CONJUGAL PARTNERSHIP OF GAINS BELCODERO vs CA FACTS: This case involves the question of ownership over a piece of land acquired

by a husband while living with a paramour and after having deserted his lawful wife and children. The property had been bought by the husband on installment basis prior to the effectivity of the Civil Code of 1950 but the final deed, as well as the questioned conveyance by him to his common law spouse, has ensued during the latter Codes regime. Now, of course, we have to likewise take note of the new Family Code which took effect on 03 August 1988. The prpoerty was acquired by Alayo then transferred title to the name of the second wife. Alayo Bosing died and left the property to his paramour turned second wife (first marriage still subsisting). First wife petitioned. HELD: The property remained as belonging to the conjugal partnership of Alayo and his legitimate wife Juliana. Under both the new Civil Code (Article 160) and the old Civil Code (Article 1407), all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. This presumption has not been convincingly rebutted. It cannot be seriously contended that, simply because the property was titled in the name of Josefa at Alayos request, she should thereby be deemed to be its owner. The property unquestionably was acquired by Alayo it was just transferred to Josefa. SPS. ESTONINA vs CA FACTS: The instant controversy involves Lot C of the amended plan Psu-22983 Amd., situated in Barrio Santisima Cruz, Sta. Cruz, Laguna with an area of 273 square meters. The said parcel of land was covered by Transfer Certificate of Title No. T-19175 issued in the name of Santiago Garcia who died on October 2, 1967. Some six years after Santiago Garcia's death, or on March 10, 1973, the then Court of First Instance of Manila issued an order granting Trinidad Estonina's application for a writ of preliminary attachment in Civil Case No. 88430 entitled "Trinidad Estonina et al., plaintiffs-versus-Consuelo Garcia et al., defendants". Consequently, a notice of attachment was inscribed as a memorandum of encumbrance at the back of TCT No. T-19175 in favor of Trinidad Estonina covering all the rights, title, interest, and participation that Consuelo Garcia, the widow of Santiago Garcia, may have in and to the parcel of land covered by the said title. As a result of a prior sale made by Santiago Garcia to Anselmo Balasoto of a sixty square meter portion of the said parcel of land, TCT No. T-19175 was cancelled and in lieu thereof, TCT No. 77215 was issued on July 25, 1975 in the name of Santiago Garcia covering the remaining 213 square meters. TCT No. 77215 was in turn cancelled on June 27, 1977 because of another sale purportedly made during his lifetime by Santiago Garcia to his wife's niece, Ofelia Garcia, and TCT No. 82229 was issued in the name of the latter. On August 14, 1977, the children of Santiago Garcia with his first wife, Adela Isoreta, namely Ofelia, Remedios, Elvira and Castor, all surnamed Garcia, executed a deed selling, transferring and conveying unto the spouses Celso Atayan and Nilda Hicban (hereinafter referred to as the spouses Atayan for brevity) their "title, rights, interest and participation which is four tenths (4/10) pro indiviso share" in the said parcel of land covered by TCT No. T-82229. About a year after, Santiago Garcia's second wife and widow, Consuelo Garcia and their children, Virgilio, Marilou and Lolita, all surnamed Garcia, followed suit and also sold to the spouses Atayan, their four-tenths (4/10) pro indiviso share in the same parcel of land. On February 22, 1980, Estrella R. Garcia, the widow of Santiago Garcia, Jr. (Santiago Garcia's son from his first marriage), and their children, Roderick, Elizabeth, Dorothy and Erlinda, likewise sold to the spouses Atayan, their one-tenth (1/10) pro indiviso share in the parcel of land covered by TCT No. T82229. 1 Subsequent to a favorable decision obtained by Trinidad Estonina in Civil Case No. 88430 against Consuelo Garcia, execution pending appeal was made on the parcel of land formerly covered by TCT No. T-19175 (now covered by TCT No. T-82229) on July 20, 1979. The said parcel of land was sold at a public auction where Trinidad Estonina was the highest bidder. Consuelo Garcia appealed the decision in Civil Case No. 88430 before the then Intermediate Appellate Court which, however, ruled in favor of Trinidad Estonina. Thus, on February 29, 1984, the Intermediate Appellate Court rendered a decision declaring "owner's copy of Certificate of Title-No. T-82229 a NULLITY and/or CANCELLED". Upon the finality of the said decision, TCT No. T-82229 was cancelled by the Register of Deeds of Laguna and

