THIRD DIVISION WHEREFORE, in view of the foregoing, the Court hereby
G.R. No. 193038, March 11, 2015 grants the instant petition for legal separation between the
JOSEFINA V. NOBLEZA, Petitioner, v. SHIRLEY B.
NUEGA, Respondent.
DECISION
VILLARAMA, JR., J.:
At bar is a petition for review on certiorari of the
Decision1 dated May 14, 2010 and the Resolution2dated July
21, 2010 of the Court of Appeals (CA) in CA-G.R. CV No.
70235, which affirmed with modification the assailed
Decision3 dated February 14, 2001 of the Regional Trial Court
(RTC) of Marikina City, Branch 273, in Civil Case No. 96-274-
MK.
The following facts are found by the trial court and affirmed
by the appellate court:
Respondent Shirley B. Nuega (Shirley) was married to Rogelio
A. Nuega (Rogelio) on September 1, 1990.4 Sometime in
1988 when the parties were still engaged, Shirley was
working as a domestic helper in Israel. Upon the request of
Rogelio, Shirley sent him money5 for the purchase of a
residential lot in Marikina where they had planned to
eventually build their home. Rogelio was then also working
abroad as a seaman. The following year, or on September 13,
1989, Rogelio purchased the subject house and lot for One
Hundred Two Thousand Pesos (P102,000.00)6 from Rodeanna
Realty Corporation. The subject property has an aggregate
area of one hundred eleven square meters (111 sq. m.)
covered by Transfer Certificate of Title (TCT) No. N-
133844.7 Shirley claims that upon her arrival in the
Philippines sometime in 1989, she settled the balance for the
equity over the subject property with the developer through
SSS8 financing. She likewise paid for the succeeding monthly
amortizations. On October 19, 1989, TCT No. 1719639 over
the subject property was issued by the Registry of Deeds of
Marikina, Rizal solely under the name of Rogelio.
On September 1, 1990, Shirley and Rogelio got married and
lived in the subject property. The following year, Shirley
returned to Israel for work. While overseas, she received
information that Rogelio had brought home another woman,
Monica Escobar, into the family home. She also learned, and
was able to confirm upon her return to the Philippines in May
1992, that Rogelio had been introducing Escobar as his wife.
In June 1992, Shirley filed two cases against Rogelio: one for
Concubinage before the Provincial Prosecution Office of Rizal,
and another for Legal Separation and Liquidation of Property
before the RTC of Pasig City. Shirley later withdrew the
complaint for legal separation and liquidation of property, but
re-filed10 the same on January 29, 1993. In between the filing
of these cases, Shirley learned that Rogelio had the intention
of selling the subject property. Shirley then advised the
interested buyers - one of whom was their neighbor and
petitioner Josefina V. Nobleza (petitioner) - of the existence of
the cases that she had filed against Rogelio and cautioned
them against buying the subject property until the cases are
closed and terminated. Nonetheless, under a Deed of
Absolute Sale11 dated December 29, 1992, Rogelio sold the
subject property to petitioner without Shirley's consent in the
amount of Three Hundred Eighty Thousand Pesos
(P380,000.00), including petitioner's undertaking to assume
the existing mortgage on the property with the National Home
Mortgage Finance Corporation and to pay the real property
taxes due thereon.
Meanwhile, in a Decision12 dated May 16, 1994, the RTC of
Pasig City, Branch 70, granted the petition for legal
separation and ordered the dissolution and liquidation of the
regime of absolute community of property between Shirley
and Rogelio, viz.:chanroblesvirtuallawlibrary
subject spouses with all its legal effects as provided for in Art.
63 of the Family Code. Their community property is
consequently dissolved and must be liquidated in accordance
with Art. 102 of the New Family Code. The respondent is thus
hereby enjoined from selling, encumbering or in any way
disposing or alienating any of their community property
including the subject house and lot before the required
liquidation. Moreover, he, being the guilty spouse, must
forfeit the net profits of the community property in favor of
the petitioner who is the innocent spouse pursuant to Art. 43
of the aforesaid law. Finally, in the light of the claim of
ownership by the present occupants who have not been
impleaded in the instant case, a separate action must be
instituted by the petitioner against the alleged buyer or
buyers thereof to determine their respective rights thereon.
Let a copy of this decision be furnished the Local Civil
Registrar of Manila, the Register of Deeds of Marikina, Metro
Manila and the National Statistics Office (NSO), sta. Mesa,
Manila.
SO ORDERED.13cralawlawlibrary
Rogelio appealed the above-quoted ruling before the CA
which denied due course and dismissed the petition. It
became final and executory and a writ of execution was
issued in August 1995.14
On August 27, 1996, Shirley instituted a Complaint15 for
Rescission of Sale and Recoveiy of Property against petitioner
and Rogelio before the RTC of Marikina City, Branch 273.
After trial on the merits, the trial court rendered its decision
on February 14, 2001, viz.:chanroblesvirtuallawlibrary
WHEREFORE, foregoing premises considered, judgment is
hereby rendered in favor of plaintiff Shirley Nuega and
against defendant Josefina Nobleza, as follows:
1) the Deed of Absolute Sale dated December 29, 1992
insofar as the 55.05 square meters representing the one
half (1/2) portion of plaintiff Shirley Nuega is concerned, is
hereby ordered rescinded, the same being null and void;
2) defendant Josefina Nobleza is ordered to reconvey said
55.05 square meters to plaintiff Shirley Nuega, or in the
alternative to pay plaintiff Shirley Nuega the present
market value of said 55.05 square meters; and
3) to pay plaintiff Shirley Nuega attorney's fees in the sum of
Twenty Thousand Pesos (P20,000.00).
For lack of merit, defendant's counterclaim is
hereby DENIED.
SO ORDERED.16
Petitioner sought recourse with the CA, while Rogelio did not
appeal the ruling of the trial court. In its assailed Decision
promulgated on May 14, 2010, the appellate court affirmed
with modification the trial court's
ruling, viz.:chanroblesvirtuallawlibrary
WHEREFORE, subject to the foregoing disquisition, the
appeal is DENIED. The Decision dated 14 February 2001 of
the Regional Trial Court of Marikina City, Branch 273 in Civil
Case No. 96-274-MK is AFFIRMED with MODIFICATION in
that the Deed of Absolute Sale dated 29 December 1992 is
hereby declared null and void in its entirety, and defendant-
appellant Josefina V. Nobleza is ordered to reconvey the
entire subject property to plaintiff-appellee Shirley B. Nuega
and defendant Rogelio Nuega, without prejudice to said
defendant-appellant's right to recover from defendant Rogelio
whatever amount she paid for the subject property. Costs
against defendant-appellant Nobleza.
SO ORDERED.17cralawlawlibrary
Petitioner moved for reconsideration. In a Resolution dated
July 21, 2010, the appellate court denied the motion for lack
of merit. Hence, this petition raising the following assignment
of errors:chanroblesvirtuallawlibrary
[I.] THE HONORABLE COURT OF APPEALS ERRED WHEN IT
AFFIRMED THE DECISION OF THE REGIONAL TRIAL
COURT BY SUSTAINING THE FINDING THAT PETITIONER
WAS NOT A PURCHASER IN GOOD FAITH.
[II.]THE HONORABLE COURT OF APPEALS ERRED WHEN IT
MODIFIED THE DECISION OF THE REGIONAL TRIAL
COURT BY DECLARING AS NULL AND VOID THE DEED OF
ABSOLUTE SALE DATED 29 DECEMBER 1992 IN ITS
ENTIRETY.18
We deny the petition.
Petitioner is not a buyer in good faith.
An innocent purchaser for value is one who buys the property
of another, without notice that some other person has a right
or interest in the property, for which a full and fair price is
paid by the buyer at the time of the purchase or before
receipt of any notice of claims or interest of some other
person in the property.19 It is the party who claims to be an
innocent purchaser for value who has the burden of proving
such assertion, and it is not enough to invoke the ordinary
presumption of good faith.20 To successfully invoke and be
considered as a buyer in good faith, the presumption is that
first and foremost, the "buyer in good faith" must have shown
prudence and due diligence in the exercise of his/her rights. It
presupposes that the buyer did everything that an ordinary
person would do for the protection and defense of his/her
rights and interests against prejudicial or injurious concerns
when placed in such a situation. The prudence required of a
buyer in good faith is "not that of a person with training in
law, but rather that of an average man who 'weighs facts and
circumstances without resorting to the calibration of our
technical rules of evidence of which his knowledge is nil.'"21 A
buyer in good faith does his homework and verifies that the
particulars are in order such as the title, the parties, the
mode of transfer and the provisions in the deed/contract of
sale, to name a few. To be more specific, such prudence can
be shown by making an ocular inspection of the property,
checking the title/ownership with the proper Register of
Deeds alongside the payment of taxes therefor, or inquiring
into the minutiae such as the parameters or lot area, the type
of ownership, and the capacity of the seller to dispose of the
property, which capacity necessarily includes an inquiry into
the civil status of the seller to ensure that if married, marital
consent is secured when necessary. In fine, for a purchaser of
a property in the possession of another to be in good faith, he
must exercise due diligence, conduct an investigation, and
weigh the surrounding facts and circumstances like what any
prudent man in a similar situation would do.22
In the case at bar, petitioner claims that she is a buyer in
good faith of the subject property which is titled under the
name of the seller Rogelio A. Nuega alone as evidenced by
TCT No. 171963 and Tax Declaration Nos. D-012-04723 and
D-012-04724.23 Petitioner argues, among others, that since
she has examined the TCT over the subject property and
found the property to have been registered under the name
of seller Rogelio alone, she is an innocent purchaser for value
and "she is not required to go beyond the face of the title in
verifying the status of the subject property at the time of the
consummation of the sale and at the date of the sale."24
We disagree with petitioner.
A buyer cannot claim to be an innocent purchaser for value by
merely relying on the TCT of the seller while ignoring all the
other surrounding circumstances relevant to the sale.
In the case of Spouses Raymundo v. Spouses
Bandong,25 petitioners therein - as does petitioner herein -
were also harping that due to the indefeasibility of a Torrens
title, there was nothing in the TCT of the property in litigation
that should have aroused the buyer's suspicion as to put her
on guard that there was a defect in the title of therein seller.
The Court held in the Spouses Raymundo case that the buyer
therein could not hide behind the cloak of being an innocent
purchaser for value by merely relying on the TCT which
showed that the registered owner of the land purchased is the
seller. The Court ruled in this case that the buyer was not an
innocent purchaser for value due to the following attendant
circumstances, viz.:chanroblesvirtuallawlibrary
In the present case, we are not convinced by the petitioners'
incessant assertion that Jocelyn is an innocent purchaser for
value. To begin with, she is a grandniece of Eulalia and
resides in the same locality where the latter lives and
conducts her principal business. It is therefore impossible for
her not to acquire knowledge of her grand aunt's business
practice of requiring her biyaheros to surrender the titles to
their properties and to sign the corresponding deeds of sale
over said properties in her favor, as security. This alone
should have put Jocelyn on guard for any possible abuses that
Eulalia may commit with the titles and the deeds of sale in
her possession.26cralawlawlibrary
Similarly, in the case of Arrofo v. Quiño,27 the Court held that
while "the law does not require a person dealing with
registered land to inquire further than what the Torrens Title
on its face indicates," the rule is not absolute.28 Thus, finding
that the buyer therein failed to take the necessary precaution
required of a prudent man, the Court held that Arrofo was not
an innocent purchaser for
value, viz.:chanroblesvirtuallawlibrary
In the present case, the records show that Arrofo failed to act
as a prudent buyer. True, she asked her daughter to verify
from the Register of Deeds if the title to the Property is free
from encumbrances. However, Arrofo admitted that the
Property is within the neighborhood and that she conducted
an ocular inspection of the Property. She saw the house
constructed on the Property. Yet, Arrofo did not even bother
to inquire about the occupants of the house. Arrofo also
admitted that at the time of the sale, Myrna was occupying a
room in her house as her lessee. The fact that Myrna was
renting a room from Arrofo yet selling a land with a house
should have put Arrofo on her guard. She knew that Myrna
was not occupying the house. Hence, someone else must
have been occupying the house.
Thus, Arrofo should have inquired who occupied the house,
and if a lessee, who received the rentals from such lessee.
Such inquiry would have led Arrofo to discover that the lessee
was paying rentals to Quino, not to Renato and Myrna, who
claimed to own the Property.29cralawlawlibrary
An analogous situation obtains in the case at bar.
The TCT of the subject property states that its sole owner is
the seller Rogelio himself who was therein also described as
"single". However, as in the cases of Spouses
Raymundo and Arrofo, there are circumstances critical to the
case at bar which convince us to affirm the ruling of both the
appellate and lower courts that herein petitioner is not a
buyer in good faith.
First, petitioner's sister Hilda Bautista, at the time of the sale,
was residing near Rogelio and Shirley's house - the subject
property - in Ladislao Diwa Village, Marikina City. Had
petitioner been more prudent as a buyer, she could have
easily checked if Rogelio had the capacity to dispose of the
subject property. Had petitioner been more vigilant, she could
have inquired with such facility - considering that her sister
lived in the same Ladislao Diwa Village where the property is
located - if there was any person other than Rogelio who had
any right or interest in the subject property.
To be sure, respondent even testified that she had warned
their neighbors at Ladislao Diwa Village - including petitioner's
sister - not to engage in any deal with Rogelio relative to the
purchase of the subject property because of the cases she
had filed against Rogelio. Petitioner denies that respondent
had given such warning to her neighbors, which includes her
sister, therefore arguing that such warning could not be
construed as "notice" on her part that there is a person other
than the seller himself who has any right or interest in the
subject property. Nonetheless, despite petitioner's adamant
denial, both courts a quo gave probative value to the
testimony of respondent, and the instant petition failed to
present any convincing evidence for this Court to reverse
such factual finding. To be sure, it is not within our province
to second-guess the courts a quo, and the re-determination
of this factual issue is beyond the reach of a petition for
review on certiorari where only questions of law may be
reviewed.30
Second, issues surrounding the execution of the Deed of
Absolute Sale also pose question on the claim of petitioner
that she is a buyer in good faith. As correctly observed by
both courts a quo, the Deed of Absolute Sale was executed
and dated on December 29, 1992. However, the Community
Tax Certificates of the witnesses therein were dated January 2
and 20, 1993.31 While this irregularity is not a direct proof of
the intent of the parties to the sale to make it appear that the
Deed of Absolute Sale was executed on December 29, 1992 -
or before Shirley filed the petition for legal separation on
January 29, 1993 - it is circumstantial and relevant to the
claim of herein petitioner as an innocent purchaser for value.
That is not all.
In the Deed of Absolute Sale dated December 29, 1992, the
civil status of Rogelio as seller was not stated, while petitioner
as buyer was indicated as
"single," viz.:chanroblesvirtuallawlibrary
ROGELIO A. NUEGA, of legal age, Filipino citizen and with
postal address at 2-A-2 Ladislao Diwa St., Concepcion,
Marikina, Metro Manila, hereinafter referred to as the
VENDOR
And
JOSEFINA V. NOBLEZA, of legal age, Filipino citizen, single
and with postal address at No. L-2-A-3 Ladislao Diwa St.,
Concepcion, Marikina, Metro Manila, hereinafter referred to as
the VENDEE.32cralawlawlibrary
It puzzles the Court that while petitioner has repeatedly
claimed that Rogelio is "single" under TCT No. 171963 and
Tax Declaration Nos. D-012-04723 and D-012-04724, his civil
status as seller was not stated in the Deed of Absolute Sale -
further creating a cloud on the claim of petitioner that she is
an innocent purchaser for value.
As to the second issue, we rule that the appellate court did
not err when it modified the decision of the trial court and
declared that the Deed of Absolute Sale dated December 29,
1992 is void in its entirety.
The trial court held that while the TCT shows that the owner
of the subject property is Rogelio alone, respondent was able
to prove at the trial court that she contributed in the payment
of the purchase price of the subject property. This fact was
also settled with finality by the RTC of Pasig City, Branch 70,
and affirmed by the CA, in the case for legal separation and
liquidation of property docketed as JDRC Case No. 2510. The
pertinent portion of the decision
reads:chanroblesvirtuallawlibrary
xxx Clearly, the house and lot jointly acquired by the parties
prior to their marriage forms part of their community property
regime, xxx
From the foregoing, Shirley sufficiently proved her financial
contribution for the purchase of the house and lot covered by
TCT 171963. Thus, the present lot which forms part of their
community property should be divided equally between them
upon the grant of the instant petition for legal separation.
Having established by preponderance of evidence the fact of
her husband's guilt in contracting a subsequent marriage xxx,
Shirley alone should be entitled to the net profits earned by
the absolute community property.33cralawlawlibrary
However, the nullity of the sale made by Rogelio is not
premised on proof of respondent's financial contribution in the
purchase of the subject property. Actual contribution is not
relevant in determining whether a piece of property is
community property for the law itself defines what constitutes
community property.
Article 91 of the Family Code thus
provides:chanroblesvirtuallawlibrary
Art. 91. Unless otherwise provided in this Chapter or in the
marriage settlements, the community property shall consist of
all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter.
The only exceptions from the above rule are: (1) those
excluded from the absolute community by theFamily Code;
and (2) those excluded by the marriage settlement.
Under the first exception are properties enumerated in Article
92 of the Family Code, which
states:chanroblesvirtuallawlibrary
Art. 92. The following shall be excluded from the community
property:
(1) Property acquired during the marriage by gratuitous title
by either spouse, and the fruits as well as the income thereof,
if any, unless it is expressly provided by the donor, testator or
grantor that they shall form part of the community property;
(2) Property for personal and exclusive use of either spouse;
however, jewelry shall form part of the community property;
(3) Property acquired before the marriage by either spouse
who has legitimate descendants by a former marriage, and
the fruits as well as the income, if any, of such property.
As held in Quiao v. Quiao:34ChanRoblesVirtualawlibrary
When a couple enters into a regime of absolute community,
the husband and the wife becomes joint owners of all the
properties of the marriage. Whatever property each spouse
brings into the marriage, and those acquired during the
marriage (except those excluded under Article 92 of the
Family Code) form the common mass of the couple's
properties. And when the couple's marriage or community is
dissolved, that common mass is divided between the spouses,
or their respective heirs, equally or in the proportion the
parties have established, irrespective of the value each one
may have originally owned.
Since the subject property does not fall under any of the
exclusions provided in Article 92, it therefore forms part of
the absolute community property of Shirley and Rogelio.
Regardless of their respective contribution to its acquisition
before their marriage, and despite the fact that only Rogelio's
name appears in the TCT as owner, the property is owned
jointly by the spouses Shirley and Rogelio.
Respondent and Rogelio were married on September 1, 1990.
Rogelio, on his own and without the consent of herein
respondent as his spouse, sold the subject property via a
Deed of Absolute Sale dated December 29, 1992 - or during
the subsistence of a valid contract of marriage. Under Article
96 of Executive Order No. 209, otherwise known as The
Family Code of the Philippines, the said disposition of a
communal property is void, viz.:chanroblesvirtuallawlibrary
Art. 96. The administration and enjoyment of the community
property shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for a proper remedy, which
must be availed of within five years from the date of the
contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the common
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers
of disposition or encumbrance without the authority of
the court or the written consent of the other spouse. In
the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the
part of the consenting spouse and the third person, and may
be perfected as a binding contract upon the acceptance by
the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors.35cralawlawlibrary
It is clear under the foregoing provision of the Family
Code that Rogelio could not sell the subject property without
the written consent of respondent or the authority of the
court. Without such consent or authority, the entire sale is
void. As correctly explained by the appellate
court:chanroblesvirtuallawlibrary
In the instant case, defendant Rogelio sold the entire subject
property to defendant-appellant Josefina on 29 December
1992 or during the existence of Rogelio's marriage to plaintiff-
appellee Shirley, without the consent of the latter. The
subject property forms part of Rogelio and Shirley's absolute
community of property. Thus, the trial court erred in declaring
the deed of sale null and void only insofar as the 55.05
square meters representing the one-half (1/2) portion of
plaintiff-appellee Shirley. In absolute community of property,
if the husband, without knowledge and consent of the wife,
sells (their) property, such sale is void. The consent of both
the husband Rogelio and the wife Shirley is required and the
absence of the consent of one renders the entire sale null and
void including the portion of the subject property pertaining
to defendant Rogelio who contracted the sale with defendant-
appellant Josefina. Since the Deed of Absolute Sale x x x
entered into by and between defendant-appellant Josefina
and defendant Rogelio dated 29 December 1992, during the
subsisting marriage between plaintiff-appellee Shirley and
Rogelio, was without the written consent of Shirley, the said
Deed of Absolute Sale is void in its entirety. Hence, the trial
court erred in declaring the said Deed of Absolute Sale as void
only insofar as the 1/2 portion pertaining to the share of
Shirley is concerned.36cralawlawlibrary
Finally, consistent with our ruling that Rogelio solely entered
into the contract of sale with petitioner and acknowledged
receiving the entire consideration of the contract under the
Deed of Absolute Sale, Shirley could not be held accountable
to petitioner for the reimbursement of her payment for the
purchase of the subject property. Under Article 94 of
the Family Code, the absolute community of property shall
only be "liable for x x x [d]ebts and obligations contracted by
either spouse without the consent of the other to the extent
that the family may have been benefited x x x." As correctly
stated by the appellate court, there being no evidence on
record that the amount received by Rogelio redounded to the
benefit of the family, respondent cannot be made to
reimburse any amount to petitioner.37
WHEREFORE, in view of the foregoing, the petition
is DENIED. The assailed Decision and Resolution of the Court
of Appeals dated May 14, 2010 and July 21, 2010,
respectively, in CA-G.R. CV No. 70235 are AFFIRMED.
Costs against petitioner.
SO ORDERED.chanroblesvirtuallawlibrary
THIRD DIVISION
FRANCISCO MUOZ, JR.,
Petitioner,
- versus -
ERLINDA RAMIREZ and ELISEO CARLOS,
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
BRION, J.:
We resolve the present petition for review on certiorari[1] filed by
petitioner Francisco Muoz, Jr. (petitioner) to challenge the decision[2] and the
resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 57126.[4] The
CA decision set aside the decision[5] of the Regional Trial Court (RTC),
Branch 166, Pasig City, in Civil Case No. 63665. The CA resolution denied
the petitioners subsequent motion for reconsideration.
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly
summarized below.
Subject of the present case is a seventy-seven (77)-square meter
residential house and lot located at 170 A. Bonifacio Street, Mandaluyong
City (subject property), covered by Transfer Certificate of Title (TCT) No.
7650 of the Registry of Deeds of Mandaluyong City in the name of the
petitioner.[6]
The residential lot in the subject property was previously covered
by TCT No. 1427, in the name of Erlinda Ramirez, married to Eliseo Carlos
(respondents).[7]
On April 6, 1989, Eliseo, a Bureau of Internal Revenue employee,
mortgaged TCT No. 1427, with Erlindas consent, to the Government Service
Insurance System (GSIS) to secure a P136,500.00 housing loan, payable
within twenty (20) years, through monthly salary deductions
of P1,687.66.[8] The respondents then constructed a thirty-six (36)-square
meter, two-story residential house on the lot.
On July 14, 1993, the title to the subject property was transferred
to the petitioner by virtue of a Deed of Absolute Sale, dated April 30, 1992,
executed by Erlinda, for herself and as attorney-in-fact of Eliseo, for a stated
consideration of P602,000.00.[9]
On September 24, 1993, the respondents filed a complaint with the
RTC for the nullification of the deed of absolute sale, claiming that there was
no sale but only a mortgage transaction, and the documents transferring the
title to the petitioners name were falsified.
The respondents alleged that in April 1992, the petitioner granted
them a P600,000.00 loan, to be secured by a first mortgage on TCT No. 1427;
the petitioner gave Erlinda a P200,000.00[10] advance to cancel the GSIS
mortgage, and made her sign a document purporting to be the mortgage
contract; the petitioner promised to give the P402,000.00 balance when
Erlinda surrenders TCT No. 1427 with the GSIS mortgage cancelled, and
submits an affidavit signed by Eliseo stating that he waives all his rights to the
subject property; with the P200,000.00 advance, Erlinda paid
GSIS P176,445.27[11] to cancel the GSIS mortgage on TCT No. 1427;[12] in
May 1992, Erlinda surrendered to the petitioner the clean TCT No. 1427, but
returned Eliseos affidavit, unsigned; since Eliseos affidavit was unsigned, the
petitioner refused to give the P402,000.00 balance and to cancel the mortgage,
and demanded that Erlinda return the P200,000.00 advance; since Erlinda
could not return the P200,000.00 advance because it had been used to pay the
GSIS loan, the petitioner kept the title; and in 1993, they discovered that TCT
No. 7650 had been issued in the petitioners name, cancelling TCT No.1427 in
their name.
The petitioner countered that there was a valid contract of sale. He
alleged that the respondents sold the subject property to him after he refused
their offer to mortgage the subject property because they lacked paying
capacity and were unwilling to pay the incidental charges; the sale was with
the implied promise to repurchase within one year,[13]during which period
(from May 1, 1992 to April 30, 1993), the respondents would lease the subject
property for a monthly rental of P500.00;[14] when the respondents failed to
repurchase the subject property within the one-year period despite notice, he
caused the transfer of title in his name on July 14, 1993;[15] when the
respondents failed to pay the monthly rentals despite demand, he filed an
ejectment case[16] against them with the Metropolitan Trial Court (MeTC),
Branch 60, Mandaluyong City, on September 8, 1993, or sixteen days before
the filing of the RTC case for annulment of the deed of absolute sale.
During the pendency of the RTC case, or on March 29, 1995, the
MeTC decided the ejectment case. It ordered Erlinda and her family to vacate
the subject property, to surrender its possession to the petitioner, and to pay
the overdue rentals.[17]
In the RTC, the respondents presented the results of the scientific
examination[18] conducted by the National Bureau of Investigation of Eliseos
purported signatures in the Special Power of Attorney[19] dated April 29, 1992
and the Affidavit of waiver of rights dated April 29, 1992, [20] showing that
they were forgeries.
The petitioner, on the other hand, introduced evidence on the
paraphernal nature of the subject property since it was registered in Erlindas
name; the residential lot was part of a large parcel of land owned by Pedro
Ramirez and Fructuosa Urcla, Erlindas parents; it was the subject of Civil
Case No. 50141, a complaint for annulment of sale, before the RTC, Branch
158, Pasig City, filed by the surviving heirs of Pedro against another heir,
Amado Ramirez, Erlindas brother; and, as a result of a compromise
agreement, Amado agreed to transfer to the other compulsory heirs of Pedro,
including Erlinda, their rightful shares of the land.[21]
THE RTC RULING
In a Decision dated January 23, 1997, the RTC dismissed the
complaint. It found that the subject property was Erlindas exclusive
paraphernal property that was inherited from her father. It also upheld the sale
to the petitioner, even without Eliseos consent as the deed of absolute sale
bore the genuine signatures of Erlinda and the petitioner as vendor and
vendee, respectively. It concluded that the NBI finding that Eliseos signatures
in the special power of attorney and in the affidavit were forgeries was
immaterial because Eliseos consent to the sale was not necessary.[22]
The respondents elevated the case to the CA via an ordinary appeal
under Rule 41 of the Revised Rules of Court.
THE CA RULING
The CA decided the appeal on June 25, 2002. Applying the second
paragraph of Article 158[23] of the Civil Code and Calimlim-Canullas v. Hon.
Fortun,[24] the CA held that the subject property, originally Erlindas exclusive
paraphernal property, became conjugal property when it was used as collateral
for a housing loan that was paid through conjugal funds Eliseos monthly
salary deductions; the subject property, therefore, cannot be validly sold or
mortgaged without Eliseos consent, pursuant to Article 124 [25] of the Family
Code. Thus, the CA declared void the deed of absolute sale, and set aside the
RTC decision.
When the CA denied[26] the subsequent motion for
reconsideration,[27] the petitioner filed the present petition for review
on certiorari under Rule 45 of the Revised Rules of Court.
THE PETITION
The petitioner argues that the CA misapplied the second paragraph
of Article 158 of the Civil Code and Calimlim-Canullas[28] because the
respondents admitted in the complaint that it was the petitioner who gave the
money used to cancel the GSIS mortgage on TCT No. 1427; Article 120 [29] of
the Family Code is the applicable rule, and since the value of the house is less
than the value of the lot, then Erlinda retained ownership of the subject
property. He also argues that the contract between the parties was a sale, not a
mortgage, because (a) Erlinda did not deny her signature in the
document;[30] (b) Erlinda agreed to sign a contract of lease over the subject
property;[31] and, (c) Erlinda executed a letter, dated April 30, 1992,
confirming the conversion of the loan application to a deed of sale. [32]
THE CASE FOR THE RESPONDENTS
The respondents submit that it is unnecessary to compare the
respective values of the house and of the lot to determine ownership of the
subject property; it was acquired during their marriage and, therefore,
considered conjugal property. They also submit that the transaction between
the parties was not a sale, but an equitable mortgage because (a) they
remained in possession of the subject property even after the execution of the
deed of absolute sale, (b) they paid the 1993 real property taxes due on the
subject property, and (c) they received P200,000.00 only of the total stated
price of P602,000.00.
THE ISSUE
The issues in the present case boil down to (1) whether the subject
property is paraphernal or conjugal; and, (2) whether the contract between the
parties was a sale or an equitable mortgage.
OUR RULING
We deny the present Petition but for reasons other than those
advanced by the CA.
This Court is not a trier of facts. However, if the inference, drawn
by the CA, from the facts is manifestly mistaken, as in the present case, we
can review the evidence to allow us to arrive at the correct factual conclusions
based on the record.[33]
First Issue:
Paraphernal or Conjugal?
As a general rule, all property acquired during the marriage, whether the
acquisition appears to have been made, contracted or registered in the name of
one or both spouses, is presumed to be conjugal unless the contrary is
proved.[34]
In the present case, clear evidence that Erlinda inherited the
residential lot from her father has sufficiently rebutted this presumption of
conjugal ownership.[35] Pursuant to Articles 92[36] and 109[37] of the Family
Code, properties acquired by gratuitous title by either spouse, during the
marriage, shall be excluded from the community property and be the exclusive
property of each spouse.[38] The residential lot, therefore, is Erlindas exclusive
paraphernal property.
The CA, however, held that the residential lot became conjugal
when the house was built thereon through conjugal funds, applying the second
paragraph of Article 158 of the Civil Code and Calimlim-Canullas.[39] Under
the second paragraph of Article 158 of the Civil Code, a land that originally
belonged to one spouse becomes conjugal upon the construction of
improvements thereon at the expense of the partnership. We applied this
provision in Calimlim-Canullas,[40] where we held that when the conjugal
house is constructed on land belonging exclusively to the husband, the
land ipso facto becomes conjugal, but the husband is entitled to
reimbursement of the value of the land at the liquidation of the conjugal
partnership.
The CA misapplied Article 158 of the
Civil Code and Calimlim-Canullas
We cannot subscribe to the CAs misplaced reliance on Article 158
of the Civil Code and Calimlim-Canullas.
As the respondents were married during the effectivity of the Civil
Code, its provisions on conjugal partnership of gains (Articles 142 to 189)
should have governed their property relations. However, with the enactment
of the Family Code on August 3, 1989, the Civil Code provisions on conjugal
partnership of gains, including Article 158, have been superseded by those
found in the Family Code (Articles 105 to 133). Article 105 of the Family
Code states:
xxxx
The provisions of this Chapter [on the Conjugal
Partnership of Gains] shall also apply to conjugal
partnerships of gains already established between
 spouses before the effectivity of this Code, without
prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as
provided in Article 256.
Thus, in determining the nature of the subject property, we refer to the
provisions of the Family Code, and not the Civil Code, except with respect to
rights then already vested.
Article 120 of the Family Code, which supersedes Article 158 of
the Civil Code, provides the solution in determining the ownership of the
improvements that are made on the separate property of the spouses, at the
expense of the partnership or through the acts or efforts of either or both
spouses. Under this provision, when the cost of the improvement and any
resulting increase in value are more than the value of the property at the time
of the improvement, the entire property of one of the spouses shall belong to
the conjugal partnership, subject to reimbursement of the value of the property
of the owner-spouse at the time of the improvement; otherwise, said property
shall be retained in ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement.[41]
In the present case, we find that Eliseo paid a portion only of the
GSIS loan through monthly salary deductions. From April 6, 1989 [42] to April
30, 1992,[43] Eliseo paid about P60,755.76,[44] not the entire amount of the
GSIS housing loan plus interest, since the petitioner advanced
the P176,445.27[45] paid by Erlinda to cancel the mortgage in 1992.
Considering the P136,500.00 amount of the GSIS housing loan, it is fairly
reasonable to assume that the value of the residential lot is considerably more
than theP60,755.76 amount paid by Eliseo through monthly salary deductions.
Thus, the subject property remained the exclusive paraphernal
property of Erlinda at the time she contracted with the petitioner; the written
consent of Eliseo to the transaction was not necessary. The NBI finding that
Eliseos signatures in the special power of attorney and affidavit were forgeries
was immaterial.
Nonetheless, the RTC and the CA apparently failed to consider the
real nature of the contract between the parties.
Second Issue:
Sale or Equitable Mortgage?
Jurisprudence has defined an equitable mortgage "as one which
although lacking in some formality, or form or words, or other requisites
demanded by a statute, nevertheless reveals the intention of the parties to
charge real property as security for a debt, there being no impossibility nor
anything contrary to law in this intent."[46]
Article 1602 of the Civil Code enumerates the instances when a
contract, regardless of its nomenclature, may be presumed to be an equitable
mortgage: (a) when the price of a sale with right to repurchase is unusually
inadequate; (b) when the vendor remains in possession as lessee or
otherwise; (c) when upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or granting a new
period is executed; (d) when the purchaser retains for himself a part of the
purchase price; (e) when the vendor binds himself to pay the taxes on the
thing sold; and, (f) in any other case where it may be fairly inferred that
the real intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation. These
instances apply to a contract purporting to be an absolute sale. [47]
For the presumption of an equitable mortgage to arise under
Article 1602 of the Civil Code, two (2) requisites must concur: (a) that the
parties entered into a contract denominated as a contract of sale; and, (b) that
their intention was to secure an existing debt by way of a mortgage. Any of
the circumstances laid out in Article 1602 of the Civil Code, not the
concurrence nor an overwhelming number of the enumerated circumstances,
is sufficient to support the conclusion that a contract of sale is in fact an
equitable mortgage.[48]
Contract is an equitable mortgage
In the present case, there are four (4) telling circumstances
pointing to the existence of an equitable mortgage.
First, the respondents remained in possession as lessees of the
subject property; the parties, in fact, executed a one-year contract of lease,
effective May 1, 1992 to April 30, 1993.[49]
Second, the petitioner retained part of the purchase price, the
petitioner gave a P200,000.00 advance to settle the GSIS housing loan, but
refused to give the P402,000.00 balance when Erlinda failed to submit Eliseos
signed affidavit of waiver of rights.
Third, respondents paid the real property taxes on July 8, 1993,
despite the alleged sale on April 30, 1992;[50] payment of real property taxes is
a usual burden attaching to ownership and when, as here, such payment is
coupled with continuous possession of the property, it constitutes evidence of
great weight that the person under whose name the realty taxes were declared
has a valid and rightful claim over the land.[51]
Fourth, Erlinda secured the payment of the principal debt owed to
the petitioner with the subject property. The records show that the petitioner,
in fact, sent Erlinda a Statement of Account showing that as of February 20,
1993, she owed P384,660.00, and the daily interest, starting February 21,
1993, was P641.10.[52] Thus, the parties clearly intended an equitable
mortgage and not a contract of sale.
That the petitioner advanced the sum of P200,000.00 to Erlinda is
undisputed. This advance, in fact, prompted the latter to transfer the subject
property to the petitioner.Thus, before the respondents can recover the subject
property, they must first return the amount of P200,000.00 to the petitioner,
plus legal interest of 12% per annum, computed from April 30, 1992.
We cannot sustain the ballooned obligation of P384,660.00,
claimed in the Statement of Account sent by the petitioner,[53] sans any
evidence of how this amount was arrived at. Additionally, a daily interest
of P641.10 or P19,233.00 per month for a P200,000.00 loan is patently
unconscionable. While parties are free to stipulate on the interest to be
imposed on monetary obligations, we can step in to temper the interest rates if
they are unconscionable.[54]
In Lustan v. CA,[55] where we established the reciprocal obligations
of the parties under an equitable mortgage, we ordered the reconveyance of
the property to the rightful owner therein upon the payment of the loan within
ninety (90) days from the finality of the decision.[56]
WHEREFORE, in light of all the foregoing, we
hereby DENY the present petition. The assailed decision and resolution of the
Court of Appeals in CA-G.R. CV No. 57126 are AFFIRMED with the
following MODIFICATIONS:
1. The Deed of Absolute Sale dated April 30, 1992 is hereby
declared an equitable mortgage; and
2. The petitioner is obligated to RECONVEY to the respondents
the property covered by Transfer Certificate of Title No. 7650 of the Register
of Deeds of Mandaluyong City, UPON THE PAYMENT OF P200,000.00,
with 12% legal interest from April 30, 1992, by respondents within NINETY
DAYS FROM THE FINALITY OF THIS DECISION.
Costs against the petitioner.
SO ORDERED.
G.R. No. 124642. February 23, 2004]
ALFREDO CHING and ENCARNACION CHING, petitioners, vs.
THE HON. COURT OF APPEALS and ALLIED BANKING
CORPORATION, respondents.
DECISION
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules of
Court, assails the Decision[1] of the Court of Appeals (CA) dated
November 27, 1995 in CA-G.R. SP No. 33585, as well as the
Resolution[2] on April 2, 1996 denying the petitioners motion for
reconsideration. The impugned decision granted the private
respondents petition for certiorari and set aside the Orders of the trial
court dated December 15, 1993[3] and February 17, 1994[4] nullifying
the attachment of 100,000 shares of stocks of the Citycorp Investment
Philippines under the name of petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills Company,
Inc. (PBMCI) obtained a loan of P9,000,000.00 from the Allied Banking
Corporation (ABC). By virtue of this loan, the PBMCI, through its
Executive Vice-President Alfredo Ching, executed a promissory note
for the said amount promising to pay on December 22, 1978 at an
interest rate of 14% per annum.[5] As added security for the said loan,
on September 28, 1978, Alfredo Ching, together with Emilio Taedo and
Chung Kiat Hua, executed a continuing guaranty with the ABC binding
themselves to jointly and severally guarantee the payment of all the
PBMCI obligations owing the ABC to the extent
of P38,000,000.00.[6] The loan was subsequently renewed on various
dates, the last renewal having been made on December 4, 1980.[7]
Earlier, on December 28, 1979, the ABC extended another loan
to the PBMCI in the amount of P13,000,000.00 payable in eighteen
months at 16% interest per annum. As in the previous loan, the
PBMCI, through Alfredo Ching, executed a promissory note to
evidence the loan maturing on June 29, 1981. [8] This was renewed
once for a period of one month.[9]
The PBMCI defaulted in the payment of all its loans. Hence, on
August 21, 1981, the ABC filed a complaint for sum of money with
prayer for a writ of preliminary attachment against the PBMCI to collect
the P12,612,972.88 exclusive of interests, penalties and other bank
charges. Impleaded as co-defendants in the complaint were Alfredo
Ching, Emilio Taedo and Chung Kiat Hua in their capacity as sureties
of the PBMCI.
The case was docketed as Civil Case No. 142729 in the
Regional Trial Court of Manila, Branch XVIII.[10] In its application for a
writ of preliminary attachment, the ABC averred that the defendants
are guilty of fraud in incurring the obligations upon which the present
action is brought[11] in that they falsely represented themselves to be in
a financial position to pay their obligation upon maturity thereof. [12] Its
supporting affidavit stated, inter alia, that the [d]efendants have
removed or disposed of their properties, or [are] ABOUT to do so, with
intent to defraud their creditors.[13]
On August 26, 1981, after an ex-parte hearing, the trial court
issued an Order denying the ABCs application for a writ of preliminary
attachment. The trial court decreed that the grounds alleged in the
application and that of its supporting affidavit are all conclusions of fact
and of law which do not warrant the issuance of the writ prayed
for.[14] On motion for reconsideration, however, the trial court, in an
Order dated September 14, 1981, reconsidered its previous order and
granted the ABCs application for a writ of preliminary attachment on a
bond ofP12,700,000. The order, in relevant part, stated:
With respect to the second ground relied upon for the grant of the writ of
preliminary attachment ex-parte, which is the alleged disposal of properties by
the defendants with intent to defraud creditors as provided in Sec. 1(e) of Rule
57 of the Rules of Court, the affidavits can only barely justify the issuance of
said writ as against the defendant Alfredo Ching who has allegedly bound
himself jointly and severally to pay plaintiff the defendant corporations
obligation to the plaintiff as a surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as against the
defendant Alfredo Ching requiring the sheriff of this Court to attach all the
properties of said Alfredo Ching not exceedingP12,612,972.82 in value,
which are within the jurisdiction of this Court and not exempt from execution
upon, the filing by plaintiff of a bond duly approved by this Court in the sum
of Twelve Million Seven Hundred Thousand Pesos (P12,700,000.00)
executed in favor of the defendant Alfredo Ching to secure the payment by
plaintiff to him of all the costs which may be adjudged in his favor and all
damages he may sustain by reason of the attachment if the court shall finally
adjudge that the plaintiff was not entitled thereto.
SO ORDERED.[15]
Upon the ABCs posting of the requisite bond, the trial court
issued a writ of preliminary attachment. Subsequently, summonses
were served on the defendants,[16] save Chung Kiat Hua who could not
be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching
jointly filed a petition for suspension of payments with the Securities
and Exchange Commission (SEC), docketed as SEC Case No. 2250,
at the same time seeking the PBMCIs rehabilitation.[17]
On July 9, 1982, the SEC issued an Order placing the PBMCIs
business, including its assets and liabilities, under rehabilitation
receivership, and ordered that all actions for claims listed in Schedule
A of the petition pending before any court or tribunal are hereby
suspended in whatever stage the same may be until further orders
from the Commission.[18] The ABC was among the PBMCIs creditors
named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo
Ching jointly filed a Motion to Dismiss and/or motion to suspend the
proceedings in Civil Case No. 142729 invoking the PBMCIs pending
application for suspension of payments (which Ching co-signed) and
over which the SEC had already assumed jurisdiction.[19] On February
4, 1983, the ABC filed its Opposition thereto.[20]
In the meantime, on July 26, 1983, the deputy sheriff of the trial
court levied on attachment the 100,000 common shares of Citycorp
stocks in the name of Alfredo Ching.[21]
Thereafter, in an Order dated September 16, 1983, the trial court
partially granted the aforementioned motion by suspending the
proceedings only with respect to the PBMCI. It denied Chings motion
to dismiss the complaint/or suspend the proceedings and pointed out
that P.D. No. 1758 only concerns the activities of corporations,
partnerships and associations and was never intended to regulate
and/or control activities of individuals. Thus, it directed the individual
defendants to file their answers.[22]
Instead of filing an answer, Ching filed on January 14, 1984 a
Motion to Suspend Proceedings on the same ground of the pendency
of SEC Case No. 2250. This motion met the opposition from the
ABC.[23]
On January 20, 1984, Taedo filed his Answer with counterclaim
and cross-claim.[24] Ching eventually filed his Answer on July 12,
1984.[25]
On October 25, 1984, long after submitting their answers, Ching
filed an Omnibus Motion,[26] again praying for the dismissal of the
complaint or suspension of the proceedings on the ground of the July
9, 1982 Injunctive Order issued in SEC Case No. 2250. He averred
that as a surety of the PBMCI, he must also necessarily benefit from
the defenses of his principal. The ABC opposed Chings omnibus
motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus
Motion[27] praying for the dismissal of the complaint, arguing that the
ABC had abandoned and waived its right to proceed against the
continuing guaranty by its act of resorting to preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the
amount of his preliminary attachment bond from P12,700,000
to P6,350,000.[28] Alfredo Ching opposed the motion,[29] but on April 2,
1987, the court issued an Order setting the incident for further hearing
on May 28, 1987 at 8:30 a.m. for the parties to adduce evidence on the
actual value of the properties of Alfredo Ching levied on by the
sheriff.[30]
On March 2, 1988, the trial court issued an Order granting the
motion of the ABC and rendered the attachment bond
of P6,350,000.[31]
On November 16, 1993, Encarnacion T. Ching, assisted by her
husband Alfredo Ching, filed a Motion to Set Aside the levy on
attachment. She alleged inter alia that the 100,000 shares of stocks
levied on by the sheriff were acquired by her and her husband during
their marriage out of conjugal funds after the Citycorp Investment
Philippines was established in 1974.Furthermore, the indebtedness
covered by the continuing guaranty/comprehensive suretyship contract
executed by petitioner Alfredo Ching for the account of PBMCI did not
redound to the benefit of the conjugal partnership. She, likewise,
alleged that being the wife of Alfredo Ching, she was a third-party
claimant entitled to file a motion for the release of the
properties.[32] She attached therewith a copy of her marriage contract
with Alfredo Ching.[33]
The ABC filed a comment on the motion to quash preliminary
attachment and/or motion to expunge records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this present
case; thus, she has no personality to file any motion before this Honorable
Court;
2.2 Said supposed movant did not file any Motion for Intervention pursuant to
Section 2, Rule 12 of the Rules of Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-Party
Claim conformably with Sec. 14, Rule 57 of the Rules of Court.
3. Furthermore, assuming in gracia argumenti that the supposed movant has
the required personality, her Motion cannot be acted upon by this Honorable
Court as the above-entitled case is still in the archives and the proceedings
thereon still remains suspended. And there is no previous Motion to revive the
same.[34]
The ABC also alleged that the motion was barred by prescription
or by laches because the shares of stocks were in custodia legis.
 During the hearing of the motion, Encarnacion T. Ching adduced
in evidence her marriage contract to Alfredo Ching to prove that they
were married on January 8, 1960;[35] the articles of incorporation of
Citycorp Investment Philippines dated May 14, 1979;[36] and, the
General Information Sheet of the corporation showing that petitioner
Alfredo Ching was a member of the Board of Directors of the said
corporation and was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their
Reply/Opposition to the motion to expunge records.
Acting on the aforementioned motion, the trial court issued on
December 15, 1993 an Order[37] lifting the writ of preliminary
attachment on the shares of stocks and ordering the sheriff to return
the said stocks to the petitioners. The dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated
November 9, 1993, is hereby granted. Let the writ of preliminary attachment
subject matter of said motion, be quashed and lifted with respect to the
attached 100,000 common shares of stock of Citycorp Investment Philippines
in the name of the defendant Alfredo Ching, the said shares of stock to be
returned to him and his movant-spouse by Deputy Sheriff Apolonio A. Golfo
who effected the levy thereon on July 26, 1983, or by whoever may be
presently in possession thereof.
SO ORDERED.[38]
The plaintiff Allied Banking Corporation filed a motion for the
reconsideration of the order but denied the same on February 17,
1994. The petitioner bank forthwith filed a petition for certiorari with the
CA, docketed as CA-G.R. SP No. 33585, for the nullification of the said
order of the court, contending that:
1. The respondent Judge exceeded his authority thereby acted
without jurisdiction in taking cognizance of, and
granting a Motion filed by a complete stranger to the
case.
2. The respondent Judge committed a grave abuse of discretion
in lifting the writ of preliminary attachment without any
basis in fact and in law, and contrary to established
jurisprudence on the matter.[39]
On November 27, 1995, the CA rendered judgment granting the
petition and setting aside the assailed orders of the trial court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby
setting aside the questioned orders (dated December 15, 1993 and February
17, 1994) for being null and void.
SO ORDERED.[40]
The CA sustained the contention of the private respondent and
set aside the assailed orders. According to the CA, the RTC deprived
the private respondent of its right to file a bond under Section 14, Rule
57 of the Rules of Court. The petitioner Encarnacion T. Ching was not
a party in the trial court; hence, she had no right of action to have the
levy annulled with a motion for that purpose. Her remedy in such case
was to file a separate action against the private respondent to nullify
the levy on the 100,000 Citycorp shares of stocks. The court stated
that even assuming that Encarnacion T. Ching had the right to file the
said motion, the same was barred by laches.
Citing Wong v. Intermediate Appellate Court,[41] the CA ruled that
the presumption in Article 160 of the New Civil Code shall not apply
where, as in this case, the petitioner-spouses failed to prove the
source of the money used to acquire the shares of stock. It held that
the levied shares of stocks belonged to Alfredo Ching, as evidenced by
the fact that the said shares were registered in the corporate books of
Citycorp solely under his name. Thus, according to the appellate court,
the RTC committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders. The
petitioners motion for reconsideration was denied by the CA in a
Resolution dated April 2, 1996.
The petitioner-spouses filed the instant petition for review on
certiorari, asserting that the RTC did not commit any grave abuse of
discretion amounting to excess or lack of jurisdiction in issuing the
assailed orders in their favor; hence, the CA erred in reversing the
same. They aver that the source of funds in the acquisition of the
levied shares of stocks is not the controlling factor when invoking the
presumption of the conjugal nature of stocks under Art. 160,[42] and that
such presumption subsists even if the property is registered only in the
name of one of the spouses, in this case, petitioner Alfredo
Ching.[43] According to the petitioners, the suretyship obligation was not
contracted in the pursuit of the petitioner-husbands profession or
business.[44] And, contrary to the ruling of the CA, where conjugal
assets are attached in a collection suit on an obligation contracted by
the husband, the wife should exhaust her motion to quash in the main
case and not file a separate suit.[45] Furthermore, the petitioners
contend that under Art. 125 of the Family Code, the petitioner-
husbands gratuitous suretyship is null and void ab initio,[46] and that the
share of one of the spouses in the conjugal partnership remains
inchoate until the dissolution and liquidation of the partnership.[47]
In its comment on the petition, the private respondent asserts
that the CA correctly granted its petition for certiorari nullifying the
assailed order. It contends that the CA correctly relied on the ruling of
this Court in Wong v. Intermediate Appellate Court. Citing Cobb-Perez
v. Lantin and G-Tractors, Inc. v. Court of Appeals, the private
respondent alleges that the continuing guaranty and suretyship
executed by petitioner Alfredo Ching in pursuit of his profession or
business. Furthermore, according to the private respondent, the right
of the petitioner-wife to a share in the conjugal partnership property is
merely inchoate before the dissolution of the partnership; as such, she
had no right to file the said motion to quash the levy on attachment of
the shares of stocks.
The issues for resolution are as follows: (a) whether the
petitioner-wife has the right to file the motion to quash the levy on
attachment on the 100,000 shares of stocks in the Citycorp Investment
Philippines; (b) whether or not the RTC committed a grave abuse of its
discretion amounting to excess or lack of jurisdiction in issuing the
assailed orders.
On the first issue, we agree with the petitioners that the
petitioner-wife had the right to file the said motion, although she was
not a party in Civil Case No. 142729.[48]
In Ong v. Tating,[49] we held that the sheriff may attach only those
properties of the defendant against whom a writ of attachment has
been issued by the court. When the sheriff erroneously levies on
attachment and seizes the property of a third person in which the said
defendant holds no right or interest, the superior authority of the court
which has authorized the execution may be invoked by the aggrieved
third person in the same case. Upon application of the third person, the
court shall order a summary hearing for the purpose of determining
whether the sheriff has acted rightly or wrongly in the performance of
his duties in the execution of the writ of attachment, more specifically if
he has indeed levied on attachment and taken hold of property not
belonging to the plaintiff. If so, the court may then order the sheriff to
release the property from the erroneous levy and to return the same to
the third person. In resolving the motion of the third party, the court
does not and cannot pass upon the question of the title to the property
with any character of finality. It can treat the matter only insofar as may
be necessary to decide if the sheriff has acted correctly or not. If the
claimants proof does not persuade the court of the validity of the title,
or right of possession thereto, the claim will be denied by the
court. The aggrieved third party may also avail himself of the remedy of
terceria by executing an affidavit of his title or right of possession over
the property levied on attachment and serving the same to the office
making the levy and the adverse party. Such party may also file an
action to nullify the levy with damages resulting from the unlawful levy
and seizure, which should be a totally separate and distinct action from
the former case. The above-mentioned remedies are cumulative and
any one of them may be resorted to by one third-party claimant without
availing of the other remedies.[50]
In this case, the petitioner-wife filed her motion to set aside the
levy on attachment of the 100,000 shares of stocks in the name of
petitioner-husband claiming that the said shares of stocks were
conjugal in nature; hence, not liable for the account of her husband
under his continuing guaranty and suretyship agreement with the
PBMCI. The petitioner-wife had the right to file the motion for said
relief.
