G.R. No. 197115. March 23, 2015.

REPUBLIC OF THE PHILIPPINES, represented by the

Secretary of Agriculture, petitioner, vs. FEDERICO
DACLAN, JOSEFINA COLLADO and her husband
FEDERICO DACLAN, TEODORO DACLAN and
MINVILUZ DACLAN as surviving heirs of deceased JOSE
DACLAN, respondents.

G.R. No. 197267. March 23, 2015. *

FEDERICO DACLAN, JOSEFINA COLLADO, TEODORO

DACLAN and MINVILUZ DACLAN as surviving heirs of
deceased JOSE DACLAN, petitioners, vs. REPUBLIC OF
THE PHILIPPINES, and represented by the Secretary of
Agriculture and PROVINCE OF LA UNION, represented
by its PROVINCIAL GOVERNOR, respondents.

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* SECOND DIVISION.

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126 SUPREME COURT REPORTS ANNOTATED

Republic vs. Daclan

Remedial Law; Evidence; Presumption of Regularity; 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
preponderance of evidence points to the fact that the breeding
station remained operational even after its transfer from the
Republic to the Province. The activities of the BAI did not cease
even after it was dissolved after the government adopted the policy
of devolution under the Local Government Code of 1991; these
activities were merely transferred to the Province. Thus, the
witnesses for the Daclans and the Republic uniformly declared that
the breeding station remained operational even after the Local
Government Code of 1991 was put into effect. Particularly, Regional
Director Reinerio Belarmino, Jr. of the Department of Agriculture,
Region 1 declared that after the breeding station was transferred to
the Province, he saw upon ocular inspection that there remained six
cows and fifty goats on the premises. Cresencia Isibido testified that
as Farm Foreman, she exercised supervision over her co-employees
in the breeding station; that in 1989, there were six personnel
assigned at the breeding station; that from 1974 until 1989, she
received her salary from the BAI; that after devolution, she started
receiving her salary from the Province; and that even after
devolution, the operation of the Agoo Breeding Station continued,
and goats, cattle and swine were being maintained thereat. Dr.
Nida Gapuz, La Union Provincial Veterinarian, said that natural as
well as artificial insemination activities were being conducted at the
breeding station, as well as goat dispersal and cattle production.
Atty. Mauro Cabading, La Union Provincial Assessor, testified that
he was directed by the Governor and the Provincial Administrator
to take photographs of the breeding station in order to verify the
complaint filed by the Daclans; that he then proceeded to the Agoo
Breeding Station; that he took photographs of the animals · cows
and goats · therein; and that the Province owned said animals at
the breeding station. As against the bare assertions of the Daclans
that the breeding station was abandoned and became
nonoperational, the testimonies of the above public officers are
credible. „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.‰

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Local Government Units; Devolution; Words and Phrases; As

defined, „devolution refers to the act by which the national
government confers power and authority upon the various local
government units (LGUs) to perform specific functions and
responsibilities.‰·Devolution cannot have any effect on the
donations made by the Daclans to the Republic. As defined,
„devolution refers to the act by which the national government
confers power and authority upon the various local government
units to perform specific functions and responsibilities.‰ It includes
„the transfer to local government units of the records, equipment,
and other assets and personnel of national agencies and offices
corresponding to the devolved powers, functions and
responsibilities.‰ 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.
Besides, the deeds of donation did not specifically prohibit the
subsequent transfer of the donated lands by the donee Republic.
The Daclans should bear in mind 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
contract are transmissible.

PETITIONS for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Office of the Solicitor General for petitioner.
Danilo C. Bumacod for province of La Union.
E.L. Gayo and Associates Law Office for F. Daclan, J.
Collado, et al.

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128 SUPREME COURT REPORTS ANNOTATED

Republic vs. Daclan

DEL CASTILLO,  J.:

Before us are consolidated Petitions for Review on

Certiorari1 assailing: 1) the January 25, 2011 Decision2 of
the Court of Appeals (CA) in C.A.-G.R. CV No. 90014 which
set aside the July 31, 2007 Decision3 of Branch 32 of the
Regional Trial Court (RTC) of Agoo, La Union, as well as 2)
the CAÊs May 30, 2011 Resolution4 denying the partiesÊ
respective Motions for Reconsideration.5

Factual Antecedents
 The facts, as found by the CA, are as follows:

Sometime in May 1972, the Agoo Breeding Station (or „breeding

station‰) was established by the Department of Agriculture,
through the Bureau of Animal Industry (BAI), Region I, for the
purpose of breeding cattle that would be distributed to the intended
beneficiaries pursuant to the livelihood program of the national
government. In support of the said project, plaintiffs6 executed four
(4) documents denominated as Deed of Donation in favor of
defendant Republic of the Philippines (or „Republic‰) donating to
the latter four (4) parcels of land, more particularly described in the
following Tax Declarations (TD):
1. TD No. 23769 registered in the name of Federico Daclan
covering a [parcel of] land with an area of 15,170 square meters,
more or less;

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1 Rollo (G.R. No. 197115), pp. 12-36; Rollo (G.R. No. 197267), pp. 8-
42.
2 Id., at pp. 38-48; penned by Associate Justice Sesinando E. Villon
and concurred in by Associate Justices Stephen C. Cruz and Amy C.
Lazaro-Javier.
3 Id., at pp. 72-87; penned by Judge Clifton U. Ganay.
4 Id., at p. 50.
5 CA Rollo, pp. 174-192.
6 Petitioners in G.R. No. 197267.

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Republic vs. Daclan

2. TD No. 38240 registered in the name of Josefina Collado

covering a [parcel of] land with an area of 3,440 square meters,
more or less;
3. TD No. 27220 registered in the name of Teodoro Daclan
covering a [parcel of] land with an area of 2,464 square meters,
more or less;
4. TD No. 1875 registered in the name of Jose Daclan (deceased
father of plaintiff Minviluz Daclan) covering a [parcel of] land with
an area of 1,769 square meters, more or less.
These parcels of land are located at Barrio Nazareno, Agoo, La
Union. The donation was subject to the conditions that these
parcels of land 1) shall be used solely for the establishment of a
breeding station, and 2) shall not be used for any other purpose,
except with the previous consent of the donors or their heirs.
Sometime in 1991, the powers and functions of certain
government agencies, including those of the Department of
Agriculture (DA), were devolved to the local government units
pursuant to Republic Act No. 7160, otherwise known as the „Local
Government Code.‰ Thus, defendant Province of La Union (or
„Province‰) assumed the powers and functions of the DA, in the
operation of the breeding station.7

In particular, the deeds of donation8 stipulated ·

a. That the land herein mentioned shall be used for the

establishment of a breeding station and shall not be used for any
other purpose, except with the previous consent of the DONOR or
his heirs;
xxxx

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7 Rollo (G.R. No. 197267), pp. 184-185.

8 Records, pp. 7-10.

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130 SUPREME COURT REPORTS ANNOTATED

Republic vs. Daclan

c. That in case of nonuse, abandonment or cessation of the

activities of the BUREAU OF ANIMAL INDUSTRY, possession or
ownership shall automatically revert to the DONOR and all
permanent improvements existing thereon shall become the
property of the DONOR. x x x9

All in all, the petitioners in G.R. No. 197267 · Federico

Daclan, Josefina Collado, Teodoro Daclan, Jose Daclan (the
Daclans) · and several others donated around 13 hectares
of land to the Republic. The uniform deeds of donation
covering these parcels of land contained the same
conditions, including the above stipulations relative to
exclusive purpose/use and automatic reversion.10
Sometime after the donations were made, the La Union
Medical Center (LUMC) was constructed on a 1.5-hectare
portion of the 13-hectare donated property.11
 In a September 4, 2003 Letter12 to the Secretary of the
Department of Agriculture, the Daclans and other donors
demanded the return of their donated lands on the ground
that the breeding station has ceased operations and that
the land has been abandoned.

Ruling of the Regional Trial Court

On March 28, 2005, the Daclans filed Civil Case No. A-

2363 for specific performance against the Republic and the
Province of La Union. The case was assigned to Branch 32
of the RTC of Agoo, La Union (Agoo RTC). The Daclans
essentially claimed in their Amended Complaint13 that
pursuant to

_______________

9 Id.
10 Id., at p. 11; Rollo (G.R. No. 197267), p. 189.
11 Rollo (G.R. No. 197115), pp. 27, 29, 44; Rollo (G.R. No. 197267), p.
189; Records, pp. 227-228, 343.
12 Records, p. 11.
13 Id., at pp. 63-69.

