First in time, preferred in right

Their peaceful co-existence ended when stones were thrown in the air.

Spouses Art and Ciana are the owners of a property on the basis of a duly registered Deed of Absolute Sale executed in their favor by Liza, the former registered owner of the property. After the sale, Art and Ciana immediately took possession of the land, employed a relative to act as its caretaker thereof, and received the fruits of the mango trees planted thereon.

Art and Ciana alleged that they allowed Joe and Nina to take actual possession of the property after the sale because they were all blood relatives.

This peaceful arrangement drastically ended when Joe and Nina allegedly harassed and threw stones at the individuals hired by Art and Ciana to spray the mango trees with chemical fruit inducers. This act of ingratitude prompted Art and Ciana to send Joe and Nina a demand letter to vacate the property.

Joe and Nina refused to vacate the land. They insisted that they own the property on the basis of an unregistered donation propter nuptias executed in their favor by Liza in 1962.

Art and Ciana found the couple’s assertion pure rubbish.

They claimed that they are buyers in good faith who did not know of the existence of the donation propter nuptias. They further assert that a registered transaction should prevail over the earlier unregistered right.

Moreover, the said donation propter nuptias was not expressly accepted by Joe and Nina, hence rendering the said donation invalid.

As expected, the word war continued. Joe and Nina countered that the non-registration of the donation propter nuptias in their favor does not make their claim inferior.

They argue that donations of immovable property are considered valid so long as these are made in a public document. They also claim that registration does not vest ownership over any particular property, but is merely an evidence of title thereto. Even on the assumption that the non-registration of the donation propter nuptias rendered the document invalid, they still have acquired ownership over the land by virtue of acquisitive prescription having possessed the property continuously since they were born, or for more than 63 years.

Q: What are donations propter nuptias?

A:Donations propter nuptias, also known as donations by reason of marriage, are those which are made before the celebration of the marriage, in consideration of the same and in favor of one or both of the future spouses. (Art. 82, Family Code)

Q: Is the donation propter nuptias invalid since it was not expressly accepted by the donees, Spouses Joe and Nina?

A: No, it is not invalid. It is settled that only laws existing at the time of the execution of a contract are applicable thereto.

Since the donation propter nuptias in this case was executed in 1962, then the provisions of the Civil Code, which were then still in force, will apply.

Article 127 of the Civil Code provides that the form of donations propter nuptias is regulated by the Statute of Frauds. Article 1403, paragraph 2, which contains the Statute of Frauds requires that the contracts mentioned thereunder need be in writing only to be enforceable.

However, as provided in Article 129, express acceptance “is not necessary for the validity of these donations.” Thus, implied acceptance is sufficient. The absence of proof that the gift was accepted in a public instrument is not controlling, since implied acceptance—such as the celebration of marriage and the annotation of this fact in the OCT must be deemed sufficient.

Q: Is implied acceptance of a donation propter nuptias sufficient under the Family Code?

A: No. The foregoing rule applies only to donations propte rnuptias made prior to the Family Code (as in this case).

At the time, Article 129 of the Civil Code allowed acceptance of those donations to be made impliedly. Since that provision is no longer part of the current Family Code, donations propter nuptias made thereafter are now subject to the rules on ordinary donations including those on the formal requisites for validity. As a result, donations of immovables under the Family Code, including those made by reason of marriage, must now be expressly accepted by the donee in a public instrument.

Q: Does acquisitive prescription apply in this case?

A:  No.  Act No. 496, which created the Torrens system of registration, already declared that registered land cannot be acquired by prescription or adverse possession. This principle is currently found in Section 47 of P.D. 1529 which states that no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession.

Q: Who are the owners of the subject property?

A: Art and Ciana. The validity of the donation propter nuptias executed, notwithstanding, does not detract from the fact that Art and Ciana are the rightful owners of the property.

The prior unregistered donation does not bind Art and Ciana, who are innocent purchasers for value. Article 709 of the Civil Code provides that all rights over immovable property must be duly inscribed or annotated on the Registry of Deeds before they can affect the rights of third persons.

As between the parties to a donation of an immovable property, all that is required is for said donation to be contained in a public document. Registration is not necessary for it to be considered valid and effective.

However, in order to bind third persons, the donation must be registered in the Registry of Property (now Registry of Land Titles and Deeds). Although the non-registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the rights of third persons are affected.

The acquisition of the property by Art and Ciana must likewise be respected because they were innocent purchasers for value. They had every right to rely on the title and the land was subject only to the encumbrances annotated on the title, which did not include the donation propter nuptias in favor of Joe and Nina.

This is rooted in the general principle that persons dealing with registered land have the right to completely rely on the Torrens title issued over the property. Buyers are not required to go beyond what the certificate of title indicates on its face, provided the acquisition of the land is made in good faith, that is, without notice that some other person has a right to, or interest in, the property.

(Source: Cano vs. Cano, G.R. No. 188666, December 14, 2017; Art. 82, Family Code)

Ma. Soledad Deriquito-Mawis is Dean, College of Law, at the Lyceum of the Philippine University; chairperson of the Philippine Association of Law Schools; and founder of Mawis Law Office