On the second issue, we find and so hold that the CA erred in
setting aside and reversing the orders of the RTC. The private
respondent, the petitioner in the CA, was burdened to prove that the
RTC committed a grave abuse of its discretion amounting to excess or
lack of jurisdiction. The tribunal acts without jurisdiction if it does not
have the legal purpose to determine the case; there is excess of
jurisdiction where the tribunal, being clothed with the power to
determine the case, oversteps its authority as determined by
law. There is grave abuse of discretion where the tribunal acts in a
capricious, whimsical, arbitrary or despotic manner in the exercise of
its judgment and is equivalent to lack of jurisdiction.[51]
It was incumbent upon the private respondent to adduce a
sufficiently strong demonstration that the RTC acted whimsically in
total disregard of evidence material to, and even decide of, the
controversy before certiorari will lie. A special civil action for certiorari
is a remedy designed for the correction of errors of jurisdiction and not
errors of judgment. When a court exercises its jurisdiction, an error
committed while so engaged does not deprive it of its jurisdiction being
exercised when the error is committed.[52]
After a comprehensive review of the records of the RTC and of
the CA, we find and so hold that the RTC did not commit any grave
abuse of its discretion amounting to excess or lack of jurisdiction in
issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties
acquired during the marriage are presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the
husband, or to the wife. In Tan v. Court of Appeals,[53] we held that it is
not even necessary to prove that the properties were acquired with
funds of the partnership. As long as the properties were acquired by
the parties during the marriage, they are presumed to be conjugal in
nature. In fact, even when the manner in which the properties were
acquired does not appear, the presumption will still apply, and the
properties will still be considered conjugal. The presumption of the
conjugal nature of the properties acquired during the marriage subsists
in the absence of clear, satisfactory and convincing evidence to
overcome the same.[54]
In this case, the evidence adduced by the petitioners in the RTC
is that the 100,000 shares of stocks in the Citycorp Investment
Philippines were issued to and registered in its corporate books in the
name of the petitioner-husband when the said corporation was
incorporated on May 14, 1979. This was done during the subsistence
of the marriage of the petitioner-spouses. The shares of stocks are,
thus, presumed to be the conjugal partnership property of the
petitioners. The private respondent failed to adduce evidence that the
petitioner-husband acquired the stocks with his exclusive
money.[55] The barefaced fact that the shares of stocks were registered
in the corporate books of Citycorp Investment Philippines solely in the
name of the petitioner-husband does not constitute proof that the
petitioner-husband, not the conjugal partnership, owned the
same.[56] The private respondents reliance on the rulings of this Court
in Maramba v. Lozano[57] and Associated Insurance & Surety Co., Inc.
v. Banzon[58] is misplaced. In the Maramba case, we held that where
there is no showing as to when the property was acquired, the fact that
the title is in the wifes name alone is determinative of the ownership of
the property. The principle was reiterated in the Associated
Insurance case where the uncontroverted evidence showed that the
shares of stocks were acquired during the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling
of this Court in Wong v. Intermediate Appellate Court[59] buttresses the
case for the petitioners. In that case, we ruled that he who claims that
property acquired by the spouses during their marriage is not conjugal
partnership property but belongs to one of them as his personal
property is burdened to prove the source of the money utilized to
purchase the same. In this case, the private respondent claimed that
the petitioner-husband acquired the shares of stocks from the Citycorp
Investment Philippines in his own name as the owner thereof. It was,
thus, the burden of the private respondent to prove that the source of
the money utilized in the acquisition of the shares of stocks was that of
the petitioner-husband alone. As held by the trial court, the private
respondent failed to adduce evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing
guaranty and suretyship agreement with the private respondent for the
payment of the PBMCI loans, the petitioner-husband was in the
exercise of his profession, pursuing a legitimate business. The
appellate court erred in concluding that the conjugal partnership is
liable for the said account of PBMCI under Article 161(1) of the New
Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and
3][60] of the Family Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same
purpose, in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and
suretyship agreement as security for the payment of the loan obtained
by the PBMCI from the private respondent in the amount
of P38,000,000. In Ayala Investment and Development Corp. v. Court
of Appeals,[61] this Court ruled that the signing as surety is certainly not
an exercise of an industry or profession. It is not embarking in a
business. No matter how often an executive acted on or was
persuaded to act as surety for his own employer, this should not be
taken to mean that he thereby embarked in the business of suretyship
or guaranty.
For the conjugal partnership to be liable for a liability that should
appertain to the husband alone, there must be a showing that some
advantages accrued to the spouses. Certainly, to make a conjugal
partnership responsible for a liability that should appertain alone to one
of the spouses is to frustrate the objective of the New Civil Code to
show the utmost concern for the solidarity and well being of the family
as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the
conjugal partnership.[62]
In this case, the private respondent failed to prove that the
conjugal partnership of the petitioners was benefited by the petitioner-
husbands act of executing a continuing guaranty and suretyship
agreement with the private respondent for and in behalf of PBMCI. The
contract of loan was between the private respondent and the PBMCI,
solely for the benefit of the latter. No presumption can be inferred from
the fact that when the petitioner-husband entered into an
accommodation agreement or a contract of surety, the conjugal
partnership would thereby be benefited. The private respondent was
burdened to establish that such benefit redounded to the conjugal
partnership.[63]
It could be argued that the petitioner-husband was a member of
the Board of Directors of PBMCI and was one of its top twenty
stockholders, and that the shares of stocks of the petitioner-husband
and his family would appreciate if the PBMCI could be rehabilitated
through the loans obtained; that the petitioner-husbands career would
be enhanced should PBMCI survive because of the infusion of fresh
capital. However, these are not the benefits contemplated by Article
161 of the New Civil Code. The benefits must be those directly
resulting from the loan. They cannot merely be a by-product or a spin-
off of the loan itself.[64]
This is different from the situation where the husband borrows
money or receives services to be used for his own business or
profession. In the Ayala case, we ruled that it is such a contract that is
one within the term obligation for the benefit of the conjugal
partnership. Thus:
(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.
THIRD DIVISION
CLEODIA U. FRANCISCO andCEAMANTHA U. G.R. No. 1
FRANCISCO,represented by their grandmotherDRA. MAIDA G.
URIARTE as their Attorney-in-Fact,
Petitioners, Present:
YNARES-S
Chairperson,
AUSTRIA-M
- versus - CHICO-NA
NACHURA
REYES, JJ.
SPOUSES JORGE C. GONZALES and Promulgate
PURIFICACION W. GONZALES,
Respondents. September
x---------------------------------------------x

DECISION
AUSTRIA-MARTINEZ, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the
Rules of Court is the Court of Appeals (CA) Decision dated April 30, 2007,
which affirmed the Regional Trial Court (RTC) Orders dated June 4,
2003 and July 31, 2003, denying petitioners' motion to stop execution sale.
Petitioners Cleodia U. Francisco and Ceamantha U. Francisco are the minor
children of Cleodualdo M. Francisco (Cleodualdo) and
Michele Uriarte Francisco (Michele). In a Partial Decision dated November
29, 2000 rendered by the RTC of Makati, Branch 144, in Civil Case No. 93-
2289 for Declaration of Nullity of Marriage, the Compromise Agreement
entered into by the estranged couple was approved. The Compromise
Agreement contained in part the following provisions:
7. In their desire to manifest their genuine concern for
their children, Cleodia and Ceamantha, Cleodualdo and
Michelle have voluntarily agreed to herein set forth
their obligations, rights and responsibilities on matters
relating to their children's support, custody, visitation,
as well as to the dissolution of their conjugal
partnership of gains as follows:
(a) Title and ownership of the
conjugal property consisting of a
house and lot located in
Ayala Alabang, Muntinlupa,
Metro Manila shall be transferred
by way of a deed of donation
to Cleodiaand Ceamantha, as co-
owners, when they reach
nineteen (19) and eighteen (18)
years old, respectively, subject to
the following conditions:
x x x[1]
The property subject of the Compromise Agreement is a house and lot
covered by Transfer Certificate of Title No. 167907 in the name
of Cleodualdo M. Francisco, married to Michele U. Francisco, with an area of
414 square meters, and located
in 410 Taal St., Ayala Alabang Village, Muntinlupa City.[2]
Meanwhile, in a case for Unlawful Detainer with Preliminary Attachment
filed by spouses Jorge C. Gonzales and Purificacion W. Gonzales
(respondents) against George ZoltanMatrai (Matrai) and Michele, the
Metropolitan Trial Court (MeTC) of Muntinlupa City, Branch 80, rendered a
Decision dated May 10, 2001, ordering Matrai and Michele to vacate the
premises leased to them located in 264 Lanka Drive,
Ayala Alabang Village, Muntinlupa City, and to pay back rentals, unpaid
telephone bills and attorney's fees.[3]
Pending appeal with the RTC of Muntinlupa, Branch 256, an order was issued
granting respondents' prayer for the execution of the MeTC Decision.[4] A
notice of sale by execution was then issued by the sheriff covering the real
property under Transfer Certificate of Title No. T-167907 in the name
of Cleodualdo M. Francisco, married to Michele U. Francisco.[5]
When petitioners' grandmother learned of the scheduled auction, she, as
guardian-in-fact of petitioners, filed with the RTC an Affidavit of Third Party
Claim[6] and a Very Urgent Motion to Stop Sale by Execution[7] but this was
denied in the Order dated June 4, 2003.[8] Petitioners' motion for
reconsideration was denied per RTC Order dated July 31, 2003.[9]
Petitioners then filed a petition for certiorari with the CA.
Pending resolution by the CA, the RTC issued an Order dated July 8, 2005,
granting respondents' petition for the issuance of a new certificate of
title.[10] The RTC also issued an Order on February 13, 2006, granting
respondents' motion for the issuance of a writ of possession.[11]
On April 30, 2007, the CA dismissed the petition, the dispositive portion of
which reads:
WHEREFORE, premises considered, the Petition is
hereby DISMISSED. The Order(s), dated June 4,
2003 and July 31, 2003, of the Regional Trial Court
of Muntinlupa City, Br. 256, in Civil Case No. 01-201,
STAND. Costs against the Petitioners.
SO ORDERED.[12]
Hence, herein petition. As prayed for, the Court issued a temporary restraining
order on July 11, 2007, enjoining respondents, the RTC, the Register of
Deeds, and the Sheriff from implementing or enforcing the RTC Order
dated July 8, 2005, canceling TCT No. 167907 and Order dated February 13,
2006, issuing a writ of possession, until further orders from the Court.[13]
Petitioners argue that: (1) they are the rightful owners of the property as the
Partial Decision issued by the RTC of Makati in Civil Case No. 93-2289 had
already become final; (2) their parents already waived in their favor their
rights over the property; (3) the adjudged obligation of Michele in
the ejectment case did not redound to the benefit of the family; (4) Michele's
obligation is a joint obligation between her and Matrai, not joint
and solidary.[14]
The Court finds that it was grave error for the RTC to proceed with the
execution, levy and sale of the subject property. The power of the court in
executing judgments extends only to properties unquestionably belonging to
the judgment debtor alone,[15] in the present case to those belonging to
Michele and Matrai. One man's goods shall not be sold for another man's
debts.[16]
To begin with, the RTC should not have ignored that TCT No.
167907 is in the name of Cleodualdo M. Francisco, married to Michele U.
Francisco. On its face, the title shows that the registered owner of the property
is not Matrai and Michele but Cleodualdo, married to Michele. This describes
the civil status of Cleodualdo at the time the property was acquired.[17]
Records show that Cleodualdo and Michele were married on June 12, 1986,
prior to the effectivity of the Family Code on August 3, 1988. As such, their
property relations are governed by the Civil Code on conjugal partnership of
gains.
The CA acknowledged that ownership of the subject property is conjugal in
nature;[18] however, it ruled that since Michele's obligation was not proven to
be a personal debt, it must be inferred that it is conjugal and redounded to the
benefit of the family, and hence, the property may be held answerable for it.[19]
The Court does not agree.
A wife may bind the conjugal partnership only when she purchases things
necessary for the support of the family, or when she borrows money for that
purpose upon her husband's failure to deliver the needed sum; when
administration of the conjugal partnership is transferred to the wife by the
courts or by the husband; or when the wife gives moderate donations for
charity. Failure to establish any of these circumstances means that the
conjugal asset may not be bound to answer for the wife's personal
obligation.[20]Considering that the foregoing circumstances are evidently not
present in this case as the liability incurred by Michele arose from a judgment
rendered in an unlawful detainercase against her and her partner Matrai.
Furthermore, even prior to the issuance of the Notice of Levy on Execution
on November 28, 2001,[21] there was already annotated on the title the
following inscription:
Entry No. 23341-42/T-167907 Nullification of
Marriage
By order of the Court RTC, NCR, Branch
144, Makati City dated July 4, 2001, which become
final and executory on October 18, 2001 declaring the
Marriage Contract between
MichelleUriarte and Cleodualdo M. Francisco, Jr. is
null & void ab initio and title of ownership of the
conjugal property consisting of the above-described
property shall be transferred by way of a Deed of
Donation to Cleodia Michaela U. Francisco
and Ceamantha Maica U. Francisco, as co-owners when
they reach nineteen (19) and eighteen (18) yrs. old to
the condition that Cleodualdo, shall
retain usufructuary rights over the property until he
reaches the age of 65 yrs. Old.
Date of instrument Oct 18, 2001
 Date of inscription Oct 22, 2001.[22] 7. In their desire to manifest their genuine concern for
their
This annotation should have put the RTC and the sheriff on guard, and they children, Cleodia and Ceamantha, Cleodualdo and
should not have proceeded with the execution of the judgment debt of Michele Michelle have voluntarily agreed to herein set forth
and Matrai. their obligations, rights and responsibilities on matters
While the trial court has the competence to identify and to secure properties relating to their children's support, custody, visitation,
and interest therein held by the judgment debtor for the satisfaction of a as well as to the dissolution of their conjugal
money judgment rendered against him, such exercise of its authority is partnership of gains as follows:
premised on one important fact: that the properties levied upon, or sought to
be levied upon, are properties unquestionably owned by the judgment (a) Title and ownership of the
debtor and are not exempt by law from execution.[23] Also, a sheriff is not conjugal property consisting of
authorized to attach or levy on property not belonging to the judgment debtor, a house and lot located in
and even incurs liability if he wrongfully levies upon the property of a third Ayala Alabang, Muntinlupa,
person. A sheriff has no authority to attach the property of any person under Metro Manila shall be
execution except that of the judgment debtor.[24] transferred by way of a deed of
donation
It should be noted that the judgment debt for which the subject property was to Cleodia and Ceamantha, as
being made to answer was incurred by Michele and her co-owners, when they reach
partner,[25] Matrai. Respondents allege that the lease of the property in Lanka nineteen (19) and eighteen (18)
Drive redounded to the benefit of the family.[26] By no stretch of one's years old, respectively, subject
imagination can it be concluded that said debt/obligation was incurred for the to the following conditions:
benefit of the conjugal partnership or that some advantage accrued to the
welfare of the family. In BA Finance Corporation v. Court of Appeals,[27] the a.1. Cleodualdo shall
Court ruled that the petitioner cannot enforce the obligation contracted retain usufructuary rights over
by Augusto Yulo against his conjugal properties with respondent the property until he reaches the
Lily Yulo because it was not established that the obligation contracted by the age of 65 years old, with the
husband redounded to the benefit of the conjugal partnership under Article following rights and
161 of the Civil Code. The Court stated: responsibilities:
In the present case, the obligation which the petitioner
is seeking to enforce against the conjugal property x x x x[32] (Emphasis supplied)
managed by the private respondent Lily Yulo was
undoubtedly contracted by AugustoYulo for his own From the foregoing, it is clear that both Michele and Cleodualdo have waived
benefit because at the time he incurred the obligation he their title to and ownership of the house and lot in Taal St. in favor of
had already abandoned his family and had left their petitioners. The property should not have been levied and sold at execution
conjugal home. Worse, he made it appear that he was sale, for lack of legal basis.
duly authorized by his wife in behalf of A & L
Industries, to procure such loan from the petitioner. Verily, the CA committed an error in sustaining the RTC Orders dated June 4,
Clearly, to make A & L Industries liable now for the 2003 and July 31, 2003.
said loan would be unjust and contrary to the express
provision of the Civil Code. (Emphasis supplied) WHEREFORE, the petition is GRANTED. The assailed Court of Appeals
Similarly in this case, Michele, who was then already living separately Decision dated April 30, 2007, affirming RTC Orders dated June 4, 2003 and
from Cleodualdo,[28] rented the house in Lanka Drive for her and Matrais own July 31, 2003, are hereby NULLIFIED and SET ASIDE. The temporary
benefit. In fact, when they entered into the lease agreement, Michele restraining order issued by the Court per Resolution of July 11, 2007 is hereby
and Matrai purported themselves to be husband and wife.[29] Respondents bare made PERMANENT.
allegation that petitioners lived with Michele on the leased property is not
sufficient to support the conclusion that the judgment debt against Michele Costs against respondents.
and Matrai in the ejectment suit redounded to the benefit of the family of
Michele and Cleodualdo and petitioners. Thus, in Homeowners Savings and SO ORDERED.
Loan Bank v. Dailo, the Court stated thus:
SECOND DIVISION
x x x Ei incumbit probatio qui dicit, non qui negat (he G.R. No. 145222 April 24, 2009
who asserts, not he who denies, must prove). Petitioners SPOUSES ROBERTO BUADO and VENUS BUADO, Petitioners,
sweeping conclusion that the loan obtained by the vs.
late Marcelino Dailo, Jr. to finance the construction of THE HONORABLE COURT OF APPEALS, Former Division, and
housing units without a doubt redounded to the benefit ROMULO NICOL, Respondents.
of his family, without adducing adequate proof, does DECISION
not persuade this Court. Other than petitioners bare TINGA, J.:
allegation, there is nothing from the records of the case Before this Court is a petition for certiorari assailing the Decision1 of
to compel a finding that, indeed, the loan obtained by the Court of Appeals in CA-G.R. CV No. 47029 and its Resolution
the late Marcelino Dailo, Jr. redounded to the benefit of denying the motion for reconsideration thereof.
the family. Consequently, the conjugal partnership The case stemmed from the following factual backdrop:
cannot be held liable for the payment of the principal On 30 April 1984, Spouses Roberto and Venus Buado (petitioners)
obligation.[30] filed a complaint for damages against Erlinda Nicol (Erlinda)
To hold the property in Taal St. liable for the obligations of Michele with Branch 19 of the Regional Trial Court (RTC) of Bacoor, Cavite,
and Matrai would be going against the spirit and avowed objective of the Civil docketed as Civil Case No. 84-33. Said action originated from Erlinda
Code to give the utmost concern for the solidarity and well-being of the Nicol’s civil liability arising from the criminal offense of slander filed
family as a unit.[31] against her by petitioners.
In justifying the levy against the property, the RTC went over the On 6 April 1987, the trial court rendered a decision ordering Erlinda to
Compromise Agreement as embodied in the Partial Decision dated November pay damages. The dispositive portion reads:
29, 2000. Oddly, the RTC ruled that there was no effective transfer of Wherefore, judgment is hereby rendered in favor of the plaintiff[s] and
ownership to the siblings Cleodia and Ceamantha Francisco. In the same against defendant ordering the latter to pay the former the amount of
breath, the RTC astonishingly ruled that Michele is now the owner of the thirty thousand (P30,000.00) pesos as moral damages, five thousand
property inasmuch as Cleodualdo already waived his rights over the (P5,000.00) pesos as attorney’s fees and litigation expenses, another
property. The Compromise Agreement must not be read piece-meal but in its five thousand (P5,000.00) pesos as exemplary damages and the cost
entirety. It is provided therein, thus: of suit.2
Said decision was affirmed, successively, by the Court of Appeals and
this Court. It became final and executory on 5 March 1992.
On 14 October 1992, the trial court issued a writ of execution, a portion
of which provides:
Now, therefore, you are commanded that of the goods and chattels of
the defendant Erlinda Nicol, or from her estates or legal heirs, you
cause the sum in the amount of forty thousand pesos (P40,000.00),
Philippine Currency, representing the moral damages, attorney’s fees
and litigation expenses and exemplary damages and the cost of suit of
the plaintiff aside from your lawful fees on this execution and do
likewise return this writ into court within sixty (60) days from date, with
your proceedings endorsed hereon.
But if sufficient personal property cannot be found whereof to satisfy
this execution and lawful fees thereon, then you are commanded that
of the lands and buildings of said defendant you make the said sum of
money in the manner required by the Rules of Court, and make return
of your proceedings with this writ within sixty (60) days from date. 3
Finding Erlinda Nicol’s personal properties insufficient to satisfy the
judgment, the Deputy Sheriff issued a notice of levy on real property on
execution addressed to the Register of Deeds of Cavite. The notice of
levy was annotated on the Transfer Certificate of Title No. T-125322.
On 20 November 1992, a notice of sheriff’s sale was issued.
Two (2) days before the public auction sale on 28 January 1993, an
affidavit of third-party claim from one Arnulfo F. Fulo was received by
the deputy sheriff prompting petitioners to put up a sheriff’s indemnity
bond. The auction sale proceeded with petitioners as the highest
bidder.
On 4 February 1993, a certificate of sale was issued in favor of
petitioners.
Almost a year later on 2 February 1994, Romulo Nicol (respondent),
the husband of Erlinda Nicol, filed a complaint for annulment of
certificate of sale and damages with preliminary injunction against
petitioners and the deputy sheriff. Respondent, as plaintiff therein,
alleged that the defendants, now petitioners, connived and directly
levied upon and execute his real property without exhausting the
personal properties of Erlinda Nicol. Respondent averred that there
was no proper publication and posting of the notice of sale.
Furthermore, respondent claimed that his property which was valued
at P500,000.00 was only sold at a "very low price" of P51,685.00,
whereas the judgment obligation of Erlinda Nicol was only P40,000.00.
The case was assigned to Branch 21 of the RTC of Imus, Cavite.
In response, petitioners filed a motion to dismiss on the grounds of lack
of jurisdiction and that they had acted on the basis of a valid writ of
execution. Citing De Leon v. Salvador,4 petitioners claimed that
respondent should have filed the case with Branch 19 where the
judgment originated and which issued the order of execution, writ of
execution, notice of levy and notice of sheriff’s sale.
In an Order5 dated 18 April 1994, the RTC dismissed respondent’s
complaint and ruled that Branch 19 has jurisdiction over the case,
thus:
As correctly pointed out by the defendants, any flaw in the
implementation of the writ of execution by the implementing sheriff
must be brought before the court issuing the writ of execution. Besides,
there are two (2) remedies open to the plaintiff, if he feels that the
property being levied on belongs to him and not to the judgment
debtor. The first remedy is to file a third-party claim. If he fails to do
this, a right is reserved to him to vindicate his claim over the property
by any proper action. But certainly, this is not the proper action
reserved to the plaintiff to vindicate his claim over the property in
question to be ventilated before this court. As earlier stated, this case
should have been addressed to Branch 19, RTC Bacoor as it was that
court which issued the writ of execution.6
Respondent moved for reconsideration but it was denied on 26 July
1994.
On appeal, the Court of Appeals reversed the trial court and held
that Branch 21 has jurisdiction to act on the complaint filed by
appellant. The dispositive portion reads:
WHEREFORE, the Orders appealed from are hereby REVERSED and
SET ASIDE. This case is REMANDED to the Regional Trial Court of
Imus, Cavite, Branch 21 for further proceedings.
SO ORDERED.7
Petitioners’ motion for reconsideration was denied on 23 August 2000.
Hence, the instant petition attributing grave abuse of discretion on the
part of the Court of Appeals.
A petition for certiorari is an extraordinary remedy that is adopted to
correct errors of jurisdiction committed by the lower court or quasi-
judicial agency, or when there is grave abuse of discretion on the part
of such court or agency amounting to lack or excess of jurisdiction.
Where the error is not one of jurisdiction, but of law or fact which is a
mistake of judgment, the proper remedy should be appeal. In addition,
an independent action for certiorari may be availed of only when there
is no appeal or any plain, speedy and adequate remedy in the ordinary
course of law.8
Nowhere in the petition was it shown that the jurisdiction of the Court of
Appeals was questioned. The issue devolves on whether the husband
of the judgment debtor may file an independent action to protect the
conjugal property subject to execution. The alleged error therefore is
an error of judgment which is a proper subject of an appeal.
Nevertheless, even if we were to treat this petition as one for review,
the case should still be dismissed on substantive grounds.
Petitioners maintain that Branch 19 retained jurisdiction over its
judgment to the exclusion of all other co-ordinate courts for its
execution and all incidents thereof, in line with De Leon v. Salvador.
Petitioners insist that respondent, who is the husband of the judgment
debtor, is not the "third party" contemplated in Section 17 (now Section
16), Rule 39 of the Rules of Court, hence a separate action need not
be filed. Furthermore, petitioners assert that the obligation of the wife
redounded to the benefit of the conjugal partnership and cited
authorities to the effect that the husband is liable for the tort committed
by his wife.
Respondent on the other hand merely avers that the decision of the
Court of Appeals is supported by substantial evidence and in accord
with law and jurisprudence.9
Verily, the question of jurisdiction could be resolved through a proper
interpretation of Section 16, Rule 39 of the Rules of Court, which
reads:
Sec. 16. Proceedings where property claimed by third person.
If the property levied on is claimed by any person other than the
judgment obligor or his agent, and such person makes an affidavit of
his title thereto or right to the possession thereof, stating the grounds
of such right or title, and serves the same upon the officer making the
levy and a copy thereof upon the judgment obligee, the officer shall not
be bound to keep the property, unless such judgment obligee, on
demand of the officer, files a bond approved by the court to indemnify
the third-party claimant in a sum not less than the value of the property
levied on. In case of disagreement as to such value, the same shall be
determined by the court issuing the writ of execution. No claim for
damages for the taking or keeping of the property may be enforced
against the bond unless the action therefor is filed within one hundred
twenty (120) days from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of
the property, to any third-party claimant if such bond is filed. Nothing
herein contained shall prevent such claimant or any third person from
vindicating his claim to the property in a separate action, or prevent the
judgment obligee from claiming damages in the same or a separate
action against a third-party claimant who filed a frivolous or plainly
spurious claim.
When the writ of execution is issued in favor of the Republic of the
Philippines, or any officer duly representing it, the filing of such bond
shall not be required, and in case the sheriff or levying officer is sued
for damages as a result of the levy, he shall be represented by the
Solicitor General and if held liable therefor, the actual damages
adjudged by the court shall be paid by the National Treasurer out of
such funds as may be appropriated for the purpose. (Emphasis
Supplied)
Apart from the remedy of terceria available to a third-party claimant or
to a stranger to the foreclosure suit against the sheriff or officer
effecting the writ by serving on him an affidavit of his title and a copy
thereof upon the judgment creditor, a third-party claimant may also
resort to an independent separate action, the object of which is the
recovery of ownership or possession of the property seized by the
sheriff, as well as damages arising from wrongful seizure and detention
of the property. If a separate action is the recourse, the third-party
claimant must institute in a forum of competent jurisdiction an action,
distinct and separate from the action in which the judgment is being
enforced, even before or without need of filing a claim in the court that
issued the writ.101awphi1.zw+
A third-party claim must be filed a person other than the judgment
debtor or his agent. In other words, only a stranger to the case may file
a third-party claim.
This leads us to the question: Is the husband, who was not a party to
the suit but whose conjugal property is being executed on account of
the other spouse being the judgment obligor, considered a "stranger?"
In determining whether the husband is a stranger to the suit, the
character of the property must be taken into account. In Mariano v.
Court of Appeals,11 which was later adopted in Spouses Ching v. Court
of Appeals,12 this Court held that the husband of the judgment debtor
cannot be deemed a "stranger" to the case prosecuted and adjudged
against his wife for an obligation that has redounded to the benefit of
the conjugal partnership.13 On the other hand, in Naguit v. Court of
Appeals14 and Sy v. Discaya,15 the Court stated that a spouse is
deemed a stranger to the action wherein the writ of execution was
issued and is therefore justified in bringing an independent action to
vindicate her right of ownership over his exclusive or paraphernal
property.lawphil.net
Pursuant to Mariano however, it must further be settled whether the
obligation of the judgment debtor redounded to the benefit of the
conjugal partnership or not.
Petitioners argue that the obligation of the wife arising from her
criminal liability is chargeable to the conjugal partnership. We do not
agree.
There is no dispute that contested property is conjugal in nature.
Article 122 of the Family Code16 explicitly provides that payment of
personal debts contracted by the husband or the wife before or during
the marriage shall not be charged to the conjugal partnership except
insofar as they redounded to the benefit of the family.
Unlike in the system of absolute community where liabilities incurred
by either spouse by reason of a crime orquasi-delict is chargeable to
the absolute community of property, in the absence or insufficiency of
the exclusive property of the debtor-spouse, the same advantage is not
accorded in the system of conjugal partnership of gains. The conjugal
partnership of gains has no duty to make advance payments for the
liability of the debtor-spouse.
Parenthetically, by no stretch of imagination can it be concluded that
the civil obligation arising from the crime of slander committed by
Erlinda redounded to the benefit of the conjugal partnership.
To reiterate, conjugal property cannot be held liable for the personal
obligation contracted by one spouse, unless some advantage or
benefit is shown to have accrued to the conjugal partnership. 17
In Guadalupe v. Tronco,18 this Court held that the car which was
claimed by the third party complainant to be conjugal property was
being levied upon to enforce "a judgment for support" filed by a third
person, the third-party claim of the wife is proper since the obligation
which is personal to the husband is chargeable not on the conjugal
property but on his separate property.
Hence, the filing of a separate action by respondent is proper and
jurisdiction is thus vested on Branch 21. Petitioners failed to show that
the Court of Appeals committed grave abuse of discretion in
remanding the case toBranch 21 for further proceedings.
WHEREFORE, the petition is DISMISSED. The Decision of the Court
of Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
THIRD DIVISION EFRENPANA,
Petitioner, -versusHEIRS OF JOSE JUANITE, ~
R. G.R. No. 164201 Present: PERALTA, J.,
Acting Chairperson, BERSAMIN, ** ABAD, MENDOZA, and LEONEN,JJ. and
JOSE JUANITE, JR., Promulgated: * Respondents. ...... 10 December 2012~~ .
_,~ X -----------------------------------------------------------------------------~~tl~
DECISION ABAD, J.: This case is about the propriety of levy and execution on
conjugal properties where one of the spouses has been found guilty of a
crime and ordered to pay civil indemnities to the victims' heirs. The Facts and
the Case " The prosecution accused petitioner Efren Pana (Efren), his wife
Melecia, and others of murder before the. Regional Trial Court (RTC) of
Surigao City in Criminal Cases 4232 and 4233. 1 ' Per Special Order 1394
dated December 6, 2012. " Designated Acting Member, in lieu of Associate
Justice Presbitero J. Velasco, Jr., per Special Order 1395-A dated December 6,
2012. . j 1 Records, pp. 20-21; 24-25. . v Decision G.R. No. 164201 2 On July 9,
1997 the RTC rendered a consolidated decision2 acquitting Efren of the
charge for insufficiency of evidence but finding Melecia and another person
guilty as charged and sentenced them to the penalty of death. The RTC
ordered those found guilty to pay each of the heirs of the victims, jointly and
severally, P50,000.00 as civil indemnity, P50,000.00 each as moral damages,
and P150,000.00 actual damages. On appeal to this Court, it affirmed on May
24, 2001 the conviction of both accused but modified the penalty to
reclusion perpetua. With respect to the monetary awards, the Court also
affirmed the award of civil indemnity and moral damages but deleted the
award for actual damages for lack of evidentiary basis. In its place, however,
the Court made an award of P15,000.00 each by way of temperate damages.
In addition, the Court awarded P50,000.00 exemplary damages per victim to
be paid solidarily by them.3 The decision became final and executory on
October 1, 2001.4 Upon motion for execution by the heirs of the deceased,
on March 12, 2002 the RTC ordered the issuance of the writ,5 resulting in the
levy of real properties registered in the names of Efren and Melecia.6
Subsequently, a notice of levy7 and a notice of sale on execution8 were
issued. On April 3, 2002, petitioner Efren and his wife Melecia filed a motion
to quash the writ of execution, claiming that the levied properties were
conjugal assets, not paraphernal assets of Melecia.9 On September 16, 2002
2 CA rollo, pp. 45-70. 3 Records, pages not indicated; Paña v. Judge Buyser,
410 Phil. 433, 450 (2001). 4 CA rollo, p. 74. 5 Id. at 74-75. 6 Original
Certificates of Title 9138, 512 and 511. 7 CA rollo, pp. 76-77. 8 Id. at 78-79. 9
Id. at 87-93. Decision G.R. No. 164201 3 the RTC denied the motion.10 The
spouses moved for reconsideration but the RTC denied the same on March 6,
2003.11 Claiming that the RTC gravely abused its discretion in issuing the
challenged orders, Efren filed a petition for certiorari before the Court of
Appeals (CA). On January 29, 2004 the CA dismissed the petition for failure to
sufficiently show that the RTC gravely abused its discretion in issuing its
assailed orders.12 It also denied Efren’s motion for reconsideration,13
prompting him to file the present petition for review on certiorari. The Issue
Presented The sole issue presented in this case is whether or not the CA
erred in holding that the conjugal properties of spouses Efren and Melecia
can be levied and executed upon for the satisfaction of Melecia’s civil liability
in the murder case. Ruling of the Court To determine whether the obligation
of the wife arising from her criminal liability is chargeable against the
properties of the marriage, the Court has first to identify the spouses’
property relations. Efren claims that his marriage with Melecia falls under the
regime of conjugal partnership of gains, given that they were married prior
to the enactment of the Family Code and that they did not execute any
prenuptial agreement.14 Although the heirs of the deceased victims do not
dispute that it was the Civil Code, not the Family Code, which governed the
marriage, 10 Rollo, p. 54. 11 Id. at 55-59. 12 Penned by Associate Justice
Amelita G. Tolentino, and concurred in by Associate Justices Eloy R. Bello, Jr.
and Arturo D. Brion (now a member of this Court), rollo, pp. 120-123. 13
Rollo, p. 127. 14 Id. at 170. Decision G.R. No. 164201 4 they insist that it was
the system of absolute community of property that applied to Efren and
Melecia. The reasoning goes: Admittedly, the spouses were married before
the effectivity of the Family Code. But that fact does not prevent the
application of [A]rt. 94, last paragraph, of the Family Code because their
property regime is precisely governed by the law on absolute community.
This finds support in Art. 256 of the Family Code which states: “This code
shall have retroactive effect in so far as it does not prejudice or impair vested
or acquired rights in accordance with the Civil Code or other laws.” None of
the spouses is dead. Therefore, no vested rights have been acquired by each
over the properties of the community. Hence, the liabilities imposed on the
accused-spouse may properly be charged against the community as
heretofore discussed.15 The RTC applied the same reasoning as above.16
Efren and Melecia’s property relation was admittedly conjugal under the Civil
Code but, since the transitory provision of the Family Code gave its
provisions retroactive effect if no vested or acquired rights are impaired, that
property relation between the couple was changed when the Family Code
took effect in 1988. The latter code now prescribes in Article 75 absolute
community of property for all marriages unless the parties entered into a
prenuptial agreement. As it happens, Efren and Melecia had no prenuptial
agreement. The CA agreed with this position.17 Both the RTC and the CA are
in error on this point. While it is true that the personal stakes of each spouse
in their conjugal assets are inchoate or unclear prior to the liquidation of the
conjugal partnership of gains and, therefore, none of them can be said to
have acquired vested rights in specific assets, it is evident that Article 256 of
the Family Code does not intend to reach back and automatically convert
into absolute community of property relation all conjugal partnerships of
gains that existed before 1988 excepting only those with prenuptial
agreements. 15 CA rollo, p. 95. 16 Rollo, pp. 56-57. 17 Id. at 121. Decision
G.R. No. 164201 5 The Family Code itself provides in Article 76 that marriage
settlements cannot be modified except prior to marriage. Art. 76. In order
that any modification in the marriage settlements may be valid, it must be
made before the celebration of the marriage, subject to the provisions of
Articles 66, 67, 128, 135 and 136. Clearly, therefore, the conjugal partnership
of gains that governed the marriage between Efren and Melecia who were
married prior to 1988 cannot be modified except before the celebration of
that marriage. Post-marriage modification of such settlements can take place
only where: (a) the absolute community or conjugal partnership was
dissolved and liquidated upon a decree of legal separation;18 (b) the spouses
who were legally separated reconciled and agreed to revive their former
property regime;19 (c) judicial separation of property had been had on the
ground that a spouse abandons the other without just cause or fails to
comply with his obligations to the family;20 (d) there was judicial separation
of property under Article 135; (e) the spouses jointly filed a petition for the
voluntary dissolution of their absolute community or conjugal partnership of
gains.21 None of these circumstances exists in the case of Efren and Melecia.
What is more, under the conjugal partnership of gains established by Article
142 of the Civil Code, the husband and the wife place only the fruits of their
separate property and incomes from their work or industry in the common
fund. Thus: Art. 142. By means of the conjugal partnership of gains the
husband and wife place in a common fund the fruits of their separate
property and the income from their work or industry, and divide equally,
upon the dissolution of the marriage or of the partnership, the net gains or
benefits obtained indiscriminately by either spouse during the marriage. 18
FAMILY CODE, Art. 66. 19 Id., Art. 67. 20 Id., Art. 128. 21 Id., Art. 136.
Decision G.R. No. 164201 6 This means that they continue under such
property regime to enjoy rights of ownership over their separate properties.
Consequently, to automatically change the marriage settlements of couples
who got married under the Civil Code into absolute community of property in
1988 when the Family Code took effect would be to impair their acquired or
vested rights to such separate properties. The RTC cannot take advantage of
the spouses’ loose admission that absolute community of property governed
their property relation since the record shows that they had been insistent
that their property regime is one of conjugal partnership of gains.22 No
evidence of a prenuptial agreement between them has been presented.
What is clear is that Efren and Melecia were married when the Civil Code was
still the operative law on marriages. The presumption, absent any evidence
to the contrary, is that they were married under the regime of the conjugal
partnership of gains. Article 119 of the Civil Code thus provides: Art. 119. The
future spouses may in the marriage settlements agree upon absolute or
relative community of property, or upon complete separation of property, or
upon any other regime. In the absence of marriage settlements, or when the
same are void, the system of relative community or conjugal partnership of
gains as established in this Code, shall govern the property relations between
husband and wife. Of course, the Family Code contains terms governing
conjugal partnership of gains that supersede the terms of the conjugal
partnership of gains under the Civil Code. Article 105 of the Family Code
states: “x x x x The provisions of this Chapter [on the Conjugal Partnership of
Gains] shall also apply to conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without 22 CA rollo, pp.
88, 91. Decision G.R. No. 164201 7 prejudice to vested rights already
acquired in accordance with the Civil Code or other laws, as provided in
Article 256.”23 Consequently, the Court must refer to the Family Code
provisions in deciding whether or not the conjugal properties of Efren and
Melecia may be held to answer for the civil liabilities imposed on Melecia in
the murder case. Its Article 122 provides: Art. 122. The payment of personal
debts contracted by the husband or the wife before or during the marriage
shall not be charged to the conjugal properties partnership except insofar as
they redounded to the benefit of the family. Neither shall the fines and
pecuniary indemnities imposed upon them be charged to the partnership.
However, the payment of personal debts contracted by either spouse before
the marriage, that of fines and indemnities imposed upon them, as well as
the support of illegitimate children of either spouse, may be enforced against
the partnership assets after the responsibilities enumerated in the preceding
Article have been covered, if the spouse who is bound should have no
exclusive property or if it should be insufficient; but at the time of the
liquidation of the partnership, such spouse shall be charged for what has
been paid for the purpose above-mentioned. Since Efren does not dispute
the RTC’s finding that Melecia has no exclusive property of her own,24 the
above applies. The civil indemnity that the decision in the murder case
imposed on her may be enforced against their conjugal assets after the
responsibilities enumerated in Article 121 of the Family Code have been
covered.25 Those responsibilities are as follows: Art. 121. The conjugal
partnership shall be liable for: (1) The support of the spouse, their common
children, and the legitimate children of either spouse; however, the support
of illegitimate children shall be governed by the provisions of this Code on
Support; (2) All debts and obligations contracted during the marriage by the
designated administrator-spouse for the benefit of the conjugal partnership
of gains, or by both spouses or by one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse without the consent of
the other to the extent that the family may have benefited; 23 Muñoz, Jr. v.
Ramirez, G.R. No. 156125, August 25, 2010, 629 SCRA 38, 49-50. 24 Rollo, p.
58. 25 See Muñoz, Jr. v. Ramirez, supra note 23, at 49; Dewara v. Lamela,
G.R. No. 179010, April 11, 2011, 647 SCRA 483, 491-492. Decision G.R. No.
164201 8 (4) All taxes, liens, charges, and expenses, including major or minor
repairs upon the conjugal partnership property; (5) All taxes and expenses
for mere preservation made during the marriage upon the separate property
of either spouse; (6) Expenses to enable either spouse to commence or
complete a professional, vocational, or other activity for self-improvement;
(7) Antenuptial debts of either spouse insofar as they have redounded to the
benefit of the family; (8) The value of what is donated or promised by both
spouses in favor of their common legitimate children for the exclusive
purpose of commencing or completing a professional or vocational course or
other activity for self-improvement; and (9) Expenses of litigation between
the spouses unless the suit is found to be groundless. If the conjugal
partnership is insufficient to cover the foregoing liabilities, the spouses shall
be solidarily liable for the unpaid balance with their separate properties.
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. 26 See People v. Lagrimas,
139 Phil. 612, 617 (1969). Decision SO ORDERED. WE CONCUR: 9 ROBERTO ~
A. ABAD Associate Justice Associat Justice Acting Chairperson G.R. No.
164201 JOSE CA~ENDOZA Asslo1f:~~:~ce Associate Justice ATTESTATION I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division. Associat Justice Acting Chairperso , Third Division Decision
10 G.R. No. 164201 CERTIFICATION Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson's Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P. A. SERENO Chief Justice
BA FINANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, AUGUSTO YULO, LILY
YULO (doing business under the name and style of A & L
INDUSTRIES), respondents.
GUTIERREZ, JR., J.:
This is a petition for review seeking to set aside the decision of the
Court of Appeals which affirmed the decision of the then Court of First
Instance of Manila, dismissing the complaint instituted by the petitioner
and ordering it to pay damages on the basis of the private respondent's
counterclaim.
On July 1, 1975, private respondent Augusto Yulo secured a loan from
the petitioner in the amount of P591,003.59 as evidenced by a
promissory note he signed in his own behalf and as representative of
the A & L Industries. Respondent Yulo presented an alleged special
power of attorney executed by his wife, respondent Lily Yulo, who
manages A & L Industries and under whose name the said business is
registered, purportedly authorizing Augusto Yulo to procure the loan
and sign the promissory note. About two months prior to the loan,
however, Augusto Yulo had already left Lily Yulo and their children and
had abandoned their conjugal home. When the obligation became due
and demandable, Augusto Yulo failed to pay the same.
On October 7, 1975, the petitioner filed its amended complaint against
the spouses Augusto and Lily Yulo on the basis of the promissory note.
It also prayed for the issuance of a writ of attatchment alleging that the
said spouses were guilty of fraud in contracting the debt upon which
the action was brought and that the fraud consisted of the spouses'
inducing the petitioner to enter into a contract with them by executing a
Deed of Assignment in favor of the petitioner, assigning all their rights,
titles and interests over a construction contract executed by and
between the spouses and A. Soriano Corporation on June 19, 1974 for
a consideration of P615,732.50 when, in truth, the spouses did not
have any intention of remitting the proceeds of the said construction
contract to the petitioner because despite the provisions in the Deed of
Assignment that the spouses shall, without compensation or costs,
collect and receive in trust for the petitioner all payments made upon
the construction contract and shall remit to the petitioner all collections
therefrom, the said spouses failed and refuse to remit the collections
and instead, misappropriated the proceeds for their own use and
benefit, without the knowledge or consent of the petitioner.
The trial court issued the writ of attachment prayed for thereby
enabling the petitioner to attach the properties of A & L Industries.
Apparently not contented with the order, the petitioner filed another
motion for the examination of attachment debtor, alleging that the
properties attached by the sheriff were not sufficient to secure the
satisfaction of any judgment that may be recovered by it in the case.
This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with counterclaim,
alleging that although Augusta Yulo and she are husband and wife, the
former had abandoned her and their children five (5) months before the
filing of the complaint; that they were already separated when the
promissory note was executed; that her signature in the special power
of attorney was forged because she had never authorized Augusto
Yulo in any capacity to transact any business for and in behalf of A & L
Industries, which is owned by her as a single proprietor, that she never
got a single centavo from the proceeds of the loan mentioned in the
promissory note; and that as a result of the illegal attachment of her
properties, which constituted the assets of the A & L Industries, the
latter closed its business and was taken over by the new owner.
After hearing, the trial court rendered judgment dismissing the
petitioner's complaint against the private respondent Lily Yulo and A &
L Industries and ordering the petitioner to pay the respondent Lily Yulo
P660,000.00 as actual damages; P500,000.00 as unrealized profits;
P300,000.00 as exemplary damages; P30,000.00 as and for attorney's
fees; and to pay the costs.
The petitioner appealed. The Court of Appeals affirmed the trial court's
decision except for the exemplary damages which it reduced from
P300,000.00 to P150,000.00 and the attorney's fees which were
reduced from P30,000.00 to P20,000.00.
In resolving the question of whether or not the trial court erred in
holding that the signature of respondent Lily Yulo in the special power
of attorney was forged, the Court of Appeals said:
The crucial issue to be determined is whether or
not the signatures of the appellee Lily Yulo in
Exhibits B and B-1 are forged. Atty. Crispin
Ordoña, the Notary Public, admitted in open court
that the parties in the subject documents did not
sign their signatures in his presence. The same
were already signed by the supposed parties and
their supposed witnesses at the time they were
brought to him for ratification. We quote from the
records the pertinent testimony of Atty. Ordoña,
thus:
Q. This document marked as
Exhibit B-1, when this was
presented to you by that
common friend, June
Enriquez, it was already
typewritten, it was already
accomplished, all
typewritten.?
A. Yes, sir.
Q And the parties had already
affixed their signatures in this
document?
A. Yes, sir.
Q. In this document marked
as Exhibit B although it
appears here that this is an
acknowledgment, you have
not stated here that the
principal actually
acknowledged this document
to be her voluntary act and
deed?
A This in one of those things
that escaped my attention.
Actually I have not gone over
the second page. I believed it
was in order I signed it. (TSN
pp. 13-14, Hearing of Nov. 26,
1976).
The glaring admission by the Notary Public that he
failed to state in the acknowledgment portion of
Exhibit B-1 that the appellee Lily Yulo
acknowledged the said document to be her own
voluntary act and deed, is a very strong and
commanding circumstance to show that she did
not appear personally before the said Notary
Public and did not sign the document.
Additionally, the Notary Public admitted that, while
June Enriquez is admittedly a mutual friend of his
and the defendant Augusta Yulo, and who is also
an instrumental witness in said Exhibit B-1., he
could not recognize or tell which of the two
signatures appearing therein, was the signature of
this June Enriquez.
Furthermore, as the issue is one of credibility of a
witness, the findings and conclusions of the trial
court before whom said witness, Atty. Crispin
Ordoña, the Notary Public before whom the
questioned document was supposedly ratified and
acknowledged, deserve great respect and are
seldom disturbed on appeal by appellate tribunals,
since it is in the best and peculiar advantage of
determining and observing the conduct, demeanor
and deportment of a particular witness while he is
testifying in court, an opportunity not enjoyed by
the appellate courts who merely have to rely on
the recorded proceedings which transpired in the
court below, and the records are bare of any
circumstance of weight, which the trial court had
overlooked and which if duly considered, may
radically affect the outcome of the case.
On the other hand, the appellee Lily Yulo, to back
up her claim of forgery of her signature in Exhibit
B-1, presented in court a handwriting expert
witness in the person of Police Captain Yakal
Giron of the Integrated National Police Training
Command, and who is also a Document Examiner
of the same Command's Crime Laboratory at Fort
Bonifacio, Metro Manila. His experience as an
examiner of questioned and disputed documents,
in our mind, is quite impressive. To qualify him as
a handwriting expert, he declared that he
underwent extensive and actual studies and
examination of disputed or questioned document,
both at the National Bureau of Investigation
Academy and National Bureau of Investigation
Questioned Document Laboratory, respectively,
from July 1964, up to his appointment as
Document Examiner in June, 1975, and, to further
his experience along this line, he attended the
297th Annual Conference of the American Society
of Questioned Docurnent Examiners held at
Seattle, Washington, in August 1971, as a
representative of the Philippines, and likewise
conducted an observation of the present and
modern trends of crime laboratories in the West
Coast, U.S.A., in 1971; that he likewise had
conducted actual tests and examination of about
100,000 documents, as requested by the different
courts, administrative, and governmental agencies
of the Government, substantial portions of which
relate to actual court cases.
In concluding that the signatures of the appellee
Lily Yulo, in the disputed document in question
(Exh. B-1), were all forgeries, and not her genuine
signature, the expert witness categorically recited
and specified in open court what he observed to
be about twelve (12) glaring and material
significant differences, in his comparison of the
signatures appearing in the genuine specimen
signatures of the said appellee and with those
appearing in the questioned document (Exhibit B-
1). Indeed, we have likewise seen the supposed
 notable differences, found in the standard or of A & L Industries exclusively
genuine signatures of the appellee which were owned by Lily T. Yulo appears
lifted and obtained in the official files of the to be without any factual or
government, such as the Bureau of Internal legal basis whatsoever. The
Revenue on her income tax returns, as compared chattel mortgage, Exhibit "4"
to the pretended signature of the appellee and the Promissory Note,
appearing in Exhibits B, B-1. It is also noteworthy Exhibit A, are based on one
to mention that the appellant did not even bother and the same obligation.
to conduct a cross-examination of the handwriting Plaintiff tried to enforce as it
expert witness, Capt. Giron, neither did the did enforce its claim into two
appellant present another handwriting expert, at different modes a single
least to counter-act or balance the appellee's obligation.
handwriting expert. Aware that defendant Lily
Prescinding from the foregoing facts, we subscribe Yulo, filed a Motion to
fully to the lower court's observations that the Suspend Proceedings by
signatures of the appellee Lily Yulo in the virtue of a complaint she filed
questioned document (Exh. B-1) were forged. with the Court of First
Hence, we find no factual basis to disagree. (pp. Instance of Caloocan, seeking
28-30, Rollo) annulment of the Promissory
As to the petitioner's contention that even if the signature of Lily Yulo Note, the very basis of the
was forged or even if the attached properties were her exclusive plaintiff in filing this complaint,
property, the same can be made answerable to the obligation because immediately after the day it
the said properties form part of the conjugal partnership of the spouses filed a Motion for the Issuance
Yulo, the appellate court held that these contentions are without merit of an Alias Writ of Preliminary
because there is strong preponderant evidence to show that A & L Attachment . . .Yet, inspite of
Industries belongs exclusively to respondent Lily Yulo, namely: a) The the knowledge and the filing
Certificate of Registration of A & L Industries, issued by the Bureau of of this Motion to Suspend
Commerce, showing that said business is a single proprietorship, and Proceedings, the Plaintiff still
that the registered owner thereof is only Lily Yulo; b) The Mayor's filed a Motion for the Issuance
Permit issued in favor of A & L Industries, by the Caloocan City of a Writ of Attachment dated
Mayor's Office showing compliance by said single proprietorship February 6, 1976 before this
company with the City Ordinance governing business establishments; court. To add insult to injury,
and c) The Special Power of Attorney itself, assuming but without plaintiff even filed a Motion for
admitting its due execution, is tangible proof that Augusto Yulo has no Examination of the
interest whatsoever in the A & L Industries, otherwise, there would Attachment Debtor, although
have been no necessity for the Special Power of Attorney if he is a part aware that Lily Yulo had
owner of said single proprietorship. already denied participation in
With regard to the award of damages, the Court of Appeals affirmed the execution of Exhibits "A"
the findings of the trial court that there was bad faith on the part of the and "B". These incidents and
petitioner as to entitle the private respondent to damages as shown not actions taken by plaintiff, to
only by the fact that the petitioner did not present the Deed of the thinking of the court, are
Assignment or the construction agreement or any evidence sufficient to prove and
whatsoever to support its claim of fraud on the part of the private establish the element of bad
respondent and to justify the issuance of a preliminary attachment, but faith and malice on the part of
also by the following findings: plaintiff which may warrant the
Continuing and elaborating further on the award of damages in favor of
appellant's mala fide actuations in securing the defendant Lily Yulo. (Ibid., pp.
writ of attachment, the lower court stated as 102-103).<äre||anº•1àw>
follows: Indeed, the existence of
Plaintiff not satisfied with the evident bad faith on the
instant case where an order appellant's part in proceeding
for attachment has already against the appellee Lily Yulo
been issued and enforced, on in the present case, may
the strength of the same likewise be distressed on the
Promissory Note (Exhibit"A"), fact that its officer Mr.
utilizing the Deed of Chattel Abraham Co, did not even
Mortgage (Exhibit "4"), filed a bother to demand the
foreclosure proceedings production of at least the
before the Office of the Sheriff duplicate original of the
of Caloocan (Exhibit"6") Special Power of Attorney
foreclosing the remaining (Exhibit B) and merely
properties found inside the contended himself with a
premises formerly occupied mere xerox copy thereof,
by the A & L Industries. A neither did he require a more
minute examination of Exhibit specific authority from the A &
"4" will show that the L Industries to contract the
contracting parties thereto, as loan in question, since from
appearing in par. 1 thereof, the very content and recitals
are Augusto Yulo, doing of the disputed document, no
business under the style of A authority, express or implied,
& L Industries (should be A & has been delegated or
L Glass Industries granted to August Yulo to
Corporation), as mortgagor contract a loan, especially
and BA Finance Corporation with the appellant. (pp. 33-34,
as mortgagee, thus the Rollo)
enforcement of the Chattel Concerning the actual damages, the appellate court ruled that the
Mortgage against the property petitioner should have presented evidence to disprove or rebut the
private respondent's claim but it remained quiet and chose not to
disturb the testimony and the evidence presented by the private
respondent to prove her claim.
In this petition for certiorari, the petitioner raises three issues. The first
issue deals with the appellate court's affirmance of the trial court's
findings that the signature of the private respondent on the Special
Power of Attorney was forged. According to the petitioner, the Court of
Appeals disregarded the direct mandate of Section 23, Rule 132 of the
Rules of Court which states in part that evidence of handwriting by
comparison may be made "with writings admitted or treated as genuine
by the party against whom the evidence is offered, or proved to be
genuine to the satisfaction of the judge," and that there is no evidence
on record which proves or tends to prove the genuineness of the
standards used.
There is no merit in this contention.
The records show that the signatures which were used as "standards"
for comparison with the alleged signature of the private respondent in
the Special Power of Attorney were those from the latter's residence
certificates in the years 1973, 1974 and 1975, her income tax returns
for the years 1973 and 1975 and from a document on long bond paper
dated May 18, 1977. Not only were the signatures in the foregoing
documents admitted by the private respondent as hers but most of the
said documents were used by the private respondent in her
transactions with the government. As was held in the case of Plymouth
Saving & Loan Assn. No. 2 v. Kassing (125 NE 488, 494):
We believe the true rule deduced from the
authorities to be that the genuineness of a
"standard" writing may be established (1) by the
admission of the person sought to be charged with
the disputed writing made at or for the purposes of
the trial or by his testimony; (2) by witnesses who
saw the standards written or to whom or in whose
hearing the person sought to be charged
acknowledged the writing thereof; (3) by evidence
showing that the reputed writer of the standard
has acquiesced in or recognized the same, or that
it has been adopted and acted upon by him his
business transactions or other concerns....
Furthermore, the judge found such signatures to be sufficient as
standards. In the case of Taylor-Wharton Iron & Steel Co. v.
