PERSONS AND FAMILY RELATIONS WHEREFORE, in view of the foregoing, the Court hereby
3RD EXAM CASE COMPILATION grants the instant petition for legal separation between the
Article 88- 104
NOBLEZA VS NUEGA 2015
At bar is a petition for review on certiorari of the Decision1
dated May 14, 2010 and the Resolution2 dated July 21,
2010 of the Court of Appeals (CA) in CA-G.R. CV No. 70235,
which affirmed with modification the assailed Decision3
dated February 14, 2001 of the Regional Trial Court (RTC)
of Marikina City, Branch 273, in Civil Case No. 96-274-MK.
The following facts are found by the trial court and
affirmed by the appellate court:
Respondent Shirley B. Nuega (Shirley) was married to
Rogelio A. Nuega (Rogelio) on September 1, 1990.4
Sometime in 1988 when the parties were still engaged,
Shirley was working as a domestic helper in Israel. Upon the
request of Rogelio, Shirley sent him money5 for the
purchase of a residential lot in Marikina where they had
planned to eventually build their home. Rogelio was then
also working abroad as a seaman. The following year, or
on September 13, 1989, Rogelio purchased the subject
house and lot for One Hundred Two Thousand Pesos
(P102,000.00)6 from Rodeanna Realty Corporation. The
subject property has an aggregate area of one hundred
eleven square meters (111 sq. m.) covered by Transfer
Certificate of Title (TCT) No. N-133844.7 Shirley claims that
upon her arrival in the Philippines sometime in 1989, she
settled the balance for the equity over the subject
property with the developer through SSS8 financing. She
likewise paid for the succeeding monthly amortizations. On
October 19, 1989, TCT No. 1719639 over the subject
property was issued by the Registry of Deeds of Marikina,
Rizal solely under the name of Rogelio.
On September 1, 1990, Shirley and Rogelio got married
and lived in the subject property. The following year, Shirley
returned to Israel for work. While overseas, she received
information that Rogelio had brought home another
woman, Monica Escobar, into the family home. She also
learned, and was able to confirm upon her return to the
Philippines in May 1992, that Rogelio had been introducing
Escobar as his wife.
In June 1992, Shirley filed two cases against Rogelio: one
for Concubinage before the Provincial Prosecution Office
of Rizal, and another for Legal Separation and Liquidation
of Property before the RTC of Pasig City. Shirley later
withdrew the complaint for legal separation and
liquidation of property, but re-filed10 the same on January
29, 1993. In between the filing of these cases, Shirley
learned that Rogelio had the intention of selling the
subject property. Shirley then advised the interested buyers
- one of whom was their neighbor and petitioner Josefina
V. Nobleza (petitioner) - of the existence of the cases that
she had filed against Rogelio and cautioned them against
buying the subject property until the cases are closed and
terminated. Nonetheless, under a Deed of Absolute Sale11
dated December 29, 1992, Rogelio sold the subject
property to petitioner without Shirley's consent in the
amount of Three Hundred Eighty Thousand Pesos
(P380,000.00), including petitioner's undertaking to assume
the existing mortgage on the property with the National
Home Mortgage Finance Corporation and to pay the real
property taxes due thereon.
Meanwhile, in a Decision12 dated May 16, 1994, the RTC
of Pasig City, Branch 70, granted the petition for legal
separation and ordered the dissolution and liquidation of
the regime of absolute community of property between
Shirley and Rogelio, viz.:chanroblesvirtuallawlibrary
subject spouses with all its legal effects as provided for in
Art. 63 of the Family Code. Their community property is
consequently dissolved and must be liquidated in
accordance with Art. 102 of the New Family Code. The
respondent is thus hereby enjoined from selling,
encumbering or in any way disposing or alienating any of
their community property including the subject house and
lot before the required liquidation. Moreover, he, being the
guilty spouse, must forfeit the net profits of the community
property in favor of the petitioner who is the innocent
spouse pursuant to Art. 43 of the aforesaid law. Finally, in
the light of the claim of ownership by the present
occupants who have not been impleaded in the instant
case, a separate action must be instituted by the
petitioner against the alleged buyer or buyers thereof to
determine their respective rights thereon.
Let a copy of this decision be furnished the Local Civil
Registrar of Manila, the Register of Deeds of Marikina,
Metro Manila and the National Statistics Office (NSO), sta.
Mesa, Manila.
SO ORDERED.13cralawlawlibrary
Rogelio appealed the above-quoted ruling before the CA
which denied due course and dismissed the petition. It
became final and executory and a writ of execution was
issued in August 1995.14
On August 27, 1996, Shirley instituted a Complaint15 for
Rescission of Sale and Recoveiy of Property against
petitioner and Rogelio before the RTC of Marikina City,
Branch 273. After trial on the merits, the trial court rendered
its decision on February 14, 2001,
viz.:chanroblesvirtuallawlibrary
WHEREFORE, foregoing premises considered, judgment is
hereby rendered in favor of plaintiff Shirley Nuega and
against defendant Josefina Nobleza, as follows:
1)
the Deed of Absolute Sale dated December 29, 1992
insofar as the 55.05 square meters representing the one
half (1/2) portion of plaintiff Shirley Nuega is concerned, is
hereby ordered rescinded, the same being null and void;
2)
defendant Josefina Nobleza is ordered to reconvey said
55.05 square meters to plaintiff Shirley Nuega, or in the
alternative to pay plaintiff Shirley Nuega the present
market value of said 55.05 square meters; and
3)
to pay plaintiff Shirley Nuega attorney's fees in the sum of
Twenty Thousand Pesos (P20,000.00).
For lack of merit, defendant's counterclaim is hereby
DENIED.
SO ORDERED.16
Petitioner sought recourse with the CA, while Rogelio did
not appeal the ruling of the trial court. In its assailed
Decision promulgated on May 14, 2010, the appellate
court affirmed with modification the trial court's ruling,
viz.:chanroblesvirtuallawlibrary
WHEREFORE, subject to the foregoing disquisition, the
appeal is DENIED. The Decision dated 14 February 2001 of
the Regional Trial Court of Marikina City, Branch 273 in Civil
Case No. 96-274-MK is AFFIRMED with MODIFICATION in
that the Deed of Absolute Sale dated 29 December 1992
is hereby declared null and void in its entirety, and
defendant-appellant Josefina V. Nobleza is ordered to
reconvey the entire subject property to plaintiff-appellee
Shirley B. Nuega and defendant Rogelio Nuega, without
prejudice to said defendant-appellant's right to recover
from defendant Rogelio whatever amount she paid for the
subject property. Costs against defendant-appellant
Nobleza.
1

SO ORDERED.17cralawlawlibrary
Petitioner moved for reconsideration. In a Resolution
dated July 21, 2010, the appellate court denied the motion
for lack of merit. Hence, this petition raising the following
assignment of errors:chanroblesvirtuallawlibrary
[I.]
THE HONORABLE COURT OF APPEALS ERRED WHEN IT
AFFIRMED THE DECISION OF THE REGIONAL TRIAL COURT BY
SUSTAINING THE FINDING THAT PETITIONER WAS NOT A
PURCHASER IN GOOD FAITH.
[II.]
THE HONORABLE COURT OF APPEALS ERRED WHEN IT
MODIFIED THE DECISION OF THE REGIONAL TRIAL COURT BY
DECLARING AS NULL AND VOID THE DEED OF ABSOLUTE
SALE DATED 29 DECEMBER 1992 IN ITS ENTIRETY.18
We deny the petition.
Petitioner is not a buyer in good faith.
An innocent purchaser for value is one who buys the
property of another, without notice that some other person
has a right or interest in the property, for which a full and
fair price is paid by the buyer at the time of the purchase
or before receipt of any notice of claims or interest of some
other person in the property.19 It is the party who claims to
be an innocent purchaser for value who has the burden of
proving such assertion, and it is not enough to invoke the
ordinary presumption of good faith.20 To successfully
invoke and be considered as a buyer in good faith, the
presumption is that first and foremost, the "buyer in good
faith" must have shown prudence and due diligence in the
exercise of his/her rights. It presupposes that the buyer did
everything that an ordinary person would do for the
protection and defense of his/her rights and interests
against prejudicial or injurious concerns when placed in
such a situation. The prudence required of a buyer in good
faith is "not that of a person with training in law, but rather
that of an average man who 'weighs facts and
circumstances without resorting to the calibration of our
technical rules of evidence of which his knowledge is
nil.'"21 A buyer in good faith does his homework and
verifies that the particulars are in order such as the title, the
parties, the mode of transfer and the provisions in the
deed/contract of sale, to name a few. To be more
specific, such prudence can be shown by making an
ocular inspection of the property, checking the
title/ownership with the proper Register of Deeds alongside
the payment of taxes therefor, or inquiring into the
minutiae such as the parameters or lot area, the type of
ownership, and the capacity of the seller to dispose of the
property, which capacity necessarily includes an inquiry
into the civil status of the seller to ensure that if married,
marital consent is secured when necessary. In fine, for a
purchaser of a property in the possession of another to be
in good faith, he must exercise due diligence, conduct an
investigation, and weigh the surrounding facts and
circumstances like what any prudent man in a similar
situation would do.22
In the case at bar, petitioner claims that she is a buyer in
good faith of the subject property which is titled under the
name of the seller Rogelio A. Nuega alone as evidenced
by TCT No. 171963 and Tax Declaration Nos. D-012-04723
and D-012-04724.23 Petitioner argues, among others, that
since she has examined the TCT over the subject property
and found the property to have been registered under the
name of seller Rogelio alone, she is an innocent purchaser
for value and "she is not required to go beyond the face
of the title in verifying the status of the subject property at
the time of the consummation of the sale and at the date
of the sale."24
We disagree with petitioner.
A buyer cannot claim to be an innocent purchaser for
value by merely relying on the TCT of the seller while
ignoring all the other surrounding circumstances relevant
to the sale.
In the case of Spouses Raymundo v. Spouses Bandong,25
petitioners therein - as does petitioner herein - were also
harping that due to the indefeasibility of a Torrens title,
there was nothing in the TCT of the property in litigation
that should have aroused the buyer's suspicion as to put
her on guard that there was a defect in the title of therein
seller. The Court held in the Spouses Raymundo case that
the buyer therein could not hide behind the cloak of being
an innocent purchaser for value by merely relying on the
TCT which showed that the registered owner of the land
purchased is the seller. The Court ruled in this case that the
buyer was not an innocent purchaser for value due to the
following attendant circumstances,
viz.:chanroblesvirtuallawlibrary
In the present case, we are not convinced by the
petitioners' incessant assertion that Jocelyn is an innocent
purchaser for value. To begin with, she is a grandniece of
Eulalia and resides in the same locality where the latter
lives and conducts her principal business. It is therefore
impossible for her not to acquire knowledge of her grand
aunt's business practice of requiring her biyaheros to
surrender the titles to their properties and to sign the
corresponding deeds of sale over said properties in her
favor, as security. This alone should have put Jocelyn on
guard for any possible abuses that Eulalia may commit
with the titles and the deeds of sale in her
possession.26cralawlawlibrary
Similarly, in the case of Arrofo v. Quio,27 the Court held
that while "the law does not require a person dealing with
registered land to inquire further than what the Torrens Title
on its face indicates," the rule is not absolute.28 Thus,
finding that the buyer therein failed to take the necessary
precaution required of a prudent man, the Court held that
Arrofo was not an innocent purchaser for value,
viz.:chanroblesvirtuallawlibrary
In the present case, the records show that Arrofo failed to
act as a prudent buyer. True, she asked her daughter to
verify from the Register of Deeds if the title to the Property
is free from encumbrances. However, Arrofo admitted that
the Property is within the neighborhood and that she
conducted an ocular inspection of the Property. She saw
the house constructed on the Property. Yet, Arrofo did not
even bother to inquire about the occupants of the house.
Arrofo also admitted that at the time of the sale, Myrna
was occupying a room in her house as her lessee. The fact
that Myrna was renting a room from Arrofo yet selling a
land with a house should have put Arrofo on her guard.
She knew that Myrna was not occupying the house.
Hence, someone else must have been occupying the
house.
Thus, Arrofo should have inquired who occupied the
house, and if a lessee, who received the rentals from such
lessee. Such inquiry would have led Arrofo to discover that
the lessee was paying rentals to Quino, not to Renato and
Myrna, who claimed to own the
Property.29cralawlawlibrary
An analogous situation obtains in the case at bar.
The TCT of the subject property states that its sole owner is
the seller Rogelio himself who was therein also described
as "single". However, as in the cases of Spouses Raymundo
and Arrofo, there are circumstances critical to the case at
bar which convince us to affirm the ruling of both the
appellate and lower courts that herein petitioner is not a
buyer in good faith.
First, petitioner's sister Hilda Bautista, at the time of the sale,
was residing near Rogelio and Shirley's house - the subject
property - in Ladislao Diwa Village, Marikina City. Had
petitioner been more prudent as a buyer, she could have
2
easily checked if Rogelio had the capacity to dispose of
the subject property. Had petitioner been more vigilant,
she could have inquired with such facility - considering that
her sister lived in the same Ladislao Diwa Village where the
property is located - if there was any person other than
Rogelio who had any right or interest in the subject
property.
To be sure, respondent even testified that she had warned
their neighbors at Ladislao Diwa Village - including
petitioner's sister - not to engage in any deal with Rogelio
relative to the purchase of the subject property because
of the cases she had filed against Rogelio. Petitioner
denies that respondent had given such warning to her
neighbors, which includes her sister, therefore arguing that
such warning could not be construed as "notice" on her
part that there is a person other than the seller himself who
has any right or interest in the subject property.
Nonetheless, despite petitioner's adamant denial, both
courts a quo gave probative value to the testimony of
respondent, and the instant petition failed to present any
convincing evidence for this Court to reverse such factual
finding. To be sure, it is not within our province to second-
guess the courts a quo, and the re-determination of this
factual issue is beyond the reach of a petition for review
on certiorari where only questions of law may be
reviewed.30
Second, issues surrounding the execution of the Deed of
Absolute Sale also pose question on the claim of petitioner
that she is a buyer in good faith. As correctly observed by
both courts a quo, the Deed of Absolute Sale was
executed and dated on December 29, 1992. However, the
Community Tax Certificates of the witnesses therein were
dated January 2 and 20, 1993.31 While this irregularity is not
a direct proof of the intent of the parties to the sale to
make it appear that the Deed of Absolute Sale was
executed on December 29, 1992 - or before Shirley filed
the petition for legal separation on January 29, 1993 - it is
circumstantial and relevant to the claim of herein
petitioner as an innocent purchaser for value.
That is not all.
In the Deed of Absolute Sale dated December 29, 1992,
the civil status of Rogelio as seller was not stated, while
petitioner as buyer was indicated as "single,"
viz.:chanroblesvirtuallawlibrary
ROGELIO A. NUEGA, of legal age, Filipino citizen and with
postal address at 2-A-2 Ladislao Diwa St., Concepcion,
Marikina, Metro Manila, hereinafter referred to as the
VENDOR
And
JOSEFINA V. NOBLEZA, of legal age, Filipino citizen, single
and with postal address at No. L-2-A-3 Ladislao Diwa St.,
Concepcion, Marikina, Metro Manila, hereinafter referred
to as the VENDEE.32cralawlawlibrary
It puzzles the Court that while petitioner has repeatedly
claimed that Rogelio is "single" under TCT No. 171963 and
Tax Declaration Nos. D-012-04723 and D-012-04724, his civil
status as seller was not stated in the Deed of Absolute Sale
- further creating a cloud on the claim of petitioner that
she is an innocent purchaser for value.
As to the second issue, we rule that the appellate court did
not err when it modified the decision of the trial court and
declared that the Deed of Absolute Sale dated December
29, 1992 is void in its entirety.
The trial court held that while the TCT shows that the owner
of the subject property is Rogelio alone, respondent was
able to prove at the trial court that she contributed in the
payment of the purchase price of the subject property.
This fact was also settled with finality by the RTC of Pasig
City, Branch 70, and affirmed by the CA, in the case for
legal separation and liquidation of property docketed as
JDRC Case No. 2510. The pertinent portion of the decision
reads:chanroblesvirtuallawlibrary
xxx Clearly, the house and lot jointly acquired by the
parties prior to their marriage forms part of their community
property regime, xxx
From the foregoing, Shirley sufficiently proved her financial
contribution for the purchase of the house and lot covered
by TCT 171963. Thus, the present lot which forms part of
their community property should be divided equally
between them upon the grant of the instant petition for
legal separation. Having established by preponderance of
evidence the fact of her husband's guilt in contracting a
subsequent marriage xxx, Shirley alone should be entitled
to the net profits earned by the absolute community
property.33cralawlawlibrary
However, the nullity of the sale made by Rogelio is not
premised on proof of respondent's financial contribution in
the purchase of the subject property. Actual contribution
is not relevant in determining whether a piece of property
is community property for the law itself defines what
constitutes community property.
Article 91 of the Family Code thus
provides:chanroblesvirtuallawlibrary
Art. 91. Unless otherwise provided in this Chapter or in the
marriage settlements, the community property shall consist
of all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter.
The only exceptions from the above rule are: (1) those
excluded from the absolute community by the Family
Code; and (2) those excluded by the marriage settlement.
Under the first exception are properties enumerated in
Article 92 of the Family Code, which
states:chanroblesvirtuallawlibrary
Art. 92. The following shall be excluded from the
community property:
(1) Property acquired during the marriage by gratuitous
title by either spouse, and the fruits as well as the income
thereof, if any, unless it is expressly provided by the donor,
testator or grantor that they shall form part of the
community property;
(2) Property for personal and exclusive use of either spouse;
however, jewelry shall form part of the community
property;
(3) Property acquired before the marriage by either
spouse who has legitimate descendants by a former
marriage, and the fruits as well as the income, if any, of
such property.
As held in Quiao v. Quiao:34ChanRoblesVirtualawlibrary
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.
Since the subject property does not fall under any of the
exclusions provided in Article 92, it therefore forms part of
the absolute community property of Shirley and Rogelio.
Regardless of their respective contribution to its acquisition
before their marriage, and despite the fact that only
Rogelio's name appears in the TCT as owner, the property
is owned jointly by the spouses Shirley and Rogelio.
3
Respondent and Rogelio were married on September 1,
1990. Rogelio, on his own and without the consent of
herein respondent as his spouse, sold the subject property
via a Deed of Absolute Sale dated December 29, 1992 - or
during the subsistence of a valid contract of marriage.
Under Article 96 of Executive Order No. 209, otherwise
known as The Family Code of the Philippines, the said
disposition of a communal property is void,
viz.:chanroblesvirtuallawlibrary
Art. 96. The administration and enjoyment of the
community property shall belong to both spouses jointly. In
case of disagreement, the husband's decision shall prevail,
subject to recourse to the court by the wife for a proper
remedy, which must be availed of within five years from
the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the common
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance without the authority of the
court or the written consent of the other spouse. In the
absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall
be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the
offer is withdrawn by either or both
offerors.35cralawlawlibrary
It is clear under the foregoing provision of the Family Code
that Rogelio could not sell the subject property without the
written consent of respondent or the authority of the court.
Without such consent or authority, the entire sale is void. As
correctly explained by the appellate
court:chanroblesvirtuallawlibrary
In the instant case, defendant Rogelio sold the entire
subject property to defendant-appellant Josefina on 29
December 1992 or during the existence of Rogelio's
marriage to plaintiff-appellee Shirley, without the consent
of the latter. The subject property forms part of Rogelio and
Shirley's absolute community of property. Thus, the trial
court erred in declaring the deed of sale null and void only
insofar as the 55.05 square meters representing the one-
half (1/2) portion of plaintiff-appellee Shirley. In absolute
community of property, if the husband, without knowledge
and consent of the wife, sells (their) property, such sale is
void. The consent of both the husband Rogelio and the
wife Shirley is required and the absence of the consent of
one renders the entire sale null and void including the
portion of the subject property pertaining to defendant
Rogelio who contracted the sale with defendant-
appellant Josefina. Since the Deed of Absolute Sale x x x
entered into by and between defendant-appellant
Josefina and defendant Rogelio dated 29 December
1992, during the subsisting marriage between plaintiff-
appellee Shirley and Rogelio, was without the written
consent of Shirley, the said Deed of Absolute Sale is void in
its entirety. Hence, the trial court erred in declaring the said
Deed of Absolute Sale as void only insofar as the 1/2
portion pertaining to the share of Shirley is
concerned.36cralawlawlibrary
Finally, consistent with our ruling that Rogelio solely entered
into the contract of sale with petitioner and
acknowledged receiving the entire consideration of the
contract under the Deed of Absolute Sale, Shirley could
not be held accountable to petitioner for the
reimbursement of her payment for the purchase of the
subject property. Under Article 94 of the Family Code, the
absolute community of property shall only be "liable for x x
x [d]ebts and obligations contracted by either spouse
without the consent of the other to the extent that the
family may have been benefited x x x." As correctly stated
by the appellate court, there being no evidence on
record that the amount received by Rogelio redounded
to the benefit of the family, respondent cannot be made
to reimburse any amount to petitioner.37
WHEREFORE, in view of the foregoing, the petition is
DENIED. The assailed Decision and Resolution of the Court
of Appeals dated May 14, 2010 and July 21, 2010,
respectively, in CA-G.R. CV No. 70235 are AFFIRMED.
Costs against petitioner.
SO ORDERED
Article 105-133
MUNOZ VS CARLOS 2010
We resolve the present petition for review on certiorari[1]
filed by petitioner Francisco Muoz, Jr. (petitioner) to
challenge the decision[2] and the resolution[3] of the
Court of Appeals (CA) in CA-G.R. CV No. 57126.[4] The CA
decision set aside the decision[5] of the Regional Trial
Court (RTC), Branch 166, Pasig City, in Civil Case No. 63665.
The CA resolution denied the petitioners subsequent
motion for reconsideration.
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are
briefly summarized below.
Subject of the present case is a seventy-seven (77)-square
meter residential house and lot located at 170 A. Bonifacio
Street, Mandaluyong City (subject property), covered by
Transfer Certificate of Title (TCT) No. 7650 of the Registry of
Deeds of Mandaluyong City in the name of the
petitioner.[6]
The residential lot in the subject property was previously
covered by TCT No. 1427, in the name of Erlinda Ramirez,
married to Eliseo Carlos (respondents).[7]
On April 6, 1989, Eliseo, a Bureau of Internal Revenue
employee, mortgaged TCT No. 1427, with Erlindas consent,
to the Government Service Insurance System (GSIS) to
secure a P136,500.00 housing loan, payable within twenty
(20) years, through monthly salary deductions of
P1,687.66.[8] The respondents then constructed a thirty-six
(36)-square meter, two-story residential house on the lot.
On July 14, 1993, the title to the subject property was
transferred to the petitioner by virtue of a Deed of Absolute
Sale, dated April 30, 1992, executed by Erlinda, for herself
and as attorney-in-fact of Eliseo, for a stated consideration
of P602,000.00.[9]
On September 24, 1993, the respondents filed a complaint
with the RTC for the nullification of the deed of absolute
sale, claiming that there was no sale but only a mortgage
transaction, and the documents transferring the title to the
petitioners name were falsified.
The respondents alleged that in April 1992, the petitioner
granted them a P600,000.00 loan, to be secured by a first
mortgage on TCT No. 1427; the petitioner gave Erlinda a
P200,000.00[10] advance to cancel the GSIS mortgage,
and made her sign a document purporting to be the
mortgage contract; the petitioner promised to give the
P402,000.00 balance when Erlinda surrenders TCT No. 1427
with the GSIS mortgage cancelled, and submits an
affidavit signed by Eliseo stating that he waives all his rights
to the subject property; with the P200,000.00 advance,
Erlinda paid GSIS P176,445.27[11] to cancel the GSIS
mortgage on TCT No. 1427;[12] in May 1992, Erlinda
surrendered to the petitioner the clean TCT No. 1427, but
returned Eliseos affidavit, unsigned; since Eliseos affidavit
was unsigned, the petitioner refused to give the
P402,000.00 balance and to cancel the mortgage, and
4
demanded that Erlinda return the P200,000.00 advance;
since Erlinda could not return the P200,000.00 advance
because it had been used to pay the GSIS loan, the
petitioner kept the title; and in 1993, they discovered that
TCT No. 7650 had been issued in the petitioners name,
cancelling TCT No.1427 in their name.
The petitioner countered that there was a valid contract
of sale. He alleged that the respondents sold the subject
property to him after he refused their offer to mortgage the
subject property because they lacked paying capacity
and were unwilling to pay the incidental charges; the sale
was with the implied promise to repurchase within one
year,[13] during which period (from May 1, 1992 to April 30,
1993), the respondents would lease the subject property
for a monthly rental of P500.00;[14] when the respondents
failed to repurchase the subject property within the one-
year period despite notice, he caused the transfer of title
in his name on July 14, 1993;[15] when the respondents
failed to pay the monthly rentals despite demand, he filed
an ejectment case[16] against them with the Metropolitan
Trial Court (MeTC), Branch 60, Mandaluyong City, on
September 8, 1993, or sixteen days before the filing of the
RTC case for annulment of the deed of absolute sale.
During the pendency of the RTC case, or on March 29,
1995, the MeTC decided the ejectment case. It ordered
Erlinda and her family to vacate the subject property, to
surrender its possession to the petitioner, and to pay the
overdue rentals.[17]
In the RTC, the respondents presented the results of the
scientific examination[18] conducted by the National
Bureau of Investigation of Eliseos purported signatures in
the Special Power of Attorney[19] dated April 29, 1992 and
the Affidavit of waiver of rights dated April 29, 1992,[20]
showing that they were forgeries.
The petitioner, on the other hand, introduced evidence on
the paraphernal nature of the subject property since it was
registered in Erlindas name; the residential lot was part of
a large parcel of land owned by Pedro Ramirez and
Fructuosa Urcla, Erlindas parents; it was the subject of Civil
Case No. 50141, a complaint for annulment of sale, before
the RTC, Branch 158, Pasig City, filed by the surviving heirs
of Pedro against another heir, Amado Ramirez, Erlindas
brother; and, as a result of a compromise agreement,
Amado agreed to transfer to the other compulsory heirs of
Pedro, including Erlinda, their rightful shares of the land.[21]
THE RTC RULING
In a Decision dated January 23, 1997, the RTC dismissed
the complaint. It found that the subject property was
Erlindas exclusive paraphernal property that was inherited
from her father. It also upheld the sale to the petitioner,
even without Eliseos consent as the deed of absolute sale
bore the genuine signatures of Erlinda and the petitioner
as vendor and vendee, respectively. It concluded that the
NBI finding that Eliseos signatures in the special power of
attorney and in the affidavit were forgeries was immaterial
because Eliseos consent to the sale was not necessary.[22]
The respondents elevated the case to the CA via an
ordinary appeal under Rule 41 of the Revised Rules of
Court.
THE CA RULING
The CA decided the appeal on June 25, 2002. Applying
the second paragraph of Article 158[23] of the Civil Code
and Calimlim-Canullas v. Hon. Fortun,[24] the CA held that
the subject property, originally Erlindas exclusive
paraphernal property, became conjugal property when it
was used as collateral for a housing loan that was paid
through conjugal funds Eliseos monthly salary deductions;
the subject property, therefore, cannot be validly sold or
mortgaged without Eliseos consent, pursuant to Article
124[25] of the Family Code. Thus, the CA declared void the
deed of absolute sale, and set aside the RTC decision.
When the CA denied[26] the subsequent motion for
reconsideration,[27] the petitioner filed the present
petition for review on certiorari under Rule 45 of the
Revised Rules of Court.
THE PETITION
The petitioner argues that the CA misapplied the second
paragraph of Article 158 of the Civil Code and Calimlim-
Canullas[28] because the respondents admitted in the
complaint that it was the petitioner who gave the money
used to cancel the GSIS mortgage on TCT No. 1427; Article
120[29] of the Family Code is the applicable rule, and since
the value of the house is less than the value of the lot, then
Erlinda retained ownership of the subject property. He also
argues that the contract between the parties was a sale,
not a mortgage, because (a) Erlinda did not deny her
signature in the document;[30] (b) Erlinda agreed to sign
a contract of lease over the subject property;[31] and, (c)
Erlinda executed a letter, dated April 30, 1992, confirming
the conversion of the loan application to a deed of
sale.[32]
THE CASE FOR THE RESPONDENTS
The respondents submit that it is unnecessary to compare
the respective values of the house and of the lot to
determine ownership of the subject property; it was
acquired during their marriage and, therefore, considered
conjugal property. They also submit that the transaction
between the parties was not a sale, but an equitable
mortgage because (a) they remained in possession of the
subject property even after the execution of the deed of
absolute sale, (b) they paid the 1993 real property taxes
due on the subject property, and (c) they received
P200,000.00 only of the total stated price of P602,000.00.
THE ISSUE
The issues in the present case boil down to (1) whether the
subject property is paraphernal or conjugal; and, (2)
whether the contract between the parties was a sale or an
equitable mortgage.
OUR RULING
We deny the present Petition but for reasons other than
those advanced by the CA.
This Court is not a trier of facts. However, if the inference,
drawn by the CA, from the facts is manifestly mistaken, as
in the present case, we can review the evidence to allow
us to arrive at the correct factual conclusions based on the
record.[33]
First Issue:
Paraphernal or Conjugal?
As a general rule, all property acquired during the
marriage, whether the acquisition appears to have been
made, contracted or registered in the name of one or
both spouses, is presumed to be conjugal unless the
contrary is proved.[34]
In the present case, clear evidence that Erlinda inherited
the residential lot from her father has sufficiently rebutted
5
this presumption of conjugal ownership.[35] Pursuant to
Articles 92[36] and 109[37] of the Family Code, properties
acquired by gratuitous title by either spouse, during the
marriage, shall be excluded from the community property
and be the exclusive property of each spouse.[38] The
residential lot, therefore, is Erlindas exclusive paraphernal
property.
The CA, however, held that the residential lot became
conjugal when the house was built thereon through
conjugal funds, applying the second paragraph of Article
158 of the Civil Code and Calimlim-Canullas.[39] Under the
second paragraph of Article 158 of the Civil Code, a land
that originally belonged to one spouse becomes conjugal
upon the construction of improvements thereon at the
expense of the partnership. We applied this provision in
Calimlim-Canullas,[40] where we held that when the
conjugal house is constructed on land belonging
exclusively to the husband, the land ipso facto becomes
conjugal, but the husband is entitled to reimbursement of
the value of the land at the liquidation of the conjugal
partnership.
The CA misapplied Article 158 of the
Civil Code and Calimlim-Canullas
We cannot subscribe to the CAs misplaced reliance on
Article 158 of the Civil Code and Calimlim-Canullas.
As the respondents were married during the effectivity of
the Civil Code, its provisions on conjugal partnership of
gains (Articles 142 to 189) should have governed their
property relations. However, with the enactment of the
Family Code on August 3, 1989, the Civil Code provisions
on conjugal partnership of gains, including Article 158,
have been superseded by those found in the Family Code
(Articles 105 to 133). Article 105 of the Family Code states:
xxxx
The provisions of this Chapter [on the Conjugal Partnership
of Gains] shall also apply to conjugal partnerships of gains
already established between spouses before the
effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or
other laws, as provided in Article 256.
Thus, in determining the nature of the subject property, we
refer to the provisions of the Family Code, and not the Civil
Code, except with respect to rights then already vested.
Article 120 of the Family Code, which supersedes Article
158 of the Civil Code, provides the solution in determining
the ownership of the improvements that are made on the
separate property of the spouses, at the expense of the
partnership or through the acts or efforts of either or both
spouses. Under this provision, when the cost of the
improvement and any resulting increase in value are more
than the value of the property at the time of the
improvement, the entire property of one of the spouses
shall belong to the conjugal partnership, subject to
reimbursement of the value of the property of the owner-
spouse at the time of the improvement; otherwise, said
property shall be retained in ownership by the owner-
spouse, likewise subject to reimbursement of the cost of
the improvement.[41]
In the present case, we find that Eliseo paid a portion only
of the GSIS loan through monthly salary deductions. From
April 6, 1989[42] to April 30, 1992,[43] Eliseo paid about
P60,755.76,[44] not the entire amount of the GSIS housing
loan plus interest, since the petitioner advanced the
P176,445.27[45] paid by Erlinda to cancel the mortgage in
1992. Considering the P136,500.00 amount of the GSIS
housing loan, it is fairly reasonable to assume that the value
of the residential lot is considerably more than the
P60,755.76 amount paid by Eliseo through monthly salary
deductions.
Thus, the subject property remained the exclusive
paraphernal property of Erlinda at the time she contracted
with the petitioner; the written consent of Eliseo to the
transaction was not necessary. The NBI finding that Eliseos
signatures in the special power of attorney and affidavit
were forgeries was immaterial.
Nonetheless, the RTC and the CA apparently failed to
consider the real nature of the contract between the
parties.
Second Issue:
Sale or Equitable Mortgage?
Jurisprudence has defined an equitable mortgage "as one
which although lacking in some formality, or form or words,
or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property
as security for a debt, there being no impossibility nor
anything contrary to law in this intent."[46]
Article 1602 of the Civil Code enumerates the instances
when a contract, regardless of its nomenclature, may be
presumed to be an equitable mortgage: (a) when the
price of a sale with right to repurchase is unusually
inadequate; (b) when the vendor remains in possession as
lessee or otherwise; (c) when upon or after the expiration
of the right to repurchase another instrument extending
the period of redemption or granting a new period is
executed; (d) when the purchaser retains for himself a part
of the purchase price; (e) when the vendor binds himself
to pay the taxes on the thing sold; and, (f) in any other
case where it may be fairly inferred that the real intention
of the parties is that the transaction shall secure the
payment of a debt or the performance of any other
obligation. These instances apply to a contract purporting
to be an absolute sale.[47]
For the presumption of an equitable mortgage to arise
under Article 1602 of the Civil Code, two (2) requisites must
concur: (a) that the parties entered into a contract
denominated as a contract of sale; and, (b) that their
intention was to secure an existing debt by way of a
mortgage. Any of the circumstances laid out in Article 1602
of the Civil Code, not the concurrence nor an
overwhelming number of the enumerated circumstances,
is sufficient to support the conclusion that a contract of
sale is in fact an equitable mortgage.[48]
Contract is an equitable mortgage
In the present case, there are four (4) telling circumstances
pointing to the existence of an equitable mortgage.
First, the respondents remained in possession as lessees of
the subject property; the parties, in fact, executed a one-
year contract of lease, effective May 1, 1992 to April 30,
1993.[49]
Second, the petitioner retained part of the purchase price,
the petitioner gave a P200,000.00 advance to settle the
GSIS housing loan, but refused to give the P402,000.00
balance when Erlinda failed to submit Eliseos signed
affidavit of waiver of rights.
Third, respondents paid the real property taxes on July 8,
1993, despite the alleged sale on April 30, 1992;[50]
payment of real property taxes is a usual burden attaching
6
to ownership and when, as here, such payment is coupled
with continuous possession of the property, it constitutes
evidence of great weight that the person under whose
name the realty taxes were declared has a valid and
rightful claim over the land.[51]
Fourth, Erlinda secured the payment of the principal debt
owed to the petitioner with the subject property. The
records show that the petitioner, in fact, sent Erlinda a
Statement of Account showing that as of February 20,
1993, she owed P384,660.00, and the daily interest, starting
February 21, 1993, was P641.10.[52] Thus, the parties clearly
intended an equitable mortgage and not a contract of
sale.
That the petitioner advanced the sum of P200,000.00 to
Erlinda is undisputed. This advance, in fact, prompted the
latter to transfer the subject property to the petitioner. Thus,
before the respondents can recover the subject property,
they must first return the amount of P200,000.00 to the
petitioner, plus legal interest of 12% per annum, computed
from April 30, 1992.
We cannot sustain the ballooned obligation of
P384,660.00, claimed in the Statement of Account sent by
the petitioner,[53] sans any evidence of how this amount
was arrived at. Additionally, a daily interest of P641.10 or
P19,233.00 per month for a P200,000.00 loan is patently
unconscionable. While parties are free to stipulate on the
interest to be imposed on monetary obligations, we can
step in to temper the interest rates if they are
unconscionable.[54]
In Lustan v. CA,[55] where we established the reciprocal
obligations of the parties under an equitable mortgage,
we ordered the reconveyance of the property to the
rightful owner therein upon the payment of the loan within
ninety (90) days from the finality of the decision.[56]
WHEREFORE, in light of all the foregoing, we hereby DENY
the present petition. The assailed decision and resolution
of the Court of Appeals in CA-G.R. CV No. 57126 are
AFFIRMED with the following MODIFICATIONS:
1. The Deed of Absolute Sale dated April 30, 1992 is hereby
declared an equitable mortgage; and
2. The petitioner is obligated to RECONVEY to the
respondents the property covered by Transfer Certificate
of Title No. 7650 of the Register of Deeds of Mandaluyong
City, UPON THE PAYMENT OF P200,000.00, with 12% legal
interest from April 30, 1992, by respondents within NINETY
DAYS FROM THE FINALITY OF THIS DECISION.
Costs against the petitioner.
SO ORDERED.
AYALA INVESTMENTS VS CA 1998
Under Article 161 of the Civil Code, what debts and
obligations contracted by the husband alone are
considered for the benefit of the conjugal partnership
which are chargeable against the conjugal partnership? Is
a surety agreement or an accommodation contract
entered into by the husband in favor of his employer within
the contemplation of the said provision?
These are the issues which we will resolve in this petition for
review.
The petitioner assails the decision dated April 14, 1994 of
the respondent Court of Appeals in Spouses Alfredo and
Encarnacion Ching vs. Ayala Investment and
Development Corporation, et. al., docketed as CA-G.R.
CV No. 29632,[1] upholding the decision of the Regional
Trial Court of Pasig, Branch 168, which ruled that the
conjugal partnership of gains of respondents-spouses
Alfredo and Encarnacion Ching is not liable for the
payment of the debts secured by respondent-husband
Alfredo Ching.
A chronology of the essential antecedent facts is
necessary for a clear understanding of the case at bar.
Philippine Blooming Mills (hereinafter referred to as PBM)
obtained a P50,300,000.00 loan from petitioner Ayala
Investment and Development Corporation (hereinafter
referred to as AIDC). As added security for the credit line
extended to PBM, respondent Alfredo Ching, Executive
Vice President of PBM, executed security agreements on
December 10, 1980 and on March 20, 1981 making himself
jointly and severally answerable with PBMs indebtedness to
AIDC.
PBM failed to pay the loan. Thus, on July 30, 1981, AIDC
filed a case for sum of money against PBM and
respondent-husband Alfredo Ching with the then Court of
First Instance of Rizal (Pasig), Branch VIII, entitled Ayala
Investment and Development Corporation vs. Philippine
Blooming Mills and Alfredo Ching, docketed as Civil Case
No. 42228.
After trial, the court rendered judgment ordering PBM and
respondent-husband Alfredo Ching to jointly and severally
pay AIDC the principal amount of P50,300,000.00 with
interests.
Pending appeal of the judgment in Civil Case No. 42228,
upon motion of AIDC, the lower court issued a writ of
execution pending appeal. Upon AIDCs putting up of an
P8,000,000.00 bond, a writ of execution dated May 12,
1982 was issued. Thereafter, petitioner Abelardo Magsajo,
Sr., Deputy Sheriff of Rizal and appointed sheriff in Civil
Case No. 42228, caused the issuance and service upon
respondents-spouses of a notice of sheriff sale dated May
20, 1982 on three (3) of their conjugal properties. Petitioner
Magsajo then scheduled the auction sale of the properties
levied.
On June 9, 1982, private respondents filed a case of
injunction against petitioners with the then Court of First
Instance of Rizal (Pasig), Branch XIII, to enjoin the auction
sale alleging that petitioners cannot enforce the judgment
against the conjugal partnership levied on the ground
that, among others, the subject loan did not redound to
the benefit of the said conjugal partnership.[2] Upon
application of private respondents, the lower court issued
a temporary restraining order to prevent petitioner
Magsajo from proceeding with the enforcement of the writ
of execution and with the sale of the said properties at
public auction.
AIDC filed a petition for certiorari before the Court of
Appeals,[3] questioning the order of the lower court
enjoining the sale. Respondent Court of Appeals issued a
Temporary Restraining Order on June 25, 1982, enjoining
the lower court[4] from enforcing its Order of June 14, 1982,
thus paving the way for the scheduled auction sale of
respondents-spouses conjugal properties.
On June 25, 1982, the auction sale took place. AIDC being
the only bidder, was issued a Certificate of Sale by
petitioner Magsajo, which was registered on July 2, 1982.
Upon expiration of the redemption period, petitioner sheriff
issued the final deed of sale on August 4, 1982 which was
registered on August 9, 1983.
In the meantime, the respondent court, on August 4, 1982,
decided CA-G.R. SP No. 14404, in this manner:
7
WHEREFORE, the petition for certiorari in this case is granted
and the challenged order of the respondent Judge dated
June 14, 1982 in Civil Case No. 46309 is hereby set aside
and nullified. The same petition insofar as it seeks to enjoin
the respondent Judge from proceeding with Civil Case
No. 46309 is, however, denied. No pronouncement is here
made as to costs. x x x x.[5]
On September 3, 1983, AIDC filed a motion to dismiss the
petition for injunction filed before Branch XIII of the CFI of
Rizal (Pasig) on the ground that the same had become
moot and academic with the consummation of the sale.
Respondents filed their opposition to the motion arguing,
among others, that where a third party who claims
ownership of the property attached or levied upon, a
different legal situation is presented; and that in this case,
two (2) of the real properties are actually in the name of
Encarnacion Ching, a non-party to Civil Case No. 42228.
The lower court denied the motion to dismiss. Hence, trial
on the merits proceeded. Private respondents presented
several witnesses. On the other hand, petitioners did not
present any evidence.
On September 18, 1991, the trial court promulgated its
decision declaring the sale on execution null and void.
Petitioners appealed to the respondent court, which was
docketed as CA-G.R. CV No. 29632.
On April 14, 1994, the respondent court promulgated the
assailed decision, affirming the decision of the regional trial
court. It held that:
The loan procured from respondent-appellant AIDC was
for the advancement and benefit of Philippine Blooming
Mills and not for the benefit of the conjugal partnership of
petitioners-appellees.
xxxxxxxxx
As to the applicable law, whether it is Article 161 of the
New Civil Code or Article 1211 of the Family Code-suffice
it to say that the two provisions are substantially the same.
Nevertheless, We agree with the trial court that the Family
Code is the applicable law on the matter x x x x x x.
Article 121 of the Family Code provides that The conjugal
partnership shall be liable for: x x x (2) All debts and
obligations contracted during the marriage by the
designated Administrator-Spouse for the benefit of the
conjugal partnership of gains x x x. The burden of proof that
the debt was contracted for the benefit of the conjugal
partnership of gains, lies with the creditor-party litigant
claiming as such. In the case at bar, respondent-appellant
AIDC failed to prove that the debt was contracted by
appellee-husband, for the benefit of the conjugal
partnership of gains.
The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, judgment is
hereby rendered DISMISSING the appeal. The decision of
the Regional Trial Court is AFFIRMED in toto.[6]
Petitioner filed a Motion for Reconsideration which was
denied by the respondent court in a Resolution dated
November 28, 1994.[7]
Hence, this petition for review. Petitioner contends that the
respondent court erred in ruling that the conjugal
partnership of private respondents is not liable for the
obligation by the respondent-husband.
Specifically, the errors allegedly committed by the
respondent court are as follows:
I. RESPONDENT COURT ERRED IN RULING THAT THE
OBLIGATION INCURRED BY RESPONDENT HUSBAND DID NOT
REDOUND TO THE BENEFIT OF THE CONJUGAL PARTNERSHIP
OF THE PRIVATE RESPONDENT.
II RESPONDENT COURT ERRED IN RULING THAT THE ACT OF
RESPONDENT HUSBAND IN SECURING THE SUBJECT LOAN IS
NOT PART OF HIS INDUSTRY, BUSINESS OR CAREER FROM
WHICH HE SUPPORTS HIS FAMILY.
Petitioners in their appeal point out that there is no need
to prove that actual benefit redounded to the benefit of
the partnership; all that is necessary, they say, is that the
transaction was entered into for the benefit of the
conjugal partnership. Thus, petitioners aver that:
The wordings of Article 161 of the Civil Code is very clear:
for the partnership to be held liable, the husband must
have contracted the debt for the benefit of the
partnership, thus:
Art. 161. The conjugal partnership shall be liable for:
1) all debts and obligations contracted by the husband for
the benefit of the conjugal partnership x x x.
There is a difference between the phrases: redounded to
the benefit of or benefited from (on the one hand) and for
the benefit of (on the other). The former require that actual
benefit must have been realized; the latter requires only
that the transaction should be one which normally would
produce benefit to the partnership, regardless of whether
or not actual benefit accrued.[8]
We do not agree with petitioners that there is a difference
between the terms redounded to the benefit of or
benefited from on the one hand; and for the benefit of on
the other. They mean one and the same thing. Article 161
(1) of the Civil Code and Article 121 (2) of the Family Code
are similarly worded, i.e., both use the term for the benefit
of. On the other hand, Article 122 of the Family Code
provides that The payment of personal debts by the
husband or the wife before or during the marriage shall not
be charged to the conjugal partnership except insofar as
they redounded to the benefit of the family. As can be
seen, the terms are used interchangeably.
Petitioners further contend that the ruling of the
respondent court runs counter to the pronouncement of
this Court in the case of Cobb-Perez vs. Lantin,[9] that the
husband as head of the family and as administrator of the
conjugal partnership is presumed to have contracted
obligations for the benefit of the family or the conjugal
partnership.
Contrary to the contention of the petitioners, the case of
Cobb-Perez is not applicable in the case at bar. This Court
has, on several instances, interpreted the term for the
benefit of the conjugal partnership.
In the cases of Javier vs. Osmea,[10] Abella de Diaz vs.
Erlanger & Galinger, Inc.,[11] Cobb-Perez vs. Lantin[12]
and G-Tractors, Inc. vs. Court of Appeals,[13] cited by the
petitioners, we held that:
The debts contracted by the husband during the marriage
relation, for and in the exercise of the industry or profession
by which he contributes toward the support of his family,
are not his personal and private debts, and the products
or income from the wifes own property, which, like those of
her husbands, are liable for the payment of the marriage
expenses, cannot be excepted from the payment of such
debts. (Javier)
The husband, as the manager of the partnership (Article
1412, Civil Code), has a right to embark the partnership in
8
an ordinary commercial enterprise for gain, and the fact
that the wife may not approve of a venture does not make
it a private and personal one of the husband. (Abella de
Diaz)
Debts contracted by the husband for and in the exercise
of the industry or profession by which he contributes to the
support of the family, cannot be deemed to be his
exclusive and private debts. (Cobb-Perez)
x x x if he incurs an indebtedness in the legitimate pursuit
of his career or profession or suffers losses in a legitimate
business, the conjugal partnership must equally bear the
indebtedness and the losses, unless he deliberately acted
to the prejudice of his family. (G-Tractors)
However, in the cases of Ansaldo vs. Sheriff of Manila,
Fidelity Insurance & Luzon Insurance Co.,[14] Liberty
Insurance Corporation vs. Banuelos,[15] and Luzon Surety
Inc. vs. De Garcia,[16] cited by the respondents, we ruled
that:
The fruits of the paraphernal property which form part of
the assets of the conjugal partnership, are subject to the
payment of the debts and expenses of the spouses, but
not to the payment of the personal obligations (guaranty
agreements) of the husband, unless it be proved that such
obligations were productive of some benefit to the family.
(Ansaldo; parenthetical phrase ours.)
When there is no showing that the execution of an
indemnity agreement by the husband redounded to the
benefit of his family, the undertaking is not a conjugal debt
but an obligation personal to him. (Liberty Insurance)
In the most categorical language, a conjugal partnership
under Article 161 of the new Civil Code is liable only for
such debts and obligations contracted by the husband for
the benefit of the conjugal partnership. There must be the
requisite showing then of some advantage which clearly
accrued to the welfare of the spouses. Certainly, to make
a conjugal partnership respond for a liability that should
appertain to the husband alone is to defeat and frustrate
the avowed objective of the new Civil Code to show the
utmost concern for the solidarity and well-being of the
family as a unit. The husband, therefore, is denied the
power to assume unnecessary and unwarranted risks to
the financial stability of the conjugal partnership. (Luzon
Surety, Inc.)
From the foregoing jurisprudential rulings of this Court, we
can derive the following conclusions:
(A) If the husband himself is the principal obligor in the
contract, i.e., he directly received the money and services
to be used in or for his own business or his own profession,
that contract falls within the term x x x x obligations for the
benefit of the conjugal partnership. Here, no actual
benefit may be proved. It is enough that the benefit to the
family is apparent at the time of the signing of the
contract. From the very nature of the contract of loan or
services, the family stands to benefit from the loan facility
or services to be rendered to the business or profession of
the husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated, where
the husband contracts obligations on behalf of the family
business, the law presumes, and rightly so, that such
obligation will redound to the benefit of the conjugal
partnership.
(B) On the other hand, if the money or services are given
to another person or entity, and the husband acted only
as a surety or guarantor, that contract cannot, by itself,
alone be categorized as falling within the context of
obligations for the benefit of the conjugal partnership. The
contract of loan or services is clearly for the benefit of the
principal debtor and not for the surety or his family. No
presumption can be inferred that, when a husband enters
into a contract of surety or accommodation agreement, it
is for the benefit of the conjugal partnership. Proof must be
presented to establish benefit redounding to the conjugal
partnership.
Thus, the distinction between the Cobb-Perez case, and
we add, that of the three other companion cases, on the
one hand, and that of Ansaldo, Liberty Insurance and
Luzon Surety, is that in the former, the husband contracted
the obligation for his own business; while in the latter, the
husband merely acted as a surety for the loan contracted
by another for the latters business.
The evidence of petitioner indubitably show that co-
respondent Alfredo Ching signed as surety for the P50M
loan contracted on behalf of PBM. Petitioner should have
adduced evidence to prove that Alfredo Chings acting as
surety redounded to the benefit of the conjugal
partnership. The reason for this is as lucidly explained by the
respondent court:
The loan procured from respondent-appellant AIDC was
for the advancement and benefit of Philippine Blooming
Mills and not for the benefit of the conjugal partnership of
petitioners-appellees. Philippine Blooming Mills has a
personality distinct and separate from the family of
petitioners-appellees - this despite the fact that the
members of the said family happened to be stockholders
of said corporate entity.
xxxxxxxxx
x x x. The burden of proof that the debt was contracted for
the benefit of the conjugal partnership of gains, lies with
the creditor-party litigant claiming as such. In the case at
bar, respondent-appellant AIDC failed to prove that the
debt was contracted by appellee-husband, for the
benefit of the conjugal partnership of gains. What is
apparent from the facts of the case is that the judgment
debt was contracted by or in the name of the Corporation
Philippine Blooming Mills and appellee-husband only
signed as surety thereof. The debt is clearly a corporate
debt and respondent-appellants right of recourse against
appellee-husband as surety is only to the extent of his
corporate stockholdings. It does not extend to the
conjugal partnership of gains of the family of petitioners-
appellees. x x x x x x. [17]
Petitioners contend that no actual benefit need accrue to
the conjugal partnership. To support this contention, they
cite Justice J.B.L. Reyes authoritative opinion in the Luzon
Surety Company case:
I concur in the result, but would like to make of record that,
in my opinion, the words all debts and obligations
contracted by the husband for the benefit of the conjugal
partnership used in Article 161 of the Civil Code of the
Philippines in describing the charges and obligations for
which the conjugal partnership is liable do not require that
actual profit or benefit must accrue to the conjugal
partnership from the husbands transaction; but it suffices
that the transaction should be one that normally would
produce such benefit for the partnership. This is the ratio
behind our ruling in Javier vs. Osmea, 34 Phil. 336, that
obligations incurred by the husband in the practice of his
profession are collectible from the conjugal partnership.
The aforequoted concurring opinion agreed with the
majority decision that the conjugal partnership should not
be made liable for the surety agreement which was clearly
for the benefit of a third party. Such opinion merely
registered an exception to what may be construed as a
sweeping statement that in all cases actual profit or
benefit must accrue to the conjugal partnership. The
9
opinion merely made it clear that no actual benefits to the
family need be proved in some cases such as in the Javier
case. There, the husband was the principal obligor himself.
Thus, said transaction was found to be one that would
normally produce x x x benefit for the partnership. In the
later case of G-Tractors, Inc., the husband was also the
principal obligor - not merely the surety. This latter case,
therefore, did not create any precedent. It did not also
supersede the Luzon Surety Company case, nor any of the
previous accommodation contract cases, where this
Court ruled that they were for the benefit of third parties.
But it could be argued, as the petitioner suggests, that
even in such kind of contract of accommodation, a
benefit for the family may also result, when the guarantee
is in favor of the husbands employer.
In the case at bar, petitioner claims that the benefits the
respondent family would reasonably anticipate were the
following:
(a) The employment of co-respondent Alfredo Ching
would be prolonged and he would be entitled to his
monthly salary of P20,000.00 for an extended length of time
because of the loan he guaranteed;
(b) The shares of stock of the members of his family would
appreciate if the PBM could be rehabilitated through the
loan obtained;
(c) His prestige in the corporation would be enhanced and
his career would be boosted should PBM survive because
of the loan.
However, these are not the benefits contemplated by
Article 161 of the Civil Code. The benefits must be one
directly resulting from the loan. It cannot merely be a by-
product or a spin-off of the loan itself.
In all our decisions involving accommodation contracts of
the husband,[18] we underscored the requirement that:
there must be the requisite showing x x x of some
advantage which clearly accrued to the welfare of the
spouses or benefits to his family or that such obligations are
productive of some benefit to the family. Unfortunately,
the petition did not present any proof to show: (a) Whether
or not the corporate existence of PBM was prolonged and
for how many months or years; and/or (b) Whether or not
the PBM was saved by the loan and its shares of stock
appreciated, if so, how much and how substantial was the
holdings of the Ching family.
Such benefits (prospects of longer employment and
probable increase in the value of stocks) might have been
already apparent or could be anticipated at the time the
accommodation agreement was entered into. But would
those benefits qualify the transaction as one of the
obligations x x x for the benefit of the conjugal partnership?
Are indirect and remote probable benefits, the ones
referred to in Article 161 of the Civil Code? The Court of
Appeals in denying the motion for reconsideration,
disposed of these questions in the following manner:
No matter how one looks at it, the debt/credit extended
by respondents-appellants is purely a corporate debt
granted to PBM, with petitioner-appellee-husband merely
signing as surety. While such petitioner-appellee-husband,
as such surety, is solidarily liable with the principal debtor
AIDC, such liability under the Civil Code provisions is
specifically restricted by Article 122 (par. 1) of the Family
Code, so that debts for which the husband is liable may
not be charged against conjugal partnership properties.
Article 122 of the Family Code is explicit The payment of
personal debts contracted by the husband or the wife
before or during the marriage shall not be charged to the
conjugal partnership except insofar as they redounded to
the benefit of the family.
Respondents-appellants insist that the corporate debt in
question falls under the exception laid down in said Article
122 (par. one). We do not agree. The loan procured from
respondent-appellant AIDC was for the sole
advancement and benefit of Philippine Blooming Mills and
not for the benefit of the conjugal partnership of
petitioners-appellees.
x x x appellee-husband derives salaries, dividends benefits
from Philippine Blooming Mills (the debtor corporation),
only because said husband is an employee of said PBM.
These salaries and benefits, are not the benefits
contemplated by Articles 121 and 122 of the Family Code.
The benefits contemplated by the exception in Article 122
(Family Code) is that benefit derived directly from the use
of the loan. In the case at bar, the loan is a corporate loan
extended to PBM and used by PBM itself, not by petitioner-
appellee-husband or his family. The alleged benefit, if any,
continuously harped by respondents-appellants, are not
only incidental but also speculative.[19]
We agree with the respondent court. Indeed, considering
the odds involved in guaranteeing a large amount
(P50,000,000.00) of loan, the probable prolongation of
employment in PBM and increase in value of its stocks,
would be too small to qualify the transaction as one for the
benefit of the suretys family. Verily, no one could say, with
a degree of certainty, that the said contract is even
productive of some benefits to the conjugal partnership.
We likewise agree with the respondent court (and this view
is not contested by the petitioners) that the provisions of
the Family Code is applicable in this case. These provisions
highlight the underlying concern of the law for the
conservation of the conjugal partnership; for the husbands
duty to protect and safeguard, if not augment, not to
dissipate it.
This is the underlying reason why the Family Code clarifies
that the obligations entered into by one of the spouses
must be those that redounded to the benefit of the family
and that the measure of the partnerships liability is to the
extent that the family is benefited.[20]
These are all in keeping with the spirit and intent of the
other provisions of the Civil Code which prohibits any of the
spouses to donate or convey gratuitously any part of the
conjugal property.[21] Thus, when co-respondent Alfredo
Ching entered into a surety agreement he, from then on,
definitely put in peril the conjugal property (in this case,
including the family home) and placed it in danger of
being taken gratuitously as in cases of donation.
In the second assignment of error, the petitioner advances
the view that acting as surety is part of the business or
profession of the respondent-husband.
This theory is new as it is novel.
The respondent court correctly observed that:
Signing as a surety is certainly not an exercise of an industry
or profession, hence the cited cases of Cobb-Perez vs.
Lantin; Abella de Diaz vs. Erlanger & Galinger; G-Tractors,
Inc. vs. CA do not apply in the instant case. Signing as a
surety is not embarking in a business.[22]
We are likewise of the view that no matter how often an
executive acted or was persuaded to act, as a surety for
his own employer, this should not be taken to mean that
he had thereby embarked in the business of suretyship or
guaranty.
10
This is not to say, however, that we are unaware that
executives are often asked to stand as surety for their
companys loan obligations. This is especially true if the
corporate officials have sufficient property of their own;
otherwise, their spouses signatures are required in order to
bind the conjugal partnerships.
The fact that on several occasions the lending institutions
did not require the signature of the wife and the husband
signed alone does not mean that being a surety became
part of his profession. Neither could he be presumed to
have acted for the conjugal partnership.
Article 121, paragraph 3, of the Family Code is emphatic
that the payment of personal debts contracted by the
husband or the wife before or during the marriage shall not
be charged to the conjugal partnership except to the
extent that they redounded to the benefit of the family.
Here, the property in dispute also involves the family home.
The loan is a corporate loan not a personal one. Signing as
a surety is certainly not an exercise of an industry or
profession nor an act of administration for the benefit of
the family.
On the basis of the facts, the rules, the law and equity, the
assailed decision should be upheld as we now uphold it.
This is, of course, without prejudice to petitioners right to
enforce the obligation in its favor against the PBM receiver
in accordance with the rehabilitation program and
payment schedule approved or to be approved by the
Securities & Exchange Commission.
WHEREFORE, the petition for review should be, as it is
hereby, DENIED for lack of merit.
SO ORDERED.
CHING VS CA 2004
This petition for review, under Rule 45 of the Revised Rules
of Court, assails the Decision1 of the Court of Appeals (CA)
dated November 27, 1995 in CA-G.R. SP No. 33585, as well
as the Resolution2 on April 2, 1996 denying the petitioners
motion for reconsideration. The impugned decision
granted the private respondents petition for certiorari and
set aside the Orders of the trial court dated December 15,
19933 and February 17, 19944 nullifying the attachment of
100,000 shares of stocks of the Citycorp Investment
Philippines under the name of petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills
Company, Inc. (PBMCI) obtained a loan of 9,000,000.00
from the Allied Banking Corporation (ABC). By virtue of this
loan, the PBMCI, through its Executive Vice-President
Alfredo Ching, executed a promissory note for the said
amount promising to pay on December 22, 1978 at an
interest rate of 14% per annum.5 As added security for the
said loan, on September 28, 1978, Alfredo Ching, together
with Emilio Taedo and Chung Kiat Hua, executed a
continuing guaranty with the ABC binding themselves to
jointly and severally guarantee the payment of all the
PBMCI obligations owing the ABC to the extent of
38,000,000.00.6 The loan was subsequently renewed on
various dates, the last renewal having been made on
December 4, 1980.7
Earlier, on December 28, 1979, the ABC extended another
loan to the PBMCI in the amount of 13,000,000.00
payable in eighteen months at 16% interest per annum. As
in the previous loan, the PBMCI, through Alfredo Ching,
executed a promissory note to evidence the loan
maturing on June 29, 1981.8 This was renewed once for a
period of one month.9
The PBMCI defaulted in the payment of all its loans. Hence,
on August 21, 1981, the ABC filed a complaint for sum of
money with prayer for a writ of preliminary attachment
against the PBMCI to collect the 12,612,972.88 exclusive
of interests, penalties and other bank charges. Impleaded
as co-defendants in the complaint were Alfredo Ching,
Emilio Taedo and Chung Kiat Hua in their capacity as
sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the
Regional Trial Court of Manila, Branch XVIII.10 In its
application for a writ of preliminary attachment, the ABC
averred that the "defendants are guilty of fraud in incurring
the obligations upon which the present action is brought11
in that they falsely represented themselves to be in a
financial position to pay their obligation upon maturity
thereof."12 Its supporting affidavit stated, inter alia, that the
"[d]efendants have removed or disposed of their
properties, or [are] ABOUT to do so, with intent to defraud
their creditors."13
On August 26, 1981, after an ex-parte hearing, the trial
court issued an Order denying the ABCs application for a
writ of preliminary attachment. The trial court decreed that
the grounds alleged in the application and that of its
supporting affidavit "are all conclusions of fact and of law"
which do not warrant the issuance of the writ prayed for.14
On motion for reconsideration, however, the trial court, in
an Order dated September 14, 1981, reconsidered its
previous order and granted the ABCs application for a
writ of preliminary attachment on a bond of 12,700,000.
The order, in relevant part, stated:
With respect to the second ground relied upon for the
grant of the writ of preliminary attachment ex-parte, which
is the alleged disposal of properties by the defendants with
intent to defraud creditors as provided in Sec. 1(e) of Rule
57 of the Rules of Court, the affidavits can only barely justify
the issuance of said writ as against the defendant Alfredo
Ching who has allegedly bound himself jointly and
severally to pay plaintiff the defendant corporations
obligation to the plaintiff as a surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as
against the defendant Alfredo Ching requiring the sheriff
of this Court to attach all the properties of said Alfredo
Ching not exceeding 12,612,972.82 in value, which are
within the jurisdiction of this Court and not exempt from
execution upon, the filing by plaintiff of a bond duly
approved by this Court in the sum of Twelve Million Seven
Hundred Thousand Pesos (12,700,000.00) executed in
favor of the defendant Alfredo Ching to secure the
payment by plaintiff to him of all the costs which may be
adjudged in his favor and all damages he may sustain by
reason of the attachment if the court shall finally adjudge
that the plaintiff was not entitled thereto.
SO ORDERED.15
Upon the ABCs posting of the requisite bond, the trial
court issued a writ of preliminary attachment.