in lieu thereof, TCT No. T-99961 was issued in favor of "Trinidad Estonina married to Paulino Estonina". 2 cdtai On July 25, 1985, the spouses Atayan filed a complaint for annulment of sheriff's sale and transfer certificate of title with damages before Branch 28 of the Regional Trial Court (RTC) of Santa Cruz, Laguna, impleading as defendants therein the spouses Trinidad and Paulino Estonina (hereinafter referred to as the spouses Estonina for brevity), Nicanor E. Silvano, Reynaldo G. Javier, Edmund R. Solidum, the Register of Deeds of Laguna, and the heirs of Santiago Garcia who sold to the spouses Atayan their pro indiviso shares in the parcel of land covered by TCT No. T-82229. HELD: The presumption under Article 160 of the Civil Code that all property of the marriage belong to the conjugal partnership applies only when there is proof that the property was acquired during the marriage. Otherwise stated, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of the conjugal partnership. In the case at bench, the petitioners have been unable to present any proof that the property in question was acquired during the marriage of Santiago and Consuelo. The fact that when the title over the land in question was issued, Santiago was already married to Consuelo as evidenced by the registration in the name of "Santiago Garcia married to Consuelo Gaza," does not suffice to establish the conjugal nature of the property. QUIAO vs QUAIO ORPIANO vs TOMAS FACTS: Petitioner Estrella Aduan Orpiano (Estrella) is the widow of Alejandro Orpiano (Alejandro). Part of their conjugal estate is an 809.5-square meter lot in Quezon City covered by Transfer Certificate of Title (TCT) No. RT-23468 (the lot). In 1979, a Decision was rendered by the defunct Juvenile and Domestic Relations Court (JDRC) of Quezon City declaring Estrella an absent/absentee spouse and granting Alejandro the authority to sell the lot. The JDRC Decision was annotated on the back of TCT No. RT-23468. cHESAD On March 19, 1996, Alejandro sold the lot on installment basis to respondent spouses Antonio and Myrna Tomas (the Tomas spouses) for P12,170,283.00. That very same day, a new title TCT No. N-152326 was issued in the name of the Tomas spouses despite the fact that the purchase price has not been paid in full, the spouses having been given until December of that same year to complete their payment. On October 28, 1996, Alejandro filed Civil Case No. Q-96-29261 (the collection case) in the Regional Trial Court (RTC) of Quezon City, Branch 226 (the collection court), seeking collection of the balance of the price in the amount of P4,314,100.00 supposedly left unpaid by the Tomas spouses, with damages. 4 During the pendency of the collection case, Alejandro passed away. His heirs, Estrella included, were substituted in his stead in the collection case. Estrella moved to amend the Complaint to one for rescission/annulment of sale and cancellation of title, but the court denied her motion. She next moved to be dropped as party plaintiff but was again rebuffed. On June 11, 2005, Estrella filed Civil Case No. Q-05-56216 (the annulment case) for annulment of the March 1996 sale and cancellation of TCT No. N-152326, with damages, against the Tomas spouses and the Register of Deeds of Quezon City which was impleaded as a nominal party. 5 The case was raffled to Branch 97 of the Quezon City RTC (the annulment court). In her Complaint, Estrella claimed that the 1979 declaration of her absence and accompanying authority to sell the lot were obtained by Alejandro through misrepresentation, fraud and deceit, adding that the May 1979 JDRC Decision was not published as required by law and by the domestic relations court. Thus, the declaration of absence and Alejandro's authority to sell the lot are null and void. Correspondingly, the ensuing sale to the Tomas spouses should be voided, and TCT No. N-152326 cancelled. In their Answer to the annulment Complaint, the Tomas spouses prayed for the dismissal thereof on the ground of forum shopping, arguing that the filing of the annulment case was prompted by the denial of Estrella's motion initiated in the collection case to amend the Complaint to one for annulment of sale. The annulment case is Estrella's attempt at securing a remedy which she could not obtain in the collection case. The Tomas spouses added that the dismissal of the annulment case would preclude the possibility that the two courts might render conflicting decisions. After pre-trial in the annulment case, the court proceeded to tackle the issue of forum shopping. The parties submitted their respective memoranda touching on the sole issue of whether Estrella is guilty of forum shopping. HELD: The petition must be denied. The Court realizes the quandary that Estrella motivated by the solitary desire to protect her conjugal share in the lot from what she believes was Alejandro's undue interference in disposing the same without her knowledge and consent finds herself in. While raring to file the annulment case, she has to first

