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THIRD DIVISION P615,732.50 when, in truth, the spouses did not have any intention from P300,000.00 to P150,000.

uses did not have any intention from P300,000.00 to P150,000.00 and the attorney's fees which
of remitting the proceeds of the said construction contract to the were reduced from P30,000.00 to P20,000.00.
G.R. No. L-61464 May 28, 1988 petitioner because despite the provisions in the Deed of Assignment
that the spouses shall, without compensation or costs, collect and In resolving the question of whether or not the trial court erred in
BA FINANCE CORPORATION, petitioner, receive in trust for the petitioner all payments made upon the holding that the signature of respondent Lily Yulo in the special
vs. construction contract and shall remit to the petitioner all collections power of attorney was forged, the Court of Appeals said:
THE HONORABLE COURT OF APPEALS, AUGUSTO YULO, LILY YULO therefrom, the said spouses failed and refuse to remit the
(doing business under the name and style of A & L collections and instead, misappropriated the proceeds for their own The crucial issue to be determined is whether or
INDUSTRIES), respondents. use and benefit, without the knowledge or consent of the not the signatures of the appellee Lily Yulo in
petitioner. Exhibits B and B-1 are forged. Atty. Crispin
Ordoña, the Notary Public, admitted in open court
The trial court issued the writ of attachment prayed for thereby that the parties in the subject documents did not
enabling the petitioner to attach the properties of A & L Industries. sign their signatures in his presence. The same
GUTIERREZ, JR., J.:
Apparently not contented with the order, the petitioner filed were already signed by the supposed parties and
another motion for the examination of attachment debtor, alleging their supposed witnesses at the time they were
This is a petition for review seeking to set aside the decision of the
that the properties attached by the sheriff were not sufficient to brought to him for ratification. We quote from the
Court of Appeals which affirmed the decision of the then Court of
secure the satisfaction of any judgment that may be recovered by it records the pertinent testimony of Atty. Ordoña,
First Instance of Manila, dismissing the complaint instituted by the
in the case. This was likewise granted by the court. thus:
petitioner and ordering it to pay damages on the basis of the private
respondent's counterclaim.
Private respondent Lily Yulo filed her answer with counterclaim, Q. This document marked as
alleging that although Augusta Yulo and she are husband and wife, Exhibit B-1, when this was
On July 1, 1975, private respondent Augusto Yulo secured a loan
the former had abandoned her and their children five (5) months presented to you by that
from the petitioner in the amount of P591,003.59 as evidenced by a
before the filing of the complaint; that they were already separated common friend, June Enriquez, it
promissory note he signed in his own behalf and as representative
when the promissory note was executed; that her signature in the was already typewritten, it was
of the A & L Industries. Respondent Yulo presented an alleged
special power of attorney was forged because she had never already accomplished, all
special power of attorney executed by his wife, respondent Lily Yulo,
authorized Augusto Yulo in any capacity to transact any business for typewritten.?
who manages A & L Industries and under whose name the said
and in behalf of A & L Industries, which is owned by her as a single
business is registered, purportedly authorizing Augusto Yulo to proprietor, that she never got a single centavo from the proceeds of
procure the loan and sign the promissory note. About two months A. Yes, sir.
the loan mentioned in the promissory note; and that as a result of
prior to the loan, however, Augusto Yulo had already left Lily Yulo
the illegal attachment of her properties, which constituted the
and their children and had abandoned their conjugal home. When Q And the parties had already
assets of the A & L Industries, the latter closed its business and was
the obligation became due and demandable, Augusto Yulo failed to affixed their signatures in this
taken over by the new owner.
pay the same. document?

After hearing, the trial court rendered judgment dismissing the


On October 7, 1975, the petitioner filed its amended complaint A. Yes, sir.
petitioner's complaint against the private respondent Lily Yulo and A
against the spouses Augusto and Lily Yulo on the basis of the
& L Industries and ordering the petitioner to pay the respondent Lily
promissory note. It also prayed for the issuance of a writ of Q. In this document marked as
Yulo P660,000.00 as actual damages; P500,000.00 as unrealized
attatchment alleging that the said spouses were guilty of fraud in Exhibit B although it appears
profits; P300,000.00 as exemplary damages; P30,000.00 as and for
contracting the debt upon which the action was brought and that here that this is an
attorney's fees; and to pay the costs.
the fraud consisted of the spouses' inducing the petitioner to enter acknowledgment, you have not
into a contract with them by executing a Deed of Assignment in stated here that the principal
The petitioner appealed. The Court of Appeals affirmed the trial
favor of the petitioner, assigning all their rights, titles and interests actually acknowledged this
court's decision except for the exemplary damages which it reduced
over a construction contract executed by and between the spouses document to be her voluntary
and A. Soriano Corporation on June 19, 1974 for a consideration of act and deed?
A This in one of those things that On the other hand, the appellee Lily Yulo, to back genuine signatures of the appellee which were
escaped my attention. Actually I up her claim of forgery of her signature in Exhibit lifted and obtained in the official files of the
have not gone over the second B-1, presented in court a handwriting expert government, such as the Bureau of Internal
page. I believed it was in order I witness in the person of Police Captain Yakal Giron Revenue on her income tax returns, as compared
signed it. (TSN pp. 13-14, of the Integrated National Police Training to the pretended signature of the appellee
Hearing of Nov. 26, 1976). Command, and who is also a Document Examiner appearing in Exhibits B, B-1. It is also noteworthy
of the same Command's Crime Laboratory at Fort to mention that the appellant did not even bother
The glaring admission by the Notary Public that he Bonifacio, Metro Manila. His experience as an to conduct a cross-examination of the handwriting
failed to state in the acknowledgment portion of examiner of questioned and disputed documents, expert witness, Capt. Giron, neither did the
Exhibit B-1 that the appellee Lily Yulo in our mind, is quite impressive. To qualify him as appellant present another handwriting expert, at
acknowledged the said document to be her own a handwriting expert, he declared that he least to counter-act or balance the appellee's
voluntary act and deed, is a very strong and underwent extensive and actual studies and handwriting expert.
commanding circumstance to show that she did examination of disputed or questioned document,
not appear personally before the said Notary both at the National Bureau of Investigation Prescinding from the foregoing facts, we subscribe
Public and did not sign the document. Academy and National Bureau of Investigation fully to the lower court's observations that the
Questioned Document Laboratory, respectively, signatures of the appellee Lily Yulo in the
Additionally, the Notary Public admitted that, from July 1964, up to his appointment as questioned document (Exh. B-1) were forged.
while June Enriquez is admittedly a mutual friend Document Examiner in June, 1975, and, to further Hence, we find no factual basis to disagree. (pp.
of his and the defendant Augusta Yulo, and who is his experience along this line, he attended the 28-30, Rollo)
also an instrumental witness in said Exhibit B-1., 297th Annual Conference of the American Society
he could not recognize or tell which of the two of Questioned Docurnent Examiners held at As to the petitioner's contention that even if the signature of Lily
signatures appearing therein, was the signature of Seattle, Washington, in August 1971, as a Yulo was forged or even if the attached properties were her
this June Enriquez. representative of the Philippines, and likewise exclusive property, the same can be made answerable to the
conducted an observation of the present and obligation because the said properties form part of the conjugal
modern trends of crime laboratories in the West partnership of the spouses Yulo, the appellate court held that these
Furthermore, as the issue is one of credibility of a
Coast, U.S.A., in 1971; that he likewise had contentions are without merit because there is strong preponderant
witness, the findings and conclusions of the trial
conducted actual tests and examination of about evidence to show that A & L Industries belongs exclusively to
court before whom said witness, Atty. Crispin
100,000 documents, as requested by the different respondent Lily Yulo, namely: a) The Certificate of Registration of A
Ordoña, the Notary Public before whom the
courts, administrative, and governmental agencies & L Industries, issued by the Bureau of Commerce, showing that said
questioned document was supposedly ratified and
of the Government, substantial portions of which business is a single proprietorship, and that the registered owner
acknowledged, deserve great respect and are
relate to actual court cases. thereof is only Lily Yulo; b) The Mayor's Permit issued in favor of A &
seldom disturbed on appeal by appellate tribunals,
since it is in the best and peculiar advantage of L Industries, by the Caloocan City Mayor's Office showing
determining and observing the conduct, In concluding that the signatures of the appellee compliance by said single proprietorship company with the City
demeanor and deportment of a particular witness Lily Yulo, in the disputed document in question Ordinance governing business establishments; and c) The Special
while he is testifying in court, an opportunity not (Exh. B-1), were all forgeries, and not her genuine Power of Attorney itself, assuming but without admitting its due
enjoyed by the appellate courts who merely have signature, the expert witness categorically recited execution, is tangible proof that Augusto Yulo has no interest
to rely on the recorded proceedings which and specified in open court what he observed to whatsoever in the A & L Industries, otherwise, there would have
transpired in the court below, and the records are be about twelve (12) glaring and material been no necessity for the Special Power of Attorney if he is a part
bare of any circumstance of weight, which the trial significant differences, in his comparison of the owner of said single proprietorship.
court had overlooked and which if duly signatures appearing in the genuine specimen
considered, may radically affect the outcome of signatures of the said appellee and with those With regard to the award of damages, the Court of Appeals affirmed
the case. appearing in the questioned document (Exhibit B- the findings of the trial court that there was bad faith on the part of
1). Indeed, we have likewise seen the supposed the petitioner as to entitle the private respondent to damages as
notable differences, found in the standard or
shown not only by the fact that the petitioner did not present the based on one and the same in proceeding against the
Deed of Assignment or the construction agreement or any evidence obligation. Plaintiff tried to appellee Lily Yulo in the present
whatsoever to support its claim of fraud on the part of the private enforce as it did enforce its claim case, may likewise be distressed
respondent and to justify the issuance of a preliminary attachment, into two different modes a single on the fact that its officer Mr.
but also by the following findings: obligation. Abraham Co, did not even
bother to demand the
Continuing and elaborating further on the Aware that defendant Lily Yulo, production of at least the
appellant's mala fide actuations in securing the filed a Motion to Suspend duplicate original of the Special
writ of attachment, the lower court stated as Proceedings by virtue of a Power of Attorney (Exhibit B)
follows: complaint she filed with the and merely contended himself
Court of First Instance of with a mere xerox copy thereof,
Plaintiff not satisfied with the Caloocan, seeking annulment of neither did he require a more
instant case where an order for the Promissory Note, the very specific authority from the A & L
attachment has already been basis of the plaintiff in filing this Industries to contract the loan in
issued and enforced, on the complaint, immediately after the question, since from the very
strength of the same Promissory day it filed a Motion for the content and recitals of the
Note (Exhibit"A"), utilizing the Issuance of an Alias Writ of disputed document, no
Deed of Chattel Mortgage Preliminary Attachment . . .Yet, authority, express or implied,
(Exhibit "4"), filed a foreclosure inspite of the knowledge and the has been delegated or granted
proceedings before the Office of filing of this Motion to Suspend to August Yulo to contract a
the Sheriff of Caloocan Proceedings, the Plaintiff still loan, especially with the
(Exhibit"6") foreclosing the filed a Motion for the Issuance of appellant. (pp. 33-34, Rollo)
remaining properties found a Writ of Attachment dated
inside the premises formerly February 6, 1976 before this Concerning the actual damages, the appellate court ruled that the
occupied by the A & L Industries. court. To add insult to injury, petitioner should have presented evidence to disprove or rebut the
A minute examination of Exhibit plaintiff even filed a Motion for private respondent's claim but it remained quiet and chose not to
"4" will show that the Examination of the Attachment disturb the testimony and the evidence presented by the private
contracting parties thereto, as Debtor, although aware that Lily respondent to prove her claim.
appearing in par. 1 thereof, are Yulo had already denied
Augusto Yulo, doing business participation in the execution of In this petition for certiorari, the petitioner raises three issues. The
under the style of A & L Exhibits "A" and "B". These first issue deals with the appellate court's affirmance of the trial
Industries (should be A & L Glass incidents and actions taken by court's findings that the signature of the private respondent on the
Industries Corporation), as plaintiff, to the thinking of the Special Power of Attorney was forged. According to the petitioner,
mortgagor and BA Finance court, are sufficient to prove and the Court of Appeals disregarded the direct mandate of Section 23,
Corporation as mortgagee, thus establish the element of bad Rule 132 of the Rules of Court which states in part that evidence of
the enforcement of the Chattel faith and malice on the part of handwriting by comparison may be made "with writings admitted or
Mortgage against the property plaintiff which may warrant the treated as genuine by the party against whom the evidence is
of A & L Industries exclusively award of damages in favor of offered, or proved to be genuine to the satisfaction of the judge,"
owned by Lily T. Yulo appears to defendant Lily Yulo. (Ibid., pp. and that there is no evidence on record which proves or tends to
be without any factual or legal 102-103).<äre||anº•1àw> prove the genuineness of the standards used.
basis whatsoever. The chattel
mortgage, Exhibit "4" and the Indeed, the existence of evident There is no merit in this contention.
Promissory Note, Exhibit A, are bad faith on the appellant's part
The records show that the signatures which were used as testimony the petitioner failed to rebut and whose credibility it conjugal property managed by the private respondent Lily Yulo was
"standards" for comparison with the alleged signature of the private likewise failed to impeach. But more important is the fact that the undoubtedly contracted by Augusto Yulo for his own benefit
respondent in the Special Power of Attorney were those from the unrebutted handwriting expert's testimony noted twelve (12) because at the time he incurred the obligation he had already
latter's residence certificates in the years 1973, 1974 and 1975, her glaring and material differences in the alleged signature of the abandoned his family and had left their conjugal home. Worse, he
income tax returns for the years 1973 and 1975 and from a private respondent in the Special Power of Attorney as compared made it appear that he was duly authorized by his wife in behalf of A
document on long bond paper dated May 18, 1977. Not only were with the specimen signatures, something which the appellate court & L Industries, to procure such loan from the petitioner. Clearly, to
the signatures in the foregoing documents admitted by the private also took into account. In Cesar v. Sandiganbayan (134 SCRA 105, make A & L Industries liable now for the said loan would be unjust
respondent as hers but most of the said documents were used by 132), we ruled: and contrary to the express provision of the Civil Code. As we have
the private respondent in her transactions with the government. As ruled in Luzon Surety Co., Inc. v. De Gracia (30 SCRA 111, 115-117):
was held in the case of Plymouth Saving & Loan Assn. No. 2 v. Mr. Maniwang pointed to other significant
Kassing (125 NE 488, 494): divergences and distinctive characteristics As explained in the decision now under review: "It
between the sample signatures and the signatures is true that the husband is the administrator of the
We believe the true rule deduced from the on the questioned checks in his report which the conjugal property pursuant to the provisions of
authorities to be that the genuineness of a court's Presiding Justice kept mentioning during Art. 163 of the new Civil Code. However, as such
"standard" writing may be established (1) by the Maniwang's testimony. administrator the only obligations incurred by the
admission of the person sought to be charged with husband that are chargeable against the conjugal
the disputed writing made at or for the purposes In the course of his cross-examination, NBI expert property are those incurred in the legitimate
of the trial or by his testimony; (2) by witnesses Tabayoyong admitted that he saw the differences pursuit of his career, profession or business with
who saw the standards written or to whom or in between the exemplars used and the questioned the honest belief that he is doing right for the
whose hearing the person sought to be charged signatures but he dismissed the differences benefit of the family. This is not true in the case at
acknowledged the writing thereof; (3) by evidence because he did not consider them fundamental. bar for we believe that the husband in acting as
showing that the reputed writer of the standard We rule that significant differences are more guarantor or surety for another in an indemnity
has acquiesced in or recognized the same, or that fundamental than a few similarities. A forger agreement as that involved in this case did not act
it has been adopted and acted upon by him his always strives to master some similarities. for the benefit of the conjugal partnership. Such
business transactions or other concerns.... inference is more emphatic in this case, when no
The second issue raised by the petitioner is that while it is true that proof is presented that Vicente Garcia in acting as
Furthermore, the judge found such signatures to be sufficient as A & L Industries is a single proprietorship and the registered owner surety or guarantor received consideration
standards. In the case of Taylor-Wharton Iron & Steel Co. v. thereof is private respondent Lily Yulo, the said proprietorship was therefore, which may redound to the benefit of
Earnshaw (156 N.E. 855, 856), it was held: established during the marriage and its assets were also acquired the conjugal partnership.(Ibid, pp. 46-47).
during the same. Therefore, it is presumed that this property forms
When a writing is offered as a standard of part of the conjugal partnership of the spouses Augusto and Lily xxx xxx xxx
comparison it is for the presiding judge to decide Yulo and thus, could be held liable for the obligations contracted by
whether it is the handwriting of the party to be Augusto Yulo, as administrator of the partnership. xxx xxx xxx
charged. Unless his finding is founded upon error
of law, or upon evidence which is, as matter of There is no dispute that A & L Industries was established during the In the most categorical language, a conjugal
law, insufficient to justify the finding, this court marriage of Augusta and Lily Yulo and therefore the same is partnership under that provision is liable only for
will not revise it upon exceptions." (Costelo v. presumed conjugal and the fact that it was registered in the name of such "debts and obligations contracted by the
Crowell, 139 Mass. 588, 590, 2 N.E. 648; Nuñez v. only one of the spouses does not destroy its conjugal nature (See husband for the benefit of the conjugal
Perry, 113 Mass, 274, 276.) Mendoza v. Reyes, 124 SCRA 161, 165). However, for the said partnership." There must be the requisite showing
property to be held liable, the obligation contracted by the husband then of some advantage which clearly accrued to
We cannot find any error on the part of the trial judge in using the must have redounded to the benefit of the conjugal partnership the welfare of the spouses. There is none in this
above documents as standards and also in giving credence to the under Article 161 of the Civil Code. In the present case, the case.
expert witness presented by the private respondent whose obligation which the petitioner is seeking to enforce against the
xxx xxx xxx Under the second, where the attachment is equipments considering that the attachment was effected way back
maliciously sued out, the damages recoverable in 1975. She states as a matter of fact that the petitioner has already
Moreover, it would negate the plain object of the may include a compensation for every injury to his caused the sale of the machineries for fear that they might be
additional requirement in the present Civil Code credit, business or feed (Tyler v. Mahoney, 168 NC destroyed due to prolonged litigation. We, therefore, deem it just
that a debt contracted by the husband to bind a 237, 84 SE 362; Pittsburg etc. 5 Wakefield, etc., and equitable to allow private respondent Lily Yulo to recover actual
conjugal partnership must redound to its benefit. 135 NC 73, 47 SE 234). ... damages based on the value of the attached properties as proven in
That is still another provision indicative of the the trial court, in the amount of P660,000.00. In turn, if there are
solicitude and tender regard that the law The question before us, therefore, is whether the attachment of the any remaining attached properties, they should be permanently
manifests for the family as a unit. Its interest is properties of A & L Industries was wrongful so as to entitle the released to herein petitioner.
paramount; its welfare uppermost in the minds of petitioner to actual damages only or whether the said attachment
the codifiers and legislators. was made in bad faith and with malice to warrant the award of We cannot, however, sustain the award of P500,000.00
other kinds of damages. Moreover, if the private respondent is representing unrealized profits because this amount was not proved
We, therefore, rule that the petitioner cannot enforce the obligation entitled only to actual damages, was the court justified in ordering or justified before the trial court. The basis of the alleged unearned
contracted by Augusto Yulo against his conjugal properties with the petitioner to pay for the value of the attached properties profits is too speculative and conjectural to show actual damages
respondent Lily Yulo. Thus, it follows that the writ of attachment instead of ordering the return of the said properties to the private for a future period. The private respondent failed to present reports
cannot issue against the said properties. respondent Yulo ? on the average actual profits earned by her business and other
evidence of profitability which are necessary to prove her claim for
Finally, the third issue assails the award of actual damages according Both the trial and appellate courts found that there was bad faith on the said amount (See G. A. Machineries, Inc. v. Yaptinchay, 126 SCRA
to the petitioner, both the lower court and the appellate court the part of the petitioner in securing the writ of attachment. We do 78, 88).
overlooked the fact that the properties referred to are still subject not think so. "An attachment may be said to be wrongful when, for
to a levy on attachment. They are, therefore, still under custodia instance, the plaintiff has no cause of action, or that there is no true The judgment is therefore set aside insofar as it holds the petitioner
legis and thus, the assailed decision should have included a ground therefore, or that the plaintiff has a sufficient security other liable for P500,000.00 actual damages representing unrealized
declaration as to who is entitled to the attached properties and that than the property attached, which is tantamout to saying that the profits, P150,000.00 for exemplary damages and P20,000.00 for
assuming arguendo that the attachment was erroneous, the lower plaintiff is not entitled to attachment because the requirements of attorney's fees. As stated earlier, the attached properties, should be
court should have ordered the sheriff to return to the private entitling him to the writ are wanting. (7 C.J.S., 664)" (p. 48, Section released in favor of the petitioner.
respondent the attached properties instead of condemning the 4, Rule 57, Francisco, Revised Rules of Court).
petitioner to pay the value thereof by way of actual damages. WHEREFORE, the decision of the Court of Appeals is hereby SET
Although the petitioner failed to prove the ground relied upon for ASIDE and the petitioner is ordered to pay the private respondent
In the case of Lazatin v. Twaño (2 SCRA 842, 847), we ruled: the issuance of the writ of attachment, this failure cannot be Lily Yulo the amount of SIX HUNDRED SIXTY THOUSAND PESOS
equated with bad faith or malicious intent. The steps which were (P660,000.00) as actual damages. The remaining properties subject
xxx xxx xxx taken by the petitioner to ensure the security of its claim were of the attachment are ordered released in favor of the petitioner.
premised, on the firm belief that the properties involved could be
made answerable for the unpaid obligation due it. There is no SO ORDERED.
... It should be observed that Sec. 4 of Rule 59,
question that a loan in the amount of P591,003.59 was borrowed
does not prescribed the remedies available to the
from the bank.
attachment defendant in case of a wrongful
attachment, but merely provides an action for
recovery upon the bond, based on the undertaking We, thus, find that the petitioner is liable only for actual damages
therein made and not upon the liability arising and not for exemplary damages and attorney's fees. Respondent Lily
from a tortuous act, like the malicious suing out of Yulo has manifested before this Court that she no longer desires the
an attachment. Under the first, where malice is return of the attached properties since the said attachment caused
not essential, the attachment defendant, is her to close down the business. From that time she has become a
entitled to recover only the actual damages mere employee of the new owner of the premises. She has grave
sustained by him by reason of the attachment. doubts as to the running condition of the attached machineries and
SECOND DIVISION balance as it suffered business reversals, eventually ceasing Factual findings of the CA, affirming those of the trial court, will not
operations in 1984. be disturbed on appeal but must be accorded great weight.4 These
G.R. No. 143382 November 29, 2006 findings are conclusive not only on the parties but on this Court as
Unable to collect the balance of the loan, petitioner filed a well.5
SECURITY BANK and TRUST COMPANY, Petitioner, complaint for a sum of money with a prayer for preliminary
vs. attachment against respondent corporation and individual The CA affirmed the finding of the RTC that the amount availed of by
MAR TIERRA CORPORATION, WILFRIDO C. MARTINEZ, MIGUEL J. respondents in the Regional Trial Court (RTC) of Makati, Branch 66. respondent corporation from its credit line with petitioner was only
LACSON and RICARDO A. LOPA, Respondents. It was docketed as Civil Case No. 3947. ₱9,952,000. Both courts correctly pointed out that petitioner itself
admitted this amount when it alleged in paragraph seven of its
DECISION Subsequently, however, petitioner had the case dismissed with complaint that respondent corporation "borrowed and received the
respect to individual respondents Lacson and Lopa, 2leaving Martinez principal sum of ₱9,952,000."6 Petitioner was therefore bound by
as the remaining individual respondent. the factual finding of the appellate and trial courts, as well as by its
CORONA, J.:
own judicial admission, on this particular point.
May the conjugal partnership be held liable for an indemnity On August 10, 1982, the RTC issued a writ of attachment on all real
and personal properties of respondent corporation and individual At any rate, the issue of the amount actually availed of by
agreement entered into by the husband to accommodate a third
respondent Martinez. As a consequence, the conjugal house and lot respondent corporation is factual. It is not within the ambit of this
party?
of the spouses Wilfrido and Josefina Martinez in Barrio Calaanan, Court’s discretionary power of judicial review under Rule 45 of the
Caloocan City covered by Transfer Certificate of Title (TCT) No. Rules of Court which is concerned solely with questions of law.7
This issue confronts us in this petition for review on certiorari
49158 was levied on.
assailing the November 9, 1999 decision1 of the Court of Appeals
We now move on to the principal issue in this case.
(CA) in CA-G.R. CV No. 48107.
3
The RTC rendered its decision on June 20, 1994. It held respondent
corporation and individual respondent Martinez jointly and severally Under Article 161(1) of the Civil Code,8 the conjugal partnership is
On May 7, 1980, respondent Mar Tierra Corporation, through its
liable to petitioner for ₱5,304,000 plus 12% interest per annum and liable for "all debts and obligations contracted by the husband for
president, Wilfrido C. Martinez, applied for a ₱12,000,000 credit
5% penalty commencing on June 21, 1982 until fully paid, plus the benefit of the conjugal partnership." But when are debts and
accommodation with petitioner Security Bank and Trust Company.
₱10,000 as attorney’s fees. It, however, found that the obligation obligations contracted by the husband alone considered for the
Petitioner approved the application and entered into a credit line
contracted by individual respondent Martinez did not redound to benefit of and therefore chargeable against the conjugal
agreement with respondent corporation. It was secured by an
the benefit of his family, hence, it ordered the lifting of the partnership? Is a surety agreement or an accommodation contract
indemnity agreement executed by individual respondents Wilfrido
attachment on the conjugal house and lot of the spouses Martinez. entered into by the husband in favor of his employer within the
C. Martinez, Miguel J. Lacson and Ricardo A. Lopa who bound
contemplation of the said provision?
themselves jointly and severally with respondent corporation for
the payment of the loan. Dissatisfied with the RTC decision, petitioner appealed to the CA but
the appellate court affirmed the trial court’s decision in toto. We ruled as early as 1969 in Luzon Surety Co., Inc. v. de Garcia9 that,
Petitioner sought reconsideration but it was denied. Hence, this in acting as a guarantor or surety for another, the husband does not
On July 2, 1980, the credit line agreement was amended and
petition. act for the benefit of the conjugal partnership as the benefit is
increased to ₱14,000,000. Individual respondents correspondingly
clearly intended for a third party.
executed a new indemnity agreement in favor of the bank to secure
the increased credit line. Petitioner makes two basic assertions: (1) the RTC and CA erred in
finding that respondent corporation availed of ₱9,952,000 only from In Ayala Investment and Development Corporation v. Court of
its credit line and not the entire ₱14,000,000 and (2) the RTC and CA Appeals,10 we ruled that, if the husband himself is the principal
On September 25, 1981, respondent corporation availed of its credit
were wrong in ruling that the conjugal partnership of the Martinez obligor in the contract, i.e., the direct recipient of the money and
line and received the sum of ₱9,952,000 which it undertook to pay
spouses could not be held liable for the obligation incurred by services to be used in or for his own business or profession, the
on or before November 30, 1981. It was able to pay ₱4,648,000 for
individual respondent Martinez. transaction falls within the term "obligations for the benefit of the
the principal loan and ₱2,729,195.56 for the interest and other
conjugal partnership." In other words, where the husband contracts
charges. However, respondent corporation was not able to pay the
We uphold the CA. an obligation on behalf of the family business, there is a legal
presumption that such obligation redounds to the benefit of the
conjugal partnership.11

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, the transaction cannot by itself be deemed an obligation
for the benefit of the conjugal partnership.12 It is for the benefit of
the principal debtor and not for the surety or his family. No
presumption is raised 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 the
benefit redounding to the conjugal partnership.13 In the absence of
any showing of benefit received by it, the conjugal partnership
cannot be held liable on an indemnity agreement executed by the
husband to accommodate a third party.14

In this case, the principal contract, the credit line agreement


between petitioner and respondent corporation, was solely for the
benefit of the latter. The accessory contract (the indemnity
agreement) under which individual respondent Martinez assumed
the obligation of a surety for respondent corporation was similarly
for the latter’s benefit. Petitioner had the burden of proving that the
conjugal partnership of the spouses Martinez benefited from the
transaction. It failed to discharge that burden.

To hold the conjugal partnership liable for an obligation pertaining


to the husband alone defeats the objective of the Civil Code to
protect the solidarity and well being of the family as a unit. 15 The
underlying concern of the law is the conservation of the conjugal
partnership.16 Hence, it limits the liability of the conjugal
partnership only to debts and obligations contracted by the husband
for the benefit of the conjugal partnership.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.
FIRST DIVISION [The spouses Carandang] refused to pay the amount, contending applicable law and jurisprudence on the matter is hereby AFFIRMED
that a pre-incorporation agreement was executed between [Arcadio and REITERATED.3
G.R. No. 160347 November 29, 2006 Carandang] and [de Guzman], whereby the latter promised to pay
for the stock subscriptions of the former without cost, in The spouses Carandang then filed before this Court the instant
ARCADIO and MARIA LUISA CARANDANG, Petitioners, consideration for [Arcadio Carandang’s] technical expertise, his Petition for Review on Certiorari, bringing forth the following issues:
vs. newly purchased equipment, and his skill in repairing and upgrading
HEIRS OF QUIRINO A. DE GUZMAN, namely: MILAGROS DE radio/communication equipment therefore, there is no I.
GUZMAN, VICTOR DE GUZMAN, REYNALDO DE GUZMAN, CYNTHIA indebtedness on their part [sic].
G. RAGASA and QUIRINO DE GUZMAN, JR., Respondents. WHETHER OR NOT THE HONORABLE COURT OF APPEALS
On June 5, 1992, [de Guzman] filed his complaint, seeking to recover COMMITTED MANIFEST ERROR IN FAILING TO STRICTLY COMPLY
DECISION the ₱336,375 together with damages. After trial on the merits, the WITH SECTION 16, RULE 3 OF THE 1997 RULES OF CIVIL PROCEDURE.
trial court disposed of the case in this wise:
CHICO-NAZARIO, J.: II.
"WHEREFORE, premises considered, judgment is hereby rendered in
favor of [de Guzman]. Accordingly, [the spouses Carandang] are
This is a Petition for Review on Certiorari assailing the Court of WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY
ordered to jointly and severally pay [de Guzman], to wit:
Appeals Decision1 and Resolution affirming the Regional Trial Court ERRED IN ITS FINDING THAT THERE IS AN ALLEGED LOAN FOR
(RTC) Decision rendering herein petitioners Arcadio and Luisa WHICH PETITIONERS ARE LIABLE, CONTRARY TO EXPRESS
Carandang [hereinafter referred to as spouses Carandang] jointly (1) ₱336,375.00 representing [the spouses Carandang’s] PROVISIONS OF BOOK IV, TITLE XI, OF THE NEW CIVIL CODE
and severally liable for their loan to Quirino A. de Guzman. loan to de Guzman; PERTAINING TO LOANS.

The Court of Appeals summarized the facts as follows: (2) interest on the preceding amount at the rate of twelve III.
percent (12%) per annum from June 5, 1992 when this
complaint was filed until the principal amount shall have
[Quirino de Guzman] and [the Spouses Carandang] are stockholders WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY
been fully paid;
as well as corporate officers of Mabuhay Broadcasting System (MBS ERRED IN FINDING THAT THE RESPONDENTS WERE ABLE TO
for brevity), with equities at fifty four percent (54%) and forty six DISCHARGE THEIR BURDEN OF PROOF, IN COMPLETE DISREGARD OF
percent (46%) respectively. (3) ₱20,000.00 as attorney’s fees; THE REVISED RULES ON EVIDENCE.

On November 26, 1983, the capital stock of MBS was increased, (4) Costs of suit. IV.
from ₱500,000 to P1.5 million and ₱345,000 of this increase was
subscribed by [the spouses Carandang]. Thereafter, on March 3, The spouses Carandang appealed the RTC Decision to the Court of WHETHER OR NOT THE HONORABLE COURT OF APPEALS
1989, MBS again increased its capital stock, from ₱1.5 million to ₱3 Appeals, which affirmed the same in the 22 April 2003 assailed COMMITTED REVERSIBLE ERROR WHEN IT FAILED TO APPLY
million, [the spouses Carandang] yet again subscribed to the Decision: SECTIONS 2 AND 7, RULE 3 OF THE 1997 RULES OF CIVIL
increase. They subscribed to ₱93,750 worth of newly issued capital PROCEDURE.
stock. WHEREFORE, in view of all the foregoing the assailed Decision is
hereby AFFIRMED. No costs.2 V.
[De Guzman] claims that, part of the payment for these
subscriptions were paid by him, ₱293,250 for the November 26, The Motion for Reconsideration filed by the spouses Carandang was WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY
1983 capital stock increase and ₱43,125 for the March 3, 1989 similarly denied by the Court of Appeals in the 6 October 2003 ERRED IN FINDING THAT THE PURPORTED LIABILITY OF PETITIONERS
Capital Stock increase or a total of ₱336,375. Thus, on March 31, assailed Resolution: ARE JOINT AND SOLIDARY, IN VIOLATION OF ARTICLE 1207 OF THE
1992, [de Guzman] sent a demand letter to [the spouses Carandang] NEW CIVIL CODE.4
for the payment of said total amount. WHEREFORE, in view thereof, the motion for reconsideration is
hereby DENIED and our Decision of April 22, 2003, which is based on
Whether or not the RTC Decision is void for failing to comply with has ever been effected, the trial held by the court without such legal but because non-compliance therewith results in the undeniable
Section 16, Rule 3 of the Rules of Court representatives or heirs and the judgment rendered after such trial violation of the right to due process of those who, though not duly
are null and void because the court acquired no jurisdiction over the notified of the proceedings, are substantially affected by the
The spouses Carandang claims that the Decision of the RTC, having persons of the legal representatives or of the heirs upon whom the decision rendered therein.12 Such violation of due process can only
been rendered after the death of Quirino de Guzman, is void for trial and judgment would be binding.7 be asserted by the persons whose rights are claimed to have been
failing to comply with Section 16, Rule 3 of the Rules of Court, which violated, namely the heirs to whom the adverse judgment is sought
provides: In the present case, there had been no court order for the legal to be enforced.
representative of the deceased to appear, nor had any such legal
SEC. 16. Death of party; duty of counsel. – Whenever a party to a representative appeared in court to be substituted for the Care should, however, be taken in applying the foregoing
pending action dies, and the claim is not thereby extinguished, it deceased; neither had the complainant ever procured the conclusions. In People v. Florendo,13 where we likewise held that
shall be the duty of his counsel to inform the court within thirty (30) appointment of such legal representative of the deceased, including the proceedings that took place after the death of the party are
days after such death of the fact thereof, and to give the name and appellant, ever asked to be substituted for the deceased. As a result, void, we gave another reason for such nullity: "the attorneys for the
address of his legal representative or representatives. Failure of no valid substitution was effected, consequently, the court never offended party ceased to be the attorneys for the deceased upon
counsel to comply with this duty shall be a ground for disciplinary acquired jurisdiction over appellant for the purpose of making her a the death of the latter, the principal x x x." Nevertheless, the case at
action. party to the case and making the decision binding upon her, either bar had already been submitted for decision before the RTC on 4
personally or as a representative of the estate of her deceased June 1998, several months before the passing away of de Guzman
The heirs of the deceased may be allowed to be substituted for the mother.8 on 19 February 1999. Hence, no further proceedings requiring the
deceased, without requiring the appointment of an executor or appearance of de Guzman’s counsel were conducted before the
administrator and the court may appoint a guardian ad litem for the However, unlike jurisdiction over the subject matter which is promulgation of the RTC Decision. Consequently, de Guzman’s
minor heirs. conferred by law and is not subject to the discretion of the counsel cannot be said to have no authority to appear in trial, as
parties,9 jurisdiction over the person of the parties to the case may trial had already ceased upon the death of de Guzman.
The court shall forthwith order the legal representative or be waived either expressly or impliedly.10Implied waiver comes in
representatives to appear and be substituted within a period of the form of either voluntary appearance or a failure to object. 11 In sum, the RTC Decision is valid despite the failure to comply with
thirty (30) days from notice. Section 16, Rule 3 of the Rules of Court, because of the express
In the cases cited by the spouses Carandang, we held that there had waiver of the heirs to the jurisdiction over their persons, and
been no valid substitution by the heirs of the deceased party, and because there had been, before the promulgation of the RTC
If no legal representative is named by the counsel for the deceased
therefore the judgment cannot be made binding upon them. In the Decision, no further proceedings requiring the appearance of de
party, or if the one so named shall fail to appear within the specified
case at bar, not only do the heirs of de Guzman interpose no Guzman’s counsel.
period, the court may order the opposing party, within a specified
time, to procure the appointment of an executor or administrator objection to the jurisdiction of the court over their persons; they are
for the estate of the deceased and the latter shall immediately actually claiming and embracing such jurisdiction. In doing so, their Before proceeding with the substantive aspects of the case,
appear for and on behalf of the deceased. The court charges in waiver is not even merely implied (by their participation in the however, there is still one more procedural issue to tackle, the
procuring such appointment, if defrayed by the opposing party, may appeal of said Decision), but express (by their explicit espousal of fourth issue presented by the spouses Carandang on the non-
be recovered as costs. such view in both the Court of Appeals and in this Court). The heirs inclusion in the complaint of an indispensable party.
of de Guzman had no objection to being bound by the Decision of
the RTC. Whether or not the RTC should have dismissed the case for failure
The spouses Carandang posits that such failure to comply with the
above rule renders void the decision of the RTC, in adherence to the to state a cause of action, considering that Milagros de Guzman,
following pronouncements in Vda. de Haberer v. Court of Thus, lack of jurisdiction over the person, being subject to waiver, is allegedly an indispensable party, was not included as a party-
Appeals5 and Ferreria v. Vda. de Gonzales6 : a personal defense which can only be asserted by the party who can plaintiff
thereby waive it by silence.
Thus, it has been held that when a party dies in an action that The spouses Carandang claim that, since three of the four checks
survives and no order is issued by the court for the appearance of It also pays to look into the spirit behind the general rule requiring a used to pay their stock subscriptions were issued in the name of
the legal representative or of the heirs of the deceased in formal substitution of heirs. The underlying principle therefor is not Milagros de Guzman, the latter should be considered an
substitution of the deceased, and as a matter of fact no substitution really because substitution of heirs is a jurisdictional requirement, indispensable party. Being such, the spouses Carandang claim, the
failure to join Mrs. de Guzman as a party-plaintiff should cause the an examination of whether the parties presently pleaded are joined, the pleader shall set forth his name, if known, and shall state
dismissal of the action because "(i)f a suit is not brought in the name interested in the outcome of the litigation, and not whether all why he is omitted. Should the court find the reason for the omission
of or against the real party in interest, a motion to dismiss may be persons interested in such outcome are actually pleaded. The latter unmeritorious, it may order the inclusion of the omitted necessary
filed on the ground that the complaint states no cause of action." 14 query is relevant in discussions concerning indispensable and party if jurisdiction over his person may be obtained.
necessary parties, but not in discussions concerning real parties in
The Court of Appeals held: interest. Both indispensable and necessary parties are considered as The failure to comply with the order for his inclusion, without
real parties in interest, since both classes of parties stand to be justifiable cause, shall be deemed a waiver of the claim against such
We disagree. The joint account of spouses Quirino A de Guzman and benefited or injured by the judgment of the suit. party.
Milagros de Guzman from which the four (4) checks were drawn is
part of their conjugal property and under both the Civil Code and Quirino and Milagros de Guzman were married before the The non-inclusion of a necessary party does not prevent the court
the Family Code the husband alone may institute an action for the effectivity of the Family Code on 3 August 1988. As they did not from proceeding in the action, and the judgment rendered therein
recovery or protection of the spouses’ conjugal property. execute any marriage settlement, the regime of conjugal shall be without prejudice to the rights of such necessary party.
partnership of gains govern their property relations.19
Thus, in Docena v. Lapesura [355 SCRA 658], the Supreme Court Non-compliance with the order for the inclusion of a necessary
held that "x x x Under the New Civil Code, the husband is the All property acquired during the marriage, whether the acquisition party would not warrant the dismissal of the complaint. This is an
administrator of the conjugal partnership. In fact, he is the sole appears to have been made, contracted or registered in the name of exception to Section 3, Rule 17 which allows the dismissal of the
administrator, and the wife is not entitled as a matter of right to join one or both spouses, is presumed to be conjugal unless the contrary complaint for failure to comply with an order of the court, as
him in this endeavor. The husband may defend the conjugal is proved.20 Credits are personal properties,21 acquired during the Section 9, Rule 3 specifically provides for the effect of such non-
partnership in a suit or action without being joined by the wife. x x x time the loan or other credit transaction was executed. Therefore, inclusion: it shall not prevent the court from proceeding in the
Under the Family Code, the administration of the conjugal property credits loaned during the time of the marriage are presumed to be action, and the judgment rendered therein shall be without
belongs to the husband and the wife jointly. However, unlike an act conjugal property. prejudice to the rights of such necessary party. Section 11, Rule 3
of alienation or encumbrance where the consent of both spouses is likewise provides that the non-joinder of parties is not a ground for
required, joint management or administration does not require that Consequently, assuming that the four checks created a debt for the dismissal of the action.
the husband and wife always act together. Each spouse may validly which the spouses Carandang are liable, such credits are presumed
exercise full power of management alone, subject to the to be conjugal property. There being no evidence to the contrary, Other than the indispensable and necessary parties, there is a third
intervention of the court in proper cases as provided under Article such presumption subsists. As such, Quirino de Guzman, being a co- set of parties: the pro-forma parties, which are those who are
124 of the Family Code. x x x." owner of specific partnership property,22 is certainly a real party in required to be joined as co-parties in suits by or against another
interest. Dismissal on the ground of failure to state a cause of party as may be provided by the applicable substantive law or
The Court of Appeals is correct. Petitioners erroneously interchange action, by reason that the suit was allegedly not brought by a real procedural rule.25 An example is provided by Section 4, Rule 3 of the
the terms "real party in interest" and "indispensable party." A real party in interest, is therefore unwarranted. Rules of Court:
party in interest is the party who stands to be benefited or injured
by the judgment of the suit, or the party entitled to the avails of the So now we come to the discussion concerning indispensable and Sec. 4. Spouses as parties. – Husband and wife shall sue or be sued
suit.15 On the other hand, an indispensable party is a party in necessary parties. When an indispensable party is not before the jointly, except as provided by law.
interest without whom no final determination can be had of an court, the action should likewise be dismissed.23 The absence of an
action,16 in contrast to a necessary party, which is one who is not indispensable party renders all subsequent actuations of the court Pro-forma parties can either be indispensable, necessary or neither
indispensable but who ought to be joined as a party if complete void, for want of authority to act, not only as to the absent parties indispensable nor necessary. The third case occurs if, for example, a
relief is to be accorded as to those already parties, or for a complete but even as to those present.24 On the other hand, the non-joinder husband files an action to recover a property which he claims to be
determination or settlement of the claim subject of the action.17 of necessary parties do not result in the dismissal of the case. part of his exclusive property. The wife may have no legal interest in
Instead, Section 9, Rule 3 of the Rules of Court provides for the such property, but the rules nevertheless require that she be joined
The spouses Carandang are indeed correct that "(i)f a suit is not consequences of such non-joinder: as a party.
brought in the name of or against the real party in interest, a motion
to dismiss may be filed on the ground that the complaint states no Sec. 9. Non-joinder of necessary parties to be pleaded. – Whenever In cases of pro-forma parties who are neither indispensable nor
cause of action."18 However, what dismissal on this ground entails is in any pleading in which a claim is asserted a necessary party is not necessary, the general rule under Section 11, Rule 3 must be
followed: such non-joinder is not a ground for dismissal. Hence, in a Being co-owners of the alleged credit, Quirino and Milagros de participation in the corporation even if the capital structures were
case concerning an action to recover a sum of money, we held that Guzman may separately bring an action for the recovery thereof. In increased, and that Quirino de Guzman would personally pay the
the failure to join the spouse in that case was not a jurisdictional the fairly recent cases of Baloloy v. Hular28 and Adlawan v. equity shares/stock subscriptions of Arcardio Carandang with no
defect.26 The non-joinder of a spouse does not warrant dismissal as Adlawan,29 we held that, in a co-ownership, co-owners may bring cost to the latter.
it is merely a formal requirement which may be cured by actions for the recovery of co-owned property without the necessity
amendment.27 of joining all the other co-owners as co-plaintiffs because the suit is On this main issue, the Court of Appeals held:
presumed to have been filed for the benefit of his co-owners. In the
Conversely, in the instances that the pro-forma parties are also latter case and in that of De Guia v. Court of Appeals,30 we also held [The spouses Carandang] aver in its ninth assigned error that [the de
indispensable or necessary parties, the rules concerning that Article 487 of the Civil Code, which provides that any of the co- Guzmans] failed to prove by preponderance of evidence, either the
indispensable or necessary parties, as the case may be, should be owners may bring an action for ejectment, covers all kinds of action existence of the purported loan or the non-payment thereof.
applied. Thus, dismissal is warranted only if the pro-forma party not for the recovery of possession.31
joined in the complaint is an indispensable party. Simply put, preponderance of evidence means that the evidence as
In sum, in suits to recover properties, all co-owners are real parties a whole adduced by one side is superior to that of the other. The
Milagros de Guzman, being presumed to be a co-owner of the in interest. However, pursuant to Article 487 of the Civil Code and concept of preponderance of evidence refers to evidence that is of
credits allegedly extended to the spouses Carandang, seems to be relevant jurisprudence, any one of them may bring an action, any greater weight, or more convincing, than that which is offered in
either an indispensable or a necessary party. If she is an kind of action, for the recovery of co-owned properties. Therefore, opposition to it; it means probability of truth.
indispensable party, dismissal would be proper. If she is merely a only one of the co-owners, namely the co-owner who filed the suit
necessary party, dismissal is not warranted, whether or not there for the recovery of the co-owned property, is an indispensable party
[The spouses Carandang] admitted that it was indeed [the de
was an order for her inclusion in the complaint pursuant to Section thereto. The other co-owners are not indispensable parties. They
Guzmans] who paid their stock subscriptions and their reason for
9, Rule 3. are not even necessary parties, for a complete relief can be
not reimbursing the latter is the alleged pre-incorporation
accorded in the suit even without their participation, since the suit is
agreement, to which they offer no clear proof as to its existence.
Article 108 of the Family Code provides: presumed to have been filed for the benefit of all co-owners.32
It is a basic rule in evidence that each party must prove his
Art. 108. The conjugal partnership shall be governed by the rules on We therefore hold that Milagros de Guzman is not an indispensable
affirmative allegation. Thus, the plaintiff or complainant has to
the contract of partnership in all that is not in conflict with what is party in the action for the recovery of the allegedly loaned money to
prove his affirmative allegations in the complaints and the
expressly determined in this Chapter or by the spouses in their the spouses Carandang. As such, she need not have been impleaded
defendant or respondent has to prove the affirmative allegations in
marriage settlements. in said suit, and dismissal of the suit is not warranted by her not
his affirmative defenses and counterclaims.33
being a party thereto.
This provision is practically the same as the Civil Code provision it The spouses Carandang, however, insist that the de Guzmans have
superceded: Whether or not respondents were able to prove the loan sought to
not proven the loan itself, having presented evidence only of the
be collected from petitioners
payment in favor of the Carandangs. They claim:
Art. 147. The conjugal partnership shall be governed by the rules on
the contract of partnership in all that is not in conflict with what is In the second and third issues presented by the spouses Carandang,
It is an undeniable fact that payment is not equivalent to a loan. For
expressly determined in this Chapter. they claim that the de Guzmans failed to prove the alleged loan for
instance, if Mr. "A" decides to pay for Mr. "B’s" obligation, that
which the spouses Carandang were held liable. As previously stated,
payment by Mr. "A" cannot, by any stretch of imagination, possibly
spouses Quirino and Milagros de Guzman paid for the stock
In this connection, Article 1811 of the Civil Code provides that "[a] mean that there is now a loan by Mr. "B" to Mr. "A". There is a
subscriptions of the spouses Carandang, amounting to ₱336,375.00.
partner is a co-owner with the other partners of specific partnership possibility that such payment by Mr. "A" is purely out of generosity
The de Guzmans claim that these payments were in the form of
property." Taken with the presumption of the conjugal nature of the or that there is a mutual agreement between them. As applied to
loans and/or advances and it was agreed upon between the late
funds used to finance the four checks used to pay for petitioners’ the instant case, that mutual agreement is the pre-incorporation
Quirino de Guzman, Sr. and the spouses Carandang that the latter
stock subscriptions, and with the presumption that the credits agreement (supra) existing between Mr. de Guzman and the
would repay him. Petitioners, on the other hand, argue that there
themselves are part of conjugal funds, Article 1811 makes Quirino petitioners --- to the effect that the former shall be responsible for
was an oral pre-incorporation agreement wherein it was agreed that
and Milagros de Guzman co-owners of the alleged credit. paying stock subscriptions of the latter. Thus, when Mr. de Guzman
Arcardio Carandang would always maintain his 46% equity
paid for the stock subscriptions of the petitioners, there was no loan
to speak of, but only a compliance with the pre-incorporation The de Guzmans have successfully proven their payment of the "Q: How much?
agreement.34 spouses Carandang’s stock subscriptions. These payments were, in
fact, admitted by the spouses Carandang. Consequently, it is now up A: ₱40,000.00 to ₱50,000.00 per month.
The spouses Carandang are mistaken. If indeed a Mr. "A" decides to to the spouses Carandang to prove the existence of the pre-
pay for a Mr. "B’s" obligation, the presumption is that Mr. "B" is incorporation agreement that was their defense to the purported Q: The plaintiff also claimed thru witness Edgar Ragasa, that there
indebted to Mr. "A" for such amount that has been paid. This is loan. were receipts issued for the payment of your shares; which receipts
pursuant to Articles 1236 and 1237 of the Civil Code, which provide: were marked as Exhibits "G" to "L" (Plaintiff).
Unfortunately for the spouses Carandang, the only testimony which
Art. 1236. The creditor is not bound to accept payment or touched on the existence and substance of the pre-incorporation I’m showing to you these receipts so marked by the plaintiff as their
performance by a third person who has no interest in the fulfillment agreement, that of petitioner Arcardio Carandang, was stricken off exhibits which were issued in the name of Ma. Luisa Carandang,
of the obligation, unless there is a stipulation to the contrary. the record because he did not submit himself to a cross-examination your wife; and also, Arcadio M. Carandang. Will you please go over
of the opposing party. On the other hand, the testimonies of Romeo this Official Receipt and state for the records, who made for the
Whoever pays for another may demand from the debtor what he Saavedra,36 Roberto S. Carandang,37 Gertrudes Z. payment stated in these receipts in your name?
has paid, except that if he paid without the knowledge or against Esteban, Ceferino Basilio, and Ma. Luisa Carandang40touched on
38 39

