THE VALIDITY OF PERPETUAL ALIENATION OF PROPERTY

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 property1.
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
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

1
Varsha Gupta of College of Legal Studies, UPES, Dehradun discusses Unauthorized alienation of
property and consequences (https://blog.ipleaders.in/alienation-of-property/)

1
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.2
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.3 According to Paton, rights of an owner
are power of enjoyment, right of possession, the power to alienate inter
vivos etc. 4Austin focused on three main attributes of ownership, namely,
indefinite user, unrestricted disposition and unlimited duration.
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 law5. 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 6.
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

2
(USLEGAL, n.d.)
3
V.D. Mahajan: Jurisprudence & Legal Theory (Fifth Edition) Pg. 288
4
Id
5
(Black's Law Dictionary Free Online Legal Dictionary 2nd Ed.)
6
(Cornell Law School Law Dictionary)

2
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 limitation7.

Concept of free alienability of Anglo-American civilization

Some legal scholars have even written that “the concept of free
alienability is a cornerstone of modern Anglo-American civilization.”8
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

7
(The Editors of Encylopaedia Britannica , 2018)
8
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.”9

Alienation 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 it10. 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 causa11.
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.12 Although donation in its generic sense
includes all forms of gratuitous dispositions but the same shall conform with
the requisites and form of donations required by law to be valid.

Limitation on alienation of property

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

9
Restraints on the Transfer of Real Proeprty (LawShelf Education Media, A Project of National
Paralegal College)
10
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.
11
(Neumann Van Rooyen, n.d.)
12
G.R No. 140487, April 2, 2001. Republic of the Philippines vs Leon Silim and Ildefonsa Mangubat

4
law, morals, good customs, public order or public policy13. 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 thereto14.
Furthermore, the New Civil Code imposes another limitation on
alienation by virtue of death of the owner of the property. Article 867 of
specifically states that provisions which contain a perpetual prohibition to
alienate, and even a temporary one, beyond the limit fixed in Article 86315,
to wit:
Art. 867. The following shall not take effect:
(1) Fideicommissary substitutions which are not made in an express
manner, either by giving them this name, or imposing upon the
fiduciary the absolute obligation to deliver the property to a second
heir;
(2) Provisions which contain a perpetual prohibition to alienate, and
even a temporary one, beyond the limit fixed in article 863;
(3) Those which impose upon the heir the charge of paying to various
persons successively, beyond the limit prescribed in article 863, a
certain income or pension;

13
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.
14
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,
15
Article 863. A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is
entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the
inheritance, shall be valid and shall take effect, provided such substitution does not go beyond one degree
from the heir originally instituted, and provided further, that the fiduciary or first heir and the second heir
are living at the time of the death of the testator. (781a)

5
 (4) Those which leave to a person the whole part of the hereditary
property in order that he may apply or invest the same according to
secret instructions communicated to him by the testator. (785a)

Grounds for revocation of donation

Although donation is made as an act of liberality whereby a person
disposes gratuitously of a thing or right in favor of another, who accepts it16,
the same may be revoke at the instance of the donor, when the donee fails to
comply with any of the conditions imposed by the former 17. Donation may
also be revoked by reason of ingratitude18.

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.
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

16
Id.
17
Art. 764. The donation shall be revoked at the instance of the donor, when the donee fails to comply with
any of the conditions which the former imposed upon the latter.
In this case, the property donated shall be returned to the donor, the alienations made by the donee and the
mortgages imposed thereon by him being void, with the limitations established, with regard to third
persons, by the Mortgage Law and the Land Registration Laws.
This action shall prescribe after four years from the noncompliance with the condition, may be transmitted
to the heirs of the donor, and may be exercised against the donee's heirs. (647a)

18
Art. 765. The donation may also be revoked at the instance of the donor, by reason of ingratitude in the
following cases:
(1) If the donee should commit some offense against the person, the honor or the property of the
donor, or of his wife or children under his parental authority;
(2) If the donee imputes to the donor any criminal offense, or any act involving moral turpitude,
even though he should prove it, unless the crime or the act has been committed against the donee
himself, his wife or children under his authority;
(3) If he unduly refuses him support when the donee is legally or morally bound to give support
to the donor.

6
Appeals, The Estate of Deceased Spouses Eusebio De Castro and Martina
Rieta, represented by Marina Reita Granados and Theresa Rieta Tolentino19.
The 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 20null 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
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

19
(The Lawphil Project, n.d.)
20
Definition of ipso facto: by the very fact or act: as an inevitable result (merriam-webster, n.d.)

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interposed to prevent an unreasonable departure from the normative policy
expressed in the aforesaid Articles 49421 and 87022 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 Code23. 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
providing for the automatic reversion 24of 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. 25
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

21
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)
22
Article 870. The dispositions of the testator declaring all or part of the estate inalienable for more
than twenty years are void. (n)
23
Article 727. Illegal or impossible condtions in simple and remuneratory donations shall be considered
as not imposed.
24
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.)
25
De Luna, et al. vs. Abrigo Et al. – Supreme Court decision on the stipulation imposed by the donor
on the deed of donation.

8
 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
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 lease26.
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, as this decided by the highest tribunal, the stipulation must be
reasonable and possible as to not restrict or prejudice the rights of the
parties and for its validity. Such as the imposition of prohibition nor
restriction of perpetual alienation of property by the donor or donee is held
to be invalid as it directly contravene the very tenor of the law. Moreover,

26
Property Law (2nd Edition)(2012) by Dr. Poonam Pradhan Saxena at P. 89 (Lexis Nexis: Nagpur)

9
the restriction limits the rights of the “new” owner over the said property
as it stops him to sell nor make use of the same for his or her benefit.
Likewise, while it is true that the imposition of restriction or
prohibition on perpetual alienation of property, the donation of the same
shall not be made invalid. Only the condition is held to be invalid for
purposes of equity.
Valid alienation is material to the transfer of property to avoid any
inconveniences to both parties. It is also significant to have security and
assurance over the property when the same is questioned before any court
tribunal.
The field of property law covered in this article has been the subject
of much misunderstanding. The difficulty would largely disappear if
consistent terminology is used in any discussion of the problems involved.
Further, to prevent the same it is imperative for the courts to recommends
or provide guidelines on the alienation of property through donations as to
not confuse parties and to avoid any abused on the use of such.

10