cause the dismissal of the collection case because she was by necessity substituted therein by virtue of her being Alejandro's heir; but the collection court nonetheless blocked all her attempts toward such end. The collection court failed to comprehend her predicament, her need to be dropped as party to the collection case in order to pursue the annulment of the sale. As plaintiff in the collection case, Estrella though merely succeeding to Alejandro's rights was an indispensable party, or one without whom no final determination can be had in the collection case. 12 Strictly, she may not be dropped from the case. However, because of her dual identity, first as heir and second as owner of her conjugal share, she has been placed in the unique position where she has to succeed to her husband's rights, even as she must protect her separate conjugal share from Alejandro's perceived undue disposition. She may not seek to amend the cause of action in the collection case to one for annulment of sale, because this adversely affects the interests of her co-heirs, which is precisely to obtain payment of the supposed balance of the sale price. Nor may Estrella simultaneously maintain the two actions in both capacities, as heir in the collection case and as separate owner of her conjugal share in the annulment case. This may not be done, because, as was earlier on declared, this amounts to simultaneously accepting and rejecting the same deed of sale. Nor is it possible to prosecute the annulment case simultaneously with the collection case, on the premise that what is merely being annulled is the sale by Alejandro of Estrella's conjugal share. To repeat, the absence of the consent of one spouse to a sale renders theentire sale null and void, including the portion of the conjugal property pertaining to the spouse who contracted the sale. Undoubtedly, Estrella had the right to maintain the annulment case as a measure of protecting her conjugal share. There thus exists a just cause for her to be dropped as party plaintiff in the collection case so that she may institute and maintain the annulment case without violating the rule against forum shopping. Unless this is done, she stands to lose her share in the conjugal property. But the issue of whether the sale should be annulled is a different matter altogether. When CPG commences and applies (a) Marriages under FC Art. 107. The rules provided in Articles 88 and 89 shall also apply to conjugal partnership of gains. (n) Art. 88. The absolute community of property between spouses shall commence at the precise moment that the marriage is celebrated. Any stipulation, express or implied, for the commencement of the community regime at any other time shall be void. (145a) Art. 89. No waiver of rights, shares and effects of the absolute community of property during the marriage can be made except in case of judicial separation of property. When the waiver takes place upon a judicial separation of property, or after the marriage has been dissolved or annulled, the same shall appear in a public instrument and shall be recorded as provided in Article 77. The creditors of the spouse who made such waiver may petition the court to rescind the waiver to the extent of the amount sufficient to cover the amount of their credits. (146a)