the will of the debtor, he can recover only insofar as the payment matters other than the existence and substance of the pre-
A: I paid for those shares."42
has been beneficial to the debtor. incorporation agreement. So aside from the fact that these
witnesses had no personal knowledge as to the alleged existence of
There being no testimony or documentary evidence proving the
the pre-incorporation agreement, the testimonies of these
Art. 1237. Whoever pays on behalf of the debtor without the existence of the pre-incorporation agreement, the spouses
witnesses did not even mention the existence of a pre-incorporation
knowledge or against the will of the latter, cannot compel the Carandang are forced to rely upon an alleged admission by the
agreement.
creditor to subrogate him in his rights, such as those arising from a original plaintiff of the existence of the pre-incorporation
mortgage, guarantee, or penalty. agreement.
Worse, the testimonies of petitioners Arcadio Carandang and Ma.
Luisa Carandang even contradicted the existence of a pre-
Articles 1236 and 1237 are clear that, even in cases where the Petitioners claim that the late Quirino A. de Guzman, Sr. had
incorporation agreement because when they were asked by their
debtor has no knowledge of payment by a third person, and even in admitted the existence of the pre-incorporation agreement by
counsel regarding the matter of the check payments made by the
cases where the third person paid against the will of the debtor, virtue of paragraphs 13 and 14 of their Answer and paragraph 4 of
late Quirino A. de Guzman, Sr. in their behalf, they said that they
such payment would produce a debt in favor of the paying third private respondents’ Reply.
had already paid for it thereby negating their own defense that
person. In fact, the only consequences for the failure to inform or
there was a pre-incorporation agreement excusing themselves from
get the consent of the debtor are the following: (1) the third person Paragraphs 13 and 14 of petitioners’ Answer dated 7 July 1992 state
paying Mr. de Guzman the amounts he advanced or loaned to them.
can recover only insofar as the payment has been beneficial to the in full:
This basic and irrefutable fact can be gleaned from their testimonies
debtor; and (2) the third person is not subrogated to the rights of
which the private respondents are quoting for easy reference:
the creditor, such as those arising from a mortgage, guarantee or
13. Sometime in November, 1973 or thereabout, herein plaintiff
penalty.35
a. With respect to the testimony of Ma. Luisa Carandang invited defendant Arcadio M. Carandang to a joint venture by
pooling together their technical expertise, equipments, financial
We say, however, that this is merely a presumption. By virtue of the resources and franchise. Plaintiff proposed to defendant and
parties’ freedom to contract, the parties could stipulate otherwise Q: Now, can you tell this Honorable Court how do you feel with
mutually agreed on the following:
and thus, as suggested by the spouses Carandang, there is indeed a respect to the Complaint of the plaintiff in this case charging you
possibility that such payment by Mr. "A" was purely out of that you paid for this year and asking enough to paid (sic) your tax?
1. That they would organize a corporation known as
generosity or that there was a mutual agreement between them.
Mabuhay Broadcasting Systems, Inc.
But such mutual agreement, being an exception to presumed course A: We have paid already, so, we are not liable for anything payment
of events as laid down by Articles 1236 and 1237, must be (sic).41
2. Considering the technical expertise and talent of
adequately proven.
defendant Arcadio M. Carandang and his new equipments
b. With respect to the testimony of Arcadio Carandang
he bought, and his skill in repairing and modifying
radio/communication equipments into high proficiency, It appears that plaintiff agreed to the formation of the corporation Finally, the Court of Appeals also upheld the RTC Decision insofar as
said defendant would have an equity participation in the principally because of a directive of then President Marcos it decreed a solidary liability. According to the Court of Appeals:
corporation of 46%, and plaintiff 54% because of his indicating the need to broaden the ownership of radio broadcasting
financial resources and franchise. stations. The plaintiff owned the franchise, the radio transmitter, With regards (sic) the tenth assigned error, [the spouses Carandang]
the antenna tower, the building containing the radio transmitter contend that:
3. That defendant would always maintain his 46% equity and other equipment. Verily, he would be placed in a great
participation in the corporation even if the capital disadvantage if he would still have to personally pay for the shares "There is absolutely no evidence, testimonial or documentary,
structures are increased, and that plaintiff would personally of defendant Arcadio M. Carandang. showing that the purported obligation of [the spouses Carandang] is
pay the equity shares/stock subscriptions of defendant joint and solidary. x x x
with no cost to the latter. 4. Plaintiff admits the allegations in paragraph 14 of the Answer.44
"Furthermore, the purported obligation of [the spouses Carandang]
4. That because of defendant’s expertise in the trade In effect, the spouses Carandang are relying on the fact that Quirino does not at all qualify as one of the obligations required by law to be
including the marketing aspects, he would be the President de Guzman stated that he admitted paragraph 14 of the Answer, solidary x x x."
and General Manager, and plaintiff the Chairman of the which incidentally contained the opening clause "(h)aving mutually
Board. agreed on the above arrangements, x x x." It is apparent from the facts of the case that [the spouses
Carandang] were married way before the effectivity of the Family
5. That considering their past and trustworthy relations, Admissions, however, should be clear and unambiguous. This Code hence; their property regime is conjugal partnership under the
they would maintain such relations in the joint venture purported admission by Quirino de Guzman reeks of ambiguity, as Civil Code.
without any mental reservation for their common benefit the clause "(h)aving mutually agreed on the above arrangements,"
and success of the business. seems to be a mere introduction to the statement that the single It must be noted that for marriages governed by the rules of
proprietorship of Quirino de Guzman had been converted into a conjugal partnership of gains, an obligation entered into by the
14. Having mutually agreed on the above arrangements, corporation. If Quirino de Guzman had meant to admit paragraph husband and wife is chargeable against their conjugal partnership
the single proprietorship of plaintiff was immediately spun- 13.3, he could have easily said so, as he did the other paragraphs he and it is the partnership, which is primarily bound for its repayment.
off into a corporation now known as Mabuhay categorically admitted. Instead, Quirino de Guzman expressly stated Thus, when the spouses are sued for the enforcement of the
Broadcasting System, Inc. The incorporators are plaintiff the opposite: that "(p)laintiff specifically denies the other obligation entered into by them, they are being impleaded in their
and his family members/nominees controlling jointly 54% allegations of paragraph 13 of the Answer."45 The Reply furthermore capacity as representatives of the conjugal partnership and not as
of the stocks and defendant Arcadio M. Carandang states that the only portion of paragraph 13 which Quirino de independent debtors, such that the concept of joint and solidary
controlling singly 46% as previously agreed.43 Guzman had admitted is paragraph 13.1, and only insofar as it said liability, as between them, does not apply.47
that Quirino de Guzman and Arcardio Carandang organized
Meanwhile, paragraphs 3 and 4 of private respondents’ Reply dated Mabuhay Broadcasting Systems, Inc.46
The Court of Appeals is correct insofar as it held that when the
29 July 1992 state in full: spouses are sued for the enforcement of the obligation entered into
All the foregoing considered, we hold that Quirino de Guzman had by them, they are being impleaded in their capacity as
3. Plaintiffs admits the allegation in paragraph 13.1 of the Answer not admitted the alleged pre-incorporation agreement. As there was representatives of the conjugal partnership and not as independent
only insofar the plaintiff and defendant Arcadio M. Carandang no admission, and as the testimony of Arcardio Carandang was debtors. Hence, either of them may be sued for the whole amount,
organized a corporation known as Mabuhay Broadcasting Systems, stricken off the record, we are constrained to rule that there was no similar to that of a solidary liability, although the amount is
Inc. Plaintiff specifically denies the other allegations in paragraph 13 pre-incorporation agreement rendering Quirino de Guzman liable chargeable against their conjugal partnership property. Thus, in the
of the Answer, the same being devoid of any legal or factual bases. for the spouses Carandang’s stock subscription. The payment by the case cited by the Court of Appeals, Alipio v. Court of Appeals, 48 the
The truth of the matter is that defendant Arcadio M. Carandang was spouses de Guzman of the stock subscriptions of the spouses two sets of defendant-spouses therein were held liable for
not able to pay plaintiff the agreed amount of the lease for a Carandang are therefore by way of loan which the spouses ₱25,300.00 each, chargeable to their respective conjugal
number of months forcing the plaintiff to terminate lease. Carandang are liable to pay.1âwphi1 partnerships.
Additionally, the records would show that it was the defendant
Arcadio M. Carandang who proposed a joint venture with the Whether or not the liability of the spouses Carandang is joint and WHEREFORE, the Decision of the Court of Appeals, affirming the
plaintiff. solidary judgment rendered against the spouses Carandang, is hereby
AFFIRMED with the following MODIFICATION: The spouses
Carandang are ORDERED to pay the following amounts from their
conjugal partnership properties:

(1) ₱336,375.00 representing the spouses Carandang’s loan


to Quirino de Guzman; and

(2) Interest on the preceding amount at the rate of twelve


percent (12%) per annum from 5 June 1992 when the
complaint was filed until the principal amount can be fully
paid; and

(3) ₱20,000.00 as attorney’s fees.

No costs.

SO ORDERED.
FIRST DIVISION Yamane, wife of Leonardo Yamane, [respondent] herein, under Rules of Court, it is deemed final and any irregularity committed in
Transfer Certificate of Title No. 12491. the course thereof will not vitiate its validity.
G.R. No. 160762 May 3, 2006
"As a result of a motion for execution of a charging lien filed by Atty. "On December 28, 1984, Muriel likewise lodged a Complaint for
Spouses JOSEPHINE MENDOZA GO & HENRY GO, Petitioners, Guillermo F. De Guzman in Civil Case No. 1841, entitled 'Florence Damages, docketed as Civil Case No. 505-R, against [petitioners] and
vs. Pucay De Gomez, Elsie Pucay Kiwas and Muriel Pucay Yamane v. Atty. Guillermo De Guzman alleging, in gist, fraud,
LEONARDO YAMANE, Respondent. Cypress Corporation,' which said counsel handled for the plaintiffs misrepresentation, manipulation and unlawful acts of the
therein, hereinafter collectively referred to as the Pucay sisters, the defendants in causing the levy of the subject property with an
DECISION subject property was levied to satisfy the lien for attorney's fees in estimated commercial value of P200,000 as against a charging lien in
the amount of P10,000. The said property was scheduled to be sold the amount of P10,000.
at public auction on August 11, 1981.
PANGANIBAN, CJ:
"In its May 27, 1985 Order, the trial court ordered the joint hearing
"Four days prior to the auction sale, [respondent] filed a Third-Party of Civil Cases Nos. 417-R and 505-R. On August 30, 1985, Muriel was
Property purchased by spouses during the existence of their
Claim with the Office of the Provincial Sheriff to stop the public declared non-suited for failure to appear in the hearing despite due
marriage is presumed to be conjugal in nature. This presumption
auction on the ground that the subject property is conjugal property notice. As a consequence, Civil Case No. 505-R was dismissed on
stands, absent any clear, categorical, and convincing evidence that
and, therefore, should not be held answerable for the personal October 15, 1985."5
the property is paraphernal. Conjugal property cannot be held liable
obligation of the Pucay sisters. However, the Sheriff proceeded with
for the personal obligation contracted by one spouse, unless some
the auction sale despite [respondent's] protest. The subject In its Decision6 dated March 25, 1998, the Regional Trial Court (RTC)
advantage or benefit is shown to have accrued to the conjugal
property was sold to spouses Josephine [and] Henry Go (or of Baguio City, Branch 4, held that the subject parcel of land was the
partnership.
[petitioners]) as highest bidder. No redemption having been made paraphernal property of the late Muriel Pucay Yamane -- spouse of
during the one-year period, a Final Sheriff's Certificate of Sale was respondent -- and was not their conjugal property. The appearance
The Case
eventually issued on August 26, 1982 conveying and transferring the of his name on the Transfer Certificate of Title (TCT) was deemed to
said property to [petitioners]. be merely descriptive of the civil status of the registered owner, his
Before the Court is a Petition for Review1 under Rule 45 of the Rules
late wife. Hence, finding that he had no legal standing to question
of Court, challenging the November 22, 2002 Decision 2 and the
"On September 4, 1984, [respondent] filed a Complaint with the the auction sale or to pray for its annulment or cancellation, the RTC
September 17, 2003 Resolution3 of the Court of Appeals (CA) in CA-
Regional Trial Court of Baguio City, docketed as Civil Case No. 417-R, dismissed the case for lack of merit.
GR CV No. 60939. The assailed Decision disposed as follows:
against [petitioners] and Sheriff Melgar for annulment and
cancellation of auction sale upon the same ground stated in the Upon receipt of the RTC Decision on April 8, 1998, respondent filed
"WHEREFORE, premises considered, the Decision appealed from is abovementioned third-party claim. Citing the Order of the Regional a Motion,7 in which he prayed that he be allowed to file his Motion
hereby REVERSED and SET ASIDE. The Sheriff's Certificate of Sale Trial Court of Baguio City, Branch V in LRC Case No. 2288, which for Reconsideration of the Decision, on or before May 30, 1998. The
dated August 12, 1981 and the Final Sheriff's Certificate of Sale ordered the cancellation of TCT No. 12491 and directed the Register trial court granted8 his Motion; received the Motion for
dated August 26, 1982 are declared NULL and VOID."4 of Deeds to issue new title in the name of Josephine Go x x x, Reconsideration,9 which was filed on May 28, 1998; and eventually
[petitioners] moved to dismiss the complaint on the ground of res denied it in its Order dated June 5, 1998.10 He then elevated the
The CA denied reconsideration in its September 17, 2003 judicata. In the Order dated November 28, 1984, the motion was matter to the CA on June 15, 1998.
Resolution. denied by the trial court.
Ruling of the Court of Appeals
The Facts "In their Answer filed on December 10, 1984, [petitioners] denied
the material allegations of the complaint and interposed the The CA reversed the RTC's Decision. The Sheriff's Certificate of Sale
The undisputed factual findings of the CA are as follows: following special affirmative defenses: that the cause of action was dated August 12, 1981, and the Final Sheriff's Certificate of Sale
barred by prior judgment; that [respondent] has not pursued any dated August 26, 1982, were declared null and void.
"Involved in the suit is a 750 square meters (sic) parcel of lot located lawful remedy to annul the execution proceeding; that there is no
at Res. Sec. 'K', Baguio City, registered in the name of Muriel Pucay flaw or irregularity in the auction sale; and that since the execution
According to the appellate court, property acquired during marriage
sale was made in accordance with Section 21, Rule 39 of the Revised
is presumed to be conjugal, unless the exclusive funds of one spouse
are shown to have been used for the purpose. That the land was In the main, they posit two issues. They raise, first, the procedural merely frivolous and dilatory; and f) the fact that the other party
acquired during the spouses' coverture was sufficiently established question of whether the CA erred in giving due course to would not be unjustly prejudiced.17
by the TCT and the Deed of Absolute Sale, both indicating that respondent's lapsed appeal; and, second, the substantive issue of
Muriel Pucay Yamane was "married to Leonardo Yamane"; and by whether the subject property is conjugal or paraphernal. Indeed, in some exceptional cases, the Court has allowed the
the undisputed testimony of the previous owner, Eugene Pucay. relaxation of the rules regulating the reglementary periods of
Because of petitioners' failure to establish that the land in question The Court's Ruling appeal. These exceptions were cited in Manila Memorial Park
had been acquired by Muriel using her exclusive funds, the CA Cemetery v. CA,18 from which we quote:
concluded that the contested land was conjugal property. The Petition has no merit.
"In Ramos vs. Bagasao, the Court excused the delay of four days in
The appellate court further held thus: Procedural Issue: the filing of the notice of appeal because the questioned decision of
the trial court had been served upon appellant Ramos at a time
"x x x [T]he disputed property being a conjugal property of Whether Respondent's Appeal Should Be Given Due Course when her counsel of record was already dead. The new counsel
[respondent] and his wife, and absent any showing of some could only file the appeal four days after the prescribed
advantage or benefit that accrued to their conjugal partnership from reglementary period was over. In Republic vs. Court of Appeals, the
Petitioners contend that the CA erred in giving due course to the
the transaction between the Pucay sisters and Atty. De Guzman, the Court allowed the perfection of an appeal by the Republic despite
appeal filed by respondent beyond the 15-day reglementary period.
public auction sale of the subject property in favor of [petitioners] is the delay of six days to prevent a gross miscarriage of justice since
null and void."11 the Republic stood to lose hundreds of hectares of land already
Concededly, he received a copy of the RTC Decision on April 8, 1998.
titled in its name and had since then been devoted for public
He had, therefore, until April 23, 1998, within which to file an
Hence, this Petition.12 purposes. In Olacao vs. National Labor Relations Commission, a
appeal. Prior to the latter date, however, he moved that his new
tardy appeal was accepted considering that the subject matter in
counsel be allowed to file a motion for reconsideration on May 30,
Issues issue had theretofore been judicially settled with finality in another
1998. It was eventually filed on May 28, 1998, but was denied.
case, and a dismissal of the appeal would have had the effect of the
Respondent subsequently filed a Notice of Appeal on June 15, 1998.
appellant being ordered twice to make the same reparation to the
Petitioners submit the following issues for our consideration: By this time, the original period to appeal had expired. It should be
appellee."19
clear that the Rules prohibit an extension to file a motion for
"I. The Court of Appeals gravely erred in taking cognizance reconsideration.14
We believe that a suspension of the Rules is similarly warranted in
of the appeal and in not dismissing the same, despite the
the present controversy. We have carefully studied the merits of the
fact that the respondent failed to perfect his appeal within The perfection of an appeal in the manner and within the period
case and noted that the review being sought has not been shown to
the 15-day reglementary period set by the Rules of Court. prescribed by the Rules of Civil Procedure is not only mandatory, but
be merely frivolous and dilatory. The Court has come to the
also jurisdictional; and the lapse of the appeal period of fifteen days
conclusion that the Decision of the RTC, Branch 4 (in Civil Case No.
"II. The Court of Appeals gravely erred in declaring the deprives a court of the jurisdiction to alter a final judgment.15
417-R), must be set aside. It would be far better and more prudent
subject property as conjugal property, despite the
to attain the ends of justice, rather than to dispose of the case on
existence of clear evidence showing that the subject There have been exceptions, however, in which the Court dispensed technicality and cause grave injustice in the process. Thus, we would
property is the exclusive paraphernal property of Muriel with technical infirmities and gave due course to tardy appeals. In rather excuse a technical lapse and afford respondent a review of
who, even during her lifetime, always claimed the said some of those instances, the presence of any justifying circumstance the case on appeal.
property as her own exclusive paraphernal property and recognized by law -- such as fraud, accident, mistake or excusable
not as property co-owned with her husband, the negligence -- properly vested the judge with discretion to approve
Substantive Issue:
respondent herein.1avvphil.net or admit an appeal filed out of time.16 In other instances, lapsed
appeals were allowed in order to serve substantial justice, upon
Paraphernal or Conjugal?
"III. The Court of Appeals, assuming, ex grati argumenti, consideration of a) matters of life, liberty, honor or property; b) the
that the subject property is conjugal property between existence of special or compelling circumstances; c) the merits of
respondent and Muriel, gravely erred in ruling that the the case; d) causes not entirely attributable to the fault or The purchase of the property had been concluded in 1967, before
same cannot answer for the charging lien of Atty. Guillermo negligence of the party that would be favored by the suspension of the Family Code took effect on August 3, 1988.20Accordingly, the
de Guzman in Civil Case No. 1841."13 the rules; e) the failure to show that the review being sought was transaction was aptly covered by the then governing provisions of
the New Civil Code. On the latter basis, therefore, we shall resolve Second. The Deed of Absolute Sale of the property is in the "x x x. We are unable to go along with [petitioners'] contention that
the issue of the nature of the contested property. sole name of Muriel. Petitioners posit that, had the spouses the subject property was acquired by Muriel with her exclusive
jointly purchased this piece of land, the document should funds. Mere registration of the contested property in the name of
Article 160 of the New Civil Code provides that "all property of the have indicated this fact or carried the name of respondent the wife is not sufficient to establish the paraphernal nature of the
marriage is presumed to belong to the conjugal partnership, unless as buyer. property. This reminds Us of the teaching in the recent case
it be proved that it pertains exclusively to the husband or to the of Diancin v. Court of Appeals, that all the property acquired by the
wife."21 As a conditio sine qua non for the operation of this article in Third. The failure of respondent to redeem the parcel of spouses, regardless of in whose name the same is registered, during
favor of the conjugal partnership,22 the party who invokes the land within the redemption period after the auction sale the marriage is presumed to belong to the conjugal partnership of
presumption must first prove that the property was acquired during indicated that he was not its co-owner. gains, unless it is proved that it pertains exclusively to the husband
the marriage.23 or to the wife. To quote:
We will discuss the three arguments seriatim.
In other words, the presumption in favor of conjugality does not "As a general rule, all property acquired by the spouses, regardless
operate if there is no showing of when the property alleged to be Unilateral Declaration of in whose name the same is registered, during the marriage is
conjugal was acquired.24 Moreover, the presumption may be presumed to belong to the conjugal partnership of gains, unless it is
rebutted only with strong, clear, categorical and convincing proved that it pertains exclusively to the husband or to the wife. In
Respondent's interest cannot be prejudiced by the claim of Muriel in
evidence.25 There must be strict proof of the exclusive ownership of the case at bar, the fishpond lease right is not paraphernal having
her Complaint in Civil Case No. 505-R that the subject parcel of land
one of the spouses,26 and the burden of proof rests upon the party been acquired during the coverture of the marriage between
was her paraphernal property. Significantly, the nature of a property
asserting it.27 Matilde and Tiburcio, which was on April 9, 1940. The fact that the
-- whether conjugal or paraphernal -- is determined by law and not
grant was solely in the name of Matilde did not make the property
by the will of one of the spouses.31 Thus, no unilateral declaration by
The CA committed no error in declaring that the parcel of land paraphernal property. What was material was the time the fishpond
one spouse can change the character of a conjugal property.32
belonged to the conjugal partnership of Spouses Muriel and lease right was acquired by the grantee, and that was during the
Leonardo Yamane. They acquired it from Eugene Pucay on February lawful existence of Matilde's marriage to Tiburcio.
Besides, the issue presented in Civil Case No. 505-R was not the
27, 1967,28 or specifically during the marriage.29 We then follow the nature of the subject piece of land being levied upon, but whether
rule that proof of the acquisition of the subject property during a "x x x [T]his presumption is rebuttable, but only with strong, clear
Atty. Guillermo de Guzman was entitled to a charging lien. In that
marriage suffices to render the statutory presumption operative. It and convincing evidence. The burden of proving that the property
case, Muriel claimed that she had not officially retained him as
is clear enough that the presently disputed piece of land pertains to belongs exclusively to the wife rests upon the party asserting it.
counsel, and that no lawyer-client relationship had been established
the conjugal partnership. Mere assertion of the property's paraphernal nature is not
between them.33
sufficient."
Petitioners concede that the property was acquired during the Deed and Title in the Name of One Spouse
subsistence of the marriage of Muriel to respondent. 30 Nonetheless, "The record as well as the foregoing established jurisprudence lead
they insist that it belonged exclusively to her for the following us to conclude that the contested property was indeed acquired
Further, the mere registration of a property in the name of one
reasons: during the marriage of herein [respondent] and Muriel. To prove
spouse does not destroy its conjugal nature.34Hence, it cannot be
that it is nonetheless paraphernal property, it is incumbent upon
contended in the present case that, simply because the title and the
First. Respondent never denied nor opposed her claim in [petitioners] to adduce strong, clear and convincing evidence that
Deed of Sale covering the parcel of land were in the name of Muriel Muriel bought the same with her exclusive funds. [Petitioners] failed
Civil Case No. 505-R, which she had filed during her alone, it was therefore her personal and exclusive property. In
lifetime; or in AG-GR Sp. No. 01616 (entitled "Muriel Pucay to discharge the burden. Nowhere in the evidence presented by
concluding that it was paraphernal, the trial court's reliance on
Yamane v. Josephine Go"), that the disputed parcel of land them do We find any indication that the land in question was
Stuart v. Yatco35 was clearly erroneous.
was her exclusive paraphernal property. They allege that acquired by Muriel with her exclusive funds. The presumption not
his failure to file a denial or opposition in those cases is having been overthrown, the conclusion is that the contested land is
As stated earlier, to rebut the presumption of the conjugal nature of conjugal property."36
tantamount to a judicial admission that militates against his
the property, petitioners must present clear and convincing
belated claim.
evidence. We affirm and quote below, for easy reference, the
Non-Redemption After the Auction Sale
relevant dispositions of the CA:
The non-redemption of the property by respondent within the It is indisputable that the services of Atty. de Guzman were acquired husband's failure to deliver the needed sum; 51 when administration
period prescribed by law did not, in any way, indicate the absence of during the marriage of respondent and Muriel. The lawyer's legal of the conjugal partnership is transferred to the wife by the
his right or title to it. Contrary to petitioners' allegation, the fact is services were engaged to recover from Cypress Corporation (in Civil courts52 or by the husband;53 or when the wife gives moderate
that he filed a Third-Party Claim37with the sheriff, upon learning of Case No. 1841) the balance of the purchase price of the sale of the donations for charity.54 Failure to establish any of these
the levy and impending auction sale. This fact was specifically exclusive property of Muriel and her sisters. 46 The recovery was circumstances in the present case means that the conjugal asset
admitted by petitioners.38 Respondent claimed that the parcel of done during the marriage.47 may not be bound to answer for Muriel's personal obligation.
land was conjugal, and that he could not answer for the separate
obligation of his wife and her sisters.39 Notwithstanding his claim, The CA elucidated on this matter as follows: The power of the court in executing judgments extends only to
the disputed piece of land was sold at a public auction on August 11, properties unquestionably belonging to the judgment debtor
1981. Consequently issued were a Sheriff's Certificate of Sale dated "x x x. The contract or transaction between Atty. De Guzman and alone.55 In this case, therefore, the property -- being conjugal in
August 12, 1981, and a Final Sheriff's Certificate of Sale dated the Pucay sisters appears to have been incurred for the exclusive nature -- cannot be levied upon.56
August 26, 1982.40 interest of the latter. Muriel was acting privately for her exclusive
interest when she joined her two sisters in hiring the services of WHEREFORE, the Petition is DENIED, and the assailed Decision and
Likewise, in his Opposition (Answer) to the Petition in LRC File Adm. Atty. De Guzman to handle a case for them. Accordingly, whatever Resolution AFFIRMED. Costs against petitioners.
Case No. 2288,41 respondent raised the issue of the conjugal nature expenses were incurred by Muriel in the litigation for her and her
of the property and reserved his right to file an independent action sisters' private and exclusive interests, are her exclusive SO ORDERED.
to annul the auction sale. In its March 30, 1983 Order,42 however, responsibility and certainly cannot be charged against the contested
Branch 5 of the RTC of Baguio City did not rule on either the actual conjugal property.
ownership or the nature of the parcel of land. Rather, it granted the
Petition to issue a new certificate of title in favor of Petitioner "Even on the remote assumption that the conjugal property could
Josephine Mendoza Go. It found that, under Section 75 of be held liable, levy on execution of the same property should still be
Presidential Decree 1529, respondent had no legal standing to denied in accordance with the ruling in Luzon Surety Co., Inc. v. De
question the auction sale, because he was not the registered owner Garcia that before a conjugal property could be held liable for the
of the property. Instead, his right to prove his claim in a separate obligation contracted by a spouse, there must be a showing of some
and independent action was upheld.43 Thus, he instituted the advantage or benefit that accrued to the conjugal partnership.
present case for annulment and cancellation of the auction sale. Concededly, the burden is on the [petitioners] to prove that the
services rendered by Atty. De Guzman in handling Civil Case No.
The foregoing points clearly explain the failure of respondent to 1841 for the Pucay sisters had, somehow, redounded to the benefit
redeem the property. Misplaced is petitioners' emphasis on his of the conjugal partnership of herein [respondent] and Muriel. This
failure to do so within the period required by law, because onus, [petitioners], however, failed to discharge." 48
redemption in this case would have been inconsistent with his claim
that the sale was invalid.44 Redemption would have served as an We find no reason to deviate from the CA's findings, which are
implied admission of the regularity of the sale and estopped him amply supported by evidence. The expenses incurred by Muriel for
from later impugning its validity on that ground.45 the recovery of the balance of the purchase price of her paraphernal
property are her exclusive responsibility. 49 This piece of land may
Since petitioners have failed to present convincing evidence that the not be used to pay for her indebtedness, because her obligation has
property is paraphernal, the presumption that it is conjugal not been shown to be one of the charges against the conjugal
therefore stands. The next question before us is, whether the partnership.50 Moreover, her rights to the property are merely
charging lien of Atty. de Guzman may be properly enforced against inchoate prior to the liquidation of the conjugal partnership.
the piece of land in question.
Under the New Civil Code, a wife may bind the conjugal partnership
Charging Lien Not Chargeable Against Conjugal Property only when she purchases things necessary for the support of the
family, or when she borrows money for that purpose upon her
SECOND DIVISION evidence the loan maturing on June 29, 1981.8 This was renewed attach all the properties of said Alfredo Ching not exceeding
once for a period of one month.9 ₱12,612,972.82 in value, which are within the jurisdiction of this
G.R. No. 124642 February 23, 2004 Court and not exempt from execution upon, the filing by plaintiff of
The PBMCI defaulted in the payment of all its loans. Hence, on a bond duly approved by this Court in the sum of Twelve Million
ALFREDO CHING and ENCARNACION CHING, petitioners August 21, 1981, the ABC filed a complaint for sum of money with Seven Hundred Thousand Pesos (₱12,700,000.00) executed in favor
vs. prayer for a writ of preliminary attachment against the PBMCI to of the defendant Alfredo Ching to secure the payment by plaintiff to
THE HON. COURT OF APPEALS and ALLIED BANKING collect the ₱12,612,972.88 exclusive of interests, penalties and him of all the costs which may be adjudged in his favor and all
CORPORATION, respondents. other bank charges. Impleaded as co-defendants in the complaint damages he may sustain by reason of the attachment if the court
were Alfredo Ching, Emilio Tañedo and Chung Kiat Hua in their shall finally adjudge that the plaintiff was not entitled thereto.
DECISION capacity as sureties of the PBMCI.
SO ORDERED.15
CALLEJO, SR., J.: 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 Upon the ABC’s posting of the requisite bond, the trial court issued a
preliminary attachment, the ABC averred that the "defendants are writ of preliminary attachment. Subsequently, summonses were
This petition for review, under Rule 45 of the Revised Rules of Court,
guilty of fraud in incurring the obligations upon which the present served on the defendants,16 save Chung Kiat Hua who could not be
assails the Decision1 of the Court of Appeals (CA) dated November
action is brought11 in that they falsely represented themselves to be found.
27, 1995 in CA-G.R. SP No. 33585, as well as the Resolution2 on April
in a financial position to pay their obligation upon maturity
2, 1996 denying the petitioners’ motion for reconsideration. The
thereof."12 Its supporting affidavit stated, inter alia, that the Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly
impugned decision granted the private respondent’s petition
"[d]efendants have removed or disposed of their properties, or [are] filed a petition for suspension of payments with the Securities and
for certiorariand set aside the Orders of the trial court dated
ABOUT to do so, with intent to defraud their creditors."13 Exchange Commission (SEC), docketed as SEC Case No. 2250, at the
December 15, 19933 and February 17, 19944 nullifying the
attachment of 100,000 shares of stocks of the Citycorp Investment same time seeking the PBMCI’s rehabilitation.17
Philippines under the name of petitioner Alfredo Ching. On August 26, 1981, after an ex-parte hearing, the trial court issued
an Order denying the ABC’s application for a writ of preliminary On July 9, 1982, the SEC issued an Order placing the PBMCI’s
attachment. The trial court decreed that the grounds alleged in the business, including its assets and liabilities, under rehabilitation
The following facts are undisputed:
application and that of its supporting affidavit "are all conclusions of receivership, and ordered that "all actions for claims listed in
fact and of law" which do not warrant the issuance of the writ Schedule "A" of the petition pending before any court or tribunal
On September 26, 1978, the Philippine Blooming Mills Company,
prayed for.14On motion for reconsideration, however, the trial are hereby suspended in whatever stage the same may be until
Inc. (PBMCI) obtained a loan of ₱9,000,000.00 from the Allied
court, in an Order dated September 14, 1981, reconsidered its further orders from the Commission."18 The ABC was among the
Banking Corporation (ABC). By virtue of this loan, the PBMCI,
previous order and granted the ABC’s application for a writ of PBMCI’s creditors named in the said schedule.
through its Executive Vice-President Alfredo Ching, executed a
preliminary attachment on a bond of ₱12,700,000. The order, in
promissory note for the said amount promising to pay on December
relevant part, stated: Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching
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 jointly filed a Motion to Dismiss and/or motion to suspend the
With respect to the second ground relied upon for the grant of the proceedings in Civil Case No. 142729 invoking the PBMCI’s pending
with Emilio Tañedo and Chung Kiat Hua, executed a continuing
writ of preliminary attachment ex-parte, which is the alleged application for suspension of payments (which Ching co-signed) and
guaranty with the ABC binding themselves to jointly and severally
disposal of properties by the defendants with intent to defraud over which the SEC had already assumed jurisdiction. 19 On February
guarantee the payment of all the PBMCI obligations owing the ABC
creditors as provided in Sec. 1(e) of Rule 57 of the Rules of Court, 4, 1983, the ABC filed its Opposition thereto.20
to the extent of ₱38,000,000.00.6 The loan was subsequently
the affidavits can only barely justify the issuance of said writ as
renewed on various dates, the last renewal having been made on
against the defendant Alfredo Ching who has allegedly bound In the meantime, on July 26, 1983, the deputy sheriff of the trial
December 4, 1980.7
himself jointly and severally to pay plaintiff the defendant court levied on attachment the 100,000 common shares of Citycorp
corporation’s obligation to the plaintiff as a surety thereof. stocks in the name of Alfredo Ching.21
Earlier, on December 28, 1979, the ABC extended another loan to
the PBMCI in the amount of ₱13,000,000.00 payable in eighteen
WHEREFORE, let a writ of preliminary attachment issue as against Thereafter, in an Order dated September 16, 1983, the trial court
months at 16% interest per annum. As in the previous loan, the
the defendant Alfredo Ching requiring the sheriff of this Court to partially granted the aforementioned motion by suspending the
PBMCI, through Alfredo Ching, executed a promissory note to
proceedings only with respect to the PBMCI. It denied Ching’s levied on by the sheriff were acquired by her and her husband On December 10, 1993, the Spouses Ching filed their
motion to dismiss the complaint/or suspend the proceedings and during their marriage out of conjugal funds after the Citycorp Reply/Opposition to the motion to expunge records.
pointed out that P.D. No. 1758 only concerns the activities of Investment Philippines was established in 1974. Furthermore, the
corporations, partnerships and associations and was never intended indebtedness covered by the continuing guaranty/comprehensive Acting on the aforementioned motion, the trial court issued on
to regulate and/or control activities of individuals. Thus, it directed suretyship contract executed by petitioner Alfredo Ching for the December 15, 1993 an Order37 lifting the writ of preliminary
the individual defendants to file their answers.22 account of PBMCI did not redound to the benefit of the conjugal attachment on the shares of stocks and ordering the sheriff to
partnership. She, likewise, alleged that being the wife of Alfredo return the said stocks to the petitioners. The dispositive portion
Instead of filing an answer, Ching filed on January 14, 1984 a Motion Ching, she was a third-party claimant entitled to file a motion for the reads:
to Suspend Proceedings on the same ground of the pendency of SEC release of the properties.32 She attached therewith a copy of her
Case No. 2250. This motion met the opposition from the ABC.23 marriage contract with Alfredo Ching.33 WHEREFORE, the instant Motion to Quash Preliminary Attachment,
dated November 9, 1993, is hereby granted. Let the writ of
On January 20, 1984, Tañedo filed his Answer with counterclaim and The ABC filed a comment on the motion to quash preliminary preliminary attachment subject matter of said motion, be quashed
cross-claim.24 Ching eventually filed his Answer on July 12, 1984.25 attachment and/or motion to expunge records, contending that: and lifted with respect to the attached 100,000 common shares of
stock of Citycorp Investment Philippines in the name of the
On October 25, 1984, long after submitting their answers, Ching 2.1 The supposed movant, Encarnacion T. Ching, is not a defendant Alfredo Ching, the said shares of stock to be returned to
filed an Omnibus Motion,26 again praying for the dismissal of the party to this present case; thus, she has no personality to him and his movant-spouse by Deputy Sheriff Apolonio A. Golfo who
complaint or suspension of the proceedings on the ground of the file any motion before this Honorable Court; effected the levy thereon on July 26, 1983, or by whoever may be
July 9, 1982 Injunctive Order issued in SEC Case No. 2250. He presently in possession thereof.
averred that as a surety of the PBMCI, he must also necessarily 2.2 Said supposed movant did not file any Motion for
benefit from the defenses of his principal. The ABC opposed Ching’s Intervention pursuant to Section 2, Rule 12 of the Rules of SO ORDERED.38
omnibus motion. Court;
The plaintiff Allied Banking Corporation filed a motion for the
Emilio Y. Tañedo, thereafter, filed his own Omnibus 2.3 Said Motion cannot even be construed to be in the reconsideration of the order but denied the same on February 17,
Motion27 praying for the dismissal of the complaint, arguing that the nature of a Third-Party Claim conformably with Sec. 14, 1994. The petitioner bank forthwith filed a petition for certiorari
ABC had "abandoned and waived" its right to proceed against the Rule 57 of the Rules of Court. with the CA, docketed as CA-G.R. SP No. 33585, for the nullification
continuing guaranty by its act of resorting to preliminary of the said order of the court, contending that:
attachment. 3. Furthermore, assuming in gracia argumenti that the supposed
movant has the required personality, her Motion cannot be acted 1. The respondent Judge exceeded his authority thereby
On December 17, 1986, the ABC filed a Motion to Reduce the upon by this Honorable Court as the above-entitled case is still in acted without jurisdiction in taking cognizance of, and
amount of his preliminary attachment bond from ₱12,700,000 to the archives and the proceedings thereon still remains suspended. granting a "Motion" filed by a complete stranger to the
₱6,350,000.28 Alfredo Ching opposed the motion,29 but on April 2, And there is no previous Motion to revive the same. 34 case.
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 The ABC also alleged that the motion was barred by prescription or 2. The respondent Judge committed a grave abuse of
evidence on the actual value of the properties of Alfredo Ching by laches because the shares of stocks were in custodia legis. discretion in lifting the writ of preliminary attachment
levied on by the sheriff.30 without any basis in fact and in law, and contrary to
During the hearing of the motion, Encarnacion T. Ching adduced in established jurisprudence on the matter.39
On March 2, 1988, the trial court issued an Order granting the evidence her marriage contract to Alfredo Ching to prove that they
motion of the ABC and rendered the attachment bond of were married on January 8, 1960;35 the articles of incorporation of On November 27, 1995, the CA rendered judgment granting the
₱6,350,000.31 Citycorp Investment Philippines dated May 14, 1979;36 and, the petition and setting aside the assailed orders of the trial court, thus:
General Information Sheet of the corporation showing that
On November 16, 1993, Encarnacion T. Ching, assisted by her petitioner Alfredo Ching was a member of the Board of Directors of WHEREFORE, premises considered, the petition is GRANTED, hereby
husband Alfredo Ching, filed a Motion to Set Aside the levy on the said corporation and was one of its top twenty stockholders. setting aside the questioned orders (dated December 15, 1993 and
attachment. She alleged inter alia that the 100,000 shares of stocks February 17, 1994) for being null and void.
SO ORDERED.40 null and void ab initio,46 and that the share of one of the spouses in does not and cannot pass upon the question of the title to the
the conjugal partnership remains inchoate until the dissolution and property with any character of finality. It can treat the matter only
The CA sustained the contention of the private respondent and set liquidation of the partnership.47 insofar as may be necessary to decide if the sheriff has acted
aside the assailed orders. According to the CA, the RTC deprived the correctly or not. If the claimant’s proof does not persuade the court
private respondent of its right to file a bond under Section 14, Rule In its comment on the petition, the private respondent asserts that of the validity of the title, or right of possession thereto, the claim
57 of the Rules of Court. The petitioner Encarnacion T. Ching was the CA correctly granted its petition for certiorari nullifying the will be denied by the court. The aggrieved third party may also avail
not a party in the trial court; hence, she had no right of action to assailed order. It contends that the CA correctly relied on the ruling himself of the remedy of "terceria" by executing an affidavit of his
have the levy annulled with a motion for that purpose. Her remedy of this Court in Wong v. Intermediate Appellate Court. Citing Cobb- title or right of possession over the property levied on attachment
in such case was to file a separate action against the private Perez v. Lantin and G-Tractors, Inc. v. Court of Appeals, the private and serving the same to the office making the levy and the adverse
respondent to nullify the levy on the 100,000 Citycorp shares of respondent alleges that the continuing guaranty and suretyship party. Such party may also file an action to nullify the levy with
stocks. The court stated that even assuming that Encarnacion T. executed by petitioner Alfredo Ching in pursuit of his profession or damages resulting from the unlawful levy and seizure, which should
Ching had the right to file the said motion, the same was barred by business. Furthermore, according to the private respondent, the be a totally separate and distinct action from the former case. The
laches. right of the petitioner-wife to a share in the conjugal partnership above-mentioned remedies are cumulative and any one of them
property is merely inchoate before the dissolution of the may be resorted to by one third-party claimant without availing of
Citing Wong v. Intermediate Appellate Court,41 the CA ruled that the partnership; as such, she had no right to file the said motion to the other remedies.50
presumption in Article 160 of the New Civil Code shall not apply quash the levy on attachment of the shares of stocks.
where, as in this case, the petitioner-spouses failed to prove the In this case, the petitioner-wife filed her motion to set aside the levy
source of the money used to acquire the shares of stock. It held that The issues for resolution are as follows: (a) whether the petitioner- on attachment of the 100,000 shares of stocks in the name of
the levied shares of stocks belonged to Alfredo Ching, as evidenced wife has the right to file the motion to quash the levy on attachment petitioner-husband claiming that the said shares of stocks were
by the fact that the said shares were registered in the corporate on the 100,000 shares of stocks in the Citycorp Investment conjugal in nature; hence, not liable for the account of her husband
books of Citycorp solely under his name. Thus, according to the Philippines; (b) whether or not the RTC committed a grave abuse of under his continuing guaranty and suretyship agreement with the
appellate court, the RTC committed a grave abuse of its discretion its discretion amounting to excess or lack of jurisdiction in issuing PBMCI. The petitioner-wife had the right to file the motion for said
amounting to excess or lack of jurisdiction in issuing the assailed the assailed orders. relief.
orders. The petitioners’ motion for reconsideration was denied by
the CA in a Resolution dated April 2, 1996. On the first issue, we agree with the petitioners that the petitioner- On the second issue, we find and so hold that the CA erred in setting
wife had the right to file the said motion, although she was not a aside and reversing the orders of the RTC. The private respondent,
The petitioner-spouses filed the instant petition for review on party in Civil Case No. 142729.48 the petitioner in the CA, was burdened to prove that the RTC
certiorari, asserting that the RTC did not commit any grave abuse of committed a grave abuse of its discretion amounting to excess or
discretion amounting to excess or lack of jurisdiction in issuing the In Ong v. Tating,49 we held that the sheriff may attach only those lack of jurisdiction. The tribunal acts without jurisdiction if it does
assailed orders in their favor; hence, the CA erred in reversing the properties of the defendant against whom a writ of attachment has not have the legal purpose to determine the case; there is excess of
same. They aver that the source of funds in the acquisition of the been issued by the court. When the sheriff erroneously levies on jurisdiction where the tribunal, being clothed with the power to
levied shares of stocks is not the controlling factor when invoking attachment and seizes the property of a third person in which the determine the case, oversteps its authority as determined by law.
the presumption of the conjugal nature of stocks under Art. said defendant holds no right or interest, the superior authority of There is grave abuse of discretion where the tribunal acts in a
160,42 and that such presumption subsists even if the property is the court which has authorized the execution may be invoked by the capricious, whimsical, arbitrary or despotic manner in the exercise
registered only in the name of one of the spouses, in this case, aggrieved third person in the same case. Upon application of the of its judgment and is equivalent to lack of jurisdiction.51
petitioner Alfredo Ching.43 According to the petitioners, the third person, the court shall order a summary hearing for the
suretyship obligation was not contracted in the pursuit of the purpose of determining whether the sheriff has acted rightly or It was incumbent upon the private respondent to adduce a
petitioner-husband’s profession or business. 44 And, contrary to the wrongly in the performance of his duties in the execution of the writ sufficiently strong demonstration that the RTC acted whimsically in
ruling of the CA, where conjugal assets are attached in a collection of attachment, more specifically if he has indeed levied on total disregard of evidence material to, and even decide of, the
suit on an obligation contracted by the husband, the wife should attachment and taken hold of property not belonging to the controversy before certiorari will lie. A special civil action for
exhaust her motion to quash in the main case and not file a separate plaintiff. If so, the court may then order the sheriff to release the certiorari is a remedy designed for the correction of errors of
suit.45 Furthermore, the petitioners contend that under Art. 125 of property from the erroneous levy and to return the same to the jurisdiction and not errors of judgment. When a court exercises its
the Family Code, the petitioner-husband’s gratuitous suretyship is third person. In resolving the motion of the third party, the court
jurisdiction, an error committed while so engaged does not deprive uncontroverted evidence showed that the shares of stocks were on or was persuaded to act as surety for his own employer, this
it of its jurisdiction being exercised when the error is committed.52 acquired during the marriage of the petitioners. should not be taken to mean that he thereby embarked in the
business of suretyship or guaranty."
After a comprehensive review of the records of the RTC and of the Instead of fortifying the contention of the respondents, the ruling of
CA, we find and so hold that the RTC did not commit any grave this Court in Wong v. Intermediate Appellate Court59 buttresses the For the conjugal partnership to be liable for a liability that should
abuse of its discretion amounting to excess or lack of jurisdiction in case for the petitioners. In that case, we ruled that he who claims appertain to the husband alone, there must be a showing that some
issuing the assailed orders. that property acquired by the spouses during their marriage is not advantages accrued to the spouses. Certainly, to make a conjugal
conjugal partnership property but belongs to one of them as his partnership responsible for a liability that should appertain alone to
Article 160 of the New Civil Code provides that all the properties personal property is burdened to prove the source of the money one of the spouses is to frustrate the objective of the New Civil Code
acquired during the marriage are presumed to belong to the utilized to purchase the same. In this case, the private respondent to show the utmost concern for the solidarity and well being of the
conjugal partnership, unless it be proved that it pertains exclusively claimed that the petitioner-husband acquired the shares of stocks family as a unit. The husband, therefore, is denied the power to
to the husband, or to the wife. In Tan v. Court of Appeals,53 we held from the Citycorp Investment Philippines in his own name as the assume unnecessary and unwarranted risks to the financial stability
that it is not even necessary to prove that the properties were owner thereof. It was, thus, the burden of the private respondent to of the conjugal partnership.62
acquired with funds of the partnership. As long as the properties prove that the source of the money utilized in the acquisition of the
were acquired by the parties during the marriage, they are shares of stocks was that of the petitioner-husband alone. As held In this case, the private respondent failed to prove that the conjugal
presumed to be conjugal in nature. In fact, even when the manner by the trial court, the private respondent failed to adduce evidence partnership of the petitioners was benefited by the petitioner-
in which the properties were acquired does not appear, the to prove this assertion. husband’s act of executing a continuing guaranty and suretyship
presumption will still apply, and the properties will still be agreement with the private respondent for and in behalf of PBMCI.
considered conjugal. The presumption of the conjugal nature of the The CA, likewise, erred in holding that by executing a continuing The contract of loan was between the private respondent and the
properties acquired during the marriage subsists in the absence of guaranty and suretyship agreement with the private respondent for PBMCI, solely for the benefit of the latter. No presumption can be
clear, satisfactory and convincing evidence to overcome the same. 54 the payment of the PBMCI loans, the petitioner-husband was in the inferred from the fact that when the petitioner-husband entered
exercise of his profession, pursuing a legitimate business. The into an accommodation agreement or a contract of surety, the
In this case, the evidence adduced by the petitioners in the RTC is appellate court erred in concluding that the conjugal partnership is conjugal partnership would thereby be benefited. The private
that the 100,000 shares of stocks in the Citycorp Investment liable for the said account of PBMCI under Article 161(1) of the New respondent was burdened to establish that such benefit redounded
Philippines were issued to and registered in its corporate books in Civil Code. to the conjugal partnership.63
the name of the petitioner-husband when the said corporation was
incorporated on May 14, 1979. This was done during the Article 161(1) of the New Civil Code (now Article 121[2 and 3]60 of It could be argued that the petitioner-husband was a member of the
subsistence of the marriage of the petitioner-spouses. The shares of the Family Code of the Philippines) provides: Board of Directors of PBMCI and was one of its top twenty
stocks are, thus, presumed to be the conjugal partnership property stockholders, and that the shares of stocks of the petitioner-
of the petitioners. The private respondent failed to adduce evidence Art. 161. The conjugal partnership shall be liable for: husband and his family would appreciate if the PBMCI could be
that the petitioner-husband acquired the stocks with his exclusive rehabilitated through the loans obtained; that the petitioner-
money.55 The barefaced fact that the shares of stocks were (1) All debts and obligations contracted by the husband for the husband’s career would be enhanced should PBMCI survive because
registered in the corporate books of Citycorp Investment Philippines benefit of the conjugal partnership, and those contracted by the of the infusion of fresh capital. However, these are not the benefits
solely in the name of the petitioner-husband does not constitute wife, also for the same purpose, in the cases where she may legally contemplated by Article 161 of the New Civil Code. The benefits
proof that the petitioner-husband, not the conjugal partnership, bind the partnership. must be those directly resulting from the loan. They cannot merely
owned the same.56 The private respondent’s reliance on the rulings be a by-product or a spin-off of the loan itself.64
of this Court in Maramba v. Lozano57 and Associated Insurance &
The petitioner-husband signed the continuing guaranty and
Surety Co., Inc. v. Banzon58 is misplaced. In the Maramba case, we This is different from the situation where the husband borrows
suretyship agreement as security for the payment of the loan
held that where there is no showing as to when the property was money or receives services to be used for his own business or
obtained by the PBMCI from the private respondent in the amount
acquired, the fact that the title is in the wife’s name alone is profession. In the Ayala case, we ruled that it is such a contract that
of ₱38,000,000. In Ayala Investment and Development Corp. v.
determinative of the ownership of the property. The principle was is one within the term "obligation for the benefit of the conjugal
Court of Appeals,61 this Court ruled "that the signing as surety is
reiterated in the Associated Insurance case where the partnership." Thus:
certainly not an exercise of an industry or profession. It is not
embarking in a business. No matter how often an executive acted
(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.
SPECIAL THIRD DIVISION totaling ₱l3,500,000 to guarantee the obligations of Tancho having caused the publication of the alias summons and the
Corporation. complaint in People's Taliba on May 15, 2006.
April 5, 2017
It appears from the records of CC No. 03-0713 that on July 2, 2003, Thereafter, upon BDO's motion, the Makati RTC declared the
G.R. No. 217617 the Makati R TC issued an Order directing the service of summons to defendants in CC No. 03-0713, including Carmelita, in default. BDO
all the defendants at the business address of Tancho Corporation soon after proceeded to present its evidence ex-parte.
CARMELITA T. BORLONGAN, Petitioner, provided by BDO: Fumakilla Compound, Amang Rodriguez Avenue,
vs. Brgy. Dela Paz, Pasig City (Fumakilla Compound). On November 29, 2007, the Makati RTC rendered a Decision holding
BANCO DE ORO (formerly EQUITABLE PCI BANK), Respondent. the defendants in CC No. 03-0713 liable to pay BDO ₱32,543,856.33
Parenthetically, the records of CC No. 03-0713 show that plus 12% interest per annum from the time of the filing of the
RESOLUTION respondent BDO already foreclosed the Fumakilla Compound as complaint until fully paid and attorney's fees. The Makati RTC
early as August 21, 2000, following Tancho Corporation's failure to decision was published on June 9, 2008.
pay its obligation, and BDO already consolidated its ownership of
VELASCO, JR, J.:
the property on November 16, 2001. On August 20, 2008, the Makati RTC issued a Writ of Execution upon
BDO's motion. The Order states that in the event that the judgment
Nature of the Case
Understandably, on July 31, 2003, the process server filed an obligors cannot pay all or part of the obligation, the sheriff shall levy
Officer's Return stating that summons remained unserved as the upon the properties of the defendants to satisfy the award.
Before the Court are two consolidated petitions invariably assailing
"defendants are no longer holding office at [Fumakilla Compound]."
the foreclosure sale of a property without properly serving the
On October 28, 2008, the Makati R TC' s sheriff filed a Report stating
summons upon its owners.
On October 27, 2003, after the single attempt at personal service on that he tried to serve the Writ of Execution upon the defendants at
Carmelita and her co-defendants, BDO moved for leave to serve the Fumakilla Compound but he was not able to do so since the
Factual Antecedents
summons by publication. On October 28, 2003, the RTC granted the defendants were no longer holding office thereat. The Sheriff also
motion. reported that, on the same day, he went to the subject property to
Sometime in 1976, Eliseo Borlongan, Jr. (Eliseo) and his wife serve the execution but likewise failed in his attempt since Carmelita
Carmelita, acquired a real property located at No. 111, Sampaguita was no longer residing at the said address.
On August 10, 2004, BDO filed an ex-parte Motion for the Issuance
St., Valle Verde II, Pasig City covered by Transfer Certificate of Title
of a Writ of Attachment against the defendants, including Carmelita.
(TCT) No. 0421 (the subject property). In 2012, they went to the
During the hearing on the motion, BDO submitted a copy of the title On November 11, 2008, BDO filed a Motion to Conduct Auction of
Registry of Deeds of Pasig City to obtain a copy of the TCT in
of the subject property. The Makati RTC thereafter granted BDO's the subject property. The motion was granted by the Makati RTC on
preparation for a prospective sale of the subject property. To their
motion and a Writ of Attachment was issued against the defendants May 5, 2009 so that the subject property was sold to BDO, as the
surprise, the title contained an annotation that the property
in CC No. 03-0713, effectively attaching the subject property on highest bidder, on October 6, 2009.
covered thereby was the subject of an execution sale in Civil Case behalf of BDO.
(CC) No. 03-0713 pending before Branch 134 of the Regional Trial
Following the discovery of the sale of their property, Eliseo executed
Court of Makati City (Makati RTC).
On December 20, 2005, BDO filed an ex-parte motion praying, an affidavit of adverse claim and, on January 21, 2013, filed a
among others, that the summons and the complaint be served Complaint for Annulment of Surety Agreements, Notice of Levy on
Petitioner immediately procured a copy of the records of CC No. 03-
against Carmelita at the subject property. The Makati RTC granted Attachment, Auction Sale and Other Documents, docketed as CC No.
0713 and found out that respondent Banco de Oro (BDO), formerly
the motion. On February 9, 2006, the Sheriff filed a return stating 73761, with the Regional Trial Court of Pasig City (Pasig RTC). 1
Equitable PCI Bank, filed a complaint for sum of money against
that no actual personal service was made as Carmelita "is no longer
Tancho residing at the given address and the said address is for 'rent,' as per He alleged in his Complaint that the subject property is a family
information gathered from the security guard on duty." home that belongs to the conjugal partnership of gains he
Corporation, the principal debtor of loan obligations obtained from
established with his wife. He further averred that the alleged surety
the bank. Likewise impleaded were several persons, including
On May 30, 2006, however, BDO filed a manifestation stating that it agreements upon which the attachment of the property was
Carmelita, who supposedly signed four (4) security agreements
had complied with the October 28, 2003 Order of the Makati RTC anchored were signed by his wife without his consent and did not
redound to benefit their family. Thus, he prayed that the surety
agreements and all other documents and processes, including the 73761 commenced by Eliseo. In so ruling, the CA held that Eliseo is Thus, on April 27, 2015, Carmelita filed a Petition for Review,
ensuing attachment, levy and execution sale, based thereon be not a stranger who can initiate an action independent from the case docketed as G.R. No. 217617, before this Court, ascribing to the
nullified. where the attachment and execution sale were ordered. Thus, the appellate court the commission of serious reversible errors. The
CA concluded that in opting to review the validity of the levy and Court denied the petition on June 22, 2015. Hence, on September 1,
BDO filed a Motion to Dismiss the Complaint, asserting that the execution sale of the subject property pursuant to the judgment of 2015, Carmelita interposed a Motion for Reconsideration urging the
Pasig RTC has no jurisdiction to hear Eliseo's Complaint, the case the Makati RTC, the Pasig RTC acted without jurisdiction. Court to take a second hard look at the facts of the case and
was barred by res judicata given the Decision and orders of the reconsider its stance.
Makati RTC, and, finally, the Complaint failed to state a cause of Eliseo moved for, but was denied, reconsideration by the appellate
action. court. Hence, he came to this Court via a Petition for Review Considering that both cases originated from the same facts and
on Certiorari under Rule 45 of the Rules of Court, docketed as G.R. involved interrelated issues, on January 25, 2016, the Court resolved
In an Order dated May 31, 2013, the Pasig R TC dismissed the case No. 218540. to consolidate G.R. No. 218540 with G.R. No. 217617.
citing lack of jurisdiction. The RTC held that it could not pass upon
matters already brought before the R TC Makati and, citing Spouses On August 19, 2015, the Court issued a Resolution denying Eliseo's Issues
Ching v.Court of Appeals,2the husband of a judgment debtor is not a petition. Eliseo begs to differ and takes exception from the said
stranger to a case who can file a separate and independent action to holding in his motion for reconsideration dated October 5, 2015, The question posed in G.R. No. 217617 is whether or not the CA
determine the validity of the levy and sale of a property. which is presently for Resolution by this Court. erred in refusing to issue a TRO and/or WPI stopping the
consolidation of BDO's ownership over the subject property. On the
On a motion for reconsideration filed by Eliseo, the Pasig RTC Meanwhile, on an ex-parte omnibus motion filed by BDO, the other hand, the issue in G.R. No. 218540 revolves around whether
reinstated the case with qualification. Relying on Buado v. Court of Makati RTC ordered the issuance of a Writ of Possession and the the Pasig RTC has jurisdiction to hear and decide a case filed by the
Appeals,3 the Pasig RTC held that since majority of Eliseo's causes of issuance of a new TCT covering the subject property in favor of the non-debtor husband to annul the levy and execution sale of the
action were premised on a claim that the obligation contracted by respondent bank. subject property ordered by the Makati RTC against his wife.
his wife has not redounded to their family, and, thus, the levy on
their property was illegal, his filing of a separate action is not an Arguing that the Makati R TC had not acquired jurisdiction over her Our Ruling
encroachment on the jurisdiction of the Makati R TC, which ordered person as the service of the summons and the other processes of
the attachment and execution in the first place. the court was defective, Carmelita filed a Petition for Annulment of A reexamination of the antecedents and arguments in G.R. Nos.
Judgment (With Urgent Prayer for Issuance of Temporary 217617 and 218540 compels the reversal of the appellate court's
The Pasig RTC clarified, however, that it cannot annul the surety Restraining Order and/or Writ of Preliminary Injunction) with the resolutions in both cases.
agreements supposedly signed by Carmelita since Eliseo was not a CA, docketed as CA-G.R. SP No. 134664.
party to those agreements and the validity and efficacy of these G.R. No. 217617
contracts had already been decided by the Makati RTC. Before the CA can act on the Petition for Annulment, the Borlongans
found posted on the subject property a Writ of Possession dated The Issuance of a TRO/WPI is not a
Both Eliseo and BDO referred the Pasig RTC's Decision to the Court August 1, 2014 and a Notice to Vacate dated August 29, 2014. prejudgment of the main case
of Appeals (CA).
In its Resolution dated November 12, 2014,5 the appellate court On the propriety of CA' s refusal to issue a TRO/WPI, it is worthy to
In its petition, docketed as CA-G.R. SP No. 133994, BDO contended denied Carmelita's prayer for the issuance of a Temporary note that Section 3, Rule 58 of the Rules of Court provides the
that it was an error for the Pasig RTC to apply Buado as it does not Restraining Order (TRO) and/or Writ of Preliminary Injunction (WPI). grounds for the issuance of a preliminary injunction, viz:
apply squarely to the circumstances of the case and has not
superseded Ching. BDO maintained that by reinstating the Aggrieved, Carmelita interposed a motion for the reconsideration of Section 3. Grounds for issuance of preliminary injunction. - A
complaint, Pasig R TC has violated the rule prohibiting non- the CA's November 12, 2014 Resolution. On March 23, 2015, preliminary injunction may be granted when it is established:
interference by one court with the orders of a coequal court. however, the appellate court denied her motion for reconsideration,
holding that "upon the expiration of the redemption period, the
(a) That the applicant is entitled to the relief demanded,
In its January 20, 2015 Decision,4 the appellate court granted BDO's right of the purchaser to the possession of the foreclosed property
and the whole or part of such relief consists in restraining
petition and ordered the Pasig RTC to cease from hearing CC No. becomes absolute."
the commission or continuance of the act or acts of such discretion. A writ of preliminary injunction would become a the service of the summons is as much an issue of due process as it
complained of, or in requiring the performance of an act or prejudgment of a case only when it grants the main prayer in the is of jurisdiction. 10 Unfortunately, as will be discussed, it would
acts either for a limited period or perpetually; complaint or responsive pleading, so much so that there is nothing seem that the Constitutional right of the petitioner to be properly
left for the trial court to try except merely incidental matters. served the summons and be notified has been disregarded by the
(b) That the commission, continuance or non-performance (emphasis supplied) officers of the trial court.
of the act or acts complained of during the litigation would
probably work injustice to the applicant; or Notably, the primary prayer of the Petition for Annulment before At this very juncture, the existence of the second ground for the
the appellate court is the declaration of the nullity of the issuance of a TRO and/or WPI is self-evident. Without a TRO and/or
(c) That a party, court, agency or a person is doing, proceedings in the R TC and its Decision dated November 29, 2007; WPI enjoining the respondent bank from continuing in the
threatening, or is attempting to do, or is procuring or it is not merely confined to the prevention of the issuance of the possession and consolidating the ownership of the subject property,
suffering to be done some act or acts probably in violation writ of possession and the consolidation of the ownership of the petitioner's right to be afforded due process will unceasingly be
of the rights of the applicant respecting the subject of the subject property in BDO's name-the concerns of the prayer for the violated.
action or proceeding, and tending to render the judgment TRO and/or WPI.
ineffectual. It need not be stressed that a continuous violation of constitutional
Indeed, the petitioner's prayer for the issuance of a TRO and/or WPI rights is by itself a grave and irreparable injury that this or any court
From the foregoing provision, it is clear that a writ of preliminary was intended to preserve the status quo ante, 7and not to pre-empt cannot plausibly tolerate.
injunction is warranted where there is a showing that there exists a the appellate court's decision on the merits of her petition for
right to be protected and that the acts against which the writ is to annulment. Thus, it was a grievous error on the part of the CA to Without a doubt, the appellate court should have acted intrepidly
be directed violate an established right. Otherwise stated, for a deny her of this provisional remedy. and issued the TRO and/or WPI posthaste to protect the
court to decide on the propriety of issuing a TRO and/or a WPI, it constitutional rights of petitioner, as it is duty-bound to do.
must only inquire into the existence of two things: (1) a clear and The appellate court's error is readily apparent given the stark
unmistakable right that must be protected; and (2) an urgent and existence of the grounds for the issuance of a writ of preliminary The performance of official duty was
paramount necessity for the writ to prevent serious damage. injunction. not regular