Subsequently, summonses were served on the
defendants,16 save Chung Kiat Hua who could not be
found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching
jointly filed a petition for suspension of payments with the
Securities and Exchange Commission (SEC), docketed as
SEC Case No. 2250, at the same time seeking the PBMCIs
rehabilitation.17
On July 9, 1982, the SEC issued an Order placing the
PBMCIs business, including its assets and liabilities, under
rehabilitation receivership, and ordered that "all actions for
claims listed in Schedule "A" of the petition pending before
11
any court or tribunal are hereby suspended in whatever
stage the same may be until further orders from the
Commission."18 The ABC was among the PBMCIs creditors
named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo
Ching jointly filed a Motion to Dismiss and/or motion to
suspend the proceedings in Civil Case No. 142729 invoking
the PBMCIs pending application for suspension of
payments (which Ching co-signed) and over which the
SEC had already assumed jurisdiction.19 On February 4,
1983, the ABC filed its Opposition thereto.20
In the meantime, on July 26, 1983, the deputy sheriff of the
trial court levied on attachment the 100,000 common
shares of Citycorp stocks in the name of Alfredo Ching.21
Thereafter, in an Order dated September 16, 1983, the trial
court partially granted the aforementioned motion by
suspending the proceedings only with respect to the
PBMCI. It denied Chings motion to dismiss the
complaint/or suspend the proceedings and pointed out
that P.D. No. 1758 only concerns the activities of
corporations, partnerships and associations and was never
intended to regulate and/or control activities of
individuals. Thus, it directed the individual defendants to
file their answers.22
Instead of filing an answer, Ching filed on January 14, 1984
a Motion to Suspend Proceedings on the same ground of
the pendency of SEC Case No. 2250. This motion met the
opposition from the ABC.23
On January 20, 1984, Taedo filed his Answer with
counterclaim and cross-claim.24 Ching eventually filed his
Answer on July 12, 1984.25
On October 25, 1984, long after submitting their answers,
Ching filed an Omnibus Motion,26 again praying for the
dismissal of the complaint or suspension of the
proceedings on the ground of the July 9, 1982 Injunctive
Order issued in SEC Case No. 2250. He averred that as a
surety of the PBMCI, he must also necessarily benefit from
the defenses of his principal. The ABC opposed Chings
omnibus motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus
Motion27 praying for the dismissal of the complaint,
arguing that the ABC had "abandoned and waived" its
right to proceed against the continuing guaranty by its act
of resorting to preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce
the amount of his preliminary attachment bond from
12,700,000 to 6,350,000.28 Alfredo Ching opposed the
motion,29 but on April 2, 1987, the court issued an Order
setting the incident for further hearing on May 28, 1987 at
8:30 a.m. for the parties to adduce evidence on the actual
value of the properties of Alfredo Ching levied on by the
sheriff.30
On March 2, 1988, the trial court issued an Order granting
the motion of the ABC and rendered the attachment
bond of 6,350,000.31
On November 16, 1993, Encarnacion T. Ching, assisted by
her husband Alfredo Ching, filed a Motion to Set Aside the
levy on attachment. She alleged inter alia that the 100,000
shares of stocks levied on by the sheriff were acquired by
her and her husband during their marriage out of conjugal
funds after the Citycorp Investment Philippines was
established in 1974. Furthermore, the indebtedness
covered by the continuing guaranty/comprehensive
suretyship contract executed by petitioner Alfredo Ching
for the account of PBMCI did not redound to the benefit
of the conjugal partnership. She, likewise, alleged that
being the wife of Alfredo Ching, she was a third-party
claimant entitled to file a motion for the release of the
properties.32 She attached therewith a copy of her
marriage contract with Alfredo Ching.33
The ABC filed a comment on the motion to quash
preliminary attachment and/or motion to expunge
records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a
party to this present case; thus, she has no personality to
file any motion before this Honorable Court;
2.2 Said supposed movant did not file any Motion for
Intervention pursuant to Section 2, Rule 12 of the Rules of
Court;
2.3 Said Motion cannot even be construed to be in the
nature of a Third-Party Claim conformably with Sec. 14,
Rule 57 of the Rules of Court.
3. Furthermore, assuming in gracia argumenti that the
supposed movant has the required personality, her Motion
cannot be acted upon by this Honorable Court as the
above-entitled case is still in the archives and the
proceedings thereon still remains suspended. And there is
no previous Motion to revive the same.34
The ABC also alleged that the motion was barred by
prescription or by laches because the shares of stocks
were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching
adduced in evidence her marriage contract to Alfredo
Ching to prove that they were married on January 8,
1960;35 the articles of incorporation of Citycorp Investment
Philippines dated May 14, 1979;36 and, the General
Information Sheet of the corporation showing that
petitioner Alfredo Ching was a member of the Board of
Directors of the said corporation and was one of its top
twenty stockholders.
On December 10, 1993, the Spouses Ching filed their
Reply/Opposition to the motion to expunge records.
Acting on the aforementioned motion, the trial court
issued on December 15, 1993 an Order37 lifting the writ of
preliminary attachment on the shares of stocks and
ordering the sheriff to return the said stocks to the
petitioners. The dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary
Attachment, dated November 9, 1993, is hereby granted.
Let the writ of preliminary attachment subject matter of
said motion, be quashed and lifted with respect to the
attached 100,000 common shares of stock of Citycorp
Investment Philippines in the name of the defendant
Alfredo Ching, the said shares of stock to be returned to
him and his movant-spouse by Deputy Sheriff Apolonio A.
Golfo who effected the levy thereon on July 26, 1983, or
by whoever may be presently in possession thereof.
SO ORDERED.38
The plaintiff Allied Banking Corporation filed a motion for
the reconsideration of the order but denied the same on
February 17, 1994. The petitioner bank forthwith filed a
petition for certiorari with the CA, docketed as CA-G.R. SP
No. 33585, for the nullification of the said order of the court,
contending that:
1. The respondent Judge exceeded his authority thereby
acted without jurisdiction in taking cognizance of, and
granting a "Motion" filed by a complete stranger to the
case.
12
2. The respondent Judge committed a grave abuse of
discretion in lifting the writ of preliminary attachment
without any basis in fact and in law, and contrary to
established jurisprudence on the matter.39
On November 27, 1995, the CA rendered judgment
granting the petition and setting aside the assailed orders
of the trial court, thus:
WHEREFORE, premises considered, the petition is
GRANTED, hereby setting aside the questioned orders
(dated December 15, 1993 and February 17, 1994) for
being null and void.
SO ORDERED.40
The CA sustained the contention of the private respondent
and set aside the assailed orders. According to the CA, the
RTC deprived the private respondent of its right to file a
bond under Section 14, Rule 57 of the Rules of Court. The
petitioner Encarnacion T. Ching was not a party in the trial
court; hence, she had no right of action to have the levy
annulled with a motion for that purpose. Her remedy in
such case was to file a separate action against the private
respondent to nullify the levy on the 100,000 Citycorp
shares of stocks. The court stated that even assuming that
Encarnacion T. Ching had the right to file the said motion,
the same was barred by laches.
Citing Wong v. Intermediate Appellate Court,41 the CA
ruled that the presumption in Article 160 of the New Civil
Code shall not apply where, as in this case, the petitioner-
spouses failed to prove the source of the money used to
acquire the shares of stock. It held that the levied shares of
stocks belonged to Alfredo Ching, as evidenced by the
fact that the said shares were registered in the corporate
books of Citycorp solely under his name. Thus, according
to the appellate court, the RTC committed a grave abuse
of its discretion amounting to excess or lack of jurisdiction
in issuing the assailed orders. The petitioners motion for
reconsideration was denied by the CA in a Resolution
dated April 2, 1996.
The petitioner-spouses filed the instant petition for review
on certiorari, asserting that the RTC did not commit any
grave abuse of discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders in their favor;
hence, the CA erred in reversing the same. They aver that
the source of funds in the acquisition of the levied shares
of stocks is not the controlling factor when invoking the
presumption of the conjugal nature of stocks under Art.
160,42 and that such presumption subsists even if the
property is registered only in the name of one of the
spouses, in this case, petitioner Alfredo Ching.43
According to the petitioners, the suretyship obligation was
not contracted in the pursuit of the petitioner-husbands
profession or business.44 And, contrary to the ruling of the
CA, where conjugal assets are attached in a collection suit
on an obligation contracted by the husband, the wife
should exhaust her motion to quash in the main case and
not file a separate suit.45 Furthermore, the petitioners
contend that under Art. 125 of the Family Code, the
petitioner-husbands gratuitous suretyship is null and void
ab initio,46 and that the share of one of the spouses in the
conjugal partnership remains inchoate until the dissolution
and liquidation of the partnership.47
In its comment on the petition, the private respondent
asserts that the CA correctly granted its petition for
certiorari nullifying the assailed order. It contends that the
CA correctly relied on the ruling of this Court in Wong v.
Intermediate Appellate Court. Citing Cobb-Perez v. Lantin
and G-Tractors, Inc. v. Court of Appeals, the private
respondent alleges that the continuing guaranty and
suretyship executed by petitioner Alfredo Ching in pursuit
of his profession or business. Furthermore, according to the
private respondent, the right of the petitioner-wife to a
share in the conjugal partnership property is merely
inchoate before the dissolution of the partnership; as such,
she had no right to file the said motion to quash the levy
on attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the
petitioner-wife has the right to file the motion to quash the
levy on attachment on the 100,000 shares of stocks in the
Citycorp Investment Philippines; (b) whether or not the RTC
committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the
petitioner-wife had the right to file the said motion,
although she was not a party in Civil Case No. 142729.48
In Ong v. Tating,49 we held that the sheriff may attach only
those properties of the defendant against whom a writ of
attachment has been issued by the court. When the sheriff
erroneously levies on attachment and seizes the property
of a third person in which the said defendant holds no right
or interest, the superior authority of the court which has
authorized the execution may be invoked by the
aggrieved third person in the same case. Upon
application of the third person, the court shall order a
summary hearing for the purpose of determining whether
the sheriff has acted rightly or wrongly in the performance
of his duties in the execution of the writ of attachment,
more specifically if he has indeed levied on attachment
and taken hold of property not belonging to the plaintiff. If
so, the court may then order the sheriff to release the
property from the erroneous levy and to return the same
to the third person. In resolving the motion of the third
party, the court does not and cannot pass upon the
question of the title to the property with any character of
finality. It can treat the matter only insofar as may be
necessary to decide if the sheriff has acted correctly or
not. If the claimants proof does not persuade the court of
the validity of the title, or right of possession thereto, the
claim will be denied by the court. The aggrieved third
party may also avail himself of the remedy of "terceria" by
executing an affidavit of his title or right of possession over
the property levied on attachment and serving the same
to the office making the levy and the adverse party. Such
party may also file an action to nullify the levy with
damages resulting from the unlawful levy and seizure,
which should be a totally separate and distinct action from
the former case. The above-mentioned remedies are
cumulative and any one of them may be resorted to by
one third-party claimant without availing of the other
remedies.50
In this case, the petitioner-wife filed her motion to set aside
the levy on attachment of the 100,000 shares of stocks in
the name of petitioner-husband claiming that the said
shares of stocks were conjugal in nature; hence, not liable
for the account of her husband under his continuing
guaranty and suretyship agreement with the PBMCI. The
petitioner-wife had the right to file the motion for said relief.
On the second issue, we find and so hold that the CA erred
in setting aside and reversing the orders of the RTC. The
private respondent, the petitioner in the CA, was
burdened to prove that the RTC committed a grave abuse
of its discretion amounting to excess or lack of jurisdiction.
The tribunal acts without jurisdiction if it does not have the
legal purpose to determine the case; there is excess of
jurisdiction where the tribunal, being clothed with the
power to determine the case, oversteps its authority as
determined by law. There is grave abuse of discretion
where the tribunal acts in a capricious, whimsical, arbitrary
or despotic manner in the exercise of its judgment and is
equivalent to lack of jurisdiction.51
13
It was incumbent upon the private respondent to adduce
a sufficiently strong demonstration that the RTC acted
whimsically in total disregard of evidence material to, and
even decide of, the controversy before certiorari will lie. A
special civil action for certiorari is a remedy designed for
the correction of errors of jurisdiction and not errors of
judgment. When a court exercises its jurisdiction, an error
committed while so engaged does not deprive it of its
jurisdiction being exercised when the error is committed.52
After a comprehensive review of the records of the RTC
and of the CA, we find and so hold that the RTC did not
commit any grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the
properties acquired during the marriage are presumed to
belong to the conjugal partnership, unless it be proved
that it pertains exclusively to the husband, or to the wife. In
Tan v. Court of Appeals,53 we held that it is not even
necessary to prove that the properties were acquired with
funds of the partnership. As long as the properties were
acquired by the parties during the marriage, they are
presumed to be conjugal in nature. In fact, even when the
manner in which the properties were acquired does not
appear, the presumption will still apply, and the properties
will still be considered conjugal. The presumption of the
conjugal nature of the properties acquired during the
marriage subsists in the absence of clear, satisfactory and
convincing evidence to overcome the same.54
In this case, the evidence adduced by the petitioners in
the RTC is that the 100,000 shares of stocks in the Citycorp
Investment Philippines were issued to and registered in its
corporate books in the name of the petitioner-husband
when the said corporation was incorporated on May 14,
1979. This was done during the subsistence of the marriage
of the petitioner-spouses. The shares of stocks are, thus,
presumed to be the conjugal partnership property of the
petitioners. The private respondent failed to adduce
evidence that the petitioner-husband acquired the stocks
with his exclusive money.55 The barefaced fact that the
shares of stocks were registered in the corporate books of
Citycorp Investment Philippines solely in the name of the
petitioner-husband does not constitute proof that the
petitioner-husband, not the conjugal partnership, owned
the same.56 The private respondents reliance on the
rulings of this Court in Maramba v. Lozano57 and
Associated Insurance & Surety Co., Inc. v. Banzon58 is
misplaced. In the Maramba case, we held that where
there is no showing as to when the property was acquired,
the fact that the title is in the wifes name alone is
determinative of the ownership of the property. The
principle was reiterated in the Associated Insurance case
where the uncontroverted evidence showed that the
shares of stocks were acquired during the marriage of the
petitioners.
Instead of fortifying the contention of the respondents, the
ruling of this Court in Wong v. Intermediate Appellate
Court59 buttresses the case for the petitioners. In that case,
we ruled that he who claims that property acquired by the
spouses during their marriage is not conjugal partnership
property but belongs to one of them as his personal
property is burdened to prove the source of the money
utilized to purchase the same. In this case, the private
respondent claimed that the petitioner-husband acquired
the shares of stocks from the Citycorp Investment
Philippines in his own name as the owner thereof. It was,
thus, the burden of the private respondent to prove that
the source of the money utilized in the acquisition of the
shares of stocks was that of the petitioner-husband alone.
As held by the trial court, the private respondent failed to
adduce evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a
continuing guaranty and suretyship agreement with the
private respondent for the payment of the PBMCI loans,
the petitioner-husband was in the exercise of his
profession, pursuing a legitimate business. The appellate
court erred in concluding that the conjugal partnership is
liable for the said account of PBMCI under Article 161(1) of
the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and
3]60 of the Family Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband
for the benefit of the conjugal partnership, and those
contracted by the wife, also for the same purpose, in the
cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty
and suretyship agreement as security for the payment of
the loan obtained by the PBMCI from the private
respondent in the amount of 38,000,000. In Ayala
Investment and Development Corp. v. Court of
Appeals,61 this Court ruled "that the signing as surety is
certainly not an exercise of an industry or profession. It is
not embarking in a business. No matter how often an
executive acted on or was persuaded to act as surety for
his own employer, this should not be taken to mean that
he thereby embarked in the business of suretyship or
guaranty."
For the conjugal partnership to be liable for a liability that
should appertain to the husband alone, there must be a
showing that some advantages accrued to the spouses.
Certainly, to make a conjugal partnership responsible for a
liability that should appertain alone to one of the spouses
is to frustrate the objective of the New Civil Code to show
the utmost concern for the solidarity and well being of the
family as a unit. The husband, therefore, is denied the
power to assume unnecessary and unwarranted risks to
the financial stability of the conjugal partnership.62
In this case, the private respondent failed to prove that the
conjugal partnership of the petitioners was benefited by
the petitioner-husbands act of executing a continuing
guaranty and suretyship agreement with the private
respondent for and in behalf of PBMCI. The contract of
loan was between the private respondent and the PBMCI,
solely for the benefit of the latter. No presumption can be
inferred from the fact that when the petitioner-husband
entered into an accommodation agreement or a
contract of surety, the conjugal partnership would thereby
be benefited. The private respondent was burdened to
establish that such benefit redounded to the conjugal
partnership.63
It could be argued that the petitioner-husband was a
member of the Board of Directors of PBMCI and was one
of its top twenty stockholders, and that the shares of stocks
of the petitioner-husband and his family would appreciate
if the PBMCI could be rehabilitated through the loans
obtained; that the petitioner-husbands career would be
enhanced should PBMCI survive because of the infusion of
fresh capital. However, these are not the benefits
contemplated by Article 161 of the New Civil Code. The
benefits must be those directly resulting from the loan. They
cannot merely be a by-product or a spin-off of the loan
itself.64
This is different from the situation where the husband
borrows money or receives services to be used for his own
business or profession. In the Ayala case, we ruled that it is
such a contract that is one within the term "obligation for
the benefit of the conjugal partnership." Thus:
14
(A) If the husband himself is the principal obligor in the
contract, i.e., he directly received the money and services
to be used in or for his own business or his own profession,
that contract falls within the term " obligations for the
benefit of the conjugal partnership." Here, no actual
benefit may be proved. It is enough that the benefit to the
family is apparent at the time of the signing of the
contract. From the very nature of the contract of loan or
services, the family stands to benefit from the loan facility
or services to be rendered to the business or profession of
the husband. It is immaterial, if in the end, his business or
profession fails or does not succeed. Simply stated, where
the husband contracts obligations on behalf of the family
business, the law presumes, and rightly so, that such
obligation will redound to the benefit of the conjugal
partnership.65
The Court held in the same case that the rulings of the
Court in Cobb-Perez and G-Tractors, Inc. are not
controlling because the husband, in those cases,
contracted the obligation for his own business. In this case,
the petitioner-husband acted merely as a surety for the
loan contracted by the PBMCI from the private
respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED.
The Decision and Resolution of the Court of Appeals are
SET ASIDE AND REVERSED. The assailed orders of the RTC
are AFFIRMED.
SO ORDERED
FRANCISCO VS GONZALES 2008
Assailed in the present petition for review on certiorari
under Rule 45 of the Rules of Court is the Court of Appeals
(CA) Decision dated April 30, 2007, which affirmed the
Regional Trial Court (RTC) Orders dated June 4, 2003 and
July 31, 2003, denying petitioners' motion to stop execution
sale.
Petitioners Cleodia U. Francisco and Ceamantha U.
Francisco are the minor children of Cleodualdo M.
Francisco (Cleodualdo) and Michele Uriarte Francisco
(Michele). In a Partial Decision dated November 29, 2000
rendered by the RTC of Makati, Branch 144, in Civil Case
No. 93-2289 for Declaration of Nullity of Marriage, the
Compromise Agreement entered into by the estranged
couple was approved. The Compromise Agreement
contained in part the following provisions:
7. In their desire to manifest their genuine concern for their
children, Cleodia and Ceamantha, Cleodualdo and
Michelle have voluntarily agreed to herein set forth their
obligations, rights and responsibilities on matters relating to
their children's support, custody, visitation, as well as to the
dissolution of their conjugal partnership of gains as follows:
(a) Title and ownership of the conjugal property consisting
of a house and lot located in Ayala Alabang, Muntinlupa,
Metro Manila shall be transferred by way of a deed of
donation to Cleodia and Ceamantha, as co-owners,
when they reach nineteen (19) and eighteen (18) years
old, respectively, subject to the following conditions:
x x x[1]
The property subject of the Compromise Agreement is a
house and lot covered by Transfer Certificate of Title No.
167907 in the name of Cleodualdo M. Francisco, married
to Michele U. Francisco, with an area of 414 square meters,
and located in 410 Taal St., Ayala Alabang Village,
Muntinlupa City.[2]
Meanwhile, in a case for Unlawful Detainer with Preliminary
Attachment filed by spouses Jorge C. Gonzales and
Purificacion W. Gonzales (respondents) against George
Zoltan Matrai (Matrai) and Michele, the Metropolitan Trial
Court (MeTC) of Muntinlupa City, Branch 80, rendered a
Decision dated May 10, 2001, ordering Matrai and Michele
to vacate the premises leased to them located in 264
Lanka Drive, Ayala Alabang Village, Muntinlupa City, and
to pay back rentals, unpaid telephone bills and attorney's
fees.[3]
Pending appeal with the RTC of Muntinlupa, Branch 256,
an order was issued granting respondents' prayer for the
execution of the MeTC Decision.[4] A notice of sale by
execution was then issued by the sheriff covering the real
property under Transfer Certificate of Title No. T-167907 in
the name of Cleodualdo M. Francisco, married to Michele
U. Francisco.[5]
When petitioners' grandmother learned of the scheduled
auction, she, as guardian-in-fact of petitioners, filed with
the RTC an Affidavit of Third Party Claim[6] and a Very
Urgent Motion to Stop Sale by Execution[7] but this was
denied in the Order dated June 4, 2003.[8] Petitioners'
motion for reconsideration was denied per RTC Order
dated July 31, 2003.[9]
Petitioners then filed a petition for certiorari with the CA.
Pending resolution by the CA, the RTC issued an Order
dated July 8, 2005, granting respondents' petition for the
issuance of a new certificate of title.[10] The RTC also
issued an Order on February 13, 2006, granting
respondents' motion for the issuance of a writ of
possession.[11]
On April 30, 2007, the CA dismissed the petition, the
dispositive portion of which reads:
WHEREFORE, premises considered, the Petition is hereby
DISMISSED. The Order(s), dated June 4, 2003 and July 31,
2003, of the Regional Trial Court of Muntinlupa City, Br. 256,
in Civil Case No. 01-201, STAND. Costs against the
Petitioners.
SO ORDERED.[12]
Hence, herein petition. As prayed for, the Court issued a
temporary restraining order on July 11, 2007, enjoining
respondents, the RTC, the Register of Deeds, and the
Sheriff from implementing or enforcing the RTC Order
dated July 8, 2005, canceling TCT No. 167907 and Order
dated February 13, 2006, issuing a writ of possession, until
further orders from the Court.[13]
Petitioners argue that: (1) they are the rightful owners of
the property as the Partial Decision issued by the RTC of
Makati in Civil Case No. 93-2289 had already become
final; (2) their parents already waived in their favor their
rights over the property; (3) the adjudged obligation of
Michele in the ejectment case did not redound to the
benefit of the family; (4) Michele's obligation is a joint
obligation between her and Matrai, not joint and
solidary.[14]
The Court finds that it was grave error for the RTC to
proceed with the execution, levy and sale of the subject
property. The power of the court in executing judgments
extends only to properties unquestionably belonging to
the judgment debtor alone,[15] in the present case to
those belonging to Michele and Matrai. One man's goods
shall not be sold for another man's debts.[16]
To begin with, the RTC should not have ignored that TCT
No. 167907 is in the name of Cleodualdo M. Francisco,
married to Michele U. Francisco. On its face, the title shows
that the registered owner of the property is not Matrai and
15
Michele but Cleodualdo, married to Michele. This
describes the civil status of Cleodualdo at the time the
property was acquired.[17]
Records show that Cleodualdo and Michele were married
on June 12, 1986, prior to the effectivity of the Family Code
on August 3, 1988. As such, their property relations are
governed by the Civil Code on conjugal partnership of
gains.
The CA acknowledged that ownership of the subject
property is conjugal in nature;[18] however, it ruled that
since Michele's obligation was not proven to be a personal
debt, it must be inferred that it is conjugal and redounded
to the benefit of the family, and hence, the property may
be held answerable for it.[19]
The Court does not agree.
A wife may bind the conjugal partnership only when she
purchases things necessary for the support of the family, or
when she borrows money for that purpose upon her
husband's failure to deliver the needed sum; when
administration of the conjugal partnership is transferred to
the wife by the courts or by the husband; or when the wife
gives moderate donations for charity. Failure to establish
any of these circumstances means that the conjugal asset
may not be bound to answer for the wife's personal
obligation.[20] Considering that the foregoing
circumstances are evidently not present in this case as the
liability incurred by Michele arose from a judgment
rendered in an unlawful detainer case against her and her
partner Matrai.
Furthermore, even prior to the issuance of the Notice of
Levy on Execution on November 28, 2001,[21] there was
already annotated on the title the following inscription:
Entry No. 23341-42/T-167907 Nullification of Marriage
By order of the Court RTC, NCR, Branch 144, Makati City
dated July 4, 2001, which become final and executory on
October 18, 2001 declaring the Marriage Contract
between Michelle Uriarte and Cleodualdo M. Francisco, Jr.
is null & void ab initio and title of ownership of the conjugal
property consisting of the above-described property shall
be transferred by way of a Deed of Donation to Cleodia
Michaela U. Francisco and Ceamantha Maica U.
Francisco, as co-owners when they reach nineteen (19)
and eighteen (18) yrs. old to the condition that
Cleodualdo, shall retain usufructuary rights over the
property until he reaches the age of 65 yrs. Old.
Date of instrument Oct 18, 2001
Date of inscription Oct 22, 2001.[22]
This annotation should have put the RTC and the sheriff on
guard, and they should not have proceeded with the
execution of the judgment debt of Michele and Matrai.
While the trial court has the competence to identify and
to secure properties and interest therein held by the
judgment debtor for the satisfaction of a money judgment
rendered against him, such exercise of its authority is
premised on one important fact: that the properties levied
upon, or sought to be levied upon, are properties
unquestionably owned by the judgment debtor and are
not exempt by law from execution.[23] Also, a sheriff is not
authorized to attach or levy on property not belonging to
the judgment debtor, and even incurs liability if he
wrongfully levies upon the property of a third person. A
sheriff has no authority to attach the property of any
person under execution except that of the judgment
debtor.[24]
It should be noted that the judgment debt for which the
subject property was being made to answer was incurred
by Michele and her partner,[25] Matrai. Respondents
allege that the lease of the property in Lanka Drive
redounded to the benefit of the family.[26] By no stretch of
one's imagination can it be concluded that said
debt/obligation was incurred for the benefit of the
conjugal partnership or that some advantage accrued to
the welfare of the family. In BA Finance Corporation v.
Court of Appeals,[27] the Court ruled that the petitioner
cannot enforce the obligation contracted by Augusto
Yulo against his conjugal properties with respondent Lily
Yulo because it was not established that the obligation
contracted by the husband redounded to the benefit of
the conjugal partnership under Article 161 of the Civil
Code. The Court stated:
In the present case, the obligation which the petitioner is
seeking to enforce against the conjugal property
managed by the private respondent Lily Yulo was
undoubtedly contracted by Augusto Yulo for his own
benefit because at the time he incurred the obligation he
had already abandoned his family and had left their
conjugal home. Worse, he made it appear that he was
duly authorized by his wife in behalf of A & L Industries, to
procure such loan from the petitioner. Clearly, to make A
& L Industries liable now for the said loan would be unjust
and contrary to the express provision of the Civil Code.
(Emphasis supplied)
Similarly in this case, Michele, who was then already living
separately from Cleodualdo,[28] rented the house in
Lanka Drive for her and Matrais own benefit. In fact, when
they entered into the lease agreement, Michele and
Matrai purported themselves to be husband and wife.[29]
Respondents bare allegation that petitioners lived with
Michele on the leased property is not sufficient to support
the conclusion that the judgment debt against Michele
and Matrai in the ejectment suit redounded to the benefit
of the family of Michele and Cleodualdo and petitioners.
Thus, in Homeowners Savings and Loan Bank v. Dailo, the
Court stated thus:
x x x Ei incumbit probatio qui dicit, non qui negat (he who
asserts, not he who denies, must prove). Petitioners
sweeping conclusion that the loan obtained by the late
Marcelino Dailo, Jr. to finance the construction of housing
units without a doubt redounded to the benefit of his
family, without adducing adequate proof, does not
persuade this Court. Other than petitioners bare
allegation, there is nothing from the records of the case to
compel a finding that, indeed, the loan obtained by the
late Marcelino Dailo, Jr. redounded to the benefit of the
family. Consequently, the conjugal partnership cannot be
held liable for the payment of the principal obligation.[30]
To hold the property in Taal St. liable for the obligations of
Michele and Matrai would be going against the spirit and
avowed objective of the Civil Code to give the utmost
concern for the solidarity and well-being of the family as a
unit.[31]
In justifying the levy against the property, the RTC went
over the Compromise Agreement as embodied in the
Partial Decision dated November 29, 2000. Oddly, the RTC
ruled that there was no effective transfer of ownership to
the siblings Cleodia and Ceamantha Francisco. In the
same breath, the RTC astonishingly ruled that Michele is
now the owner of the property inasmuch as Cleodualdo
already waived his rights over the property. The
Compromise Agreement must not be read piece-meal but
in its entirety. It is provided therein, thus:
7. In their desire to manifest their genuine concern for their
children, Cleodia and Ceamantha, Cleodualdo and
Michelle have voluntarily agreed to herein set forth their
obligations, rights and responsibilities on matters relating to
their children's support, custody, visitation, as well as to the
dissolution of their conjugal partnership of gains as follows:
(a) Title and ownership of the conjugal property consisting
of a house and lot located in Ayala Alabang, Muntinlupa,
Metro Manila shall be transferred by way of a deed of
donation to Cleodia and Ceamantha, as co-owners,
when they reach nineteen (19) and eighteen (18) years
old, respectively, subject to the following conditions:
16
a.1. Cleodualdo shall retain usufructuary rights over the
property until he reaches the age of 65 years old, with the
following rights and responsibilities:
x x x x[32] (Emphasis supplied)
From the foregoing, it is clear that both Michele and
Cleodualdo have waived their title to and ownership of
the house and lot in Taal St. in favor of petitioners. The
property should not have been levied and sold at
execution sale, for lack of legal basis.
Verily, the CA committed an error in sustaining the RTC
Orders dated June 4, 2003 and July 31, 2003.
WHEREFORE, the petition is GRANTED. The assailed Court of
Appeals Decision dated April 30, 2007, affirming RTC
Orders dated June 4, 2003 and July 31, 2003, are hereby
NULLIFIED and SET ASIDE. The temporary restraining order
issued by the Court per Resolution of July 11, 2007 is hereby
made PERMANENT.
Costs against respondents.
SO ORDERED
BUADO VS NICOL 2009
Before this Court is a petition for certiorari assailing the
Decision1 of the Court of Appeals in CA-G.R. CV No. 47029
and its Resolution denying the motion for reconsideration
thereof.
The case stemmed from the following factual backdrop:
On 30 April 1984, Spouses Roberto and Venus Buado
(petitioners) filed a complaint for damages against Erlinda
Nicol (Erlinda) with Branch 19 of the Regional Trial Court
(RTC) of Bacoor, Cavite, docketed as Civil Case No. 84-33.
Said action originated from Erlinda Nicols civil liability
arising from the criminal offense of slander filed against her
by petitioners.
On 6 April 1987, the trial court rendered a decision ordering
Erlinda to pay damages. The dispositive portion reads:
Wherefore, judgment is hereby rendered in favor of the
plaintiff[s] and against defendant ordering the latter to
pay the former the amount of thirty thousand (30,000.00)
pesos as moral damages, five thousand (5,000.00) pesos
as attorneys fees and litigation expenses, another five
thousand (5,000.00) pesos as exemplary damages and
the cost of suit.2
Said decision was affirmed, successively, by the Court of
Appeals and this Court. It became final and executory on
5 March 1992.
On 14 October 1992, the trial court issued a writ of
execution, a portion of which provides:
Now, therefore, you are commanded that of the goods
and chattels of the defendant Erlinda Nicol, or from her
estates or legal heirs, you cause the sum in the amount of
forty thousand pesos (40,000.00), Philippine Currency,
representing the moral damages, attorneys fees and
litigation expenses and exemplary damages and the cost
of suit of the plaintiff aside from your lawful fees on this
execution and do likewise return this writ into court within
sixty (60) days from date, with your proceedings endorsed
hereon.
But if sufficient personal property cannot be found
whereof to satisfy this execution and lawful fees thereon,
then you are commanded that of the lands and buildings
of said defendant you make the said sum of money in the
manner required by the Rules of Court, and make return of
your proceedings with this writ within sixty (60) days from
date.3
Finding Erlinda Nicols personal properties insufficient to
satisfy the judgment, the Deputy Sheriff issued a notice of
levy on real property on execution addressed to the
Register of Deeds of Cavite. The notice of levy was
annotated on the Transfer Certificate of Title No. T-125322.
On 20 November 1992, a notice of sheriffs sale was issued.
Two (2) days before the public auction sale on 28 January
1993, an affidavit of third-party claim from one Arnulfo F.
Fulo was received by the deputy sheriff prompting
petitioners to put up a sheriffs indemnity bond. The
auction sale proceeded with petitioners as the highest
bidder.
On 4 February 1993, a certificate of sale was issued in favor
of petitioners.
Almost a year later on 2 February 1994, Romulo Nicol
(respondent), the husband of Erlinda Nicol, filed a
complaint for annulment of certificate of sale and
damages with preliminary injunction against petitioners
and the deputy sheriff. Respondent, as plaintiff therein,
alleged that the defendants, now petitioners, connived
and directly levied upon and execute his real property
without exhausting the personal properties of Erlinda Nicol.
Respondent averred that there was no proper publication
and posting of the notice of sale. Furthermore, respondent
claimed that his property which was valued at 500,000.00
was only sold at a "very low price" of 51,685.00, whereas
the judgment obligation of Erlinda Nicol was only
40,000.00. The case was assigned to Branch 21 of the RTC
of Imus, Cavite.
In response, petitioners filed a motion to dismiss on the
grounds of lack of jurisdiction and that they had acted on
the basis of a valid writ of execution. Citing De Leon v.
Salvador,4 petitioners claimed that respondent should
have filed the case with Branch 19 where the judgment
originated and which issued the order of execution, writ of
execution, notice of levy and notice of sheriffs sale.
In an Order5 dated 18 April 1994, the RTC dismissed
respondents complaint and ruled that Branch 19 has
jurisdiction over the case, thus:
As correctly pointed out by the defendants, any flaw in the
implementation of the writ of execution by the
implementing sheriff must be brought before the court
issuing the writ of execution. Besides, there are two (2)
remedies open to the plaintiff, if he feels that the property
being levied on belongs to him and not to the judgment
debtor. The first remedy is to file a third-party claim. If he
fails to do this, a right is reserved to him to vindicate his
claim over the property by any proper action. But
certainly, this is not the proper action reserved to the
plaintiff to vindicate his claim over the property in question
to be ventilated before this court. As earlier stated, this
case should have been addressed to Branch 19, RTC
Bacoor as it was that court which issued the writ of
execution.6
Respondent moved for reconsideration but it was denied
on 26 July 1994.
On appeal, the Court of Appeals reversed the trial court
and held that Branch 21 has jurisdiction to act on the
complaint filed by appellant. The dispositive portion reads:
WHEREFORE, the Orders appealed from are hereby
REVERSED and SET ASIDE. This case is REMANDED to the
17
Regional Trial Court of Imus, Cavite, Branch 21 for further
proceedings.
SO ORDERED.7
Petitioners motion for reconsideration was denied on 23
August 2000. Hence, the instant petition attributing grave
abuse of discretion on the part of the Court of Appeals.
A petition for certiorari is an extraordinary remedy that is
adopted to correct errors of jurisdiction committed by the
lower court or quasi-judicial agency, or when there is
grave abuse of discretion on the part of such court or
agency amounting to lack or excess of jurisdiction. Where
the error is not one of jurisdiction, but of law or fact which
is a mistake of judgment, the proper remedy should be
appeal. In addition, an independent action for certiorari
may be availed of only when there is no appeal or any
plain, speedy and adequate remedy in the ordinary
course of law.8
Nowhere in the petition was it shown that the jurisdiction of
the Court of Appeals was questioned. The issue devolves
on whether the husband of the judgment debtor may file
an independent action to protect the conjugal property
subject to execution. The alleged error therefore is an error
of judgment which is a proper subject of an appeal.
Nevertheless, even if we were to treat this petition as one
for review, the case should still be dismissed on substantive
grounds.
Petitioners maintain that Branch 19 retained jurisdiction
over its judgment to the exclusion of all other co-ordinate
courts for its execution and all incidents thereof, in line with
De Leon v. Salvador. Petitioners insist that respondent, who
is the husband of the judgment debtor, is not the "third
party" contemplated in Section 17 (now Section 16), Rule
39 of the Rules of Court, hence a separate action need not
be filed. Furthermore, petitioners assert that the obligation
of the wife redounded to the benefit of the conjugal
partnership and cited authorities to the effect that the
husband is liable for the tort committed by his wife.
Respondent on the other hand merely avers that the
decision of the Court of Appeals is supported by
substantial evidence and in accord with law and
jurisprudence.9
Verily, the question of jurisdiction could be resolved
through a proper interpretation of Section 16, Rule 39 of
the Rules of Court, which reads:
Sec. 16. Proceedings where property claimed by third
person.
If the property levied on is claimed by any person other
than the judgment obligor or his agent, and such person
makes an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title,
and serves the same upon the officer making the levy and
a copy thereof upon the judgment obligee, the officer
shall not be bound to keep the property, unless such
judgment obligee, on demand of the officer, files a bond
approved by the court to indemnify the third-party
claimant in a sum not less than the value of the property
levied on. In case of disagreement as to such value, the
same shall be determined by the court issuing the writ of
execution. No claim for damages for the taking or keeping
of the property may be enforced against the bond unless
the action therefor is filed within one hundred twenty (120)
days from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or
keeping of the property, to any third-party claimant if such
bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to
the property in a separate action, or prevent the judgment
obligee from claiming damages in the same or a separate
action against a third-party claimant who filed a frivolous
or plainly spurious claim.
When the writ of execution is issued in favor of the Republic
of the Philippines, or any officer duly representing it, the
filing of such bond shall not be required, and in case the
sheriff or levying officer is sued for damages as a result of
the levy, he shall be represented by the Solicitor General
and if held liable therefor, the actual damages adjudged
by the court shall be paid by the National Treasurer out of
such funds as may be appropriated for the purpose.
(Emphasis Supplied)
Apart from the remedy of terceria available to a third-
party claimant or to a stranger to the foreclosure suit
against the sheriff or officer effecting the writ by serving on
him an affidavit of his title and a copy thereof upon the
judgment creditor, a third-party claimant may also resort
to an independent separate action, the object of which is
the recovery of ownership or possession of the property
seized by the sheriff, as well as damages arising from
wrongful seizure and detention of the property. If a
separate action is the recourse, the third-party claimant
must institute in a forum of competent jurisdiction an
action, distinct and separate from the action in which the
judgment is being enforced, even before or without need
of filing a claim in the court that issued the
writ.101awphi1.zw+
A third-party claim must be filed a person other than the
judgment debtor or his agent. In other words, only a
stranger to the case may file a third-party claim.
This leads us to the question: Is the husband, who was not
a party to the suit but whose conjugal property is being
executed on account of the other spouse being the
judgment obligor, considered a "stranger?"
In determining whether the husband is a stranger to the
suit, the character of the property must be taken into
account. In Mariano v. Court of Appeals,11 which was
later adopted in Spouses Ching v. Court of Appeals,12 this
Court held that the husband of the judgment debtor
cannot be deemed a "stranger" to the case prosecuted
and adjudged against his wife for an obligation that has
redounded to the benefit of the conjugal partnership.13
On the other hand, in Naguit v. Court of Appeals14 and Sy
v. Discaya,15 the Court stated that a spouse is deemed a
stranger to the action wherein the writ of execution was
issued and is therefore justified in bringing an independent
action to vindicate her right of ownership over his exclusive
or paraphernal property.lawphil.net
Pursuant to Mariano however, it must further be settled
whether the obligation of the judgment debtor
redounded to the benefit of the conjugal partnership or
not.
Petitioners argue that the obligation of the wife arising from
her criminal liability is chargeable to the conjugal
partnership. We do not agree.
There is no dispute that contested property is conjugal in
nature. Article 122 of the Family Code16 explicitly provides
that payment of personal debts contracted by the
husband or the wife before or during the marriage shall not
be charged to the conjugal partnership except insofar as
they redounded to the benefit of the family.
Unlike in the system of absolute community where liabilities
incurred by either spouse by reason of a crime or quasi-
delict is chargeable to the absolute community of
property, in the absence or insufficiency of the exclusive
18
property of the debtor-spouse, the same advantage is not
accorded in the system of conjugal partnership of gains.
The conjugal partnership of gains has no duty to make
advance payments for the liability of the debtor-spouse.
Parenthetically, by no stretch of imagination can it be
concluded that the civil obligation arising from the crime
of slander committed by Erlinda redounded to the benefit
of the conjugal partnership.
To reiterate, conjugal property cannot be held liable for
the personal obligation contracted by one spouse, unless
some advantage or benefit is shown to have accrued to
the conjugal partnership.17
In Guadalupe v. Tronco,18 this Court held that the car
which was claimed by the third party complainant to be
conjugal property was being levied upon to enforce "a
judgment for support" filed by a third person, the third-
party claim of the wife is proper since the obligation which
is personal to the husband is chargeable not on the
conjugal property but on his separate property.
Hence, the filing of a separate action by respondent is
proper and jurisdiction is thus vested on Branch 21.
Petitioners failed to show that the Court of Appeals
committed grave abuse of discretion in remanding the
case to Branch 21 for further proceedings.
WHEREFORE, the petition is DISMISSED. The Decision of the
Court of Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED
PANA VS HEIRS OF JUANITE 2012
This case is about the propriety of levy and execution on
conjugal properties where one of the spouses has been
found guilty of a crime and ordered to pay civil indemnities
to the victims' heirs.
The Facts and the Case
The prosecution accused petitioner Efren Pana (Efren), his
wife Melecia, and others of murder before the. Regional
Trial Court (RTC) of Surigao City in Criminal Cases 4232 and
4233.1
On July 9, 1997 the RTC rendered a consolidated decision2
acquitting Efren of the charge for insufficiency of evidence
but finding Melecia and another person guilty as charged
and sentenced them to the penalty of death. The RTC
ordered those found guilty to pay each of the heirs of the
victims, jointly and severally, P50,000.00 as civil indemnity,
P50,000.00 each as moral damages, and P150,000.00
actual damages.
On appeal to this Court, it affirmed on May 24, 2001 the
conviction of both accused but modified the penalty to
reclusion perpetua. With respect to the monetary awards,
the Court also affirmed the award of civil indemnity and
moral damages but deleted the award for actual
damages for lack of evidentiary basis. In its place,
however, the Court made an award of P15,000.00 each by
way of temperate damages. In addition, the Court
awarded P50,000.00 exemplary damages per victim to be
paid solidarily by them.3 The decision became final and
executory on October 1, 2001.4
Upon motion for execution by the heirs of the deceased,
on March 12, 2002 the RTC ordered the issuance of the
writ,5 resulting in the levy of real properties registered in the
names of Efren and Melecia.6 Subsequently, a notice of
levy7 and a notice of sale on execution8 were issued.
On April 3, 2002, petitioner Efren and his wife Melecia filed
a motion to quash the writ of execution, claiming that the
levied properties were conjugal assets, not paraphernal
assets of Melecia.9 On September 16, 2002 the RTC denied
the motion.10 The spouses moved for reconsideration but
the RTC denied the same on March 6, 2003.11
Claiming that the RTC gravely abused its discretion in
issuing the challenged orders, Efren filed a petition for
certiorari before the Court of Appeals (CA). On January
29, 2004 the CA dismissed the petition for failure to
sufficiently show that the RTC gravely abused its discretion
in issuing its assailed orders.12 It also denied Efrens motion
for reconsideration,13 prompting him to file the present
petition for review on certiorari.
The Issue Presented
The sole issue presented in this case is whether or not the
CA erred in holding that the conjugal properties of spouses
Efren and Melecia can be levied and executed upon for
the satisfaction of Melecias civil liability in the murder
case.
Ruling of the Court
To determine whether the obligation of the wife arising
from her criminal liability is chargeable against the
properties of the marriage, the Court has first to identify the
spouses property relations.
Efren claims that his marriage with Melecia falls under the
regime of conjugal partnership of gains, given that they
were married prior to the enactment of the Family Code
and that they did not execute any prenuptial
agreement.14 Although the heirs of the deceased victims
do not dispute that it was the Civil Code, not the Family
Code, which governed the marriage, they insist that it was
the system of absolute community of property that applied
to Efren and Melecia. The reasoning goes:
Admittedly, the spouses were married before the
effectivity of the Family Code. But that fact does not
prevent the application of [A]rt. 94, last paragraph, of the
Family Code because their property regime is precisely
governed by the law on absolute community. This finds
support in Art. 256 of the Family Code which states:
"This code shall have retroactive effect in so far as it does
not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other laws."
None of the spouses is dead. Therefore, no vested rights
have been acquired by each over the properties of the
community. Hence, the liabilities imposed on the accused-
spouse may properly be charged against the community
as heretofore discussed.15
The RTC applied the same reasoning as above.16 Efren
and Melecias property relation was admittedly conjugal
under the Civil Code but, since the transitory provision of
the Family Code gave its provisions retroactive effect if no
vested or acquired rights are impaired, that property
relation between the couple was changed when the
Family Code took effect in 1988. The latter code now
prescribes in Article 75 absolute community of property for
all marriages unless the parties entered into a prenuptial
agreement. As it happens, Efren and Melecia had no
prenuptial agreement. The CA agreed with this position.17
Both the RTC and the CA are in error on this point. While it
is true that the personal stakes of each spouse in their
conjugal assets are inchoate or unclear prior to the
liquidation of the conjugal partnership of gains and,
therefore, none of them can be said to have acquired
vested rights in specific assets, it is evident that Article 256
19
of the Family Code does not intend to reach back and
automatically convert into absolute community of
property relation all conjugal partnerships of gains that
existed before 1988 excepting only those with prenuptial
agreements.
The Family Code itself provides in Article 76 that marriage
settlements cannot be modified except prior to marriage.
Art. 76. In order that any modification in the marriage
settlements may be valid, it must be made before the
celebration of the marriage, subject to the provisions of
Articles 66, 67, 128, 135 and 136.
Clearly, therefore, the conjugal partnership of gains that
governed the marriage between Efren and Melecia who
were married prior to 1988 cannot be modified except
before the celebration of that marriage.
Post-marriage modification of such settlements can take
place only where: (a) the absolute community or conjugal
partnership was dissolved and liquidated upon a decree
of legal separation;18 (b) the spouses who were legally
separated reconciled and agreed to revive their former
property regime;19 (c) judicial separation of property had
been had on the ground that a spouse abandons the
other without just cause or fails to comply with his
obligations to the family;20 (d) there was judicial
separation of property under Article 135; (e) the spouses
jointly filed a petition for the voluntary dissolution of their
absolute community or conjugal partnership of gains.21
None of these circumstances exists in the case of Efren and
Melecia.
What is more, under the conjugal partnership of gains
established by Article 142 of the Civil Code, the husband
and the wife place only the fruits of their separate property
and incomes from their work or industry in the common
fund. Thus:
Art. 142. By means of the conjugal partnership of gains the
husband and wife place in a common fund the fruits of
their separate property and the 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.
This means that they continue under such property regime
to enjoy rights of ownership over their separate properties.
Consequently, to automatically change the marriage
settlements of couples who got married under the Civil
Code into absolute community of property in 1988 when
the Family Code took effect would be to impair their
acquired or vested rights to such separate properties.
The RTC cannot take advantage of the spouses loose
admission that absolute community of property governed
their property relation since the record shows that they
had been insistent that their property regime is one of
conjugal partnership of gains.22 No evidence of a
prenuptial agreement between them has been
presented.
What is clear is that Efren and Melecia were married when
the Civil Code was still the operative law on marriages. The
presumption, absent any evidence to the contrary, is that
they were married under the regime of the conjugal
partnership of gains. Article 119 of the Civil Code thus
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.
Of course, the Family Code contains terms governing
conjugal partnership of gains that supersede the terms of
the conjugal partnership of gains under the Civil Code.
Article 105 of the Family Code states:
"x x x x
The provisions of this Chapter [on the Conjugal Partnership
of Gains] shall also apply to conjugal partnerships of gains
already established between spouses before the
effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or
other laws, as provided in Article 256."23
Consequently, the Court must refer to the Family Code
provisions in deciding whether or not the conjugal
properties of Efren and Melecia may be held to answer for
the civil liabilities imposed on Melecia in the murder case.
Its Article 122 provides:
Art. 122. The payment of personal debts contracted by the
husband or the wife before or during the marriage shall not
be charged to the conjugal properties partnership except
insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed
upon them be charged to the partnership.
However, the payment of personal debts contracted by
either spouse before the marriage, that of fines and
indemnities imposed upon them, as well as the support of
illegitimate children of either spouse, may be enforced
against the partnership assets after the responsibilities
enumerated in the preceding Article have been covered,
if the spouse who is bound should have no exclusive
property or if it should be insufficient; but at the time of the
liquidation of the partnership, such spouse shall be
charged for what has been paid for the purpose above-
mentioned.
Since Efren does not dispute the RTCs finding that Melecia
has no exclusive property of her own,24 the above applies.
The civil indemnity that the decision in the murder case
imposed on her may be enforced against their conjugal
assets after the responsibilities enumerated in Article 121 of
the Family Code have been covered.25 Those
responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and
the legitimate children of either spouse; however, the
support of illegitimate children shall be governed by the
provisions of this Code on Support;
(2) All debts and obligations contracted during the
marriage by the designated administrator-spouse for the
benefit of the conjugal partnership of gains, or by both
spouses or by one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse
without the consent of the other to the extent that the
family may have benefited;
(4) All taxes, liens, charges, and expenses, including major
or minor repairs upon the conjugal partnership property;
(5) All taxes and expenses for mere preservation made
during the marriage upon the separate property of either
spouse;
20
(6) Expenses to enable either spouse to commence or
complete a professional, vocational, or other activity for
self-improvement;
(7) Antenuptial debts of either spouse insofar as they have
redounded to the benefit of the family;
(8) The value of what is donated or promised by both
spouses in favor of their common legitimate children for
the exclusive purpose of commencing or completing a
professional or vocational course or other activity for self-
improvement; and
(9) Expenses of litigation between the spouses unless the
suit is found to be groundless.
If the conjugal partnership is insufficient to cover the
foregoing liabilities, the spouses shall be solidarily liable for
the unpaid balance with their separate
properties.1wphi1
Contrary to Efrens contention, Article 121 above allows
payment of the criminal indemnities imposed on his wife,
Melecia, out of the partnership assets even before these
are liquidated. Indeed, it states that such indemnities "may
be enforced against the partnership assets after the
responsibilities enumerated in the preceding article have
been covered."[26] No prior liquidation of those assets is
required. This is not altogether unfair since Article 122 states
that "at the time of liquidation of the partnership, such
[offending] spouse shall be charged for what has been
paid for the purposes above-mentioned."
WHEREFORE, the Court AFFIRMS with MODIFICATION the
Resolutions of the Court of Appeals in CA-G.R. SP 77198
dated January 29, 2004 and May 14, 2004. The Regional
Trial Court of Surigao City, Branch 30, shall first ascertain
that, in enforcing the writ of execution on the conjugal
properties of spouses Efren and Melecia Pana for the
satisfaction of the indemnities imposed by final judgment
on the latter accused in Criminal Cases 4232 and 4233, the
responsibilities enumerated in Article 121 of the Family
Code have been covered.
SO ORDERED
BA FINANCE VS CA 1988
On July 1, 1975, private respondent Augusto Yulo secured
a loan from the petitioner in the amount of P591,003.59 as
evidenced by a promissory note he signed in his own
behalf and as representative of the A & L Industries.
Respondent Yulo presented an alleged special power of
attorney executed by his wife, respondent Lily Yulo, who
manages A & L Industries and under whose name the said
business is registered, purportedly authorizing Augusto Yulo
to procure the loan and sign the promissory note. About
two months prior to the loan, however, Augusto Yulo had
already left Lily Yulo and their children and had
abandoned their conjugal home. When the obligation
became due and demandable, Augusto Yulo failed to
pay the same.
On October 7, 1975, the petitioner filed its amended
complaint against the spouses Augusto and Lily Yulo on
the basis of the promissory note. It also prayed for the
issuance of a writ of attatchment alleging that the said
spouses were guilty of fraud in contracting the debt upon
which the action was brought and that the fraud consisted
of the spouses' inducing the petitioner to enter into a
contract with them by executing a Deed of Assignment in
favor of the petitioner, assigning all their rights, titles and
interests over a construction contract executed by and
between the spouses and A. Soriano Corporation on June
19, 1974 for a consideration of P615,732.50 when, in truth,
the spouses did not have any intention of remitting the
proceeds of the said construction contract to the
petitioner because despite the provisions in the Deed of
Assignment that the spouses shall, without compensation
or costs, collect and receive in trust for the petitioner all
payments made upon the construction contract and shall
remit to the petitioner all collections therefrom, the said
spouses failed and refuse to remit the collections and
instead, misappropriated the proceeds for their own use
and benefit, without the knowledge or consent of the
petitioner.
The trial court issued the writ of attachment prayed for
thereby enabling the petitioner to attach the properties of
A & L Industries. Apparently not contented with the order,
the petitioner filed another motion for the examination of
attachment debtor, alleging that the properties attached
by the sheriff were not sufficient to secure the satisfaction
of any judgment that may be recovered by it in the case.
This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with
counterclaim, alleging that although Augusta Yulo and
she are husband and wife, the former had abandoned her
and their children five (5) months before the filing of the
complaint; that they were already separated when the
promissory note was executed; that her signature in the
special power of attorney was forged because she had
never authorized Augusto Yulo in any capacity to transact
any business for and in behalf of A & L Industries, which is
owned by her as a single proprietor, that she never got a
single centavo from the proceeds of the loan mentioned
in the promissory note; and that as a result of the illegal
attachment of her properties, which constituted the assets
of the A & L Industries, the latter closed its business and was
taken over by the new owner.
After hearing, the trial court rendered judgment dismissing
the petitioner's complaint against the private respondent
Lily Yulo and A & L Industries and ordering the petitioner to
pay the respondent Lily Yulo P660,000.00 as actual
damages; P500,000.00 as unrealized profits; P300,000.00 as
exemplary damages; P30,000.00 as and for attorney's fees;
and to pay the costs.
The petitioner appealed. The Court of Appeals affirmed
the trial court's decision except for the exemplary
damages which it reduced from P300,000.00 to
P150,000.00 and the attorney's fees which were reduced
from P30,000.00 to P20,000.00.
In resolving the question of whether or not the trial court
erred in holding that the signature of respondent Lily Yulo
in the special power of attorney was forged, the Court of
Appeals said:
The crucial issue to be determined is whether or not the
signatures of the appellee Lily Yulo in Exhibits B and B-1 are
forged. Atty. Crispin Ordoa, the Notary Public, admitted
in open court that the parties in the subject documents did
not sign their signatures in his presence. The same were
already signed by the supposed parties and their
supposed witnesses at the time they were brought to him
for ratification. We quote from the records the pertinent
testimony of Atty. Ordoa, thus:
Q. This document marked as Exhibit B-1, when this
was presented to you by that common friend, June
Enriquez, it was already typewritten, it was already
accomplished, all typewritten.?
A. Yes, sir.
Q And the parties had already affixed their
signatures in this document?
A. Yes, sir.
21

Q. In this document marked as Exhibit B although it
appears here that this is an acknowledgment, you have
not stated here that the principal actually acknowledged
this document to be her voluntary act and deed?
A This in one of those things that escaped my
attention. Actually I have not gone over the second page.
I believed it was in order I signed it. (TSN pp. 13-14, Hearing
of Nov. 26, 1976).
The glaring admission by the Notary Public that he failed
to state in the acknowledgment portion of Exhibit B-1 that
the appellee Lily Yulo acknowledged the said document
to be her own voluntary act and deed, is a very strong and
commanding circumstance to show that she did not
appear personally before the said Notary Public and did
not sign the document.
Additionally, the Notary Public admitted that, while June
Enriquez is admittedly a mutual friend of his and the
defendant Augusta Yulo, and who is also an instrumental
witness in said Exhibit B-1., he could not recognize or tell
which of the two signatures appearing therein, was the
signature of this June Enriquez.
Furthermore, as the issue is one of credibility of a witness,
the findings and conclusions of the trial court before whom
said witness, Atty. Crispin Ordoa, the Notary Public before
whom the questioned document was supposedly ratified
and acknowledged, deserve great respect and are
seldom disturbed on appeal by appellate tribunals, since
it is in the best and peculiar advantage of determining and
observing the conduct, demeanor and deportment of a
particular witness while he is testifying in court, an
opportunity not enjoyed by the appellate courts who
merely have to rely on the recorded proceedings which
transpired in the court below, and the records are bare of
any circumstance of weight, which the trial court had
overlooked and which if duly considered, may radically
affect the outcome of the case.
On the other hand, the appellee Lily Yulo, to back up her
claim of forgery of her signature in Exhibit B-1, presented in
court a handwriting expert witness in the person of Police
Captain Yakal Giron of the Integrated National Police
Training Command, and who is also a Document Examiner
of the same Command's Crime Laboratory at Fort
Bonifacio, Metro Manila. His experience as an examiner of
questioned and disputed documents, in our mind, is quite
impressive. To qualify him as a handwriting expert, he
declared that he underwent extensive and actual studies
and examination of disputed or questioned document,
both at the National Bureau of Investigation Academy
and National Bureau of Investigation Questioned
Document Laboratory, respectively, from July 1964, up to
his appointment as Document Examiner in June, 1975,
and, to further his experience along this line, he attended
the 297th Annual Conference of the American Society of
Questioned Docurnent Examiners held at Seattle,
Washington, in August 1971, as a representative of the
Philippines, and likewise conducted an observation of the
present and modern trends of crime laboratories in the
West Coast, U.S.A., in 1971; that he likewise had conducted
actual tests and examination of about 100,000
documents, as requested by the different courts,
administrative, and governmental agencies of the
Government, substantial portions of which relate to actual
court cases.
In concluding that the signatures of the appellee Lily Yulo,
in the disputed document in question (Exh. B-1), were all
forgeries, and not her genuine signature, the expert
witness categorically recited and specified in open court
what he observed to be about twelve (12) glaring and
material significant differences, in his comparison of the
signatures appearing in the genuine specimen signatures
of the said appellee and with those appearing in the
questioned document (Exhibit B-1). Indeed, we have
likewise seen the supposed notable differences, found in
the standard or genuine signatures of the appellee which
were lifted and obtained in the official files of the
government, such as the Bureau of Internal Revenue on
her income tax returns, as compared to the pretended
signature of the appellee appearing in Exhibits B, B-1. It is
also noteworthy to mention that the appellant did not
even bother to conduct a cross-examination of the
handwriting expert witness, Capt. Giron, neither did the
appellant present another handwriting expert, at least to
counter-act or balance the appellee's handwriting expert.
Prescinding from the foregoing facts, we subscribe fully to
the lower court's observations that the signatures of the
appellee Lily Yulo in the questioned document (Exh. B-1)
were forged. Hence, we find no factual basis to disagree.
(pp. 28-30, Rollo)
As to the petitioner's contention that even if the signature
of Lily Yulo was forged or even if the attached properties
were her exclusive property, the same can be made
answerable to the obligation because the said properties
form part of the conjugal partnership of the spouses Yulo,
the appellate court held that these contentions are
without merit because there is strong preponderant
evidence to show that A & L Industries belongs exclusively
to respondent Lily Yulo, namely: a) The Certificate of
Registration of A & L Industries, issued by the Bureau of
Commerce, showing that said business is a single
proprietorship, and that the registered owner thereof is
only Lily Yulo; b) The Mayor's Permit issued in favor of A & L
Industries, by the Caloocan City Mayor's Office showing
compliance by said single proprietorship company with
the City Ordinance governing business establishments;
and c) The Special Power of Attorney itself, assuming but
without admitting its due execution, is tangible proof that
Augusto Yulo has no interest whatsoever in the A & L
Industries, otherwise, there would have been no necessity
for the Special Power of Attorney if he is a part owner of
said single proprietorship.
With regard to the award of damages, the Court of
Appeals affirmed the findings of the trial court that there
was bad faith on the part of the petitioner as to entitle the
private respondent to damages as shown not only by the
fact that the petitioner did not present the Deed of
Assignment or the construction agreement or any
evidence whatsoever to support its claim of fraud on the
part of the private respondent and to justify the issuance
of a preliminary attachment, but also by the following
findings:
Continuing and elaborating further on the appellant's
mala fide actuations in securing the writ of attachment,
the lower court stated as follows:
Plaintiff not satisfied with the instant case where an order
for attachment has already been issued and enforced, on
the strength of the same Promissory Note (Exhibit"A"),
utilizing the Deed of Chattel Mortgage (Exhibit "4"), filed a
foreclosure proceedings before the Office of the Sheriff of
Caloocan (Exhibit"6") foreclosing the remaining properties
found inside the premises formerly occupied by the A & L
Industries. A minute examination of Exhibit "4" will show that
the contracting parties thereto, as appearing in par. 1
thereof, are Augusto Yulo, doing business under the style
of A & L Industries (should be A & L Glass Industries
Corporation), as mortgagor and BA Finance Corporation
as mortgagee, thus the enforcement of the Chattel
Mortgage against the property of A & L Industries
exclusively owned by Lily T. Yulo appears to be without any
factual or legal basis whatsoever. The chattel mortgage,
Exhibit "4" and the Promissory Note, Exhibit A, are based on
22
one and the same obligation. Plaintiff tried to enforce as it
did enforce its claim into two different modes a single
obligation.
Aware that defendant Lily Yulo, filed a Motion to Suspend
Proceedings by virtue of a complaint she filed with the
Court of First Instance of Caloocan, seeking annulment of
the Promissory Note, the very basis of the plaintiff in filing
this complaint, immediately after the day it filed a Motion
for the Issuance of an Alias Writ of Preliminary Attachment
. . .Yet, inspite of the knowledge and the filing of this Motion
to Suspend Proceedings, the Plaintiff still filed a Motion for
the Issuance of a Writ of Attachment dated February 6,
1976 before this court. To add insult to injury, plaintiff even
filed a Motion for Examination of the Attachment Debtor,
although aware that Lily Yulo had already denied
participation in the execution of Exhibits "A" and "B". These
incidents and actions taken by plaintiff, to the thinking of
the court, are sufficient to prove and establish the element
of bad faith and malice on the part of plaintiff which may
warrant the award of damages in favor of defendant Lily
Yulo. (Ibid., pp. 102-103).<re||an1w>
Indeed, the existence of evident bad faith on the
appellant's part in proceeding against the appellee Lily
Yulo in the present case, may likewise be distressed on the
fact that its officer Mr. Abraham Co, did not even bother
to demand the production of at least the duplicate
original of the Special Power of Attorney (Exhibit B) and
merely contended himself with a mere xerox copy thereof,
neither did he require a more specific authority from the A
& L Industries to contract the loan in question, since from
the very content and recitals of the disputed document,
no authority, express or implied, has been delegated or
granted to August Yulo to contract a loan, especially with
the appellant. (pp. 33-34, Rollo)
Concerning the actual damages, the appellate court
ruled that the petitioner should have presented evidence
to disprove or rebut the private respondent's claim but it
remained quiet and chose not to disturb the testimony and
the evidence presented by the private respondent to
prove her claim.
In this petition for certiorari, the petitioner raises three issues.
The first issue deals with the appellate court's affirmance of
the trial court's findings that the signature of the private
respondent on the Special Power of Attorney was forged.
According to the petitioner, the Court of Appeals
disregarded the direct mandate of Section 23, Rule 132 of
the Rules of Court which states in part that evidence of
handwriting by comparison may be made "with writings
admitted or treated as genuine by the party against whom
the evidence is offered, or proved to be genuine to the
satisfaction of the judge," and that there is no evidence on
record which proves or tends to prove the genuineness of
the standards used.
There is no merit in this contention.
The records show that the signatures which were used as
"standards" for comparison with the alleged signature of
the private respondent in the Special Power of Attorney
were those from the latter's residence certificates in the
years 1973, 1974 and 1975, her income tax returns for the
years 1973 and 1975 and from a document on long bond
paper dated May 18, 1977. Not only were the signatures in
the foregoing documents admitted by the private
respondent as hers but most of the said documents were
used by the private respondent in her transactions with the
government. As was held in the case of Plymouth Saving &
Loan Assn. No. 2 v. Kassing (125 NE 488, 494):
We believe the true rule deduced from the authorities to
be that the genuineness of a "standard" writing may be
established (1) by the admission of the person sought to be
charged with the disputed writing made at or for the
purposes of the trial or by his testimony; (2) by witnesses
who saw the standards written or to whom or in whose
hearing the person sought to be charged acknowledged
the writing thereof; (3) by evidence showing that the
reputed writer of the standard has acquiesced in or
recognized the same, or that it has been adopted and
acted upon by him his business transactions or other
concerns....
