1

Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
BRIGIDO B. QUIAO, G.R. No 176556

Petitioner,
Present:
CARPIO, J., Chairperson,

- versus - BRION,
PEREZ,
SERENO, and
REYES, JJ.
RITA C. QUIAO, KITCHIE C. QUIAO,
LOTIS C. QUIAO, PETCHIE C.
QUIAO, represented by their mother Promulgated:
RITA QUIAO, July 4, 2012
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
REYES, J.:
The family is the basic and the most important institution of society. It is in
the family where children are born and molded either to become useful citizens of
the country or troublemakers in the community. Thus, we are saddened when
parents have to separate and fight over properties, without regard to the message
they send to their children. Notwithstanding this, we must not shirk from our
obligation to rule on this case involving legal separation escalating to questions on
dissolution and partition of properties.
The Case
This case comes before us via Petition for Review on Certiorari[1] under
Rule 45 of the Rules of Court. The petitioner seeks that we vacate and set aside the
Order[2] dated January 8, 2007 of the Regional Trial Court (RTC), Branch
1, Butuan City. In lieu of the said order, we are asked to issue a Resolution defining
the net profits subject of the forfeiture as a result of the decree of legal separation
in accordance with the provision of Article 102(4) of the Family Code, or
alternatively, in accordance with the provisions of Article 176 of the Civil Code.
Antecedent Facts
On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a

complaint for legal separation against herein petitioner Brigido B. Quiao (Brigido).
[3]
Subsequently, the RTC rendered a Decision[4] dated October 10, 2005, the
dispositive portion of which provides:
WHEREFORE, viewed from the foregoing considerations, judgment is

hereby rendered declaring the legal separation of plaintiff Rita C. Quiao and
defendant-respondent Brigido B. Quiao pursuant to Article 55.
As such, the herein parties shall be entitled to live separately from each
other, but the marriage bond shall not be severed.
Except for Letecia C. Quiao who is of legal age, the three minor children,
namely, Kitchie, Lotis and Petchie, all surnamed Quiao shall remain under the
custody of the plaintiff who is the innocent spouse.
Further, except for the personal and real properties already foreclosed by
the RCBC, all the remaining properties, namely:
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;

2. coffee mill in Durian, Las Nieves, Agusan del Norte;
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
4. coffee mill in Esperanza, Agusan del Sur;
5. a parcel of land with an area of 1,200 square meters located in
Tungao, Butuan City;
6. a parcel of agricultural land with an area of 5 hectares located in
Manila de Bugabos, Butuan City;
7. a parcel of land with an area of 84 square meters located in
8. Bashier Bon Factory located in Tungao, Butuan City;
shall be divided equally between herein [respondents] and [petitioner] subject to

the respective legitimes of the children and the payment of the unpaid conjugal
liabilities of [P]45,740.00.
[Petitioners] share, however, of the net profits earned by the conjugal

partnership is forfeited in favor of the common children.
He is further ordered to reimburse [respondents] the sum of [P]19,000.00

as attorney's fees and litigation expenses of [P]5,000.00[.]
SO ORDERED.[5]
Neither party filed a motion for reconsideration and appeal within the period
provided for under Section 17(a) and (b) of the Rule on Legal Separation.[6]
On December 12, 2005, the respondents filed a motion for

execution[7] which the trial court granted in its Order dated December 16, 2005, the
dispositive portion of which reads:
Wherefore, finding the motion to be well taken, the same is hereby

granted. Let a writ of execution be issued for the immediate enforcement of the
Judgment.
SO ORDERED.[8]
Subsequently, on February 10, 2006, the RTC issued a Writ of

Execution[9] which reads as follows:
NOW THEREFORE, that of the goods and chattels of the [petitioner]

BRIGIDO B. QUIAO you cause to be made the sums stated in the afore-quoted
DECISION [sic], together with your lawful fees in the service of this Writ, all in
the Philippine Currency.
But if sufficient personal property cannot be found whereof to satisfy this

execution and your lawful fees, then we command you that of the lands and
buildings of the said [petitioner], you make the said sums in the manner required
by law. You are enjoined to strictly observed Section 9, Rule 39, Rule [sic] of the
1997 Rules of Civil Procedure.
You are hereby ordered to make a return of the said proceedings
immediately after the judgment has been satisfied in part or in full in consonance
with Section 14, Rule 39 of the 1997 Rules of Civil Procedure, as amended.[10]
On July 6, 2006, the writ was partially executed with the petitioner paying
the respondents the amount of P46,870.00, representing the following payments:
(a) P22,870.00 as petitioner's share of the payment of the conjugal share;

(b) P19,000.00 as attorney's fees; and
(c) P5,000.00 as litigation expenses.[11]
On July 7, 2006, or after more than nine months from the promulgation of
the Decision, the petitioner filed before the RTC a Motion for Clarification,
[12]
asking the RTC to define the term Net Profits Earned.
To resolve the petitioner's Motion for Clarification, the RTC issued an

Order[13] dated August 31, 2006, which held that the phrase NET PROFIT
EARNED denotes the remainder of the properties of the parties after deducting the
separate properties of each [of the] spouse and the debts. [14] The Order further held
that after determining the remainder of the properties, it shall be forfeited in favor
of the common children because the offending spouse does not have any right to
any share of the net profits earned, pursuant to Articles 63, No. (2) and 43, No. (2)
of the Family Code.[15] The dispositive portion of the Order states:
WHEREFORE, there is no blatant disparity when the sheriff intends to

forfeit all the remaining properties after deducting the payments of the debts for
only separate properties of the defendant-respondent shall be delivered to him
which he has none.
The Sheriff is herein directed to proceed with the execution of the

Decision.
IT IS SO ORDERED.[16]
Not satisfied with the trial court's Order, the petitioner filed a Motion for
Reconsideration[17] on September 8, 2006. Consequently, the RTC issued another
Order[18] dated November 8, 2006, holding that although the Decision dated
October 10, 2005 has become final and executory, it may still consider the Motion
for Clarification because the petitioner simply wanted to clarify the meaning of net
profit earned.[19] Furthermore, the same Order held:
ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set
aside. NET PROFIT EARNED, which is subject of forfeiture in favor of [the]
parties' common children, is ordered to be computed in accordance [with] par. 4
of Article 102 of the Family Code.[20]
On November 21, 2006, the respondents filed a Motion for Reconsideration,

[21]
praying for the correction and reversal of the Order dated November 8,
2006.Thereafter, on January 8, 2007,[22] the trial court had changed its ruling again
and granted the respondents' Motion for Reconsideration whereby the Order dated
November 8, 2006 was set aside to reinstate the Order dated August 31, 2006.
Not satisfied with the trial court's Order, the petitioner filed on February 27,
2007 this instant Petition for Review under Rule 45 of the Rules of Court, raising
the following:
Issues
IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION

OF THE COMMON PROPERTIES OF THE HUSBAND AND WIFE
BY VIRTUE OF THE DECREE OF LEGAL SEPARATION
GOVERNED BY ARTICLE 125 (SIC) OF THE FAMILY CODE?
II
WHAT IS THE MEANING OF THE NET PROFITS EARNED BY

THE CONJUGAL PARTNERSHIP FOR PURPOSES OF
EFFECTING THE FORFEITURE AUTHORIZED UNDER
ARTICLE 63 OF THE FAMILY CODE?
III
WHAT LAW GOVERNS THE PROPERTY RELATIONS
BETWEEN THE HUSBAND AND WIFE WHO GOT MARRIED IN
1977? CAN THE FAMILY CODE OF THE PHILIPPINES BE
GIVEN RETROACTIVE EFFECT FOR PURPOSES OF
DETERMINING THE NET PROFITS SUBJECT OF FORFEITURE
AS A RESULT OF THE DECREE OF LEGAL SEPARATION
WITHOUT IMPAIRING VESTED RIGHTS ALREADY
ACQUIRED UNDER THE CIVIL CODE?
IV
WHAT PROPERTIES SHALL BE INCLUDED IN THE

FORFEITURE OF THE SHARE OF THE GUILTY SPOUSE IN THE
NET CONJUGAL PARTNERSHIP AS A RESULT OF THE
ISSUANCE OF THE DECREE OF LEGAL SEPARATION? [23]
Our Ruling
While the petitioner has raised a number of issues on the applicability of

certain laws, we are well-aware that the respondents have called our attention to
the fact that the Decision dated October 10, 2005 has attained finality when the
Motion for Clarification was filed.[24] Thus, we are constrained to resolve first the
issue of the finality of the Decision dated October 10, 2005 and subsequently
discuss the matters that we can clarify.
The Decision dated October 10, 2005 has

become final and executory at the time
the Motion for Clarification was filed on
July 7, 2006.
Section 3, Rule 41 of the Rules of Court provides:
Section 3. Period of ordinary appeal. - The appeal shall be taken within

fifteen (15) days from notice of the judgment or final order appealed from. Where
a record on appeal is required, the appellant shall file a notice of appeal and a
record on appeal within thirty (30) days from notice of the judgment or final
order.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed.
In Neypes v. Court of Appeals,[25] we clarified that to standardize the appeal

periods provided in the Rules and to afford litigants fair opportunity to appeal their
cases, we held that it would be practical to allow a fresh period of 15 days within
which to file the notice of appeal in the RTC, counted from receipt of the order
dismissing a motion for a new trial or motion for reconsideration.[26]
In Neypes, we explained that the "fresh period rule" shall also apply to Rule
40 governing appeals from the Municipal Trial Courts to the RTCs; Rule 42 on
petitions for review from the RTCs to the Court of Appeals (CA); Rule 43 on
appeals from quasi-judicial agencies to the CA and Rule 45 governing appeals
by certiorari to the Supreme Court. We also said, The new rule aims to regiment or
make the appeal period uniform, to be counted from receipt of the order denying
the motion for new trial, motion for reconsideration (whether full or partial) or any
final order or resolution.[27] In other words, a party litigant may file his notice of
appeal within a fresh 15-day period from his receipt of the trial court's decision or
final order denying his motion for new trial or motion for reconsideration. Failure
to avail of the fresh 15-day period from the denial of the motion for
reconsideration makes the decision or final order in question final and executory.
In the case at bar, the trial court rendered its Decision on October 10,
2005. The petitioner neither filed a motion for reconsideration nor a notice of
appeal. On December 16, 2005, or after 67 days had lapsed, the trial court issued
an order granting the respondent's motion for execution; and on February 10, 2006,
or after 123 days had lapsed, the trial court issued a writ of execution. Finally,
when the writ had already been partially executed, the petitioner, on July 7, 2006 or
after 270 days had lapsed, filed his Motion for Clarification on the definition of the
net profits earned. From the foregoing, the petitioner had clearly slept on his right
to question the RTCs Decision dated October 10, 2005. For 270 days, the petitioner
never raised a single issue until the decision had already been partially
executed. Thus at the time the petitioner filed his motion for clarification, the trial
courts decision has become final and executory. A judgment becomes final and
executory when the reglementary period to appeal lapses and no appeal is
perfected within such period. Consequently, no court, not even this Court, can
arrogate unto itself appellate jurisdiction to review a case or modify a judgment
that became final.[28]
The petitioner argues that the decision he is questioning is a void

judgment. Being such, the petitioner's thesis is that it can still be disturbed even
after 270 days had lapsed from the issuance of the decision to the filing of the
motion for clarification. He said that a void judgment is no judgment at all. It never
attains finality and cannot be a source of any right nor any obligation. [29] But what
precisely is a void judgment in our jurisdiction? When does a judgment becomes
void?
A judgment is null and void when the court which rendered it had no power
to grant the relief or no jurisdiction over the subject matter or over the parties or
both.[30] In other words, a court, which does not have the power to decide a case or
that has no jurisdiction over the subject matter or the parties, will issue a void
judgment or a coram non judice.[31]
The questioned judgment does not fall within the purview of a void
judgment. For sure, the trial court has jurisdiction over a case involving legal
separation.Republic Act (R.A.) No. 8369 confers upon an RTC, designated as the
Family Court of a city, the exclusive original jurisdiction to hear and decide,
among others, complaints or petitions relating to marital status and property
relations of the husband and wife or those living together. [32] The Rule on Legal
Separation[33]provides that the petition [for legal separation] shall be filed in the
Family Court of the province or city where the petitioner or the respondent has
been residing for at least six months prior to the date of filing or in the case of a
non-resident respondent, where he may be found in the Philippines, at the election
of the petitioner.[34] In the instant case, herein respondent Rita is found to reside in
Tungao, Butuan City for more than six months prior to the date of filing of the
petition; thus, the RTC, clearly has jurisdiction over the respondent's petition
below. Furthermore, the RTC also acquired jurisdiction over the persons of both
parties, considering that summons and a copy of the complaint with its annexes
were served upon the herein petitioner on December 14, 2000 and that the herein
petitioner filed his Answer to the Complaint on January 9, 2001. [35] Thus, without
doubt, the RTC, which has rendered the questioned judgment, has jurisdiction over
the complaint and the persons of the parties.
From the aforecited facts, the questioned October 10, 2005 judgment of the
trial court is clearly not void ab initio, since it was rendered within the ambit of the
court's jurisdiction. Being such, the same cannot anymore be disturbed, even if the
modification is meant to correct what may be considered an erroneous conclusion
of fact or law.[36] In fact, we have ruled that for [as] long as the public respondent
acted with jurisdiction, any error committed by him or it in the exercise thereof
will amount to nothing more than an error of judgment which may be reviewed or
corrected only by appeal.[37] Granting without admitting that the RTC's judgment
dated October 10, 2005 was erroneous, the petitioner's remedy should be an appeal
filed within the reglementary period. Unfortunately, the petitioner failed to do
this. He has already lost the chance to question the trial court's decision, which has
become immutable and unalterable. What we can only do is to clarify the very
question raised below and nothing more.
For our convenience, the following matters cannot anymore be disturbed

since the October 10, 2005 judgment has already become immutable and
unalterable, to wit:
(a) The finding that the petitioner is the offending spouse since he cohabited
with a woman who is not his wife;[38]
(b) The trial court's grant of the petition for legal separation of respondent
[39]
Rita;
(c) The dissolution and liquidation of the conjugal partnership;[40]
(d) The forfeiture of the petitioner's right to any share of the net profits
earned by the conjugal partnership;[41]
(e) The award to the innocent spouse of the minor children's custody;[42]
(f) The disqualification of the offending spouse from inheriting from the
innocent spouse by intestate succession;[43]
(g) The revocation of provisions in favor of the offending spouse made in
the will of the innocent spouse;[44]
(h) The holding that the property relation of the parties is conjugal
partnership of gains and pursuant to Article 116 of the Family Code, all properties
acquired during the marriage, whether acquired by one or both spouses, is
presumed to be conjugal unless the contrary is proved;[45]
(i) The finding that the spouses acquired their real and personal properties
while they were living together;[46]
(j) The list of properties which Rizal Commercial Banking Corporation