In Levi Strauss (Phils.) Inc. v. Vogue Traders Clothing Company,6 the On the first ground, petitioner has a clear and unmistakable right Regrettably, the appellate court fell short in the fulfillment of its
Court already explained that the issuance of a TRO is not conclusive that must be protected. This right is not just her proprietary rights mandate and instead relied on the disputable presumption that
of the outcome of the case as it requires but a sampling of the over the subject property but her constitutionally protected right to "official duty has been regularly performed." The Court cannot
evidence, viz: due process before she can be deprived of her property. No less subscribe to the position taken by the appellate court.
than Section 1 of the Bill of Rights of the 1987 Constitution
Indeed, a writ of preliminary injunction is generally based solely on mandates that: As a rule, summons should be personally served on a defendant.
initial and incomplete evidence adduced by the applicant (herein When summons cannot be served personally within a reasonable
petitioner). The evidence submitted during the hearing of the No person shall be deprived of life, liberty, or property without due period of time, substituted service may be resorted to. Service of
incident is not conclusive, for only a "sampling" is needed to give process of law, nor shall any person be denied the equal protection summons by publication can be resorted to only if the defendant's
the trial court an idea of the justification for its issuance pending of the laws. (emphasis supplied) "whereabouts are unknown and cannot be ascertained by diligent
the decision of the case on the merits. As such, the findings of fact inquiry." The relevant sections of Rule 14 of the Rules of Court
and opinion of a court when issuing the writ of preliminary In its classic formulation, due process means that any person with provide, thus:
injunction are interlocutory in nature. Moreover, the sole object of interest to the thing in litigation must be notifiedand given an
a preliminary injunction is to preserve the status quo until the opportunity to def end that interest. 8 Thus, as the essence of due SEC. 6. Service in person on defendant. - Whenever practicable, the
merits of the case can be heard. Since Section 4 of Rule 58 of the process lies in the reasonable opportunity to be heard and to submit summons shall be served by handing a copy thereof to the
Rules of Civil Procedure gives the trial courts sufficient discretion to any evidence the defendant may have in support of her defense, defendant in person, or, if he refuses to receive and sign for it, by
evaluate the conflicting claims in an application for a provisional she must be properly served the summons of the court. In other tendering it to him.
writ which often involves a factual determination, the appellate words, the service of summons is a vital and indispensable
courts generally will not interfere in the absence of manifest abuse ingredient of due process 9 and compliance with the rules regarding
SEC. 7. Substituted service. - If, for justifiable causes, the defendant In Manotoc v. Court of Appeals, 12 the Court enumerated and defendant personally and the failure of such efforts," which should
cannot be served within a reasonable time as provided in the explained the requirements to effect a valid service of summons be made in the proof of service.
preceding section, service may be effected (a) by leaving copies of other than by personal service, viz:
the summons at the defendant's residence with some person of In the case now before Us, the summons was served on the
suitable age and discretion then residing therein, or (b) by leaving (1) Impossibility of Prompt Personal Service petitioner by publication. Yet, the circumstances surrounding the
the copies at defendant's office or regular place of business with case do not justify the resort.
some competent person in charge thereof. xxxx
Consider: in July 2003, the sheriff attempted to serve the summons
xxxx Sheriffs are asked to discharge their duties on the service of on the defendants, including petitioner Carmelita, at Fumakilla
summons with due care, utmost diligence, and reasonable Compound, i.e., at the property already foreclosed, acquired, and
SEC. 14. Service upon defendant whose identity or whereabouts are promptness and speed so as not to prejudice the expeditious possessed by the respondent bank as early as August 2001.
unknown. - In any action where the defendant is designated as an dispensation of justice. Thus, they are enjoined to try their best Immediately after this single attempt at personal service in July
unknown owner, or the like, or whenever his whereabouts are efforts to accomplish personal service on defendant. On the other 2003, the respondent bank moved in October 2003 for leave to
unknown and cannot be ascertained by diligent inquiry, service may, hand, since the defendant is expected to try to avoid and evade serve the summons by publication (and not even substituted
by leave of court, be effected upon him by publication in a service of summons, the sheriff must be resourceful, persevering, service), which motion the RTC granted.
newspaper of general circulation and in such places and for such canny, and diligent in serving the process on the defendant. For
time as the court may order. substituted service of summons to be available, there must be Clearly, there was no diligent effort made to find the petitioner and
several attempts by the sheriff to personally serve the summons properly serve her the summons before the service by publication
It is, therefore, proper to state that the hierarchy and rules in the within a reasonable period [of one month) which eventually was allowed. Neither was it impossible to locate the residence of
service of summons are as follows: resulted in failure to prove impossibility of prompt service. petitioner and her whereabouts.
"Several attempts" means at least three (3) tries, preferably on at
(1) Personal service; least two different dates. In addition, the sheriff must cite why It should be noted that the principal obligor in CC No. 03-0713 was
such efforts were unsuccessful. It is only then that impossibility of Tancho Corporation and petitioner Carmelita was impleaded only
(2) Substituted service, if for justifiable causes the service can be confirmed or accepted. because she supposedly signed a surety agreement as a director. As
defendant cannot be served within a reasonable time; and a juridical person, Tancho Corporation is required to file mandatory
(2) Specific Details in the Return corporate papers with the Securities and Exchange Commission
(3) Service by publication, whenever the defendant's (SEC), such as its General Information Sheet (GIS). In 1997 and 2000,
whereabouts are unknown and cannot be ascertained by The sheriff must describe in the Return of Summons the facts and the GIS filed by Tancho Corporation with the SEC provided the
diligent inquiry. circumstances surrounding the attempted personal service. The names of its directors and their addresses. One of these directors
efforts made to find the defendant and the reasons behind the included petitioner Carmelita with her address listed at 41 Chicago
failure must be clearly narrated in detail in the Return. The date St., Quezon City. The GIS of Tancho Corporation was readily
Simply put, personal service of summons is the preferred mode.
and time of the attempts on personal service, the inquiries made to available to the public including the RTC's process server and
And, the rules on the service of summons other than by personal
locate the defendant, the name/s of the occupants of the alleged respondent bank.
service may be used only as prescribed and only in the
circumstances authorized by statute. Thus, the impossibility of residence or house of defendant and all other acts done, though
prompt personal service must be shown by stating that efforts have futile, to serve the summons on defendant must be specified in the Patently, it cannot be plausibly argued that it was impossible to find
been made to find the defendant personally and that such efforts Return to justify substituted service. The form on Sheriffs Return of the petitioner and personally serve her with summons. In like
have failed before substituted service may be Summons on Substituted Service prescribed in the Handbook for manner, it can hardly be stated that the process server regularly
availed. 11Furthermore, their rules must be followed strictly, Sheriffs published by the Philippine Judicial Academy requires a performed his duty.
faithfully and fully as they are extraordinary in character and narration of the efforts made to find the defendant personally and
considered in derogation of the usual method of service. the fact of failure. Supreme Court Administrative Circular No. 5 The subject property was not
dated November 9, 1989 requires that "impossibility of prompt foreclosed by the respondent bank;
service should be shown by stating the efforts made to find the right of BDO to the possession of the
subject property is questionable
Still unwilling to issue the TRO and/or WPI fervently prayed for by The respondent appellate court's emphasis on the failure of The The officer shall not be liable for damages for the taking or keeping
petitioner, the appellate court held that "upon the expiration of the petitioner to redeem the properties within the period required by of the property, to any third-party claimant if such bond is
redemption period, the right of the purchaser to the possession of law is misplaced because redemption, in this case, is inconsistent filed. Nothing herein contained shall prevent such claimant or any
the foreclosed property becomes absolute." This Court cannot with the petitioner's claim of invalidity of levy and sale. third person from vindicating his claim to the property in a
affirm the appellate court's ruling. Redemption is an implied admission of the regularity of the sale separate action, or prevent the judgment obligee from claiming
and would estop the petitioner from later impugning its validity on damages in the same or a separate action against a third-party
At the outset, it must be pointed out that the subject property was that ground. (emphasis supplied) claimant who filed a frivolous or plainly spurious claim. (emphasis
never mortgaged to, much less foreclosed by, the respondent bank. supplied)
Thus, it was error for the CA to refer to the subject property as Thus, even given the expiration of the redemption period, a TRO
"foreclosed property." and/or WPI is still obtainable and warranted where the validity of Clearly, the availability of the remedy provided under the foregoing
the acquisition of the possession is afflicted by Constitutional and provision requires only that that the claim is a third-party or a
Rather, as disclosed by the records, the possession of the subject procedural infirmities. "stranger" to the case. The poser then is this: is the husband, who
property was acquired by BDO through attachment and later by was not a party to the suit but whose conjugal property was
execution sale. However, it is presumptive to state that the right of G.R. No. 218540 executed on account of the other spouse's debt, a "stranger" to the
BDO over the possession of the subject property is now absolute Eliseo can file an independent action suit? In Buado v. Court of Appeals,14 this Court had the opportunity
considering that there is an action that questions the validity of the for the annulment of the attachment to clarify that, to resolve the issue, it must first be determined
bank's acquisition over the same property. of their conjugal property whether the debt had redounded to the benefit of the conjugal
partnership or not. In the negative, the spouse is a stranger to the
In Cometa v. Intermediate Appellate Court, 13 we explained that the As to the question of the Pasig RTC' s jurisdiction to hear Eliseo's suit who can file an independent separate action, distinct from the
expiration of the redemption period does not automatically vest in complaint, we cannot subscribe to BDO' s contention that Eliseo action in which the writ was issued. We held, thus:
the auction purchaser an absolutely possessory right over the cannot file a separate and independent action for the annulment of
property, viz: the levy on their conjugal property. A third-party claim must be filed [by] a person other than the
judgment debtor or his agent. In other words, only a stranger to the
From the foregoing discussion, it can be seen that the writ of Section 16, Rule 39 of the Rules of Court allows third-party case may file a third-party claim.
possession may issue in favor of a purchaser in an execution sale claimants of properties under execution to vindicate their claims to
when the deed of conveyance has been executed and delivered to the property in a separate action with another court. It states, thus: This leads us to the question: Is the husband, who was not a party to
him after the period of redemption has expired and no redemption the suit but whose conjugal property is being executed on account
has been made by the judgment debtor. SECTION 16. Proceedings Where Property Claimed by Third Person. - of the other spouse being the judgment obligor, considered a
If the property levied on is claimed by any person other than the "stranger?"
A writ of possession is complementary to a writ of execution (see judgment obligor or his agent, and such person makes an affidavit of
Vda. de Bogacki v. Inserto, 111 SCRA 356, 363), and in an execution his title thereto or right to the possession thereof, stating the xxxx
sale, it is a consequence of a writ of execution, a public auction sale, grounds of such right or title, and serves the same upon the officer
and the fulfillment of several other conditions for conveyance set by making the levy and a copy thereof upon the judgment obligee, the Pursuant to Mariano however, it must further be settled whether
law. The issuance of a writ of possession is dependent on the valid officer shall not be bound to keep the property, unless such the obligation of the judgment debtor redounded to the benefit of
execution of the procedural stages preceding it. Any flaw afflicting judgment obligee, on demand of the officer, files a bond approved the conjugal partnership or not.
any of its stages, therefore, could affect the validity of its issuance. 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 Petitioners argue that the obligation of the wife arising from her
In the case at bar, the validity of the levy and sale of the properties to such value, the same shall be determined by the court issuing the criminal liability is chargeable to the conjugal
is directly put in issue in another case by the petitioners. This Court writ of execution. No claim for damages for the taking or keeping of partnership.1âwphi1 We do not agree.
finds it an issue which requires pre-emptive resolution. For if the the property may be enforced against the bond unless the action
respondent acquired no interest in the property by virtue of the therefor is filed within one hundred twenty (120) days from the date There is no dispute that contested property is conjugal in nature.
levy and sale, then, he is not entitled to its possession. of the filing of the bond. Article 122 of the Family Code 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 husband's career would be enhanced should PBMCI survive because their property is taken. As this Court is duty-bound to protect and
except insofar as they redounded to the benefit of the family. of the infusion of fresh capital. However, these are not the benefits enforce Constitutional rights, this we cannot allow.
contemplated by Article 161 of the New Civil Code. The benefits
xxxx must be those directly resulting from the loan. They cannot merely WHEREFORE, the petitions are GRANTED.
be a by-product or a spin-off of the loan itself.
Parenthetically, by no stretch of imagination can it be concluded (1) The January 20, 2015 Decision and May 26, 2015
that the civil obligation arising from the crime of slander committed This is different from the situation where the husband borrows Resolution of the Court of Appeals in CA-G.R. SP No.
by Erlinda redounded to the benefit of the conjugal partnership. money or receives services to be used for his own business or 133994 are hereby REVERSED and SETASIDE. The Regional
profession. In the Ayala case, we ruled that it is such a contract that Trial Court of Pasig, Branch 155 is ordered to continue with
To reiterate, conjugal property cannot be held liable for the is one within the term "obligation for the benefit of the conjugal the proceedings and decide Civil Case No. 73761 with
personal obligation contracted by one spouse, unless some partnership." Thus: reasonable dispatch.
advantage or benefit is shown to have accrued to the conjugal
partnership. xxxx (2) The November 12, 2014 and March 23, 2015
Resolutions of the appellate court in CA-G.R. SP No. 134664
xxxx The Court held in the same case that the rulings of the Court in are REVERSED and SETASIDE.
Cobb-Perez and G-Tractors, Inc. are not controlling because the
Hence, the filing of a separate action by respondent is proper and husband, in those cases, contracted the obligation for his own Accordingly, let a Temporary Restraining Order (TRO) be issued
jurisdiction is thus vested on Branch 21. (emphasis supplied) business. In this case, the petitioner-husband acted merely as a enjoining, prohibiting, and preventing respondent Banco De Oro, its
surety for the loan contracted by the PBMCI from the private assigns, transferees, successors, or any and all other persons acting
respondent. (emphasis supplied) on its behalf from possessing, selling, transferring, encumbering or
In the present case, it is not disputed that the conjugal property was
attached on the basis of a surety agreement allegedly signed by otherwise exercising acts of ownership over the property subject of
Carmelita for and in behalf of Tancho Corporation. In our 2004 Furthermore, it is not apparent from the records of this case that the controversy. Said TRO shall remain valid and effective until such
Decision in Spouses Ching v. Court of Appeals, 15 we elucidated that BDO had established the benefit to the conjugal partnership flowing time as the rights and interests of the parties in CA-G.R. SP No.
there is no presumption that the conjugal partnership is benefited from the surety agreement allegedly signed by Carmelita. Thus, 134664 shall have been determined and finally resolved.
when a spouse enters into a contract of surety, holding thusly: Eliseo's claim over the subject property lodged with the RTC Pasig is
proper, with the latter correctly exercising jurisdiction thereon.
In this case, the private respondent failed to prove that the conjugal
partnership of the petitioners was benefited by the petitioner- Besides, BDO's reliance on Spouses Ching v. Court of
husband's act of executing a continuing guaranty and suretyship Appeals16 (2003) is improper. In the present case, Eliseo and his wife
agreement with the private respondent for and in behalf of PBMCI. discovered the attachment of their conjugal property only after the
The contract of loan was between the private respondent and the finality of the decision by the R TC Makati. There was, therefore, no
PBMCI, solely for the benefit of the latter. No presumption can be opportunity for Eliseo to intervene in the case before the R TC
inferred from the fact that when the petitioner-husband entered Makati which attached the conjugal property, as a motion to
into an accommodation agreement or a contract of surety, the intervene can only be filed "at any time before rendition of
conjugal partnership would thereby be benefited. The private judgment by the trial court."17 This spells the whale of difference
respondent was burdened to establish that such benefit between the case at bar and the earlier Spouses Ching. Unlike in the
redounded to the conjugal partnership. present case, the debtor in the case cited by BDO was properly
informed of the collection suit and his spouse had the opportunity
to question the attachment of their conjugal property before the
It could be argued that the petitioner-husband was a member of the
court that issued the levy on attachment, but simply refused to do
Board of Directors of PBMCI and was one of its top twenty
so. Thus, to now deny Eliseo the opportunity to question the
stockholders, and that the shares of stocks of the petitioner-
attachment made by the R TC Makati in a separate and independent
husband and his family would appreciate if the PBMCI could be
action will be to, again, refuse him the due process of law before
rehabilitated through the loans obtained; that the petitioner-
EN BANC appears, however, that appellant, who became a widower in 1951, wife, against the conjugal assets, forms the exception to the general
remarried in 1960. The writ of execution and notice of garnishment rule, it is incumbent upon the one who invokes this provision or the
G.R. No. L-19346 May 31, 1965 in this case were issued and implemented in 1961. It is now creditor to show that the requisites for its applicability are
contended that, as the conjugal partnership resulting of the second obtaining.
SOLEDAD L. LACSON, ET AL., plaintiffs-appellees, marriage is different from that of the first marriage, during which
vs. existence the obligation arose, such obligation, as far as the second In the instant case, although it is not controverted that there is due
ABELARDO G. DIAZ, defendant-appellant. conjugal partnership is concerned, is personal to the husband and and owing the plaintiffs-appellees a certain sum of money from the
cannot be charged against the properties of the second union. And, appellant-debtor — a personal obligation yet, it has not been
since his salaries form part of the conjugal asset the same cannot be established that the latter does not have properties of his own or
Agustin Locsin for plaintiffs-appellees.
garnished to satisfy his personal obligations. In support of this that the same are not adequate to satisfy appellees' claim.
Abelardo G. Diaz in his own behalf as defendant-appellant.
proposition, appellant cites Article 163 of the new Civil Code and the Furthermore, there is no showing that the responsibilities named in
ruling of this Court that the right of the husband to one-half of the Article 161 of the new Civil Code have already been covered in order
BARRERA, J.:
assets of the conjugal partnership does not vest until the dissolution that the personal obligation of the husband may be made
of the marriage.1 chargeable against the properties of the second marriage.
The facts of this case are not disputed:
Article 163 of the new Civil Code relied upon by the appellant IN VIEW OF THE FOREGOING CONSIDERATIONS, this case is hereby
In connection with a final decision rendered by the Court of First provides: remanded to the court of origin for further proceedings, in
Instance of Negros Occidental in Civil Case No. 5790 (Soledad L.
accordance with the aforestated observation. No costs. So ordered.
Lacson, et al. v. Abelardo G. Diaz), sentencing therein defendant to
ART. 163. The payment of debts contracted by the husband
pay the plaintiffs the sum of P97,532.93 with legal interest thereon
or the wife before the marriage shall not be charged to the
from July 1, 1960 until fully paid, plus a sum equivalent to 25% of
conjugal partnership.
the total amount as attorney's fees, the court issued a writ of
execution on August 1, 1961. On August 7, 1961, the Provincial
Neither shall the fines and pecuniary indemnities imposed
Sheriff of Negros Occidental sent to the manager of Talisay-Silay
upon them be charged to the partnership.
Milling Company, wherein defendant Diaz was employed, a notice
to garnish one-third of his monthly salary and of any other personal
properties belonging to said defendant, to cover the total amount of However, the payment of debts contracted by the husband
P132,718.30. or the wife before the marriage, and that of fines and
indemnities imposed upon them, may be enforced against
the partnership assets after the responsibilities
Diaz filed with the court a motion to quash the writ of execution and
enumerated in article 161 have been covered, if the spouse
to lift the notice of garnishment (of his salary), on the ground that
who is bound should have no exclusive property or if it
the same are not enforceable against his present family. It was
should be insufficient; but at the time of the liquidation of
claimed that since the money-judgment arose out of a contract
the partnership such spouse shall be charged for what has
entered into by him during his first marriage said judgment cannot
been paid for the purpose above-mentioned.
be enforced against his salaries which form part of the conjugal
properties of the second marriage. Plaintiffs opposed this motion,
for the reason that re-marriage is not a cause for extinction of As a general rule, therefore, debts contracted by the husband or the
obligations. As his aforesaid motion after hearing was denied by the wife before the marriage, 2 as well as fines and pecuniary
court for lack of merit, the defendant instituted the present indemnities imposed thereon, are not chargeable to the conjugal
appeal.1äwphï1.ñët partnership. However, such obligations may be enforced against the
conjugal assets if the responsibilities enumerated in Article 161 3 of
the new Civil Code have already been covered, and that the obligor
Appellant does not dispute the existence of the money-judgment
has no exclusive property or the same is insufficient. Considering
against him in the amount abovestated, which decision was
that the enforceability of the personal obligations of the husband or
rendered in 1947 and affirmed by the appellate court in 1950. It
THIRD DIVISION levy of real properties registered in the names of Efren and Admittedly, the spouses were married before the effectivity of the
Melecia.6 Subsequently, a notice of levy7 and a notice of sale on Family Code. But that fact does not prevent the application of [A]rt.
G.R. No. 164201 December 10, 2012 execution8 were issued. 94, last paragraph, of the Family Code because their property
regime is precisely governed by the law on absolute community.
EFREN PANA, Petitioner, On April 3, 2002, petitioner Efren and his wife Melecia filed a This finds support in Art. 256 of the Family Code which states:
vs. motion to quash the writ of execution, claiming that the levied
HEIRS OF JOSE JUANITE, SR. and JOSE JUANITE, JR., Respondents. properties were conjugal assets, not paraphernal assets of "This code shall have retroactive effect in so far as it does not
Melecia.9 On September 16, 2002 the RTC denied the motion.10 The prejudice or impair vested or acquired rights in accordance with the
DECISION spouses moved for reconsideration but the RTC denied the same on Civil Code or other laws."
March 6, 2003.11
ABAD, J.: None of the spouses is dead. Therefore, no vested rights have been
Claiming that the RTC gravely abused its discretion in issuing the acquired by each over the properties of the community. Hence, the
challenged orders, Efren filed a petition for certiorari before the liabilities imposed on the accused-spouse may properly be charged
This case is about the propriety of levy and execution on conjugal
Court of Appeals (CA). On January 29, 2004 the CA dismissed the against the community as heretofore discussed. 15
properties where one of the spouses has been found guilty of a
petition for failure to sufficiently show that the RTC gravely abused
crime and ordered to pay civil indemnities to the victims' heirs.
its discretion in issuing its assailed orders.12 It also denied Efren’s The RTC applied the same reasoning as above. 16 Efren and Melecia’s
motion for reconsideration,13 prompting him to file the present property relation was admittedly conjugal under the Civil Code but,
The Facts and the Case
petition for review on certiorari. since the transitory provision of the Family Code gave its provisions
retroactive effect if no vested or acquired rights are impaired, that
The prosecution accused petitioner Efren Pana (Efren), his wife
The Issue Presented property relation between the couple was changed when the Family
Melecia, and others of murder before the. Regional Trial Court (RTC)
Code took effect in 1988. The latter code now prescribes in Article
of Surigao City in Criminal Cases 4232 and 4233.1
The sole issue presented in this case is whether or not the CA erred 75 absolute community of property for all marriages unless the
in holding that the conjugal properties of spouses Efren and Melecia parties entered into a prenuptial agreement. As it happens, Efren
On July 9, 1997 the RTC rendered a consolidated decision 2 acquitting and Melecia had no prenuptial agreement. The CA agreed with this
can be levied and executed upon for the satisfaction of Melecia’s
Efren of the charge for insufficiency of evidence but finding Melecia position.17
civil liability in the murder case.
and another person guilty as charged and sentenced them to the
penalty of death. The RTC ordered those found guilty to pay each of
Ruling of the Court Both the RTC and the CA are in error on this point. While it is true
the heirs of the victims, jointly and severally, P50,000.00 as civil
that the personal stakes of each spouse in their conjugal assets are
indemnity, P50,000.00 each as moral damages, and P150,000.00
To determine whether the obligation of the wife arising from her inchoate or unclear prior to the liquidation of the conjugal
actual damages.
criminal liability is chargeable against the properties of the partnership of gains and, therefore, none of them can be said to
marriage, the Court has first to identify the spouses’ property have acquired vested rights in specific assets, it is evident that
On appeal to this Court, it affirmed on May 24, 2001 the conviction Article 256 of the Family Code does not intend to reach back and
relations.
of both accused but modified the penalty to reclusion perpetua. automatically convert into absolute community of property relation
With respect to the monetary awards, the Court also affirmed the all conjugal partnerships of gains that existed before 1988 excepting
award of civil indemnity and moral damages but deleted the award Efren claims that his marriage with Melecia falls under the regime of
only those with prenuptial agreements.
for actual damages for lack of evidentiary basis. In its place, conjugal partnership of gains, given that they were married prior to
however, the Court made an award of P15,000.00 each by way of the enactment of the Family Code and that they did not execute any
prenuptial agreement.14Although the heirs of the deceased victims The Family Code itself provides in Article 76 that marriage
temperate damages. In addition, the Court awarded P50,000.00
do not dispute that it was the Civil Code, not the Family Code, which settlements cannot be modified except prior to marriage.
exemplary damages per victim to be paid solidarily by them. 3 The
decision became final and executory on October 1, 2001.4 governed the marriage, they insist that it was the system of absolute
community of property that applied to Efren and Melecia. The Art. 76. In order that any modification in the marriage settlements
reasoning goes: may be valid, it must be made before the celebration of the
Upon motion for execution by the heirs of the deceased, on March
marriage, subject to the provisions of Articles 66, 67, 128, 135 and
12, 2002 the RTC ordered the issuance of the writ, 5 resulting in the
136.
Clearly, therefore, the conjugal partnership of gains that governed What is clear is that Efren and Melecia were married when the Civil spouse, may be enforced against the partnership assets after the
the marriage between Efren and Melecia who were married prior to Code was still the operative law on marriages. The presumption, responsibilities enumerated in the preceding Article have been
1988 cannot be modified except before the celebration of that absent any evidence to the contrary, is that they were married covered, if the spouse who is bound should have no exclusive
marriage. under the regime of the conjugal partnership of gains. Article 119 of property or if it should be insufficient; but at the time of the
the Civil Code thus provides: liquidation of the partnership, such spouse shall be charged for what
Post-marriage modification of such settlements can take place only has been paid for the purpose above-mentioned.
where: (a) the absolute community or conjugal partnership was Art. 119. The future spouses may in the marriage settlements agree
dissolved and liquidated upon a decree of legal separation;18 (b) the upon absolute or relative community of property, or upon complete Since Efren does not dispute the RTC’s finding that Melecia has no
spouses who were legally separated reconciled and agreed to revive separation of property, or upon any other regime. In the absence of exclusive property of her own,24 the above applies. The civil
their former property regime;19 (c) judicial separation of property marriage settlements, or when the same are void, the system of indemnity that the decision in the murder case imposed on her may
had been had on the ground that a spouse abandons the other relative community or conjugal partnership of gains as established be enforced against their conjugal assets after the responsibilities
without just cause or fails to comply with his obligations to the in this Code, shall govern the property relations between husband enumerated in Article 121 of the Family Code have been
family;20 (d) there was judicial separation of property under Article and wife. covered.25 Those responsibilities are as follows:
135; (e) the spouses jointly filed a petition for the voluntary
dissolution of their absolute community or conjugal partnership of Of course, the Family Code contains terms governing conjugal Art. 121. The conjugal partnership shall be liable for:
gains.21 None of these circumstances exists in the case of Efren and partnership of gains that supersede the terms of the conjugal
Melecia. partnership of gains under the Civil Code. Article 105 of the Family (1) The support of the spouse, their common children, and
Code states: the legitimate children of either spouse; however, the
What is more, under the conjugal partnership of gains established support of illegitimate children shall be governed by the
by Article 142 of the Civil Code, the husband and the wife place only "x x x x provisions of this Code on Support;
the fruits of their separate property and incomes from their work or
industry in the common fund. Thus: The provisions of this Chapter [on the Conjugal Partnership of Gains] (2) All debts and obligations contracted during the marriage
shall also apply to conjugal partnerships of gains already established by the designated administrator-spouse for the benefit of
Art. 142. By means of the conjugal partnership of gains the husband between spouses before the effectivity of this Code, without the conjugal partnership of gains, or by both spouses or by
and wife place in a common fund the fruits of their separate prejudice to vested rights already acquired in accordance with the one of them with the consent of the other;
property and the income from their work or industry, and divide Civil Code or other laws, as provided in Article 256."23
equally, upon the dissolution of the marriage or of the partnership, (3) Debts and obligations contracted by either spouse
the net gains or benefits obtained indiscriminately by either spouse Consequently, the Court must refer to the Family Code provisions in without the consent of the other to the extent that the
during the marriage. deciding whether or not the conjugal properties of Efren and family may have benefited;
Melecia may be held to answer for the civil liabilities imposed on
This means that they continue under such property regime to enjoy Melecia in the murder case. Its Article 122 provides: (4) All taxes, liens, charges, and expenses, including major
rights of ownership over their separate properties. Consequently, to or minor repairs upon the conjugal partnership property;
automatically change the marriage settlements of couples who got Art. 122. The payment of personal debts contracted by the husband
married under the Civil Code into absolute community of property or the wife before or during the marriage shall not be charged to the (5) All taxes and expenses for mere preservation made
in 1988 when the Family Code took effect would be to impair their conjugal properties partnership except insofar as they redounded to during the marriage upon the separate property of either
acquired or vested rights to such separate properties. the benefit of the family. spouse;

