In the Philippines, a Deed of Donation is a powerful legal instrument where a person (the donor) gratuitously transfers property or rights to another (the donee), who accepts it. Unlike a contract of lease or a power of attorney, a Deed of Donation does not have an "expiration date" in the traditional sense. Once perfected and completed, it is generally permanent.
However, its validity is subject to strict formalities, and it can be undone through revocation or rescission under specific legal grounds.
1. The Requirement of Formal Validity
For a donation to be legally binding and "never expire," it must first be validly executed. Under the Civil Code of the Philippines, the requirements depend on the type of property:
Movable Property (Personal Property)
- Oral Donation: Requires simultaneous delivery of the item. If the value exceeds ₱5,000, the donation and the acceptance must be in writing to be valid.
Immovable Property (Real Estate)
- Public Instrument: The donation must be made in a public document (notarized).
- Acceptance: The donee must accept the donation. This can be done in the same deed or in a separate public document. If done separately, the donor must be notified in an authentic form, and this step must be noted in both instruments.
- Failure to comply: If the acceptance isn't properly notarized or communicated, the donation is void ab initio (void from the beginning). It doesn't "expire"—it never existed in the eyes of the law.
2. Can a Deed of Donation be Revoked?
While a donation is generally irrevocable, the law provides specific instances where a donor can "take back" the gift. These grounds are limited and often subject to prescriptive periods (deadlines).
A. Non-Fulfillment of Conditions
If the donation was conditional (e.g., "I donate this land provided you build a school on it"), and the donee fails to comply with the condition, the donor can sue to revoke the donation.
- Prescription: Usually 4 years from the non-compliance.
B. Ingratitude
The donor can revoke the donation if the donee commits acts of ingratitude, such as:
- Committing an offense against the person, honor, or property of the donor, their spouse, or children.
- Imputing a crime to the donor that involves moral turpitude, even if proven.
- Unduly refusing the donor support when the donee is legally bound to give it.
- Prescription: The action must be filed within 1 year from the time the donor knew of the fact.
C. Birth, Appearance, or Adoption of Children (B.A.R.)
Under Article 760, a donor who had no children at the time of donation may revoke or reduce the donation if:
- The donor subsequently has legitimate, legitimated, or illegitimate children.
- A child the donor thought was dead turns out to be alive.
- The donor adopts a minor child.
- Prescription: 4 years from the birth or appearance of the child.
3. Reduction of "Inofficious" Donations
A donation might be "valid" but legally "excessive." In the Philippines, the law protects the legitime (the mandatory inheritance) of compulsory heirs.
- Inofficious Donation: If a person gives away so much of their property through donation that there is nothing left for their heirs, the donation is considered "inofficious."
- The Result: The donation will not be cancelled entirely, but it will be reduced to the extent that it impairs the heirs' legitime. This usually happens after the donor’s death during the settlement of the estate.
4. Rescission of Donation
Rescission usually occurs if the donation was made to defraud creditors. If a person donates all their assets to avoid paying a debt, the creditors can ask the court to rescind the donation to satisfy the donor's obligations.
Summary Table: Validity vs. Expiry
| Feature | Rule |
|---|---|
| Duration | Perpetual (it does not expire). |
| Registration | Must be registered with the Registry of Deeds to bind third parties, but is valid between parties once notarized. |
| Revocation Period | Varies (1 to 4 years) depending on the ground (Ingratitude vs. Condition). |
| Taxes | Donor's Tax must be paid within 30 days of the donation to avoid penalties. |
Note: While the deed itself doesn't expire, the right to file a case to revoke it does expire. If you wait too long after a violation of conditions or an act of ingratitude, you lose the legal right to take the property back.
Would you like me to draft a basic template for a Deed of Donation for real property, or perhaps explain the current Donor's Tax rates under the TRAIN Law?