Furthermore, the judge found such signatures to be
sufficient as standards. In the case of Taylor-Wharton Iron
& Steel Co. v. Earnshaw (156 N.E. 855, 856), it was held:
When a writing is offered as a standard of comparison it is
for the presiding judge to decide whether it is the
handwriting of the party to be charged. Unless his finding
is founded upon error of law, or upon evidence which is,
as matter of law, insufficient to justify the finding, this court
will not revise it upon exceptions." (Costelo v. Crowell, 139
Mass. 588, 590, 2 N.E. 648; Nuez v. Perry, 113 Mass, 274,
276.)
We cannot find any error on the part of the trial judge in
using the above documents as standards and also in
giving credence to the expert witness presented by the
private respondent whose testimony the petitioner failed
to rebut and whose credibility it likewise failed to impeach.
But more important is the fact that the unrebutted
handwriting expert's testimony noted twelve (12) glaring
and material differences in the alleged signature of the
private respondent in the Special Power of Attorney as
compared with the specimen signatures, something which
the appellate court also took into account. In Cesar v.
Sandiganbayan (134 SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other significant divergences
and distinctive characteristics between the sample
signatures and the signatures on the questioned checks in
his report which the court's Presiding Justice kept
mentioning during Maniwang's testimony.
In the course of his cross-examination, NBI expert
Tabayoyong admitted that he saw the differences
between the exemplars used and the questioned
signatures but he dismissed the differences because he
did not consider them fundamental. We rule that
significant differences are more fundamental than a few
similarities. A forger always strives to master some
similarities.
The second issue raised by the petitioner is that while it is
true that A & L Industries is a single proprietorship and the
registered owner thereof is private respondent Lily Yulo, the
said proprietorship was established during the marriage
and its assets were also acquired during the same.
Therefore, it is presumed that this property forms part of the
conjugal partnership of the spouses Augusto and Lily Yulo
and thus, could be held liable for the obligations
contracted by Augusto Yulo, as administrator of the
partnership.
There is no dispute that A & L Industries was established
during the marriage of Augusta and Lily Yulo and therefore
the same is presumed conjugal and the fact that it was
registered in the name of only one of the spouses does not
destroy its conjugal nature (See Mendoza v. Reyes, 124
SCRA 161, 165). However, for the said property to be held
liable, the obligation contracted by the husband must
have redounded to the benefit of the conjugal partnership
under Article 161 of the Civil Code. In the present case, the
obligation which the petitioner is seeking to enforce
against the conjugal property managed by the private
respondent Lily Yulo was undoubtedly contracted by
Augusto Yulo for his own benefit because at the time he
incurred the obligation he had already abandoned his
23
family and had left their conjugal home. Worse, he made
it appear that he was duly authorized by his wife in behalf
of A & L Industries, to procure such loan from the petitioner.
Clearly, to make A & L Industries liable now for the said loan
would be unjust and contrary to the express provision of
the Civil Code. As we have ruled in Luzon Surety Co., Inc.
v. De Gracia (30 SCRA 111, 115-117):
As explained in the decision now under review: "It is true
that the husband is the administrator of the conjugal
property pursuant to the provisions of Art. 163 of the new
Civil Code. However, as such administrator the only
obligations incurred by the husband that are chargeable
against the conjugal property are those incurred in the
legitimate pursuit of his career, profession or business with
the honest belief that he is doing right for the benefit of the
family. This is not true in the case at bar for we believe that
the husband in acting as guarantor or surety for another in
an indemnity agreement as that involved in this case did
not act for the benefit of the conjugal partnership. Such
inference is more emphatic in this case, when no proof is
presented that Vicente Garcia in acting as surety or
guarantor received consideration therefore, which may
redound to the benefit of the conjugal partnership.(Ibid,
pp. 46-47).
xxx xxx xxx
xxx xxx xxx
In the most categorical language, a conjugal partnership
under that provision is liable only for such "debts and
obligations contracted by the husband for the benefit of
the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued
to the welfare of the spouses. There is none in this case.
xxx xxx xxx
Moreover, it would negate the plain object of the
additional requirement in the present Civil Code that a
debt contracted by the husband to bind a conjugal
partnership must redound to its benefit. That is still another
provision indicative of the solicitude and tender regard
that the law manifests for the family as a unit. Its interest is
paramount; its welfare uppermost in the minds of the
codifiers and legislators.
We, therefore, rule that the petitioner cannot enforce the
obligation contracted by Augusto Yulo against his
conjugal properties with respondent Lily Yulo. Thus, it
follows that the writ of attachment cannot issue against
the said properties.
Finally, the third issue assails the award of actual damages
according to the petitioner, both the lower court and the
appellate court overlooked the fact that the properties
referred to are still subject to a levy on attachment. They
are, therefore, still under custodia legis and thus, the
assailed decision should have included a declaration as to
who is entitled to the attached properties and that
assuming arguendo that the attachment was erroneous,
the lower court should have ordered the sheriff to return to
the private respondent the attached properties instead of
condemning the petitioner to pay the value thereof by
way of actual damages.
In the case of Lazatin v. Twao (2 SCRA 842, 847), we ruled:
xxx xxx xxx
... It should be observed that Sec. 4 of Rule 59, does not
prescribed the remedies available to the attachment
defendant in case of a wrongful attachment, but merely
provides an action for recovery upon the bond, based on
the undertaking therein made and not upon the liability
arising from a tortuous act, like the malicious suing out of
an attachment. Under the first, where malice is not
essential, the attachment defendant, is entitled to recover
only the actual damages sustained by him by reason of
the attachment. Under the second, where the
attachment is maliciously sued out, the damages
recoverable may include a compensation for every injury
to his credit, business or feed (Tyler v. Mahoney, 168 NC
237, 84 SE 362; Pittsburg etc. 5 Wakefield, etc., 135 NC 73,
47 SE 234). ...
The question before us, therefore, is whether the
attachment of the properties of A & L Industries was
wrongful so as to entitle the petitioner to actual damages
only or whether the said attachment was made in bad
faith and with malice to warrant the award of other kinds
of damages. Moreover, if the private respondent is entitled
only to actual damages, was the court justified in ordering
the petitioner to pay for the value of the attached
properties instead of ordering the return of the said
properties to the private respondent Yulo ?
Both the trial and appellate courts found that there was
bad faith on the part of the petitioner in securing the writ
of attachment. We do not think so. "An attachment may
be said to be wrongful when, for instance, the plaintiff has
no cause of action, or that there is no true ground
therefore, or that the plaintiff has a sufficient security other
than the property attached, which is tantamout to saying
that the plaintiff is not entitled to attachment because the
requirements of entitling him to the writ are wanting. (7
C.J.S., 664)" (p. 48, Section 4, Rule 57, Francisco, Revised
Rules of Court).
Although the petitioner failed to prove the ground relied
upon for the issuance of the writ of attachment, this failure
cannot be equated with bad faith or malicious intent. The
steps which were taken by the petitioner to ensure the
security of its claim were premised, on the firm belief that
the properties involved could be made answerable for the
unpaid obligation due it. There is no question that a loan in
the amount of P591,003.59 was borrowed from the bank.
We, thus, find that the petitioner is liable only for actual
damages and not for exemplary damages and attorney's
fees. Respondent Lily Yulo has manifested before this Court
that she no longer desires the return of the attached
properties since the said attachment caused her to close
down the business. From that time she has become a mere
employee of the new owner of the premises. She has
grave doubts as to the running condition of the attached
machineries and equipments considering that the
attachment was effected way back in 1975. She states as
a matter of fact that the petitioner has already caused the
sale of the machineries for fear that they might be
destroyed due to prolonged litigation. We, therefore,
deem it just and equitable to allow private respondent Lily
Yulo to recover actual damages based on the value of the
attached properties as proven in the trial court, in the
amount of P660,000.00. In turn, if there are any remaining
attached properties, they should be permanently released
to herein petitioner.
We cannot, however, sustain the award of P500,000.00
representing unrealized profits because this amount was
not proved or justified before the trial court. The basis of
the alleged unearned profits is too speculative and
conjectural to show actual damages for a future period.
The private respondent failed to present reports on the
average actual profits earned by her business and other
evidence of profitability which are necessary to prove her
claim for the said amount (See G. A. Machineries, Inc. v.
Yaptinchay, 126 SCRA 78, 88).
The judgment is therefore set aside insofar as it holds the
petitioner liable for P500,000.00 actual damages
24
representing unrealized profits, P150,000.00 for exemplary
damages and P20,000.00 for attorney's fees. As stated
earlier, the attached properties, should be released in
favor of the petitioner.
WHEREFORE, the decision of the Court of Appeals is hereby
SET ASIDE and the petitioner is ordered to pay the private
respondent Lily Yulo the amount of SIX HUNDRED SIXTY
THOUSAND PESOS (P660,000.00) as actual damages. The
remaining properties subject of the attachment are
ordered released in favor of the petitioner.
SO ORDERED.
HEIRS OF AYUSTE VS CA 1999
Before us is a petition for certiorari under Rule 45, asking this
Court to review the decision of the Court of Appeals dated
January 23, 1995 in CA-G.R. CV No. 38232,[1] which
overturned the decision of the Regional Trial Court of
Lucena City in Civil Case No. 90-33.
At the outset, we note that Christina Ayuste, the plaintiff in
the lower court and the original petitioner herein, died on
November 21, 1995.[2] In his Comment dated January 14,
1998 to private respondents Manifestation informing the
Court of Christina Ayustes death, petitioners counsel re-
affirmed such fact of death and informed the Court of the
names of Christina Ayustes legal representatives.[3] The
claim not having been extinguished by the death of
Christina Ayuste, we ordered the substitution of her heirs
Marlon Ayuste and Arlaine Ayuste-Yu for Christina Ayuste
in our Resolution dated August 11, 1999.
Christina Ayuste married Rafael Ayuste on September 24,
1961. Although the couple resided in Manila, they
operated a machine shop in Barangay Iyam, Lucena City,
which was managed by Rafael Ayuste. In order to serve as
a temporary residence for Rafael Ayuste while in Lucena,
the couple purchased on August 26, 1982 a parcel of land
with an area of 180 square meters on which a residential
house was built situated at Yale Street, University Village,
Barrio Ibabang Dupay, Lucena City from spouses Pedro
and Aida David. A deed of sale[4] was executed and
signed by the parties and filed with the Register of Deeds
of Lucena City. On October 23, 1983, the Register of Deeds
of Lucena City issued Transfer Certificate of Title No. T-
42972 in the name of RAFAEL T. AYUSTE, married to Christina
Ayuste.[5]
On February 27, 1987, a deed of absolute sale[6] was
executed by Rafael Ayuste in favor of private respondent
whereby the former sold the abovementioned parcel of
land to the latter for P40,000, which amount Rafael Ayuste
acknowledge having received in the deed. On page 2 of
this deed appears the signature of Christina Ayuste below
the phrase With my conformity. The deed of sale was
registered with the Register of deeds of Lucena City on
March 5, 1987 and Transfer Certificate of Title No. T-50046
was issued in the name of private respondent.[7]
After Rafael Ayustes death on October 13, 1989, Christina
Ayuste discovered, in the course of an inventory of their
properties, that the title to the land in Lucena was missing.
She searched for it in the office of her husband in Lucena
City and it was then that she learned from her employees
about the sale of the house and lot by her husband to
private respondent.
On March 2, 1990, Christina Ayuste filed a complaint with
the Regional Trial Court of Lucena City for the annulment
of the sale, cancellation of the title issued in the name of
private respondent and for the payment of moral,
exemplary and actual damages. In her complaint
Christina Ayuste alleges that her signature on the deed of
sale was forged and that her husband Rafael Ayuste sold
the property without her knowledge and consent.
The Regional Trial Court rendered its Decision on June 20,
1991, the dispositive portion of which provides as follows-
WHEREFORE, judgment is hereby rendered as follows:
(1) Declaring null and void the Deed of Absolute Sale of
House and Lot (Exhibit C') executed by defendant and
plaintiffs husband, the deceased Rafael Ayuste, on
February 27, 1987;
(2) Ordering defendant Viena Malabonga to return to
plaintiff Christina Ayuste the possession of the house and
lot covered by Transfer Certificate of Title No. T-50045, now
in the name of defendant Viena Malabonga, together
with the improvements thereon;
(3) Directing the Register of Deeds of Lucena City to
cancel Transfer Certificate of Title No. T-50046 and to issue
in the name of plaintiff and her children by the late Rafael
Ayuste new Transfer Certificate of Title in lieu thereof,
subject to all/any liens and encumbrances annotated on
the memorandum of the title to be cancelled;
(4) Ordering plaintiff Christina Ayuste to pay the defendant
Vienna Malabonga the sum of P258,200.00 for the
improvements introduced on the lot and house as well as
for maintenance of the premises; and
(5) Ordering defendant to pay plaintiff the amount of rents
received from the premises starting March, 1990 until such
time that she finally turns-over (sic) the possession of the
house and lot to plaintiff, at the rate of P2,700.00 per
month.
With costs against defendant.[8]
Both parties appealed the trial courts decision. On January
23, 1995, the Court of Appeals reversed the trial courts
ruling by holding that Christina Ayustes right to bring an
action for the annulment of the sale is barred by laches
because of her failure to file it during the existence of the
marriage in accordance with article 173 of the Civil Code.
Also, it found private respondent to be entitled to the
protection of a buyer in good faith and for value. The
pertinent portion of the public respondents decision
provides-
Record shows that plaintiff-appellant wife (sic) instituted
on March 2, 1990 her action for annulment of the sale
executed by her husband on February 27, 1987 long after
said vendor-husband died in 1989. It is thus clear that the
action for annulment of the sale was not instituted during
the marriage as required by Article 173, the very provision
of law which grants the wife the privilege/right to have the
sale executed by her husband annulled, in derogation of
the suppose (sic) vested right of the buyer. The two periods
provided for in said Article 173 during the marriage and
within 10 years should concur.
We find no merit in plaintiff-appellants claim that she
discovered the sale, only after her husbands death, when
she made an inventory and found out that the pertinent
titles to the land subject of the sale were missing. It is settled
in this jurisdiction that registration with the Register of Deeds
is notice to the whole world. The questioned deed of sale
has long been registered with the Register of Deeds of
Lucena City on March 5, 1987- and in fact the said
property was registered in the name of defendant-
appellant under Transfer Certificate of Title No. T-50046.
Said TCT in the name of defendant-appellant is now
indefeasible.
25
The peculiar circumstances that militates in favor of
defendant-appellant buyer are as follows: The questioned
deed of sale was not actually without the wifes signature
signifying marital consent, so to speak. Evidently,
defendant-appellant was led to believe by the husband-
vendor that plaintiff-appellant gave her marital consent to
the sale, as said husband presented a deed of sale
supposedly pre-signed by his wife, plaintiff-appellant.
Defendant-appellant is therefore undoubtedly a buyer in
good faith and for value, with vested rights equally entitled
to the protection of the law. The questioned deed of sale
was duly registered In the name of defendant-appellant
who was issued a Transfer Certificate of Title.
xxx xxx xxx
Unlike the statute of limitations, laches is not a mere
question of time but is principally a question of the inequity
on unfairness of permitting a stale right to be enforced or
asserted. (Marcelino vs. CA, 210 SCRA 444). For failure of
the plaintiff-appellant wife to institute her action for
annulment of sale, while her husband-vendor was still alive
as required by Article 173 of the New Civil Code, plaintiff-
appellant wifes right under Article 166 of the same Code
has become stale and is now barred by laches.
In view of the foregoing findings, We rule that the trial court
erred in giving due course to the action for annulment of
sale. With the foregoing findings and resolution the other
issues raised in this appeal are now moot and academic.
WHEREFORE, in view of all the foregoing, judgment is
hereby rendered giving due course to the appeal of
defendant-appellant, -and- dismissing the appeal of
plaintiff-appellant.
The decision dated June 20, 1991 rendered by the
Regional Trial Court is REVERSED and SET ASIDE.
The Deed of Absolute Sale executed on February 27, 1987
by and between defendant-appellant and plaintiff-
appellants husband is declared VALID and BINDING upon
the plaintiff-appellant.[9]
Both the trial and the appellate court decisions have
established that Rafael Ayuste sold conjugal property
without the consent of Christina Ayuste, his wife. This
factual finding shall not be disturbed because only
questions of law are reviewed in an appeal under Rule 45
of the Rules of Court subject to certain well-defined
exceptions none of which are present in the instant case.
The only issue which remains to be resolved is whether
petitioners are entitled to the annulment of the contract of
sale entered into by Rafael Ayuste without the consent of
Christina Ayuste.
Petitioners claim that since the law expressly prohibits the
husband from alienating real property belonging to the
conjugal partnership without his wifes consent, the
contract of sale in question is a nullity pursuant to article
1409 of the Civil Code which provides that contracts
expressly prohibited by law are inexistent and void from
the beginning. It is further averred by petitioners that the
present action is not barred because the action to declare
the nullity of a contract does not prescribe. Futhermore,
Christina Ayuste cannot be faulted for having brought the
action only after the death of her husband, despite the
periods stated in article 173 of the Civil Code, since she
had no knowledge of the sale during his lifetime as he
concealed the same from her. Finally, it is contended that
article 166 is the relevant provision, not article 173.[10]
Under the Civil Code, although the husband is the
administrator of the conjugal partnership,[11] he cannot
alienate or encumber any real property of the conjugal
partnership without his wifes consent,[12] subject only to
certain exceptions specified in the law.[13] The remedy
available to the wife in case her husband should dispose
of their conjugal property without her consent is laid down
in Article 173 of the Civil Code which states that-
The wife may, during the marriage, and within ten years
from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her
or impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the
value of property fraudulently alienated by the husband.
(emphasis supplied)
There is no ambiguity in the wording of the law. A sale of
real property of the conjugal partnership made by the
husband without the consent of his wife is voidable[14] The
action for annulment must be brought during the marriage
and within ten years from the questioned transaction by
the wife.[15] Where the law speaks in clear and
categorical languange, there is no room for interpretation
there is room only for application.[16]
In the present case, the deed of sale was executed on
February 27, 1987. Rafael Ayuste died on October 13, 1989.
However, it was only on March 2, 1990 that Christina Ayuste
filed her complaint with the lower court asking for the
annulment of the sale. Although the action was filed within
ten years from the questioned transaction, it was not
brought during the existence of the marriage which was
dissolved upon the death of Rafael Ayuste in 1989.[17]
Clearly, the action for annulment filed by Christina Ayuste
was barred for having been filed out of time.
The fact that Christina Ayuste only learned of the sale after
the death of her husband is not material. We affirm public
respondents ruling that registration of the sale with the
Register of Deeds constitutes a notice to the whole
world.[18] Precisely, the purpose of the legislature in
providing a system of registration is to afford a means of
publicity so that persons dealing with real property may
search the records and thereby acquire security against
instruments the execution of which have not been
revealed to them.[19] Since the deed of sale was
registered on March 5, 1987, Christina Ayuste is presumed
to have constructive notice of the sale from such date.
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED. No pronouncement as to costs.
SO ORDERED
HEIRS OF REYES VS MIJARES 2003
Under the regime of the Civil Code, the alienation or
encumbrance of a conjugal real property requires the
consent of the wife. The absence of such consent renders
the entire transaction[1] merely voidable and not void.[2]
The wife may, during the marriage and within ten years
from the transaction questioned, bring an action for the
annulment of the contract entered into by her husband
without her consent.[3]
Assailed in this petition for review on certiorari are the
January 26, 2000 Decision[4] and June 19, 2000,
Resolution[5] of the Court of Appeals in CA-G.R. No. 28464
which declared respondents as purchasers in good faith
and set aside the May 31, 1990 and June 29, 1990 Orders
of the Regional Trial Court of Quezon City, Branch 101, in
Civil Case No. Q-48018.
The controversy stemmed from a dispute over Lot No.
4349-B-2,[6] approximately 396 square meters, previously
covered by Transfer Certificate of Title (TCT) No. 205445,
26
located in Balintawak, Quezon City and registered in the
name of Spouses Vicente Reyes and Ignacia Aguilar-
Reyes.[7] Said lot and the apartments built thereon were
part of the spouses conjugal properties having been
purchased using conjugal funds from their garments
business.[8]
Vicente and Ignacia were married in 1960, but had been
separated de facto since 1974.[9] Sometime in 1984,
Ignacia learned that on March 1, 1983, Vicente sold Lot
No. 4349-B-2 to respondent spouses Cipriano and
Florentina Mijares for P40,000.00.[10] As a consequence
thereof, TCT No. 205445 was cancelled and TCT No. 306087
was issued on April 19, 1983 in the name of respondent
spouses.[11] She likewise found out that Vicente filed a
petition for administration and appointment of guardian
with the Metropolitan Trial Court of Quezon City, Branch
XXI. Vicente misrepresented therein that his wife, Ignacia,
died on March 22, 1982, and that he and their 5 minor
children were her only heirs.[12] On September 29, 1983,
the court appointed Vicente as the guardian of their minor
children.[13] Subsequently, in its Order dated October 14,
1983, the court authorized Vicente to sell the estate of
Ignacia.[14]
On August 9, 1984, Ignacia, through her counsel, sent a
letter to respondent spouses demanding the return of her
share in the lot. Failing to settle the matter amicably,
Ignacia filed on June 4, 1996 a complaint[15] for
annulment of sale against respondent spouses. The
complaint was thereafter amended to include Vicente
Reyes as one of the defendants.[16]
In their answer, respondent spouses claimed that they are
purchasers in good faith and that the sale was valid
because it was duly approved by the court.[17] Vicente
Reyes, on the other hand, contended that what he sold to
the spouses was only his share in Lot No. 4349-B-2,
excluding the share of his wife, and that he never
represented that the latter was already dead.[18] He
likewise testified that respondent spouses, through the
counsel they provided him, took advantage of his illiteracy
by filing a petition for the issuance of letters of
administration and appointment of guardian without his
knowledge.[19]
On February 15, 1990, the court a quo rendered a decision
declaring the sale of Lot No. 4349-B-2 void with respect to
the share of Ignacia. It held that the purchase price of the
lot was P110,000.00 and ordered Vicente to return thereof
or P55,000.00 to respondent spouses. The dispositive
portion of the said decision, reads-
WHEREFORE, premises above considered, judgment is
hereby rendered declaring the subject Deed of Absolute
Sale, dated March [1,] 1983 signed by and between
defendants Vicente Reyes and defendant Cipriano
Mijares NULL AND VOID WITH RESPECT TO ONE-HALF (1/2)
OF THE SAID PROPERTY;
The Register of Deeds of Quezon City is hereby ordered to
cancel TCT No. 306083 (sic) in the names of defendant
spouses Cipriano Mijares and Florentina Mijares and to
issue a new TCT in the name of the plaintiff Ignacia Aguilar-
Reyes as owner in fee simple of one-half (1/2) of said
property and the other half in the names of defendant
spouses Cipriano Mijares and Florentin[a] Mijares, upon
payment of the required fees therefore;
Said defendant spouses Mijares are also ordered to allow
plaintiff the use and exercise of rights, as well as
obligations, pertinent to her one-half (1/2) ownership of the
subject property;
Defendant Vicente Reyes is hereby ordered to reimburse
P55,000.00 with legal rate of interest from the execution of
the subject Deed of Absolute Sale on March 1, 1983, to the
defendant spouses Cipriano Mijares and Florentina Mijares
which corresponds to the one-half (1/2) of the actual
purchase price by the said Mijares but is annulled in this
decision (sic);
Defendant Vicente Reyes is hereby further ordered to pay
plaintiff the amount of P50,000.00 by way of moral and
exemplary damages, plus costs of this suit.
SO ORDERED.[20]
Ignacia filed a motion for modification of the decision
praying that the sale be declared void in its entirety and
that the respondents be ordered to reimburse to her the
rentals they collected on the apartments built on Lot No.
4349-B-2 computed from March 1, 1983.
On May 31, 1990, the trial court modified its decision by
declaring the sale void in its entirety and ordering Vicente
Reyes to reimburse respondent spouses the purchase price
of P110,000, thus
WHEREFORE, premises considered, judgment is hereby
rendered declaring the subject Deed of Absolute Sale,
dated March 1, 1983 signed by and between defendants
Vicente Reyes and defendant Cipriano Mijares as null and
void ab initio, in view of the absence of the wifes
conformity to said transaction.
Consequent thereto, the Register of Deeds for Quezon City
is hereby ordered to cancel TCT No. 306083 (sic) in the
name of Cipriano Mijares and Florentin[a] Mijares and issue
a new TCT in the name of the plaintiff and defendant
Ignacia Aguilar-Reyes and Vicente Reyes as owners in fee
simple, upon payment of required fees therefore.
Defendant Vicente Reyes is hereby ordered to pay the
amount of one hundred ten thousand pesos (P110,000.00)
with legal rate of interest at 12% per annum from the
execution of the subject Deed of Absolute Sale on March
1, 1983.
Further, defendant Vicente Reyes is ordered to pay the
amount of P50,000.00 by way of moral and exemplary
damages, plus costs of this suit.
SO ORDERED.[21]
On motion[22] of Ignacia, the court issued an Order dated
June 29, 1990 amending the dispositive portion of the May
31, 1990 decision by correcting the Transfer Certificate of
Title of Lot No. 4349-B-2, in the name of Cipriano Mijares
and Florentina Mijares, from TCT No. 306083 to TCT No.
306087; and directing the Register of Deeds of Quezon City
to issue a new title in the name of Ignacia Aguilar-Reyes
and Vicente Reyes. The Order likewise specified that
Vicente Reyes should pay Ignacia Aguilar-Reyes the
amount of P50,000.00 as moral and exemplary
damages.[23]
Both Ignacia Aguilar-Reyes and respondent spouses
appealed the decision to the Court of Appeals.[24]
Pending the appeal, Ignacia died and she was substituted
by her compulsory heirs.[25]
Petitioners contended that they are entitled to
reimbursement of the rentals collected on the apartment
built on Lot No. 4349-B-2, while respondent spouses
claimed that they are buyers in good faith. On January 26,
2000, the Court of Appeals reversed and set aside the
decision of the trial court. It ruled that notwithstanding the
absence of Ignacias consent to the sale, the same must
be held valid in favor of respondents because they were
innocent purchasers for value.[26] The decretal potion of
the appellate courts decision states
27

WHEREFORE, premises considered, the Decision appealed
from and the Orders dated May 31, 1990 and June 29,
1990, are SET ASIDE and in lieu thereof a new one is
rendered
1. Declaring the Deed of Absolute Sale dated March 1,
1983 executed by Vicente Reyes in favor of spouses
Cipriano and [Florentina] Mijares valid and lawful;
2. Ordering Vicente Reyes to pay spouses Mijares the
amount of P30,000.00 as attorneys fees and legal
expenses; and
3. Ordering Vicente Reyes to pay spouses Mijares
P50,000.00 as moral damages.
No pronouncement as to costs.
SO ORDERED.[27]
Undaunted by the denial of their motion for
reconsideration,[28] petitioners filed the instant petition
contending that the assailed sale of Lot No. 4392-B-2
should be annulled because respondent spouses were not
purchasers in good faith.
The issues for resolution are as follows: (1) What is the status
of the sale of Lot No. 4349-B-2 to respondent spouses? (2)
Assuming that the sale is annullable, should it be annulled
in its entirety or only with respect to the share of Ignacia?
(3) Are respondent spouses purchasers in good faith?
Articles 166 and 173 of the Civil Code,[29] the governing
laws at the time the assailed sale was contracted, provide:
Art.166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wifes consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same
Art. 173. The wife may, during the marriage and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage,
may demand the value of property fraudulently alienated
by the husband.
Pursuant to the foregoing provisions, the husband could
not alienate or encumber any conjugal real property
without the consent, express or implied, of the wife
otherwise, the contract is voidable. Indeed, in several
cases[30] the Court had ruled that such alienation or
encumbrance by the husband is void. The better view,
however, is to consider the transaction as merely voidable
and not void.[31] This is consistent with Article 173 of the
Civil Code pursuant to which the wife could, during the
marriage and within 10 years from the questioned
transaction, seek its annulment.[32]
In the case of Heirs of Christina Ayuste v. Court of
Appeals,[33] it was categorically held that
There is no ambiguity in the wording of the law. A sale of
real property of the conjugal partnership made by the
husband without the consent of his wife is voidable. The
action for annulment must be brought during the marriage
and within ten years from the questioned transaction by
the wife. Where the law speaks in clear and categorical
language, there is no room for interpretation there is room
only for application.[34]
Likewise, in Spouses Guiang v. Court of Appeals,[35] the
Court quoted with approval the ruling of the trial court that
under the Civil Code, the encumbrance or alienation of a
conjugal real property by the husband absent the wifes
consent, is voidable and not void. Thus
Under Article 166 of the Civil Code, the husband cannot
generally alienate or encumber any real property of the
conjugal partnership without the wifes consent. The
alienation or encumbrance if so made however is not null
and void. It is merely voidable. The offended wife may
bring an action to annul the said alienation or
encumbrance. Thus, the provision of Article 173 of the Civil
Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage,
may demand the value of property fraudulently alienated
by the husband.
This particular provision giving the wife ten (10) years x x x
during [the] marriage to annul the alienation or
encumbrance was not carried over to the Family Code. It
is thus clear that any alienation or encumbrance made
after August 3, 1988 when the Family Code took effect by
the husband of the conjugal partnership property without
the consent of the wife is null and void
In the case at bar, there is no dispute that Lot No. 4349-B-
2, is a conjugal property having been purchased using the
conjugal funds of the spouses during the subsistence of
their marriage. It is beyond cavil therefore that the sale of
said lot to respondent spouses without the knowledge and
consent of Ignacia is voidable. Her action to annul the
March 1, 1983 sale which was filed on June 4, 1986, before
her demise is perfectly within the 10 year prescriptive
period under Article 173 of the Civil Code. Even if we
reckon the period from November 25, 1978 which was the
date when Vicente and the respondent spouses entered
into a contract concerning Lot No. 4349-B-2, Ignacias
action would still be within the prescribed period.
Anent the second issue, the trial court correctly annulled
the voidable sale of Lot No. 4349-B-2 in its entirety. In Bucoy
v. Paulino,[36] a case involving the annulment of sale with
assumption of mortgages executed by the husband
without the consent of the wife, it was held that the
alienation or encumbrance must be annulled in its entirety
and not only insofar as the share of the wife in the conjugal
property is concerned. Although the transaction in the said
case was declared void and not merely voidable, the
rationale for the annulment of the whole transaction is the
same thus
The plain meaning attached to the plain language of the
law is that the contract, in its entirety, executed by the
husband without the wife's consent, may be annulled by
the wife. Had Congress intended to limit such annulment
in so far as the contract shall prejudice the wife, such
limitation should have been spelled out in the statute. It is
not the legitimate concern of this Court to recast the law.
As Mr. Justice Jose B. L. Reyes of this Court and Judge
Ricardo C. Puno of the Court of First Instance correctly
stated, [t]he rule (in the first sentence of Article 173)
revokes Baello vs. Villanueva, 54 Phil. 213 and Coque vs.
Navas Sioca, 45 Phil. 430, in which cases annulment was
28
held to refer only to the extent of the one-half interest of
the wife
The necessity to strike down the contract of July 5, 1963 as
a whole, not merely as to the share of the wife, is not
without its basis in the common-sense rule. To be
underscored here is that upon the provisions of Articles 161,
162 and 163 of the Civil Code, the conjugal partnership is
liable for many obligations while the conjugal partnership
exists. Not only that. The conjugal property is even subject
to the payment of debts contracted by either spouse
before the marriage, as those for the payment of fines and
indemnities imposed upon them after the responsibilities in
Article 161 have been covered (Article 163, par. 3), if it
turns out that the spouse who is bound thereby, should
have no exclusive property or if it should be insufficient.
These are considerations that go beyond the mere
equitable share of the wife in the property. These are
reasons enough for the husband to be stopped from
disposing of the conjugal property without the consent of
the wife. Even more fundamental is the fact that the nullity
is decreed by the Code not on the basis of prejudice but
lack of consent of an indispensable party to the contract
under Article 166.[37]
With respect to the third issue, the Court finds that
respondent spouses are not purchasers in good faith. A
purchaser in good faith is one who buys property of
another, without notice that some other person has a right
to, or interest in, such property and pays full and fair price
for the same, at the time of such purchase, or before he
has notice of the claim or interest of some other persons in
the property. He buys the property with the belief that the
person from whom he receives the thing was the owner
and could convey title to the property. A purchaser
cannot close his eyes to facts which should put a
reasonable man on his guard and still claim he acted in
good faith.[38]
In the instant case, there existed circumstances that should
have placed respondent spouses on guard. The death
certificate of Ignacia, shows that she died on March 22,
1982. The same death certificate, however, reveals that (1)
it was issued by the Office of the Civil Registrar of Lubao
Pampanga on March 10, 1982; (2) the alleged death of
Ignacia was reported to the Office of the Civil Registrar on
March 4, 1982; and (3) her burial or cremation would be
on March 8, 1982.[39] These obvious flaws in the death
certificate should have prompted respondents to
investigate further, especially so that respondent
Florentina Mijares admitted on cross examination that she
asked for the death certificate of Ignacia because she
was suspicious that Ignacia was still alive.[40] Moreover,
respondent spouses had all the opportunity to verify the
claim of Vicente that he is a widower because it was their
lawyer, Atty. Rodriguito S. Saet, who represented Vicente
in the special proceedings before the Metropolitan Trial
Court.
Neither can respondent spouses rely on the alleged court
approval of the sale. Note that the Order issued by the
Metropolitan Trial Court of Quezon City, Branch XXXI,
appointing Vicente as guardian of his 5 minor children, as
well as the Order authorizing him to sell the estate of
Ignacia were issued only on September 29, 1983 and
October 14, 1983, respectively. On the other hand, the sale
of the entire Lot No. 4349-B-2 to respondent spouses
appears to have been made not on March 1, 1983, but
even as early as November 25, 1978. In the Agreement
dated November 25, 1978, Vicente in consideration of the
amount of P110,000.00, sold to Cipriano Mijares Lot No.
4349-B-2 on installment basis, with the first installment due
on or before July 31, 1979.[41] This was followed by a
Memorandum of Understanding executed on July 30,
1979, by Vicente and Cipriano (1) acknowledging
Ciprianos receipt of Vicentes down payment in the
amount of P50,000.00; and (2) authorizing Florentina
Mijares to collect rentals.[42] On July 14, 1981, Vicente and
Cipriano executed another Memorandum of Agreement,
stating, among other, that out of the purchase price of
P110,000.00 Vicente had remaining balance of
P19,000.00.[43] Clearly therefore, the special proceedings
before the Metropolitan Trial Court of Quezon City, Branch
XXXI, could not have been the basis of respondent spouses
claim of good faith because the sale of Lot No. 4349-B-2
occurred prior thereto.
Respondent spouses cannot deny knowledge that at the
time of the sale in 1978, Vicente was married to Ignacia
and that the latter did not give her conformity to the sale.
This is so because the 1978 Agreement described Vicente
as married but the conformity of his wife to the sale did not
appear in the deed. Obviously, the execution of another
deed of sale in 1983 over the same Lot No. 4349-B-2, after
the alleged death of Ignacia on March 22, 1982, as well as
the institution of the special proceedings were, intended
to correct the absence of Ignacias consent to the sale.
Even assuming that respondent spouses believed in good
faith that Ignacia really died on March 22, 1982, after they
purchased the lot, the fact remains that the sale of Lot No.
4349-B-2 prior to Ignacias alleged demise was without her
consent and therefore subject to annulment. The October
14, 1983 order authorizing the sale of the estate of Ignacia,
could not have validated the sale of Lot No. 4349-B-2
because said order was issued on the assumption that
Ignacia was already dead and that the sale dated March
1, 1983 was never categorically approved in the said
order.
The fact that the 5 minor children[44] of Vicente
represented by the latter, signed the March 1, 1983 deed
of sale of Lot No. 4349-B-2 will not estop them from assailing
the validity thereof. Not only were they too young at that
time to understand the repercussions of the sale, they
likewise had no right to sell the property of their mother
who, when they signed the deed, was very much alive.
If a voidable contract is annulled, the restoration of what
has been given is proper. The relationship between parties
in any contract even if subsequently annulled must always
be characterized and punctuated by good faith and fair
dealing. Hence, for the sake of justice and equity, and in
consonance with the salutary principle of non-enrichment
at anothers expense, the Court sustains the trial courts
order directing Vicente to refund to respondent spouses
the amount of P110,000.00 which they have paid as
purchase price of Lot No. 4349-B-2.[45] The court a quo
correctly found that the subject of the sale was the entire
Lot No. 4349-B-2 and that the consideration thereof is not
P40,000.00 as stated in the March 1, 1983 deed of sale, but
P110,000.00 as evidenced by the (1) Agreement dated
November 25, 1978 as well as the July 30, 1979
Memorandum of Understanding and the July 14, 1981
Memorandum of Agreement which served as receipts of
the installment payments made by respondent Cipriano
Mijares; and (2) the receipt duly signed by Vicente Reyes
acknowledging receipt of the amount of P110,000.00 from
respondent spouses as payment of the sale of the
controverted lot.[46]
The trial court, however, erred in imposing 12% interest per
annum on the amount due the respondents. In Eastern
Shipping Lines, Inc. v. Court of Appeals,[47] it was held that
interest on obligations not constituting a loan or
forbearance of money is six percent (6%) annually. If the
purchase price could be established with certainty at the
time of the filing of the complaint, the six percent (6%)
interest should be computed from the date the complaint
was filed until finality of the decision. In Lui v. Loy,[48]
involving a suit for reconveyance and annulment of title
filed by the first buyer against the seller and the second
buyer, the Court, ruling in favor of the first buyer and
29
annulling the second sale, ordered the seller to refund to
the second buyer (who was not a purchaser in good faith)
the purchase price of the lots. It was held therein that the
6% interest should be computed from the date of the filing
of the complaint by the first buyer. After the judgment
becomes final and executory until the obligation is
satisfied, the amount due shall earn interest at 12% per
year, the interim period being deemed equivalent to a
forbearance of credit.[49]
Accordingly, the amount of P110,000.00 due the
respondent spouses which could be determined with
certainty at the time of the filing of the complaint shall earn
6% interest per annum from June 4, 1986 until the finality of
this decision. If the adjudged principal and the interest (or
any part thereof) remain unpaid thereafter, the interest
rate shall be twelve percent (12%) per annum computed
from the time the judgment becomes final and executory
until it is fully satisfied.
Petitioners prayer for payment of rentals should be denied.
Other than the allegation of Ignacia in her Sinumpaang
Salaysay that the apartments could be rented at P1,000.00
a month, no other evidence was presented to substantiate
her claim. In awarding rentals which are in the nature of
actual damages, the Court cannot rely on mere assertions,
speculations, conjectures or guesswork but must depend
on competent proof and on the best evidence obtainable
regarding the actual amount of loss.[50] None, having
been presented in the case at bar, petitioners claim for
rentals must be denied.
While as a general rule, a party who has not appealed is
not entitled to affirmative relief other than the ones
granted in the decision of the court below, law and
jurisprudence authorize a tribunal to consider errors,
although unassigned, if they involve (1) errors affecting the
lower courts jurisdiction over the subject matter, (2) plain
errors not specified, and (3) clerical errors.[51] In this case,
though defendant Vicente Reyes did not appeal, the plain
error committed by the court a quo as to the award of
moral and exemplary damages must be corrected. These
awards cannot be lumped together as was done by the
trial court.[52] Moral and exemplary damages are
different in nature, and require separate determination.
Moral damages are awarded where the claimant
experienced physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury as a result
of the act complained of.[53] The award of exemplary
damages, on the other hand, is warranted when moral,
temperate, liquidated, or compensatory damages were
likewise awarded by the court.[54]
Hence, the trial courts award of P50,000.00 by way of
moral and exemplary damages should be modified.
Vicente Reyes should be ordered to pay the amounts of
P25,000.00 as moral damages and P25,000.00 as
exemplary damages. Since Vicente Reyes was among the
heirs substituted to the late Ignacia Aguilar-Reyes,
payment of moral and exemplary damages must be
made by Vicente to his children, petitioners in this case.
WHEREFORE, in view of all the foregoing, the petition is
PARTIALLY GRANTED. The January 26, 2000 Decision and
June 19, 2002, Resolution of the Court of Appeals in CA-
G.R. No. 28464 are REVERSED and SET ASIDE. The May 31,
1990 Order of the Regional Trial Court of Quezon City,
Branch 101, in Civil Case No. Q-48018, which annulled the
March 1, 1983 Deed of Absolute Sale over Lot No. 4349-B-
2, and ordered the Register of Deeds of Quezon City to
cancel TCT No. 306087 in the name of respondent spouses
Cipriano Mijares and Florentina Mijares covering the same
property; as well as the June 29, 1990 Order correcting the
typographical errors in the order dated March 1, 1983, are
REINSTATED, with the following MODIFICATIONS
(1) The Register of Deeds of Quezon City is ordered to issue
a new certificate of title over Lot No. 4349-B-2, in the name
of petitioners as co-owners thereof;
(2) Vicente Reyes is ordered to reimburse the respondent
spouses the amount of P110,000.00 as purchase price of
Lot No. 4349-B-2, with interest at 6% per annum from June
4, 1986, until finality of this decision. After this decision
becomes final, interest at the rate of 12% per annum on
the principal and interest (or any part thereof) shall be
imposed until full payment.
(3) Defendant Vicente Reyes is ordered to pay the heirs of
the late Ignacia Aguilar-Reyes, the amounts of P25,000.00
as moral damages and P25,000.00 as exemplary
damages.
SO ORDERED.
PELAYO VS PEREZ 2005
This resolves the petition for review on certiorari seeking the
reversal of the Decision[1] of the Court of Appeals (CA)
promulgated on April 20, 1999 which reversed the Decision
of the Regional Trial Court (RTC) of Panabo, Davao, Branch
34, in Civil Case No. 91-46; and the CA Resolution dated
December 17, 1999 denying petitioners motion for
reconsideration.
The antecedent facts as aptly narrated by the CA are as
follows:
David Pelayo (Pelayo),by a Deed of Absolute Sale
executed on January 11, 1988, conveyed to Melki Perez
(Perez) two parcels of agricultural land (the lots) situated
in Panabo, Davao which are portions of Lot 4192, Cad. 276
covered by OCT P-16873.
Loreza Pelayo (Loreza), wife of Pelayo, and another one
whose signature is illegible witnessed the execution of the
deed.
Loreza, however, signed only on the third page in the
space provided for witnesses on account of which Perez
application for registration of the deed with the Office of
the Register of Deeds in Tagum, Davao was denied.
Perez thereupon asked Loreza to sign on the first and
second pages of the deed but she refused, hence, he
instituted on August 8, 1991 the instant complaint for
specific performance against her and her husband Pelayo
(defendants).
The defendants moved to dismiss the complaint on the
ground that it stated no cause of action, citing Section 6
of RA 6656 otherwise known as the Comprehensive
Agrarian Reform Law which took effect on June 10, 1988
and which provides that contracts executed prior thereto
shall be valid only when registered with the Register of
Deeds within a period of three (3) months after the
effectivity of this Act.
The questioned deed having been executed on January
10, 1988, the defendants claimed that Perez had at least
up to September 10, 1988 within which to register the
same, but as they failed to, it is not valid and, therefore,
unenforceable.
The trial court thus dismissed the complaint. On appeal to
this Court, the dismissal was set aside and the case was
remanded to the lower court for further proceedings.
In their Answer, the defendants claimed that as the lots
were occupied illegally by some persons against whom
they filed an ejectment case, they and Perez who is their
30
friend and known at the time as an activist/leftist, hence
feared by many, just made it appear in the deed that the
lots were sold to him in order to frighten said illegal
occupants, with the intentional omission of Lorezas
signature so that the deed could not be registered; and
that the deed being simulated and bereft of consideration
is void/inexistent.
Perez countered that the lots were given to him by
defendant Pelayo in consideration of his services as his
attorney-in-fact to make the necessary representation
and negotiation with the illegal occupants-defendants in
the ejectment suit; and that after his relationship with
defendant Pelayo became sour, the latter sent a letter to
the Register of Deeds of Tagum requesting him not to
entertain any transaction concerning the lots title to which
was entrusted to Perez who misplaced and could [not]
locate it.
Defendant Pelayo claimed in any event, in his Pre-trial brief
filed on March 19, 1996, that the deed was without his wife
Lorezas consent, hence, in light of Art. 166 of the Civil Code
which provides:
Article 166. Unless the wife has been declared a non
compos mentis or a spendthrift, or is under civil interdiction
or is confined in a leprosarium, the husband cannot
alienate or encumber any real property of the conjugal
partnership without the wifes consent . . .
it is null and void.
The trial court, finding, among others, that Perez did not
possess, nor pay the taxes on the lots, that defendant
Pelayo was indebted to Perez for services rendered and,
therefore, the deed could only be considered as evidence
of debt, and that in any event, there was no marital
consent to nor actual consideration for the deed, held
that the deed was null and void and accordingly
rendered judgment the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering and
directing the defendants to pay plaintiff Melki Perez the
sum of TEN THOUSAND (P10,000.00) Pesos as principal with
12% interest per annum starting from the date of filing of
the complaint on August 1, 1991 until plaintiff is fully paid.
The defendants shall likewise pay to plaintiff the sum of
THREE THOUSAND (P3,000.00) as attorneys fees.
The court further orders that the Deed of Absolute Sale,
(Annex A) of the complaint and (Annex C) of the plaintiffs
Motion for Summary Judgment is declared null and void
and without force and it is likewise removed as a cloud
over defendants title and property in suit. . . .[2]
The RTC Decision was appealed by herein respondent
Perez to the CA. Petitioners failed to file their appellees
brief. The CA then promulgated its Decision on April 20,
1999 whereby it ruled that by Lorenzas signing as witness to
the execution of the deed, she had knowledge of the
transaction and is deemed to have given her consent to
the same; that herein petitioners failed to adduce
sufficient proof to overthrow the presumption that there
was consideration for the deed, and that petitioner David
Pelayo, being a lawyer, is presumed to have acted with
due care and to have signed the deed with full knowledge
of its contents and import. The CA reversed and set aside
the RTC Decision, declaring as valid and enforceable the
questioned deed of sale and ordering herein petitioner
Lorenza Pelayo to affix her signature on all pages of said
document.
Petitioners moved for reconsideration of the decision but
the same was denied per Resolution dated December 17,
1999. The CA found said motion to have been filed out of
time and ruled that even putting aside technicality,
petitioners failed to present any ground bearing on the
merits of the case to justify a reversal or setting aside of the
decision.
Hence, this petition for review on certiorari on the following
grounds:
1. The CA erred in ignoring the specific provision of Section
6, in relation to Section 4 of R.A. No. 6657 otherwise known
as the Comprehensive Agrarian Reform Law of 1988 which
took effect on June 15, 1988 and which provides that
contracts executed prior thereto shall be valid only when
registered with the Register of Deeds within a period of
three (3) months after the effectivity of this Act.
2. The CA erred in holding that the deed of sale was valid
and considering the P10,000.00 adjudged by the trial court
as Perezs remuneration as the consideration for the deed
of sale, instead of declaring the same as null and void for
being fictitious or simulated and on the basis of Art. 491,
Par. 2 of the New Civil Code which prohibits agents from
acquiring by purchase properties from his principal under
his charge.
3. The CA made a novel ruling that there was implied
marital consent of the wife of petitioner David Pelayo.
4. Petitioners should have been allowed to file their
appellees brief to ventilate their side, considering the
existence of peculiar circumstances which prevented
petitioners from filing said brief.
On the other hand, respondent points out that the CA, in
resolving the first appeal docketed as CA-G.R. SP No.
38700[3] brought by respondent assailing the RTC Order
granting herein petitioners motion to dismiss, already ruled
that under R.A. No. 6657, the sale or transfer of private
agricultural land is allowed only when the area of the land
being conveyed constitutes or is a part of, the landowner-
seller retained area and when the total landholding of the
purchaser-transferee, including the property sold, does not
exceed five (5) hectares; that in this case, the land in
dispute is only 1.3 hectares and there is no proof that the
transferees (herein respondent) total landholding inclusive
of the subject land will exceed 5 hectares, the landholding
ceiling prescribed by R.A. No. 6657; that the failure of
respondent to register the instrument was not due to his
fault or negligence but can be attributed to Lorenzas
unjustified refusal to sign two pages of the deed despite
several requests of respondent; and that therefore, the CA
ruled that the deed of sale subject of this case is valid
under R.A. No. 6657.
Respondent further maintains that the CA correctly held in
its assailed Decision that there was consideration for the
contract and that Lorenza is deemed to have given her
consent to the deed of sale.
Respondent likewise opines that the CA was right in
denying petitioners motion for reconsideration where they
prayed that they be allowed to file their appellees brief as
their counsel failed to file the same on account of said
counsels failing health due to cancer of the liver.
Respondent emphasized that in petitioners motion for
reconsideration, they did not even cite any errors made by
the CA in its Decision.
The issues boil down to the question of whether or not the
deed of sale was null and void on the following grounds:
(a) for not complying with the provision in R.A. No. 6657
that such document must be registered with the Register
of Deeds within three months after the effectivity of said
31
law; (b) for lack of marital consent; (c) for being prohibited
under Article 1491 (2) of the Civil Code; and (d) for lack of
consideration.
We rule against petitioners.
The issue of whether or not the deed of sale is null and void
under R.A. No. 6657, for respondents failure to register said
document with the Register of Deeds within three months
after the effectivity of R.A. No. 6657, had been resolved
with finality by the CA in its Decision dated November 24,
1994 in CA-G.R. SP No. 38700.[4] Herein petitioners no
longer elevated said CA Decision to this Court and the
same became final and executory on January 7, 1995.[5]
In said decision, the CA interpreted Section 4, in relation to
Section 70 of R.A. No. 6657, to mean thus:
. . . the proper interpretation of both sections is that under
R.A. No. 6657, the sale or transfer of a private agricultural
land is allowed only when said land area constitutes or is a
part of the landowner-seller retained area and only when
the total landholdings of the purchaser-transferee,
including the property sold does not exceed five (5)
hectares.
Aside from declaring that the failure of respondent to
register the deed was not of his own fault or negligence,
the CA ruled that respondents failure to register the deed
of sale within three months after effectivity of The
Comprehensive Agrarian Reform Law did not invalidate
the deed of sale as the transaction over said property is
not proscribed by R.A. No. 6657.
Thus, under the principle of law of the case, said ruling of
the CA is now binding on petitioners. Such principle was
elucidated in Cucueco vs. Court of Appeals,[6] to wit:
Law of the case has been defined as the opinion delivered
on a former appeal. It is a term applied to an established
rule that when an appellate court passes on a question
and remands the case to the lower court for further
proceedings, the question there settled becomes the law
of the case upon subsequent appeal. It means that
whatever is once irrevocably established as the controlling
legal rule or decision between the same parties in the
same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on
which such decision was predicated continue to be the
facts of the case before the court.
Petitioners not having questioned the Decision of the CA
dated November 24, 1994 which then attained finality, the
ruling that the deed of sale subject of this case is not
among the transactions deemed as invalid under R.A. No.
6657, is now immutable.
We agree with the CA ruling that petitioner Lorenza, by
affixing her signature to the Deed of Sale on the space
provided for witnesses, is deemed to have given her
implied consent to the contract of sale.
Sale is a consensual contract that is perfected by mere
consent, which may either be express or implied.[7] A wifes
consent to the husbands disposition of conjugal property
does not always have to be explicit or set forth in any
particular document, so long as it is shown by acts of the
wife that such consent or approval was indeed given.[8]
In the present case, although it appears on the face of the
deed of sale that Lorenza signed only as an instrumental
witness, circumstances leading to the execution of said
document point to the fact that Lorenza was fully aware
of the sale of their conjugal property and consented to the
sale.
In their Pre-Trial Brief,[9] petitioners admitted that even prior
to 1988, they have been having serious problems,
including threats to the life of petitioner David Pelayo, due
to conflicts with the illegal occupants of the property in
question, so that respondent, whom many feared for
being a leftist/activist, offered his help in driving out said
illegal occupants.
Human experience tells us that a wife would surely be
aware of serious problems such as threats to her husbands
life and the reasons for such threats. As they themselves
stated, petitioners problems over the subject property had
been going on for quite some time, so it is highly
improbable for Lorenza not to be aware of what her
husband was doing to remedy such problems. Petitioners
do not deny that Lorenza Pelayo was present during the
execution of the deed of sale as her signature appears
thereon. Neither do they claim that Lorenza Pelayo had no
knowledge whatsoever about the contents of the subject
document. Thus, it is quite
certain that she knew of the sale of their conjugal property
between her husband and respondent.
Under the rules of evidence, it is presumed that a person
takes ordinary care of his concerns.[10] Petitioners did not
even attempt to overcome the aforementioned
presumption as no evidence was ever presented to show
that Lorenza was in any way lacking in her mental faculties
and, hence, could not have fully understood the
ramifications of signing the deed of sale. Neither did
petitioners present any evidence that Lorenza had been
defrauded, forced, intimidated or threatened either by
her own husband or by respondent into affixing her
signature on the subject document. If Lorenza had any
objections over the conveyance of the disputed property,
she could have totally refrained from having any part in
the execution of the deed of sale. Instead, Lorenza even
affixed her signature thereto.
Moreover, under Article 173, in relation to Article 166, both
of the New Civil Code, which was still in effect on January
11, 1988 when the deed in question was executed, the
lack of marital consent to the disposition of conjugal
property does not make the contract void ab initio but
merely voidable. Said provisions of law provide:
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal property
without the wifes consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same.
...
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage,
may demand the value of property fraudulently alienated
by the husband.
Hence, it has been held that the contract is valid until the
court annuls the same and only upon an action brought
by the wife whose consent was not obtained.[11] In the
present case, despite respondents repeated demands for
Lorenza to affix her signature on all the pages of the deed
of sale, showing respondents insistence on enforcing said
contract, Lorenza still did not file a case for annulment of
32
the deed of sale. It was only when respondent filed a
complaint for specific performance on August 8, 1991
when petitioners brought up Lorenzas alleged lack of
consent as an affirmative defense. Thus, if the transaction
was indeed entered into without Lorenzas consent, we find
it quite puzzling why for more than three and a half years,
Lorenza did absolutely nothing to seek the nullification of
the assailed contract.
The foregoing circumstances lead the Court to believe
that Lorenza knew of the full import of the transaction
between respondent and her
husband; and, by affixing her signature on the deed of
sale, she, in effect, signified her consent to the disposition
of their conjugal property.
With regard to petitioners asseveration that the deed of
sale is invalid under Article 1491, paragraph 2 of the New
Civil Code, we find such argument unmeritorious. Article
1491 (2) provides:
Art. 1491. The following persons cannot acquire by
purchase, even at a public or judicial auction, either in
person or through the mediation of another:
...
(2) Agents, the property whose administration or sale may
have been entrusted to them, unless the consent of the
principal has been given;
...
In Distajo vs. Court of Appeals,[12] a landowner, Iluminada
Abiertas, designated one of her sons as the administrator
of several parcels of her land. The landowner subsequently
executed a Deed of Certification of Sale of Unregistered
Land, conveying some of said land to her
son/administrator. Therein, we held that:
Under paragraph (2) of the above article, the prohibition
against agents purchasing property in their hands for sale
or management is not absolute. It does not apply if the
principal consents to the sale of the property in the hands
of the agent or administrator. In this case, the deeds of sale
signed by Iluminada Abiertas shows that she gave consent
to the sale of the properties in favor of her son, Rufo, who
was the administrator of the properties. Thus, the consent
of the principal Iluminada Abiertas removes the
transaction out of the prohibition contained in Article
1491(2).[13]
The above-quoted ruling is exactly in point with this case
before us. Petitioners, by signing the Deed of Sale in favor
of respondent, are also deemed to have given their
consent to the sale of the subject property in favor of
respondent, thereby making the transaction an exception
to the general rule that agents are prohibited from
purchasing the property of their principals.
Petitioners also argue that the CA erred in ruling that there
was consideration for the sale. We find no error in said
appellate courts ruling. The element of consideration for
the sale is indeed present. Petitioners, in adopting the trial
courts narration of antecedent facts in their petition,[14]
thereby admitted that they authorized respondent to
represent them in negotiations with the squatters
occupying the disputed property and, in consideration of
respondents services, they executed the subject deed of
sale. Aside from such services rendered by respondent,
petitioners also acknowledged in the deed of sale that
they received in full the amount of Ten Thousand Pesos.
Evidently, the consideration for the sale is respondents
services plus the aforementioned cash money.
Petitioners contend that the consideration stated in the
deed of sale is excessively inadequate, indicating that the
deed of sale was merely simulated. We are not persuaded.
Our ruling in Buenaventura vs. Court of Appeals[15] is
pertinent, to wit:
. . . Indeed, there is no requirement that the price be equal
to the exact value of the subject matter of sale. . . . As we
stated in Vales vs. Villa:
Courts cannot follow one every step of his life and
extricate him from bad bargains, protect him from unwise
investments, relieve him from one-sided contracts, or annul
the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally
incompetent. Courts operate not because one person has
been defeated or overcome by another, but because he
has been defeated or overcome illegally. Men may do
foolish things, make ridiculous contracts, use miserable
judgment, and lose money by them indeed, all they have
in the world; but not for that alone can the law intervene
and restore. There must be, in addition, a violation of the
law, the commission of what the law knows as an
actionable wrong, before the courts are authorized to lay
hold of the situation and remedy it.[16]
Verily, in the present case, petitioners have not presented
proof that there has been fraud, mistake or undue
influence exercised upon them by respondent. It is highly
unlikely and contrary to human experience that a layman
like respondent would be able to defraud, exert undue
influence, or in any way vitiate the consent of a lawyer like
petitioner David Pelayo who is expected to be more
knowledgeable in the ways of drafting contracts and
other legal transactions.
Furthermore, in their Reply to Respondents
Memorandum,[17] petitioners adopted the CAs narration
of fact that petitioners stated in a letter they sent to the
Register of Deeds of Tagum that they have entrusted the
titles over subject lots to herein respondent. Such act is a
clear indication that they intended to convey the subject
property to herein respondent and the deed of sale was
not merely simulated or fictitious.
Lastly, petitioners claim that they were not able to fully
ventilate their defense before the CA as their lawyer, who
was then suffering from cancer of the liver, failed to file
their appellees brief. Thus, in their motion for
reconsideration of the CA Decision, they prayed that they
be allowed to submit such appellees brief. The CA, in its
Resolution dated December 17, 1999, stated thus:
By movant-defendant-appellees own information, his
counsel received a copy of the decision on May 5, 1999.
He, therefore, had fifteen (15) days from said date or up to
May 20, 1999 to file the motion. The motion, however, was
sent through a private courier and, therefore, considered
to have been filed on the date of actual receipt on June
17, 1999 by the addressee Court of Appeals, was filed
beyond the reglementary period.
Technicality aside, movant has not proffered any ground
bearing on the merits of the case why the decision should
be set aside.
Petitioners never denied the CA finding that their motion
for reconsideration was filed beyond the fifteen-day
reglementary period. On that point alone, the CA is
correct in denying due course to said motion. The motion
having been belatedly filed, the CA Decision had then
attained finality. Thus, in Abalos vs. Philex Mining
Corporation,[18] we held that:
33

. . . Nothing is more settled in law than that once a
judgment attains finality it thereby becomes immutable
and unalterable. It may no longer be modified in any
respect, even if the modification is meant to correct what
is perceived to be an erroneous conclusion of fact or law,
and regardless of whether the modification is attempted
to be made by the court rendering it or by the highest
court of the land.
Moreover, it is pointed out by the CA that said motion did
not present any defense or argument on the merits of the
case that could have convinced the CA to reverse or
modify its Decision.
We have consistently held that a petitioners right to due
process is not violated where he was able to move for
reconsideration of the order or decision in question.[19] In
this case, petitioners had the opportunity to fully expound
on their defenses through a motion for reconsideration.
Petitioners did file such motion but they wasted such
opportunity by failing to present therein whatever errors
they believed the CA had committed in its Decision.
Definitely, therefore, the denial of petitioners motion for
reconsideration, praying that they be allowed to file
appellees brief, did not infringe petitioners right to due
process as any issue that petitioners wanted to raise could
and should have been contained in said motion for
reconsideration.
IN VIEW OF THE FOREGOING, the petition is DENIED and the
Decision of the Court of Appeals dated April 20, 1999 and
its Resolution dated December 17, 1999 are hereby
AFFIRMED.
SO ORDERED.
AGUETE VS PNB 2011
The Case
G.R. No. 170166 is a petition for review1 assailing the
Decision2 promulgated on 17 October 2005 by the Court
of Appeals (appellate court) in CA-G.R. CV No. 76845. The
appellate court granted the appeal filed by the Philippine
National Bank Laoag Branch (PNB). The appellate court
reversed the 29 June 2001 Decision of Branch 15 of the
Regional Trial Court of Laoag City (trial court) in Civil Case
No. 7803.
The trial court declared the Deed of Real Estate Mortgage
executed by spouses Jose A. Ros3 (Ros) and Estrella
Aguete (Aguete) (collectively, petitioners), as well as the
subsequent foreclosure proceedings, void. Aside from
payment of attorneys fees, the trial court also ordered PNB
to vacate the subject property to give way to petitioners
possession.
The Facts
The appellate court narrated the facts as follows:
On January 13, 1983, spouses Jose A. Ros and Estrella
Aguete filed a complaint for the annulment of the Real
Estate Mortgage and all legal proceedings taken
thereunder against PNB, Laoag Branch before the Court
of First Instance, Ilocos Norte docketed as Civil Case No.
7803.
The complaint was later amended and was raffled to the
Regional Trial Court, Branch 15, Laoag City.
The averments in the complaint disclosed that plaintiff-
appellee Joe A. Ros obtained a loan of P115,000.00 from
PNB Laoag Branch on October 14, 1974 and as security for
the loan, plaintiff-appellee Ros executed a real estate
mortgage involving a parcel of land Lot No. 9161 of the
Cadastral Survey of Laoag, with all the improvements
thereon described under Transfer Certificate of Title No. T-
9646.
Upon maturity, the loan remained outstanding. As a result,
PNB instituted extrajudicial foreclosure proceedings on the
mortgaged property. After the extrajudicial sale thereof, a
Certificate of Sale was issued in favor of PNB, Laoag as the
highest bidder. After the lapse of one (1) year without the
property being redeemed, the property was consolidated
and registered in the name of PNB, Laoag Branch on
August 10, 1978.
Claiming that she (plaintiff-appellee Estrella Aguete) has
no knowledge of the loan obtained by her husband nor
she consented to the mortgage instituted on the conjugal
property a complaint was filed to annul the proceedings
pertaining to the mortgage, sale and consolidation of the
property interposing the defense that her signatures
affixed on the documents were forged and that the loan
did not redound to the benefit of the family.
In its answer, PNB prays for the dismissal of the complaint
for lack of cause of action, and insists that it was plaintiffs-
appellees own acts [of]
omission/connivance that bar them from recovering the
subject property on the ground of estoppel, laches,
abandonment and prescription.4
The Trial Courts Ruling
On 29 June 2001, the trial court rendered its Decision5 in
favor of petitioners. The trial court declared that Aguete
did not sign the loan documents, did not appear before
the Notary Public to acknowledge the execution of the
loan documents, did not receive the loan proceeds from
PNB, and was not aware of the loan until PNB notified her
in 14 August 1978 that she and her family should vacate
the mortgaged property because of the expiration of the
redemption period. Under the Civil Code, the effective law
at the time of the transaction, Ros could not encumber
any real property of the conjugal partnership without
Aguetes consent. Aguete may, during their marriage and
within ten years from the transaction questioned, ask the
courts for the annulment of the contract her husband
entered into without her consent, especially in the present
case where her consent is required. The trial court,
however, ruled that its decision is without prejudice to the
right of action of PNB to recover the amount of the loan
and its interests from Ros.