latter for himself while in Dubai, UAE. He modified the original agreement upon return to the Philippines in 1984. Proof of this was given by Moises brother, Cerefino Miat, who said testified the original agreement that Paco would go to Moises sons. This was reiterated at the death bed of Moises wife and affirmed upon Moises return to the Philippines. The Paco property, being the land in dispute, was paid for on an installment basis from May 17, 1977 to December 14, 1984. Full payment was made on the latter date and title was secured under Moises name as widower. Romeo and Alexander, sons of Moises, lived on the property with their wives and paid its realty taxes and fire insurance premiums. Alexander and his wife, however, left the property in August 1985 for personal reasons. February 1988, Romeo learns from godmother of his wedding that son of godmother, Virgilio Castro (VC, petitioner), who happens to be Romeos neighbor, that the Paco property was being sold to VC. A thirty thousand peso downpayment was made by godmother to Moises for her son. April 1988, Alexander agrees to sell his share of the Paco property for P42,750.00; a partial payment was made in the sum of P6,000 by Romeo but Alexander did not execute a deed of assignment in favor of his brother because he had lots of work to do and the title was already in Romeos possession. Downpayment information corroborated by Virgilio Miat (brother of Moises) and Pedro Miranda (who worked with Moises in two hotels: Bayview Hotel and Hotel Filipinas) but Alexander later said that he did not consider the money to be a downpayment but a personal debt due to Romeo. Romeo had possession of the title because he borrowed it from his father when he mortgaged the land to his friend Lorenzo. But when Moises ran into financial difficulties, he mortgaged for P30,000.00 the Paco property to parents of petitioner VC. December 1, 1988, Romeo and VC met in MTC Manila to discuss status of Paco property. On the 16th, a letter from petitioners lawyer informed Romeo that the Paco property had been sold to VC by Moises by virtue of a deed of sale dated Dec. 5, 1988 for P95,000.00. Buyer, petitioner, VC admitted that the title of the property was with Romeo but bought it anyway on the assurance of Moises that hed be able to retrieve it from his son. Romeo files in the RTC action to nullify sale and compel Moises and Alexander to execute deed of conveyance/assignment. RTC ordered (1) Alexander to pay the remaining balance due his brother, (2) Romeo to recognize sale made by Moises, (3) dismissal of defendants counterclaim and (4) defendants to pay the costs of suit. Both parties appealed to the CA which modified the decision by saying that: (1) the deed of sale was nullified, (2) Moises and Alexander had to execute a deed of conveyance, and (3) for defendants to pay cost of suit (as applied for by the petitioner). VC subsequently brings the action to the SC.

(b)

Marriages before FC

Art. 105. In case the future spouses agree in the marriage settlements that the regime of conjugal partnership gains shall govern their property relations during marriage, the provisions in this Chapter shall be of supplementary application. The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code, without prejudice to vested rights already acquired in accordance with the Civil Code or other laws, as provided in Article 256. (n) Art. 256. This Code shall take effect one year after the completion of its publication in a newspaper of general circulation, as certified by the Executive Secretary, Office of the President. CASTRO vs MIAT Facts: Father of two children, Moises, widower (wife died in 1978), originally intended his two properties, one in Paco and the other in Paranaque for his offspring but reverted to keeping the

Issues/Held/Ratio: (1) WON Paco property is conjugal or capital.

Although petitioners allege that property was paid for by Moises and at the time it was paid, his wife had long been dead, the SC disagrees on the grounds of the new Civil Code (which was applicable because marriage was celebrated before FC): Art 153 (1) The following are conjugal partnership property: (1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; x x x. Records show that property was acquired by onerous title during the marriage out of the common fund. It is clearly conjugal property. Petitioners also overlook Article 160 of the New Civil Code. It provides that all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. This article does not require proof that the property was acquired with funds of the partnership. The presumption applies even when the manner in which the property was acquired does not appear. In the case at bar (as opposed to petitioners reliance on Lorenzo v. Nicolas), Moises and Concordia bought the Paco property during their marriage Moises did not bring it into their marriage, hence it has to be considered as conjugal. (2) WON valid oral partition between Moises and his sons involving the said property is valid. Yes. The validity of the agreement is apparent in (a) latter of the father to his sons (the one which stated that he didnt favor any of his sons), (b) the testimony (see above) of Moises brother, Ceferino, and the oral agreement between the brothers to divide the property between themselves (attested to by extended Family members). We also hold that the oral partition between Romeo and Alexander is not covered by the Statute of Frauds. It is enforceable for two reasons. Firstly, Alexander accepted the six thousand (P6,000.00) pesos given by Romeo as downpayment for the purchase of his share in the Paco property. Secondly, Romeo and his witnesses, Ceferino Miat and Pedro Miranda, who testified regarding the sale of Alexanders share to Romeo, were intensely questioned by petitioners counsel. (3) WON Castro spouses were buyers in good faith. Ruling of the CA which was affirmed by the SC: In the case at bench, the said spouses have actual knowledge of the adverse claim of plaintiffappellant. The most protuberant index that they are not buyers in good faith is that before the sale, Virgilio Castro talked with Romeo Miat on the supposed sale. Virgilio testified that together with Romeo, Alexander and Moses Miat, they went to Judge Anunciacion of Manila in order to find out if Romeo has a right over the property. Romeo told Virgilio in that meeting that Romeo has a right over the Paco property by virtue of an oral partition and assignment. Virgilio even admitted that he knew Romeo was in possession of the title and Romeo then insisted that he is the owner of the property. xxx