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Republic vs. Daclan

the automatic reversion clause in the deeds of donation,

they are entitled to a return of their donated parcels of land
after the Bureau of Animal Industry (BAI) ceased
operating the breeding station, but that the Republic and
the Province failed to honor the said clause and refused to
return their land. They thus prayed that the defendants be
ordered to return to them the donated land, with all
improvements existing thereon.
In its Answer,14 the Province alleged that the Daclans
have no cause of action since the breeding station was still
existing · although this time it is being operated by the
Province, pursuant to the devolution program under the
Local Government Code of 1991, and that the Daclans
violated the deeds of donation because they have occupied
the donated land and have begun fencing the same. It
prayed for the dismissal of the complaint as well as the
grant of injunctive relief.
In a subsequent Manifestation,15 the Republic opted to
adopt the above Answer filed by the Province.
In their Reply,16 the Daclans claimed that the donated
land cannot be assigned by the Republic to the Province as
the deeds of donation did not include the RepublicÊs
successors or assigns as intended beneficiaries; that
contrary to the ProvinceÊs claim, the breeding station is not
operational and has been abandoned, and the existing
heads of cattle found therein do not belong to the
government but to former officials of the BAI; and that
with the automatic reversion clause, they are granted the
immediate right to occupy the subject land, and no
injunctive relief should issue against them.
Upon motion of the parties, an ocular inspection of the
premises was conducted, and a CommissionerÊs Report17
was

_______________

14 Id., at pp. 84-87.

15 Id., at pp. 102-103.
16 Id., at pp. 88-91.
17 Id., at pp. 227-228; prepared and signed by Commissioner Dante
R. Evangelista.

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132 SUPREME COURT REPORTS ANNOTATED

Republic vs. Daclan

prepared and issued thereafter. The report indicated in

part that ·

From information gathered from Ms. Cresencia Isibido, a

caretaker of the Agoo Breeding Station, the land had an original
area of thirteen (13) hectares. At present though, only eleven point
five (11.5) hectares is [sic] being occupied by the Agoo Breeding
Station as 1.5 hectares was [sic] occupied by the La Union Medical
Center.
At a distance of about 200 meters from the main entrance of the
breeding station, an office is located at the south of said lot. Beside
the office is a shed where six (6) young goats (kids) are housed.
Another shed where goats are housed is located at the northern side
of the lot, fronting a water pump station.
 It was likewise gathered that at present, the breeding station
has a total number of fifty (50) goats. Also, there are six (6) cows
roaming in the pasture land. Four (4) of these cows are pregnant. It
was clarified that these cows belong to the Cross Australian Bi-
Bhraman [sic] breed.
There are four (4) caretakers in the breeding station, all of whom
are employed by the provincial government of La Union. They
receive salary from the provincial government and they likewise
submit monthly reports to the Provincial Veterinarian. These four
caretakers are Cresencia Isibido, Manuel Daclan, Ruben Daclan
(son of plaintiff Federico Daclan), and Tita Fortes.
The group left the breeding station at around 3:30 p.m.
Agoo, La Union, this 14th day of December, 2006.18

During trial, the witnesses testified as follows:

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18 Id., at p. 228.

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To substantiate their claim, the plaintiffs presented the following

witnesses whose testimonies are summarized, thus:
REINERIO BELARMINO[,] JR., is 46 years old, married, a
resident of Namnama, San Fernando, La Union, and Regional
Director of the Department of Agriculture, Region 1.
Dir. Belarmino testified that by virtue of a subpoena ad
testificandum and subpoena duces tecum, he brought to Court a
photocopy of a letter he issued to Atty. Benjamin Tabios, Legal
Consultant of the Department of Agriculture dated October 14,
2003.
Dir. Belarmino said that while he confirmed and affirmed the
contents of the letter, he nevertheless could not agree on [sic] one
sentence written therein. This pertains to the entry that the
artificial breeding station is no longer operational. He explained
that although he signed the letter, it was his legal officer who
prepared the same.
Further, he said that he had been calling his legal officer since it
was the latter who drafted said letter. He clarified that upon
personal verification, he found out that it was not the artificial
breeding station that was not [operational]. Rather, it was the
breeding station that was not operational.
He likewise mentioned that as early as 1993, the Department of
Agriculture, particularly the Bureau of Animal Industry, gave up
the breeding station because of the devolution. In particular, the
operation of the breeding station was transferred to the Province of
La Union. However, he affirmed that in the deed of donation, there
is no mention of the Province of La Union. Likewise, there is no
mention of any successor.
He clarified though that no breeding activity was done by the
Department of Agriculture through the Bureau of Animal Industry
since 1993 because ownership of the breeding station was
transferred to the Province of La Union. The transfer was made
without the consent of the donors since the transfer was between
two government entities.

