Short answer. Yes. Article 762 of the Civil Code provides that when a donation is revoked by the birth of a child and the donee has already sold the property, the donee must return its value instead. The sale of the property does not extinguish the obligation to make restitution.
What the law says
Upon the revocation or reduction of the donation by the birth, appearance or adoption of a child, the property affected shall be returned or its value if the donee has sold the same. If the property is mortgaged, the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover the same from the donee. When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation.
Civil Code, Article 762 — Returning the Property. Read the full provision →
Return the property or its value
Article 762 of the Civil Code addresses what happens when a donation is revoked or reduced because of the birth, appearance, or adoption of a child — and the donee has already disposed of the property. The article provides: Upon the revocation or reduction of the donation by the birth, appearance or adoption of a child, the property affected shall be returned or its value if the donee has sold the same. The sale does not relieve the donee of the obligation to make restitution. When the donee can no longer return the land because it has been sold to a third party, the law substitutes an obligation to pay the property's value.
What value is used when the property cannot be returned
Article 762 specifies the measure of value in cases where return of the property is impossible: When the property cannot be returned, it shall be estimated at what it was worth at the time of the donation. This is an important rule for the donee. The valuation is fixed at the moment the donation was originally made, not at the time of revocation. If the property appreciated significantly between the donation and the revocation, the donee owes the value at the earlier date — the amount the donor gave up, not the amount the donee ultimately received from the sale.
What happens if the property is mortgaged rather than sold
Article 762 also addresses a related situation: when the donated property has been mortgaged rather than sold. In that case, the article gives the donor a specific option: the donor may redeem the mortgage, by paying the amount guaranteed, with a right to recover the same from the donee. The donor can step in, pay off the mortgage, reclaim the property free of the encumbrance, and then recover from the donee the amount paid to redeem. This allows the donor to get back the actual property even when the donee has encumbered it, without being permanently blocked by the mortgage.
Practical implications for the donor
If you are the donor in this situation, the key point is that revocation by birth of a child is not defeated by the donee having already sold or encumbered the donated property. Your right of restitution shifts from the property itself to its monetary equivalent — specifically, the value at the time the donation was made. If the donee sold the land for a price higher than its value at the time of donation, the donee is not required to hand over the full sale proceeds. Conversely, if the sale price was lower, the donee's obligation is still measured by what the property was worth when the donation occurred, which may exceed what the donee actually received.