(RCBC) foreclosed;[47]
(k) The list of the remaining properties of the couple which must be
dissolved and liquidated and the fact that respondent Rita was the one who took
charge of the administration of these properties;[48]
(l) The holding that the conjugal partnership shall be liable to matters
included under Article 121 of the Family Code and the conjugal liabilities
totaling P503,862.10 shall be charged to the income generated by these properties;
[49]
(m) The fact that the trial court had no way of knowing whether the
petitioner had separate properties which can satisfy his share for the support of the
family;[50]
(n) The holding that the applicable law in this case is Article 129(7);[51]
(o) The ruling that the remaining properties not subject to any encumbrance
shall therefore be divided equally between the petitioner and the respondent
without prejudice to the children's legitime;[52]
(p) The holding that the petitioner's share of the net profits earned by the
conjugal partnership is forfeited in favor of the common children;[53] and
(q) The order to the petitioner to reimburse the respondents the sum
of P19,000.00 as attorney's fees and litigation expenses of P5,000.00.[54]
After discussing lengthily the immutability of the Decision dated October

10, 2005, we will discuss the following issues for the enlightenment of the parties
and the public at large.
Article 129 of the Family Code applies to

the present case since the parties'
property relation is governed by
the system of relative community or
conjugal partnership of gains.
The petitioner claims that the court a quo is wrong when it applied Article
129 of the Family Code, instead of Article 102. He confusingly argues that Article
102 applies because there is no other provision under the Family Code which
defines net profits earned subject of forfeiture as a result of legal separation.
Offhand, the trial court's Decision dated October 10, 2005 held that Article
129(7) of the Family Code applies in this case. We agree with the trial court's
holding.
First, let us determine what governs the couple's property relation. From the
record, we can deduce that the petitioner and the respondent tied the marital knot
on January 6, 1977. Since at the time of the exchange of marital vows, the
operative law was the Civil Code of the Philippines (R.A. No. 386) and since they
did not agree on a marriage settlement, the property relations between the
petitioner and the respondent is the system of relative community or conjugal
partnership of gains.[55] Article 119 of the Civil Code provides:
Art. 119. The future spouses may in the marriage settlements agree upon
absolute or relative community of property, or upon complete separation of
property, or upon any other regime. In the absence of marriage settlements, or
when the same are void, the system of relative community or conjugal partnership
of gains as established in this Code, shall govern the property relations between
husband and wife.
Thus, from the foregoing facts and law, it is clear that what governs the
property relations of the petitioner and of the respondent is conjugal partnership of
gains. And under this property relation, the husband and the wife place in a
common fund the fruits of their separate property and the income from their work
or industry.[56] The husband and wife also own in common all the property of the
conjugal partnership of gains.[57]
Second, since at the time of the dissolution of the petitioner and the
respondent's marriage the operative law is already the Family Code, the same
applies in the instant case and the applicable law in so far as the liquidation of the
conjugal partnership assets and liabilities is concerned is Article 129 of the Family
Code in relation to Article 63(2) of the Family Code. The latter provision is
applicable because according to Article 256 of the Family Code [t]his Code shall
have retroactive effect insofar as it does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other law.[58]
Now, the petitioner asks: Was his vested right over half of the common
properties of the conjugal partnership violated when the trial court forfeited them
in favor of his children pursuant to Articles 63(2) and 129 of the Family Code?
We respond in the negative.
Indeed, the petitioner claims that his vested rights have been impaired,
arguing: As earlier adverted to, the petitioner acquired vested rights over half of the
conjugal properties, the same being owned in common by the spouses. If the
provisions of the Family Code are to be given retroactive application to the point
of authorizing the forfeiture of the petitioner's share in the net remainder of the
conjugal partnership properties, the same impairs his rights acquired prior to the
effectivity of the Family Code.[59] In other words, the petitioner is saying that since
the property relations between the spouses is governed by the regime of Conjugal
Partnership of Gains under the Civil Code, the petitioner acquired vested rights
over half of the properties of the Conjugal Partnership of Gains, pursuant to Article
143 of the Civil Code, which provides: All property of the conjugal partnership of
gains is owned in common by the husband and wife. [60] Thus, since he is one of the
owners of the properties covered by the conjugal partnership of gains, he has a
vested right over half of the said properties, even after the promulgation of the
Family Code; and he insisted that no provision under the Family Code may deprive
him of this vested right by virtue of Article 256 of the Family Code which prohibits
retroactive application of the Family Code when it will prejudice a person's vested
right.
However, the petitioner's claim of vested right is not one which is written on
stone. In Go, Jr. v. Court of Appeals,[61] we define and explained vested right in the
following manner:
A vested right is one whose existence, effectivity and extent do not depend
upon events foreign to the will of the holder, or to the exercise of which no
obstacle exists, and which is immediate and perfect in itself and not dependent
upon a contingency. The term vested right expresses the concept of present fixed
interest which, in right reason and natural justice, should be protected against
arbitrary State action, or an innately just and imperative right which enlightened
free society, sensitive to inherent and irrefragable individual rights, cannot deny.
To be vested, a right must have become a titlelegal or equitableto the

present or future enjoyment of property.[62] (Citations omitted)
In our en banc Resolution dated October 18, 2005 for ABAKADA Guro
Party List Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary
Eduardo R. Ermita,[63] we also explained:
The concept of vested right is a consequence of the constitutional

guaranty of due process that expresses a present fixed interest which in right
reason and natural justice is protected against arbitrary state action; it includes not
only legal or equitable title to the enforcement of a demand but also exemptions
from new obligations created after the right has become vested. Rights are
considered vested when the right to enjoyment is a present interest, absolute,
unconditional, and perfect or fixed and irrefutable.[64] (Emphasisand
underscoring supplied)
From the foregoing, it is clear that while one may not be deprived of his
vested right, he may lose the same if there is due process and such deprivation is
founded in law and jurisprudence.
In the present case, the petitioner was accorded his right to due
process. First, he was well-aware that the respondent prayed in her complaint that
all of the conjugal properties be awarded to her. [65] In fact, in his Answer, the
petitioner prayed that the trial court divide the community assets between the
petitioner and the respondent as circumstances and evidence warrant after the
accounting and inventory of all the community properties of the parties.
[66]
Second, when the Decision dated October 10, 2005 was promulgated, the
petitioner never questioned the trial court's ruling forfeiting what the trial court
termed as net profits, pursuant to Article 129(7) of the Family Code. [67] Thus, the
petitioner cannot claim being deprived of his right to due process.
Furthermore, we take note that the alleged deprivation of the petitioner's

vested right is one founded, not only in the provisions of the Family Code, but in
Article 176 of the Civil Code. This provision is like Articles 63 and 129 of the
Family Code on the forfeiture of the guilty spouse's share in the conjugal
partnership profits. The said provision says:
Art. 176. In case of legal separation, the guilty spouse shall forfeit his or
her share of the conjugal partnership profits, which shall be awarded to the
children of both, and the children of the guilty spouse had by a prior
marriage. However, if the conjugal partnership property came mostly or entirely
from the work or industry, or from the wages and salaries, or from the fruits of the
separate property of the guilty spouse, this forfeiture shall not apply.
In case there are no children, the innocent spouse shall be entitled to all
the net profits.
From the foregoing, the petitioner's claim of a vested right has no basis
considering that even under Article 176 of the Civil Code, his share of the conjugal
partnership profits may be forfeited if he is the guilty party in a legal separation
case. Thus, after trial and after the petitioner was given the chance to present his
evidence, the petitioner's vested right claim may in fact be set aside under the Civil
Code since the trial court found him the guilty party.
More, in Abalos v. Dr. Macatangay, Jr.,[68] we reiterated our long-standing
ruling that:
[P]rior to the liquidation of the conjugal partnership, the interest of each spouse in
the conjugal assets is inchoate, a mere expectancy, which constitutes neither a
legal nor an equitable estate, and does not ripen into title until it appears that there
are assets in the community as a result of the liquidation and settlement. The
interest of each spouse is limited to the net remainder or remanente liquido (haber
ganancial) resulting from the liquidation of the affairs of the partnership after its
dissolution. Thus, the right of the husband or wife to one-half of the conjugal
assets does not vest until the
dissolution and liquidation of the conjugal partnership, or after dissolution of the
marriage, when it is finally determined that, after settlement of conjugal
obligations, there are net assets left which can be divided between the spouses or
their respective heirs.[69] (Citations omitted)
Finally, as earlier discussed, the trial court has already decided in its
Decision dated October 10, 2005 that the applicable law in this case is Article
129(7) of the Family Code.[70] The petitioner did not file a motion for
reconsideration nor a notice of appeal. Thus, the petitioner is now precluded from
questioning the trial court's decision since it has become final and executory. The
doctrine of immutability and unalterability of a final judgment prevents us from
disturbing the Decision dated October 10, 2005 because final and executory
decisions can no longer be reviewed nor reversed by this Court.[71]
From the above discussions, Article 129 of the Family Code clearly applies
to the present case since the parties' property relation is governed by the system of
relative community or conjugal partnership of gains and since the trial court's
Decision has attained finality and immutability.
The net profits of the conjugal

partnership of gains are all the fruits of
the separate properties of the spouses and
the products of their labor and industry.
The petitioner inquires from us the meaning of net profits earned by the
conjugal partnership for purposes of effecting the forfeiture authorized under
Article 63 of the Family Code. He insists that since there is no other provision
under the Family Code, which defines net profits earned subject of forfeiture as a
result of legal separation, then Article 102 of the Family Code applies.
What does Article 102 of the Family Code say? Is the computation of net
profits earned in the conjugal partnership of gains the same with the computation
of net profits earned in the absolute community?
Now, we clarify.
First and foremost, we must distinguish between the applicable law as to the
property relations between the parties and the applicable law as to the definition of
net profits. As earlier discussed, Article 129 of the Family Code applies as to the
property relations of the parties. In other words, the computation and the
succession of events will follow the provisions under Article 129 of the said Code.
Moreover, as to the definition of net profits, we cannot but refer to Article 102(4)
of the Family Code, since it expressly provides that for purposes of computing the
net profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2),
Article 102(4) applies. In this provision, net profits shall be the increase in value
between the market value of the community property at the time of the celebration
of the marriage and the market value at the time of its dissolution. [72] Thus, without
any iota of doubt, Article 102(4) applies to both the dissolution of the absolute
community regime under Article 102 of the Family Code, and to the dissolution of
the conjugal partnership regime under Article 129 of the Family Code. Where lies
the difference? As earlier shown, the difference lies in the processes used under the
dissolution of the absolute community regime under Article 102 of the Family
Code, and in the processes used under the dissolution of the conjugal partnership
regime under Article 129 of the Family Code.
Let us now discuss the difference in the processes between the absolute
community regime and the conjugal partnership regime.
On Absolute Community Regime:

When a couple enters into a regime of absolute community, the husband
and the wife becomes joint owners of all the properties of the marriage. Whatever
property each spouse brings into the marriage, and those acquired during the
marriage (except those excluded under Article 92 of the Family Code) form the
common mass of the couple's properties. And when the couple's marriage or
community is dissolved, that common mass is divided between the spouses, or
their respective heirs, equally or in the proportion the parties have established,
irrespective of the value each one may have originally owned.[73]
Under Article 102 of the Family Code, upon dissolution of marriage, an

inventory is prepared, listing separately all the properties of the absolute
community and the exclusive properties of each; then the debts and obligations of
the absolute community are paid out of the absolute community's assets and if the
community's properties are insufficient, the separate properties of each of the
couple will be solidarily liable for the unpaid balance. Whatever is left of the
separate properties will be delivered to each of them. The net remainder of the
absolute community is its net assets, which shall be divided between the husband
and the wife; and for purposes of computing the net profits subject to forfeiture,
said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market
value at the time of its dissolution.[74]
Applying Article 102 of the Family Code, the net profits requires that we
first find the market value of the properties at the time of the community's
dissolution.From the totality of the market value of all the properties, we subtract
the debts and obligations of the absolute community and this result to the net assets
or net remainder of the properties of the absolute community, from which we
deduct the market value of the properties at the time of marriage, which then
results to the net profits.[75]
Granting without admitting that Article 102 applies to the instant case, let us
see what will happen if we apply Article 102:
(a) According to the trial court's finding of facts, both husband and wife have
no separate properties, thus, the remaining properties in the list above are all part
of the absolute community. And its market value at the time of the dissolution of
the absolute community constitutes the market value at dissolution.
(b) Thus, when the petitioner and the respondent finally were legally
separated, all the properties which remained will be liable for the debts and
obligations of the community. Such debts and obligations will be subtracted from
the market value at dissolution.
(c) What remains after the debts and obligations have been paid from the
total assets of the absolute community constitutes the net remainder or net
asset. And from such net asset/remainder of the petitioner and respondent's
remaining properties, the market value at the time of marriage will be subtracted
and the resulting totality constitutes the net profits.
(d) Since both husband and wife have no separate properties, and
nothing would be returned to each of them, what will be divided equally between
them is simply the net profits. However, in the Decision dated October 10, 2005,
the trial court forfeited the half-share of the petitioner in favor of his
children. Thus, if we use Article 102 in the instant case (which should not be the
case), nothing is left to the petitioner since both parties entered into their marriage
without bringing with them any property.
On Conjugal Partnership Regime:
Before we go into our disquisition on the Conjugal Partnership Regime, we

make it clear that Article 102(4) of the Family Code applies in the instant case for
purposes only of defining net profit. As earlier explained, the definition of net
profits in Article 102(4) of the Family Code applies to both the absolute
community regime and conjugal partnership regime as provided for under Article
63, No. (2) of the Family Code, relative to the provisions on Legal Separation.
Now, when a couple enters into a regime of conjugal partnership of