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On the ocular inspection which was conducted, Dir. Belarmino

affirmed that at present, there are six cows and fifty (50) goats in
the breeding station. However, he clarified that said 50 goats are
not the same goats that were turned over to the province of La
Union as a result of the devolution.
TEODORO DACLAN, 84 years old, married, retired government
employee and a resident of Nazareno, Agoo, La Union, testified that
he is one of the plaintiffs in this case.
He said that he executed a Deed of Donation in favor of the
Republic of the Philippines, then represented by the Secretary of
the Department of Agriculture. He clarified that as embodied in
their complaint, they seek to enforce the common provision that in
case of nonuse, abandonment or cessation of activities of the Bureau
of Animal Industry, possession and ownership of the lots subject of
donation shall revert x x x to the donors.
In this respect, he said that the Department of Agriculture,
through the Bureau of Animal Industry, has no ongoing breeding
activity in the above mentioned lots. He maintained that he came to
know of such non-operation of the breeding station as early as
thirteen (13) years ago.
He likewise testified that he was never informed of any
devolution which transferred the operations of the breeding station
from the Bureau of Animal Industry to the Province of La Union.
Moreover, his permission was never sought for the use of the
donated lots by the Province of La Union.
FEDERICO DACLAN, 83 years old, married, retired employee of
the Bureau of Animal Industry and a resident of Brgy. Nazareno,
Agoo, La Union, also testified.
He said that he is one of the plaintiffs in this case. Plaintiff
Teodoro Daclan is his brother while plaintiff Minviluz Daclan is his
niece. His spouse, Josefina Collado, is likewise a co-plaintiff.

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He added that he donated a parcel of land with an area of 15,170

square meters located at Nazareno, Agoo, La Union in favor of the
Republic of the Philippines through the Secretary of Agriculture.
Further, he reiterated that as embodied in the deed of donation,
one of the conditions therein is that the land shall be used as a
breeding station and shall not be used for any other purpose, except
with the previous consent of the donor or his heirs.
He maintained that since 1993 up to the present, the lot is no
longer being used as a breeding station nor has the defendant
province of La Union sought his permission for the use of said lot
for any other purpose.
JOSEFINA COLLADO, 72 years old, married, housewife and a
resident of Nazareno, Agoo, La Union testified that she and her
husband donated a parcel of land situated at Nazareno, Agoo, La
Union in favor of the Republic of the Philippines through the
Secretary of Agriculture.
She said that at present, there is no breeding activity being
conducted on said lot. She added that there has been no breeding
activity for a long time now. Further, she clarified that she and the
other plaintiffs were never notified of a devolution so much so that
the operation of the breeding station was transferred to defendant
Province of La Union. Also, the defendant Province of La Union
never secured their consent for the use of the lot for any other
purpose other than a breeding station.
MINVILUZ DACLAN, 75 years old, single, retired teacher and
resident of San Pedro, Agoo, La Union testified that she is the
[daughter] of the late Jose Daclan. She said that during the lifetime
of her father, she was aware of a Deed of Donation executed by her
father in favor of the Republic of the Philippines represented by the
then Secretary of Agriculture.
She said that the lot subject of the donation is situated in
Nazareno, Agoo, La Union. Likewise, she testified that the donation
was premised on the condition that a breeding station is to be
established in said property.

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Republic vs. Daclan

However, she maintained that there is no such breeding station.