Earnshaw (156 N.E. 855, 856), it was held:
When a writing is offered as a standard of
comparison it is for the presiding judge to decide
whether it is the handwriting of the party to be
charged. Unless his finding is founded upon error
of law, or upon evidence which is, as matter of
law, insufficient to justify the finding, this court will
not revise it upon exceptions." (Costelo v. Crowell,
139 Mass. 588, 590, 2 N.E. 648; Nuñez v. Perry,
113 Mass, 274, 276.)
We cannot find any error on the part of the trial judge in using the
above documents as standards and also in giving credence to the
expert witness presented by the private respondent whose testimony
the petitioner failed to rebut and whose credibility it likewise failed to
impeach. But more important is the fact that the unrebutted handwriting
expert's testimony noted twelve (12) glaring and material differences in
the alleged signature of the private respondent in the Special Power of
Attorney as compared with the specimen signatures, something which
the appellate court also took into account. In Cesar v.
Sandiganbayan (134 SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other significant
divergences and distinctive characteristics
between the sample signatures and the signatures
on the questioned checks in his report which the
court's Presiding Justice kept mentioning during
Maniwang's testimony.
In the course of his cross-examination, NBI expert
Tabayoyong admitted that he saw the differences
between the exemplars used and the questioned
signatures but he dismissed the differences
because he did not consider them fundamental.
We rule that significant differences are more
fundamental than a few similarities. A forger
always strives to master some similarities.
The second issue raised by the petitioner is that while it is true that A &
L Industries is a single proprietorship and the registered owner thereof
is private respondent Lily Yulo, the said proprietorship was established
during the marriage and its assets were also acquired during the same.
Therefore, it is presumed that this property forms part of the conjugal
partnership of the spouses Augusto and Lily Yulo and thus, could be
held liable for the obligations contracted by Augusto Yulo, as
administrator of the partnership.
There is no dispute that A & L Industries was established during the
marriage of Augusta and Lily Yulo and therefore the same is presumed
conjugal and the fact that it was registered in the name of only one of
the spouses does not destroy its conjugal nature (See Mendoza v.
Reyes, 124 SCRA 161, 165). However, for the said property to be held
liable, the obligation contracted by the husband must have redounded
to the benefit of the conjugal partnership under Article 161 of the Civil
Code. In the present case, the obligation which the petitioner is
seeking to enforce against the conjugal property managed by the
private respondent Lily Yulo was undoubtedly contracted by Augusto
Yulo for his own benefit because at the time he incurred the obligation
he had already abandoned his family and had left their conjugal home.
Worse, he made it appear that he was duly authorized by his wife in
behalf of A & L Industries, to procure such loan from the petitioner.
Clearly, to make A & L Industries liable now for the said loan would be
unjust and contrary to the express provision of the Civil Code. As we
have ruled in Luzon Surety Co., Inc. v. De Gracia (30 SCRA 111, 115-
117):
As explained in the decision now under review: "It
is true that the husband is the administrator of the
conjugal property pursuant to the provisions of Art.
163 of the new Civil Code. However, as such
administrator the only obligations incurred by the
husband that are chargeable against the conjugal
property are those incurred in the legitimate
pursuit of his career, profession or business with
the honest belief that he is doing right for the
benefit of the family. This is not true in the case at
bar for we believe that the husband in acting as
guarantor or surety for another in an indemnity
agreement as that involved in this case did not act
for the benefit of the conjugal partnership. Such
inference is more emphatic in this case, when no
proof is presented that Vicente Garcia in acting as
surety or guarantor received consideration
therefore, which may redound to the benefit of the
conjugal partnership.(Ibid, pp. 46-47).
xxx xxx xxx
xxx xxx xxx
In the most categorical language, a conjugal
partnership under that provision is liable only for
such "debts and obligations contracted by the
husband for the benefit of the conjugal
partnership." There must be the requisite showing
then of some advantage which clearly accrued to
the welfare of the spouses. There is none in this
case.
xxx xxx xxx
Moreover, it would negate the plain object of the
additional requirement in the present Civil Code
that a debt contracted by the husband to bind a
conjugal partnership must redound to its benefit.
That is still another provision indicative of the
solicitude and tender regard that the law manifests
for the family as a unit. Its interest is paramount;
its welfare uppermost in the minds of the codifiers
and legislators.
We, therefore, rule that the petitioner cannot enforce the obligation
contracted by Augusto Yulo against his conjugal properties with
respondent Lily Yulo. Thus, it follows that the writ of attachment cannot
issue against the said properties.
Finally, the third issue assails the award of actual damages according
to the petitioner, both the lower court and the appellate court
overlooked the fact that the properties referred to are still subject to a
levy on attachment. They are, therefore, still under custodia legis and
thus, the assailed decision should have included a declaration as to
who is entitled to the attached properties and that assuming arguendo
that the attachment was erroneous, the lower court should have
ordered the sheriff to return to the private respondent the attached
properties instead of condemning the petitioner to pay the value
thereof by way of actual damages.
In the case of Lazatin v. Twaño (2 SCRA 842, 847), we ruled:
 xxx xxx xxx
... It should be observed that Sec. 4 of Rule 59,
does not prescribed the remedies available to the
attachment defendant in case of a wrongful
attachment, but merely provides an action for
recovery upon the bond, based on the undertaking
therein made and not upon the liability arising from
a tortuous act, like the malicious suing out of an
attachment. Under the first, where malice is not
essential, the attachment defendant, is entitled to
recover only the actual damages sustained by him
by reason of the attachment. Under the second,
where the attachment is maliciously sued out, the
damages recoverable may include a
compensation for every injury to his credit,
business or feed (Tyler v. Mahoney, 168 NC 237,
84 SE 362; Pittsburg etc. 5 Wakefield, etc., 135
NC 73, 47 SE 234). ...
The question before us, therefore, is whether the attachment of the
properties of A & L Industries was wrongful so as to entitle the
petitioner to actual damages only or whether the said attachment was
made in bad faith and with malice to warrant the award of other kinds
of damages. Moreover, if the private respondent is entitled only to
actual damages, was the court justified in ordering the petitioner to pay
for the value of the attached properties instead of ordering the return of
the said properties to the private respondent Yulo ?
Both the trial and appellate courts found that there was bad faith on the
part of the petitioner in securing the writ of attachment. We do not think
so. "An attachment may be said to be wrongful when, for instance, the
plaintiff has no cause of action, or that there is no true ground
therefore, or that the plaintiff has a sufficient security other than the
property attached, which is tantamout to saying that the plaintiff is not
entitled to attachment because the requirements of entitling him to the
writ are wanting. (7 C.J.S., 664)" (p. 48, Section 4, Rule 57, Francisco,
Revised Rules of Court).
Although the petitioner failed to prove the ground relied upon for the
issuance of the writ of attachment, this failure cannot be equated with
bad faith or malicious intent. The steps which were taken by the
petitioner to ensure the security of its claim were premised, on the firm
belief that the properties involved could be made answerable for the
unpaid obligation due it. There is no question that a loan in the amount
of P591,003.59 was borrowed from the bank.
We, thus, find that the petitioner is liable only for actual damages and
not for exemplary damages and attorney's fees. Respondent Lily Yulo
has manifested before this Court that she no longer desires the return
of the attached properties since the said attachment caused her to
close down the business. From that time she has become a mere
employee of the new owner of the premises. She has grave doubts as
to the running condition of the attached machineries and equipments
considering that the attachment was effected way back in 1975. She
states as a matter of fact that the petitioner has already caused the
sale of the machineries for fear that they might be destroyed due to
prolonged litigation. We, therefore, deem it just and equitable to allow
private respondent Lily Yulo to recover actual damages based on the
value of the attached properties as proven in the trial court, in the
amount of P660,000.00. In turn, if there are any remaining attached
properties, they should be permanently released to herein petitioner.
We cannot, however, sustain the award of P500,000.00 representing
unrealized profits because this amount was not proved or justified
before the trial court. The basis of the alleged unearned profits is too
speculative and conjectural to show actual damages for a future
period. The private respondent failed to present reports on the average
actual profits earned by her business and other evidence of profitability
which are necessary to prove her claim for the said amount (See G. A.
Machineries, Inc. v. Yaptinchay, 126 SCRA 78, 88).
The judgment is therefore set aside insofar as it holds the petitioner
liable for P500,000.00 actual damages representing unrealized profits,
P150,000.00 for exemplary damages and P20,000.00 for attorney's
fees. As stated earlier, the attached properties, should be released in
favor of the petitioner.
WHEREFORE, the decision of the Court of Appeals is hereby SET
ASIDE and the petitioner is ordered to pay the private respondent Lily
Yulo the amount of SIX HUNDRED SIXTY THOUSAND PESOS
(P660,000.00) as actual damages. The remaining properties subject of
the attachment are ordered released in favor of the petitioner.
SO ORDERED.
HEIRS OF CHRISTINA AYUSTE, petitioner, vs. COURT OF APPEALS
and VIENA MALABONGA, respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a petition for certiorari under Rule 45, asking this Court to
review the decision of the Court of Appeals dated January 23, 1995 in CA-
G.R. CV No. 38232,[1] which overturned the decision of the Regional Trial
Court of Lucena City in Civil Case No. 90-33.
At the outset, we note that Christina Ayuste, the plaintiff in the lower
court and the original petitioner herein, died on November 21, 1995. [2] In his
Comment dated January 14, 1998 to private respondents Manifestation
informing the Court of Christina Ayustes death, petitioners counsel re-
affirmed such fact of death and informed the Court of the names of Christina
Ayustes legal representatives.[3] The claim not having been extinguished by
the death of Christina Ayuste, we ordered the substitution of her heirs Marlon
Ayuste and Arlaine Ayuste-Yu for Christina Ayuste in our Resolution dated
August 11, 1999.
Christina Ayuste married Rafael Ayuste on September 24,
1961. Although the couple resided in Manila, they operated a machine shop in
Barangay Iyam, Lucena City, which was managed by Rafael Ayuste. In order
to serve as a temporary residence for Rafael Ayuste while in Lucena, the
couple purchased on August 26, 1982 a parcel of land with an area of 180
square meters on which a residential house was built situated at Yale Street,
University Village, Barrio Ibabang Dupay, Lucena City from spouses Pedro
and Aida David. A deed of sale[4] was executed and signed by the parties and
filed with the Register of Deeds of Lucena City. On October 23, 1983, the
Register of Deeds of Lucena City issued Transfer Certificate of Title No. T-
42972 in the name of RAFAEL T. AYUSTE, married to Christina Ayuste. [5]
On February 27, 1987, a deed of absolute sale[6] was executed by
Rafael Ayuste in favor of private respondent whereby the former sold the
abovementioned parcel of land to the latter for P40,000, which amount Rafael
Ayuste acknowledge having received in the deed. On page 2 of this deed
appears the signature of Christina Ayuste below the phrase With my
conformity. The deed of sale was registered with the Register of deeds of
Lucena City on March 5, 1987 and Transfer Certificate of Title No. T-50046
was issued in the name of private respondent.[7]
After Rafael Ayustes death on October 13, 1989, Christina Ayuste
discovered, in the course of an inventory of their properties, that the title to the
land in Lucena was missing. She searched for it in the office of her husband in
Lucena City and it was then that she learned from her employees about the
sale of the house and lot by her husband to private respondent.
On March 2, 1990, Christina Ayuste filed a complaint with the
Regional Trial Court of Lucena City for the annulment of the sale,
cancellation of the title issued in the name of private respondent and for the
payment of moral, exemplary and actual damages. In her complaint Christina
Ayuste alleges that her signature on the deed of sale was forged and that her
husband Rafael Ayuste sold the property without her knowledge and consent.
The Regional Trial Court rendered its Decision on June 20, 1991, the
dispositive portion of which provides as follows-
WHEREFORE, judgment is hereby rendered as follows:
(1) Declaring null and void the Deed of Absolute Sale of House and
Lot (Exhibit C') executed by defendant and plaintiffs husband, the
deceased Rafael Ayuste, on February 27, 1987;
(2) Ordering defendant Viena Malabonga to return to plaintiff Christina
Ayuste the possession of the house and lot covered by Transfer
Certificate of Title No. T-50045, now in the name of defendant
Viena Malabonga, together with the improvements thereon;
(3) Directing the Register of Deeds of Lucena City to cancel Transfer
Certificate of Title No. T-50046 and to issue in the name of
plaintiff and her children by the late Rafael Ayuste new Transfer
Certificate of Title in lieu thereof, subject to all/any liens and
encumbrances annotated on the memorandum of the title to be
cancelled;
(4) Ordering plaintiff Christina Ayuste to pay the defendant Vienna
Malabonga the sum of P258,200.00 for the improvements
introduced on the lot and house as well as for maintenance of the
premises; and
(5) Ordering defendant to pay plaintiff the amount of rents received
from the premises starting March, 1990 until such time that she
finally turns-over (sic) the possession of the house and lot to
plaintiff, at the rate of P2,700.00 per month.
With costs against defendant.[8]
Both parties appealed the trial courts decision. On January 23, 1995,
the Court of Appeals reversed the trial courts ruling by holding that Christina
Ayustes right to bring an action for the annulment of the sale is barred by
laches because of her failure to file it during the existence of the marriage in
accordance with article 173 of the Civil Code. Also, it found private
respondent to be entitled to the protection of a buyer in good faith and for
value. The pertinent portion of the public respondents decision provides-
Record shows that plaintiff-appellant wife (sic) instituted on March 2, 1990
her action for annulment of the sale executed by her husband on February 27,
1987 long after said vendor-husband died in 1989. It is thus clear that the
action for annulment of the sale was not instituted during the marriage as
required by Article 173, the very provision of law which grants the wife the
privilege/right to have the sale executed by her husband annulled, in
derogation of the suppose (sic) vested right of the buyer. The two periods
provided for in said Article 173 during the marriage and within 10 years
should concur.
We find no merit in plaintiff-appellants claim that she discovered the sale,
only after her husbands death, when she made an inventory and found out that
the pertinent titles to the land subject of the sale were missing. It is settled in
this jurisdiction that registration with the Register of Deeds is notice to the
whole world. The questioned deed of sale has long been registered with the
Register of Deeds of Lucena City on March 5, 1987- and in fact the said
property was registered in the name of defendant-appellant under Transfer
Certificate of Title No. T-50046. Said TCT in the name of defendant-appellant
is now indefeasible.
The peculiar circumstances that militates in favor of defendant-appellant
buyer are as follows: The questioned deed of sale was not actually without the
wifes signature signifying marital consent, so to speak.Evidently, defendant-
appellant was led to believe by the husband-vendor that plaintiff-appellant
gave her marital consent to the sale, as said husband presented a deed of sale
supposedly pre-signed by his wife, plaintiff-appellant. Defendant-appellant is
therefore undoubtedly a buyer in good faith and for value, with vested rights
equally entitled to the protection of the law. The questioned deed of sale was
duly registered In the name of defendant-appellant who was issued a Transfer
Certificate of Title.
xxx xxx xxx
Unlike the statute of limitations, laches is not a mere question of time but is
principally a question of the inequity on unfairness of permitting a stale right
to be enforced or asserted. (Marcelino vs. CA, 210 SCRA 444). For failure of
the plaintiff-appellant wife to institute her action for annulment of sale, while
her husband-vendor was still alive as required by Article 173 of the New Civil
Code, plaintiff-appellant wifes right under Article 166 of the same Code has
become stale and is now barred by laches.
In view of the foregoing findings, We rule that the trial court erred in giving
due course to the action for annulment of sale. With the foregoing findings
and resolution the other issues raised in this appeal are now moot and
academic.
WHEREFORE, in view of all the foregoing, judgment is hereby rendered
giving due course to the appeal of defendant-appellant, -and- dismissing the
appeal of plaintiff-appellant.
The decision dated June 20, 1991 rendered by the Regional Trial Court is
REVERSED and SET ASIDE.
The Deed of Absolute Sale executed on February 27, 1987 by and between
defendant-appellant and plaintiff-appellants husband is declared VALID and
BINDING upon the plaintiff-appellant.[9]
Both the trial and the appellate court decisions have established that
Rafael Ayuste sold conjugal property without the consent of Christina Ayuste,
his wife. This factual finding shall not be disturbed because only questions of
law are reviewed in an appeal under Rule 45 of the Rules of Court subject to
certain well-defined exceptions none of which are present in the instant
case. The only issue which remains to be resolved is whether petitioners are
entitled to the annulment of the contract of sale entered into by Rafael Ayuste
without the consent of Christina Ayuste.
Petitioners claim that since the law expressly prohibits the husband
from alienating real property belonging to the conjugal partnership without his
wifes consent, the contract of sale in question is a nullity pursuant to article
1409 of the Civil Code which provides that contracts expressly prohibited by
law are inexistent and void from the beginning. It is further averred by
petitioners that the present action is not barred because the action to declare
the nullity of a contract does not prescribe. Futhermore, Christina Ayuste
cannot be faulted for having brought the action only after the death of her
husband, despite the periods stated in article 173 of the Civil Code, since she
had no knowledge of the sale during his lifetime as he concealed the same
from her. Finally, it is contended that article 166 is the relevant provision, not
article 173.[10]
Under the Civil Code, although the husband is the administrator of the
conjugal partnership,[11] he cannot alienate or encumber any real property of
the conjugal partnership without his wifes consent,[12]subject only to certain
exceptions specified in the law.[13] The remedy available to the wife in case
her husband should dispose of their conjugal property without her consent is
laid down in Article 173 of the Civil Code which states that-
The wife may, during the marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband
entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this right, she
or her heirs, after the dissolution of the marriage, may demand the value of
property fraudulently alienated by the husband. (emphasis supplied)
There is no ambiguity in the wording of the law. A sale of real property
of the conjugal partnership made by the husband without the consent of his
wife is voidable[14] The action for annulment must be brought during the
marriage and within ten years from the questioned transaction by the
wife.[15] Where the law speaks in clear and categorical languange, there is no
room for interpretation there is room only for application.[16]
In the present case, the deed of sale was executed on February 27,
1987. Rafael Ayuste died on October 13, 1989. However, it was only on
March 2, 1990 that Christina Ayuste filed her complaint with the lower court
asking for the annulment of the sale. Although the action was filed within ten
years from the questioned transaction, it was not brought during the existence
of the marriage which was dissolved upon the death of Rafael Ayuste in
1989.[17] Clearly, the action for annulment filed by Christina Ayuste was
barred for having been filed out of time.
The fact that Christina Ayuste only learned of the sale after the death of
her husband is not material. We affirm public respondents ruling that
registration of the sale with the Register of Deeds constitutes a notice to the
whole world.[18] Precisely, the purpose of the legislature in providing a system
of registration is to afford a means of publicity so that persons dealing with
real property may search the records and thereby acquire security against
instruments the execution of which have not been revealed to them. [19] Since
the deed of sale was registered on March 5, 1987, Christina Ayuste is
presumed to have constructive notice of the sale from such date.
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
[G.R. No. 143826. August 28, 2003]
HEIRS OF IGNACIA AGUILAR-REYES, petitioners, vs. SPOUSES
CIPRIANO MIJARES AND FLORENTINA
MIJARES, respondents.
DECISION
YNARES-SANTIAGO, J.:
Under the regime of the Civil Code, the alienation or
encumbrance of a conjugal real property requires the consent of the
wife. The absence of such consent renders the entire
transaction[1] merely voidable and not void.[2] The wife may, during the
marriage and within ten years from the transaction questioned, bring
an action for the annulment of the contract entered into by her husband
without her consent.[3]
Assailed in this petition for review on certiorari are the January
26, 2000 Decision[4] and June 19, 2000, Resolution[5] of the Court of
Appeals in CA-G.R. No. 28464 which declared respondents as
purchasers in good faith and set aside the May 31, 1990 and June 29,
1990 Orders of the Regional Trial Court of Quezon City, Branch 101, in
Civil Case No. Q-48018.
The controversy stemmed from a dispute over Lot No. 4349-B-
2,[6] approximately 396 square meters, previously covered by Transfer
Certificate of Title (TCT) No. 205445, located in Balintawak, Quezon
City and registered in the name of Spouses Vicente Reyes and Ignacia
Aguilar-Reyes.[7] Said lot and the apartments built thereon were part of
the spouses conjugal properties having been purchased using conjugal
funds from their garments business.[8]
Vicente and Ignacia were married in 1960, but had been
separated de facto since 1974.[9] Sometime in 1984, Ignacia learned
that on March 1, 1983, Vicente sold Lot No. 4349-B-2 to respondent
spouses Cipriano and Florentina Mijares for P40,000.00. [10] As a
consequence thereof, TCT No. 205445 was cancelled and TCT No.
306087 was issued on April 19, 1983 in the name of respondent
spouses.[11] She likewise found out that Vicente filed a petition for
administration and appointment of guardian with the Metropolitan Trial
Court of Quezon City, Branch XXI. Vicente misrepresented therein that
his wife, Ignacia, died on March 22, 1982, and that he and their 5
minor children were her only heirs.[12] On September 29, 1983, the
court appointed Vicente as the guardian of their minor
children.[13] Subsequently, in its Order dated October 14, 1983, the
court authorized Vicente to sell the estate of Ignacia.[14]
On August 9, 1984, Ignacia, through her counsel, sent a letter to
respondent spouses demanding the return of her share in the
lot. Failing to settle the matter amicably, Ignacia filed on June 4, 1996
a complaint[15] for annulment of sale against respondent spouses. The
complaint was thereafter amended to include Vicente Reyes as one of
the defendants.[16]
In their answer, respondent spouses claimed that they are
purchasers in good faith and that the sale was valid because it was
duly approved by the court.[17] Vicente Reyes, on the other hand,
contended that what he sold to the spouses was only his share in Lot
No. 4349-B-2, excluding the share of his wife, and that he never
represented that the latter was already dead.[18] He likewise testified
that respondent spouses, through the counsel they provided him, took
advantage of his illiteracy by filing a petition for the issuance of letters
of administration and appointment of guardian without his
knowledge.[19]
On February 15, 1990, the court a quo rendered a decision
declaring the sale of Lot No. 4349-B-2 void with respect to the share of
Ignacia. It held that the purchase price of the lot was P110,000.00 and
ordered Vicente to return thereof or P55,000.00 to respondent
spouses. The dispositive portion of the said decision, reads-
WHEREFORE, premises above considered, judgment is hereby rendered
declaring the subject Deed of Absolute Sale, dated March [1,] 1983 signed by
and between defendants Vicente Reyes and defendant Cipriano Mijares
NULL AND VOID WITH RESPECT TO ONE-HALF (1/2) OF THE SAID
PROPERTY;
The Register of Deeds of Quezon City is hereby ordered to cancel TCT No.
306083 (sic) in the names of defendant spouses Cipriano Mijares and
Florentina Mijares and to issue a new TCT in the name of the plaintiff Ignacia
Aguilar-Reyes as owner in fee simple of one-half (1/2) of said property and
the other half in the names of defendant spouses Cipriano Mijares and
Florentin[a] Mijares, upon payment of the required fees therefore;
Said defendant spouses Mijares are also ordered to allow plaintiff the use and
exercise of rights, as well as obligations, pertinent to her one-half (1/2)
ownership of the subject property;
Defendant Vicente Reyes is hereby ordered to reimburse P55,000.00 with
legal rate of interest from the execution of the subject Deed of Absolute Sale
on March 1, 1983, to the defendant spouses Cipriano Mijares and Florentina
Mijares which corresponds to the one-half (1/2) of the actual purchase price
by the said Mijares but is annulled in this decision (sic);
Defendant Vicente Reyes is hereby further ordered to pay plaintiff the amount
of P50,000.00 by way of moral and exemplary damages, plus costs of this
suit.
SO ORDERED.[20]
Ignacia filed a motion for modification of the decision praying that
the sale be declared void in its entirety and that the respondents be
ordered to reimburse to her the rentals they collected on the
apartments built on Lot No. 4349-B-2 computed from March 1, 1983.
On May 31, 1990, the trial court modified its decision by
declaring the sale void in its entirety and ordering Vicente Reyes to
reimburse respondent spouses the purchase price of P110,000, thus
WHEREFORE, premises considered, judgment is hereby rendered declaring
the subject Deed of Absolute Sale, dated March 1, 1983 signed by and
between defendants Vicente Reyes and defendant Cipriano Mijares as null and
void ab initio, in view of the absence of the wifes conformity to said
transaction.
Consequent thereto, the Register of Deeds for Quezon City is hereby ordered
to cancel TCT No. 306083 (sic) in the name of Cipriano Mijares and
Florentin[a] Mijares and issue a new TCT in the name of the plaintiff and
defendant Ignacia Aguilar-Reyes and Vicente Reyes as owners in fee simple,
upon payment of required fees therefore.
Defendant Vicente Reyes is hereby ordered to pay the amount of one hundred
ten thousand pesos (P110,000.00) with legal rate of interest at 12% per annum
from the execution of the subject Deed of Absolute Sale on March 1, 1983.
Further, defendant Vicente Reyes is ordered to pay the amount of P50,000.00
by way of moral and exemplary damages, plus costs of this suit.
SO ORDERED.[21]
On motion[22] of Ignacia, the court issued an Order dated June
29, 1990 amending the dispositive portion of the May 31, 1990
decision by correcting the Transfer Certificate of Title of Lot No. 4349-
B-2, in the name of Cipriano Mijares and Florentina Mijares, from TCT
No. 306083 to TCT No. 306087; and directing the Register of Deeds of
Quezon City to issue a new title in the name of Ignacia Aguilar-Reyes
and Vicente Reyes. The Order likewise specified that Vicente Reyes
should pay Ignacia Aguilar-Reyes the amount of P50,000.00 as moral
and exemplary damages.[23]
Both Ignacia Aguilar-Reyes and respondent spouses appealed
the decision to the Court of Appeals.[24] Pending the appeal, Ignacia
died and she was substituted by her compulsory heirs. [25]
Petitioners contended that they are entitled to reimbursement of
the rentals collected on the apartment built on Lot No. 4349-B-2, while
respondent spouses claimed that they are buyers in good faith. On
January 26, 2000, the Court of Appeals reversed and set aside the
decision of the trial court. It ruled that notwithstanding the absence of
Ignacias consent to the sale, the same must be held valid in favor of
respondents because they were innocent purchasers for value.[26] The
decretal potion of the appellate courts decision states
WHEREFORE, premises considered, the Decision appealed from and the
Orders dated May 31, 1990 and June 29, 1990, are SET ASIDE and in lieu
thereof a new one is rendered
1. Declaring the Deed of Absolute Sale dated March 1, 1983 executed by
Vicente Reyes in favor of spouses Cipriano and [Florentina] Mijares valid and
lawful;
2. Ordering Vicente Reyes to pay spouses Mijares the amount of P30,000.00
as attorneys fees and legal expenses; and
3. Ordering Vicente Reyes to pay spouses Mijares P50,000.00 as moral
damages.
No pronouncement as to costs.
SO ORDERED.[27]
Undaunted by the denial of their motion for
reconsideration,[28] petitioners filed the instant petition contending that
the assailed sale of Lot No. 4392-B-2 should be annulled because
respondent spouses were not purchasers in good faith.
The issues for resolution are as follows: (1) What is the status of
the sale of Lot No. 4349-B-2 to respondent spouses? (2) Assuming
that the sale is annullable, should it be annulled in its entirety or only
with respect to the share of Ignacia? (3) Are respondent spouses
purchasers in good faith?
Articles 166 and 173 of the Civil Code,[29] the governing laws at
the time the assailed sale was contracted, provide:
Art.166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the
husband cannot alienate or encumber any real property of the conjugal
partnership without the wifes consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same
Art. 173. The wife may, during the marriage and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the
husband entered into without her consent, when such consent is required, or
any act or contract of the husband which tends to defraud her or impair her
interest in the conjugal partnership property. Should the wife fail to exercise
this right, she or her heirs after the dissolution of the marriage, may demand
the value of property fraudulently alienated by the husband.
Pursuant to the foregoing provisions, the husband could not
alienate or encumber any conjugal real property without the consent,
express or implied, of the wife otherwise, the contract is
voidable. Indeed, in several cases[30] the Court had ruled that such
alienation or encumbrance by the husband is void. The better view,
however, is to consider the transaction as merely voidable and not
void.[31] This is consistent with Article 173 of the Civil Code pursuant to
which the wife could, during the marriage and within 10 years from the
questioned transaction, seek its annulment.[32]
In the case of Heirs of Christina Ayuste v. Court of Appeals,[33] it
was categorically held that
There is no ambiguity in the wording of the law. A sale of real property of the
conjugal partnership made by the husband without the consent of his wife is
voidable. The action for annulment must be brought during the marriage and
within ten years from the questioned transaction by the wife. Where the law
speaks in clear and categorical language, there is no room for interpretation
there is room only for application.[34]
Likewise, in Spouses Guiang v. Court of Appeals,[35] the Court
quoted with approval the ruling of the trial court that under the Civil
Code, the encumbrance or alienation of a conjugal real property by the
husband absent the wifes consent, is voidable and not void. Thus
Under Article 166 of the Civil Code, the husband cannot generally alienate or
encumber any real property of the conjugal partnership without the wifes
consent. The alienation or encumbrance if so made however is not null and
void. It is merely voidable. The offended wife may bring an action to annul
the said alienation or encumbrance. Thus, the provision of Article 173 of the
Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of the
husband entered into without her consent, when such consent is required, or
any act or contract of the husband which tends to defraud her or impair her
interest in the conjugal partnership property. Should the wife fail to exercise
this right, she or her heirs after the dissolution of the marriage, may demand
the value of property fraudulently alienated by the husband.
This particular provision giving the wife ten (10) years x x x during [the]
marriage to annul the alienation or encumbrance was not carried over to the
Family Code. It is thus clear that any alienation or encumbrance made after
August 3, 1988 when the Family Code took effect by the husband of the
conjugal partnership property without the consent of the wife is null and void
In the case at bar, there is no dispute that Lot No. 4349-B-2, is a
conjugal property having been purchased using the conjugal funds of
the spouses during the subsistence of their marriage. It is beyond cavil
therefore that the sale of said lot to respondent spouses without the
knowledge and consent of Ignacia is voidable. Her action to annul the
March 1, 1983 sale which was filed on June 4, 1986, before her
demise is perfectly within the 10 year prescriptive period under Article
173 of the Civil Code. Even if we reckon the period from November 25,
1978 which was the date when Vicente and the respondent spouses
entered into a contract concerning Lot No. 4349-B-2, Ignacias action
would still be within the prescribed period.
Anent the second issue, the trial court correctly annulled the
voidable sale of Lot No. 4349-B-2 in its entirety. In Bucoy v.
Paulino,[36] a case involving the annulment of sale with assumption of
mortgages executed by the husband without the consent of the wife, it
was held that the alienation or encumbrance must be annulled in its
entirety and not only insofar as the share of the wife in the conjugal
property is concerned. Although the transaction in the said case was
declared void and not merely voidable, the rationale for the annulment
of the whole transaction is the same thus
The plain meaning attached to the plain language of the law is that the
contract, in its entirety, executed by the husband without the wife's consent,
may be annulled by the wife. Had Congress intended to limit such annulment
in so far as the contract shall prejudice the wife, such limitation should have
been spelled out in the statute. It is not the legitimate concern of this Court to
recast the law. As Mr. Justice Jose B. L. Reyes of this Court and Judge
Ricardo C. Puno of the Court of First Instance correctly stated, [t]he rule (in
the first sentence of Article 173) revokes Baello vs. Villanueva, 54 Phil. 213
and Coque vs. Navas Sioca, 45 Phil. 430, in which cases annulment was held
to refer only to the extent of the one-half interest of the wife
The necessity to strike down the contract of July 5, 1963 as a whole, not
merely as to the share of the wife, is not without its basis in the common-sense
rule. To be underscored here is that upon the provisions of Articles 161, 162
and 163 of the Civil Code, the conjugal partnership is liable for many
obligations while the conjugal partnership exists. Not only that. The conjugal
property is even subject to the payment of debts contracted by either spouse
before the marriage, as those for the payment of fines and indemnities
imposed upon them after the responsibilities in Article 161 have been covered
(Article 163, par. 3), if it turns out that the spouse who is bound thereby,
should have no exclusive property or if it should be insufficient. These are
considerations that go beyond the mere equitable share of the wife in the
property. These are reasons enough for the husband to be stopped from
disposing of the conjugal property without the consent of the wife. Even more
fundamental is the fact that the nullity is decreed by the Code not on the basis
of prejudice but lack of consent of an indispensable party to the contract under
Article 166.[37]
With respect to the third issue, the Court finds that respondent
spouses are not purchasers in good faith. A purchaser in good faith is
one who buys property of another, without notice that some other
person has a right to, or interest in, such property and pays full and fair
price for the same, at the time of such purchase, or before he has
notice of the claim or interest of some other persons in the
property. He buys the property with the belief that the person from
whom he receives the thing was the owner and could convey title to
the property. A purchaser cannot close his eyes to facts which should
put a reasonable man on his guard and still claim he acted in good
faith.[38]
In the instant case, there existed circumstances that should have
placed respondent spouses on guard. The death certificate of Ignacia,
shows that she died on March 22, 1982. The same death certificate,
however, reveals that (1) it was issued by the Office of the Civil
Registrar of Lubao Pampanga on March 10, 1982; (2) the alleged
death of Ignacia was reported to the Office of the Civil Registrar
on March 4, 1982; and (3) her burial or cremation would be on March
8, 1982.[39] These obvious flaws in the death certificate should have
prompted respondents to investigate further, especially so that
respondent Florentina Mijares admitted on cross examination that she
asked for the death certificate of Ignacia because she was suspicious
that Ignacia was still alive.[40] Moreover, respondent spouses had all
the opportunity to verify the claim of Vicente that he is a widower
because it was their lawyer, Atty. Rodriguito S. Saet, who represented
Vicente in the special proceedings before the Metropolitan Trial Court.
Neither can respondent spouses rely on the alleged court
approval of the sale. Note that the Order issued by the Metropolitan
Trial Court of Quezon City, Branch XXXI, appointing Vicente as
guardian of his 5 minor children, as well as the Order authorizing him
to sell the estate of Ignacia were issued only on September 29, 1983
and October 14, 1983, respectively. On the other hand, the sale of the
entire Lot No. 4349-B-2 to respondent spouses appears to have been
made not on March 1, 1983, but even as early as November 25,
1978. In the Agreement dated November 25, 1978, Vicente in
consideration of the amount of P110,000.00, sold to Cipriano Mijares
Lot No. 4349-B-2 on installment basis, with the first installment due on
or before July 31, 1979.[41] This was followed by a Memorandum of
Understanding executed on July 30, 1979, by Vicente and Cipriano (1)
acknowledging Ciprianos receipt of Vicentes down payment in the
amount of P50,000.00; and (2) authorizing Florentina Mijares to collect
rentals.[42] On July 14, 1981, Vicente and Cipriano executed another
Memorandum of Agreement, stating, among other, that out of the
purchase price of P110,000.00 Vicente had remaining balance of
P19,000.00.[43] Clearly therefore, the special proceedings before the
Metropolitan Trial Court of Quezon City, Branch XXXI, could not have
been the basis of respondent spouses claim of good faith because the
sale of Lot No. 4349-B-2 occurred prior thereto.
Respondent spouses cannot deny knowledge that at the time of
the sale in 1978, Vicente was married to Ignacia and that the latter did
not give her conformity to the sale. This is so because the 1978
Agreement described Vicente as married but the conformity of his wife
to the sale did not appear in the deed. Obviously, the execution of
another deed of sale in 1983 over the same Lot No. 4349-B-2, after the
alleged death of Ignacia on March 22, 1982, as well as the institution of
the special proceedings were, intended to correct the absence of
Ignacias consent to the sale. Even assuming that respondent spouses
believed in good faith that Ignacia really died on March 22, 1982, after
they purchased the lot, the fact remains that the sale of Lot No. 4349-
B-2 prior to Ignacias alleged demise was without her consent and
therefore subject to annulment. The October 14, 1983 order
authorizing the sale of the estate of Ignacia, could not have validated
the sale of Lot No. 4349-B-2 because said order was issued on the
assumption that Ignacia was already dead and that the sale dated
March 1, 1983 was never categorically approved in the said order.
The fact that the 5 minor children[44] of Vicente represented by
the latter, signed the March 1, 1983 deed of sale of Lot No. 4349-B-2
will not estop them from assailing the validity thereof. Not only were
they too young at that time to understand the repercussions of the
sale, they likewise had no right to sell the property of their mother who,
when they signed the deed, was very much alive.
If a voidable contract is annulled, the restoration of what has
been given is proper. The relationship between parties in any contract
even if subsequently annulled must always be characterized and
punctuated by good faith and fair dealing. Hence, for the sake of
justice and equity, and in consonance with the salutary principle of
non-enrichment at anothers expense, the Court sustains the trial courts
order directing Vicente to refund to respondent spouses the amount
of P110,000.00 which they have paid as purchase price of Lot No.
4349-B-2.[45] The court a quo correctly found that the subject of the
sale was the entire Lot No. 4349-B-2 and that the consideration thereof
is not P40,000.00 as stated in the March 1, 1983 deed of sale, but
P110,000.00 as evidenced by the (1) Agreement dated November 25,
1978 as well as the July 30, 1979 Memorandum of Understanding and
the July 14, 1981 Memorandum of Agreement which served as
receipts of the installment payments made by respondent Cipriano
Mijares; and (2) the receipt duly signed by Vicente Reyes
acknowledging receipt of the amount of P110,000.00 from respondent
spouses as payment of the sale of the controverted lot.[46]
The trial court, however, erred in imposing 12% interest per
annum on the amount due the respondents. In Eastern Shipping Lines,
Inc. v. Court of Appeals,[47] it was held that interest on obligations not
constituting a loan or forbearance of money is six percent (6%)
annually. If the purchase price could be established with certainty at
the time of the filing of the complaint, the six percent (6%) interest
should be computed from the date the complaint was filed until finality
of the decision. In Lui v. Loy,[48] involving a suit for reconveyance and
annulment of title filed by the first buyer against the seller and the
second buyer, the Court, ruling in favor of the first buyer and annulling
the second sale, ordered the seller to refund to the second buyer (who
was not a purchaser in good faith) the purchase price of the lots. It was
held therein that the 6% interest should be computed from the date of
the filing of the complaint by the first buyer. After the judgment
becomes final and executory until the obligation is satisfied, the
amount due shall earn interest at 12% per year, the interim period
being deemed equivalent to a forbearance of credit.[49]
Accordingly, the amount of P110,000.00 due the respondent
spouses which could be determined with certainty at the time of the
filing of the complaint shall earn 6% interest per annum from June 4,
1986 until the finality of this decision. If the adjudged principal and the
interest (or any part thereof) remain unpaid thereafter, the interest rate
shall be twelve percent (12%) per annum computed from the time the
judgment becomes final and executory until it is fully satisfied.
Petitioners prayer for payment of rentals should be denied. Other
than the allegation of Ignacia in her Sinumpaang Salaysay that the
apartments could be rented at P1,000.00 a month, no other evidence
was presented to substantiate her claim. In awarding rentals which are
in the nature of actual damages, the Court cannot rely on mere
assertions, speculations, conjectures or guesswork but must depend
on competent proof and on the best evidence obtainable regarding the
actual amount of loss.[50] None, having been presented in the case at
bar, petitioners claim for rentals must be denied.
While as a general rule, a party who has not appealed is not
entitled to affirmative relief other than the ones granted in the decision
of the court below, law and jurisprudence authorize a tribunal to
consider errors, although unassigned, if they involve (1) errors
affecting the lower courts jurisdiction over the subject matter, (2) plain
errors not specified, and (3) clerical errors.[51]In this case, though
defendant Vicente Reyes did not appeal, the plain error committed by
the court a quo as to the award of moral and exemplary damages must
be corrected. These awards cannot be lumped together as was done
by the trial court.[52] Moral and exemplary damages are different in
nature, and require separate determination. Moral damages are
awarded where the claimant experienced physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury as a result
of the act complained of.[53] The award of exemplary damages, on the
other hand, is warranted when moral, temperate, liquidated, or
compensatory damages were likewise awarded by the court.[54]
Hence, the trial courts award of P50,000.00 by way of moral and
exemplary damages should be modified. Vicente Reyes should be
ordered to pay the amounts of P25,000.00 as moral damages and
P25,000.00 as exemplary damages. Since Vicente Reyes was among
the heirs substituted to the late Ignacia Aguilar-Reyes, payment of
moral and exemplary damages must be made by Vicente to his
children, petitioners in this case.
WHEREFORE, in view of all the foregoing, the petition is
PARTIALLY GRANTED. The January 26, 2000 Decision and June 19,
2002, Resolution of the Court of Appeals in CA-G.R. No. 28464 are
REVERSED and SET ASIDE. The May 31, 1990 Order of the Regional
Trial Court of Quezon City, Branch 101, in Civil Case No. Q-48018,
which annulled the March 1, 1983 Deed of Absolute Sale over Lot No.
4349-B-2, and ordered the Register of Deeds of Quezon City to cancel
TCT No. 306087 in the name of respondent spouses Cipriano Mijares
and Florentina Mijares covering the same property; as well as the June
29, 1990 Order correcting the typographical errors in the order dated
March 1, 1983, are REINSTATED, with the followingMODIFICATIONS
(1) The Register of Deeds of Quezon City is ordered to issue a
new certificate of title over Lot No. 4349-B-2, in the name of petitioners
as co-owners thereof;
(2) Vicente Reyes is ordered to reimburse the respondent
spouses the amount of P110,000.00 as purchase price of Lot No.
4349-B-2, with interest at 6% per annum from June 4, 1986, until
finality of this decision. After this decision becomes final, interest at the
rate of 12% per annum on the principal and interest (or any part
thereof) shall be imposed until full payment.
(3) Defendant Vicente Reyes is ordered to pay the heirs of the
late Ignacia Aguilar-Reyes, the amounts of P25,000.00 as moral
damages and P25,000.00 as exemplary damages.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna,
JJ., concur.
DAVID V. PELAYO and LORENZA* B. G.R. No. 141323
PELAYO,
Petitioners, Present:
PUNO, Chairman,**
AUSTRIA-MARTINEZ,***
CALLEJO, SR.,
- versus - TINGA, and
CHICO-NAZARIO, JJ.
Promulgated:
MELKI E. PEREZ,
Respondent. June 8, 2005
x----------------------------------------------------------
-x
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the
reversal of the Decision[1] of the Court of Appeals (CA) promulgated on April
20, 1999 which reversed the Decision of the Regional Trial Court (RTC) of
Panabo, Davao, Branch 34, in Civil Case No. 91-46; and the CA Resolution
dated December 17, 1999 denying petitioners motion for reconsideration.
The antecedent facts as aptly narrated by the CA are as follows:
David Pelayo (Pelayo),by a Deed of Absolute
Sale executed on January 11, 1988, conveyed to Melki
Perez (Perez) two parcels of agricultural land (the lots)
situated in Panabo, Davao which are portions of Lot
4192, Cad. 276 covered by OCT P-16873.
Loreza Pelayo (Loreza), wife of Pelayo, and
another one whose signature is illegible witnessed the
execution of the deed.
Loreza, however, signed only on the third
page in the space provided for witnesses on account of
which Perez application for registration of the deed
with the Office of the Register of Deeds in Tagum,
Davao was denied.
Perez thereupon asked Loreza to sign on
the first and second pages of the deed but she refused,
hence, he instituted on August 8, 1991 the instant
complaint for specific performance against her and her
husband Pelayo (defendants).
The defendants moved to dismiss the
complaint on the ground that it stated no cause of
action, citing Section 6 of RA 6656 otherwise known as
the Comprehensive Agrarian Reform Law which took
effect on June 10, 1988 and which provides that
contracts executed prior thereto shall be valid only
when registered with the Register of Deeds within a
period of three (3) months after the effectivity of this
Act.
The questioned deed having been executed
on January 10, 1988, the defendants claimed that
Perez had at least up to September 10, 1988 within
which to register the same, but as they failed to, it is
not valid and, therefore, unenforceable.
The trial court thus dismissed the
complaint. On appeal to this Court, the dismissal was
set aside and the case was remanded to the lower
court for further proceedings.
In their Answer, the defendants claimed
that as the lots were occupied illegally by some
persons against whom they filed an ejectment case,
they and Perez who is their friend and known at the
time as an activist/leftist, hence feared by many, just
 made it appear in the deed that the lots were sold to
him in order to frighten said illegal occupants, with the
intentional omission of Lorezas signature so that the
deed could not be registered; and that the deed being
simulated and bereft of consideration is
void/inexistent.
Perez countered that the lots were given to
him by defendant Pelayo in consideration of his
services as his attorney-in-fact to make the necessary
representation and negotiation with the illegal
occupants-defendants in the ejectment suit; and that
after his relationship with defendant Pelayo became
sour, the latter sent a letter to the Register of Deeds of
Tagum requesting him not to entertain any transaction
concerning the lots title to which was entrusted to
Perez who misplaced and could [not] locate it.
Defendant Pelayo claimed in any event, in
his Pre-trial brief filed on March 19, 1996, that the
deed was without his wife Lorezas consent, hence, in
light of Art. 166 of the Civil Code which provides:
Article 166. Unless
the wife has been declared a non
compos mentis or a spendthrift,
or is under civil interdiction or is
confined in a leprosarium, the
husband cannot alienate or
encumber any real property of
the conjugal partnership without
the wifes consent . . .
it is null and void.
The trial court, finding, among others, that
Perez did not possess, nor pay the taxes on the lots,
that defendant Pelayo was indebted to Perez for
services rendered and, therefore, the deed could only
be considered as evidence of debt, and that in any
event, there was no marital consent to nor actual
consideration for the deed, held that the deed was null
and void and accordingly rendered judgment the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering and directing the
defendants to pay plaintiff Melki Perez the sum of TEN THOUSAND
(P10,000.00) Pesos as principal with 12% interest per annum starting from
the date of filing of the complaint on August 1, 1991 until plaintiff is fully
paid.
The defendants shall likewise pay to plaintiff the sum of THREE THOUSAND
(P3,000.00) as attorneys fees.
The court further orders that the Deed of Absolute Sale, (Annex A) of the
complaint and (Annex C) of the plaintiffs Motion for Summary Judgment is
declared null and void and without force and it is likewise removed as a cloud
over defendants title and property in suit. . . .[2]
The RTC Decision was appealed by herein respondent Perez to the
CA. Petitioners failed to file their appellees brief. The CA then promulgated
its Decision on April 20, 1999 whereby it ruled that by Lorenzas signing as
witness to the execution of the deed, she had knowledge of the transaction
and is deemed to have given her consent to the same; that herein petitioners
failed to adduce sufficient proof to overthrow the presumption that there
was consideration for the deed, and that petitioner David Pelayo, being a
lawyer, is presumed to have acted with due care and to have signed the deed
with full knowledge of its contents and import. The CA reversed and set aside
the RTC Decision, declaring as valid and enforceable the questioned deed of
sale and ordering herein petitioner Lorenza Pelayo to affix her signature on
all pages of said document.
Petitioners moved for reconsideration of the decision but the
same was denied per Resolution dated December 17, 1999. The CA found
said motion to have been filed out of time and ruled that even putting aside
technicality, petitioners failed to present any ground bearing on the merits of
the case to justify a reversal or setting aside of the decision.
Hence, this petition for review on certiorari on the following
grounds:
1. The CA erred in ignoring the specific provision of Section 6, in
relation to Section 4 of R.A. No. 6657 otherwise known as the
Comprehensive Agrarian Reform Law of 1988 which took effect on June 15,
1988 and which provides that contracts executed prior thereto shall be valid
only when registered with the Register of Deeds within a period of three (3)
months after the effectivity of this Act.
2. The CA erred in holding that the deed of sale was valid and
considering the P10,000.00 adjudged by the trial court as Perezs
remuneration as the consideration for the deed of sale, instead of declaring
the same as null and void for being fictitious or simulated and on the basis of
Art. 491, Par. 2 of the New Civil Code which prohibits agents from acquiring
by purchase properties from his principal under his charge.
3. The CA made a novel ruling that there was implied marital
consent of the wife of petitioner David Pelayo.
4. Petitioners should have been allowed to file their appellees
brief to ventilate their side, considering the existence of peculiar
circumstances which prevented petitioners from filing said brief.
On the other hand, respondent points out that the CA, in
resolving the first appeal docketed as CA-G.R. SP No. 38700[3] brought by
respondent assailing the RTC Order granting herein petitioners motion to
dismiss, already ruled that under R.A. No. 6657, the sale or transfer of private
agricultural land is allowed only when the area of the land being conveyed
constitutes or is a part of, the landowner-seller retained area and when the
total landholding of the purchaser-transferee, including the property sold,
does not exceed five (5) hectares; that in this case, the land in dispute is only
1.3 hectares and there is no proof that the transferees (herein respondent)
total landholding inclusive of the subject land will exceed 5 hectares, the
landholding ceiling prescribed by R.A. No. 6657; that the failure of
respondent to register the instrument was not due to his fault or negligence
but can be attributed to Lorenzas unjustified refusal to sign two pages of the
deed despite several requests of respondent; and that therefore, the CA
ruled that the deed of sale subject of this case is valid under R.A. No. 6657.
Respondent further maintains that the CA correctly held in its
assailed Decision that there was consideration for the contract and that
Lorenza is deemed to have given her consent to the deed of sale.
Respondent likewise opines that the CA was right in denying
petitioners motion for reconsideration where they prayed that they be
allowed to file their appellees brief as their counsel failed to file the same on
account of said counsels failing health due to cancer of the liver. Respondent
emphasized that in petitioners motion for reconsideration, they did not even
cite any errors made by the CA in its Decision.
The issues boil down to the question of whether or not the deed
of sale was null and void on the following grounds: (a) for not complying with
the provision in R.A. No. 6657 that such document must be registered with
the Register of Deeds within three months after the effectivity of said law;
(b) for lack of marital consent; (c) for being prohibited under Article 1491 (2)
of the Civil Code; and (d) for lack of consideration.
We rule against petitioners.
The issue of whether or not the deed of sale is null and void under
R.A. No. 6657, for respondents failure to register said document with the
Register of Deeds within three months after the effectivity of R.A. No. 6657,
had been resolved with finality by the CA in its Decision dated November 24,
1994 in CA-G.R. SP No. 38700.[4] Herein petitioners no longer elevated said
CA Decision to this Court and the same became final and executory on
January 7, 1995.[5]

In said decision, the CA interpreted Section 4, in relation to
Section 70 of R.A. No. 6657, to mean thus:
. . . the proper interpretation of both
sections is that under R.A. No. 6657, the sale or
transfer of a private agricultural land is allowed only
when said land area constitutes or is a part of the
landowner-seller retained area and only when the total
landholdings of the purchaser-transferee, including the
property sold does not exceed five (5) hectares.
Aside from declaring that the failure of respondent to register the deed was
not of his own fault or negligence, the CA ruled that respondents failure to
register the deed of sale within three months after effectivity of The
Comprehensive Agrarian Reform Law did not invalidate the deed of sale as
the transaction over said property is not proscribed by R.A. No. 6657.
Thus, under the principle of law of the case, said ruling of the CA
is now binding on petitioners. Such principle was elucidated in Cucueco vs.
Court of Appeals,[6] to wit:
Law of the case has been defined as the opinion delivered on a former
appeal. It is a term applied to an established rule that when an appellate
court passes on a question and remands the case to the lower court for
further proceedings, the question there settled becomes the law of the case
upon subsequent appeal. It means that whatever is once irrevocably
established as the controlling legal rule or decision between the same parties
in the same case continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court.
Petitioners not having questioned the Decision of the CA dated November
24, 1994 which then attained finality, the ruling that the deed of sale subject
of this case is not among the transactions deemed as invalid under R.A. No.
6657, is now immutable.
We agree with the CA ruling that petitioner Lorenza, by affixing
her signature to the Deed of Sale on the space provided for witnesses, is
deemed to have given her implied consent to the contract of sale.
Sale is a consensual contract that is perfected by mere consent,
which may either be express or implied.[7] A wifes consent to the husbands
disposition of conjugal property does not always have to be explicit or set
forth in any particular document, so long as it is shown by acts of the wife
that such consent or approval was indeed given.[8] In the present case,
although it appears on the face of the deed of sale that Lorenza signed only
as an instrumental witness, circumstances leading to the execution of said
document point to the fact that Lorenza was fully aware of the sale of their
conjugal property and consented to the sale.
In their Pre-Trial Brief,[9] petitioners admitted that even prior to
1988, they have been having serious problems, including threats to the life of
petitioner David Pelayo, due to conflicts with the illegal occupants of the
property in question, so that respondent, whom many feared for being a
leftist/activist, offered his help in driving out said illegal occupants.
Human experience tells us that a wife would surely be aware of
serious problems such as threats to her husbands life and the reasons for
such threats. As they themselves stated, petitioners problems over the
subject property had been going on for quite some time, so it is highly
improbable for Lorenza not to be aware of what her husband was doing to
remedy such problems. Petitioners do not deny that Lorenza Pelayo was
present during the execution of the deed of sale as her signature appears
thereon. Neither do they claim that Lorenza Pelayo had no knowledge
whatsoever about the contents of the subject document. Thus, it is quite
certain that she knew of the sale of their conjugal property between her
husband and respondent.
Under the rules of evidence, it is presumed that a person takes
ordinary care of his concerns.[10] Petitioners did not even attempt to
overcome the aforementioned presumption as no evidence was ever
presented to show that Lorenza was in any way lacking in her mental
faculties and, hence, could not have fully understood the ramifications of
signing the deed of sale. Neither did petitioners present any evidence that
Lorenza had been defrauded, forced, intimidated or threatened either by her
own husband or by respondent into affixing her signature on the subject
document. If Lorenza had any objections over the conveyance of the
disputed property, she could have totally refrained from having any part in
the execution of the deed of sale. Instead, Lorenza even affixed her signature
thereto.
Moreover, under Article 173, in relation to Article 166, both of the
New Civil Code, which was still in effect on January 11, 1988 when the deed
in question was executed, the lack of marital consent to the disposition of
conjugal property does not make the contract void ab initio but merely
voidable. Said provisions of law provide:
Art. 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the
husband cannot alienate or encumber any real property of the conjugal
property without the wifes consent. If she refuses unreasonably to give her
consent, the court may compel her to grant the same.
Art. 173. The wife may, during the marriage, and within ten years from the
transaction questioned, ask the courts for the annulment of any contract of
the husband entered into without her consent, when such consent is
required, or any act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property. Should the wife fail
to exercise this right, she or her heirs, after the dissolution of the marriage,
may demand the value of property fraudulently alienated by the husband.