The RTC cannot take advantage of the spouses’ loose admission that Neither shall the fines and pecuniary indemnities imposed upon (6) Expenses to enable either spouse to commence or
absolute community of property governed their property relation them be charged to the partnership. complete a professional, vocational, or other activity for
since the record shows that they had been insistent that their
self-improvement;
property regime is one of conjugal partnership of gains. 22 No
However, the payment of personal debts contracted by either
evidence of a prenuptial agreement between them has been
spouse before the marriage, that of fines and indemnities imposed
presented.
upon them, as well as the support of illegitimate children of either
(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.1âwphi1

Contrary to Efren’s 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.
THIRD DIVISION On September 18, 1972, Katrina issued in favor of Anita Chan a 289 and 916 square meters in the amount of P119,000.00 to
check for P55,000 which, however, was dishonored for lack of funds. Leonardo B. Joson.12
G.R. No. 70082 August 19, 1991 Hence, Katrina was charged with estafa before the then Court of
First Instance of Pampanga and Angeles City, Branch IV.5 After trial, After the inscription on Transfer Certificate of Title No. 30951 of the
SPOUSES RICKY WONG and ANITA CHAN, LEONARDO JOSON, the lower court rendered a decision dismissing the case on the levy on execution of the judgment in Civil Case No. 2224, the
JUANITO SANTOS, EMERITO SICAT and CONRADO ground that Katrina's liability was not criminal but civil in nature as property covered by said title was extrajudicially foreclosed by the
LAGMAN, petitioners, no estafa was committed by the issuance of the check in payment of Rural Bank of Porac, Pampanga on account of the mortgage loan of
vs. a pre-existing obligation.6 P8,000 which Romarico and Katrina had obtained from said bank.
HON. INTERMEDIATE APPELLATE COURT and ROMARICO The property was sold by the sheriff to the highest bidder for
HENSON, respondents. In view of said decision, Anita Chan and her husband Ricky Wong P57,000 on September 9, 1977. On September 14, 1978, Juanito
filed against Katrina and her husband Romarico Henson, an action Santos, who had earlier bought the same property at public auction
Feliciano C. Tumale for petitioners. for collection of a sum of money also in the same branch of the on November 11, 1977, redeemed it by paying the sum of P57,000
Benjamin Dadios and Bausa, Ampil, Suarez, Paredes & Bausa for aforesaid court.7 The records of the case show that Atty. Gregorio plus the legal interest of P6,840.00 or a total amount of
private respondent. Albino, Jr. filed an answer with counterclaim but only in behalf of P63,840.00.13
Katrina. When the case was called for pre-trial, Atty. Albino once
again appeared as counsel for Katrina only. While it is true that About a month before such redemption or on August 8, 1 978,
FERNAN, C.J.:
during subsequent hearings, Atty. Expedite Yumul, who collaborated Romarico filed an action for the annulment of the decision in Civil
with Atty. Albino, appeared for the defendants, it is not shown on Case No. 2224 as well as the writ of execution, levy on execution
Submitted for adjudication in the instant petition for review on record that said counsel also represented Romarico. In fact, a power and the auction sale therein in the same Court of First
certiorari is the issue of whether or not the execution of a decision of attorney which Atty. Albino produced during the trial, showed Instance.14 Romarico alleged that he was "not given his day in court"
in an action for collection of a sum of money may be nullified on the that the same was executed solely by Katrina.8 because he was not represented by counsel as Attys. Albino and
ground that the real properties levied upon and sold at public
Yumul appeared solely for Katrina; that although he did not file an
auction are the alleged exclusive properties of a husband who did
After trial, the court promulgated a decisions9 in favor of the Wongs. answer to the complaint, he was not declared in default in the case;
not participate in his wife's business transaction from which said
It ordered Katrina and Romarico Henson to pay the Wongs that while Atty. Albino received a copy of the decision, he and his
action stemmed. HK$199,895.00 or P321,830.95 with legal interest from May 27, wife were never personally served a copy thereof; that he had
1975, the date of filing of the complaint, until fully paid; P20,000 as nothing to do with the business transactions of Katrina as he did not
Private respondent Romarico Henson married Katrina Pineda on expenses for litigation; P15,000 as attorney's fees, and the costs of authorize her to enter into such transactions; and that the
January 6, 1964.1 They have three children but even during the early the suit. properties levied on execution and sold at public auction by the
years of their marriage, Romarico and Katrina had been most of the sheriff were his capital properties and therefore, as to him, all the
time living separately. The former stayed in Angeles City while the proceedings had in the case were null and void.
A writ of execution was thereafter issued. Levied upon were four
latter lived in Manila. During the marriage or on January 6, 1971,
lots in Angeles City covered by Transfer Certificates of Title Nos.
Romarico bought a 1,787 square-meter parcel of land in Angeles 30950, 30951, 30952 and 30953 all in the name of Romarico Henson On November 10, 1978, the lower court issued an order restraining
City for P11,492 from his father, Dr. Celestino L. Henson 2with money
... married to Katrina Henson.10 the Register of Deeds of Angeles City from issuing the final bill of
borrowed from an officemate. His father need the amount for
sale of Transfer Certificates of Title Nos. 30950 and 30951 in favor of
investments in Angeles City and Palawan.3 Juanito Santos and Transfer Certificates of Title Nos. 30952 and
The public auction sale was first set for October 30, 1977 but since
said date was declared a public holiday, Deputy Sheriff Emerito Sicat 30953 in favor of Leonardo Joson until further orders of the
Meanwhile, in Hongkong sometime in June 1972, Katrina entered court.15 On January 22, 1979, upon motion of Romarico, the court
reset the sale to November 11, 1977. On said date, the following
into an agreement with Anita Chan whereby the latter consigned to issued a writ of preliminary injunction enjoining the sheriff from
properties registered in the name of Romarico Henson "married to
Katrina pieces of jewelry for sale valued at 199,895 Hongkong Katrina Henson" were sold at public auction: (a) two parcels of land approving the final bill of sale of the land covered by the
dollars or P321,830.95.4 When Katrina failed to return the pieces of aforementioned certificates of title and the Register of Deeds of
covered by Transfer Certificates of Title Nos. 30950 and 30951 with
jewelry within the 20-day period agreed upon, Anita Chan Angeles City from registering said certificates of title in the names of
respective areas of 293 and 289 square meters at P145,000 each to
demanded payment of their value. Santos and Joson until the final outcome of the case subject to
Juanito L. Santos,11 and (b) two parcels of land covered by Transfer
Certificates of Title Nos. 30952 and 30953 with respective areas of Romarico's posting of a bond in the amount of P321,831.00. 16
After trial on the merits, the lower court17 rendered a decision plaintiff herein, by Deputy Sheriff Emerito Sicat, are decision therein was not served on him and that he was not
holding that Romarico was indeed not given his day in court as he likewise declared null and void and of no force and effect; represented by counsel. Therefore, estoppel may not be applied
was not represented by counsel nor was he notified of the hearings against him as, not having been served with the decision, Romarico
therein although he was never declared in default. Noting that the (c) Defendants Emerito Sicat and Conrado Lagman, in their did not know anything about it. Corollarily, there can be no valid
complaint in Civil Case No. 2224 as well as the testimonial and official capacity as Sheriff and Register of Deeds, writ of execution inasmuch as the decision had not become final as
documentary evidence adduced at the trial in said case do not show respectively, are enjoined permanently from issuing and/or far as Romarico is concerned.
that Romarico had anything to do with the transactions between registering the corresponding deeds of sale affecting the
Katrina and Anita Chan, the court ruled that the judgment in Civil property; On whether the properties may be levied upon as conjugal
Case No. 2224 "is devoid of legal or factual basis which is not even properties, the appellate court ruled in the negative. It noted that
supported by a finding of fact or ratio decidendi in the body of the (d) The aforementioned buyers are directed to reconvey the properties are Romarico' s exclusive capital having been bought
decision, and may be declared null and void ... pursuant to a the property they have thus purchased at public auction to by him with his own funds. But granting that the properties are
doctrine laid down by the Supreme Court to the effect that the plaintiff Romarico Henson; conjugal, they cannot answer for Katrina's obligations as the latter
Court of First Instance or a branch thereof, has authority and were exclusively hers because they were incurred without the
jurisdiction to try and decide an action for annulment of a final and consent of her husband, they were not for the daily expenses of the
(e) As far as the claim for reimbursement filed by Juanito
executory judgment or order rendered by another court of first family and they did not redound to the benefit of the family. The
Santos concerning the redemption of the property covered
instance or of a branch thereof (Gianan vs. Imperial, 55 SCRA court underscored the fact that no evidence has been submitted
by Transfer Certificate of Title No. 30951 from the Rural
755)."18 that the administration of the conjugal partnership had been
Bank of Porac, which foreclosed the same extrajudicially, is
concerned, plaintiff Romarico Henson may redeem the transferred to Katrina either by Romarico or by the court before said
On whether or not the properties lenied upon and sold at public same within the period and in the manner prescribed by obligations were incurred.
auction may be reconveyed to Romarico, the court, finding that law, after the corresponding deed of redemption shall have
there was no basis for holding the conjugal partnership liable for the been registered in the Office of the Registry of Deeds for The appellants filed a motion for reconsideration of the decision of
personal indebtedness of Katrina, ruled in favor of reconveyance in Angeles City; the appellate court but the same was denied for lack of merit on
view of the jurisprudence that the interest of the wife in the February 6, 1985.20
conjugal partnership property being inchoate and therefore merely
(f) Defendants Spouses Ricky Wong and Anita Chan are,
an expectancy, the same may not be sold or disposed of for value Hence, the instant petition for review on certiorari. Petitioners
with the exception of the defendants Juanito Santos,
until after the liquidation and settlement of the community assets. contend that, inasmuch as the Henson spouses were duly
Leonardo Joson, Sheriff and Register of Deeds, are ordered
The dispositive portion of the decision reads: represented by Atty. Albino as shown by their affidavit of August 25,
jointly and severally, to pay the plaintiff Romarico Henson
the sum of P10,000.00, corresponding to the expenses of 1977 wherein they admitted that they were represented by said
WHEREFORE, and in view of the foregoing, judgment is litigation, with legal interest thereon from the time this suit counsel until Atty. Yumul took over the actual management and
hereby rendered in favor of the plaintiff and against all the was filed up to the time the same shall have been paid, plus conduct of the case and that Atty. Albino had not withdrawn as their
defendants, as follows: P5,000.00 for and as attorney's fees, and the costs of suit; counsel, the lower court "did not commit an error" in serving a copy
and of the decision in Civil Case No. 2224 only on Atty. Albino.
(a) The Decision of the Court of First Instance of Pampanga Moreover, during the 2-year period between the filing of the
and Angeles City, Branch IV, rendered in Civil Case No. (g) The counterclaims respectively filed on behalf of all the complaint in Civil Case No. 2224 and the public auction sale on
2224, entitled "RICKY WONG, ET AL. vs. KATRINA PINEDA defendants in the above-entitled case are hereby November 11, 1977, Romarico remained silent thereby making him
HENSON and ROMARICO HENSON", is hereby declared null DISMISSED. in estoppel and guilty of laches.
and void, only as far as it affects plaintiff herein Romarico
Henson; Petitioners further aver that there being sufficient evidence that the
SO ORDERED.
auction sale was conducted in accordance with law, the acts of the
(b) The Writ of Execution, levy in execution and auction sheriffs concerned are presumed to be regular and valid. But
The defendants appealed to the then Intermediate Appellate Court.
sale of the conjugal property of the spouses Romarico granting that an irregularity consisting of the non-notification of
In its decision of January 22, 198519 the said court affirmed in toto
Henson and Katrina Pineda Henson which were sold at Romarico attended the conduct of the auction sale, the rights of
the decision of the lower court. It added that as to Romarico, the
public auction on November 11, 1977, without notice to Santos and Joson who were "mere strangers who participated as the
judgment in Civil Case No. 2224 had not attained finality as the
highest bidders" therein, may not be prejudiced. Santos and Joson Baltazar, Sr. appeared for the plaintiffs while Atty. Albino A Yes, sir but may I add, I received the summons
bought the properties sincerely believing that the sheriff was categorically appeared "FOR DEFENDANT KATRINA but I did not file an answer because my wife took a
regularly performing his duties and no evidence was presented to HENSON". lawyer and that lawyer I think will protect her
the effect that they acted with fraud or that they connived with the interest and my interest being so I did not have
sheriff. However, should the auction sale be nullified, petitioners It might be true that in subsequent hearings, Atty. Expedito nothing to do in the transaction which is attached
assert that Romarico should not be unduly enriched at the expense Yumul 'appeared as counsel for the defendants,' but the to the complaint.' (TSN, Jan. 14, 1980, pp. 52-53).
of Santos and Joson. whole trouble is that he never expressly manifested to the
Court that he was likewise actually representing defendant That plaintiff never appeared in Civil Case No.
The petitioners' theory is that Romarico Henson was guilty of laches "ROMARICO HENSON", for it cannot be disputed that Atty. 2224, nor was he therein represented by counsel
and may not now belatedly assert his rights over the properties Yumul only entered his appearance in collaboration with was impliedly admitted by defendants' counsel of
because he and Katrina were represented by counsel in Civil Case Atty. Albino (see p. 2 tsn, January 26, 1976, Espinosa), who records thru a question he propounded on cross,
No. 2224. Said theory is allegedly founded on the perception that in turn entered his initial appearance during the pre- trial, and the answer given by Katrina Pineda, to wit:
the Hensons were like any other ordinary couple wherein a spouse and through the filing of an Answer, for defendant
knows or should know the transactions of the other spouse which KATRINA HENSON. As a matter of fact, the Power of Q How about your husband, do you remember if
necessarily must be in interest of the family. The factual background Attorney which Atty. Albino produced during the pre-trial he physically appeared in that Civil Case No. 2224,
of this case, however, takes it out of said ideal situation. was executed solely by defendant KATRINA HENSON. will you tell us if he was represented by counsel as
Accordingly, as collaborating counsel, Atty. Yumul cannot, a party defendant?
Romarico and Katrina had in fact been separated when Katrina by any stretch of the imagination, be considered as duly
entered into a business deal with Anita Wong. Thus, when that authorized to formally appear likewise on behalf of A No, sir, he did not appear.
business transaction eventually resulted in the filing of Civil Case No. defendant ROMARICO HENSON for whom principal counsel
2224, Romarico acted, or, as charged by petitioners, failed to act, in of record Atty. Gregorio Albino, Jr. never made any formal
Q You are husband and wife, please tell us the
the belief that he was not involved in the personal dealings of his appearance. On this score, it is not amiss to state that "A
reason why you have your own counsel in that
estranged wife. That belief was buttressed by the fact that the spring cannot rise higher than its source:.
case whereas Romarico Henson did not appear
complaint itself did not mention or implicate him other than as the nor a counsel did not appear in that proceedings
husband of Katrina. On whether Romarico was also represented by Now, what about that statement in the aforementioned (TSN, Feb. 25,1980, pp. 6-7).
Atty. Albino, Katrina's counsel, the courts below found that: joint affidavit of the spouses KATRINA HENSON and
ROMARICO HENSON, to the effect that our first lawyer in
xxx xxx xxx
... Atty. Albino filed an Answer with Counterclaims dated said case was Atty. Gregorio Albino, Jr., and sometime later
July 25, 1975 solely on behalf of defendant Katrina Henson. Atty. Expedito B. Yumul took over ...
A Because that case is my exclusive and personal
The salutary statement in that Answer categorically reads:
case, he has nothing to do with that, sir. (TSN, Feb.
... COMES NOW THE DEFENDANT KATRINA HENSON by and That statement which plaintiff ROMARICO HENSON was
25, 1980, p. 9). (Rollo, pp. 17-20)
through undersigned counsel, in answer to plaintiffs' made to sign by Atty. Yumul on August 25,1977, after the
complaint respectfully alleges: ... . filing of this case, allegedly for the purpose of dissolving the
Hence, laches may not be charged against Romarico because, aside
writ of execution, as claimed in paragraph XIV of the
complaint herein, and is satisfactorily explained by both from the fact that he had no knowledge of the transactions of his
That Answer was signed by GREGORIO ALBINO, JR., over
estranged wife, he was also not afforded an opportunity to defend
the phrase COUNSEL FOR DEFENDANT KATRINA HENSON. plaintiff herein and his wife, while on cross-examination by
himself in Civil Case No. 2224.21 There is no laches or even finality of
Atty. Baltazar, Sr., and We quote:
decision to speak of with respect to Romarico since the decision in
Again, when Civil Case No. 2224 was called for pre-trial on Civil Case No. 2224 is null and void for having been rendered
November 27, 1975, before then Presiding Judge Q So, the summons directed your filing of your
without jurisdiction for failure to observe the notice requirements
Bienvenido Ejercito, it is clearly stated on page 2 of the Answer for both of you, your wife and your good
prescribed by law.22 Failure to notify Romarico may not be
day's stenographic notes, under "APPEARANCES that Atty. self?
attributed to the fact that the plaintiffs in Civil Case No. 2224 acted
Albino, Jr. appeared as COUNSEL FOR DEFENDANT KATRINA on the presumption that the Hensons were still happily married
HENSON". And when the case was called, Atty. Jose because the complaint itself shows that they did not consider
Romarico as a party to the transaction which Katrina undertook with support of the family or when she borrows money for the purpose inchoate proprietary rights over the properties sold at public
Anita Wong. In all likelihood, the plaintiffs merely impleaded of purchasing things necessary for the support of the family if the auction. After all, a person can sell only what he owns or is
Romarico as a nominal party in the case pursuant to the provisions husband fails to deliver the proper sum;32 when the administration authorized to sell and the buyer can, as a consequence, acquire no
of Rule 3, Section 4 of the Rules of Court. of the conjugal partnership is transferred to the wife by the more that what the seller can legally transfer.36 But, inasmuch as the
courts33 or by the husband34 and when the wife gives moderate decision in Civil Case No. 2224 is void only as far as Romarico and
Consequently, the writ of execution cannot be issued against donations for charity.35 Having failed to establish that any of these the conjugal properties are concerned, the same may still be
Romarico as he has not yet had his day in court23 and, necessarily, circumstances occurred, the Wongs may not bind the conjugal executed by the Spouses Wong against Katrina Henson personally
the public auction sale is null and void.24 Moreover, the power of assets to answer for Katrina's personal obligation to them. and exclusively. The Spouses Wong must return to Juanito Santos
the court in the execution of judgments extends only over and Leonardo Joson the purchase prices of P145,000 and P119,000
properties unquestionably belonging to the judgment debtor. 25 Petitioners' contention that the rights of Santos and Joson as respectively, received by said spouse from the public auction sale.
innocent buyers at the public auction sale may not be prejudiced, is,
On the matter of ownership of the properties involved, however, to a certain extent, valid. After all, in the absence of proof that The redemption made by Santos in the foreclosure proceeding
the Court disagrees with the appellate court that the said properties irregularities attended the sale, the same must be presumed to have against Romarico and Katrina Henson filed by the Rural Bank of
are exclusively owned by Romarico.1âwphi1 Having been acquired been conducted in accordance with law. There is, however, a Porac, should, however, be respected unless Romarico exercises his
during the marriage, they are still presumed to belong to the peculiar factual circumstance that goes against the grain of that right of redemption over the property covered by Transfer
conjugal partnership26 even though Romarico and Katrina had been general presumption the properties levied upon and sold at the Certificate of Title No. 30951 in accordance with law.
living separately.27 public auction do not exclusively belong to the judgment debtor.
Thus, the guiding jurisprudence is as follows: WHEREFORE, the decisions of the appellate court and the lower
The presumption of the conjugal nature of the properties subsists in court in Civil Case No. 28-09 are hereby AFFIRMED subject to the
the absence of clear, satisfactory and convincing evidence to The rule in execution sales is that an execution creditor modifications above stated. No costs.
overcome said presumption or to prove that the properties are acquires no higher or better right than what the execution
exclusively owned by Romarico.28 While there is proof that debtor has in the property levied upon. The purchaser of SO ORDERED.
Romarico acquired the properties with money he had borrowed property on sale under execution and levy takes as
from an officemate, it is unclear where he obtained the money to assignee, only as the judicial seller possesses no title other
repay the loan. If he paid it out of his salaries, then the money is than that which would pass by an assignment by the
part of the conjugal assets29 and not exclusively his. Proof on this owner. "An execution purchaser generally acquires such
matter is of paramount importance considering that in the estate or interest as was vested in the execution debtor at
determination of the nature of a property acquired by a person the time of the seizure on execution, and only such
during covertrue, the controlling factor is the source of the money interest, taking merely a quit-claim of the execution
utilized in the purchase. debtor's title, without warranty on the part of either the
execution officer or of the parties, whether the property is
The conjugal nature of the properties notwithstanding, Katrina's realty or personalty. This rule prevails even if a larger
indebtedness may not be paid for with them her obligation not interest in the property was intended to be sold.
having been shown by the petitioners to be one of the charges Accordingly, if the judgment debtor had no interest in the
against the conjugal partnership.30 In addition to the fact that her property, the execution purchaser acquires no interest
rights over the properties are merely inchoate prior to the therein." (Pacheco vs. Court of Appeals, L-48689, August
liquidation of the conjugal partnership, the consent of her husband 31, 1987, 153 SCRA 382, 388-389 quoting Laureano vs.
and her authority to incur such indebtedness had not been alleged Stevenson, 45 Phil. 252; Cabuhat vs. Ansery, 42 Phil. 170;
in the complaint and proven at the trial.31 Fore v. Manove, 18 Cal. 436 and 21 Am. Jur., 140-141.
Emphasis supplied.)
Furthermore, under the Civil Code (before the effectivity of the
Family Code on August 3, 1988), a wife may bind the conjugal Applying this jurisprudence, execution purchasers Santos and Joson
partnership only when she purchases things necessary for the possess no rights which may rise above judgment debtor Katrina's
SECOND DIVISION effect on June 10, 1988 and which provides that contracts executed The trial court, finding, among others, that Perez did not possess,
prior thereto shall "be valid only when registered with the Register nor pay the taxes on the lots, that defendant Pelayo was indebted
G.R. No. 141323 June 8, 2005 of Deeds within a period of three (3) months after the effectivity of to Perez for services rendered and, therefore, the deed could only
this Act." be considered as evidence of debt, and that in any event, there was
DAVID V. PELAYO and LORENZA* B. PELAYO, Petitioners, no marital consent to nor actual consideration for the deed, held
vs. The questioned deed having been executed on January 10, 1988, that the deed was null and void and accordingly rendered judgment
MELKI E. PEREZ, Respondent. the defendants claimed that Perez had at least up to September 10, the dispositive portion of which reads:
1988 within which to register the same, but as they failed to, it is
DECISION not valid and, therefore, unenforceable. WHEREFORE, judgment is hereby rendered ordering and directing
the defendants to pay plaintiff Melki Perez the sum of TEN
The trial court thus dismissed the complaint. On appeal to this THOUSAND (₱10,000.00) Pesos as principal with 12% interest per
AUSTRIA-MARTINEZ, J.:
Court, the dismissal was set aside and the case was remanded to the annum starting from the date of filing of the complaint on August 1,
lower court for further proceedings. 1991 until plaintiff is fully paid.
This resolves the petition for review on certiorari seeking the
reversal of the Decision1 of the Court of Appeals (CA) promulgated
In their Answer, the defendants claimed that as the lots were The defendants shall likewise pay to plaintiff the sum of THREE
on April 20, 1999 which reversed the Decision of the Regional Trial
occupied illegally by some persons against whom they filed an THOUSAND (₱3,000.00) as attorney’s fees.
Court (RTC) of Panabo, Davao, Branch 34, in Civil Case No. 91-46;
and the CA Resolution dated December 17, 1999 denying ejectment case, they and Perez who is their friend and known at the
petitioners’ motion for reconsideration. time as an activist/leftist, hence feared by many, just made it appear The court further orders that the Deed of Absolute Sale, (Annex ‘A’)
in the deed that the lots were sold to him in order to frighten said of the complaint and (Annex ‘C’) of the plaintiff’s Motion for
illegal occupants, with the intentional omission of Loreza’s signature Summary Judgment is declared null and void and without force and
The antecedent facts as aptly narrated by the CA are as follows:
so that the deed could not be registered; and that the deed being it is likewise removed as a cloud over defendants’ title and property
simulated and bereft of consideration is void/inexistent. in suit. . . ."2
David Pelayo (Pelayo),by a Deed of Absolute Sale executed on
January 11, 1988, conveyed to Melki Perez (Perez) two parcels of
Perez countered that the lots were given to him by defendant The RTC Decision was appealed by herein respondent Perez to the
agricultural land (the lots) situated in Panabo, Davao which are
Pelayo in consideration of his services as his attorney-in-fact to CA. Petitioners failed to file their appellees’ brief. The CA then
portions of Lot 4192, Cad. 276 covered by OCT P-16873.
make the necessary representation and negotiation with the illegal promulgated its Decision on April 20, 1999 whereby it ruled that by
occupants-defendants in the ejectment suit; and that after his Lorenza’s signing as witness to the execution of the deed, she had
Loreza Pelayo (Loreza), wife of Pelayo, and another one whose
relationship with defendant Pelayo became sour, the latter sent a knowledge of the transaction and is deemed to have given her
signature is illegible witnessed the execution of the deed.
letter to the Register of Deeds of Tagum requesting him not to consent to the same; that herein petitioners failed to adduce
entertain any transaction concerning the lots title to which was sufficient proof to overthrow the presumption that there was
Loreza, however, signed only on the third page in the space entrusted to Perez who misplaced and could [not] locate it. consideration for the deed, and that petitioner David Pelayo, being a
provided for witnesses on account of which Perez’ application for lawyer, is presumed to have acted with due care and to have signed
registration of the deed with the Office of the Register of Deeds in the deed with full knowledge of its contents and import. The CA
Defendant Pelayo claimed in any event, in his Pre-trial brief filed on
Tagum, Davao was denied. reversed and set aside the RTC Decision, declaring as valid and
March 19, 1996, that the deed was without his wife Loreza’s
consent, hence, in light of Art. 166 of the Civil Code which provides: enforceable the questioned deed of sale and ordering herein
Perez thereupon asked Loreza to sign on the first and second pages petitioner Lorenza Pelayo to affix her signature on all pages of said
of the deed but she refused, hence, he instituted on August 8, 1991 document.
Article 166. Unless the wife has been declared a non compos mentis
the instant complaint for specific performance against her and her or a spendthrift, or is under civil interdiction or is confined in a
husband Pelayo (defendants). Petitioners moved for reconsideration of the decision but the same
leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership without the wife’s consent . . . was denied per Resolution dated December 17, 1999. The CA found
The defendants moved to dismiss the complaint on the ground that said motion to have been filed out of time and ruled that even
it stated no cause of action, citing Section 6 of RA 6656 otherwise putting aside technicality, petitioners failed to present any ground
it is null and void.
known as the Comprehensive Agrarian Reform Law which took
bearing on the merits of the case to justify a reversal or setting aside 6657; that the failure of respondent to register the instrument was seller retained area and only when the total landholdings of the
of the decision. not due to his fault or negligence but can be attributed to Lorenza’s purchaser-transferee, including the property sold does not exceed
unjustified refusal to sign two pages of the deed despite several five (5) hectares.
Hence, this petition for review on certiorari on the following requests of respondent; and that therefore, the CA ruled that the
grounds: deed of sale subject of this case is valid under R.A. No. 6657. Aside from declaring that the failure of respondent to register the
deed was not of his own fault or negligence, the CA ruled that
1. The CA erred in ignoring the specific provision of Section Respondent further maintains that the CA correctly held in its respondent’s failure to register the deed of sale within three months
6, in relation to Section 4 of R.A. No. 6657 otherwise known assailed Decision that there was consideration for the contract and after effectivity of The Comprehensive Agrarian Reform Law did not
as the Comprehensive Agrarian Reform Law of 1988 which that Lorenza is deemed to have given her consent to the deed of invalidate the deed of sale as "the transaction over said property is
took effect on June 15, 1988 and which provides that sale. not proscribed by R.A. No. 6657."
contracts executed prior thereto shall "be valid only when
registered with the Register of Deeds within a period of Respondent likewise opines that the CA was right in denying Thus, under the principle of law of the case, said ruling of the CA is
three (3) months after the effectivity of this Act." petitioners’ motion for reconsideration where they prayed that they now binding on petitioners.1avvph!1 Such principle was elucidated
be allowed to file their appellees’ brief as their counsel failed to file in Cucueco vs. Court of Appeals,6 to wit:
2. The CA erred in holding that the deed of sale was valid the same on account of said counsel’s failing health due to cancer of
and considering the ₱10,000.00 adjudged by the trial court the liver. Respondent emphasized that in petitioners’ motion for Law of the case has been defined as the opinion delivered on a
as Perez’s remuneration as the consideration for the deed reconsideration, they did not even cite any errors made by the CA in former appeal. It is a term applied to an established rule that when
of sale, instead of declaring the same as null and void for its Decision. an appellate court passes on a question and remands the case to
being fictitious or simulated and on the basis of Art. 491, the lower court for further proceedings, the question there settled
Par. 2 of the New Civil Code which prohibits agents from The issues boil down to the question of whether or not the deed of becomes the law of the case upon subsequent appeal. It means that
acquiring by purchase properties from his principal under sale was null and void on the following grounds: (a) for not whatever is once irrevocably established as the controlling legal rule
his charge. complying with the provision in R.A. No. 6657 that such document or decision between the same parties in the same case continues to
must be registered with the Register of Deeds within three months be the law of the case, whether correct on general principles or not,
3. The CA made a novel ruling that there was implied after the effectivity of said law; (b) for lack of marital consent; (c) for so long as the facts on which such decision was predicated continue
marital consent of the wife of petitioner David Pelayo. being prohibited under Article 1491 (2) of the Civil Code; and (d) for to be the facts of the case before the court.
lack of consideration.
4. Petitioners should have been allowed to file their Petitioners not having questioned the Decision of the CA dated
appellees’ brief to ventilate their side, considering the We rule against petitioners. November 24, 1994 which then attained finality, the ruling that the
existence of peculiar circumstances which prevented deed of sale subject of this case is not among the transactions
petitioners from filing said brief. The issue of whether or not the deed of sale is null and void under deemed as invalid under R.A. No. 6657, is now immutable.
R.A. No. 6657, for respondent’s failure to register said document
On the other hand, respondent points out that the CA, in resolving with the Register of Deeds within three months after the effectivity We agree with the CA ruling that petitioner Lorenza, by affixing her
the first appeal docketed as CA-G.R. SP No. 387003 brought by of R.A. No. 6657, had been resolved with finality by the CA in its signature to the Deed of Sale on the space provided for witnesses, is
respondent assailing the RTC Order granting herein petitioners’ Decision dated November 24, 1994 in CA-G.R. SP No. 38700.4 Herein deemed to have given her implied consent to the contract of sale.
motion to dismiss, already ruled that under R.A. No. 6657, the sale petitioners no longer elevated said CA Decision to this Court and the
or transfer of private agricultural land is allowed only when the area same became final and executory on January 7, 1995.5 Sale is a consensual contract that is perfected by mere consent,
of the land being conveyed constitutes or is a part of, the which may either be express or implied.7 A wife’s consent to the
landowner-seller retained area and when the total landholding of In said decision, the CA interpreted Section 4, in relation to Section husband’s disposition of conjugal property does not always have to
the purchaser-transferee, including the property sold, does not 70 of R.A. No. 6657, to mean thus: be explicit or set forth in any particular document, so long as it is
exceed five (5) hectares; that in this case, the land in dispute is only shown by acts of the wife that such consent or approval was indeed
1.3 hectares and there is no proof that the transferee’s (herein . . . the proper interpretation of both sections is that under R.A. No. given.8 In the present case, although it appears on the face of the
respondent) total landholding inclusive of the subject land will 6657, the sale or transfer of a private agricultural land is allowed deed of sale that Lorenza signed only as an instrumental witness,
exceed 5 hectares, the landholding ceiling prescribed by R.A. No. only when said land area constitutes or is a part of the landowner- circumstances leading to the execution of said document point to
the fact that Lorenza was fully aware of the sale of their conjugal Art. 166. Unless the wife has been declared a non compos mentis or With regard to petitioners’ asseveration that the deed of sale is
property and consented to the sale. a spendthrift, or is under civil interdiction or is confined in a invalid under Article 1491, paragraph 2 of the New Civil Code, we
leprosarium, the husband cannot alienate or encumber any real find such argument unmeritorious. Article 1491 (2) provides:
In their Pre-Trial Brief,9 petitioners admitted that even prior to 1988, property of the conjugal property without the wife’s consent. If she
they have been having serious problems, including threats to the life refuses unreasonably to give her consent, the court may compel her Art. 1491. The following persons cannot acquire by purchase, even
of petitioner David Pelayo, due to conflicts with the illegal occupants to grant the same. at a public or judicial auction, either in person or through the
of the property in question, so that respondent, whom many feared mediation of another:
for being a leftist/activist, offered his help in driving out said illegal ...
occupants. ...
Art. 173. The wife may, during the marriage, and within ten years
Human experience tells us that a wife would surely be aware of from the transaction questioned, ask the courts for the annulment (2) Agents, the property whose administration or sale may have
serious problems such as threats to her husband’s life and the of any contract of the husband entered into without her consent, been entrusted to them, unless the consent of the principal has
reasons for such threats. As they themselves stated, petitioners’ when such consent is required, or any act or contract of the been given;
problems over the subject property had been going on for quite husband which tends to defraud her or impair her interest in the
some time, so it is highly improbable for Lorenza not to be aware of conjugal partnership property. Should the wife fail to exercise this ...
what her husband was doing to remedy such problems. Petitioners right, she or her heirs, after the dissolution of the marriage, may
do not deny that Lorenza Pelayo was present during the execution demand the value of property fraudulently alienated by the
In Distajo vs. Court of Appeals,12 a landowner, Iluminada Abiertas,
of the deed of sale as her signature appears thereon. Neither do husband.
designated one of her sons as the administrator of several parcels of
they claim that Lorenza Pelayo had no knowledge whatsoever about
her land. The landowner subsequently executed a Deed of
the contents of the subject document. Thus, it is quite Hence, it has been held that the contract is valid until the court Certification of Sale of Unregistered Land, conveying some of said
annuls the same and only upon an action brought by the wife whose land to her son/administrator. Therein, we held that:
certain that she knew of the sale of their conjugal property between consent was not obtained.11 In the present case, despite
her husband and respondent. respondent’s repeated demands for Lorenza to affix her signature
Under paragraph (2) of the above article, the prohibition against
on all the pages of the deed of sale, showing respondent’s insistence
agents purchasing property in their hands for sale or management is
Under the rules of evidence, it is presumed that a person takes on enforcing said contract, Lorenza still did not file a case for
not absolute. It does not apply if the principal consents to the sale of
ordinary care of his concerns.10 Petitioners did not even attempt to annulment of the deed of sale. It was only when respondent filed a
the property in the hands of the agent or administrator. In this case,
overcome the aforementioned presumption as no evidence was complaint for specific performance on August 8, 1991 when
the deeds of sale signed by Iluminada Abiertas shows that she gave
ever presented to show that Lorenza was in any way lacking in her petitioners brought up Lorenza’s alleged lack of consent as an
consent to the sale of the properties in favor of her son, Rufo, who
mental faculties and, hence, could not have fully understood the affirmative defense. Thus, if the transaction was indeed entered into
was the administrator of the properties. Thus, the consent of the
ramifications of signing the deed of sale. Neither did petitioners without Lorenza’s consent, we find it quite puzzling why for more
principal Iluminada Abiertas removes the transaction out of the
present any evidence that Lorenza had been defrauded, forced, than three and a half years, Lorenza did absolutely nothing to seek
prohibition contained in Article 1491(2). 13
intimidated or threatened either by her own husband or by the nullification of the assailed contract.
respondent into affixing her signature on the subject document. If
The above-quoted ruling is exactly in point with this case before us.
Lorenza had any objections over the conveyance of the disputed The foregoing circumstances lead the Court to believe that Lorenza
Petitioners, by signing the Deed of Sale in favor of respondent, are
property, she could have totally refrained from having any part in knew of the full import of the transaction between respondent and
also deemed to have given their consent to the sale of the subject
the execution of the deed of sale. Instead, Lorenza even affixed her her
property in favor of respondent, thereby making the transaction an
signature thereto.
exception to the general rule that agents are prohibited from
husband; and, by affixing her signature on the deed of sale, she, in purchasing the property of their principals.
Moreover, under Article 173, in relation to Article 166, both of the effect, signified her consent to the disposition of their conjugal
New Civil Code, which was still in effect on January 11, 1988 when property.
Petitioners also argue that the CA erred in ruling that there was
the deed in question was executed, the lack of marital consent to
consideration for the sale. We find no error in said appellate court’s
the disposition of conjugal property does not make the contract
ruling. The element of consideration for the sale is indeed present.
void ab initio but merely voidable. Said provisions of law provide:
Petitioners, in adopting the trial court’s narration of antecedent
facts in their petition,14 thereby admitted that they authorized petitioners stated in a letter they sent to the Register of Deeds of We have consistently held that a petitioner’s right to due process is
respondent to represent them in negotiations with the "squatters" Tagum that they have entrusted the titles over subject lots to herein not violated where he was able to move for reconsideration of the
occupying the disputed property and, in consideration of respondent. Such act is a clear indication that they intended to order or decision in question.19 In this case, petitioners had the
respondent’s services, they executed the subject deed of sale. Aside convey the subject property to herein respondent and the deed of opportunity to fully expound on their defenses through a motion for
from such services rendered by respondent, petitioners also sale was not merely simulated or fictitious. reconsideration. Petitioners did file such motion but they wasted
acknowledged in the deed of sale that they received in full the such opportunity by failing to present therein whatever errors they
amount of Ten Thousand Pesos. Evidently, the consideration for the Lastly, petitioners claim that they were not able to fully ventilate believed the CA had committed in its Decision. Definitely, therefore,
sale is respondent’s services plus the aforementioned cash money. their defense before the CA as their lawyer, who was then suffering the denial of petitioners’ motion for reconsideration, praying that
from cancer of the liver, failed to file their appellees’ brief. Thus, in they be allowed to file appellees’ brief, did not infringe petitioners’
Petitioners contend that the consideration stated in the deed of sale their motion for reconsideration of the CA Decision, they prayed right to due process as any issue that petitioners wanted to raise
is excessively inadequate, indicating that the deed of sale was that they be allowed to submit such appellees’ brief. The CA, in its could and should have been contained in said motion for
merely simulated. We are not persuaded. Our ruling Resolution dated December 17, 1999, stated thus: reconsideration.
in Buenaventura vs. Court of Appeals15 is pertinent, to wit:
By movant-defendant-appellee’s own information, his counsel IN VIEW OF THE FOREGOING, the petition is DENIED and the
. . . Indeed, there is no requirement that the price be equal to the received a copy of the decision on May 5, 1999. He, therefore, had Decision of the Court of Appeals dated April 20, 1999 and its
exact value of the subject matter of sale. . . . As we stated in Vales fifteen (15) days from said date or up to May 20, 1999 to file the Resolution dated December 17, 1999 are hereby AFFIRMED.
vs. Villa: motion. The motion, however, was sent through a private courier
and, therefore, considered to have been filed on the date of actual SO ORDERED.
Courts cannot follow one every step of his life and extricate him receipt on June 17, 1999 by the addressee – Court of Appeals, was
from bad bargains, protect him from unwise investments, relieve filed beyond the reglementary period.
him from one-sided contracts, or annul the effects of foolish acts.
Courts cannot constitute themselves guardians of persons who are Technicality aside, movant has not proffered any ground bearing on
not legally incompetent. Courts operate not because one person has the merits of the case why the decision should be set aside.1awphi1
been defeated or overcome by another, but because he has been
defeated or overcome illegally. Men may do foolish things, make Petitioners never denied the CA finding that their motion for
ridiculous contracts, use miserable judgment, and lose money by reconsideration was filed beyond the fifteen-day reglementary
them – indeed, all they have in the world; but not for that alone can period. On that point alone, the CA is correct in denying due course
the law intervene and restore. There must be, in addition, to said motion. The motion having been belatedly filed, the CA
a violation of the law, the commission of what the law knows as Decision had then attained finality. Thus, in Abalos vs. Philex Mining
an actionable wrong, before the courts are authorized to lay hold of Corporation,18 we held that:
the situation and remedy it.16
. . . Nothing is more settled in law than that once a judgment attains
Verily, in the present case, petitioners have not presented proof finality it thereby becomes immutable and unalterable. It may no
that there has been fraud, mistake or undue influence exercised longer be modified in any respect, even if the modification is meant
upon them by respondent. It is highly unlikely and contrary to to correct what is perceived to be an erroneous conclusion of fact or
human experience that a layman like respondent would be able to law, and regardless of whether the modification is attempted to be
defraud, exert undue influence, or in any way vitiate the consent of made by the court rendering it or by the highest court of the land.
a lawyer like petitioner David Pelayo who is expected to be more
knowledgeable in the ways of drafting contracts and other legal Moreover, it is pointed out by the CA that said motion did not
transactions. present any defense or argument on the merits of the case that
could have convinced the CA to reverse or modify its Decision.
Furthermore, in their Reply to Respondent’s
Memorandum,17 petitioners adopted the CA’s narration of fact that
SECOND DIVISION Upon maturity, the loan remained outstanding. As a result, (b) The Certificate of Sale executed by Notary Public Reynaldo
petitioner instituted extrajudicial foreclosure proceedings on the Alcantara on April 20, 1995.
G.R. No. 153802. March 11, 2005 mortgaged property. After the extrajudicial sale thereof, a
Certificate of Sale was issued in favor of petitioner as the highest (c) The Affidavit of Consolidation of Ownership executed by the
HOMEOWNERS SAVINGS & LOAN BANK, Petitioner, bidder. After the lapse of one year without the property being defendant
vs. redeemed, petitioner, through its vice-president, consolidated the
MIGUELA C. DAILO, Respondents. ownership thereof by executing on June 6, 1996 an Affidavit of (c) The Affidavit of Consolidation of Ownership executed by the
Consolidation of Ownership and a Deed of Absolute Sale.5 defendant over the residential lot located at Brgy. San Francisco,
DECISION San Pablo City, covered by ARP No. 95-091-1236 entered as Doc. No.
In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In 406; Page No. 83, Book No. III, Series of 1996 of Notary Public
one of her visits to the subject property, respondent learned that Octavio M. Zayas.
TINGA, J.:
petitioner had already employed a certain Roldan Brion to clean its
premises and that her car, a Ford sedan, was razed because Brion (d) The assessment of real property No. 95-051-1236.
This is a petition for review on certiorari under Rule 45 of the
allowed a boy to play with fire within the premises.
Revised Rules of Court, assailing the Decision1 of the Court of
Appeals in CA-G.R. CV No. 59986 rendered on June 3, 2002, which 2. The defendant is ordered to reconvey the property subject of this
Claiming that she had no knowledge of the mortgage constituted on complaint to the plaintiff.
affirmed with modification the October 18, 1997 Decision2 of the
the subject property, which was conjugal in nature, respondent
Regional Trial Court, Branch 29, San Pablo City, Laguna in Civil Case