Further, she was not aware if her father gave his consent for the
use of the property for any other purpose other than for a breeding
station. She emphasized that her father gave his consent only for
the use of a breeding station. Likewise, she has not been consulted
nor her permission sought for if the land can be used for any other
purpose other than for breeding.
The defendant Province of La Union presented the following
witnesses whose testimonies are summarized, thus:
CRESENCIA ISIBIDO, 58 years old, single, government
employee and a resident of San Pedro, Agoo, La Union testified that
she is employed at the Office of the Veterinarian, particularly at the
Agoo Breeding Station at Nazareno, Agoo, La Union.
Particularly, she has been employed thereat since August 28,
1974, initially as Farm Worker and now, as Farm Foreman. As
foreman, she exercises supervision over her co-employees and over
all animals in the breeding station. She clarified that in 1989, there
were six (6) personnel assigned at the breeding station. She
likewise clarified that from 1974 until 1989, she received her salary
from the Bureau of Animal Industry.
During the devolution of 1993, she started receiving her salary
from the provincial government of La Union. She added though that
even after devolution took place, the operation of the Agoo Breeding
Station continued.
Likewise, she testified that from the time she was promoted as
farm foreman, goats, cattle and swine were being maintained at the
breeding station. She recalled that there were about twenty (20)
cattle, seventy (70) goats and eight (8) swine.
When the devolution took place, she specified that the activities
in the breeding station included production of animals, forage and
artificial insemination. She said that the cattles in the breeding
station were either sub-

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 Republic vs. Daclan

jected to natural insemination or artificial insemination. Upon

the other hand, goats are subjected to natural insemination. Aside
from artificial or natural insemination, greasing is also being
conducted in the breeding station.
DR. NIDA GAPUZ, 47 years old, married, Provincial
Veterinarian and a resident of Bauang, La Union testified that she
is the provincial veterinarian of the province of La Union since
October, 2006. Prior to her appointment as provincial veterinarian,
she was the Supervisor Agriculturist of the Provincial
VeterinarianÊs Office. Again, prior to her appointment as supervisor
agriculturist, she was Agricultural Center Chief II of the same
office.
She recalled that in 1983, their office was under the Department
of Agriculture Regional Office. Thereafter, they were transferred to
the Provincial Office of the Department of Agriculture. She said
that at that time, the Agoo Breeding Station was already existing.
Thereafter, with the advent of devolution, the Office of the
Provincial Veterinarian was created and eventually, they were
separated from the Department of Agriculture.
Further, she testified that in her capacity as Agricultural Center
Chief II, she handled the facilities for the Agoo Breeding Station
and the La Union Breeding Station, both of which are under the
office of the provincial veterinarian.
She mentioned that she used to visit the Agoo Breeding Station
at least two (2) times a month. She added that natural as well as
artificial insemination activities were conducted in said breeding
station. As such, she explained that one of the purpose[s] of the
breeding station is to reproduce and disperse animals.
At present, she said that the breeding station engages in goat
dispersal and cattle production. There are no swine since swine
production was phased out because of the establishment of the La
Union Medical Center within the vicinity of the breeding station.

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Republic vs. Daclan

Likewise, she said that at present, there are seven (7) heads of
cattle being raised in the breeding station. Of these, two (2) are
pregnant. There are also forty-six (46) heads of goats.
ATTY. MAURO CABADING, 53 years old, married, Provincial
Assessor and a resident of San Fernando City, La Union testified
that he is familiar with the Agoo Breeding Station because he took
photographs thereof sometime last year.
He explained that he was directed by the governor and the
provincial administrator to take photographs of the breeding station
to determine whether the allegations contained in the complaint
filed by herein plaintiffs [are] true or not. He then proceeded to the
Agoo Breeding Station accompanied by his driver and a personnel
from the Provincial VeterinarianÊs Office.
He maintained that he can recognize the photographs taken at
the breeding station since it was his camera that was used in taking
pictures. He then started identifying the photographs, making
mention of those which depicted cows, goats and houses for cows
and goats. Also, he said that the [owner] of the goats and cows seen
at the photographs he took is the provincial government of La
Union.19

On July 31, 2007, the Agoo RTC rendered its Decision20

in Civil Case No. A-2363, which decreed thus:

WHEREFORE, in view of the foregoing, the Court hereby

renders judgment DISMISSING this instant case for specific
performance.
SO ORDERED.21

The trial court held that although the functions and

powers of the BAI were transferred to the Province by
virtue of devo-

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19 Id., at pp. 344-351.

20 Rollo (G.R. No. 197115), pp. 72-87.
21 Id., at p. 87.

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Republic vs. Daclan

lution under the Local Government Code of 1991, the

Province continued to operate the breeding station. It
added that the DaclansÊ consent to the transfer of functions
and powers was not necessary as to affect the validity of
the donations of their lands; devolution of power took effect
by operation of law. It held further that contrary to the
DaclansÊ claims, the preponderance of evidence suggested
that the operations of the breeding station never ceased;
and there are farm animals, buildings, structures, and
offices being supervised by four caretakers whose salaries
were being paid by the Province, and these personnel
submit monthly reports of operations to the provincial
veterinarian.