Hence, it has been held that the contract is valid until the court
annuls the same and only upon an action brought by the wife whose consent
was not obtained.[11] In the present case, despite respondents repeated
demands for Lorenza to affix her signature on all the pages of the deed of
sale, showing respondents insistence on enforcing said contract, Lorenza still
did not file a case for annulment of the deed of sale. It was only when
respondent filed a complaint for specific performance on August 8, 1991
when petitioners brought up Lorenzas alleged lack of consent as an
affirmative defense. Thus, if the transaction was indeed entered into without
Lorenzas consent, we find it quite puzzling why for more than three and a
half years, Lorenza did absolutely nothing to seek the nullification of the
assailed contract.
The foregoing circumstances lead the Court to believe that
Lorenza knew of the full import of the transaction between respondent and
her
husband; and, by affixing her signature on the deed of sale, she, in effect,
signified her consent to the disposition of their conjugal property.
With regard to petitioners asseveration that the deed of sale is
invalid under Article 1491, paragraph 2 of the New Civil Code, we find such
argument unmeritorious. Article 1491 (2) provides:
Art. 1491. The following persons cannot acquire by
purchase, even at a public or judicial auction, either in
person or through the mediation of another:
...
(2) Agents, the property whose administration or sale
may have been entrusted to them, unless the consent
of the principal has been given;
...
In Distajo vs. Court of Appeals,[12] a landowner, Iluminada
Abiertas, designated one of her sons as the administrator of several parcels
of her land. The landowner subsequently executed a Deed of Certification of
Sale of Unregistered Land, conveying some of said land to her
son/administrator. Therein, we held that:
 Under paragraph (2) of the above article,
the prohibition against agents purchasing property in
their hands for sale or management is not absolute. It
does not apply if the principal consents to the sale of
the property in the hands of the agent or
administrator. In this case, the deeds of sale signed by
Iluminada Abiertas shows that she gave consent to the
sale of the properties in favor of her son, Rufo, who
was the administrator of the properties. Thus, the
consent of the principal Iluminada Abiertas removes
the transaction out of the prohibition contained in
Article 1491(2).[13]
The above-quoted ruling is exactly in point with this case before
us. Petitioners, by signing the Deed of Sale in favor of respondent, are also
deemed to have given their consent to the sale of the subject property in
favor of respondent, thereby making the transaction an exception to the
general rule that agents are prohibited from purchasing the property of their
principals.
Petitioners also argue that the CA erred in ruling that there was
consideration for the sale. We find no error in said appellate courts ruling.
The element of consideration for the sale is indeed present. Petitioners, in
adopting the trial courts narration of antecedent facts in their
petition,[14] thereby admitted that they authorized respondent to represent
them in negotiations with the squatters occupying the disputed property
and, in consideration of respondents services, they executed the subject
deed of sale. Aside from such services rendered by respondent, petitioners
also acknowledged in the deed of sale that they received in full the amount
of Ten Thousand Pesos. Evidently, the consideration for the sale is
respondents services plus the aforementioned cash money.
Petitioners contend that the consideration stated in the deed of
sale is excessively inadequate, indicating that the deed of sale was merely
simulated. We are not persuaded. Our ruling in Buenaventura vs. Court of
Appeals[15] is pertinent, to wit:
. . . Indeed, there is no requirement that the price be equal to the exact value
of the subject matter of sale. . . . As we stated in Vales vs. Villa:
Courts cannot follow one every step of his life and extricate him from bad
bargains, protect him from unwise investments, relieve him from one-sided
contracts, or annul the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally incompetent. Courts
operate not because one person has been defeated or overcome by another,
but because he has been defeated or overcome illegally. Men may do foolish
things, make ridiculous contracts, use miserable judgment, and lose money
by them indeed, all they have in the world; but not for that alone can the law
intervene and restore. There must be, in addition, a violation of the law, the
commission of what the law knows as an actionable wrong, before the courts
are authorized to lay hold of the situation and remedy it.[16]
Verily, in the present case, petitioners have not presented proof that there
has been fraud, mistake or undue influence exercised upon them by
respondent. It is highly unlikely and contrary to human experience that a
layman like respondent would be able to defraud, exert undue influence, or
in any way vitiate the consent of a lawyer like petitioner David Pelayo who is
expected to be more knowledgeable in the ways of drafting contracts and
other legal transactions.
Furthermore, in their Reply to Respondents
Memorandum,[17] petitioners adopted the CAs narration of fact that
petitioners stated in a letter they sent to the Register of Deeds of Tagum that
they have entrusted the titles over subject lots to herein respondent. Such
act is a clear indication that they intended to convey the subject property to
herein respondent and the deed of sale was not merely simulated or
fictitious.
Lastly, petitioners claim that they were not able to fully ventilate
their defense before the CA as their lawyer, who was then suffering from
cancer of the liver, failed to file their appellees brief. Thus, in their motion for
reconsideration of the CA Decision, they prayed that they be allowed to
submit such appellees brief. The CA, in its Resolution dated December 17,
1999, stated thus:
By movant-defendant-appellees own
information, his counsel received a copy of the
decision on May 5, 1999. He, therefore, had fifteen
(15) days from said date or up to May 20, 1999 to file
the motion. The motion, however, was sent through a
private courier and, therefore, considered to have
been filed on the date of actual receipt on June 17,
1999 by the addressee Court of Appeals, was filed
beyond the reglementary period.
Technicality aside, movant has not
proffered any ground bearing on the merits of the case
why the decision should be set aside.
Petitioners never denied the CA finding that their motion for
reconsideration was filed beyond the fifteen-day reglementary period. On
that point alone, the CA is correct in denying due course to said motion. The
motion having been belatedly filed, the CA Decision had then attained
finality. Thus, in Abalos vs. Philex Mining Corporation,[18] we held that:
. . . Nothing is more settled in law than that
once a judgment attains finality it thereby becomes
immutable and unalterable. It may no longer be
modified in any respect, even if the modification is
meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court
rendering it or by the highest court of the land.
Moreover, it is pointed out by the CA that said motion did not
present any defense or argument on the merits of the case that could have
convinced the CA to reverse or modify its Decision.
We have consistently held that a petitioners right to due process
is not violated where he was able to move for reconsideration of the order or
decision in question.[19] In this case, petitioners had the opportunity to fully
expound on their defenses through a motion for reconsideration. Petitioners
did file such motion but they wasted such opportunity by failing to present
therein whatever errors they believed the CA had committed in its Decision.
Definitely, therefore, the denial of petitioners motion for reconsideration,
praying that they be allowed to file appellees brief, did not infringe
petitioners right to due process as any issue that petitioners wanted to raise
could and should have been contained in said motion for reconsideration.
IN VIEW OF THE FOREGOING, the petition is DENIED and the
Decision of the Court of Appeals dated April 20, 1999 and its Resolution
dated December 17, 1999 are hereby AFFIRMED.
SO ORDERED.
G.R. No. 170166 April 6, 2011
JOE A. ROS and ESTRELLA AGUETE, Petitioners,
vs.
PHILIPPINE NATIONAL BANK - LAOAG BRANCH, Respondent.
DECISION
CARPIO, J.:
The Case
G.R. No. 170166 is a petition for review1 assailing the
Decision2 promulgated on 17 October 2005 by the Court of Appeals
(appellate court) in CA-G.R. CV No. 76845. The appellate court
granted the appeal filed by the Philippine National Bank – Laoag
Branch (PNB). The appellate court reversed the 29 June 2001
Decision of Branch 15 of the Regional Trial Court of Laoag City (trial
court) in Civil Case No. 7803.
The trial court declared the Deed of Real Estate Mortgage executed by
spouses Jose A. Ros3 (Ros) and Estrella Aguete (Aguete) (collectively,
petitioners), as well as the subsequent foreclosure proceedings, void.
Aside from payment of attorney’s fees, the trial court also ordered PNB
to vacate the subject property to give way to petitioners’ possession.
The Facts
The appellate court narrated the facts as follows:
On January 13, 1983, spouses Jose A. Ros and Estrella Aguete filed a
complaint for the annulment of the Real Estate Mortgage and all legal
proceedings taken thereunder against PNB, Laoag Branch before the
Court of First Instance, Ilocos Norte docketed as Civil Case No. 7803.
The complaint was later amended and was raffled to the Regional Trial
Court, Branch 15, Laoag City.
The averments in the complaint disclosed that plaintiff-appellee Joe A.
Ros obtained a loan of P115,000.00 from PNB Laoag Branch on
October 14, 1974 and as security for the loan, plaintiff-appellee Ros
executed a real estate mortgage involving a parcel of land – Lot No.
9161 of the Cadastral Survey of Laoag, with all the improvements
thereon described under Transfer Certificate of Title No. T-9646.
Upon maturity, the loan remained outstanding. As a result, PNB
instituted extrajudicial foreclosure proceedings on the mortgaged
property. After the extrajudicial sale thereof, a Certificate of Sale was
issued in favor of PNB, Laoag as the highest bidder. After the lapse of
one (1) year without the property being redeemed, the property was
consolidated and registered in the name of PNB, Laoag Branch on
August 10, 1978.
Claiming that she (plaintiff-appellee Estrella Aguete) has no knowledge
of the loan obtained by her husband nor she consented to the
mortgage instituted on the conjugal property – a complaint was filed to
annul the proceedings pertaining to the mortgage, sale and
consolidation of the property – interposing the defense that her
signatures affixed on the documents were forged and that the loan did
not redound to the benefit of the family.1avvphi1
In its answer, PNB prays for the dismissal of the complaint for lack of
cause of action, and insists that it was plaintiffs-appellees’ own acts [of]
omission/connivance that bar them from recovering the subject
property on the ground of estoppel, laches, abandonment and
prescription.4]
The Trial Court’s Ruling
On 29 June 2001, the trial court rendered its Decision5 in favor of
petitioners. The trial court declared that Aguete did not sign the loan
documents, did not appear before the Notary Public to acknowledge
the execution of the loan documents, did not receive the loan proceeds
from PNB, and was not aware of the loan until PNB notified her in 14
August 1978 that she and her family should vacate the mortgaged
property because of the expiration of the redemption period. Under the
Civil Code, the effective law at the time of the transaction, Ros could
not encumber any real property of the conjugal partnership without
Aguete’s consent. Aguete may, during their marriage and within ten
years from the transaction questioned, ask the courts for the
annulment of the contract her husband entered into without her
consent, especially in the present case where her consent is required.
The trial court, however, ruled that its decision is without prejudice to
the right of action of PNB to recover the amount of the loan and its
interests from Ros.
The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. DECLARING the Deed of Real Estate Mortgage (Exhibit
"C") and the subsequent foreclosure proceedings conducted
thereon NULL and VOID;
2. ORDERING the Register of Deeds of the City of Laoag to
cancel TCT No. T-15276 in the name of defendant PNB and
revert the same in the name of plaintiffs spouses Joe Ros
and Estrella Aguete;
3. ORDERING defendant to vacate and turnover the
possession of the premises of the property in suit to the
plaintiffs; and
4. ORDERING defendant to pay plaintiffs attorney’s fee and
litigation expenses in the sum of TEN THOUSAND
(P10,000.00) PESOS.
No pronouncement as to costs.
SO ORDERED.6]
PNB filed its Notice of Appeal7 of the trial court’s decision on 13
September 2001 and paid the corresponding fees. Petitioners filed on
the same date a motion for execution pending appeal,8 which PNB
opposed.9 In their comment to the opposition10 filed on 10 October
2001, petitioners stated that at the hearing of the motion on 3 October
2001, PNB’s lay representative had no objection to the execution of
judgment pending appeal. Petitioners claimed that the house on the
subject lot is dilapidated, a danger to life and limb, and should be
demolished. Petitioners added that they obliged themselves to make
the house habitable at a cost of not less P50,000.00. The repair cost
would accrue to PNB’s benefit should the appellate court reverse the
trial court. PNB continued to oppose petitioners’ motion.11
In an Order12 dated 8 May 2002, the trial court found petitioners’
motion for execution pending appeal improper because petitioners
have made it clear that they were willing to wait for the appellate
court’s decision. However, as a court of justice and equity, the trial
court allowed petitioners to occupy the subject property with the
condition that petitioners would voluntarily vacate the premises and
waive recovery of improvements introduced should PNB prevail on
appeal.
The Appellate Court’s Ruling
On 17 October 2005, the appellate court rendered its Decision13 and
granted PNB’s appeal. The appellate court reversed the trial court’s
decision, and dismissed petitioners’ complaint.
The appellate court stated that the trial court concluded forgery without
adequate proof; thus it was improper for the trial court to rely solely on
Aguete’s testimony that her signatures on the loan documents were
forged. The appellate court declared that Aguete affixed her signatures
on the documents knowingly and with her full consent.
Assuming arguendo that Aguete did not give her consent to Ros’ loan,
the appellate court ruled that the conjugal partnership is still liable
because the loan proceeds redounded to the benefit of the family. The
records of the case reveal that the loan was used for the expansion of
the family’s business. Therefore, the debt obtained is chargeable
against the conjugal partnership.
Petitioners filed the present petition for review before this Court on 9
December 2005.
The Issues
Petitioners assigned the following errors:
I. The Honorable Court of Appeals erred in not giving weight to the
findings and conclusions of the trial court, and in reversing and setting
aside such findings and conclusions without stating specific contrary
evidence;
II. The Honorable Court of Appeals erred in declaring the real estate
mortgage valid;
III. The Honorable Court of Appeals erred in declaring, without basis,
that the loan contracted by husband Joe A. Ros with respondent
Philippine National Bank – Laoag redounded to the benefit of his
family, aside from the fact that such had not been raised by respondent
in its appeal.14]
The Court’s Ruling
The petition has no merit. We affirm the ruling of the appellate court.
The Civil Code was the applicable law at the time of the mortgage. The
subject property is thus considered part of the conjugal partnership of
gains. The pertinent articles of the Civil Code provide:
Art. 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the
marriage at the expense of the common fund, whether the
acquisition be for the partnership, or for only one of the
spouses;
(2) That which is obtained by the industry, or work or as
salary of the spouses, or of either of them;
(3) The fruits, rents or interest received or due during the
marriage, coming from the common property or from the
exclusive property of each spouse.
Art. 160. All property of the marriage is presumed to belong to the
conjugal partnership, unless it be proved that it pertains exclusively to
the husband or to the wife.
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for
the benefit of the conjugal partnership, and those contracted
by the wife, also for the same purpose, in the cases where
she may legally bind the partnership;
(2) Arrears or income due, during the marriage, from
obligations which constitute a charge upon property of either
spouse or of the partnership;
(3) Minor repairs or for mere preservation made during the
marriage upon the separate property of either the husband
or the wife; major repairs shall not be charged to the
partnership;
(4) Major or minor repairs upon the conjugal partnership
property;
(5) The maintenance of the family and the education of the
children of both husband and wife, and of legitimate children
of one of the spouses;
(6) Expenses to permit the spouses to complete a
professional, vocational or other course.
Art. 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium,
the husband cannot alienate or encumber any real property of the
conjugal partnership without the wife’s consent. If she refuses
unreasonably to give her consent, the court may compel her to grant
the same.
Art. 173. The wife may, during the marriage, and within ten years from
the transaction questioned, ask the courts for the annulment of any
contract of the husband entered into without her consent, when such
consent is required, or any act or contract of the husband which tends
to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs
after the dissolution of the marriage may demand the value of the
property fraudulently alienated by the husband.
There is no doubt that the subject property was acquired during Ros
and Aguete’s marriage. Ros and Aguete were married on 16 January
1954, while the subject property was acquired in 1968.15 There is also
no doubt that Ros encumbered the subject property when he
mortgaged it for P115,000.00 on 23 October 1974.16 PNB Laoag does
not doubt that Aguete, as evidenced by her signature, consented to
Ros’ mortgage to PNB of the subject property. On the other hand,
Aguete denies ever having consented to the loan and also denies
affixing her signature to the mortgage and loan documents.
The husband cannot alienate or encumber any conjugal real property
without the consent, express or implied, of the wife. Should the
husband do so, then the contract is voidable.17 Article 173 of the Civil
Code allows Aguete to question Ros’ encumbrance of the subject
property. However, the same article does not guarantee that the courts
will declare the annulment of the contract. Annulment will be declared
only upon a finding that the wife did not give her consent. In the
present case, we follow the conclusion of the appellate court and rule
that Aguete gave her consent to Ros’ encumbrance of the subject
property.
The documents disavowed by Aguete are acknowledged before a
notary public, hence they are public documents. Every instrument duly
acknowledged and certified as provided by law may be presented in
evidence without further proof, the certificate of acknowledgment
being prima facie evidence of the execution of the instrument or
document involved.18 The execution of a document that has been
ratified before a notary public cannot be disproved by the mere denial
of the alleged signer.19 PNB was correct when it stated that petitioners’
omission to present other positive evidence to substantiate their claim
of forgery was fatal to petitioners’ cause.20Petitioners did not present
any corroborating witness, such as a handwriting expert, who could
authoritatively declare that Aguete’s signatures were really forged.
A notarized document carries the evidentiary weight conferred upon it
with respect to its due execution, and it has in its favor the presumption
of regularity which may only be rebutted by evidence so clear, strong
and convincing as to exclude all controversy as to the falsity of the
certificate. Absent such, the presumption must be upheld. The burden
of proof to overcome the presumption of due execution of a notarial
document lies on the one contesting the same. Furthermore, an
allegation of forgery must be proved by clear and convincing evidence,
and whoever alleges it has the burden of proving the same. 21]
Ros himself cannot bring action against PNB, for no one can come
before the courts with unclean hands.1avvphi1 In their memorandum
before the trial court, petitioners themselves admitted that Ros forged
Aguete’s signatures.
Joe A. Ros in legal effect admitted in the complaint that the signatures
of his wife in the questioned documents are forged, incriminating
himself to criminal prosecution. If he were alive today, he would be
prosecuted for forgery. This strengthens the testimony of his wife that
her signatures on the questioned documents are not hers.
In filing the complaint, it must have been a remorse of conscience for
having wronged his family; in forging the signature of his wife on the
questioned documents; in squandering the P115,000.00 loan from the
bank for himself, resulting in the foreclosure of the conjugal property;
eviction of his family therefrom; and, exposure to public contempt,
embarassment and ridicule.22]
The application for loan shows that the loan would be used exclusively
"for additional working [capital] of buy & sell of garlic & virginia
tobacco."23 In her testimony, Aguete confirmed that Ros engaged in
such business, but claimed to be unaware whether it prospered.
Aguete was also aware of loans contracted by Ros, but did not know
where he "wasted the money."24 Debts contracted by the husband for
and in the exercise of the industry or profession by which he
contributes to the support of the family cannot be deemed to be his
exclusive and private debts.25
If the husband himself is the principal obligor in the contract, i.e., he
directly received the money and services to be used in or for his own
business or his own profession, that contract falls within the term "x x x
x obligations for the benefit of the conjugal partnership." Here, no
actual benefit may be proved. It is enough that the benefit to the family
is apparent at the signing of the contract. From the very nature of the
contract of loan or services, the family stands to benefit from the loan
facility or services to be rendered to the business or profession of the
husband. It is immaterial, if in the end, his business or profession fails
or does not succeed. Simply stated, where the husband contracts
obligations on behalf of the family business, the law presumes, and
rightly so, that such obligation will redound to the benefit of the
conjugal partnership.26]
For this reason, we rule that Ros’ loan from PNB redounded to the
benefit of the conjugal partnership. Hence, the debt is chargeable to
the conjugal partnership.
WHEREFORE, we DENY the petition. The Decision of the Court of
Appeals in CA-G.R. CV No. 76845 promulgated on 17 October 2005
is AFFIRMED. Costs against petitioners.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
NELLIE VDA. DE FORMOSO and her children, namely, MA.
THERESA FORMOSO-PESCADOR, ROGER FORMOSO,
MARY JANE FORMOSO, BERNARD FORMOSO and
PRIMITIVO MALCABA,
Petitioners,
- versus -
PHILIPPINE NATIONAL BANK, FRANCISCO ARCE, ATTY. BENJAMIN
BARBERO, and ROBERTO NAVARRO,
Respondents.
x ----------------------------------------------------------------------------------------------------
-x
DECISION
MENDOZA, J.:
Assailed in this petition are the January 25, 2002 Resolution[1] and
the August 8, 2002 Resolution[2] of the Court of Appeals (CA) which dismissed
the petition for certiorari filed by the petitioners on the ground that the
verification and certification of non-forum shopping was signed by only one
of the petitioners in CA G.R. SP No. 67183, entitled Nellie P. Vda. De Formoso,
et al. v. Philippine National Bank, et al.
The Factual and
Procedural Antecedents
Records show that on October 14, 1989, Nellie Panelo Vda. De
Formoso (Nellie) and her children namely: Ma. Theresa Formoso-Pescador,
Roger Formoso, Mary Jane Formoso, Bernard Formoso, and Benjamin
Formoso, executed a special power of attorney in favor of Primitivo
Malcaba (Malcaba) authorizing him, among others, to secure all papers and
documents including the owners copies of the titles of real properties
pertaining to the loan with real estate mortgage originally secured by Nellie
and her late husband, Benjamin S. Formoso, from Philippine National Bank,
Vigan Branch (PNB) on September 4, 1980.
On April 20, 1990, the Formosos sold the subject mortgaged real
properties to Malcaba through a Deed of Absolute Sale. Subsequently,
on March 22, 1994, Malcaba and his lawyer went to PNB to fully pay the loan
obligation including interests in the amount of ₱2,461,024.74.
 PNB, however, allegedly refused to accept Malcabas tender of
payment and to release the mortgage or surrender the titles of the subject
mortgaged real properties.
On March 24, 1994, the petitioners filed a Complaint for Specific
Performance against PNB before the Regional Trial Court of Vigan, Ilocos
Sur (RTC) praying, among others, that PNB be ordered to accept the amount
of ₱2,461,024.74 as full settlement of the loan obligation of the Formosos.
After an exchange of several pleadings, the RTC finally rendered
its decision[3] on October 27, 1999 favoring the petitioners. The petitioners
prayer for exemplary or corrective damages, attorneys fees, and annual
interest and daily interest, however, were denied for lack of evidence.
PNB filed a motion for reconsideration but it was denied for failure to comply
with Rule 15, Section 5 of the 1997 Rules of Civil Procedure. PNB then filed a
Notice of Appeal but it was dismissed for being filed out of time.
The petitioners received their copy of the decision on November
26, 1999, and on January 25, 2001, they filed their Petition for Relief from
Judgment[4] questioning the RTC decision that there was no testimonial
evidence presented to warrant the award for moral and exemplary damages.
They reasoned out that they could not then file a motion for reconsideration
because they could not get hold of a copy of the transcripts of stenographic
notes. In its August 6, 2001 Order, the RTC denied the petition for lack of
merit.[5]
On September 7, 2001, the petitioners moved for reconsideration but it was
denied by the RTC in its Omnibus Order of September 26, 2001.[6]
Before the Court of Appeals
On November 29, 2001, the petitioners filed a petition for certiorari before
the CA challenging the RTC Order of August 6, 2001 and its Omnibus Order
dated September 26, 2001.
In its January 25, 2002 Resolution, the CA dismissed the petition
stating that:
The verification and certification of non-
forum shopping was signed by only one (Mr.
Primitivo Macalba) of the many petitioners.
In Loquias v. Office of the Ombudsman, G.R. No.
139396, August 15, 2000, it was ruled that all
petitioners must be signatories to the certification
of non-forum shopping unless the one who signed
it is authorized by the other petitioners. In the case
at bar, there was no showing that the one who
signed was empowered to act for the rest.
Therefore, it cannot be presumed that the one who
signed knew to the best of his knowledge whether
his co-petitioners had the same or similar claims
or actions filed or pending. The ruling in Loquias
further declared that substantial compliance will
not suffice in the matter involving strict
observance of the Rules. Likewise, the certification
of non-forum shopping requires personal
knowledge of the party who executed the same and
that petitioners must show reasonable cause for
failure to personally sign the certification. Utter
disregard of the Rules cannot just be rationalized
by harping on the policy of liberal construction.
Aggrieved, after the denial of their motion for reconsideration, the
petitioners filed this petition for review anchored on the following
GROUNDS
THE COURT OF APPEALS PATENTLY ERRED IN
RULING THAT ALL THE PETITIONERS MUST SIGN
THE VERIFICATION AND CERTIFICATION OF
NON-FORUM SHOPPING IN A PETITION FOR
CERTIORARI WHEREIN ONLY QUESTIONS OF
LAW ARE INVOLVED.
ALTERNATIVELY, THE COURT OF APPEALS
PATENTLY ERRED IN DISMISSING THE WHOLE
PETITION WHEN AT THE VERY LEAST THE
PETITION INSOFAR AS PETITIONER MALCABA IS
CONCERNED BEING THE SIGNATORY THEREOF
SHOULD HAVE BEEN GIVEN DUE COURSE.
THE COURT OF APPEALS PATENTLY ERRED IN
GIVING MORE WEIGHT ON TECHNICALITIES
WHEN THE PETITION BEFORE IT WAS CLEARLY
MERITORIOUS.[7]
The petitioners basically argue that they have substantially
complied with the requirements provided under the 1997 Rules of Civil
Procedure on Verification and Certification of Non-Forum Shopping. The
petitioners are of the view that the rule on Verification and Certification of
Non-Forum Shopping that all petitioners must sign should be liberally
construed, since only questions of law are raised in a petition for certiorari
and no factual issues that require personal knowledge of the petitioners.
The petitioners further claim that they have a meritorious petition
because contrary to the ruling of the RTC, their Petition for Relief clearly
showed that, based on the transcript of stenographic notes, there was
enough testimonial evidence for the RTC to grant them damages and
attorneys fees as prayed for.
On the other hand, PNB counters that the mandatory rule on the
certification against forum shopping requires that all of the six (6) petitioners
must sign, namely: Nellie Vda. De Formoso and her children Ma. Theresa
Formoso-Pescador, Roger Formoso, Mary Jane Formoso, and Bernard
Formoso, and Primitivo Malcaba. Therefore, the signature alone of Malcaba
on the certification is insufficient.
PNB further argues that Malcaba was not even a party or
signatory to the contract of loan entered into by his co-petitioners. Neither
was there evidence that Malcaba is a relative or a co-owner of the subject
properties. It likewise argues that, contrary to the stance of the petitioners,
the issue raised before the CA, as to whether or not the petitioners were
entitled to moral and exemplary damages as well as attorneys fees, is a
factual one.
Finally, PNB asserts that the body of the complaint filed by the
petitioners failed to show any allegation that Macalba alone suffered
damages for which he alone was entitled to reliefs as prayed for. PNB claims
that the wordings of the complaint were clear that all the petitioners were
asking for moral and exemplary damages and attorneys fees.
OUR RULING
The petition lacks merit.
Certiorari is an extraordinary, prerogative remedy and is never
issued as a matter of right. Accordingly, the party who seeks to avail of it
must strictly observe the rules laiddown by law.[8] Section 1, Rule 65 of the
1997 Rules of Civil Procedure provides:
SECTION 1. Petition for certiorari.-
When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or
with grave abuse of discretion amounting to lack
or excess of jurisdiction, and there is no appeal, or
any plain, speedy, and adequate remedy in the
 ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court,
alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and
granting such incidental reliefs as law and justice
may require.
The petition shall be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings
and documents relevant and pertinent thereto, and
a sworn certification of non-forum shopping as
provided in the third paragraph of Section 3, Rule
46. [Emphasis supplied]
Under Rule 46, Section 3, paragraph 3 of the 1997 Rules of Civil
Procedure, as amended, petitions for certiorari must be verified and
accompanied by a sworn certification of non-forum shopping.
SECTION 3. Contents and filing of
petition; effect of non-compliance with
requirements. The petition shall contain the full
names and actual addresses of all the petitioners
and respondents, a concise statement of the
matters involved, the factual background of the
case, and the grounds relied upon for the relief
prayed for.
In actions filed under Rule 65, the
petition shall further indicate the material dates
showing when notice of the judgment or final
order or resolution subject thereof was received,
when a motion for new trial or reconsideration, if
any, was filed and when notice of the denial
thereof was received.
It shall be filed in seven (7) clearly
legible copies together with proof of service thereof
on the respondent with the original copy intended
for the court indicated as such by the petitioner,
and shall be accompanied by a clearly legible
duplicate original or certified true copy of the
judgment, order, resolution, or ruling subject
thereof, such material portions of the record as are
referred to therein, and other documents relevant
or pertinent thereto. The certification shall be
accomplished by the proper clerk of court or his
duly authorized representative, or by the proper
officer of the court, tribunal, agency or office
involved or by his duly authorized
representative. The other requisite number of
copies of the petition shall be accompanied by
clearly legible plain copies of all documents
attached to the original.
The petitioner shall also submit together
with the petition a sworn certification that he has
not theretofore commenced any other action
involving the same issues in the Supreme Court,
the Court of Appeals or different divisions thereof,
or any other tribunal or agency; if there is such
other action or proceeding, he must state the
status of the same; and if he should thereafter
learn that a similar action or proceeding has been
filed or is pending before the Supreme Court, the
Court of Appeals, or different divisions thereof, or
any other tribunal or agency, he undertakes to
promptly inform the aforesaid courts and other
tribunal or agency thereof within five (5) days
therefrom.
The petitioner shall pay the
corresponding docket and other lawful fees to the
clerk of court and deposit the amount of P500.00
for costs at the time of the filing of the petition.
The failure of the petitioner to comply with
any of the foregoing requirements shall be sufficient
ground for the dismissal of the petition. [Emphases
supplied]
The acceptance of a petition for certiorari as well as the grant of
due course thereto is, in general, addressed to the sound discretion of the
court. Although the Court has absolute discretion to reject and dismiss a
petition for certiorari, it does so only (1) when the petition fails to
demonstrate grave abuse of discretion by any court, agency, or branch of the
government; or (2) when there are procedural errors, like violations of the
Rules of Court or Supreme Court Circulars.[9] [Emphasis supplied]
In the case at bench, the petitioners claim that the petition for
certiorari that they filed before the CA substantially complied with the
requirements provided for under the 1997 Rules of Civil Procedure on
Verification and Certification of Non-Forum Shopping.
The Court disagrees.
Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:
SEC. 4. Verification. Except when
otherwise specifically required by law or rule,
pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit that
the affiant has read the pleadings and that the
allegations therein are true and correct of his
personal knowledge or based on authentic records.
A pleading required to be verified which
contains a verification based on information and
belief or upon knowledge, information and belief
or lacks a proper verification, shall be treated as an
unsigned pleading.
SEC. 5. Certification against forum
shopping. The plaintiff or principal party shall
certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in
a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any
claim involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best of
his knowledge, no such other action or claim is
pending therein; (b) if there is such other pending
action or claim, a complete statement of the
present status thereof; and (c) if he should
thereafter learn that the same or similar action or
claim has been filed or is pending, he shall report
that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory
pleading has been filed.
Failure to comply with the foregoing
requirements shall not be curable by mere
amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the
case without prejudice, unless otherwise provided,
upon motion and after hearing. The submission of
a false certification or non-compliance with any of
the undertakings therein shall constitute indirect
contempt of court, without prejudice to the
corresponding administrative and criminal
actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum
shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative
sanctions. x x x.
In this regard, the case of Oldarico S. Traveno v. Bobongon Banana Growers
Multi-Purpose Cooperative,[10] is enlightening:
Respecting the appellate courts
dismissal of petitioners appeal due to the failure of
some of them to sign the therein accompanying
verification and certification against forum-
shopping, the Courts guidelines for the bench and
bar in Altres v. Empleo, which were culled from
jurisprudential pronouncements, are instructive:
For the guidance of the bench and bar,
the Court restates in capsule form the
jurisprudential pronouncements already reflected
above respecting non-compliance with the
requirements on, or submission of defective,
verification and certification against forum
shopping:
1) A distinction must be made between
non-compliance with the requirement on or
submission of defective verification, and non-
compliance with the requirement on or submission
of defective certification against forum shopping.
2) As to verification, non-compliance
therewith or a defect therein does not necessarily
render the pleading fatally defective. The Court
may order its submission or correction or act on
the pleading if the attending circumstances are
such that strict compliance with the Rule may be
dispensed with in order that the ends of justice
may be served thereby.
3) Verification is deemed substantially
complied with when one who has ample
knowledge to swear to the truth of the allegations
in the complaint or petition signs the verification,
and when matters alleged in the petition have been
made in good faith or are true and correct.
4) As to certification against forum
shopping, non-compliance therewith or a defect
therein, unlike in verification, is generally not
curable by its subsequent submission or correction
thereof, unless there is a need to relax the Rule on
the ground of substantial compliance or presence
of special circumstances or compelling reasons.
5) The certification against forum
shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not
sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however,
as when all the plaintiffs or petitioners share a
common interest and invoke a common cause of
action or defense, the signature of only one of
them in the certification against forum shopping
substantially complies with the Rule.
6) Finally, the certification against
forum shopping must be executed by the party-
pleader, not by his counsel. If, however, for
reasonable or justifiable reasons, the party-pleader
is unable to sign, he must execute a Special Power
of Attorney designating his counsel of record to
sign on his behalf.
The petition for certiorari filed with the CA stated the following names as
petitioners: Nellie Panelo Vda. De Formoso, Ma. Theresa Formoso-Pescador,
Roger Formoso, Mary Jane Formoso, Bernard Formoso, Benjamin Formoso,
and Primitivo Malcaba.
Admittedly, among the seven (7) petitioners mentioned, only
Malcaba signed the verification and certification of non-forum shopping in
the subject petition. There was no proof that Malcaba was authorized by his
co-petitioners to sign for them. There was no special power of attorney
shown by the Formosos authorizing Malcaba as their attorney-in-fact in filing
a petition for review on certiorari. Neither could the petitioners give at least
a reasonable explanation as to why only he signed the verification and
certification of non-forum shopping. In Athena Computers, Inc. and Joselito R.
Jimenez v. Wesnu A. Reyes, the Court explained that:
The verification of the petition and
certification on non-forum shopping before the
Court of Appeals were signed only by
Jimenez. There is no showing that he was
authorized to sign the same by Athena, his co-
petitioner.
Section 4, Rule 7 of the Rules states that
a pleading is verified by an affidavit that the affiant
has read the pleading and that the allegations
therein are true and correct of his knowledge and
belief. Consequently, the verification should have
been signed not only by Jimenez but also by
Athenas duly authorized representative.
In Docena v. Lapesura, we ruled that
the certificate of non-forum shopping should be
signed by all the petitioners or plaintiffs in a case, and
that the signing by only one of them is
insufficient. The attestation on non-forum shopping
requires personal knowledge by the party executing
the same, and the lone signing petitioner cannot be
presumed to have personal knowledge of the filing or
non-filing by his co-petitioners of any action or claim
the same as similar to the current petition.
The certification against forum shopping in
CA-G.R. SP No. 72284 is fatally defective, not having
been duly signed by both petitioners and thus
warrants the dismissal of the petition
for certiorari. We have consistently held that the
certification against forum shopping must be
signed by the principal parties. With respect to a
corporation, the certification against forum
shopping may be signed for and on its behalf, by a
specifically authorized lawyer who has personal
knowledge of the facts required to be disclosed in
such document.
While the Rules of Court may be relaxed
for persuasive and weighty reasons to relieve a
litigant from an injustice commensurate with his
failure to comply with the prescribed procedures,
nevertheless they must be faithfully followed. In
the instant case, petitioners have not shown any
reason which justifies relaxation of the Rules. We
have held that procedural rules are not to be
belittled or dismissed simply because their non-
observance may have prejudiced a partys
substantive rights. Like all rules, they are required
to be followed except for the most persuasive of
reasons when they may be relaxed. Not one of
these persuasive reasons is present here.
In fine, we hold that the Court of
Appeals did not err in dismissing the petition
for certiorari in view of the procedural lapses
committed by petitioners.[11] [Emphases supplied]
Furthermore, the petitioners argue that the CA should not have
dismissed the whole petition but should have given it due course insofar as
Malcaba is concerned because he signed the certification. The petitioners
also contend that the CA should have been liberal in the application of the
Rules because they have a meritorious case against PNB.
The Court, however, is not persuaded.
The petitioners were given a chance by the CA to comply with the
Rules when they filed their motion for reconsideration, but they refused to
do so. Despite the opportunity given to them to make all of them sign the
verification and certification of non-forum shopping, they still failed to
comply. Thus, the CA was constrained to deny their motion and affirm the
earlier resolution.[12]
Indeed, liberality and leniency were accorded in some cases.[13] In these
cases, however, those who did not sign were relatives of the lone signatory,
so unlike in this case, where Malcaba is not a relative who is similarly
situated with the other petitioners and who cannot speak for them. In the
case of Heirs of Domingo Hernandez, Sr. v. Plaridel Mingoa, Sr., [14] it was
written:
In the instant case, petitioners share a
common interest and defense inasmuch as they
collectively claim a right not to be dispossessed of
the subject lot by virtue of their and their deceased
parents construction of a family home and
occupation thereof for more than 10 years. The
commonality of their stance to defend their alleged
right over the controverted lot thus gave
petitioners xxx authority to inform the Court of
Appeals in behalf of the other petitioners that they
have not commenced any action or claim involving
the same issues in another court or tribunal, and
that there is no other pending action or claim in
another court or tribunal involving the same
issues.
Here, all the petitioners are immediate
relatives who share a common interest in the land
sought to be reconveyed and a common cause of
action raising the same arguments in support
thereof. There was sufficient basis, therefore, for
Domingo Hernandez, Jr. to speak for and in behalf
of his co-petitioners when he certified that they
had not filed any action or claim in another court
or tribunal involving the same issues. Thus, the
Verification/Certification that Hernandez, Jr.
executed constitutes substantial compliance under
the Rules. [Emphasis supplied]
The same leniency was accorded to the petitioner in the case
of Oldarico S. Traveno v. Bobongon Banana Growers Multi-Purpose
Cooperative,[15] where it was stated:
The same leniency was applied by the
Court in Cavile v. Heirs of Cavile, because the lone
petitioner who executed the certification of non-
forum shopping was a relativeand co-owner of the
other petitioners with whom he shares a common
interest. x x x[16]
Considering the above circumstances, the Court does not see any
similarity at all in the case at bench to compel itself to relax the requirement
of strict compliance with the rule regarding the certification against forum
shopping.
At any rate, the Court cannot accommodate the petitioners request to re-
examine the testimony of Malcaba in the transcript of stenographic notes of
the April 25, 1999 hearing concerning his alleged testimonial proof of
damages for obvious reasons.
Primarily, Section 1, Rule 45 of the Rules of Court categorically
states that the petition filed shall raise only questions of law, which must be
distinctly set forth. A question of law arises when there is doubt as to what
the law is on a certain state of facts, while there is a question of fact when
the doubt arises as to the truth or falsity of the alleged facts.For a question
to be one of law, the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law provides on the given
set of circumstances. Once it is clear that the issue invites a review of the
evidence presented, the question posed is one of fact.[17]
In this case, the petition clearly raises a factual issue. As correctly
argued by PNB, the substantive issue of whether or not the petitioners are
entitled to moral and exemplary damages as well as attorneys fees is a
factual issue which is beyond the province of a petition for review
on certiorari.
Secondly, even if the Court glosses over the technical defects, the
petition for relief cannot be granted. A perusal of the Petition for Relief of
Judgment discloses that there is no fact constituting fraud, accident, mistake
or excusable negligence which are the grounds therefor. From the petition
itself, it appears that the petitioners counsel had a copy of the transcript of
stenographic notes which was in his cabinet all along and only discovered it
when he was disposing old and terminated cases.[18] If he was only attentive
to his records, he could have filed a motion for reconsideration or a notice of
appeal in behalf of the petitioners.
WHEREFORE, the petition is DENIED.
SO ORDERED.
THE HEIRS OF PROTACIO GO, SR. and MARTA G.R. No. 157537
BAROLA, namely: LEONOR, SIMPLICIO, PROTACIO,
JR., ANTONIO, BEVERLY ANN LORRAINNE, TITA,
CONSOLACION, LEONORA and ASUNCION, all
surnamed GO, represented by
LEONORA B. GO,
Petitioners,
-versus -
ESTER L. SERVACIO and RITO B. GO,
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:
The disposition by sale of a portion of the conjugal property by the surviving
spouse without the prior liquidation mandated by Article 130 of the Family
Code is not necessarily void if said portion has not yet been allocated by
judicial or extrajudicial partition to another heir of the deceased spouse. At
any rate, the requirement of prior liquidation does not prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a total
area of 17,140 square meters situated in Southern Leyte to Protacio B. Go, Jr.
(Protacio, Jr.). Twenty three years later, or on March 29, 1999, Protacio, Jr.
executed an Affidavit of Renunciation and Waiver,[1] whereby he affirmed
under oath that it was his father, Protacio Go, Sr. (Protacio, Sr.), not he, who
had purchased the two parcels of land (the property).
On November 25, 1987, Marta Barola Go died. She was the wife of Protacio,
Sr. and mother of the petitioners.[2] On December 28, 1999, Protacio, Sr. and
his son Rito B. Go (joined by Ritos wife Dina B. Go) sold a portion of the
property with an area of 5,560 square meters to Ester L. Servacio (Servacio)
for ₱5,686,768.00.[3] On March 2, 2001, the petitioners demanded the return
of the property,[4] but Servacio refused to heed their demand. After barangay
proceedings failed to resolve the dispute,[5] they sued Servacio and Rito in the
Regional Trial Court in Maasin City, Southern Leyte (RTC) for the annulment
of the sale of the property.
The petitioners averred that following Protacio, Jr.s renunciation, the property
became conjugal property; and that the sale of the property to Servacio
without the prior liquidation of the community property between Protacio, Sr.
and Marta was null and void.[6]
Servacio and Rito countered that Protacio, Sr. had exclusively
owned the property because he had purchased it with his own money. [7]
On October 3, 2002,[8] the RTC declared that the property was the conjugal
property of Protacio, Sr. and Marta, not the exclusive property of Protacio, Sr.,
because there were three vendors in the sale to Servacio (namely: Protacio,
Sr., Rito, and Dina); that the participation of Rito and Dina as vendors had
been by virtue of their being heirs of the late Marta; that under Article 160 of
the Civil Code, the law in effect when the property was acquired, all property
acquired by either spouse during the marriage was conjugal unless there was
proof that the property thus acquired pertained exclusively to the husband or
to the wife; and that Protacio, Jr.s renunciation was grossly insufficient to
rebut the legal presumption.[9]

Nonetheless, the RTC affirmed the validity of the sale of the property, holding
that: xxx As long as the portion sold, alienated or encumbered will not be
allotted to the other heirs in the final partition of the property, or to state it
plainly, as long as the portion sold does not encroach upon the legitimate (sic)
of other heirs, it is valid.[10] Quoting Tolentinos commentary on the matter as
authority,[11] the RTC opined:
In his comment on Article 175 of the New Civil Code
regarding the dissolution of the conjugal partnership,
Senator Arturo Tolentino, says [sic]
Alienation by the survivor. After
the death of one of the spouses, in case it
is necessary to sell any portion of the
community property in order to pay
outstanding obligation of the partnership,
such sale must be made in the manner
and with the formalities established by
the Rules of Court for the sale of the
property of the deceased persons. Any
sale, transfer, alienation or disposition of
said property affected without said
formalities shall be null and void, except
as regards the portion that belongs to the
vendor as determined in the liquidation
and partition. Pending the liquidation, the
disposition must be considered as limited
only to the contingent share or interest of
the vendor in the particular property
involved, but not to the corpus of the
property.
This rule applies not only to sale but
also to mortgages. The alienation,
mortgage or disposal of the conjugal
property without the required formality,
is not however, null ab initio, for the law
recognizes their validity so long as they
do not exceed the portion which, after
liquidation and partition, should pertain
to the surviving spouse who made the
contract. [underlining supplied]
It seems clear from these comments of Senator Arturo
Tolentino on the provisions of the New Civil Code and
the Family Code on the alienation by the surviving
spouse of the community property that jurisprudence
remains the same - that the alienation made by the
surviving spouse of a portion of the community
property is not wholly void ab initio despite Article 103
of the Family Code, and shall be valid to the extent of
what will be allotted, in the final partition, to the
vendor. And rightly so, because why invalidate the sale
by the surviving spouse of a portion of the community
property that will eventually be his/her share in the final
partition? Practically there is no reason for that view
and it would be absurd.
Now here, in the instant case, the 5,560 square meter
portion of the 17,140 square-meter conjugal lot is
certainly mush (sic) less than what vendors Protacio Go
and his son Rito B. Go will eventually get as their share
in the final partition of the property. So the sale is still
valid.
WHEREFORE, premises considered, complaint is
hereby DISMISSED without pronouncement as to cost
and damages.
SO ORDERED.[12]
The RTCs denial of their motion for reconsideration [13] prompted the
petitioners to appeal directly to the Court on a pure question of law.
Issue
The petitioners claim that Article 130 of the Family Code is the applicable
law; and that the sale by Protacio, Sr., et al. to Servacio was void for being
made without prior liquidation.
In contrast, although they have filed separate comments, Servacio
and Rito both argue that Article 130 of the Family Code was inapplicable; that
the want of the liquidation prior to the sale did not render the sale invalid,
because the sale was valid to the extent of the portion that was finally allotted
to the vendors as his share; and that the sale did not also prejudice any rights
of the petitioners as heirs, considering that what the sale disposed of was
within the aliquot portion of the property that the vendors were entitled to as
heirs.[14]
Ruling
The appeal lacks merit.
Article 130 of the Family Code reads:
Article 130. Upon the termination of the
marriage by death, the conjugal partnership property
shall be liquidated in the same proceeding for the
settlement of the estate of the deceased.
If no judicial settlement proceeding is
instituted, the surviving spouse shall liquidate the
conjugal partnership property either judicially or extra-
judicially within one year from the death of the
deceased spouse. If upon the lapse of the six month
period no liquidation is made, any disposition or
encumbrance involving the conjugal partnership
property of the terminated marriage shall be void.
Should the surviving spouse contract a
subsequent marriage without compliance with the
foregoing requirements, a mandatory regime of
complete separation of property shall govern the
property relations of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of the Family Code,
viz:
Article 105. In case the future spouses agree in
the marriage settlements that the regime of conjugal
partnership of gains shall govern their property
relations during marriage, the provisions in this Chapter
shall be of supplementary application.
The provisions of this Chapter shall also
apply to conjugal partnerships of gains already
established between spouses before the effectivity of
this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other
laws, as provided in Article 256. (n) [emphasis
supplied]
It is clear that conjugal partnership of gains established before and
after the effectivity of the Family Code are governed by the rules found in
Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations
Between Husband And Wife) of the Family Code. Hence, any disposition of
the conjugal property after the dissolution of the conjugal partnership must be
made only after the liquidation; otherwise, the disposition is void.
Before applying such rules, however, the conjugal partnership of
gains must be subsisting at the time of the effectivity of the Family Code.
There being no dispute that Protacio, Sr. and Marta were married prior to the
effectivity of the Family Code on August 3, 1988, their property relation was
properly characterized as one of conjugal partnership governed by the Civil
Code. Upon Martas death in 1987, the conjugal partnership was dissolved,
pursuant to Article 175 (1) of the Civil Code,[15] and an implied ordinary co-
ownership ensued among Protacio, Sr. and the other heirs of Marta with
respect to her share in the assets of the conjugal partnership pending a
liquidation following its liquidation.[16] The ensuing implied ordinary co-
ownership was governed by Article 493 of the Civil Code,[17] to wit:
 Article 493. Each co-owner shall have the full
ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign
or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved.
But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the
termination of the co-ownership. (399)
Protacio, Sr., although becoming a co-owner with his children in respect of
Martas share in the conjugal partnership, could not yet assert or claim title to
any specific portion of Martas share without an actual partition of the property
being first done either by agreement or by judicial decree. Until then, all that
he had was an ideal or abstract quota in Martas share.[18] Nonetheless, a co-
owner could sell his undivided share; hence, Protacio, Sr. had the right to
freely sell and dispose of his undivided interest, but not the interest of his co-
owners.[19] Consequently, the sale by Protacio, Sr. and Rito as co-owners
without the consent of the other co-owners was not necessarily void, for the
rights of the selling co-owners were thereby effectively transferred, making
the buyer (Servacio) a co-owner of Martas share.[20] This result conforms to
the well-established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so (quando res non valet ut
ago, valeat quantum valere potest).[21]
Article 105 of the Family Code, supra, expressly provides that the
applicability of the rules on dissolution of the conjugal partnership is without
prejudice to vested rights already acquired in accordance with
the Civil Code or other laws. This provision gives another reason not to
declare the sale as entirely void. Indeed, such a declaration prejudices the
rights of Servacio who had already acquired the shares of Protacio, Sr. and
Rito in the property subject of the sale.
In their separate comments,[22] the respondents aver that each of the
heirs had already received a certain allotted portion at the time of the sale, and
that Protacio, Sr. and Rito sold only the portions adjudicated to and owned by
them. However, they did not present any public document on the allocation
among her heirs, including themselves, of specific shares in Martas estate.
Neither did they aver that the conjugal properties had already been liquidated
and partitioned. Accordingly, pending a partition among the heirs of Marta,
the efficacy of the sale, and whether the extent of the property sold adversely
affected the interests of the petitioners might not yet be properly decided with
finality. The appropriate recourse to bring that about is to commence an action
for judicial partition, as instructed in Bailon-Casilao v. Court of Appeals,[23] to
wit:
From the foregoing, it may be deduced that
since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one
co-owner without the consent of the other co-owners
is not null and void. However, only the rights of the
co-owner-seller are transferred, thereby making the
buyer a co-owner of the property.
The proper action in cases like this is not for
the nullification of the sale or for the recovery of
possession of the thing owned in common from the
third person who substituted the co-owner or co-owners
who alienated their shares, but the DIVISION of the
common property as if it continued to remain in the
possession of the co-owners who possessed and
administered it[Mainit v. Bandoy, supra].
Thus, it is now settled that the appropriate
recourse of co-owners in cases where their consent
were not secured in a sale of the entire property as
well as in a sale merely of the undivided shares of
some of the co-owners is an action for PARTITION
under Rule 69 of the Revised Rules of Court. xxx[24]
In the meanwhile, Servacio would be a trustee for the benefit of the
co-heirs of her vendors in respect of any portion that might not be validly sold
to her. The following observations of Justice Paras are explanatory of this
result, viz:
xxx [I]f it turns out that the property alienated or
mortgaged really would pertain to the share of the
surviving spouse, then said transaction is valid. If it
turns out that there really would be, after liquidation, no
more conjugal assets then the whole transaction is null
and void. But if it turns out that half of the property
thus alienated or mortgaged belongs to the husband as
his share in the conjugal partnership, and half should go
to the estate of the wife, then that corresponding to the
husband is valid, and that corresponding to the other is
not. Since all these can be determined only at the time
the liquidation is over, it follows logically that a
disposal made by the surviving spouse is not void ab
initio. Thus, it has been held that the sale of conjugal
properties cannot be made by the surviving spouse
without the legal requirements. The sale is void as to
the share of the deceased spouse (except of course as to
that portion of the husbands share inherited by her as
the surviving spouse). The buyers of the property that
could not be validly sold become trustees of said
portion for the benefit of the husbands other heirs,
the cestui que trust ent. Said heirs shall not be barred by
prescription or by laches (See Cuison, et al. v.
Fernandez, et al.,L-11764, Jan.31, 1959.)[25]
WHEREFORE, we DENY the petition for review
on certiorari; and AFFIRM the decision of the Regional Trial
Court.
The petitioners shall pay the costs of suit.
SO ORDERED.
Spouses ANTONIO and LUZVIMINDA
GUIANG, petitioners, vs. COURT OF APPEALS and
GILDA CORPUZ, respondents.
DECISION
PANGANIBAN, J.:
The sale of a conjugal property requires the consent of both the
husband and the wife. The absence of the consent of one renders the
sale null and void, while the vitiation thereof makes it merely
voidable. Only in the latter case can ratification cure the defect.
The Case
These were the principles that guided the Court in deciding this
petition for review of the Decision[1] dated January 30, 1996 and the
Resolution[2] dated May 28, 1996, promulgated by the Court of Appeals
in CA-GR CV No. 41758, affirming the Decision of the lower court and
denying reconsideration, respectively.
On May 28, 1990, Private Respondent Gilda Corpuz filed an
Amended Complaint[3] against her husband Judie Corpuz and
Petitioners-Spouses Antonio and Luzviminda Guiang. The said
Complaint sought the declaration of a certain deed of sale, which
involved the conjugal property of private respondent and her husband,
null and void. The case was raffled to the Regional Trial Court of
Koronadal, South Cotabato, Branch 25. In due course, the trial court
rendered a Decision[4] dated September 9, 1992, disposing as
follows:[5]
ACCORDINGLY, judgment is rendered for the plaintiff and
against the defendants,
1. Declaring both the Deed of Transfer of Rights dated March 1, 1990
(Exh. A) and the amicable settlement dated March 16, 1990 (Exh. B)
as null and void and of no effect;
2. Recognizing as lawful and valid the ownership and possession of
plaintiff Gilda Corpuz over the remaining one-half portion of Lot 9,
Block 8, (LRC) Psd-165409 which has been the subject of the Deed of
Transfer of Rights (Exh. A);
3. Ordering plaintiff Gilda Corpuz to reimburse defendants Luzviminda
and Antonio Guiang the amount of NINE THOUSAND (P9,000.00)
PESOS corresponding to the payment made by defendants Guiangs to
Manuel Callejo for the unpaid balance of the account of plaintiff in favor
of Manuel Callejo, and another sum of P379.62 representing one-half
of the amount of realty taxes paid by defendants Guiangs on Lot 9,
Block 8, (LRC) Psd-165409, both with legal interests thereon
computed from the finality of the decision.
No pronouncement as to costs in view of the factual circumstances of
the case.
 Dissatisfied, petitioners-spouses filed an appeal with the Court of
Appeals. Respondent Court, in its challenged Decision, ruled as
follows:[6]
WHEREFORE, the appealed decision of the lower court in
Civil Case No. 204 is hereby AFFIRMED by this Court. No
costs considering plaintiff-appellees failure to file her brief,
despite notice.