gains under Article 142 of the Civil Code, the husband and the wife place in
common fund the fruits of their separate property and income from their work or
industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either spouse
during the marriage.[76] From the foregoing provision, each of the couple has his
and her own property and debts. The law does not intend to effect a mixture or
merger of those debts or properties between the spouses. Rather, it establishes a
complete separation of capitals.[77]
Considering that the couple's marriage has been dissolved under the Family
Code, Article 129 of the same Code applies in the liquidation of the couple's
properties in the event that the conjugal partnership of gains is dissolved, to wit:
Art. 129. Upon the dissolution of the conjugal partnership regime, the
following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of

the conjugal partnership and the exclusive properties of each spouse.
(2) Amounts advanced by the conjugal partnership in payment of personal

debts and obligations of either spouse shall be credited to the conjugal partnership
as an asset thereof.
(3) Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her exclusive
property, the ownership of which has been vested by law in the conjugal
partnership.
(4) The debts and obligations of the conjugal partnership shall be paid out
of the conjugal assets. In case of insufficiency of said assets, the spouses shall be
solidarily liable for the unpaid balance with their separate properties, in
accordance with the provisions of paragraph (2) of Article 121.
(5) Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
(6) Unless the owner had been indemnified from whatever source, the loss
or deterioration of movables used for the benefit of the family, belonging to either
spouse, even due to fortuitous event, shall be paid to said spouse from the
conjugal funds, if any.
(7) The net remainder of the conjugal partnership properties shall

constitute the profits, which shall be divided equally between husband and wife,
unless a different proportion or division was agreed upon in the marriage
settlements or unless there has been a voluntary waiver or forfeiture of such share
as provided in this Code.
(8) The presumptive legitimes of the common children shall be delivered
upon the partition in accordance with Article 51.
(9) In the partition of the properties, the conjugal dwelling and the lot on
which it is situated shall, unless otherwise agreed upon by the parties, be
adjudicated to the spouse with whom the majority of the common children choose
to remain. Children below the age of seven years are deemed to have chosen the
mother, unless the court has decided otherwise. In case there is no such majority,
the court shall decide, taking into consideration the best interests of said children.
In the normal course of events, the following are the steps in the liquidation
of the properties of the spouses:
(a) An inventory of all the actual properties shall be made, separately listing
the couple's conjugal properties and their separate properties.[78] In the instant
case, the trial court found that the couple has no separate properties when
they married.[79] Rather, the trial court identified the following conjugal
properties, to wit:
1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;
2. coffee mill in Durian, Las Nieves, Agusan del Norte;
3. corn mill in Casiklan, Las Nieves, Agusan del Norte;
4. coffee mill in Esperanza, Agusan del Sur;
5. a parcel of land with an area of 1,200 square meters located in

6. a parcel of agricultural land with an area of 5 hectares located in Manila de

Bugabos, Butuan City;
7. a parcel of land with an area of 84 square meters located in

8. Bashier Bon Factory located in Tungao, Butuan City.[80]
(b) Ordinarily, the benefit received by a spouse from the conjugal

partnership during the marriage is returned in equal amount to the assets of the
conjugal partnership;[81] and if the community is enriched at the expense of the
separate properties of either spouse, a restitution of the value of such properties to
their respective owners shall be made.[82]
(c) Subsequently, the couple's conjugal partnership shall pay the debts of the
conjugal partnership; while the debts and obligation of each of the spouses shall be
paid from their respective separate properties. But if the conjugal partnership is not
sufficient to pay all its debts and obligations, the spouses with their separate
properties shall be solidarily liable.[83]
(d) Now, what remains of the separate or exclusive properties of the husband
and of the wife shall be returned to each of them.[84] In the instant case, since it was
already established by the trial court that the spouses have no separate
properties,[85] there is nothing to return to any of them. The listed properties
above are considered part of the conjugal partnership. Thus, ordinarily, what
remains in the above-listed properties should be divided equally between the
spouses and/or their respective heirs.[86] However, since the trial court found the
petitioner the guilty party, his share from the net profits of the conjugal partnership
is forfeited in favor of the common children, pursuant to Article 63(2) of the
Family Code. Again, lest we be confused, like in the absolute community regime,
nothing will be returned to the guilty party in the conjugal partnership regime,
because there is no separate property which may be accounted for in the guilty
party's favor.
In the discussions above, we have seen that in both instances, the petitioner
is not entitled to any property at all. Thus, we cannot but uphold the Decision dated
October 10, 2005 of the trial court. However, we must clarify, as we already did
above, the Order dated January 8, 2007.
WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial
Court, Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for
Clarification dated July 7, 2006 in the Regional Trial Court, the Order dated
January 8, 2007 of the Regional Trial Court is hereby CLARIFIED in accordance
with the above discussions.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Senior Associate Justice
Chairperson, Second Division
ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice
MARIA LOURDES P. A. SERENO

Associate Justice
C E RT I FI CAT I O N
I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296
The Judiciary Act of 1948, as amended)
[1]
Rollo, pp. 7-35.
[2]
Penned by Judge Eduardo S. Casals; id. at 115-122.
[3]
Id. at 36.
[4]
Id. at 36-57.
[5]
Id. at 56-57.
[6]
A.M. No. 02-11-11-SC.
[7]
Rollo, p. 185.
[8]
Id. at 59.
[9]
Id. at 58-59.
[10]
Id. at 59.
[11]
Id. at 60.
[12]
Id. at 61-69.
[13]
Id. at 70-76.
[14]
Id. at 75.
[15]
Id. at 74-75.
[16]
Id. at 75-76.
[17]
Id. at 77-86.
[18]
Id. at 87-91.
[19]
Id. at 90.
[20]
Id. at 91.
[21]
Id. at 92-97.
[22]
Id. at 115-122.
[23]
Id. at 18.
[24]
Id. at 143-146.
[25]
506 Phil. 613, 629 (2005).
[26]
Id. at 626.
[27]
Id. at 627.
[28]
PCI Leasing and Finance, Inc., v. Milan, G.R. No. 151215, April 5, 2010, 617 SCRA 258.
[29]
Rollo, p. 166.
[30]
See Moreno, Federico B., Philippine Law Dictionary, 3rd ed., 1988, p. 998.
[31]
People v. Judge Navarro, 159 Phil. 863, 874 (1975).
[32]
R.A. No. 8369, Section 5(d).
[33]
A.M. No. 02-11-11-SC.
[34]
Id. at Section 2(c).
[35]
Rollo, p. 38.
[36]
Sps. Edillo v. Sps. Dulpina, G.R. No. 188360, January 21, 2010, 610 SCRA 590, 601-602.
[37]
Lim v. Judge Vianzon, 529 Phil. 472, 483-484 (2006); See also Herrera v. Barretto and Joaquin, 25 Phil. 245, 256
(1913), citing Miller v. Rowan, 251 Ill., 344.
[38]
Rollo, pp. 50-51.
[39]
Id. at 51.
[40]
Id.
[41]
Id. at 51-52.
[42]
Id. at 52 and 56.
[43]
Id. at 52.
[44]
Id.
[45]
Id.
[46]
Id.
[47]
Id. at 52-53.
[48]
Id. at 53.
[49]
Id. at 53-54.
[50]
Id. at 55.
[51]
Id.
[52]
Id. at 56.
[53]
Id. at 57.
[54]
Id.
[55]
CIVIL CODE OF THE PHILIPPINES, Art. 119.
[56]
Id. at Art. 142.
[57]
Id. at Art. 143.
[58]
FAMILY CODE OF THE PHILIPPINES, Art. 256.
[59]
Rollo, p. 29.
[60]
[61]
G.R. No. 172027, July 29, 2010, 626 SCRA 180, 201.
[62]
Id. at 199.
[63]
The Court consolidated the following cases: ABAKADA Guro Party List Officer Samson S. Alcantara, et al. v.
The Hon. Executive Secretary Eduardo R. Ermita, G.R. No. 168056; Aquilino Q. Pimentel, Jr., et al. v. Executive
Secretary Eduardo R. Ermita, et al., G.R. No. 168207; Association of Pilipinas Shell Dealers, Inc., et al. v. Cesar V.
Purisima, et al., G.R. No. 168461; Francis Joseph G. Escudero v. Cesar V. Purisima, et al, G.R. No. 168463;
and Bataan Governor Enrique T. Garcia, Jr. v. Hon. Eduardo R. Ermita, et al., G.R. No. 168730.
[64]
Id.
[65]
Rollo, p. 37.
[66]
Id. at 39.
[67]
Id. at 55-57.
[68]
482 Phil. 877-894 (2004).
[69]
Id. at 890-891.
[70]
Rollo, p. 55.
[71]
Malayan Employees Association-FFW v. Malayan Insurance Co., Inc., G.R. No. 181357, February 2, 2010, 611
SCRA 392, 399; Catmon Sales Int'l. Corp. v. Atty. Yngson, Jr., G.R. No. 179761, January 15, 2010, 610 SCRA 236,
245.
[72]
FAMILY CODE OF THE PHILIPPINES, Art. 102(4).
[73]
Id. at Art. 91; See also Tolentino, Arturo, M., COMMENTARIES AND JURISPRUDENCE ON THE CIVIL
CODE OF THE PHILIPPINES: VOLUME ONE WITH THE FAMILY CODE OF THE PHILIPPINES, 379 (1990).
[74]
FAMILY CODE OF THE PHILIPPINES, Art. 102.
[75]
Tolentino, Arturo, M., COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF
THE PHILIPPINES: VOLUME ONE WITH THE FAMILY CODE OF THE PHILIPPINES, 401-402 (1990).
[76]
[77]
THE PHILIPPINES: VOLUME ONE, 365 (1974).
[78]
THE PHILIPPINES: VOLUME ONE WITH THE FAMILY CODE OF THE PHILIPPINES, 472 (1990).
[79]
Rollo, p. 55.
[80]
Id. at 56-57.
[81]
[82]
Id. at Art. 129(3).
[83]
Id. at Art. 129(4).
[84]
Id. at Art. 129(5).
[85]
Rollo, p. 55.
[86]
Supreme Court
Manila
THIRD DIVISION
VIRGILIO MAQUILAN, G.R. NO. 155409

Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.
DITA MAQUILAN, Promulgated:
Respondent. June 8, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under

Rule 45 of the Rules of Court assailing the Decision [ 1 ] dated August
30, 2002 promulgated by the Court of Appeals (CA) in CA-G.R. SP
No. 69689, which affirmed the Judgment on Compromise Agreement
dated January 2, 2002 of the Regional Trial Court (RTC), Branch
3, Nabunturan, Compostela Valley, and the RTC Orders dated January
21, 2002 and February 7, 2002 (ORDERS) in Civil Case No. 656.
The facts of the case, as found by the CA, are as follows:
Herein petitioner and herein private respondent are spouses who
once had a blissful married life and out of which were blessed to
have a son.However, their once sugar coated romance turned bitter
when petitioner discovered that private respondent was having
illicit sexual affair with her paramour, which thus, prompted the
petitioner to file a case of adultery against private respondent and
the latters paramour. Consequently, both the private respondent and
her paramour were convicted of the crime charged and were
sentenced to suffer an imprisonment ranging from one (1) year,
eight (8) months, minimum of prision correccional as minimum
penalty, to three (3) years, six (6) months and twenty one (21) days,
medium of prision correccional as maximum penalty.
Thereafter, private respondent, through counsel, filed a Petition for

Declaration of Nullity of Marriage, Dissolution and Liquidation of
Conjugal Partnership of Gains and Damages on June 15, 2001 with
the Regional Trial Court, Branch 3
of Nabunturan, Compostela Valley, docketed as Civil Case No. 656,
imputing psychological incapacity on the part of the petitioner.
During the pre-trial of the said case, petitioner and private

respondent entered into a COMPROMISE AGREEMENT in the
following terms, to wit:
1. In partial settlement of the conjugal partnership of gains,

the parties agree to the following:
a. P 500,000.00 of the m oney deposi t ed in t he bank

j oi ntl y i n t he nam e of the spouses shal l be
wi t hdra wn and deposi t ed in f avor and i n t rust of
t hei r comm on chi l d, N ei l Maqui l an, wi t h t he
deposi t i n t he j oi nt a ccount of the part i es.
The bal anc e of such deposi t , whi ch pres ent l y

st ands at P 1,318,043.36, shal l be wi t hdrawn and
di vi ded equ al l y by the part i es;
b. The st or e t hat i s now bei ng oc cupi ed by t he

pl ai nt i ff shal l be al l ot t ed to her whi l e t he bodeg a
shal l be for t he de fendant . The de fendant shall be
pai d t he sum of P 50,000.00 as hi s share i n the
st ocks of the st or e i n ful l set tl em ent the reof.
The pl ai nt i ff shal l be al l owed t o occupy t he

bodeg a unt il t he ti m e t he own er of the l ot on
whi ch it st ands shal l const ruct a bui l di ng t her eon;
c. The m ot or cycl es shal l be di vi ded bet ween t hem

such t hat the Ka wasaki shal l be owned by the
pl ai nt i ff whi l e the Hond a Dream shal l be fo r the
de fendant ;
d. The passeng er j eep shal l be for the pl ai nt i ff who

shal l pay the def endant t he sum of P 75,000.00 as
hi s shar e t hereon and i n ful l set t l em ent t hereo f;
e. The house and l ot shal l be t o the com m on chi l d.
2. This settlement is only partial, i.e., without prejudice to

the litigation of other conjugal properties that have
not been mentioned;
x x x x
The said Compromise Agreement was given judicial imprimatur by

the respondent judge in the assailed Judgment On Compromise
Agreement, which was erroneously dated January 2, 2002. [ 2 ]
However, petitioner filed an Omnibus Motion dated January 15,

2002, praying for the repudiation of the Compromise Agreement and
the reconsideration of the Judgment on Compromise Agreement by
the respondent judge on the grounds that his previous lawyer did not
intelligently and judiciously apprise him of the consequential
effects of the Compromise Agreement.
The respondent Judge in the assailed Order dated January 21,

