Exchange involves reciprocal transfers of ownership, while gifts represent absolute, unpaid transfers of property interest.
1. Exchange (Section 118)
When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an Exchange.
- Note: If money is paid to equalize the value of the exchanged properties, the transaction remains an exchange, not a sale.
2. Gifts (Sections 122-129)
Gift (Section 122): The transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person called the donor, to another called the donee, and accepted by or on behalf of the donee.
⚠️ Core Essentials of a Valid Gift:
- Gratuitous: Must be made completely without monetary consideration.
- Existing Property: Must be existing movable or immovable property. A gift of future property is void (Section 124).
- Acceptance: Must be accepted by the donee during the lifetime of the donor and while they are still capable of giving. If the donee dies before acceptance, the gift is void.
- Immovable Property Formalities: Must be effected strictly by a registered instrument signed by the donor and attested by at least two witnesses (Section 123). Delivery of possession is not mandatory if registered.
3. Onerous Gifts & Universal Donee (Sections 127 & 128)
- Onerous Gift (Section 127): A gift consisting of several properties, some of which are burdened by obligations/debts. The donee must accept the gift in its entirety; they cannot accept the beneficial properties and reject the burdened ones (*approbate and reprobate*).
- Universal Donee (Section 128): A person who receives a gift of the donor's entire property (both movable and immovable). The universal donee is personally liable for all debts and liabilities of the donor existing at the time of the gift, to the extent of the property received.