C-J Yulo & Sons, Inc. vs. Roman Catholic Bishop of San Pablo,Inc.

Nature of Donation

C.J. Yulo & Sons Inc. vs. Roman Catholic Archbishop of San Pablo
Facts:
Donor: C.J. Yulo
Donee: Roman Catholic Archbishop of San Pablo
On September 24, 1977, CJ Yulo and Sons Inc (CJ Yulo for brevity) donated unto the
Roman Catholic Bishop of San Pablo, a parcel of land at Canlubang, Calamba,
Laguna with an area of 41,117 square meters and registered in its name under Transfer
Certificate of Title (TCT) No. T-82803.

The deed of donation which also bears the acceptance of the donee recites the following
important conditions:
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1.) So much of the land as may be necessary shall be used for the construction of a
home for the aged and infirm, regardless of religion or creed, but preferably those
coming from Canlubang, Calamba, Laguna; provided that retired and/or aged
priests may be admitted to the home; and provided further that any senior citizen
from the area who has retired from business or work may likewise be admitted to
the home, subject to the payment to the institution of such sum as he may afford
for his support.

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5.) Except with prior written consent of the Donor or its successor, the Donee shall
not use the land except for the purpose as provided above in paragraph 1 hereof, nor
sell or dispose the land for any reason whatsoever, nor convey any portion of the same
except in lease for commercial use as provided above in paragraph 3 hereof, otherwise
the said land with all real improvements thereon shall revert in trust to the Donor for
prompt disposition in favor of some other charitable organization that Donor may
deem best suited to the care of the aged.
However, the donee entered into 3 lease agreements for the purpose of generating funds
to build the perimeter fence on the donated property and the construction of a nucleus
building for the aged and the infirm:

1.) Leased a portion of the donated property to Martin Gomez. The lease agreement
was entered into by the done without the prior written consent of the donor, as
required in the deed of donation;
2.) Leased a portion of the donated land to Jose Bostre. Once again, such lease
contract was without the prior written consent of the donor;
3.) Leased a portion of the donated land to Rudy Caballes. The donee did not secure
the prior written consent of the donor.

On September 20, 1990, pursuant to a board resolution, the donor, through its president
Miguel A. Yulo, addressed a letter to the donee informing the latter that it was revoking
the donation in accordance with Section 5 of the deed due to the donee’s non-compliance
with and material breach of the conditions thereunder stipulated.

In the same letter, the donor requested for the turn-over of the donee’s TCT No. T-91348
over the donated property.

Finally, CJ Yulo (donor) filed a complaint against the done Roman Catholic Archbishop
of San Pablo Inc., reciting the imputed non-compliance and violation by the done of the
terms and conditions of the deed of donation.

RTC: The RTC ruled in favor of the donor and revoked the Deed of Donation.

CA: Consequently, the CA reversed the ruling of the RTC and upheld the donation in
question.

Issue:
W/N the donation should be revoked?

Held:
The Supreme Court held that the donation should not be revoked. It proceeded to lay
down the different aspects that became the basis of its decision.

Casual breach of the Onerous Donation

The Court held that the case at bar was in all fours with the precedent case of “Republic
vs. Silim”.

In the precedent case it was held by the Court that there were 4 types of donations,
namely:

1.) Pure and Simple—a pure or simple donation is one where the underlying cause is
plain gratuity. This is donation in its truest form.

2.) Remuneratory or Compensatory— a remuneratory or compensatory donation is

3.) Conditional or Modal— A conditional or modal donation is one where the

4.) Onerous— an onerous donation is that which imposes upon the donee a reciprocal
obligation or, to be more precise, this is the kind of donation made for a valuable
consideration, the cost of which is equal to or more than the thing donated.

Also, it was held by the Court that of all the foregoing classifications, donations of the
onerous type are the most distinct. This is because, unlike the other forms of donation, the
validity of and the rights and obligations of the parties involved in an onerous donation is
completely governed not by the law on donations but by the law on contracts.
ARTICLE 733 Donations with onerous cause shall be governed by the rules on
contracts, and remuneratory donations by the provisions of the present Title as regards
that portion which exceeds the value of the burden imposed.

Further, the Court held in this case of “Republic vs. Silim” that: in relation to the law on
contracts, in order for an onerous donation to be revoked or rescinded there must be
substantial breach of the contract as to defeat the very object of the parties in
making the agreement.

Applying the doctrine found in the precedent case of “Republic vs. Silim”, the Court held
that:

1.) The donation by C.J. Yulo to the Roman Catholic Archbishop of San Pablo was
that of an onerous donation;

2.) The 3 lease contracts entered into by the done were for the sole purpose of
pursuing the objective for which the donation was intended;

3.) The acts of the done did not detract from the very purpose for which the donation
was made but precisely to achieve such purpose;

4.) A lack of prior written consent of the donor would only constitute a casual breach
of the deed of donation—which will not warrant the revocation of the donation.

Lack of Prior Written Consent

The Donor posits that the donee failed to acquire the prior written consent of the Donor
when it contracted such lease agreements. Therefore, such is a ground of revocation of
the Deed of Donation.

However, the Supreme Court held lack of a prior written consent is not a ground for
revoking the said Deed of Donation. The Court based its ruling on the absolute ownership
of the done of the donated property.In the precedent case of “The Roman Catholic
Archbishop of Manila vs. CA”, it was held that:
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.

Therefore, any condition, which unreasonably emasculates and denies the integral
attribute of ownership of the donee on the donated property, shall be considered as an
illegal or impossible condition. Consequently, such condition shall not be considered as
imposed.

If C.J. Yulo would insist that the lack of prior written consent is a resolutory condition
that is absolute in character, such insistence would result to denial of the integral attribute
of ownership of the donee. A reasonable construction of such condition rather than totally
striking it would, therefore, is more in accord with the spirit of the donation.
Thus, for as long as the contracts of lease do not detract from the purpose for which the
donation was made, the complained acts of the donee will not be deemed as substantial
breaches of the terms and conditions of the deed of donation to merit a valid revocation
thereof by the donor.

[Note: The following paragraphs below are factual answers. I just included this in
case you want it to be in your report.]
Abandonment of the idea of constructing a home for the aged and infirm
Finally, C.J. Yulo posits that the donee abandoned the idea of constructing a home for the
aged and infirm, thus violating the clause in the Deed of Donation. The Donee however
explains in his letter that the surrounding area was being considered to be reclassified into
an industrial zone where factories are expected to be put up. There is no question that this
will definitely be disadvantageous to the health of the aged and the infirm. Thus, the
Bishop asked permission from the donor for a possible exchange or sale of the donated
property to ultimately pursue the purpose for which the donation was intended in another
location that is more appropriate.The Court sees the wisdom, prudence and good
judgment of the Bishop on this point, to which it conforms completely.
In Silim, supra, this Court ruled that such exchange does not constitute breach of the
terms and conditions of the donation. We see no reason for the Court to think otherwise
in this case. To insist that the home for the aged and infirm be constructed on the donated
property, if the industrialization indeed pushes through, defies rhyme and reason.