2002, denied the aforementioned Omnibus Motion.
Displeased, petitioner filed a Motion for Reconsideration of the

aforesaid Order, but the same was denied in the assailed Order
dated February 7, 2002. [ 3 ] (Emphasis supplied)
The petitioner filed a Petition for Certiorari and Prohibition with the
CA under Rule 65 of the Rules of Court claiming that the RTC
committed grave error and abuse of discretion amounting to lack or
excess of jurisdiction (1) in upholding the validity of the Compromise
Agreement dated January 11, 2002; (2) when it held in its Order dated
February 7, 2002 that the Compromise Agreement was made within the
cooling-off period; (3) when it denied petitioners Motion to Repudiate
Compromise Agreement and to Reconsider Its Judgment on
Compromise Agreement; and (4) when it conducted the proceedings
without the appearance and participation of the Office of the Solicitor
General and/or the Provincial Prosecutor. [ 4 ]
On August 30, 2002, the CA dismissed the Petition for lack of
merit. The CA held that the conviction of the respondent of the crime
of adultery does not ipso facto disqualify her from sharing in the
conjugal property, especially considering that she had only been
sentenced with the penalty of prision correccional, a penalty that does
not carry the accessory penalty of civil interdiction which deprives the
person of the rights to manage her property and to dispose of such
property inter vivos; that Articles 43 and 63 of the Family Code, which
pertain to the effects of a nullified marriage and the effects of legal
separation, respectively, do not apply, considering, too, that the
Petition for the Declaration of the Nullity of Marriage filed by the
respondent invoking Article 36 of the Family Code has yet to be
decided, and, hence, it is premature to apply Articles 43 and 63 of the
Family Code; that, although adultery is a ground for legal separation,
nonetheless, Article 63 finds no application in the instant case since no
petition to that effect was filed by the petitioner against the
respondent; that the spouses voluntarily separated their property
through their Compromise Agreement with court approval under
Article 134 of the Family Code; that the Compromise Agreement,
which embodies the voluntary separation of property, is valid and
binding in all respects because it had been voluntarily entered into by
the parties; that, furthermore, even if it were true that the petitioner
was not duly informed by his previous counsel about the legal effects
of the Compromise Agreement, this point is untenable since the
mistake or negligence of the lawyer binds his client, unless such
mistake or negligence amounts to gross negligence or deprivation of
due process on the part of his client; that these exceptions are not
present in the instant case; that the Compromise Agreement was
plainly worded and written in simple language, which a person of
ordinary intelligence can discern the consequences thereof, hence,
petitioners claim that his consent was vitiated is highly incredible;
that the Compromise Agreement was made during the existence of the
marriage of the parties since it was submitted during the pendency of
the petition for declaration of nullity of marriage; that the application
of Article 2035 of the Civil Code is misplaced; that the cooling-off
period under Article 58 of the Family Code has no bearing on the
validity of the Compromise Agreement; that the Compromise
Agreement is not contrary to law, morals, good customs, public order,
and public policy; that this agreement may not be later disowned
simply because of a change of mind; that the presence of the Solicitor
General or his deputy is not indispensable to the execution and
validity of the Compromise Agreement, since the purpose of his
presence is to curtail any collusion between the parties and to see to it
that evidence is not fabricated, and, with this in mind, nothing in the
Compromise Agreement touches on the very merits of the case of
declaration of nullity of marriage for the court to be wary of any
possible collusion; and, finally, that the Compromise Agreement is
merely an agreement between the parties to separate their conjugal
properties partially without prejudice to the outcome of the pending
case of declaration of nullity of marriage.
Hence, herein Petition, purely on questions of law, raising the
following issues:
I.
WHETHER OF NOT A SPOUSE CONVICTED OF EITHER

CONCUBINAGE OR ADULTERY, CAN STILL SHARE IN THE
CONJUGAL PARTNERSHIP;
II
WHETHER OR NOT A COMPROMISE AGREEMENT ENTERED

INTO BY SPOUSES, ONE OF WHOM WAS CONVICTED OF
ADULTERY, GIVING THE CONVICTED SPOUSE A SHARE IN
THE CONJUGAL PROPERTY, VALID AND LEGAL;
III
WHETHER OR NOT A JUDGMENT FOR ANNULMENT AND

LEGAL SEPARATION IS A PRE-REQUISITE BEFORE A SPOUSE
CONVICTED OF EITHER CONCUBINAGE OR ADULTERY, BE
DISQUALIFIED AND PROHIBITED FROM SHARING IN THE
CONJUGAL PROPERTY;
IV
WHETHER OR NOT THE DISQUALIFICATION OF A
CONVICTED SPOUSE OF ADULTERY FROM SHARING IN A
CONJUGAL PROPERTY, CONSTITUTES CIVIL INTERDICTION.
[5]
The petitioner argues that the Compromise Agreement should not

have been given judicial imprimatur since it is against law and
public policy; that the proceedings where it was approved is null
and void, there being no appearance and participation of the
Solicitor General or the Provincial Prosecutor; that it was timely
repudiated; and that the respondent, having been convicted of
adultery, is therefore disqualified from sharing in the conjugal
property.
The Petition must fail.
The essential question is whether the partial voluntary separation of
property made by the spouses pending the petition for declaration of
nullity of marriage is valid.
First. The petitioner contends that the Compromise Agreement is void

because it circumvents the law that prohibits the guilty spouse, who
was convicted of either adultery or concubinage, from sharing in the
conjugal property. Since the respondent was convicted of adultery, the
petitioner argues that her share should be forfeited in favor of the
common child under Articles 43(2) [ 6 ] and 63 [ 7 ] of the Family Code.
To the petitioner, it is the clear intention of the law to disqualify the

spouse convicted of adultery from sharing in the conjugal property;
and because the Compromise Agreement is void, it never became final
and executory.
Moreover, the petitioner cites Article 2035 [ 8 ] of the Civil Code and
argues that since adultery is a ground for legal separation, the
Compromise Agreement is therefore void.
These arguments are specious. The foregoing provisions of the law are
inapplicable to the instant case.
Article 43 of the Family Code refers to Article 42, to wit:
Article 42. The subsequent marriage referred to in the preceding

Article [ 9 ] shall be automatically terminated by the recording of the
affidavit of reappearance of the absent spouse, unless there is a
judgment annulling the previous marriage or declaring it
void ab initio.
A sworn statement of the fact and circumstances of reappearance

shall be recorded in the civil registry of the residence of the parties
to the subsequent marriage at the instance of any interested person,
with due notice to the spouses of the subsequent marriage and
without prejudice to the fact of reappearance being judicially
determined in case such fact is disputed.
where a subsequent marriage is terminated because of the

reappearance of an absent spouse; while Article 63 applies to the
effects of a decree of legal separation. The present case involves a
proceeding where the nullity of the marriage is sought to be declared
under the ground of psychological capacity.
Article 2035 of the Civil Code is also clearly inapplicable. The

Compromise Agreement partially divided the properties of the
conjugal partnership of gains between the parties and does not deal
with the validity of a marriage or legal separation. It is not among
those that are expressly prohibited by Article 2035.
Moreover, the contention that the Compromise Agreement is
tantamount to a circumvention of the law prohibiting the guilty spouse
from sharing in the conjugal properties is misplaced. Existing law and
jurisprudence do not impose such disqualification.
Under Article 143 of the Family Code, separation of property may be

effected voluntarily or for sufficient cause, subject to judicial
approval. The questioned Compromise Agreement which was judicially
approved is exactly such a separation of property allowed under the
law. This conclusion holds true even if the proceedings for the
declaration of nullity of marriage was still pending. However, the
Court must stress that this voluntary separation of property is
subject to the rights of all creditors of the conjugal partnership of
gains and other persons with pecuniary interest pursuant to Article
136 of the Family Code.
Second. Petitioners claim that since the proceedings before the RTC
were void in the absence of the participation of the provincial
prosecutor or solicitor, the voluntary separation made during
the pendency of the case is also void. The proceedings pertaining to
the Compromise Agreement involved the conjugal properties of the
spouses. The settlement had no relation to the questions surrounding
the validity of their marriage. Nor did the settlement amount to a
collusion between the parties.
Article 48 of the Family Code states:
Art. 48. In all cases of annulment or declaration of absolute nullity

of marriage, the Court shall order the prosecuting attorney or fiscal
assigned to it to appear on behalf of the State to take steps to
prevent collusion between the parties and to take care that the
evidence is not fabricated or suppressed. (Emphasis supplied)
Section 3(e) of Rule 9 of the 1997 Rules of Court provides:
SEC. 3. Default; declaration of.- x x x x

x x x x
(e) Where no defaults allowed. If the defending party in

action for annulment or declaration of nullity of marriage or for
legal separation fails to answer, the court shall order the
prosecuting attorney to investigate whether or not a collusion
between the parties exists if there is no collusion, to intervene
for the State in order to see to it that the evidence submitted is
not fabricated. (Emphasis supplied
Truly, the purpose of the active participation of the Public Prosecutor

or the Solicitor General is to ensure that the interest of the State is
represented and protected in proceedings for annulment and
declaration of nullity of marriages by preventing collusion between the
parties, or the fabrication or suppression of evidence. [ 1 0 ] While the
appearances of the Solicitor General and/or the Public Prosecutor are
mandatory, the failure of the RTC to require their appearance does
not per se nullify the Compromise Agreement. This Court fully
concurs with the findings of the CA:
x x x. It bears emphasizing that the intendment of the law in

requiring the presence of the Solicitor General and/or State
prosecutor in all proceedings of legal separation and annulment or
declaration of nullity of marriage is to curtail or prevent any
possibility of collusion between the parties and to see to it that their
evidence respecting the case is not fabricated. In the instant case,
there is no exigency for the presence of the Solicitor General and/or
the State prosecutor because as already stated, nothing in the
subject compromise agreement touched into the very merits of the
case of declaration of nullity of marriage for the court to be wary of
any possible collusion between the parties. At the risk of
being repetiti[ve], the compromise agreement pertains merely to an
agreement between the petitioner and the private respondent to
separate their conjugal properties partially without prejudice to the
outcome of the pending case of declaration of nullity of marriage. [ 11 ]
Third. The conviction of adultery does not carry the accessory of civil
interdiction. Article 34 of the Revised Penal Code provides for the
consequences of civil interdiction:
Art. 34. Civil Interdiction. Civil interdiction shall deprive the

offender during the time of his sentence of the rights of parental
authority, or guardianship, either as to the person or property of any
ward, of marital authority, of the right to manage his property and
of the right to dispose of such property by any act or any
conveyance inter vivos.
Under Article 333 of the same Code, the penalty for adultery
is prision correccional in its medium and maximum periods. Article
333 should be read with Article 43 of the same Code. The latter
provides:
Art. 43. Prision correccional Its accessory penalties. The penalty

of prision correccional shall carry with it that of suspension from
public office, from the right to follow a profession or calling, and
that of perpetual special disqualification from the right of suffrage,
if the duration of said imprisonment shall exceed eighteen
months. The offender shall suffer the disqualification provided in
this article although pardoned as to the principal penalty, unless the
same shall have been expressly remitted in the pardon.
It is clear, therefore, and as correctly held by the CA, that the crime of
adultery does not carry the accessory penalty of civil interdiction
which deprives the person of the rights to manage her property and to
dispose of such property inter vivos.
Fourth. Neither could it be said that the petitioner was not

intelligently and judiciously informed of the consequential effects of
the compromise agreement, and that, on this basis, he may repudiate
the Compromise Agreement. The argument of the petitioner that he
was not duly informed by his previous counsel about the legal effects
of the voluntary settlement is not convincing. Mistake or vitiation of
consent, as now claimed by the petitioner as his basis for repudiating
the settlement, could hardly be said to be evident. In Salonga v. Court
of Appeals, [ 1 2 ] this Court held:
[I]t is well-settled that the negligence of counsel binds the

client. This is based on the rule that any act performed by a lawyer
within the scope of his general or implied authority is regarded as
an act of his client. Consequently, the mistake or negligence of
petitioners' counsel may result in the rendition of an unfavorable
judgment against them.
Exceptions to the foregoing have been recognized by the Court in

cases where reckless or gross negligence of counsel deprives the
client of due process of law, or when its application "results in the
outright deprivation of one's property through a technicality."
x x x x[13]
None of these exceptions has been sufficiently shown in the present

case.
WHEREFORE, the Petition is DENIED. The Decision of the Court of

Appeals is AFFIRMED with MODIFICATION that the subject
Compromise Agreement is VALID without prejudice to the rights of
all creditors and other persons with pecuniary interest in the properties
of the conjugal partnership of gains.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
Associate Justice
Chairperson, Third Division
C E R T I FI CAT I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
LEONARDO A. QUISUMBING
Acting Chief Justice
[1]
P enned by Associ at e Just i ce Bi env eni do L. R eyes, wi t h Associ at e Just i ces R obert o A.
B ar ri os (now de ceas ed) and Edga rdo F. Sundi am , con curri ng.
[2]
The C om prom ise Agr eem ent is dat ed January 11, 2002.
[3]
Roll o , pp. 29- 31.
[4]
Roll o, p. 32.
[5]
Roll o , pp. 19- 20.
[6]
Art i cl e 43 r eads:
Art . 43. The t erm i nat i on of the subsequent m arri age re fer red t o i n the pr ecedi ng
Art i cl e shal l produce t he fol l owi ng effe ct s:
x x x x
(2) The absol ut e comm uni t y of prop ert y or t he conj ugal part ne rshi p, as t he
c ase m ay be, shal l be di ssol ved and l i qui dat ed, b u t i f ei th er sp ou se
con t ract ed sai d mar ri age in bad fai th , hi s or h er sh are of th e n et p rofi ts of
th e com mun i ty p rop erty or con ju gal partn e rsh ip p rop e rty sh al l b e for fei t ed
i n favo r of th e com mon ch i ld ren or, i ft her e are none, t he chi l dren of t he
gui l t y spouse by a previ ous m arri ag e or i n defaul t of chi l dren, t he innoc ent
spouse;
x x x x (emphasis supplied)
[7]
Art . 63. The de cre e of l egal sepa rat i on shal l have the fol l owi ng eff ect s:
x x x x
(2) The absol ut e comm uni t y or t he conj ug al part ne rshi p shal l b e d issol ved and
l iq u id at ed bu t th e of fen di n g sp ou se sh all h ave n o ri gh t to an y sh are of th e
n et p rofi ts ea rn ed by th e ab solu t e com mun i ty or th e con ju gal p artn e rshi p ,
wh i ch s hal l be for fei t ed i n a ccord anc e wi t h t he provi si ons of Art i cl e 43(2);
x x x x ( em phasi s suppl i ed)
[8]
Art . 2035. No com prom i se upon t he foll owi ng quest i ons shal l be val i d:
(1) The ci vi l st at us of persons;
(2) Th e val i di ty of a mar ri age or a l egal sep arati on ;
(3) An y groun d for l egal sep arati on ;
(4) Fut ure support ;
(5) The j uri sdi ct i on of court s;
(6) Fut ure l egit i m e. (1814 a)
( em phasi s suppl i ed)
[9]
Art . 41. A m ar ri age cont r act ed by any person duri ng t he subsist en ce of a
pr evi ous m ar ri age shal l be nul l and voi d, unl ess befo re t he cel eb rat i on of t he
subsequent m arri ag e, t he pri or spouse had be en absent for fou r conse cut i ve
ye ars and t he spouse pres ent had a wel l -found ed bel i ef t hat the absent spouse
was al re ady de ad. In case of di sappe aran ce wher e t here i s danger of deat h
unde r t he ci r cum st ances set fort h i n t he provi si ons of Art i cl es 391 of t he Ci vi l
C ode, an absenc e of onl y t wo ye ars shal l be suffi ci ent .
F or t he purpos e of cont r act i ng t he subsequ ent m arri ag e under t he pre cedi ng
pa ragr aph, the spouse pres ent m ust i nst it ut e a summ a ry proce edi ng as provi ded
i n t his C ode for t he de cl ar at i on of presum pt i ve de at h of t he abs ent ee, wit hout
pr ej udi ce t o t he e ffe ct of r eapp ear anc e of t he absent spouse.
[10]
S ee Republ i c v. Cui son-M el gar , G.R . No. 139676, March 31, 2006, 486 SC R A 177, 187.
[ 11 ]
Roll o , p. 39.
[12]
336 Phi l . 514 (1997).
[13]
Id. at 526- 527.
THIRD DIVISION
PHILIP MATTHEWS, G.R. No. 164584

Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - CHICO-NAZARIO,
VELASCO, JR.
NACHURA, and
PERALTA, JJ.
BENJAMIN A. TAYLOR and JOSELYN Promulgated:

C. TAYLOR,
Respondents. June 22, 2009
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
Assailed in this petition for review on certiorari are the Court of Appeals
(CA) December 19, 2003 Decision[1] and July 14, 2004 Resolution[2] in CA-G.R.
CV No. 59573. The assailed decision affirmed and upheld the June 30, 1997
Decision[3] of the Regional Trial Court (RTC), Branch 8, Kalibo, Aklan in Civil
Case No. 4632 for Declaration of Nullity of Agreement of Lease with Damages.
On June 30, 1988, respondent Benjamin A. Taylor (Benjamin), a British subject,

married Joselyn C. Taylor (Joselyn), a 17-year old Filipina.[4] On June 9, 1989,
while their marriage was subsisting, Joselyn bought from Diosa M. Martin a 1,294
square-meter lot (Boracay property) situated at Manoc-Manoc, Boracay Island,
Malay, Aklan, for and in consideration of P129,000.00.[5] The sale was allegedly
financed by Benjamin.[6] Joselyn and Benjamin, also using the latters funds,
constructed improvements thereon and eventually converted the property to a
vacation and tourist resort known as the Admiral Ben Bow Inn. [7] All required
permits and licenses for the operation of the resort were obtained in the name of
Ginna Celestino, Joselyns sister.[8]
However, Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim
Philippsen. On June 8, 1992, Joselyn executed a Special Power of Attorney (SPA)
in favor of Benjamin, authorizing the latter to maintain, sell, lease, and sub-lease
and otherwise enter into contract with third parties with respect to their Boracay
property.[9]
On July 20, 1992, Joselyn as lessor and petitioner Philip Matthews as lessee,
entered into an Agreement of Lease[10] (Agreement) involving the Boracay property
for a period of 25 years, with an annual rental of P12,000.00. The agreement was
signed by the parties and executed before a Notary Public. Petitioner thereafter
took possession of the property and renamed the resort as Music Garden Resort.
Claiming that the Agreement was null and void since it was entered into by Joselyn
without his (Benjamins) consent, Benjamin instituted an action for Declaration of
Nullity of Agreement of Lease with Damages [11] against Joselyn and the
petitioner. Benjamin claimed that his funds were used in the acquisition and
improvement of the Boracay property, and coupled with the fact that he was
Joselyns husband, any transaction involving said property required his consent.
No Answer was filed, hence, the RTC declared Joselyn and the petitioner in
defeault. On March 14, 1994, the RTC rendered judgment by default declaring the
Agreement null and void.[12] The decision was, however, set aside by the CA in
CA-G.R. SP No. 34054.[13] The CA also ordered the RTC to allow the petitioner to
file his Answer, and to conduct further proceedings.
In his Answer,[14] petitioner claimed good faith in transacting with Joselyn. Since
Joselyn appeared to be the owner of the Boracay property, he found it unnecessary
to obtain the consent of Benjamin. Moreover, as appearing in the Agreement,
Benjamin signed as a witness to the contract, indicating his knowledge of the
transaction and, impliedly, his conformity to the agreement entered into by his
wife. Benjamin was, therefore, estopped from questioning the validity of the
Agreement.
There being no amicable settlement during the pre-trial, trial on the merits ensued.
On June 30, 1997, the RTC disposed of the case in this manner:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the

plaintiff and against the defendants as follows:
1. The Agreement of Lease dated July 20, 1992 consisting of eight (8)
pages (Exhibits T, T-1, T-2, T-3, T-4, T-5, T-6 and T-7) entered into by
and between Joselyn C. Taylor and Philip Matthews before Notary
Public Lenito T. Serrano under Doc. No. 390, Page 79, Book I, Series
of 1992 is hereby declared NULL and VOID;
2. Defendants are hereby ordered, jointly and severally, to pay plaintiff

the sum of SIXTEEN THOUSAND (P16,000.00) PESOS as damages
representing unrealized income for the residential building and
cottages computed monthly from July 1992 up to the time the property
in question is restored to plaintiff; and
3. Defendants are hereby ordered, jointly and severally, to pay plaintiff

the sum of TWENTY THOUSAND (P20,000.00) PESOS, Philippine
Currency, for attorneys fees and other incidental expenses.
SO ORDERED.[15]
The RTC considered the Boracay property as community property of Benjamin and
Joselyn; thus, the consent of the spouses was necessary to validate any contract
involving the property. Benjamins right over the Boracay property was bolstered
by the courts findings that the property was purchased and improved through funds
provided by Benjamin. Although the Agreement was evidenced by a public
document, the trial court refused to consider the alleged participation of Benjamin
in the questioned transaction primarily because his signature appeared only on the
last page of the document and not on every page thereof.
On appeal to the CA, petitioner still failed to obtain a favorable decision. In

its December 19, 2003 Decision,[16] the CA affirmed the conclusions made by the
RTC.The appellate court was of the view that if, indeed, Benjamin was a willing
participant in the questioned transaction, the parties to the Agreement should have
used the phrase with my consent instead of signed in the presence of. The CA
noted that Joselyn already prepared an SPA in favor of Benjamin involving the
Boracay property; it was therefore unnecessary for Joselyn to participate in the
execution of the Agreement. Taken together, these circumstances yielded the
inevitable conclusion that the contract was null and void having been entered into
by Joselyn without the consent of Benjamin.
Aggrieved, petitioner now comes before this Court in this petition for review
on certiorari based on the following grounds:
4.1. THE MARITAL CONSENT OF RESPONDENT BENJAMIN TAYLOR IS
NOT REQUIRED IN THE AGREEMENT OF LEASE DATED 20 JULY
1992. GRANTING ARGUENDO THAT HIS CONSENT IS REQUIRED,
BENJAMIN TAYLOR IS DEEMED TO HAVE GIVEN HIS CONSENT WHEN
HE AFFIXED HIS SIGNATURE IN THE AGREEMENT OF LEASE AS
WITNESS IN THE LIGHT OF THE RULING OF THE SUPREME COURT IN
THE CASE OF SPOUSES PELAYO VS. MELKI PEREZ, G.R. NO.
141323, JUNE 8, 2005.
4.2. THE PARCEL OF LAND SUBJECT OF THE AGREEMENT OF LEASE IS

THE EXCLUSIVE PROPERTY OF JOCELYN C. TAYLOR, A FILIPINO
CITIZEN, IN THE LIGHT OF CHEESMAN VS. IAC, G.R. NO.
74833, JANUARY 21, 1991.
4.3. THE COURTS A QUO ERRONEOUSLY APPLIED ARTICLE 96 OF THE

FAMILY CODE OF THE PHILIPPINES WHICH IS A PROVISION
REFERRING TO THE ABSOLUTE COMMUNITY OF PROPERTY. THE
PROPERTY REGIME GOVERNING THE PROPERTY RELATIONS OF
BENJAMIN TAYLOR AND JOSELYN TAYLORIS THE CONJUGAL
PARTNERSHIP OF GAINS BECAUSE THEY WERE MARRIED ON 30 JUNE
1988 WHICH IS PRIOR TO THE EFFECTIVITY OF THE FAMILY
CODE. ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES FINDS
NO APPLICATION IN THIS CASE.
4.4. THE HONORABLE COURT OF APPEALS IGNORED THE

PRESUMPTION OF REGULARITY IN THE EXECUTION OF NOTARIAL
DOCUMENTS.
4.5. THE HONORABLE COURT OF APPEALS FAILED TO PASS UPON THE

COUNTERCLAIM OF PETITIONER DESPITE THE FACT THAT IT WAS
NOT CONTESTED AND DESPITE THE PRESENTATION OF EVIDENCE
ESTABLISHING SAID CLAIM.[17]
The petition is impressed with merit.
In fine, we are called upon to determine the validity of an Agreement of Lease of a

parcel of land entered into by a Filipino wife without the consent of her British
husband. In addressing the matter before us, we are confronted not only with civil
law or conflicts of law issues, but more importantly, with a constitutional question.
It is undisputed that Joselyn acquired the Boracay property in 1989. Said

acquisition was evidenced by a Deed of Sale with Joselyn as the vendee. The
property was also declared for taxation purposes under her name. When Joselyn
leased the property to petitioner, Benjamin sought the nullification of the contract
on two grounds: first, that he was the actual owner of the property since he
provided the funds used in purchasing the same; and second, that Joselyn could not
enter into a valid contract involving the subject property without his consent.
The trial and appellate courts both focused on the property relations of petitioner
and respondent in light of the Civil Code and Family Code provisions. They,
however, failed to observe the applicable constitutional principles, which, in fact,
are the more decisive.
Section 7, Article XII of the 1987 Constitution states:[18]

Section 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, have been disqualified from acquiring
lands of the public domain. Hence, by virtue of the aforecited constitutional
provision, they are also disqualified from acquiring private lands. [19] The primary
purpose of this constitutional provision is the conservation of the national
patrimony.[20] Our fundamental law cannot be any clearer. The right to acquire
lands of the public domain is reserved only to Filipino citizens or corporations at
least sixty percent of the capital of which is owned by Filipinos.[21]
In Krivenko v. Register of Deeds,[22] cited in Muller v. Muller,[23] we had the

occasion to explain the constitutional prohibition:
Under Section 1 of Article XIII of the Constitution, natural resources, with

the exception of public agricultural land, shall not be alienated, and with respect
to public agricultural lands, their alienation is limited to Filipino citizens. But this
constitutional purpose conserving agricultural resources in the hands of Filipino
citizens may easily be defeated by the Filipino citizens themselves who may
alienate their agricultural lands in favor of aliens. It is partly to prevent this result
that Section 5 is included in Article XIII, and it reads as follows:
Section 5. Save in cases of hereditary succession, no private agricultural

land will be transferred or assigned except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain in
the Philippines.
This constitutional provision closes the only remaining avenue through
which agricultural resources may leak into aliens hands. It would certainly be
futile to prohibit the alienation of public agricultural lands to aliens if, after all,
they may be freely so alienated upon their becoming private agricultural lands in
the hands of Filipino citizens. x x x
xxxx
If the term private agricultural lands is to be construed as not including

residential lots or lands not strictly agricultural, the result would be that aliens
may freely acquire and possess not only residential lots and houses for themselves
but entire subdivisions, and whole towns and cities, and that they may validly buy
and hold in their names lands of any area for building homes, factories, industrial
plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf
courses, playgrounds, airfields, and a host of other uses and purposes that are not,
in appellants words, strictly agricultural. (Solicitor Generals Brief, p. 6) That this
is obnoxious to the conservative spirit of the Constitution is beyond question.[24]
The rule is clear and inflexible: aliens are absolutely not allowed to acquire public
or private lands in the Philippines, save only in constitutionally recognized
exceptions.[25] There is no rule more settled than this constitutional prohibition, as
more and more aliens attempt to circumvent the provision by trying to own lands
through another. In a long line of cases, we have settled issues that directly or
indirectly involve the above constitutional provision. We had cases where aliens
wanted that a particular property be declared as part of their fathers estate; [26] that
they be reimbursed the funds used in purchasing a property titled in the name of
another;[27] that an implied trust be declared in their (aliens) favor; [28] and that a
contract of sale be nullified for their lack of consent.[29]
In Ting Ho, Jr. v. Teng Gui,[30] Felix Ting Ho, a Chinese citizen, acquired a parcel of
land, together with the improvements thereon. Upon his death, his heirs (the
petitioners therein) claimed the properties as part of the estate of their deceased
father, and sought the partition of said properties among themselves. We, however,
excluded the land and improvements thereon from the estate of Felix Ting Ho,
precisely because he never became the owner thereof in light of the above-
mentioned constitutional prohibition.
In Muller v. Muller,[31] petitioner Elena Buenaventura Muller and respondent