instituted with the Regional Trial Court, Branch 29, San Pablo City,
No. SP-4748 (97). ON THE SECOND CAUSE OF ACTION
Civil Case No. SP-2222 (97) for Nullity of Real Estate Mortgage and
Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of
The following factual antecedents are undisputed. 1. The defendant to pay the plaintiff the sum of ₱40,000.00
Sale, Reconveyance with Prayer for Preliminary Injunction and
representing the value of the car which was burned.
Damages against petitioner. In the latter’s Answer with
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married Counterclaim, petitioner prayed for the dismissal of the complaint
on August 8, 1967. During their marriage, the spouses purchased a on the ground that the property in question was the exclusive ON BOTH CAUSES OF ACTION
house and lot situated at Barangay San Francisco, San Pablo City property of the late Marcelino Dailo, Jr.
from a certain Sandra Dalida. The subject property was declared for 1. The defendant to pay the plaintiff the sum of ₱25,000.00 as
tax assessment purposes under Assessment of Real Property No. 94- attorney’s fees;
After trial on the merits, the trial court rendered a Decision on
051-2802. The Deed of Absolute Sale, however, was executed only
October 18, 1997. The dispositive portion thereof reads as follows:
in favor of the late Marcelino Dailo, Jr. as vendee thereof to the 2. The defendant to pay plaintiff ₱25,000.00 as moral damages;
exclusion of his wife.3
WHEREFORE, the plaintiff having proved by the preponderance of
evidence the allegations of the Complaint, the Court finds for the 3. The defendant to pay the plaintiff the sum of ₱10,000.00 as
On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power exemplary damages;
plaintiff and hereby orders:
of Attorney (SPA) in favor of one Lilibeth Gesmundo, authorizing the
latter to obtain a loan from petitioner Homeowners Savings and
ON THE FIRST CAUSE OF ACTION: 4. To pay the cost of the suit.
Loan Bank to be secured by the spouses Dailo’s house and lot in San
Pablo City. Pursuant to the SPA, Gesmundo obtained a loan in the
1. The declaration of the following documents as null and void: The counterclaim is dismissed.
amount of ₱300,000.00 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 (a) The Deed of Real Estate Mortgage dated December 1, 1993 SO ORDERED.6
abovementioned transactions, including the execution of the SPA in executed before Notary Public Romulo Urrea and his notarial
favor of Gesmundo, took place without the knowledge and consent register entered as Doc. No. 212; Page No. 44, Book No. XXI, Series Upon elevation of the case to the Court of Appeals, the appellate
of respondent.4 of 1993. court affirmed the trial court’s 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 In the event that one spouse is incapacitated or otherwise unable to through their efforts or by chance.17 Unlike the absolute community
partnership.7 The appellate court declared as void the mortgage on participate in the administration of the conjugal properties, the of property wherein the rules on co-ownership apply in a suppletory
the subject property because it was constituted without the other spouse may assume sole powers of administration. These manner,18 the conjugal partnership shall be governed by the rules
knowledge and consent of respondent, in accordance with Article powers do not include the powers of disposition or encumbrance on contract of partnership in all that is not in conflict with what is
124 of the Family Code. Thus, it upheld the trial court’s order to which must have the authority of the court or the written consent of expressly determined in the chapter (on conjugal partnership of
reconvey the subject property to respondent.8 With respect to the the other spouse. In the absence of such authority or consent, the gains) or by the spouses in their marriage settlements.19 Thus, the
damage to respondent’s car, the appellate court found petitioner to disposition or encumbrance shall be void. . . . property relations of respondent and her late husband shall be
be liable therefor because it is responsible for the consequences of governed, foremost, by Chapter 4 on Conjugal Partnership of
the acts or omissions of the person it hired to accomplish the Petitioner argues that although Article 124 of the Family Code Gains of the Family Code and, suppletorily, by the rules on
assigned task.9 All told, the appellate court affirmed the trial requires the consent of the other spouse to the mortgage of partnership under the Civil Code. In case of conflict, the former
court’s Decision, but deleted the award for damages and attorney’s conjugal properties, the framers of the law could not have intended prevails because the Civil Code provisions on partnership apply only
fees for lack of basis.10 to curtail the right of a spouse from exercising full ownership over when the Family Code is silent on the matter.
the portion of the conjugal property pertaining to him under the
Hence, this petition, raising the following issues for this Court’s concept of co-ownership.12 Thus, petitioner would have this Court The basic and established fact is that during his lifetime, without the
consideration: uphold the validity of the mortgage to the extent of the late knowledge and consent of his wife, Marcelino Dailo, Jr. constituted
Marcelino Dailo, Jr.’s share in the conjugal partnership. a real estate mortgage on the subject property, which formed part
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE of their conjugal partnership. By express provision of Article 124 of
MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS CO-OWNER In Guiang v. Court of Appeals,13 it was held that the sale of a the Family Code, in the absence of (court) authority or written
THEREOF IS VALID AS TO HIS UNDIVIDED SHARE. conjugal property requires the consent of both the husband and consent of the other spouse, any disposition or encumbrance of the
wife.14 In applying Article 124 of the Family Code, this Court conjugal property shall be void.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE FOR declared that the absence of the consent of one renders the entire
THE PAYMENT OF THE LOAN OBTAINED BY THE LATE MARCELINO sale null and void, including the portion of the conjugal property The aforequoted provision does not qualify with respect to the
DAILO, JR. THE SAME HAVING REDOUNDED TO THE BENEFIT OF THE pertaining to the husband who contracted the sale. The same share of the spouse who makes the disposition or encumbrance in
FAMILY.11 principle in Guiang squarely applies to the instant case. As shall be the same manner that the rule on co-ownership under Article 493 of
discussed next, there is no legal basis to construe Article 493 of the the Civil Code does. Where the law does not distinguish, courts
First, petitioner takes issue with the legal provision applicable to the Civil Code as an exception to Article 124 of the Family Code. should not distinguish.20 Thus, both the trial court and the appellate
factual milieu of this case. It contends that Article 124 of the Family court are correct in declaring the nullity of the real estate mortgage
Code should be construed in relation to Article 493 of the Civil Code, Respondent and the late Marcelino Dailo, Jr. were married on on the subject property for lack of respondent’s consent.
which states: August 8, 1967. In the absence of a marriage settlement, the system
of relative community or conjugal partnership of gains governed the Second, petitioner imposes the liability for the payment of the
ART. 493. Each co-owner shall have the full ownership of his part property relations between respondent and her late principal obligation obtained by the late Marcelino Dailo, Jr. on the
and of the fruits and benefits pertaining thereto, and he may husband.15 With the effectivity of the Family Code on August 3, conjugal partnership to the extent that it redounded to the benefit
therefore alienate, assign or mortgage it, and even substitute 1988, Chapter 4 on Conjugal Partnership of Gains in the Family Code of the family.21
another person in its enjoyment, except when personal rights are was made applicable to conjugal partnership of gains already
involved. But the effect of the alienation or the mortgage, with established before its effectivity unless vested rights have already Under Article 121 of the Family Code, "[T]he conjugal partnership
respect to the co-owners, shall be limited to the portion which may been acquired under the Civil Code or other laws.16 shall be liable for: . . . (3) Debts and obligations contracted by either
be allotted to him in the division upon the termination of the co- spouse without the consent of the other to the extent that the
ownership. The rules on co-ownership do not even apply to the property family may have been benefited; . . . ." For the subject property to
relations of respondent and the late Marcelino Dailo, Jr. even in a be held liable, the obligation contracted by the late Marcelino Dailo,
Article 124 of the Family Code provides in part: suppletory manner. The regime of conjugal partnership of gains is a Jr. must have redounded to the benefit of the conjugal partnership.
special type of partnership, where the husband and wife place in a There must be the requisite showing then of some advantage which
common fund the proceeds, products, fruits and income from their clearly accrued to the welfare of the spouses. Certainly, to make a
ART. 124. The administration and enjoyment of the conjugal
separate properties and those acquired by either or both spouses conjugal partnership respond for a liability that should appertain to
partnership property shall belong to both spouses jointly. . . .
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 Petitioner’s
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
petitioner’s 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.
FIRST DIVISION prevent him from competently administering his properties, and in the mounting expenses for treatment and Hospitalization. The said
order to prevent the loss and dissipation of the Jardelezas’ real and court also made the pronouncement that the petition filed by Gilda
G.R. No. 109557 November 29, 2000 personal assets, there was a need for a court-appointed guardian to L. Jardeleza was "pursuant to Article 124 of the Family Code, and
administer said properties. It was prayed therein that Letters of that the proceedings thereon are governed by the rules on summary
JOSE UY and his Spouse GLENDA J. UY and GILDA L. Guardianship be issued in favor of herein private respondent Gilda proceedings sanctioned under Article 253 of the same Code x x x.
JARDELEZA, petitioners, Ledesma Jardeleza, wife of Dr. Ernesto Jardeleza, Sr. It was further
vs. prayed that in the meantime, no property of Dr. Ernesto Jardeleza, "The said court then disposed as follows:
COURT OF APPEALS and TEODORO L. JARDELEZA, respondents. Sr. be negotiated, mortgaged or otherwise alienated to third
persons, particularly Lot No. 4291 and all the improvements "WHEREFORE, there being factual and legal bases to the petition
thereon, located along Bonifacio Drive, Iloilo City, and covered by dated June 13, 1991, the Court hereby renders judgment as follows:
DECISION
T.C.T. No. 47337.
PARDO, J.: "1) declaring Ernesto Jardeleza, Sr., petitioner’s husband, to be
"A few days later, or on June 13, 1991, respondent Gilda L. Jardeleza incapacitated and unable to participate in the administration of
herself filed a petition docketed as Special Proceeding NO. 4691, conjugal properties;
The case is an appeal via certiorari from the decision1 of the Court of
before Branch 32 of the R.T.C. of Iloilo City, regarding the
Appeals and its resolution denying reconsideration 2 reversing that of
declaration of incapacity of Ernesto Jardeleza, Sr., assumption of
the Regional Trial Court, Iloilo, Branch 323 and declaring void the "2) authorizing petitioner Gilda L. Jardeleza to assume sole powers
sole powers of administration of conjugal properties, and
special proceedings instituted therein by petitioners to authorize of administration of their conjugal properties; and
authorization to sell the same (Annex "B"). Therein, the petitioner
petitioner Gilda L. Jardeleza, in view of the comatose condition of
Gilda L. Jardeleza averred the physical and mental incapacity of her
her husband, Ernesto Jardeleza, Sr., with the approval of the court, "3) authorizing aforesaid petitioner to sell Lot No. 4291 of the
husband, who was then confined for intensive medical care and
to dispose of their conjugal property in favor of co-petitioners, their Cadastral Survey of Iloilo, situated in Iloilo City and covered by TCT
treatment at the Iloilo Doctor’s Hospital. She signified to the court
daughter and son in law, for the ostensible purpose of "financial No. 47337 issued in the names of Ernesto Jardeleza, Sr. and Gilda L.
her desire to assume sole powers of administration of their conjugal
need in the personal, business and medical expenses of her Jardeleza and the buildings standing thereof.
properties. She also alleged that her husband’s medical treatment
‘incapacitated’ husband."
and hospitalization expenses were piling up, accumulating to several
hundred thousands of pesos already. For this, she urgently needed "SO ORDERED.
The facts, as found by the Court of Appeals, are as follows: to sell one piece of real property, specifically Lot No. 4291 and its
improvements. Thus, she prayed for authorization from the court to "On June 24, 1991, herein petitioner Teodoro Jardeleza filed his
"This case is a dispute between Teodoro L. Jardeleza (herein sell said property. Opposition to the proceedings before Branch 32 in Spec. Proc. Case
respondent) on the one hand, against his mother Gilda L. Jardeleza, No. 4691, said petitioner being unaware and not knowing that a
and sister and brother-in-law, the spouses Jose Uy and Glenda "The following day, June 14, 1991, Branch 32 of the R.T.C. of Iloilo decision has already been rendered on the case by public
Jardeleza (herein petitioners) on the other hand. The controversy City issued an Order (Annex "C") finding the petition in Spec. Proc. respondent.
came about as a result of Dr. Ernesto Jardeleza, Sr.’s suffering of a No. 4691 to be sufficient in form and substance, and setting the
stroke on March 25, 1991, which left him comatose and bereft of hearing thereof for June 20, 1991. The scheduled hearing of the "On July 3, 1991, herein petitioner Teodoro Jardeleza filed a motion
any motor or mental faculties. Said Ernesto Jardeleza, Sr. is the petition proceeded, attended by therein petitioner Gilda Jardeleza, for reconsideration of the judgment in Spec. Proc. No. 4691 and a
father of herein respondent Teodoro Jardeleza and husband of her counsel, her two children, namely Ernesto Jardeleza, Jr., and motion for consolidation of the two cases (Annex "F"). He
herein private respondent Gilda Jardeleza. Glenda Jardeleza Uy, and Dr. Rolando Padilla, one of Ernesto propounded the argument that the petition for declaration of
Jardeleza, Sr.’s attending physicians. incapacity, assumption of sole powers of administration, and
"Upon learning that one piece of real property belonging to the authority to sell the conjugal properties was essentially a petition
senior Jardeleza spouses was about to be sold, petitioner Teodoro "On that same day, June 20, 1991, Branch 32 of the RTC of Iloilo City for guardianship of the person and properties of Ernesto Jardeleza,
Jardeleza, on June 6, 1991, filed a petition (Annex "A") before the rendered its Decision (Annex "D"), finding that it was convinced that Sr. As such, it cannot be prosecuted in accordance with the
R.T.C. of Iloilo City, Branch 25, where it was docketed as Special Ernesto Jardeleza, Sr. was truly incapacitated to participate in the provisions on summary proceedings set out in Article 253 of the
Proceeding No. 4689, in the matter of the guardianship of Dr. administration of the conjugal properties, and that the sale of Lot Family Code. It should follow the rules governing special
Ernesto Jardeleza, Sr. The petitioner averred therein that the No. 4291 and the improvements thereon was necessary to defray proceedings in the Revised Rules of Court which require procedural
present physical and mental incapacity of Dr. Ernesto Jardeleza, Sr. due process, particularly the need for notice and a hearing on the
merits. On the other hand, even if Gilda Jardeleza’s petition can be "While the motion for reconsideration was pending, Gilda Jardeleza partnership of the spouses Ernesto and Gilda Jardeleza, who are
prosecuted by summary proceedings, there was still a failure to disposed by absolute sale Lot No. 4291 and all its improvements to both still alive.
comply with the basic requirements thereof, making the decision in her daughter, Ma. Glenda Jardeleza Uy, for Eight Million Pesos
Spec. Proc. No. 4691 a defective one. He further alleged that under (P8,000,000.00), as evidenced by a Deed Absolute Sale dated July 8, "In view thereof, the Motion for Reconsideration of "oppositor"
the New Civil Code, Ernesto Jardeleza, Sr. had acquired vested rights 1991 executed between them (p. 111, Rollo). Under date of July 23, Teodoro L. Jardeleza, is hereby denied for lack of merit.
as a conjugal partner, and that these rights cannot be impaired or 1991, Gilda Jardeleza filed an urgent ex-parte motion for approval of
prejudiced without his consent. Neither can he be deprived of his the deed of absolute sale. "Considering the validity of the decision dated June 20, 1991, which
share in the conjugal properties through mere summary among others, authorized Gilda L. Jardeleza to sell Lot No. 4291 of
proceedings. He then restated his position that Spec. Proc. No. 4691 "On August 12, 1991 Teodoro Jardeleza filed his Opposition to the the Cadastral Survey of Iloilo, covered by Transfer Certificate of Title
should be consolidated with Spec. Proc. No. 4689 which was filed motion for approval of the deed of sale on the grounds that: (1) the No. 47337 issued in the names of Ernesto Jardeleza, Sr., and Gilda L.
earlier and pending before Branch 25. motion was prematurely filed and should be held in abeyance until Jardeleza and the building standing thereon, the Urgent Ex-Parte
the final resolution of the petition; (2) the motion does not allege Motion for Approval of Deed of Absolute Sale dated July 23, 1991,
"Teodoro Jardeleza also questioned the propriety of the sale of Lot nor prove the justifications for the sale; and (3) the motion does not filed by petitioner, through counsel, is hereby granted and the deed
No. 4291 and the improvements thereon supposedly to pay the allege that had Ernesto Jardeleza, Sr. been competent, he would of absolute sale, executed and notarized on July 8, 1991, by and
accumulated financial obligations arising from Ernesto Jardeleza, have given his consent to the sale. between Gilda L. Jardeleza, as vendor, and Ma. Glenda Jardeleza, as
Sr.’s hospitalization. He alleged that the market value of the vendee, is hereby approved, and the Register of Deeds of Iloilo City,
property would be around Twelve to Fifteen Million Pesos, but that "Judge Amelita K. del Rosario-Benedicto of Branch 32 of the is directed to register the sale and issue the corresponding transfer
he had been informed that it would be sold for much less. He also respondent Court, who had penned the decision in Spec. Proc. No. certificate of title to the vendee.
pointed out that the building thereon which houses the Jardeleza 4691 had in the meantime formally inhibited herself from further
Clinic is a monument to Ernesto Jardeleza Sr.’s industry, labor and acting in this case (Annex "I"). The case was then reraffled to Branch "SO ORDERED."4
service to his fellowmen. Hence, the said property has a lot of 28 of the said court.
sentimental value to his family. Besides, argued Teodoro Jardeleza,
On December 9, 1992, the Court of Appeals promulgated its
then conjugal partnership had other liquid assets to pay off all "On December 19, 1991, the said court issued an Order (Annex "M") decision reversing the appealed decision and ordering the trial court
financial obligations. He mentioned that apart from sufficient cash, denying herein petitioner’s motion for reconsideration and to dismiss the special proceedings to approve the deed of sale,
Jardeleza, Sr. owned stocks of Iloilo Doctors’ Hospital which can be approving respondent Jardeleza’s motion for approval of the deed which was also declared void.5
off-set against the cost of medical and hospital bills. Furthermore, of absolute sale. The said court ruled that:
Ernesto Jardeleza, Sr. enjoys certain privileges at the said hospital
On December 29, 1992, petitioners filed a motion for
which allows him to pay on installment basis. Moreover, two of
"After a careful and thorough perusal of the decision, dated June 20, reconsideration,6 however, on March 29, 1993, the Court of Appeals
Ernesto Jardeleza Sr.’s attending physicians are his own sons who do
1991, the Motion for Reconsideration, as well as its supplements denied the motion, finding no cogent and compelling reason to
not charge anything for their professional services.
filed by "oppositor", Teodoro L. Jardeleza, through counsel, and the disturb the decision.7
opposition to the Motion for Reconsideration, including its
"On July 4, 1991, Teodoro Jardeleza filed in Spec. Proc. No. 4691 a supplements, filed by petitioner, through counsel, this Court is of Hence, this appeal.8
supplement to his motion for reconsideration (Annex "G"). He the opinion and so holds, that her Honor, Amelita K. del Rosario-
reiterated his contention that summary proceedings was irregularly Benedicto, Presiding Judge of Branch 32, of this Court, has properly
applied. He also noted that the provisions on summary proceedings The issue raised is whether petitioner Gilda L. Jardeleza as the wife
observed the procedure embodied under Article 253, in relation to
found in Chapter 2 of the Family Code comes under the heading on of Ernesto Jardeleza, Sr. who suffered a stroke, a cerebrovascular
Article 124, of the Family Code, in rendering her decision dated June
"Separation in Fact Between Husband and Wife" which accident, rendering him comatose, without motor and mental
20, 1991.
contemplates of a situation where both spouses are of disposing faculties, and could not manage their conjugal partnership property
mind. Thus, he argued that were one spouse is "comatose without may assume sole powers of administration of the conjugal property
"Also, as correctly stated by petitioner, through counsel, that under Article 124 of the Family Code and dispose of a parcel of land
motor and mental faculties," the said provisions cannot be made to
"oppositor" Teodor L. Jardeleza does not have the personality to with its improvements, worth more than twelve million pesos, with
apply.
oppose the instant petition considering that the property or the approval of the court in a summary proceedings, to her co-
properties, subject of the petition, belongs to the conjugal petitioners, her own daughter and son-in-law, for the amount of
eight million pesos.
The Court of Appeals ruled that in the condition of Dr. Ernesto infarct.9 In such case, the proper remedy is a judicial guardianship
Jardeleza, Sr., the procedural rules on summary proceedings in proceedings under Rule 93 of the 1964 Revised Rules of Court.
relation to Article 124 of the Family Code are not applicable.
Because Dr. Jardeleza, Sr. was unable to take care of himself and Even assuming that the rules of summary judicial proceedings under
manage the conjugal property due to illness that had rendered him the Family Code may apply to the wife's administration of the
comatose, the proper remedy was the appointment of a judicial conjugal property, the law provides that the wife who assumes sole
guardian of the person or estate or both of such incompetent, under powers of administration has the same powers and duties as a
Rule 93, Section 1, 1964 Revised Rules of Court. Indeed, petitioner guardian under the Rules of Court.10
earlier had filed such a petition for judicial guardianship.
Consequently, a spouse who desires to sell real property as such
Article 124 of the Family Code provides as follows: administrator of the conjugal property must observe the procedure
for the sale of the ward’s estate required of judicial guardians under
"ART. 124. The administration and enjoyment of the conjugal Rule 95, 1964 Revised Rules of Court, not the summary judicial
partnership property shall belong to both spouses jointly. In case of proceedings under the Family Code.
disagreement, the husband’s decision shall prevail, subject to
recourse to the court by the wife for a proper remedy which must In the case at bar, the trial court did not comply with the procedure
be availed of within five years from the date of the contract under the Revised Rules of Court.1âwphi1 Indeed, the trial court did
implementing such decision. not even observe the requirements of the summary judicial
proceedings under the Family Code. Thus, the trial court did not
"In the event that one spouse is incapacitated or otherwise unable serve notice of the petition to the incapacitated spouse; it did not
to participate in the administration of the conjugal properties, the require him to show cause why the petition should not be granted.
other spouse may assume sole powers of administration. These
powers do not include the powers of disposition or encumbrance Hence, we agree with the Court of Appeals that absent an
which must have the authority of the court or the written consent of opportunity to be heard, the decision rendered by the trial court is
the other spouse. In the absence of such authority or consent, the void for lack of due process. The doctrine consistently adhered to by
disposition or encumbrance shall be void. However, the transaction this Court is that a denial of due process suffices to cast on the
shall be construed as a continuing offer on the part of the official act taken by whatever branch of the government the impress
consenting spouse and the third person, and may be perfected as a of nullity.11 A decision rendered without due process is void ab
binding contract upon the acceptance by the other spouse or initio and may be attacked directly or collaterally.12 "A decision is
authorization by the court before the offer is withdrawn by either or void for lack of due process if, as a result, a party is deprived of the
both offerors. (165a)." opportunity of being heard."13 "A void decision may be assailed or
impugned at any time either directly or collaterally, by means of a
In regular manner, the rules on summary judicial proceedings under separate action, or by resisting such decision in any action or
the Family Code govern the proceedings under Article 124 of the proceeding where it is invoked."14
Family Code. The situation contemplated is one where the spouse is
absent, or separated in fact or has abandoned the other or consent WHEREFORE, the Court AFFIRMS the decision of the Court of
is withheld or cannot be obtained. Such rules do not apply to cases Appeals in CA-G. R. SP No. 26936, in toto.
where the non-consenting spouse is incapacitated or incompetent
to give consent. In this case, the trial court found that the subject Costs against petitioners.
spouse "is an incompetent" who was in comatose or semi-comatose
condition, a victim of stroke, cerebrovascular accident, without
SO ORDERED.
motor and mental faculties, and with a diagnosis of brain stem
FIRST DIVISION 6th month P200,000.00 P300,000.00 A Motion to Dismiss14 was filed by respondents which was denied by
the trial court in its Resolution of July 21, 1992.15
12th month 700,000.00 1,600,000.00
G.R. No. 147978 January 23, 2002
18th month 500,000.00 Respondents then filed their Answer with Compulsory Counter-
THELMA A. JADER-MANALO, petitioner, claim, alleging that it was an agreement between herein petitioner
vs. and respondent Edilberto Camaisa that the sale of the subject
NORMA FERNANDEZ C. CAMAISA and EDILBERTO This agreement was handwritten by petitioner and signed by properties was still subject to the approval and conformity of his
CAMAISA, respondents. Edilberto.6 When petitioner pointed out the conjugal nature of the wife Norma Camaisa.16 Thereafter, when Norma refused to give her
properties, Edilberto assured her of his wife's conformity and consent to the sale, her refusal was duly communicated by Edilberto
KAPUNAN, J.: consent to the sale.7 The formal typewritten Contracts to Sell were to petitioner.17 The checks issued by petitioner were returned to her
thereafter prepared by petitioner. The following day, petitioner, the by Edilberto and she accepted the same without any
real estate broker and Edilberto met in the latter's office for the objection.18 Respondent further claimed that the acceptance of the
The issue raised in this case is whether or not the husband may
validly dispose of a conjugal property without the wife's written formal signing of the typewritten Contracts to Sell. 8 After Edilberto checks returned to petitioner signified her assent to the cancellation
signed the contracts, petitioner delivered to him two checks, of the sale of the subject properties. 19 Respondent Norma denied
consent.
namely, UCPB Check No. 62807 dated April 15, 1992 for that she ever participated in the negotiations for the sale of the
₱200,000.00 and UCPB Check No. 62808 also dated April 15, 1992 subject properties and that she gave her consent and conformity to
The present controversy had its beginning when petitioner Thelma
for ₱100,000.00 in the presence of the real estate broker and an the same.20
A. Jader-Manalo allegedly came across an advertisement placed by
employee in Edilberto's office.9 The contracts were given to
respondents, the Spouses Norma Fernandez C. Camaisa and
Edilberto for the formal affixing of his wife's signature. On October 20, 1992, respondent Norma F. Camaisa filed a Motion
Edilberto Camaisa, in the Classified Ads Section of the newspaper
for Summary Judgment21 asserting that there is no genuine issue as
BULLETIN TODAY in its April, 1992 issue, for the sale of their ten-
The following day, petitioner received a call from respondent to any material fact on the basis of the pleadings and admission of
door apartment in Makati, as well as that in Taytay, Rizal.
Norma, requesting a meeting to clarify some provisions of the the parties considering that the wife's written consent was not
contracts.10 To accommodate her queries, petitioner, accompanied obtained in the contract to sell, the subject conjugal properties
As narrated by petitioner in her complaint filed with the Regional
by her lawyer, met with Edilberto and Norma and the real estate belonging to respondents; hence, the contract was null and void.
Trial Court of Makati, Metro Manila, she was interested in buying
broker at Cafe Rizal in Makati.11 During the meeting, handwritten
the two properties so she negotiated for the purchase through a
notations were made on the contracts to sell, so they arranged to On April 14, 1993, the trial court rendered a summary judgment
real estate broker, Mr. Proceso Ereno, authorized by respondent
incorporate the notations and to meet again for the formal signing dismissing the complaint on the ground that under Art. 124 of the
spouses.1 Petitioner made a visual inspection of the said lots with
of the contracts.12 Family Code, the court cannot intervene to authorize the
the real estate broker and was shown the tax declarations, real
transaction in the absence of the consent of the wife since said wife
property tax payment receipts, location plans, and vicinity maps
When petitioner met again with respondent spouses and the real who refused to give consent had not been shown to be
relating to the properties.2 Thereafter, petitioner met with the
estate broker at Edilberto's office for the formal affixing of Norma's incapacitated. The dispositive portion of the trial court's decision
vendors who turned out to be respondent spouses. She made a
signature, she was surprised when respondent spouses informed reads:
definite offer to buy the properties to respondent Edilberto Camaisa
with the knowledge and conformity of his wife, respondent Norma her that they were backing out of the agreement because they
Camaisa in the presence of the real estate broker.3 After some needed "spot cash" for the full amount of the WHEREFORE, considering these premises, judgment is
bargaining, petitioner and Edilberto agreed upon the purchase price consideration.13 Petitioner reminded respondent spouses that the hereby rendered:
of ₱1,500,000.00 for the Taytay property and ₱2,100,000.00 for the contracts to sell had already been duly perfected and Norma's
Makati property4 to be paid on installment basis with refusal to sign the same would unduly prejudice petitioner. Still, 1. Dismissing the complaint and ordering the cancellation
downpayments of ₱100,000.00 and ₱200,000.00, respectively, on Norma refused to sign the contracts prompting petitioner to file a of the Notice of Lis Pendens by reason of its filing on TCT
April 15, 1992. The balance thereof was to be paid as follows5 : complaint for specific performance and damages against Nos. (464860) S-8724 and (464861) S-8725 of the Registry
respondent spouses before the Regional Trial Court of Makati, of Deeds at Makati and on TCT Nos. 295976 and 295971 of
Branch 136 on April 29, 1992, to compel respondent Norma Camaisa the Registry of Rizal.
Taytay Property Makati Property to sign the contracts to sell.
2. Ordering plaintiff Thelma A. Jader to pay defendant EJECTMENT OF TENANTS, SUBDIVISION OF TITLE AND consent of the wife, otherwise, the disposition is void. Thus, Article
spouses Norma and Edilberto Camaisa, FIFTY THOUSAND RESCISSION IN CASE OF NONPAYMENT, WHICH PETITIONER 124 of the Family Code provides:
(₱50,000.00) as Moral Damages and FIFTY THOUSAND READILY AGREED AND ACCEDED TO THEIR INCLUSION;
(₱50,000.00) as Attorney's Fees. Art. 124. The administration and enjoyment of the conjugal
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED partnership property shall belong to both spouses jointly.
Costs against plaintiff.22 WHEN IT FAILED TO CONSIDER THAT CONTRACT OF SALE IS In case of disagreement, the husband's decision shall
CONSENSUAL AND IT IS PERFECTED BY THE MERE CONSENT prevail, subject to recourse to the court by the wife for a
Petitioner, thus, elevated the case to the Court of Appeals. On OF THE PARTIES AND THE APPLICABLE PROVISIONS ARE proper remedy, which must be availed of within five years
November 29, 2000, the Court of Appeals affirmed the dismissal by ARTICLES 1157, 1356, 1357, 1358, 1403, 1405 AND 1475 OF from the date of the contract implementing such decision.
the trial court but deleted the award of ₱50,000.00 as damages and THE CIVIL CODE OF THE PHILIPPINES AND GOVERNED BY
₱50,000.00 as attorney's fees. THE STATUTE OF FRAUD.23 In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
The Court of Appeals explained that the properties subject of the The Court does not find error in the decisions of both the trial court properties, the other spouse may assume sole powers of
contracts were conjugal properties and as such, the consent of both and the Court of Appeals. administration. These powers do not include the powers of
spouses is necessary to give effect to the sale. Since private disposition or encumbrance which must have the authority
respondent Norma Camaisa refused to sign the contracts, the sale Petitioner alleges that the trial court erred when it entered a of the court or the written consent of the other spouse. In
was never perfected. In fact, the downpayment was returned by summary judgment in favor of respondent spouses there being a the absence of such authority or consent the disposition or
respondent spouses and was accepted by petitioner. The Court of genuine issue of fact. Petitioner maintains that the issue of whether encumbrance shall be void. However, the transaction shall
Appeals also stressed that the authority of the court to allow sale or the contracts to sell between petitioner and respondent spouses be construed as a continuing offer on the part of the
encumbrance of a conjugal property without the consent of the was perfected is a question of fact necessitating a trial on the consenting spouse and the third person, and may be
other spouse is applicable only in cases where the said spouse is merits. perfected as a binding contract upon the acceptance by the
incapacitated or otherwise unable to participate in the other spouse or authorization by the court before the offer
administration of the conjugal property. The Court does not agree. A summary judgment is one granted by is withdrawn by either or both offerors. (Underscoring
the court upon motion by a party for an expeditious settlement of a ours.)
Hence, the present recourse assigning the following errors: case, there appearing from the pleadings, depositions, admissions
and affidavits that there are no important questions or issues of fact The properties subject of the contracts in this case were conjugal;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED involved, and that therefore the moving party is entitled to hence, for the contracts to sell to be effective, the consent of both
IN RENDERING SUMMARY JUDGMENT IN DISMISSING THE judgment as a matter of law.24 A perusal of the pleadings submitted husband and wife must concur.
COMPLAINT ENTIRELY AND ORDERING THE CANCELLATION by both parties show that there is no genuine controversy as to the
OF NOTICE OF LIS PENDENS ON THE TITLES OF THE SUBJECT facts involved therein. Respondent Norma Camaisa admittedly did not give her written
REAL PROPERTIES; consent to the sale. Even granting that respondent Norma actively
Both parties admit that there were negotiations for the sale of four participated in negotiating for the sale of the subject properties,
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED parcels of land between petitioner and respondent spouses; that which she denied, her written consent to the sale is required by law
IN FAILING TO CONSIDER THAT THE SALE OF REAL petitioner and respondent Edilberto Camaisa came to an agreement for its validity. Significantly, petitioner herself admits that Norma
PROPERTIES BY RESPONDENTS TO PETITIONER HAVE as to the price and the terms of payment, and a downpayment was refused to sign the contracts to sell. Respondent Norma may have
ALREADY BEEN PERFECTED, FOR AFTER THE LATTER PAID paid by petitioner to the latter; and that respondent Norma refused been aware of the negotiations for the sale of their conjugal
P300,000.00 DOWNPAYMENT, RESPONDENT MRS. to sign the contracts to sell. The issue thus posed for resolution in properties. However, being merely aware of a transaction is not
CAMAISA NEVER OBJECTED TO STIPULATIONS WITH the trial court was whether or not the contracts to sell between consent.25
RESPECT TO PRICE, OBJECT AND TERMS OF PAYMENT IN petitioner and respondent spouses were already perfected such
THE CONTRACT TO SELL ALREADY SIGNED BY THE that the latter could no longer back out of the agreement. Finally, petitioner argues that since respondent Norma unjustly
PETITIONER, RESPONDENT MR. CAMAISA AND WITNESSES refuses to affix her signatures to the contracts to sell, court
MARKED AS ANNEX "G" IN THE COMPLAINT EXCEPT, FOR The law requires that the disposition of a conjugal property by the authorization under Article 124 of the Family Code is warranted.
MINOR PROVISIONS ALREADY IMPLIED BY LAW, LIKE husband as administrator in appropriate cases requires the written
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 wife's 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.
FIRST DIVISION 2. Recognizing as lawful and valid the ownership The Facts
and possession of plaintiff Gilda Corpuz over the
G.R. No. 125172 June 26, 1998 remaining one-half portion of Lot 9, Block 8, (LRC) The facts of this case are simple. Over the objection of private
Psd-165409 which has been the subject of the respondent and while she was in Manila seeking employment, her
Spouses ANTONIO and LUZVIMINDA GUIANG, petitioners, Deed of Transfer of Rights (Exh. "A"); husband sold to the petitioners-spouses one half of their conjugal
vs. peoperty, consisting of their residence and the lot on which it stood.
COURT OF APPEALS and GILDA COPUZ, respondents. 3. Ordering plaintiff Gilda Corpuz to reimburse The circumstances of this sale are set forth in the Decision of
defendants Luzviminda Guiang the amount of Respondent Court, which quoted from the Decision of the trial court
PANGANIBAN, J.: NINE THOUSAND (P9,000.00) PESOS as follows: 8
corresponding to the payment made by
defendants Guiangs to Manuel Callejo for the 1. Plaintiff Gilda Corpuz and defendant Judie
The sale of a conjugal property requires the consent of both the
unpaid balance of the account of plaintiff in favor Corpuz are legally married spouses. They were
husband and the wife. The absence of the consent of one renders
of Manuel Callejo, and another sum of P379.62 married on December 24, 1968 in Bacolod City,
the sale null and void, while the vitiation thereof makes it merely
representing one-half of the amount of realty before a judge. This is admitted by defendants-
voidable. Only in the latter case can ratification cure the defect.
taxes paid by defendants Guiangs on Lot 9, Block spouses Antonio and Luzviminda Guiang in their
8, (LRC) Psd-165409, both with legal interests answer, and also admitted by defendant Judie
The Case
thereon computed from the finality of the Corpuz when he testified in court (tsn. p. 3, June 9,
decision. 1992), although the latter says that they were
These were the principles that guided the Court in deciding this
married in 1967. The couple have three children,
petition for review of the Decision 1 dated January 30, 1996 and the
No pronouncement as to costs in view of the namely: Junie — 18 years old, Harriet — 17 years
Resolution 2 dated May 28, 1996, promulgated by the Court of
factual circumstances of the case. of age, and Jodie or Joji, the youngest, who was 15
Appeals in CA-GR CV No. 41758, affirming the Decision of the lower
years of age in August, 1990 when her mother
court and denying reconsideration, respectively.
Dissatisfied, petitioners-spouses filed an appeal with the Court of testified in court.
Appeals. Respondent Court, in its challenged Decision, ruled as
On May 28, 1990, Private Respondent Gilda Corpuz filed an
follow: 6 Sometime on February 14, 1983, the couple Gilda
Amended Complainant 3 against her husband Judie Corpuz and
and Judie Corpuz, with plaintiff-wife Gilda Corpuz
Petitioner-Spouses Antonio and Luzviminda Guiang. The said
WHEREFORE, the appealed of the lower court in as vendee, bought a 421 sq. meter lot located in
Complaint sought the declaration of a certain deed of sale, which
Civil Case No. 204 is hereby AFFIRMED by this Barangay Gen. Paulino Santos (Bo. 1), Koronadal,
involved the conjugal property of private respondent and her
Court. No costs considering plaintiff-appellee's South Cotabato, and particularly known as Lot 9,
husband, null and void. The case was raffled to the Regional Trial
failure to file her brief despite notice. Block 8, (LRC) Psd-165409 from Manuel Callejo
Court of Koronadal, South Cotabato, Branch 25. In due course, the
who signed as vendor through a conditional deed
trial court rendered a Decision 4 dated September 9, 1992, disposing
Reconsideration was similarly denied by the same court in its of sale for a total consideration of P14,735.00. The
as follow: 5
assailed Resolution: 7 consideration was payable in installment, with
right of cancellation in favor of vendor should
ACCORDINGLY, judgment is rendered for the vendee fail to pay three successive installments
plaintiff and against the defendants, Finding that the issues raised in defendants-
(Exh. "2", tsn p. 6, February 14, 1990).
appellants motion for reconsideration of Our
decision in this case of January 30, 1996, to be a
1. Declaring both the Deed of Transfer of Rights 2. Sometime on April 22, 1988, the couple Gilda
mere rehash of the same issues which we have
dated March 1, 1990 (Exh. "A") and the "amicable and Judie Corpuz sold one-half portion of their Lot
already passed upon in the said decision, and
settlement" dated March 16, 1990 (Exh. "B") as No. 9, Block 8, (LRC) Psd-165409 to the
there [being] no cogent reason to disturb the
null void and of no effect; defendants-spouses Antonio and Luzviminda
same, this Court RESOLVED to DENY the instant
motion for reconsideration for lack of merit. 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 sold to defendant Luzviminda Guiang thru a barangay authorities as Barangay Case No. 38 for
neighbors of the Corpuzes. document known as "Deed of Transfer of Rights" "trespassing". On March 16, 1990, the parties
(Exh. "A") the remaining one-half portion of their thereat signed a document known as "amicable
3. Plaintiff Gilda Corpuz left for Manila sometime lot and the house standing thereon for a total settlement". In full, the settlement provides for, to
in June 1989. She was trying to look for work consideration of P30,000.00 of which P5,000.00 wit:
abroad, in [the] Middle East. Unfortunately, she was to be paid in June, 1990. Transferor Judie
became a victim of an unscrupulous illegal Corpuz's children Junie and Harriet signed the That respondent, Mrs. Gilda
recruiter. She was not able to go abroad. She document as witness. Corpuz and her three children,
stayed for sometime in Manila however, coming namely: Junie, Hariet and Judie
back to Koronadal, South Cotabato, . . . on March Four (4) days after March 1, 1990 or on March 5, to leave voluntarily the house of
11, 1990. Plaintiff's departure for Manila to look 1990, obviously to cure whatever defect in Mr. and Mrs. Antonio Guiang,
for work in the Middle East was with the consent defendant Judie Corpuz's title over the lot where they are presently
of her husband Judie Corpuz (tsn. p. 16, Aug. 12, transferred, defendant Luzviminda Guiang as boarding without any charge, on
1990; p. 10 Sept. 6, 1991). vendee executed another agreement over Lot 9, or before April 7, 1990.
Block 8, (LRC) Psd-165408 (Exh. "3"), this time with
After his wife's departure for Manila, defendant Manuela Jimenez Callejo, a widow of the original FAIL NOT UNDER THE PENALTY
Judie Corpuz seldom went home to the conjugal registered owner from whom the couple Judie and OF THE LAW.
dwelling. He stayed most of the time at his place Gilda Corpuz originally bought the lot (Exh. "2"),
of work at Samahang Nayon Building, a hotel, who signed as vendor for a consideration of Believing that she had received the shorter end of
restaurant, and a cooperative. Daughter Herriet P9,000.00. Defendant Judie Corpuz signed as a the bargain, plaintiff to the Barangay Captain of
Corpuz went to school at King's College, Bo. 1, witness to the sale (Exh. "3-A"). The new sale (Exh. Barangay Paulino Santos to question her signature
Koronadal, South Cotabato, but she was at the "3") describes the lot sold as Lot 8, Block 9, (LRC) on the amicable settlement. She was referred
same time working as household help of, and Psd-165408 but it is obvious from the mass of however to the Office-In-Charge at the time, a
staying at, the house of Mr. Panes. Her brother evidence that the correct lot is Lot 8, Block 9, (LRC) certain Mr. de la Cruz. The latter in turn told her
Junie was not working. Her younger sister Jodie Psd-165409, the very lot earlier sold to the couple that he could not do anything on the matter (tsn.
(Jojie) was going to school. Her mother sometimes Gilda and Judie Corpuz. p. 31, Aug. 17, 1990).
sent them money (tsn. p. 14, Sept. 6, 1991.)
5. Sometimes on March 11, 1990, plaintiff This particular point not rebutted. The Barangay
Sometime in January 1990, Harriet Corpuz learned returned home. She found her children staying Captain who testified did not deny that Mrs. Gilda
that her father intended to sell the remaining one- with other households. Only Junie was staying in Corpuz approached him for the annulment of the
half portion including their house, of their homelot their house. Harriet and Joji were with Mr. Panes. settlement. He merely said he forgot whether Mrs.
to defendants Guiangs. She wrote a letter to her Gilda gathered her children together and stayed at Corpuz had approached him (tsn. p. 13, Sept. 26,
mother informing her. She [Gilda Corpuz] replied their house. Her husband was nowhere to be 1990). We thus conclude that Mrs. Corpuz really
that she was objecting to the sale. Harriet, found. She was informed by her children that their approached the Barangay Captain for the
however, did not inform her father about this; but father had a wife already. annulment of the settlement. Annulment not
instead gave the letter to Mrs. Luzviminda Guiang having been made, plaintiff stayed put in her
so that she [Guiang] would advise her father (tsn. 6. For staying in their house sold by her husband, house and lot.
pp. 16-17, Sept. 6, 1991). plaintiff was complained against by defendant
Luzviminda Guiang and her husband Antonio 7. Defendant-spouses Guiang followed thru the
4. However, in the absence of his wife Gilda Guiang before the Barangay authorities of amicable settlement with a motion for the
Corpuz, defendant Judie Corpuz pushed through Barangay General Paulino Santos (Bo. 1), execution of the amicable settlement, filing the
the sale of the remaining one-half portion of Lot 9, Koronadal, South Cotabato, for trespassing (tsn. p. same with the Municipal Trial Court of Koronadal,
Block 8, (LRC) Psd-165409. On March 1, 1990, he 34, Aug. 17, 1990). The case was docketed by the South Cotabato. The proceedings [are] still
pending before the said court, with the filing of II These contracts are binding, unless they are
the instant suit. annulled by a proper action in court. They are
Whether or not the Cour of Appeals erred in not susceptible of ratification.(n)
8. As a consequence of the sale, the spouses declairing as voidable contract under Art. 1390 of
Guiang spent P600.00 for the preparation of the the Civil Code the impugned Deed of Transfer of The error in petitioners' contention is evident. Article 1390, par. 2,
Deed of Transfer of Rights, Exh. "A", P9,000.00 as Rights which was validly ratified thru the refers to contracts visited by vices of consent, i.e., contracts which
the amount they paid to Mrs. Manuela Callejo, execution of the "amicable settlement" by the were entered into by a person whose consent was obtained and
having assumed the remaining obligation of the contending parties. vitiated through mistake, violence, intimidation, undue influence or
Corpuzes to Mrs. Callejo (Exh. "3"); P100.00 for fraud. In this instance, private respondent's consent to the contract
the preparation of Exhibit "3"; a total of P759.62 III of sale of their conjugal property was totally inexistent or absent.
basic tax and special education fund on the lot; Gilda Corpuz, on direct examination, testified thus: 11
P127.50 as the total documentary stamp tax on Whether or not the Court of Appeals erred in not
the various documents; P535.72 for the capital setting aside the findings of the Court a quowhich Q Now, on March 1, 1990, could
gains tax; P22.50 as transfer tax; a standard fee of recognized as lawful and valid the ownership and you still recall where you were?
P17.00; certification fee of P5.00. These expenses possession of private respondent over the
particularly the taxes and other expenses towards remaining one half (1/2) portion of the properly. A I was still in Manila during that
the transfer of the title to the spouses Guiangs time.
were incurred for the whole Lot 9, Block 8, (LRC)
In a nutshell, petitioners-spouses contend that (1) the contract of
Psd-165409.
sale (Deed of Transfer of Rights) was merely voidable, and (2) such xxx xxx xxx
contract was ratified by private respondent when she entered into
Ruling of Respondent Court an amicable sttlement with them. ATTY. FUENTES:

Respondent Court found no reversible error in the trial court's ruling This Court's Ruling Q When did you come back to
that any alienation or encumbrance by the husband of the conjugal
Koronadal, South Cotabato?
propety without the consent of his wife is null and void as provided
The petition is bereft of merit.
under Article 124 of the Family Code. It also rejected petitioners'
A That was on March 11, 1990,
contention that the "amicable sttlement" ratified said
First Issue: Void or Voidable Contract? Ma'am.
sale, citing Article 1409 of the Code which expressly bars ratification
of the contracts specified therein, particularly those "prohibited or
declared void by law." Petitioners insist that the questioned Deed of Transfer of Rights was Q Now, when you arrived at
validly executed by the parties-litigants in good faith and for Koronadal, was there any
valuable consideration. The absence of private respondent's consent problem which arose concerning
Hence, this petition. 9
merely rendered the Deed voidable under Article 1390 of the Civil the ownership of your
Code, which provides: residential house at Callejo
The Issues
Subdivision?
Art. 1390. The following contracts are voidable or
In their Memorandum, petitioners assign to public respondent the
annullable, even though there may have been no A When I arrived here in
following errors: 10
damage to the contracting parties: Koronadal, there was a problem
which arose regarding my
I residential house and lot
xxx xxx xxx
because it was sold by my
Whether or not the assailed Deed of Transfer of husband without my knowledge.
(2) Those where the consent is vitiated by mistake,
Rights was validly executed.
violence, intimidation, undue influence or fraud.
This being the case, said contract properly falls within the ambit of voidable. The offended wife may bring an action In sum, the nullity of the contract of sale is premised on the absence
Article 124 of the Family Code, which was correctly applied by the to annul the said alienation or encumbrance. Thus of private respondent's consent. To constitute a valid contract, the
teo lower court: the provision of Article 173 of the Civil Code of the Civil Code requires the concurrence of the following elements: (1)
Philippines, to wit: cause, (2) object, and (3) consent, 14 the last element being
Art. 124. The administration and enjoyment of the indubitably absent in the case at bar.
conjugal partnerhip properly shall belong to both Art. 173. The wife may, during
spouses jointly. In case of disgreement, the the marriage and within ten Second Issue: Amicable Settlement
husband's decision shall prevail, subject recourse years from the transaction
to the court by the wife for proper remedy, which questioned, ask the courts for Insisting that the contract of sale was merely voidable, petitioners
must be availed of within five years from the date the annulment of any contract of aver that it was duly ratified by the contending parties through the
of the contract implementing such decision. the husband entered into "amicable settlement" they executed on March 16, 1990 in
without her consent, when such Barangay Case No. 38.
In the event that one spouse is incapacitated or consent is required, or any act or
otherwise unable to participate in the contract of the husband which The position is not well taken. The trial and the appellate courts
administration of the conjugal properties, the tends to defraud her or impair have resolved this issue in favor of the private respondent. The trial
other spouse may assume sole powers of her interest in the conjugal court correctly held: 15
administration. These powers do not include the partnership property. Should the
powers of disposition or encumbrance which must wife fail to exercise this right,
By the specific provision of the law [Art. 1390, Civil
have the authority of the court or the written she or her heirs after the
Code] therefore, the Deed to Transfer of Rights
consent of the other spouse. In the absence of dissolution of the marriage, may
(Exh. "A") cannot be ratified, even by an "amicable
such authority or consent, the disposition or demand the value of property
settlement". The participation by some barangay
encumbrance shall be void. However, the fraudulently alienated by the
authorities in the "amicable settlement" cannot
transaction shall be construed as a continuing husband.(n)
otherwise validate an invalid act. Moreover, it
offer on the part of the consenting spouse and the cannot be denied that the "amicable settlement
third person, and may be perfected as a binding This particular provision giving the wife ten (10) (Exh. "B") entered into by plaintiff Gilda Corpuz
contract upon the acceptance by the other spouse years . . . during [the] marriage to annul the and defendent spouses Guiang is a contract. It is a
or authorization by the court before the offer is alienation or encumbrance was not carried over to direct offshoot of the Deed of Transfer of Rights
withdrawn by either or both offerors. (165a) the Family Code. It is thus clear that any alienation (Exh. "A"). By express provision of law, such a
(Emphasis supplied) or encumbrance made after August 3, 1988 when contract is also void. Thus, the legal provision, to
the Family Code took effect by the husband of the wit:
Comparing said law with its equivalent provision in the Civil Code, conjugal partnership property without the consent
the trial court adroitly explained the amendatory effect of the above of the wife is null and void.
Art. 1422. Acontract which is the
provision in this wise: 12 direct result of a previous illegal
Furthermore, it must be noted that the fraud and the intimidation contract, is also void and
The legal provision is clear. The disposition or referred to by petitioners were perpetrated in the execution of the inexistent. (Civil Code of the
encumbrance is void. It becomes still clearer if we document embodying the amicable settlement. Gilda Corpuz alleged Philippines).
compare the same with the equivalent provision during trial that barangay authorities made her sign said document
of the Civil Code of the Philippines. Under Article through misrepresentation and
In summation therefore, both the Deed of transfer
166 of the Civil Code, the husband cannot coercion. 13 In any event, its execution does not alter the void
of Rights (Exh. "A") and the "amicable settlement"
generally alienate or encumber any real property character of the deed of sale between the husband and the
(Exh. "3") are null and void.
of the conjugal partnershit without the wife's petitioners-spouses, as will be discussed later. The fact remains that
consent. The alienation or encumbrance if so such contract was entered into without the wife's consent.
Doctrinally and clearly, a void contract cannot be ratified. 16
made however is not null and void. It is merely
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.
SECOND DIVISION WHEREFORE, viewed from the foregoing considerations, judgment He is further ordered to reimburse [respondents] the sum of
is hereby rendered declaring the legal separation of plaintiff Rita C. [₱]19,000.00 as attorney's fees and litigation expenses of
G.R. No 176556 July 4, 2012 Quiao and defendant-respondent Brigido B. Quiao pursuant to [₱]5,000.00[.]
Article 55.
BRIGIDO B. QUIAO, Petitioner, SO ORDERED.5
vs. As such, the herein parties shall be entitled to live separately from
RITA C. QUIAO, KITCHIE C. QUIAO, LOTIS C. QUIAO, PETCHIE C. each other, but the marriage bond shall not be severed. Neither party filed a motion for reconsideration and appeal within
QUIAO, represented by their mother RITA QUIAO, Respondents. the period provided for under Section 17(a) and (b) of the Rule on
Except for Letecia C. Quiao who is of legal age, the three minor Legal Separation.6
DECISION children, namely, Kitchie, Lotis and Petchie, all surnamed Quiao shall
remain under the custody of the plaintiff who is the innocent On December 12, 2005, the respondents filed a motion for
REYES, J.: spouse. execution7 which the trial court granted in its Order dated
December 16, 2005, the dispositive portion of which reads:
The family is the basic and the most important institution of society. Further, except for the personal and real properties already
It is in the family where children are born and molded either to foreclosed by the RCBC, all the remaining properties, namely: "Wherefore, finding the motion to be well taken, the same is hereby
become useful citizens of the country or troublemakers in the granted. Let a writ of execution be issued for the immediate
community. Thus, we are saddened when parents have to separate 1. coffee mill in Balongagan, Las Nieves, Agusan del Norte; enforcement of the Judgment.
and fight over properties, without regard to the message they send
to their children. Notwithstanding this, we must not shirk from our 2. coffee mill in Durian, Las Nieves, Agusan del Norte; SO ORDERED."8
obligation to rule on this case involving legal separation escalating
to questions on dissolution and partition of properties. 3. corn mill in Casiklan, Las Nieves, Agusan del Norte; Subsequently, on February 10, 2006, the RTC issued a Writ of
Execution9 which reads as follows:
The Case 4. coffee mill in Esperanza, Agusan del Sur;
NOW THEREFORE, that of the goods and chattels of the [petitioner]
This case comes before us via Petition for Review 5. a parcel of land with an area of 1,200 square meters BRIGIDO B. QUIAO you cause to be made the sums stated in the
on Certiorari1 under Rule 45 of the Rules of Court. The petitioner located in Tungao, Butuan City; afore-quoted DECISION [sic], together with your lawful fees in the
seeks that we vacate and set aside the Order 2 dated January 8, 2007 service of this Writ, all in the Philippine Currency.
of the Regional Trial Court (RTC), Branch 1, Butuan City. In lieu of the 6. a parcel of agricultural land with an area of 5 hectares
said order, we are asked to issue a Resolution defining the net located in Manila de Bugabos, Butuan City; But if sufficient personal property cannot be found whereof to
profits subject of the forfeiture as a result of the decree of legal satisfy this execution and your lawful fees, then we command you
separation in accordance with the provision of Article 102(4) of the that of the lands and buildings of the said [petitioner], you make the
7. a parcel of land with an area of 84 square meters located
Family Code, or alternatively, in accordance with the provisions of said sums in the manner required by law. You are enjoined to
in Tungao, Butuan City;
Article 176 of the Civil Code. strictly observed Section 9, Rule 39, Rule [sic] of the 1997 Rules of
Civil Procedure.
8. Bashier Bon Factory located in Tungao, Butuan City;
Antecedent Facts
You are hereby ordered to make a return of the said proceedings
shall be divided equally between herein [respondents] and
On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a immediately after the judgment has been satisfied in part or in full
[petitioner] subject to the respective legitimes of the children and
complaint for legal separation against herein petitioner Brigido B. in consonance with Section 14, Rule 39 of the 1997 Rules of Civil
the payment of the unpaid conjugal liabilities of [₱]45,740.00.
Quiao (Brigido).3 Subsequently, the RTC rendered a Decision 4 dated Procedure, as amended.10
October 10, 2005, the dispositive portion of which provides:
[Petitioner’s] share, however, of the net profits earned by the
conjugal partnership is forfeited in favor of the common children.
On July 6, 2006, the writ was partially executed with the petitioner because the petitioner simply wanted to clarify the meaning of "net FORFEITURE AS A RESULT OF THE DECREE OF LEGAL SEPARATION
paying the respondents the amount of ₱46,870.00, representing the profit earned."19 Furthermore, the same Order held: WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER
following payments: THE CIVIL CODE?
ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered
(a) ₱22,870.00 – as petitioner's share of the payment of the set aside. NET PROFIT EARNED, which is subject of forfeiture in favor IV
conjugal share; of [the] parties' common children, is ordered to be computed in
accordance [with] par. 4 of Article 102 of the Family Code.20 WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE
(b) ₱19,000.00 – as attorney's fees; and SHARE OF THE GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP
On November 21, 2006, the respondents filed a Motion for AS A RESULT OF THE ISSUANCE OF THE DECREE OF LEGAL
(c) ₱5,000.00 – as litigation expenses. 11 Reconsideration,21 praying for the correction and reversal of the SEPARATION?23
Order dated November 8, 2006. Thereafter, on January 8,
On July 7, 2006, or after more than nine months from the 2007,22 the trial court had changed its ruling again and granted the Our Ruling
promulgation of the Decision, the petitioner filed before the RTC a respondents' Motion for Reconsideration whereby the Order dated
Motion for Clarification,12 asking the RTC to define the term "Net November 8, 2006 was set aside to reinstate the Order dated While the petitioner has raised a number of issues on the
Profits Earned." August 31, 2006. applicability of certain laws, we are well-aware that the respondents
have called our attention to the fact that the Decision dated
To resolve the petitioner's Motion for Clarification, the RTC issued Not satisfied with the trial court's Order, the petitioner filed on October 10, 2005 has attained finality when the Motion for
an Order13 dated August 31, 2006, which held that the phrase "NET February 27, 2007 this instant Petition for Review under Rule 45 of Clarification was filed.24 Thus, we are constrained to resolve first the
PROFIT EARNED" denotes "the remainder of the properties of the the Rules of Court, raising the following: issue of the finality of the Decision dated October 10, 2005 and
parties after deducting the separate properties of each [of the] subsequently discuss the matters that we can clarify.
spouse and the debts."14 The Order further held that after Issues
determining the remainder of the properties, it shall be forfeited in The Decision dated October 10, 2005 has become final and
favor of the common children because the offending spouse does I executory at the time the Motion for Clarification was filed on July
not have any right to any share of the net profits earned, pursuant 7, 2006.
to Articles 63, No. (2) and 43, No. (2) of the Family Code.15 The IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE
dispositive portion of the Order states: COMMON PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF Section 3, Rule 41 of the Rules of Court provides:
THE DECREE OF LEGAL SEPARATION GOVERNED BY ARTICLE 125
WHEREFORE, there is no blatant disparity when the sheriff intends (SIC) OF THE FAMILY CODE? Section 3. Period of ordinary appeal. - The appeal shall be taken
to forfeit all the remaining properties after deducting the payments within fifteen (15) days from notice of the judgment or final order
of the debts for only separate properties of the defendant- II appealed from. Where a record on appeal is required, the appellant
respondent shall be delivered to him which he has none. shall file a notice of appeal and a record on appeal within thirty (30)
WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE days from notice of the judgment or final order.
The Sheriff is herein directed to proceed with the execution of the CONJUGAL PARTNERSHIP FOR PURPOSES OF EFFECTING THE
Decision. FORFEITURE AUTHORIZED UNDER ARTICLE 63 OF THE FAMILY The period of appeal shall be interrupted by a timely motion for new
CODE? trial or reconsideration. No motion for extension of time to file a
IT IS SO ORDERED.16 motion for new trial or reconsideration shall be allowed.
III
Not satisfied with the trial court's Order, the petitioner filed a In Neypes v. Court of Appeals,25 we clarified that to standardize the
Motion for Reconsideration17 on September 8, 2006. Consequently, WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE appeal periods provided in the Rules and to afford litigants fair
the RTC issued another Order18 dated November 8, 2006, holding HUSBAND AND WIFE WHO GOT MARRIED IN 1977? CAN THE opportunity to appeal their cases, we held that "it would be
that although the Decision dated October 10, 2005 has become final FAMILY CODE OF THE PHILIPPINES BE GIVEN RETROACTIVE EFFECT practical to allow a fresh period of 15 days within which to file the
and executory, it may still consider the Motion for Clarification FOR PURPOSES OF DETERMINING THE NET PROFITS SUBJECT OF
notice of appeal in the RTC, counted from receipt of the order void judgment is no judgment at all. It never attains finality and him or it in the exercise thereof will amount to nothing more than
dismissing a motion for a new trial or motion for reconsideration."26 cannot be a source of any right nor any obligation."29 But what an error of judgment which may be reviewed or corrected only by
precisely is a void judgment in our jurisdiction? When does a appeal."37 Granting without admitting that the RTC's judgment
In Neypes, we explained that the "fresh period rule" shall also apply judgment becomes void? dated October 10, 2005 was erroneous, the petitioner's remedy
to Rule 40 governing appeals from the Municipal Trial Courts to the should be an appeal filed within the reglementary period.
RTCs; Rule 42 on petitions for review from the RTCs to the Court of "A judgment is null and void when the court which rendered it had Unfortunately, the petitioner failed to do this. He has already lost
Appeals (CA); Rule 43 on appeals from quasi-judicial agencies to the no power to grant the relief or no jurisdiction over the subject the chance to question the trial court's decision, which has become
CA and Rule 45 governing appeals by certiorari to the Supreme matter or over the parties or both."30 In other words, a court, which immutable and unalterable. What we can only do is to clarify the
Court. We also said, "The new rule aims to regiment or make the does not have the power to decide a case or that has no jurisdiction very question raised below and nothing more.
appeal period uniform, to be counted from receipt of the order over the subject matter or the parties, will issue a void judgment or
denying the motion for new trial, motion for reconsideration a coram non judice.31 For our convenience, the following matters cannot anymore be
(whether full or partial) or any final order or resolution." 27 In other disturbed since the October 10, 2005 judgment has already become
words, a party litigant may file his notice of appeal within a fresh 15- The questioned judgment does not fall within the purview of a void immutable and unalterable, to wit:
day period from his receipt of the trial court's decision or final order judgment. For sure, the trial court has jurisdiction over a case
denying his motion for new trial or motion for reconsideration. involving legal separation. Republic Act (R.A.) No. 8369 confers upon (a) The finding that the petitioner is the offending spouse
Failure to avail of the fresh 15-day period from the denial of the an RTC, designated as the Family Court of a city, the exclusive since he cohabited with a woman who is not his wife;38
motion for reconsideration makes the decision or final order in original jurisdiction to hear and decide, among others, complaints or
question final and executory. petitions relating to marital status and property relations of the (b) The trial court's grant of the petition for legal separation
husband and wife or those living together. 32 The Rule on Legal of respondent Rita;39
In the case at bar, the trial court rendered its Decision on October Separation33 provides that "the petition [for legal separation] shall
10, 2005. The petitioner neither filed a motion for reconsideration be filed in the Family Court of the province or city where the (c) The dissolution and liquidation of the conjugal
nor a notice of appeal. On December 16, 2005, or after 67 days had petitioner or the respondent has been residing for at least six partnership;40
lapsed, the trial court issued an order granting the respondent's months prior to the date of filing or in the case of a non-resident
motion for execution; and on February 10, 2006, or after 123 days respondent, where he may be found in the Philippines, at the
(d) The forfeiture of the petitioner's right to any share of
had lapsed, the trial court issued a writ of execution. Finally, when election of the petitioner."34 In the instant case, herein respondent
the net profits earned by the conjugal partnership;41
the writ had already been partially executed, the petitioner, on July Rita is found to reside in Tungao, Butuan City for more than six
7, 2006 or after 270 days had lapsed, filed his Motion for months prior to the date of filing of the petition; thus, the RTC,
Clarification on the definition of the "net profits earned." From the clearly has jurisdiction over the respondent's petition below. (e) The award to the innocent spouse of the minor
children's custody;42
foregoing, the petitioner had clearly slept on his right to question Furthermore, the RTC also acquired jurisdiction over the persons of
the RTC’s Decision dated October 10, 2005. For 270 days, the both parties, considering that summons and a copy of the complaint
petitioner never raised a single issue until the decision had already with its annexes were served upon the herein petitioner on (f) The disqualification of the offending spouse from
been partially executed. Thus at the time the petitioner filed his December 14, 2000 and that the herein petitioner filed his Answer inheriting from the innocent spouse by intestate
motion for clarification, the trial court’s decision has become final to the Complaint on January 9, 2001.35 Thus, without doubt, the succession;43
and executory. A judgment becomes final and executory when the RTC, which has rendered the questioned judgment, has jurisdiction
reglementary period to appeal lapses and no appeal is perfected over the complaint and the persons of the parties. (g) The revocation of provisions in favor of the offending
within such period. Consequently, no court, not even this Court, can spouse made in the will of the innocent spouse;44
arrogate unto itself appellate jurisdiction to review a case or modify From the aforecited facts, the questioned October 10, 2005
a judgment that became final.28 judgment of the trial court is clearly not void ab initio, since it was (h) The holding that the property relation of the parties is
rendered within the ambit of the court's jurisdiction. Being such, the conjugal partnership of gains and pursuant to Article 116 of
The petitioner argues that the decision he is questioning is a void same cannot anymore be disturbed, even if the modification is the Family Code, all properties acquired during the
judgment. Being such, the petitioner's thesis is that it can still be meant to correct what may be considered an erroneous conclusion marriage, whether acquired by one or both spouses, is
disturbed even after 270 days had lapsed from the issuance of the of fact or law.36 In fact, we have ruled that for "[as] long as the presumed to be conjugal unless the contrary is proved; 45
decision to the filing of the motion for clarification. He said that "a public respondent acted with jurisdiction, any error committed by
(i) The finding that the spouses acquired their real and Article 129 of the Family Code applies to the present case since the as the liquidation of the conjugal partnership assets and liabilities is
personal properties while they were living together;46 parties' property relation is governed by the system of relative concerned is Article 129 of the Family Code in relation to Article
community or conjugal partnership of gains. 63(2) of the Family Code. The latter provision is applicable because
(j) The list of properties which Rizal Commercial Banking according to Article 256 of the Family Code "[t]his Code shall have
Corporation (RCBC) foreclosed;47 The petitioner claims that the court a quo is wrong when it applied retroactive effect insofar as it does not prejudice or impair vested or
Article 129 of the Family Code, instead of Article 102. He confusingly acquired rights in accordance with the Civil Code or other law."58
(k) The list of the remaining properties of the couple which argues that Article 102 applies because there is no other provision
must be dissolved and liquidated and the fact that under the Family Code which defines net profits earned subject of Now, the petitioner asks: Was his vested right over half of the
respondent Rita was the one who took charge of the forfeiture as a result of legal separation. common properties of the conjugal partnership violated when the
administration of these properties;48 trial court forfeited them in favor of his children pursuant to Articles
Offhand, the trial court's Decision dated October 10, 2005 held that 63(2) and 129 of the Family Code?
(l) The holding that the conjugal partnership shall be liable Article 129(7) of the Family Code applies in this case. We agree with
to matters included under Article 121 of the Family Code the trial court's holding. We respond in the negative.
and the conjugal liabilities totaling ₱503,862.10 shall be
charged to the income generated by these properties;49 First, let us determine what governs the couple's property relation. Indeed, the petitioner claims that his vested rights have been
From the record, we can deduce that the petitioner and the impaired, arguing: "As earlier adverted to, the petitioner acquired
(m) The fact that the trial court had no way of knowing respondent tied the marital knot on January 6, 1977. Since at the vested rights over half of the conjugal properties, the same being
whether the petitioner had separate properties which can time of the exchange of marital vows, the operative law was the owned in common by the spouses. If the provisions of the Family
satisfy his share for the support of the family;50 Civil Code of the Philippines (R.A. No. 386) and since they did not Code are to be given retroactive application to the point of
agree on a marriage settlement, the property relations between the authorizing the forfeiture of the petitioner's share in the net
(n) The holding that the applicable law in this case is Article petitioner and the respondent is the system of relative community remainder of the conjugal partnership properties, the same impairs
129(7);51 or conjugal partnership of gains.55 Article 119 of the Civil Code his rights acquired prior to the effectivity of the Family Code." 59 In
provides: other words, the petitioner is saying that since the property
relations between the spouses is governed by the regime of
(o) The ruling that the remaining properties not subject to
Art. 119. The future spouses may in the marriage settlements agree Conjugal Partnership of Gains under the Civil Code, the petitioner
any encumbrance shall therefore be divided equally
upon absolute or relative community of property, or upon complete acquired vested rights over half of the properties of the Conjugal
between the petitioner and the respondent without
separation of property, or upon any other regime. In the absence of Partnership of Gains, pursuant to Article 143 of the Civil Code, which
prejudice to the children's legitime;52
marriage settlements, or when the same are void, the system of provides: "All property of the conjugal partnership of gains is owned
relative community or conjugal partnership of gains as established in common by the husband and wife."60 Thus, since he is one of the
(p) The holding that the petitioner's share of the net profits
in this Code, shall govern the property relations between husband owners of the properties covered by the conjugal partnership of
earned by the conjugal partnership is forfeited in favor of
and wife. gains, he has a vested right over half of the said properties, even
the common children;53 and
after the promulgation of the Family Code; and he insisted that no
Thus, from the foregoing facts and law, it is clear that what governs provision under the Family Code may deprive him of this vested
(q) The order to the petitioner to reimburse the right by virtue of Article 256 of the Family Code which prohibits
the property relations of the petitioner and of the respondent is
respondents the sum of ₱19,000.00 as attorney's fees and retroactive application of the Family Code when it will prejudice a
conjugal partnership of gains. And under this property relation, "the
litigation expenses of ₱5,000.00.54 person's vested right.
husband and the wife place in a common fund the fruits of their
separate property and the income from their work or
After discussing lengthily the immutability of the Decision dated However, the petitioner's claim of vested right is not one which is
industry."56 The husband and wife also own in common all the
October 10, 2005, we will discuss the following issues for the written on stone. In Go, Jr. v. Court of Appeals,61we define and
property of the conjugal partnership of gains. 57
enlightenment of the parties and the public at large. explained "vested right" in the following manner:
Second, since at the time of the dissolution of the petitioner and the
respondent's marriage the operative law is already the Family Code, A vested right is one whose existence, effectivity and extent do not
the same applies in the instant case and the applicable law in so far depend upon events foreign to the will of the holder, or to the
exercise of which no obstacle exists, and which is immediate and Furthermore, we take note that the alleged deprivation of the left which can be divided between the spouses or their respective
perfect in itself and not dependent upon a contingency. The term petitioner's "vested right" is one founded, not only in the provisions heirs.69 (Citations omitted)
"vested right" expresses the concept of present fixed interest which, of the Family Code, but in Article 176 of the Civil Code. This
in right reason and natural justice, should be protected against provision is like Articles 63 and 129 of the Family Code on the Finally, as earlier discussed, the trial court has already decided in its
arbitrary State action, or an innately just and imperative right which forfeiture of the guilty spouse's share in the conjugal partnership Decision dated October 10, 2005 that the applicable law in this case
enlightened free society, sensitive to inherent and irrefragable profits. The said provision says: is Article 129(7) of the Family Code.70 The petitioner did not file a
individual rights, cannot deny. motion for reconsideration nor a notice of appeal. Thus, the
Art. 176. In case of legal separation, the guilty spouse shall forfeit petitioner is now precluded from questioning the trial court's
To be vested, a right must have become a title—legal or equitable— his or her share of the conjugal partnership profits, which shall be decision since it has become final and executory. The doctrine of
to the present or future enjoyment of property.62(Citations omitted) awarded to the children of both, and the children of the guilty immutability and unalterability of a final judgment prevents us from
spouse had by a prior marriage. However, if the conjugal disturbing the Decision dated October 10, 2005 because final and
In our en banc Resolution dated October 18, 2005 for ABAKADA partnership property came mostly or entirely from the work or executory decisions can no longer be reviewed nor reversed by this
Guro Party List Officer Samson S. Alcantara, et al. v. The Hon. industry, or from the wages and salaries, or from the fruits of the Court.71
Executive Secretary Eduardo R. Ermita,63 we also explained: separate property of the guilty spouse, this forfeiture shall not
apply. From the above discussions, Article 129 of the Family Code clearly
The concept of "vested right" is a consequence of the constitutional applies to the present case since the parties' property relation is
guaranty of due process that expresses a present fixed interest In case there are no children, the innocent spouse shall be entitled governed by the system of relative community or conjugal
which in right reason and natural justice is protected against to all the net profits. partnership of gains and since the trial court's Decision has attained
arbitrary state action; it includes not only legal or equitable title to finality and immutability.
the enforcement of a demand but also exemptions from new From the foregoing, the petitioner's claim of a vested right has no
obligations created after the right has become vested. Rights are basis considering that even under Article 176 of the Civil Code, his The net profits of the conjugal partnership of gains are all the fruits
considered vested when the right to enjoyment is a present interest, share of the conjugal partnership profits may be forfeited if he is the of the separate properties of the spouses and the products of their
absolute, unconditional, and perfect or fixed and guilty party in a legal separation case. Thus, after trial and after the labor and industry.
irrefutable.64 (Emphasis and underscoring supplied) petitioner was given the chance to present his evidence, the
petitioner's vested right claim may in fact be set aside under the The petitioner inquires from us the meaning of "net profits" earned
From the foregoing, it is clear that while one may not be deprived of Civil Code since the trial court found him the guilty party. by the conjugal partnership for purposes of effecting the forfeiture
his "vested right," he may lose the same if there is due process and authorized under Article 63 of the Family Code. He insists that since
such deprivation is founded in law and jurisprudence. More, in Abalos v. Dr. Macatangay, Jr.,68 we reiterated our long- there is no other provision under the Family Code, which defines
standing ruling that: "net profits" earned subject of forfeiture as a result of legal
In the present case, the petitioner was accorded his right to due separation, then Article 102 of the Family Code applies.
process. First, he was well-aware that the respondent prayed in her [P]rior to the liquidation of the conjugal partnership, the interest of
complaint that all of the conjugal properties be awarded to her.65 In each spouse in the conjugal assets is inchoate, a mere expectancy, What does Article 102 of the Family Code say? Is the computation of
fact, in his Answer, the petitioner prayed that the trial court divide which constitutes neither a legal nor an equitable estate, and does "net profits" earned in the conjugal partnership of gains the same
the community assets between the petitioner and the respondent not ripen into title until it appears that there are assets in the with the computation of "net profits" earned in the absolute
as circumstances and evidence warrant after the accounting and community as a result of the liquidation and settlement. The community?
inventory of all the community properties of the interest of each spouse is limited to the net remainder or
parties.66 Second, when the Decision dated October 10, 2005 was "remanente liquido" (haber ganancial) resulting from the liquidation Now, we clarify.
promulgated, the petitioner never questioned the trial court's ruling of the affairs of the partnership after its dissolution. Thus, the right
forfeiting what the trial court termed as "net profits," pursuant to of the husband or wife to one-half of the conjugal assets does not First and foremost, we must distinguish between the applicable law
Article 129(7) of the Family Code.67 Thus, the petitioner cannot claim vest until the dissolution and liquidation of the conjugal partnership, as to the property relations between the parties and the applicable
being deprived of his right to due process. or after dissolution of the marriage, when it is finally determined law as to the definition of "net profits." As earlier discussed, Article
that, after settlement of conjugal obligations, there are net assets 129 of the Family Code applies as to the property relations of the
parties. In other words, the computation and the succession of
events will follow the provisions under Article 129 of the said Code. be divided between the husband and the wife; and for purposes of 10, 2005, the trial court forfeited the half-share of the
Moreover, as to the definition of "net profits," we cannot but refer computing the net profits subject to forfeiture, said profits shall be petitioner in favor of his children. Thus, if we use Article
to Article 102(4) of the Family Code, since it expressly provides that the increase in value between the market value of the community 102 in the instant case (which should not be the case),
for purposes of computing the net profits subject to forfeiture under property at the time of the celebration of the marriage and the nothing is left to the petitioner since both parties entered
Article 43, No. (2) and Article 63, No. (2), Article 102(4) applies. In market value at the time of its dissolution.74 into their marriage without bringing with them any
this provision, net profits "shall be the increase in value between property.
the market value of the community property at the time of the Applying Article 102 of the Family Code, the "net profits" requires
celebration of the marriage and the market value at the time of its that we first find the market value of the properties at the time of On Conjugal Partnership Regime:
dissolution."72 Thus, without any iota of doubt, Article 102(4) applies the community's dissolution. From the totality of the market value
to both the dissolution of the absolute community regime under of all the properties, we subtract the debts and obligations of the Before we go into our disquisition on the Conjugal Partnership
Article 102 of the Family Code, and to the dissolution of the conjugal absolute community and this result to the net assets or net Regime, we make it clear that Article 102(4) of the Family Code
partnership regime under Article 129 of the Family Code. Where lies remainder of the properties of the absolute community, from which applies in the instant case for purposes only of defining "net
the difference? As earlier shown, the difference lies in the processes we deduct the market value of the properties at the time of profit." As earlier explained, the definition of "net profits" in Article
used under the dissolution of the absolute community regime under marriage, which then results to the net profits.75 102(4) of the Family Code applies to both the absolute community
Article 102 of the Family Code, and in the processes used under the regime and conjugal partnership regime as provided for under
dissolution of the conjugal partnership regime under Article 129 of Granting without admitting that Article 102 applies to the instant Article 63, No. (2) of the Family Code, relative to the provisions on
the Family Code. case, let us see what will happen if we apply Article 102: Legal Separation.

Let us now discuss the difference in the processes between the (a) According to the trial court's finding of facts, both Now, when a couple enters into a regime of conjugal partnership of
absolute community regime and the conjugal partnership regime. husband and wife have no separate properties, thus, the gains under Article 142 of the Civil Code, "the husband and the wife
remaining properties in the list above are all part of the place in common fund the fruits of their separate property and
On Absolute Community Regime: absolute community. And its market value at the time of income from their work or industry, and divide equally, upon the
the dissolution of the absolute community constitutes the dissolution of the marriage or of the partnership, the net gains or
When a couple enters into a regime of absolute community, the "market value at dissolution." benefits obtained indiscriminately by either spouse during the
husband and the wife becomes joint owners of all the properties of marriage."76 From the foregoing provision, each of the couple has
the marriage. Whatever property each spouse brings into the (b) Thus, when the petitioner and the respondent finally his and her own property and debts. The law does not intend to
marriage, and those acquired during the marriage (except those were legally separated, all the properties which remained effect a mixture or merger of those debts or properties between the
excluded under Article 92 of the Family Code) form the common will be liable for the debts and obligations of the spouses. Rather, it establishes a complete separation of capitals. 77
mass of the couple's properties. And when the couple's marriage or community. Such debts and obligations will be subtracted
community is dissolved, that common mass is divided between the from the "market value at dissolution." Considering that the couple's marriage has been dissolved under the
spouses, or their respective heirs, equally or in the proportion the Family Code, Article 129 of the same Code applies in the liquidation
parties have established, irrespective of the value each one may (c) What remains after the debts and obligations have been of the couple's properties in the event that the conjugal partnership
have originally owned.73 paid from the total assets of the absolute community of gains is dissolved, to wit:
constitutes the net remainder or net asset. And from such
Under Article 102 of the Family Code, upon dissolution of marriage, net asset/remainder of the petitioner and respondent's Art. 129. Upon the dissolution of the conjugal partnership regime,
an inventory is prepared, listing separately all the properties of the remaining properties, the market value at the time of the following procedure shall apply:
absolute community and the exclusive properties of each; then the marriage will be subtracted and the resulting totality
debts and obligations of the absolute community are paid out of the constitutes the "net profits." (1) An inventory shall be prepared, listing separately all the
absolute community's assets and if the community's properties are properties of the conjugal partnership and the exclusive
insufficient, the separate properties of each of the couple will be (d) Since both husband and wife have no separate properties of each spouse.
solidarily liable for the unpaid balance. Whatever is left of the properties, and nothing would be returned to each of
separate properties will be delivered to each of them. The net them, what will be divided equally between them is simply (2) Amounts advanced by the conjugal partnership in
remainder of the absolute community is its net assets, which shall the "net profits." However, in the Decision dated October payment of personal debts and obligations of either spouse
shall be credited to the conjugal partnership as an asset decide, taking into consideration the best interests of said restitution of the value of such properties to their
thereof. children. respective owners shall be made.82

(3) Each spouse shall be reimbursed for the use of his or In the normal course of events, the following are the steps in the (c) Subsequently, the couple's conjugal partnership shall
her exclusive funds in the acquisition of property or for the liquidation of the properties of the spouses: pay the debts of the conjugal partnership; while the debts
value of his or her exclusive property, the ownership of and obligation of each of the spouses shall be paid from
which has been vested by law in the conjugal partnership. (a) An inventory of all the actual properties shall be made, their respective separate properties. But if the conjugal
separately listing the couple's conjugal properties and their partnership is not sufficient to pay all its debts and
(4) The debts and obligations of the conjugal partnership separate properties.78 In the instant case, the trial court obligations, the spouses with their separate properties shall
shall be paid out of the conjugal assets. In case of found that the couple has no separate properties when be solidarily liable.83
insufficiency of said assets, the spouses shall be solidarily they married.79 Rather, the trial court identified the
liable for the unpaid balance with their separate properties, following conjugal properties, to wit: (d) Now, what remains of the separate or exclusive
in accordance with the provisions of paragraph (2) of properties of the husband and of the wife shall be returned
Article 121. 1. coffee mill in Balongagan, Las Nieves, Agusan to each of them.84 In the instant case, since it was already
del Norte; established by the trial court that the spouses have no
(5) Whatever remains of the exclusive properties of the separate properties,85 there is nothing to return to any of
spouses shall thereafter be delivered to each of them. 2. coffee mill in Durian, Las Nieves, Agusan del them. The listed properties above are considered part of
Norte; the conjugal partnership. Thus, ordinarily, what remains in
(6) Unless the owner had been indemnified from whatever the above-listed properties should be divided equally
source, the loss or deterioration of movables used for the between the spouses and/or their respective
3. corn mill in Casiklan, Las Nieves, Agusan del
benefit of the family, belonging to either spouse, even due heirs.86 However, since the trial court found the petitioner
Norte;
to fortuitous event, shall be paid to said spouse from the the guilty party, his share from the net profits of the
conjugal funds, if any. conjugal partnership is forfeited in favor of the common
4. coffee mill in Esperanza, Agusan del Sur;
children, pursuant to Article 63(2) of the Family Code.
Again, lest we be confused, like in the absolute community
(7) The net remainder of the conjugal partnership 5. a parcel of land with an area of 1,200 square regime, nothing will be returned to the guilty party in the
properties shall constitute the profits, which shall be meters located in Tungao, Butuan City; conjugal partnership regime, because there is no separate
divided equally between husband and wife, unless a
property which may be accounted for in the guilty party's
different proportion or division was agreed upon in the
6. a parcel of agricultural land with an area of 5 favor.
marriage settlements or unless there has been a voluntary
hectares located in Manila de Bugabos, Butuan
waiver or forfeiture of such share as provided in this Code.
City; In the discussions above, we have seen that in both instances, the
petitioner is not entitled to any property at all. Thus, we cannot but
(8) The presumptive legitimes of the common children shall
7. a parcel of land with an area of 84 square uphold the Decision dated October 10, 2005 of the trial court.
be delivered upon the partition in accordance with Article
meters located in Tungao, Butuan City; However, we must clarify, as we already did above, the Order dated
51.
January 8, 2007.
8. Bashier Bon Factory located in Tungao, Butuan
(9) In the partition of the properties, the conjugal dwelling
City.80 WHEREFORE, the Decision dated October 10, 2005 of the Regional
and the lot on which it is situated shall, unless otherwise
Trial Court, Branch 1 of Butuan City is AFFIRMED. Acting on the
agreed upon by the parties, be adjudicated to the spouse
(b) Ordinarily, the benefit received by a spouse from the Motion for Clarification dated July 7, 2006 in the Regional Trial
with whom the majority of the common children choose to
conjugal partnership during the marriage is returned in Court, the Order dated January 8, 2007 of the Regional Trial Court is
remain. Children below the age of seven years are deemed
equal amount to the assets of the conjugal hereby CLARIFIED in accordance with the above discussions.
to have chosen the mother, unless the court has decided
partnership;81 and if the community is enriched at the
otherwise. In case there is no such majority, the court shall
expense of the separate properties of either spouse, a SO ORDERED.
SECOND DIVISION of Ownership (Complaint) against the spouses Molina on May 17, on the subject property only in 1999, without their knowledge and
1999.8 consent.13
April 20, 2016
Melecio claims that Anastacio gave the subject property to the The spouses Molina presented Jaime Garlitos (Jaime) as their sole
G.R. No. 200274 spouses Molina to serve as collateral for the money that Anastacio witness and who is one of the occupants of the subject lot.
borrowed. Anastacio could not have validly sold the interest over
MELECIO DOMINGO, Petitioner, the subject property without Flora’s consent, as Flora was already Jaime testified that Elena Molina permitted him to build a house on
vs. dead at the time of the sale. the subject property in 1993. Jaime, together with the other
SPOUSES GENARO MOLINA and ELENA B. MOLINA, substituted by tenants, planted fruit bearing trees on the subject property and
ESTER MOLINA, Respondents. Melecio also claims that Genaro Molina must have falsified the gave portions of their harvest to Elena Molina without any
document transferring Anastacio and Flora’s one-half undivided complaint from Melecio. Jaime further testified that Melecio never
DECISION interest over the land. Finally, Melecio asserts that he occupied the lived on the subject property and that only George Domingo, as the
subject property from the time of Anastacio’s death up to the time caretaker of the spouses Molina, has a hut on the property.
he filed the Complaint.9
BRION, J.:
Meanwhile, the spouses Molina died during the pendency of the
1 Melecio presented the testimonies of the Records Officer of the case and were substituted by their adopted son, Cornelio Molina. 14
We resolve the petition for review on certiorari filed by the
Register of Deeds of Tarlac, and of Melecio’s nephew, George
petitioner Melecio Domingo (Melecio) assailing the August 9, 2011
Domingo (George).10 THE RTC RULING
decision2 and January 10, 2012 resolution 3 of the Court of
Appeals (CA) in CA-G.R. CV No. 94160.
The Records Officer testified that he could not locate the instrument The Regional Trial Court (RTC) dismissed15 the case because Melecio
that documents the transfer of the subject property ownership from failed to establish his claim that Anastacio did not sell the property
THE FACTS
Anastacio to the spouses Molina. The Records Officer also testified to the spouses Molina.
that the alleged sale was annotated at the time when Genaro
In June 15, 1951, the spouses Anastacio and Flora Domingo bought
Molina’s brother was the Register of Deeds for Camiling, Tarlac.11 The RTC also held that Anastacio could dispose of conjugal property
a property in Camiling, Tarlac, consisting of a one-half undivided
portion over an 18, 164 square meter parcel of land. The sale was without Flora’s consent since the sale was necessary to answer for
George, on the other hand, testified that he has been living on the conjugal liabilities.
annotated on the Original Certificate of Title (OCT) No. 16354
subject property owned by Anastacio since 1986. George testified,
covering the subject property.
however, that aside from himself, there were also four other The RTC denied Melecio’s motion for reconsideration of the RTC
occupants on the subject property, namely Jaime Garlitos, Linda ruling. From this ruling, Melecio proceeded with his appeal to the
During his lifetime, Anastacio borrowed money from the respondent
Sicangco, Serafio Sicangco and Manuel Ramos.12 CA.
spouses Genaro and Elena Molina (spouses Molina). On September
10, 1978 or 10 years after Flora’s death4, Anastacio sold his interest
The spouses Molina asserted that Anastacio surrendered the title to THE CA RULING
over the land to the spouses Molina to answer for his debts. The
the subject property to answer for his debts and told the spouses
sale to the spouses Molina was annotated at the OCT of the subject
Molina that they already own half of the land. The spouses Molina
property.5 In 1986, Anastacio died.6 In a decision dated August 9, 2011, the CA affirmed the RTC ruling in
have been in possession of the subject property before the title was
toto.
registered under their names and have religiously paid the
In May 19, 1995, the sale of Anastacio’s interest was registered
property’s real estate taxes.
under Transfer Certificate of Title (TCT) No. 272967[[7 ]]and The CA held that Melecio failed to prove by preponderant evidence
transferred the entire one-half undivided portion of the land to the that there was fraud in the conveyance of the property to the
The spouses Molina also asserted that Melecio knew of the disputed
spouses Molina. spouses Molina. The CA gave credence to the OCT annotation of the
sale since he accompanied Anastacio several times to borrow
disputed property sale.
money. The last loan was even used to pay for Melecio’s wedding.
Melecio, one of the children of Anastacio and Flora, learned of the
Finally, the spouses Molina asserted that Melecio built his nipa hut
transfer and filed a Complaint for Annulment of Title and Recovery
The CA also held that Flora’s death is immaterial because Anastacio The core issues of the petition are as follows: (1) whether the sale of The conjugal partnership of Anastacio and Flora was dissolved
only sold his rights, excluding Flora’s interest, over the lot to the a conjugal property to the spouses Molina without Flora’s consent is when Flora died in 1968, pursuant to Article 175 (1) of the Civil
spouses Molina.1âwphi1 The CA explained that "[t]here is no valid and legal; and (2) whether fraud attended the transfer of the Code22 (now Article 126 (1) of the Family Code).
prohibition against the sale by the widower of real property subject property to the spouses Molina.
formerly belonging to the conjugal partnership of gains" 16. Article 130 of the Family Code requires the liquidation of the
OUR RULING conjugal partnership upon death of a spouse and prohibits any
Finally, the CA held that Melecio’s action has prescribed. According disposition or encumbrance of the conjugal property prior to the
to the CA, Melecio failed to file the action within one year after We deny the petition. conjugal partnership liquidation, to quote:
entry of the decree of registration.
It is well settled that when the trial court’s factual findings have Article 130. Upon the termination of the marriage by death, the
Melecio filed a motion for reconsideration of the CA Decision. The been affirmed by the CA, the findings are generally conclusive and conjugal partnership property shall be liquidated in the same
CA denied Melecio’s motion for reconsideration for lack of merit. 17 binding upon the Court and may no longer be reviewed on Rule 45 proceeding for the settlement of the estate of the deceased.
petitions.19 While there are exceptions20 to this rule, the Court finds
THE PETITION no applicable exception with respect to the lower courts’ finding If no judicial settlement proceeding is instituted, the surviving
that the subject property was Anastacio and Flora’s conjugal spouse shall liquidate the conjugal partnership property either
Melecio filed the present petition for review on certiorari to property. Records before the Court show that the parties did not judicially or extrajudicially within one year from the death of the
challenge the CA ruling. dispute the conjugal nature of the property. deceased spouse. If upon the lapse of the six month period no
liquidation is made, any disposition or encumbrance involving the
Melecio principally argues that the sale of land belonging to the Melecio argues that the sale of the disputed property to the spouses conjugal partnership property of the terminated marriage shall be
conjugal partnership without the wife’s consent is invalid. Molina is void without Flora’s consent. void. x x x (emphases supplied)

