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PERSONS & PERSONALITY

PUNO, C.J.:

DOCTRINE:

A donation is an act of liberality whereby a person disposes gratuitously a thing or right in favor of
another, who accepts it. Like any other contract, an agreement of the parties is essential. Consent in
contracts presupposes the following requisites: (1) it should be intelligent or with an exact notion of
the matter to which it refers; (2) it should be free; and (3) it should be spontaneous. The parties'
intention must be clear and the attendance of a vice of consent, like any contract, renders the donation
voidable.

In order for donation of property to be valid, what is crucial is the donor’s capacity to give consent at
the time of the donation. Certainly, there lies no doubt in the fact that insanity impinges on consent
freely given. However, the burden of proving such incapacity rests upon the person who alleges it; if
no sufficient proof to this effect is presented, capacity will be presumed.

FACTS:

Heirs of the late Feliciano Catalan (petitioners) filed a petition for review on certiorari with regard to
the Court of Appeals decision that affirmed judgement of RTC Branch 69 Lingayen, Pangasinan in
dismissing the Complaint for Declaration of Nullity of Documents, Recovery of Possession and
ownership, and damages.

Feliciano Catalan was discharged from active military service in October 1948 due to his
schizophrenia. This was verified by The Board of Medical Officers of the Department of Veteran
Affairs. He married Corazon Cerezo on September 1949. On June 1951, Feliciano allegedly donated
one-half (400.50sqm) of his real property to his sister Mercedes Catalan in a document titled
“Absolute Deed of Donation”. The donation was registered with the Register of Deeds and the
remaining half of the property was retained under his name. On December 1953, the Court of First
Instance of Pangasinan issued its Order for Adjudication of Incompetency for Appointing Guardian
for the Estate and Fixing Allowance of Feliciano. The same court appointed People’s Bank and Trust
Company (now BPI) as Feliciano’s guardian. On November 1978, Feliciano and Corazon donated
parts of the property to one of their sons. His sister, Mercedes, sold the property in issue to her
children Jesus and Delia Basa on March 1979. The Deed of Absolute Sale was registered with the
Register of Deeds of Pangasinan on February 1992. Feliciano and Corazon made further donations of
property to the rest of their children on February and June of 1983.

BPI, acting as Feliciano’s guardian, filed a case for Declaration of Nullity of Documents, Recovery of
Possession and Ownership, as well as damages against the respondents. BPI argued that the donation
to Mercedes was void ab initio and emphasized that Feliciano is not of sound mind and incapable of
giving valid consent. They also doubted the deed of sale and cited that its registration long after
Mercedes’ death indicated fraud. BPI claimed that the donation and the sale should be nullified.

RTC found that the evidence presented by the complainants was insufficient to overcome the
presumption that Feliciano was sane and competent at the time he executed the deed of donation
in favor of Mercedes. The Court of Appeals also affirmed RTC’s ruling and declared ownership of the
donated property is valid in favor of Mercedes Catalan. The appellate court also cited that the Deed of
Absolute Sale, as a notarized document, carries evidentiary weight and has in its favor the
presumption of regularity.

ISSUES:

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1. Whether or not Feliciano’s mental incapacity or insanity voids his donation to Mercedes

2. Whether or not the Certificate of Disability for Discharge and the report of a Board of Medical
Officers convened under the provisions of Army regulations are admissible in evidence;

3. Whether or not the subsequent sale of the property in dispute by the donee Mercedes Catalan to her
children, respondents Jesus and Delia Basa, is deemed valid

4. Whether or not Civil Case no. 17666 (filed in 1997) is barred by prescription and laches.

RULING:

No. The petition is bereft of merit, and we affirm the findings of the Court of Appeals and the trial
court.

[A]s early as 1948, Feliciano had been found to be suffering from schizophrenia by the Board of
Medical Officers of the Department of Veteran Affairs. By itself, however, the allegation cannot
prove the incompetence of Feliciano.

[I]t has been proven that the administration of the correct medicine helps the patient. Antipsychotic
medications help bring biochemical imbalances closer to normal in a schizophrenic...

[A] person suffering from schizophrenia does not necessarily lose his competence to intelligently
dispose his property… petitioners failed to show substantial proof that at the date of the donation,
June 16, 1951, Feliciano Catalan had lost total control of his mental faculties…Sufficient proof of his
infirmity to give consent to contracts was only established when the Court of First Instance of
Pangasinan declared him an incompetent on December 22, 1953.

It is interesting to note that the petitioners questioned Feliciano’s capacity at the time he donated the
property, yet did not see fit to question his mental competence when he entered into a contract of
marriage with Corazon Cerezo or when he executed deeds of donation of his other properties in their
favor. The presumption that Feliciano remained competent to execute contracts, despite his illness, is
bolstered by the existence of these other contracts. Competency and freedom from undue influence,
shown to have existed in the other acts done or contracts executed, are presumed to continue until the
contrary is shown.

[I]t is of little bearing that the Deed of Sale was registered only after the death of Mercedes. What is
material is that the sale of the property to Delia and Jesus Basa was legal and binding at the time of its
execution. Thus, the property in question belongs to Delia and Jesus Basa.

Finally, we note that the petitioners raised the issue of prescription and laches for the first time on
appeal before this Court…the Deed of Donation was still a voidable, not a void, contract. As such, it
remained binding as it was not annulled in a proper action in court within four years.

IN VIEW WHEREOF, there being no merit in the arguments of the petitioners, the petition is
DENIED. The decision of the Court of Appeals in CA-G.R. CV No. 66073 is affirmed in toto.