Helmut Muller were married in Germany. During the subsistence of their marriage,
respondent purchased a parcel of land in Antipolo City and constructed a house
thereon. The Antipolo property was registered in the name of the petitioner. They
eventually separated, prompting the respondent to file a petition for separation of
property. Specifically, respondent prayed for reimbursement of the funds he paid
for the acquisition of said property. In deciding the case in favor of the petitioner,
the Court held that respondent was aware that as an alien, he was prohibited from
owning a parcel of land situated in the Philippines. He had, in fact, declared that
when the spouses acquired the Antipolo property, he had it titled in the name of the
petitioner because of said prohibition. Hence, we denied his attempt at
subsequently asserting a right to the said property in the form of a claim for
reimbursement. Neither did the Court declare that an implied trust was created by
operation of law in view of petitioners marriage to respondent. We said that to rule
otherwise would permit circumvention of the constitutional prohibition.
In Frenzel v. Catito,[32] petitioner, an Australian citizen, was married to Teresita
Santos; while respondent, a Filipina, was married to Klaus Muller. Petitioner and
respondent met and later cohabited in a common-law relationship, during which
petitioner acquired real properties; and since he was disqualified from owning
lands in the Philippines, respondents name appeared as the vendee in the deeds of
sale. When their relationship turned sour, petitioner filed an action for the recovery
of the real properties registered in the name of respondent, claiming that he was the
real owner. Again, as in the other cases, the Court refused to declare petitioner as
the owner mainly because of the constitutional prohibition. The Court added that
being a party to an illegal contract, he could not come to court and ask to have his
illegal objective carried out. One who loses his money or property by knowingly
engaging in an illegal contract may not maintain an action for his losses.
Finally, in Cheesman v. Intermediate Appellate Court,[33] petitioner (an American
citizen) and Criselda Cheesman acquired a parcel of land that was later registered
in the latters name. Criselda subsequently sold the land to a third person without
the knowledge of the petitioner. The petitioner then sought the nullification of the
sale as he did not give his consent thereto. The Court held that assuming that it was
his (petitioners) intention that the lot in question be purchased by him and his wife,
he acquired no right whatever over the property by virtue of that purchase; and in
attempting to acquire a right or interest in land, vicariously and clandestinely, he
knowingly violated the Constitution; thus, the sale as to him was null and void.
In light of the foregoing jurisprudence, we find and so hold that Benjamin

has no right to nullify the Agreement of Lease between Joselyn and
petitioner.Benjamin, being an alien, is absolutely prohibited from acquiring private
and public lands in the Philippines. Considering that Joselyn appeared to be the
designated vendee in the Deed of Sale of said property, she acquired sole
ownership thereto. This is true even if we sustain Benjamins claim that he provided
the funds for such acquisition. By entering into such contract knowing that it was
illegal, no implied trust was created in his favor; no reimbursement for his
expenses can be allowed; and no declaration can be made that the subject property
was part of the conjugal/community property of the spouses. In any event, he had
and has no capacity or personality to question the subsequent lease of the Boracay
property by his wife on the theory that in so doing, he was merely exercising the
prerogative of a husband in respect of conjugal property. To sustain such a theory
would countenance indirect controversion of the constitutional prohibition. If the
property were to be declared conjugal, this would accord the alien husband a
substantial interest and right over the land, as he would then have a decisive vote
as to its transfer or disposition. This is a right that the Constitution does not permit
him to have.[34]
In fine, the Agreement of Lease entered into between Joselyn and petitioner cannot
be nullified on the grounds advanced by Benjamin. Thus, we uphold its validity.
With the foregoing disquisition, we find it unnecessary to address the other

issues raised by the petitioner.
WHEREFORE, premises considered, the December 19, 2003 Decision and

July 14, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59573,
are REVERSED and SET ASIDE and a new one is entered DISMISSING the
complaint against petitioner Philip Matthews.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA

Associate Justice
WE CONCUR:
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.

DIOSDADO M. PERALTA
Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
Associate Justice
Chairperson, Third Division
C E RT I FI CAT I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
Penned by Associate Justice Sergio L. Pestao, with Associate Justices Marina L. Buzon and Jose C.
Mendoza, concurring; rollo, pp. 54-61.
[2]
Id. at 52.
[3]
Penned by Acting Presiding Judge Pepito T. Ta-ay; CA rollo, pp. 102-115.
[4]
Evidenced by a Marriage Contract; Exh A, Folder of Exhibits of the Plaintiff.
[5]
The sale was evidenced by a Deed of Sale duly executed by the parties and registered with the Registry of Deeds
of Aklan; Exh. D, Folder of Exhibits of the Plaintiff.
[6]
Rollo, p. 55.
[7]
Id.
[8]
The licenses and permits were under the name of Joselyns sister because at the time of the application, Joselyn
was still a minor.
[9]
Exh. V; Folder of Exhibits of the Plaintiff.
[10]
Exh. T; Folder of Exhibits of the Plaintiff.
[11]
Records, pp. 1-3.
[12]
Id. at 132-137.
[13]
Penned by Associate Justice Ruben T. Reyes, with Associate Justices Oscar M. Herrera and Angelina Sandoval-
Gutierrez, concurring; Id. at 139-148.
[14]
Id. at 201-201-m.
[15]
Id. at 355.
[16]
Supra note 1.
[17]
Rollo, pp. 554-556.
[18]
A similar provision was set forth in the 1935 and 1973 Constitutions, viz:
Section 5, Article XIII of the 1935 Constitution states:
Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned
except to individuals, corporations, or associations qualified to acquire or hold lands of the public
domain in the Philippines.
Section 14, Article XIV of the 1973 Constitution also states:
Save in cases of hereditary succession, no private land shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands in the public domain.
[19]
Muller v. Muller, G.R. No. 149615, August 29, 2006, 500 SCRA 65, 71; Frenzel v. Catito, 453 Phil. 885, 904
(2003).
[20]
Muller v. Muller, Id.
[21]
Ting Ho, Jr. v. Teng Gui, G.R. No. 130115, July 16, 2008, 558 SCRA 421.
[22]
79 Phil. 461 (1947).
[23]
Supra.
[24]
Id. at 71-72; Krivenko v. Register of Deeds of Manila, 79 Phil. 461, 473-476 (1947).
[25]
The instances when aliens may be allowed to acquire private lands in the Philippines are:
(a) By hereditary succession (Section 7, Article XII, Philippine Constitution).
(b) A natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of
private lands, subject to limitations provided by law (Section 8, Article XII, Philippine
Constitution). Republic Act No. 8179 now allows a former natural-born Filipino citizen to acquire up
to 5,000 square meters of urban land and 3 hectares or rural land, and he may now use the land not
only for residential purposes, but even for business or other purposes.
(c) Americans who may have acquired tile to private lands during the effectivity of the Parity Agreement
shall hold valid title thereto as against private persons (Section 11, Article XVII, 1973 Constitution).
[26]
Ting Ho, Jr. v. Teng Gui, supra. note 21.
[27]
Muller v. Muller, supra. note 19; Frenzel v. Catito, supra. note 19.
[28]
Muller v. Muller, Id.
[29]
Cheesman v. Intermediate Appellate Court, G.R. No. 74833, January 21, 1991, 193 SCRA 93.
[30]
Supra.
[31]
Supra.
[32]
Supra.
[33]
Supra.
[34]
Cheesman v. Intermediate Appellate Court, supra. at 103-104.
FIRST DIVISION
IN RE: PETITION FOR G.R. No. 149615

SEPARATION OF PROPERTY
ELENA BUENAVENTURA MULLER,

Petitioner, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
HELMUT MULLER,
Respondent. Promulgated:
August 29, 2006
x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari[1] assails the February 26, 2001 Decision[2] of
the Court of Appeals in CA-G.R. CV No. 59321 affirming with modification the
August 12, 1996 Decision[3] of the Regional Trial Court of Quezon City, Branch 86
in Civil Case No. Q-94-21862, which terminated the regime of absolute
community of property between petitioner and respondent, as well as the
Resolution[4] dated August 13, 2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married
in Hamburg, Germany on September 22, 1989. The couple resided in Germany at a
house owned by respondents parents but decided to move and reside permanently
in the Philippines in 1992. By this time, respondent had inherited the house
inGermany from his parents which he sold and used the proceeds for the purchase
of a parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the
construction of a house amounting to P2,300,000.00. The Antipolo property was
registered in the name of petitioner under Transfer Certificate of Title No.
219438[5] of the Register of Deeds of Marikina, Metro Manila.
Due to incompatibilities and respondents alleged womanizing, drinking, and

maltreatment, the spouses eventually separated. On September 26, 1994,
respondent filed a petition[6] for separation of properties before the Regional Trial
Court of Quezon City.
On August 12, 1996, the trial court rendered a decision which terminated the
regime of absolute community of property between the petitioner and
respondent. It also decreed the separation of properties between them and ordered
the equal partition of personal properties located within the country, excluding
those acquired by gratuitous title during the marriage. With regard to the Antipolo
property, the court held that it was acquired using paraphernal funds of the
respondent. However, it ruled that respondent cannot recover his funds because the
property was purchased in violation of Section 7, Article XII of the
Constitution. Thus
However, pursuant to Article 92 of the Family Code, properties acquired

by gratuitous title by either spouse during the marriage shall be excluded from the
community property. The real property, therefore, inherited by petitioner
in Germany is excluded from the absolute community of property of the herein
spouses. Necessarily, the proceeds of the sale of said real property as well as the
personal properties purchased thereby, belong exclusively to the
petitioner. However, the part of that inheritance used by the petitioner for
acquiring the house and lot in this country cannot be recovered by the petitioner,
its acquisition being a violation of Section 7, Article XII of the Constitution which
provides that save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations or associations
qualified to acquire or hold lands of the public domain. The law will leave the
parties in the situation where they are in without prejudice to a voluntary partition
by the parties of the said real property. x x x
xxxx
As regards the property covered by Transfer Certificate of Title No.

219438 of the Registry of Deeds of Marikina, Metro Manila, situated in Antipolo,
Rizal and the improvements thereon, the Court shall not make any pronouncement
on constitutional grounds.[7]
Respondent appealed to the Court of Appeals which rendered the assailed
decision modifying the trial courts Decision. It held that respondent merely prayed
for reimbursement for the purchase of the Antipolo property, and not acquisition or
transfer of ownership to him. It also considered petitioners ownership over the
property in trust for the respondent. As regards the house, the Court of Appeals
ruled that there is nothing in the Constitution which prohibits respondent from
acquiring the same. The dispositive portion of the assailed decision reads:
WHEREFORE, in view of the foregoing, the Decision of the lower court

dated August 12, 1996 is hereby MODIFIED. Respondent Elena Buenaventura
Muller is hereby ordered to REIMBURSE the petitioner the amount of
P528,000.00 for the acquisition of the land and the amount of P2,300,000.00 for
the construction of the house situated in Atnipolo, Rizal, deducting therefrom the
amount respondent spent for the preservation, maintenance and development of
the aforesaid real property including the depreciation cost of the house or in the
alternative to SELL the house and lot in the event respondent does not have the
means to reimburse the petitioner out of her own money and from the proceeds
thereof, reimburse the petitioner of the cost of the land and the house deducting
the expenses for its maintenance and preservation spent by the respondent. Should
there be profit, the same shall be divided in proportion to the equity each has over
the property. The case is REMANDED to the lower court for reception of
evidence as to the amount claimed by the respondents for the preservation and
maintenance of the property.
SO ORDERED.[8]
Hence, the instant petition for review raising the following issues:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING

THAT THE RESPONDENT HEREIN IS ENTITLED TO REIMBURSEMENT
OF THE AMOUNT USED TO PURCHASE THE LAND AS WELL AS THE
COSTS FOR THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING,
IT INDIRECTLY ALLOWED AN ACT DONE WHICH OTHERWISE COULD
NOT BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO THE
CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS PROHIBITED
FROM ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN
THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
RESPONDENTS CAUSE OF ACTION WHICH IS ACTUALLY A DESPERATE
ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT IN QUESTION,
CLOTHED UNDER THE GUISE OF CLAIMING REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified to own

private lands in the Philippines; that respondent was aware of the constitutional
prohibition but circumvented the same; and that respondents purpose for filing an
action for separation of property is to obtain exclusive possession, control and
disposition of the Antipolo property.
Respondent claims that he is not praying for transfer of ownership of the

Antipolo property but merely reimbursement; that the funds paid by him for the
said property were in consideration of his marriage to petitioner; that the funds
were given to petitioner in trust; and that equity demands that respondent should be
reimbursed of his personal funds.
The issue for resolution is whether respondent is entitled to reimbursement

of the funds used for the acquisition of the Antipolo property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be

transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from acquiring

lands of the public domain. Hence, they are also disqualified from acquiring
private lands.[9] The primary purpose of the constitutional provision is the
conservation of the national patrimony. In the case of Krivenko v. Register of
Deeds,[10] the Court held:
Under section 1 of Article XIII of the Constitution, natural resources, with

the exception of public agricultural land, shall not be alienated, and with respect
to public agricultural lands, their alienation is limited to Filipino citizens. But this
constitutional purpose conserving agricultural resources in the hands of Filipino
citizens may easily be defeated by the Filipino citizens themselves who may
alienate their agricultural lands in favor of aliens. It is partly to prevent this result
that section 5 is included in Article XIII, and it reads as follows:
Sec. 5. Save in cases of hereditary succession, no private agricultural land

will be transferred or assigned except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain in the Philippines.
This constitutional provision closes the only remaining avenue through

which agricultural resources may leak into aliens hands. It would certainly be
futile to prohibit the alienation of public agricultural lands to aliens if, after all,
they may be freely so alienated upon their becoming private agricultural lands in
the hands of Filipino citizens. x x x
xxxx
If the term private agricultural lands is to be construed as not including

residential lots or lands not strictly agricultural, the result would be that aliens
may freely acquire and possess not only residential lots and houses for themselves
but entire subdivisions, and whole towns and cities, and that they may validly buy
and hold in their names lands of any area for building homes, factories, industrial
plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf
courses, playgrounds, airfields, and a host of other uses and purposes that are not,
in appellants words, strictly agricultural. (Solicitor Generals Brief, p. 6.) That this
is obnoxious to the conservative spirit of the Constitution is beyond question.
Respondent was aware of the constitutional prohibition and expressly

admitted his knowledge thereof to this Court.[11] He declared that he had the
Antipolo property titled in the name of petitioner because of the said prohibition.
[12]
His attempt at subsequently asserting or claiming a right on the said property
cannot be sustained.
The Court of Appeals erred in holding that an implied trust was created and
resulted by operation of law in view of petitioners marriage to respondent. Save for
the exception provided in cases of hereditary succession, respondents
disqualification from owning lands in the Philippines is absolute. Not even an
ownership in trust is allowed. Besides, where the purchase is made in violation of
an existing statute and in evasion of its express provision, no trust can result in
favor of the party who is guilty of the fraud.[13] To hold otherwise would allow
circumvention of the constitutional prohibition.
Invoking the principle that a court is not only a court of law but also a court
of equity, is likewise misplaced. It has been held that equity as a rule will follow
the law and will not permit that to be done indirectly which, because of public
policy, cannot be done directly.[14] He who seeks equity must do equity, and he who
comes into equity must come with clean hands. The latter is a frequently stated
maxim which is also expressed in the principle that he who has done inequity shall
not have equity. It signifies that a litigant may be denied relief by a court of equity
on the ground that his conduct has been inequitable, unfair and dishonest, or
fraudulent, or deceitful as to the controversy in issue.[15]
Thus, in the instant case, respondent cannot seek reimbursement on the