The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby
rendered:
1. DECLARING the Deed of Real Estate Mortgage (Exhibit
C) and the subsequent foreclosure proceedings
conducted thereon NULL and VOID;
2. ORDERING the Register of Deeds of the City of Laoag to
cancel TCT No. T-15276 in the name of defendant PNB and
revert the same in the name of plaintiffs spouses Joe Ros
and Estrella Aguete;
3. ORDERING defendant to vacate and turnover the
possession of the premises of the property in suit to the
plaintiffs; and
4. ORDERING defendant to pay plaintiffs attorneys fee and
litigation expenses in the sum of TEN THOUSAND
(P10,000.00) PESOS.
34
No pronouncement as to costs.
SO ORDERED.6
PNB filed its Notice of Appeal7 of the trial courts decision
on 13 September 2001 and paid the corresponding fees.
Petitioners filed on the same date a motion for execution
pending appeal,8 which PNB opposed.9 In their comment
to the opposition10 filed on 10 October 2001, petitioners
stated that at the hearing of the motion on 3 October
2001, PNBs lay representative had no objection to the
execution of judgment pending appeal. Petitioners
claimed that the house on the subject lot is dilapidated, a
danger to life and limb, and should be demolished.
Petitioners added that they obliged themselves to make
the house habitable at a cost of not less P50,000.00. The
repair cost would accrue to PNBs benefit should the
appellate court reverse the trial court. PNB continued to
oppose petitioners motion.11
In an Order12 dated 8 May 2002, the trial court found
petitioners motion for execution pending appeal improper
because petitioners have made it clear that they were
willing to wait for the appellate courts decision. However,
as a court of justice and equity, the trial court allowed
petitioners to occupy the subject property with the
condition that petitioners would voluntarily vacate the
premises and waive recovery of improvements introduced
should PNB prevail on appeal.
The Appellate Courts Ruling
On 17 October 2005, the appellate court rendered its
Decision13 and granted PNBs appeal. The appellate court
reversed the trial courts decision, and dismissed petitioners
complaint.
The appellate court stated that the trial court concluded
forgery without adequate proof; thus it was improper for
the trial court to rely solely on Aguetes testimony that her
signatures on the loan documents were forged. The
appellate court declared that Aguete affixed her
signatures on the documents knowingly and with her full
consent.
Assuming arguendo that Aguete did not give her consent
to Ros loan, the appellate court ruled that the conjugal
partnership is still liable because the loan proceeds
redounded to the benefit of the family. The records of the
case reveal that the loan was used for the expansion of
the familys business. Therefore, the debt obtained is
chargeable against the conjugal partnership.
Petitioners filed the present petition for review before this
Court on 9 December 2005.
The Issues
Petitioners assigned the following errors:
I. The Honorable Court of Appeals erred in not giving
weight to the findings and conclusions of the trial court,
and in reversing and setting aside such findings and
conclusions without stating specific contrary evidence;
II. The Honorable Court of Appeals erred in declaring the
real estate mortgage valid;
III. The Honorable Court of Appeals erred in declaring,
without basis, that the loan contracted by husband Joe A.
Ros with respondent Philippine National Bank Laoag
redounded to the benefit of his family, aside from the fact
that such had not been raised by respondent in its
appeal.14
The Courts Ruling
The petition has no merit. We affirm the ruling of the
appellate court.
The Civil Code was the applicable law at the time of the
mortgage. The subject property is thus considered part of
the conjugal partnership of gains. The pertinent articles of
the Civil Code provide:
Art. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the
marriage at the expense of the common fund, whether
the acquisition be for the partnership, or for only one of the
spouses;
(2) That which is obtained by the industry, or work or as
salary of the spouses, or of either of them;
(3) The fruits, rents or interest received or due during the
marriage, coming from the common property or from the
exclusive property of each spouse.
Art. 160. All property of the marriage is presumed to belong
to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife.
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband
for the benefit of the conjugal partnership, and those
contracted by the wife, also for the same purpose, in the
cases where she may legally bind the partnership;
(2) Arrears or income due, during the marriage, from
obligations which constitute a charge upon property of
either spouse or of the partnership;
(3) Minor repairs or for mere preservation made during the
marriage upon the separate property of either the
husband or the wife; major repairs shall not be charged to
the partnership;
(4) Major or minor repairs upon the conjugal partnership
property;
(5) The maintenance of the family and the education of
the children of both husband and wife, and of legitimate
children of one of the spouses;
(6) Expenses to permit the spouses to complete a
professional, vocational or other course.
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wifes consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same.
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage
may demand the value of the property fraudulently
alienated by the husband.
There is no doubt that the subject property was acquired
during Ros and Aguetes marriage. Ros and Aguete were
married on 16 January 1954, while the subject property
was acquired in 1968.15 There is also no doubt that Ros
encumbered the subject property when he mortgaged it
for P115,000.00 on 23 October 1974.16 PNB Laoag does not
doubt that Aguete, as evidenced by her signature,
35
consented to Ros mortgage to PNB of the subject
property. On the other hand, Aguete denies ever having
consented to the loan and also denies affixing her
signature to the mortgage and loan documents.
The husband cannot alienate or encumber any conjugal
real property without the consent, express or implied, of
the wife. Should the husband do so, then the contract is
voidable.17 Article 173 of the Civil Code allows Aguete to
question Ros encumbrance of the subject property.
However, the same article does not guarantee that the
courts will declare the annulment of the contract.
Annulment will be declared only upon a finding that the
wife did not give her consent. In the present case, we
follow the conclusion of the appellate court and rule that
Aguete gave her consent to Ros encumbrance of the
subject property.
The documents disavowed by Aguete are acknowledged
before a notary public, hence they are public documents.
Every instrument duly acknowledged and certified as
provided by law may be presented in evidence without
further proof, the certificate of acknowledgment being
prima facie evidence of the execution of the instrument or
document involved.18 The execution of a document that
has been ratified before a notary public cannot be
disproved by the mere denial of the alleged signer.19 PNB
was correct when it stated that petitioners omission to
present other positive evidence to substantiate their claim
of forgery was fatal to petitioners cause.20 Petitioners did
not present any corroborating witness, such as a
handwriting expert, who could authoritatively declare that
Aguetes signatures were really forged.
A notarized document carries the evidentiary weight
conferred upon it with respect to its due execution, and it
has in its favor the presumption of regularity which may
only be rebutted by evidence so clear, strong and
convincing as to exclude all controversy as to the falsity of
the certificate. Absent such, the presumption must be
upheld. The burden of proof to overcome the presumption
of due execution of a notarial document lies on the one
contesting the same. Furthermore, an allegation of forgery
must be proved by clear and convincing evidence, and
whoever alleges it has the burden of proving the same.21
Ros himself cannot bring action against PNB, for no one
can come before the courts with unclean hands. In their
memorandum before the trial court, petitioners themselves
admitted that Ros forged Aguetes signatures.
Joe A. Ros in legal effect admitted in the complaint that
the signatures of his wife in the questioned documents are
forged, incriminating himself to criminal prosecution. If he
were alive today, he would be prosecuted for forgery. This
strengthens the testimony of his wife that her signatures on
the questioned documents are not hers.
In filing the complaint, it must have been a remorse of
conscience for having wronged his family; in forging the
signature of his wife on the questioned documents; in
squandering the P115,000.00 loan from the bank for
himself, resulting in the foreclosure of the conjugal
property; eviction of his family therefrom; and, exposure to
public contempt, embarassment and ridicule.22
The application for loan shows that the loan would be used
exclusively for additional working [capital] of buy & sell of
garlic & virginia tobacco.23 In her testimony, Aguete
confirmed that Ros engaged in such business, but claimed
to be unaware whether it prospered. Aguete was also
aware of loans contracted by Ros, but did not know where
he wasted the money.24 Debts contracted by the
husband for and in the exercise of the industry or profession
by which he contributes to the support of the family
cannot be deemed to be his exclusive and private
debts.25
If the husband himself is the principal obligor in the
contract, i.e., he directly received the money and services
to be used in or for his own business or his own profession,
that contract falls within the term x x x x obligations for the
benefit of the conjugal partnership. Here, no actual
benefit may be proved. It is enough that the benefit to the
family is apparent at the signing of the contract. From the
very nature of the contract of loan or services, the family
stands to benefit from the loan facility or services to be
rendered to the business or profession of the husband. It is
immaterial, if in the end, his business or profession fails or
does not succeed. Simply stated, where the husband
contracts obligations on behalf of the family business, the
law presumes, and rightly so, that such obligation will
redound to the benefit of the conjugal partnership.26
For this reason, we rule that Ros loan from PNB redounded
to the benefit of the conjugal partnership. Hence, the debt
is chargeable to the conjugal partnership.
WHEREFORE, we DENY the petition. The Decision of the
Court of Appeals in CA-G.R. CV No. 76845 promulgated on
17 October 2005 is AFFIRMED. Costs against petitioners.
SO ORDERED
HEIRS OF HERNANDEZ VS MINGOA 2009
This is a petition for review on certiorari of the Decision[2]
dated September 7, 2000 and Resolution[3] dated
December 29, 2000, both of the Court of Appeals (CA), in
CA-G.R. CV No. 54896. The CA Decision reversed and set
aside the decision of the Regional Trial Court (RTC) of
Quezon City (Branch 92), which ruled in favor of herein
petitioners in the action for reconveyance filed by the
latter in said court against the respondents. The CA
Resolution denied the petitioners motion for
reconsideration.
The subject matter of the action is a parcel of land with an
area of 520.50 square meters situated in Diliman, Quezon
City, described as Lot 15, Block 89 of the subdivision plan
Psd-68807, covered by Transfer Certificate of Title (TCT) No.
107534[4] issued on May 23, 1966 and registered in the
name of Domingo B. Hernandez, Sr. married to Sergia V.
Hernandez. Later on, said TCT No. 107534 was cancelled
and in lieu thereof, TCT No. 290121[5] was issued in favor of
Melanie Mingoa.
These are the factual antecedents of this case:
On February 11, 1994, a complaint[6] was filed with the RTC
of Quezon City by herein petitioners, heirs of Domingo
Hernandez, Sr., namely, spouse Sergia Hernandez and their
surviving children Domingo, Jr. and Maria Leonora Wilma,
against the respondents herein, Dolores Camisura,
Melanie Mingoa, Atty. Plaridel Mingoa, Sr. and all persons
claiming rights under the latter, and the Quezon City
Register of Deeds. The case was docketed as Civil Case
No. 094-19276.
In their complaint, the petitioners asked for (a) the
annulment and/or declaration of nullity of TCT No. 290121
including all its derivative titles, the Irrevocable Special
Power of Attorney (SPA) dated February 14, 1963 in favor
of Dolores Camisura,[7] the SPA dated May 9, 1964 in favor
of Plaridel Mingoa, Sr.,[8] and the Deed of Absolute Sale of
Real Estate[9] dated July 9, 1978 executed by Plaridel
Mingoa, Sr. in favor of Melanie Mingoa for being products
of forgery and falsification; and (b) the reconveyance
and/or issuance to them (petitioners) by the Quezon City
36
Register of Deeds of the certificate of title covering the
subject property.
Respondents filed a Motion to Dismiss[10] the complaint
interposing the following grounds: the claim or demand
has been paid, waived, abandoned or otherwise
extinguished; lack of cause of action; lack of jurisdiction
over the person of the defendants or over the subject or
nature of the suit; and prescription. The following were
attached to said motion: a Deed of Transfer of Rights[11]
dated February 14, 1963 from Domingo Hernandez, Sr. to
Camisura, the Irrevocable SPA[12] executed by the former
in the latters favor, and a Deed of Sale of Right in a
Residential Land and Improvements Therein[13] dated
May 9, 1964 executed by Camisura in favor of Plaridel
Mingoa, Sr.
In its Order[14] dated September 1, 1994, the trial court
denied respondents motion to dismiss.
Respondents filed a petition for certiorari and prohibition
with the CA assailing the aforementioned Order of denial
by the RTC. Their initial petition was dismissed for being
insufficient in form. Respondents then re-filed their petition,
which was docketed as CA-G.R. SP No. 36868. In a
decision[15] dated May 26, 1995, respondents re-filed
petition was denied due course by the CA. Having been
filed beyond the reglementary period, respondents
subsequent motion for reconsideration was simply noted
by the CA in its Resolution of July 7, 1995. On the basis of a
technicality, this Court, in a Resolution dated September
27, 1995, dismissed respondents' appeal which was
docketed as G.R. No. 121020. Per Entry of Judgment,[16]
said Resolution became final and executory on January 2,
1996.
Meanwhile, respondents filed their Answer[17] in the main
case therein denying the allegations of the complaint and
averring as defenses the same grounds upon which they
anchored their earlier motion to dismiss.
The parties having failed to amicably settle during the
scheduled pre-trial conference, the case proceeded to
trial.
The evidence respectively presented by the parties is
summarized as follows:[18]
x x x [It] appears that in the early part of 1958, Domingo
Hernandez, Sr. (who was then a Central Bank employee)
and his spouse Sergia V. Hernandez were awarded a
piece of real property by the Philippine Homesite and
Housing Corporation (PHHC) by way of salary deduction.
On October 18, 1963, the [petitioners] then having paid in
full the entire amount of P6,888.96, a Deed of Absolute Sale
of the property was executed by the PHHC in their favor.
TCT No. 107534, covering the property was issued to the
[petitioners] on May 23, 1966. It bears an annotation of the
retention period of the property by the awardee (i.e.,
restriction of any unauthorized sale to third persons within
a certain period). Tax payments due on the property were
religiously paid (until 1955) by the [petitioners] as
evidenced by receipts under the [petitioners] name.
Hernandez, Sr. died intestate in April 1983 and it was only
after his burial that his heirs found out that TCT No. 107534
was already cancelled a year before (in 1982), and in lieu
thereof, TCT No. 290121 was issued to the [respondents].
Upon diligent inquiry, [petitioners] came to know that the
cancellation of TCT (No. 107534) in favor of the
[respondents] xxx TCT (No. 290121) was based upon three
sets of documents, namely, (1) Irrevocable Power of
Attorney; (2) Irrevocable Special Power of Attorney; and
(3) Deed of Absolute Sale.
[Petitioners] also allege that because of financial
difficulties, they were only able to file a complaint on
February 11, 1995 after consulting with several lawyers.
xxxx
[Respondents] xxx on the other hand do not deny that
Hernandez, Sr. was indeed awarded a piece of real
property by the PHHC. According to the [respondents] xxx,
Hernandez, Sr. was awarded by the PHHC the Right to
Purchase the property in question; however, the late
Hernandez, Sr. failed to pay all the installments due on the
said property. Thus, afraid that he would forfeit his right to
purchase the property awarded to him, Hernandez, Sr.
sold to Dolores Camisura his rights for the sum of P6,500.00
on February 14, 1963, through a deed of transfer of rights,
seemingly a printed form from the PHHC. Simultaneous to
this, Hernandez, Sr. and his spouse executed an
irrevocable special power of attorney, appointing Dolores
Camisura as their attorney-in-fact with express power to
sign, execute and acknowledge any contract of
disposition, alienation and conveyance of her right over
the aforesaid parcel of land.
Apparently, this special power of attorney was executed
for the purpose of securing her right to transfer the property
to a third person considering that there was a prohibition
to dispose of the property by the original purchaser within
one (1) year from full payment. Else wise stated, the
irrevocable power of attorney was necessary in order to
enable the buyer, Dolores Camisura, to sell the lot to
another, Plaridel Mingoa, without the need of requiring
Hernandez, to sign a deed of conveyance.
On May 9, 1964, Dolores Camisura sold her right over the
said property to Plaridel Mingoa for P7,000.00. Camisura
then executed a similar irrevocable power of attorney and
a deed of sale of right in a residential land and
improvements therein in favor of Plaridel Mingoa. Upon
such payment and on the strength of the said irrevocable
power of attorney, Plaridel Mingoa took possession of the
said property and began paying all the installments due
on the property to PHHC. Plaridel Mingoa further secured
TCT No. 107534 (issued in the name of Domingo
Hernandez, Sr.) on May, 1966. On July 9, 1978, Plaridel
Mingoa sold to his eldest child, Melanie Mingoa, the
property in question for P18,000.00. TCT No. 107534 was
thus cancelled and TCT No. 290121 was issued in the name
of Melanie Mingoa. It is further claimed that since 1966 until
1982, Plaridel Mingoa religiously paid all the taxes due on
the said property; and that from 1983 up to the present,
Melanie Mingoa paid all the property taxes due thereon
aside from having actual possession of the said property.
(words in brackets ours)
On May 9, 1996, the RTC rendered a decision[19] in favor
of the petitioners, with the following dispositive portion:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiffs as follows:
1) TCT No. 290121 and all its derivative titles are hereby
declared null and void;
2) Ordering the Register of Deeds of Quezon City to cancel
TCT No. 290121 issued in the name of defendant Melanie
Mingoa and corresponding owners duplicate certificate
and all its derivative title[s];
3) Ordering defendant Melanie Mingoa and all derivative
owners to surrender owners duplicate copies of transfer
certificate of title to the Register of Deeds of Quezon City
for cancellation upon finality of this decision;
4) Ordering the defendants except the Register of Deeds
of Quezon City to turn over to the plaintiffs the peaceful
possession of the subject property; and
5) Ordering the defendants except the Register of Deeds
of Quezon City to jointly and severally (sic) pay the plaintiffs
37
the sum of P10,000.00 as attorneys [fees] and to pay the
costs of suit.
SO ORDERED.
In ruling in favor of petitioners, the trial court reasoned as
follows:[20]
The two (2) parties in the case at bar gave out conflicting
versions as to who paid for the subject property. The
plaintiffs claim that they were the ones who paid the entire
amount out of the conjugal funds while it is the contention
of the defendant Mingoa that the former were not able to
pay. The defendant alleged that the right to purchase was
sold to him and he was able to pay the whole amount. The
Court is of the opinion that petitioners version is more
credible taken together with the presence of the
irrevocable power of attorney which both parties
admitted. In light of the version of the defendants, it is
highly improbable that a Power of Attorney would be
constituted by the plaintiffs authorizing the former to sell
the subject property. This is because for all intents and
purposes, the land is already the defendants for if we are
to follow their claim, they paid for the full amount of the
same. It can be safely concluded then that the Power of
Attorney was unnecessary because the defendants, as
buyers, can compel the plaintiff-sellers to execute the
transfer of the said property after the period of prohibition
has lapsed. The defendants, as owners, will have the right
to do whatever they want with the land even without an
Irrevocable Power of Attorney. Since the presence of the
Irrevocable Power of Attorney is established, it is now the
task of this Court to determine the validity of the sale made
by virtue of the said Power of Attorney. As what was said
earlier, the Court subscribes to the points raised by the
plaintiffs. It was proved during trial that the signature of the
wife was falsified. Therefore, it is as if the wife never
authorized the agent to sell her share of the subject land,
it being conjugal property. It follows that the sale of half of
the land is invalid. However, it must be pointed out that the
signature of the deceased husband was never contested
and is therefore deemed admitted. We now come to the
half which belongs to the deceased husband. The Law on
Sales expressly prohibits the agent from purchasing the
property of the principal without the latters consent (Article
1491 of the Civil Code). It was established from the records
that defendant Plaridel Mingoa sold the subject land to his
daughter Melanie. It is now for the Court to decide
whether this transaction is valid. x x x Considering that the
sale took place in July 1978, it follows from simple
mathematical computation that Melanie was then a
minor (20 years of age) when she allegedly bought the
property from her father. Since Melanies father is the sub-
agent of the deceased principal, he is prohibited by law
from purchasing the land without the latters consent. This
being the case, the sale is invalid for it appears that Plaridel
Mingoa sold the land to himself. It should be noted that the
defendants could have easily presented Melanies birth
certificate, it being at their disposal, but they chose not to.
Because of this, this Court is of the belief that the
presumption that evidence willfully suppressed would be
adverse if produced arises.
The trial court denied respondents motion for
reconsideration of the aforementioned decision in its
Order[21] of August 22, 1996.
Aggrieved, the respondents appealed to the CA, where
their case was docketed as CA-G.R. CV No. 54896. Holding
that the petitioners were barred by prescription and laches
to take any action against the respondents, the CA, in its
herein assailed Decision[22] dated September 7, 2000,
reversed and set aside the appealed decision, thereby
dismissing the complaint filed by the petitioners before the
trial court. In full, the disposition reads:
WHEREFORE, in view of the foregoing, the Decision of the
RTC Branch 92, Quezon City, in Civil Case No. Q-94-19276,
entitled, Heirs of Domingo Hernandez, Sr. vs. Dolores
Camisura, et. al., is hereby REVERSED AND SET ASIDE. A new
one is hereby entered, DISMISSING the complaint in Civil
Case No. Q-94-19276 entitled, Heirs of Domingo
Hernandez, Sr. vs. Dolores Camisura, et. al., filed by the
plaintiffs-appellees before the RTC Branch 92, Quezon City
for lack of merit.
SO ORDERED.
Petitioners subsequent motion for reconsideration was
denied by the CA in its impugned Resolution[23] dated
December 29, 2000.
Hence, petitioners are now before this Court via the
present recourse. The ten (10) assigned errors set forth in
the petition all boil down to the essential issue of whether
the title of the subject property in the name of respondent
Melanie Mingoa may still be reconveyed to the petitioners.
As we see it, the resolution thereof hinges on these two
pivotal questions: (1) whether there was a valid alienation
involving the subject property; and (2) whether the action
impugning the validity of such alienation has prescribed
and/or was barred by laches.
The Court shall deal first with the procedural issues raised
by the respondents in their Comment.[24]
We held in Vera-Cruz v. Calderon[25] that:
As a general rule, only questions of law may be raised in a
petition for review on certiorari to the Supreme Court.
Although it has long been settled that findings of fact are
conclusive upon this Court, there are exceptional
circumstances which would require us to review findings of
fact of the Court of Appeals, to wit:
(1) the conclusion is a finding grounded entirely on
speculation, surmise and conjectures; (2) the inference
made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on misapprehension
of facts; (5) the findings of fact are conflicting; (6) the
Court of Appeals went beyond the issues of the case and
its findings are contrary to the admissions of both appellant
and appellees; (7) the findings of fact of the Court of
Appeals are contrary to those of the trial court; (8) said
findings of fact are conclusions without citation of specific
evidence on which they are based; (9) the facts set forth
in the decision as well as in the petitioners main and reply
briefs are not disputed by the respondents; (10) the finding
of fact of the Court of Appeals is premised on the
supposed absence of evidence and is contradicted by
evidence on record. (emphasis ours)
The petition before us raises factual issues which are not
proper in a petition for review under Rule 45 of the Rules of
Court. However, we find that one of the exceptional
circumstances qualifying a factual review by the Court
exists, that is, the factual findings of the CA are at variance
with those of the trial court. We shall then give due course
to the instant petition and review the factual findings of the
CA.
Even if only petitioner Domingo Hernandez, Jr. executed
the Verification/Certification[26] against forum-shopping,
this will not deter us from proceeding with the judicial
determination of the issues in this petition. As we
ratiocinated in Heirs of Olarte v. Office of the President:[27]
The general rule is that the certificate of non-forum
shopping must be signed by all the plaintiffs in a case and
the signature of only one of them is insufficient. However,
the Court has also stressed that the rules on forum
shopping were designed to promote and facilitate the
orderly administration of justice and thus should not be
38
interpreted with such absolute literalness as to subvert its
own ultimate and legitimate objective. The rule of
substantial compliance may be availed of with respect to
the contents of the certification. This is because the
requirement of strict compliance with the provisions
regarding the certification of non-forum shopping merely
underscores its mandatory nature in that the certification
cannot be altogether dispensed with or its requirements
completely disregarded. Thus, under justifiable
circumstances, the Court has relaxed the rule requiring the
submission of such certification considering that although
it is obligatory, it is not jurisdictional.
In HLC Construction and Development Corporation v.
Emily Homes Subdivision Homeowners Association, it was
held that the signature of only one of the petitioners in the
certification against forum shopping substantially
complied with rules because all the petitioners share a
common interest and invoke a common cause of action
or defense.
The same leniency was applied by the Court in Cavile v.
Heirs of Cavile, because the lone petitioner who executed
the certification of non-forum shopping was a relative and
co-owner of the other petitioners with whom he shares a
common interest. x x x
xxx
In the instant case, petitioners share a common interest
and defense inasmuch as they collectively claim a right
not to be dispossessed of the subject lot by virtue of their
and their deceased parents construction of a family home
and occupation thereof for more than 10 years. The
commonality of their stance to defend their alleged right
over the controverted lot thus gave petitioners xxx
authority to inform the Court of Appeals in behalf of the
other petitioners that they have not commenced any
action or claim involving the same issues in another court
or tribunal, and that there is no other pending action or
claim in another court or tribunal involving the same issues.
xxx
Here, all the petitioners are immediate relatives who share
a common interest in the land sought to be reconveyed
and a common cause of action raising the same
arguments in support thereof. There was sufficient basis,
therefore, for Domingo Hernandez, Jr. to speak for and in
behalf of his co-petitioners when he certified that they had
not filed any action or claim in another court or tribunal
involving the same issues. Thus, the
Verification/Certification that Hernandez, Jr. executed
constitutes substantial compliance under the Rules.
Anent the contention that the petition erroneously
impleaded the CA as respondent in contravention of
Section 4(a)[28] of Rule 45 of the 1997 Rules of Civil
Procedure, we shall apply our ruling in Simon v. Canlas,[29]
wherein we held that:
x x x [The] Court agrees that the correct procedure, as
mandated by Section 4, Rule 45 of the 1997 Rules of Civil
Procedure, is not to implead the lower court which
rendered the assailed decision. However, impleading the
lower court as respondent in the petition for review on
certiorari does not automatically mean the dismissal of the
appeal but merely authorizes the dismissal of the petition.
Besides, formal defects in petitions are not uncommon. The
Court has encountered previous petitions for review on
certiorari that erroneously impleaded the CA. In those
cases, the Court merely called the petitioners attention to
the defects and proceeded to resolve the case on their
merits.
The Court finds no reason why it should not afford the same
liberal treatment in this case. While unquestionably, the
Court has the discretion to dismiss the appeal for being
defective, sound policy dictates that it is far better to
dispose of cases on the merits, rather than on technicality
as the latter approach may result in injustice. This is in
accordance with Section 6, Rule 1 of the 1997 Rules of Civil
Procedure which encourages a reading of the procedural
requirements in a manner that will help secure and not
defeat justice.
We now come to the substantive issues.
As correctly found by the appellate court, the following
facts are undisputed:[30]
1. Domingo Hernandez, Sr. was awarded a piece of real
property in 1958 by the PHHC as part of the governments
housing program at the time. Title over the said property
was issued in 1966 in the name of Hernandez, Sr., after full
payment for the property was received by the PHHC.
2. Neither [petitioners] nor Hernandez, Sr., took
possession of the said property. On the other hand, the
[respondents] took possession of the said property in 1966
and are in actual and physical possession thereof up to the
present, and have made considerable improvements
thereon, including a residential house where they presently
reside.
3. The Owners Duplicate Copy of the title over the
property given by the PHHC to Hernandez, Sr. was in the
possession of Plaridel Mingoa, the latter being able to
facilitate the cancellation of the said title and [the
issuance of] a new TCT xxx in the name of Melanie Mingoa.
4. The realty taxes have been paid by [respondents],
albeit in the name of Hernandez, Sr., but all official receipts
of tax payments are kept by the [respondents].
5. From 1966 (the time when the [respondents] were
able to possess the property) to 1983 (the time when the
[petitioners] had knowledge that the TCT in the name of
Hernandez, Sr. had already been cancelled by the
Registry of Deeds of Quezon City) covers almost a span of
17 years; and from 1983 to 1995 (the time when the Heirs
filed the original action) is a period of another 12 years.
The SPA[31] in favor of Dolores Camisura pertinently states
that the latter is the lawful attorney-in-fact of Domingo B.
Hernandez, Sr., married to Sergia Hernandez, to do and
perform, among others, the following acts and deeds:
1. To sign, execute and acknowledge all such contracts,
deeds or other instruments which may be required by the
Peoples Homesite and Housing Corporation with respect
to the purchase of that certain parcel of land known and
designated as Lot No. 15 Block E-89 of the Malaya Avenue
Subdivision, situated in Quezon City and containing an
area of 520 square meters, more or less, which I have
acquired thru the CENTRAL BANK STAFF HOUSING
CORPORATION;
2. To sign, execute and acknowledge all such contracts or
other instruments which may deem necessary or be
required to sign, execute and acknowledge for the
purpose of selling, transferring, conveying, disposing of or
alienating whatever rights I may have over that parcel of
land mentioned above;
x x x.
The Deed of Transfer of Rights,[32] also executed by
Hernandez, Sr. in Camisuras favor, expressly states that the
former, in consideration of the amount of P6,500.00,
transfers his rights over the subject property to the latter.
Notably, such deed was simultaneously executed with the
SPA on February 14, 1963.
From the foregoing, the Court cannot but conclude that
the SPA executed by Hernandez, Sr. in respondent
Camisura's favor was, in reality, an alienation involving the
subject property. We particularly note that Hernandez, Sr.,
aside from executing said SPA, likewise sold his rights and
39
interests over the property awarded by the PHHC to
Camisura. The CA committed no error when it ruled:[33]
x x x Appreciating the case in its entirety, the purported
SPA appear to be merely a grant of authority to Camisura
(and then to Plaridel Mingoa) to sell and dispose of the
subject property as well as a grant of right to purchase the
said property; but in essence, such SPA are disguised
deeds of sale of the property executed in circumventing
the retention period restriction over the said property.
Verily, the parties knew that the land in question could not
be alienated in favor of any third person within one (1) year
without the approval of the PHHC.
Having ruled that the SPA in favor of Camisura was a
contract of sale, the next question is whether or not such
sale was valid.
To constitute a valid contract, the Civil Code requires the
concurrence of the following elements: (1) cause, (2)
object, and (3) consent.
The consent of Domingo Hernandez, Sr. to the contract is
undisputed, thus, the sale of his share in the conjugal
property was valid. With regard to the consent of his wife,
Sergia Hernandez, to the sale involving their conjugal
property, the trial court found that it was lacking because
said wifes signature on the SPA was falsified. Notably, even
the CA observed that the forgery was so blatant as to be
remarkably noticeable to the naked eye of an ordinary
person. Having compared the questioned signature on
the SPA[34] with those of the documents[35] bearing the
sample standard signature of Sergia Hernandez, we affirm
both lower courts' findings regarding the forgery.
However, Sergias lack of consent to the sale did not render
the transfer of her share invalid.
Petitioners contend that such lack of consent on the part
of Sergia Hernandez rendered the SPAs and the deed of
sale fictitious, hence null and void in accordance with
Article 1409[36] of the Civil Code. Petitioners likewise
contend that an action for the declaration of the non-
existence of a contract under Article 1410[37] does not
prescribe.
We find, after meticulous review of the facts, that Articles
1409 and 1410 are not applicable to the matter now
before us.
It bears stressing that the subject matter herein involves
conjugal property. Said property was awarded to
Domingo Hernandez, Sr. in 1958. The assailed SPAs were
executed in 1963 and 1964. Title in the name of Domingo
Hernandez, Sr. covering the subject property was issued on
May 23, 1966. The sale of the property to Melanie Mingoa
and the issuance of a new title in her name happened in
1978. Since all these events occurred before the Family
Code took effect in 1988, the provisions of the New Civil
Code govern these transactions. We quote the applicable
provisions, to wit:
Art. 165. The husband is the administrator of the conjugal
partnership.
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wifes consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same. x x x.
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage,
may demand the value of property fraudulently alienated
by the husband. (Emphasis ours.)
Notwithstanding the foregoing, petitioners argue that the
disposition of conjugal property made by a husband
without the wifes consent is null and void and the right to
file an action thereon is imprescriptible, in accordance
with Garcia v. CA[38] and Bucoy v. Paulino.[39].
Concededly, in the aforementioned cases of Garcia and
Bucoy, the contracts involving the sale of conjugal
property by the husband without the wife's consent were
declared null and void by this Court. But even in Bucoy, we
significantly ruled, in reference to Article 173, that:
The plain meaning attached to the plain language of the
law is that the contract, in its entirety, executed by the
husband without the wifes consent, may be annulled by
the wife.[40] (emphasis ours)
In succeeding cases, we held that alienation and/or
encumbrance of conjugal property by the husband
without the wifes consent is not null and void but merely
voidable.
In Sps. Alfredo v. Sps. Borras,[41] we held that:
The Family Code, which took effect on 3 August 1988,
provides that any alienation or encumbrance made by
the husband of the conjugal partnership property without
the consent of the wife is void. However, when the sale is
made before the effectivity of the Family Code, the
applicable law is the Civil Code.
Article 173 of the Civil Code provides that the disposition
of conjugal property without the wife's consent is not void
but merely voidable.
We likewise made the same holding in Pelayo v. Perez :[42]
xxx [Under] Article 173, in relation to Article 166, both of the
New Civil Code, which was still in effect on January 11,
1988 when the deed in question was executed, the lack of
marital consent to the disposition of conjugal property
does not make the contract void ab initio but merely
voidable.
In Vera-Cruz v. Calderon,[43] the Court noted the state of
jurisprudence and elucidated on the matter, thus:
In the recent case of Heirs of Ignacia Aguilar-Reyes v.
Spouses Mijares, we reiterated the rule that the husband
cannot alienate or encumber any conjugal real property
without the consent, express or implied, of the wife,
otherwise, the contract is voidable. To wit:
Indeed, in several cases the Court has ruled that such
alienation or encumbrance by the husband is void. The
better view, however, is to consider the transaction as
merely voidable and not void. This is consistent with Article
173 of the Civil Code pursuant to which the wife could,
during the marriage and within 10 years from the
questioned transaction, seek its annulment.
xxx
Likewise, in the case of Heirs of Christina Ayuste v. Court of
Appeals, we declared that:
There is no ambiguity in the wording of the law. A sale of
real property of the conjugal partnership made by the
husband without the consent of his wife is voidable. The
action for annulment must be brought during the marriage
and within ten years from the questioned transaction by
40
the wife. Where the law speaks in clear and categorical
language, there is no room for interpretation there is room
only for application.
x x x (Emphasis ours.)
Here, the husbands first act of disposition of the subject
property occurred in 1963 when he executed the SPA and
the Deed of Transfer of Rights in favor of Dolores Camisura.
Thus, the right of action of the petitioners accrued in 1963,
as Article 173 of the Civil Code provides that the wife may
file for annulment of a contract entered into by the
husband without her consent within ten (10) years from the
transaction questioned. Petitioners filed the action for
reconveyance in 1995. Even if we were to consider that
their right of action arose when they learned of the
cancellation of TCT No. 107534 and the issuance of TCT No.
290121 in Melanie Mingoas name in 1993, still, twelve (12)
years have lapsed since such discovery, and they filed the
petition beyond the period allowed by law. Moreover,
when Sergia Hernandez, together with her children, filed
the action for reconveyance, the conjugal partnership of
property with Hernandez, Sr. had already been terminated
by virtue of the latter's death on April 16, 1983. Clearly,
therefore, petitioners action has prescribed.
And this is as it should be, for in the same Vera-Cruz case,
we further held that:[44]
xxx [Under] Article 173 of the New Civil Code, an action for
the annulment of any contract entered into by the
husband without the wifes consent must be filed (1) during
the marriage; and (2) within ten years from the transaction
questioned. Where any one of these two conditions is
lacking, the action will be considered as having been filed
out of time.
In the case at bar, while respondent filed her complaint for
annulment of the deed of sale on July 8, 1994, i.e., within
the ten-year period counted from the execution of the
deed of sale of the property on June 3, 1986, the marriage
between her and Avelino had already been dissolved by
the death of the latter on November 20, 1993. In other
words, her marriage to Avelino was no longer subsisting at
the time she filed her complaint. Therefore, the civil case
had already been barred by prescription. (Emphasis ours.)
Thus, the failure of Sergia Hernandez to file with the courts
an action for annulment of the contract during the
marriage and within ten (10) years from the transaction
necessarily barred her from questioning the sale of the
subject property to third persons.
As we held in Vda. De Ramones v. Agbayani:[45]
In Villaranda v. Villaranda, et al., this Court, through Mr.
Justice Artemio V. Panganiban, ruled that without the
wifes consent, the husbands alienation or encumbrance
of conjugal property prior to the effectivity of the Family
Code is not void, but merely voidable. However, the wifes
failure to file with the courts an action for annulment of the
contract during the marriage and within ten (10) years
from the transaction shall render the sale valid. x x x
(emphasis ours)
More than having merely prescribed, petitioners action
has likewise become stale, as it is barred by laches.
In Isabela Colleges v. Heirs of Nieves-Tolentino,[46] this
Court held:
Laches means the failure or neglect for an unreasonable
and unexplained length of time to do that which, by
observance of due diligence, could or should have been
done earlier. It is negligence or omission to assert a right
within a reasonable time, warranting the presumption that
the party entitled to assert his right either has abandoned
or declined to assert it. Laches thus operates as a bar in
equity.
xxx
The time-honored rule anchored on public policy is that
relief will be denied to a litigant whose claim or demand
has become stale, or who has acquiesced for an
unreasonable length of time, or who has not been vigilant
or who has slept on his rights either by negligence, folly or
inattention. In other words, public policy requires, for
peace of society, the discouragement of claims grown
stale for non-assertion; thus laches is an impediment to the
assertion or enforcement of a right which has become,
under the circumstances, inequitable or unfair to permit.
Pertinently, in De la Calzada-Cierras v. CA,[47] we ruled
that a complaint to recover the title and possession of the
lot filed 12 years after the registration of the sale is
considered neglect for an unreasonably long time to
assert a right to the property.
Here, petitioners' unreasonably long period of inaction in
asserting their purported rights over the subject property
weighs heavily against them. We quote with approval the
findings of the CA that:[48]
It was earlier shown that there existed a period of 17 years
during which time Hernandez, Sr. xxx never even
questioned the defendants-appellants possession of the
property; also there was another interval of 12 years after
discovering that the TCT of the property in the name of
Hernandez, Sr. before the Heirs of Hernandez instituted an
action for the reconveyance of the title of the property.
xxx
The fact that the Mingoa's were able to take actual
possession of the subject property for such a long period
without any form of cognizable protest from Hernandez, Sr.
and the plaintiffs-appellees strongly calls for the
application of the doctrine of laches. It is common
practice in the real estate industry, an ocular inspection of
the premises involved is a safeguard to the cautious and
prudent purchaser usually takes, and should he find out
that the land he intends to buy is occupied by anybody
else other than the seller who is not in actual possession, it
could then be incumbent upon the purchaser to verify the
extent of the occupant's possessory rights. The plaintiffs-
appellees asseverate that the award was made in favor of
Hernandez, Sr. in 1958; full payment made in 1963; and title
issued in 1966. It would thus be contrary to ordinary human
conduct (and prudence dictates otherwise) for any
awardee of real property not to visit and inspect even
once, the property awarded to him and find out if there
are any transgressors in his property.
Furthermore, Hernandez, Sr.'s inaction during his lifetime
lends more credence to the defendants-appellants
assertion that the said property was indeed sold by
Hernandez, Sr. by way of the SPAs, albeit without the
consent of his wife. xxx
In addition, the reasons of poverty and poor health
submitted by the plaintiffs-appellees could not justify the
12 years of delay in filing a complaint against the
defendants-appellants. The records are bereft of any
evidence to support the idea that the plaintiffs-appellees
diligently asserted their rights over the said property after
having knowledge of the cancellation of the TCT issued in
Hernandez name. Moreover the Court seriously doubts the
plausibility of this contention since what the plaintiffs-
appellees are trying to impress on this Court's mind is that
they did not know anything at all except only shortly
before the death of Hernandez. To accept that not even
the wife knew of the transactions made by Hernandez, Sr.
nor anything about the actual possession of the
defendants-appellants for such a long period is to Us
absurd if not fantastic.
41
In sum, the rights and interests of the spouses Hernandez
over the subject property were validly transferred to
respondent Dolores Camisura. Since the sale of the
conjugal property by Hernandez, Sr. was without the
consent of his wife, Sergia, the same is voidable; thus,
binding unless annulled. Considering that Sergia failed to
exercise her right to ask for the annulment of the sale within
the prescribed period, she is now barred from questioning
the validity thereof. And more so, she is precluded from
assailing the validity of the subsequent transfers from
Camisura to Plaridel Mingoa and from the latter to Melanie
Mingoa. Therefore, title to the subject property cannot
anymore be reconveyed to the petitioners by reason of
prescription and laches. The issues of prescription and
laches having been resolved, it is no longer necessary to
discuss the other issues raised in this petition.
WHEREFORE, the instant petition is DENIED and the assailed
Decision dated September 7, 2000 and Resolution dated
December 29, 2000 of the Court of Appeals are hereby
AFFIRMED.
Costs against the petitioners.
SO ORDERED
GUIANG VS CA 1998
The sale of a conjugal property requires the consent of
both the husband and the wife. The absence of the
consent of one renders the sale null and void, while the
vitiation thereof makes it merely voidable. Only in the latter
case can ratification cure the defect.
The Case
These were the principles that guided the Court in
deciding this petition for review of the Decision[1] dated
January 30, 1996 and the Resolution[2] dated May 28,
1996, promulgated by the Court of Appeals in CA-GR CV
No. 41758, affirming the Decision of the lower court and
denying reconsideration, respectively.
On May 28, 1990, Private Respondent Gilda Corpuz filed
an Amended Complaint[3] against her husband Judie
Corpuz and Petitioners-Spouses Antonio and Luzviminda
Guiang. The said Complaint sought the declaration of a
certain deed of sale, which involved the conjugal property
of private respondent and her husband, null and void. The
case was raffled to the Regional Trial Court of Koronadal,
South Cotabato, Branch 25. In due course, the trial court
rendered a Decision[4] dated September 9, 1992,
disposing as follows:[5]
ACCORDINGLY, judgment is rendered for the plaintiff and
against the defendants,
1. Declaring both the Deed of Transfer of Rights dated
March 1, 1990 (Exh. A) and the amicable settlement dated
March 16, 1990 (Exh. B) as null and void and of no effect;
2. Recognizing as lawful and valid the ownership and
possession of plaintiff Gilda Corpuz over the remaining
one-half portion of Lot 9, Block 8, (LRC) Psd-165409 which
has been the subject of the Deed of Transfer of Rights (Exh.
A);
3. Ordering plaintiff Gilda Corpuz to reimburse defendants
Luzviminda and Antonio Guiang the amount of NINE
THOUSAND (P9,000.00) PESOS corresponding to the
payment made by defendants Guiangs to Manuel Callejo
for the unpaid balance of the account of plaintiff in favor
of Manuel Callejo, and another sum of P379.62
representing one-half of the amount of realty taxes paid
by defendants Guiangs on Lot 9, Block 8, (LRC) Psd-165409,
both with legal interests thereon computed from the
finality of the decision.
No pronouncement as to costs in view of the factual
circumstances of the case.
Dissatisfied, petitioners-spouses filed an appeal with the
Court of Appeals. Respondent Court, in its challenged
Decision, ruled as follows:[6]
WHEREFORE, the appealed decision of the lower court in
Civil Case No. 204 is hereby AFFIRMED by this Court. No
costs considering plaintiff-appellees failure to file her brief,
despite notice.
Reconsideration was similarly denied by the same court in
its assailed Resolution:[7]
Finding that the issues raised in defendants-appellants
motion for reconsideration of Our decision in this case of
January 30, 1996, to be a mere rehash of the same issues
which We have already passed upon in the said decision,
and there [being] no cogent reason to disturb the same,
this Court RESOLVES to DENY the instant motion for
reconsideration for lack of merit.
The Facts
The facts of this case are simple. Over the objection of
private respondent and while she was in Manila seeking
employment, her husband sold to the petitioners-spouses
one half of their conjugal property, consisting of their
residence and the lot on which it stood. The circumstances
of this sale are set forth in the Decision of Respondent
Court, which quoted from the Decision of the trial court, as
follows:[8]
1. Plaintiff Gilda Corpuz and defendant Judie Corpuz are
legally married spouses. They were married on December
24, 1968 in Bacolod City, before a judge. This is admitted
by defendants-spouses Antonio and Luzviminda Guiang in
their answer, and also admitted by defendant Judie
Corpuz when he testified in court (tsn. p..3, June 9, 1992),
although the latter says that they were married in 1967. The
couple have three children, namely: Junie 18 years old,
Harriet 17 years of age, and Jodie or Joji, the youngest,
who was 15 years of age in August, 1990 when her mother
testified in court.
Sometime on February 14, 1983, the couple Gilda and
Judie Corpuz, with plaintiff-wife Gilda Corpuz as vendee,
bought a 421 sq. meter lot located in Barangay Gen.
Paulino Santos (Bo. 1), Koronadal, South Cotabato, and
particularly known as Lot 9, Block 8, (LRC) Psd-165409 from
Manuel Callejo who signed as vendor through a
conditional deed of sale for a total consideration of
P14,735.00. The consideration was payable in installment,
with right of cancellation in favor of vendor should vendee
fail to pay three successive installments (Exh. 2, tsn. p. 6,
February 14, 1990).
2. Sometime on April 22, 1988, the couple Gilda and Judie
Corpuz sold one-half portion of their Lot No. 9, Block 8,
(LRC) Psd-165409 to the defendants-spouses Antonio and
Luzviminda Guiang. The latter have since then occupied
the one-half portion [and] built their house thereon (tsn. p.
4, May 22, 1992). They are thus adjoining neighbors of the
Corpuzes.
3. Plaintiff Gilda Corpuz left for Manila sometime in June
1989. She was trying to look for work abroad, in [the]
Middle East. Unfortunately, she became a victim of an
unscrupulous illegal recruiter. She was not able to go
abroad. She stayed for sometime in Manila however,
coming back to Koronadal, South Cotabato, x x x on
March 11, 1990. Plaintiffs departure for Manila to look for
work in the Middle East was with the consent of her
42
husband Judie Corpuz (tsn. p. 16, Aug.12, 1990; p. 10, Sept.
6, 1991).
After his wifes departure for Manila, defendant Judie
Corpuz seldom went home to the conjugal dwelling. He
stayed most of the time at his place of work at Samahang
Nayon Building, a hotel, restaurant, and a cooperative.
Daughter Harriet Corpuz went to school at Kings College,
Bo. 1, Koronadal, South Cotabato, but she was at the
same time working as household help of, and staying at,
the house of Mr. Panes. Her brother Junie was not working.
Her younger sister Jodie (Joji) was going to school. Her
mother sometimes sent them money (tsn. p. 14, Sept. 6,
1991).
Sometime in January 1990, Harriet Corpuz learned that her
father intended to sell the remaining one-half portion
including their house, of their homelot to defendants
Guiangs. She wrote a letter to her mother informing her.
She [Gilda Corpuz] replied that she was objecting to the
sale. Harriet, however, did not inform her father about this;
but instead gave the letter to Mrs. Luzviminda Guiang so
that she [Guiang] would advise her father (tsn. pp. 16-17,
Sept. 6, 1991).
4. However, in the absence of his wife Gilda Corpuz,
defendant Judie Corpuz pushed through the sale of the
remaining one-half portion of Lot 9, Block 8, (LRC) Psd-
165409. On March 1, 1990, he sold to defendant
Luzviminda Guiang thru a document known as Deed of
Transfer of Rights (Exh. A) the remaining one-half portion of
their lot and the house standing thereon for a total
consideration of P30,000.00 of which P5,000.00 was to be
paid in June , 1990. Transferor Judie Corpuzs children Junie
and Harriet signed the document as witnesses.
Four (4) days after March 1, 1990 or on March 5, 1990,
obviously to cure whatever defect in defendant Judie
Corpuzs title over the lot transferred, defendant
Luzviminda Guiang as vendee executed another
agreement over Lot 9, Block 8, (LRC) Psd-165408 (Exh. 3),
this time with Manuela Jimenez Callejo, a widow of the
original registered owner from whom the couple Judie and
Gilda Corpuz originally bought the lot (Exh. 2), who signed
as vendor for a consideration of P9,000.00. Defendant
Judie Corpuz signed as a witness to the sale (Exh. 3-A). The
new sale (Exh. 3) describes the lot sold as Lot 8, Block 9,
(LRC) Psd-165408 but it is obvious from the mass of
evidence that the correct lot is Lot 8, Block 9, (LRC) Psd-
165409, the very lot earlier sold to the couple Gilda and
Judie Corpuz.
5. Sometime on March 11, 1990, plaintiff returned home.
She found her children staying with other households. Only
Junie was staying in their house. Harriet and Joji were with
Mr. Panes. Gilda gathered her children together and
stayed at their house. Her husband was nowhere to be
found. She was informed by her children that their father
had a wife already.
6. For staying in their house sold by her husband, plaintiff
was complained against by defendant Luzviminda
Guiang and her husband Antonio Guiang before the
Barangay authorities of Barangay General Paulino Santos
(Bo. 1), Koronadal, South Cotabato, for trespassing (tsn. p.
34, Aug. 17, 1990). The case was docketed by the
barangay authorities as Barangay Case No. 38 for
trespassing. On March 16, 1990, the parties thereat signed
a document known as amicable settlement. In full, the
settlement provides for, to wit:
That respondent, Mrs. Gilda Corpuz and her three children,
namely: Junie, Hariet and Judie to leave voluntarily the
house of Mr. and Mrs. Antonio Guiang, where they are
presently boarding without any charge, on or before April
7, 1990.
FAIL NOT UNDER THE PENALTY OF THE LAW.
Believing that she had received the shorter end of the
bargain, plaintiff went to the Barangay Captain of
Barangay Paulino Santos to question her signature on the
amicable settlement. She was referred however to the
Officer-In-Charge at the time, a certain Mr. de la Cruz. The
latter in turn told her that he could not do anything on the
matter (tsn. p. 31, Aug. 17, 1990).
This particular point was not rebutted. The Barangay
Captain who testified did not deny that Mrs. Gilda Corpuz
approached him for the annulment of the settlement. He
merely said he forgot whether Mrs. Corpuz had
approached him (tsn. p. 13, Sept. 26, 1990). We thus
conclude that Mrs. Corpuz really approached the
Barangay Captain for the annulment of the settlement.
Annulment not having been made, plaintiff stayed put in
her house and lot.
7. Defendant-spouses Guiang followed thru the amicable
settlement with a motion for the execution of the amicable
settlement, filing the same with the Municipal Trial Court of
Koronadal, South Cotabato. The proceedings [are] still
pending before the said court, with the filing of the instant
suit.
8. As a consequence of the sale, the spouses Guiang spent
P600.00 for the preparation of the Deed of Transfer of
Rights, Exh. A; P9,000.00 as the amount they paid to Mrs.
Manuela Callejo, having assumed the remaining
obligation of the Corpuzes to Mrs. Callejo (Exh. 3); P100.00
for the preparation of Exhibit 3; a total of P759.62 basic tax
and special educational fund on the lot; P127.50 as the
total documentary stamp tax on the various documents;
P535.72 for the capital gains tax; P22.50 as transfer tax; a
standard fee of P17.00; certification fee of P5.00. These
expenses particularly the taxes and other expenses
towards the transfer of the title to the spouses Guiangs
were incurred for the whole Lot 9, Block 8, (LRC) Psd-
165409.
Ruling of Respondent Court
Respondent Court found no reversible error in the trial
courts ruling that any alienation or encumbrance by the
husband of the conjugal property without the consent of
his wife is null and void as provided under Article 124 of the
Family Code. It also rejected petitioners contention that
the amicable settlement ratified said sale, citing Article
1409 of the Code which expressly bars ratification of the
contracts specified therein, particularly those prohibited or
declared void by law.
Hence, this petition.[9]
The Issues
In their Memorandum, petitioners assign to public
respondent the following errors:[10]
I
Whether or not the assailed Deed of Transfer of Rights was
validly executed.
II
Whether or not the Court of Appeals erred in not declaring
as voidable contract under Art. 1390 of the Civil Code the
impugned Deed of Transfer of Rights which was validly
ratified thru the execution of the amicable settlement by
the contending parties.
III
43

Whether or not the Court of Appeals erred in not setting
aside the findings of the Court a quo which recognized as
lawful and valid the ownership and possession of private
respondent over the remaining one half (1/2) portion of
the subject property.
In a nutshell, petitioners-spouses contend that (1) the
contract of sale (Deed of Transfer of Rights) was merely
voidable, and (2) such contract was ratified by private
respondent when she entered into an amicable
settlement with them.
This Courts Ruling
The petition is bereft of merit.
First Issue: Void or Voidable Contract?
Petitioners insist that the questioned Deed of Transfer of
Rights was validly executed by the parties-litigants in good
faith and for valuable consideration. The absence of
private respondents consent merely rendered the Deed
voidable under Article 1390 of the Civil Code, which
provides:
ART. 1390. The following contracts are voidable or
annullable, even though there may have been no
damage to the contracting parties:
xxxxxxxxx
(2) Those where the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a
proper action in court. They are susceptible of
ratification.(n)
The error in petitioners contention is evident. Article 1390,
par. 2, refers to contracts visited by vices of consent, i.e.,
contracts which were entered into by a person whose
consent was obtained and vitiated through mistake,
violence, intimidation, undue influence or fraud. In this
instance, private respondents consent to the contract of
sale of their conjugal property was totally inexistent or
absent. Gilda Corpuz, on direct examination, testified
thus:[11]
Q Now, on March 1, 1990, could you still recall where you
were?
A I was still in Manila during that time.
xxxxxxxxx
ATTY. FUENTES:
Q When did you come back to Koronadal, South
Cotabato?
A That was on March 11, 1990, Maam.
Q Now, when you arrived at Koronadal, was there any
problem which arose concerning the ownership of your
residential house at Callejo Subdivision?
A When I arrived here in Koronadal, there was a problem
which arose regarding my residential house and lot
because it was sold by my husband without my
knowledge.
This being the case, said contract properly falls within the
ambit of Article 124 of the Family Code, which was
correctly applied by the two lower courts:
ART. 124. The administration and enjoyment of the
conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husbands decision
shall prevail, subject to recourse to the court by the wife
for proper remedy, which must be availed of within five
years from the date of the contract implementing such
decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority
of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition
or encumbrance shall be void. However, the transaction
shall be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors.(165a) (Italics
supplied)
Comparing said law with its equivalent provision in the Civil
Code, the trial court adroitly explained the amendatory
effect of the above provision in this wise:[12]
The legal provision is clear. The disposition or encumbrance
is void. It becomes still clearer if we compare the same with
the equivalent provision of the Civil Code of the
Philippines. Under Article 166 of the Civil Code, the
husband cannot generally alienate or encumber any real
property of the conjugal partnership without the wifes
consent. The alienation or encumbrance if so made
however is not null and void. It is merely voidable. The
offended wife may bring an action to annul the said
alienation or encumbrance. Thus, the provision of Article
173 of the Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of the marriage,
may demand the value of property fraudulently alienated
by the husband.(n)
This particular provision giving the wife ten (10) years x x x
during [the] marriage to annul the alienation or
encumbrance was not carried over to the Family Code. It
is thus clear that any alienation or encumbrance made
after August 3, 1988 when the Family Code took effect by
the husband of the conjugal partnership property without
the consent of the wife is null and void.
Furthermore, it must be noted that the fraud and the
intimidation referred to by petitioners were perpetrated in
the execution of the document embodying the amicable
settlement. Gilda Corpuz alleged during trial that
barangay authorities made her sign said document
through misrepresentation and coercion.[13] In any event,
its execution does not alter the void character of the deed
of sale between the husband and the petitioners-spouses,
as will be discussed later. The fact remains that such
contract was entered into without the wifes consent.
In sum, the nullity of the contract of sale is premised on the
absence of private respondents consent. To constitute a
valid contract, the Civil Code requires the concurrence of
the following elements: (1) cause, (2) object, and (3)
consent,[14] the last element being indubitably absent in
the case at bar.
44
Second Issue: Amicable Settlement
Insisting that the contract of sale was merely voidable,
petitioners aver that it was duly ratified by the contending
parties through the amicable settlement they executed on
March 16, 1990 in Barangay Case No. 38.
The position is not well taken. The trial and the appellate
courts have resolved this issue in favor of the private
respondent. The trial court correctly held:[15]
By the specific provision of the law [Art. 1390, Civil Code]
therefore, the Deed of Transfer of Rights (Exh. A) cannot be
ratified, even by an amicable settlement. The
participation by some barangay authorities in the
amicable settlement cannot otherwise validate an invalid
act. Moreover, it cannot be denied that the amicable
settlement (Exh. B) entered into by plaintiff Gilda Corpuz
and defendant spouses Guiang is a contract. It is a direct
offshoot of the Deed of Transfer of Rights (Exh. A). By
express provision of law, such a contract is also void. Thus,
the legal provision, to wit:
Art. 1422. A contract which is the direct result of a previous
illegal contract, is also void and inexistent. (Civil Code of
the Philippines).
In summation therefore, both the Deed of Transfer of Rights
(Exh. A) and the amicable settlement (Exh. 3) are null and
void.
Doctrinally and clearly, a void contract cannot be
ratified.[16]
Neither can the amicable settlement be considered a
continuing offer that was accepted and perfected by the
parties, following the last sentence of Article 124. The order
of the pertinent events is clear: after the sale, petitioners
filed a complaint for trespassing against private
respondent, after which the barangay authorities secured
an amicable settlement and petitioners filed before the
MTC a motion for its execution. The settlement, however,
does not mention a continuing offer to sell the property or
an acceptance of such a continuing offer. Its tenor was to
the effect that private respondent would vacate the
property. By no stretch of the imagination, can the Court
interpret this document as the acceptance mentioned in
Article 124.
WHEREFORE, the Court hereby DENIES the petition and
AFFIRMS the challenged Decision and Resolution. Costs
against petitioners.
SO ORDERED
MANALO VS CAMAISA 2002
The issue raised in this case is whether or not the husband
may validly dispose of a conjugal property without the
wifes written consent.
The present controversy had its beginning when petitioner
Thelma A. Jader-Manalo allegedly came across an
advertisement placed by respondents, the Spouses Norma
Fernandez C. Camaisa and Edilberto Camaisa, in the
Classified Ads Section of the newspaper BULLETIN TODAY
in its April, 1992 issue, for the sale of their ten-door
apartment in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the
Regional Trial Court of Makati, Metro Manila, she was
interested in buying the two properties so she negotiated
for the purchase through a real estate broker, Mr. Proceso
Ereno, authorized by respondent spouses.[1] Petitioner
made a visual inspection of the said lots with the real
estate broker and was shown the tax declarations, real
property tax payment receipts, location plans, and vicinity
maps relating to the properties.[2] Thereafter, petitioner
met with the vendors who turned out to be respondent
spouses. She made a definite offer to buy the properties to
respondent Edilberto Camaisa with the knowledge and
conformity of his wife, respondent Norma Camaisa in the
presence of the real estate broker.[3] After some
bargaining, petitioner and Edilberto agreed upon the
purchase price of P1,500,000.00 for the Taytay property
and P2,100,000.00 for the Makati property[4] to be paid on
installment basis with downpayments of P100,000.00 and
P200,000.00, respectively, on April 15, 1992. The balance
thereof was to be paid as follows[5]:
Taytay Property Makati Property
6th month P200,000.00 P300,000.00
12th month 700,000.00 1,600,000.00
18th month 500,000.00
This agreement was handwritten by petitioner and signed
by Edilberto.[6] When petitioner pointed out the conjugal
nature of the properties, Edilberto assured her of his wifes
conformity and consent to the sale.[7] The formal
typewritten Contracts to Sell were thereafter prepared by
petitioner. The following day, petitioner, the real estate
broker and Edilberto met in the latters office for the formal
signing of the typewritten Contracts to Sell.[8] After
Edilberto signed the contracts, petitioner delivered to him
two checks, namely, UCPB Check No. 62807 dated April
15, 1992 for P200,000.00 and UCPB Check No. 62808 also
dated April 15, 1992 for P100,000.00 in the presence of the
real estate broker and an employee in Edilbertos office.[9]
The contracts were given to Edilberto for the formal affixing
of his wifes signature.
The following day, petitioner received a call from
respondent Norma, requesting a meeting to clarify some
provisions of the contracts.[10] To accommodate her
queries, petitioner, accompanied by her lawyer, met with
Edilberto and Norma and the real estate broker at Cafe
Rizal in Makati.[11] During the meeting, handwritten
notations were made on the contracts to sell, so they
arranged to incorporate the notations and to meet again
for the formal signing of the contracts.[12]
When petitioner met again with respondent spouses and
the real estate broker at Edilbertos office for the formal
affixing of Normas signature, she was surprised when
respondent spouses informed her that they were backing
out of the agreement because they needed spot cash for
the full amount of the consideration.[13] Petitioner
reminded respondent spouses that the contracts to sell
had already been duly perfected and Normas refusal to
sign the same would unduly prejudice petitioner. Still,
Norma refused to sign the contracts prompting petitioner
to file a complaint for specific performance and damages
against respondent spouses before the Regional Trial Court
of Makati, Branch 136 on April 29, 1992, to compel
respondent Norma Camaisa to sign the contracts to sell.
A Motion to Dismiss[14] was filed by respondents which was
denied by the trial court in its Resolution of July 21, 1992.[15]
Respondents then filed their Answer with Compulsory
Counter-claim, alleging that it was an agreement
between herein petitioner and respondent Edilberto
Camaisa that the sale of the subject properties was still
subject to the approval and conformity of his wife Norma
Camaisa.[16] Thereafter, when Norma refused to give her
consent to the sale, her refusal was duly communicated
by Edilberto to petitioner.[17] The checks issued by
petitioner were returned to her by Edilberto and she
accepted the same without any objection.[18]
Respondent further claimed that the acceptance of the
checks returned to petitioner signified her assent to the
45
cancellation of the sale of the subject properties.[19]
Respondent Norma denied that she ever participated in
the negotiations for the sale of the subject properties and
that she gave her consent and conformity to the same.[20]
On October 20, 1992, respondent Norma F. Camaisa filed
a Motion for Summary Judgment[21] asserting that there is
no genuine issue as to any material fact on the basis of the
pleadings and admission of the parties considering that
the wifes written consent was not obtained in the contract
to sell, the subject conjugal properties belonging to
respondents; hence, the contract was null and void.
On April 14, 1993, the trial court rendered a summary
judgment dismissing the complaint on the ground that
under Art. 124 of the Family Code, the court cannot
intervene to authorize the transaction in the absence of
the consent of the wife since said wife who refused to give
consent had not been shown to be incapacitated. The
dispositive portion of the trial courts decision reads:
WHEREFORE, considering these premises, judgment is
hereby rendered:
1. Dismissing the complaint and ordering the cancellation
of the Notice of Lis Pendens by reason of its filing on TCT
Nos. (464860) S-8724 and (464861) S-8725 of the Registry of
Deeds at Makati and on TCT Nos. 295976 and 295971 of the
Registry of Rizal.
2. Ordering plaintiff Thelma A. Jader to pay defendant
spouses Norma and Edilberto Camaisa, FIFTY THOUSAND
(P50,000.00) as Moral Damages and FIFTY THOUSAND
(P50,000.00) as Attorneys Fees.
Costs against plaintiff.[22]
Petitioner, thus, elevated the case to the Court of Appeals.
On November 29, 2000, the Court of Appeals affirmed the
dismissal by the trial court but deleted the award of
P50,000.00 as damages and P50,000.00 as attorneys fees.
The Court of Appeals explained that the properties subject
of the contracts were conjugal properties and as such, the
consent of both spouses is necessary to give effect to the
sale. Since private respondent Norma Camaisa refused to
sign the contracts, the sale was never perfected. In fact,
the downpayment was returned by respondent spouses
and was accepted by petitioner. The Court of Appeals
also stressed that the authority of the court to allow sale or
encumbrance of a conjugal property without the consent
of the other spouse is applicable only in cases where the
said spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal property.