Virgilio Castro is further aware that plaintiff is in possession of the property, they being neighbors. A purchaser who was fully aware of another persons possession of the lot he purchased cannot successfully pretend to be an innocent purchaser for value. (c) When applicable

See Art. 105 Art. 74. The property relationship between husband and wife shall be governed in the following order: (1) By marriage settlements executed before the marriage; (2) By the provisions of this Code; and (3) By the local custom. (118) Art. 75. The future spouses may, in the marriage settlements, agree upon the regime of absolute community, conjugal partnership of gains, complete separation of property, or any other regime. In the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established in this Code shall govern. (119a) Art. 76. In order that any modification in the marriage settlements may be valid, it must be made before the celebration of the marriage, subject to the provisions of Articles 66, 67, 128, 135 and 136. (121) See Art. 107, 88 & 89 (d) Suppletory rules

Art. 108. The conjugal partnership shall be governed by the rules on the contract of partnership in all that is not in conflict with what is expressly determined in this Chapter or by the spouses in their marriage settlements. (147a) Article 1767. By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. Two or more persons may also form a partnership for the exercise of a profession. (1665a) Article 1768. The partnership has a juridical personality separate and distinct from that of each of the partners, even in case of failure to comply with the requirements of article 1772, first paragraph. (n) What is included in CPG Art. 106. Under the regime of conjugal partnership of gains, the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance, and, upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouses shall be divided equally between them, unless otherwise agreed in the marriage settlements. (142a) Art. 117. The following are conjugal partnership properties: (1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; (2) Those obtained from the labor, industry, work or profession of either or both of the spouses; (3) The fruits, natural, industrial, or civil, due or received during the marriage from the common property, as well as the net fruits from the exclusive property of each spouse; (4) The share of either spouse in the hidden treasure which the law awards to the finder or owner of the property where the treasure is found; (5) Those acquired through occupation such as fishing or hunting; (6) Livestock existing upon the dissolution of the partnership in excess of the number of each kind brought to the marriage by either spouse; and (7) Those which are acquired by chance, such as winnings from gambling or betting. However, losses therefrom shall be borne exclusively by the loser-spouse. (153a, 154a, 155, 159)

Art. 115. Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits shall be governed by the rules on gratuitous or onerous acquisitions as may be proper in each case. (n) Art. 118. Property bought on installments paid partly from exclusive funds of either or both spouses and partly from conjugal funds belongs to the buyer or buyers if full ownership was vested before the marriage and to the conjugal partnership if such ownership was vested during the marriage. In either case, any amount advanced by the partnership or by either or both spouses shall be reimbursed by the owner or owners upon liquidation of the partnership. (n) Art. 119. Whenever an amount or credit payable within a period of time belongs to one of the spouses, the sums which may be collected during the marriage in partial payments or by installments on the principal shall be the exclusive property of the spouse. However, interests falling due during the marriage on the principal shall belong to the conjugal partnership. (156a, 157a) Art. 120. The ownership of improvements, whether for utility or adornment, made on the separate property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses shall pertain to the conjugal partnership, or to the original owner-spouse, subject to the following rules: When the cost of the improvement made by the conjugal partnership and any resulting increase in value are more than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of the value of the property of the owner-spouse at the time of the improvement; otherwise, said property shall be retained in ownership by the ownerspouse, likewise subject to reimbursement of the cost of the improvement. In either case, the ownership of the entire property shall be vested upon the reimbursement, which shall be made at the time of the liquidation of the conjugal partnership. (158a)

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