Ruling of the Court of Appeals

The Daclans took the Agoo RTCÊs July 31, 2007 Decision
to the CA via appeal. On January 25, 2011, the CA issued
the assailed Decision, decreeing as follows:

WHEREFORE, in view of all the foregoing, the assailed July 31,

2007 decision of Branch 32 of the Regional Trial Court of Agoo, La
Union is hereby SET ASIDE. The donation insofar as the 1.5
hectare portion of the donated parcels of land that is now being
used by the La Union Medical Center for its medical facility, hence
no longer being used for the purpose for which the donation was
constituted, is hereby declared revoked. Accordingly, possession and
ownership of that particular portion of the donated parcels of land
shall revert to the donor/s or their heir/s.
SO ORDERED.22

In essence, the CA agreed with the findings of fact of the

Agoo RTC, except that it held that the Province violated
the exclusive use stipulations in the deeds of donation
when it allowed the construction of the LUMC within a
portion of the donated lands, as the operation of a human
medical facility

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22 Id., at p. 47.

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Republic vs. Daclan

has no relation to the operation of an animal breeding

station, and it has not been shown that the consent of the
donors was obtained prior to the construction of the LUMC.
Thus, with respect to the portion occupied by the LUMC,
the automatic reversion clauses in the deeds of donation
apply. The appellate court held further that even the Office
of the Solicitor General conceded that if any violation of the
deeds of donation occurred, it could only affect that portion
which is no longer used as a breeding station. Finally, it
upheld the validity of the automatic reversion clauses in
the subject deeds of donation, which it found to be
consistent with law, morals, good customs, public order and
public policy.
Both the Daclans and the Republic moved for
reconsideration, but on May 30, 2011, the CA issued the
second assailed disposition sustaining its judgment.
The present Petitions were thus filed.
In an October 3, 2011 Resolution23 of the Court, both
Petitions were ordered consolidated.

Issues

The following issues are raised:

By the Republic in G.R. No. 197115

I.
THE HONORABLE COURT ERRED IN RULING THAT
PETITIONER VIOLATED THE PROVISIONS OF THE DEEDS OF
DONATION.
II.
THE HONORABLE COURT OF APPEALS ERRED IN
DIRECTING THE PETITIONER TO RETURN PORTION/S OF
THE PARCEL/S OF LAND DONATED BY RESPONDENTS
AND/OR THEIR FOREBEARS BASED ON AN UNESTABLISHED
INFERENCE.24

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23 Id., at p. 136.
24 Id., at pp. 18-19.

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Republic vs. Daclan
 By the Daclans in G.R. No. 197267

A.
THE HONORABLE COURT OF APPEALS DID NOT DECIDE
THE MAIN ISSUES RAISED BY THE PETITIONERS IN THE
TRIAL COURT AND BEFORE IT.
B.
THE HONORABLE COURT OF APPEALS HAS DECIDED A
QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH
THE ESTABLISHED FACTS AND THE APPLICABLE LAWS AND
JURISPRUDENCE.25

The PartiesÊ Respective Arguments

G.R. No. 197115. For the Republic, the lone point of

contention is that the CA could not validly order the return
to the Daclans of the donated 1.5-hectare portion where the
LUMC is situated because it has not been proved that such
portion formed part of lands originally donated by the
Daclans. The Republic contends that the Daclans donated
only an aggregate of 2.2843 hectares, while the breeding
station sits on 13 hectares of donated land; the Daclans did
not prove during trial that the 1.5-hectare land where the
LUMC is erected sits within the 2.2843 hectares donated
by them. It maintains that if reversion must occur, the
Daclans must first clearly identify the land on which the
LUMC is erected as theirs. Thus, it prays that the July 31,
2007 Decision of the Agoo RTC be reinstated.
For their part, the Daclans adopt their Petition in G.R.
No. 197267 as their Comment to the RepublicÊs Petition. In
turn, the Republic manifested that it was adopting its
Comment26 to the DaclansÊ Petition in G.R. No. 197267 as
its Reply.
G.R. No. 197267. The Daclans in their Petition insist
that the deeds of donation they executed are „personal and
exclu-

_______________

25 Id., Rollo (G.R. No. 197267), p. 18.

26 Id., at pp. 235-251.

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142 SUPREME COURT REPORTS ANNOTATED

 Republic vs. Daclan

sively limited to the parties, the donor and the donee.