Hence, the present recourse assigning the following errors:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN RENDERING SUMMARY JUDGMENT IN DISMISSING THE
COMPLAINT ENTIRELY AND ORDERING THE CANCELLATION
OF NOTICE OF LIS PENDENS ON THE TITLES OF THE SUBJECT
REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN FAILING TO CONSIDER THAT THE SALE OF REAL
PROPERTIES BY RESPONDENTS TO PETITIONER HAVE
ALREADY BEEN PERFECTED, FOR AFTER THE LATTER PAID
P300,000.00 DOWNPAYMENT, RESPONDENT MRS. CAMAISA
NEVER OBJECTED TO STIPULATIONS WITH RESPECT TO PRICE,
OBJECT AND TERMS OF PAYMENT IN THE CONTRACT TO SELL
ALREADY SIGNED BY THE PETITIONER, RESPONDENT MR.
CAMAISA AND WITNESSES MARKED AS ANNEX G IN THE
COMPLAINT EXCEPT, FOR MINOR PROVISIONS ALREADY
IMPLIED BY LAW, LIKE EJECTMENT OF TENANTS, SUBDIVISION
OF TITLE AND RESCISSION IN CASE OF NONPAYMENT,
WHICH PETITIONER READILY AGREED AND ACCEDED TO
THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
WHEN IT FAILED TO CONSIDER THAT CONTRACT OF SALE IS
CONSENSUAL AND IT IS PERFECTED BY THE MERE CONSENT
OF THE PARTIES AND THE APPLICABLE PROVISIONS ARE
ARTICLES 1157, 1356, 1357, 1358, 1403, 1405 AND 1475 OF
THE CIVIL CODE OF THE PHILIPPINES AND GOVERNED BY THE
STATUTE OF FRAUD.[23]
The Court does not find error in the decisions of both the
trial court and the Court of Appeals.
Petitioner alleges that the trial court erred when it entered
a summary judgment in favor of respondent spouses there
being a genuine issue of fact. Petitioner maintains that the
issue of whether the contracts to sell between petitioner
and respondent spouses was perfected is a question of
fact necessitating a trial on the merits.
The Court does not agree. A summary judgment is one
granted by the court upon motion by a party for an
expeditious settlement of a case, there appearing from
the pleadings, depositions, admissions and affidavits that
there are no important questions or issues of fact involved,
and that therefore the moving party is entitled to judgment
as a matter of law.[24] A perusal of the pleadings
submitted by both parties show that there is no genuine
controversy as to the facts involved therein.
Both parties admit that there were negotiations for the sale
of four parcels of land between petitioner and respondent
spouses; that petitioner and respondent Edilberto
Camaisa came to an agreement as to the price and the
terms of payment, and a downpayment was paid by
petitioner to the latter; and that respondent Norma
refused to sign the contracts to sell. The issue thus posed
for resolution in the trial court was whether or not the
contracts to sell between petitioner and respondent
spouses were already perfected such that the latter could
no longer back out of the agreement.
The law requires that the disposition of a conjugal property
by the husband as administrator in appropriate cases
requires the written consent of the wife, otherwise, the
disposition is void. Thus, Article 124 of the Family Code
provides:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In
case of disagreement, the husbands decision shall prevail,
subject to recourse to the court by the wife for a proper
remedy, which must be availed of within five years from
the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority
of the court or the written consent of the other spouse. In
the absence of such authority or consent the disposition or
encumbrance shall be void. However, the transaction shall
be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors. (Underscoring
ours.)
The properties subject of the contracts in this case were
conjugal; hence, for the contracts to sell to be effective,
the consent of both husband and wife must concur.
46
Respondent Norma Camaisa admittedly did not give her
written consent to the sale. Even granting that respondent
Norma actively participated in negotiating for the sale of
the subject properties, which she denied, her written
consent to the sale is required by law for its validity.
Significantly, petitioner herself admits that Norma refused
to sign the contracts to sell. Respondent Norma may have
been aware of the negotiations for the sale of their
conjugal properties. However, being merely aware of a
transaction is not consent.[25]
Finally, petitioner argues that since respondent Norma
unjustly refuses to affix her signatures to the contracts to
sell, court authorization under Article 124 of the Family
Code is warranted.
The argument is bereft of merit. Petitioner is correct insofar
as she alleges that if the written consent of the other
spouse cannot be obtained or is being withheld, the
matter may be brought to court which will give such
authority if the same is warranted by the circumstances.
However, it should be stressed that court authorization
under Art. 124 is only resorted to in cases where the spouse
who does not give consent is incapacitated.[26] In this
case, petitioner failed to allege and prove that
respondent Norma was incapacitated to give her consent
to the contracts. In the absence of such showing of the
wifes incapacity, court authorization cannot be sought.
Under the foregoing facts, the motion for summary
judgment was proper considering that there was no
genuine issue as to any material fact. The only issue to be
resolved by the trial court was whether the contract to sell
involving conjugal properties was valid without the written
consent of the wife.
WHEREFORE, the petition is hereby DENIED and the
decision of the Court of Appeals dated November 29, 2000
in CA-G.R. CV No. 43421 AFFIRMED.
SO ORDERED
HOMEOWNERS SAVINGS BANK VS DAILO 2005
This is a petition for review on certiorari under Rule 45 of the
Revised Rules of Court, assailing the Decision[1] of the
Court of Appeals in CA-G.R. CV No. 59986 rendered on
June 3, 2002, which affirmed with modification the
October 18, 1997 Decision[2] of the Regional Trial Court,
Branch 29, San Pablo City, Laguna in Civil Case No. SP-4748
(97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr.
were married on August 8, 1967. During their marriage, the
spouses purchased a house and lot situated at Barangay
San Francisco, San Pablo City from a certain Sandra
Dalida. The subject property was declared for tax
assessment purposes under Assessment of Real Property
No. 94-051-2802. The Deed of Absolute Sale, however, was
executed only in favor of the late Marcelino Dailo, Jr. as
vendee thereof to the exclusion of his wife.[3]
On December 1, 1993, Marcelino Dailo, Jr. executed a
Special Power of Attorney (SPA) in favor of one Lilibeth
Gesmundo, authorizing the latter to obtain a loan from
petitioner Homeowners Savings and Loan Bank to be
secured by the spouses Dailos house and lot in San Pablo
City. Pursuant to the SPA, Gesmundo obtained a loan in
the amount of P300,000.00 from petitioner. As security
therefor, Gesmundo executed on the same day a Real
Estate Mortgage constituted on the subject property in
favor of petitioner. The abovementioned transactions,
including the execution of the SPA in favor of Gesmundo,
took place without the knowledge and consent of
respondent.[4]
Upon maturity, the loan remained outstanding. As a result,
petitioner instituted extrajudicial foreclosure proceedings
on the mortgaged property. After the extrajudicial sale
thereof, a Certificate of Sale was issued in favor of
petitioner as the highest bidder. After the lapse of one year
without the property being redeemed, petitioner, through
its vice-president, consolidated the ownership thereof by
executing on June 6, 1996 an Affidavit of Consolidation of
Ownership and a Deed of Absolute Sale.[5]
In the meantime, Marcelino Dailo, Jr. died on December
20, 1995. In one of her visits to the subject property,
respondent learned that petitioner had already employed
a certain Roldan Brion to clean its premises and that her
car, a Ford sedan, was razed because Brion allowed a boy
to play with fire within the premises.
Claiming that she had no knowledge of the mortgage
constituted on the subject property, which was conjugal in
nature, respondent instituted with the Regional Trial Court,
Branch 29, San Pablo City, Civil Case No. SP-2222 (97) for
Nullity of Real Estate Mortgage and Certificate of Sale,
Affidavit of Consolidation of Ownership, Deed of Sale,
Reconveyance with Prayer for Preliminary Injunction and
Damages against petitioner. In the latters Answer with
Counterclaim, petitioner prayed for the dismissal of the
complaint on the ground that the property in question was
the exclusive property of the late Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision
on October 18, 1997. The dispositive portion thereof reads
as follows:
WHEREFORE, the plaintiff having proved by the
preponderance of evidence the allegations of the
Complaint, the Court finds for the plaintiff and hereby
orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and
void:
(a) The Deed of Real Estate Mortgage dated December 1,
1993 executed before Notary Public Romulo Urrea and his
notarial register entered as Doc. No. 212; Page No. 44,
Book No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public
Reynaldo Alcantara on April 20, 1995.
(c) The Affidavit of Consolidation of Ownership executed
by the defendant
(c) The Affidavit of Consolidation of Ownership executed
by the defendant over the residential lot located at Brgy.
San Francisco, San Pablo City, covered by ARP No. 95-091-
1236 entered as Doc. No. 406; Page No. 83, Book No. III,
Series of 1996 of Notary Public Octavio M. Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property
subject of this complaint to the plaintiff.
ON THE SECOND CAUSE OF ACTION
1. The defendant to pay the plaintiff the sum of P40,000.00
representing the value of the car which was burned.
ON BOTH CAUSES OF ACTION
1. The defendant to pay the plaintiff the sum of P25,000.00
as attorneys fees;
47

2. The defendant to pay plaintiff P25,000.00 as moral
damages;
3. The defendant to pay the plaintiff the sum of P10,000.00
as exemplary damages;
4. To pay the cost of the suit.
The counterclaim is dismissed.
SO ORDERED.[6]
Upon elevation of the case to the Court of Appeals, the
appellate court affirmed the trial courts finding that the
subject property was conjugal in nature, in the absence of
clear and convincing evidence to rebut the presumption
that the subject property acquired during the marriage of
spouses Dailo belongs to their conjugal partnership.[7] The
appellate court declared as void the mortgage on the
subject property because it was constituted without the
knowledge and consent of respondent, in accordance
with Article 124 of the Family Code. Thus, it upheld the trial
courts order to reconvey the subject property to
respondent.[8] With respect to the damage to
respondents car, the appellate court found petitioner to
be liable therefor because it is responsible for the
consequences of the acts or omissions of the person it
hired to accomplish the assigned task.[9] All told, the
appellate court affirmed the trial courts Decision, but
deleted the award for damages and attorneys fees for
lack of basis.[10]
Hence, this petition, raising the following issues for this
Courts consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE
LATE MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS
CO-OWNER THEREOF IS VALID AS TO HIS UNDIVIDED SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE
FOR THE PAYMENT OF THE LOAN OBTAINED BY THE LATE
MARCELINO DAILO, JR. THE SAME HAVING REDOUNDED TO
THE BENEFIT OF THE FAMILY.[11]
First, petitioner takes issue with the legal provision
applicable to the factual milieu of this case. It contends
that Article 124 of the Family Code should be construed in
relation to Article 493 of the Civil Code, which states:
ART. 493. Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership.
Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the
conjugal partnership property shall belong to both spouses
jointly. . . .
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority
of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition
or encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family
Code requires the consent of the other spouse to the
mortgage of conjugal properties, the framers of the law
could not have intended to curtail the right of a spouse
from exercising full ownership over the portion of the
conjugal property pertaining to him under the concept of
co-ownership.[12] Thus, petitioner would have this Court
uphold the validity of the mortgage to the extent of the
late Marcelino Dailo, Jr.s share in the conjugal partnership.
In Guiang v. Court of Appeals,[13] it was held that the sale
of a conjugal property requires the consent of both the
husband and wife.[14] In applying Article 124 of the Family
Code, this Court declared that the absence of the
consent of one renders the entire sale null and void,
including the portion of the conjugal property pertaining
to the husband who contracted the sale. The same
principle in Guiang squarely applies to the instant case. As
shall be discussed next, there is no legal basis to construe
Article 493 of the Civil Code as an exception to Article 124
of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married
on August 8, 1967. In the absence of a marriage
settlement, the system of relative community or conjugal
partnership of gains governed the property relations
between respondent and her late husband.[15] With the
effectivity of the Family Code on August 3, 1988, Chapter
4 on Conjugal Partnership of Gains in the Family Code was
made applicable to conjugal partnership of gains already
established before its effectivity unless vested rights have
already been acquired under the Civil Code or other
laws.[16]
The rules on co-ownership do not even apply to the
property relations of respondent and the late Marcelino
Dailo, Jr. even in a suppletory manner. The regime of
conjugal partnership of gains is a special type of
partnership, where the husband and wife place in a
common fund the proceeds, products, fruits and income
from their separate properties and those acquired by
either or both spouses through their efforts or by
chance.[17] Unlike the absolute community of property
wherein the rules on co-ownership apply in a suppletory
manner,[18] the conjugal partnership shall be governed
by the rules on contract of partnership in all that is not in
conflict with what is expressly determined in the chapter
(on conjugal partnership of gains) or by the spouses in their
marriage settlements.[19] Thus, the property relations of
respondent and her late husband shall be governed,
foremost, by Chapter 4 on Conjugal Partnership of Gains
of the Family Code and, suppletorily, by the rules on
partnership under the Civil Code. In case of conflict, the
former prevails because the Civil Code provisions on
partnership apply only when the Family Code is silent on
the matter.
The basic and established fact is that during his lifetime,
without the knowledge and consent of his wife, Marcelino
Dailo, Jr. constituted a real estate mortgage on the subject
property, which formed part of their conjugal partnership.
By express provision of Article 124 of the Family Code, in
the absence of (court) authority or written consent of the
other spouse, any disposition or encumbrance of the
conjugal property shall be void.
The aforequoted provision does not qualify with respect to
the share of the spouse who makes the disposition or
encumbrance in the same manner that the rule on co-
ownership under Article 493 of the Civil Code does. Where
the law does not distinguish, courts should not
distinguish.[20] Thus, both the trial court and the appellate
court are correct in declaring the nullity of the real estate
mortgage on the subject property for lack of respondents
consent.
Second, petitioner imposes the liability for the payment of
the principal obligation obtained by the late Marcelino
48
Dailo, Jr. on the conjugal partnership to the extent that it
redounded to the benefit of the family.[21]
Under Article 121 of the Family Code, [T]he conjugal
partnership shall be liable for: . . . (3) Debts and obligations
contracted by either spouse without the consent of the
other to the extent that the family may have been
benefited; . . . . For the subject property to be held liable,
the obligation contracted by the late Marcelino Dailo, Jr.
must have redounded to the benefit of the conjugal
partnership. There must be the requisite showing then of
some advantage which clearly accrued to the welfare of
the spouses. Certainly, to make a conjugal partnership
respond for a liability that should appertain to the husband
alone is to defeat and frustrate the avowed objective of
the new Civil Code to show the utmost concern for the
solidarity and well-being of the family as a unit.[22]
The burden of proof that the debt was contracted for the
benefit of the conjugal partnership of gains lies with the
creditor-party litigant claiming as such.[23] Ei incumbit
probatio qui dicit, non qui negat (he who asserts, not he
who denies, must prove).[24] Petitioners sweeping
conclusion that the loan obtained by the late Marcelino
Dailo, Jr. to finance the construction of housing units
without a doubt redounded to the benefit of his family,
without adducing adequate proof, does not persuade this
Court. Other than petitioners bare allegation, there is
nothing from the records of the case to compel a finding
that, indeed, the loan obtained by the late Marcelino
Dailo, Jr. redounded to the benefit of the family.
Consequently, the conjugal partnership cannot be held
liable for the payment of the principal obligation.
In addition, a perusal of the records of the case reveals
that during the trial, petitioner vigorously asserted that the
subject property was the exclusive property of the late
Marcelino Dailo, Jr. Nowhere in the answer filed with the
trial court was it alleged that the proceeds of the loan
redounded to the benefit of the family. Even on appeal,
petitioner never claimed that the family benefited from
the proceeds of the loan. When a party adopts a certain
theory in the court below, he will not be permitted to
change his theory on appeal, for to permit him to do so
would not only be unfair to the other party but it would also
be offensive to the basic rules of fair play, justice and due
process.[25] A party may change his legal theory on
appeal only when the factual bases thereof would not
require presentation of any further evidence by the
adverse party in order to enable it to properly meet the
issue raised in the new theory.[26]
WHEREFORE, the petition is DENIED. Costs against
petitioner.
SO ORDERED.
FUENTES VS ROCA 2010
This case is about a husbands sale of conjugal real
property, employing a challenged affidavit of consent
from an estranged wife. The buyers claim valid consent,
loss of right to declare nullity of sale, and prescription.
The Facts and the Case
Sabina Tarroza owned a titled 358-square meter lot in
Canelar, Zamboanga City. On October 11, 1982 she sold it
to her son, Tarciano T. Roca (Tarciano) under a deed of
absolute sale.[1] But Tarciano did not for the meantime
have the registered title transferred to his name.
Six years later in 1988, Tarciano offered to sell the lot to
petitioners Manuel and Leticia Fuentes (the Fuentes
spouses). They arranged to meet at the office of Atty.
Romulo D. Plagata whom they asked to prepare the
documents of sale. They later signed an agreement to sell
that Atty. Plagata prepared[2] dated April 29, 1988, which
agreement expressly stated that it was to take effect in six
months.
The agreement required the Fuentes spouses to pay
Tarciano a down payment of P60,000.00 for the transfer of
the lots title to him. And, within six months, Tarciano was to
clear the lot of structures and occupants and secure the
consent of his estranged wife, Rosario Gabriel Roca
(Rosario), to the sale. Upon Tarcianos compliance with
these conditions, the Fuentes spouses were to take
possession of the lot and pay him an additional
P140,000.00 or P160,000.00, depending on whether or not
he succeeded in demolishing the house standing on it. If
Tarciano was unable to comply with these conditions, the
Fuentes spouses would become owners of the lot without
any further formality and payment.
The parties left their signed agreement with Atty. Plagata
who then worked on the other requirements of the sale.
According to the lawyer, he went to see Rosario in one of
his trips to Manila and had her sign an affidavit of
consent.[3] As soon as Tarciano met the other conditions,
Atty. Plagata notarized Rosarios affidavit in Zamboanga
City. On January 11, 1989 Tarciano executed a deed of
absolute sale[4] in favor of the Fuentes spouses. They then
paid him the additional P140,000.00 mentioned in their
agreement. A new title was issued in the name of the
spouses[5] who immediately constructed a building on the
lot. On January 28, 1990 Tarciano passed away, followed
by his wife Rosario who died nine months afterwards.
Eight years later in 1997, the children of Tarciano and
Rosario, namely, respondents Conrado G. Roca,
Annabelle R. Joson, and Rose Marie R. Cristobal, together
with Tarcianos sister, Pilar R. Malcampo, represented by her
son, John Paul M. Trinidad (collectively, the Rocas), filed an
action for annulment of sale and reconveyance of the
land against the Fuentes spouses before the Regional Trial
Court (RTC) of Zamboanga City in Civil Case 4707. The
Rocas claimed that the sale to the spouses was void since
Tarcianos wife, Rosario, did not give her consent to it. Her
signature on the affidavit of consent had been forged.
They thus prayed that the property be reconveyed to
them upon reimbursement of the price that the Fuentes
spouses paid Tarciano.[6]
The spouses denied the Rocas allegations. They presented
Atty. Plagata who testified that he personally saw Rosario
sign the affidavit at her residence in Paco, Manila, on
September 15, 1988. He admitted, however, that he
notarized the document in Zamboanga City four months
later on January 11, 1989.[7] All the same, the Fuentes
spouses pointed out that the claim of forgery was personal
to Rosario and she alone could invoke it. Besides, the four-
year prescriptive period for nullifying the sale on ground of
fraud had already lapsed.
Both the Rocas and the Fuentes spouses presented
handwriting experts at the trial. Comparing Rosarios
standard signature on the affidavit with those on various
documents she signed, the Rocas expert testified that the
signatures were not written by the same person. Making
the same comparison, the spouses expert concluded that
they were.[8]
On February 1, 2005 the RTC rendered judgment,
dismissing the case. It ruled that the action had already
prescribed since the ground cited by the Rocas for
annulling the sale, forgery or fraud, already prescribed
under Article 1391 of the Civil Code four years after its
discovery. In this case, the Rocas may be deemed to have
notice of the fraud from the date the deed of sale was
registered with the Registry of Deeds and the new title was
issued. Here, the Rocas filed their action in 1997, almost
49
nine years after the title was issued to the Fuentes spouses
on January 18, 1989.[9]
Moreover, the Rocas failed to present clear and
convincing evidence of the fraud. Mere variance in the
signatures of Rosario was not conclusive proof of
forgery.[10] The RTC ruled that, although the Rocas
presented a handwriting expert, the trial court could not
be bound by his opinion since the opposing expert witness
contradicted the same. Atty. Plagatas testimony
remained technically unrebutted.[11]
Finally, the RTC noted that Atty. Plagatas defective
notarization of the affidavit of consent did not invalidate
the sale. The law does not require spousal consent to be
on the deed of sale to be valid. Neither does the
irregularity vitiate Rosarios consent. She personally signed
the affidavit in the presence of Atty. Plagata.[12]
On appeal, the Court of Appeals (CA) reversed the RTC
decision. The CA found sufficient evidence of forgery and
did not give credence to Atty. Plagatas testimony that he
saw Rosario sign the document in Quezon City. Its jurat said
differently. Also, upon comparing the questioned
signature with the specimen signatures, the CA noted
significant variance between them. That Tarciano and
Rosario had been living separately for 30 years since 1958
also reinforced the conclusion that her signature had been
forged.
Since Tarciano and Rosario were married in 1950, the CA
concluded that their property relations were governed by
the Civil Code under which an action for annulment of sale
on the ground of lack of spousal consent may be brought
by the wife during the marriage within 10 years from the
transaction. Consequently, the action that the Rocas, her
heirs, brought in 1997 fell within 10 years of the January 11,
1989 sale.
Considering, however, that the sale between the Fuentes
spouses and Tarciano was merely voidable, the CA held
that its annulment entitled the spouses to reimbursement
of what they paid him plus legal interest computed from
the filing of the complaint until actual payment. Since the
Fuentes spouses were also builders in good faith, they were
entitled under Article 448 of the Civil Code to payment of
the value of the improvements they introduced on the lot.
The CA did not award damages in favor of the Rocas and
deleted the award of attorneys fees to the Fuentes
spouses.[13]
Unsatisfied with the CA decision, the Fuentes spouses
came to this court by petition for review.[14]
The Issues Presented
The case presents the following issues:
1. Whether or not Rosarios signature on the document of
consent to her husband Tarcianos sale of their conjugal
land to the Fuentes spouses was forged;
2. Whether or not the Rocas action for the declaration of
nullity of that sale to the spouses already prescribed; and
3. Whether or not only Rosario, the wife whose consent was
not had, could bring the action to annul that sale.
The Courts Rulings
First. The key issue in this case is whether or not Rosarios
signature on the document of consent had been forged.
For, if the signature were genuine, the fact that she gave
her consent to her husbands sale of the conjugal land
would render the other issues merely academic.
The CA found that Rosarios signature had been forged.
The CA observed a marked difference between her
signature on the affidavit of consent[15] and her specimen
signatures.[16] The CA gave no weight to Atty. Plagatas
testimony that he saw Rosario sign the document in Manila
on September 15, 1988 since this clashed with his
declaration in the jurat that Rosario signed the affidavit in
Zamboanga City on January 11, 1989.
The Court agrees with the CAs observation that Rosarios
signature strokes on the affidavit appears heavy,
deliberate, and forced. Her specimen signatures, on the
other hand, are consistently of a lighter stroke and more
fluid. The way the letters R and s were written is also
remarkably different. The variance is obvious even to the
untrained eye.
Significantly, Rosarios specimen signatures were made at
about the time that she signed the supposed affidavit of
consent. They were, therefore, reliable standards for
comparison. The Fuentes spouses presented no evidence
that Rosario suffered from any illness or disease that
accounted for the variance in her signature when she
signed the affidavit of consent. Notably, Rosario had been
living separately from Tarciano for 30 years since 1958. And
she resided so far away in Manila. It would have been
quite tempting for Tarciano to just forge her signature and
avoid the risk that she would not give her consent to the
sale or demand a stiff price for it.
What is more, Atty. Plagata admittedly falsified the jurat of
the affidavit of consent. That jurat declared that Rosario
swore to the document and signed it in Zamboanga City
on January 11, 1989 when, as Atty. Plagata testified, she
supposedly signed it about four months earlier at her
residence in Paco, Manila on September 15, 1988. While a
defective notarization will merely strip the document of its
public character and reduce it to a private instrument,
that falsified jurat, taken together with the marks of forgery
in the signature, dooms such document as proof of
Rosarios consent to the sale of the land. That the Fuentes
spouses honestly relied on the notarized affidavit as proof
of Rosarios consent does not matter. The sale is still void
without an authentic consent.
Second. Contrary to the ruling of the Court of Appeals, the
law that applies to this case is the Family Code, not the
Civil Code. Although Tarciano and Rosario got married in
1950, Tarciano sold the conjugal property to the Fuentes
spouses on January 11, 1989, a few months after the Family
Code took effect on August 3, 1988.
When Tarciano married Rosario, the Civil Code put in
place the system of conjugal partnership of gains on their
property relations. While its Article 165 made Tarciano the
sole administrator of the conjugal partnership, Article
166[17] prohibited him from selling commonly owned real
property without his wifes consent. Still, if he sold the same
without his wifes consent, the sale is not void but merely
voidable. Article 173 gave Rosario the right to have the
sale annulled during the marriage within ten years from the
date of the sale. Failing in that, she or her heirs may
demand, after dissolution of the marriage, only the value
of the property that Tarciano fraudulently sold. Thus:
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for
the annulment of any contract of the husband entered
into without her consent, when such consent is required, or
any act or contract of the husband which tends to
defraud her or impair her interest in the conjugal
partnership property. Should the wife fail to exercise this
right, she or her heirs, after the dissolution of the marriage,
may demand the value of property fraudulently alienated
by the husband.
But, as already stated, the Family Code took effect on
August 3, 1988. Its Chapter 4 on Conjugal Partnership of
50
Gains expressly superseded Title VI, Book I of the Civil Code
on Property Relations Between Husband and Wife.[18]
Further, the Family Code provisions were also made to
apply to already existing conjugal partnerships without
prejudice to vested rights.[19] Thus:
Art. 105. x x x The provisions of this Chapter shall also apply
to conjugal partnerships of gains already established
between spouses before the effectivity of this Code,
without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as provided
in Article 256. (n)
Consequently, when Tarciano sold the conjugal lot to the
Fuentes spouses on January 11, 1989, the law that
governed the disposal of that lot was already the Family
Code.
In contrast to Article 173 of the Civil Code, Article 124 of
the Family Code does not provide a period within which
the wife who gave no consent may assail her husbands
sale of the real property. It simply provides that without the
other spouses written consent or a court order allowing the
sale, the same would be void. Article 124 thus provides:
Art. 124. x x x In the event that one spouse is incapacitated
or otherwise unable to participate in the administration of
the conjugal properties, the other spouse may assume sole
powers of administration. These powers do not include the
powers of disposition or encumbrance which must have
the authority of the court or the written consent of the
other spouse. In the absence of such authority or consent,
the disposition or encumbrance shall be void. x x x
Under the provisions of the Civil Code governing contracts,
a void or inexistent contract has no force and effect from
the very beginning. And this rule applies to contracts that
are declared void by positive provision of law,[20] as in the
case of a sale of conjugal property without the other
spouses written consent. A void contract is equivalent to
nothing and is absolutely wanting in civil effects. It cannot
be validated either by ratification or prescription.[21]
But, although a void contract has no legal effects even if
no action is taken to set it aside, when any of its terms have
been performed, an action to declare its inexistence is
necessary to allow restitution of what has been given
under it.[22] This action, according to Article 1410 of the
Civil Code does not prescribe. Thus:
Art. 1410. The action or defense for the declaration of the
inexistence of a contract does not prescribe.
Here, the Rocas filed an action against the Fuentes
spouses in 1997 for annulment of sale and reconveyance
of the real property that Tarciano sold without their
mothers (his wifes) written consent. The passage of time did
not erode the right to bring such an action.
Besides, even assuming that it is the Civil Code that applies
to the transaction as the CA held, Article 173 provides that
the wife may bring an action for annulment of sale on the
ground of lack of spousal consent during the marriage
within 10 years from the transaction. Consequently, the
action that the Rocas, her heirs, brought in 1997 fell within
10 years of the January 11, 1989 sale. It did not yet
prescribe.
The Fuentes spouses of course argue that the RTC nullified
the sale to them based on fraud and that, therefore, the
applicable prescriptive period should be that which
applies to fraudulent transactions, namely, four years from
its discovery. Since notice of the sale may be deemed
given to the Rocas when it was registered with the Registry
of Deeds in 1989, their right of action already prescribed in
1993.
But, if there had been a victim of fraud in this case, it would
be the Fuentes spouses in that they appeared to have
agreed to buy the property upon an honest belief that
Rosarios written consent to the sale was genuine. They had
four years then from the time they learned that her
signature had been forged within which to file an action
to annul the sale and get back their money plus damages.
They never exercised the right.
If, on the other hand, Rosario had agreed to sign the
document of consent upon a false representation that the
property would go to their children, not to strangers, and it
turned out that this was not the case, then she would have
four years from the time she discovered the fraud within
which to file an action to declare the sale void. But that is
not the case here. Rosario was not a victim of fraud or
misrepresentation. Her consent was simply not obtained at
all. She lost nothing since the sale without her written
consent was void. Ultimately, the Rocas ground for
annulment is not forgery but the lack of written consent of
their mother to the sale. The forgery is merely evidence of
lack of consent.
Third. The Fuentes spouses point out that it was to Rosario,
whose consent was not obtained, that the law gave the
right to bring an action to declare void her husbands sale
of conjugal land. But here, Rosario died in 1990, the year
after the sale. Does this mean that the right to have the
sale declared void is forever lost?
The answer is no. As stated above, that sale was void from
the beginning. Consequently, the land remained the
property of Tarciano and Rosario despite that sale. When
the two died, they passed on the ownership of the
property to their heirs, namely, the Rocas.[23] As lawful
owners, the Rocas had the right, under Article 429 of the
Civil Code, to exclude any person from its enjoyment and
disposal.
In fairness to the Fuentes spouses, however, they should be
entitled, among other things, to recover from Tarcianos
heirs, the Rocas, the P200,000.00 that they paid him, with
legal interest until fully paid, chargeable against his estate.
Further, the Fuentes spouses appear to have acted in
good faith in entering the land and building improvements
on it. Atty. Plagata, whom the parties mutually entrusted
with closing and documenting the transaction,
represented that he got Rosarios signature on the affidavit
of consent. The Fuentes spouses had no reason to believe
that the lawyer had violated his commission and his oath.
They had no way of knowing that Rosario did not come to
Zamboanga to give her consent. There is no evidence that
they had a premonition that the requirement of consent
presented some difficulty. Indeed, they willingly made a 30
percent down payment on the selling price months earlier
on the assurance that it was forthcoming.
Further, the notarized document appears to have
comforted the Fuentes spouses that everything was
already in order when Tarciano executed a deed of
absolute sale in their favor on January 11, 1989. In fact,
they paid the balance due him. And, acting on the
documents submitted to it, the Register of Deeds of
Zamboanga City issued a new title in the names of the
Fuentes spouses. It was only after all these had passed that
the spouses entered the property and built on it. He is
deemed a possessor in good faith, said Article 526 of the
Civil Code, who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it.
As possessor in good faith, the Fuentes spouses were under
no obligation to pay for their stay on the property prior to
its legal interruption by a final judgment against them.[24]
What is more, they are entitled under Article 448 to
indemnity for the improvements they introduced into the
51
property with a right of retention until the reimbursement is
made. Thus:
Art. 448. The owner of the land on which anything has
been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In
such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees
after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court
shall fix the terms thereof. (361a)
The Rocas shall of course have the option, pursuant to
Article 546 of the Civil Code,[25] of indemnifying the
Fuentes spouses for the costs of the improvements or
paying the increase in value which the property may have
acquired by reason of such improvements.
WHEREFORE, the Court DENIES the petition and AFFIRMS
WITH MODIFICATION the decision of the Court of Appeals
in CA-G.R. CV 00531 dated February 27, 2007 as follows:
1. The deed of sale dated January 11, 1989 that Tarciano
T. Roca executed in favor of Manuel O. Fuentes, married
to Leticia L. Fuentes, as well as the Transfer Certificate of
Title T-90,981 that the Register of Deeds of Zamboanga City
issued in the names of the latter spouses pursuant to that
deed of sale are DECLARED void;
2. The Register of Deeds of Zamboanga City is DIRECTED to
reinstate Transfer Certificate of Title 3533 in the name of
Tarciano T. Roca, married to Rosario Gabriel;
3. Respondents Gonzalo G. Roca, Annabelle R. Joson,
Rose Marie R. Cristobal, and Pilar Malcampo are ORDERED
to pay petitioner spouses Manuel and Leticia Fuentes the
P200,000.00 that the latter paid Tarciano T. Roca, with legal
interest from January 11, 1989 until fully paid, chargeable
against his estate;
4. Respondents Gonzalo G. Roca, Annabelle R. Joson,
Rose Marie R. Cristobal, and Pilar Malcampo are further
ORDERED, at their option, to indemnify petitioner spouses
Manuel and Leticia Fuentes with their expenses for
introducing useful improvements on the subject land or
pay the increase in value which it may have acquired by
reason of those improvements, with the spouses entitled to
the right of retention of the land until the indemnity is
made; and
5. The RTC of Zamboanga City from which this case
originated is DIRECTED to receive evidence and determine
the amount of indemnity to which petitioner spouses
Manuel and Leticia Fuentes are entitled.
SO ORDERED
FERRER VS FERRER 2006
Before this Court is an Appeal by Certiorari which assails
the Decision[1] of the Court of Appeals dated 16 August
2004 in CA-G.R. SP No. 78525, reversing and setting aside
the Order[2] dated 16 December 2002 of the Regional Trial
Court (RTC), Mandaluyong City, Branch 212 in Civil Case
No. MC02-1780. The Court of Appeals ordered the dismissal
of the Complaint[3] filed by petitioner Josefa Bautista
Ferrer against respondents Sps. Manuel M. Ferrer and
Virginia Ferrer, and Sps. Ismael M. Ferrer and Flora Ferrer in
the aforesaid Civil Case No. MC02-1780.
In her Complaint for payment of conjugal improvements,
sum of money, and accounting with prayer for injunction
and damages, petitioner alleged that she is the widow of
Alfredo Ferrer (Alfredo), a half-brother of respondents
Manuel M. Ferrer (Manuel) and Ismael M. Ferrer (Ismael).
Before her marriage to Alfredo, the latter acquired a piece
of lot, covered by Transfer Certificate of Title (TCT) No.
67927.[4] He applied for a loan with the Social Security
System (SSS) to build improvements thereon, including a
residential house and a two-door apartment building.
However, it was during their marriage that payment of the
loan was made using the couples conjugal funds. From
their conjugal funds, petitioner posited, they constructed a
warehouse on the lot. Moreover, petitioner averred that
respondent Manuel occupied one door of the apartment
building, as well as the warehouse; however, in September
1991, he stopped paying rentals thereon, alleging that he
had acquired ownership over the property by virtue of a
Deed of Sale executed by Alfredo in favor of respondents,
Manuel and Ismael and their spouses. TCT No. 67927 was
cancelled, and TCT. No. 2728 was issued and registered in
the names of respondents.
It is petitioners contention that on 2 October 1989, when
her husband was already bedridden, respondents Ismael
and Flora Ferrer made him sign a document, purported to
be his last will and testament. The document, however,
was a Deed of Sale covering Alfredos lot and the
improvements thereon. Learning of this development,
Alfredo filed with the RTC of Pasig, a Complaint for
Annulment of the said sale against respondents, docketed
as Civil Case No. 61327.[5] On 22 June 1993, the RTC
dismissed the same.[6] The RTC found that the terms and
conditions of the Deed of Sale are not contrary to law,
morals, good customs, and public policy, and should be
complied with by the parties in good faith, there being no
compelling reason
under the law to do otherwise. The dismissal was affirmed
by the Court of Appeals. Subsequently, on 7 November
1994, this Court, in G.R. No. L-117067, finding no reversible
error committed by the appellate court in affirming the
dismissal of the RTC, affirmed the Decision of the Court of
Appeals.[7]
Further, in support of her Complaint, petitioner alluded to
a portion of the Decision dated 22 June 1993 of the RTC in
Civil Case No. 61327, which stated, to wit:
In determining which property is the principal and which is
the accessory, the property of greater value shall be
considered the principal. In this case, the lot is the principal
and the improvements the accessories. Since Article 120 of
the Family Code provides the rule that the ownership of
accessory follows the ownership of the principal, then the
subject lot with all its improvements became an exclusive
and capital property of Alfredo with an obligation to
reimburse the conjugal partnership of the cost of
improvements at the time of liquidation of [the] conjugal
partnership. Clearly, Alfredo has all the rights to sell the
subject property by himself without need of Josefas
consent.[8]
According to petitioner, the ruling of the RTC shows that,
when Alfredo died on 29 September 1999, or at the time of
the liquidation of the conjugal partnership, she had the
right to be reimbursed for the cost of the improvements on
Alfredos lot. She alleged that the cost of the improvements
amounted to P500,000.00; hence, one-half thereof should
be reimbursed and paid by respondents as they are now
the registered owners of Alfredos lot. She averred that
respondents cannot claim lack of knowledge about the
fact that the improvements were constructed using
conjugal funds as they had occupied one of the
apartment buildings on Alfredos lot, and even paid rentals
to petitioner. In addition, petitioner prayed that
52
respondents be ordered to render an accounting from
September, 1991, on the income of the boarding house
constructed thereon which they had appropriated for
themselves, and to remit one-half thereof as her share.
Finally, petitioner sought from respondents moral and
exemplary damages, litigation and incidental expenses.
For their part, respondents filed a Motion to Dismiss,[9]
contending that petitioner had no cause of action against
them, and that the cause of action was barred by prior
judgment.
On 16 December 2002, the RTC rendered an Order,[10]
denying the Motion to Dismiss. According to the RTC, no
pronouncement as to the improvements constructed on
Alfredos lot has been made in Civil Case No. 61327, and
the payment of petitioners share in the conjugal
partnership constitutes a separate cause of action. A
subsequent Order[11] dated 17 January 2003 was issued
by the RTC, denying respondents Motion for
Reconsideration.
Aggrieved, respondents elevated the case to the Court of
Appeals by way of a Petition for Certiorari, alleging grave
abuse of discretion amounting to lack or excess of
jurisdiction on the RTC in denying the dismissal.
On 16 August 2004, the Court of Appeals rendered a
Decision granting the Petition. It held that petitioners
Complaint failed to state a cause of action. The appellate
court rationalized as follows:
[W]e believe that the instant complaint is not the proper
action for the respondent to enforce her right of
reimbursement of the cost of the improvement[s] on the
subject property. As correctly pointed out by the
petitioners, the same should be made and directed in the
settlement of estate of her deceased husband Alfredo
Ferrer pursuant to Article 129[12] of the Family Code. Such
being the case, it appears that the complaint herein fails
to state a cause of action against the petitioners, the latter
not being the proper parties against whom the subject
action for reimbursement must be directed to. A
complaint states a cause of action where it contains three
essential elements of a cause of action, namely: (1) the
legal right of the plaintiff; (2) the correlative obligation of
the defendant, and (3) the act or omission of the
defendant in violation of said legal right. If these elements
are absent, the complaint becomes vulnerable to a
motion to dismiss on the ground of failure to state a cause
of action. Albeit the respondent herein has the legal right
to be reimbursed of the cost of the improvements of the
subject property, it is not the petitioners but the estate of
her deceased husband which has the obligation to pay
the same. The complaint herein is therefore dismissible for
failure to state a cause of action against the petitioners.
Needless to say, the respondent is not without any further
recourse as she may file her claim against the estate of her
deceased husband.
In light of the foregoing, we find that the public respondent
committed grave abuse of discretion in denying the
petitioners motion to dismiss for failure to state a cause of
action.[13]
Aggrieved, petitioner filed a Motion for Reconsideration
thereon. However, on 17 December 2004, the Court of
Appeals rendered a Resolution[14] denying the motion.
Hence, the present recourse.
Petitioner submits the following grounds for the allowance
of the instant Petition, to wit:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT PETITIONERS COMPLAINT FAILS TO STATE A CAUSE OF
ACTION AGAINST THE RESPONDENTS, THE LATTER NOT
BEING THE PROPER PARTIES AGAINST WHOM THE SUBJECT
ACTION FOR REIMBURSEMENT MUST BE DIRECTED TO.
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THE PUBLIC RESPONDENT, HON. RIZALINA T. CAPCO-
UMALI, COMMITTED GRAVE ABUSE OF DISCRETION IN
DENYING THE [RESPONDENTS] MOTION TO DISMISS FOR
FAILURE TO STATE A CAUSE OF ACTION.[15]
Both arguments raise the sole issue of whether the Court of
Appeals erred in dismissing petitioners Complaint for failure
to state a cause of action.
Section 1(g) Rule 16[16] of the 1997 Rules of Civil Procedure
makes it clear that failure to make a sufficient allegation of
a cause of action in the complaint warrants the dismissal
thereof. Section 2, Rule 2 of the 1997 Rules of Civil
Procedure defines a cause of action as the act or omission
by which a party violates the right of another. It is the delict
or the wrongful act or omission committed by the
defendant in violation of the primary right of the
plaintiff.[17]
A cause of action has the following essential elements, viz:
(1) A right in favor of the plaintiff by whatever means and
under whatever law it arises or is created;
(2) An obligation on the part of the named defendant to
respect or not to violate such right; and
(3) Act or omission on the part of such defendant in
violation of the right of the plaintiff or constituting a breach
of the obligation of the defendant to the plaintiff for which
the latter may maintain an action for recovery of
damages or other appropriate relief.[18]
A complaint states a cause of action only when it has the
three indispensable elements.[19]
In the determination of the presence of these elements,
inquiry is confined to the four corners of the complaint.
Only the statements in the Complaint may be properly
considered.[20] The absence of any of these elements
makes a complaint vulnerable to a Motion to Dismiss on
the ground of a failure to state a cause of action.[21]
After a reading of the allegations contained in petitioners
Complaint, we are convinced that the same failed to state
a cause of action.
In the case at bar, petitioner asserts a legal right in her
favor by relying on the Decision of the RTC in Civil Case No.
61327. It can be recalled that the aforesaid case is an
action for Annulment filed by Alfredo and petitioner
against the respondents to seek annulment of the Deed of
Sale, executed by Alfredo in respondents favor and
covering the herein subject premises. The Complaint was
dismissed by the RTC, and subsequently affirmed by the
Court of Appeals and by this Court in G.R. No. L-117067.
According to petitioner, while the RTC in Civil Case No.
61327 recognized that the improvements constructed on
Alfredos lots were deemed as Alfredos exclusive and
capital property, the court also held that petitioner, as
Alfredos spouse, has the right to claim reimbursement from
the estate of Alfredo. It is argued by petitioner that her
husband had no other property, and his only property had
been sold to the respondents; hence, she has the legal
right to claim for reimbursement from the respondents who
are now the owners of the lot and the improvements
53
thereon. In fine, petitioner asseverates that the Complaint
cannot be dismissed on the ground of failure to state a
cause of action because the respondents have the
correlative obligation to pay the value of the
improvements.
Petitioner was not able to show that there is an obligation
on the part of the respondents to respect or not to violate
her right. While we could concede that Civil Case No.
61327 made a reference to the right of the spouse as
contemplated in Article 120[22] of the Family Code to be
reimbursed for the cost of the improvements, the
obligation to reimburse rests on the spouse upon whom
ownership of the entire property is vested. There is no
obligation on the part of the purchaser of the property, in
case the property is sold by the owner-spouse.
Indeed, Article 120 provides the solution in determining the
ownership of the improvements that are made on the
separate property of the spouses at the expense of the
partnership or through the acts or efforts of either or both
spouses. Thus, when the cost of the improvement and any
resulting increase in value are more than the value of the
property at the time of the improvement, the entire
property of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the
property of the owner-spouse at the time of the
improvement; otherwise, said property shall be retained in
ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement. The
subject property was precisely declared as the exclusive
property of Alfredo on the basis of Article 120 of the Family
Code.
What is incontrovertible is that the respondents, despite the
allegations contained in the Complaint that they are the
buyers of the subject premises, are not petitioners spouse
nor can they ever be deemed as the owner-spouse upon
whom the obligation to reimburse petitioner for her costs
rested. It is the owner-spouse who has the obligation to
reimburse the conjugal partnership or the spouse who
expended the acts or efforts, as the case may be.
Otherwise stated, respondents do not have the obligation
to respect petitioners right to be reimbursed.
On this matter, we do not find an act or omission on the
part of respondents in violation of petitioners rights. The
right of the respondents to acquire as buyers the subject
premises from Alfredo under the assailed Deed of Sale in
Civil Case No. 61327 had been laid to rest. This is because
the validity of the Deed of Sale had already been
determined and upheld with finality. The same had been
similarly admitted by petitioner in her Complaint. It can be
said, thus, that respondents act of acquiring the subject
property by sale was not in violation of petitioners rights.
The same can also be said of the respondents objection to
reimburse petitioner. Simply, no correlative obligation exists
on the part of the respondents to reimburse the petitioner.
Corollary thereto, neither can it be said that their refusal to
reimburse constituted a violation of petitioners rights. As
has been shown in the foregoing, no obligation by the
respondents under the law exists. Petitioners Complaint
failed to state a cause of action against the respondents,
and for this reason, the Court of Appeals was not in error in
dismissing the same.
WHEREFORE, the Petition is DENIED. The Decision dated 16
August 2004 and the Resolution dated 17 December 2004
of the Court of Appeals in CA G.R. SP. No. 78525 are
AFFIRMED. Costs de oficio.
SO ORDERED.
MULLER VS MULLER 2006
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 in Germany
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.
xxx
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,
54
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:
I aliens hands. It would certainly be futile to prohibit the
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
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
xx
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.
55
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.
Article 130
GO, SR. VS SERVACIO 2011
The disposition by sale of a portion of the conjugal property
by the surviving spouse without the prior liquidation
mandated by Article 130 of the Family Code is not
necessarily void if said portion has not yet been allocated
by judicial or extrajudicial partition to another heir of the
deceased spouse. At any rate, the requirement of prior
liquidation does not prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of
land with a total area of 17,140 square meters situated in
Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.). Twenty
three years later, or on March 29, 1999, Protacio, Jr.
executed an Affidavit of Renunciation and Waiver,[1]
whereby he affirmed under oath that it was his father,
Protacio Go, Sr. (Protacio, Sr.), not he, who had purchased
the two parcels of land (the property).
On November 25, 1987, Marta Barola Go died. She was the
wife of Protacio, Sr. and mother of the petitioners.[2] On
December 28, 1999, Protacio, Sr. and his son Rito B. Go
(joined by Ritos wife Dina B. Go) sold a portion of the
property with an area of 5,560 square meters to Ester L.
Servacio (Servacio) for 5,686,768.00.[3] On March 2, 2001,
the petitioners demanded the return of the property,[4]
but Servacio refused to heed their demand. After
barangay proceedings failed to resolve the dispute,[5]
they sued Servacio and Rito in the Regional Trial Court in
Maasin City, Southern Leyte (RTC) for the annulment of the
sale of the property.
The petitioners averred that following Protacio, Jr.s
renunciation, the property became conjugal property;
and that the sale of the property to Servacio without the
prior liquidation of the community property between
Protacio, Sr. and Marta was null and void.[6]
Servacio and Rito countered that Protacio, Sr. had
exclusively owned the property because he had
purchased it with his own money.[7]
On October 3, 2002,[8] the RTC declared that the property
was the conjugal property of Protacio, Sr. and Marta, not
the exclusive property of Protacio, Sr., because there were
three vendors in the sale to Servacio (namely: Protacio, Sr.,
Rito, and Dina); that the participation of Rito and Dina as
vendors had been by virtue of their being heirs of the late
Marta; that under Article 160 of the Civil Code, the law in
effect when the property was acquired, all property
acquired by either spouse during the marriage was
conjugal unless there was proof that the property thus
acquired pertained exclusively to the husband or to the
wife; and that Protacio, Jr.s renunciation was grossly
insufficient to rebut the legal presumption.[9]
Nonetheless, the RTC affirmed the validity of the sale of the
property, holding that: xxx As long as the portion sold,
alienated or encumbered will not be allotted to the other
heirs in the final partition of the property, or to state it
plainly, as long as the portion sold does not encroach
upon the legitimate (sic) of other heirs, it is valid.[10]
56
Quoting Tolentinos commentary on the matter as
authority,[11] the RTC opined:
In his comment on Article 175 of the New Civil Code
regarding the dissolution of the conjugal partnership,
Senator Arturo Tolentino, says [sic]
Alienation by the survivor. After the death of one of the
spouses, in case it is necessary to sell any portion of the
community property in order to pay outstanding
obligation of the partnership, such sale must be made in
the manner and with the formalities established by the
Rules of Court for the sale of the property of the deceased
persons. Any sale, transfer, alienation or disposition of said
property affected without said formalities shall be null and
void, except as regards the portion that belongs to the
vendor as determined in the liquidation and partition.
Pending the liquidation, the disposition must be
considered as limited only to the contingent share or
interest of the vendor in the particular property involved,
but not to the corpus of the property.
This rule applies not only to sale but also to mortgages. The
alienation, mortgage or disposal of the conjugal property
without the required formality, is not however, null ab initio,
for the law recognizes their validity so long as they do not
exceed the portion which, after liquidation and partition,
should pertain to the surviving spouse who made the
contract. [underlining supplied]
It seems clear from these comments of Senator Arturo
Tolentino on the provisions of the New Civil Code and the
Family Code on the alienation by the surviving spouse of
the community property that jurisprudence remains the
same - that the alienation made by the surviving spouse of
a portion of the community property is not wholly void ab
initio despite Article 103 of the Family Code, and shall be
valid to the extent of what will be allotted, in the final
partition, to the vendor. And rightly so, because why
invalidate the sale by the surviving spouse of a portion of
the community property that will eventually be his/her
share in the final partition? Practically there is no reason for
that view and it would be absurd.
Now here, in the instant case, the 5,560 square meter
portion of the 17,140 square-meter conjugal lot is certainly
mush (sic) less than what vendors Protacio Go and his son
Rito B. Go will eventually get as their share in the final
partition of the property. So the sale is still valid.
WHEREFORE, premises considered, complaint is hereby
DISMISSED without pronouncement as to cost and
damages.
SO ORDERED.[12]
The RTCs denial of their motion for reconsideration[13]
prompted the petitioners to appeal directly to the Court
on a pure question of law.
Issue
The petitioners claim that Article 130 of the Family Code is
the applicable law; and that the sale by Protacio, Sr., et al.
to Servacio was void for being made without prior
liquidation.
In contrast, although they have filed separate comments,
Servacio and Rito both argue that Article 130 of the Family
Code was inapplicable; that the want of the liquidation
prior to the sale did not render the sale invalid, because
the sale was valid to the extent of the portion that was
finally allotted to the vendors as his share; and that the sale
did not also prejudice any rights of the petitioners as heirs,
considering that what the sale disposed of was within the
aliquot portion of the property that the vendors were
entitled to as heirs.[14]
Ruling
The appeal lacks merit.
Article 130 of the Family Code reads:
Article 130. Upon the termination of the marriage by
death, the conjugal partnership property shall be
liquidated in the same proceeding for the settlement of
the estate of the deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal partnership
property either judicially or extra-judicially within one year
from the death of the deceased spouse. If upon the lapse
of the six month period no liquidation is made, any
disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be
void.
Should the surviving spouse contract a subsequent
marriage without compliance with the foregoing
requirements, a mandatory regime of complete
separation of property shall govern the property relations
of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of
the Family Code, viz:
Article 105. In case the future spouses agree in the
marriage settlements that the regime of conjugal
partnership of gains shall govern their property relations
during marriage, the provisions in this Chapter shall be of
supplementary application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses
before the effectivity of this Code, without prejudice to
vested rights already acquired in accordance with the
Civil Code or other laws, as provided in Article 256. (n)
[emphasis supplied]
It is clear that conjugal partnership of gains established
before and after the effectivity of the Family Code are
governed by the rules found in Chapter 4 (Conjugal
Partnership of Gains) of Title IV (Property Relations Between
Husband And Wife) of the Family Code. Hence, any
disposition of the conjugal property after the dissolution of
the conjugal partnership must be made only after the
liquidation; otherwise, the disposition is void.
Before applying such rules, however, the conjugal
partnership of gains must be subsisting at the time of the
effectivity of the Family Code. There being no dispute that
Protacio, Sr. and Marta were married prior to the effectivity
of the Family Code on August 3, 1988, their property
relation was properly characterized as one of conjugal
partnership governed by the Civil Code. Upon Martas
death in 1987, the conjugal partnership was dissolved,
pursuant to Article 175 (1) of the Civil Code,[15] and an
implied ordinary co-ownership ensued among Protacio, Sr.
and the other heirs of Marta with respect to her share in
the assets of the conjugal partnership pending a
liquidation following its liquidation.[16] The ensuing implied
ordinary co-ownership was governed by Article 493 of the
Civil Code,[17] to wit:
Article 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners,
57
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership.
(399)
Protacio, Sr., although becoming a co-owner with his
children in respect of Martas share in the conjugal
partnership, could not yet assert or claim title to any
specific portion of Martas share without an actual partition
of the property being first done either by agreement or by
judicial decree. Until then, all that he had was an ideal or
abstract quota in Martas share.[18] Nonetheless, a co-
owner could sell his undivided share; hence, Protacio, Sr.
had the right to freely sell and dispose of his undivided
interest, but not the interest of his co-owners.[19]
Consequently, the sale by Protacio, Sr. and Rito as co-
owners without the consent of the other co-owners was
not necessarily void, for the rights of the selling co-owners
were thereby effectively transferred, making the buyer
(Servacio) a co-owner of Martas share.[20] This result
conforms to the well-established principle that the binding
force of a contract must be recognized as far as it is legally
possible to do so (quando res non valet ut ago, valeat
quantum valere potest).[21]
Article 105 of the Family Code, supra, expressly provides
that the applicability of the rules on dissolution of the
conjugal partnership is without prejudice to vested rights
already acquired in accordance with the Civil Code or
other laws. This provision gives another reason not to
declare the sale as entirely void. Indeed, such a
declaration prejudices the rights of Servacio who had
already acquired the shares of Protacio, Sr. and Rito in the
property subject of the sale.
In their separate comments,[22] the respondents aver that
each of the heirs had already received a certain allotted
portion at the time of the sale, and that Protacio, Sr. and
Rito sold only the portions adjudicated to and owned by
them. However, they did not present any public document
on the allocation among her heirs, including themselves,
of specific shares in Martas estate. Neither did they aver
that the conjugal properties had already been liquidated
and partitioned. Accordingly, pending a partition among
the heirs of Marta, the efficacy of the sale, and whether
the extent of the property sold adversely affected the
interests of the petitioners might not yet be properly
decided with finality. The appropriate recourse to bring
that about is to commence an action for judicial partition,
as instructed in Bailon-Casilao v. Court of Appeals,[23] to
wit:
From the foregoing, it may be deduced that since a co-
owner is entitled to sell his undivided share, a sale of the
entire property by one
co-owner without the consent of the other co-owners is not
null and void. However, only the rights of the co-owner-
seller are transferred, thereby making the buyer a co-
owner of the property.
The proper action in cases like this is not for the nullification
of the sale or for the recovery of possession of the thing
owned in common from the third person who substituted
the co-owner or co-owners who alienated their shares, but
the DIVISION of the common property as if it continued to
remain in the possession of the co-owners who possessed
and administered it [Mainit v. Bandoy, supra].
Thus, it is now settled that the appropriate recourse of co-
owners in cases where their consent were not secured in a
sale of the entire property as well as in a sale merely of the
undivided shares of some of the co-owners is an action for
PARTITION under Rule 69 of the Revised Rules of Court.
xxx[24]
In the meanwhile, Servacio would be a trustee for the
benefit of the co-heirs of her vendors in respect of any
portion that might not be validly sold to her. The following
observations of Justice Paras are explanatory of this result,
viz:
xxx [I]f it turns out that the property alienated or
mortgaged really would pertain to the share of the
surviving spouse, then said transaction is valid. If it turns out
that there really would be, after liquidation, no more
conjugal assets then the whole transaction is null and void.
But if it turns out that half of the property thus alienated or
mortgaged belongs to the husband as his share in the
conjugal partnership, and half should go to the estate of
the wife, then that corresponding to the husband is valid,
and that corresponding to the other is not. Since all these
can be determined only at the time the liquidation is over,
it follows logically that a disposal made by the surviving
spouse is not void ab initio. Thus, it has been held that the
sale of conjugal properties cannot be made by the
surviving spouse without the legal requirements. The sale is
void as to the share of the deceased spouse (except of
course as to that portion of the husbands share inherited
by her as the surviving spouse). The buyers of the property
that could not be validly sold become trustees of said
portion for the benefit of the husbands other heirs, the
cestui que trust ent. Said heirs shall not be barred by
prescription or by laches (See Cuison, et al. v. Fernandez,
et al.,L-11764, Jan.31, 1959.)[25]
WHEREFORE, we DENY the petition for review on certiorari;
and AFFIRM the decision of the Regional Trial Court.
The petitioners shall pay the costs of suit.
SO ORDERED
DOMINGO VS MOLINA 2016
We resolve the petition for review on certiorari1 filed by the
petitioner Melecio Domingo (Melecio) assailing the August
9, 2011 decision2 and January 10, 2012 resolution3 of the
Court of Appeals (CA) in CA-G.R. CV No. 94160.
THE FACTS
In June 15, 1951, the spouses Anastacio and Flora Domingo
bought a property in Camiling, Tarlac, consisting of a one-
half undivided portion over an 18, 164 square meter parcel
of land. The sale was annotated on the Original Certificate
of Title (OCT) No. 16354 covering the subject property.
During his lifetime, Anastacio borrowed money from the
respondent spouses Genaro and Elena Molina (spouses
Molina). On September 10, 1978 or 10 years after Floras
death4, Anastacio sold his interest over the land to the
spouses Molina to answer for his debts. The sale to the
spouses Molina was annotated at the OCT of the subject
property.5 In 1986, Anastacio died.6
In May 19, 1995, the sale of Anastacios interest was
registered under Transfer Certificate of Title (TCT) No.
272967[[7 ]]and transferred the entire one-half undivided
portion of the land to the spouses Molina.
Melecio, one of the children of Anastacio and Flora,
learned of the transfer and filed a Complaint for
Annulment of Title and Recovery of Ownership
(Complaint) against the spouses Molina on May 17, 1999.8
Melecio claims that Anastacio gave the subject property
to the spouses Molina to serve as collateral for the money
that Anastacio borrowed. Anastacio could not have
validly sold the interest over the subject property without
58
Floras consent, as Flora was already dead at the time of
the sale.
Melecio also claims that Genaro Molina must have falsified
the document transferring Anastacio and Floras one-half
undivided interest over the land. Finally, Melecio asserts
that he occupied the subject property from the time of
Anastacios death up to the time he filed the Complaint.9
Melecio presented the testimonies of the Records Officer
of the Register of Deeds of Tarlac, and of Melecios
nephew, George Domingo (George).10
The Records Officer testified that he could not locate the
instrument that documents the transfer of the subject
property ownership from Anastacio to the spouses Molina.
The Records Officer also testified that the alleged sale was
annotated at the time when Genaro Molinas brother was
the Register of Deeds for Camiling, Tarlac.11
George, on the other hand, testified that he has been
living on the subject property owned by Anastacio since
1986. George testified, however, that aside from himself,
there were also four other occupants on the subject
property, namely Jaime Garlitos, Linda Sicangco, Serafio
Sicangco and Manuel Ramos.12
The spouses Molina asserted that Anastacio surrendered
the title to the subject property to answer for his debts and
told the spouses Molina that they already own half of the
land. The spouses Molina have been in possession of the
subject property before the title was registered under their
names and have religiously paid the propertys real estate
taxes.
The spouses Molina also asserted that Melecio knew of the
disputed sale since he accompanied Anastacio several
times to borrow money. The last loan was even used to pay
for Melecios wedding. Finally, the spouses Molina asserted
that Melecio built his nipa hut on the subject property only
in 1999, without their knowledge and consent.13
The spouses Molina presented Jaime Garlitos (Jaime) as
their sole witness and who is one of the occupants of the
subject lot.
Jaime testified that Elena Molina permitted him to build a
house on the subject property in 1993. Jaime, together
with the other tenants, planted fruit bearing trees on the
subject property and gave portions of their harvest to
Elena Molina without any complaint from Melecio. Jaime
further testified that Melecio never lived on the subject
property and that only George Domingo, as the caretaker
of the spouses Molina, has a hut on the property.
Meanwhile, the spouses Molina died during the pendency
of the case and were substituted by their adopted son,
Cornelio Molina.14
THE RTC RULING
The Regional Trial Court (RTC) dismissed15 the case
because Melecio failed to establish his claim that
Anastacio did not sell the property to the spouses Molina.
The RTC also held that Anastacio could dispose of
conjugal property without Floras consent since the sale
was necessary to answer for conjugal liabilities.
The RTC denied Melecios motion for reconsideration of
the RTC ruling. From this ruling, Melecio proceeded with his
appeal to the CA.
THE CA RULING
In a decision dated August 9, 2011, the CA affirmed the
RTC ruling in toto.
The CA held that Melecio failed to prove by preponderant
evidence that there was fraud in the conveyance of the
property to the spouses Molina. The CA gave credence to
the OCT annotation of the disputed property sale.
The CA also held that Floras death is immaterial because
Anastacio only sold his rights, excluding Floras interest,
over the lot to the spouses Molina.1wphi1 The CA
explained that "[t]here is no prohibition against the sale by
the widower of real property formerly belonging to the
conjugal partnership of gains"16.
Finally, the CA held that Melecios action has prescribed.
According to the CA, Melecio failed to file the action
within one year after entry of the decree of registration.
Melecio filed a motion for reconsideration of the CA
Decision. The CA denied Melecios motion for
reconsideration for lack of merit.17
THE PETITION
Melecio filed the present petition for review on certiorari to
challenge the CA ruling.
Melecio principally argues that the sale of land belonging
to the conjugal partnership without the wifes consent is
invalid.
Melecio also claims that fraud attended the conveyance
of the subject property and the absence of any document
evidencing the alleged sale made the transfer null and
void. Finally, Melecio claims that the action has not yet
prescribed.
The respondents, on the other hand, submitted and
adopted their arguments in their Appeal Brief18.
First, Melecios counsel admitted that Anastacio had given
the lot title in payment of the debt amounting to
Php30,000.00. The delivery of the title is constructive
delivery of the lot itself based on Article 1498, paragraph 2
of
the Civil Code.
Second, the constructive delivery of the title coupled with
the spouses Molinas exercise of attributes of ownership
over the subject property, perfected the sale and
completed the transfer of ownership.
THE ISSUES
The core issues of the petition are as follows: (1) whether
the sale of a conjugal property to the spouses Molina
without Floras consent is valid and legal; and (2) whether
fraud attended the transfer of the subject property to the
spouses Molina.
OUR RULING
We deny the petition.
It is well settled that when the trial courts factual findings
have been affirmed by the CA, the findings are generally
conclusive and binding upon the Court and may no longer
be reviewed on Rule 45 petitions.19 While there are
exceptions20 to this rule, the Court finds no applicable
exception with respect to the lower courts finding that the
subject property was Anastacio and Floras conjugal
property. Records before the Court show that the parties
did not dispute the conjugal nature of the property.
59
Melecio argues that the sale of the disputed property to
the spouses Molina is void without Floras consent.
We do not find Melecios argument meritorious.
Anastacio and Floras
conjugal partnership was
dissolved upon Floras death.