Melecio also claims that fraud attended the conveyance of the We do not find Melecio’s argument meritorious. While Article 130 of the Family Code provides that any disposition
subject property and the absence of any document evidencing the involving the conjugal property without prior liquidation of the
alleged sale made the transfer null and void. Finally, Melecio claims Anastacio and Flora’s partnership shall be void, this rule does not apply since the
that the action has not yet prescribed. conjugal partnership was provisions of the Family Code shall be "without prejudice to vested
dissolved upon Flora’s death. rights already acquired in accordance with the Civil Code or other
laws."23
The respondents, on the other hand, submitted and adopted their
arguments in their Appeal Brief18. There is no dispute that Anastacio and Flora Domingo married
before the Family Code’s effectivity on August 3, 1988 and their An implied co-ownership
property relation is a conjugal partnership.21 among Flora’s heirs governed
First, Melecio’s counsel admitted that Anastacio had given the lot
the conjugal properties
title in payment of the debt amounting to Php30,000.00. The
pending liquidation and
delivery of the title is constructive delivery of the lot itself based on Conjugal partnership of gains established before and after the
partition.
Article 1498, paragraph 2 of 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 In the case of Taningco v. Register of Deeds of Laguna,24 we held
the Civil Code.
clear from Article 105 of the Family Code which states: that the properties of a dissolved conjugal partnership fall under the
regime of co-ownership among the surviving spouse and the heirs of
Second, the constructive delivery of the title coupled with the the deceased
spouses Molina’s exercise of attributes of ownership over the x x x The provisions of this Chapter shall also apply to conjugal
subject property, perfected the sale and completed the transfer of partnerships of gains already established between spouses before
the effectivity of this Code, without prejudice to vested rights spouse until final liquidation and partition. The surviving spouse,
ownership.
already acquired in accordance with the Civil Code or other laws, as however, has an actual and vested one-half undivided share of the
provided in Article 256. properties, which does not consist of determinate and segregated
THE ISSUES
properties until liquidation
and partition of the conjugal partnership. Consequently, Anastactio’s sale to the spouses Molina without the The sale of the subject
consent of the other co-owners was not totally void, for Anastacio’s property to the spouses Molina
An implied ordinary co-ownership ensued among Flora’s surviving rights or a portion thereof were thereby effectively transferred, was not attended with fraud.
heirs, including Anastacio, with respect to Flora’s share of the making the spouses Molina a co-owner of the subject property to
conjugal partnership until final liquidation and partition; Anastacio, the extent of Anastacio’s interest. This result conforms with the On the issue of fraud, the lower courts found that there was no
on the other hand, owns one-half of the original conjugal well-established principle that the binding force of a contract must fraud in the sale of the disputed property to the spouses Molina.
partnership properties as his share, but this is an undivided interest. be recognized as far as it is legally possible to do so (quando res non
valet ut ago, valeat quantum valere potest).26 The issue of fraud would require the Court to inquire into the weight
Article 493 of the Civil Code on co-ownership provides: of evidentiary matters to determine the merits of the petition and is
The spouses Molina would be a trustee for the benefit of the co- essentially factual in nature. It is basic that factual questions cannot
Article 493. Each co-owner shall have the full ownership of his part heirs of Anastacio in respect of any portion that might belong to the be cannot be entertained in a Rule 45 petition, unless it falls under
and of the fruits and benefits pertaining thereto, and co-heirs after liquidation and partition. The observations of Justice any of the recognized exceptions29 found in jurisprudence. The
he may therefore alienate, assign or mortgage it, and even Paras cited in the case of Heirs of Protacio Go, Sr. V. Servacio27 are present petition does not show that it falls under any of the
substitute another person in its enjoyment, except when personal instructive: exceptions allowing factual review.
rights are involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall be limited to the x x x [I]f it turns out that the property alienated or mortgaged really The CA and RTC conclusion that there is no fraud in the sale is
portion which may be allotted to him in the division upon the would pertain to the share of the surviving spouse, then said supported by the evidence on record.
termination of the co-ownership. (399) (emphases supplied) transaction is valid. If it turns out that there really would be, after
liquidation, no more conjugal assets then the whole transaction is Melecio' s argument that no document was executed for the sale is
Thus, Anastacio, as co-owner, cannot claim title to any specific null and void. But if it turns out that half of the property thus negated by the CA finding that there was a notarized deed of
portion of the conjugal properties without an actual partition being alienated or mortgaged belongs to the husband as his share in the conveyance executed between Anastacio and the spouses Molina,
first done either by agreement or by judicial decree. Nonetheless, conjugal partnership, and half should go to the estate of the wife, as annotated on the OCT of the disputed property.
Anastacio had the right to freely sell and dispose of his undivided then that corresponding to the husband is valid, and that
interest in the subject property. corresponding to the other is not. Since all these can be determined
Furthermore, Melecio's belief that Anastacio could not have sold the
only at the time the liquidation is over, it follows logically that a
property without his knowledge cannot be considered as proof of
disposal made by the surviving spouse is not void ab initio. Thus, it
The spouses Molina became fraud to invalidate the spouses Molina's registered title over the
has been held that the sale of conjugal properties cannot be made
co-owners of the subject subject property.30
by the surviving spouse without the legal requirements. The sale is
property to the extent of
void as to the share of the deceased spouse (except of course as to
Anastacio’s interest. Prevailing jurisprudence uniformly holds that findings of facts of the
that portion of the husband’s share inherited by her as the surviving
trial court, particularly when affirmed by the Court of Appeals, are
spouse). The buyers of the property that could not be validly sold
The OCT annotation of the sale to the spouses Molina reads binding upon t his court. 31
become trustees of said portion for the benefit of the husband’s
that "[o]nly the rights, interests and participation of Anastacio
other heirs, the cestui que trust ent. Said heirs shall not be barred
Domingo, married to Flora Dela Cruz, is hereby sold, transferred, Considering these findings, we find no need to discuss the other
by prescription or by laches.
and conveyed unto the said vendees for the sum of ONE THOUSAND issues raised by Melecio.
PESOS (P1,000.00) which pertains to an undivided one-half (1/2)
Melecio’s recourse as a co-owner of the conjugal properties,
portion and subject to all other conditions specified in the WHEREFORE, we hereby DENY the petition for review
including the subject property, is an action for partition under Rule
document x x x"25 (emphases supplied). At the time of the sale, on certiorari. The decision dated August 9, 2011 of the Court of
69 of the Revised Rules of Court. As held in the case of Heirs of
Anastacio’s undivided interest in the conjugal properties consisted Appeals in CA-G.R. CV No. 94160 is AFFIRMED.
Protacio Go, Sr., "it is now settled that the appropriate recourse of
of: (1) one-half of the entire conjugal properties; and (2) his share as
co-owners in cases where their consent were not secured in a sale
Flora’s heir on the conjugal properties.
of the entire property as well as in a sale merely of the undivided SO ORDERED.
shares of some of the co-owners is an action for PARTITION under
Anastacio, as a co-owner, had the right to freely sell and dispose of
Rule 69 of the Revised Rules of Court."28
his undivided interest, but not the interest of his co-owners.
FIRST DIVISION (2) The three older children, Carlos Enrique III, Antonio In the liquidation and partition of properties owned in
Quintin and Angela Rosario shall choose which parent they common by the plaintiff and defendant, the provisions on
would want to stay with. ownership found in the Civil Code shall apply.3 (Emphasis
supplied.)
G.R. No. 122749 July 31, 1996 Stella Eloisa and Joaquin Pedro shall be placed in the
custody of their mother, herein respondent Consuelo In addressing specifically the issue regarding the disposition of the
ANTONIO A. S. VALDEZ, petitioner, Gomez-Valdes. family dwelling, the trial court said:
vs.
REGIONAL TRIAL COURT, BRANCH 102, QUEZON CITY, and The petitioner and respondent shall have visitation rights Considering that this Court has already declared the
CONSUELO M. GOMEZ-VALDEZ, respondents. over the children who are in the custody of the other. marriage between petitioner and respondent as null and
void ab initio, pursuant to Art. 147, the property regime of
(3) The petitioner and the respondent are directed to start petitioner and respondent shall be governed by the rules
proceedings on the liquidation of their common on ownership.
VITUG, J.:p properties as defined by Article 147 of the Family Code, and
to comply with the provisions of Articles 50, 51, and 52 of The provisions of Articles 102 and 129 of the Family Code
the same code, within thirty (30) days from notice of this finds no application since Article 102 refers to the
The petition for new bewails, purely on the question of law, an
decision. procedure for the liquidation of the conjugal partnership
alleged error committed by the Regional Trial Court in Civil Case No.
property and Article 129 refers to the procedure for the
Q-92-12539. Petitioner avers that the court a quo has failed to apply
Let a copy of this decision be furnished the Local Civil liquidation of the absolute community of property.4
the correct law that should govern the disposition of a family
dwelling in a situation where a marriage is declared void ab Registrar of Mandaluyong, Metro Manila, for proper
initio because of psychological incapacity on the part of either or recording in the registry of marriages.2 (Emphasis ours.) Petitioner moved for a reconsideration of the order. The motion
both parties in the contract. was denied on 30 October 1995.
Consuelo Gomez sought a clarification of that portion of the
The pertinent facts giving rise to this incident are, by large, not in decision directing compliance with Articles 50, 51 and 52 of the In his recourse to this Court, petitioner submits that Articles 50, 51
dispute. Family Code. She asserted that the Family Code contained no and 52 of the Family Code should be held controlling: he argues
provisions on the procedure for the liquidation of common property that:
in "unions without marriage." Parenthetically, during the hearing of
Antonio Valdez and Consuelo Gomez were married on 05 January
the motion, the children filed a joint affidavit expressing their desire I
1971. Begotten during the marriage were five children. In a petition,
to remain with their father, Antonio Valdez, herein petitioner.
dated 22 June 1992, Valdez sought the declaration of nullity of the
marriage pursuant to Article 36 of the Family code (docketed Civil Article 147 of the Family Code does not apply to cases
Case No. Q-92-12539, Regional Trial Court of Quezon City, Branch In an order, dated 05 May 1995, the trial court made the following where the parties are psychologically incapacitated.
102). After the hearing the parties following the joinder of issues, clarification:
the trial court,1 in its decision of 29 July 1994, granted the II
petition, viz: Consequently, considering that Article 147 of the Family
Code explicitly provides that the property acquired by both Articles 50, 51 and 52 in relation to Articles 102 and 129 of
WHEREFORE, judgment is hereby rendered as follows: parties during their union, in the absence of proof to the the Family Code govern the disposition of the family
contrary, are presumed to have been obtained through the dwelling in cases where a marriage is declared void ab
joint efforts of the parties and will be owned by them in initio, including a marriage declared void by reason of the
(1) The marriage of petitioner Antonio Valdez and
equal shares, plaintiff and defendant will own their "family psychological incapacity of the spouses.
respondent Consuelo Gomez-Valdez is hereby declared null
home" and all their properties for that matter in equal
and void under Article 36 of the Family Code on the ground
shares.
of their mutual psychological incapacity to comply with III
their essential marital obligations;
Assuming arguendo that Article 147 applies to marriages shall be forfeited in favor of their common children. In case When the common-law spouses suffer from a legal impediment to
declared void ab initio on the ground of the psychological of default of or waiver by any or all of the common children marry or when they do not live exclusively with each other (as
incapacity of a spouse, the same may be read consistently or their descendants, each vacant share shall belong to the husband and wife), only the property acquired by both of them
with Article 129. innocent party. In all cases, the forfeiture shall take place through their actual joint contribution of money, property or
upon the termination of the cohabitation. industry shall be owned in common and in proportion to their
IV respective contributions. Such contributions and corresponding
This particular kind of co-ownership applies when a man and a shares, however, are prima facie presumed to be equal. The share
It is necessary to determine the parent with whom majority woman, suffering no illegal impediment to marry each other, so of any party who is married to another shall accrue to the absolute
of the children wish to stay.5 exclusively live together as husband and wife under a void marriage community or conjugal partnership, as the case may be, if so
or without the benefit of marriage. The term "capacitated" in the existing under a valid marriage. If the party who has acted in bad
provision (in the first paragraph of the law) refers to the legal faith is not validly married to another, his or her share shall be
The trial court correctly applied the law. In a void marriage,
capacity of a party to contract marriage, i.e., any "male or female of forfeited in the manner already heretofore expressed. 11
regardless of the cause thereof, the property relations of the parties
during the period of cohabitation is governed by the provisions of the age of eighteen years or upwards not under any of the
Article 147 or Article 148, such as the case may be, of the Family impediments mentioned in Articles 37 and 38"7 of the Code. In deciding to take further cognizance of the issue on the settlement
Code. Article 147 is a remake of Article 144 of the Civil Code as of the parties' common property, the trial court acted neither
interpreted and so applied in previous cases;6 it provides: Under this property regime, property acquired by both spouses imprudently nor precipitately; a court which has jurisdiction to
through their work and industry shall be governed by the rules on declare the marriage a nullity must be deemed likewise clothed in
equal co-ownership. Any property acquired during the union authority to resolve incidental and consequential matters. Nor did it
Art. 147. When a man and a woman who are capacitated to
is prima facie presumed to have been obtained through their joint commit a reversible error in ruling that petitioner and private
marry each other, live exclusively with each other as
efforts. A party who did not participate in the acquisition of the respondent own the "family home" and all their common property
husband and wife without the benefit of marriage or under
property shall be considered as having contributed thereto jointly if in equal shares, as well as in concluding that, in the liquidation and
a void marriage, their wages and salaries shall be owned by
said party's "efforts consisted in the care and maintenance of the partition of the property owned in common by them, the provisions
them in equal shares and the property acquired by both of
family household."8 Unlike the conjugal partnership of gains, the on co-ownership under the Civil Code, not Articles 50, 51 and 52, in
them through their work or industry shall be governed by
fruits of the couple's separate property are not included in the co- relation to Articles 102 and 129, 12 of the Family Code, should aptly
the rules on co-ownership.
ownership. prevail. The rules set up to govern the liquidation of either the
absolute community or the conjugal partnership of gains, the
In the absence of proof to the contrary, properties acquired
Article 147 of the Family Code, in the substance and to the above property regimes recognized for valid and voidable marriages (in the
while they lived together shall be presumed to have been
extent, has clarified Article 144 of the Civil Code; in addition, the law latter case until the contract is annulled), are irrelevant to the
obtained by their joint efforts, work or industry, and shall
now expressly provides that — liquidation of the co-ownership that exists between common-law
be owned by them in equal shares. For purposes of this
spouses. The first paragraph of Articles 50 of the Family Code,
Article, a party who did not participate in the acquisition by
applying paragraphs (2), (3), (4) and 95) of Article 43, 13 relates only,
the other party of any property shall be deemed to have (a) Neither party can dispose or encumber by act intervivos his or
by its explicit terms, to voidable marriages and, exceptionally,
contributed jointly in the acquisition thereof in the former's her share in co-ownership property, without consent of the other,
to void marriages under Article 40 14 of the Code, i.e., the
efforts consisted in the care and maintenance of the family during the period of cohabitation; and
declaration of nullity of a subsequent marriage contracted by a
and of the household.
spouse of a prior void marriage before the latter is judicially
(b) In the case of a void marriage, any party in bad faith shall forfeit
declared void. The latter is a special rule that somehow recognizes
Neither party can encumber or dispose by acts inter his or her share in the co-ownership in favor of their common
the philosophy and an old doctrine that void marriages are
vivos of his or her share in the property acquired during children; in default thereof or waiver by any or all of the common
inexistent from the very beginning and no judicial decree is
cohabitation and owned in common, without the consent children, each vacant share shall belong to the respective surviving
necessary to establish their nullity. In now requiring for purposes of
of the other, until after the termination of their descendants, or still in default thereof, to the innocent party. The
remarriage, the declaration of nullity by final judgment of the
cohabitation. forfeiture shall take place upon the termination of the
previously contracted void marriage, the present law aims to do
cohabitation9 or declaration of nullity of the marriage. 10
away with any continuing uncertainty on the status of the second
When only one of the parties to a void marriage is in good marriage. It is not then illogical for the provisions of Article 43, in
faith, the share of the party in bad faith in the ownership 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 the other, between common-law spouses or
spouses of void marriages, leaving to ordain, on the latter case, the
ordinary rules on co-ownership subject to 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.
SECOND DIVISION reglementary period. Petitioner later learned that respondent filed a and all its effects under the law, as NULL and VOID from
petition for divorce/dissolution of her marriage with petitioner, the beginning; and
G.R. No. 178044 January 19, 2011 which was granted by the Superior Court of California on 25 May
2001. Petitioner also learned that on 5 October 2001, respondent 2. Dissolving the regime of absolute community of
ALAIN M. DIÑO , Petitioner, married a certain Manuel V. Alcantara. property.
vs.
MA. CARIDAD L. DIÑO, Respondent. On 30 April 2002, the Office of the Las Piñas prosecutor found that A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall only be issued
there were no indicative facts of collusion between the parties and upon compliance with Article[s] 50 and 51 of the Family Code.
DECISION the case was set for trial on the merits.
Let copies of this Decision be furnished the parties, the Office of the
CARPIO, J.: Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a Solicitor General, Office of the City Prosecutor, Las Piñas City and
psychological report establishing that respondent was suffering the Office of the Local Civil Registrar of Las Piñas City, for their
from Narcissistic Personality Disorder which was deeply ingrained in information and guidance.
The Case
her system since her early formative years. Dr. Tayag found that
respondent’s disorder was long-lasting and by nature, incurable. SO ORDERED.4
Before the Court is a petition for review1 assailing the 18 October
2006 Decision2 and the 12 March 2007 Order3 of the Regional Trial
In its 18 October 2006 Decision, the trial court granted the petition Petitioner filed a motion for partial reconsideration questioning the
Court of Las Piñas City, Branch 254 (trial court) in Civil Case No. LP-
on the ground that respondent was psychologically incapacited to dissolution of the absolute community of property and the ruling
01-0149.
comply with the essential marital obligations at the time of the that the decree of annulment shall only be issued upon compliance
celebration of the marriage. with Articles 50 and 51 of the Family Code.
The Antecedent Facts
The Decision of the Trial Court In its 12 March 2007 Order, the trial court partially granted the
Alain M. Diño (petitioner) and Ma. Caridad L. Diño (respondent)
were childhood friends and sweethearts. They started living motion and modified its 18 October 2006 Decision as follows:
The trial court ruled that based on the evidence presented,
together in 1984 until they decided to separate in 1994. In 1996,
petitioner was able to establish respondent’s psychological WHEREFORE, in view of the foregoing, judgment is hereby rendered:
petitioner and respondent decided to live together again. On 14
incapacity. The trial court ruled that even without Dr. Tayag’s
January 1998, they were married before Mayor Vergel Aguilar of Las
psychological report, the allegations in the complaint, substantiated
Piñas City. 1) Declaring the marriage between plaintiff ALAIN M. DIÑO
in the witness stand, clearly made out a case of psychological
and defendant MA. CARIDAD L. DIÑO on January 14, 1998,
incapacity against respondent. The trial court found that respondent
On 30 May 2001, petitioner filed an action for Declaration of Nullity and all its effects under the law, as NULL and VOID from
committed acts which hurt and embarrassed petitioner and the rest
of Marriage against respondent, citing psychological incapacity the beginning; and
of the family, and that respondent failed to observe mutual love,
under Article 36 of the Family Code. Petitioner alleged that
respect and fidelity required of her under Article 68 of the Family
respondent failed in her marital obligation to give love and support 2) Dissolving the regime of absolute community of
Code. The trial court also ruled that respondent abandoned
to him, and had abandoned her responsibility to the family, property.
petitioner when she obtained a divorce abroad and married another
choosing instead to go on shopping sprees and gallivanting with her
man.
friends that depleted the family assets. Petitioner further alleged A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be issued after
that respondent was not faithful, and would at times become liquidation, partition and distribution of the parties’ properties
The dispositive portion of the trial court’s decision reads:
violent and hurt him. under Article 147 of the Family Code.
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
Extrajudicial service of summons was effected upon respondent Let copies of this Order be furnished the parties, the Office of the
who, at the time of the filing of the petition, was already living in the Solicitor General, the Office of the City Prosecutor of Las Piñas City
United States of America. Despite receipt of the summons, 1. Declaring the marriage between plaintiff ALAIN M. DIÑO
and the Local Civil Registrar of Las Piñas City, for their information
respondent did not file an answer to the petition within the and defendant MA. CARIDAD L. DIÑO on January 14, 1998,
and guidance.5
Hence, the petition before this Court. In the absence of proof to the contrary, properties acquired while because Section 19(1) of the Rule does not apply to cases governed
they lived together shall be presumed to have been obtained by under Articles 147 and 148 of the Family Code. Section 19(1) of the
The Issue their joint efforts, work or industry, and shall be owned by them in Rule provides:
equal shares. For purposes of this Article, a party who did not
The sole issue in this case is whether the trial court erred when it participate in the acquisition by the other party of any property shall Sec. 19. Decision. - (1) If the court renders a decision granting the
ordered that a decree of absolute nullity of marriage shall only be be deemed to have contributed jointly in the acquisition thereof if petition, it shall declare therein that the decree of absolute nullity or
issued after liquidation, partition, and distribution of the parties’ the former’s efforts consisted in the care and maintenance of the decree of annulment shall be issued by the court only after
properties under Article 147 of the Family Code. family and of the household. compliance with Articles 50 and 51 of the Family Code as
implemented under the Rule on Liquidation, Partition and
The Ruling of this Court Neither party can encumber or dispose by acts inter vivos of his or Distribution of Properties.
her share in the property acquired during cohabitation and owned
in common, without the consent of the other, until after the The pertinent provisions of the Family Code cited in Section 19(1) of
The petition has merit.
termination of their cohabitation. the Rule are:
Petitioner assails the ruling of the trial court ordering that a decree
When only one of the parties to a void marriage is in good faith, the Article 50. The effects provided for in paragraphs (2), (3), (4) and (5)
of absolute nullity of marriage shall only be issued after liquidation,
share of the party in bad faith in the co-ownership shall be forfeited of Article 43 and in Article 44 shall also apply in proper cases to
partition, and distribution of the parties’ properties under Article
in favor of their common children. In case of default of or waiver by marriages which are declared void ab initio or annulled by final
147 of the Family Code. Petitioner argues that Section 19(1) of the
any or all of the common children or their descendants, each vacant judgment under Articles 40 and 45.10
Rule on Declaration of Absolute Nullity of Null Marriages and
share shall belong to the respective surviving descendants. In the
Annulment of Voidable Marriages6 (the Rule) does not apply to
absence of descendants, such share shall belong to the innocent The final judgment in such cases shall provide for the liquidation,
Article 147 of the Family Code.
party. In all cases, the forfeiture shall take place upon termination of partition and distribution of the properties of the spouses, the
the cohabitation. custody and support of the common children, and the delivery of
We agree with petitioner.
their presumptive legitimes, unless such matters had been
For Article 147 of the Family Code to apply, the following elements adjudicated in previous judicial proceedings.
The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in
must be present:
a void marriage, regardless of its cause, the property relations of the
parties during the period of cohabitation is governed either by All creditors of the spouses as well as of the absolute community of
1. The man and the woman must be capacitated to marry the conjugal partnership shall be notified of the proceedings for
Article 147 or Article 148 of the Family Code.7 Article 147 of the
each other; liquidation.
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 2. They live exclusively with each other as husband and In the partition, the conjugal dwelling and the lot on which it is
the case before the Court. wife; and situated, shall be adjudicated in accordance with the provisions of
Articles 102 and 129.
Article 147 of the Family Code provides: 3. Their union is without the benefit of marriage, or their
marriage is void.9 Article 51. In said partition, the value of the presumptive legitimes
Article 147. When a man and a woman who are capacitated to of all common children, computed as of the date of the final
marry each other, live exclusively with each other as husband and All these elements are present in this case and there is no question judgment of the trial court, shall be delivered in cash, property or
wife without the benefit of marriage or under a void marriage, their that Article 147 of the Family Code applies to the property relations sound securities, unless the parties, by mutual agreement judicially
wages and salaries shall be owned by them in equal shares and the between petitioner and respondent. approved, had already provided for such matters.
property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership. We agree with petitioner that the trial court erred in ordering that a The children of their guardian, or the trustee of their property, may
decree of absolute nullity of marriage shall be issued only after ask for the enforcement of the judgment.
liquidation, partition and distribution of the parties’ properties
under Article 147 of the Family Code. The ruling has no basis
The delivery of the presumptive legitimes herein prescribed shall in In this case, petitioner’s marriage to respondent was declared void
no way prejudice the ultimate successional rights of the children under Article 3615 of the Family Code and not under Article 40 or 45.
accruing upon the death of either or both of the parents; but the Thus, what governs the liquidation of properties owned in common
value of the properties already received under the decree of by petitioner and respondent are the rules on co-ownership.
annulment or absolute nullity shall be considered as advances on In Valdes, the Court ruled that the property relations of parties in a
their legitime. 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-
It is clear from Article 50 of the Family Code that Section 19(1) of the ownership apply and the properties of the spouses should be
Rule applies only to marriages which are declared void ab initio or liquidated in accordance with the Civil Code provisions on co-
annulled by final judgment under Articles 40 and 45 of the Family ownership. Under Article 496 of the Civil Code, "[p]artition may be
Code. In short, Article 50 of the Family Code does not apply to made by agreement between the parties or by judicial proceedings.
marriages which are declared void ab initio under Article 36 of the x x x." It is not necessary to liquidate the properties of the spouses
Family Code, which should be declared void without waiting for the in the same proceeding for declaration of nullity of marriage.
liquidation of the properties of the parties.
WHEREFORE, we AFFIRM the Decision of the trial court with
Article 40 of the Family Code contemplates a situation where a the MODIFICATION that the decree of absolute nullity of the
second or bigamous marriage was contracted.1avvphilUnder Article marriage shall be issued upon finality of the trial court’s decision
40, "[t]he absolute nullity of a previous marriage may be invoked for without waiting for the liquidation, partition, and distribution of the
purposes of remarriage on the basis solely of a final judgment parties’ properties under Article 147 of the Family Code.
declaring such previous marriage void." Thus we ruled:
SO ORDERED.
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.
THIRD DIVISION WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered, ₱8,080.00, it clearly fell within the MTCC’s jurisdiction. Also,
ordering the conjugal property of the former Spouses Leonardo and although the RTC erred in relying on Article 129 of the FamilyCode,
G.R. No. 176492 October 20, 2014 Marietta Nonato, a house and lot covered by TCT No. T-140361 instead of Article 147, the dispositive portion of its decision still
located at Eroreco, Bacolod City, which was their conjugal dwelling, correctly ordered the equitable partition of the property. Barrido
MARIETTA N. BARRIDO, Petitioner, adjudicated to the defendant Marietta Nonato, the spouse with filed a Motion for Reconsideration, which was, however, denied for
vs. whom the majority of the common children choose to remain. lack of merit.
LEONARDO V. NONATO, Respondent.
Furthermore, defendant’s counterclaim is hereby granted, ordering Hence, Barrido brought the case to the Court via a Petition for
DECISION plaintiff to pay defendant ₱10,000.00 as moral damages for the Review. She assigned the following errors in the CA Decision:
mental anguish and unnecessary inconvenience brought about by
this suit; and an additional ₱10,000.00 as exemplary damages to I.
PERALTA, J.:
deter others from following suit; and attorney’s fees of ₱2,000.00
and litigation expenses of ₱575.00. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE
For the Court's resolution is a Petition for Review filed by petitioner
Marietta N. Barrido questioning the Decision 1 of the Court of MTCC HAD JURISDICTION TO TRY THE PRESENT CASE.
SO ORDERED.4
Appeals (CA), dated November 16, 2006, and its Resolution 2 dated
January 24, 2007 in CA-G.R. SP No. 00235. The CA affirmed the II.
Decision3 of the Regional Trial Court (RTC) ofBacolod City, Branch Nonato appealed the MTCC Decision before the RTC. On July 21,
53, dated July 21, 2004, in Civil Case No. 03-12123, which ordered 2004, the Bacolod RTC reversed the ruling of the MTCC. It found THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE
the partition of the subject property. that even though the MTCC aptly applied Article 129 of the Family LOT COVERED BY TCT NO. T-140361 IS CONJUGAL AFTER BEING
Code, it nevertheless made a reversible error in adjudicating the SOLD TO THE CHILDREN, JOSEPH LEO NONATO AND JOSEPH
subject property to Barrido. Its dispositive portion reads: RAYMUND NONATO.
The facts, as culled from the records, are as follows: In the course of
the marriage of respondent Leonardo V. Nonato and petitioner
Marietta N. Barrido,they were able to acquire a property situated in WHEREFORE, premises considered, the decision dated September III.
Eroreco, Bacolod City, consisting ofa house and lot, covered by 17, 2003 is hereby REVERSED and SET ASIDE and a new judgment is
Transfer Certificate of Title (TCT) No. T-140361. On March 15, 1996, hereby rendered ordering the parties:
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
their marriage was declared void on the ground of psychological ARTICLE 129 OF THE FAMILY CODE HAS NO APPLICATION IN THE
incapacity. Since there was no more reason to maintain their co- (1) to equitably partition the house and lot covered by TCT PRESENT CASE, ON THE ASSUMPTION
ownership over the property, Nonato asked Barrido for partition, No. T-140361;
but the latter refused. Thus, on January 29, 2003, Nonato filed a THAT THE TRIAL COURT HAD JURISDICTION OVER THE CASE. 6
Complaint for partition before the Municipal Trial Court in Cities (2) to reimburse Joseph Raymund and Joseph Leo Nonato
(MTCC) of Bacolod City, Branch 3. of the amount advanced by them in payment of the debts
The petition lacks merit.
and obligation of TCT No. T-140361 with Philippine
Barrido claimed, by way of affirmative defense, that the subject National Bank;
Contrary to Barrido’s contention, the MTCC has jurisdiction to take
property had already been sold to their children, Joseph Raymund
cognizance of real actions or those affecting title to real property, or
and Joseph Leo. She likewise moved for the dismissal of the (3) to deliver the presumptive legitimes of Joseph Raymund
for the recovery of possession, or for the partition or condemnation
complaint because the MTCC lacked jurisdiction, the partition case and Joseph Leo Nonato pursuant to Article 51 of the Family
of, or foreclosure of a mortgage on real property.7 Section 33 of
being an action incapable of pecuniary estimation. Code.
Batas Pambansa Bilang 1298 provides:

