2001. Republic of the Philippines vs Leon Silim and Ildefonsa Mangubat

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 conform with the requisites and form of donations required by law to be

valid.

Likewise, under Article 1306 of the New Civil Code, the parties to a

contract have the right “to establish such stipulations, clauses, terms and

conditions as they may deem convenient, provided they are not contract to

law, morals, good customs, public order or public policy14. For example, a

stipulation on the deed of donation stating “violation of nay of the conditions

shall cause the automatic reversion of the donated of the donated area to the

donor, his heirs, …, without the need of executing any other document for

that purpose and without obligation on the part of the DONOR". Said

stipulation not being contrary to law, morals, good customs, public order or

public policy, is valid and binding upon the foundation who voluntarily

consented thereto15.

Jurisprudence in relation alienation of property

One of the most controversial issue on donation of property is whether

or not stipulation of perpetual alienation of property imposed by the donee or

donor is valid.

14
Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy.
15
G.R. No. L-57455, January 18, 1990 Evelyn De Luna, Rosalina De Luna, Prudencio De Luna, Jr.,
Willard De Luna, Antonio De Luna, and Joeselito De Luna vs. Hon. Sofronio F. Abrigo, Presiding Judge
of the Court of first Instance of Quezon City, Branch IX, and Luzonian University Foundation, Inc,

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 This issue has been resolved by the court in the consolidated case of

The Roman Catholic Bishop of Manila, The Roman Catholic Bishop of Imus,

and the Spouses Florencio Ignao and Soledad C. Ignao vs. Hon. Court of

Appeals, The Estate of Deceased Spouses Eusebio De Castro and Martina

Rieta, represented by Marina Reita Granados and Theresa Rieta Tolentino16.

The consolidated case pertains to the deed of donation executed by the

spouses Eusebio de Castro and Martina Rieta, both deceased, in favor of

Roman Catholic Archbishop of Manila covering a parcel of land located at

Kawit, Cavite. The above-mentioned deed of donation allegedly provides that

the done shall not dispose or sell the property within a period of one hundred

(100) years from the execution of the deed of donation, otherwise a violation

of such condition would render ipso facto 17null and void the deed of donation

and the property would revert to the estate of the donors.

Allegedly, while still within the prohibitive period to dispose of the

property, the done herein, Roman Catholic of Bishop of Imus, in whose

administration all properties within the province of Cavite owned by the

Archdiocese of Manila was transferred by virtue of a deed of sale executed

in favor of spouses Florencio Ignao and Soledad C. Ignao.

It is significant that the provisions therein regarding a testator also

necessarily involve, in the main, the devolution of property by gratuitous title

16
(The Lawphil Project, n.d.)
17
Definition of ipso facto: by the very fact or act: as an inevitable result (merriam-webster, n.d.)

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hence, as is generally the case of donations, being an act of liberality, the

imposition of an unreasonable period of prohibition to alienate the property

should be deemed anathema to the basic and actual intent of either the donor

or testator. For that reason, the regulatory arm of the law is or must be

interposed to prevent an unreasonable departure from the normative policy

expressed in the aforesaid Articles 49418 and 87019 of the Code.

In the case at bar, the Supreme Court hold that the probation in the

deed of donation against alienation of the property for an entire century, being

unreasonable emasculation and denial of an integral attribute of ownership,

should be as an illegal or impossible condition within the contemplation of

Article 727 of the Civil Code20. Hence, the stipulation “the done shall not

dispose or sell the property within a period of one hundred (100) years from

the execution of the deed of donation” in the deed of donation is not valid.

The respondents, Marina Reita Granados and Theresa Rieta

Tolentino, contends that the validity of stipulations in the deem of donation

18
Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may
demand at any time the partition of the thing owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten
years, shall be valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long
as he expressly or impliedly recognizes the co-ownership. (400a)
19
Article 870. The dispositions of the testator declaring all or part of the estate inalienable for more
than twenty years are void. (n)
20
Article 727. Illegal or impossible condtions in simple and remuneratory donations shall be considered
as not imposed.

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providing for the automatic reversion 21of the donated property to the donor

upon non-compliance of the condition was upheld in the case De Luna, et al.

vs. Abrigo Et al. 22

In the said decision, the court discussed donation, as a mode of

acquiring ownership and the imposition of certain conditions in the deed of

donation applying it into the petition at bar, to wit:

Donation, as a mode of acquiring ownership, results in an

effective transfer of title over the property from the donor to the

donee. Once a donation is accepted, the donee becomes the

absolute owner of the property donated. Although the donor

may impose certain conditions in the deed of donation, the same

must not be contrary to law, morals, good customs, public order

and public policy. The condition imposed in the deed of

donation in the case before us constitutes a patently

unreasonable and undue restriction on the right of the donee to

dispose of the property donated, which right is an indispensable

attribute of ownership. Such a prohibition against alienation, in

order to be valid, must not be perpetual or for an unreasonable

period of time. (Emphasis given on the italicized)

Conclusion

21
Automatic Reversion - A future interest left in a transferor or his (or her) heirs. A reservation in a real
property conveyance that the property reverts back to the original owner upon the occurrence of a certain
event ( (duhaime.org, n.d.)
22
De Luna, et al. vs. Abrigo Et al. – Supreme Court decision on the stipulation imposed by the donor
on the deed of donation.

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 It is evident from the definitions, articles and jurisprudential view

ownership of property carries with it certain basic rights, such as a right to

have the title to the property, a right to possess and enjoy it to the exclusion

of everyone else, and a right to alienate it without being dictated to, save

in accordance with a provision of law. An absolute right to dispose of the

property indicates that the owner can sell it for consideration or can donate

it for religious or charitable purposes he may gift it to anyone, mortgage it

or put it up for lease.

Although the owner may impose stipulations or conditions upon the

alienation of his property, it should be remembered that the same shall not

be contrary to law, morals, good customs, public order or public policy.

Moreover, us this decided by the court, the stipulation must be reasonable

and possible as to not restrict or prejudice the rights of the parties and for

its validity.

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