There is no dispute that Anastacio and Flora Domingo
married before the Family Codes effectivity on August 3,
1988 and their property relation is a conjugal
partnership.21
Conjugal partnership of gains established before and after
the effectivity of the Family Code are governed by the
rules found in Chapter 4 (Conjugal Partnership of Gains) of
Title IV (Property Relations Between Husband and Wife) of
the Family Code. This is clear from Article 105 of the Family
Code which states:
x x x The provisions of this Chapter shall also apply to
conjugal partnerships of gains already established
between spouses before the effectivity of this Code,
without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as provided
in Article 256.
The conjugal partnership of Anastacio and Flora was
dissolved when Flora died in 1968, pursuant to Article 175
(1) of the Civil Code22 (now Article 126 (1) of the Family
Code).
Article 130 of the Family Code requires the liquidation of
the conjugal partnership upon death of a spouse and
prohibits any disposition or encumbrance of the conjugal
property prior to the conjugal partnership liquidation, to
quote:
Article 130. Upon the termination of the marriage by
death, the conjugal partnership property shall be
liquidated in the same proceeding for the settlement of
the estate of the deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal partnership
property either judicially or extrajudicially within one year
from the death of the deceased spouse. If upon the lapse
of the six month period no liquidation is made, any
disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be
void. x x x (emphases supplied)
While Article 130 of the Family Code provides that any
disposition involving the conjugal property without prior
liquidation of the partnership shall be void, this rule does
not apply since the provisions of the Family Code shall be
"without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws."23
An implied co-ownership
among Floras heirs governed
the conjugal properties
pending liquidation and
partition.
In the case of Taningco v. Register of Deeds of Laguna,24
we held that the properties of a dissolved conjugal
partnership fall under the regime of co-ownership among
the surviving spouse and the heirs of the deceased
spouse until final liquidation and partition. The surviving
spouse, however, has an actual and vested one-half
undivided share of the properties, which does not consist
of determinate and segregated properties until liquidation
and partition of the conjugal partnership.
An implied ordinary co-ownership ensued among Floras
surviving heirs, including Anastacio, with respect to Floras
share of the conjugal partnership until final liquidation and
partition; Anastacio, on the other hand, owns one-half of
the original conjugal partnership properties as his share,
but this is an undivided interest.
Article 493 of the Civil Code on co-ownership provides:
Article 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership.
(399) (emphases supplied)
Thus, Anastacio, as co-owner, cannot claim title to any
specific portion of the conjugal properties without an
actual partition being first done either by agreement or by
judicial decree. Nonetheless, Anastacio had the right to
freely sell and dispose of his undivided interest in the
subject property.
The spouses Molina became
co-owners of the subject
property to the extent of
Anastacios interest.
The OCT annotation of the sale to the spouses Molina
reads that "[o]nly the rights, interests and participation of
Anastacio Domingo, married to Flora Dela Cruz, is hereby
sold, transferred, and conveyed unto the said vendees for
the sum of ONE THOUSAND PESOS (P1,000.00) which
pertains to an undivided one-half (1/2) portion and subject
to all other conditions specified in the document x x x"25
(emphases supplied). At the time of the sale, Anastacios
undivided interest in the conjugal properties consisted of:
(1) one-half of the entire conjugal properties; and (2) his
share as Floras heir on the conjugal properties.
Anastacio, as a co-owner, had the right to freely sell and
dispose of his undivided interest, but not the interest of his
co-owners. Consequently, Anastactios sale to the spouses
Molina without the consent of the other co-owners was not
totally void, for Anastacios rights or a portion thereof were
thereby effectively transferred, making the spouses Molina
a co-owner of the subject property to the extent of
Anastacios interest. This result conforms with the well-
established principle that the binding force of a contract
must be recognized as far as it is legally possible to do so
(quando res non valet ut ago, valeat quantum valere
potest).26
The spouses Molina would be a trustee for the benefit of
the co-heirs of Anastacio in respect of any portion that
might belong to the co-heirs after liquidation and partition.
The observations of Justice Paras cited in the case of Heirs
of Protacio Go, Sr. V. Servacio27 are instructive:
x x x [I]f it turns out that the property alienated or
mortgaged really would pertain to the share of the
surviving spouse, then said transaction is valid. If it turns out
that there really would be, after liquidation, no more
conjugal assets then the whole transaction is null and void.
But if it turns out that half of the property thus alienated or
mortgaged belongs to the husband as his share in the
conjugal partnership, and half should go to the estate of
the wife, then that corresponding to the husband is valid,
and that corresponding to the other is not. Since all these
can be determined only at the time the liquidation is over,
it follows logically that a disposal made by the surviving
60
spouse is not void ab initio. Thus, it has been held that the
sale of conjugal properties cannot be made by the
surviving spouse without the legal requirements. The sale is
void as to the share of the deceased spouse (except of
course as to that portion of the husbands share inherited
by her as the surviving spouse). The buyers of the property
that could not be validly sold become trustees of said
portion for the benefit of the husbands other heirs, the
cestui que trust ent. Said heirs shall not be barred by
prescription or by laches.
Melecios recourse as a co-owner of the conjugal
properties, including the subject property, is an action for
partition under Rule 69 of the Revised Rules of Court. As
held in the case of Heirs of Protacio Go, Sr., "it is now settled
that the appropriate recourse of co-owners in cases where
their consent were not secured in a sale of the entire
property as well as in a sale merely of the undivided shares
of some of the co-owners is an action for PARTITION under
Rule 69 of the Revised Rules of Court."28
The sale of the subject
property to the spouses Molina
was not attended with fraud.
On the issue of fraud, the lower courts found that there was
no fraud in the sale of the disputed property to the spouses
Molina.
The issue of fraud would require the Court to inquire into
the weight of evidentiary matters to determine the merits
of the petition and is essentially factual in nature. It is basic
that factual questions cannot be cannot be entertained
in a Rule 45 petition, unless it falls under any of the
recognized exceptions29 found in jurisprudence. The
present petition does not show that it falls under any of the
exceptions allowing factual review.
The CA and RTC conclusion that there is no fraud in the
sale is supported by the evidence on record.
Melecio' s argument that no document was executed for
the sale is negated by the CA finding that there was a
notarized deed of conveyance executed between
Anastacio and the spouses Molina, as annotated on the
OCT of the disputed property.
Furthermore, Melecio's belief that Anastacio could not
have sold the property without his knowledge cannot be
considered as proof of fraud to invalidate the spouses
Molina's registered title over the subject property.30
Prevailing jurisprudence uniformly holds that findings of
facts of the trial court, particularly when affirmed by the
Court of Appeals, are binding upon t his court. 31
Considering these findings, we find no need to discuss the
other issues raised by Melecio.
WHEREFORE, we hereby DENY the petition for review on
certiorari. The decision dated August 9, 2011 of the Court
of Appeals in CA-G.R. CV No. 94160 is AFFIRMED.
SO ORDERED
Article 134- 141
MAQUILAN VS MAQUILAN 2007
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. P500,000.00 of the money deposited in the bank jointly
in the name of the spouses shall be withdrawn and
deposited in favor and in trust of their common child, Neil
Maquilan, with the deposit in the joint account of the
parties.
The balance of such deposit, which presently stands at
P1,318,043.36, shall be withdrawn and divided equally by
the parties;
b. The store that is now being occupied by the plaintiff
shall be allotted to her while the bodega shall be for the
defendant. The defendant shall be paid the sum of
P50,000.00 as his share in the stocks of the store in full
settlement thereof.
The plaintiff shall be allowed to occupy the bodega until
the time the owner of the lot on which it stands shall
construct a building thereon;
c. The motorcycles shall be divided between them such
that the Kawasaki shall be owned by the plaintiff while the
Honda Dream shall be for the defendant;
d. The passenger jeep shall be for the plaintiff who shall
pay the defendant the sum of P75,000.00 as his share
thereon and in full settlement thereof;
e. The house and lot shall be to the common child.
2. This settlement is only partial, i.e., without prejudice to
the litigation of other conjugal properties that have not
been mentioned;
xxxx
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]
61
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.
62
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
xxxx
(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.[10] 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
63
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,[12] 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
NOVERAS VS NOVERAS (read on the first exam
compilation)
Article 147
VALDES VS RTC BRANCH 102
The petition for review bewails, purely on a question of law,
an alleged error committed by the Regional Trial Court in
Civil Case No. Q-92-12539. Petitioner avers that the court a
quo has failed to apply the correct law that should govern
the disposition of a family dwelling in a situation where a
marriage is declared void ab initio because of
psychological incapacity on the part of either or both of
the parties to the contract.
The pertinent facts giving rise to this incident are, by and
large, not in dispute.
Antonio Valdes and Consuelo Gomez were married on 05
January 1971. Begotten during the marriage were five
children. In a petition, dated 22 June 1992, Valdes sought
the declaration of nullity of the marriage pursuant to
Article 36 of the Family Code (docketed Civil Case No. Q-
92-12539, Regional Trial Court of Quezon City, Branch 102).
After hearing the parties following the joinder of issues, the
trial court,[1] in its decision of 29 July 1994, granted the
petition; viz:
"WHEREFORE, judgment is hereby rendered as follows:
"(1) The marriage of petitioner Antonio Valdes and
respondent Consuelo Gomez-Valdes is hereby declared
null and void under Article 36 of the Family Code on the
ground of their mutual psychological incapacity to
comply with their essential marital obligations;
"(2) The three older children, Carlos Enrique III, Antonio
Quintin and Angela Rosario shall choose which parent
they would want to stay with.
"Stella Eloisa and Joaquin Pedro shall be placed in the
custody of their mother, herein respondent Consuelo
Gomez-Valdes.
"The petitioner and respondent shall have visitation rights
over the children who are in the custody of the other.
"(3) The petitioner and respondent are directed to start
proceedings on the liquidation of their common properties
as defined by Article 147 of the Family Code, and to
comply with the provisions of Articles 50, 51 and 52 of the
same code, within thirty (30) days from notice of this
decision.
"Let a copy of this decision be furnished the Local Civil
Registrar of Mandaluyong, Metro Manila, for proper
recording in the registry of marriages."[2] (Italics ours)
Consuelo Gomez sought a clarification of that portion of
the decision directing compliance with Articles 50, 51 and
52 of the Family Code. She asserted that the Family Code
contained no provisions on the procedure for the
liquidation of common property in "unions without
marriage." Parenthetically, during the hearing on the
motion, the children filed a joint affidavit expressing their
desire to remain with their father, Antonio Valdes, herein
petitioner.
In an Order, dated 05 May 1995, the trial court made the
following clarification:
"Consequently, considering that Article 147 of the Family
Code explicitly provides that the property acquired by
both parties during their union, in the absence of proof to
the contrary, are presumed to have been obtained
through the joint efforts of the parties and will be owned
by them in equal shares, plaintiff and defendant will own
their 'family home' and all their other properties for that
matter in equal shares.
"In the liquidation and partition of the properties owned in
common by the plaintiff and defendant, the provisions on
co-ownership found in the Civil Code shall apply."[3] (Italics
supplied)
In addressing specifically the issue regarding the
disposition of the family dwelling, the trial court said:
"Considering that this Court has already declared the
marriage between petitioner and respondent as null and
void ab initio, pursuant to Art. 147, the property regime of
petitioner and respondent shall be governed by the rules
on co-ownership.
"The provisions of Articles 102 and 129 of the Family Code
finds no application since Article 102 refers to the
procedure for the liquidation of the conjugal partnership
property and Article 129 refers to the procedure for the
liquidation of the absolute community of property."[4]
Petitioner moved for a reconsideration of the order. The
motion was denied on 30 October 1995.
In his recourse to this Court, petitioner submits that Articles
50, 51 and 52 of the Family Code should be held
controlling; he argues that:
"I
"Article 147 of the Family Code does not apply to cases
where the parties are psychological incapacitated.
"II
"Articles 50, 51 and 52 in relation to Articles 102 and 129 of
the Family Code govern the disposition of the family
dwelling in cases where a marriage is declared void ab
initio, including a marriage declared void by reason of the
psychological incapacity of the spouses.
64
"III
"Assuming arguendo that Article 147 applies to marriages
declared void ab initio on the ground of the psychological
incapacity of a spouse, the same may be read consistently
with Article 129.
"IV
"It is necessary to determine the parent with whom majority
of the children wish to stay."[5]
The trial court correctly applied the law. In a void marriage,
regardless of the cause thereof, the property relations of
the parties during the period of cohabitation is governed
by the provisions of Article 147 or Article 148, such as the
case may be, of the Family Code. Article 147 is a remake
of Article 144 of the Civil Code as interpreted and so
applied in previous cases;[6] it provides:
"ART. 147. When a man and a woman who are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.
"In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof if the former's efforts consisted in the care and
maintenance of the family and of the household.
"Neither party can encumber or dispose by acts inter vivos
of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
"When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common
children or their descendants, each vacant share shall
belong to the respective surviving descendants. In the
absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place
upon termination of the cohabitation."
This peculiar kind of co-ownership applies when a man
and a woman, suffering no legal impediment to marry
each other, so exclusively live together as husband and
wife under a void marriage or without the benefit of
marriage. The term "capacitated" in the provision (in the
first paragraph of the law) refers to the legal capacity of a
party to contract marriage, i.e., any "male or female of the
age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38"[7] of the
Code.
Under this property regime, property acquired by both
spouses through their work and industry shall be governed
by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed to have
been obtained through their joint efforts. A party who did
not participate in the acquisition of the property shall still
be considered as having contributed thereto jointly if said
party's "efforts consisted in the care and maintenance of
the family household."[8] Unlike the conjugal partnership of
gains, the fruits of the couple's separate property are not
included in the co-ownership.
Article 147 of the Family Code, in substance and to the
above extent, has clarified Article 144 of the Civil Code; in
addition, the law now expressly provides that
(a) Neither party can dispose or encumber by act inter
vivos his or her share in co-ownership property, without the
consent of the other, during the period of cohabitation;
and
(b) In the case of a void marriage, any party in bad faith
shall forfeit his or her share in the co-ownership in favor of
their common children; in default thereof or waiver by any
or all of the common children, each vacant share shall
belong to the respective surviving descendants, or still in
default thereof, to the innocent party. The forfeiture shall
take place upon the termination of the cohabitation[9] or
declaration of nullity of the marriage.[10]
When the common-law spouses suffer from a legal
impediment to marry or when they do not live exclusively
with each other (as husband and wife ),only the property
acquired by both of them through their actual joint
contribution of money, property or industry shall be owned
in common and in proportion to their respective
contributions. Such contributions and corresponding
shares, however, are prima facie presumed to be equal.
The share of any party who is married to another shall
accrue to the absolute community or conjugal
partnership, as the case may be, if so existing under a valid
marriage. If the party who has acted in bad faith is not
validly married to another, his or her share shall be forfeited
in the manner already heretofore expressed.[11]
In deciding to take further cognizance of the issue on the
settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which
has jurisdiction to declare the marriage a nullity must be
deemed likewise clothed with authority to resolve
incidental and consequential matters. Nor did it commit a
reversible error in ruling that petitioner and private
respondent own the "family home" and all their common
property in equal shares, as well as in concluding that, in
the liquidation and partition of the property owned in
common by them, the provisions on co-ownership under
the Civil Code, not Articles 50, 51 and 52, in relation to
Articles 102 and 129,[12] of the Family Code, should aptly
prevail. The rules set up to govern the liquidation of either
the absolute community or the conjugal partnership of
gains, the property regimes recognized for valid and
voidable marriages (in the latter case until the contract is
annulled ),are irrelevant to the liquidation of the co-
ownership that exists between common-law spouses. The
first paragraph of Article 50 of the Family Code, applying
paragraphs (2 ),(3 ),(4) and (5) of Article 43,[13] relates
only, by its explicit terms, to voidable marriages and,
exceptionally, to void marriages under Article 40[14] of the
Code, i.e., the declaration of nullity of a subsequent
marriage contracted by a spouse of a prior void marriage
before the latter is judicially declared void. The latter is a
special rule that somehow recognizes the philosophy and
an old doctrine that void marriages are inexistent from the
very beginning and no judicial decree is necessary to
establish their nullity. In now requiring for purposes of
remarriage, the declaration of nullity by final judgment of
the previously contracted void marriage, the present law
aims to do away with any continuing uncertainty on the
status of the second marriage. It is not then illogical for the
provisions of Article 43, in relation to Articles 41[15] and
42,[16] of the Family Code, on the effects of the
termination of a subsequent marriage contracted during
the subsistence of a previous marriage to be made
applicable pro hac vice. In all other cases, it is not to be
assumed that the law has also meant to have coincident
property relations, on the one hand, between spouses in
valid and voidable marriages (before annulment) and, on
65
the other, between common-law spouses or spouses of
void marriages, leaving to ordain, in the latter case, the
ordinary rules on co-ownership subject to the provision of
Article 147 and Article 148 of the Family Code. It must be
stressed, nevertheless, even as it may merely state the
obvious, that the provisions of the Family Code on the
"family home," i.e., the provisions found in Title V, Chapter
2, of the Family Code, remain in force and effect
regardless of the property regime of the spouses.
WHEREFORE, the questioned orders, dated 05 May 1995
and 30 October 1995, of the trial court are AFFIRMED. No
costs.
SO ORDERED
BUENAVENTURA VS CA 2005
These cases involve a petition for the declaration of nullity
of marriage, which was filed by petitioner Noel
Buenaventura on July 12, 1992, on the ground of the
alleged psychological incapacity of his wife, Isabel Singh
Buenaventura, herein respondent. After respondent filed
her answer, petitioner, with leave of court, amended his
petition by stating that both he and his wife were
psychologically incapacitated to comply with the
essential obligations of marriage. In response, respondent
filed an amended answer denying the allegation that she
was psychologically incapacitated.[1]
On July 31, 1995, the Regional Trial Court promulgated a
Decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into
between plaintiff Noel A. Buenaventura and defendant
Isabel Lucia Singh Buenaventura on July 4, 1979, null and
void ab initio;
2) Ordering the plaintiff to pay defendant moral damages
in the amount of 2.5 million pesos and exemplary damages
of 1 million pesos with 6% interest from the date of this
decision plus attorneys fees of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of
litigation of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal
partnership property[,] particularly the plaintiffs
separation/retirement benefits received from the Far East
Bank [and] Trust Company[,] by ceding, giving and paying
to her fifty percent (50%) of the net amount of
P3,675,335.79 or P1,837,667.89 together with 12% interest
per annum from the date of this decision and one-half
(1/2) of his outstanding shares of stock with Manila
Memorial Park and Provident Group of Companies;
5) Ordering him to give a regular support in favor of his son
Javy Singh Buenaventura in the amount of P15,000.00
monthly, subject to modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh
Buenaventura to his mother, the herein defendant; and
7) Hereby authorizing the defendant to revert back to the
use of her maiden family name Singh.
Let copies of this decision be furnished the appropriate
civil registry and registries of properties.
SO ORDERED.[2]
Petitioner appealed the above decision to the Court of
Appeals. While the case was pending in the appellate
court, respondent filed a motion to increase the P15,000
monthly support pendente lite of their son Javy Singh
Buenaventura. Petitioner filed an opposition thereto,
praying that it be denied or that such incident be set for
oral argument.[3]
On September 2, 1996, the Court of Appeals issued a
Resolution increasing the support pendente lite to
P20,000.[4] Petitioner filed a motion for reconsideration
questioning the said Resolution.[5]
On October 8, 1996, the appellate court promulgated a
Decision dismissing petitioners appeal for lack of merit and
affirming in toto the trial courts decision.[6] Petitioner filed
a motion for reconsideration which was denied. From the
abovementioned Decision, petitioner filed the instant
Petition for Review on Certiorari.
On November 13, 1996, through another Resolution, the
Court of Appeals denied petitioners motion for
reconsideration of the September 2, 1996 Resolution,
which increased the monthly support for the son.[7]
Petitioner filed a Petition for Certiorari to question these two
Resolutions.
On July 9, 1997, the Petition for Review on Certiorari[8] and
the Petition for Certiorari[9] were ordered consolidated by
this Court.[10]
In the Petition for Review on Certiorari petitioner claims that
the Court of Appeals decided the case not in accord with
law and jurisprudence, thus:
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL
DAMAGES IN THE AMOUNT OF P2.5 MILLION AND
EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST
FROM THE DATE OF ITS DECISION, WITHOUT ANY LEGAL AND
MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEYS FEES AND
P50,000.00 EXPENSES OF LITIGATION, PLUS COSTS, TO
DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL
BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY
DEFENDANT-APPELLEE ONE-HALF OR P1,837,667.89 OUT OF
HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST
BANK AND TRUST CO., WITH 12% INTEREST THEREON FROM
THE DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID
RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE
PROPERTY OF NOEL, AND ALSO TO DELIVER TO DEFENDANT-
APPELLEE ONE-HALF OF HIS SHARES OF STOCK WITH THE
MANILA MEMORIAL PARK AND THE PROVIDENT GROUP OF
COMPANIES, ALTHOUGH SAID SHARES OF STOCK WERE
ACQUIRED BY NOEL BEFORE HIS MARRIAGE TO
RESPONDENT ISABEL AND ARE, THEREFORE, AGAIN HIS
EXCLUSIVE PROPERTIES; AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY
OVER THE PARTIES MINOR CHILD TO DEFENDANT-APPELLEE
WITHOUT ASKING THE CHILD (WHO WAS ALREADY 13 YEARS
OLD AT THAT TIME) HIS CHOICE AS TO WHOM, BETWEEN HIS
TWO PARENTS, HE WOULD LIKE TO HAVE CUSTODY OVER HIS
PERSON.[11]
In the Petition for Certiorari, petitioner advances the
following contentions:
THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION
WHEN IT REFUSED TO SET RESPONDENTS MOTION FOR
INCREASED SUPPORT FOR THE PARTIES SON FOR
HEARING.[12]
THERE WAS NO NEED FOR THE COURT OF APPEALS TO
INCREASE JAVYS MONTHLY SUPPORT OF P15,000.00 BEING
GIVEN BY PETITIONER EVEN AT PRESENT PRICES.[13]
66
IN RESOLVING RESPONDENTS MOTION FOR THE INCREASE
OF JAVYS SUPPORT, THE COURT OF APPEALS SHOULD HAVE
EXAMINED THE LIST OF EXPENSES SUBMITTED BY
RESPONDENT IN THE LIGHT OF PETITIONERS OBJECTIONS
THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS
ENTITLED TO A P5,000 INCREASE IN SUPPORT AS SAID
AMOUNT IS TOO MINIMAL.[14]
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN
PETITIONER AN OPPORTUNITY TO PROVE HIS PRESENT
INCOME TO SHOW THAT HE CANNOT AFFORD TO INCREASE
JAVYS SUPPORT.[15]
With regard to the first issue in the main case, the Court of
Appeals articulated:
On Assignment of Error C, the trial court, after findings of
fact ascertained from the testimonies not only of the
parties particularly the defendant-appellee but likewise,
those of the two psychologists, awarded damages on the
basis of Articles 21, 2217 and 2229 of the Civil Code of the
Philippines.
Thus, the lower court found that plaintiff-appellant
deceived the defendant-appellee into marrying him by
professing true love instead of revealing to her that he was
under heavy parental pressure to marry and that because
of pride he married defendant-appellee; that he was not
ready to enter into marriage as in fact his career was and
always would be his first priority; that he was unable to
relate not only to defendant-appellee as a husband but
also to his son, Javy, as a father; that he had no inclination
to make the marriage work such that in times of trouble,
he chose the easiest way out, that of leaving
defendantappellee and their son; that he had no desire to
keep defendant-appellee and their son as proved by his
reluctance and later, refusal to reconcile after their
separation; that the aforementioned caused defendant-
appellee to suffer mental anguish, anxiety, besmirched
reputation, sleepless nights not only in those years the
parties were together but also after and throughout their
separation.
Plaintiff-appellant assails the trial courts decision on the
ground that unlike those arising from a breach in ordinary
contracts, damages arising as a consequence of
marriage may not be awarded. While it is correct that
there is, as yet, no decided case by the Supreme Court
where damages by reason of the performance or non-
performance of marital obligations were awarded, it does
not follow that no such award for damages may be made.
Defendant-appellee, in her amended answer, specifically
prayed for moral and exemplary damages in the total
amount of 7 million pesos. The lower court, in the exercise
of its discretion, found full justification of awarding at least
half of what was originally prayed for. We find no reason
to disturb the ruling of the trial court.[16]
The award by the trial court of moral damages is based on
Articles 2217 and 21 of the Civil Code, which read as
follows:
ART. 2217. Moral damages include physical suffering,
mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendants wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the
damage.
The trial court referred to Article 21 because Article
2219[17] of the Civil Code enumerates the cases in which
moral damages may be recovered and it mentions Article
21 as one of the instances. It must be noted that Article 21
states that the individual must willfully cause loss or injury to
another. There is a need that the act is willful and hence
done in complete freedom. In granting moral damages,
therefore, the trial court and the Court of Appeals could
not but have assumed that the acts on which the moral
damages were based were done willfully and freely,
otherwise the grant of moral damages would have no leg
to stand on.
On the other hand, the trial court declared the marriage
of the parties null and void based on Article 36 of the
Family Code, due to psychological incapacity of the
petitioner, Noel Buenaventura. Article 36 of the Family
Code states:
A marriage contracted by any party who, at the time of
the celebration, was psychologically incapacitated to
comply with the essential marital obligations of marriage,
shall likewise be void even if such incapacity becomes
manifest only after its solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that
causes a party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so
expressed by Article 68 of the Family Code, include their
mutual obligations to live together, observe love, respect
and fidelity and render help and support. There is hardly
any doubt that the intendment of the law has been to
confine the meaning of "psychological incapacity" to the
most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage. . . .[18]
The Court of Appeals and the trial court considered the
acts of the petitioner after the marriage as proof of his
psychological incapacity, and therefore a product of his
incapacity or inability to comply with the essential
obligations of marriage. Nevertheless, said courts
considered these acts as willful and hence as grounds for
granting moral damages. It is contradictory to
characterize acts as a product of psychological
incapacity, and hence beyond the control of the party
because of an innate inability, while at the same time
considering the same set of acts as willful. By declaring the
petitioner as psychologically incapacitated, the possibility
of awarding moral damages on the same set of facts was
negated. The award of moral damages should be
predicated, not on the mere act of entering into the
marriage, but on specific evidence that it was done
deliberately and with malice by a party who had
knowledge of his or her disability and yet willfully
concealed the same. No such evidence appears to have
been adduced in this case.
For the same reason, since psychological incapacity
means that one is truly incognitive of the basic marital
covenants that one must assume and discharge as a
consequence of marriage, it removes the basis for the
contention that the petitioner purposely deceived the
private respondent. If the private respondent was
deceived, it was not due to a willful act on the part of the
petitioner. Therefore, the award of moral damages was
without basis in law and in fact.
Since the grant of moral damages was not proper, it
follows that the grant of exemplary damages cannot
stand since the Civil Code provides that exemplary
damages are imposed in addition to moral, temperate,
liquidated or compensatory damages.[19]
67

With respect to the grant of attorneys fees and expenses
of litigation the trial court explained, thus:
Regarding Attorneys fees, Art. 2208 of the Civil Code
authorizes an award of attorneys fees and expenses of
litigation, other than judicial costs, when as in this case the
plaintiffs act or omission has compelled the defendant to
litigate and to incur expenses of litigation to protect her
interest (par. 2), and where the Court deems it just and
equitable that attorneys fees and expenses of litigation
should be recovered. (par. 11)[20]
The Court of Appeals reasoned as follows:
On Assignment of Error D, as the award of moral and
exemplary damages is fully justified, the award of
attorneys fees and costs of litigation by the trial court is
likewise fully justified.[21]
The acts or omissions of petitioner which led the lower court
to deduce his psychological incapacity, and his act in
filing the complaint for the annulment of his marriage
cannot be considered as unduly compelling the private
respondent to litigate, since both are grounded on
petitioners psychological incapacity, which as explained
above is a mental incapacity causing an utter inability to
comply with the obligations of marriage. Hence, neither
can be a ground for attorneys fees and litigation expenses.
Furthermore, since the award of moral and exemplary
damages is no longer justified, the award of attorneys fees
and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East
Bank and Trust Co. and the shares of stock in the Manila
Memorial Park and the Provident Group of Companies, the
trial court said:
The third issue that must be resolved by the Court is what
to do with the assets of the conjugal partnership in the
event of declaration of annulment of the marriage. The
Honorable Supreme Court has held that the declaration of
nullity of marriage carries ipso facto a judgment for the
liquidation of property (Domingo v. Court of Appeals, et
al., G.R. No. 104818, Sept. 17, 1993, 226 SCRA, pp. 572 573,
586). Thus, speaking through Justice Flerida Ruth P.
Romero, it was ruled in this case:
When a marriage is declared void ab initio, the law states
that the final judgment therein shall provide for the
liquidation, partition and distribution of the properties of
the spouses, the custody and support of the common
children and the delivery of their presumptive legitimes,
unless such matters had been adjudicated in the previous
proceedings.
The parties here were legally married on July 4, 1979, and
therefore, all property acquired during the marriage,
whether the acquisition appears to have been made,
contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is
proved (Art. 116, New Family Code; Art. 160, Civil Code).
Art. 117 of the Family Code enumerates what are conjugal
partnership properties. Among others they are the
following:
1) Those acquired by onerous title during the marriage at
the expense of the common fund, whether the acquisition
be for the partnership, or for only one of the spouses;
2) Those obtained from the labor, industry, work or
profession of either or both of the spouses;
3) The fruits, natural, industrial, or civil, due or received
during the marriage from the common property, as well as
the net fruits from the exclusive property of each spouse. .
..
Applying the foregoing legal provisions, and without
prejudice to requiring an inventory of what are the parties
conjugal properties and what are the exclusive properties
of each spouse, it was disclosed during the proceedings in
this case that the plaintiff who worked first as Branch
Manager and later as Vice-President of Far East Bank &
Trust Co. received separation/retirement package from
the said bank in the amount of P3,701,500.00 which after
certain deductions amounting to P26,164.21 gave him a
net amount of P3,675,335.79 and actually paid to him on
January 9, 1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having shown
debts or obligations other than those deducted from the
said retirement/separation pay, under Art. 129 of the
Family Code 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 settlement or unless there has been a
voluntary waiver or forfeiture of such share as provided in
this Code. In this particular case, however, there had been
no marriage settlement between the parties, nor had
there been any voluntary waiver or valid forfeiture of the
defendant wifes share in the conjugal partnership
properties. The previous cession and transfer by the plaintiff
of his one-half (1/2) share in their residential house and lot
covered by T.C.T. No. S-35680 of the Registry of Deeds of
Paraaque, Metro Manila, in favor of the defendant as
stipulated in their Compromise Agreement dated July 12,
1993, and approved by the Court in its Partial Decision
dated August 6, 1993, was actually intended to be in full
settlement of any and all demands for past support. In
reality, the defendant wife had allowed some concession
in favor of the plaintiff husband, for were the law strictly to
be followed, in the process of liquidation of the conjugal
assets, 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 their only child
has chosen to remain (Art. 129, par. 9). Here, what was
done was one-half (1/2) portion of the house was ceded
to defendant so that she will not claim anymore for past
unpaid support, while the other half was transferred to their
only child as his presumptive legitime.
Consequently, nothing yet has been given to the
defendant wife by way of her share in the conjugal
properties, and it is but just, lawful and fair, that she be
given one-half (1/2) share of the separation/retirement
benefits received by the plaintiff the same being part of
their conjugal partnership properties having been
obtained or derived from the labor, industry, work or
profession of said defendant husband in accordance with
Art. 117, par. 2 of the Family Code. For the same reason,
she is entitled to one-half (1/2) of the outstanding shares of
stock of the plaintiff husband with the Manila Memorial
Park and the Provident Group of Companies.[22]
The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the
order of the trial court for him to give one-half of his
separation/retirement benefits from Far East Bank & Trust
Company and half of his outstanding shares in Manila
Memorial Park and Provident Group of Companies to the
defendant-appellee as the latters share in the conjugal
partnership.
On August 6, 1993, the trial court rendered a Partial
Decision approving the Compromise Agreement entered
into by the parties. In the same Compromise Agreement,
the parties had agreed that henceforth, their conjugal
partnership is dissolved. Thereafter, no steps were taken for
the liquidation of the conjugal partnership.
68
Finding that defendant-appellee is entitled to at least half
of the separation/retirement benefits which plaintiff-
appellant received from Far East Bank & Trust Company
upon his retirement as Vice-President of said company for
the reason that the benefits accrued from
plaintiffappellants service for the bank for a number of
years, most of which while he was married to defendant-
appellee, the trial court adjudicated the same. The same
is true with the outstanding shares of plaintiff-appellant in
Manila Memorial Park and Provident Group of Companies.
As these were acquired by the plaintiff-appellant at the
time he was married to defendant-appellee, the latter is
entitled to one-half thereof as her share in the conjugal
partnership. We find no reason to disturb the ruling of the
trial court.[23]
Since the present case does not involve the annulment of
a bigamous marriage, the provisions of Article 50 in relation
to Articles 41, 42 and 43 of the Family Code, providing for
the dissolution of the absolute community or conjugal
partnership of gains, as the case may be, do not apply.
Rather, the general rule applies, which is that in case a
marriage is declared void ab initio, the property regime
applicable and to be liquidated, partitioned and
distributed is that of equal co-ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon
City,[24] this Court expounded on the consequences of a
void marriage on the property relations of the spouses and
specified the applicable provisions of law:
The trial court correctly applied the law. In a void marriage,
regardless of the cause thereof, the property relations of
the parties during the period of cohabitation is governed
by the provisions of Article 147 or Article 148, such as the
case may be, of the Family Code. Article 147 is a remake
of Article 144 of the Civil Code as interpreted and so
applied in previous cases; it provides:
ART. 147. When a man and a woman who are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof if the former's efforts consisted in the care and
maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos
of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common
children or their descendants, each vacant share shall
belong to the respective surviving descendants. In the
absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place
upon termination of the cohabitation.
This peculiar kind of co-ownership applies when a man
and a woman, suffering no legal impediment to marry
each other, so exclusively live together as husband and
wife under a void marriage or without the benefit of
marriage. The term "capacitated" in the provision (in the
first paragraph of the law) refers to the legal capacity of a
party to contract marriage, i.e., any "male or female of the
age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38" of the Code.
Under this property regime, property acquired by both
spouses through their work and industry shall be governed
by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed to have
been obtained through their joint efforts. A party who did
not participate in the acquisition of the property shall still
be considered as having contributed thereto jointly if said
party's "efforts consisted in the care and maintenance of
the family household." Unlike the conjugal partnership of
gains, the fruits of the couple's separate property are not
included in the co-ownership.
Article 147 of the Family Code, in substance and to the
above extent, has clarified Article 144 of the Civil Code; in
addition, the law now expressly provides that
(a) Neither party can dispose or encumber by act[s] inter
vivos [of] his or her share in co-ownership property, without
the consent of the other, during the period of
cohabitation; and
(b) In the case of a void marriage, any party in bad faith
shall forfeit his or her share in the co-ownership in favor of
their common children; in default thereof or waiver by any
or all of the common children, each vacant share shall
belong to the respective surviving descendants, or still in
default thereof, to the innocent party. The forfeiture shall
take place upon the termination of the cohabitation or
declaration of nullity of the marriage.
In deciding to take further cognizance of the issue on the
settlement of the parties' common property, the trial court
acted neither imprudently nor precipitately; a court which
had jurisdiction to declare the marriage a nullity must be
deemed likewise clothed with authority to resolve
incidental and consequential matters. Nor did it commit a
reversible error in ruling that petitioner and private
respondent own the "family home" and all their common
property in equal shares, as well as in concluding that, in
the liquidation and partition of the property owned in
common by them, the provisions on co-ownership under
the Civil Code, not Articles 50, 51 and 52, in relation to
Articles 102 and 129, of the Family Code, should aptly
prevail. The rules set up to govern the liquidation of either
the absolute community or the conjugal partnership of
gains, the property regimes recognized for valid and
voidable marriages (in the latter case until the contract is
annulled), are irrelevant to the liquidation of the co-
ownership that exists between common-law spouses. The
first paragraph of Article 50 of the Family Code, applying
paragraphs (2), (3), (4) and (5) of Article 43, relates only,
by its explicit terms, to voidable marriages and,
exceptionally, to void marriages under Article 40 of the
Code, i.e., the declaration of nullity of a subsequent
marriage contracted by a spouse of a prior void marriage
before the latter is judicially declared void. The latter is a
special rule that somehow recognizes the philosophy and
an old doctrine that void marriages are inexistent from the
very beginning and no judicial decree is necessary to
establish their nullity. In now requiring for purposes of
remarriage, the declaration of nullity by final judgment of
the previously contracted void marriage, the present law
aims to do away with any continuing uncertainty on the
status of the second marriage. It is not then illogical for the
provisions of Article 43, in relation to Articles 41 and 42, of
the Family Code, on the effects of the termination of a
subsequent marriage contracted during the subsistence of
a previous marriage to be made applicable pro hac vice.
In all other cases, it is not to be assumed that the law has
69
also meant to have coincident property relations, on the
one hand, between spouses in valid and voidable
marriages (before annulment) and, on the other, between
common-law spouses or spouses of void marriages,
leaving to ordain, in the latter case, the ordinary rules on
co-ownership subject to the provision of Article 147 and
Article 148 of the Family Code. It must be stressed,
nevertheless, even as it may merely state the obvious, that
the provisions of the Family Code on the "family home," i.e.,
the provisions found in Title V, Chapter 2, of the Family
Code, remain in force and effect regardless of the
property regime of the spouses.[25]
Since the properties ordered to be distributed by the court
a quo were found, both by the trial court and the Court of
Appeals, to have been acquired during the union of the
parties, the same would be covered by the co-ownership.
No fruits of a separate property of one of the parties
appear to have been included or involved in said
distribution. The liquidation, partition and distribution of the
properties owned in common by the parties herein as
ordered by the court a quo should, therefore, be
sustained, but on the basis of co-ownership and not of the
regime of conjugal partnership of gains.
As to the issue on custody of the parties over their only
child, Javy Singh Buenaventura, it is now moot since he is
about to turn twenty-five years of age on May 27, 2005[26]
and has, therefore, attained the age of majority.
With regard to the issues on support raised in the Petition
for Certiorari, these would also now be moot, owing to the
fact that the son, Javy Singh Buenaventura, as previously
stated, has attained the age of majority.
WHEREFORE, the Decision of the Court of Appeals dated
October 8, 1996 and its Resolution dated December 10,
1996 which are contested in the Petition for Review (G.R.
No. 127449), are hereby MODIFIED, in that the award of
moral and exemplary damages, attorneys fees, expenses
of litigation and costs are deleted. The order giving
respondent one-half of the retirement benefits of
petitioner from Far East Bank and Trust Co. and one-half of
petitioners shares of stock in Manila Memorial Park and in
the Provident Group of Companies is sustained but on the
basis of the liquidation, partition and distribution of the co-
ownership and not of the regime of conjugal partnership
of gains. The rest of said Decision and Resolution are
AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358)
contesting the Court of Appeals Resolutions of September
2, 1996 and November 13, 1996 which increased the
support pendente lite in favor of the parties son, Javy Singh
Buenaventura, is now MOOT and ACADEMIC and is,
accordingly, DISMISSED.
No costs.
SO ORDERED.
ABING VS WAEYAN 2006
In this appeal by way of a petition for review under Rule 45
of the Rules of Court, petitioner John Abing (John,
hereafter) seeks to set aside the Decision1 dated October
24, 2000 of the Court of Appeals (CA) in CA-G.R. SP No.
48675, reversing that of the Regional Trial Court (RTC) of
Benguet, Branch 64, which affirmed an earlier decision of
the Municipal Trial Court (MTC) of Mankayan, Benguet in
an ejectment suit thereat commenced by the petitioner
against the respondent.
In the main, the controversy is between a man and a
woman who, during the good old days, lived together as
husband and wife without the benefit of marriage. During
their cohabitation, they acquired properties. Later, they
parted ways, and with it this litigation between them
involving one of their common properties.
The facts:
Sometime in 1986, John and respondent Juliet Waeyan
(Juliet, for short) met and fell in love with each other. In
time, the duo cohabited as husband and wife without the
benefit of marriage. Together, the couple bought a 2-
storey residential house from one Benjamin Macua which
was erected on a lot owned by a certain Alejandro Dio
on Aurora Street, Mankayan, Benguet. Consequent to the
purchase, the tax declaration of the 2-storey house was
transferred in the name of Juliet.
On December 2, 1991, Juliet left for overseas employment
in Korea. She would send money to John who deposited
the same in their joint bank account.
In 1992, the original 2-storey residential house underwent
renovation. To it was annexed a new structure which
housed a sari-sari store. This new structure and the sari-sari
store thereat are the properties involved in this case.
In 1994, Juliet returned from Korea and continued to live
with John. She managed the sari-sari store while John
worked as a mine employee of the Lepanto Consolidated
Mining, Inc.
In 1995, the relationship between the two turned from bad
to worse. Hence, they decided to partition their properties.
For the purpose, they executed on October 7, 1995 a
Memorandum of Agreement. Unfortunately, the
document was left unsigned by the parties although
signed by the witnesses thereto. Under their unsigned
agreement, John shall leave the couples' dwelling with
Juliet paying him the amount of P428,870.00 representing
John's share in all their properties. On the same date
October 7, 1995 Juliet paid John the sum of P232,397.66
by way of partial payment of his share, with the balance
of P196,472.34 to be paid by Juliet in twelve monthly
installment beginning November 1995.
Juliet, however, failed to make good the balance. On
account thereof, John demanded of her to vacate the
annex structure housing the sari-sari store. Juliet refused,
prompting John to file an ejectment suit against her before
the MTC of Mankayan, Benguet.
In his complaint, John alleged that he alone spent for the
construction of the annex structure with his own funds and
thru money he borrowed from his relatives. In fact, he
added that the tax declaration for the structure was under
his name. On this premise, John claimed exclusive
ownership of the subject structure, which thereby gave
him the right to eject Juliet therefrom upon the latter's
failure to pay the agreed balance due him under the
aforementioned Memorandum of Agreement.
In her answer, Juliet countered that their original house was
renovated thru their common funds and that the subject
structure annexed thereto was merely an attachment or
an extension of their original residential house, hence the
same pertained to the two of them in common.
In a decision2 dated March 15, 1997, the MTC, on its finding
that the money used in the construction of the structure in
question solely came from John, ruled that the same
exclusively pertained to the latter, and accordingly
ordered Juliet's eviction therefrom, including the sari-sari
store thereat, and required her to surrender possession
thereof to John, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff
(John) and against the defendant (Juliet).
70

Defendant is hereby ordered to vacate the premises of the
store in litigation covered by Tax Declaration No. 96-001-
00445 in the name of the Plaintiff and turn over possession
thereof to the latter.
Defendant is hereby further ordered to pay the Plaintiff the
sum of P2,500.00 a month from the time she withheld
possession of the store in litigation in June 1996 until she
vacates the same and turn over possession thereof to the
Plaintiff.
Defendant is finally ordered, to pay the sum of P5,000.00 to
the Plaintiff by way of Attorney's fees; and to pay the costs.
SO ORDERED.
On Juliet's appeal to the RTC, the latter, in its decision of
July 29, 1995, affirmed that of the MTC. Undaunted, Juliet
then went to the CA in CA-G.R. SP No. 48675.
As stated at the threshold hereof, the CA, in its Decision of
October 24, 2000,3 reversed that of the RTC, to wit:
WHEREFORE, the petition is GRANTED. The assailed decision
of the Regional Trial Court is hereby reversed and set aside.
Petitioner, Juliet Waeyan is entitled to possess the property
and maintain therein her business.
SO ORDERED.
Partly says the CA in its reversal disposition:
It is undisputed that the parties lived together as husband
and wife without the benefit of marriage from 1986 to 1995
and that they acquired certain properties which must be
divided between them upon the termination of their
common law relationship.
xxx xxx xxx
. . . their property relations cannot be governed by the
provision of the Civil Code on conjugal partnership... but
by the rule on co-ownership.
xxx xxx xxx
. . . the parties' share in respect of the properties they have
accumulated during their cohabitation shall be equal
unless there is proof to the contrary.
To the CA, John's evidence failed to establish that he
alone spent for the construction of the annex structure.
Hence, the same pertained to both, and being a co-
owner herself, Juliet cannot be evicted therefrom, adding
that if ever, John's cause of action should have been for a
sum of money "because he claims that Juliet still owes him
the payment for the extension." According to the CA,
ejectment cannot lie against Juliet because Juliet's
possession of the premises in dispute was not by virtue of a
contract, express or implied, nor did she obtain such
possession thru force, intimidation, threat, strategy or
stealth.
Hence, John's present recourse, submitting that the CA
erred in
1. not giving effect to the parties' Memorandum of
Agreement which should have been binding between
them albeit unsigned by both;
2. in holding that the subject premises (annex structure
housing the sari-sari store) is owned by the two of them in
common;
3. in ruling that the parties should settle their common
properties in a separate action for partition even as the
community character of the subject premises has not
been proven.
We AFFIRM with modification.
Essentially, the issues raised center on the core question of
whether or not the property subject of the suit pertains to
the exclusive ownership of petitioner, John. Departing from
the factual findings of the two courts before it, the CA
found that the premises in dispute is owned in common by
Juliet and John, the latter having failed to establish by the
required quantum of proof that the money spent for the
construction thereof solely came from him. Being a co-
owner of the same structure, Juliet may not be ejected
therefrom.
While the question raised is essentially one of fact, of which
the Court normally eschews from, yet, given the conflicting
factual findings of the three courts below, the Court shall
go by the exception4 to the general rule and proceed to
make its own assessment of the evidence.
First and foremost, it is undisputed that the parties hereto
lived together as husband and wife from 1986 to 1995
without the benefit of marriage. Neither is it disputed that
sometime in December 1991, Juliet left for Korea and
worked thereat, sending money to John which the latter
deposited in their joint account. In fact, Juliet was still in
Korea when the annex structure was constructed in 1992.
Other than John's bare allegation that he alone, thru his
own funds and money he borrowed from his relatives,
spent for the construction of the annex structure, evidence
is wanting to support such naked claim. For sure, John
even failed to reveal how much he spent therefor. Neither
did he divulge the names of the alleged relatives from
whom he made his borrowings, let alone the amount of
money he borrowed from them. All that petitioner could
offer by way of reinforcing his claim of spending his own
funds and borrowed money in putting up the subject
structure was the affidavit executed by a certain Manuel
Macaraeg to the effect that petitioner borrowed
P30,000.00 from him. Even then, Macaraeg stated in his
affidavit that it was sometime in 1990 when John borrowed
said amount from him. With the petitioner's own admission
that the subject structure was constructed only in 1992, or
two years after he borrowed P30,000.00 from Macaraeg, it
is even doubtful whether the amount he allegedly
borrowed from the latter went into the construction of the
structure in dispute. More, it is noted that while petitioner
was able to present in evidence the Macaraeg affidavit,
he failed to introduce similar affidavits, if any, of his close
relatives from whom he claimed to have made similar
borrowings. For sure, not a single relative came forward to
confirm petitioner's tale. In short, there is a paucity of
evidence, testimonial or documentary, to support
petitioner's self-serving allegation that the annex structure
which housed the sari-sari store was put up thru his own
funds and/or money borrowed by him. Sure, petitioner has
in his favor the tax declaration covering the subject
structure. We have, however, ruled time and again that
tax declarations do not prove ownership but at best an
indicia of claims of ownership.5 Payment of taxes is not
proof of ownership, any more than indicating possession in
the concept of an owner.6 Neither tax receipts nor
declaration of ownership for taxation purposes are
evidence of ownership or of the right to possess realty
when not supported by other effective proofs.7
In this connection, Article 147 of the Family Code is
instructive. It reads:
Art. 147. When a man and a woman who are capacitated
to marry each other, live exclusively with each other as
71
husband and wife without the benefit of marriage or under
a void marriage, their wages and salaries shall be owned
by them in equal shares and the property acquired by
both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by other party of any property shall be deemed
to have contributed jointly in the acquisition thereof if the
former's efforts consisted in the care and maintenance of
the family and of the household.
The law is clear. In the absence, as here, of proofs to the
contrary, any property acquired by common-law spouses
during their period of cohabitation is presumed to have
been obtained thru their joint efforts and is owned by them
in equal shares. Their property relationship is governed by
the rules on co-ownership. And under this regime, they
owned their properties in common "in equal shares." Being
herself a co-owner of the structure in question, Juliet, as
correctly ruled by the CA, may not be ejected therefrom.
True it is that under Article 4878 of the Civil Code, a co-
owner may bring an action for ejectment against a co-
owner who takes exclusive possession and asserts exclusive
ownership of a common property. It bears stressing,
however, that in this case, evidence is totally wanting to
establish John's or Juliet's exclusive ownership of the
property in question. Neither did Juliet obtain possession
thereof by virtue of a contract, express or implied, or thru
intimidation, threat, strategy or stealth. As borne by the
record, Juliet was in possession of the subject structure and
the sari-sari store thereat by virtue of her being a co-owner
thereof. As such, she is as much entitled to enjoy its
possession and ownership as John.
We, however, disagree with the ruling of the CA that the
subject Memorandum of Agreement, being unsigned by
Juliet and John, has no binding effect between them.
It is a matter of record that pursuant to said Agreement,
Juliet did pay John the amount of P232,397.66, as initial
payment for John's share in their common properties, with
the balance of P196,472.34 payable in twelve monthly
installments beginning November 1995. It is also a matter
of record that the Agreement was signed by the witnesses
thereto. Hence, the irrelevant circumstances that the
Agreement was left unsigned by Juliet and John cannot
adversely affect its binding force or effect between them,
as evidently, Juliet's initial payment of P232,397.66 to John
was in fulfillment of what the parties had agreed upon
thereunder. However, and as correctly held by the CA,
Juliet's failure to pay John the balance of the latter's share
in their common properties could at best give rise to an
action for a sum of money against Juliet, or for rescission of
the said agreement and not for ejectment.
WHEREFORE, the petition is DENIED and the assailed CA
Decision is AFFIRMED, except that portion thereof denying
effect to the parties' Memorandum of Agreement for
being unsigned by both.
Costs against petitioner.
SO ORDERED
METROBANK VS PASCUAL 2008
Respondent Nicholson Pascual and Florencia Nevalga
were married on January 19, 1985. During the union,
Florencia bought from spouses Clarito and Belen Sering a
250-square meter lot with a three-door apartment
standing thereon located in Makati City. Subsequently,
Transfer Certificate of Title (TCT) No. S-101473/T-510
covering the purchased lot was canceled and, in lieu
thereof, TCT No. 1562831 of the Registry of Deeds of Makati
City was issued in the name of Florencia, "married to
Nelson Pascual" a.k.a. Nicholson Pascual.
In 1994, Florencia filed a suit for the declaration of nullity of
marriage under Article 36 of the Family Code, docketed
as Civil Case No. Q-95-23533. After trial, the Regional Trial
Court (RTC), Branch 94 in Quezon City rendered, on July
31, 1995, a Decision,2 declaring the marriage of Nicholson
and Florencia null and void on the ground of
psychological incapacity on the part of Nicholson. In the
same decision, the RTC, inter alia, ordered the dissolution
and liquidation of the ex-spouses conjugal partnership of
gains. Subsequent events saw the couple going their
separate ways without liquidating their conjugal
partnership.
On April 30, 1997, Florencia, together with spouses
Norberto and Elvira Oliveros, obtained a PhP 58 million loan
from petitioner Metropolitan Bank and Trust Co.
(Metrobank). To secure the obligation, Florencia and the
spouses Oliveros executed several real estate mortgages
(REMs) on their properties, including one involving the lot
covered by TCT No. 156283. Among the documents
Florencia submitted to procure the loan were a copy of
TCT No. 156283, a photocopy of the marriage-nullifying
RTC decision, and a document denominated as "Waiver"
that Nicholson purportedly executed on April 9, 1995. The
waiver, made in favor of Florencia, covered the conjugal
properties of the ex-spouses listed therein, but did not
incidentally include the lot in question.
Due to the failure of Florencia and the spouses Oliveros to
pay their loan obligation when it fell due, Metrobank, on
November 29, 1999, initiated foreclosure proceedings
under Act No. 3135, as amended, before the Office of the
Notary Public of Makati City. Subsequently, Metrobank
caused the publication of the notice of sale on three issues
of Remate.3 At the auction sale on January 21, 2000,
Metrobank emerged as the highest bidder.
Getting wind of the foreclosure proceedings, Nicholson
filed on June 28, 2000, before the RTC in Makati City, a
Complaint to declare the nullity of the mortgage of the
disputed property, docketed as Civil Case No. 00-789 and
eventually raffled to Branch 65 of the court. In it, Nicholson
alleged that the property, which is still conjugal property,
was mortgaged without his consent.
Metrobank, in its Answer with Counterclaim and Cross-
Claim,4 alleged that the disputed lot, being registered in
Florencias name, was paraphernal. Metrobank also
asserted having approved the mortgage in good faith.
Florencia did not file an answer within the reglementary
period and, hence, was subsequently declared in default.
The RTC Declared the REM Invalid
After trial on the merits, the RTC rendered, on September
24, 2001, judgment finding for Nicholson. The fallo reads:
PREMISES CONSIDERED, the Court renders judgment
declaring the real estate mortgage on the property
covered by [TCT] No. 156283 of the Registry of Deeds for
the City of Makati as well as all proceedings thereon null
and void.
The Court further orders defendants [Metrobank and
Florencia] jointly and severally to pay plaintiff [Nicholson]:
1. PhP100,000.00 by way of moral damages;
72
2. PhP75,000.00 by way of attorneys fees; and
3. The costs.
SO ORDERED.5
Even as it declared the invalidity of the mortgage, the trial
court found the said lot to be conjugal, the same having
been acquired during the existence of the marriage of
Nicholson and Florencia. In so ruling, the RTC invoked Art.
116 of the Family Code, providing that "all property
acquired during the marriage, whether the acquisition
appears to have been made, contracted or registered in
the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved." To the trial court,
Metrobank had not overcome the presumptive conjugal
nature of the lot. And being conjugal, the RTC concluded
that the disputed property may not be validly
encumbered by Florencia without Nicholsons consent.
The RTC also found the deed of waiver Florencia submitted
to Metrobank to be fatally defective. For let alone the fact
that Nicholson denied executing the same and that the
signature of the notarizing officer was a forgery, the waiver
document was allegedly executed on April 9, 1995 or a
little over three months before the issuance of the RTC
decision declaring the nullity of marriage between
Nicholson and Florencia.
The trial court also declared Metrobank as a mortgagee in
bad faith on account of negligence, stating the
observation that certain data appeared in the supporting
contract documents, which, if properly scrutinized, would
have put the bank on guard against approving the
mortgage. Among the data referred to was the date of
execution of the deed of waiver.
The RTC dismissed Metrobanks counterclaim and cross-
claim against the ex-spouses.
Metrobanks motion for reconsideration was denied.
Undeterred, Metrobank appealed to the Court of Appeals
(CA), the appeal docketed as CA-G.R. CV No. 74874.
The CA Affirmed with Modification the RTCs Decision
On January 28, 2004, the CA rendered a Decision
affirmatory of that of the RTC, except for the award therein
of moral damages and attorneys fees which the CA
ordered deleted. The dispositive portion of the CAs
Decision reads:
WHEREFORE, premises considered, the appealed decision
is hereby AFFIRMED WITH MODIFICATION with respect to
the award of moral damages and attorneys fees which is
hereby DELETED.
SO ORDERED.6
Like the RTC earlier held, the CA ruled that Metrobank
failed to overthrow the presumption established in Art. 116
of the Family Code. And also decreed as going against
Metrobank was Florencias failure to comply with the
prescriptions of the succeeding Art. 124 of the Code on the
disposition of conjugal partnership property. Art. 124 states:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In
case of disagreement, the husbands decision shall
prevail, subject to recourse to the court by the wife for
proper remedy x x x.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or
encumbrance without authority of the court or written
consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall
be void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and
the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by
either or both offerors.
As to the deletion of the award of moral damages and
attorneys fees, the CA, in gist, held that Metrobank did not
enter into the mortgage contract out of ill-will or for some
fraudulent purpose, moral obliquity, or like dishonest
considerations as to justify damages.
Metrobank moved but was denied reconsideration by the
CA.
Thus, Metrobank filed this Petition for Review on Certiorari
under Rule 45, raising the following issues for consideration:
a. Whether or not the [CA] erred in declaring subject
property as conjugal by applying Article 116 of the Family
Code.
b. Whether or not the [CA] erred in not holding that the
declaration of nullity of marriage between the respondent
Nicholson Pascual and Florencia Nevalga ipso facto
dissolved the regime of community of property of the
spouses.
c. Whether or not the [CA] erred in ruling that the petitioner
is an innocent purchaser for value.7
Our Ruling
A modification of the CAs Decision is in order.
The Disputed Property is Conjugal
It is Metrobanks threshold posture that Art. 160 of the Civil
Code providing that "[a]ll property of the marriage is
presumed to belong to the conjugal partnership, unless it
be prove[n] that it pertains exclusively to the husband or
to the wife," applies. To Metrobank, Art. 116 of the Family
Code could not be of governing application inasmuch as
Nicholson and Florencia contracted marriage before the
effectivity of the Family Code on August 3, 1988. Citing
Manongsong v. Estimo,8 Metrobank asserts that the
presumption of conjugal ownership under Art. 160 of the
Civil Code applies when there is proof that the property
was acquired during the marriage. Metrobank adds,
however, that for the presumption of conjugal ownership
to operate, evidence must be adduced to prove that not
only was the property acquired during the marriage but
that conjugal funds were used for the acquisition, a
burden Nicholson allegedly failed to discharge.
To bolster its thesis on the paraphernal nature of the
disputed property, Metrobank cites Francisco v. Court of
Appeals9 and Jocson v. Court of Appeals,10 among other
cases, where this Court held that a property registered in
the name of a certain person with a description of being
married is no proof that the property was acquired during
the spouses marriage.
On the other hand, Nicholson, banking on De Leon v.
Rehabilitation Finance Corporation11 and Wong v. IAC,12
contends that Metrobank failed to overcome the legal
presumption that the disputed property is conjugal. He
asserts that Metrobanks arguments on the matter of
presumption are misleading as only one postulate needs
to be shown for the presumption in favor of conjugal
ownership to arise, that is, the fact of acquisition during
marriage. Nicholson dismisses, as inapplicable, Francisco
73
and Jocson, noting that they are relevant only when there
is no indication as to the exact date of acquisition of the
property alleged to be conjugal.
As a final point, Nicholson invites attention to the fact that
Metrobank had virtually recognized the conjugal nature of
the property in at least three instances. The first was when
the bank lumped him with Florencia in Civil Case No. 00-
789 as co-mortgagors and when they were referred to as
"spouses" in the petition for extrajudicial foreclosure of
mortgage. Then came the published notice of foreclosure
sale where Nicholson was again designated as co-
mortgagor. And third, in its demand-letter13 to vacate the
disputed lot, Metrobank addressed Nicholson and
Florencia as "spouses," albeit the finality of the decree of
nullity of marriage between them had long set in.
We find for Nicholson.
First, while Metrobank is correct in saying that Art. 160 of
the Civil Code, not Art. 116 of the Family Code, is the
applicable legal provision since the property was acquired
prior to the enactment of the Family Code, it errs in its
theory that, before conjugal ownership could be legally
presumed, there must be a showing that the property was
acquired during marriage using conjugal funds. Contrary
to Metrobanks submission, the Court did not, in
Manongsong,14 add the matter of the use of conjugal
funds as an essential requirement for the presumption of
conjugal ownership to arise. Nicholson is correct in pointing
out that only proof of acquisition during the marriage is
needed to raise the presumption that the property is
conjugal. Indeed, if proof on the use of conjugal is still
required as a necessary condition before the presumption
can arise, then the legal presumption set forth in the law
would veritably be a superfluity. As we stressed in Castro v.
Miat:
Petitioners also overlook Article 160 of the New Civil Code.
It provides that "all property of the marriage is presumed to
be conjugal partnership, unless it be prove[n] that it
pertains exclusively to the husband or to the wife." This
article does not require proof that the property was
acquired with funds of the partnership. The presumption
applies even when the manner in which the property was
acquired does not appear.15 (Emphasis supplied.)
Second, Francisco and Jocson do not reinforce
Metrobanks theory. Metrobank would thrust on the Court,
invoking the two cases, the argument that the registration
of the property in the name of "Florencia Nevalga, married
to Nelson Pascual" operates to describe only the marital
status of the title holder, but not as proof that the property
was acquired during the existence of the marriage.
Metrobank is wrong. As Nicholson aptly points out, if proof
obtains on the acquisition of the property during the
existence of the marriage, then the presumption of
conjugal ownership applies. The correct lesson of
Francisco and Jocson is that proof of acquisition during the
marital coverture is a condition sine qua non for the
operation of the presumption in favor of conjugal
ownership. When there is no showing as to when the
property was acquired by the spouse, the fact that a title
is in the name of the spouse is an indication that the
property belongs exclusively to said spouse.16
The Court, to be sure, has taken stock of Nicholsons
arguments regarding Metrobank having implicitly
acknowledged, thus being in virtual estoppel to question,
the conjugal ownership of the disputed lot, the bank
having named the former in the foreclosure proceedings
below as either the spouse of Florencia or her co-
mortgagor. It is felt, however, that there is no compelling
reason to delve into the matter of estoppel, the same
having been raised only for the first time in this petition.
Besides, however Nicholson was designated below does
not really change, one way or another, the classification
of the lot in question.
Termination of Conjugal Property Regime does
not ipso facto End the Nature of Conjugal Ownership
Metrobank next maintains that, contrary to the CAs
holding, Art. 129 of the Family Code is inapplicable. Art. 129
in part reads:
Art. 129. Upon the dissolution of the conjugal partnership
regime, the following procedure shall apply:
xxxx
(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.
Apropos the aforequoted provision, Metrobank asserts
that the waiver executed by Nicholson, effected as it were
before the dissolution of the conjugal property regime,
vested on Florencia full ownership of all the properties
acquired during the marriage.
Nicholson counters that the mere declaration of nullity of
marriage, without more, does not automatically result in a
regime of complete separation when it is shown that there
was no liquidation of the conjugal assets.
We again find for Nicholson.
While the declared nullity of marriage of Nicholson and
Florencia severed their marital bond and dissolved the
conjugal partnership, the character of the properties
acquired before such declaration continues to subsist as
conjugal properties until and after the liquidation and
partition of the partnership. This conclusion holds true
whether we apply Art. 129 of the Family Code on
liquidation of the conjugal partnerships assets and
liabilities which is generally prospective in application, or
Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185) of the
Civil Code on the subject, Conjugal Partnership of Gains.
For, the relevant provisions of both Codes first require the
liquidation of the conjugal properties before a regime of
separation of property reigns.
In Dael v. Intermediate Appellate Court, we ruled that
pending its liquidation following its dissolution, the conjugal
partnership of gains is converted into an implied ordinary
co-ownership among the surviving spouse and the other
heirs of the deceased.17
In this pre-liquidation scenario, Art. 493 of the Civil Code
shall govern the property relationship between the former
spouses, where:
Each co-owner shall have the full ownership of his part and
of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
(Emphasis supplied.)
In the case at bar, Florencia constituted the mortgage on
the disputed lot on April 30, 1997, or a little less than two
years after the dissolution of the conjugal partnership on
July 31, 1995, but before the liquidation of the partnership.
Be that as it may, what governed the property relations of
74
the former spouses when the mortgage was given is the
aforequoted Art. 493. Under it, Florencia has the right to
mortgage or even sell her one-half (1/2) undivided interest
in the disputed property even without the consent of
Nicholson. However, the rights of Metrobank, as
mortgagee, are limited only to the 1/2 undivided portion
that Florencia owned. Accordingly, the mortgage
contract insofar as it covered the remaining 1/2 undivided
portion of the lot is null and void, Nicholson not having
consented to the mortgage of his undivided half.