Reconsideration was similarly denied by the same court in its
assailed Resolution:[7]
Finding that the issues raised in defendants-appellants
motion for reconsideration of Our decision in this case of
January 30, 1996, to be a mere rehash of the same issues
which We have already passed upon in the said decision,
and there [being] no cogent reason to disturb the same, this
Court RESOLVES to DENY the instant motion for
reconsideration for lack of merit.
The Facts
The facts of this case are simple. Over the objection of private
respondent and while she was in Manila seeking employment, her
husband sold to the petitioners-spouses one half of their conjugal
property, consisting of their residence and the lot on which it
stood. The circumstances of this sale are set forth in the Decision of
Respondent Court, which quoted from the Decision of the trial court, as
follows:[8]
1. Plaintiff Gilda Corpuz and defendant Judie Corpuz are
legally married spouses. They were married on December
24, 1968 in Bacolod City, before a judge. This is admitted
by defendants-spouses Antonio and Luzviminda Guiang in
their answer, and also admitted by defendant Judie Corpuz
when he testified in court (tsn. p..3, June 9, 1992), although
the latter says that they were married in 1967. The couple
have three children, namely: Junie 18 years old, Harriet 17
years of age, and Jodie or Joji, the youngest, who was 15
years of age in August, 1990 when her mother testified in
court.
Sometime on February 14, 1983, the couple Gilda and
Judie Corpuz, with plaintiff-wife Gilda Corpuz as vendee,
bought a 421 sq. meter lot located in Barangay Gen.
Paulino Santos (Bo. 1), Koronadal, South Cotabato, and
particularly known as Lot 9, Block 8, (LRC) Psd-165409
from Manuel Callejo who signed as vendor through a
conditional deed of sale for a total consideration
of P14,735.00. The consideration was payable in
installment, with right of cancellation in favor of vendor
should vendee fail to pay three successive installments
(Exh. 2, tsn. p. 6, February 14, 1990).
2. Sometime on April 22, 1988, the couple Gilda and Judie
Corpuz sold one-half portion of their Lot No. 9, Block 8,
(LRC) Psd-165409 to the defendants-spouses Antonio and
Luzviminda Guiang. The latter have since then occupied
the one-half portion [and] built their house thereon (tsn. p.
4, May 22, 1992). They are thus adjoining neighbors of the
Corpuzes.
3. Plaintiff Gilda Corpuz left for Manila sometime in June
1989. She was trying to look for work abroad, in [the]
Middle East. Unfortunately, she became a victim of an
unscrupulous illegal recruiter. She was not able to go
abroad. She stayed for sometime in Manila however,
coming back to Koronadal, South Cotabato, x x x on March
11, 1990. Plaintiffs departure for Manila to look for work in
the Middle East was with the consent of her husband Judie
Corpuz (tsn. p. 16, Aug.12, 1990; p. 10, Sept. 6, 1991).
After his wifes departure for Manila, defendant Judie
Corpuz seldom went home to the conjugal dwelling. He
stayed most of the time at his place of work at Samahang
Nayon Building, a hotel, restaurant, and a
cooperative. Daughter Harriet Corpuz went to school at
Kings College, Bo. 1, Koronadal, South Cotabato, but she
was at the same time working as household help of, and
staying at, the house of Mr. Panes. Her brother Junie was
not working. Her younger sister Jodie (Joji) was going to
school. Her mother sometimes sent them money (tsn. p. 14,
Sept. 6, 1991).
Sometime in January 1990, Harriet Corpuz learned that her
father intended to sell the remaining one-half portion
including their house, of their homelot to defendants
Guiangs. She wrote a letter to her mother informing
her. She [Gilda Corpuz] replied that she was objecting to
the sale. Harriet, however, did not inform her father about
this; but instead gave the letter to Mrs. Luzviminda Guiang
so that she [Guiang] would advise her father (tsn. pp. 16-
17, Sept. 6, 1991).
4. However, in the absence of his wife Gilda Corpuz,
defendant Judie Corpuz pushed through the sale of the
remaining one-half portion of Lot 9, Block 8, (LRC) Psd-
165409. On March 1, 1990, he sold to defendant
Luzviminda Guiang thru a document known as Deed of
Transfer of Rights (Exh. A) the remaining one-half portion of
their lot and the house standing thereon for a total
consideration of P30,000.00 of which P5,000.00 was to be
paid in June , 1990. Transferor Judie Corpuzs children
Junie and Harriet signed the document as witnesses.
Four (4) days after March 1, 1990 or on March 5, 1990,
obviously to cure whatever defect in defendant Judie
Corpuzs title over the lot transferred, defendant Luzviminda
Guiang as vendee executed another agreement over Lot 9,
Block 8, (LRC) Psd-165408 (Exh. 3), this time with Manuela
Jimenez Callejo, a widow of the original registered owner
from whom the couple Judie and Gilda Corpuz originally
bought the lot (Exh. 2), who signed as vendor for a
consideration of P9,000.00. Defendant Judie Corpuz signed
as a witness to the sale (Exh. 3-A). The new sale (Exh. 3)
describes the lot sold as Lot 8, Block 9, (LRC) Psd-165408
but it is obvious from the mass of evidence that the correct
lot is Lot 8, Block 9, (LRC) Psd-165409, the very lot earlier
sold to the couple Gilda and Judie Corpuz.
5. Sometime on March 11, 1990, plaintiff returned
home. She found her children staying with other
households. Only Junie was staying in their house. Harriet
and Joji were with Mr. Panes. Gilda gathered her children
together and stayed at their house. Her husband was
nowhere to be found. She was informed by her children that
their father had a wife already.
6. For staying in their house sold by her husband, plaintiff
was complained against by defendant Luzviminda Guiang
and her husband Antonio Guiang before the Barangay
authorities of Barangay General Paulino Santos (Bo. 1),
Koronadal, South Cotabato, for trespassing (tsn. p. 34, Aug.
17, 1990). The case was docketed by the barangay
authorities as Barangay Case No. 38 for trespassing. On
March 16, 1990, the parties thereat signed a document
known as amicable settlement. In full, the settlement
provides for, to wit:
That respondent, Mrs. Gilda Corpuz and her
three children, namely: Junie, Hariet and Judie
to leave voluntarily the house of Mr. and Mrs.
Antonio Guiang, where they are presently
boarding without any charge, on or before April
7, 1990.
FAIL NOT UNDER THE PENALTY OF THE LAW.
Believing that she had received the shorter end of the
bargain, plaintiff went to the Barangay Captain of Barangay
Paulino Santos to question her signature on the amicable
settlement. She was referred however to the Officer-In-
Charge at the time, a certain Mr. de la Cruz. The latter in
turn told her that he could not do anything on the matter
(tsn. p. 31, Aug. 17, 1990).
This particular point was not rebutted. The Barangay
Captain who testified did not deny that Mrs. Gilda Corpuz
approached him for the annulment of the settlement. He
merely said he forgot whether Mrs. Corpuz had approached
him (tsn. p. 13, Sept. 26, 1990). We thus conclude that Mrs.
Corpuz really approached the Barangay Captain for the
annulment of the settlement. Annulment not having been
made, plaintiff stayed put in her house and lot.
7. Defendant-spouses Guiang followed thru the amicable
settlement with a motion for the execution of the amicable
settlement, filing the same with the Municipal Trial Court of
Koronadal, South Cotabato. The proceedings [are] still
pending before the said court, with the filing of the instant
suit.
8. As a consequence of the sale, the spouses Guiang
spent P600.00 for the preparation of the Deed of Transfer
of Rights, Exh. A; P9,000.00 as the amount they paid to
 Mrs. Manuela Callejo, having assumed the remaining
obligation of the Corpuzes to Mrs. Callejo (Exh. 3); P100.00
for the preparation of Exhibit 3; a total of P759.62 basic tax
and special educational fund on the lot; P127.50 as the total
documentary stamp tax on the various documents; P535.72
for the capital gains tax; P22.50 as transfer tax; a standard
fee ofP17.00; certification fee of P5.00. These expenses
particularly the taxes and other expenses towards the
transfer of the title to the spouses Guiangs were incurred
for the whole Lot 9, Block 8, (LRC) Psd-165409.
Ruling of Respondent Court
Respondent Court found no reversible error in the trial courts
ruling that any alienation or encumbrance by the husband of the
conjugal property without the consent of his wife is null and void as
provided under Article 124 of the Family Code. It also rejected
petitioners contention that the amicable settlement ratified said sale,
citing Article 1409 of the Code which expressly bars ratification of the
contracts specified therein, particularly those prohibited or declared
void by law.
Hence, this petition.[9]
The Issues
In their Memorandum, petitioners assign to public respondent the
following errors:[10]
I other spouse or authorization by the court before the offer is
Whether or not the assailed Deed of Transfer of Rights was
validly executed.
II
Whether or not the Court of Appeals erred in not declaring
as voidable contract under Art. 1390 of the Civil Code the
impugned Deed of Transfer of Rights which was validly
ratified thru the execution of the amicable settlement by the
contending parties.
III
Whether or not the Court of Appeals erred in not setting
aside the findings of the Court a quo which recognized as
lawful and valid the ownership and possession of private
respondent over the remaining one half (1/2) portion of the
subject property.
In a nutshell, petitioners-spouses contend that (1) the contract of
sale (Deed of Transfer of Rights) was merely voidable, and (2) such
contract was ratified by private respondent when she entered into an
amicable settlement with them.
This Courts Ruling
The petition is bereft of merit.
First Issue: Void or Voidable Contract?
Petitioners insist that the questioned Deed of Transfer of Rights
was validly executed by the parties-litigants in good faith and for
valuable consideration. The absence of private respondents consent
merely rendered the Deed voidable under Article 1390 of the Civil
Code, which provides:
ART. 1390. The following contracts are voidable or
annullable, even though there may have been no damage
to the contracting parties:
xxxxxxxxx
(2) Those where the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a
proper action in court. They are susceptible of
ratification.(n)
The error in petitioners contention is evident. Article 1390, par. 2,
refers to contracts visited by vices of consent, i.e., contracts which
were entered into by a person whose consent was obtained and
vitiated through mistake, violence, intimidation, undue influence or
fraud. In this instance, private respondents consent to the contract of
sale of their conjugal property was totally inexistent or absent. Gilda
Corpuz, on direct examination, testified thus:[11]
Q Now, on March 1, 1990, could you still recall where you were?
A I was still in Manila during that time.
xxxxxxxxx
ATTY. FUENTES:
Q When did you come back to Koronadal, South Cotabato?
A That was on March 11, 1990, Maam.
Q Now, when you arrived at Koronadal, was there any problem
which arose concerning the ownership of your residential
house at Callejo Subdivision?
A When I arrived here in Koronadal, there was a problem which
arose regarding my residential house and lot because it was
sold by my husband without my knowledge.
This being the case, said contract properly falls within the ambit
of Article 124 of the Family Code, which was correctly applied by the
two lower courts:
ART. 124. The administration and enjoyment of the
conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husbands decision
shall prevail, subject to recourse to the court by the wife for
proper remedy, which must be availed of within five years
from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance which must have the authority
of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall
be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by the
withdrawn by either or both offerors.(165a) (Italics supplied)
Comparing said law with its equivalent provision in the Civil
Code, the trial court adroitly explained the amendatory effect of the
above provision in this wise:[12]
The legal provision is clear. The disposition or
encumbrance is void. It becomes still clearer if we compare
the same with the equivalent provision of the Civil Code of
the Philippines.Under Article 166 of the Civil Code, the
husband cannot generally alienate or encumber any real
property of the conjugal partnership without the wifes
consent. The alienation or encumbrance if so made
however is not null and void. It is merely voidable. The
offended wife may bring an action to annul the said
alienation or encumbrance. Thus, the provision of Article
173 of the Civil Code of the Philippines, to wit:
Art. 173. The wife may, during the marriage
and within ten years from the transaction
questioned, ask the courts for the annulment of
any contract of the husband entered into
without her consent, when such consent is
required, or any act or contract of the husband
which tends to defraud her or impair her
interest in the conjugal partnership
property. Should the wife fail to exercise this
right, she or her heirs after the dissolution of
the marriage, may demand the value of
property fraudulently alienated by the
husband.(n)
This particular provision giving the wife ten (10) years x x x
during [the] marriage to annul the alienation or
encumbrance was not carried over to the Family Code. It is
thus clear that any alienation or encumbrance made after
August 3, 1988 when the Family Code took effect by the
husband of the conjugal partnership property without the
consent of the wife is null and void.
Furthermore, it must be noted that the fraud and the intimidation
referred to by petitioners were perpetrated in the execution of the
document embodying the amicable settlement. Gilda Corpuz alleged
during trial that barangay authorities made her sign said document
through misrepresentation and coercion.[13] In any event, its execution
does not alter the void character of the deed of sale between the
husband and the petitioners-spouses, as will be discussed later. The
fact remains that such contract was entered into without the wifes
consent.
In sum, the nullity of the contract of sale is premised on the
absence of private respondents consent. To constitute a valid contract,
the Civil Code requires the concurrence of the following elements: (1)
cause, (2) object, and (3) consent,[14] the last element being indubitably
absent in the case at bar.
Second Issue: Amicable Settlement
Insisting that the contract of sale was merely voidable,
petitioners aver that it was duly ratified by the contending parties
through the amicable settlement they executed on March 16, 1990 in
Barangay Case No. 38.
The position is not well taken. The trial and the appellate courts
have resolved this issue in favor of the private respondent. The trial
court correctly held:[15]
By the specific provision of the law [Art. 1390, Civil Code]
therefore, the Deed of Transfer of Rights (Exh. A) cannot be
ratified, even by an amicable settlement. The participation
by some barangay authorities in the amicable settlement
cannot otherwise validate an invalid act. Moreover, it cannot
be denied that the amicable settlement (Exh. B) entered
into by plaintiff Gilda Corpuz and defendant spouses
Guiang is a contract. It is a direct offshoot of the Deed of
Transfer of Rights (Exh. A). By express provision of law,
such a contract is also void. Thus, the legal provision, to
wit:
Art. 1422. A contract which is the direct result
of a previous illegal contract, is also void and
inexistent. (Civil Code of the Philippines).
In summation therefore, both the Deed of Transfer of Rights
(Exh. A) and the amicable settlement (Exh. 3) are null and
void.
Doctrinally and clearly, a void contract cannot be ratified.[16]
Neither can the amicable settlement be considered a continuing
offer that was accepted and perfected by the parties, following the last
sentence of Article 124. The order of the pertinent events is
clear: after the sale, petitioners filed a complaint for trespassing
against private respondent, after which the barangay authorities
secured an amicable settlement and petitioners filed before the MTC a
motion for its execution. The settlement, however, does not mention a
continuing offer to sell the property or an acceptance of such a
continuing offer. Its tenor was to the effect that private respondent
would vacate the property. By no stretch of the imagination, can the
Court interpret this document as the acceptance mentioned in Article
124.
WHEREFORE, the Court hereby DENIES the petition
and AFFIRMS the challenged Decision and Resolution. Costs against
petitioners.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing,
JJ., concur.
[G.R. No. 147978. January 23, 2002]
THELMA A. JADER-MANALO, petitioner, vs. NORMA FERNANDEZ
C. CAMAISA and EDILBERTO CAMAISA, respondents.
DECISION
KAPUNAN, J.:
The issue raised in this case is whether or not the husband may
validly dispose of a conjugal property without the wifes written consent.
The present controversy had its beginning when petitioner
Thelma A. Jader-Manalo allegedly came across an
advertisement placed by respondents, the Spouses Norma Fernandez
C.Camaisa and Edilberto Camaisa, in the Classified Ads Section of the
newspaper BULLETIN TODAY in its April, 1992 issue, for the sale of
their ten-door apartment in Makati, as well as that in Taytay, Rizal.
As narrated by petitioner in her complaint filed with the Regional
Trial Court of Makati, Metro Manila, she was interested in buying the
two properties so she negotiated for the purchase through a real estate
broker, Mr. Proceso Ereno, authorized by respondent
spouses.[1] Petitioner made a visual inspection of the said lots with the
real estate broker and was shown the tax declarations, real property
tax payment receipts, location plans, and vicinity maps relating to the
properties.[2] Thereafter, petitioner met with the vendors who turned out
to be respondent spouses. She made a definite offer to buy the
properties to respondent Edilberto Camaisa with the knowledge and
conformity of his wife, respondent Norma Camaisa in the presence of
the real estate broker.[3] After some bargaining, petitioner
and Edilberto agreed upon the purchase price of P1,500,000.00 for
the Taytay property and P2,100,000.00 for the Makati property[4] to be
paid on installment basis with downpayments of P100,000.00
and P200,000.00, respectively, on April 15, 1992. The balance thereof
was to be paid as follows[5]:
Taytay Property Makati Property
6th month P200,000.00 P300,000.00
12th month 700,000.00 1,600,000.00
18th month 500,000.00
This agreement was handwritten by petitioner and signed
by Edilberto.[6] When petitioner pointed out the conjugal nature of the
properties, Edilberto assured her of his wifes conformity and consent to
the sale.[7] The formal typewritten Contracts to Sell were thereafter
prepared by petitioner. The following day, petitioner, the real estate
broker and Edilberto met in the latters office for the formal signing of
the typewritten Contracts to Sell.[8] After Edilberto signed the
contracts, petitioner delivered to him two checks, namely, UCPB
Check No. 62807 dated April 15, 1992 for P200,000.00 and UCPB
Check No. 62808 also dated April 15, 1992 for P100,000.00 in the
presence of the real estate broker and an employee
in Edilbertos office.[9] The contracts were given to Edilberto for the
formal affixing of his wifes signature.
The following day, petitioner received a call from
respondent Norma, requesting a meeting to clarify some provisions of
the contracts.[10] To accommodate her queries, petitioner,
accompanied by her lawyer, met with Edilberto and Norma and the real
estate broker at Cafe Rizal in Makati.[11] During the meeting,
handwritten notations were made on the contracts to sell, so they
arranged to incorporate the notations and to meet again for the formal
signing of the contracts.[12]
When petitioner met again with respondent spouses and the real
estate broker at Edilbertos office for the formal affixing of Normas
signature, she was surprised when respondent spouses informed her
that they were backing out of the agreement because they needed
spot cash for the full amount of the consideration.[13] Petitioner
reminded respondent spouses that the contracts to sell had already
been duly perfected and Normas refusal to sign the same would
unduly prejudice petitioner. Still, Norma refused to sign the contracts
prompting petitioner to file a complaint for specific performance and
damages against respondent spouses before the Regional Trial Court
of Makati, Branch 136 on April 29, 1992, to compel respondent
NormaCamaisa to sign the contracts to sell.
A Motion to Dismiss[14] was filed by respondents which was
denied by the trial court in its Resolution of July 21, 1992.[15]
Respondents then filed their Answer with Compulsory Counter-
claim, alleging that it was an agreement between herein petitioner and
respondent Edilberto Camaisa that the sale of the subject properties
was still subject to the approval and conformity of his wife
Norma Camaisa.[16] Thereafter, when Norma refused to give her
consent to the sale, her refusal was duly communicated by Edilberto to
petitioner.[17] The checks issued by petitioner were returned to her
by Edilberto and she accepted the same without any
objection.[18] Respondent further claimed that the acceptance of the
checks returned to petitioner signified her assent to the cancellation of
the sale of the subject properties.[19] Respondent Norma denied that
she ever participated in the negotiations for the sale of the subject
properties and that she gave her consent and conformity to the
same.[20]
On October 20, 1992, respondent Norma F. Camaisa filed a
Motion for Summary Judgment[21] asserting that there is no genuine
issue as to any material fact on the basis of the pleadings and
admission of the parties considering that the wifes written consent was
not obtained in the contract to sell, the subject conjugal properties
belonging to respondents; hence, the contract was null and void.
On April 14, 1993, the trial court rendered a summary judgment
dismissing the complaint on the ground that under Art. 124 of the
Family Code, the court cannot intervene to authorize the transaction in
the absence of the consent of the wife since said wife who refused to
give consent had not been shown to be incapacitated.
The dispositive portion of the trial courts decision reads:
WHEREFORE, considering these premises, judgment is hereby rendered:
1. Dismissing the complaint and ordering the cancellation of the Notice
of Lis Pendens by reason of its filing on TCT Nos. (464860) S-8724 and
(464861) S-8725 of the Registry of Deeds at Makati and on TCT Nos. 295976
and 295971 of the Registry of Rizal.
2. Ordering plaintiff Thelma A. Jader to pay defendant spouses Norma
and Edilberto Camaisa, FIFTY THOUSAND (P50,000.00) as Moral Damages
and FIFTY THOUSAND (P50,000.00) as Attorneys Fees.
Costs against plaintiff.[22]
Petitioner, thus, elevated the case to the Court of Appeals.
On November 29, 2000, the Court of Appeals affirmed the dismissal by
the trial court but deleted the award of P50,000.00 as damages
and P50,000.00 as attorneys fees.
The Court of Appeals explained that the properties subject of the
contracts were conjugal properties and as such, the consent of both
spouses is necessary to give effect to the sale.Since private
respondent Norma Camaisa refused to sign the contracts, the sale was
never perfected. In fact, the downpayment was returned by respondent
spouses and was accepted by petitioner. The Court of Appeals also
stressed that the authority of the court to allow sale or encumbrance of
a conjugal property without the consent of the other spouse is
applicable only in cases where the said spouse is incapacitated or
otherwise unable to participate in the administration of the conjugal
property.
Hence, the present recourse assigning the following errors:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN RENDERING SUMMARY JUDGMENT IN DISMISSING THE
COMPLAINT ENTIRELY AND ORDERING THE
CANCELLATION OF NOTICE OF LIS PENDENS ON THE TITLES
OF THE SUBJECT REAL PROPERTIES;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
IN FAILING TO CONSIDER THAT THE SALE OF REAL
PROPERTIES BY RESPONDENTS TO PETITIONER HAVE
ALREADY BEEN PERFECTED, FOR AFTER THE LATTER PAID
P300,000.00 DOWNPAYMENT, RESPONDENT MRS. CAMAISA
NEVER OBJECTED TO STIPULATIONS WITH RESPECT TO
PRICE, OBJECT AND TERMS OF PAYMENT IN THE
CONTRACT TO SELL ALREADY SIGNED BY THE PETITIONER,
RESPONDENT MR. CAMAISA AND WITNESSES MARKED AS
ANNEX G IN THE COMPLAINT EXCEPT, FOR MINOR
PROVISIONS ALREADY IMPLIED BY LAW, LIKE EJECTMENT
OF TENANTS, SUBDIVISION OF TITLE AND RESCISSION IN
CASE OF NONPAYMENT, WHICH PETITIONER READILY
AGREED AND ACCEDED TO THEIR INCLUSION;
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED
WHEN IT FAILED TO CONSIDER THAT CONTRACT OF SALE
IS CONSENSUAL AND IT IS PERFECTED BY THE MERE
CONSENT OF THE PARTIES AND THE APPLICABLE
PROVISIONS ARE ARTICLES 1157, 1356, 1357, 1358, 1403, 1405
AND 1475 OF THE CIVIL CODE OF THE PHILIPPINES AND
GOVERNED BY THE STATUTE OF FRAUD.[23]
The Court does not find error in the decisions of both the trial
court and the Court of Appeals.
Petitioner alleges that the trial court erred when it entered a
summary judgment in favor of respondent spouses there being a
genuine issue of fact. Petitioner maintains that the issue of whether the
contracts to sell between petitioner and respondent spouses was
perfected is a question of fact necessitating a trial on the merits.
The Court does not agree. A summary judgment is one granted
by the court upon motion by a party for an expeditious settlement of a
case, there appearing from the pleadings, depositions, admissions and
affidavits that there are no important questions or issues of fact
involved, and that therefore the moving party is entitled to judgment as
a matter of law.[24] A perusal of the pleadings submitted by both parties
show that there is no genuine controversy as to the facts involved
therein.
Both parties admit that there were negotiations for the sale of
four parcels of land between petitioner and respondent spouses;
that petitioner and respondent Edilberto Camaisa came to an
agreement as to the price and the terms of payment, and
a downpayment was paid by petitioner to the latter; and that
respondent Norma refused to sign the contracts to sell. The issue thus
posed for resolution in the trial court was whether or not the contracts
to sell between petitioner and respondent spouses were already
perfected such that the latter could no longer back out of the
agreement.
The law requires that the disposition of a conjugal property by
the husband as administrator in appropriate cases requires the written
consent of the wife, otherwise, the disposition is void. Thus, Article 124
of the Family Code provides:
Art. 124. The administration and enjoyment of the conjugal partnership
property shall belong to both spouses jointly. In case of disagreement, the
husbands decision shall prevail, subject to recourse to the court by the wife for
a proper remedy, which must be availed of within five years from the date of
the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate
in the administration of the conjugal properties, the other spouse may assume
sole powers of administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the court or the
written consent of the other spouse. In the absence of such authority or
consent the disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or authorization by the court
before the offer is withdrawn by either or both offerors. (Underscoring ours.)
The properties subject of the contracts in this case were
conjugal; hence, for the contracts to sell to be effective, the consent of
both husband and wife must concur.
Respondent Norma Camaisa admittedly did not give her written
consent to the sale. Even granting that respondent Norma actively
participated in negotiating for the sale of the subject properties, which
she denied, her written consent to the sale is required by law for its
validity. Significantly, petitioner herself admits that Norma refused to
sign the contracts to sell. Respondent Norma may have been aware of
the negotiations for the sale of their conjugal properties. However,
being merely aware of a transaction is not consent.[25]
Finally, petitioner argues that since respondent Norma unjustly
refuses to affix her signatures to the contracts to sell, court
authorization under Article 124 of the Family Code is warranted.
The argument is bereft of merit. Petitioner is correct insofar as
she alleges that if the written consent of the other spouse cannot be
obtained or is being withheld, the matter may be brought to court which
will give such authority if the same is warranted by the circumstances.
However, it should be stressed that court authorization under Art. 124
is only resorted to in cases where the spouse who does not give
consent is incapacitated.[26] In this case, petitioner failed to allege and
prove that respondent Norma was incapacitated to give her consent to
the contracts. In the absence of such showing of the wifes incapacity,
court authorization cannot be sought.
Under the foregoing facts, the motion for summary judgment was
proper considering that there was no genuine issue as to any material
fact. The only issue to be resolved by the trial court was whether the
contract to sell involving conjugal properties was valid without the
written consent of the wife.
WHEREFORE, the petition is hereby DENIED and the decision
of the Court of Appeals dated November 29, 2000 in CA-G.R. CV No.
43421 AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-
Santiago, JJ., concur.
HOMEOWNERS SAVINGS & LOAN BANK, petitioner, vs.
MIGUELA C. DAILO, respondent.
DECISION
TINGA, J.:
This is a petition for review on certiorari under Rule 45 of the
Revised Rules of Court, assailing the Decision[1] of the Court of
Appeals in CA-G.R. CV No. 59986 rendered on June 3, 2002, which
affirmed with modification the October 18, 1997 Decision[2] of the
Regional Trial Court, Branch 29, San Pablo City, Laguna in Civil Case
No. SP-4748 (97).
The following factual antecedents are undisputed.
Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were
married on August 8, 1967. During their marriage, the spouses
purchased a house and lot situated at Barangay San Francisco, San
Pablo City from a certain Sandra Dalida. The subject property was
declared for tax assessment purposes under Assessment of Real
Property No. 94-051-2802. The Deed of Absolute Sale, however, was
executed only in favor of the late Marcelino Dailo, Jr. as vendee
thereof to the exclusion of his wife.[3]
On December 1, 1993, Marcelino Dailo, Jr. executed a Special
Power of Attorney (SPA) in favor of one Lilibeth Gesmundo,
authorizing the latter to obtain a loan from petitioner Homeowners
Savings and Loan Bank to be secured by the spouses Dailos house
and lot in San Pablo City. Pursuant to the SPA, Gesmundo obtained a
loan in the amount of P300,000.00 from petitioner. As security therefor,
Gesmundo executed on the same day a Real Estate Mortgage
constituted on the subject property in favor of petitioner. The
abovementioned transactions, including the execution of the SPA in
favor of Gesmundo, took place without the knowledge and consent of
respondent.[4]
Upon maturity, the loan remained outstanding. As a result,
petitioner instituted extrajudicial foreclosure proceedings on the
mortgaged property. After the extrajudicial sale thereof, a Certificate of
Sale was issued in favor of petitioner as the highest bidder. After the
lapse of one year without the property being redeemed, petitioner,
through its vice-president, consolidated the ownership thereof by
executing on June 6, 1996 an Affidavit of Consolidation of Ownership
and a Deed of Absolute Sale.[5]
In the meantime, Marcelino Dailo, Jr. died on December 20,
1995. In one of her visits to the subject property, respondent learned
that petitioner had already employed a certain Roldan Brion to clean its
premises and that her car, a Ford sedan, was razed because Brion
allowed a boy to play with fire within the premises.
Claiming that she had no knowledge of the mortgage constituted
on the subject property, which was conjugal in nature, respondent
instituted with the Regional Trial Court, Branch 29, San Pablo City,
Civil Case No. SP-2222 (97) for Nullity of Real Estate Mortgage and
Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of
Sale, Reconveyance with Prayer for Preliminary Injunction and
Damages against petitioner. In the latters Answer with Counterclaim,
petitioner prayed for the dismissal of the complaint on the ground that
the property in question was the exclusive property of the late
Marcelino Dailo, Jr.
After trial on the merits, the trial court rendered a Decision on
October 18, 1997. The dispositive portion thereof reads as follows:
WHEREFORE, the plaintiff having proved by the preponderance of evidence
the allegations of the Complaint, the Court finds for the plaintiff and hereby
orders:
ON THE FIRST CAUSE OF ACTION:
1. The declaration of the following documents as null and void:
(a) The Deed of Real Estate Mortgage dated December 1,
1993 executed before Notary Public Romulo
Urrea and his notarial register entered as Doc. No.
212; Page No. 44, Book No. XXI, Series of 1993.
(b) The Certificate of Sale executed by Notary Public
Reynaldo Alcantara on April 20, 1995.
(c) The Affidavit of Consolidation of Ownership executed
by the defendant
(c) The Affidavit of Consolidation of Ownership executed
by the defendant over the residential lot located at
Brgy. San Francisco, San Pablo City, covered by
ARP No. 95-091-1236 entered as Doc. No. 406;
Page No. 83, Book No. III, Series of 1996 of
Notary Public Octavio M. Zayas.
(d) The assessment of real property No. 95-051-1236.
2. The defendant is ordered to reconvey the property subject of this complaint
to the plaintiff.
ON THE SECOND CAUSE OF ACTION
1. The defendant to pay the plaintiff the sum of P40,000.00
representing the value of the car which was burned.
ON BOTH CAUSES OF ACTION
1. The defendant to pay the plaintiff the sum of P25,000.00 as attorneys
fees;
2. The defendant to pay plaintiff P25,000.00 as moral damages;
3. The defendant to pay the plaintiff the sum of P10,000.00 as
exemplary damages;
4. To pay the cost of the suit.
The counterclaim is dismissed.
SO ORDERED.[6]
Upon elevation of the case to the Court of Appeals, the appellate
court affirmed the trial courts finding that the subject property was
conjugal in nature, in the absence of clear and convincing evidence to
rebut the presumption that the subject property acquired during the
marriage of spouses Dailo belongs to their conjugal partnership. [7] The
appellate court declared as void the mortgage on the subject property
because it was constituted without the knowledge and consent of
respondent, in accordance with Article 124 of the Family Code. Thus, it
upheld the trial courts order to reconvey the subject property to
respondent.[8] With respect to the damage to respondents car, the
appellate court found petitioner to be liable therefor because it is
responsible for the consequences of the acts or omissions of the
person it hired to accomplish the assigned task. [9] All told, the appellate
court affirmed the trial courtsDecision, but deleted the award for
damages and attorneys fees for lack of basis.[10]
Hence, this petition, raising the following issues for this Courts
consideration:
1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE
LATE MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS CO-
OWNER THEREOF IS VALID AS TO HIS UNDIVIDED SHARE.
2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE
FOR THE PAYMENT OF THE LOAN OBTAINED BY THE LATE
MARCELINO DAILO, JR. THE SAME HAVING REDOUNDED TO THE
BENEFIT OF THE FAMILY.[11]
First, petitioner takes issue with the legal provision applicable to
the factual milieu of this case. It contends that Article 124 of the Family
Code should be construed in relation to Article 493 of the Civil Code,
which states:
ART. 493. Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it, and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or the mortgage,
with respect to the co-owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership.
Article 124 of the Family Code provides in part:
ART. 124. The administration and enjoyment of the conjugal partnership
property shall belong to both spouses jointly. . . .
In the event that one spouse is incapacitated or otherwise unable to participate
in the administration of the conjugal properties, the other spouse may assume
sole powers of administration. These powers do not include the powers of
disposition or encumbrance which must have the authority of the court or the
written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. . . .
Petitioner argues that although Article 124 of the Family Code
requires the consent of the other spouse to the mortgage of conjugal
properties, the framers of the law could not have intended to curtail the
right of a spouse from exercising full ownership over the portion of the
conjugal property pertaining to him under the concept of co-
ownership.[12] Thus, petitioner would have this Court uphold the validity
of the mortgage to the extent of the late Marcelino Dailo, Jr.s share in
the conjugal partnership.
In Guiang v. Court of Appeals,[13] it was held that the sale of a
conjugal property requires the consent of both the husband and
wife.[14] In applying Article 124 of the Family Code, this Court declared
that the absence of the consent of one renders the entire sale null and
void, including the portion of the conjugal property pertaining to the
husband who contracted the sale. The same principle
in Guiang squarely applies to the instant case. As shall be discussed
next, there is no legal basis to construe Article 493 of the Civil Code as
an exception to Article 124 of the Family Code.
Respondent and the late Marcelino Dailo, Jr. were married on
August 8, 1967. In the absence of a marriage settlement, the system of
relative community or conjugal partnership of gains governed the
property relations between respondent and her late husband.[15] With
the effectivity of the Family Code on August 3, 1988, Chapter 4
on Conjugal Partnership of Gainsin the Family Code was made
applicable to conjugal partnership of gains already established before
its effectivity unless vested rights have already been acquired under
the Civil Code or other laws.[16]
The rules on co-ownership do not even apply to the property
relations of respondent and the late Marcelino Dailo, Jr. even in a
suppletory manner. The regime of conjugal partnership of gains is a
special type of partnership, where the husband and wife place in a
common fund the proceeds, products, fruits and income from their
separate properties and those acquired by either or both spouses
through their efforts or by chance.[17] Unlike the absolute community of
property wherein the rules on co-ownership apply in a suppletory
manner,[18] the conjugal partnership shall be governed by the rules on
contract of partnership in all that is not in conflict with what is expressly
determined in the chapter (on conjugal partnership of gains) or by the
spouses in their marriage settlements.[19] Thus, the property relations
of respondent and her late husband shall be governed, foremost, by
Chapter 4 on Conjugal Partnership of Gains of the Family Code and,
suppletorily, by the rules on partnership under the Civil Code. In case
of conflict, the former prevails because the Civil Code provisions on
partnership apply only when the Family Code is silent on the matter.
The basic and established fact is that during his lifetime, without
the knowledge and consent of his wife, Marcelino Dailo, Jr. constituted
a real estate mortgage on the subject property, which formed part of
their conjugal partnership. By express provision of Article 124 of the
Family Code, in the absence of (court) authority or written consent of
the other spouse, any disposition or encumbrance of the conjugal
property shall be void.
The aforequoted provision does not qualify with respect to the
share of the spouse who makes the disposition or encumbrance in the
same manner that the rule on co-ownership under Article 493 of the
Civil Code does. Where the law does not distinguish, courts should not
distinguish.[20] Thus, both the trial court and the appellate court are
correct in declaring the nullity of the real estate mortgage on the
subject property for lack of respondents consent.
Second, petitioner imposes the liability for the payment of the
principal obligation obtained by the late Marcelino Dailo, Jr. on the
conjugal partnership to the extent that it redounded to the benefit of the
family.[21]
 Under Article 121 of the Family Code, [T]he conjugal partnership
shall be liable for: . . . (3) Debts and obligations contracted by either
spouse without the consent of the other to the extent that the family
may have been benefited; . . . . For the subject property to be held
liable, the obligation contracted by the late Marcelino Dailo, Jr. must
have redounded to the benefit of the conjugal partnership. There must
be the requisite showing then of some advantage which clearly
accrued to the welfare of the spouses. Certainly, to make a conjugal
partnership respond for a liability that should appertain to the husband
alone is to defeat and frustrate the avowed objective of the new Civil
Code to show the utmost concern for the solidarity and well-being of
the family as a unit.[22]
The burden of proof that the debt was contracted for the benefit
of the conjugal partnership of gains lies with the creditor-party litigant
claiming as such.[23] Ei incumbit probatio qui dicit, non qui negat (he
who asserts, not he who denies, must prove). [24] Petitioners sweeping
conclusion that the loan obtained by the late Marcelino Dailo, Jr. to
finance the construction of housing units without a doubt redounded to
the benefit of his family, without adducing adequate proof, does not
persuade this Court. Other than petitioners bare allegation, there is
nothing from the records of the case to compel a finding that, indeed,
the loan obtained by the late Marcelino Dailo, Jr. redounded to the
benefit of the family. Consequently, the conjugal partnership cannot be
held liable for the payment of the principal obligation.
In addition, a perusal of the records of the case reveals that
during the trial, petitioner vigorously asserted that the subject property
was the exclusive property of the late Marcelino Dailo, Jr. Nowhere in
the answer filed with the trial court was it alleged that the proceeds of
the loan redounded to the benefit of the family. Even on appeal,
petitioner never claimed that the family benefited from the proceeds of
the loan. When a party adopts a certain theory in the court below, he
will not be permitted to change his theory on appeal, for to permit him
to do so would not only be unfair to the other party but it would also be
offensive to the basic rules of fair play, justice and due process.[25] A
party may change his legal theory on appeal only when the factual
bases thereof would not require presentation of any further evidence
by the adverse party in order to enable it to properly meet the issue
raised in the new theory.[26]
WHEREFORE, the petition is DENIED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-
Nazario, JJ., concur.
MANUEL O. FUENTES and G.R. No. 178902
LETICIA L. FUENTES,
Petitioners, Present:
CONRADO G. ROCA, ANNABELLE R.
Respondents.
April 21, 2010
x ---------------------------------------------------------------------------------------- x
DECISION
ABAD, J.:
This case is about a husbands sale of conjugal real property,
employing a challenged affidavit of consent from an estranged wife. The
buyers claim valid consent, loss of right to declare nullity of sale, and
prescription.
The Facts and the Case
Sabina Tarroza owned a titled 358-square meter lot in
Canelar, Zamboanga City. On October 11, 1982 she sold it to her son,
Tarciano T. Roca (Tarciano) under a deed of absolute sale.[1] But Tarciano did
not for the meantime have the registered title transferred to his name.
Six years later in 1988, Tarciano offered to sell the lot to petitioners Manuel
and Leticia Fuentes (the Fuentes spouses). They arranged to meet at the
office of Atty. Romulo D. Plagata whom they asked to prepare the
documents of sale. They later signed an agreement to sell that Atty. Plagata
prepared[2] dated April 29, 1988, which agreement expressly stated that it
was to take effect in six months.
The agreement required the Fuentes spouses to pay Tarciano a
down payment of P60,000.00 for the transfer of the lots title to him. And,
within six months, Tarciano was to clear the lot of structures and occupants
and secure the consent of his estranged wife, Rosario Gabriel Roca (Rosario),
to the sale. Upon Tarcianos compliance with these conditions, the Fuentes
spouses were to take possession of the lot and pay him an
additional P140,000.00 or P160,000.00, depending on whether or not he
succeeded in demolishing the house standing on it. If Tarciano was unable to
comply with these conditions, the Fuentes spouses would become owners of
the lot without any further formality and payment.
The parties left their signed agreement with Atty. Plagata who then worked
on the other requirements of the sale. According to the lawyer, he went to
see Rosario in one of his trips to Manila and had her sign an affidavit of
consent.[3] As soon as Tarciano met the other conditions, Atty. Plagata
notarized Rosarios affidavit in Zamboanga City. OnJanuary 11, 1989 Tarciano
executed a deed of absolute sale[4] in favor of the Fuentes spouses. They then
paid him the additional P140,000.00 mentioned in their agreement. A new
title was issued in the name of the spouses[5] who immediately constructed a
building on the lot. On January 28, 1990 Tarciano passed away, followed by
his wife Rosario who died nine months afterwards.
Eight years later in 1997, the children of Tarciano and Rosario, namely,
respondents Conrado G. Roca, Annabelle R. Joson, and Rose Marie R.
Cristobal, together with Tarcianos sister, Pilar R. Malcampo, represented by
her son, John Paul M. Trinidad (collectively, the Rocas), filed an action for
annulment of sale and reconveyance of the land against the Fuentes spouses
before the Regional Trial Court (RTC) of Zamboanga City in Civil Case
4707. The Rocas claimed that the sale to the spouses was void since
Tarcianos wife, Rosario, did not give her consent to it. Her signature on the
affidavit of consent had been forged. They thus prayed that the property be
reconveyed to them upon reimbursement of the price that the Fuentes
spouses paid Tarciano.[6]
The spouses denied the Rocas allegations. They presented Atty. Plagata who
testified that he personally saw Rosario sign the affidavit at her residence in
Paco, Manila, onSeptember 15, 1988. He admitted, however, that he
notarized the document in Zamboanga City four months later on January 11,
1989.[7] All the same, the Fuentes spouses pointed out that the claim of
forgery was personal to Rosario and she alone could invoke it. Besides, the
four-year prescriptive period for nullifying the sale on ground of fraud had
already lapsed.
Both the Rocas and the Fuentes spouses presented handwriting experts at
the trial. Comparing Rosarios standard signature on the affidavit with those
on various documents she signed, the Rocas expert testified that the
signatures were not written by the same person. Making the same
comparison, the spouses expert concluded that they were.[8]
On February 1, 2005 the RTC rendered judgment, dismissing the case. It ruled
that the action had already prescribed since the ground cited by the Rocas
for annulling the sale, forgery or fraud, already prescribed under Article 1391
of the Civil Code four years after its discovery. In this case, the Rocas may be
deemed to have notice of the fraud from the date the deed of sale was
registered with the Registry of Deeds and the new title was issued. Here, the
Rocas filed their action in 1997, almost nine years after the title was issued to
the Fuentes spouses on January 18, 1989.[9]
Moreover, the Rocas failed to present clear and convincing evidence of the
fraud. Mere variance in the signatures of Rosario was not conclusive proof of
forgery.[10] The RTC ruled that, although the Rocas presented a handwriting
expert, the trial court could not be bound by his opinion since the opposing
expert witness contradicted the same. Atty. Plagatas testimony remained
technically unrebutted.[11]
Finally, the RTC noted that Atty. Plagatas defective notarization of the
affidavit of consent did not invalidate the sale. The law does not require
spousal consent to be on the deed of sale to be valid. Neither does the
irregularity vitiate Rosarios consent. She personally signed the affidavit in the
presence of Atty. Plagata.[12]
On appeal, the Court of Appeals (CA) reversed the RTC decision. The CA
found sufficient evidence of forgery and did not give credence to Atty.
Plagatas testimony that he sawRosario sign the document in Quezon City. Its
jurat said differently. Also, upon comparing the questioned signature with
the specimen signatures, the CA noted significant variance between
them. That Tarciano and Rosario had been living separately for 30 years since
1958 also reinforced the conclusion that her signature had been forged.
Since Tarciano and Rosario were married in 1950, the CA concluded that
their property relations were governed by the Civil Code under which an
action for annulment of sale on the ground of lack of spousal consent may be
brought by the wife during the marriage within 10 years from the
transaction. Consequently, the action that the Rocas, her heirs, brought in
1997 fell within 10 years of the January 11, 1989 sale.
Considering, however, that the sale between the Fuentes spouses and
Tarciano was merely voidable, the CA held that its annulment entitled the
spouses to reimbursement of what they paid him plus legal interest
computed from the filing of the complaint until actual payment. Since the
Fuentes spouses were also builders in good faith, they were entitled under
Article 448 of the Civil Code to payment of the value of the improvements
they introduced on the lot. The CA did not award damages in favor of the
Rocas and deleted the award of attorneys fees to the Fuentes spouses.[13]
Unsatisfied with the CA decision, the Fuentes spouses came to this court by
petition for review.[14]
The Issues Presented
The case presents the following issues:
1. Whether or not Rosarios signature on the document of consent
to her husband Tarcianos sale of their conjugal land to the Fuentes spouses
was forged;
2. Whether or not the Rocas action for the declaration of nullity of
that sale to the spouses already prescribed; and
3. Whether or not only Rosario, the wife whose consent was not
had, could bring the action to annul that sale.
The Courts Rulings
First. The key issue in this case is whether or not Rosarios
signature on the document of consent had been forged. For, if the signature
were genuine, the fact that she gave her consent to her husbands sale of the
conjugal land would render the other issues merely academic.
The CA found that Rosarios signature had been forged. The CA
observed a marked difference between her signature on the affidavit of
consent[15] and her specimen signatures.[16] The CA gave no weight to Atty.
Plagatas testimony that he saw Rosario sign the document in Manila on
September 15, 1988 since this clashed with his declaration in the jurat that
Rosario signed the affidavit in Zamboanga City on January 11, 1989.
The Court agrees with the CAs observation that Rosarios signature
strokes on the affidavit appears heavy, deliberate, and forced. Her specimen
signatures, on the other hand, are consistently of a lighter stroke and more
fluid. The way the letters R and s were written is also remarkably
different. The variance is obvious even to the untrained eye.
Significantly, Rosarios specimen signatures were made at about
the time that she signed the supposed affidavit of consent. They were,
therefore, reliable standards for comparison. The Fuentes spouses presented
no evidence that Rosario suffered from any illness or disease that accounted
for the variance in her signature when she signed the affidavit of
consent. Notably, Rosario had been living separately from Tarciano for 30
years since 1958. And she resided so far away in Manila. It would have been
quite tempting for Tarciano to just forge her signature and avoid the risk that
she would not give her consent to the sale or demand a stiff price for it.
What is more, Atty. Plagata admittedly falsified the jurat of the
affidavit of consent. That jurat declared that Rosario swore to the document
and signed it in ZamboangaCity on January 11, 1989 when, as Atty. Plagata
testified, she supposedly signed it about four months earlier at her residence
in Paco, Manila on September 15, 1988. While a defective notarization will
merely strip the document of its public character and reduce it to a private
instrument, that falsified jurat, taken together with the marks of forgery in
the signature, dooms such document as proof of Rosarios consent to the sale
of the land. That the Fuentes spouses honestly relied on the notarized
affidavit as proof of Rosarios consent does not matter. The sale is still void
without an authentic consent.
Second. Contrary to the ruling of the Court of Appeals, the law
that applies to this case is the Family Code, not the Civil Code. Although
Tarciano and Rosario got married in 1950, Tarciano sold the conjugal
property to the Fuentes spouses on January 11, 1989, a few months after the
Family Code took effect on August 3, 1988.
When Tarciano married Rosario, the Civil Code put in place the system of
conjugal partnership of gains on their property relations. While its Article 165
made Tarciano the sole administrator of the conjugal partnership, Article
166[17] prohibited him from selling commonly owned real property without
his wifes consent. Still, if he sold the same without his wifes consent, the sale
is not void but merely voidable. Article 173 gave Rosario the right to have the
sale annulled during the marriage within ten years from the date of the
sale. Failing in that, she or her heirs may demand, after dissolution of the
marriage, only the value of the property that Tarciano fraudulently
sold. Thus:
Art. 173. The wife may, during the
marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any
contract of the husband entered into without her
consent, when such consent is required, or any act
or contract of the husband which tends to defraud
her or impair her interest in the conjugal
partnership property. Should the wife fail to
exercise this right, she or her heirs, after the
dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
But, as already stated, the Family Code took effect on August 3,
1988. Its Chapter 4 on Conjugal Partnership of Gains expressly superseded
Title VI, Book I of the Civil Code on Property Relations Between Husband and
Wife.[18] Further, the Family Code provisions were also made to apply to
already existing conjugal partnerships without prejudice to vested
rights.[19] Thus:
Art. 105. x x x The provisions of this Chapter shall also
apply to conjugal partnerships of gains already
established between spouses before the effectivity of
this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other
laws, as provided in Article 256. (n)
Consequently, when Tarciano sold the conjugal lot to the Fuentes spouses
on January 11, 1989, the law that governed the disposal of that lot was
already the Family Code.
In contrast to Article 173 of the Civil Code, Article 124 of the
Family Code does not provide a period within which the wife who gave no
consent may assail her husbands sale of the real property. It simply provides
that without the other spouses written consent or a court order allowing the
sale, the same would be void. Article 124 thus provides:
Art. 124. x x x In the event that one spouse
is incapacitated or otherwise unable to participate in
the administration of the conjugal properties, the
other spouse may assume sole powers of
administration. These powers do not include the
powers of disposition or encumbrance which must
have the authority of the court or the written consent
of the other spouse. In the absence of such authority
or consent, the disposition or encumbrance shall be
void. x x x
Under the provisions of the Civil Code governing contracts, a void
or inexistent contract has no force and effect from the very beginning. And
this rule applies to contracts that are declared void by positive provision of
law,[20] as in the case of a sale of conjugal property without the other spouses
written consent. A void contract is equivalent to nothing and is absolutely
wanting in civil effects. It cannot be validated either by ratification or
prescription.[21]
But, although a void contract has no legal effects even if no action
is taken to set it aside, when any of its terms have been performed, an action
to declare its inexistence is necessary to allow restitution of what has been
given under it.[22] This action, according to Article 1410 of the Civil Code does
not prescribe. Thus:
Art. 1410. The action or defense for the declaration of
the inexistence of a contract does not prescribe.
Here, the Rocas filed an action against the Fuentes spouses in
1997 for annulment of sale and reconveyance of the real property that
Tarciano sold without their mothers (his wifes) written consent. The passage
of time did not erode the right to bring such an action.
Besides, even assuming that it is the Civil Code that applies to the
transaction as the CA held, Article 173 provides that the wife may bring an
action for annulment of sale on the ground of lack of spousal consent during
the marriage within 10 years from the transaction. Consequently, the action
that the Rocas, her heirs, brought in 1997 fell within 10 years of the January
11, 1989 sale. It did not yet prescribe.
The Fuentes spouses of course argue that the RTC nullified the
sale to them based on fraud and that, therefore, the applicable prescriptive
period should be that which applies to fraudulent transactions, namely, four
years from its discovery. Since notice of the sale may be deemed given to the
Rocas when it was registered with the Registry of Deeds in 1989, their right
of action already prescribed in 1993.
But, if there had been a victim of fraud in this case, it would be
the Fuentes spouses in that they appeared to have agreed to buy the
property upon an honest belief thatRosarios written consent to the sale was
genuine. They had four years then from the time they learned that her
signature had been forged within which to file an action to annul the sale and
get back their money plus damages. They never exercised the right.
If, on the other hand, Rosario had agreed to sign the document of
consent upon a false representation that the property would go to their
children, not to strangers, and it turned out that this was not the case, then
she would have four years from the time she discovered the fraud within
which to file an action to declare the sale void. But that is not the case
here. Rosario was not a victim of fraud or misrepresentation. Her consent
was simply not obtained at all. She lost nothing since the sale without her
written consent was void. Ultimately, the Rocas ground for annulment is not
forgery but the lack of written consent of their mother to the sale. The
forgery is merely evidence of lack of consent.
Third. The Fuentes spouses point out that it was to Rosario,
whose consent was not obtained, that the law gave the right to bring an
action to declare void her husbands sale of conjugal land. But
here, Rosario died in 1990, the year after the sale. Does this mean that the
right to have the sale declared void is forever lost?
The answer is no. As stated above, that sale was void from the
beginning. Consequently, the land remained the property of Tarciano and
Rosario despite that sale. When the two died, they passed on the ownership
of the property to their heirs, namely, the Rocas.[23] As lawful owners, the
Rocas had the right, under Article 429 of the Civil Code, to exclude any
person from its enjoyment and disposal.
In fairness to the Fuentes spouses, however, they should be
entitled, among other things, to recover from Tarcianos heirs, the Rocas,
the P200,000.00 that they paid him, with legal interest until fully paid,
chargeable against his estate.
Further, the Fuentes spouses appear to have acted in good faith in
entering the land and building improvements on it. Atty. Plagata, whom the
parties mutually entrusted with closing and documenting the transaction,
represented that he got Rosarios signature on the affidavit of consent. The
Fuentes spouses had no reason to believe that the lawyer had violated his
commission and his oath. They had no way of knowing that Rosario did not
come to Zamboanga to give her consent. There is no evidence that they had
a premonition that the requirement of consent presented some
difficulty. Indeed, they willingly made a 30 percent down payment on the
selling price months earlier on the assurance that it was forthcoming.
Further, the notarized document appears to have comforted the
Fuentes spouses that everything was already in order when Tarciano
executed a deed of absolute sale in their favor on January 11, 1989. In fact,
they paid the balance due him. And, acting on the documents submitted to
it, the Register of Deeds of Zamboanga City issued a new title in the names of
the Fuentes spouses. It was only after all these had passed that the spouses
entered the property and built on it. He is deemed a possessor in good faith,
said Article 526 of the Civil Code, who is not aware that there exists in his
title or mode of acquisition any flaw which invalidates it.
As possessor in good faith, the Fuentes spouses were under no
obligation to pay for their stay on the property prior to its legal interruption
by a final judgment against them.[24] What is more, they are entitled under
Article 448 to indemnity for the improvements they introduced into the
property with a right of retention until the reimbursement is made. Thus:
Art. 448. The owner of the land on which anything
has been built, sown or planted in good faith, shall
have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity
provided for in Articles 546 and 548, or to oblige the
one who built or planted to pay the price of the land,
and the one who sowed, the proper rent.However,
the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to
appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of
the lease and in case of disagreement, the court shall
fix the terms thereof. (361a)
The Rocas shall of course have the option, pursuant to Article 546
of the Civil Code,[25] of indemnifying the Fuentes spouses for the costs of the
improvements or paying the increase in value which the property may have
acquired by reason of such improvements.