ground of equity where it is clear that he willingly and knowingly bought the
property despite the constitutional prohibition.
Further, the distinction made between transfer of ownership as opposed to

recovery of funds is a futile exercise on respondents part. To allow reimbursement
would in effect permit respondent to enjoy the fruits of a property which he is not
allowed to own. Thus, it is likewise proscribed by law. As expressly held
in Cheesman v. Intermediate Appellate Court:[16]
Finally, the fundamental law prohibits the sale to aliens of residential

land. Section 14, Article XIV of the 1973 Constitution ordains that, Save in cases
of hereditary succession, no private land shall be transferred or conveyed except
to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain. Petitioner Thomas Cheesman was, of course, charged with
knowledge of this prohibition. Thus, assuming that it was his intention that the lot
in question be purchased by him and his wife, he acquired no right whatever over
the property by virtue of that purchase; and in attempting to acquire a right or
interest in land, vicariously and clandestinely, he knowingly violated the
Constitution; the sale as to him was null and void. In any event, he had and has no
capacity or personality to question the subsequent sale of the same property by his
wife on the theory that in so doing he is merely exercising the prerogative of a
husband in respect of conjugal property. To sustain such a theory would permit
indirect controversion of the constitutional prohibition. If the property were to be
declared conjugal, this would accord to the alien husband a not insubstantial
interest and right over land, as he would then have a decisive vote as to its transfer
or disposition. This is a right that the Constitution does not permit him to have.
As already observed, the finding that his wife had used her own money to
purchase the property cannot, and will not, at this stage of the proceedings be
reviewed and overturned. But even if it were a fact that said wife had used
conjugal funds to make the acquisition, the considerations just set out to
militate, on high constitutional grounds, against his recovering and holding
the property so acquired, or any part thereof. And whether in such an event,
he may recover from his wife any share of the money used for the purchase
or charge her with unauthorized disposition or expenditure of conjugal funds
is not now inquired into; that would be, in the premises, a purely academic
exercise. (Emphasis added)
WHEREFORE, in view of the foregoing, the instant petition

is GRANTED. The Decision dated February 26, 2001 of the Court of Appeals in
CA-G.R. CV No. 59321 ordering petitioner Elena Buenaventura Muller to
reimburse respondent Helmut Muller the amount of P528,000 for the acquisition of
the land and the amount of P2,300,000 for the construction of the house in
Antipolo City, and the Resolution dated August 13, 2001 denying reconsideration
thereof, are REVERSED and SET ASIDE. The August 12, 1996 Decision of the
Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862
terminating the regime of absolute community between the petitioner and
respondent, decreeing a separation of property between them and ordering the
partition of the personal properties located in the Philippines equally,
is REINSTATED.
SO ORDERED.
Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.

MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
ARTEMIO V. PANGANIBAN
Chief Justice
[1]
Rollo, pp. 31-50.
[2]
Id. at 8-13. Penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by Associate Justices Ruben T.
Reyes and Presbitero J. Velasco, Jr. (who is now a Member of this Court).
[3]
Id. at 98-101. Penned by Judge Teodoro A. Bay.
[4]
Id. at 22.
[5]
Id. at 58.
[6]
Id. at 52-57.
[7]
Id. at 100-101.
[8]
Id. at 12.
[9]
Ong Ching Po v. Court of Appeals, G.R. Nos. 113472-73, December 20, 1994, 239 SCRA 341, 346.
[10]
79 Phil. 461, 473, 476 (1947).
[11]
Rollo, p. 114.
[12]
TSN, April 18, 1995, p. 12.
[13]
Morales v. Court of Appeals, G.R. No. 117228, June 19, 1997, 274 SCRA 282, 299.
[14]
Frenzel v. Catito, 453 Phil. 885, 905 (2003).
[15]
University of the Philippines v. Catungal, Jr., 338 Phil. 728, 743-744 (1997).
[16]
G.R. No. 74833, January 21, 1991, 193 SCRA 93, 103-104.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 188289 August 20, 2014
DAVID A. NOVERAS, Petitioner,

vs.
LETICIA T. NOVERAS, Respondent.
DECISION
PEREZ, J.:
Before the Court is a petition for review assailing the 9 May 2008 Decision of the Court of Appeals in
1
CA-G.R .. CV No. 88686, which affirmed in part the 8 December 2006 Decision of the Regional Trial
2
Court (RTC) of Baler, Aurora, Branch 96.
The factual antecedents are as follow:
David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3 December 1988 in
Quezon City, Philippines. They resided in California, United States of America (USA) where they
eventually acquired American citizenship. They then begot two children, namely: Jerome T.
Noveras, who was born on 4 November 1990 and JenaT. Noveras, born on 2 May 1993. David was
engaged in courier service business while Leticia worked as a nurse in San Francisco, California.
During the marriage, they acquired the following properties in the Philippines and in the USA:
PHILIPPINES
PROPERTY FAIR MARKET VALUE
P1,693,125.00
House and Lot with an area of 150 sq. m.
located at 1085 Norma Street, Sampaloc,
Manila (Sampaloc property)
P400,000.00
Agricultural land with an area of 20,742 sq.
m. located at Laboy, Dipaculao, Aurora
P490,000.00
A parcel of land with an area of 2.5 hectares
located at Maria Aurora, Aurora
3
P175,000.00
A parcel of land with an area of 175 sq.m.
located at Sabang Baler, Aurora
P750,000.00
3-has. coconut plantation in San Joaquin
Maria Aurora, Aurora
USA
PROPERTY FAIR MARKET VALUE
House and Lot at 1155 Hanover Street, Daly

City, California
$550,000.00
(unpaid debt of $285,000.00)
$3,000
Furniture and furnishings
$9,000
Jewelries (ring and watch)
$13,770.00
2000 Nissan Frontier 4x4 pickup truck
$8,000
Bank of America Checking Account
Bank of America Cash Deposit
$100,000.00
Life Insurance (Cash Value)
4
$56,228.00
Retirement, pension, profit-sharing, annuities
The Sampaloc property used to beowned by Davids parents. The parties herein secured a loan from
a bank and mortgaged the property. When said property was about to be foreclosed, the couple paid
a total of P1.5 Million for the redemption of the same.
Due to business reverses, David left the USA and returned to the Philippines in 2001. In December
2002,Leticia executed a Special Power of Attorney (SPA) authorizing David to sell the Sampaloc
property for P2.2 Million. According to Leticia, sometime in September 2003, David abandoned his
family and lived with Estrellita Martinez in Aurora province. Leticia claimed that David agreed toand
executed a Joint Affidavit with Leticia in the presence of Davids father, Atty. Isaias Noveras, on 3
December 2003 stating that: 1) the P1.1Million proceeds from the sale of the Sampaloc property
shall be paid to and collected by Leticia; 2) that David shall return and pay to Leticia P750,000.00,
which is equivalent to half of the amount of the redemption price of the Sampaloc property; and 3)
that David shall renounce and forfeit all his rights and interest in the conjugal and real properties
situated in the Philippines. David was able to collect P1,790,000.00 from the sale of the Sampaloc
5
property, leaving an unpaid balance of P410,000.00.
Upon learning that David had an extra-marital affair, Leticia filed a petition for divorce with the
Superior Court of California, County of San Mateo, USA. The California court granted the divorce on
24 June 2005 and judgment was duly entered on 29 June 2005. The California court granted to
6
Leticia the custody of her two children, as well as all the couples properties in the USA. 7
On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal Property before the
RTC of Baler, Aurora. She relied on the 3 December 2003 Joint Affidavit and Davids failure to
comply with his obligation under the same. She prayed for: 1) the power to administer all conjugal
properties in the Philippines; 2) David and his partner to cease and desist from selling the subject
conjugal properties; 3) the declaration that all conjugal properties be forfeited in favor of her children;
4) David to remit half of the purchase price as share of Leticia from the sale of the Sampaloc
property; and 5) the payment ofP50,000.00 and P100,000.00 litigation expenses. 8
In his Answer, David stated that a judgment for the dissolution of their marriage was entered on 29
June 2005 by the Superior Court of California, County of San Mateo. He demanded that the conjugal
partnership properties, which also include the USA properties, be liquidated and that all expenses of
liquidation, including attorneys fees of both parties be charged against the conjugal partnership. 9
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed acts of abandonment and marital
infidelity which can result intothe forfeiture of the parties properties in favor of the petitioner
and their two (2) children.
2. Whether or not the Court has jurisdiction over the properties in California, U.S.A. and the
same can be included in the judicial separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T. Noveras and
respondent David A. Noveras will amount to a waiver or forfeiture of the latters property
rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled to reimbursement of onehalf of the P2.2

[M]illion sales proceeds of their property in Sampaloc, Manila and one-half of the P1.5
[M]illion used to redeem the property of Atty. Isaias Noveras, including interests and charges.
5. How the absolute community properties should be distributed.
6. Whether or not the attorneys feesand litigation expenses of the parties were chargeable
against their conjugal properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are entitled to support and presumptive
legitimes.
10
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is hereby declared DISSOLVED;
2. The net assets of the absolute community of property ofthe parties in the Philippines are
hereby ordered to be awarded to respondent David A. Noveras only, with the properties in
the United States of America remaining in the sole ownership of petitioner Leticia Noveras
a.k.a. Leticia Tacbiana pursuant to the divorce decree issuedby the Superior Court of
California, County of San Mateo, United States of America, dissolving the marriage of the
parties as of June 24, 2005. The titles presently covering said properties shall be cancelled
and new titles be issued in the name of the party to whom said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras in the preceding

paragraph are hereby given to Jerome and Jena, his two minor children with petitioner
LeticiaNoveras a.k.a. Leticia Tacbiana as their presumptive legitimes and said legitimes must
be annotated on the titles covering the said properties.Their share in the income from these
properties shall be remitted to them annually by the respondent within the first half of
January of each year, starting January 2008;
4. One-half of the properties in the United States of America awarded to petitioner Leticia
Noveras a.k.a. Leticia Tacbiana in paragraph 2 are hereby given to Jerome and Jena, her
two minor children with respondent David A. Noveras as their presumptive legitimes and said
legitimes must be annotated on the titles/documents covering the said properties. Their
share in the income from these properties, if any, shall be remitted to them annually by the
petitioner within the first half of January of each year, starting January 2008;
5. For the support of their two (2) minor children, Jerome and Jena, respondent David A.
Noveras shall give them US$100.00 as monthly allowance in addition to their income from
their presumptive legitimes, while petitioner Leticia Tacbiana shall take care of their food,
clothing, education and other needs while they are in her custody in the USA. The monthly
allowance due from the respondent shall be increased in the future as the needs of the
children require and his financial capacity can afford;
6. Of the unpaid amount of P410,000.00 on the purchase price of the Sampaloc property, the
Paringit Spouses are hereby ordered to pay P5,000.00 to respondent David A. Noveras
and P405,000.00 to the two children. The share of the respondent may be paid to him
directly but the share of the two children shall be deposited with a local bank in Baler, Aurora,
in a joint account tobe taken out in their names, withdrawal from which shall only be made by
them or by their representative duly authorized with a Special Power of Attorney. Such
payment/deposit shall be made withinthe period of thirty (30) days after receipt of a copy of
this Decision, with the passbook of the joint account to be submitted to the custody of the
Clerk of Court of this Court within the same period. Said passbook can be withdrawn from
the Clerk of Court only by the children or their attorney-in-fact; and
7. The litigation expenses and attorneys fees incurred by the parties shall be shouldered by
them individually.
11
The trial court recognized that since the parties are US citizens, the laws that cover their legal and
personalstatus are those of the USA. With respect to their marriage, the parties are divorced by
virtue of the decree of dissolution of their marriage issued by the Superior Court of California, County
of San Mateo on 24June 2005. Under their law, the parties marriage had already been dissolved.
Thus, the trial court considered the petition filed by Leticia as one for liquidation of the absolute
community of property regime with the determination of the legitimes, support and custody of the
children, instead of an action for judicial separation of conjugal property.
With respect to their property relations, the trial court first classified their property regime as absolute
community of property because they did not execute any marriage settlement before the
solemnization of their marriage pursuant to Article 75 of the Family Code. Then, the trial court ruled
that in accordance with the doctrine of processual presumption, Philippine law should apply because
the court cannot take judicial notice of the US law since the parties did not submit any proof of their
national law. The trial court held that as the instant petition does not fall under the provisions of the
law for the grant of judicial separation of properties, the absolute community properties cannot
beforfeited in favor of Leticia and her children. Moreover, the trial court observed that Leticia failed to
prove abandonment and infidelity with preponderant evidence.
The trial court however ruled that Leticia is not entitled to the reimbursements she is praying for
considering that she already acquired all of the properties in the USA. Relying still on the principle of
equity, the Court also adjudicated the Philippine properties to David, subject to the payment of the
childrens presumptive legitimes. The trial court held that under Article 89 of the Family Code, the
waiver or renunciation made by David of his property rights in the Joint Affidavit is void.
On appeal, the Court of Appeals modified the trial courts Decision by directing the equal division of
the Philippine properties between the spouses. Moreover with respect to the common childrens
presumptive legitime, the appellate court ordered both spouses to each pay their children the
amount of P520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the