The conclusion would have, however, been different if
Nicholson indeed duly waived his share in the conjugal
partnership. But, as found by the courts a quo, the April 9,
1995 deed of waiver allegedly executed by Nicholson
three months prior to the dissolution of the marriage and
the conjugal partnership of gains on July 31, 1995 bore his
forged signature, not to mention that of the notarizing
officer. A spurious deed of waiver does not transfer any
right at all, albeit it may become the root of a valid title in
the hands of an innocent buyer for value.
Upon the foregoing perspective, Metrobanks right, as
mortgagee and as the successful bidder at the auction of
the lot, is confined only to the 1/2 undivided portion
thereof heretofore pertaining in ownership to Florencia.
The other undivided half belongs to Nicholson. As owner
pro indiviso of a portion of the lot in question, Metrobank
may ask for the partition of the lot and its property rights
"shall be limited to the portion which may be allotted to
[the bank] in the division upon the termination of the co-
ownership."18 This disposition is in line with the well-
established principle that the binding force of a contract
must be recognized as far as it is legally possible to do so
quando res non valet ut ago, valeat quantum valere
potest.19
In view of our resolution on the validity of the auction of the
lot in favor of Metrobank, there is hardly a need to discuss
at length whether or not Metrobank was a mortgagee in
good faith. Suffice it to state for the nonce that where the
mortgagee is a banking institution, the general rule that a
purchaser or mortgagee of the land need not look beyond
the four corners of the title is inapplicable.20 Unlike private
individuals, it behooves banks to exercise greater care and
due diligence before entering into a mortgage contract.
The ascertainment of the status or condition of the
property offered as security and the validity of the
mortgagors title must be standard and indispensable part
of the banks operation.21 A bank that failed to observe
due diligence cannot be accorded the status of a bona
fide mortgagee,22 as here.
But as found by the CA, however, Metrobanks failure to
comply with the due diligence requirement was not the
result of a dishonest purpose, some moral obliquity or
breach of a known duty for some interest or ill-will that
partakes of fraud that would justify damages.
WHEREFORE, the petition is PARTLY GRANTED. The
appealed Decision of the CA dated January 28, 2004,
upholding with modification the Decision of the RTC,
Branch 65 in Makati City, in Civil Case No. 00-789, is
AFFIRMED with the MODIFICATION that the REM over the
lot covered by TCT No. 156283 of the Registry of Deeds of
Makati City is hereby declared valid only insofar as the pro
indiviso share of Florencia thereon is concerned.
As modified, the Decision of the RTC shall read:
PREMISES CONSIDERED, the real estate mortgage on the
property covered by TCT No. 156283 of the Registry of
Deeds of Makati City and all proceedings thereon are
NULL and VOID with respect to the undivided 1/2 portion
of the disputed property owned by Nicholson, but VALID
with respect to the other undivided 1/2 portion belonging
to Florencia.
The claims of Nicholson for moral damages and attorneys
fees are DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED
DINO VS DINO 2011
The Case
Before the Court is a petition for review1 assailing the 18
October 2006 Decision2 and the 12 March 2007 Order3 of
the Regional Trial Court of Las Pias City, Branch 254 (trial
court) in Civil Case No. LP-01-0149.
The Antecedent Facts
Alain M. Dio (petitioner) and Ma. Caridad L. Dio
(respondent) were childhood friends and sweethearts.
They started living together in 1984 until they decided to
separate in 1994. In 1996, petitioner and respondent
decided to live together again. On 14 January 1998, they
were married before Mayor Vergel Aguilar of Las Pias
City.
On 30 May 2001, petitioner filed an action for Declaration
of Nullity of Marriage against respondent, citing
psychological incapacity under Article 36 of the Family
Code. Petitioner alleged that respondent failed in her
marital obligation to give love and support to him, and
had abandoned her responsibility to the family, choosing
instead to go on shopping sprees and gallivanting with her
friends that depleted the family assets. Petitioner further
alleged that respondent was not faithful, and would at
times become violent and hurt him.
Extrajudicial service of summons was effected upon
respondent who, at the time of the filing of the petition,
was already living in the United States of America. Despite
receipt of the summons, respondent did not file an answer
to the petition within the reglementary period. Petitioner
later learned that respondent filed a petition for
divorce/dissolution of her marriage with petitioner, which
was granted by the Superior Court of California on 25 May
2001. Petitioner also learned that on 5 October 2001,
respondent married a certain Manuel V. Alcantara.
On 30 April 2002, the Office of the Las Pias prosecutor
found that there were no indicative facts of collusion
between the parties and the case was set for trial on the
merits.
Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist,
submitted a psychological report establishing that
respondent was suffering from Narcissistic Personality
Disorder which was deeply ingrained in her system since
her early formative years. Dr. Tayag found that
respondents disorder was long-lasting and by nature,
incurable.
In its 18 October 2006 Decision, the trial court granted the
petition on the ground that respondent was
psychologically incapacited to comply with the essential
marital obligations at the time of the celebration of the
marriage.
The Decision of the Trial Court
The trial court ruled that based on the evidence
presented, petitioner was able to establish respondents
psychological incapacity. The trial court ruled that even
without Dr. Tayags psychological report, the allegations in
75
the complaint, substantiated in the witness stand, clearly
made out a case of psychological incapacity against
respondent. The trial court found that respondent
committed acts which hurt and embarrassed petitioner
and the rest of the family, and that respondent failed to
observe mutual love, respect and fidelity required of her
under Article 68 of the Family Code. The trial court also
ruled that respondent abandoned petitioner when she
obtained a divorce abroad and married another man.
The dispositive portion of the trial courts decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered:
1. Declaring the marriage between plaintiff ALAIN M. DIO
and defendant MA. CARIDAD L. DIO on January 14, 1998,
and all its effects under the law, as NULL and VOID from
the beginning; and
2. Dissolving the regime of absolute community of
property.
A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only
be issued upon compliance with Article[s] 50 and 51 of the
Family Code.
Let copies of this Decision be furnished the parties, the
Office of the Solicitor General, Office of the City
Prosecutor, Las Pias City and the Office of the Local Civil
Registrar of Las Pias City, for their information and
guidance.
SO ORDERED.4
Petitioner filed a motion for partial reconsideration
questioning the dissolution of the absolute community of
property and the ruling that the decree of annulment shall
only be issued upon compliance with Articles 50 and 51 of
the Family Code.
In its 12 March 2007 Order, the trial court partially granted
the motion and modified its 18 October 2006 Decision as
follows:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered:
1) Declaring the marriage between plaintiff ALAIN M. DIO
and defendant MA. CARIDAD L. DIO on January 14, 1998,
and all its effects under the law, as NULL and VOID from
the beginning; and
2) Dissolving the regime of absolute community of
property.
A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be
issued after liquidation, partition and distribution of the
parties properties under Article 147 of the Family Code.
Let copies of this Order be furnished the parties, the Office
of the Solicitor General, the Office of the City Prosecutor of
Las Pias City and the Local Civil Registrar of Las Pias City,
for their information and guidance.5
Hence, the petition before this Court.
The Issue
The sole issue in this case is whether the trial court erred
when it ordered that a decree of absolute nullity of
marriage shall only be issued after liquidation, partition,
and distribution of the parties properties under Article 147
of the Family Code.
The Ruling of this Court
The petition has merit.
Petitioner assails the ruling of the trial court ordering that a
decree of absolute nullity of marriage shall only be issued
after liquidation, partition, and distribution of the parties
properties under Article 147 of the Family Code. Petitioner
argues that Section 19(1) of the Rule on Declaration of
Absolute Nullity of Null Marriages and Annulment of
Voidable Marriages6 (the Rule) does not apply to Article
147 of the Family Code.
We agree with petitioner.
The Court has ruled in Valdes v. RTC, Branch 102, Quezon
City that in a void marriage, regardless of its cause, the
property relations of the parties during the period of
cohabitation is governed either by Article 147 or Article 148
of the Family Code.7 Article 147 of the Family Code applies
to union of parties who are legally capacitated and not
barred by any impediment to contract marriage, but
whose marriage is nonetheless void,8 such as petitioner
and respondent in the case before the Court.
Article 147 of the Family Code provides:
Article 147. When a man and a woman who are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof if the formers efforts consisted in the care and
maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos
of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common
children or their descendants, each vacant share shall
belong to the respective surviving descendants. In the
absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place
upon termination of the cohabitation.
For Article 147 of the Family Code to apply, the following
elements must be present:
1. The man and the woman must be capacitated to marry
each other;
2. They live exclusively with each other as husband and
wife; and
3. Their union is without the benefit of marriage, or their
marriage is void.9
All these elements are present in this case and there is no
question that Article 147 of the Family Code applies to the
property relations between petitioner and respondent.
76
We agree with petitioner that the trial court erred in
ordering that a decree of absolute nullity of marriage shall
be issued only after liquidation, partition and distribution of
the parties properties under Article 147 of the Family
Code. The ruling has no basis because Section 19(1) of the
Rule does not apply to cases governed under Articles 147
and 148 of the Family Code. Section 19(1) of the Rule
provides:
Sec. 19. Decision. - (1) If the court renders a decision
granting the petition, it shall declare therein that the
decree of absolute nullity or decree of annulment shall be
issued by the court only after compliance with Articles 50
and 51 of the Family Code as implemented under the Rule
on Liquidation, Partition and Distribution of Properties.
The pertinent provisions of the Family Code cited in Section
19(1) of the Rule are:
Article 50. The effects provided for in paragraphs (2), (3),
(4) and (5) of Article 43 and in Article 44 shall also apply in
proper cases to marriages which are declared void ab
initio or annulled by final judgment under Articles 40 and
45.10
The final judgment in such cases shall provide for the
liquidation, partition and distribution of the properties of
the spouses, the custody and support of the common
children, and the delivery of their presumptive legitimes,
unless such matters had been adjudicated in previous
judicial proceedings.
All creditors of the spouses as well as of the absolute
community of the conjugal partnership shall be notified of
the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which
it is situated, shall be adjudicated in accordance with the
provisions of Articles 102 and 129.
Article 51. In said partition, the value of the presumptive
legitimes of all common children, computed as of the date
of the final judgment of the trial court, shall be delivered in
cash, property or sound securities, unless the parties, by
mutual agreement judicially approved, had already
provided for such matters.
The children of their guardian, or the trustee of their
property, may ask for the enforcement of the judgment.
The delivery of the presumptive legitimes herein prescribed
shall in no way prejudice the ultimate successional rights of
the children accruing upon the death of either or both of
the parents; but the value of the properties already
received under the decree of annulment or absolute
nullity shall be considered as advances on their legitime.
It is clear from Article 50 of the Family Code that Section
19(1) of the Rule applies only to marriages which are
declared void ab initio or annulled by final judgment under
Articles 40 and 45 of the Family Code. In short, Article 50 of
the Family Code does not apply to marriages which are
declared void ab initio under Article 36 of the Family Code,
which should be declared void without waiting for the
liquidation of the properties of the parties.
Article 40 of the Family Code contemplates a situation
where a second or bigamous marriage was
contracted.1avvphil Under Article 40, "[t]he absolute nullity
of a previous marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment
declaring such previous marriage void." Thus we ruled:
x x x where the absolute nullity of a previous marriage is
sought to be invoked for purposes of contracting a second
marriage, the sole basis acceptable in law, for said
projected marriage to be free from legal infirmity, is a final
judgment declaring a previous marriage void.11
Article 45 of the Family Code, on the other hand, refers to
voidable marriages, meaning, marriages which are valid
until they are set aside by final judgment of a competent
court in an action for annulment.12 In both instances
under Articles 40 and 45, the marriages are governed
either by absolute community of property13 or conjugal
partnership of gains14 unless the parties agree to a
complete separation of property in a marriage settlement
entered into before the marriage. Since the property
relations of the parties is governed by absolute community
of property or conjugal partnership of gains, there is a
need to liquidate, partition and distribute the properties
before a decree of annulment could be issued. That is not
the case for annulment of marriage under Article 36 of the
Family Code because the marriage is governed by the
ordinary rules on co-ownership.
In this case, petitioners marriage to respondent was
declared void under Article 3615 of the Family Code and
not under Article 40 or 45. Thus, what governs the
liquidation of properties owned in common by petitioner
and respondent are the rules on co-ownership. In Valdes,
the Court ruled that the property relations of parties in a
void marriage during the period of cohabitation is
governed either by Article 147 or Article 148 of the Family
Code.16 The rules on co-ownership apply and the
properties of the spouses should be liquidated in
accordance with the Civil Code provisions on co-
ownership. Under Article 496 of the Civil Code, "[p]artition
may be made by agreement between the parties or by
judicial proceedings. x x x." It is not necessary to liquidate
the properties of the spouses in the same proceeding for
declaration of nullity of marriage.
WHEREFORE, we AFFIRM the Decision of the trial court with
the MODIFICATION that the decree of absolute nullity of
the marriage shall be issued upon finality of the trial courts
decision without waiting for the liquidation, partition, and
distribution of the parties properties under Article 147 of
the Family Code.
SO ORDERED
SALAS VS AGUILA 2013
The Case
This petition for review on certiorari1 assails the 16 March
2012 Decision2 and the 28 June 2012 Resolution3 of the
Court of Appeals (CA) in CA-G.R. CV No. 95322. The CA
affirmed the 26 September 2008 Order4 of the Regional
Trial Court of Nasugbu, Batangas, Branch 14 (RTC), in Civil
Case No. 787.
The Facts
On 7 September 1985, petitioner Juan Sevilla Salas, Jr.
(Salas) and respondent Eden Villena Aguila (Aguila) were
married. On 7 June 1986, Aguila gave birth to their
daughter, Joan Jiselle. Five months later, Salas left their
conjugal dwelling. Since then, he no longer
communicated with Aguila or their daughter.
On 7 October 2003, Aguila filed a Petition for Declaration
of Nullity of Marriage (petition) citing psychological
incapacity under Article 36 of the Family Code. The
petition states that they "have no conjugal properties
whatsoever."5 In the Return of Summons dated 13 October
2003, the sheriff narrated that Salas instructed his mother
Luisa Salas to receive the copy of summons and the
petition.6
77
On 7 May 2007, the RTC rendered a Decision7 declaring
the nullity of the marriage of Salas and Aguila (RTC
Decision). The RTC Decision further provides for the
"dissolution of their conjugal partnership of gains, if any."8
On 10 September 2007, Aguila filed a Manifestation and
Motion9 stating that she discovered: (a) two 200-square-
meter parcels of land with improvements located in San
Bartolome, Quezon City, covered by Transfer Certificate of
Title (TCT) No. N-259299-A and TCT No. N-255497; and (b) a
108-square-meter parcel of land with improvement
located in Tondo, Manila, covered by TCT No. 243373
(collectively, "Discovered Properties"). The registered
owner of the Discovered Properties is "Juan S.Salas,
married to Rubina C. Salas." The manifestation was set for
hearing on 21 September 2007. However, Salas notice of
hearing was returned unserved with the remark, "RTS
Refused To Receive."
On 19 September 2007, Salas filed a Manifestation with
Entry of Appearance10 requesting for an Entry of
Judgment of the RTC Decision since no motion for
reconsideration or appeal was filed and no conjugal
property was involved.
On 21 September 2007, the hearing for Aguilas
manifestation ensued, with Aguila, her counsel and the
state prosecutor present. During the hearing, Aguila
testified that on 17 April 2007 someone informed her of the
existence of the Discovered Properties. Thereafter, she
verified the information and secured copies of TCTs of the
Discovered Properties. When asked to clarify, Aguila
testified that Rubina C. Salas (Rubina) is Salas common-
law wife.11
On 8 February 2008, Salas filed an Opposition to the
Manifestation12 alleging that there is no conjugal property
to be partitioned based on Aguilas petition. According to
Salas, Aguilas statement was a judicial admission and was
not made through palpable mistake. Salas claimed that
Aguila waived her right to the Discovered Properties. Salas
likewise enumerated properties he allegedly waived in
favor of Aguila, to wit:(1) parcels of land with
improvements located in Sugar Landing Subdivision,
Alangilan, Batangas City; No. 176 Brias Street, Nasugbu,
Batangas; P. Samaniego Street, Silangan, Nasugbu,
Batangas; and Batangas City, financed by Filinvest; (2)
cash amounting to 200,000.00; and (3) motor vehicles,
specifically Honda City and Toyota Tamaraw
FX(collectively, "Waived Properties"). Thus, Salas
contended that the conjugal properties were deemed
partitioned.
The Ruling of the Regional Trial Court
In its 26 September 2008 Order, the RTC ruled in favor of
Aguila. The dispositive portion of the Order reads:
WHEREFORE, foregoing premises being considered, the
petitioner and the respondent are hereby directed to
partition between themselves by proper instruments of
conveyance, the following properties, without prejudice to
the legitime of their legitimate child, Joan Jisselle Aguila
Salas:
(1) A parcel of land registered in the name of Juan S. Salas
married to Rubina C. Salas located in San Bartolome,
Quezon City and covered by TCT No. N-259299-A marked
as Exhibit "A" and its improvements;
(2) A parcel of land registered in the name of Juan S.Salas
married to Rubina C. Salas located in San Bartolome,
Quezon City and covered by TCT No. N-255497 marked as
Exhibit "B" and its improvements;
(3) A parcel of land registered in the name of Juan S.Salas
married to Rubina Cortez Salas located in Tondo and
covered by TCT No. 243373-Ind. marked as Exhibit "D" and
its improvements.
Thereafter, the Court shall confirm the partition so agreed
upon bythe parties, and such partition, together with the
Order of the Court confirming the same, shall be recorded
in the Registry of Deeds of the place in which the property
is situated.
SO ORDERED.13
The RTC held that pursuant to the Rules,14 even upon entry
of judgment granting the annulment of marriage, the
court can proceed with the liquidation, partition and
distribution of the conjugal partnership of gains if it has not
been judicially adjudicated upon, as in this case. The RTC
found that the Discovered Properties are among the
conjugal properties to be partitioned and distributed
between Salas and Aguila. However, the RTC held that
Salas failed to prove the existence of the Waived
Properties.
On 11 November 2008, Rubina filed a Complaint-in-
Intervention, claiming that: (1) she is Rubina Cortez, a
widow and unmarried to Salas; (2) the Discovered
Properties are her paraphernal properties; (3) Salas did not
contribute money to purchase the Discovered Properties
as he had no permanent job in Japan; (4) the RTC did not
acquire jurisdiction over her as she was not a party in the
case; and (5) she authorized her brother to purchase the
Discovered Properties but because he was not well-versed
with legal documentation, he registered the properties in
the name of "Juan S. Salas, married to Rubina C. Salas."
In its 16 December 2009 Order, the RTC denied the Motion
for Reconsideration filed by Salas. The RTC found that Salas
failed to prove his allegation that Aguila transferred the
Waived Properties to third persons. The RTC emphasized
that it cannot go beyond the TCTs, which state that Salas
is the registered owner of the Discovered Properties. The
RTC further held that Salas and Rubina were at fault for
failing to correct the TCTs, if they were not married as they
claimed.
Hence, Salas filed an appeal with the CA.
The Ruling of the Court of Appeals
On 16 March 2012, the CA affirmed the order of the RTC.15
The CA ruled that Aguilas statement in her petition is not
a judicial admission. The CA pointed out that the petition
was filed on 7 October 2003, but Aguila found the
Discovered Properties only on 17 April 2007 or before the
promulgation of the RTC decision. Thus, the CA concluded
that Aguila was palpably mistaken in her petition and it
would be unfair to punish her over a matter that she had
no knowledge of at the time she made the admission. The
CA also ruled that Salas was not deprived of the
opportunity to refute Aguilas allegations in her
manifestation, even though he was not present in its
hearing. The CA likewise held that Rubina cannot
collaterally attack a certificate of title.
In a Resolution dated 28 June 2012,16 the CA denied the
Motion for Reconsideration17 filed by Salas. Hence, this
petition.
The Issues
Salas seeks a reversal and raises the following issues for
resolution:
1. The Court of Appeals erred in affirming the trial courts
decision ordering the partition of the parcels of land
78
covered by TCT Nos. N-259299-A and N-255497 in Quezon
City and as well as the property in Manila covered by TCT
No. 243373 between petitioner and respondent.
2. The Court of Appeals erred in affirming the trial courts
decision in not allowing Rubina C. Cortez to intervene in
this case18
The Ruling of the Court
The petition lacks merit.
Since the original manifestation was an action for partition,
this Court cannot order a division of the property, unless it
first makes a determination as to the existence of a co-
ownership.19 Thus, the settlement of the issue of ownership
is the first stage in this action.20
Basic is the rule that the party making an allegation in a
civil case has the burden of proving it by a preponderance
of evidence.21 Salas alleged that contrary to Aguilas
petition stating that they had no conjugal property, they
actually acquired the Waived Properties during their
marriage. However, the RTC found, and the CA affirmed,
that Salas failed to prove the existence and acquisition of
the Waived Properties during their marriage:
A perusal of the record shows that the documents
submitted by [Salas] as the properties allegedly registered
in the name of [Aguila] are merely photocopies and not
certified true copies, hence, this Court cannot admit the
same as part of the records of this case. These are the
following:
(1) TCT No. T-65876 a parcel of land located at Poblacion,
Nasugbu, Batangas, registered in the name of Eden A.
Salas, married to Juan Salas Jr. which is cancelled by TCT
No. T-105443 in the name of Joan Jiselle A. Salas, single;
(2) TCT No. T-68066 a parcel of land situated in the Barrio
of Landing, Nasugbu, Batangas, registered in the name of
Eden A. Salas, married to Juan S. Salas Jr.
Moreover, [Aguila] submitted original copy of Certification
issued by Ms. Erlinda A. Dasal, Municipal Assessor of
Nasugbu, Batangas, certifying that [Aguila] has no real
property (land and improvement) listed in the Assessment
Roll for taxation purposes, as of September 17, 2008.
Such evidence, in the absence of proof to the contrary,
has the presumption of regularity. x x x.
Suffice it to say that such real properties are existing and
registered in the name of [Aguila], certified true copies
thereof should have been the ones submitted to this Court.
Moreover, there is also a presumption that properties
registered in the Registry of Deeds are also declared in the
Assessment Roll for taxation purposes.22
On the other hand, Aguila proved that the Discovered
Properties were acquired by Salas during their
marriage.1wphi1 Both the RTC and the CA agreed that
the Discovered Properties registered in Salas name were
acquired during his marriage with Aguila. The TCTs of the
Discovered Properties were entered on 2 July 1999 and 29
September 2003, or during the validity of Salas and Aguilas
marriage. In Villanueva v. Court of Appeals,23 we held that
the question of whether the properties were acquired
during the marriage is a factual issue. Factual findings of
the RTC, particularly if affirmed by the CA, are binding on
us, except under compelling circumstances not present in
this case.24
On Salas allegation that he was not accorded due
process for failing to attend the hearing of Aguilas
manifestation, we find the allegation untenable. The
essence of due process is opportunity to be heard. We
hold that Salas was given such opportunity when he filed
his opposition to the manifestation, submitted evidence
and filed his appeal.
On both Salas and Rubinas contention that Rubina owns
the Discovered Properties, we likewise find the contention
unmeritorious. The TCTs state that "Juan S. Salas, married to
Rubina C. Salas" is the registered owner of the Discovered
Properties. A Torrens title is generally a conclusive
evidence of the ownership of the land referred to,
because there is a strong presumption that it is valid and
regularly issued.25 The phrase "married to" is merely
descriptive of the civil status of the registered owner.26
Furthermore, Salas did not initially dispute the ownership of
the Discovered Properties in his opposition to the
manifestation. It was only when Rubina intervened that
Salas supported Rubinas statement that she owns the
Discovered Properties.
Considering that Rubina failed to prove her title or her legal
interest in the Discovered Properties, she has no right to
intervene in this case. The Rules of Court provide that only
"a person who has a legal interest in the matter in litigation,
or in the success of either of the parties, or an interest
against both, or is so situated as to be adversely affected
by a distribution or other disposition of property in the
custody of the court or of an officer thereof may, with
leave of court, be allowed to intervene in the action."27
In Dio v. Dio,28 we held that Article 147 of the Family
Code applies to the union of parties who are legally
capacitated and not barred by any impediment to
contract marriage, but whose marriage is nonetheless
declared void under Article 36 of the Family Code, as in
this case. Article147 of the Family Code provides:
ART. 147. When a man and a woman who are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof if the formers efforts consisted in the care and
maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos
of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common
children or their descendants, each vacant share shall
belong to the respective surviving descendants. In the
absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place
upon termination of the cohabitation. (Emphasis supplied)
Under this property regime, property acquired during the
marriage is prima facie presumed to have been obtained
through the couples joint efforts and governed by the
rules on co-ownership.29 In the present case, Salas did not
rebut this presumption. In a similar case where the ground
79
for nullity of marriage was also psychological incapacity,
we held that the properties acquired during the union of
the parties, as found by both the RTC and the CA, would
be governed by co-ownership.30 Accordingly, the
partition of the Discovered Properties as ordered by the
RTC and the CA should be sustained, but on the basis of
co-ownership and not on the regime of conjugal
partnership of gains.
WHEREFORE, we DENY the petition. We AFFIRM the
Decision dated16 March 2012 and the Resolution dated 28
June 2012 of the Court of Appeals in CA-G.R. CV No.
95322.
SO ORDERED.
VENTURAN VS ABUDA 2013
The Case
This petition for review on certiorari seeks to annul the
Decision1 dated 9 March 2012 of the Court of Appeals
(CA) in CA-G.R. CV No. 92330 and the Resolution2 dated
3 August 2012 denying the motion for reconsideration. The
Decision and Resolution dismissed the Appeal dated 23
October 2009 and affirmed with modification the
Decision3 dated 24 November 2008 of the Regional Trial
Court of Manila, Branch 32 (RTC-Manila).
The Facts
The RTC-Manila and the CA found the facts to be as
follows:
Socorro Torres (Socorro) and Esteban Abletes (Esteban)
were married on 9 June 1980. Although Socorro and
Esteban never had common children, both of them had
children from prior marriages: Esteban had a daughter
named Evangeline Abuda (Evangeline), and Socorro had
a son, who was the father of Edilberto U. Ventura, Jr.
(Edilberto), the petitioner in this case.
Evidence shows that Socorro had a prior subsisting
marriage to Crispin Roxas (Crispin) when she married
Esteban. Socorro married Crispin on 18 April 1952. This
marriage was not annulled, and Crispin was alive at the
time of Socorros marriage to Esteban.
Estebans prior marriage, on the other hand, was dissolved
by virtue of his wifes death in 1960. According to Edilberto,
sometime in 1968, Esteban purchased a portion of a lot
situated at 2492 State Alley, Bonifacio Street, Vitas, Tondo,
Manila (Vitas property). The remaining portion was
thereafter purchased by Evangeline on her fathers behalf
sometime in 1970.4 The Vitas property was covered by
Transfer Certificate of Title No. 141782, dated 11 December
1980, issued to "Esteban Abletes, of legal age, Filipino,
married to Socorro Torres."5
Edilberto also claimed that starting 1978, Evangeline and
Esteban operated small business establishments located
at 903 and 905 Delpan Street, Tondo, Manila (Delpan
property).6
On 6 September 1997, Esteban sold the Vitas and Delpan
properties to Evangeline and her husband, Paulino Abuda
(Paulino).7 According to Edilberto:
when Esteban was diagnosed with colon cancer
sometime in 1993, he decided to sell the Delpan and Vitas
properties to Evangeline. Evangeline continued paying
the amortizations on the two (2) properties situated in
Delpan Street. The amortizations, together with the
amount of Two Hundred Thousand Pesos (Php 200,000.00),
which Esteban requested as advance payment, were
considered part of the purchase price of the Delpan
properties. Evangeline likewise gave her father Fifty
Thousand Pesos (Php 50,000.00) for the purchase of the
Vitas properties and she shouldered his medical
expenses.8
Esteban passed away on 11 September 1997, while
Socorro passed away on 31 July 1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother
of Edilberto, discovered the sale. Thus, Edilberto,
represented by Leonora, filed a Petition for Annulment of
Deeds of Sale before the RTC-Manila. Edilberto alleged
that the sale of the properties was fraudulent because
Estebans signature on the deeds of sale was forged.
Respondents, on the other hand, argued that because of
Socorros prior marriage to Crispin, her subsequent
marriage to Esteban was null and void. Thus, neither
Socorro nor her heirs can claim any right or interest over
the properties purchased by Esteban and respondents.9
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro
and Esteban was void from the beginning.10 Article 83 of
the Civil Code, which was the governing law at the time
Esteban and Socorro were married, provides:
Art. 83. Any marriage subsequently contracted by any
person during the lifetime of the first spouse of such person
shall be illegal and void from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive
years at the time of the second marriage without the
spouse present having news of the absentee being alive,
or if the absentee, though he has been absent for less than
seven years, is generally considered as dead and believed
to be so by the spouse present at the time of contracting
such subsequent marriage, or if the absentee is presumed
dead according to articles 390 and 391. The marriage so
contracted shall be valid in any of the three cases until
declared null and void.
During trial, Edilberto offered the testimony of Socorros
daughter-in-law Conchita Ventura (Conchita). In her first
affidavit, Conchita claimed that Crispin, who was a
seaman, had been missing and unheard from for 35 years.
However, Conchita recanted her earlier testimony and
executed an Affidavit of Retraction.11
The RTC-Manila ruled that the lack of a judicial decree of
nullity does not affect the status of the union. It applied our
ruling in Nial v. Badayog:12
Jurisprudence under the Civil Code states that no judicial
decree is necessary in order to establish the nullity of a
marriage. x x x
Under ordinary circumstances, the effect of a void
marriage, so far as concerns the conferring of legal rights
upon the parties, is as though no marriage had ever taken
place. And therefore, being good for no legal purpose, its
invalidity can be maintained in any proceeding in which
[the] fact of marriage may be material, either direct or
collateral, in any civil court between any parties at any
time, whether before or after the death of either or both
the husband and the wife, and upon mere proof of the
facts rendering such marriage void, it will be disregarded
or treated as non-existent by the courts.13
According to the RTC-Manila, the Vitas and Delpan
properties are not conjugal, and are governed by Articles
144 and 485 of the Civil Code, to wit:
80

Art. 144. When a man and a woman live together as
husband and wife, but they are not married, or their
marriage is void from the beginning, the property acquired
by either or both of them through their work or industry or
their wages and salaries shall be governed by the rules on
co-ownership.
Art. 485. The share of the co-owners, in the benefits as well
as in the charges, shall be proportional to their respective
interests. Any stipulation in a contract to the contrary shall
be void.
The portions belonging to the co-owners in the co-
ownership shall be presumed equal, unless the contrary is
proved.
The RTC-Manila then determined the respective shares of
Socorro and Esteban in the properties. It found that:
with respect to the property located at 2492 State Alley,
Bonifacio St. Vitas, Tondo, Manila covered by TCT No.
141782, formerly Marcos Road, Magsaysay Village, Tondo,
Manila, [Evangeline] declared that part of it was first
acquired by her father Esteban Abletes sometime in 1968
when he purchased the right of Ampiano Caballegan.
Then, in 1970, she x x x bought the right to one-half of the
remaining property occupied by Ampiano Caballegan.
However, during the survey of the National Housing
Authority, she allowed the whole lot to be registered in her
fathers name. As proof thereof, she presented Exhibits "8"
to "11" x x x. These documents prove that that she has been
an occupant of the said property in Vitas, Tondo even
before her father and Socorro Torres got married in June,
1980.14
Anent the parcels of land and improvements thereon 903
and 905 Del Pan Street, Tondo, Manila, x x x Evangeline
professed that in 1978, before her father met Socorro Torres
and before the construction of the BLISS Project thereat,
her father [already had] a bodega of canvas (lona) and
a sewing machine to sew the canvas being sold at 903 Del
Pan Street, Tondo Manila. In 1978, she was also operating
Vangies Canvas Store at 905 Del Pan Street, Tondo,
Manila, which was evidenced by Certificate of
Registration of Business Name issued in her favor on 09
November 1998 x x x. When the BLISS project was
constructed in 1980, the property became known as Units
D-9 and D-10. At first, her father [paid] for the amortizations
for these two (2) parcels of land but when he got sick with
colon cancer in 1993, he asked respondents to continue
paying for the amortizations x x x. [Evangeline] paid a total
of 195,259.52 for Unit D-9 as shown by the 37 pieces of
receipts x x x and the aggregate amount of 188,596.09
for Unit D-10, as evidenced by 36 receipts x x x.15
The RTC-Manila concluded that Socorro did not contribute
any funds for the acquisition of the properties. Hence, she
cannot be considered a co-owner, and her heirs cannot
claim any rights over the Vitas and Delpan properties.16
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision17 dated 9 March 2012, the CA sustained the
decision of the RTC-Manila. The dispositive portion of the
CA Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the
challenged Decision of the court a quo STANDS.
SO ORDERED.18
The CA ruled, however, that the RTC-Manila should have
applied Article 148 of the Family Code, and not Articles 144
and 485 of the Civil Code. Article 148 of the Family Code
states that in unions between a man and a woman who
are incapacitated to marry each other:
x x x only the properties acquired by both of the parties
through their actual joint contribution of money, property,
or industry shall be owned by them in common in
proportion to their respective contributions. In the absence
of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of
money and evidences of credit.
If one of the parties is validly married to another, his or her
share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in the
manner provided in the last paragraph of the preceding
Article.
The foregoing rules on forfeiture shall likewise apply even if
both parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals,19
and held that the foregoing provision applies "even if the
cohabitation or the acquisition of the property occurred
before the effectivity of the Family Code."20 The CA found
that Edilberto failed to prove that Socorro contributed to
the purchase of the Vitas and Delpan properties. Edilberto
was unable to provide any documentation evidencing
Socorros alleged contribution.21
On 2 April 2012, Edilberto filed a Motion for
Reconsideration,22 which was denied by the CA in its
Resolution dated 3 August 2012.23
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a
woman who are incapacitated to marry each other, the
ownership over the properties acquired during the
subsistence of that relationship shall be based on the
actual contribution of the parties. He even quoted our
ruling in Borromeo v. Descallar24 in his petition:
It is necessary for each of the partners to prove his or her
actual contribution to the acquisition of property in order
to be able to lay claim to any portion of it. Presumptions of
co-ownership and equal contribution do not apply.25
This is a reiteration of Article 148 of the Family Code, which
the CA applied in the assailed decision:
Art 148. In cases of cohabitation [wherein the parties are
incapacitated to marry each other], only the properties
acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned
by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to
be equal. The same rule and presumption shall apply to
joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her
share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in the
manner provided in the last paragraph of the preceding
Article.
81
The foregoing rules on forfeiture shall likewise apply even if
both parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan
properties can be considered common property if: (1)
these were acquired during the cohabitation of Esteban
and Socorro; and (2) there is evidence that the properties
were acquired through the parties actual joint
contribution of money, property, or industry.
Edilberto argues that the certificate of title covering the
Vitas property shows that the parcel of land is co-owned
by Esteban and Socorro because: (1) the Transfer
Certificate of Title was issued on 11 December 1980, or
several months after the parties were married; and (2) title
to the land was issued to "Esteban Abletes, of legal age,
married to Socorro Torres."26
We disagree. The title itself shows that the Vitas property is
owned by Esteban alone.1wphi1 The phrase "married to
Socorro Torres" is merely descriptive of his civil status, and
does not show that Socorro co-owned the property.27 The
evidence on record also shows that Esteban acquired
ownership over the Vitas property prior to his marriage to
Socorro, even if the certificate of title was issued after the
celebration of the marriage. Registration under the Torrens
title system merely confirms, and does not vest title. This
was admitted by Edilberto on page 9 of his petition
wherein he quotes an excerpt of our ruling in Borromeo:
Registration is not a mode of acquiring ownership. It is only
a means of confirming the fact of its existence with notice
to the world at large. Certificates of title are not a source
of right. The mere possession of a title does not make one
the true owner of the property. Thus, the mere fact that
respondent has the titles of the disputed properties in her
name does not necessarily, conclusively and absolutely
make her the owner. The rule on indefeasibility of title
likewise does not apply to respondent. A certificate of title
implies that the title is quiet, and that it is perfect, absolute
and indefeasible. However, there are well-defined
exceptions to this rule, as when the transferee is not a
holder in good faith and did not acquire the subject
properties for a valuable consideration.
Edilberto claims that Esteban s actual contribution to the
purchase of the Delpan property was not sufficiently
proven since Evangeline shouldered some of the
amortizations.28 Thus, the law presumes that Esteban and
Socorro jointly contributed to the acquisition of the Del pan
property.
We cannot sustain Edilberto s claim. Both the RTC-Manila
and the CA found that the Delpan property was acquired
prior to the marriage of Esteban and Socorro.29
Furthermore, even if payment of the purchase price of the
Delpan property was made by Evangeline, such payment
was made on behalf of her father. Article 1238 of the Civil
Code provides:
Art. 1238. Payment made by a third person who does not
intend to be reimbursed by the debtor is deemed to be a
donation, which requires the debtor s consent. But the
payment is in any case valid as to the creditor who has
accepted it.
Thus, it is clear that Evangeline paid on behalf of her father,
and the parties intended that the Delpan property would
be owned by and registered under the name of Esteban.
During trial, the Abuda spouses presented receipts
evidencing payments of the amortizations for the Delpan
property.1wphi1 On the other hand, Edilberto failed to
show any evidence showing Socorro s alleged monetary
contributions. As correctly pointed out by the CA:
settled is the rule that in civil cases x x x the burden of proof
rests upon the party who, as determined by the pleadings
or the nature of the case, asserts the affirmative of an issue.
x x x. Here it is Appellant who is duty bound to prove the
allegations in the complaint which undoubtedly, he
miserably failed to do so.30
WHEREFORE, the petition is DENIED. The Decision dated 9
March 2012 of the Court of Appeals in CA-G.R. CV No.
92330 is AFFIRMED.
SO ORDERED.
BEUMER VS BEUMER 2012
Before the Court is a Petition for Review on Certiorari1
under Rule 45 of the Rules of CoLlli assailing the October 8,
2009 Decision2 and January 24, 2011 Resolution3 of the
court of Appeals (CA) in CA-G.R. CV No. 01940, which
affirmed the February 28, 2007 Decision4 of the Regional
Trial Court (RTC) of Negros Oriental, Branch 34 in Civil Case
No. I 2884. The foregoing rulings dissolved the conjugal
partnership of gains of Willem Beumer (petitioner) and
Avelina Amores (respondent) and distributed the
properties forming part of the said property regime.
The Factual Antecedents
Petitioner, a Dutch National, and respondent, a Filipina,
married in March 29, 1980. After several years, the RTC of
Negros Oriental, Branch 32, declared the nullity of their
marriage in the Decision5 dated November 10, 2000 on the
basis of the formers psychological incapacity as
contemplated in Article 36 of the Family Code.
Consequently, petitioner filed a Petition for Dissolution of
Conjugal Partnership6 dated December 14, 2000 praying
for the distribution of the following described properties
claimed to have been acquired during the subsistence of
their marriage, to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated survey of Lots 2144 &
2147 of the Dumaguete Cadastre, covered by Transfer
Certificate of Title (TCT) No. 22846, containing an area of
252 square meters (sq.m.), including a residential house
constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre, covered by TCT
No. 21974, containing an area of 806 sq.m., including a
residential house constructed thereon.
c. Lot 5845 of the Dumaguete Cadastre, covered by TCT
No. 21306, containing an area of 756 sq.m.
d. Lot 4, Block 4 of the consolidated survey of Lots 2144 &
2147 of the Dumaguete Cadastre, covered by TCT No.
21307, containing an area of 45 sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered
by TCT No. 23567, containing an area of 2,635 sq.m. (the
area that appertains to the conjugal partnership is 376.45
sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered
by TCT No. 23575, containing an area of 360 sq.m. (the
area that appertains to the conjugal partnership is 24
sq.m.).7
In defense,8 respondent averred that, with the exception
of their two (2) residential houses on Lots 1 and 2142, she
and petitioner did not acquire any conjugal properties
during their marriage, the truth being that she used her
82
own personal money to purchase Lots 1, 2142, 5845 and 4
out of her personal funds and Lots 2055-A and 2055-I by
way of inheritance.9 She submitted a joint affidavit
executed by her and petitioner attesting to the fact that
she purchased Lot 2142 and the improvements thereon
using her own money.10 Accordingly, respondent sought
the dismissal of the petition for dissolution as well as
payment for attorneys fees and litigation expenses.11
During trial, petitioner testified that while Lots 1, 2142, 5845
and 4 were registered in the name of respondent, these
properties were acquired with the money he received
from the Dutch government as his disability benefit12 since
respondent did not have sufficient income to pay for their
acquisition. He also claimed that the joint affidavit they
submitted before the Register of Deeds of Dumaguete City
was contrary to Article 89 of the Family Code, hence,
invalid.13
For her part, respondent maintained that the money used
for the purchase of the lots came exclusively from her
personal funds, in particular, her earnings from selling
jewelry as well as products from Avon, Triumph and
Tupperware.14 She further asserted that after she filed for
annulment of their marriage in 1996, petitioner transferred
to their second house and brought along with him certain
personal properties, consisting of drills, a welding machine,
grinders, clamps, etc. She alleged that these tools and
equipment have a total cost of P500,000.00.15
The RTC Ruling
On February 28, 2007, the RTC of Negros Oriental, Branch
34 rendered its Decision, dissolving the parties conjugal
partnership, awarding all the parcels of land to respondent
as her paraphernal properties; the tools and equipment in
favor of petitioner as his exclusive properties; the two (2)
houses standing on Lots 1 and 2142 as co-owned by the
parties, the dispositive of which reads:
WHEREFORE, judgment is hereby rendered granting the
dissolution of the conjugal partnership of gains between
petitioner Willem Beumer and respondent Avelina Amores
considering the fact that their marriage was previously
annulled by Branch 32 of this Court. The parcels of land
covered by Transfer Certificate of Titles Nos. 22846, 21974,
21306, 21307, 23567 and 23575 are hereby declared
paraphernal properties of respondent Avelina Amores due
to the fact that while these real properties were acquired
by onerous title during their marital union, Willem Beumer,
being a foreigner, is not allowed by law to acquire any
private land in the Philippines, except through inheritance.
The personal properties, i.e., tools and equipment
mentioned in the complaint which were brought out by
Willem from the conjugal dwelling are hereby declared to
be exclusively owned by the petitioner.
The two houses standing on the lots covered by Transfer
Certificate of Title Nos. 21974 and 22846 are hereby
declared to be co-owned by the petitioner and the
respondent since these were acquired during their marital
union and since there is no prohibition on foreigners from
owning buildings and residential units. Petitioner and
respondent are, thereby, directed to subject this court for
approval their project of partition on the two houses
aforementioned.
The Court finds no sufficient justification to award the
counterclaim of respondent for attorneys fees considering
the well settled doctrine that there should be no premium
on the right to litigate. The prayer for moral damages are
likewise denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.16
It ruled that, regardless of the source of funds for the
acquisition of Lots 1, 2142, 5845 and 4, petitioner could not
have acquired any right whatsoever over these properties
as petitioner still attempted to acquire them
notwithstanding his knowledge of the constitutional
prohibition against foreign ownership of private lands.17
This was made evident by the sworn statements petitioner
executed purporting to show that the subject parcels of
land were purchased from the exclusive funds of his wife,
the herein respondent.18 Petitioners plea for
reimbursement for the amount he had paid to purchase
the foregoing properties on the basis of equity was likewise
denied for not having come to court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only
the RTCs award of Lots 1, 2142, 5845 and 4 in favor of
respondent. He insisted that the money used to purchase
the foregoing properties came from his own capital funds
and that they were registered in the name of his former
wife only because of the constitutional prohibition against
foreign ownership. Thus, he prayed for reimbursement of
one-half (1/2) of the value of what he had paid in the
purchase of the said properties, waiving the other half in
favor of his estranged ex-wife.19
On October 8, 2009, the CA promulgated a Decision20
affirming in toto the judgment rendered by the RTC of
Negros Oriental, Branch 34. The CA stressed the fact that
petitioner was "well-aware of the constitutional prohibition
for aliens to acquire lands in the Philippines."21 Hence, he
cannot invoke equity to support his claim for
reimbursement.
Consequently, petitioner filed the instant Petition for
Review on Certiorari assailing the CA Decision due to the
following error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT
SUSTAINING THE PETITIONERS ATTEMPT AT SUBSEQUENTLY
ASSERTING OR CLAIMING A RIGHT OF HALF OR WHOLE OF
THE PURCHASE PRICE USED IN THE PURCHASE OF THE REAL
PROPERTIES SUBJECT OF THIS CASE.22 (Emphasis supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first impression. In In Re:
Petition For Separation of Property-Elena Buenaventura
Muller v. Helmut Muller23 the Court had already denied a
claim for reimbursement of the value of purchased parcels
of Philippine land instituted by a foreigner Helmut Muller,
against his former Filipina spouse, Elena Buenaventura
Muller. It held that Helmut Muller cannot seek
reimbursement on the ground of equity where it is clear
that he willingly and knowingly bought the property
despite the prohibition against foreign ownership of
Philippine land24 enshrined under Section 7, Article XII of
the 1987 Philippine Constitution which reads:
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.
Undeniably, petitioner openly admitted that he "is well
aware of the above-cited constitutional prohibition"25
and even asseverated that, because of such prohibition,
he and respondent registered the subject properties in the
latters name.26 Clearly, petitioners actuations showed his
palpable intent to skirt the constitutional prohibition. On
the basis of such admission, the Court finds no reason why
83
it should not apply the Muller ruling and accordingly, deny
petitioners claim for reimbursement.
As also explained in Muller, the time-honored principle is
that he who seeks equity must do equity, and he who
comes into equity must come with clean hands.
Conversely stated, he who has done inequity shall not be
accorded equity. Thus, 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.27
In this case, petitioners statements regarding the real
source of the funds used to purchase the subject parcels
of land dilute the veracity of his claims: While admitting to
have previously executed a joint affidavit that
respondents personal funds were used to purchase Lot
1,28 he likewise claimed that his personal disability funds
were used to acquire the same. Evidently, these
inconsistencies show his untruthfulness. Thus, as petitioner
has come before the Court with unclean hands, he is now
precluded from seeking any equitable refuge.
In any event, the Court cannot, even on the grounds of
equity, grant reimbursement to petitioner given that he
acquired no right whatsoever over the subject properties
by virtue of its unconstitutional purchase. It is well-
established 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.29 Surely, a
contract that violates the Constitution and the law is null
and void, vests no rights, creates no obligations and
produces no legal effect at all.30 Corollary thereto, under
Article 1412 of the Civil Code,31 petitioner cannot have
the subject properties deeded to him or allow him to
recover the money he had spent for the purchase thereof.
The law will not aid either party to an illegal contract or
agreement; it leaves the parties where it finds them.32
Indeed, one cannot salvage any rights from an
unconstitutional transaction knowingly entered into.
Neither can the Court grant petitioners claim for
reimbursement on the basis of unjust enrichment.33 As
held in Frenzel v. Catito, a case also involving a foreigner
seeking monetary reimbursement for money spent on
purchase of Philippine land, the provision on unjust
enrichment does not apply if the action is proscribed by
the Constitution, to wit:
Futile, too, is petitioner's reliance on Article 22 of the New
Civil Code which reads:
Art. 22. Every person who through an act of performance
by another, or any other means, acquires or comes into
possession of something at the expense of the latter
without just or legal ground, shall return the same to
him.1wphi1
The provision is expressed in the maxim: "MEMO CUM
ALTERIUS DETER DETREMENTO PROTEST" (No person should
unjustly enrich himself at the expense of another). An
action for recovery of what has been paid without just
cause has been designated as an accion in rem verso. This
provision does not apply if, as in this case, the action is
proscribed by the Constitution or by the application of the
pari delicto doctrine. It may be unfair and unjust to bar the
petitioner from filing an accion in rem verso over the
subject properties, or from recovering the money he paid
for the said properties, but, as Lord Mansfield stated in the
early case of Holman v. Johnson: "The objection that a
contract is immoral or illegal as between the plaintiff and
the defendant, sounds at all times very ill in the mouth of
the defendant. It is not for his sake, however, that the
objection is ever allowed; but it is founded in general
principles of policy, which the defendant has the
advantage of, contrary to the real justice, as between him
and the plaintiff."34 (Citations omitted)
Nor would the denial of his claim amount to an injustice
based on his foreign citizenship.35 Precisely, it is the
Constitution itself which demarcates the rights of citizens
and non-citizens in owning Philippine land. To be sure, the
constitutional ban against foreigners applies only to
ownership of Philippine land and not to the improvements
built thereon, such as the two (2) houses standing on Lots
1 and 2142 which were properly declared to be co-owned
by the parties subject to partition. Needless to state, the
purpose of the prohibition is to conserve the national
patrimony36 and it is this policy which the Court is duty-
bound to protect.
WHEREFORE, the petition is DENIED. Accordingly, the
assailed October 8, 2009 Decision and January 24, 2011
Resolution of the Court of Appeals in CA-G.R. CV No. 01940
are AFFIRMED.
SO ORDERED
OCAMPO VS OCAMPO 2015
This is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court seeking the reversal of the Decision1
dated August 11, 2010 and Resolution2 dated October 5,
2011, respectively, of the Court of Appeals (CA) in CA-G.R.
CV No. 82318, which denied the petitioner's appeal and
motion for reconsideration.
The facts of the case, as culled from the records, are as
follows:LawlibraryofCRAlaw
On September 10, 1990, petitioner Virginia Sy Ocampo
(Virginia) filed a Petition for Declaration of Nullity of her
Marriage with Deogracio Ocampo (Deogracio) before
Regional Trial Court of Quezon City, Branch 87, on the
ground of psychological incapacity, docketed as Civil
Case No. Q-90-6616.3redarclaw
On January 22, 1993, the trial court rendered a Decision4
declaring the marriage between Virginia and Deogracio
as null and void, the dispositive portion of which
reads:LawlibraryofCRAlaw
WHEREFORE, the petition is hereby GRANTED. The marriage
between the petitioner and the respondent is hereby
declared null and void from the beginning under Article 36
of the Family Code. The status of their children, however,
shall remain legitimate and their custody is hereby
awarded to the petitioner.
As to the couple's property relations, their conjugal
partnership of gains shall necessarily be dissolved and
liquidated but since the petitioner has not submitted any
detailed and formal listing or inventory of such property,
the court cannot act now on the liquidation aspect. The
parties are given thirty (30) days to submit an inventory of
their conjugal partnership for the purpose of liquidation.
IT IS SO ORDERED.5
The decision became final, since no party appealed the
judgment annulling the marriage.
On March 31, 1999, the trial court directed the parties to
submit a project of partition of their inventoried properties,
and if they failed to do so, a hearing will be held on the
factual issues with regard to said properties. Having failed
to agree on a project of partition of their conjugal
properties, hearing ensued where the parties adduced
evidence in support of their respective stand.
84
On January 13, 2004, the trial court rendered the assailed
Order6 stating that the properties declared by the parties
belong to each one of them on a 50-50 sharing.
On February 2, 2004, Virginia filed a Notice of Appeal
before the trial court.
On February 13, 2004, Deogracio filed a Motion to Deny
and/or Dismiss the Notice of Appeal and for immediate
execution pursuant to Section 20 of A.M. No. 02-1-10.
On February 20, 2004, the trial court denied the aforesaid
motion to deny and/or dismiss the notice of appeal for
lack of merit.
On March 4, 2004, Deogracio filed a Motion for
Reconsideration. On March 22, 2004, the trial court denied
anew the motion for reconsideration.
In the disputed Decision dated August 11, 2010, the Court
of Appeals denied Virginia's appeal. Virginia moved for
reconsideration, but was denied in a Resolution dated
October 5, 2011.
Thus, the instant petition for review substantially
questioning whether respondent should be deprived of his
share in the conjugal partnership of gains by reason of bad
faith and psychological perversity.
The petition lacks merit.
While Virginia and Deogracio tied the marital knot on
January 16, 1978, it is still the Family Code provisions on
conjugal partnerships, however, which will govern the
property relations between Deogracio and Virginia even if
they were married before the effectivity of the Family
Code.
Article 105 of the Family Code explicitly mandates that the
Family Code shall apply to conjugal partnerships
established before the Family Code without prejudice to
vested rights already acquired under the Civil Code or
other laws. Thus, under the Family Code, if the properties
are acquired during the marriage, the presumption is that
they are conjugal. Hence, the burden of proof is on the
party claiming that they are not conjugal. This is counter-
balanced by the requirement that the properties must first
be proven to have been acquired during the marriage
before they are presumed conjugal.7redarclaw
The applicable law, however, in so far as the liquidation of
the conjugal partnership assets and liability is concerned,
is Article 1298 of the Family Code in relation to Article 147
of the Family Code.9redarclaw
The Court held that in a void marriage, as in those
declared void under Article 3610 of the Family Code, the
property relations of the parties during the period of
cohabitation is governed either by Article 147 or Article 148
of the Family Code.11 Article 147 of the Family Code
applies to union of parties who are legally capacitated
and not barred by any impediment to contract marriage,
but whose marriage is nonetheless void, as in this case.
Article 147 of the Family Code
provides:LawlibraryofCRAlaw
Article 147. When a man and a woman who are
capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or
industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof if the formers efforts consisted in the care and
maintenance of the family and of the household.
Neither party can encumber or dispose by acts inter vivos
of his or her share in the property acquired during
cohabitation and owned in common, without the consent
of the other, until after the termination of their
cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case
of default of or waiver by any or all of the common
children or their descendants, each vacant share shall
belong to the respective surviving descendants. In the
absence of descendants, such share shall belong to the
innocent party. In all cases, the forfeiture shall take place
upon termination of the cohabitation.12
This particular kind of co-ownership applies when a man
and a woman, suffering no illegal impediment to marry
each other, exclusively live together as husband and wife
under a void marriage or without the benefit of marriage.
It is clear, therefore, that for Article 147 to operate, the man
and the woman: (1) must be capacitated to marry each
other; (2) live exclusively with each other as husband and
wife; and (3) their union is without the benefit of marriage
or their marriage is void, as in the instant case. The term
"capacitated" in the first paragraph of the provision
pertains to the legal capacity of a party to contract
marriage. Any impediment to marry has not been shown
to have existed on the part of either Virginia or Deogracio.
They lived exclusively with each other as husband and
wife. However, their marriage was found to be void under
Article 36 of the Family Code on the ground of
psychological incapacity.13redarclaw
From the foregoing, property acquired by both spouses
through their work and industry should, therefore, be
governed by the rules on equal co-ownership. Any
property acquired during the union is prima facie
presumed to have been obtained through their joint
efforts. A party who did not participate in the acquisition
of the property shall be considered as having contributed
to the same jointly if said party's efforts consisted in the
care and maintenance of the family household. Efforts in
the care and maintenance of the family and household
are regarded as contributions to the acquisition of
common property by one who has no salary or income or
work or industry.14redarclaw
Citing Valdes v. RTC,15 the Court held that the court a quo
did not commit a reversible error in utilizing Article 147 of
the Family Code and in ruling that the former spouses own
the family home and all their common property in equal
shares, as well as in concluding that, in the liquidation and
partition of the property that they owned in common, the
provisions on co-ownership under the Civil Code should
aptly prevail. The rules which are set up to govern the
liquidation of either the absolute community or the
conjugal partnership of gains, the property regimes
recognized for valid and voidable marriages, are
irrelevant to the liquidation of the co-ownership that exists
between common-law spouses or spouses of void
marriages.
Thus, the trial court and the appellate court correctly held
that the parties will share on equal shares considering that
Virginia failed to prove that the properties were acquired
solely on her own efforts, to wit:LawlibraryofCRAlaw
85
This Court keenly observes that only testimonial evidence
was presented by the parties respectively, to prove and
dispute the claim of the other with regard to the properties
and assets acquired during the marriage. In the absence,
therefore, of any documentary evidence to prove the
contrary, all the properties acquired by the spouses during
the marriage are presumed conjugal. Further, the
testimonial evidence adduced by the petitioner aimed at
establishing that respondent took no part in acquiring said
properties failed to convince this Court that the latter be
given only a meager share thereof.
While it may be true that management of the businesses
referred to herein may have been actively undertaken by
the petitioner, it cannot be gainsaid that petitioner was
able to do so without the invaluable help of respondent.
Even a plain housewife who stays all the time in the house
and take[s] care of the household while the husband
indulges in lucrative and gainful activities is entitled to a
share in the same proportion the husband is, to the
property or properties acquired by the marriage. In the
same breadth, respondent must be considered to be
entitled to the same extent. Petitioner's claim that the seed
money in that business was provided by her mother and
that, had it not been for that reason, the properties now
subject of controversy could not have been acquired.
That may be true but the Court is not prone to believe so
because of insufficient evidence to prove such contention
but petitioner's self-serving allegations. Of course, attempts
to establish respondent as an irresponsible and unfaithful
husband, as well as family man were made but the
testimonies adduced towards that end, failed to fully
convince the Court that respondent should be punished
by depriving him of his share of the conjugal property
because of his indiscretion.16
In the instant case, both the trial and appellate courts
agreed that the subject properties were in fact acquired
during the marriage of Virginia and Deogracio. We give
due deference to factual findings of trial courts, especially
when affirmed by the appellate court, as in this case. A
reversal of this finding can only occur if petitioners show
sufficient reason for us to doubt its correctness. There is
none, in this case.
Likewise, we note that the former spouses both
substantially agree that they acquired the subject
properties during the subsistence of their marriage.17 The
certificates of titles and tax declarations are not sufficient
proof to overcome the presumption under Article 116 of
the Family Code. All properties acquired by the spouses
during the marriage, regardless in whose name the
properties are registered, are presumed conjugal unless
proved otherwise. The presumption is not rebutted by the
mere fact that the certificate of title of the property or the
tax declaration is in the name of one of the spouses only.
Article 116 expressly provides that the presumption remains
even if the property is "registered in the name of one or
both of the spouses."18 Thus, the failure of Virginia to rebut
this presumption, said properties were obtained by the
spouses' joint efforts, work or industry, and shall be jointly
owned by them in equal shares. Accordingly, the partition
of the former spouses' properties on the basis of co-
ownership, as ordered by the RTC and the appellate court,
should be affirmed, and not on the regime of conjugal
partnership of gains.
WHEREFORE, the petition is DENIED. The Decision dated
August 11, 2010 and the Resolution dated October 5, 2011
of the Court of Appeals in CA-G.R. CV No. 82318 are
AFFIRMED. The case is REMANDED to the trial court for
proper disposition.
SO ORDERED
Article 148
AGAPAY VS PALANG 1997
Before us is a petition for review of the decision of the Court
of Appeals in CA-G.R. CV No. 24199 entitled Erlinda
Agapay v. Carlina (Cornelia) Palang and Herminia P. Dela
Cruz dated June 22, 1994 involving the ownership of two
parcels of land acquired during the cohabitation of
petitioner and private respondents legitimate spouse.
Miguel Palang contracted his first marriage on July 16, 1949
when he took private respondent Carlina (or Cornelia)
Vallesterol as a wife at the Pozorrubio Roman Catholic
Church in Pangasinan. A few months after the wedding, in
October 1949, he left to work in Hawaii. Miguel and
Carlinas only child, Herminia Palang, was born on May 12,
1950.
Miguel returned in 1954 for a year. His next visit to the
Philippines was in 1964 and during the entire duration of his
year-long sojourn he stayed in Zambales with his brother,
not in Pangasinan with his wife and child. The trial court
found evidence that as early as 1957, Miguel had
attempted to divorce Carlina in Hawaii.[1] When he
returned for good in 1972, he refused to live with private
respondents, but stayed alone in a house in Pozorrubio,
Pangasinan.
On July 15, 1973, the then sixty-three-year-old Miguel
contracted his second marriage with nineteen-year-old
Erlinda Agapay, herein petitioner.[2] Two months earlier,
on May 17, 1973, Miguel and Erlinda, as evidenced by the
Deed of Sale, jointly purchased a parcel of agricultural
land located at San Felipe, Binalonan, Pangasinan with an
area of 10,080 square meters. Consequently, Transfer
Certificate of Title No. 101736 covering said rice land was
issued in their names.
A house and lot in Binalonan, Pangasinan was likewise
purchased on September 23, 1975, allegedly by Erlinda as
the sole vendee. TCT No. 143120 covering said property
was later issued in her name.
On October 30, 1975, Miguel and Cornelia Palang
executed a Deed of Donation as a form of compromise
agreement to settle and end a case filed by the latter.[3]
The parties therein agreed to donate their conjugal
property consisting of six parcels of land to their only child,
Herminia Palang.[4]
Miguel and Erlindas cohabitation produced a son,
Kristopher A. Palang, born on December 6, 1977. In 1979,
Miguel and Erlinda were convicted of Concubinage upon
Carlinas complaint.[5] Two years later, on February 15,
1981, Miguel died.
On July 11, 1981, Carlina Palang and her daughter
Herminia Palang de la Cruz, herein private respondents,
instituted the case at bar, an action for recovery of
ownership and possession with damages against
petitioner before the Regional Trial Court in Urdaneta,
Pangasinan (Civil Case No. U-4265). Private respondents
sought to get back the riceland and the house and lot
both located at Binalonan, Pangasinan allegedly
purchased by Miguel during his cohabitation with
petitioner.
Petitioner, as defendant below, contended that while the
riceland covered by TCT No. 101736 is registered in their
names (Miguel and Erlinda), she had already given her half
of the property to their son Kristopher Palang. She added
that the house and lot covered by TCT No. 143120 is her
sole property, having bought the same with her own
money. Erlinda added that Carlina is precluded from
claiming aforesaid properties since the latter had already
donated their conjugal estate to Herminia.
86
After trial on the merits, the lower court rendered its
decision on June 30, 1989 dismissing the complaint after
declaring that there was little evidence to prove that the
subject properties pertained to the conjugal property of
Carlina and Miguel Palang. The lower court went on to
provide for the intestate shares of the parties, particularly
of Kristopher Palang, Miguels illegitimate son. The
dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered-
1) Dismissing the complaint, with costs against plaintiffs;
2) Confirming the ownership of defendant Erlinda Agapay
of the residential lot located at Poblacion, Binalonan,
Pangasinan, as evidenced by TCT No. 143120, Lot 290-B
including the old house standing therein;
3) Confirming the ownership of one-half (1/2) portion of
that piece of agricultural land situated at Balisa, San
Felipe, Binalonan, Pangasinan, consisting of 10,080 square
meters and as evidenced by TCT No. 101736, Lot 1123-A to
Erlinda Agapay;
4) Adjudicating to Kristopher Palang as his inheritance from
his deceased father, Miguel Palang, the one-half (1/2) of
the agricultural land situated at Balisa, San Felipe,
Binalonan, Pangasinan, under TCT No. 101736 in the name
of Miguel Palang, provided that the former (Kristopher)
executes, within 15 days after this decision becomes final
and executory, a quit-claim forever renouncing any claims
to annul/reduce the donation to Herminia Palang de la
Cruz of all conjugal properties of her parents, Miguel
Palang and Carlina Vallesterol Palang, dated October 30,
1975, otherwise, the estate of deceased Miguel Palang will
have to be settled in another separate action;
5) No pronouncement as to damages and attorneys fees.
SO ORDERED.[6]
On appeal, respondent court reversed the trial courts
decision. The Court of Appeals rendered its decision on
July 22, 1994 with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the appealed
decision is hereby REVERSED and another one entered:
1. Declaring plaintiffs-appellants the owners of the
properties in question;
2. Ordering defendant-appellee to vacate and deliver the
properties in question to herein plaintiffs-appellants;
3. Ordering the Register of Deeds of Pangasinan to cancel
Transfer Certificate of Title Nos. 143120 and 101736 and to
issue in lieu thereof another certificate of title in the name
of plaintiffs-appellants.
No pronouncement as to costs.[7]
Hence, this petition.
