The Supreme Court ruled that land donations to the government for specific purposes do not automatically revert to the donors if the government’s functions are transferred to another agency, as long as the land continues to be used for the originally intended purpose. This decision clarifies the conditions under which donated land can revert to private ownership and underscores the importance of adhering to the stipulations outlined in donation agreements.

Breeding Promises: Can Donated Land Revert When Government Functions Shift?

This case revolves around several parcels of land donated to the Republic of the Philippines for the establishment of a breeding station. The donors, the Daclans, stipulated that the land should be used exclusively for this purpose and that it would automatically revert to them if the breeding station ceased operations. Subsequently, the functions of the Bureau of Animal Industry (BAI), which operated the breeding station, were devolved to the Province of La Union under the Local Government Code of 1991. A portion of the donated land was later used for the construction of the La Union Medical Center (LUMC).

The Daclans sought the return of their donated lands, arguing that the breeding station had ceased operations and that the transfer of functions to the Province and the construction of the LUMC constituted a violation of the terms of the donation. They claimed that the deeds of donation were personal and did not extend to successors or assigns. The Republic, however, maintained that the breeding station continued to operate under the Province’s management and that the devolution did not violate the terms of the donation.

The Regional Trial Court (RTC) initially dismissed the Daclans’ case, finding that the breeding station continued to operate despite the devolution. The Court of Appeals (CA) reversed this decision in part, declaring that the portion used for the LUMC should revert to the donors because it was no longer used for the originally intended purpose. Both parties appealed to the Supreme Court, leading to the consolidated petitions.

The central legal question before the Supreme Court was whether the transfer of functions from the BAI to the Province and the subsequent use of a portion of the land for the LUMC constituted a violation of the conditions stipulated in the deeds of donation, thus triggering the automatic reversion clause.

The Supreme Court, in reversing the Court of Appeals’ decision, emphasized that the key factor was whether the land continued to be used for the originally intended purpose. The Court found that the breeding station remained operational even after the transfer of functions to the Province. Witnesses testified that the breeding station continued to maintain animals and conduct breeding activities. The Court stated:

In the absence of any controverting evidence, the testimonies of public officers are given full faith and credence, as they are presumed to have acted in the regular performance of their official duties.

The Court also addressed the issue of devolution, clarifying that it did not violate the terms of the donation. Devolution, as defined by the Local Government Code, is the act by which the national government confers power and authority upon local government units. The Court stated that:

While the breeding station may have been transferred to the Province of La Union by the Department of Agriculture as a consequence of devolution, it remained as such, and continued to function as a breeding station; and the purpose for which the donations were made remained and was carried out.

The Court further explained that the deeds of donation did not specifically prohibit the subsequent transfer of the donated lands by the Republic. The Court referenced Article 1311 of the Civil Code, which states that:

Contracts take effect between the parties, their assigns and heirs, except in cases where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.

Thus, as a general rule, rights and obligations derived from a contract are transmissible unless otherwise stipulated. In this case, the Court found no such stipulation that would prevent the transfer of the breeding station’s operations to the Province.

Addressing the Daclans’ argument that the Province failed to provide adequate agricultural extension services, the Court held that this could not be a ground for the reversion of the donated lands. To allow such an argument would condone undue interference by private individuals in the operations of the government. The Court clarified that the deeds of donation stipulated only the use of the land for a breeding station and did not grant the donors the right to interfere in its management.

The Court also noted that the CA erred in ordering the return of the 1.5-hectare portion used for the LUMC, as the Daclans admitted that this portion was not part of the lands they donated. Only the original donor of that portion would be entitled to its return if a violation of the donation terms occurred.

FAQs

What was the key issue in this case?	The key issue was whether the transfer of government functions and the use of donated land for a different purpose (medical center) violated the terms of the donation, triggering the reversion clause.
What is a conditional donation?	A conditional donation is a transfer of property where the donor specifies certain conditions that the recipient (donee) must fulfill. Failure to meet these conditions can lead to the revocation of the donation.
What is devolution in the context of local government?	Devolution is the transfer of power and authority from the national government to local government units, allowing them to perform specific functions and responsibilities.
Did the devolution of the breeding station violate the donation agreement?	The Supreme Court held that devolution did not violate the donation agreement because the breeding station continued to operate under the Province’s management, fulfilling the original purpose of the donation.
Why was the construction of the medical center an issue?	The construction of the medical center was an issue because it represented a different use of the donated land, potentially violating the condition that the land be used exclusively for a breeding station.
Who is entitled to the return of the land used for the medical center?	The Supreme Court stated that only the original donor of the land used for the medical center would be entitled to its return, not the Daclans, as they did not donate that specific portion.
What is the significance of Article 1311 of the Civil Code in this case?	Article 1311 states that contracts take effect between the parties, their assigns, and heirs, meaning that the Republic could transfer the breeding station’s operations unless the donation specifically prohibited such a transfer.
Can donors interfere with the management of donated property?	The Supreme Court ruled that donors cannot interfere with the management of donated property unless the donation agreement explicitly grants them such rights.
What is the legal presumption regarding the actions of public officers?	The law presumes that public officers act in the regular performance of their official duties. Their testimonies are given full faith and credence unless there is evidence to the contrary.

In conclusion, this case highlights the importance of clearly defining the conditions of donations and the consequences of failing to meet those conditions. The decision emphasizes that as long as the donated land continues to be used for its originally intended purpose, the transfer of government functions to another agency does not automatically trigger the reversion clause.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: REPUBLIC OF THE PHILIPPINES VS. FEDERICO DACLAN, G.R. No. 197267, March 23, 2015