WHEREFORE, the Court DENIES the petition and AFFIRMS WITH
MODIFICATION the decision of the Court of Appeals in CA-G.R. CV 00531
dated February 27, 2007as follows:
1. The deed of sale dated January 11, 1989 that Tarciano T. Roca
executed in favor of Manuel O. Fuentes, married to Leticia L. Fuentes, as well
as the Transfer Certificate of Title T-90,981 that the Register of Deeds of
Zamboanga City issued in the names of the latter spouses pursuant to that
deed of sale are DECLARED void;
2. The Register of Deeds of Zamboanga City is DIRECTED to
reinstate Transfer Certificate of Title 3533 in the name of Tarciano T. Roca,
married to Rosario Gabriel;
3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie
R. Cristobal, and Pilar Malcampo are ORDERED to pay petitioner spouses
Manuel and Leticia Fuentes the P200,000.00 that the latter paid Tarciano T.
Roca, with legal interest from January 11, 1989 until fully paid, chargeable
against his estate;
4. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie
R. Cristobal, and Pilar Malcampo are further ORDERED, at their option, to
indemnify petitioner spouses Manuel and Leticia Fuentes with their expenses
for introducing useful improvements on the subject land or pay the increase
in value which it may have acquired by reason of those improvements, with
the spouses entitled to the right of retention of the land until the indemnity
is made; and

5. The RTC of Zamboanga City from which this case originated
is DIRECTED to receive evidence and determine the amount of indemnity to
which petitioner spouses Manuel and Leticia Fuentes are entitled.
SO ORDERED.
ERLINDA FRANCISCO, doing business in the name and style of Cebu
Fountainhead Bakeshop and JULIANA
PAMAONG, petitioners, vs. RICARDO FERRER, JR.,
ANNETTE FERRER, ERNESTO LO AND REBECCA
LO, respondents.
DECISION
PARDO, J.:
Appeal via certiorari[1] taken by petitioners from the decision of the
Court of Appeals[2] increasing the trial courts award of moral damages to
Ricardo Ferrer, Jr., Annette Ferrer, Ernesto Lo and Rebecca Lo to two
hundred fifty thousand pesos (P250,000.00) and awarding exemplary damages
in the amount of one hundred thousand pesos (P100,000.00), in addition to the
following:
1. The cost of the wedding cake in the amount of P3,175.00;
2. Attorneys fees in the amount of P10,000.00; and
3. Cost of litigation.
The facts, as found by the Court of Appeals,[3] are as follows:
On November 19, 1992 Mrs. Rebecca Lo and her daughter Annette Ferrer
ordered a three layered cake from Fountainhead Bakeshop, Mango Avenue
Branch. It was then agreed that the wedding cake shall be delivered at 5:00
oclock in the afternoon at the Cebu Country Club, Cebu City, stating clearly
that the wedding is scheduled on December 14, 1992.
Plaintiffs made their first deposit in the amount of P1,000.00 on November
19, 1992 and two weeks thereafter made a full payment on the remaining
balance.
On the day of the wedding, December 14, 1992, plaintiffs arrived at the Cebu
Country club around 6:00 oclock in the evening. They immediately notice the
absence of the wedding cake.
At 7:00 oclock in the evening they made a follow-up call to Fountainhead
Bakeshop and was informed that it was probably late because of the traffic.
At 8:00 oclock they were informed that no wedding cake will be delivered
because the order slip got lost. Plaintiffs were then compelled to buy the only
available cake at the Cebu Country Club which was a sans rival. Even though
they felt that it was a poor substitute to a wedding cake, the cutting of the cake
is always a part of the ceremony.
At 10:00 oclock in the evening, the wedding cake arrived but plaintiffs
declined to accept it, besides their order was a three-layered cake and what
was actually delivered was a two-layered one.
Subsequently, defendant Erlinda Francisco sent a letter of apology
accompanied with a P5,000.00 check, however, the same was declined by
plaintiffs because they felt it was inadequate.
Two weeks after the wedding, defendant Erlinda Francisco called Mrs.
Rebecca Lo and apologized.
Ricardo Ferrer, son-in-law of Rebecca Lo corroborated the latters testimony,
stating that two weeks after the wedding, as a result of the non-delivery of the
wedding cake, Ramon Montinola, the son-in-law of Erlinda Francisco, went to
Rebecca Los residence and offered the sum of P5,000.00 to indemnify for the
damage done, but it was rejected.[4]
On March 12, 1993, respondents filed with the Regional Trial Court,
Cebu City an action for breach of contract with damages against petitioners. [5]
After due trial, on May 19, 1995, the trial court rendered a decision in
favor of plaintiffs [herein defendants], the dispositive portion of which reads
as follows:
THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of
the plaintiffs and against Erlinda Francisco.
Directing the latter to pay the former the following:
1. The cost of the wedding cake in the amount of P3,175.00;
2. Moral damages in the amount of P30,000.00;
3. Attorneys fees in the amount of P10,000.00; and
4. Cost of litigation.
SO ORDERED.[6]
On May 25, 1995, petitioners appealed to the Court of Appeals. [7]
After due proceedings, on July 05, 1999, the Court of Appeals
promulgated its decision modifying the appealed decision as set out in the
opening paragraph of this opinion.[8]
Hence, this appeal.[9]
The issues raised are (1) whether the Court of Appeals erred in
affirming the trial courts award of moral damages and increasing the amount
from thirty thousand (P30,000.00) to two hundred fifty thousand pesos
(P250,000.00); and (2) whether the Court of Appeals was justified in
awarding in addition to moral damages, exemplary damages of one hundred
thousand pesos (P100,000.00).
Petitioners submit that the Court of Appeals and the trial court erred in
awarding moral damages in favor of respondents because moral damages are
recoverable in breach of contract cases only where the breach was palpably
wanton, reckless, malicious, in bad faith, oppressive or abusive.[10]
We agree. To recover moral damages in an action for breach of
contract, the breach must be palpably wanton, reckless, malicious, in bad
faith, oppressive or abusive.[11]
Under the provisions of this law,[12] in culpa contractual or breach of
contract, moral damages may be recovered when the defendant acted in bad
faith or was guilty of gross negligence (amounting to bad faith) or in wanton
disregard of his contractual obligation and, exceptionally, when the act of
breach of contract itself is constitutive of tort resulting in physical injuries. [13]
Moral damages may be awarded in breaches of contracts where the
defendant acted fraudulently or in bad faith.[14]
Bad faith does not simply connote bad judgment or negligence, it
imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong, a breach of known duty through some motive or interest or ill will that
partakes of the nature of fraud.[15]
In this case, [w]e find no such fraud or bad faith.[16]
Moral damages are in the category of an award designed to compensate
the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer.[17]
The person claiming moral damages must prove the existence of bad
faith by clear and convincing evidence for the law always presumes good
faith. It is not enough that one merely suffered sleepless nights, mental
anguish, serious anxiety as the result of the actuations of the other
party. Invariably such action must be shown to have been willfully done in
bad faith or with ill motive.[18] Mere allegations of besmirched reputation,
embarrassment and sleepless nights are insufficient to warrant an award for
moral damages. It must be shown that the proximate cause thereof was the
unlawful act or omission of the [private respondent] petitioners. [19]
An award of moral damages would require certain conditions to be met,
to wit: (1) first, there must be an injury, whether physical, mental or
psychological, clearly sustained by the claimant; (2) second, there must be
culpable act or omission factually established; (3) third, the wrongful act or
omission of the defendant is the proximate cause of the injury sustained by the
claimant; and (4) fourth, the award of damages is predicated on any of the
cases stated in Article 2219 of the Civil Code. 21
It must again stressed that moral damages are emphatically not
intended to enrich a plaintiff at the expense of the defendant. 22 When
awarded, moral damages must not be palpably and scandalously excessive as
to indicate that it was the result of passion, prejudice or corruption on the part
of the trial court judge23 or appellate court justices. 24
In the same fashion, to warrant the award of exemplary damages, [t]he
wrongful act must be accompanied by bad faith, and an award of damages
would be allowed only if the guilty party acted in a wanton, fraudulent,
reckless or malevolent manner. 25
The requirements of an award of exemplary damages are: (1) they may
be imposed by way of example in addition to compensatory damages, and
only after the claimants right to them has been established; (2) that they can
not be recovered as a matter of right, their determination depending upon the
amount of compensatory damages that may be awarded to the claimant; (3)
the act must be accompanied by bad faith or done in a wanton, fraudulent,
oppressive or malevolent manner. 26
Nevertheless, the facts show that when confronted with their failure to
deliver on the wedding day the wedding cake ordered and paid for, petitioners
gave the lame excuse that delivery was probably delayed because of the
traffic, when in truth, no cake could be delivered because the order slip got
lost. For such prevarication, petitioners must be held liable for nominal
damages for insensitivity, inadvertence or inattention to their customers
anxiety and need of the hour. Nominal damages are recoverable where a legal
right is technically violated and must be vindicated against an invasion that
has produced no actual present loss of any kind or where there has been a
breach of contract and no substantial injury or actual damages whatsoever
have been or can be shown. 27Nominal damages may be awarded to a plaintiff
whose right has been violated or invaded by the defendant, for the purpose of
vindicating or recognizing that right, not for indemnifying the plaintiff for any
loss suffered. 28
WHEREFORE, the Court GRANTS the petition. The Court
REVERSES the decision of the Court of Appeals in CA-G. R. CV No. 50894,
and in lieu thereof, sentences petitioners to pay respondents, as follows:
1. The cost of the wedding cake in the amount of P3, 175.00;
2. Nominal damages in the amount of P10,000.00;
3. Attorneys fees in the amount of P10,000.00; and
4. Costs of litigation.
 No costs in this instance.
G.R. No. 149615 August 29, 2006
IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA
BUENAVENTURA MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the February 26, 2001
Decision 2 of the Court of Appeals in CA-G.R. CV No. 59321 affirming
with modification the August 12, 1996 Decision 3 of the Regional Trial
Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862, which
terminated the regime of absolute community of property between
petitioner and respondent, as well as the Resolution 4 dated August 13,
2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller
were married in Hamburg, Germany on September 22, 1989. The
couple resided in Germany at a house owned by respondent’s parents
but decided to move and reside permanently in the Philippines in 1992.
By this time, respondent had inherited the house in Germany from his
parents which he sold and used the proceeds for the purchase of a
parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the
construction of a house amounting to P2,300,000.00. The Antipolo
property was registered in the name of petitioner under Transfer
Certificate of Title No. 219438 5 of the Register of Deeds of Marikina,
Metro Manila.
Due to incompatibilities and respondent’s alleged womanizing,
drinking, and maltreatment, the spouses eventually separated. On
September 26, 1994, respondent filed a petition 6 for separation of
properties before the Regional Trial Court of Quezon City.
On August 12, 1996, the trial court rendered a decision which
terminated the regime of absolute community of property between the
petitioner and respondent. It also decreed the separation of properties
between them and ordered the equal partition of personal properties
located within the country, excluding those acquired by gratuitous title
during the marriage. With regard to the Antipolo property, the court
held that it was acquired using paraphernal funds of the respondent.
However, it ruled that respondent cannot recover his funds because
the property was purchased in violation of Section 7, Article XII of the
Constitution. Thus –
However, pursuant to Article 92 of the Family Code, properties
acquired by gratuitous title by either spouse during the marriage shall
be excluded from the community property. The real property, therefore,
inherited by petitioner in Germany is excluded from the absolute
community of property of the herein spouses. Necessarily, the
proceeds of the sale of said real property as well as the personal
properties purchased thereby, belong exclusively to the petitioner.
However, the part of that inheritance used by the petitioner for
acquiring the house and lot in this country cannot be recovered by the
petitioner, its acquisition being a violation of Section 7, Article XII of the
Constitution which provides that "save in cases of hereditary
succession, no private lands shall be transferred or conveyed except to
individuals, corporations or associations qualified to acquire or hold
lands of the public domain." The law will leave the parties in the
situation where they are in without prejudice to a voluntary partition by
the parties of the said real property. x x x
xxxx
As regards the property covered by Transfer Certificate of Title No.
219438 of the Registry of Deeds of Marikina, Metro Manila, situated in
Antipolo, Rizal and the improvements thereon, the Court shall not
make any pronouncement on constitutional grounds. 7
Respondent appealed to the Court of Appeals which rendered the
assailed decision modifying the trial court’s Decision. It held that
respondent merely prayed for reimbursement for the purchase of the
Antipolo property, and not acquisition or transfer of ownership to him. It
also considered petitioner’s ownership over the property in trust for the
respondent. As regards the house, the Court of Appeals ruled that
there is nothing in the Constitution which prohibits respondent from
acquiring the same. The dispositive portion of the assailed decision
reads:
WHEREFORE, in view of the foregoing, the Decision of the lower court
dated August 12, 1996 is hereby MODIFIED. Respondent Elena
Buenaventura Muller is hereby ordered to REIMBURSE the petitioner
the amount of P528,000.00 for the acquisition of the land and the
amount of P2,300,000.00 for the construction of the house situated in
Atnipolo, Rizal, deducting therefrom the amount respondent spent for
the preservation, maintenance and development of the aforesaid real
property including the depreciation cost of the house or in the
alternative to SELL the house and lot in the event respondent does not
have the means to reimburse the petitioner out of her own money and
from the proceeds thereof, reimburse the petitioner of the cost of the
land and the house deducting the expenses for its maintenance and
preservation spent by the respondent. Should there be profit, the same
shall be divided in proportion to the equity each has over the property.
The case is REMANDED to the lower court for reception of evidence
as to the amount claimed by the respondents for the preservation and
maintenance of the property.
SO ORDERED. 8
Hence, the instant petition for review raising the following issues:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE RESPONDENT HEREIN IS ENTITLED TO
REIMBURSEMENT OF THE AMOUNT USED TO PURCHASE THE
LAND AS WELL AS THE COSTS FOR THE CONSTRUCTION OF
THE HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED AN
ACT DONE WHICH OTHERWISE COULD NOT BE DIRECTLY x x x
DONE, WITHOUT DOING VIOLENCE TO THE CONSTITUTIONAL
PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM
ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN
THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
RESPONDENT’S CAUSE OF ACTION WHICH IS ACTUALLY A
DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT
IN QUESTION, CLOTHED UNDER THE GUISE OF CLAIMING
REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified to
own private lands in the Philippines; that respondent was aware of the
constitutional prohibition but circumvented the same; and that
respondent’s purpose for filing an action for separation of property is to
obtain exclusive possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer of ownership of
the Antipolo property but merely reimbursement; that the funds paid by
him for the said property were in consideration of his marriage to
petitioner; that the funds were given to petitioner in trust; and that
equity demands that respondent should be reimbursed of his personal
funds.
The issue for resolution is whether respondent is entitled to
reimbursement of the funds used for the acquisition of the Antipolo
property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from
acquiring lands of the public domain. Hence, they are also disqualified
from acquiring private lands. 9 The primary purpose of the
constitutional provision is the conservation of the national patrimony. In
the case of Krivenko v. Register of Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution, "natural resources,
with the exception of public agricultural land, shall not be alienated,"
and with respect to public agricultural lands, their alienation is limited to
Filipino citizens. But this constitutional purpose conserving agricultural
resources in the hands of Filipino citizens may easily be defeated by
the Filipino citizens themselves who may alienate their agricultural
lands in favor of aliens. It is partly to prevent this result that section 5 is
included in Article XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private agricultural
land will be transferred or assigned except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain
in the Philippines."
This constitutional provision closes the only remaining avenue through
which agricultural resources may leak into aliens’ hands. It would
certainly be futile to prohibit the alienation of public agricultural lands to
aliens if, after all, they may be freely so alienated upon their becoming
private agricultural lands in the hands of Filipino citizens. x x x
xxxx
If the term "private agricultural lands" is to be construed as not
including residential lots or lands not strictly agricultural, the result
would be that "aliens may freely acquire and possess not only
residential lots and houses for themselves but entire subdivisions, and
whole towns and cities," and that "they may validly buy and hold in
their names lands of any area for building homes, factories, industrial
plants, fisheries, hatcheries, schools, health and vacation resorts,
markets, golf courses, playgrounds, airfields, and a host of other uses
and purposes that are not, in appellant’s words, strictly agricultural."
(Solicitor General’s Brief, p. 6.) That this is obnoxious to the
conservative spirit of the Constitution is beyond question.
Respondent was aware of the constitutional prohibition and expressly
admitted his knowledge thereof to this Court. 11 He declared that he
had the Antipolo property titled in the name of petitioner because of the
said prohibition. 12 His attempt at subsequently asserting or claiming a
right on the said property cannot be sustained.
The Court of Appeals erred in holding that an implied trust was created
and resulted by operation of law in view of petitioner’s marriage to
respondent. Save for the exception provided in cases of hereditary
succession, respondent’s disqualification from owning lands in the
Philippines is absolute. Not even an ownership in trust is allowed.
Besides, where the purchase is made in violation of an existing statute
and in evasion of its express provision, no trust can result in favor of
the party who is guilty of the fraud. 13 To hold otherwise would allow
circumvention of the constitutional prohibition.
Invoking the principle that a court is not only a court of law but also a
court of equity, is likewise misplaced. It has been held that equity as a
rule will follow the law and will not permit that to be done indirectly
which, because of public policy, cannot be done directly. 14 He who
seeks equity must do equity, and he who comes into equity must come
with clean hands. The latter is a frequently stated maxim which is also
expressed in the principle that he who has done inequity shall not have
equity. It signifies that a litigant may be denied relief by a court of
equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy in issue. 15
Thus, in the instant case, respondent cannot seek reimbursement on
the ground of equity where it is clear that he willingly and knowingly
bought the property despite the constitutional prohibition.
Further, the distinction made between transfer of ownership as
opposed to recovery of funds is a futile exercise on respondent’s part.
To allow reimbursement would in effect permit respondent to enjoy the
fruits of a property which he is not allowed to own. Thus, it is likewise
proscribed by law. As expressly held in Cheesman v. Intermediate
Appellate Court: 16
Finally, the fundamental law prohibits the sale to aliens of residential
land. Section 14, Article XIV of the 1973 Constitution ordains that,
"Save in cases of hereditary succession, no private land shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain."
Petitioner Thomas Cheesman was, of course, charged with knowledge
of this prohibition. Thus, assuming that it was his intention that the lot
in question be purchased by him and his wife, he acquired no right
whatever over the property by virtue of that purchase; and in
attempting to acquire a right or interest in land, vicariously and
clandestinely, he knowingly violated the Constitution; the sale as to him
was null and void. In any event, he had and has no capacity or
personality to question the subsequent sale of the same property by
his wife on the theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal property. To sustain
such a theory would permit indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would
accord to the alien husband a not insubstantial interest and right over
land, as he would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit him to
have.
As already observed, the finding that his wife had used her own money
to purchase the property cannot, and will not, at this stage of the
proceedings be reviewed and overturned. But even if it were a fact that
said wife had used conjugal funds to make the acquisition, the
considerations just set out to militate, on high constitutional grounds,
against his recovering and holding the property so acquired, or any
part thereof. And whether in such an event, he may recover from his
wife any share of the money used for the purchase or charge her with
unauthorized disposition or expenditure of conjugal funds is not now
inquired into; that would be, in the premises, a purely academic
exercise. (Emphasis added)
WHEREFORE, in view of the foregoing, the instant petition is
GRANTED. The Decision dated February 26, 2001 of the Court of
Appeals in CA-G.R. CV No. 59321 ordering petitioner Elena
Buenaventura Muller to reimburse respondent Helmut Muller the
amount of P528,000 for the acquisition of the land and the amount of
P2,300,000 for the construction of the house in Antipolo City, and the
Resolution dated August 13, 2001 denying reconsideration thereof, are
REVERSED and SET ASIDE. The August 12, 1996 Decision of the
Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-
21862 terminating the regime of absolute community between the
petitioner and respondent, decreeing a separation of property between
them and ordering the partition of the personal properties located in the
Philippines equally, is REINSTATED.
SO ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice
DR. LORNA VILLA, G.R. No. 162028
Petitioner,
Present:
QUISUMBING, J.,
- versus - YNARES-SANTIAGO,
Chairperson,
AUSTRIA-MARTINEZ,
NACHURA, and
HEIRS OF ENRIQUE ALTAVAS, REYES, JJ.
namely: Enrique Altavas II,
Erlinda Liboro and Maria A. de Jesus, Promulgated:
Respondents. July 14, 2008
x---------------------------------------------------------x
DECISION
AUSTRIA-MARTINEZ, J.:
Assailed in the present Petition for Review on Certiorari under Rule 45 of the Rules of Court
is the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 63123 promulgated on
January 31, 2003 which affirmed the Orders dated December 13, 2000[2] and January 19,
2001[3] of the Regional Trial Court (RTC) of Roxas City, Branch 16; and the CA Resolution[4] of
January 14, 2004, denying herein petitioner's Motion for Reconsideration.
The facts of the case are as follows:
On November 26, 1997, Enrique Altavas II, Erlinda Liboro and Maria de Jesus
(respondents), in their capacity as heirs of Enrique Altavas (Enrique), filed a
Complaint[5] for ejectment with the 2nd Municipal Circuit Trial Court (MCTC) of Pontevedra-
Panay in the Province of Capiz against Dr. Lorna Villa (petitioner) together with
Virginia Bermejo (Virginia) and Rolito Roxas (Roxas), alleging that respondents are heirs of
the deceased Enrique, the registered owner of two parcels of fishpond designated as Lot
No. 2816 and Lot No. 2817, who have been in actual possession through their
administrator, overseer and representative, the late councilor Mussolini C. Bermejo, the
husband of Virgina; that on January 31, 1994, after the death of Mussolini, Virgina took
over the possession of the premises in question without the consent or permission of
respondents; that Virginia leased in favor of petitioner a portion of about five hectares of
Lot No. 2816, without any right whatsoever to do so; that on October 21, 1997,
respondents through counsel formally sent demand letters to Virginia and petitioner to
vacate the respective portions occupied by them; and that despite said demands, they
persisted in continuing their illegal possession of the premises.
Petitioner and Virginia filed their respective Answers to the Complaint.
On her part, petitioner contended that: she is in lawful possession of the area possessed
and developed by her as lessee; she is a possessor in good faith; the subject lot was leased
to her by a person who was in actual possession thereof, and who represented herself as
the owner of the said lot; and respondents have no cause of action against her, as they
(respondents) are no longer the owners of the said lots, it appearing that the same were
already conveyed by the original owners during their lifetime; and the complaint was
premature, as there was still a pending case in court involving the ownership of the
properties in question.[6]
After preliminary conference and submission by the parties of their respective affidavits,
evidence and position papers, the MCTC rendered a Decision with the
following dispositive portion:
 WHEREFORE, in the light of the foregoing circumstances,
judgment is hereby rendered in favor of plaintiffs [respondents],
declaring them as rightful owners and legal possessors of Lot.
Nos. 2816 and 2817 portion of which are possessed by
defendants [petitioner and Virginia], ordering the following:
1. a) To defendant Virginia Bermejo to vacate
the premises of portion of Lot no. 2817
presently occupied by her,
surrendering peacefully its possession
to plaintiffs;
b) Payment of Ten Thousand (P10,000.00) Pesos
per hectare a year as compensation to
plaintiff's deprivation of possession of
the property reckoned from October
21, 1997 until possession is returned;
c) The payment of attorney's fees in the amount of
Fifty Thousand (P50,000.00) Pesos and costs
of suit.
2. To defendant Lorna Villa to vacate the premises
over portion of Lot No. 2817 she occupies
with an area of five (5) hectares and to
peacefully return its possession to plaintiffs,
as well as pay the amount of Ten Thousand
(10,000.00) Pesos per hectare a year
reckoned from the date of demand until
possession is returned to plaintiffs;
xxxx
c) Payment of attorney's fees in the amount of Fifty
Thousand (P50,000.00) Pesos and
costs of suit.
SO DECIDED.[7]
Aggrieved by the Decision of the MCTC, petitioner and Virginia filed an appeal with the RTC
of Roxas City.
However, in its Order dated December 13, 2000, the RTC dismissed the appeal of
petitioner pursuant to Section 7, Rule 40 of the Rules of Court for her failure to file her
appeal memorandum.Virginia's appeal, on the other hand, was dismissed because of her
withdrawal of her appeal.
Petitioner filed a Motion for Reconsideration but the same was denied by the RTC in its
Order of January 19, 2001.
Petitioner then filed a special civil action for certiorari with the CA contending that the RTC
committed grave abuse of discretion in dismissing her appeal on technical ground.
On January 31, 2003, the CA promulgated its presently assailed Decision dismissing the
petition for certiorari and affirming the December 13, 2000 and January 19, 2001 Orders of
the RTC.
Petitioner moved for reconsideration but her motion was denied by the CA in its
Resolution dated January 14, 2004.
Hence, the present petition raising the following issues:
I denied petitioner's appeal for her failure to timely file her appeal memorandum.
WHETHER OR NOT THE SUBMISSION OF POSITION PAPER WILL
SUFFICE TO SUPPORT A DECISION IN FAVOR OF RESPONDENTS
IN THE EJECTMENT CASE?
II
WHETHER OR NOT RESPONDENTS WHO DID NOT HAVE
ACTUAL, PHYSICAL POSSESSION OF THE LOT IN QUESTION FOR
YEARS RECOVER POSSESSION THEREOF THROUGH THE
SUMMARY REMEDY OF EJECTMENT? WILL AN ACTION FOR
EJECTMENT LIE AGAINST PETITIONER?
III
WHETHER OR NOT THE AWARD OF ATTORNEY'S FEES
EXCEEDING THE AMOUNT OF P20,000.00 LEGAL?
IV
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
AFFIRMING THE DECISION OF THE RTC, BR. 16.[8]
Petitioner contends that respondents failed to comply with the provisions of Section 10,
Rule 70 of the Rules of Court requiring the submission of affidavits of witnesses and other
evidence on the factual issues of the case; that the complaint, the exhibits marked by
respondents and their position paper do not constitute preponderance of evidence in their
favor, especially in view of the fact that the allegations in respondents' complaint
were controverted by petitioner; and that since there is no sufficient evidence to support
respondents' complaint, the MCTC committed error when it rendered judgment in favor of
respondents.
Petitioner also avers that respondents failed to establish that they are in actual possession
of the lots in question; that, in fact, they have not proven that they are the owners of the
said properties; and that petitioner has a valid contract of lease with Virginia which entitles
her to the possession of Lot No. 2817.
Petitioner argues that respondents have no cause of action against her as they are
not lessors, vendors or persons with whom petitioner has a contract, express or implied
and that respondents failed to aver facts constitutive of either forcible entry or
unlawful detainer. As such, the MCTC did not acquire jurisdiction over the case.
Petitioner further contends that the MCTC erred in awarding attorney's fees exceeding the
amount of P20,000.00 because the Rules on Summary Procedure clearly provide that
in ejectment cases, irrespective of the amount of damages or unpaid rentals sought to be
recovered, the attorney's fees to be awarded should not exceed P20,000.00.
Lastly, petitioner avers that the CA erred in ruling that the RTC did not commit grave abuse
of discretion in denying petitioner's appeal considering that the latter's failure to submit her
appeal memorandum on time was due to a fortuitous event. Petitioner cites jurisprudence
holding that technical rules should be liberally construed in favor of the parties so as not to
frustrate substantial justice or bar vindication of a legitimate grievance.
Respondents counter that the Decision of the MCTC is based on the titles over the
disputed lots which they presented in evidence; and that the award of damages is
supported by the stipulations in the Lease Contract entered into between petitioner and
Virginia.
Respondents assert that the findings of fact by lower courts are not subject to review by
this Court. Moreover, the findings of fact by the MCTC and the CA are based on stipulations
of facts made by the parties as contained in the Pre-Trial Order of the MCTC
dated September 10, 1999 and on the parties admissions in their respective pleadings.
The petition is unmeritorious.
However, certain clarification must first be made. While respondents in their Complaint
filed with the RTC refer to Lot No. 2816, which is allegedly occupied by herein petitioner,
the MCTC and the CA, in their respective Decisions, found that the disputed property
occupied by petitioner is Lot No. 2817. Respondents never questioned this finding in any of
their pleadings in the present petition. Hence, insofar as the Court is concerned, the subject
property is Lot No. 2817.
The Court will resolve the last issue ahead of the first three issues. The Court finds that the
CA did not err in ruling that the RTC did not commit grave abuse of discretion when it
Section 7(b), Rule 40 of the Rules of Court provides:
Sec. 7. Procedure in the Regional Trial Court. - x x x
(b) Within fifteen (15) days from such notice, it shall be the duty
of the appellant to submit a memorandum which shall briefly
discuss the errors imputed to the lower court, a copy of which
shall be furnished by him to the adverse party. Within fifteen (15)
 days from receipt of the appellant's memorandum,
the appellee may file his memorandum. Failure of the appellant
to file a memorandum shall be a ground for dismissal of the
appeal. (Emphasis supplied)
Rules of procedure do not exist for the convenience of the litigants.[9] These rules are
established to provide order to and enhance the efficiency of our judicial system.[10] They
are not to be trifled with lightly or overlooked by the mere expedience of invoking
substantial justice.[11] In a long line of decisions, this Court has repeatedly held that, while
the rules of procedure are liberally construed, the provisions on reglementary periods are
strictly applied, indispensable as they are to the prevention of needless delays, and are
necessary to the orderly and speedy discharge of judicial business.[12] The same is true with
respect to the rules on the manner of and periods for perfecting appeals.[13]
In Enriquez v. Court of Appeals,[14] the Court further elucidated on the meaning and
consequence of the provisions of Section 7(b), Rule 40 of the Rules of Court, to wit:
Rule 40, Section 7 (b) provides that, it shall be the duty of the
appellant to submit a memorandum and failure to do so shall be
a ground for dismissal of the appeal. The use of the word shall in
a statute or rule expresses what is mandatory and compulsory.
Further, the Rule imposes upon an appellant the duty to submit
his memorandum. A duty is a legal or moral obligation,
mandatory act, responsibility, charge, requirement, trust, chore,
function, commission, debt, liability, assignment, role, pledge,
dictate, office, (and) engagement. Thus, under the express
mandate of said Rule, the appellant is duty-bound to submit his
memorandum on appeal. Such submission is not a matter of
discretion on his part. His failure to comply with this mandate or
to perform said duty will compel the RTC to dismiss his appeal.
In rules of procedure, an act which is jurisdictional, or of the
essence of the proceedings, or is prescribed for the protection or
benefit of the party affected is mandatory. As private respondent
points out, in appeals from inferior courts to the RTC, the
appellants brief is mandatory for the assignment of errors is vital
to the decision of the appeal on the merits. This is because on
appeal only errors specifically assigned and properly argued in
the brief or memorandum will be considered, except those
affecting jurisdiction over the subject matter as well as plain and
clerical errors. Otherwise stated, an appellate court has no
power to resolve an unassigned error, which does not affect the
courts jurisdiction over the subject matter, save for a plain or
clerical error.
It is true that the Rules should be interpreted so as to give
litigants ample opportunity to prove their respective claims and
that a possible denial of substantial justice due to legal
technicalities should be avoided. But it is equally true that an
appeal being a purely statutory right, an appealing party must
strictly comply with the requisites laid down in the Rules of Court.
In other words, he who seeks to avail of the right to appeal must
play by the rules. This the petitioner failed to do when she did
not submit her memorandum of appeal in Civil Case No. 12044
as required by Rule 40, Section 7 of the 1997 Rules of Civil
Procedure. That she lost her case is not the trial courts fault but
her own.[15]
The aforequoted ruling of the Court was reiterated in the more recent case of Gonzales v.
Gonzales.[16]
In the instant case, upon motion of petitioner, she was granted by the RTC an additional 45
days, within which to file the appeal memorandum, with a warning that the period is non-
extendible.The last day for filing the memorandum is December 8, 2000. The Court is not
persuaded by petitioner's contention that because of a typhoon that hit Roxas City, her
counsel was not able to go to work on December 7, 2000 and finish the preparation of her
memorandum. In the first place, the 45-day extension given to petitioner was an ample
period for her counsel to prepare the required memorandum, such that the failure of the
latter to go to work on December 7, 2000 was not a sufficient justification for the RTC to
grant another extension, especially in light of the warning that the 45-day period is non-
extendible. Secondly, petitioner's counsel was already able to go to work on December 8,
2000 and, instead of filing a motion for extension, she should have finished the preparation
of the memorandum. She had until the closing of government offices on that day to finish
and file the said memorandum. Yet, she failed to do so.
The Court is also not persuaded by petitioner's contention that her failure to submit her
appeal memorandum was because her counsel also had to prepare a memorandum
required by this Court in another case which was due for submission on December 10,
2000. Petitioner's counsel should have prioritized the preparation of the memorandum
required by the RTC because of its earlier deadline.
Clearly, petitioner's counsel is guilty of simple negligence. Settled is the rule that the
negligence of counsel binds the client.[17] This is based on the rule that any act performed by
a lawyer within the scope of his general or implied authority is regarded as an act of his
client.[18] Consequently, the mistake or negligence of petitioners' counsel may result in the
rendition of an unfavorable judgment against them.[19] It is true that there are recognized
exceptions to this rule, as in cases where reckless or gross negligence of counsel deprives
the client of due process of law, or when its application results in the outright deprivation of
one's property through a technicality.[20] However, none of these exceptions have been
shown to be present in the instant case. Hence, the negligence of her counsel binds
petitioner, and she cannot insist that the principle of liberal interpretation of the rules of
procedure be applied to her case.
In any event, petitioners claim over the subject property has no leg to stand on.
With respect to the first and second issues, the CA sustained the following findings of the
MCTC, to wit: that respondents' predecessor, Enrique Altavas, was not divested of his
ownership of the subject lots; that the titles over the subject properties remain in his name;
that, not being the owner or administrator of the said lots, Virginia has no right to enter
into any contract for the lease of the said properties; and that petitioner's possession of
portions of the disputed properties is merely upon tolerance of respondents.
Settled is the rule that the trial courts findings of fact, especially when affirmed by the CA,
are generally binding and conclusive upon this Court.[21] There are recognized exceptions to
this rule, among which are: (1) the conclusion is grounded on speculations, surmises or
conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is
grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the
findings of fact are conflicting; (6) there is no citation of specific evidence on which the
factual findings are based; (7) the finding of absence of facts is contradicted by the presence
of evidence on record; (8) the findings of the CA are contrary to the findings of the trial
court; (9) the CA manifestly overlooked certain relevant and undisputed facts that, if
properly considered, would justify a different conclusion; (10) the findings of the CA are
beyond the issues of the case; and (11) such findings are contrary to the admissions of both
parties.[22] However, petitioner failed to show that any of the exceptions is present in the
instant case to warrant a review of the findings of fact of the lower courts.
As to respondents' ownership and right of possession of the subject properties, records
show that the MCTC based its Decision not only on the Position Paper of respondents but
also on the pieces of evidence submitted by them. Respondents attached, as annexes to
their Complaint, the Original Certificates of Title Nos. RO-4326 and RO-4327 in the name of
Enrique, covering Lot Nos. 2816 and 2817, respectively, as evidence of their ownership and
right to possess the disputed properties.
Moreover, being a mere lessee, petitioner steps into the shoes of her lessor,
Virginia. However, Virginia's claim of ownership was not sustained by the MCTC, which
instead found that she was not the owner of and had no right to possess the disputed
property or to transfer possession of the same, through lease, in favor of another
person. Virginia later withdrew her appeal filed with the RTC. By reason of such
withdrawal, she is bound by the findings of the MCTC.
The third issue raised by petitioner is misplaced. Only Roxas and Virginia, co-defendants of
petitioner, were ordered by the MCTC to pay attorney's fees in the amount
of P50,000.00. Both appealed the MCTC Decision. However, their respective appeals were
dismissed by the RTC Roxas's, for failure to file his appeal memorandum; and Virginia's,
because of her subsequent withdrawal of her appeal.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated January
31, 2003 and its Resolution of January 14, 2004 in CA-G.R. SP No. 63123 are AFFIRMED.
Double costs against petitioner.
G.R. No. 195670 December 3, 2012
WILLEM BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a Petition for Review on Certiorari1 under Rule 45
of the Rules of CoLlli assailing the October 8, 2009 Decision2 and
January 24, 2011 Resolution3 of the court of Appeals (CA) in CA-G.R.
CV No. 01940, which affirmed the February 28, 2007 Decision4 of the
Regional Trial Court (RTC) of Negros Oriental, Branch 34 in Civil Case
No. I 2884. The foregoing rulings dissolved the conjugal partnership of
gains of Willem Beumer (petitioner) and Avelina Amores (respondent)
and distributed the properties forming part of the said property regime.
The Factual Antecedents
Petitioner, a Dutch National, and respondent, a Filipina, married in
March 29, 1980. After several years, the RTC of Negros Oriental,
Branch 32, declared the nullity of their marriage in the Decision5 dated
November 10, 2000 on the basis of the former’s psychological
incapacity as contemplated in Article 36 of the Family Code.
Consequently, petitioner filed a Petition for Dissolution of Conjugal
Partnership6 dated December 14, 2000 praying for the distribution of
the following described properties claimed to have been acquired
during the subsistence of their marriage, to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated survey of Lots 2144 &
2147 of the Dumaguete Cadastre, covered by Transfer
Certificate of Title (TCT) No. 22846, containing an area of
252 square meters (sq.m.), including a residential house
constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre, covered by TCT
No. 21974, containing an area of 806 sq.m., including a
residential house constructed thereon.
c. Lot 5845 of the Dumaguete Cadastre, covered by TCT
No. 21306, containing an area of 756 sq.m.
d. Lot 4, Block 4 of the consolidated survey of Lots 2144 &
2147 of the Dumaguete Cadastre, covered by TCT No.
21307, containing an area of 45 sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by
TCT No. 23567, containing an area of 2,635 sq.m. (the area
that appertains to the conjugal partnership is 376.45 sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by
TCT No. 23575, containing an area of 360 sq.m. (the area
that appertains to the conjugal partnership is 24 sq.m.).7
In defense,8 respondent averred that, with the exception of their two (2)
residential houses on Lots 1 and 2142, she and petitioner did not
acquire any conjugal properties during their marriage, the truth being
that she used her own personal money to purchase Lots 1, 2142, 5845
and 4 out of her personal funds and Lots 2055-A and 2055-I by way of
inheritance.9 She submitted a joint affidavit executed by her and
petitioner attesting to the fact that she purchased Lot 2142 and the
improvements thereon using her own money.10 Accordingly,
respondent sought the dismissal of the petition for dissolution as well
as payment for attorney’s fees and litigation expenses. 11
During trial, petitioner testified that while Lots 1, 2142, 5845 and 4
were registered in the name of respondent, these properties were
acquired with the money he received from the Dutch government as
his disability benefit12since respondent did not have sufficient income
to pay for their acquisition. He also claimed that the joint affidavit they
submitted before the Register of Deeds of Dumaguete City was
contrary to Article 89 of the Family Code, hence, invalid. 13
For her part, respondent maintained that the money used for the
purchase of the lots came exclusively from her personal funds, in
particular, her earnings from selling jewelry as well as products from
Avon, Triumph and Tupperware.14 She further asserted that after she
filed for annulment of their marriage in 1996, petitioner transferred to
their second house and brought along with him certain personal
properties, consisting of drills, a welding machine, grinders, clamps,
etc. She alleged that these tools and equipment have a total cost of
P500,000.00.15
The RTC Ruling
On February 28, 2007, the RTC of Negros Oriental, Branch 34
rendered its Decision, dissolving the parties’ conjugal partnership,
awarding all the parcels of land to respondent as her paraphernal
properties; the tools and equipment in favor of petitioner as his
exclusive properties; the two (2) houses standing on Lots 1 and 2142
as co-owned by the parties, the dispositive of which reads:
WHEREFORE, judgment is hereby rendered granting the dissolution of
the conjugal partnership of gains between petitioner Willem Beumer
and respondent Avelina Amores considering the fact that their
marriage was previously annulled by Branch 32 of this Court. The
parcels of land covered by Transfer Certificate of Titles Nos. 22846,
21974, 21306, 21307, 23567 and 23575 are hereby declared
paraphernal properties of respondent Avelina Amores due to the fact
that while these real properties were acquired by onerous title during
their marital union, Willem Beumer, being a foreigner, is not allowed by
law to acquire any private land in the Philippines, except through
inheritance.
The personal properties, i.e., tools and equipment mentioned in the
complaint which were brought out by Willem from the conjugal dwelling
are hereby declared to be exclusively owned by the petitioner.
The two houses standing on the lots covered by Transfer Certificate of
Title Nos. 21974 and 22846 are hereby declared to be co-owned by
the petitioner and the respondent since these were acquired during
their marital union and since there is no prohibition on foreigners from
owning buildings and residential units. Petitioner and respondent are,
thereby, directed to subject this court for approval their project of
partition on the two houses aforementioned.
The Court finds no sufficient justification to award the counterclaim of
respondent for attorney’s fees considering the well settled doctrine that
there should be no premium on the right to litigate. The prayer for
moral damages are likewise denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.16
It ruled that, regardless of the source of funds for the acquisition of
Lots 1, 2142, 5845 and 4, petitioner could not have acquired any right
whatsoever over these properties as petitioner still attempted to
acquire them notwithstanding his knowledge of the constitutional
prohibition against foreign ownership of private lands.17 This was made
evident by the sworn statements petitioner executed purporting to
show that the subject parcels of land were purchased from the
exclusive funds of his wife, the herein respondent.18 Petitioner’s plea
for reimbursement for the amount he had paid to purchase the
foregoing properties on the basis of equity was likewise denied for not
having come to court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only the RTC’s
award of Lots 1, 2142, 5845 and 4 in favor of respondent. He insisted
that the money used to purchase the foregoing properties came from
his own capital funds and that they were registered in the name of his
former wife only because of the constitutional prohibition against
foreign ownership. Thus, he prayed for reimbursement of one-half (1/2)
of the value of what he had paid in the purchase of the said properties,
waiving the other half in favor of his estranged ex-wife.19
On October 8, 2009, the CA promulgated a Decision20 affirming in toto
the judgment rendered by the RTC of Negros Oriental, Branch 34. The
CA stressed the fact that petitioner was "well-aware of the
constitutional prohibition for aliens to acquire lands in the
Philippines."21 Hence, he cannot invoke equity to support his claim for
reimbursement.
Consequently, petitioner filed the instant Petition for Review on
Certiorari assailing the CA Decision due to the following error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT
SUSTAINING THE PETITIONER’S ATTEMPT AT SUBSEQUENTLY
ASSERTING OR CLAIMING A RIGHT OF HALF OR WHOLE OF THE
PURCHASE PRICE USED IN THE PURCHASE OF THE REAL
PROPERTIES SUBJECT OF THIS CASE.22 (Emphasis supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first impression. In In Re: Petition For
Separation of Property-Elena Buenaventura Muller v. Helmut
Muller23 the Court had already denied a claim for reimbursement of the
value of purchased parcels of Philippine land instituted by a foreigner
Helmut Muller, against his former Filipina spouse, Elena Buenaventura
Muller. It held that Helmut Muller cannot seek reimbursement on the
ground of equity where it is clear that he willingly and knowingly bought
the property despite the prohibition against foreign ownership of
Philippine land24 enshrined under Section 7, Article XII of the 1987
Philippine Constitution which reads:
Section 7. Save in cases of hereditary succession, no private lands
shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Undeniably, petitioner openly admitted that he "is well aware of the
above-cited constitutional prohibition"25 and even asseverated that,
because of such prohibition, he and respondent registered the subject ESTELA M. PERLAS-BERNABE
properties in the latter’s name.26 Clearly, petitioner’s actuations showed Associate Justice
his palpable intent to skirt the constitutional prohibition. On the basis of WE CODAVID A. NOVERAS, Petitioner,
such admission, the Court finds no reason why it should not apply the vs.
Muller ruling and accordingly, deny petitioner’s claim for LETICIA T. NOVERAS, Respondent.
reimbursement. DECISION
As also explained in Muller, the time-honored principle is that he who PEREZ, J.:
seeks equity must do equity, and he who comes into equity must come Before the Court is a petition for review assailing the 9 May 2008
with clean hands. Conversely stated, he who has done inequity shall Decision1 of the Court of Appeals in CA-G.R .. CV No. 88686, which
not be accorded equity. Thus, a litigant may be denied relief by a court affirmed in part the 8 December 2006 Decision2 of the Regional Trial
of equity on the ground that his conduct has been inequitable, unfair Court (RTC) of Baler, Aurora, Branch 96.
and dishonest, or fraudulent, or deceitful.27 The factual antecedents are as follow:
In this case, petitioner’s statements regarding the real source of the David A. Noveras (David) and Leticia T. Noveras (Leticia) were
funds used to purchase the subject parcels of land dilute the veracity of married on 3 December 1988 in Quezon City, Philippines. They
his claims: While admitting to have previously executed a joint affidavit resided in California, United States of America (USA) where they
that respondent’s personal funds were used to purchase Lot 1, 28 he eventually acquired American citizenship. They then begot two
likewise claimed that his personal disability funds were used to acquire children, namely: Jerome T.
the same. Evidently, these inconsistencies show his untruthfulness. Noveras, who was born on 4 November 1990 and JenaT. Noveras,
Thus, as petitioner has come before the Court with unclean hands, he born on 2 May 1993. David was engaged in courier service business
is now precluded from seeking any equitable refuge. while Leticia worked as a nurse in San Francisco, California.
In any event, the Court cannot, even on the grounds of equity, grant During the marriage, they acquired the following properties in the
reimbursement to petitioner given that he acquired no right whatsoever Philippines and in the USA:
over the subject properties by virtue of its unconstitutional purchase. It PHILIPPINES
is well-established that equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public policy, PROPERTY FAIR MARKET VALUE
cannot be done directly.29 Surely, a contract that violates the
Constitution and the law is null and void, vests no rights, creates no House and Lot with an area of 150 sq. m. located at 1085 P1,693,125
obligations and produces no legal effect at all.30 Corollary thereto,Norma Street, Sampaloc, Manila (Sampaloc property)
under Article 1412 of the Civil Code,31 petitioner cannot have the
subject properties deeded to him or allow him to recover the money Agricultural
he land with an area of 20,742 sq. m. located at P400,000
had spent for the purchase thereof. The law will not aid either party Laboy,
to Dipaculao, Aurora
an illegal contract or agreement; it leaves the parties where it finds
them.32 Indeed, one cannot salvage any rights from an unconstitutional A parcel of land with an area of 2.5 hectares located at P490,000
transaction knowingly entered into. Maria Aurora, Aurora
Neither can the Court grant petitioner’s claim for reimbursement on the
A parcel of land with an area of 175 sq.m. located at P175,000
basis of unjust enrichment.33 As held in Frenzel v. Catito, a case also
Sabang Baler, Aurora
involving a foreigner seeking monetary reimbursement for money
spent on purchase of Philippine land, the provision on unjust 3-has. coconut plantation in San Joaquin Maria Aurora, P750,000
enrichment does not apply if the action is proscribed by the Aurora
Constitution, to wit:
Futile, too, is petitioner's reliance on Article 22 of the New Civil Code USA
which reads:
Art. 22. Every person who through an act of performance by another, PROPERTY FAIR MARKET VALUE
or any other means, acquires or comes into possession of something
at the expense of the latter without just or legal ground, shall returnHouse
the and Lot at 1155 Hanover Street, Daly City,
same to him.1âwphi1 California
The provision is expressed in the maxim: "MEMO CUM ALTERIUS
$550,000
DETER DETREMENTO PROTEST" (No person should unjustly enrich
(unpaid debt of $285,000.
himself at the expense of another). An action for recovery of what has
been paid without just cause has been designated as an accion inFurniturerem and furnishings $3,0
verso. This provision does not apply if, as in this case, the action is
proscribed by the Constitution or by the application of the pari delicto
Jewelries (ring and watch) $9,0
doctrine. It may be unfair and unjust to bar the petitioner from filing an
accion in rem verso over the subject properties, or from recovering 2000
the Nissan Frontier 4x4 pickup truck $13,770
money he paid for the said properties, but, as Lord Mansfield stated in
the early case of Holman v. Johnson: "The objection that a contract Bank is of America Checking Account $8,0
immoral or illegal as between the plaintiff and the defendant, sounds at
Bank of America Cash Deposit
all times very ill in the mouth of the defendant. It is not for his sake,
however, that the objection is ever allowed; but it is founded in general
Life Insurance (Cash Value) $100,000
principles of policy, which the defendant has the advantage of, contrary
to the real justice, as between him and the plaintiff." 34 (Citations Retirement, pension, profit-sharing, annuities $56,228
omitted)
Nor would the denial of his claim amount to an injustice based on his The Sampaloc property used to beowned by David’s parents. The
foreign citizenship.35 Precisely, it is the Constitution itself which parties herein secured a loan from a bank and mortgaged the property.
demarcates the rights of citizens and non-citizens in owning Philippine When said property was about to be foreclosed, the couple paid a total
land. To be sure, the constitutional ban against foreigners applies only of P1.5 Million for the redemption of the same.
to ownership of Philippine land and not to the improvements built Due to business reverses, David left the USA and returned to the
thereon, such as the two (2) houses standing on Lots 1 and 2142 Philippines in 2001. In December 2002,Leticia executed a Special
which were properly declared to be co-owned by the parties subject to Power of Attorney (SPA) authorizing David to sell the Sampaloc
partition. Needless to state, the purpose of the prohibition is to property for P2.2 Million. According to Leticia, sometime in September
conserve the national patrimony36 and it is this policy which the Court is 2003, David abandoned his family and lived with Estrellita Martinez in
duty-bound to protect. Aurora province. Leticia claimed that David agreed toand executed a
WHEREFORE, the petition is DENIED. Accordingly, the assailed Joint Affidavit with Leticia in the presence of David’s father, Atty. Isaias
October 8, 2009 Decision and January 24, 2011 Resolution of the Noveras, on 3 December 2003 stating that: 1) the P1.1Million proceeds
Court of Appeals in CA-G.R. CV No. 01940 are AFFIRMED. from the sale of the Sampaloc property shall be paid to and collected
SO ORDERED. by Leticia; 2) that David shall return and pay to LeticiaP750,000.00,
which is equivalent to half of the amount of the redemption price of the
Sampaloc property; and 3) that David shall renounce and forfeit all his
rights and interest in the conjugal and real properties situated in the
Philippines.5 David was able to collect P1,790,000.00 from the sale of
the Sampaloc property, leaving an unpaid balance of P410,000.00.
Upon learning that David had an extra-marital affair, Leticia filed a
petition for divorce with the Superior Court of California, County of San
Mateo, USA. The California court granted the divorce on 24 June 2005
and judgment was duly entered on 29 June 2005.6 The California court
granted to Leticia the custody of her two children, as well as all the
couple’s properties in the USA.7
On 8 August 2005, Leticia filed a petition for Judicial Separation of
Conjugal Property before the RTC of Baler, Aurora. She relied on the 3
December 2003 Joint Affidavit and David’s failure to comply with his
obligation under the same. She prayed for: 1) the power to administer
all conjugal properties in the Philippines; 2) David and his partner to
cease and desist from selling the subject conjugal properties; 3) the
declaration that all conjugal properties be forfeited in favor of her
children; 4) David to remit half of the purchase price as share of Leticia
from the sale of the Sampaloc property; and 5) the payment
ofP50,000.00 and P100,000.00 litigation expenses.8
In his Answer, David stated that a judgment for the dissolution of their
marriage was entered on 29 June 2005 by the Superior Court of
California, County of San Mateo. He demanded that the conjugal
partnership properties, which also include the USA properties, be
liquidated and that all expenses of liquidation, including attorney’s fees
of both parties be charged against the conjugal partnership.9
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed
acts of abandonment and marital infidelity which can result
intothe forfeiture of the parties’ properties in favor of the
petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction over the
properties in California, U.S.A. and the same can be
included in the judicial separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by
petitioner Leticia T. Noveras and respondent David A.
Noveras will amount to a waiver or forfeiture of the latter’s
property rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled to
reimbursement of onehalf of the P2.2 [M]illion sales
proceeds of their property in Sampaloc, Manila and one-half
of the P1.5 [M]illion used to redeem the property of Atty.
Isaias Noveras, including interests and charges.
5. How the absolute community properties should be
distributed.
6. Whether or not the attorney’s feesand litigation expenses
of the parties were chargeable against their conjugal
properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are entitled to
support and presumptive legitimes.10
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is
hereby declared DISSOLVED;
2. The net assets of the absolute community of property
ofthe parties in the Philippines are hereby ordered to be
awarded to respondent David A. Noveras only, with the
properties in the United States of America remaining in the
sole ownership of petitioner Leticia Noveras a.k.a. Leticia
Tacbiana pursuant to the divorce decree issuedby the
Superior Court of California, County of San Mateo, United
States of America, dissolving the marriage of the parties as
of June 24, 2005. The titles presently covering said
properties shall be cancelled and new titles be issued in the
name of the party to whom said properties are awarded;
3. One-half of the properties awarded to respondent David
A. Noveras in the preceding paragraph are hereby given to
Jerome and Jena, his two minor children with petitioner
LeticiaNoveras a.k.a. Leticia Tacbiana as their presumptive
legitimes and said legitimes must be annotated on the titles
covering the said properties.Their share in the income from
these properties shall be remitted to them annually by the
respondent within the first half of January of each year,
starting January 2008;
4. One-half of the properties in the United States of America
awarded to petitioner Leticia Noveras a.k.a. Leticia Tacbiana
in paragraph 2 are hereby given to Jerome and Jena, her
two minor children with respondent David A. Noveras as
their presumptive legitimes and said legitimes must be
annotated on the titles/documents covering the said
properties. Their share in the income from these properties,
if any, shall be remitted to them annually by the petitioner
within the first half of January of each year, starting January
2008;
5. For the support of their two (2) minor children, Jerome and
Jena, respondent David A. Noveras shall give them
US$100.00 as monthly allowance in addition to their income
from their presumptive legitimes, while petitioner Leticia
Tacbiana shall take care of their food, clothing, education
and other needs while they are in her custody in the USA.
The monthly allowance due from the respondent shall be
increased in the future as the needs of the children require
and his financial capacity can afford;
6. Of the unpaid amount of P410,000.00 on the purchase
price of the Sampaloc property, the Paringit Spouses are
hereby ordered to pay P5,000.00 to respondent David A.
Noveras and P405,000.00 to the two children. The share of
the respondent may be paid to him directly but the share of
the two children shall be deposited with a local bank in Baler,
Aurora, in a joint account tobe taken out in their names,
withdrawal from which shall only be made by them or by
their representative duly authorized with a Special Power of
Attorney. Such payment/deposit shall be made withinthe
period of thirty (30) days after receipt of a copy of this
Decision, with the passbook of the joint account to be
submitted to the custody of the Clerk of Court of this Court
within the same period. Said passbook can be withdrawn
from the Clerk of Court only by the children or their attorney-
in-fact; and
7. The litigation expenses and attorney’s fees incurred by the
parties shall be shouldered by them individually.11
The trial court recognized that since the parties are US citizens, the
laws that cover their legal and personalstatus are those of the USA.