assailedDecision dated December 8, 2006 of Branch 96, RTC of Baler, Aurora Province, in Civil
Case No. 828 are hereby MODIFIED to read as follows:
2. The net assets of the absolute community of property of the parties in the Philippines are
hereby divided equally between petitioner Leticia Noveras a.k.a. Leticia Tacbiana (sic) and
respondent David A. Noveras;
xxx
4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in paragraph 2 shall
pertain to her minor children, Jerome and Jena, as their presumptive legitimes which shall be
annotated on the titles/documents covering the said properties. Their share in the income
therefrom, if any, shall be remitted to them by petitioner annually within the first half of
January, starting 2008;
xxx
6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are each ordered to
pay the amount ofP520,000.00 to their two children, Jerome and Jena, as their presumptive
legitimes from the sale of the Sampaloc property inclusive of the receivables therefrom,
which shall be deposited to a local bank of Baler, Aurora, under a joint account in the latters
names. The payment/deposit shall be made within a period of thirty (30) days from receipt
ofa copy of this Decision and the corresponding passbook entrusted to the custody ofthe
Clerk of Court a quowithin the same period, withdrawable only by the children or their
attorney-in-fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia Tacbiana (sic)
the amount of P1,040,000.00 representing her share in the proceeds from the sale of the
Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil registry of
Quezon City; the Civil RegistrarGeneral, National Statistics Office, Vibal Building, Times Street
corner EDSA, Quezon City; the Office of the Registry of Deeds for the Province of Aurora; and to the
children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED. 12
In the present petition, David insists that the Court of Appeals should have recognized the California
Judgment which awarded the Philippine properties to him because said judgment was part of the
pleading presented and offered in evidence before the trial court. David argues that allowing Leticia
to share in the Philippine properties is tantamount to unjust enrichment in favor of Leticia considering
that the latter was already granted all US properties by the California court.
In summary and review, the basic facts are: David and Leticia are US citizens who own properties in
the USA and in the Philippines. Leticia obtained a decree of divorce from the Superior Court of
California in June 2005 wherein the court awarded all the properties in the USA to Leticia. With
respect to their properties in the Philippines, Leticiafiled a petition for judicial separation ofconjugal
properties.
At the outset, the trial court erred in recognizing the divorce decree which severed the bond of
marriage between the parties. In Corpuz v. Sto. Tomas, we stated that:
13
The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our
courts do not take judicial notice of foreign judgments and laws. Justice Herrera explained that, as a
rule, "no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of
another country." This means that the foreign judgment and its authenticity must beproven as facts
under our rules on evidence, together with the aliens applicable national law to show the effect of
the judgment on the alien himself or herself. The recognition may be made in an action instituted
specifically for the purpose or in another action where a party invokes the foreign decree as an
integral aspect of his claim or defense.14
The requirements of presenting the foreign divorce decree and the national law of the foreigner must
comply with our Rules of Evidence. Specifically, for Philippine courts to recognize a foreign judgment
relating to the status of a marriage, a copy of the foreign judgment may be admitted in evidence and
proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the
Rules of Court. 15
Under Section 24 of Rule 132, the record of public documents of a sovereign authority or tribunal
may be proved by: (1) an official publication thereof or (2) a copy attested by the officer having the
legal custody thereof. Such official publication or copy must beaccompanied, if the record is not kept
in the Philippines, with a certificate that the attesting officer has the legal custody thereof. The
certificate may be issued by any of the authorized Philippine embassy or consular officials stationed
in the foreign country in which the record is kept, and authenticated by the seal of his office. The
attestation must state, in substance, that the copy is a correct copy of the original, or a specific part
thereof, asthe case may be, and must be under the official seal of the attesting officer.
Section 25 of the same Rule states that whenever a copy of a document or record is attested for the
purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be. The attestation must be under the official seal
of the attesting officer, if there be any, or if hebe the clerk of a court having a seal, under the seal of
such court.
Based on the records, only the divorce decree was presented in evidence. The required certificates
to prove its authenticity, as well as the pertinent California law on divorce were not presented.
It may be noted that in Bayot v. Court of Appeals, we relaxed the requirement on certification where
16
we held that "[petitioner therein] was clearly an American citizenwhen she secured the divorce and
that divorce is recognized and allowed in any of the States of the Union, the presentation of a copy
of foreign divorce decree duly authenticatedby the foreign court issuing said decree is, as here,
sufficient." In this case however, it appears that there is no seal from the office where the divorce
decree was obtained.
Even if we apply the doctrine of processual presumption as the lower courts did with respect to the
17
property regime of the parties, the recognition of divorce is entirely a different matter because, to
begin with, divorce is not recognized between Filipino citizens in the Philippines. Absent a valid
recognition of the divorce decree, it follows that the parties are still legally married in the Philippines.
The trial court thus erred in proceeding directly to liquidation.
As a general rule, any modification in the marriage settlements must be made before the celebration
of marriage. An exception to this rule is allowed provided that the modification isjudicially approved
and refers only to the instances provided in Articles 66,67, 128, 135 and 136 of the Family Code. 18
Leticia anchored the filing of the instant petition for judicial separation of property on paragraphs 4
and 6 of Article 135 of the Family Code, to wit:
Art. 135. Any of the following shall be considered sufficient cause for judicial separation of property:
(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it
civil interdiction;
(2) That the spouse of the petitioner has been judicially declared an absentee;
(3) That loss of parental authority ofthe spouse of petitioner has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or
her obligations to the family as provided for in Article 101;
(5) That the spouse granted the power of administration in the marriage settlements has
abused that power; and
(6) That at the time of the petition, the spouses have been separated in fact for at least one
year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation of the final judgment against
the guiltyor absent spouse shall be enough basis for the grant of the decree ofjudicial separation of
property. (Emphasis supplied).
The trial court had categorically ruled that there was no abandonment in this case to necessitate
judicial separation of properties under paragraph 4 of Article 135 of the Family Code. The trial court
ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code quoted above, must be for a valid
cause and the spouse is deemed to have abandoned the other when he/she has left the conjugal
dwelling without intention of returning. The intention of not returning is prima facie presumed if the
allegedly [sic] abandoning spouse failed to give any information as to his or her whereabouts within
the period of three months from such abandonment.
In the instant case, the petitioner knows that the respondent has returned to and stayed at his
hometown in Maria Aurora, Philippines, as she even went several times to visit him there after the
alleged abandonment. Also, the respondent has been going back to the USA to visit her and their
children until the relations between them worsened. The last visit of said respondent was in October
2004 when he and the petitioner discussed the filing by the latter of a petition for dissolution of
marriage with the California court. Such turn for the worse of their relationship and the filing of the
saidpetition can also be considered as valid causes for the respondent to stay in the Philippines. 19
Separation in fact for one year as a ground to grant a judicial separation of property was not tackled
in the trial courts decision because, the trial court erroneously treated the petition as liquidation of
the absolute community of properties.
The records of this case are replete with evidence that Leticia and David had indeed separated for
more than a year and that reconciliation is highly improbable. First, while actual abandonment had
not been proven, it is undisputed that the spouses had been living separately since 2003 when
David decided to go back to the Philippines to set up his own business. Second, Leticia heard from
her friends that David has been cohabiting with Estrellita Martinez, who represented herself as
Estrellita Noveras. Editha Apolonio, who worked in the hospital where David was once confined,
testified that she saw the name of Estrellita listed as the wife of David in the Consent for Operation
form. Third and more significantly, they had filed for divorce and it was granted by the California
20
court in June 2005.
Having established that Leticia and David had actually separated for at least one year, the petition
for judicial separation of absolute community of property should be granted.
The grant of the judicial separation of the absolute community property automatically dissolves the
absolute community regime, as stated in the 4th paragraph of Article 99 ofthe Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;

(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134 to 138.
(Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the dissolution of the absolute community
regime and the following procedure should apply:
Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the absolute
community and the exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid out of its assets. In
case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid
balance with their separate properties in accordance with the provisions of the second
paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered
to each of them.
(4) The net remainder of the properties of the absolute community shall constitute its net
assets, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements, or unless there has
been a voluntary waiver of such share provided in this Code. For purposes of computing the
net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No. (2),the said
profits shall be the increase in value between the market value of the community property at
the time of the celebration of the marriage and the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be delivered upon partition, in
accordance with Article 51.
(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the
conjugal dwelling and the lot on which it is situated shall be adjudicated tothe spouse with
whom the majority of the common children choose to remain. Children below the age of
seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide, taking into consideration
the best interests of said children. At the risk of being repetitious, we will not remand the
case to the trial court. Instead, we shall adopt the modifications made by the Court of
Appeals on the trial courts Decision with respect to liquidation.
We agree with the appellate court that the Philippine courts did not acquire jurisdiction over the
California properties of David and Leticia. Indeed, Article 16 of the Civil Code clearly states that real
property as well as personal property is subject to the law of the country where it is situated. Thus,
liquidation shall only be limited to the Philippine properties.
We affirm the modification madeby the Court of Appeals with respect to the share of the spouses in
the absolutecommunity properties in the Philippines, as well as the payment of their childrens
presumptive legitimes, which the appellate court explained in this wise:
Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc
property. While both claimed to have contributed to the redemption of the Noveras property, absent
1wphi1
a clear showing where their contributions came from, the same is presumed to have come from the
community property. Thus, Leticia is not entitled to reimbursement of half of the redemption money.
David's allegation that he used part of the proceeds from the sale of the Sampaloc property for the
benefit of the absolute community cannot be given full credence. Only the amount of P120,000.00
incurred in going to and from the U.S.A. may be charged thereto. Election expenses in the amount
of P300,000.00 when he ran as municipal councilor cannot be allowed in the absence of receipts or
at least the Statement of Contributions and Expenditures required under Section 14 of Republic Act
No. 7166 duly received by the Commission on Elections. Likewise, expenses incurred to settle the
criminal case of his personal driver is not deductible as the same had not benefited the family. In
sum, Leticia and David shall share equally in the proceeds of the sale net of the amount
of P120,000.00 or in the respective amounts of P1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil Code, "(t)he legitime of legitimate children and
descendants consists of one-half or the hereditary estate of the father and of the mother." The
children arc therefore entitled to half of the share of each spouse in the net assets of the absolute
community, which shall be annotated on the titles/documents covering the same, as well as to their
respective shares in the net proceeds from the sale of the Sampaloc property including the
receivables from Sps. Paringit in the amount of P410,000.00. Consequently, David and Leticia
should each pay them the amount of P520,000.00 as their presumptive legitimes therefrom. 21
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA G.R. CV
No. 88686 is AFFIRMED.
SO ORDERED.
JOSE PORTUGAL PEREZ

Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO*

Chief Justice
ANTONIO T. CARPIO
PRESBITERO J. VELASCO, JR.**
Associate Justice
Associate Justice
Chairperson
MARIANO C. DEL CASTILLO

Associate Justice
ATT E STATI O N
I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Second Division Chairperson
C E RTI F I CATI O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P. A. SERENO

Chief Justice
Footnotes
* Per Raffle dated 28 July 2014.
** Per Special Order No. 1757 dated 20 August 2014.
1
Penned by Associate Justice Estela M. Perlas-Bernabe (now Supreme Court Associate
Justice) with Associate Justices Portia Aliflo-Hormachuelos and Rosmari D. Carandang,
concurring. Rollo, pp. 26-37.
2
Presided by Judge Corazon D. Soluren. Records, pp. 262-288.
3
Id. at 2.
4
Id. at 27-28.
5
Id. at 16.
6
Id. at 77.
7
Id. at 79-81.
8
Id. at 4-5.
9
Id. at 23-26.
10
Id. at 267.
11
Id. at 287-288.
12
Rollo, pp. 36-37.
13
G.R. No. 186571, 11 August 2010, 628 SCRA 266.

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Republic of the Philippines

BRIGIDO B. QUIAO, G.R. No 176556

CARPIO, J., Chairperson,

On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a

WHEREFORE, viewed from the foregoing considerations, judgment is

1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;

shall be divided equally between herein [respondents] and [petitioner] subject to

[Petitioners] share, however, of the net profits earned by the conjugal

He is further ordered to reimburse [respondents] the sum of [P]19,000.00

On December 12, 2005, the respondents filed a motion for

Wherefore, finding the motion to be well taken, the same is hereby

Subsequently, on February 10, 2006, the RTC issued a Writ of

NOW THEREFORE, that of the goods and chattels of the [petitioner]

But if sufficient personal property cannot be found whereof to satisfy this

(a) P22,870.00 as petitioner's share of the payment of the conjugal share;

To resolve the petitioner's Motion for Clarification, the RTC issued an

WHEREFORE, there is no blatant disparity when the sheriff intends to

The Sheriff is herein directed to proceed with the execution of the

On November 21, 2006, the respondents filed a Motion for Reconsideration,

IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION

WHAT IS THE MEANING OF THE NET PROFITS EARNED BY

WHAT PROPERTIES SHALL BE INCLUDED IN THE

While the petitioner has raised a number of issues on the applicability of

The Decision dated October 10, 2005 has

Section 3, Rule 41 of the Rules of Court provides:

Section 3. Period of ordinary appeal. - The appeal shall be taken within

In Neypes v. Court of Appeals,[25] we clarified that to standardize the appeal

The petitioner argues that the decision he is questioning is a void

For our convenience, the following matters cannot anymore be disturbed

(c) The dissolution and liquidation of the conjugal partnership;[40]

(j) The list of properties which Rizal Commercial Banking Corporation

After discussing lengthily the immutability of the Decision dated October

Article 129 of the Family Code applies to

We respond in the negative.

To be vested, a right must have become a titlelegal or equitableto the

The concept of vested right is a consequence of the constitutional

Furthermore, we take note that the alleged deprivation of the petitioner's

The net profits of the conjugal

On Absolute Community Regime:

Under Article 102 of the Family Code, upon dissolution of marriage, an

On Conjugal Partnership Regime:

Before we go into our disquisition on the Conjugal Partnership Regime, we

Now, when a couple enters into a regime of conjugal partnership of

(1) An inventory shall be prepared, listing separately all the properties of

(2) Amounts advanced by the conjugal partnership in payment of personal

(7) The net remainder of the conjugal partnership properties shall

1. coffee mill in Balongagan, Las Nieves, Agusan del Norte;

2. coffee mill in Durian, Las Nieves, Agusan del Norte;

3. corn mill in Casiklan, Las Nieves, Agusan del Norte;

4. coffee mill in Esperanza, Agusan del Sur;

5. a parcel of land with an area of 1,200 square meters located in

6. a parcel of agricultural land with an area of 5 hectares located in Manila de

7. a parcel of land with an area of 84 square meters located in

8. Bashier Bon Factory located in Tungao, Butuan City.[80]

(b) Ordinarily, the benefit received by a spouse from the conjugal

ARTURO D. BRION JOSE PORTUGAL PEREZ

MARIA LOURDES P. A. SERENO

VIRGILIO MAQUILAN, G.R. NO. 155409

Before the Court is a Petition for Review on Certiorari under

Thereafter, private respondent, through counsel, filed a Petition for

During the pre-trial of the said case, petitioner and private

1. In partial settlement of the conjugal partnership of gains,

a. P 500,000.00 of the m oney deposi t ed in t he bank

The bal anc e of such deposi t , whi ch pres ent l y