(They do) not extend to or inure to the benefit of their
successors and assigns‰;27 the rights and obligations of the
parties to the donations are not transmissible by their
nature or stipulation. Thus, the unauthorized turnover of
the breeding station to the Province by the BAI · the sole
beneficiary under the deeds of donation · constitutes a
violation of the terms of the deeds of donation, thus giving
ground for reversion; and with the passage of the Local
Government Code of 1991, the BAI ceased to exist and was
abolished. Thus, the donated lands automatically revert to
their original owners. They add that the evidence clearly
indicates that the donated lands are no longer being used
as a breeding station, but merely grazing land for a few
animals whose ownership is even in doubt. Finally, the
Daclans decry the failure of the Province to provide
„agricultural extension and on-site research services and
facilities‰ as required under the Implementing Rules and
Regulations of the Local Government Code of 1991, which
thus constitutes a violation of the stipulation contained in
the deeds of donation to develop and improve the livestock
industry of the country. Thus, they pray that the assailed
CA dispositions be set aside completely and all their
donated lands be reverted to them.
Notably, the Daclans admit in their Petition that the 1.5-
hectare portion where the LUMC is constructed does not
form part of the lands they donated to the government, but
belongs to „other donors who are not parties to the case.‰28
In its Comment29 with a prayer for the denial of the
DaclansÊ Petition and reinstatement of the July 31, 2007
Decision of the Agoo RTC, the Republic argues that the
question of whether the breeding station is still in
operation is one of fact which should not be disturbed at
this stage of the proceed

_______________

27 Id., at p. 19.
28 Id., at pp. 32-33.
29 Id., at pp. 235-251.

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 VOL. 754, MARCH 23, 2015 143
Republic vs. Daclan

ings; that the DaclansÊ admission in their Petition that

the 1.5-hectare portion where the LUMC is constructed
does not form part of the lands they donated to the
government contradicts its argument that the CA
committed serious error in ordering the reversion of the
said portion to them; that it is not merely the BAI which
acted as the donee, but the Republic itself · represented
by the Secretary of the Department of Agriculture · which
is the recipient of the DaclansÊ donated lands under the
deeds; and that the passage of the Local Government Code
of 1991 did not result in the cessation of operations of the
Agoo breeding station.
In an August 28, 2013 Manifestation,30 the Province
adopted the RepublicÊs Comment to the Petition as its own.

Our Ruling

The Court grants the RepublicÊs Petition in G.R. No.

197115 and denies that of the DaclansÊ in G.R. No. 197267.
The preponderance of evidence points to the fact that
the breeding station remained operational even after its
transfer from the Republic to the Province. The activities of
the BAI did not cease even after it was dissolved after the
government adopted the policy of devolution under the
Local Government Code of 1991; these activities were
merely transferred to the Province. Thus, the witnesses for
the Daclans and the Republic uniformly declared that the
breeding station remained operational even after the Local
Government Code of 1991 was put into effect. Particularly,
Regional Director Reinerio Belarmino, Jr. of the
Department of Agriculture, Region 1 declared that after the
breeding station was transferred to the Province, he saw
upon ocular inspection that there remained six cows and
fifty goats on the premises. Cresencia Isibido testified that
as Farm Foreman, she exercised supervision over her co-
employees in the breeding station; that in 1989, there were
six personnel assigned at the breeding station;

_______________

30 Id., at pp. 263-265.

 144

144 SUPREME COURT REPORTS ANNOTATED

Republic vs. Daclan

that from 1974 until 1989, she received her salary from
the BAI; that after devolution, she started receiving her
salary from the Province; and that even after devolution,
the operation of the Agoo Breeding Station continued, and
goats, cattle and swine were being maintained thereat. Dr.
Nida Gapuz, La Union Provincial Veterinarian, said that
natural as well as artificial insemination activities were
being conducted at the breeding station, as well as goat
dispersal and cattle production. Atty. Mauro Cabading, La
Union Provincial Assessor, testified that he was directed by
the Governor and the Provincial Administrator to take
photographs of the breeding station in order to verify the
complaint filed by the Daclans; that he then proceeded to
the Agoo Breeding Station; that he took photographs of the
animals · cows and goats · therein; and that the
Province owned said animals at the breeding station.
As against the bare assertions of the Daclans that the
breeding station was abandoned and became
nonoperational, the testimonies of the above public officers
are credible. „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.‰31
Devolution cannot have any effect on the donations
made by the Daclans to the Republic. As defined,
„devolution refers to the act by which the national
government confers power and authority upon the various
local government units to perform specific functions and
responsibilities.‰32 It includes „the transfer to local
government units of the records, equipment, and other
assets and personnel of national agencies and offices
corresponding to the devolved powers, functions and
responsibilities.‰33 While the breeding station may have
been