With respect to their marriage, the parties are divorced by virtue of the
decree of dissolution of their marriage issued by the Superior Court of
California, County of San Mateo on 24June 2005. Under their law, the
parties’ marriage had already been dissolved. Thus, the trial court
considered the petition filed by Leticia as one for liquidation of the
absolute community of property regime with the determination of the
legitimes, support and custody of the children, instead of an action for
judicial separation of conjugal property.
With respect to their property relations, the trial court first classified
their property regime as absolute community of property because they
did not execute any marriage settlement before the solemnization of
their marriage pursuant to Article 75 of the Family Code. Then, the trial
court ruled that in accordance with the doctrine of processual
presumption, Philippine law should apply because the court cannot
take judicial notice of the US law since the parties did not submit any
proof of their national law. The trial court held that as the instant
petition does not fall under the provisions of the law for the grant of
judicial separation of properties, the absolute community properties
cannot beforfeited in favor of Leticia and her children. Moreover, the
trial court observed that Leticia failed to prove abandonment and
infidelity with preponderant evidence.
The trial court however ruled that Leticia is not entitled to the
reimbursements she is praying for considering that she already
acquired all of the properties in the USA. Relying still on the principle of
equity, the Court also adjudicated the Philippine properties to David,
subject to the payment of the children’s presumptive legitimes. The trial
court held that under Article 89 of the Family Code, the waiver or
renunciation made by David of his property rights in the Joint Affidavit
is void.
On appeal, the Court of Appeals modified the trial court’s Decision by
directing the equal division of the Philippine properties between the
spouses. Moreover with respect to the common children’s presumptive
legitime, the appellate court ordered both spouses to each pay their
children the amount of P520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2,
4 and 6 of the assailedDecision dated December 8, 2006 of Branch 96,
RTC of Baler, Aurora Province, in Civil Case No. 828 are hereby
MODIFIED to read as follows:
2. The net assets of the absolute community of property of
the parties in the Philippines are hereby divided equally
 between petitioner Leticia Noveras a.k.a. Leticia Tacbiana
(sic) and respondent David A. Noveras;
xxx
4. One-half of the properties awarded to petitioner Leticia
Tacbiana (sic) in paragraph 2 shall pertain to her minor
children, Jerome and Jena, as their presumptive legitimes
which shall be annotated on the titles/documents covering
the said properties. Their share in the income therefrom, if
any, shall be remitted to them by petitioner annually within
the first half of January, starting 2008;
xxx
6. Respondent David A. Noveras and petitioner Leticia
Tacbiana (sic) are each ordered to pay the amount
ofP520,000.00 to their two children, Jerome and Jena, as
their presumptive legitimes from the sale of the Sampaloc
property inclusive of the receivables therefrom, which shall
be deposited to a local bank of Baler, Aurora, under a joint
account in the latter’s names. The payment/deposit shall be
made within a period of thirty (30) days from receipt ofa copy
of this Decision and the corresponding passbook entrusted
to the custody ofthe Clerk of Court a quowithin the same
period, withdrawable only by the children or their attorney-in-
fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay
petitioner Leticia Tacbiana (sic) the amount ofP1,040,000.00
representing her share in the proceeds from the sale of the
Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of Baler, Aurora;
the local civil registry of Quezon City; the Civil RegistrarGeneral,
National Statistics Office, Vibal Building, Times Street corner EDSA,
Quezon City; the Office of the Registry of Deeds for the Province of
Aurora; and to the children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.12
In the present petition, David insists that the Court of Appeals should
have recognized the California Judgment which awarded the Philippine
properties to him because said judgment was part of the pleading
presented and offered in evidence before the trial court. David argues
that allowing Leticia to share in the Philippine properties is tantamount
to unjust enrichment in favor of Leticia considering that the latter was
already granted all US properties by the California court.
In summary and review, the basic facts are: David and Leticia are US
citizens who own properties in the USA and in the Philippines. Leticia
obtained a decree of divorce from the Superior Court of California in
June 2005 wherein the court awarded all the properties in the USA to
Leticia. With respect to their properties in the Philippines, Leticiafiled a
petition for judicial separation ofconjugal properties.
At the outset, the trial court erred in recognizing the divorce decree
which severed the bond of marriage between the parties. In Corpuz v.
Sto. Tomas,13 we stated that:
The starting point in any recognition of a foreign divorce judgment is
the acknowledgment that our courts do not take judicial notice of
foreign judgments and laws. Justice Herrera explained that, as a rule,
"no sovereign is bound to give effect within its dominion to a judgment
rendered by a tribunal of another country." This means that the foreign
judgment and its authenticity must beproven as facts under our rules
on evidence, together with the alien’s applicable national law to show
the effect of the judgment on the alien himself or herself. The
recognition may be made in an action instituted specifically for the
purpose or in another action where a party invokes the foreign decree
as an integral aspect of his claim or defense. 14
The requirements of presenting the foreign divorce decree and the
national law of the foreigner must comply with our Rules of Evidence.
Specifically, for Philippine courts to recognize a foreign judgment
relating to the status of a marriage, a copy of the foreign judgment may
be admitted in evidence and proven as a fact under Rule 132, Sections
24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.15
Under Section 24 of Rule 132, the record of public documents of a
sovereign authority or tribunal may be proved by: (1) an official
publication thereof or (2) a copy attested by the officer having the legal
custody thereof. Such official publication or copy must beaccompanied,
if the record is not kept in the Philippines, with a certificate that the
attesting officer has the legal custody thereof. The certificate may be
issued by any of the authorized Philippine embassy or consular
officials stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office. The attestation must state, in
substance, that the copy is a correct copy of the original, or a specific
part thereof, asthe case may be, and must be under the official seal of
the attesting officer.
Section 25 of the same Rule states that whenever a copy of a
document or record is attested for the purpose of evidence, the
attestation must state, in substance, that the copy is a correct copy of
the original, or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting officer, if
there be any, or if hebe the clerk of a court having a seal, under the
seal of such court.
Based on the records, only the divorce decree was presented in
evidence. The required certificates to prove its authenticity, as well as
the pertinent California law on divorce were not presented.
It may be noted that in Bayot v. Court of Appeals,16 we relaxed the
requirement on certification where we held that "[petitioner therein] was
clearly an American citizenwhen she secured the divorce and that
divorce is recognized and allowed in any of the States of the Union, the
presentation of a copy of foreign divorce decree duly authenticatedby
the foreign court issuing said decree is, as here, sufficient." In this case
however, it appears that there is no seal from the office where the
divorce decree was obtained.
Even if we apply the doctrine of processual presumption17 as the lower
courts did with respect to the property regime of the parties, the
recognition of divorce is entirely a different matter because, to begin
with, divorce is not recognized between Filipino citizens in the
Philippines. Absent a valid recognition of the divorce decree, it follows
that the parties are still legally married in the Philippines. The trial court
thus erred in proceeding directly to liquidation.
As a general rule, any modification in the marriage settlements must
be made before the celebration of marriage. An exception to this rule is
allowed provided that the modification isjudicially approved and refers
only to the instances provided in Articles 66,67, 128, 135 and 136 of
the Family Code.18
Leticia anchored the filing of the instant petition for judicial separation
of property on paragraphs 4 and 6 of Article 135 of the Family Code, to
wit:
Art. 135. Any of the following shall be considered sufficient cause for
judicial separation of property:
(1) That the spouse of the petitioner has been sentenced to
a penalty which carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially
declared an absentee;
(3) That loss of parental authority ofthe spouse of petitioner
has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the
latter or failed to comply with his or her obligations to the
family as provided for in Article 101;
(5) That the spouse granted the power of administration in
the marriage settlements has abused that power; and
(6) That at the time of the petition, the spouses have been
separated in fact for at least one year and reconciliation is
highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation
of the final judgment against the guiltyor absent spouse shall be
enough basis for the grant of the decree ofjudicial separation of
property. (Emphasis supplied).
The trial court had categorically ruled that there was no abandonment
in this case to necessitate judicial separation of properties under
paragraph 4 of Article 135 of the Family Code. The trial court
ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code quoted
above, must be for a valid cause and the spouse is deemed to have
abandoned the other when he/she has left the conjugal dwelling
without intention of returning. The intention of not returning is prima
facie presumed if the allegedly [sic] abandoning spouse failed to give
any information as to his or her whereabouts within the period of three
months from such abandonment.
In the instant case, the petitioner knows that the respondent has
returned to and stayed at his hometown in Maria Aurora, Philippines,
as she even went several times to visit him there after the alleged
abandonment. Also, the respondent has been going back to the USA
to visit her and their children until the relations between them
worsened. The last visit of said respondent was in October 2004 when
he and the petitioner discussed the filing by the latter of a petition for
dissolution of marriage with the California court. Such turn for the
worse of their relationship and the filing of the saidpetition can also be
considered as valid causes for the respondent to stay in the
Philippines.19
Separation in fact for one year as a ground to grant a judicial
separation of property was not tackled in the trial court’s decision
because, the trial court erroneously treated the petition as liquidation of
the absolute community of properties.
The records of this case are replete with evidence that Leticia and
David had indeed separated for more than a year and that
reconciliation is highly improbable. First, while actual abandonment
had not been proven, it is undisputed that the spouses had been living
separately since 2003 when David decided to go back to the
Philippines to set up his own business. Second, Leticia heard from her
friends that David has been cohabiting with Estrellita Martinez, who
represented herself as Estrellita Noveras. Editha Apolonio, who
worked in the hospital where David was once confined, testified that
she saw the name of Estrellita listed as the wife of David in the
Consent for Operation form.20 Third and more significantly, they had
filed for divorce and it was granted by the California court in June
2005.
Having established that Leticia and David had actually separated for at
least one year, the petition for judicial separation of absolute
community of property should be granted.
The grant of the judicial separation of the absolute community property
automatically dissolves the absolute community regime, as stated in
the 4th paragraph of Article 99 ofthe Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the
marriage under Articles 134 to 138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the dissolution
of the absolute community regime and the following procedure should
apply:
Art. 102. Upon dissolution of the absolute community regime, the
following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the
properties of the absolute community and the exclusive
properties of each spouse.
(2) The debts and obligations of the absolute community
shall be paid out of its assets. In case of insufficiency of said
assets, the spouses shall be solidarily liable for the unpaid
balance with their separate properties in accordance with the
provisions of the second paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the
spouses shall thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute
community shall constitute its net assets, which shall be
divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage
settlements, or unless there has been a voluntary waiver of
such share provided in this Code. For purposes of
computing the net profits subject to forfeiture in accordance
with Articles 43, No. (2) and 63, No. (2),the said profits shall
be the increase in value between the market value of the
community property at the time of the celebration of the
marriage and the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall
be delivered upon partition, in accordance with Article 51.
(6) Unless otherwise agreed upon by the parties, in the
partition of the properties, the conjugal dwelling and the lot
on which it is situated shall be adjudicated tothe spouse with
whom the majority of the common children choose to
remain. Children below the age of seven years are deemed
to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said
children. At the risk of being repetitious, we will not remand
the case to the trial court. Instead, we shall adopt the
modifications made by the Court of Appeals on the trial
court’s Decision with respect to liquidation.
We agree with the appellate court that the Philippine courts did not
acquire jurisdiction over the California properties of David and Leticia.
Indeed, Article 16 of the Civil Code clearly states that real property as
well as personal property is subject to the law of the country where it is
situated. Thus, liquidation shall only be limited to the Philippine
properties.
We affirm the modification madeby the Court of Appeals with respect
to the share of the spouses in the absolutecommunity properties in the
Philippines, as well as the payment of their children’s presumptive
legitimes, which the appellate court explained in this wise:
Leticia and David shall likewise have an equal share in the proceeds of
the Sampaloc property.1âwphi1 While both claimed to have
contributed to the redemption of the Noveras property, absent a clear
showing where their contributions came from, the same is presumed to
have come from the community property. Thus, Leticia is not entitled to
reimbursement of half of the redemption money.
David's allegation that he used part of the proceeds from the sale of
the Sampaloc property for the benefit of the absolute community
cannot be given full credence. Only the amount of P120,000.00
incurred in going to and from the U.S.A. may be charged thereto.
Election expenses in the amount of P300,000.00 when he ran as
municipal councilor cannot be allowed in the absence of receipts or at
least the Statement of Contributions and Expenditures required under
Section 14 of Republic Act No. 7166 duly received by the Commission
on Elections. Likewise, expenses incurred to settle the criminal case of
his personal driver is not deductible as the same had not benefited the
family. In sum, Leticia and David shall share equally in the proceeds of
the sale net of the amount of P120,000.00 or in the respective amounts
of P1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil Code, "(t)he
legitime of legitimate children and descendants consists of one-half or
the hereditary estate of the father and of the mother." The children arc
therefore entitled to half of the share of each spouse in the net assets
of the absolute community, which shall be annotated on the
titles/documents covering the same, as well as to their respective
shares in the net proceeds from the sale of the Sampaloc property
including the receivables from Sps. Paringit in the amount
of P410,000.00. Consequently, David and Leticia should each pay
them the amount of P520,000.00 as their presumptive legitimes
therefrom.21
WHEREFORE, the petition is DENIED. The assailed Decision of the
Court of Appeals in CA G.R. CV No. 88686 is AFFIRMED.
SO ORDERED.
NOEL BUENAVENTURA, petitioner, vs. COURT OF APPEALS and
ISABEL LUCIA SINGH BUENAVENTURA, respondents.
[G.R. No. 127449. March 31, 2005]
NOEL BUENAVENTURA, petitioner, vs. COURT OF APPEALS and
ISABEL LUCIA SINGH BUENAVENTURA, respondents.
DECISION
AZCUNA, J.:
These cases involve a petition for the declaration of nullity of
marriage, which was filed by petitioner Noel Buenaventura on July 12,
1992, on the ground of the alleged psychological incapacity of his wife,
Isabel Singh Buenaventura, herein respondent. After respondent filed
her answer, petitioner, with leave of court, amended his petition by
stating that both he and his wife were psychologically incapacitated to
comply with the essential obligations of marriage. In response,
respondent filed an amended answer denying the allegation that she
was psychologically incapacitated.[1]
On July 31, 1995, the Regional Trial Court promulgated a
Decision, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into
between plaintiff Noel A. Buenaventura and
defendant Isabel Lucia Singh Buenaventura on July
4, 1979, null and void ab initio;
2) Ordering the plaintiff to pay defendant moral damages
in the amount of 2.5 million pesos and exemplary
damages of 1 million pesos with 6% interest from the
date of this decision plus attorneys fees
of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of
litigation of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal
partnership property[,] particularly the plaintiffs
separation/retirement benefits received from the Far
East Bank [and] Trust Company[,] by ceding, giving
and paying to her fifty percent (50%) of the net
amount of P3,675,335.79 or P1,837,667.89 together
with 12% interest per annum from the date of this
decision and one-half (1/2) of his outstanding shares
 of stock with Manila Memorial Park and Provident
Group of Companies;
5) Ordering him to give a regular support in favor of his
son Javy Singh Buenaventura in the amount
of P15,000.00 monthly, subject to modification as the
necessity arises;
6) Awarding the care and custody of the minor Javy Singh
Buenaventura to his mother, the herein defendant;
and
7) Hereby authorizing the defendant to revert back to the
use of her maiden family name Singh.
Let copies of this decision be furnished the appropriate civil registry and
registries of properties.
SO ORDERED.[2]
Petitioner appealed the above decision to the Court of Appeals.
While the case was pending in the appellate court, respondent filed a
motion to increase the P15,000 monthly supportpendente lite of their
son Javy Singh Buenaventura. Petitioner filed an opposition thereto,
praying that it be denied or that such incident be set for oral
argument.[3]
On September 2, 1996, the Court of Appeals issued a Resolution
increasing the support pendente lite to P20,000.[4] Petitioner filed a
motion for reconsideration questioning the said Resolution.[5]
On October 8, 1996, the appellate court promulgated a Decision
dismissing petitioners appeal for lack of merit and affirming in toto the
trial courts decision.[6] Petitioner filed a motion for reconsideration
which was denied. From the abovementioned Decision, petitioner filed
the instant Petition for Review on Certiorari.
On November 13, 1996, through another Resolution, the Court of
Appeals denied petitioners motion for reconsideration of the
September 2, 1996 Resolution, which increased the monthly support
for the son.[7] Petitioner filed a Petition for Certiorari to question these
two Resolutions.
On July 9, 1997, the Petition for Review on Certiorari[8] and the
Petition for Certiorari[9] were ordered consolidated by this Court.[10]
In the Petition for Review on Certiorari petitioner claims that the
Court of Appeals decided the case not in accord with law and
jurisprudence, thus:
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL DAMAGES
IN THE AMOUNT OF P2.5 MILLION AND EXEMPLARY DAMAGES OF
P1 MILLION, WITH 6% INTEREST FROM THE DATE OF ITS
DECISION, WITHOUT ANY LEGAL AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEYS FEES
AND P50,000.00 EXPENSES OF LITIGATION, PLUS COSTS, TO
DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY
DEFENDANT-APPELLEE ONE-HALF OR P1,837,667.89 OUT OF HIS
RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST BANK
AND TRUST CO., WITH 12% INTEREST THEREON FROM THE DATE
OF ITS DECISION, NOTWITHSTANDING THAT SAID RETIREMENT
BENEFITS ARE GRATUITOUS AND EXCLUSIVE PROPERTY OF
NOEL, AND ALSO TO DELIVER TO DEFENDANT-APPELLEE ONE-
HALF OF HIS SHARES OF STOCK WITH THE MANILA MEMORIAL
PARK AND THE PROVIDENT GROUP OF COMPANIES, ALTHOUGH
SAID SHARES OF STOCK WERE ACQUIRED BY NOEL BEFORE HIS
MARRIAGE TO RESPONDENT ISABEL AND ARE, THEREFORE,
AGAIN HIS EXCLUSIVE PROPERTIES; AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY OVER
THE PARTIES MINOR CHILD TO DEFENDANT-APPELLEE WITHOUT
ASKING THE CHILD (WHO WAS ALREADY 13 YEARS OLD AT THAT
TIME) HIS CHOICE AS TO WHOM, BETWEEN HIS TWO PARENTS, HE
WOULD LIKE TO HAVE CUSTODY OVER HIS PERSON.[11]
In the Petition for Certiorari, petitioner advances the following
contentions:
THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION
WHEN IT REFUSED TO SET RESPONDENTS MOTION FOR
INCREASED SUPPORT FOR THE PARTIES SON FOR HEARING.[12]
THERE WAS NO NEED FOR THE COURT OF APPEALS TO INCREASE
JAVYS MONTHLY SUPPORT OF P15,000.00 BEING GIVEN BY
PETITIONER EVEN AT PRESENT PRICES.[13]
IN RESOLVING RESPONDENTS MOTION FOR THE INCREASE OF
JAVYS SUPPORT, THE COURT OF APPEALS SHOULD HAVE
EXAMINED THE LIST OF EXPENSES SUBMITTED BY RESPONDENT
IN THE LIGHT OF PETITIONERS OBJECTIONS THERETO, INSTEAD
OF MERELY ASSUMING THAT JAVY IS ENTITLED TO A P5,000
INCREASE IN SUPPORT AS SAID AMOUNT IS TOO MINIMAL.[14]
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN
PETITIONER AN OPPORTUNITY TO PROVE HIS PRESENT INCOME
TO SHOW THAT HE CANNOT AFFORD TO INCREASE JAVYS
SUPPORT.[15]
With regard to the first issue in the main case, the Court of
Appeals articulated:
On Assignment of Error C, the trial court, after findings of fact ascertained
from the testimonies not only of the parties particularly the defendant-appellee
but likewise, those of the two psychologists, awarded damages on the basis of
Articles 21, 2217 and 2229 of the Civil Code of the Philippines.
Thus, the lower court found that plaintiff-appellant deceived the defendant-
appellee into marrying him by professing true love instead of revealing to her
that he was under heavy parental pressure to marry and that because of pride
he married defendant-appellee; that he was not ready to enter into marriage as
in fact his career was and always would be his first priority; that he was
unable to relate not only to defendant-appellee as a husband but also to his
son, Javy, as a father; that he had no inclination to make the marriage work
such that in times of trouble, he chose the easiest way out, that of leaving
defendantappellee and their son; that he had no desire to keep defendant-
appellee and their son as proved by his reluctance and later, refusal to
reconcile after their separation; that the aforementioned caused defendant-
appellee to suffer mental anguish, anxiety, besmirched reputation, sleepless
nights not only in those years the parties were together but also after and
throughout their separation.
Plaintiff-appellant assails the trial courts decision on the ground that unlike
those arising from a breach in ordinary contracts, damages arising as a
consequence of marriage may not be awarded. While it is correct that there is,
as yet, no decided case by the Supreme Court where damages by reason of the
performance or non-performance of marital obligations were awarded, it does
not follow that no such award for damages may be made.
Defendant-appellee, in her amended answer, specifically prayed for moral and
exemplary damages in the total amount of 7 million pesos. The lower court, in
the exercise of its discretion, found full justification of awarding at least half
of what was originally prayed for. We find no reason to disturb the ruling of
the trial court.[16]
The award by the trial court of moral damages is based on
Articles 2217 and 21 of the Civil Code, which read as follows:
ART. 2217. Moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation,
moral damages may be recovered if they are the proximate result of the
defendants wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
The trial court referred to Article 21 because Article 2219[17] of
the Civil Code enumerates the cases in which moral damages may be
recovered and it mentions Article 21 as one of the instances. It must be
noted that Article 21 states that the individual must willfully cause loss
or injury to another. There is a need that the act is willful and hence
done in complete freedom. In granting moral damages, therefore, the
trial court and the Court of Appeals could not but have assumed that
the acts on which the moral damages were based were done willfully
and freely, otherwise the grant of moral damages would have no leg to
stand on.
On the other hand, the trial court declared the marriage of the
parties null and void based on Article 36 of the Family Code, due to
psychological incapacity of the petitioner, Noel Buenaventura. Article
36 of the Family Code states:
A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations
of marriage, shall likewise be void even if such incapacity becomes manifest
only after its solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that causes a party to
be truly incognitive of the basic marital covenants that concomitantly
must be assumed and discharged by the parties to the marriage which, as
so expressed by Article 68 of the Family Code, include their mutual
obligations to live together, observe love, respect and fidelity and render help
and support. There is hardly any doubt that the intendment of the law has been
to confine the meaning of "psychological incapacity" to the most serious cases
of personality disorders clearly demonstrative of an utter insensitivity or
inability to give meaning and significance to the marriage. . . . [18]
The Court of Appeals and the trial court considered the acts of
the petitioner after the marriage as proof of his psychological
incapacity, and therefore a product of his incapacity or inability to
comply with the essential obligations of marriage. Nevertheless, said
courts considered these acts as willful and hence as grounds for
granting moral damages. It is contradictory to characterize acts as a
product of psychological incapacity, and hence beyond the control of
the party because of an innate inability, while at the same time
considering the same set of acts as willful. By declaring the petitioner
as psychologically incapacitated, the possibility of awarding moral
damages on the same set of facts was negated. The award of moral
damages should be predicated, not on the mere act of entering into the
marriage, but on specific evidence that it was done deliberately and
with malice by a party who had knowledge of his or her disability and
yet willfully concealed the same. No such evidence appears to have
been adduced in this case.
For the same reason, since psychological incapacity means that
one is truly incognitive of the basic marital covenants that one must
assume and discharge as a consequence of marriage, it removes the
basis for the contention that the petitioner purposely deceived the
private respondent. If the private respondent was deceived, it was not
due to a willful act on the part of the petitioner. Therefore, the award of
moral damages was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows that
the grant of exemplary damages cannot stand since the Civil Code
provides that exemplary damages are imposed in addition to moral,
temperate, liquidated or compensatory damages.[19]
With respect to the grant of attorneys fees and expenses of
litigation the trial court explained, thus:
Regarding Attorneys fees, Art. 2208 of the Civil Code authorizes an award of
attorneys fees and expenses of litigation, other than judicial costs, when as in
this case the plaintiffs act or omission has compelled the defendant to litigate
and to incur expenses of litigation to protect her interest (par. 2), and where
the Court deems it just and equitable that attorneys fees and expenses of
litigation should be recovered. (par. 11)[20]
The Court of Appeals reasoned as follows:
On Assignment of Error D, as the award of moral and exemplary damages is
fully justified, the award of attorneys fees and costs of litigation by the trial
court is likewise fully justified.[21]
The acts or omissions of petitioner which led the lower court to
deduce his psychological incapacity, and his act in filing the complaint
for the annulment of his marriage cannot be considered as unduly
compelling the private respondent to litigate, since both are grounded
on petitioners psychological incapacity, which as explained above is a
mental incapacity causing an utter inability to comply with the
obligations of marriage. Hence, neither can be a ground for attorneys
fees and litigation expenses. Furthermore, since the award of moral
and exemplary damages is no longer justified, the award of attorneys
fees and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank
and Trust Co. and the shares of stock in the Manila Memorial Park and
the Provident Group of Companies, the trial court said:
The third issue that must be resolved by the Court is what to do with the assets
of the conjugal partnership in the event of declaration of annulment of the
marriage. The Honorable Supreme Court has held that the declaration of
nullity of marriage carries ipso facto a judgment for the liquidation of property
(Domingo v. Court of Appeals, et al., G.R. No. 104818, Sept. 17, 1993, 226
SCRA, pp. 572 573, 586). Thus, speaking through Justice Flerida Ruth P.
Romero, it was ruled in this case:
When a marriage is declared void ab initio, the law states that the final
judgment therein shall provide for the liquidation, partition and distribution of
the properties of the spouses, the custody and support of the common children
and the delivery of their presumptive legitimes, unless such matters had been
adjudicated in the previous proceedings.
The parties here were legally married on July 4, 1979, and therefore, all
property acquired during the marriage, whether the acquisition appears to
have been made, contracted or registered in the name of one or both spouses,
is presumed to be conjugal unless the contrary is proved (Art. 116, New
Family Code; Art. 160, Civil Code). Art. 117 of the Family Code enumerates
what are conjugal partnership properties. Among others they are the
following:
1) Those acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one
of the spouses;
2) Those obtained from the labor, industry, work or profession of either or
both of the spouses;
3) The fruits, natural, industrial, or civil, due or received during the marriage
from the common property, as well as the net fruits from the exclusive
property of each spouse. . . .
Applying the foregoing legal provisions, and without prejudice to requiring an
inventory of what are the parties conjugal properties and what are the
exclusive properties of each spouse, it was disclosed during the proceedings in
this case that the plaintiff who worked first as Branch Manager and later as
Vice-President of Far East Bank & Trust Co. received separation/retirement
package from the said bank in the amount of P3,701,500.00 which after
certain deductions amounting to P26,164.21 gave him a net amount
of P3,675,335.79 and actually paid to him on January 9, 1995 (Exhs. 6, 7, 8, 9,
10, 11). Not having shown debts or obligations other than those deducted from
the said retirement/separation pay, under Art. 129 of the Family Code The net
remainder of the conjugal partnership properties shall constitute the profits,
which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlement or unless
there has been a voluntary waiver or forfeiture of such share as provided in
this Code. In this particular case, however, there had been no marriage
settlement between the parties, nor had there been any voluntary waiver or
valid forfeiture of the defendant wifes share in the conjugal partnership
properties. The previous cession and transfer by the plaintiff of his one-half
(1/2) share in their residential house and lot covered by T.C.T. No. S-35680 of
the Registry of Deeds of Paraaque, Metro Manila, in favor of the defendant as
stipulated in their Compromise Agreement dated July 12, 1993, and approved
by the Court in its Partial Decision dated August 6, 1993, was actually
intended to be in full settlement of any and all demands for past support. In
reality, the defendant wife had allowed some concession in favor of the
plaintiff husband, for were the law strictly to be followed, in the process of
liquidation of the conjugal assets, the conjugal dwelling and the lot on which
it is situated shall, unless otherwise agreed upon by the parties, be adjudicated
to the spouse with whom their only child has chosen to remain (Art. 129, par.
9). Here, what was done was one-half (1/2) portion of the house was ceded to
defendant so that she will not claim anymore for past unpaid support, while
the other half was transferred to their only child as his presumptive legitime.
Consequently, nothing yet has been given to the defendant wife by way of her
share in the conjugal properties, and it is but just, lawful and fair, that she be
given one-half (1/2) share of the separation/retirement benefits received by the
plaintiff the same being part of their conjugal partnership properties having
been obtained or derived from the labor, industry, work or profession of said
defendant husband in accordance with Art. 117, par. 2 of the Family Code.
For the same reason, she is entitled to one-half (1/2) of the outstanding shares
of stock of the plaintiff husband with the Manila Memorial Park and the
Provident Group of Companies.[22]
The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the order of the trial
court for him to give one-half of his separation/retirement benefits from Far
East Bank & Trust Company and half of his outstanding shares in Manila
Memorial Park and Provident Group of Companies to the defendant-appellee
as the latters share in the conjugal partnership.
On August 6, 1993, the trial court rendered a Partial Decision approving the
Compromise Agreement entered into by the parties. In the same Compromise
Agreement, the parties had agreed that henceforth, their conjugal partnership
is dissolved. Thereafter, no steps were taken for the liquidation of the conjugal
partnership.
Finding that defendant-appellee is entitled to at least half of the
separation/retirement benefits which plaintiff-appellant received from Far East
Bank & Trust Company upon his retirement as Vice-President of said
company for the reason that the benefits accrued from plaintiffappellants
service for the bank for a number of years, most of which while he was
married to defendant-appellee, the trial court adjudicated the same. The same
is true with the outstanding shares of plaintiff-appellant in Manila Memorial
Park and Provident Group of Companies. As these were acquired by the
plaintiff-appellant at the time he was married to defendant-appellee, the latter
is entitled to one-half thereof as her share in the conjugal partnership. We find
no reason to disturb the ruling of the trial court.[23]
Since the present case does not involve the annulment of a
bigamous marriage, the provisions of Article 50 in relation to Articles
41, 42 and 43 of the Family Code, providing for the dissolution of the
absolute community or conjugal partnership of gains, as the case may
be, do not apply. Rather, the general rule applies, which is that in case
a marriage is declared voidab initio, the property regime applicable and
to be liquidated, partitioned and distributed is that of equal co-
ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon
City,[24] this Court expounded on the consequences of a void marriage
on the property relations of the spouses and specified the applicable
provisions of law:
The trial court correctly applied the law. In a void marriage, regardless of the
cause thereof, the property relations of the parties during the period of
cohabitation is governed by the provisions of Article 147 or Article 148, such
as the case may be, of the Family Code. Article 147 is a remake of Article 144
of the Civil Code as interpreted and so applied in previous cases; it provides:
ART. 147. When a man and a woman who are capacitated to marry each
other, live exclusively with each other as husband and wife without the benefit
of marriage or under a void marriage, their wages and salaries shall be owned
by them in equal shares and the property acquired by both of them through
their work or industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work
or industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by the other party of
any property shall be deemed to have contributed jointly in the acquisition
thereof if the former's efforts consisted in the care and maintenance of the
family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in
the property acquired during cohabitation and owned in common, without the
consent of the other, until after the termination of their cohabitation.
When only one of the parties to a void marriage is in good faith, the share of
the party in bad faith in the co-ownership shall be forfeited in favor of their
common children. In case of default of or waiver by any or all of the common
children or their descendants, each vacant share shall belong to the respective
surviving descendants. In the absence of descendants, such share shall belong
to the innocent party. In all cases, the forfeiture shall take place upon
termination of the cohabitation.
This peculiar kind of co-ownership applies when a man and a woman,
suffering no legal impediment to marry each other, so exclusively live
together as husband and wife under a void marriage or without the benefit of
marriage. The term "capacitated" in the provision (in the first paragraph of the
law) refers to the legal capacity of a party to contract marriage, i.e., any "male
or female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38" of the Code.
Under this property regime, property acquired by both spouses through
their work and industry shall be governed by the rules on equal co-ownership.
Any property acquired during the union is prima facie presumed to have been
obtained through their joint efforts. A party who did not participate in the
acquisition of the property shall still be considered as having contributed
thereto jointly if said party's "efforts consisted in the care and maintenance of
the family household." Unlike the conjugal partnership of gains, the fruits of
the couple's separate property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent, has
clarified Article 144 of the Civil Code; in addition, the law now expressly
provides that
(a) Neither party can dispose or encumber by act[s] inter vivos [of] his or her
share in co-ownership property, without the consent of the other, during the
period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his or her
share in the co-ownership in favor of their common children; in default
thereof or waiver by any or all of the common children, each vacant share
shall belong to the respective surviving descendants, or still in default thereof,
to the innocent party. The forfeiture shall take place upon the termination of
the cohabitation or declaration of nullity of the marriage.
In deciding to take further cognizance of the issue on the settlement of the
parties' common property, the trial court acted neither imprudently nor
precipitately; a court which had jurisdiction to declare the marriage a nullity
must be deemed likewise clothed with authority to resolve incidental and
consequential matters. Nor did it commit a reversible error in ruling that
petitioner and private respondent own the "family home" and all their
common property in equal shares, as well as in concluding that, in the
liquidation and partition of the property owned in common by them, the
provisions on co-ownership under the Civil Code, not Articles 50, 51 and 52,
in relation to Articles 102 and 129, of the Family Code, should aptly prevail.
The rules set up to govern the liquidation of either the absolute community or
the conjugal partnership of gains, the property regimes recognized for valid
and voidable marriages (in the latter case until the contract is annulled), are
irrelevant to the liquidation of the co-ownership that exists between common-
law spouses. The first paragraph of Article 50 of the Family Code, applying
paragraphs (2), (3), (4) and (5) of Article 43, relates only, by its explicit terms,
to voidable marriages and, exceptionally, to void marriages under Article 40
of the Code, i.e., the declaration of nullity of a subsequent marriage contracted
by a spouse of a prior void marriage before the latter is judicially declared
void. The latter is a special rule that somehow recognizes the philosophy and
an old doctrine that void marriages are inexistent from the very beginning and
no judicial decree is necessary to establish their nullity. In now requiring
for purposes of remarriage, the declaration of nullity by final judgment of the
previously contracted void marriage, the present law aims to do away with
any continuing uncertainty on the status of the second marriage. It is not then
illogical for the provisions of Article 43, in relation to Articles 41 and 42, of
the Family Code, on the effects of the termination of a subsequent marriage
contracted during the subsistence of a previous marriage to be made
applicable pro hac vice. In all other cases, it is not to be assumed that the law
has also meant to have coincident property relations, on the one hand, between
spouses in valid and voidable marriages (before annulment) and, on the other,
between common-law spouses or spouses of void marriages, leaving to ordain,
in the latter case, the ordinary rules on co-ownership subject to the provision
of Article 147 and Article 148 of the Family Code. It must be stressed,
nevertheless, even as it may merely state the obvious, that the provisions of
the Family Code on the "family home," i.e., the provisions found in Title V,
Chapter 2, of the Family Code, remain in force and effect regardless of the
property regime of the spouses.[25]
Since the properties ordered to be distributed by the court a quo
were found, both by the trial court and the Court of Appeals, to have
been acquired during the union of the parties, the same would be
covered by the co-ownership. No fruits of a separate property of one of
the parties appear to have been included or involved in said
distribution. The liquidation, partition and distribution of the properties
owned in common by the parties herein as ordered by the court a
quo should, therefore, be sustained, but on the basis of co-ownership
and not of the regime of conjugal partnership of gains.
As to the issue on custody of the parties over their only child,
Javy Singh Buenaventura, it is now moot since he is about to turn
twenty-five years of age on May 27, 2005[26] and has, therefore,
attained the age of majority.
With regard to the issues on support raised in the Petition
for Certiorari, these would also now be moot, owing to the fact that the
son, Javy Singh Buenaventura, as previously stated, has attained the
age of majority.
WHEREFORE, the Decision of the Court of Appeals dated
October 8, 1996 and its Resolution dated December 10, 1996 which
are contested in the Petition for Review (G.R. No. 127449), are hereby
MODIFIED, in that the award of moral and exemplary damages,
attorneys fees, expenses of litigation and costs are deleted. The order
giving respondent one-half of the retirement benefits of petitioner from
Far East Bank and Trust Co. and one-half of petitioners shares of
stock in Manila Memorial Park and in the Provident Group of
Companies issustained but on the basis of the liquidation,
partition and distribution of the co-ownership and not of the
regime of conjugal partnership of gains. The rest of said Decision
and Resolution are AFFIRMED.
The Petition for Review on Certiorari (G.R. No. 127358)
contesting the Court of Appeals Resolutions of September 2, 1996 and
November 13, 1996 which increased the supportpendente lite in favor
of the parties son, Javy Singh Buenaventura, is now MOOT and
ACADEMIC and is, accordingly, DISMISSED.
No costs.
SO ORDERED.
G.R. No. 146294 July 31, 2006
JOHN ABING, petitioner,
vs.
JULIET WAEYAN, respondent.
DECISION
GARCIA, J.:
In this appeal by way of a petition for review under Rule 45 of the
Rules of Court, petitioner John Abing (John, hereafter) seeks to set
aside the Decision1 dated October 24, 2000 of the Court of Appeals
(CA) in CA-G.R. SP No. 48675, reversing that of the Regional Trial
Court (RTC) of Benguet, Branch 64, which affirmed an earlier decision
of the Municipal Trial Court (MTC) of Mankayan, Benguet in an
ejectment suit thereat commenced by the petitioner against the
respondent.
In the main, the controversy is between a man and a woman who,
during the good old days, lived together as husband and wife without
the benefit of marriage. During their cohabitation, they acquired
properties. Later, they parted ways, and with it this litigation between
them involving one of their common properties.
The facts:
Sometime in 1986, John and respondent Juliet Waeyan (Juliet, for
short) met and fell in love with each other. In time, the duo cohabited
as husband and wife without the benefit of marriage. Together, the
couple bought a 2-storey residential house from one Benjamin Macua
which was erected on a lot owned by a certain Alejandro Diño on
Aurora Street, Mankayan, Benguet. Consequent to the purchase, the
tax declaration of the 2-storey house was transferred in the name of
Juliet.
On December 2, 1991, Juliet left for overseas employment in Korea.
She would send money to John who deposited the same in their joint
bank account.
In 1992, the original 2-storey residential house underwent renovation.
To it was annexed a new structure which housed a sari-sari store. This
new structure and the sari-sari store thereat are the properties involved
in this case.
In 1994, Juliet returned from Korea and continued to live with John.
She managed the sari-sari store while John worked as a mine
employee of the Lepanto Consolidated Mining, Inc.
In 1995, the relationship between the two turned from bad to worse.
Hence, they decided to partition their properties. For the purpose, they
executed on October 7, 1995 a Memorandum of Agreement.
Unfortunately, the document was left unsigned by the parties although
signed by the witnesses thereto. Under their unsigned agreement,
John shall leave the couples' dwelling with Juliet paying him the
amount of P428,870.00 representing John's share in all their
properties. On the same date – October 7, 1995 – Juliet paid John the
sum ofP232,397.66 by way of partial payment of his share, with the
balance of P196,472.34 to be paid by Juliet in twelve monthly
installment beginning November 1995.
Juliet, however, failed to make good the balance. On account thereof,
John demanded of her to vacate the annex structure housing the sari-
sari store. Juliet refused, prompting John to file an ejectment suit
against her before the MTC of Mankayan, Benguet.
In his complaint, John alleged that he alone spent for the construction
of the annex structure with his own funds and thru money he borrowed
from his relatives. In fact, he added that the tax declaration for the
structure was under his name. On this premise, John claimed
exclusive ownership of the subject structure, which thereby gave him
the right to eject Juliet therefrom upon the latter's failure to pay the
agreed balance due him under the aforementioned Memorandum of
Agreement.
In her answer, Juliet countered that their original house was renovated
thru their common funds and that the subject structure annexed thereto
was merely an attachment or an extension of their original residential
house, hence the same pertained to the two of them in common.
In a decision2 dated March 15, 1997, the MTC, on its finding that the
money used in the construction of the structure in question solely came
from John, ruled that the same exclusively pertained to the latter, and
accordingly ordered Juliet's eviction therefrom, including the sari-
sari store thereat, and required her to surrender possession thereof to
John, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff
(John) and against the defendant (Juliet).
Defendant is hereby ordered to vacate the premises of the
store in litigation covered by Tax Declaration No. 96-001-
00445 in the name of the Plaintiff and turn over possession
thereof to the latter.
Defendant is hereby further ordered to pay the Plaintiff the
sum of P2,500.00 a month from the time she withheld
possession of the store in litigation in June 1996 until she
vacates the same and turn over possession thereof to the
Plaintiff.
Defendant is finally ordered, to pay the sum of P5,000.00 to
the Plaintiff by way of Attorney's fees; and to pay the costs.
SO ORDERED.
On Juliet's appeal to the RTC, the latter, in its decision of July 29,
1995, affirmed that of the MTC. Undaunted, Juliet then went to the CA
in CA-G.R. SP No. 48675.
As stated at the threshold hereof, the CA, in its Decision of October 24,
2000,3 reversed that of the RTC, to wit:
WHEREFORE, the petition is GRANTED. The assailed
decision of the Regional Trial Court is hereby reversed and
set aside. Petitioner, Juliet Waeyan is entitled to possess the
property and maintain therein her business.
SO ORDERED.
Partly says the CA in its reversal disposition:
It is undisputed that the parties lived together as husband
and wife without the benefit of marriage from 1986 to 1995
and that they acquired certain properties which must be
divided between them upon the termination of their common
law relationship.
xxx xxx xxx
. . . their property relations cannot be governed by the
provision of the Civil Code on conjugal partnership... but by
the rule on co-ownership.
xxx xxx xxx
. . . the parties' share in respect of the properties they have
accumulated during their cohabitation shall be equal unless
there is proof to the contrary.
To the CA, John's evidence failed to establish that he alone spent for
the construction of the annex structure. Hence, the same pertained to
both, and being a co-owner herself, Juliet cannot be evicted therefrom,
adding that if ever, John's cause of action should have been for a sum
of money "because he claims that Juliet still owes him the payment for
the extension." According to the CA, ejectment cannot lie against Juliet
because Juliet's possession of the premises in dispute was not by
virtue of a contract, express or implied, nor did she obtain such
possession thru force, intimidation, threat, strategy or stealth.
Hence, John's present recourse, submitting that the CA erred in –
1. not giving effect to the parties' Memorandum of
Agreement which should have been binding between them
albeit unsigned by both;
2. in holding that the subject premises (annex structure
housing the sari-sari store) is owned by the two of them in
common;
3. in ruling that the parties should settle their common
properties in a separate action for partition even as the
community character of the subject premises has not been
proven.
We AFFIRM with modification.
Essentially, the issues raised center on the core question of whether or
not the property subject of the suit pertains to the exclusive ownership
of petitioner, John. Departing from the factual findings of the two courts
before it, the CA found that the premises in dispute is owned in
common by Juliet and John, the latter having failed to establish by the
required quantum of proof that the money spent for the construction
thereof solely came from him. Being a co-owner of the same structure,
Juliet may not be ejected therefrom.
While the question raised is essentially one of fact, of which the Court
normally eschews from, yet, given the conflicting factual findings of the
three courts below, the Court shall go by the exception4 to the general
rule and proceed to make its own assessment of the evidence.
First and foremost, it is undisputed that the parties hereto lived
together as husband and wife from 1986 to 1995 without the benefit of
marriage. Neither is it disputed that sometime in December 1991, Juliet
left for Korea and worked thereat, sending money to John which the
latter deposited in their joint account. In fact, Juliet was still in Korea
when the annex structure was constructed in 1992.
Other than John's bare allegation that he alone, thru his own funds and
money he borrowed from his relatives, spent for the construction of the
annex structure, evidence is wanting to support such naked claim. For
sure, John even failed to reveal how much he spent therefor. Neither
did he divulge the names of the alleged relatives from whom he made
his borrowings, let alone the amount of money he borrowed from them.
All that petitioner could offer by way of reinforcing his claim of spending
his own funds and borrowed money in putting up the subject structure
was the affidavit executed by a certain Manuel Macaraeg to the effect
that petitioner borrowedP30,000.00 from him. Even then, Macaraeg
stated in his affidavit that it was sometime in 1990 when John
borrowed said amount from him. With the petitioner's own admission
that the subject structure was constructed only in 1992, or two years
after he borrowed P30,000.00 from Macaraeg, it is even doubtful
whether the amount he allegedly borrowed from the latter went into the
construction of the structure in dispute. More, it is noted that while
petitioner was able to present in evidence the Macaraeg affidavit, he
failed to introduce similar affidavits, if any, of his close relatives from
whom he claimed to have made similar borrowings. For sure, not a
single relative came forward to confirm petitioner's tale. In short, there
is a paucity of evidence, testimonial or documentary, to support
petitioner's self-serving allegation that the annex structure which
housed the sari-sari store was put up thru his own funds and/or money
borrowed by him. Sure, petitioner has in his favor the tax declaration
covering the subject structure. We have, however, ruled time and
again that tax declarations do not prove ownership but at best an
indicia of claims of ownership.5 Payment of taxes is not proof of
ownership, any more than indicating possession in the concept of an
owner.6 Neither tax receipts nor declaration of ownership for taxation
purposes are evidence of ownership or of the right to possess realty
when not supported by other effective proofs.7
In this connection, Article 147 of the Family Code is instructive. It
reads:
Art. 147. When a man and a woman who are capacitated to
marry each other, live exclusively with each other as
 husband and wife without the benefit of marriage or under a
void marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both of
them through their work or industry shall be governed by the
rules on co-ownership.
In the absence of proof to the contrary, properties acquired
while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be
owned by them in equal shares. For purposes of this Article,
a party who did not participate in the acquisition by other
party of any property shall be deemed to have contributed
jointly in the acquisition thereof if the former's efforts
consisted in the care and maintenance of the family and of
the household.
The law is clear. In the absence, as here, of proofs to the contrary, any
property acquired by common-law spouses during their period of
cohabitation is presumed to have been obtained thru their joint efforts
and is owned by them in equal shares. Their property relationship is
governed by the rules on co-ownership. And under this regime, they
owned their properties in common "in equal shares." Being herself a
co-owner of the structure in question, Juliet, as correctly ruled by the
CA, may not be ejected therefrom.
True it is that under Article 4878 of the Civil Code, a co-owner may
bring an action for ejectment against a co-owner who takes exclusive
possession and asserts exclusive ownership of a common property. It
bears stressing, however, that in this case, evidence is totally wanting
to establish John's or Juliet's exclusive ownership of the property in
question. Neither did Juliet obtain possession thereof by virtue of a
contract, express or implied, or thru intimidation, threat, strategy or
stealth. As borne by the record, Juliet was in possession of the subject
structure and the sari-sari store thereat by virtue of her being a co-
owner thereof. As such, she is as much entitled to enjoy its possession
and ownership as John.
We, however, disagree with the ruling of the CA that the
subject Memorandum of Agreement, being unsigned by Juliet and
John, has no binding effect between them.
It is a matter of record that pursuant to said Agreement, Juliet did pay
John the amount of P232,397.66, as initial payment for John's share in
their common properties, with the balance of P196,472.34 payable in
twelve monthly installments beginning November 1995. It is also a
matter of record that the Agreement was signed by the witnesses
thereto. Hence, the irrelevant circumstances that the Agreement was
left unsigned by Juliet and John cannot adversely affect its binding
force or effect between them, as evidently, Juliet's initial payment
ofP232,397.66 to John was in fulfillment of what the parties had agreed
upon thereunder. However, and as correctly held by the CA, Juliet's
failure to pay John the balance of the latter's share in their common
properties could at best give rise to an action for a sum of money
against Juliet, or for rescission of the said agreement and not for
ejectment.
WHEREFORE, the petition is DENIED and the assailed CA Decision
is AFFIRMED, except that portion thereof denying effect to the parties'
Memorandum of Agreement for being unsigned by both.
Costs against petitioner.
SO ORDERED.
Puno, Chairperson, Sandoval-Gutierrez, Corona, Azcuna, J.J., concur.
METROPOLITAN BANK AND TRUST CO., petitioner,
vs.
NICHOLSON PASCUAL a.k.a. NELSON PASCUAL, respondent.
DECISION
VELASCO, JR., J.:
Respondent Nicholson Pascual and Florencia Nevalga were married
on January 19, 1985. During the union, Florencia bought from spouses
Clarito and Belen Sering a 250-square meter lot with a three-door
apartment standing thereon located in Makati City. Subsequently,
Transfer Certificate of Title (TCT) No. S-101473/T-510 covering the
purchased lot was canceled and, in lieu thereof, TCT No. 1562831 of
the Registry of Deeds of Makati City was issued in the name of
Florencia, "married to Nelson Pascual" a.k.a. Nicholson Pascual.
In 1994, Florencia filed a suit for the declaration of nullity of marriage
under Article 36 of the Family Code, docketed as Civil Case No. Q-95-
23533. After trial, the Regional Trial Court (RTC), Branch 94 in Quezon
City rendered, on July 31, 1995, a Decision,2 declaring the marriage of
Nicholson and Florencia null and void on the ground of psychological
incapacity on the part of Nicholson. In the same decision, the
RTC, inter alia, ordered the dissolution and liquidation of the ex-
spouses’ conjugal partnership of gains. Subsequent events saw the
couple going their separate ways without liquidating their conjugal
partnership.
On April 30, 1997, Florencia, together with spouses Norberto and
Elvira Oliveros, obtained a PhP 58 million loan from petitioner
Metropolitan Bank and Trust Co. (Metrobank). To secure the
obligation, Florencia and the spouses Oliveros executed several real
estate mortgages (REMs) on their properties, including one involving
the lot covered by TCT No. 156283. Among the documents Florencia
submitted to procure the loan were a copy of TCT No. 156283, a
photocopy of the marriage-nullifying RTC decision, and a document
denominated as "Waiver" that Nicholson purportedly executed on April
9, 1995. The waiver, made in favor of Florencia, covered the conjugal
properties of the ex-spouses listed therein, but did not incidentally
include the lot in question.
Due to the failure of Florencia and the spouses Oliveros to pay their
loan obligation when it fell due, Metrobank, on November 29, 1999,
initiated foreclosure proceedings under Act No. 3135, as amended,
before the Office of the Notary Public of Makati City. Subsequently,
Metrobank caused the publication of the notice of sale on three issues
of Remate.3 At the auction sale on January 21, 2000, Metrobank
emerged as the highest bidder.
Getting wind of the foreclosure proceedings, Nicholson filed on June
28, 2000, before the RTC in Makati City, a Complaint to declare the
nullity of the mortgage of the disputed property, docketed as Civil Case
No. 00-789 and eventually raffled to Branch 65 of the court. In it,
Nicholson alleged that the property, which is still conjugal property,
was mortgaged without his consent.
Metrobank, in its Answer with Counterclaim and Cross-Claim,4 alleged
that the disputed lot, being registered in Florencia’s name, was
paraphernal. Metrobank also asserted having approved the mortgage
in good faith.
Florencia did not file an answer within the reglementary period and,
hence, was subsequently declared in default.
The RTC Declared the REM Invalid
After trial on the merits, the RTC rendered, on September 24, 2001,
judgment finding for Nicholson. The falloreads:
PREMISES CONSIDERED, the Court renders judgment
declaring the real estate mortgage on the property covered
by [TCT] No. 156283 of the Registry of Deeds for the City of
Makati as well as all proceedings thereon null and void.
The Court further orders defendants [Metrobank and
Florencia] jointly and severally to pay plaintiff [Nicholson]:
1. PhP100,000.00 by way of moral damages;
2. PhP75,000.00 by way of attorney’s fees; and
3. The costs.
SO ORDERED.5
Even as it declared the invalidity of the mortgage, the trial court found
the said lot to be conjugal, the same having been acquired during the
existence of the marriage of Nicholson and Florencia. In so ruling, the
RTC invoked Art. 116 of the Family Code, providing that "all property
acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is proved." To
the trial court, Metrobank had not overcome the presumptive conjugal
nature of the lot. And being conjugal, the RTC concluded that the
disputed property may not be validly encumbered by Florencia without
Nicholson’s consent.
The RTC also found the deed of waiver Florencia submitted to
Metrobank to be fatally defective. For let alone the fact that Nicholson
denied executing the same and that the signature of the notarizing
officer was a forgery, the waiver document was allegedly executed on
April 9, 1995 or a little over three months before the issuance of the
RTC decision declaring the nullity of marriage between Nicholson and
Florencia.
The trial court also declared Metrobank as a mortgagee in bad faith on
account of negligence, stating the observation that certain data
appeared in the supporting contract documents, which, if properly
scrutinized, would have put the bank on guard against approving the
mortgage. Among the data referred to was the date of execution of the
deed of waiver.
The RTC dismissed Metrobank’s counterclaim and cross-claim against
the ex-spouses.
Metrobank’s motion for reconsideration was denied. Undeterred,
Metrobank appealed to the Court of Appeals (CA), the appeal
docketed as CA-G.R. CV No. 74874.
The CA Affirmed with Modification the RTC’s Decision
On January 28, 2004, the CA rendered a Decision affirmatory of that of
the RTC, except for the award therein of moral damages and
attorney’s fees which the CA ordered deleted. The dispositive portion
of the CA’s Decision reads:
WHEREFORE, premises considered, the appealed decision
is hereby AFFIRMED WITH MODIFICATION with respect to
the award of moral damages and attorney’s fees which is
hereby DELETED.
SO ORDERED.6
Like the RTC earlier held, the CA ruled that Metrobank failed to
overthrow the presumption established in Art. 116 of the Family Code.
And also decreed as going against Metrobank was Florencia’s failure
to comply with the prescriptions of the succeeding Art. 124 of the Code
on the disposition of conjugal partnership property. Art. 124 states:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In
case of disagreement, the husband’s decision shall prevail,
subject to recourse to the court by the wife for proper
remedy x x x.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or
encumbrance without authority of the court or written
consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall be
void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the
third person, and may be perfected as a binding contract
upon the acceptance by the other spouse or authorization by
the court before the offer is withdrawn by either or both
offerors.
