Marcelino Espino vs. Spouses Ricardo and Emma Vicente (G.R. No. 168396, June 22, 2006, 492 SCRA 337)

FACTS:
The crux of the controversy in this case arose from the execution by Emerenciana and Marcelina Espino on January 9, 1997 of a document, denominated as "Pagkakaloob," purportedly donating two lots to respondent Emma Vicente, the wife of Ricardo Vicente, nephew of Emerenciana.

It appears that sometime in December 1996, Emma convinced Marcelina and Emerenciana that she could facilitate the registration and titling in their name of the house and lot where they are staying. Emma allegedly asked Emerenciana and Marcelina who are both illliterate to sign a document to be used in titling the property in their name.

Subsequently, Emerenciana and Marcelina learned that the document they signed was a Deed of Donation or a "Pagkakaloob," of the house and lot in favor of Emma, including the 20 square-meter portion that was earlier sold to Marissa. As a consequence, when Emma filed an application for free patent with the DENR-PENRO Office of Malolos, Bulacan on January 13, 1997, Marissa delos Santos filed an opposition with the DENR-PENRO and the Register of Deeds. On the other hand, Emerenciana and Marcelina executed a Deed of Revocation of Donation or "Kasulatan ng Pagpapawalang Bisa sa Kasulatan ng Pagkakaloob".

Petitioners then filed a petition for annulment of patent/title and reconveyance of real property with damages with the Regional Trial Court of Malolos, Bulacan dated April 14, 1997. The trial court ruled in favor of the plaintiffs, but when the respondents appealed to the Court of Appeals, the appellate court reversed the decision.

ISSUE:
Whether the Court of Appeals erred in reversing the lower court’s decision and concluding that the assailed deed of donation enjoys the legal presumption of due execution and validity.

HELD:
The petition is impressed with merit.

A DONATION is an act of liberality whereby a person disposes gratuitously a thing or a right in favour of another, who accepts it. Like any other contract, an agreement of the parties is essential. Consent in contracts presupposed 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 that attendance of vice of consent, like in any other contract, renders the donation voidable.

It is evident that fraud attended the act of respondent Emma when she procured the signatures of Marcelino and Emerciana. There is fraud when through insidious words or machinations of one of the contracting parties, the other is induces into a contract which without them, he would have agreed to. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.