The Bacolod MTCC rendered a Decision dated September 17, 2003, SO ORDERED.5
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
applying Article 129 of the Family Code. It ruled in this wise:
Courts and Municipal Circuit Trial Courts in civil cases.–
Upon appeal, the CA affirmed the RTC Decision on November 16, Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
2006. It held that since the property’s assessed value was only Circuit
Trial Courts shall exercise: the former's efforts consisted in the care and maintenance of the common property by one who has no salary or income or work or
family and of the household. industry.17
xxxx
Neither party can encumber or dispose by acts inter vivos of his or In the analogous case of Valdez,18 it was likewise averred that the
(3) Exclusive original jurisdiction in all civil actions which involve title her share in the property acquired during cohabitation and owned trial court failed to apply the correct law that should govern the
to, or possession of, real property, or any interest therein where the in common, without the consent of the other, until after the disposition of a family dwelling in a situation where a marriage is
assessed value of the propertyor interest therein does not exceed termination of their cohabitation. declared void ab initiobecause of psychological incapacity on the
Twenty thousand pesos (₱20,000.00)or, in civil actions in Metro part of either or both parties in the contract of marriage.The Court
Manila, where such assessed value does not exceed Fifty thousand When only one of the parties to a void marriage is in good faith, the held that the court a quodid not commit a reversible error in
pesos (₱50,000.00) exclusive of interest, damages of whatever kind, share of the party in bad faith in the co-ownership shall be forfeited utilizing Article 147 of the Family Code and in ruling that the former
attorney's fees, litigation expenses and costs: Provided, That value in favor of their common children. In case of default of or waiver by spouses own the family home and all their common property in
of such property shall be determined by the assessed value of the any or all of the common children or their descendants, each vacant equal shares, as well as in concluding that, in the liquidation and
adjacent lots. (as amended by R.A. No. 7691) 9 share shall belong to the respective surviving descendants. In the partition of the property that they owned in common, the
absence of descendants, such share shall belong to the innocent provisions on coownership under the Civil Code should aptly
Here, the subject property’s assessed value was merely ₱8,080.00, party.1âwphi1 In all cases, the forfeiture shall take place upon prevail.19 The rules which are set up to govern the liquidation of
an amount which certainly does not exceed the required limit of termination of the cohabitation. either the absolute community or the conjugal partnership of gains,
₱20,000.00 for civil actions outside Metro Manila tofall within the the property regimes recognized for valid and voidable marriages,
jurisdiction of the MTCC. Therefore, the lower court correctly took This particular kind of co-ownership applies when a man and a are irrelevant to the liquidation of the co-ownership that exists
cognizance of the instant case. woman, suffering no illegal impedimentto marry each other, between common-law spousesor spouses of void marriages.20
exclusively live together as husband and wife under a void marriage
The records reveal that Nonatoand Barrido’s marriage had been or without the benefit of marriage.12 It is clear, therefore, that for Here, the former spouses both agree that they acquired the subject
declared void for psychological incapacity under Article 36 10 of the Article 147 to operate, the man and the woman: (1) must be property during the subsistence of their marriage. Thus, it shall be
Family Code. During their marriage, however, the conjugal capacitated to marry each other; (2) live exclusively with each other presumed to have been obtained by their joint efforts, work or
partnership regime governed their property relations. Although as husband and wife; and (3) their union is without the benefit of industry, and shall be jointly owned by them in equal shares.
Article 12911 provides for the marriage or their marriage is void. Here, all these elements are Barrido, however, claims that the ownership over the property in
present.13 The term "capacitated" inthe first paragraph of the question is already vested on their children, by virtue of a Deed of
provision pertains to the legal capacity of a party to contract Sale. But aside from the title to the property still being registered in
procedure in case of dissolution of the conjugal partnership regime,
marriage.14 Any impediment to marry has not been shown to have the names of the former spouses, said document of safe does not
Article 147 specifically covers the effects of void marriages on the
existed on the part of either Nonato or Barrido. They lived bear a notarization of a notary public. It must be noted that without
spouses’ property relations. Article 147 reads:
exclusively with each other as husband and wife. However, their the notarial seal, a document remains to be private and cannot be
marriage was found to be void under Article 36 of the Family Code converted into a public document,21 making it inadmissible in
Art. 147. When a man and a woman who are capacitated to marry
on the ground of psychological incapacity.15 evidence unless properly authenticated.22 Unfortunately, Barrido
each other, live exclusively with each other as husband and wife
failed to prove its due execution and authenticity. In fact, she
without the benefit of marriage or under a void marriage, their
Under this property regime, property acquired by both spouses merely annexed said Deed of Sale to her position paper. Therefore,
wages and salaries shall be owned by them in equal shares and the
through their work and industry shall be governed by the rules on the subject property remains to be owned in common by Nonato
property acquired by both of them through their work or industry
equal coownership. Any property acquired during the union is prima and Barrido, which should be divided in accordance with the rules
shall be governed by the rules on co-ownership.
faciepresumed to have been obtained through their joint efforts. A on co-ownership.
party who did not participate in the acquisition of the property shall
In the absence of proof to the contrary, properties acquired while
be considered as having contributed to the same jointly if said WHEREFORE, premises considered, the petition is DENIED. The
they lived together shall be presumed tohave been obtained by
party's efforts consisted in the care and maintenance of the family Decision of the Court of Appeals, dated November 16, 2006, as well
their joint efforts, work or industry, and shall beowned by them in
household.16 Efforts in the care and maintenance of the family and as its Resolution dated January 24, 2007 in CA-G.R. SP No. 00235,
equal shares. For purposes of this Article, a party who did not
household are regarded as contributions to the acquisition of are hereby AFFIRMED. SO ORDERED.
participate in the acquisition by the other party of any property shall
be deemed to have contributed jointly in the acquisition thereof if
SECOND DIVISION A house and lot in Binalonan, Pangasinan was likewise purchased on 1) Dismissing the complaint, with costs against plaintiffs;
September 23, 1975, allegedly by Erlinda as the sole vendee. TCT
G.R. No. 116668 July 28, 1997 No. 143120 covering said property was later issued in her name. 2) Confirming the ownership of defendant Erlinda Agapay
of the residential lot located at Poblacion, Binalonan,
ERLINDA A. AGAPAY, petitioner, On October 30, 1975, Miguel and Cornelia Palang executed a Deed Pangasinan, as evidenced by TCT No. 143120, Lot 290-B
vs. of Donation as a form of compromise agreement to settle and end a including the old house standing therein;
CARLINA (CORNELIA) V. PALANG and HERMINIA P. DELA case filed by the latter.3 The parties therein agreed to donate their
CRUZ, respondents. conjugal property consisting of six parcels of land to their only child, 3) Confirming the ownership of one-half (1/2) portion of
Herminia Palang.4 that piece of agricultural land situated at Balisa, San Felipe,
ROMERO, J.: Binalonan, Pangasinan, consisting of 10,080 square meters
Miguel and Erlinda's cohabitation produced a son, Kristopher A. and as evidenced by TCT No. 101736, Lot 1123-A to Erlinda
Before us is a petition for review of the decision of the Court of Palang, born on December 6, 1977. In 1979, Miguel and Erlinda Agapay;
Appeals in CA-G.R. CV No. 24199 entitled "Erlinda Agapay v. Carlina were convicted of Concubinage upon Carlina's complaint. 5 Two
(Cornelia) Palang and Herminia P. Dela Cruz" dated June 22, 1994 years later, on February 15, 1981, Miguel died. 4. Adjudicating to Kristopher Palang as his inheritance from
involving the ownership of two parcels of land acquired during the his deceased father, Miguel Palang, the one-half (1/2) of
cohabitation of petitioner and private respondent's legitimate On July 11, 1981, Carlina Palang and her daughter Herminia Palang the agricultural land situated at Balisa, San Felipe,
spouse. de la Cruz, herein private respondents, instituted the case at bar, an Binalonan, Pangasinan, under TCT No. 101736 in the name
action for recovery of ownership and possession with damages of Miguel Palang, provided that the former (Kristopher)
Miguel Palang contracted his first marriage on July 16, 1949 when against petitioner before the Regional Trial Court in Urdaneta, executes, within 15 days after this decision becomes final
he took private respondent Carlina (or Cornelia) Vallesterol as a wife Pangasinan (Civil Case No. U-4265). Private respondents sought to and executory, a quit-claim forever renouncing any claims
at the Pozorrubio Roman Catholic Church in Pangasinan. A few get back the riceland and the house and lot both located at to annul/reduce the donation to Herminia Palang de la Cruz
months after the wedding, in October 1949, he left to work in Binalonan, Pangasinan allegedly purchased by Miguel during his of all conjugal properties of her parents, Miguel Palang and
Hawaii. Miguel and Carlina's only child, Herminia Palang, was born cohabitation with petitioner. Carlina Vallesterol Palang, dated October 30, 1975,
on May 12, 1950. otherwise, the estate of deceased Miguel Palang will have
Petitioner, as defendant below, contended that while the riceland to be settled in another separate action;
Miguel returned in 1954 for a year. His next visit to the Philippines covered by TCT No. 101736 is registered in their names (Miguel and
was in 1964 and during the entire duration of his year-long sojourn Erlinda), she had already given her half of the property to their son 5) No pronouncement as to damages and attorney's fees.
he stayed in Zambales with his brother, not in Pangasinan with his Kristopher Palang. She added that the house and lot covered by TCT
wife and child. The trial court found evidence that as early as 1957, No. 143120 is her sole property, having bought the same with her SO ORDERED.6
Miguel had attempted to divorce Carlina in Hawaii.1 When he own money. Erlinda added that Carlina is precluded from claiming
returned for good in 1972, he refused to live with private aforesaid properties since the latter had already donated their On appeal, respondent court reversed the trial court's decision. The
respondents, but stayed alone in a house in Pozorrubio, Pangasinan. conjugal estate to Herminia. Court of Appeals rendered its decision on July 22, 1994 with the
following dispositive portion;
On July 15, 1973, the then sixty-three-year-old Miguel contracted After trial on the merits, the lower court rendered its decision on
his second marriage with nineteen-year-old Erlinda Agapay, herein June 30, 1989 dismissing the complaint after declaring that there WHEREFORE, PREMISES CONSIDERED, the appealed
petitioner.2 Two months earlier, on May 17, 1973, Miguel and was little evidence to prove that the subject properties pertained to decision in hereby REVERSED and another one entered:
Erlinda, as evidenced by the Deed of Sale, jointly purchased a parcel the conjugal property of Carlina and Miguel Palang. The lower court
of agricultural land located at San Felipe, Binalonan, Pangasinan went on to provide for the intestate shares of the parties,
1. Declaring plaintiffs-appellants the owners of the
with an area of 10,080 square meters. Consequently, Transfer particularly of Kristopher Palang, Miguel's illegitimate son. The
properties in question;
Certificate of Title No. 101736 covering said rice land was issued in dispositive portion of the decision reads.
their names. 2. Ordering defendant-appellee to vacate and deliver the
WHEREFORE, premises considered, judgment is hereby
properties in question to herein plaintiffs-appellants;
rendered —
3. Ordering the Register of Deeds of Pangasinan to cancel Under Article 148, only the properties acquired by both of the adopting their compromise agreement "in effect partakes the
Transfer Certificate of Title Nos. 143120 and 101736 and to parties through their actual joint contribution of money, property or nature of judicial confirmation of the separation of property
issue in lieu thereof another certificate of title in the name industry shall be owned by them in common in proportion to their between spouses and the termination of the conjugal
of plaintiffs-appellants. respective contributions. It must be stressed that actual partnership."12 Separation of property between spouses during the
contribution is required by this provision, in contrast to Article 147 marriage shall not take place except by judicial order or without
No pronouncement as to costs.7 which states that efforts in the care and maintenance of the family judicial conferment when there is an express stipulation in the
and household, are regarded as contributions to the acquisition of marriage settlements.13 The judgment which resulted from the
Hence, this petition. common property by one who has no salary or income or work or parties' compromise was not specifically and expressly for
industry. If the actual contribution of the party is not proved, there separation of property and should not be so inferred.
will be no co-ownership and no presumption of equal shares.9
Petitioner claims that the Court of Appeals erred in not sustaining
the validity of two deeds of absolute sale covering the riceland and With respect to the house and lot, Erlinda allegedly bought the
the house and lot, the first in favor of Miguel Palang and Erlinda In the case at bar, Erlinda tried to establish by her testimony that same for P20,000.00 on September 23, 1975 when she was only 22
Agapay and the second, in favor of Erlinda Agapay alone. Second, she is engaged in the business of buy and sell and had a sari- years old. The testimony of the notary public who prepared the
petitioner contends that respondent appellate court erred in not sari store10 but failed to persuade us that she actually contributed deed of conveyance for the property reveals the falsehood of this
declaring Kristopher A. Palang as Miguel Palang's illegitimate son money to buy the subject riceland. Worth noting is the fact that on claim. Atty. Constantino Sagun testified that Miguel Palang provided
and thus entitled to inherit from Miguel's estate. Third, respondent the date of conveyance, May 17, 1973, petitioner was only around the money for the purchase price and directed that Erlinda's name
court erred, according to petitioner, "in not finding that there is twenty years of age and Miguel Palang was already sixty-four and a alone be placed as the vendee.14
sufficient pleading and evidence that Kristopher A. Palang or pensioner of the U.S. Government. Considering her youthfulness, it
Christopher A. Palang should be considered as party-defendant in is unrealistic to conclude that in 1973 she contributed P3,750.00 as The transaction was properly a donation made by Miguel to Erlinda,
Civil Case No. U-4625 before the trial court and in CA-G.R. No. her share in the purchase price of subject property, 11 there being no but one which was clearly void and inexistent by express provision
24199.8 proof of the same. of law because it was made between persons guilty of adultery or
concubinage at the time of the donation, under Article 739 of the
After studying the merits of the instant case, as well as the pertinent Petitioner now claims that the riceland was bought two months Civil Code. Moreover, Article 87 of the Family Code expressly
provisions of law and jurisprudence, the Court denies the petition before Miguel and Erlinda actually cohabited. In the nature of an provides that the prohibition against donations between spouses
and affirms the questioned decision of the Court of Appeals. afterthought, said added assertion was intended to exclude their now applies to donations between persons living together as
case from the operation of Article 148 of the Family Code. Proof of husband and wife without a valid marriage,15 for otherwise, the
the precise date when they commenced their adulterous condition of those who incurred guilt would turn out to be better
The first and principal issue is the ownership of the two pieces of
cohabitation not having been adduced, we cannot state definitively than those in legal union.16
property subject of this action. Petitioner assails the validity of the
that the riceland was purchased even before they started living
deeds of conveyance over the same parcels of land. There is no
together. In any case, even assuming that the subject property was The second issue concerning Kristopher Palang's status and claim as
dispute that the transfer of ownership from the original owners of
bought before cohabitation, the rules of co-ownership would still an illegitimate son and heir to Miguel's estate is here resolved in
the riceland and the house and lot, Corazon Ilomin and the spouses
apply and proof of actual contribution would still be essential. favor of respondent court's correct assessment that the trial court
Cespedes, respectively, were valid.
erred in making pronouncements regarding Kristopher's heirship
Since petitioner failed to prove that she contributed money to the and filiation "inasmuch as questions as to who are the heirs of the
The sale of the riceland on May 17, 1973, was made in favor of
purchase price of the riceland in Binalonan, Pangasinan, we find no decedent, proof of filiation of illegitimate children and the
Miguel and Erlinda. The provision of law applicable here is Article
basis to justify her co-ownership with Miguel over the same. determination of the estate of the latter and claims thereto should
148 of the Family Code providing for cases of cohabitation when a
Consequently, the riceland should, as correctly held by the Court of be ventilated in the proper probate court or in a special proceeding
man and a woman who are not capacitated to marry each other live
Appeals, revert to the conjugal partnership property of the instituted for the purpose and cannot be adjudicated in the instant
exclusively with each other as husband and wife without the benefit
deceased Miguel and private respondent Carlina Palang. ordinary civil action which is for recovery of ownership and
of marriage or under a void marriage. While Miguel and Erlinda
possession."17
contracted marriage on July 15, 1973, said union was patently void
because the earlier marriage of Miguel and Carlina was still Furthermore, it is immaterial that Miguel and Carlina previously
subsisting and unaffected by the latter's de facto separation. agreed to donate their conjugal property in favor of their daughter As regards the third issue, petitioner contends that Kristopher
Herminia in 1975. The trial court erred in holding that the decision Palang should be considered as party-defendant in the case at bar
following the trial court's decision which expressly found that
Kristopher had not been impleaded as party defendant but
theorized that he had submitted to the court's 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 illegitimate son of Miguel, in order to
avoid multiplicity of suits.19 Petitioner's grave error has been
discussed in the preceding paragraph where the need for probate
proceedings to resolve the settlement of Miguel's estate and
Kristopher's 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.
EN BANC representations to the deputy sheriff and to the counsel of No. 794 Harvard St., Mandaluyong, and levied upon the
respondent Manila Surety regarding the ownership of the same properties, with the exception of the baby grand
G.R. No. L-20530 June 29, 1967 petitioner over certain personal effects levied upon, but piano and the "Columbia" phonograph which were the
they ignored the same and proceeded with the levy. properties of Jose Corominas, Jr. and which had already
MANILA SURETY and FIDELITY COMPANY, INC., petitioner, been sold at public auction November 6, 1961 for
vs. Thus, respondents caused the posting at several places P3,305.00, the Regal sewing machine owned by Nati
TRINIDAD TEODORO and THE COURT OF APPEALS, respondents. notices of sale, preparatory to disposing petitioner's Fresco, the beds found in the boy's and girl's rooms, a
properties at public auction. marble dining table and chairs, a stereophonic phonograph
and the G.E. television set. And on the following day, June
De Santos and Delfino for petitioner.
To stay the sale at public auction of petitioner's properties, 8, 1962, respondent provincial sheriff of Rizal advertised
V. J. Francisco and R. F. Francisco for respondents.
she filed on November 3, 1961, with the Court of First the sale at public auction of the aforementioned properties
Instance of Rizal a complaint with injunction, entitled claimed by herein petitioner, setting the date thereof
MAKALINTAL, J.:
"Trinidad Teodoro vs Manila Surety & Fidelity Co., Inc. and for June 16, 1962.
the Provincial Sheriff of Rizal," praying among other things,
The Manila Surety & Fidelity Company, Inc., filed this petition for
for damages and a writ of preliminary injunction which was Trinidad Teodoro thereupon filed an original petition for injunction
review by certiorari of the decision of the Court of Appeals in its
accordingly issued upon petitioner's filing of a bond in the in the Court of Appeals to stop the scheduled sale. On October 24,
Case No. CA-G.R. 30916. The case relates to the execution of a joint
sum of P30,000.00 enjoining the provincial sheriff of Rizal 1962 the said Court rendered the decision now under review,
and several judgment for money obtained by the said company
from selling at public auction the properties claimed by said granting the writ prayed for and permanently enjoining respondent
against the Philippine Ready-Mix Concrete Co., Inc. and Jose
petitioner. provincial sheriff of Rizal from selling at public auction the
Corominas, Jr., in a litigation started in 1952 in the Court of First
properties in question for the satisfaction of the judgment debt of
Instance of Manila (Civil Case No. 17014), whose decision was
However, on November 9, 1961, respondent Manila Surety Jose Corominas, Jr.1äwphï1.ñët
affirmed by the Court of Appeals with only a slight modification in
respect of the award for attorney's fees. filed an "Omnibus Motion to Dismiss the Complaint and to
Dissolve Injunction" to which an opposition was filed. The case for herein petitioner rests on the proposition that the said
properties, claimed by respondent Teodoro to be hers exclusively,
The proceedings which took place thereafter are narrated in the
After the parties had adduced their evidence in support of pertain to the co-ownership established between her and Jose
decision sought to be reviewed as follows:
their respective claims and after hearing their arguments, Corominas, Jr., pursuant to Article 144 of the Civil Code, and
the lower court declared that the properties in question are consequently may be levied upon on execution for the satisfaction
When said decision became final, respondent Manila Sure of the latter's judgment debt. The facts relied upon in support of
community properties of Trinidad Teodoro (herein
secured on September 20, 1961, from the Court of First this theory of co-ownership are stated in the decision of the court a
petitioner) and Jose Corominas, Jr., dissolved on May 12,
Instance of Manila in Civil Case No. 17014 a second alias quo and quoted by the Court of Appeals, as follows:
1962, the writ of preliminary injunction it had issued and
writ of execution addressed to respondent provincial
dismissed the complaint (Civil case No. 6865, CFI Rizal).
sheriff of Rizal whose deputy, together with counsel for
Jose Corominas, Jr. and Sonia Lizares were married in Iloilo
respondent Manila Surety, repaired to the residence of
Not satisfied, Trinidad Teodoro (as plaintiff in said civil case on January 5, 1935. On November 29,1954, a decree of
herein petitioner at No. 794 Harvard Street, Mandaluyong,
No. 6865 of Rizal) interposed an appeal. In the meanwhile, divorce was granted by the Court of the State of Nevada
Rizal, and levied upon a car, some furniture, appliances and dissolving the bonds of matrimony between Sonia Lizares
personal properties found therein belonging solely and however, the Manila Surety filed on May 29, 1962, in the
Court of First Instance of Manila a motion for the issuance and Jose Corominas, Jr. . . .
exclusively to the petitioner with the exception of sewing
machine which belonged to a maid by the name of Nati of a third alias writ of execution for the satisfaction of the
judgment debt in civil case No. 17014. Acting upon said Trinidad Teodoro met Jose Corominas, Jr. in Hongkong on
Fresco, a G.E. television set which was the property of the
motion the Court of First Instance of Manila issued October 30, 1955. . . . On March 26,1956, they went
minor Jose Alfonso Corominas, and a baby grand piano as
on June 2, 1962, the "Third Alias Writ of Execution." through a Buddhist wedding ceremony in Hongkong. Upon
well as a Columbia radio phonograph which belonged to
their return to the Philippines they took up residence in a
Jose Corominas, Jr. As the petitioner was then abroad, her
Thus, on June 7,1962, deputies of the provincial sheriff of rented house at No. 2305 Agno Street, . . . Manila. On
sister Josefina Teodoro, to whom she had entrusted the
Rizal again repaired to the residence of herein petitioner at September 5, 1961, plaintiff and Jose Corominas, Jr. were
custody and safekeeping of the properties, had made
married for a second time on Washoe County, Nevada. valid marriage" dictum in said decisions will undoubtedly deserve injunction. Of course, what happened here was that before the
U.S.A. closer examination, since it establishes an exception to the broad record on appeal could be filed (on June 18, 1962) or approved (on
terms of Article 144. For one thing, a situation may arise involving a September 8, 1962) a third alias writ of execution was issued by the
Additional Pertinent facts, also mentioned in the decision under conflict of rights between a co-ownership under that provision and trial court (on June 2, 1962) and the properties in question were
review and controverted by the parties, are that Sonia Lizares is still an existing conjugal partnership formed by a prior marriage where, again levied upon by the sheriff and advertised for sale on June 16,
living and that the conjugal partnership formed by her marriage to for instance, the husband in such marriage lives with another 1962. It was impracticable for respondent to first wait for the appeal
Corominas was dissolved by the Juvenile and Domestic Relations woman and with his salary or wages acquires properties during the to be elevated to and docketed in the Court of Appeals and there
Court of Manila upon their joint petition, the decree of dissolution extra-marital cohabitation. A ruling would then be in order to secure the ancillary remedy of injunction therein. An independent
having been issued on October 21, 1957. determine which — as between the co-ownership and the conjugal petition for injunction, under the circumstances, was not
partnership — could claim ascendancy insofar as the properties are unjustified.
The principal issue here is the applicability of Article 144 of the Civil concerned.
Code to the situation thus created. This Article provides: Respondent could, indeed, have filed a third party claim instead as
In the present case, however, we find no need to pass on this indicated in Rule 39, Section 15.* But then her sister Josefina
When a man and a woman live together as husband and question. The particular properties involved here which were Teodoro did make such a claim in her behalf after the second alias
wife, but they are not married, or their marriage is void admittedly acquired by respondent Teodoro, cannot be deemed to writ of execution was issued, but it was ignored and the sheriff
from the beginning, the property acquired by either or both belong to such co-ownership because, as found by the trial court proceeded with the levy. In any event, a third party claim is not an
of them through then work or industry or their wages and and confirmed by the Court of Appeals, the funds used in acquiring exclusive remedy: the same rule provides that nothing therein
salaries shall be governed by the rules on co-ownership. said properties were fruits of respondent's paraphernal investments contained "shall prevent such third person from vindicating his claim
which accrued before her "marriage" to Corominas. In other words to the property by any proper action.
they were not acquired by either or both of the partners in the void
There is no doubt that the decree of divorce granted by the Court of
marriage through their work or industry or their wages and salaries, We do not deem it to be a reversible error for Trinidad Teodoro not
Nevada in 1954 is not valid under Philippine law, which has
and hence cannot be the subject of co-ownership under Article 144. to include the trial Judge as party-respondent in her petition for
outlawed divorce altogether; that the matrimonial bonds between
They remain respondent's exclusive properties, beyond the reach of injunction in the Court of Appeals. The trial Judge would have been
Jose Corominas, Jr. and Sonia Lizares have not been dissolved,
execution to satisfy the judgment debt of Corominas. merely a nominal party anyway, and no substantial rights of
although their conjugal partnership was terminated in 1957; and
that the former's subsequent marriage in Hongkong to Trinidad petitioner here have been prejudiced by the omission.
Teodoro is bigamous and void. Several procedural questions have been raised by petitioner. First,
that the injunction issued by the Court of Appeals was improper In view of the foregoing, the judgment of the Court of Appeals is
since it was not in aid of its appellate jurisdiction; second, that affirmed, with costs.
While Article 144 speaks, inter alia, of a void marriage without any
respondent Trinidad Teodoro having elected to appeal from the
qualification, the Court of Appeals declined to apply it in this case on
decision of the Court of First Instance of Rizal, she may not pursue
two grounds: (1) the subsisting marriage of Corominas to Sonia
the remedy of injunction as she did in this case; third, that
Lizares constitutes an impediment to a valid marriage between him
respondent's petition for injunction in the Court of Appeals failed to
and respondent Trinidad Teodoro, which impediment, according to
state a cause of action; fourth, that the proper remedy available to
a number of decisions of the Supreme Court, precludes the
respondent was by filing a third-party claim; and finally, that the
establishment of a co-ownership under said article, and (2) the
trial judge should have been included as party respondent in the
funds used by said respondent in acquiring the properties in
petition for injunction.
question were "fruits of her paraphernal investments which accrued
before her marriage to Corominas."
As to the first in second points, the fact is that respondent Trinidad
Teodoro perfected her appeal to the Court of Appeals, which found
The decisions cited under the first ground are Christensen vs. Garcia,
that there were questions of fact involved therein, one of them
56 O.G. No. 16, p. 3199; Samson vs. Salaysay, 56 O.G. No. 11, p.
being whether the properties in question were acquired before or
2401; and Osmeña vs. Rodriguez, 54 O.G. No. 20, p. 5526. In a
after her void marriage to Corominas. In aid of its appellate
proper case, where it may be necessary to do so in order to resolve
jurisdiction, therefore, the said Court could issue a writ of
an unavoidable issue, the precise scope of the "no impediment to a
SECOND DIVISION On February 15, 1985, the Register of Deeds made of record Entry owner-type jeep for ₱10,000.00 to MIWCC.12 Sheriff Alejo issued a
No. 85-18003 at the dorsal portion of the said titles. This referred to Notice of Levy on Execution/Attachment over the lots covered by
G.R. No. 151967 February 16, 2005 an Affidavit of Waiver executed by Eduardo where he declared that TCT No. 87976 (60550) and 87977 (60551) for the recovery of the
before his marriage to Josefina, the latter purchased two parcels of balance of the amount due under the decision of the trial court in
JOSEFINA C. FRANCISCO, petitioner, land, including the house constructed thereon, with her own Civil Case No. 90-3251.13 On June 24, 1994, the sale of the property
vs. savings, and that he was waiving whatever claims he had over the at a public auction was set to August 5, 1994. 14
MASTER IRON WORKS & CONSTRUCTION CORPORATION and property.7 On January 13, 1986, Josefina mortgaged the said
ROBERTO V. ALEJO, Sheriff IV, Regional Trial Court of Makati City, property to Leonila Cando for a loan of ₱157,000.00.8 It appears that On July 3, 1994, Josefina executed an Affidavit of Third Party
Branch 142, respondents. Eduardo affixed his marital conformity to the deed.9 Claim15 over the two parcels of land in which she claimed that they
were her paraphernal property, and that her husband Eduardo had
DECISION On June 11, 1990, Eduardo, who was then the General Manager and no proprietary right or interest over them as evidenced by his
President of Reach Out Trading International, bought 7,500 bags of affidavit of waiver, a copy of which she attached to her affidavit.
cement worth ₱768,750.00 from Master Iron Works & Construction She, likewise, requested Sheriff Alejo to cause the cancellation of
CALLEJO, SR., J.:
Corporation (MIWCC) but failed to pay for the same. On November the notice of levy on execution/attachment earlier issued by him.
27, 1990, MIWCC filed a complaint against him in the RTC of Makati
Before us is a petition for review on certiorari of the Decision1 of the
City for the return of the said commodities, or the value thereof in On July 7, 1994, Josefina filed the said Affidavit of Third Party Claim
Court of Appeals (CA) in CA-G.R. No. CV No. 59045, which reversed
the amount of ₱768,750.00. The case was docketed as Civil Case No. in the trial court and served a copy thereof to the sheriff. MIWCC
and set aside the Decision2 of the Regional Trial Court (RTC) of
90-3251. On January 8, 1992, the trial court rendered judgment in then submitted an indemnity bond16 in the amount of
Parañaque, Metro Manila, Branch 260, in Civil Case No. 94-2260 and
favor of MIWCC and against Eduardo. The fallo of the decision ₱1,361,500.00 issued by the Prudential Guarantee and Assurance,
the Resolution of the CA denying the petitioner’s motion for
reads: Inc. The sale at public auction proceeded. MIWCC made a bid for the
reconsideration of the said decision.
property for the price of ₱1,350,000.00.17
Accordingly, the Court renders judgment in favor of the plaintiff
Josefina Castillo was only 24 years old when she and Eduardo G.
Master Iron Works And Construction Corporation against the On July 28, 1994, Josefina filed a Complaint against MIWCC and
Francisco were married on January 15, 1983.3Eduardo was then
defendant [Eduardo] Francisco ordering the latter as follows: Sheriff Alejo in the RTC of Parañaque for damages with a prayer for
employed as the vice president in a private corporation. A little
a writ of preliminary injunction or temporary restraining order,
more than a year and seven months thereafter, or on August 31,
1. To replace to plaintiff 7,500 bags at 50 kilos/bag of docketed as Civil Case No. 94-2260. She alleged then that she was
1984, the Imus Rural Bank, Inc. (Imus Bank) executed a deed of
Portland cement or, in the alternative, to pay the plaintiff the sole owner of the property levied on execution by Sheriff Alejo
absolute sale for ₱320,000.00 in favor of Josefina Castillo Francisco,
the amount of ₱768,750.00; in Civil Case No. 90-3251; hence, the levy on execution of the
married to Eduardo Francisco, covering two parcels of residential
property was null and void. She reiterated that her husband, the
land with a house thereon located at St. Martin de Porres Street,
2. In either case, to pay liquidated damages by way of defendant in Civil Case No. 90-3251, had no right or proprietary
San Antonio Valley I, Sucat, Parañaque, Metro Manila. One of the
interest at 12% per annum from June 21, 1990 until fully interest over the said property as evidenced by his affidavit of
lots was covered by Transfer Certificate of Title (TCT) No. 36519,
paid; waiver annotated at the dorsal portion of the said title. Josefina
with an area of 342 square meters, while the other lot, with an area
prayed that the court issue a temporary restraining order/writ of
of 360 square meters, was covered by TCT No. 36518.4 The purchase
3. To pay ₱50,000.00 as actual damages; and preliminary injunction to enjoin MIWCC from causing the sale of the
price of the property was paid to the Bank via Check No. 002334 in
said property at public auction. Considering that no temporary
the amount of ₱320,000.00 drawn and issued by the Commercial
restraining order had as yet been issued by the trial court, the
Bank of Manila, for which the Imus Bank issued Official Receipt No. 4. To pay attorney’s fees of ₱153,750.00 and litigation
sheriff sold the subject property at public auction to MIWCC for
121408 on August 31, 1984.5 On the basis of the said deed of sale, expenses of ₱20,000.00.
₱1,350,000.00 on August 5, 1994.18 However, upon the failure of
TCT Nos. 36518 and 36519 were cancelled and, on September 4,
MIWCC to remit the sheriff’s commission on the sale, the latter did
1984, the Register of Deeds issued TCT Nos. 87976 (60550) and SO ORDERED.10
not execute a sheriff’s certificate of sale over the property. The RTC
87977 (60551) in the name of "Josefina Castillo Francisco married to
of Parañaque, thereafter, issued a temporary restraining order 19 on
Eduardo G. Francisco."6 The decision in Civil Case No. 90-3251 became final and executory August 16, 1994.
and, on June 7, 1994, the court issued a writ of execution. 11 On June
14, 1994, Sheriff Roberto Alejo sold at a public auction one stainless,
When Josefina learned of the said sale at public auction, she filed an affidavit of waiver to evade the satisfaction of the decision in Civil family;26 Josefina decided that he execute the affidavit of waiver
amended complaint impleading MIWCC, with the following prayer: Case No. 90-3251 and to place the property beyond the reach of because her mother and sister gave the property to her.27
creditors; hence, the said affidavit was null and void.
WHEREFORE, premises considered, it is most respectfully prayed to On December 20, 1997, the trial court rendered judgment finding
this Honorable Court that, after hearing, judgment be rendered in Before she could commence presenting her evidence, Josefina filed the levy on the subject property and the sale thereof at public
favor of the plaintiff and against the defendants and the same be in a petition to annul her marriage to Eduardo in the RTC of auction to be null and void. The fallo of the decision reads:
the following tenor: Parañaque, Metro Manila, on the ground that when they were
married on January 15, 1983, Eduardo was already married to one WHEREFORE, PREMISES CONSIDERED, THIS COURT finds the Levying
1. Ordering the defendants, jointly and severally, to pay the Carmelita Carpio. The case was docketed as Civil Case No. 95-0169. and sale at public auction of the plaintiff’s properties null and void.
plaintiff the following amounts:
Josefina and Carmelita testified in Civil Case No. 95-0169. Josefina The court orders the defendants to, jointly and severally, pay
A. The sum of ₱50,000.00 representing as actual declared that during her marriage to Eduardo, she acquired the plaintiff the following amounts:
damages; property covered by TCT Nos. 87976 (60550) and 87977 (60551),
through the help of her sisters and brother, and that Eduardo had a. The sum of ₱50,000.00 as actual damages;
B. The sum of ₱200,000.00 representing as moral no participation whatsoever in the said acquisition. She added that
damages; Eduardo had five children, namely, Mary Jane, Dianne, Mary Grace
b. The sum of ₱50,000.00 representing as moral damages;
Jo, Mark Joseph and Mary Cecille, all surnamed Francisco.
C. The sum of ₱50,000.00 or such amount which c. The sum of ₱50,000.00 as exemplary damages;
this Honorable Court deems just as exemplary On September 9, 1996, the RTC of Parañaque rendered
damages; judgment21 in Civil Case No. 95-0169, declaring the marriage
d. The sum of ₱60,000.00 as and for attorney’s fees.
between Josefina and Eduardo as null and void for being bigamous.
D. The sum of ₱60,000.00 as and for attorney’s The court orders the cancellation of whatever entries appearing at
fees. In the meantime, Josefina testified in Civil Case No. 94-2260,
the Titles as a result of the enforcement of the writ of execution
declaring, inter alia, that she was able to purchase the property
issued in Civil Case No. 90-3251.
from the Bank when she was still single with her mother’s financial
2. Declaring the levying and sale at public auction of the
assistance; she was then engaged in recruitment when Eduardo
plaintiff’s properties null and void; SO ORDERED.28
executed an affidavit of waiver; she learned that he was previously
married when they already had two children; nevertheless, she
3. To issue writ of preliminary injunction and makes it The trial court held that the property levied by Sheriff Alejo was the
continued cohabiting with him and had three more children by him;
permanent; sole and exclusive property of Josefina, applying Articles 144, 160,
and because of Eduardo’s first marriage, she decided to have him
execute the affidavit of waiver. 175 and 485 of the New Civil Code. The trial court also held that
4. Order the cancellation of whatever entries appearing at MIWCC failed to prove that Eduardo Francisco contributed to the
the titles as a result of the enforcement of the writ of acquisition of the property.
Eduardo testified that when his wife bought the property in 1984,
execution issued in Civil Case No. 90-3251.
he was in Davao City and had no knowledge of the said purchases;
he came to know of the purchase only when Josefina informed him MIWCC appealed the decision to the CA in which it alleged that:
Plaintiff further prays for such other reliefs as may be just under the a week after his arrival from Davao;22 Josefina’s sister, Lolita Castillo,
premises.20 told him that she would collect from him the money his wife I. THE TRIAL COURT ERRED IN RULING THAT THE REAL ESTATE
borrowed from her and their mother to buy the property; 23 when he PROPERTIES SUBJECT OF THE AUCTION SALE ARE PARAPHERNAL
In its answer to the complaint, MIWCC cited Article 116 of the told Lolita that he had no money, she said that she would no longer PROPERTIES OWNED BY PLAINTIFF-APPELLEE JOSEFINA FRANCISCO;
Family Code of the Philippines and averred that the property was collect from him, on the condition that he would have no
the conjugal property of Josefina and her husband Eduardo, who participation over the property,24 which angered Eduardo;25 when II. THE TRIAL COURT ERRED IN ALLOWING THE RECEPTION OF
purchased the same on August 31, 1984 after their marriage on Josefina purchased the property, he had a gross monthly income of REBUTTAL EVIDENCE WITH REGARD TO THE ANNULMENT OF
January 14, 1983. MIWCC asserted that Eduardo executed the ₱10,000.00 and gave ₱5,000.00 to Josefina for the support of his PLAINTIFF-APPELLEE’S MARRIAGE WITH EDUARDO FRANCISCO;
III. THE TRIAL COURT ERRED IN RULING THAT THE LEVY ON The threshold issues for resolution are as follows: (a) whether or not highly meritorious circumstances are present, and where it is
EXECUTION OF PLAINTIFF-APPELLEE’S PROPERTIES SUBJECT OF THE the subject property is the conjugal property of Josefina Castillo and necessary to give substantial justice to the parties. In the present
PRESENT CONTROVERSY IS NULL AND VOID; Eduardo Francisco; and (b) whether or not the subject properties action, the findings of facts and the conclusions of the trial court
may be held to answer for the personal obligations of Eduardo. and those of the CA are opposite. There is thus an imperative need
IV. THE TRIAL COURT ERRED IN ORDERING DEFENDANT-APPELLANT for the Court to delve into and resolve the factual issues, in tandem
TO PAY DAMAGES TO PLAINTIFF-APPELLEE FOR ALLEGED IMPROPER We shall deal with the issues simultaneously as they are closely with the questions of law raised by the parties.
LEVY ON EXECUTION.29 related.
The petition has no merit.
The CA rendered judgment setting aside and reversing the decision The petitioner asserts that inasmuch as her marriage to Eduardo is
of the RTC on September 20, 2001. The fallo of the decision reads: void ab initio, there is no occasion that would give rise to a regime The petitioner failed to prove that she acquired the property with
of conjugal partnership of gains. The petitioner adds that to rule her personal funds before her cohabitation with Eduardo and that
WHEREFORE, premises considered, the Decision, dated 20 otherwise would render moot and irrelevant the provisions on the she is the sole owner of the property. The evidence on record shows
December 1997, of the Regional Trial Court of Parañaque, Branch regime of special co-ownership under Articles 147 and 148 of the that the Imus Bank executed a deed of absolute sale over the
260, is hereby REVERSED and SETASIDE and a new one entered Family Code of the Philippines, in relation to Article 144 of the New property to the petitioner on August 31, 1984 and titles over the
dismissing Civil Case No. 94-0126. Civil Code. property were, thereafter, issued to the latter as vendee on
September 4, 1984 after her marriage to Eduardo on January 15,
SO ORDERED.30 The petitioner avers that since Article 148 of the Family Code 1983.1ªvvphi1.nét
governs their property relationship, the respondents must adduce
The CA ruled that the property was presumed to be the conjugal evidence to show that Eduardo actually contributed to the We agree with the petitioner that Article 144 of the New Civil Code
property of Eduardo and Josefina, and that the latter failed to rebut acquisition of the subject properties. The petitioner asserts that she does not apply in the present case. This Court in Tumlos v.
such presumption. It also held that the affidavit of waiver executed purchased the property before her marriage to Eduardo with her Fernandez32 held that Article 144 of the New Civil Code applies only
by Eduardo was contrary to Article 146 of the New Civil Code and, as own money without any contribution from him; hence, the subject to a relationship between a man and a woman who are not
such, had no force and effect. Josefina filed a motion for property is her paraphernal property.l^vvphi1.net Consequently, incapacitated to marry each other, or to one in which the marriage
reconsideration of the decision, which was, likewise, denied by the such property is not liable for the debts of Eduardo to private of the parties is void from the very beginning. It does not apply to a
CA. respondent MIWCC. cohabitation that is adulterous or amounts to concubinage, for it
would be absurd to create a co-ownership where there exists a prior
The respondents, on the other hand, contend that the appellate conjugal partnership or absolute community between the man and
Josefina, now the petitioner, filed the present petition for review,
court was correct in ruling that the properties are conjugal in nature his lawful wife. In this case, the petitioner admitted that when she
alleging that:
because there is nothing in the records to support the petitioner’s and Eduardo cohabited, the latter was incapacitated to marry her.
uncorroborated claim that the funds she used to purchase the
A. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT
subject properties were her personal funds or came from her Article 148 of the Family Code of the Philippines, on which the
THERE EXISTS A CONJUGAL PARTNERSHIP BETWEEN PETITIONER
mother and sister. The respondents point out that if, as claimed by petitioner anchors her claims, provides as follows:
AND EDUARDO FRANCISCO;
the petitioner, the subject properties were, indeed, not conjugal in
nature, then, there was no need for her to obtain marital Art. 148. In cases of cohabitation not falling under the preceding
B. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT
(Eduardo’s) consent when she mortgaged the properties to two Article, only the properties acquired by both of the parties through
THE SUBJECT PROPERTIES WERE NOT PARAPHERNAL PROPERTIES
different parties sometime in the first quarter of 1986, or after their actual joint contribution of money, property, or industry shall
OF PETITIONER;
Eduardo executed the affidavit of waiver. be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their
C. THE HONORABLE COURT OF APPEALS ERRED IN DISTURBING THE
We note that the only questions raised in this case are questions of contributions and corresponding shares are presumed to be equal.
FINDINGS OF FACTS AND CONCLUSION BY THE TRIAL COURT IN ITS
facts. Under Rule 45 of the Rules of Court, only questions of law may The same rule and presumption shall apply to joint deposits of
DECISION OF DECEMBER 20, 1997, THE SAME BEING IN
be raised in and resolved by the Court. The Court may, however, money and evidences of credit.
ACCORDANCE WITH LAW AND JURISPRUDENCE.31
determine and resolve questions of facts in cases where the findings
of facts of the trial court and those of the CA are inconsistent, where
If one of the parties is validly married to another, his or her share in to purchase the subject properties came from her mother and We note that, as gleaned from the receipt issued by the Imus Bank,
the co-ownership shall accrue to the absolute community or sister. She did not, for instance, present the testimonies of her the payment for the subject property was drawn via Check No.
conjugal partnership existing in such valid marriage. If the party who mother and sister who could have corroborated her claim. 002334 and issued by the Commercial Bank of Manila in the amount
acted in bad faith is not validly married to another, his or her share Furthermore, in her Affidavit of Third-Party Claim (Exh. "C"), she of ₱320,000.00.40 The petitioner failed to testify against whose
shall be forfeited in the manner provided in the last paragraph of stated that the subject properties "are my own paraphernal account the check was drawn and issued, and whether the said
the preceding Article. properties, including the improvements thereon, as such are the account was owned by her and/or Eduardo Francisco or her mother,
fruits of my own exclusive efforts …," clearly implying that she used sister or brother. She even failed to testify whether the check was a
The foregoing rules on forfeiture shall, likewise, apply even if both her own money and contradicting her later claim that the funds manager’s check and, if so, whose money was used to purchase the
parties are in bad faith. were provided by her mother and sister. She also stated in her same.
affidavit that she acquired the subject properties before her
Indeed, the Family Code has filled the hiatus in Article 144 of the marriage to Eduardo Francisco on 15 January 1983, a claim later We also agree with the findings of the CA that the affidavit of waiver
New Civil Code by expressly regulating in Article 148 the property belied by the presentation of the Deed of Absolute Sale clearly executed by Eduardo on February 15, 1985, stating that the
relations of couples living in a state of adultery or concubinage. indicating that she bought the properties from Imus Rural Bank on property is owned by the petitioner, is barren of probative weight.
Under Article 256 of the Family Code, the law can be applied 31 August 1984, or one year and seven months after her marriage We are convinced that he executed the said affidavit in anticipation
retroactively if it does not prejudice vested or acquired rights. The (Exh. "D"). In the face of all these contradictions, plaintiff-appellee’s of claims by third parties against him and hold the property liable
petitioner failed to prove that she had any vested right over the uncorroborated testimony that she acquired the subject properties for the said claims. First, the petitioner failed to prove that she had
property in question.33 with funds provided by her mother and sister should not have been any savings before her cohabitation with Eduardo. Second, despite
given any weight by the lower court. Eduardo’s affidavit of waiver, he nevertheless affixed his marital
Since the subject property was acquired during the subsistence of conformity to the real estate mortgage executed by the petitioner
the marriage of Eduardo and Carmelita, under normal It is to be noted that plaintiff-appellee got married at the age of 23. over the property in favor of Leonila on January 13, 1986. 41 Third,
circumstances, the same should be presumed to be conjugal At that age, it is doubtful if she had enough funds of her own to the petitioner testified that she borrowed the funds for the
property.34 Article 105 of the Family Code of the Philippines provides purchase the subject properties as she claimed in her Affidavit of purchase of the property from her mother and sister. 42 Fourth, the
that the Code shall apply to conjugal partnership established before Third Party Claim. Confronted with this reality, she later claimed petitioner testified that Eduardo executed the affidavit of waiver
the code took effect, without prejudice to vested rights already that the funds were provided by her mother and sister, clearly an because she discovered that he had a first marriage.43 Lastly,
acquired under the New Civil Code or other laws.35 Thus, even if afterthought in a desperate effort to shield the subject properties Eduardo belied the petitioner’s testimony when he testified that he
Eduardo and Carmelita were married before the effectivity of the from appellant Master Iron as judgment creditor.38 executed the affidavit of waiver because his mother-in-law and
Family Code of the Philippines, the property still cannot be sister-in-law had given the property to the petitioner.44
considered conjugal property because there can only be but one Aside from her bare claims, the petitioner offered nothing to prove
valid existing marriage at any given time.36 Article 148 of the Family her allegation that she borrowed the amount of ₱320,000.00 from IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of
Code also debilitates against the petitioner’s claim since, according her mother and her sister, which she paid to the Imus Bank on merit. The Decision of the Court of Appeals reversing the decision of
to the said article, a co-ownership may ensue in case of cohabitation August 31, 1984 to purchase the subject property. The petitioner the Regional Trial Court is AFFIRMED. No pronouncement as to
where, for instance, one party has a pre-existing valid marriage even failed to divulge the name of her mother and the sources of costs.
provided that the parents prove their actual joint contribution of her income, if any, and that of her sister. When she testified in Civil
money, property or industry and only to the extent of their Case No. 95-0169, the petitioner declared that she borrowed part of SO ORDERED.
proportionate interest thereon.37 the purchase price of the property from her brother, 39 but failed to
divulge the latter’s name, let alone reveal how much money she
We agree with the findings of the appellate court that the petitioner borrowed and when. The petitioner even failed to adduce any
failed to adduce preponderance of evidence that she contributed evidence to prove that her mother and sister had ₱320,000.00 in
money, property or industry in the acquisition of the subject 1984, which, considering the times, was then quite a substantial
property and, hence, is not a co-owner of the property: amount. Moreover, the petitioner’s third-party-claim affidavit
stating that the properties "are the fruits of my own exclusive effort
before I married Eduardo Francisco" belies her testimony in the trial
First of all, other than plaintiff-appellee’s bare testimony, there is
court and in Civil Case No. 95-0169.1awphi1.nét
nothing in the record to support her claim that the funds she used
SECOND DIVISION property was acquired during his union with Yolanda as common- SO ORDERED.
law husband and wife, hence the property is co-owned by them.
G.R. No. 169698 November 29, 2006 From the decision of the trial court, Yolanda went on appeal to the
Elaborating, Lupo averred in his complaint that the property in CA in CA-G.R. CV No. 69797, therein arguing that the evidence on
LUPO ATIENZA, Petitioner, question was acquired by Yolanda sometime in 1987 using his record preponderate that she purchased the disputed property in
vs. exclusive funds and that the title thereto was transferred by the her own name with her own money. She maintained that the
YOLANDA DE CASTRO, Respondent. seller in Yolanda’s name without his knowledge and consent. He did documents appertaining to her acquisition thereof are the best
not interpose any objection thereto because at the time, their affair evidence to prove who actually bought it, and refuted the findings
DECISION was still thriving. It was only after their separation and his receipt of of the trial court, as well as Lupo’s assertions casting doubt as to her
information that Yolanda allowed her new live-in partner to live in financial capacity to acquire the disputed property.
the disputed property, when he demanded his share thereat as a co-
GARCIA, J.:
owner. As stated at the threshold hereof, the appellate court, in its
decision4 of April 29, 2005, reversed and set aside that of the trial
Assailed and sought to be set aside in this petition for review on
In her answer, Yolanda denied Lupo’s allegations. According to her, court and adjudged the litigated property as exclusively owned by
certiorari is the Decision1 dated April 29, 2005 of the Court of
she acquired the same property for Two Million Six Hundred Yolanda, to wit:
Appeals (CA) in CA-G.R. CV No. 69797, as reiterated in its
Thousand Pesos (₱2,600,000.00) using her exclusive funds. She
Resolution2 of September 16, 2005, reversing an earlier decision of
insisted having bought it thru her own savings and earnings as a WHEREFORE, the foregoing considered, the assailed decision is
the Regional Trial Court (RTC) of Makati City, Branch 61, in an action
businesswoman. hereby REVERSED and SET ASIDE . The subject property is hereby
for Judicial Partition of Real Property thereat commenced by the
herein petitioner Lupo Atienza against respondent Yolanda de declared to be exclusively owned by defendant-appellant Yolanda U.
Castro. In a decision3 dated December 11, 2000, the trial court rendered De Castro. No costs.
judgment for Lupo by declaring the contested property as owned in
common by him and Yolanda and ordering its partition between the SO ORDERED.
The facts:
two in equal shares, thus:
Sometime in 1983, petitioner Lupo Atienza, then the President and In decreeing the disputed property as exclusively owned by Yolanda,
WHEREFORE, judgment is hereby rendered declaring the property the CA ruled that under the provisions of Article 148 of the Family
General Manager of Enrico Shipping Corporation and Eurasian
covered by Transfer Certificate of Title No. 147828 of the Registry of Code vis-à-vis the evidence on record and attending circumstances,
Maritime Corporation, hired the services of respondent Yolanda U.
Deeds of Makati City to be owned in common by plaintiff LUPO Yolanda’s claim of sole ownership is meritorious, as it has been
De Castro as accountant for the two corporations.
ATIENZA and the defendant YOLANDA U. DE CASTRO share-and- substantiated by competent evidence. To the CA, Lupo failed to
share alike and ordering the partition of said property between overcome the burden of proving his allegation that the subject
In the course of time, the relationship between Lupo and Yolanda
them. Upon the finality of this Decision, the parties are hereby property was purchased by Yolanda thru his exclusive funds.
became intimate. Despite Lupo being a married man, he and
directed to submit for the confirmation of the Court a mutually
Yolanda eventually lived together in consortium beginning the later
agreed project of partition of said property or, in case the physical With his motion for reconsideration having been denied by the CA in
part of 1983. Out of their union, two children were born. However,
partition of said property is not feasible because of its nature, that its Resolution of September 16, 2005, 5 Lupo is now with this Court
after the birth of their second child, their relationship turned sour
either the same be assigned to one of the parties who shall pay the via the present recourse arguing that pursuant to Article 144 6 of the
until they parted ways.
value corresponding to the share of the other or that the property Civil Code, he was in no way burdened to prove that he contributed
to be sold and the proceeds thereof be divided equally between the to the acquisition of the subject property because with or without
On May 28, 1992, Lupo filed in the RTC of Makati City a complaint parties after deducting the expenses incident to said sale. the contribution by either partner, he is deemed a co-owner
against Yolanda for the judicial partition between them of a parcel
thereof, adding that under Article 484 7 of Civil Code, as long as the
of land with improvements located in Bel-Air Subdivision, Makati
The parties shall bear their own attorney’s fees and expenses of property was acquired by either or both of them during their
City and covered by Transfer Certificate of Title No. 147828 of the
litigation. extramarital union, such property would be legally owned by them
Registry of Deeds of Makati City. In his complaint, docketed in said
in common and governed by the rules on co-ownership, which apply
court as Civil Case No. 92-1423, Lupo alleged that the subject
Costs against the defendant. in default of contracts, or special provisions.
We DENY. defendant some measure of protection as the plaintiff must still their behalf do not prove that the money she used in buying the
prove the allegations in the complaint. Favorable relief can be disputed property, or any property for that matter, came from said
It is not disputed that the parties herein were not capacitated to granted only after the court is convinced that the facts proven by withdrawals.
marry each other because petitioner Lupo Atienza was validly the plaintiff warrant such relief. 14 Indeed, the party alleging a fact
married to another woman at the time of his cohabitation with the has the burden of proving it and a mere allegation is not evidence.15 As it is, the disquisition of the court a quo heavily rested on the
respondent. Their property regime, therefore, is governed by Article apparent financial capacity of the parties.1âwphi1 On one side,
1488 of the Family Code, which applies to bigamous marriages, It is the petitioner’s posture that the respondent, having no financial there is [Lupo], a retired sea captain and the President and General
adulterous relationships, relationships in a state of concubinage, capacity to acquire the property in question, merely manipulated Manager of two corporations and on the other is [Yolanda], a
relationships where both man and woman are married to other the dollar bank accounts of his two (2) corporations to raise the Certified Public Accountant. Surmising that [Lupo] is financially well
persons, and multiple alliances of the same married man. Under this amount needed therefor. Unfortunately for petitioner, his heeled than [Yolanda], the court a quo concluded, sans evidence,
regime, …only the properties acquired by both of the parties submissions are burdened by the fact that his claim to the property that [Yolanda] had taken advantage of [Lupo]. Clearly, the court a
through their actual joint contribution of money, property, or contradicts duly written instruments, i.e., the Contract to Sell dated quo is in error. (Words in brackets supplied.)
industry shall be owned by them in common in proportion to their March 24, 1987, the Deed of Assignment of Redemption dated
respective contributions ...9 Proof of actual contribution is March 27, 1987 and the Deed of Transfer dated April 27, 1987, all As we see it, petitioner’s claim of co-ownership in the disputed
required.10 entered into by and between the respondent and the vendor of said property is without basis because not only did he fail to substantiate
property, to the exclusion of the petitioner. As aptly pointed out by his alleged contribution in the purchase thereof but likewise the
As it is, the regime of limited co-ownership of property governing the CA: very trail of documents pertaining to its purchase as evidentiary
the union of parties who are not legally capacitated to marry each proof redounds to the benefit of the respondent. In contrast, aside
other, but who nonetheless live together as husband and wife, Contrary to the disquisition of the trial court, [Lupo] failed to from his mere say so and voluminous records of bank accounts,
applies to properties acquired during said cohabitation in proportion overcome this burden. Perusing the records of the case, it is evident which sadly find no relevance in this case, the petitioner failed to
to their respective contributions. Co-ownership will only be up to that the trial court committed errors of judgment in its findings of overcome his burden of proof. Allegations must be proven by
the extent of the proven actual contribution of money, property or fact and appreciation of evidence with regard to the source of the sufficient evidence. Simply stated, he who alleges a fact has the
industry. Absent proof of the extent thereof, their contributions and funds used for the purchase of the disputed property and ultimately burden of proving it; mere allegation is not evidence.
corresponding shares shall be presumed to be equal.11 the rightful owner thereof. Factual findings of the trial court are
indeed entitled to respect and shall not be disturbed, unless some True, the mere issuance of a certificate of title in the name of any
Here, although the adulterous cohabitation of the parties facts or circumstances of weight and substance have been person does not foreclose the possibility that the real property
commenced in 1983, or way before the effectivity of the Family overlooked or misinterpreted that would otherwise materially affect covered thereby may be under co-ownership with persons not
Code on August 3, 1998, Article 148 thereof applies because this the disposition of the case. named in the certificate or that the registrant may only be a trustee
provision was intended precisely to fill up the hiatus in Article 144 of or that other parties may have acquired interest subsequent to the
the Civil Code.12 Before Article 148 of the Family Code was enacted, In making proof of his case, it is paramount that the best and most issuance of the certificate of title. However, as already stated,
there was no provision governing property relations of couples living complete evidence be formally entered. Rather than presenting petitioner’s evidence in support of his claim is either insufficient or
in a state of adultery or concubinage. Hence, even if the proof of his actual contribution to the purchase money used as immaterial to warrant the trial court’s finding that the disputed
cohabitation or the acquisition of the property occurred before the consideration for the disputed property, [Lupo] diverted the burden property falls under the purview of Article 148 of the Family Code.
Family Code took effect, Article 148 governs.13 imposed upon him to [Yolanda] by painting her as a shrewd and In contrast to petitioner’s dismal failure to prove his cause, herein
scheming woman without the capacity to purchase any property. respondent was able to present preponderant evidence of her sole
The applicable law being settled, we now remind the petitioner that Instead of proving his ownership, or the extent thereof, over the ownership. There can clearly be no co-ownership when, as here, the
here, as in other civil cases, the burden of proof rests upon the party subject property, [Lupo] relegated his complaint to a mere attack on respondent sufficiently established that she derived the funds used
who, as determined by the pleadings or the nature of the case, the financial capacity of [Yolanda]. He presented documents to purchase the property from her earnings, not only as an
asserts an affirmative issue. Contentions must be proved by pertaining to the ins and outs of the dollar accounts of ENRICO and accountant but also as a businesswoman engaged in foreign
competent evidence and reliance must be had on the strength of EURASIAN, which unfortunately failed to prove his actual currency trading, money lending and jewelry retail. She presented
the party’s own evidence and not upon the weakness of the contribution in the purchase of the said property. The fact that her clientele and the promissory notes evincing substantial dealings
opponent’s defense. The petitioner as plaintiff below is not [Yolanda] had a limited access to the funds of the said corporations with her clients. She also presented her bank account statements
automatically entitled to the relief prayed for. The law gives the and had repeatedly withdrawn money from their bank accounts for
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.