Of said spouses who had been cultivating the parcels

of said spouses who had been cultivating the parcels of land even before
World War II either personally or through their predecessors-in-interest.
Marina Gonzales died intestate, and Lilia Gonzales was appointed
administratrix of her estate. Prior to the partition of said estate, Ignacio
Gonzales executed a Deed of Donation conveying his share of the property in
favor of his 14 grandchildren. The donation was not registered. When P.D. No.
27 took effect on October 21, 1972, the landholdings of the spouses
Gonzales were placed under Operation Land Transfer and private

respondents were issued the corresponding Certificates of Land Transfer and
Emancipation Patents. Lilia filed an application for retention with the then
Ministry of Agrarian Reform, requesting that their property be excluded from
the coverage of Operation Land Transfer but the application was denied.
However, a reinvestigation was conducted and the present Department of
Agrarian Reform (DAR) subsequently issued an order declaring that the
subject landholdings covered by the deed of donation are exempt from
Operation Land Transfer, and cancelling the Certificates of Land Transfer
issued in favor of private respondents. The Court of Appeals (CA) reversed
the action of the DAR.
ISSUE
Should the property subject of the deed of donation which was not registered
when P.D. No. 27 took effect, be excluded from the Operation Land Transfer?
RULING
No. Article 749 of the Civil Code and its corollary provision, Article 709,
provides that, 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.
In the case at bar, it is undisputed that the donation executed by Ignacio
Gonzales in favor of his grandchildren, although in writing and duly
notarized, has not been registered in accordance with law. For this reason, it
shall not be binding upon private respondents who did not participate in said
deed or had no actual knowledge thereof. Hence, while the deed of donation
is valid between the donor and the donees, such deed, however, did not bind
the tenants-farmers who were not parties to the donation. Thus, the
unregistered deed of donation cannot operate to exclude the subject land
from the coverage of the Operation Land Transfer of P.D. No. 27. To rule
otherwise would render ineffectual the rights and interests that the tenants-
farmers immediately acquired upon the promulgation of P.D. No. 27,
especially so because they had been cultivating the land even before World
War II.