_______________

31 Peligrino v. People, 415 Phil. 94, 121-122; 362 SCRA 683, 708-709
(2001).
 32 Local Government Code of 1991, Section 17(e).
33 Id., Section 17(i).

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Republic vs. Daclan

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. Besides, the
deeds of donation did not specifically prohibit the
subsequent transfer of the donated lands by the donee
Republic. The Daclans should bear in mind 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.‰34 Thus, as a general
rule, rights and obligations derived from contract are
transmissible.
The Daclans lament the supposed failure of the Province
to provide „agricultural extension and on-site research
services and facilities‰ as required under the Implementing
Rules and Regulations of the Local Government Code of
1991, which failure they believe, constituted a violation of
the stipulation contained in the deeds of donation to
develop and improve the livestock industry of the country.
Yet this cannot be made a ground for the reversion of the
donated lands; on the contrary, to allow such an argument
would condone undue interference by private individuals in
the operations of government. The deeds of donation
merely stipulated that the donated lands shall be used for
the establishment of a breeding station and shall not be
used for any other purpose, and that in case of nonuse,
abandonment or cessation of the activities of the BAI,
possession or ownership shall automatically revert to the
Daclans. It was never stipulated that they may interfere in
the management and operation of the breeding station.
Even then, they could not directly participate in the
operations of the breeding station.
Thus, even if the BAI ceased to exist or was abolished as
an office, its activities continued when its functions were
devolved to the local government units such as the
Province of

_______________

34 Civil Code, Article 1311.

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146 SUPREME COURT REPORTS ANNOTATED

Republic vs. Daclan

La Union. It cannot be said that the deeds of donation

may be nullified just by the fact that the BAI became
defunct; its functions continued in the government
offices/local government units to which said functions were
devolved.
Lastly, the CA cannot validly order the return to the
Daclans of the donated 1.5-hectare portion where the
LUMC is situated, because such portion was not donated
by them. They admitted that the 1.5-hectare portion where
the LUMC is constructed does not form part of the lands
they donated to the government, but belonged to other
donors who are not parties to the instant case. As far as the
Daclans are concerned, whatever they donated remains
part of the breeding station and so long as it remains so, no
right of reversion accrues to them. Only the original owner-
donor of the 1.5-hectare portion where the LUMC is
constructed is entitled to its return.
WHEREFORE, the Court resolves as follows:
1. The January 25, 2011 Decision and May 30, 2011
Resolution of the Court of Appeals in C.A.-G.R. CV No.
90014 are REVERSED and SET ASIDE;
2. The Petition in G.R. No. 197115 is GRANTED. The
July 31, 2007 Decision of the Regional Trial Court of Agoo,
La Union, Branch 32 dismissing Civil Case No. A-2363 is
REINSTATED; and
3. The Petition in G.R. No. 197267 is DENIED.
SO ORDERED.

Brion** (Acting Chairperson), Mendoza, Perlas-

Bernabe*** and Leonen, JJ., concur.

_______________

* * Per Special Order No. 1955 dated March 23, 2015.

 * ** Designated acting member per Special Order No. 1956 dated
March 23, 2015.

147

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Republic vs. Daclan

Judgment dated January 25, 2011 and resolution dated

May 30, 2011 in C.A.-G.R. CV No. 90014 reversed and set
aside, meanwhile petition in G.R. No. 197115 granted;
petition in G.R. No. 197267 denied.

Note.·Administrative autonomy may involve

devolution of powers, but subject to limitations like
following national policies or standards, and those provided
by the Local Government Code, as the structuring of local
governments and the allocation of powers, responsibilities,
and resources among the different local government units
and local officials have been placed by the Constitution in
the hands of Congress under Section 3, Article X of the
Constitution. (League of Provinces of the Philippines vs.
Department of Environment and Natural Resources, 696
SCRA 190 [2013])
··o0o··

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