Petitioner claims that the Court of Appeals erred in not
sustaining the validity of two deeds of absolute sale
covering the riceland and the house and lot, the first in
favor of Miguel Palang and Erlinda Agapay and the
second, in favor of Erlinda Agapay alone. Second,
petitioner contends that respondent appellate court erred
in not declaring Kristopher A. Palang as Miguel Palangs
illegitimate son and thus entitled to inherit from Miguels
estate. Third, respondent court erred, according to
petitioner, in not finding that there is sufficient pleading
and evidence that Kristoffer A. Palang or Christopher A.
Palang should be considered as party-defendant in Civil
Case No. U-4625 before the trial court and in CA-G.R. No.
24199.[8]
After studying the merits of the instant case, as well as the
pertinent provisions of law and jurisprudence, the Court
denies the petition and affirms the questioned decision of
the Court of Appeals.
The first and principal issue is the ownership of the two
pieces of property subject of this action. Petitioner assails
the validity of the deeds of conveyance over the same
parcels of land. There is no dispute that the transfers of
ownership from the original owners of the riceland and the
house and lot, Corazon Ilomin and the spouses Cespedes,
respectively, were valid.
The sale of the riceland on May 17, 1973, was made in
favor of Miguel and Erlinda. The provision of law applicable
here is Article 148 of the Family Code providing for cases
of cohabitation when a man and a woman who are not
capacitated to marry each other live exclusively with
each other as husband and wife without the benefit of
marriage or under a void marriage. While Miguel and
Erlinda contracted marriage on July 15, 1973, said union
was patently void because the earlier marriage of Miguel
and Carlina was still susbsisting and unaffected by the
latters de facto separation.
Under Article 148, only the properties acquired by both of
the parties through their actual joint contribution of
money, property or industry shall be owned by them in
common in proportion to their respective contributions. It
must be stressed that actual contribution is required by this
provision, in contrast to Article 147 which states that efforts
in the care and maintenance of the family and household,
are regarded as contributions to the acquisition of
common property by one who has no salary or income or
work or industry. If the actual contribution of the party is not
proved, there will be no co-ownership and no presumption
of equal shares.[9]
In the case at bar, Erlinda tried to establish by her testimony
that she is engaged in the business of buy and sell and had
a sari-sari store[10] but failed to persuade us that she
actually contributed money to buy the subject riceland.
Worth noting is the fact that on the date of conveyance,
May 17, 1973, petitioner was only around twenty years of
age and Miguel Palang was already sixty-four and a
pensioner of the U.S. Government. Considering her
youthfulness, it is unrealistic to conclude that in 1973 she
contributed P3,750.00 as her share in the purchase price of
subject property,[11] there being no proof of the same.
Petitioner now claims that the riceland was bought two
months before Miguel and Erlinda actually cohabited. In
the nature of an afterthought, said added assertion was
intended to exclude their case from the operation of
Article 148 of the Family Code. Proof of the precise date
when they commenced their adulterous cohabitation not
having been adduced, we cannot state definitively that
the riceland was purchased even before they started
living together. In any case, even assuming that the
subject property was bought before cohabitation, the
rules of co-ownership would still apply and proof of actual
contribution would still be essential.
Since petitioner failed to prove that she contributed
money to the purchase price of the riceland in Binalonan,
Pangasinan, we find no basis to justify her co-ownership
with Miguel over the same. Consequently, the riceland
should, as correctly held by the Court of Appeals, revert to
the conjugal partnership property of the deceased Miguel
and private respondent Carlina Palang.
Furthermore, it is immaterial that Miguel and Carlina
previously agreed to donate their conjugal property in
87
favor of their daughter Herminia in 1975. The trial court
erred in holding that the decision adopting their
compromise agreement in effect partakes the nature of
judicial confirmation of the separation of property
between spouses and the termination of the conjugal
partnership.[12] Separation of property between spouses
during the marriage shall not take place except by judicial
order or without judicial conferment when there is an
express stipulation in the marriage settlements.[13] The
judgment which resulted from the parties compromise was
not specifically and expressly for separation of property
and should not be so inferred.
With respect to the house and lot, Erlinda allegedly bought
the same for P20,000.00 on September 23, 1975 when she
was only 22 years old. The testimony of the notary public
who prepared the deed of conveyance for the property
reveals the falsehood of this claim. Atty. Constantino
Sagun testified that Miguel Palang provided the money for
the purchase price and directed that Erlindas name alone
be placed as the vendee.[14]
The transaction was properly a donation made by Miguel
to Erlinda, but one which was clearly void and inexistent
by express provision of law because it was made between
persons guilty of adultery or concubinage at the time of
the donation, under Article 739 of the Civil Code.
Moreover, Article 87 of the Family Code expressly provides
that the prohibition against donations between spouses
now applies to donations between persons living together
as husband and wife without a valid marriage,[15] for
otherwise, the condition of those who incurred guilt would
turn out to be better than those in legal union.[16]
The second issue concerning Kristopher Palangs status and
claim as an illegitimate son and heir to Miguels estate is
here resolved in favor of respondent courts correct
assessment that the trial court erred in making
pronouncements regarding Kristophers heirship and
filiation inasmuch as questions as to who are the heirs of
the decedent, proof of filiation of illegitimate children and
the determination of the estate of the latter and claims
thereto should be ventilated in the proper probate court
or in a special proceeding instituted for the purpose and
cannot be adjudicated in the instant ordinary civil action
which is for recovery of ownership and possession.[17]
As regards the third issue, petitioner contends that
Kristopher Palang should be considered as party-
defendant in the case at bar following the trial courts
decision which expressly found that Kristopher had not
been impleaded as party defendant but theorized that he
had submitted to the courts jurisdiction through his
mother/guardian ad litem.[18] The trial court erred gravely.
Kristopher, not having been impleaded, was, therefore,
not a party to the case at bar. His mother, Erlinda, cannot
be called his guardian ad litem for he was not involved in
the case at bar. Petitioner adds that there is no need for
Kristopher to file another action to prove that he is the
illegitimate son of Miguel, in order to avoid multiplicity of
suits.[19] Petitioners grave error has been discussed in the
preceeding paragraph where the need for probate
proceedings to resolve the settlement of Miguels estate
and Kristophers successional rights has been pointed out.
WHEREFORE, the instant petition is hereby DENIED. The
questioned decision of the Court of Appeals is AFFIRMED.
Costs against petitioner.
SO ORDERED.
MALLILIN VS CASTILLO 2000
This is a petition for review of the amended decision[1] of
the Court of Appeals dated May 7, 1998 in CA G.R. CV No.
48443 granting respondents motion for reconsideration of
its decision dated November 7, 1996, and of the resolution
dated December 21, 1998 denying petitioners motion for
reconsideration.
The factual and procedural antecedents are as follows:
On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed
a complaint[2] for "Partition and/or Payment of Co-
Ownership Share, Accounting and Damages" against
respondent Ma. Elvira Castillo. The complaint, docketed as
Civil Case No. 93-656 at the Regional Trial Court in Makati
City, alleged that petitioner and respondent, both married
and with children, but separated from their respective
spouses, cohabited after a brief courtship sometime in
1979 while their respective marriages still subsisted. During
their union, they set up the Superfreight Customs
Brokerage Corporation, with petitioner as president and
chairman of the board of directors, and respondent as
vice-president and treasurer. The business flourished and
petitioner and respondent acquired real and personal
properties which were registered solely in respondents
name. In 1992, due to irreconcilable differences, the
couple separated. Petitioner demanded from respondent
his share in the subject properties, but respondent refused
alleging that said properties had been registered solely in
her name.
In her Amended Answer,[3] respondent admitted that she
engaged in the customs brokerage business with
petitioner but alleged that the Superfreight Customs
Brokerage Corporation was organized with other
individuals and duly registered with the Securities and
Exchange Commission in 1987. She denied that she and
petitioner lived as husband and wife because the fact was
that they were still legally married to their respective
spouses. She claimed to be the exclusive owner of all real
and personal properties involved in petitioners action for
partition on the ground that they were acquired entirely
out of her own money and registered solely in her name.
On November 25, 1994, respondent filed a Motion for
Summary Judgment,[4] in accordance with Rule 34 of the
Rules of Court.[5] She contended that summary judgment
was proper, because the issues raised in the pleadings
were sham and not genuine, to wit: CODES
A.
The main issue is -- Can plaintiff validly claim the partition
and/or payment of co-ownership share, accounting and
damages, considering that plaintiff and defendant are
admittedly both married to their respective spouses under
still valid and subsisting marriages, even assuming as
claimed by plaintiff, that they lived together as husband
and wife without benefit of marriage? In other words, can
the parties be considered as co-owners of the properties,
under the law, considering the present status of the parties
as both married and incapable of marrying each other,
even assuming that they lived together as husband and
wife (?)
B.
As a collateral issue, can the plaintiff be considered as an
unregistered co-owner of the real properties under the
Transfer Certificates of Title duly registered solely in the
name of defendant Ma. Elvira Castillo? This issue is also true
as far as the motor vehicles in question are concerned
which are also registered in the name of defendant.[6]
On the first point, respondent contended that even if she
and petitioner actually cohabited, petitioner could not
validly claim a part of the subject real and personal
properties because Art. 144 of the Civil Code, which
provides that the rules on co-ownership shall govern the
properties acquired by a man and a woman living
88
together as husband and wife but not married, or under a
marriage which is void ab initio, applies only if the parties
are not in any way incapacitated to contract marriage.[7]
In the parties case, their union suffered the legal
impediment of a prior subsisting marriage. Thus, the
question of fact being raised by petitioner, i.e., whether
they lived together as husband and wife, was irrelevant as
no co-ownership could exist between them.
As to the second issue, respondent maintained that
petitioner can not be considered an unregistered co-
owner of the subject properties on the ground that, since
titles to the land are solely in her name, to grant petitioners
prayer would be to allow a collateral attack on the validity
of such titles.
Petitioner opposed respondents Motion for Summary
Judgment.[8] He contended that the case presented
genuine factual issues and that Art. 144 of the Civil Code
had been repealed by the Family Code which now allows,
under Art. 148, a limited co-ownership even though a man
and a woman living together are not capacitated to
marry each other. Petitioner also asserted that an implied
trust was constituted when he and respondent agreed to
register the properties solely in the latters name although
the same were acquired out of the profits made from their
brokerage business. Petitioner invoked the following
provisions of the Civil Code: yacats
Art. 1452. If two or more persons agree to purchase
property and by common consent the legal title is taken in
the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion
to the interest of each.
Art. 1453. When the property is conveyed to a person in
reliance upon his declared intention to hold it for, or
transfer it to another grantor, there is an implied trust in
favor of the person whose benefit is contemplated.
On January 30, 1995, the trial court rendered its decision[9]
granting respondents motion for summary judgment. It
ruled that an examination of the pleadings shows that the
issues involved were purely legal. The trial court also
sustained respondents contention that petitioners action
for partition amounted to a collateral attack on the validity
of the certificates of title covering the subject properties. It
held that even if the parties really had cohabited, the
action for partition could not be allowed because an
action for partition among co-owners ceases to be so and
becomes one for title if the defendant, as in the present
case, alleges exclusive ownership of the properties in
question. For these reasons, the trial court dismissed Civil
Case No. 93-656.
On appeal, the Court of Appeals on November 7, 1996,
ordered the case remanded to the court of origin for trial
on the merits. It cited the decision in Roque v. Intermediate
Appellate Court[10] to the effect that an action for
partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a
determinate portion of the properties involved. If the
defendant asserts exclusive title over the property, the
action for partition should not be dismissed. Rather, the
court should resolve the case and if the plaintiff is unable
to sustain his claimed status as a co-owner, the court
should dismiss the action, not because the wrong remedy
was availed of, but because no basis exists for requiring the
defendant to submit to partition. Resolving the issue
whether petitioners action for partition was a collateral
attack on the validity of the certificates of title, the Court
of Appeals held that since petitioner sought to compel
respondent to execute documents necessary to effect
transfer of what he claimed was his share, petitioner was
not actually attacking the validity of the titles but in fact,
recognized their validity. Finally, the appellate court
upheld petitioners position that Art. 144 of the Civil Code
had been repealed by Art. 148 of the Family Code.
haideem
Respondent moved for reconsideration of the decision of
the Court of Appeals. On May 7, 1998, nearly two years
after its first decision, the Court of Appeals granted
respondents motion and reconsidered its prior decision. In
its decision now challenged in the present petition, it held
Prefatorily, and to better clarify the controversy on whether
this suit is a collateral attack on the titles in issue, it must be
underscored that plaintiff-appellant alleged in his
complaint that all the nine (9) titles are registered in the
name of defendant-appellee, Ma. Elvira T. Castillo, except
one which appears in the name of Eloisa Castillo (see par.
9, Complaint). However, a verification of the annexes of
such initiatory pleading shows some discrepancies, to wit:
1. TCT No. 149046 (Annex A)
=.Elvira T. Castillo, single
2. TCT No. 168208 ( Annex B)
=..........-do-
3. TCT No. 37046 (Annex C)
=..........-do-
4. TCT No. 37047 (Annex D)
= ..... ...-do-
5. TCT No. 37048 (Annex E)
=..........-do-
6. TCT No. 30368 (Annex F)
=.Steelhaus Realty & Dev. Corp.
7. TCT No. 30369 (Annex G)
=..........-do-
8. TCT No. 30371 (Annex F)
=..........-do-
9.TCT No. (92323) 67881 (Annex I)
= Eloisa Castillo
hustisya
In this action, plaintiff-appellant seeks to be declared as
1/2 co-owner of the real properties covered by the above
listed titles and eventually for their partition [par. (a),
Prayer; p. 4 Records]. Notably, in order to achieve such
prayer for a joint co-ownership declaration, it is
unavoidable that the individual titles involved be altered,
changed, canceled or modified to include therein the
name of the appellee as a registered 1/2 co-owner. Yet,
no cause of action or even a prayer is contained in the
complaint filed. Manifestly, absent any cause or prayer for
the alteration, cancellation, modification or changing of
the titles involved, the desired declaration of co-ownership
and eventual partition will utterly be an indirect or
collateral attack on the subject titles in this suit.
It is here that We fell into error, such that, if not rectified will
surely lead to a procedural lapse and a possible injustice.
Well settled is the rule that a certificate of title cannot be
89
altered, modified or canceled except in a direct
proceeding in accordance with law. Jksm
In this jurisdiction, the remedy of the landowner whose
property has been wrongfully or erroneously registered in
another name is, after one year from the date of the
decree, not to set aside the decree, but respecting it as
incontrovertible and no longer open to review, to bring an
action for reconveyance or, if the property had passed
into the hands of an innocent purchaser for value, for
damages. Verily, plaintiff-appellant should have first
pursued such remedy or any other relief directly attacking
the subject titles before instituting the present partition suit.
Apropos, the case at bench appears to have been
prematurely filed.
Lastly, to grant the partition prayed for by the appellant
will in effect rule and decide against the properties
registered in the names of Steelhouse Realty and
Development Corporation and Eloisa Castillo, who are not
parties in the case. To allow this to happen will surely result
to injustice and denial of due process of law. . . .[11]
Petitioner moved for reconsideration but his motion was
denied by the Court of Appeals in its resolution dated
December 21, 1998. Hence this petition.
Petitioner contends that: (1) the Court of Appeals, in its first
decision of November 7, 1996, was correct in applying the
Roque ruling and in rejecting respondents claim that she
was the sole owner of the subject properties and that the
partition suit was a collateral attack on the titles; (2) the
Court of Appeals correctly ruled in its first decision that Art.
148 of the Family Code governs the co-ownership
between the parties, hence, the complaint for partition is
proper; (3) with respect to the properties registered in the
name of Steelhouse Realty, respondent admitted
ownership thereof and, at the very least, these properties
could simply be excluded and the partition limited to the
remaining real and personal properties; and (4) the Court
of Appeals erred in not holding that under the Civil Code,
there is an implied trust in his favor.[12]
The issue in this case is really whether summary judgment,
in accordance with Rule 35 of the Rules of Court, is proper.
We rule in the negative.
First. Rule 35, 3 of the Rules of Court provides that summary
judgment is proper only when, based on the pleadings,
depositions, and admissions on file, and after summary
hearing, it is shown that except as to the amount of
damages, there is no veritable issue regarding any
material fact in the action and the movant is entitled to
judgment as a matter of law.[13] Conversely, where the
pleadings tender a genuine issue, i.e., an issue of fact the
resolution of which calls for the presentation of evidence,
as distinguished from an issue which is sham, fictitious,
contrived, set-up in bad faith, or patently unsubstantial,
summary judgment is not proper.[14] Chiefx
In the present case, we are convinced that genuine issues
exist. Petitioner anchors his claim of co-ownership on two
factual grounds: first, that said properties were acquired
by him and respondent during their union from 1979 to
1992 from profits derived from their brokerage business;
and second, that said properties were registered solely in
respondents name only because they agreed to that
arrangement, thereby giving rise to an implied trust in
accordance with Art. 1452 and Art. 1453 of the Civil Code.
These allegations are denied by respondent. She denies
that she and petitioner lived together as husband and
wife. She also claims that the properties in question were
acquired solely by her with her own money and resources.
With such conflicting positions, the only way to ascertain
the truth is obviously through the presentation of evidence
by the parties.
The trial court ruled that it is immaterial whether the parties
actually lived together as husband and wife because Art.
144 of the Civil Code can not be made to apply to them
as they were both incapacitated to marry each other.
Hence, it was impossible for a co-ownership to exist
between them.
We disagree.
Art. 144 of the Civil Code provides:
When a man and a woman live together as husband and
wife, but they are not married, or their marriage is void from
the beginning, the property acquired by either or both of
them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership.
This provision of the Civil Code, applies only to cases in
which a man and a woman live together as husband and
wife without the benefit of marriage provided they are not
incapacitated or are without impediment to marry each
other,[15] or in which the marriage is void ab initio,
provided it is not bigamous. Art. 144, therefore, does not
cover parties living in an adulterous relationship. However,
Art. 148 of the Family Code now provides for a limited co-
ownership in cases where the parties in union are
incapacitated to marry each other. It states:
In cases of cohabitation not falling under the preceding
article,[16] only the properties acquired by both of the
parties through their actual joint contribution of money,
property or industry shall be owned by them in common in
proportion to their respective contributions. In the absence
of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of
money and evidences of credits. HTML
If one of the parties is validly married to another, his or her
share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in the
manner provided in the last paragraph of the preceding
article.
The foregoing rules on forfeiture shall likewise apply even if
both parties are in bad faith.
It was error for the trial court to rule that, because the
parties in this case were not capacitated to marry each
other at the time that they were alleged to have been
living together, they could not have owned properties in
common. The Family Code, in addition to providing that a
co-ownership exists between a man and a woman who
live together as husband and wife without the benefit of
marriage, likewise provides that, if the parties are
incapacitated to marry each other, properties acquired
by them through their joint contribution of money, property
or industry shall be owned by them in common in
proportion to their contributions which, in the absence of
proof to the contrary, is presumed to be equal. There is thus
co-ownership eventhough the couple are not
capacitated to marry each other.
In this case, there may be a co-ownership between the
parties herein. Consequently, whether petitioner and
respondent cohabited and whether the properties
involved in the case are part of the alleged co-ownership
are genuine and material. All but one of the properties
involved were alleged to have been acquired after the
Family Code took effect on August 3, 1988. With respect to
the property acquired before the Family Code took effect
if it is shown that it was really acquired under the regime of
the Civil Code, then it should be excluded.
90

Petitioner also alleged in paragraph 7 of his complaint
that:
Due to the effective management, hardwork and
enterprise of plaintiff assisted by defendant, their customs
brokerage business grew and out of the profits therefrom,
the parties acquired real and personal properties which
were, upon agreement of the parties, listed and registered
in defendants name with plaintiff as the unregistered co-
owner of all said properties.[17] Esmsc
On the basis of this, he contends that an implied trust
existed pursuant to Art. 1452 of the Civil Code which
provides that "(I)f two or more persons agree to purchase
property and by common consent the legal title is taken in
the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion
to the interest of each." We do not think this is correct. The
legal relation of the parties is already specifically covered
by Art. 148 of the Family Code under which all the
properties acquired by the parties out of their actual joint
contributions of money, property or industry shall constitute
a co-ownership. Co-ownership is a form of trust and every
co-owner is a trustee for the other.[18] The provisions of Art.
1452 and Art. 1453 of the Civil Code, then are no longer
material since a trust relation already inheres in a co-
ownership which is governed under Title III, Book II of the
Civil Code.
Second. The trial court likewise dismissed petitioners action
on the ground that the same amounted to a collateral
attack on the certificates of title involved. As already
noted, at first, the Court of Appeals ruled that petitioners
action does not challenge the validity of respondents titles.
However, on reconsideration, it reversed itself and
affirmed the trial court. It noted that petitioners complaint
failed to include a prayer for the alteration, cancellation,
modification, or changing of the titles involved. Absent
such prayer, the appellate court ruled that a declaration
of co-ownership and eventual partition would involve an
indirect or collateral attack on the titles. We disagree.
A torrens title, as a rule, is conclusive and indefeasible.
Proceeding from this, P.D. No. 1529,[19] 48 provides that a
certificate of title shall not be subject to collateral attack
and can not be altered, modified, or canceled except in
a direct proceeding. When is an action an attack on a
title? It is when the object of the action or proceeding is to
nullify the title, and thus challenge the judgment pursuant
to which the title was decreed. The attack is direct when
the object of an action or proceeding is to annul or set
aside such judgment, or enjoin its enforcement. On the
other hand, the attack is indirect or collateral when, in an
action to obtain a different relief, an attack on the
judgment is nevertheless made as an incident thereof.[20]
In his complaint for partition, consistent with our ruling in
Roque regarding the nature of an action for partition,
petitioner seeks first, a declaration that he is a co-owner of
the subject properties; and second, the conveyance of his
lawful shares. He does not attack respondents titles.
Petitioner alleges no fraud, mistake, or any other
irregularity that would justify a review of the registration
decree in respondents favor. His theory is that although the
subject properties were registered solely in respondents
name, but since by agreement between them as well as
under the Family Code, he is co-owner of these properties
and as such is entitled to the conveyance of his shares. On
the premise that he is a co-owner, he can validly seek the
partition of the properties in co-ownership and the
conveyance to him of his share. Esmmis
Thus, in Guevara v. Guevara,[21] in which a parcel of land
bequeathed in a last will and testament was registered in
the name of only one of the heirs, with the understanding
that he would deliver to the others their shares after the
debts of the original owner had been paid, this Court ruled
that notwithstanding the registration of the land in the
name of only one of the heirs, the other heirs can claim
their shares in "such action, judicial or extrajudicial, as may
be necessary to partition the estate of the testator."[22]
Third. The Court of Appeals also reversed its first decision on
the ground that to order partition will, in effect, rule and
decide against Steelhouse Realty Development
Corporation and Eloisa Castillo, both strangers to the
present case, as to the properties registered in their names.
This reasoning, however, ignores the fact that the majority
of the properties involved in the present case are
registered in respondents name, over which petitioner
claims rights as a co-owner. Besides, other than the real
properties, petitioner also seeks partition of a substantial
amount of personal properties consisting of motor vehicles
and several pieces of jewelry. By dismissing petitioners
complaint for partition on grounds of due process and
equity, the appellate court unwittingly denied petitioner
his right to prove ownership over the claimed real and
personal properties. The dismissal of petitioners complaint
is unjustified since both ends may be amply served by
simply excluding from the action for partition the properties
registered in the name of Steelhouse Realty and Eloisa
Castillo.
WHEREFORE, the amended decision of the Court of
Appeals, dated May 7, 1998, is REVERSED and the case is
REMANDED to the Regional Trial Court, Branch 59, Makati
City for further proceedings on the merits.
SO ORDERED
SAGUID VS CA 2003
The regime of limited co-ownership of property governing
the union of parties who are not legally capacitated to
marry each other, but who nonetheless live together as
husband and wife, applies to properties acquired during
said cohabitation in proportion to their respective
contributions. Co-ownership will only be up to the extent of
the proven actual contribution of money, property or
industry. Absent proof of the extent thereof, their
contributions and corresponding shares shall be presumed
to be equal.[1]
Seventeen-year old Gina S. Rey was married,[2] but
separated de facto from her husband, when she met
petitioner Jacinto Saguid in Marinduque, sometime in July
1987.[3] After a brief courtship, the two decided to cohabit
as husband and wife in a house built on a lot owned by
Jacintos father.[4] Their cohabitation was not blessed with
any children. Jacinto made a living as the patron of their
fishing vessel Saguid Brothers.[5] Gina, on the other hand,
worked as a fish dealer, but decided to work as an
entertainer in Japan from 1992 to 1994 when her
relationship with Jacintos relatives turned sour. Her periodic
absence, however, did not ebb away the conflict with
petitioners relatives. In 1996, the couple decided to
separate and end up their 9-year cohabitation.[6]
On January 9, 1997, private respondent filed a complaint
for Partition and Recovery of Personal Property with
Receivership against the petitioner with the Regional Trial
Court of Boac, Marinduque. She alleged that from her
salary of $1,500.00 a month as entertainer in Japan, she
was able to contribute P70,000.00 in the completion of
their unfinished house. Also, from her own earnings as an
entertainer and fish dealer, she was able to acquire and
accumulate appliances, pieces of furniture and
household effects, with a total value of P111,375.00. She
prayed that she be declared the sole owner of these
personal properties and that the amount of P70,000.00,
91
representing her contribution to the construction of their
house, be reimbursed to her.
Private respondent testified that she deposited part of her
earnings in her savings account with First Allied
Development Bank.[7] Her Pass Book shows that as of May
23, 1995, she had a balance of P21,046.08.[8] She further
stated that she had a total of P35,465.00[9] share in the
joint account deposit which she and the petitioner
maintained with the same bank.[10] Gina declared that
said deposits were spent for the purchase of construction
materials, appliances and other personal properties.[11]
In his answer[12] to the complaint, petitioner claimed that
the expenses for the construction of their house were
defrayed solely from his income as a captain of their fishing
vessel. He averred that private respondents meager
income as fish dealer rendered her unable to contribute in
the construction of said house. Besides, selling fish was a
mere pastime to her; as such, she was contented with the
small quantity of fish allotted to her from his fishing trips.
Petitioner further contended that Gina did not work
continuously in Japan from 1992 to 1994, but only for a 6-
month duration each year. When their house was repaired
and improved sometime in 1995-1996, private respondent
did not share in the expenses because her earnings as
entertainer were spent on the daily needs and business of
her parents. From his income in the fishing business, he
claimed to have saved a total of P130,000.00, P75,000.00
of which was placed in a joint account deposit with
private respondent. This savings, according to petitioner
was spent in purchasing the disputed personal properties.
On May 21, 1997, the trial court declared the petitioner as
in default for failure to file a pre-trial brief as required by
Supreme Court Circular No. 1-89.[13]
On May 26, 1997, petitioner filed a motion for
reconsideration[14] of the May 21, 1997 order, which was
denied on June 2, 1997, and private respondent was
allowed to present evidence ex parte.[15] Petitioner filed
another motion for reconsideration but the same was also
denied on October 8, 1997.
On July 15, 1998, a decision[16] was rendered in favor of
private respondent, the dispositive portion of which reads:
WHEREFORE, in view of all the foregoing, judgment is
hereby rendered in favor of the plaintiff Gina S. Rey against
defendant Jacinto Saguid:
a) Ordering the partition of the house identified as plaintiffs
Exhibit C and D and directing the defendant to return
and/or reimburse to the plaintiff the amount of seventy
thousand pesos (P70,000,00) which the latter actually
contributed to its construction and completion;
b) Declaring the plaintiff as the exclusive owner of the
personal properties listed on Exhibit M;
c) Ordering the defendant, and/or anyone in possession
of the aforesaid personal properties, to return and/or
deliver the same to the plaintiff; and
d) Ordering the defendant to pay the plaintiff moral
damages in the sum of fifty thousand pesos (P50,000.00)
plus the costs of suit.
SO ORDERED.[17]
On appeal, said decision was affirmed by the Court of
Appeals; however, the award of P50,000.00 as moral
damages was deleted for lack of basis.[18] The appellate
court ruled that the propriety of the order which declared
the petitioner as in default became moot and academic
in view of the effectivity of the 1997 Rules of Civil
Procedure. It explained that the new rules now require the
filing of a pre-trial brief and the defendants non-
compliance therewith entitles the plaintiff to present
evidence ex parte.
Both parties filed motions for reconsideration which were
denied; hence, petitioner filed the instant petition based
on the following assigned errors:
A.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A
REVERSIBLE ERROR IN APPLYING RETROACTIVELY THE 1997
RULES OF CIVIL PROCEDURE IN THE PRESENT CASE AND
HOLDING THE FIRST ASSIGNED ERROR THEREIN MOOT AND
ACADEMIC THUS, FAILED TO RULE ON THE PROPRIETY OF THE
TRIAL COURTS REFUSAL TO SET ASIDE THE ORDER OF
DEFAULT DUE TO MISTAKE AND/OR EXCUSABLE
NEGLIGENCE COMMITTED BY PETITIONER.
B.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A
REVERSIBLE ERROR IN RELYING ON THE FACTUAL FINDINGS
OF THE TRIAL COURT WHICH RECEIVED THE EVIDENCE OF
HEREIN RESPONDENT ONLY EX PARTE.[19]
The issues for resolution are: (1) whether or not the trial
court erred in allowing private respondent to present
evidence ex parte; and (2) whether or not the trial courts
decision is supported by evidence.
Under Section 6, Rule 18 of the 1997 Rules of Civil
Procedure, the failure of the defendant to file a pre-trial
brief shall have the same effect as failure to appear at the
pre-trial, i.e., the plaintiff may present his evidence ex
parte and the court shall render judgment on the basis
thereof.[20] The remedy of the defendant is to file a motion
for reconsideration[21] showing that his failure to file a pre-
trial brief was due to fraud, accident, mistake or excusable
neglect.[22] The motion need not really stress the fact that
the defendant has a valid and meritorious defense
because his answer which contains his defenses is already
on record.[23]
In the case at bar, petitioner insists that his failure to file a
pre-trial brief is justified because he was not represented
by counsel. This justification is not, however, sufficient to set
aside the order directing private respondent to present
evidence ex parte, inasmuch as the petitioner chose at his
own risk not to be represented by counsel. Even without
the assistance of a lawyer, petitioner was able to file a
motion for extension to file answer,[24] the required answer
stating therein the special and affirmative defenses,[25]
and several other motions.[26] If it were true that petitioner
did not understand the import of the April 23, 1997 order
directing him to file a pre-trial brief, he could have inquired
from the court or filed a motion for extension of time to file
the brief. Instead, he waited until May 26, 1997, or 14 days
from his alleged receipt of the April 23, 1997 order before
he filed a motion asking the court to excuse his failure to
file a brief. Pre-trial rules are not to be belittled or dismissed
because their non-observance may result in prejudice to
a partys substantive rights. Like all rules, they should be
followed except only for the most persuasive of reasons
when they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure
prescribed.[27]
In the instant case, the fact that petitioner was not assisted
by a lawyer is not a persuasive reason to relax the
application of the rules. There is nothing in the Constitution
which mandates that a party in a non-criminal proceeding
be represented by counsel and that the absence of such
representation amounts to a denial of due process. The
92
assistance of lawyers, while desirable, is not indispensable.
The legal profession is not engrafted in the due process
clause such that without the participation of its members
the safeguard is deemed ignored or violated.[28]
However, the Court of Appeals erred in ruling that the
effectivity of the 1997 Rules of Civil Procedure, specifically,
Section 6, Rule 18 thereof, rendered moot and academic
the issue of whether or not the plaintiff may be allowed to
present evidence ex parte for failure of the defendant to
file a pre-trial brief. While the rules may indeed be applied
retroactively, the same is not called for in the case at bar.
Even before the 1997 Rules of Civil Procedure took effect
on July 1, 1997, the filing of a pre-trial brief was required
under Circular No. 1-89 which became effective on
February 1, 1989. Pursuant to the said circular, [f]ailure to
file pre-trial briefs may be given the same effect as the
failure to appear at the pre-trial, that is, the party may be
declared non-suited or considered as in default.[29]
Coming now to the substantive issue, it is not disputed that
Gina and Jacinto were not capacitated to marry each
other because the former was validly married to another
man at the time of her cohabitation with the latter. Their
property regime therefore is governed by Article 148[30] of
the Family Code, which applies to bigamous marriages,
adulterous relationships, relationships in a state of
concubinage, relationships where both man and woman
are married to other persons, and multiple alliances of the
same married man. Under this regime, only the properties
acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned
by them in common in proportion to their respective
contributions ...[31] Proof of actual contribution is
required.[32]
In the case at bar, although the adulterous cohabitation
of the parties commenced in 1987, which is before the
date of the effectivity of the Family Code on August 3,
1998, Article 148 thereof applies because this provision was
intended precisely to fill up the hiatus in Article 144 of the
Civil Code.[33] Before Article 148 of the Family Code was
enacted, there was no provision governing property
relations of couples living in a state of adultery or
concubinage. Hence, even if the cohabitation or the
acquisition of the property occurred before the Family
Code took effect, Article 148 governs.[34]
In the cases of Agapay v. Palang,[35] and Tumlos v.
Fernandez,[36] which involved the issue of co-ownership of
properties acquired by the parties to a bigamous marriage
and an adulterous relationship, respectively, we ruled that
proof of actual contribution in the acquisition of the
property is essential. The claim of co-ownership of the
petitioners therein who were parties to the bigamous and
adulterous union is without basis because they failed to
substantiate their allegation that they contributed money
in the purchase of the disputed properties. Also in Adriano
v. Court of Appeals,[37] we ruled that the fact that the
controverted property was titled in the name of the parties
to an adulterous relationship is not sufficient proof of co-
ownership absent evidence of actual contribution in the
acquisition of the property.
As in other civil cases, the burden of proof rests upon the
party who, as determined by the pleadings or the nature
of the case, asserts an affirmative issue. Contentions must
be proved by competent evidence and reliance must be
had on the strength of the partys own evidence and not
upon the weakness of the opponents defense.[38] This
applies with more vigor where, as in the instant case, the
plaintiff was allowed to present evidence ex parte. The
plaintiff is not automatically entitled to the relief prayed for.
The law gives the defendant some measure of protection
as the plaintiff must still prove the allegations in the
complaint. Favorable relief can be granted only after the
court is convinced that the facts proven by the plaintiff
warrant such relief.[39] Indeed, the party alleging a fact
has the burden of proving it and a mere allegation is not
evidence.[40]
In the case at bar, the controversy centers on the house
and personal properties of the parties. Private respondent
alleged in her complaint that she contributed P70,000.00
for the completion of their house. However, nowhere in her
testimony did she specify the extent of her contribution.
What appears in the record are receipts[41] in her name
for the purchase of construction materials on November
17, 1995 and December 23, 1995, in the total amount of
P11,413.00.
On the other hand, both parties claim that the money
used to purchase the disputed personal properties came
partly from their joint account with First Allied Development
Bank. While there is no question that both parties
contributed in their joint account deposit, there is,
however, no sufficient proof of the exact amount of their
respective shares therein. Pursuant to Article 148 of the
Family Code, in the absence of proof of extent of the
parties respective contribution, their share shall be
presumed to be equal. Here, the disputed personal
properties were valued at P111,375.00, the existence and
value of which were not questioned by the petitioner.
Hence, their share therein is equivalent to one-half, i.e.,
P55,687.50 each.
The Court of Appeals thus erred in affirming the decision of
the trial court which granted the reliefs prayed for by
private respondent. On the basis of the evidence
established, the extent of private respondents co-
ownership over the disputed house is only up to the
amount of P11,413.00, her proven contribution in the
construction thereof. Anent the personal properties, her
participation therein should be limited only to the amount
of P55,687.50.
As regards the trial courts award of P50,000.00 as moral
damages, the Court of Appeals correctly deleted the
same for lack of basis.
WHEREFORE, in view of all the foregoing, the Decision of
the Court of Appeals in CA-G.R. CV No. 64166 is AFFIRMED
with MODIFICATION. Private respondent Gina S. Rey is
declared co-owner of petitioner Jacinto Saguid in the
controverted house to the extent of P11,413.00 and
personal properties to the extent of P55,687.50. Petitioner is
ordered to reimburse the amount of P67,100.50 to private
respondent, failing which the house shall be sold at public
auction to satisfy private respondents claim.
SO ORDERED.
ATIENZA VS DE CASTRO 2006
Assailed and sought to be set aside in this petition for
review on certiorari is the Decision[1] dated April 29, 2005
of the Court of Appeals (CA) in CA-G.R. CV No. 69797, as
reiterated in its Resolution[2] of September 16, 2005,
reversing an earlier decision of the Regional Trial Court
(RTC) of Makati City, Branch 61, in an action for Judicial
Partition of Real Property thereat commenced by the
herein petitioner Lupo Atienza against respondent
Yolanda de Castro.
The facts:
Sometime in 1983, petitioner Lupo Atienza, then the
President and General Manager of Enrico Shipping
Corporation and Eurasian Maritime Corporation, hired the
services of respondent Yolanda U. De Castro as
accountant for the two corporations.
93
In the course of time, the relationship between Lupo and
Yolanda became intimate. Despite Lupo being a married
man, he and Yolanda eventually lived together in
consortium beginning the later part of 1983. Out of their
union, two children were born. However, after the birth of
their second child, their relationship turned sour until they
parted ways.
On May 28, 1992, Lupo filed in the RTC of Makati City a
complaint against Yolanda for the judicial partition
between them of a parcel of land with improvements
located in Bel-Air Subdivision, Makati City and covered by
Transfer Certificate of Title No. 147828 of the Registry of
Deeds of Makati City. In his complaint, docketed in said
court as Civil Case No. 92-1423, Lupo alleged that the
subject property was acquired during his union with
Yolanda as common-law husband and wife, hence the
property is co-owned by them.
Elaborating, Lupo averred in his complaint that the
property in question was acquired by Yolanda sometime
in 1987 using his exclusive funds and that the title thereto
was transferred by the seller in Yolandas name without his
knowledge and consent. He did not interpose any
objection thereto because at the time, their affair was still
thriving. It was only after their separation and his receipt of
information that Yolanda allowed her new live-in partner
to live in the disputed property, when he demanded his
share thereat as a co-owner.
In her answer, Yolanda denied Lupos allegations.
According to her, she acquired the same property for Two
Million Six Hundred Thousand Pesos (P2,600,000.00) using
her exclusive funds. She insisted having bought it thru her
own savings and earnings as a businesswoman.
In a decision[3] dated December 11, 2000, the trial court
rendered judgment for Lupo by declaring the contested
property as owned in common by him and Yolanda and
ordering its partition between the two in equal shares, thus:
WHEREFORE, judgment is hereby rendered declaring the
property covered by Transfer Certificate of Title No. 147828
of the Registry of Deeds of Makati City to be owned in
common by plaintiff LUPO ATIENZA and the defendant
YOLANDA U. DE CASTRO share-and-share alike and
ordering the partition of said property between them.
Upon the finality of this Decision, the parties are hereby
directed to submit for the confirmation of the Court a
mutually agreed project of partition of said property or, in
case the physical partition of said property is not feasible
because of its nature, that either the same be assigned to
one of the parties who shall pay the value corresponding
to the share of the other or that the property to be sold
and the proceeds thereof be divided equally between the
parties after deducting the expenses incident to said sale.
The parties shall bear their own attorneys fees and
expenses of litigation.
Costs against the defendant.
SO ORDERED.
From the decision of the trial court, Yolanda went on
appeal to the CA in CA-G.R. CV No. 69797, therein arguing
that the evidence on record preponderate that she
purchased the disputed property in her own name with her
own money. She maintained that the documents
appertaining to her acquisition thereof are the best
evidence to prove who actually bought it, and refuted the
findings of the trial court, as well as Lupos assertions casting
doubt as to her financial capacity to acquire the disputed
property.
As stated at the threshold hereof, the appellate court, in its
decision[4] of April 29, 2005, reversed and set aside that of
the trial court and adjudged the litigated property as
exclusively owned by Yolanda, to wit:
WHEREFORE, the foregoing considered, the assailed
decision is hereby REVERSED and SET ASIDE . The subject
property is hereby declared to be exclusively owned by
defendant-appellant Yolanda U. De Castro. No costs.
SO ORDERED.
In decreeing the disputed property as exclusively owned
by Yolanda, the CA ruled that under the provisions of
Article 148 of the Family Code vis--vis the evidence on
record and attending circumstances, Yolandas claim of
sole ownership is meritorious, as it has been substantiated
by competent evidence. To the CA, Lupo failed to
overcome the burden of proving his allegation that the
subject property was purchased by Yolanda thru his
exclusive funds.
With his motion for reconsideration having been denied by
the CA in its Resolution of September 16, 2005,[5] Lupo is
now with this Court via the present recourse arguing that
pursuant to Article 144[6] of the Civil Code, he was in no
way burdened to prove that he contributed to the
acquisition of the subject property because with or without
the contribution by either partner, he is deemed a co-
owner thereof, adding that under Article 484[7] of Civil
Code, as long as the property was acquired by either or
both of them during their extramarital union, such property
would be legally owned by them in common and
governed by the rules on co-ownership, which apply in
default of contracts, or special provisions.
We DENY.
It is not disputed that the parties herein were not
capacitated to marry each other because petitioner Lupo
Atienza was validly married to another woman at the time
of his cohabitation with the respondent. Their property
regime, therefore, is governed by Article 148[8] of the
Family Code, which applies to bigamous marriages,
adulterous relationships, relationships in a state of
concubinage, relationships where both man and woman
are married to other persons, and multiple alliances of the
same married man. Under this regime, only the properties
acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned
by them in common in proportion to their respective
contributions ...[9] Proof of actual contribution is
required.[10]
As it is, the regime of limited co-ownership of property
governing the union of parties who are not legally
capacitated to marry each other, but who nonetheless
live together as husband and wife, applies to properties
acquired during said cohabitation in proportion to their
respective contributions. Co-ownership will only be up to
the extent of the proven actual contribution of money,
property or industry. Absent proof of the extent thereof,
their contributions and corresponding shares shall be
presumed to be equal.[11]
Here, although the adulterous cohabitation of the parties
commenced in 1983, or way before the effectivity of the
Family Code on August 3, 1998, Article 148 thereof applies
because this provision was intended precisely to fill up the
hiatus in Article 144 of the Civil Code.[12] Before Article 148
of the Family Code was enacted, there was no provision
governing property relations of couples living in a state of
adultery or concubinage. Hence, even if the cohabitation
or the acquisition of the property occurred before the
Family Code took effect, Article 148 governs.[13]
The applicable law being settled, we now remind the
petitioner that here, as in other civil cases, the burden of
proof rests upon the party who, as determined by the
94
pleadings or the nature of the case, asserts an affirmative
issue. Contentions must be proved by competent
evidence and reliance must be had on the strength of the
partys own evidence and not upon the weakness of the
opponents defense. The petitioner as plaintiff below is not
automatically entitled to the relief prayed for. The law
gives the defendant some measure of protection as the
plaintiff must still prove the allegations in the complaint.
Favorable relief can be granted only after the court is
convinced that the facts proven by the plaintiff warrant
such relief.[14] Indeed, the party alleging a fact has the
burden of proving it and a mere allegation is not
evidence.[15]
It is the petitioners posture that the respondent, having no
financial capacity to acquire the property in question,
merely manipulated the dollar bank accounts of his two
(2) corporations to raise the amount needed therefor.
Unfortunately for petitioner, his submissions are burdened
by the fact that his claim to the property contradicts duly
written instruments, i.e., the Contract to Sell dated March
24, 1987, the Deed of Assignment of Redemption dated
March 27, 1987 and the Deed of Transfer dated April 27,
1987, all entered into by and between the respondent and
the vendor of said property, to the exclusion of the
petitioner. As aptly pointed out by the CA:
Contrary to the disquisition of the trial court, [Lupo] failed
to overcome this burden. Perusing the records of the case,
it is evident that the trial court committed errors of
judgment in its findings of fact and appreciation of
evidence with regard to the source of the funds used for
the purchase of the disputed property and ultimately the
rightful owner thereof. Factual findings of the trial court are
indeed entitled to respect and shall not be disturbed,
unless some facts or circumstances of weight and
substance have been overlooked or misinterpreted that
would otherwise materially affect the disposition of the
case.
In making proof of his case, it is paramount that the best
and most complete evidence be formally entered. Rather
than presenting proof of his actual contribution to the
purchase money used as consideration for the disputed
property, [Lupo] diverted the burden imposed upon him to
[Yolanda] by painting her as a shrewd and scheming
woman without the capacity to purchase any property.
Instead of proving his ownership, or the extent thereof,
over the subject property, [Lupo] relegated his complaint
to a mere attack on the financial capacity of [Yolanda].
He presented documents pertaining to the ins and outs of
the dollar accounts of ENRICO and EURASIAN, which
unfortunately failed to prove his actual contribution in the
purchase of the said property. The fact that [Yolanda] had
a limited access to the funds of the said corporations and
had repeatedly withdrawn money from their bank
accounts for their behalf do not prove that the money she
used in buying the disputed property, or any property for
that matter, came from said withdrawals.
As it is, the disquisition of the court a quo heavily rested on
the apparent financial capacity of the parties. On one
side, there is [Lupo], a retired sea captain and the
President and General Manager of two corporations and
on the other is [Yolanda], a Certified Public Accountant.
Surmising that [Lupo] is financially well heeled than
[Yolanda], the court a quo concluded, sans evidence,
that [Yolanda] had taken advantage of [Lupo]. Clearly,
the court a quo is in error. (Words in brackets supplied.)
As we see it, petitioners claim of co-ownership in the
disputed property is without basis because not only did he
fail to substantiate his alleged contribution in the purchase
thereof but likewise the very trail of documents pertaining
to its purchase as evidentiary proof redounds to the
benefit of the respondent. In contrast, aside from his mere
say so and voluminous records of bank accounts, which
sadly find no relevance in this case, the petitioner failed to
overcome his burden of proof. Allegations must be proven
by sufficient evidence. Simply stated, he who alleges a
fact has the burden of proving it; mere allegation is not
evidence.
True, the mere issuance of a certificate of title in the name
of any person does not foreclose the possibility that the
real property covered thereby may be under co-
ownership with persons not named in the certificate or that
the registrant may only be a trustee or that other parties
may have acquired interest subsequent to the issuance of
the certificate of title. However, as already stated,
petitioners evidence in support of his claim is either
insufficient or immaterial to warrant the trial courts finding
that the disputed property falls under the purview of Article
148 of the Family Code. In contrast to petitioners dismal
failure to prove his cause, herein respondent was able to
present preponderant evidence of her sole ownership.
There can clearly be no co-ownership when, as here, the
respondent sufficiently established that she derived the
funds used to purchase the property from her earnings, not
only as an accountant but also as a businesswoman
engaged in foreign currency trading, money lending and
jewelry retail. She presented her clientele and the
promissory notes evincing substantial dealings with her
clients. She also presented her bank account statements
and bank transactions, which reflect that she had the
financial capacity to pay the purchase price of the
subject property.
All told, the Court finds and so holds that the CA
committed no reversible error in rendering the herein
challenged decision and resolution.
WHEREFORE, the instant petition is DENIED and the assailed
issuances of the CA are AFFIRMED.
Costs against the petitioner.
SO ORDERED.
BORROMEO VS DESCALLAR 2009
What are the rights of an alien (and his successor-in-
interest) who acquired real properties in the country as
against his former Filipina girlfriend in whose sole name the
properties were registered under the Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in
1983 after he was assigned by his employer, Simmering-
Graz Panker A.G., an Austrian company, to work at a
project in Mindoro. In 1984, he transferred to Cebu and
worked at the Naga II Project of the National Power
Corporation. There, he met respondent Antonietta Opalla-
Descallar, a separated mother of two boys who was
working as a waitress at St. Moritz Hotel. Jambrich
befriended respondent and asked her to tutor him in
English. In dire need of additional income to support her
children, respondent agreed. The tutorials were held in
Antoniettas residence at a squatters area in Gorordo
Avenue.
Jambrich and respondent fell in love and decided to live
together in a rented house in Hernan Cortes, Mandaue
City. Later, they transferred to their own house and lots at
Agro-Macro Subdivision, Cabancalan, Mandaue City. In
the Contracts to Sell dated November 18, 19851 and
March 10, 19862 covering the properties, Jambrich and
respondent were referred to as the buyers. A Deed of
Absolute Sale dated November 16, 19873 was likewise
issued in their favor. However, when the Deed of Absolute
Sale was presented for registration before the Register of
Deeds, registration was refused on the ground that
95
Jambrich was an alien and could not acquire alienable
lands of the public domain. Consequently, Jambrichs
name was erased from the document. But it could be
noted that his signature remained on the left hand margin
of page 1, beside respondents signature as buyer on
page 3, and at the bottom of page 4 which is the last
page. Transfer Certificate of Title (TCT) Nos. 24790, 24791
and 24792 over the properties were issued in respondents
name alone.
Jambrich also formally adopted respondents two sons in
Sp. Proc. No. 39-MAN,4 and per Decision of the Regional
Trial Court of Mandaue City dated May 5, 1988.5
However, the idyll lasted only until April 1991. By then,
respondent found a new boyfriend while Jambrich began
to live with another woman in Danao City. Jambrich
supported respondents sons for only two months after the
break up.
Jambrich met petitioner Camilo F. Borromeo sometime in
1986. Petitioner was engaged in the real estate business.
He also built and repaired speedboats as a hobby. In 1989,
Jambrich purchased an engine and some accessories for
his boat from petitioner, for which he became indebted to
the latter for about 150,000.00. To pay for his debt, he sold
his rights and interests in the Agro-Macro properties to
petitioner for 250,000, as evidenced by a "Deed of
Absolute Sale/Assignment."6 On July 26, 1991, when
petitioner sought to register the deed of assignment, he
discovered that titles to the three lots have been
transferred in the name of respondent, and that the
subject property has already been mortgaged.
On August 2, 1991, petitioner filed a complaint against
respondent for recovery of real property before the
Regional Trial Court of Mandaue City. Petitioner alleged
that the Contracts to Sell dated November 18, 1985 and
March 10, 1986 and the Deed of Absolute Sale dated
November 16, 1987 over the properties which identified
both Jambrich and respondent as buyers do not reflect
the true agreement of the parties since respondent did not
pay a single centavo of the purchase price and was not in
fact a buyer; that it was Jambrich alone who paid for the
properties using his exclusive funds; that Jambrich was the
real and absolute owner of the properties; and, that
petitioner acquired absolute ownership by virtue of the
Deed of Absolute Sale/Assignment dated July 11, 1991
which Jambrich executed in his favor.
In her Answer, respondent belied the allegation that she
did not pay a single centavo of the purchase price. On the
contrary, she claimed that she "solely and exclusively used
her own personal funds to defray and pay for the purchase
price of the subject lots in question," and that Jambrich,
being an alien, was prohibited to acquire or own real
property in the Philippines.
At the trial, respondent presented evidence showing her
alleged financial capacity to buy the disputed property
with money from a supposed copra business. Petitioner, in
turn, presented Jambrich as his witness and documentary
evidence showing the substantial salaries which Jambrich
received while still employed by the Austrian company,
Simmering-Graz Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the
purchase and acquisition of [the] properties under
litigation that Wilhelm Jambrich was still working and
earning much. This fact of Jambrich earning much is not
only supported by documentary evidence but also by the
admission made by the defendant Antoniet[t]a Opalla. So
that, Jambrichs financial capacity to acquire and
purchase the properties . . . is not disputed.7
xxx
On the other hand, evidence . . . clearly show that before
defendant met Jambrich sometime in the latter part of
1984, she was only working as a waitress at the St. Moritz
Hotel with an income of 1,000.00 a month and was . . .
renting and living only in . . . [a] room at . . . [a] squatter
area at Gorordo Ave., Cebu City; that Jambrich took pity
of her and the situation of her children that he offered her
a better life which she readily accepted. In fact, this
miserable financial situation of hers and her two children .
. . are all stated and reflected in the Child Study Report
dated April 20, 1983 (Exhs. "G" and "G-1") which facts she
supplied to the Social Worker who prepared the same
when she was personally interviewed by her in connection
with the adoption of her two children by Wilhelm Jambrich.
So that, if such facts were not true because these are now
denied by her . . . and if it was also true that during this time
she was already earning as much as 8,000.00 to 9,000.00
as profit per month from her copra business, it would be
highly unbelievable and impossible for her to be living only
in such a miserable condition since it is the observation of
this Court that she is not only an extravagant but also an
expensive person and not thrifty as she wanted to impress
this Court in order to have a big saving as clearly shown by
her actuation when she was already cohabiting and living
with Jambrich that according to her . . . the allowance
given . . . by him in the amount of $500.00 a month is not
enough to maintain the education and maintenance of
her children.8
This being the case, it is highly improbable and impossible
that she could acquire the properties under litigation or
could contribute any amount for their acquisition which
according to her is worth more than 700,000.00 when
while she was working as [a] waitress at St. Moritz Hotel
earning 1,000.00 a month as salary and tips of more or less
2,000.00 she could not even provide [for] the daily needs
of her family so much so that it is safe to conclude that she
was really in financial distress when she met and accepted
the offer of Jambrich to come and live with him because
that was a big financial opportunity for her and her
children who were already abandoned by her husband.9
xxx
The only probable and possible reason why her name
appeared and was included in [the contracts to sell dated
November 18, 1985 and March 10, 1986 and finally, the
deed of absolute sale dated November 16, 1987] as buyer
is because as observed by the Court, she being a
scheming and exploitive woman, she has taken
advantage of the goodness of Jambrich who at that time
was still bewitched by her beauty, sweetness, and good
attitude shown by her to him since he could still very well
provide for everything she needs, he being earning (sic)
much yet at that time. In fact, as observed by this Court,
the acquisition of these properties under litigation was at
the time when their relationship was still going smoothly
and harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the
plaintiff and against the defendant Antoniet[t]a Opalla
by:
1) Declaring plaintiff as the owner in fee simple over the
residential house of strong materials and three parcels of
land designated as Lot Nos. 1, 3 and 5 which are covered
by TCT Nos. 24790, 24791 and 24792 issued by the Register
of Deeds of Mandaue City;
96
2) Declaring as null and void TCT Nos. 24790, 24791 and
24792 issued in the name of defendant Antoniet[t]a
Descallar by the Register of Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to
cancel TCT Nos. 24790, 24791 and 24792 in the name of
defendant Antoniet[t]a Descallar and to issue new ones in
the name of plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K"
and "L" as avoided insofar as they appear to convey rights
and interests over the properties in question to the
defendant Antoniet[t]a Descallar;
5) Ordering the defendant to pay plaintiff attorneys fees
in the amount of 25,000.00 and litigation expenses in the
amount of 10,000.00; and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a
Decision dated April 10, 2002,12 the appellate court
reversed the decision of the trial court. In ruling for the
respondent, the Court of Appeals held:
We disagree with the lower courts conclusion. The
circumstances involved in the case cited by the lower
court and similar cases decided on by the Supreme Court
which upheld the validity of the title of the subsequent
Filipino purchasers are absent in the case at bar. It should
be noted that in said cases, the title to the subject property
has been issued in the name of the alien transferee
(Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223
citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461;
United Church Board for World Ministries vs. Sebastian, 159
SCRA 446, citing the case of Sarsosa Vda. De Barsobia vs.
Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA
78). In the case at bar, the title of the subject property is
not in the name of Jambrich but in the name of
defendant-appellant. Thus, Jambrich could not have
transferred a property he has no title thereto.13
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
DISREGARDING RESPONDENTS JUDICIAL ADMISSION AND
OTHER OVERWHELMING EVIDENCE ESTABLISHING
JAMBRICHS PARTICIPATION, INTEREST AND OWNERSHIP OF
THE PROPERTIES IN QUESTION AS FOUND BY THE
HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
IN HOLDING THAT JAMBRICH HAS NO TITLE TO THE
PROPERTIES IN QUESTION AND MAY NOT THEREFORE
TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN
FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
IN REVERSING THE WELL-REASONED DECISION OF THE TRIAL
COURT AND IN IMPOSING DOUBLE COSTS AGAINST HEREIN
PETITIONER (THEN, PLAINTIFF-APPELLEE).14
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial
court, who between respondent and Jambrich possesses
the financial capacity to acquire the properties in dispute.
At the time of the acquisition of the properties in 1985 to
1986, Jambrich was gainfully employed at Simmering-Graz
Panker A.G., an Austrian company. He was earning an
estimated monthly salary of 50,000.00. Then, Jambrich
was assigned to Syria for almost one year where his
monthly salary was approximately 90,000.00.
On the other hand, respondent was employed as a
waitress from 1984 to 1985 with a monthly salary of not
more than 1,000.00. In 1986, when the parcels of land
were acquired, she was unemployed, as admitted by her
during the pre-trial conference. Her allegations of income
from a copra business were unsubstantiated. The
supposed copra business was actually the business of her
mother and their family, with ten siblings. She has no
license to sell copra, and had not filed any income tax
return. All the motorized bancas of her mother were lost to
fire, and the last one left standing was already scrap.
Further, the Child Study Report15 submitted by the
Department of Social Welfare and Development (DSWD)
in the adoption proceedings of respondents two sons by
Jambrich disclosed that:
Antonietta tried all types of job to support the children until
she was accepted as a waitress at St. Moritz Restaurant in
1984. At first she had no problem with money because
most of the customers of St. Moritz are (sic) foreigners and
they gave good tips but towards the end of 1984 there
were no more foreigners coming because of the situation
in the Philippines at that time. Her financial problem started
then. She was even renting a small room in a squatters
area in Gorordo Ave., Cebu City. It was during her time of
great financial distress that she met Wilhelm Jambrich who
later offered her a decent place for herself and her
children.16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when
he saw Antonietta Descallar, one of the waitresses of the
said Restaurants. He made friends with the girl and asked
her to tutor him in [the] English language. Antonietta
accepted the offer because she was in need of additional
income to support [her] 2 young children who were
abandoned by their father. Their session was agreed to be
scheduled every afternoon at the residence of Antonietta
in the squatters area in Gorordo Avenue, Cebu City. The
Austrian was observing the situation of the family
particularly the children who were malnourished. After a
few months sessions, Mr. Jambrich offered to transfer the
family into a decent place. He told Antonietta that the
place is not good for the children. Antonietta who was
miserable and financially distressed at that time accepted
the offer for the sake of the children.18
Further, the following additional pieces of evidence point
to Jambrich as the source of fund used to purchase the
three parcels of land, and to construct the house thereon:
(1) Respondent Descallar herself affirmed under oath,
during her re-direct examination and during the
proceedings for the adoption of her minor children, that
Jambrich was the owner of the properties in question, but
that his name was deleted in the Deed of Absolute Sale
because of legal constraints. Nonetheless, his signature
remained in the deed of sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land in
installments was in postdated checks issued by Jambrich.
Respondent has never opened any account with any
bank. Receipts of the installment payments were also in
the name of Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with Jambrich
and her two children for ten months, where she was
completely under the support of Jambrich.
(4) Jambrich executed a Last Will and Testament, where
he, as owner, bequeathed the subject properties to
respondent.
97

Thus, Jambrich has all authority to transfer all his rights,
interests and participation over the subject properties to
petitioner by virtue of the Deed of Assignment he
executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts.
The findings of fact of the trial court are accorded great
weight and respect, if not finality by this Court, subject to
a number of exceptions. In the instant case, we find no
reason to disturb the factual findings of the trial court. Even
the appellate court did not controvert the factual findings
of the trial court. They differed only in their conclusions of
law.
Further, the fact that the disputed properties were
acquired during the couples cohabitation also does not
help respondent. The rule that co-ownership applies to a
man and a woman living exclusively with each other as
husband and wife without the benefit of marriage, but are
otherwise capacitated to marry each other, does not
apply.19 In the instant case, respondent was still legally
married to another when she and Jambrich lived together.
In such an adulterous relationship, no co-ownership exists
between the parties. It is necessary for each of the partners
to prove his or her actual contribution to the acquisition of
property in order to be able to lay claim to any portion of
it. Presumptions of co-ownership and equal contribution
do not apply.20
Second, we dispose of the issue of registration of the
properties in the name of respondent alone. Having found
that the true buyer of the disputed house and lots was the
Austrian Wilhelm Jambrich, what now is the effect of
registration of the properties in the name of respondent?
It is settled that registration is not a mode of acquiring
ownership.21 It is only a means of confirming the fact of its
existence with notice to the world at large.22 Certificates
of title are not a source of right. The mere possession of a
title does not make one the true owner of the property.
Thus, the mere fact that respondent has the titles of the
disputed properties in her name does not necessarily,
conclusively and absolutely make her the owner. The rule
on indefeasibility of title likewise does not apply to
respondent. A certificate of title implies that the title is
quiet,23 and that it is perfect, absolute and indefeasible.24
However, there are well-defined exceptions to this rule, as
when the transferee is not a holder in good faith and did
not acquire the subject properties for a valuable
consideration.25 This is the situation in the instant case.
Respondent did not contribute a single centavo in the
acquisition of the properties. She had no income of her
own at that time, nor did she have any savings. She and
her two sons were then fully supported by Jambrich.
Respondent argued that aliens are prohibited from
acquiring private land. This is embodied in Section 7, Article
XII of the 1987 Constitution,26 which is basically a
reproduction of Section 5, Article XIII of the 1935
Constitution,27 and Section 14, Article XIV of the 1973
Constitution.28 The capacity to acquire private land is
dependent on the capacity "to acquire or hold lands of
the public domain." Private land may be transferred only
to individuals or entities "qualified to acquire or hold lands
of the public domain." Only Filipino citizens or corporations
at least 60% of the capital of which is owned by Filipinos
are qualified to acquire or hold lands of the public domain.
Thus, as the rule now stands, the fundamental law explicitly
prohibits non-Filipinos from acquiring or holding title to
private lands, except only by way of legal succession or if
the acquisition was made by a former natural-born
citizen.29
Therefore, in the instant case, the transfer of land from
Agro-Macro Development Corporation to Jambrich, who
is an Austrian, would have been declared invalid if
challenged, had not Jambrich conveyed the properties to
petitioner who is a Filipino citizen. In United Church Board
for World Ministries v. Sebastian,30 the Court reiterated the
consistent ruling in a number of cases31 that if land is
invalidly transferred to an alien who subsequently
becomes a Filipino citizen or transfers it to a Filipino, the
flaw in the original transaction is considered cured and the
title of the transferee is rendered valid. Applying United
Church Board for World Ministries, the trial court ruled in
favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm
Jambrich of the properties under litigation [were] void ab
initio since [they were] contrary to the Constitution of the
Philippines, he being a foreigner, yet, the acquisition of
these properties by plaintiff who is a Filipino citizen from
him, has cured the flaw in the original transaction and the
title of the transferee is valid.
The trial court upheld the sale by Jambrich in favor of
petitioner and ordered the cancellation of the TCTs in the
name of respondent. It declared petitioner as owner in fee
simple of the residential house of strong materials and
three parcels of land designated as Lot Nos. 1, 3 and 5,
and ordered the Register of Deeds of Mandaue City to
issue new certificates of title in his name. The trial court
likewise ordered respondent to pay petitioner 25,000 as
attorneys fees and 10,000 as litigation expenses, as well
as the costs of suit.
We affirm the Regional Trial Court.
The rationale behind the Courts ruling in United Church
Board for World Ministries, as reiterated in subsequent
cases,32 is this since the ban on aliens is intended to
preserve the nations land for future generations of
Filipinos, that aim is achieved by making lawful the
acquisition of real estate by aliens who became Filipino
citizens by naturalization or those transfers made by aliens
to Filipino citizens. As the property in dispute is already in
the hands of a qualified person, a Filipino citizen, there
would be no more public policy to be protected. The
objective of the constitutional provision to keep our lands
in Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of
the Court of Appeals in C.A. G.R. CV No. 42929 dated April
10, 2002 and its Resolution dated July 8, 2003 are REVERSED
and SET ASIDE. The Decision of the Regional Trial Court of
Mandaue City in Civil Case No. MAN-1148 is REINSTATED.
SO ORDERED
LAVADIA VS HEIRS OF LUNA (read on first exam
compilation)
98