As to the deletion of the award of moral damages and attorney’s fees,
the CA, in gist, held that Metrobank did not enter into the mortgage
contract out of ill-will or for some fraudulent purpose, moral obliquity, or
like dishonest considerations as to justify damages.
Metrobank moved but was denied reconsideration by the CA.
Thus, Metrobank filed this Petition for Review on Certiorari under Rule
45, raising the following issues for consideration:
a. Whether or not the [CA] erred in declaring subject
property as conjugal by applying Article 116 of the Family
Code.
b. Whether or not the [CA] erred in not holding that the
declaration of nullity of marriage between the respondent
Nicholson Pascual and Florencia Nevalga ipso
facto dissolved the regime of community of property of the
spouses.
c. Whether or not the [CA] erred in ruling that the petitioner is
an innocent purchaser for value.7
Our Ruling
A modification of the CA’s Decision is in order.
The Disputed Property is Conjugal
It is Metrobank’s threshold posture that Art. 160 of the Civil Code
providing that "[a]ll property of the marriage is presumed to belong to
the conjugal partnership, unless it be prove[n] that it pertains
exclusively to the husband or to the wife," applies. To Metrobank, Art.
116 of the Family Code could not be of governing application inasmuch
as Nicholson and Florencia contracted marriage before the effectivity
of the Family Code on August 3, 1988. Citing Manongsong v.
Estimo,8 Metrobank asserts that the presumption of conjugal
ownership under Art. 160 of the Civil Code applies when there is proof
that the property was acquired during the marriage. Metrobank adds,
however, that for the presumption of conjugal ownership to operate,
evidence must be adduced to prove that not only was the property
acquired during the marriage but that conjugal funds were used for the
acquisition, a burden Nicholson allegedly failed to discharge.
To bolster its thesis on the paraphernal nature of the disputed property,
Metrobank cites Francisco v. Court of Appeals9 and Jocson v. Court of
Appeals,10 among other cases, where this Court held that a property
registered in the name of a certain person with a description of being
married is no proof that the property was acquired during the spouses’
marriage.
On the other hand, Nicholson, banking on De Leon v. Rehabilitation
Finance Corporation11 and Wong v. IAC,12contends that Metrobank
failed to overcome the legal presumption that the disputed property is
conjugal. He asserts that Metrobank’s arguments on the matter of
presumption are misleading as only one postulate needs to be shown
for the presumption in favor of conjugal ownership to arise, that is, the
fact of acquisition during marriage. Nicholson dismisses, as
inapplicable, Francisco and Jocson, noting that they are relevant only
when there is no indication as to the exact date of acquisition of the
property alleged to be conjugal.
As a final point, Nicholson invites attention to the fact that Metrobank
had virtually recognized the conjugal nature of the property in at least
three instances. The first was when the bank lumped him with
Florencia in Civil Case No. 00-789 as co-mortgagors and when they
were referred to as "spouses" in the petition for extrajudicial
foreclosure of mortgage. Then came the published notice of
foreclosure sale where Nicholson was again designated as co-
mortgagor. And third, in its demand-letter13 to vacate the disputed lot,
Metrobank addressed Nicholson and Florencia as "spouses," albeit the
finality of the decree of nullity of marriage between them had long set
in.
We find for Nicholson.
First, while Metrobank is correct in saying that Art. 160 of the Civil
Code, not Art. 116 of the Family Code, is the applicable legal provision
since the property was acquired prior to the enactment of the Family
Code, it errs in its theory that, before conjugal ownership could be
legally presumed, there must be a showing that the property was
acquired during marriage using conjugal funds. Contrary to
Metrobank’s submission, the Court did not, inManongsong,14 add the
matter of the use of conjugal funds as an essential requirement for the
presumption of conjugal ownership to arise. Nicholson is correct in
pointing out that only proof of acquisition during the marriage is needed
to raise the presumption that the property is conjugal. Indeed, if proof
on the use of conjugal is still required as a necessary condition before
the presumption can arise, then the legal presumption set forth in the
law would veritably be a superfluity. As we stressed in Castro v. Miat:
Petitioners also overlook Article 160 of the New Civil Code. It
provides that "all property of the marriage is presumed to be
conjugal partnership, unless it be prove[n] that it pertains
exclusively to the husband or to the wife." This article does
not require proof that the property was acquired with
funds of the partnership. The presumption applies even
when the manner in which the property was acquired does
not appear.15 (Emphasis supplied.)
Second, Francisco and Jocson do not reinforce Metrobank’s theory.
Metrobank would thrust on the Court, invoking the two cases, the
argument that the registration of the property in the name of "Florencia
Nevalga, married to Nelson Pascual" operates to describe only the
marital status of the title holder, but not as proof that the property was
acquired during the existence of the marriage.
Metrobank is wrong. As Nicholson aptly points out, if proof obtains on
the acquisition of the property during the existence of the marriage,
then the presumption of conjugal ownership applies. The correct
lesson of Franciscoand Jocson is that proof of acquisition during the
marital coverture is a condition sine qua non for the operation of the
presumption in favor of conjugal ownership. When there is no showing
as to when the property was acquired by the spouse, the fact that a
title is in the name of the spouse is an indication that the property
belongs exclusively to said spouse.16
The Court, to be sure, has taken stock of Nicholson’s arguments
regarding Metrobank having implicitly acknowledged, thus being in
virtual estoppel to question, the conjugal ownership of the disputed lot,
the bank having named the former in the foreclosure proceedings
below as either the spouse of Florencia or her co-mortgagor. It is felt,
however, that there is no compelling reason to delve into the matter of
estoppel, the same having been raised only for the first time in this
petition. Besides, however Nicholson was designated below does not
really change, one way or another, the classification of the lot in
question.
Termination of Conjugal Property Regime does
not ipso facto End the Nature of Conjugal Ownership
Metrobank next maintains that, contrary to the CA’s holding, Art. 129 of
the Family Code is inapplicable. Art. 129 in part reads:
Art. 129. Upon the dissolution of the conjugal partnership
regime, the following procedure shall apply:
xxxx
(7) The net remainder of the conjugal partnership properties
shall constitute the profits, which shall be divided equally
between husband and wife, unless a different proportion or
division was agreed upon in the marriage settlements or
unless there has been a voluntary waiver or forfeiture of
such share as provided in this Code.
 Apropos the aforequoted provision, Metrobank asserts that
the waiver executed by Nicholson, effected as it were before
the dissolution of the conjugal property regime, vested on
Florencia full ownership of all the properties acquired during
the marriage.
Nicholson counters that the mere declaration of nullity of marriage,
without more, does not automatically result in a regime of complete
separation when it is shown that there was no liquidation of the
conjugal assets.
We again find for Nicholson.
While the declared nullity of marriage of Nicholson and Florencia
severed their marital bond and dissolved the conjugal partnership, the
character of the properties acquired before such declaration continues
to subsist as conjugal properties until and after the liquidation and
partition of the partnership. This conclusion holds true whether we
apply Art. 129 of the Family Code on liquidation of the conjugal
partnership’s assets and liabilities which is generally prospective in
application, or Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185)
of the Civil Code on the subject, Conjugal Partnership of Gains. For,
the relevant provisions of both Codes first require the liquidation of the
conjugal properties before a regime of separation of property reigns.
In Dael v. Intermediate Appellate Court, we ruled that pending its
liquidation following its dissolution, the conjugal partnership of gains is
converted into an implied ordinary co-ownership among the surviving
spouse and the other heirs of the deceased. 17
In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern
the property relationship between the former spouses, where:
Each co-owner shall have the full ownership of his part and
of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights
are involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall be
limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
(Emphasis supplied.)
In the case at bar, Florencia constituted the mortgage on the disputed
lot on April 30, 1997, or a little less than two years after the dissolution
of the conjugal partnership on July 31, 1995, but before the liquidation
of the partnership. Be that as it may, what governed the property
relations of the former spouses when the mortgage was given is the
aforequoted Art. 493. Under it, Florencia has the right to mortgage or
even sell her one-half (1/2) undivided interest in the disputed property
even without the consent of Nicholson. However, the rights of
Metrobank, as mortgagee, are limited only to the 1/2 undivided portion
that Florencia owned. Accordingly, the mortgage contract insofar as it
covered the remaining 1/2 undivided portion of the lot is null and void,
Nicholson not having consented to the mortgage of his undivided half.
The conclusion would have, however, been different if Nicholson
indeed duly waived his share in the conjugal partnership. But, as found
by the courts a quo, the April 9, 1995 deed of waiver allegedly
executed by Nicholson three months prior to the dissolution of the
marriage and the conjugal partnership of gains on July 31, 1995 bore
his forged signature, not to mention that of the notarizing officer. A
spurious deed of waiver does not transfer any right at all, albeit it may
become the root of a valid title in the hands of an innocent buyer for
value.
Upon the foregoing perspective, Metrobank’s right, as mortgagee and
as the successful bidder at the auction of the lot, is confined only to the
1/2 undivided portion thereof heretofore pertaining in ownership to
Florencia. The other undivided half belongs to Nicholson. As owner pro
indiviso of a portion of the lot in question, Metrobank may ask for the
partition of the lot and its property rights "shall be limited to the portion
which may be allotted to [the bank] in the division upon the termination
of the co-ownership."18 This disposition is in line with the well-
established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so––quando res non
valet ut ago, valeat quantum valere potest.19
In view of our resolution on the validity of the auction of the lot in favor
of Metrobank, there is hardly a need to discuss at length whether or
not Metrobank was a mortgagee in good faith. Suffice it to state for the
nonce that where the mortgagee is a banking institution, the general
rule that a purchaser or mortgagee of the land need not look beyond
the four corners of the title is inapplicable.20 Unlike private individuals, it
behooves banks to exercise greater care and due diligence before
entering into a mortgage contract. The ascertainment of the status or
condition of the property offered as security and the validity of the
mortgagor’s title must be standard and indispensable part of the bank’s
operation.21 A bank that failed to observe due diligence cannot be
accorded the status of a bona fide mortgagee,22 as here.
But as found by the CA, however, Metrobank’s failure to comply with
the due diligence requirement was not the result of a dishonest
purpose, some moral obliquity or breach of a known duty for some
interest or ill-will that partakes of fraud that would justify damages.
WHEREFORE, the petition is PARTLY GRANTED. The appealed
Decision of the CA dated January 28, 2004, upholding with
modification the Decision of the RTC, Branch 65 in Makati City, in Civil
Case No. 00-789, isAFFIRMED with the MODIFICATION that the REM
over the lot covered by TCT No. 156283 of the Registry of Deeds of
Makati City is hereby declared valid only insofar as the pro
indiviso share of Florencia thereon is concerned.
As modified, the Decision of the RTC shall read:
PREMISES CONSIDERED, the real estate mortgage on the property
covered by TCT No. 156283 of the Registry of Deeds of Makati City
and all proceedings thereon are NULL and VOID with respect to the
undivided 1/2 portion of the disputed property owned by Nicholson,
but VALID with respect to the other undivided 1/2 portion belonging to
Florencia.
The claims of Nicholson for moral damages and attorney’s fees
are DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.
ALAIN M. DIO , G.R. No. 178044
Petitioner,
P
resent:
C
ARPIO, J.,
Chairperso
n,
- versus - NACHURA,
P
ERALTA,
A
BAD, and
M
ENDOZA,
JJ.
MA. CARIDAD L. DIO, Promulgated:
Respondent. January 19, 2011
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the 18 October 2006
Decision2 and the 12 March 2007 Order3 of the Regional Trial Court of
Las Pias City, Branch 254 (trial court) in Civil Case No. LP-01-0149.
The Antecedent Facts
Alain M. Dio (petitioner) and
Ma. Caridad L. Dio (respondent) were childhood friends and sweethearts.
They started living together in 1984 until they decided to separate in 1994. In
1996, petitioner and respondent decided to live together again. On 14 January
1998, they were married before Mayor Vergel Aguilar of Las Pias City.
On 30 May 2001, petitioner filed an action for Declaration of Nullity of
Marriage against respondent, citing psychological incapacity under Article 36
of the Family Code. Petitioner alleged that respondent failed in her marital
obligation to give love and support to him, and had abandoned her
responsibility to the family, choosing instead to go on shopping sprees and
gallivanting with her friends that depleted the family assets. Petitioner further
alleged that respondent was not faithful, and would at times become violent
and hurt him.
Extrajudicial service of summons was effected upon respondent who, at the
time of the filing of the petition, was already living in the United States of
America. Despite receipt of the summons, respondent did not file an answer to
the petition within the reglementary period. Petitioner later learned that
respondent filed a petition for divorce/dissolution of her marriage with
petitioner, which was granted by the Superior Court of California on 25 May
2001. Petitioner also learned that on 5 October 2001, respondent married a
certain Manuel V.Alcantara.
On 30 April 2002, the Office of the Las Pias prosecutor found that there were
no indicative facts of collusion between the parties and the case was set for
trial on the merits.
Dr. Nedy L. Tayag (Dr. Tayag), a clinical psychologist, submitted a
psychological report establishing that respondent was suffering from
Narcissistic Personality Disorder which was deeply ingrained in her system
since her early formative years. Dr. Tayag found that respondents disorder
was long-lasting and by nature, incurable.
In its 18 October 2006 Decision, the trial court granted the petition on the
ground that respondent was psychologically incapacited to comply with the
essential marital obligations at the time of the celebration of the marriage.
The Decision of the Trial Court
The trial court ruled that based on the evidence presented, petitioner was able
to establish respondents psychological incapacity. The trial court ruled that
even without Dr. Tayagspsychological report, the allegations in the complaint,
substantiated in the witness stand, clearly made out a case of psychological
incapacity against respondent. The trial court found that respondent
committed acts which hurt and embarrassed petitioner and the rest of the
family, and that respondent failed to observe mutual love, respect and fidelity
required of her under Article 68 of the Family Code. The trial court also ruled
that respondent abandoned petitioner when she obtained a divorce abroad and
married another man.
The dispositive portion of the trial courts decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered:
1. Declaring the marriage between plaintiff
ALAIN M. DIO and defendant MA.
CARIDAD L. DIO on January 14, 1998, and
all its effects under the law, as NULL and
VOID from the beginning; and
2. Dissolving the regime of absolute
community of property.
A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall
only be issued upon compliance with Article[s] 50 and 51 of the
Family Code.
Let copies of this Decision be furnished the parties, the Office of
the Solicitor General, Office of the City Prosecutor, Las Pias City
and the Office of the Local Civil Registrar of Las Pias City, for
their information and guidance.
SO ORDERED.4
Petitioner filed a motion for partial reconsideration questioning the dissolution
of the absolute community of property and the ruling that the decree of
annulment shall only be issued upon compliance with Articles 50 and 51 of
the Family Code.
In its 12 March 2007 Order, the trial court partially granted the motion and
modified its 18 October 2006 Decision as follows:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered:
1) Declaring the marriage between plaintiff ALAIN M. DIO and
defendant MA. CARIDAD L. DIO on January 14, 1998, and all its
effects under the law, as NULL and VOID from the beginning; and
2) Dissolving the regime of absolute community of property.
A DECREE OF ABSOLUTE NULLITY OF MARRIAGE shall be
issued after liquidation, partition and distribution of the parties
properties under Article 147 of the Family Code.
Let copies of this Order be furnished the parties, the Office of the
Solicitor General, the Office of the City Prosecutor of
Las Pias City and the Local Civil Registrar of Las Pias City, for
their information and guidance.5
Hence, the petition before this Court.
The Issue
The sole issue in this case is whether the trial court erred when it ordered that
a decree of absolute nullity of marriage shall only be issued after liquidation,
partition, and distribution of the parties properties under Article 147 of the
Family Code.
The Ruling of this Court
The petition has merit.
Petitioner assails the ruling of the trial court ordering that a decree of absolute
nullity of marriage shall only be issued after liquidation, partition, and
distribution of the parties properties under Article 147 of the Family Code.
Petitioner argues that Section 19(1) of the Rule on Declaration of Absolute
Nullity of Null Marriages and Annulment of Voidable Marriages6 (the Rule)
does not apply to Article 147 of the Family Code.
We agree with petitioner.
The Court has ruled in Valdes v. RTC, Branch 102, Quezon City that in a void
marriage, regardless of its cause, the property relations of the parties during
the period of cohabitation is governed either by Article 147 or Article 148 of
the Family Code.7 Article 147 of the Family Code applies to union of parties
who are legally capacitated and not barred by any impediment to contract
marriage, but whose marriage is nonetheless void,8 such as petitioner and
respondent in the case before the Court.
Article 147 of the Family Code provides:
Article 147. When a man and a woman who are capacitated to
marry each other, live exclusively with each other as husband and
wife without the benefit of marriage or under a void marriage, their
wages and salaries shall be owned by them in equal shares and the
property acquired by both of them through their work or industry
shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while
they lived together shall be presumed to have been obtained by
their joint efforts, work or industry, and shall be owned by them in
equal shares. For purposes of this Article, a party who did not
participate in the acquisition by the other party of any property
shall be deemed to have contributed jointly in the acquisition
thereof if the formers efforts consisted in the care and maintenance
of the family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or
her share in the property acquired during cohabitation and owned
in common, without the consent of the other, until after the
termination of their cohabitation.
When only one of the parties to a void marriage is in good faith,
the share of the party in bad faith in the co-ownership shall be
forfeited in favor of their common children. In case of default of or
waiver by any or all of the common children or their descendants,
each vacant share shall belong to the respective surviving
descendants. In the absence of descendants, such share shall
belong to the innocent party. In all cases, the forfeiture shall take
place upon termination of the cohabitation.
For Article 147 of the Family Code to apply, the following elements must be
present:
1. The man and the woman must be capacitated to marry each other;
2. They live exclusively with each other as husband and wife; and
3. Their union is without the benefit of marriage, or their marriage is
void.9
All these elements are present in this case and there is no question that Article
147 of the Family Code applies to the property relations between petitioner
and respondent.
We agree with petitioner that the trial court erred in ordering that a decree of
absolute nullity of marriage shall be issued only after liquidation, partition and
distribution of the parties properties under Article 147 of the Family Code.
The ruling has no basis because Section 19(1) of the Rule does not apply to
cases governed under Articles 147 and 148 of the Family Code. Section 19(1)
of the Rule provides:
Sec. 19. Decision. - (1) If the court renders a decision granting the
petition, it shall declare therein that the decree of absolute nullity
or decree of annulment shall be issued by the court only after
compliance with Articles 50 and 51 of the Family Code as
implemented under the Rule on Liquidation, Partition and
Distribution of Properties.
The pertinent provisions of the Family Code cited in Section 19(1) of the Rule
are:
Article 50. The effects provided for in paragraphs (2), (3), (4) and
(5) of Article 43 and in Article 44 shall also apply in proper cases
to marriages which are declared void ab initio or annulled by final
judgment under Articles 40 and 45.10
The final judgment in such cases shall provide for the liquidation,
partition and distribution of the properties of the spouses, the
custody and support of the common children, and the delivery of
their presumptive legitimes, unless such matters had been
adjudicated in previous judicial proceedings.
All creditors of the spouses as well as of the absolute community
of the conjugal partnership shall be notified of the proceedings for
liquidation.
In the partition, the conjugal dwelling and the lot on which it
is situated, shall be adjudicated in accordance with the provisions
of Articles 102 and 129.
Article 51. In said partition, the value of the
presumptive legitimes of all common children, computed as of the
date of the final judgment of the trial court, shall be delivered in
cash, property or sound securities, unless the parties, by mutual
agreement judicially approved, had already provided for such
matters.
The children of their guardian, or the trustee of their property, may
ask for the enforcement of the judgment.
The delivery of the presumptive legitimes herein prescribed shall
in no way prejudice the ultimate successional rights of the children
accruing upon the death of either or both of the parents; but the
value of the properties already received under the decree of
annulment or absolute nullity shall be considered as advances on
their legitime.
It is clear from Article 50 of the Family Code that Section 19(1) of the Rule
applies only to marriages which are declared void ab initio or annulled by
final judgment under Articles 40 and 45 of the Family Code. In short,
Article 50 of the Family Code does not apply to marriages which are declared
void ab initio under Article 36 of the Family Code, which should be declared
void without waiting for the liquidation of the properties of the parties.
Article 40 of the Family Code contemplates a situation where a second or
bigamous marriage was contracted. Under Article 40, [t]he absolute nullity of
a previous marriage may be invoked for purposes of remarriage on the basis
solely of a final judgment declaring such previous marriage void. Thus we
ruled:
x x x where the absolute nullity of a previous marriage is sought to
be invoked for purposes of contracting a second marriage, the sole
basis acceptable in law, for said projected marriage to be free from
legal infirmity, is a final judgment declaring a previous marriage
void.11
Article 45 of the Family Code, on the other hand, refers to voidable marriages,
meaning, marriages which are valid until they are set aside by final judgment
of a competent court in an action for annulment.12 In both instances under
Articles 40 and 45, the marriages are governed either by absolute community
of property13 or conjugal partnership of gains14 unless the parties agree to a
complete separation of property in a marriage settlement entered into before
the marriage. Since the property relations of the parties is governed by
absolute community of property or conjugal partnership of gains, there is a
need to liquidate, partition and distribute the properties before a decree of
annulment could be issued. That is not the case for annulment of marriage
under Article 36 of the Family Code because the marriage is governed by the
ordinary rules on co-ownership.
In this case, petitioners marriage to respondent was declared void under
Article 3615 of the Family Code and not under Article 40 or 45. Thus, what
governs the liquidation of properties owned in common by petitioner and
respondent are the rules on co-ownership. In Valdes, the Court ruled that the
property relations of parties in a void marriage during the period of
cohabitation is governed either by Article 147 or Article 148 of the Family
Code.16 The rules on co-ownership apply and the properties of the spouses
should be liquidated in accordance with the Civil Code provisions on co-
ownership. Under Article 496 of the Civil Code, [p]artition may be made by
agreement between the parties or by judicial proceedings. x x x. It is not
necessary to liquidate the properties of the spouses in the same proceeding for
declaration of nullity of marriage.
WHEREFORE, we AFFIRM the Decision of the trial court with
the MODIFICATION that the decree of absolute nullity of the marriage shall
be issued upon finality of the trial courts decision without waiting for the
liquidation, partition, and distribution of the parties properties under Article
147 of the Family Code.
SO ORDERED.
G.R. No. 202370 September 23, 2013
JUAN SEVILLA SALAS, JR., Petitioner,
vs.
EDEN VILLENA AGUILA, Respondent.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari1 assails the 16 March 2012
Decision and the 28 June 2012 Resolution3 of the Court of Appeals
2
(CA) in CA-G.R. CV No. 95322. The CA affirmed the 26 September
2008 Order4 of the Regional Trial Court of Nasugbu, Batangas, Branch
14 (RTC), in Civil Case No. 787.
The Facts
On 7 September 1985, petitioner Juan Sevilla Salas, Jr. (Salas) and
respondent Eden Villena Aguila (Aguila) were married. On 7 June
1986, Aguila gave birth to their daughter, Joan Jiselle. Five months
later, Salas left their conjugal dwelling. Since then, he no longer
communicated with Aguila or their daughter.
On 7 October 2003, Aguila filed a Petition for Declaration of Nullity of
Marriage (petition) citing psychological incapacity under Article 36 of
the Family Code. The petition states that they "have no conjugal
properties whatsoever."5 In the Return of Summons dated 13 October
2003, the sheriff narrated that Salas instructed his mother Luisa Salas
to receive the copy of summons and the petition.6
On 7 May 2007, the RTC rendered a Decision7 declaring the nullity of
the marriage of Salas and Aguila (RTC Decision). The RTC Decision
further provides for the "dissolution of their conjugal partnership of
gains, if any."8
On 10 September 2007, Aguila filed a Manifestation and
Motion9 stating that she discovered: (a) two 200-square-meter parcels
of land with improvements located in San Bartolome, Quezon City,
covered by Transfer Certificate of Title (TCT) No. N-259299-A and
TCT No. N-255497; and (b) a 108-square-meter parcel of land with
improvement located in Tondo, Manila, covered by TCT No. 243373
(collectively, "Discovered Properties"). The registered owner of the
Discovered Properties is "Juan S.Salas, married to Rubina C. Salas."
The manifestation was set for hearing on 21 September 2007.
However, Salas’ notice of hearing was returned unserved with the
remark, "RTS Refused To Receive."
On 19 September 2007, Salas filed a Manifestation with Entry of
Appearance10 requesting for an Entry of Judgment of the RTC Decision
since no motion for reconsideration or appeal was filed and no
conjugal property was involved.
On 21 September 2007, the hearing for Aguila’s manifestation ensued,
with Aguila, her counsel and the state prosecutor present. During the
hearing, Aguila testified that on 17 April 2007 someone informed her of
the existence of the Discovered Properties. Thereafter, she verified the
information and secured copies of TCTs of the Discovered Properties.
When asked to clarify, Aguila testified that Rubina C. Salas (Rubina) is
Salas’ common-law wife.11
On 8 February 2008, Salas filed an Opposition to the
Manifestation12 alleging that there is no conjugal property to be
partitioned based on Aguila’s petition. According to Salas, Aguila’s
statement was a judicial admission and was not made through
palpable mistake. Salas claimed that Aguila waived her right to the
Discovered Properties. Salas likewise enumerated properties he
allegedly waived in favor of Aguila, to wit:(1) parcels of land with
improvements located in Sugar Landing Subdivision, Alangilan,
Batangas City; No. 176 Brias Street, Nasugbu, Batangas; P.
Samaniego Street, Silangan, Nasugbu, Batangas; and Batangas City,
financed by Filinvest; (2) cash amounting to P200,000.00; and (3)
motor vehicles, specifically Honda City and Toyota Tamaraw
FX(collectively, "Waived Properties"). Thus, Salas contended that the
conjugal properties were deemed partitioned.
The Ruling of the Regional Trial Court
In its 26 September 2008 Order, the RTC ruled in favor of Aguila. The
dispositive portion of the Order reads:
WHEREFORE, foregoing premises being considered, the petitioner
and the respondent are hereby directed to partition between
themselves by proper instruments of conveyance, the following
properties, without prejudice to the legitime of their legitimate child,
Joan Jisselle Aguila Salas:
(1) A parcel of land registered in the name of Juan S. Salas
married to Rubina C. Salas located in San Bartolome,
Quezon City and covered by TCT No. N-259299-A marked
as Exhibit "A" and its improvements;
(2) A parcel of land registered in the name of Juan S.Salas
married to Rubina C. Salas located in San Bartolome,
Quezon City and covered by TCT No. N-255497 marked as
Exhibit "B" and its improvements;
(3) A parcel of land registered in the name of Juan S.Salas
married to Rubina Cortez Salas located in Tondo and
covered by TCT No. 243373-Ind. marked as Exhibit "D" and
its improvements.
Thereafter, the Court shall confirm the partition so agreed upon bythe
parties, and such partition, together with the Order of the Court
confirming the same, shall be recorded in the Registry of Deeds of the
place in which the property is situated.
SO ORDERED.13
The RTC held that pursuant to the Rules,14 even upon entry of
judgment granting the annulment of marriage, the court can proceed
with the liquidation, partition and distribution of the conjugal partnership
of gains if it has not been judicially adjudicated upon, as in this case.
The RTC found that the Discovered Properties are among the conjugal
properties to be partitioned and distributed between Salas and Aguila.
However, the RTC held that Salas failed to prove the existence of the
Waived Properties.
On 11 November 2008, Rubina filed a Complaint-in-Intervention,
claiming that: (1) she is Rubina Cortez, a widow and unmarried to
Salas; (2) the Discovered Properties are her paraphernal properties;
(3) Salas did not contribute money to purchase the Discovered
Properties as he had no permanent job in Japan; (4) the RTC did not
acquire jurisdiction over her as she was not a party in the case; and (5)
she authorized her brother to purchase the Discovered Properties but
because he was not well-versed with legal documentation, he
registered the properties in the name of "Juan S. Salas, married to
Rubina C. Salas."
In its 16 December 2009 Order, the RTC denied the Motion for
Reconsideration filed by Salas. The RTC found that Salas failed to
prove his allegation that Aguila transferred the Waived Properties to
third persons. The RTC emphasized that it cannot go beyond the
TCTs, which state that Salas is the registered owner of the Discovered
Properties. The RTC further held that Salas and Rubina were at fault
for failing to correct the TCTs, if they were not married as they claimed.
Hence, Salas filed an appeal with the CA.
The Ruling of the Court of Appeals
On 16 March 2012, the CA affirmed the order of the RTC. 15 The CA
ruled that Aguila’s statement in her petition is not a judicial admission.
The CA pointed out that the petition was filed on 7 October 2003, but
Aguila found the Discovered Properties only on 17 April 2007 or before
the promulgation of the RTC decision. Thus, the CA concluded that
Aguila was palpably mistaken in her petition and it would be unfair to
punish her over a matter that she had no knowledge of at the time she
made the admission. The CA also ruled that Salas was not deprived of
the opportunity to refute Aguila’s allegations in her manifestation, even
though he was not present in its hearing. The CA likewise held that
Rubina cannot collaterally attack a certificate of title.
In a Resolution dated 28 June 2012,16 the CA denied the Motion for
Reconsideration17 filed by Salas. Hence, this petition.
The Issues
Salas seeks a reversal and raises the following issues for resolution:
1. The Court of Appeals erred in affirming the trial court’s
decision ordering the partition of the parcels of land covered
by TCT Nos. N-259299-A and N-255497 in Quezon City and
as well as the property in Manila covered by TCT No.
243373 between petitioner and respondent.
2. The Court of Appeals erred in affirming the trial court’s
decision in not allowing Rubina C. Cortez to intervene in this
case18
The Ruling of the Court
The petition lacks merit.
Since the original manifestation was an action for partition, this Court
cannot order a division of the property, unless it first makes a
determination as to the existence of a co-ownership.19 Thus, the
settlement of the issue of ownership is the first stage in this action. 20
Basic is the rule that the party making an allegation in a civil case has
the burden of proving it by a preponderance of evidence.21 Salas
alleged that contrary to Aguila’s petition stating that they had no
conjugal property, they actually acquired the Waived Properties during
their marriage. However, the RTC found, and the CA affirmed, that
Salas failed to prove the existence and acquisition of the Waived
Properties during their marriage:
A perusal of the record shows that the documents submitted by [Salas]
as the properties allegedly registered in the name of [Aguila] are
merely photocopies and not certified true copies, hence, this Court
cannot admit the same as part of the records of this case. These are
the following:
(1) TCT No. T-65876 – a parcel of land located at Poblacion,
Nasugbu, Batangas, registered in the name of Eden A.
Salas, married to Juan Salas Jr. which is cancelled by TCT
No. T-105443 in the name of Joan Jiselle A. Salas, single;
(2) TCT No. T-68066 – a parcel of land situated in the Barrio
of Landing, Nasugbu, Batangas, registered in the name of
Eden A. Salas, married to Juan S. Salas Jr.
Moreover, [Aguila] submitted original copy of Certification issued by
Ms. Erlinda A. Dasal, Municipal Assessor of Nasugbu, Batangas,
certifying that [Aguila] has no real property (land and improvement)
listed in the Assessment Roll for taxation purposes, as of September
17, 2008.
Such evidence, in the absence of proof to the contrary, has the
presumption of regularity. x x x.
Suffice it to say that such real properties are existing and registered in
the name of [Aguila], certified true copies thereof should have been the
ones submitted to this Court. Moreover, there is also a presumption
that properties registered in the Registry of Deeds are also declared in
the Assessment Roll for taxation purposes.22
On the other hand, Aguila proved that the Discovered Properties were
acquired by Salas during their marriage.1âwphi1Both the RTC and the
CA agreed that the Discovered Properties registered in Salas’ name
were acquired during his marriage with Aguila. The TCTs of the
Discovered Properties were entered on 2 July 1999 and 29 September
2003, or during the validity of Salas and Aguila’s marriage. In
Villanueva v. Court of Appeals,23 we held that the question of whether
the properties were acquired during the marriage is a factual issue.
Factual findings of the RTC, particularly if affirmed by the CA, are
binding on us, except under compelling circumstances not present in
this case.24
On Salas’ allegation that he was not accorded due process for failing
to attend the hearing of Aguila’s manifestation, we find the allegation
untenable. The essence of due process is opportunity to be heard. We
hold that Salas was given such opportunity when he filed his
opposition to the manifestation, submitted evidence and filed his
appeal.
On both Salas and Rubina’s contention that Rubina owns the
Discovered Properties, we likewise find the contention unmeritorious.
The TCTs state that "Juan S. Salas, married to Rubina C. Salas" is the
registered owner of the Discovered Properties. A Torrens title is
generally a conclusive evidence of the ownership of the land referred
to, because there is a strong presumption that it is valid and regularly
issued.25 The phrase "married to" is merely descriptive of the civil
status of the registered owner.26 Furthermore, Salas did not initially
dispute the ownership of the Discovered Properties in his opposition to
the manifestation. It was only when Rubina intervened that Salas
supported Rubina’s statement that she owns the Discovered
Properties.
Considering that Rubina failed to prove her title or her legal interest in
the Discovered Properties, she has no right to intervene in this case.
The Rules of Court provide that only "a person who has a legal interest
in the matter in litigation, or in the success of either of the parties, or an
interest against both, or is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to intervene
in the action."27
In Diño v. Diño,28 we held that Article 147 of the Family Code applies to
the union of parties who are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage is nonetheless
declared void under Article 36 of the Family Code, as in this case.
Article147 of the Family Code provides:
ART. 147. When a man and a woman who are capacitated to marry
each other, live exclusively with each other as husband and wife
without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former’s efforts
consisted in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his or her
share in the property acquired during cohabitation and owned in
common, without the consent of the other, until after the termination of
their cohabitation.
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the co-ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any or
all of the common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all
cases, the forfeiture shall take place upon termination of the
cohabitation. (Emphasis supplied)
Under this property regime, property acquired during the marriage is
prima facie presumed to have been obtained through the couple’s joint
efforts and governed by the rules on co-ownership.29 In the present
case, Salas did not rebut this presumption. In a similar case where the
ground for nullity of marriage was also psychological incapacity, we
held that the properties acquired during the union of the parties, as
found by both the RTC and the CA, would be governed by co-
ownership.30 Accordingly, the partition of the Discovered Properties as
ordered by the RTC and the CA should be sustained, but on the basis
of co-ownership and not on the regime of conjugal partnership of
gains.
WHEREFORE, we DENY the petition. We AFFIRM the Decision
dated16 March 2012 and the Resolution dated 28 June 2012 of the
Court of Appeals in CA-G.R. CV No. 95322.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
G.R. No. 202932 October 23, 2013
EDILBERTO U. VENTURA JR., Petitioner,
vs.
SPOUSES PAULINO and EVANGELINE ABUDA, Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari seeks to annul the Decision1 dated
9 March 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 92330
and the Resolution2 dated 3 August 2012 denying the motion for
reconsideration. The Decision and Resolution dismissed the Appeal
dated 23 October 2009 and affirmed with modification the
Decision3 dated 24 November 2008 of the Regional Trial Court of
Manila, Branch 32 (RTC-Manila).
The Facts
The RTC-Manila and the CA found the facts to be as follows:
Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married
on 9 June 1980. Although Socorro and Esteban never had common
children, both of them had children from prior marriages: Esteban had
a daughter named Evangeline Abuda (Evangeline), and Socorro had a
son, who was the father of Edilberto U. Ventura, Jr. (Edilberto), the
petitioner in this case.
Evidence shows that Socorro had a prior subsisting marriage to Crispin
Roxas (Crispin) when she married Esteban. Socorro married Crispin
on 18 April 1952. This marriage was not annulled, and Crispin was
alive at the time of Socorro’s marriage to Esteban.
Esteban’s prior marriage, on the other hand, was dissolved by virtue of
his wife’s death in 1960. According to Edilberto, sometime in 1968,
Esteban purchased a portion of a lot situated at 2492 State Alley,
Bonifacio Street, Vitas, Tondo, Manila (Vitas property). The remaining
portion was thereafter purchased by Evangeline on her father’s behalf
sometime in 1970.4 The Vitas property was covered by Transfer
Certificate of Title No. 141782, dated 11 December 1980, issued to
"Esteban Abletes, of legal age, Filipino, married to Socorro Torres."5
Edilberto also claimed that starting 1978, Evangeline and Esteban
operated small business establishments located at 903 and 905
Delpan Street, Tondo, Manila (Delpan property).6
On 6 September 1997, Esteban sold the Vitas and Delpan properties
to Evangeline and her husband, Paulino Abuda (Paulino).7 According
to Edilberto:
when Esteban was diagnosed with colon cancer sometime in 1993, he
decided to sell the Delpan and Vitas properties to Evangeline.
Evangeline continued paying the amortizations on the two (2)
properties situated in Delpan Street. The amortizations, together with
the amount of Two Hundred Thousand Pesos (Php 200,000.00), which
Esteban requested as advance payment, were considered part of the
purchase price of the Delpan properties. Evangeline likewise gave her
father Fifty Thousand Pesos (Php 50,000.00) for the purchase of the
Vitas properties and she shouldered his medical expenses. 8
Esteban passed away on 11 September 1997, while Socorro passed
away on 31 July 1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto,
discovered the sale. Thus, Edilberto, represented by Leonora, filed a
Petition for Annulment of Deeds of Sale before the RTC-Manila.
Edilberto alleged that the sale of the properties was fraudulent
because Esteban’s signature on the deeds of sale was forged.
Respondents, on the other hand, argued that because of Socorro’s
prior marriage to Crispin, her subsequent marriage to Esteban was null
and void. Thus, neither Socorro nor her heirs can claim any right or
interest over the properties purchased by Esteban and respondents. 9
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro and Esteban
was void from the beginning.10 Article 83 of the Civil Code, which was
the governing law at the time Esteban and Socorro were married,
provides:
Art. 83. Any marriage subsequently contracted by any person during
the lifetime of the first spouse of such person shall be illegal and void
from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive
years at the time of the second marriage without the spouse
present having news of the absentee being alive, or if the
absentee, though he has been absent for less than seven
years, is generally considered as dead and believed to be so
by the spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed dead
according to articles 390 and 391. The marriage so
contracted shall be valid in any of the three cases until
declared null and void.
During trial, Edilberto offered the testimony of Socorro’s daughter-in-
law Conchita Ventura (Conchita). In her first affidavit, Conchita claimed
that Crispin, who was a seaman, had been missing and unheard from
for 35 years. However, Conchita recanted her earlier testimony and
executed an Affidavit of Retraction.11
The RTC-Manila ruled that the lack of a judicial decree of nullity does
not affect the status of the union. It applied our ruling in Niñal v.
Badayog:12
Jurisprudence under the Civil Code states that no judicial decree is
necessary in order to establish the nullity of a marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far as
concerns the conferring of legal rights upon the parties, is as though no
marriage had ever taken place. And therefore, being good for no legal
purpose, its invalidity can be maintained in any proceeding in which
[the] fact of marriage may be material, either direct or collateral, in any
civil court between any parties at any time, whether before or after the
death of either or both the husband and the wife, and upon mere proof
of the facts rendering such marriage void, it will be disregarded or
treated as non-existent by the courts.13
According to the RTC-Manila, the Vitas and Delpan properties are not
conjugal, and are governed by Articles 144 and 485 of the Civil Code,
to wit:
Art. 144. When a man and a woman live together as husband and wife,
but they are not married, or their marriage is void from the beginning,
the property acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by the rules on
co-ownership.
Art. 485. The share of the co-owners, in the benefits as well as in the
charges, shall be proportional to their respective interests. Any
stipulation in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall be
presumed equal, unless the contrary is proved.
The RTC-Manila then determined the respective shares of Socorro and
Esteban in the properties. It found that:
with respect to the property located at 2492 State Alley, Bonifacio St.
Vitas, Tondo, Manila covered by TCT No. 141782, formerly Marcos
Road, Magsaysay Village, Tondo, Manila, [Evangeline] declared that
part of it was first acquired by her father Esteban Abletes sometime in
1968 when he purchased the right of Ampiano Caballegan. Then, in
1970, she x x x bought the right to one-half of the remaining property
occupied by Ampiano Caballegan. However, during the survey of the
National Housing Authority, she allowed the whole lot to be registered
in her father’s name. As proof thereof, she presented Exhibits "8" to
"11" x x x. These documents prove that that she has been an occupant
of the said property in Vitas, Tondo even before her father and Socorro
Torres got married in June, 1980.14
Anent the parcels of land and improvements thereon 903 and 905 Del
Pan Street, Tondo, Manila, x x x Evangeline professed that in 1978,
before her father met Socorro Torres and before the construction of the
BLISS Project thereat, her father [already had] a bodega of canvas
(lona) and a sewing machine to sew the canvas being sold at 903 Del
Pan Street, Tondo Manila. In 1978, she was also operating Vangie’s
Canvas Store at 905 Del Pan Street, Tondo, Manila, which was
evidenced by Certificate of Registration of Business Name issued in
her favor on 09 November 1998 x x x. When the BLISS project was
constructed in 1980, the property became known as Units D-9 and D-
10. At first, her father [paid] for the amortizations for these two (2)
parcels of land but when he got sick with colon cancer in 1993, he
asked respondents to continue paying for the amortizations x x x.
[Evangeline] paid a total of P195,259.52 for Unit D-9 as shown by the
37 pieces of receipts x x x and the aggregate amount of P188,596.09
for Unit D-10, as evidenced by 36 receipts x x x.15
The RTC-Manila concluded that Socorro did not contribute any funds
for the acquisition of the properties. Hence, she cannot be considered
a co-owner, and her heirs cannot claim any rights over the Vitas and
Delpan properties.16
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision17 dated 9 March 2012, the CA sustained the decision of
the RTC-Manila. The dispositive portion of the CA Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the challenged
Decision of the court a quo STANDS.
SO ORDERED.18
The CA ruled, however, that the RTC-Manila should have applied
Article 148 of the Family Code, and not Articles 144 and 485 of the
Civil Code. Article 148 of the Family Code states that in unions
between a man and a woman who are incapacitated to marry each
other:
x x x only the properties acquired by both of the parties through their
actual joint contribution of money, property, or industry shall be owned
by them in common in proportion to their respective contributions. In
the absence of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The same rule and
presumption shall apply to joint deposits of money and evidences of
credit.
If one of the parties is validly married to another, his or her share in the
co-ownership shall accrue to the absolute community or conjugal
partnership existing in such valid marriage. If the party who acted in
bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding
Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals,19 and held
that the foregoing provision applies "even if the cohabitation or the
acquisition of the property occurred before the effectivity of the Family
Code."20 The CA found that Edilberto failed to prove that Socorro
contributed to the purchase of the Vitas and Delpan properties.
Edilberto was unable to provide any documentation evidencing
Socorro’s alleged contribution.21
On 2 April 2012, Edilberto filed a Motion for Reconsideration,22 which
was denied by the CA in its Resolution dated 3 August 2012.23
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman who
are incapacitated to marry each other, the ownership over the
properties acquired during the subsistence of that relationship shall be
based on the actual contribution of the parties. He even quoted our
ruling in Borromeo v. Descallar24 in his petition:
It is necessary for each of the partners to prove his or her actual
contribution to the acquisition of property in order to be able to lay
claim to any portion of it. Presumptions of co-ownership and equal
contribution do not apply.25
This is a reiteration of Article 148 of the Family Code, which the CA
applied in the assailed decision:
Art 148. In cases of cohabitation [wherein the parties are incapacitated
to marry each other], only the properties acquired by both of the parties
through their actual joint contribution of money, property, or industry
shall be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The
same rule and presumption shall apply to joint deposits of money and
evidences of credit.
If one of the parties is validly married to another, his or her share in the
co-ownership shall accrue to the absolute community or conjugal
partnership existing in such valid marriage. If the party who acted in
bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding
Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan properties can
be considered common property if: (1) these were acquired during the
cohabitation of Esteban and Socorro; and (2) there is evidence that the
properties were acquired through the parties’ actual joint contribution of
money, property, or industry.
Edilberto argues that the certificate of title covering the Vitas property
shows that the parcel of land is co-owned by Esteban and Socorro
because: (1) the Transfer Certificate of Title was issued on 11
December 1980, or several months after the parties were married; and
(2) title to the land was issued to "Esteban Abletes, of legal age,
married to Socorro Torres."26
We disagree. The title itself shows that the Vitas property is owned by
Esteban alone.1âwphi1 The phrase "married to Socorro Torres" is
merely descriptive of his civil status, and does not show that Socorro
co-owned the property.27The evidence on record also shows that
Esteban acquired ownership over the Vitas property prior to his
marriage to Socorro, even if the certificate of title was issued after the
celebration of the marriage. Registration under the Torrens title system
merely confirms, and does not vest title. This was admitted by
Edilberto on page 9 of his petition wherein he quotes an excerpt of our
ruling in Borromeo:
Registration is not a mode of acquiring ownership. It is only a means of
confirming the fact of its existence with notice to the world at large.
Certificates of title are not a source of right. The mere possession of a
title does not make one the true owner of the property. Thus, the mere
fact that respondent has the titles of the disputed properties in her
name does not necessarily, conclusively and absolutely make her the
owner. The rule on indefeasibility of title likewise does not apply to
respondent. A certificate of title implies that the title is quiet, and that it
is perfect, absolute and indefeasible. However, there are well-defined
exceptions to this rule, as when the transferee is not a holder in good
faith and did not acquire the subject properties for a valuable
consideration.
Edilberto claims that Esteban s actual contribution to the purchase of
the Delpan property was not sufficiently proven since Evangeline
shouldered some of the amortizations.28 Thus, the law presumes that
Esteban and Socorro jointly contributed to the acquisition of the Del
pan property.
We cannot sustain Edilberto s claim. Both the RTC-Manila and the CA
found that the Delpan property was acquired prior to the marriage of
Esteban and Socorro.29 Furthermore, even if payment of the purchase
price of the Delpan property was made by Evangeline, such payment
was made on behalf of her father. Article 1238 of the Civil Code
provides:
Art. 1238. Payment made by a third person who does not intend to be
reimbursed by the debtor is deemed to be a donation, which requires
the debtor s consent. But the payment is in any case valid as to the
creditor who has accepted it.
Thus, it is clear that Evangeline paid on behalf of her father, and the
parties intended that the Delpan property would be owned by and
registered under the name of Esteban.
During trial, the Abuda spouses presented receipts evidencing
payments of the amortizations for the Delpan property.1âwphi1 On the
other hand, Edilberto failed to show any evidence showing Socorro s
alleged monetary contributions. As correctly pointed out by the CA:
settled is the rule that in civil cases x x x the burden of proof rests upon
the party who, as determined by the pleadings or the nature of the
case, asserts the affirmative of an issue. x x x. Here it is Appellant who
is duty bound to prove the allegations in the complaint which
undoubtedly, he miserably failed to do so.30
WHEREFORE, the petition is DENIED. The Decision dated 9 March
2012 of the Court of Appeals in CA-G.R. CV No. 92330 is AFFIRMED.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
VIRGINIA OCAMPO, Petitioner, v. DEOGRACIO
OCAMPO, Respondent.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking the reversal of the Decision1 dated
August 11, 2010 and Resolution2 dated October 5, 2011,
respectively, of the Court of Appeals (CA) in CA-G.R. CV No.
82318, which denied the petitioner's appeal and motion for
reconsideration.
The facts of the case, as culled from the records, are as
follows:LawlibraryofCRAlaw
On September 10, 1990, petitioner Virginia Sy Ocampo
(Virginia) filed a Petition for Declaration of Nullity of her
Marriage with Deogracio Ocampo (Deogracio) before Regional
Trial Court of Quezon City, Branch 87, on the ground of
psychological incapacity, docketed as Civil Case No. Q-90-
6616.3redarclaw
On January 22, 1993, the trial court rendered a
Decision4 declaring the marriage between Virginia and
Deogracio as null and void, the dispositive portion of which
reads:LawlibraryofCRAlaw
WHEREFORE, the petition is hereby GRANTED. The marriage
between the petitioner and the respondent is hereby declared
null and void from the beginning under Article 36 of the
Family Code. The status of their children, however, shall
remain legitimate and their custody is hereby awarded to the
petitioner.
As to the couple's property relations, their conjugal
partnership of gains shall necessarily be dissolved and
liquidated but since the petitioner has not submitted any
detailed and formal listing or inventory of such property, the
court cannot act now on the liquidation aspect. The parties
are given thirty (30) days to submit an inventory of their
conjugal partnership for the purpose of liquidation.
IT IS SO ORDERED.5
The decision became final, since no party appealed the
judgment annulling the marriage.
On March 31, 1999, the trial court directed the parties to
submit a project of partition of their inventoried properties,
and if they failed to do so, a hearing will be held on the
factual issues with regard to said properties. Having failed to
agree on a project of partition of their conjugal properties,
hearing ensued where the parties adduced evidence in
support of their respective stand.
On January 13, 2004, the trial court rendered the assailed
Order6 stating that the properties declared by the parties
belong to each one of them on a 50-50 sharing.
On February 2, 2004, Virginia filed a Notice of Appeal before
the trial court.
On February 13, 2004, Deogracio filed a Motion to Deny
and/or Dismiss the Notice of Appeal and for immediate
execution pursuant to Section 20 of A.M. No. 02-1-10.
On February 20, 2004, the trial court denied the aforesaid
motion to deny and/or dismiss the notice of appeal for lack of
merit.
On March 4, 2004, Deogracio filed a Motion for
Reconsideration. On March 22, 2004, the trial court denied
anew the motion for reconsideration.
In the disputed Decision dated August 11, 2010, the Court of
Appeals denied Virginia's appeal. Virginia moved for
reconsideration, but was denied in a Resolution dated
October 5, 2011.
Thus, the instant petition for review substantially questioning
whether respondent should be deprived of his share in the
conjugal partnership of gains by reason of bad faith and
psychological perversity.
The petition lacks merit.
While Virginia and Deogracio tied the marital knot on January
16, 1978, it is still the Family Code provisions on conjugal
partnerships, however, which will govern the property
relations between Deogracio and Virginia even if they were
married before the effectivity of the Family Code.
Article 105 of the Family Code explicitly mandates that the
Family Code shall apply to conjugal partnerships established
before the Family Code without prejudice to vested rights
already acquired under the Civil Code or other laws. Thus,
under the Family Code, if the properties are acquired during
the marriage, the presumption is that they are conjugal.
Hence, the burden of proof is on the party claiming that they
are not conjugal. This is counter-balanced by the requirement
that the properties must first be proven to have been
acquired during the marriage before they are presumed
conjugal.7redarclaw
The applicable law, however, in so far as the liquidation of the
conjugal partnership assets and liability is concerned, is
Article 1298 of the Family Code in relation to Article 147 of the
Family Code.9redarclaw
The Court held that in a void marriage, as in those declared
void under Article 3610 of the Family Code, the property
relations of the parties during the period of cohabitation is
governed either by Article 147 or Article 148 of the Family
Code.11 Article 147 of the Family Code applies to union of
parties who are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage is
nonetheless void, as in this case. Article 147 of the Family
Code provides:LawlibraryofCRAlaw
Article 147. When a man and a woman who are capacitated to
marry each other, live exclusively with each other as husband
and wife without the benefit of marriage or under a void
marriage, their wages and salaries shall be owned by them in
equal shares and the property acquired by both of them
through their work or industry shall be governed by the rules
on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or
industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not
participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly in
the acquisition thereof if the former’s efforts consisted
in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of
his or her share in the property acquired during cohabitation
and owned in common, without the consent of the other, until
after the termination of their cohabitation.
When only one of the parties to a void marriage is in good
faith, the share of the party in bad faith in the co-ownership
shall be forfeited in favor of their common children. In case of
default of or waiver by any or all of the common children or
their descendants, each vacant share shall belong to the
respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In
all cases, the forfeiture shall take place upon termination of
the cohabitation.12
This particular kind of co-ownership applies when a man and
a woman, suffering no illegal impediment to marry each
other, exclusively live together as husband and wife under a
void marriage or without the benefit of marriage. It is clear,
therefore, that for Article 147 to operate, the man and the
woman: (1) must be capacitated to marry each other; (2) live
exclusively with each other as husband and wife; and (3)
their union is without the benefit of marriage or their
marriage is void, as in the instant case. The term
"capacitated" in the first paragraph of the provision pertains
to the legal capacity of a party to contract marriage. Any
impediment to marry has not been shown to have existed on
the part of either Virginia or Deogracio. They lived exclusively
with each other as husband and wife. However, their
marriage was found to be void under Article 36 of the Family
Code on the ground of psychological incapacity.13redarclaw
From the foregoing, property acquired by both spouses
through their work and industry should, therefore, be
governed by the rules on equal co-ownership. Any property
acquired during the union is prima facie presumed to have
been obtained through their joint efforts. A party who did not
participate in the acquisition of the property shall be
considered as having contributed to the same jointly if said
party's efforts consisted in the care and maintenance of the
family household. Efforts in the care and maintenance of the
family and household are regarded as contributions to the
acquisition of common property by one who has no salary or
income or work or industry.14redarclaw
Citing Valdes v. RTC,15 the Court held that the court a quo did
not commit a reversible error in utilizing Article 147 of the
Family Code and in ruling that the former spouses own the
family home and all their common property in equal shares,
as well as in concluding that, in the liquidation and partition of
the property that they owned in common, the provisions on
co-ownership under the Civil Code should aptly prevail. The
rules which are set up to govern the liquidation of either the
absolute community or the conjugal partnership of gains, the
property regimes recognized for valid and voidable marriages,
are irrelevant to the liquidation of the co-ownership that
exists between common-law spouses or spouses of void
marriages.
Thus, the trial court and the appellate court correctly held
that the parties will share on equal shares considering that
Virginia failed to prove that the properties were acquired
solely on her own efforts, to wit:LawlibraryofCRAlaw
This Court keenly observes that only testimonial evidence was
presented by the parties respectively, to prove and dispute
the claim of the other with regard to the properties and
assets acquired during the marriage. In the absence,
therefore, of any documentary evidence to prove the
contrary, all the properties acquired by the spouses during
the marriage are presumed conjugal. Further, the testimonial
evidence adduced by the petitioner aimed at establishing that
respondent took no part in acquiring said properties failed to
convince this Court that the latter be given only a meager
share thereof.
While it may be true that management of the businesses
referred to herein may have been actively undertaken by the
petitioner, it cannot be gainsaid that petitioner was able to do
so without the invaluable help of respondent. Even a plain
housewife who stays all the time in the house and take[s]
care of the household while the husband indulges in lucrative
and gainful activities is entitled to a share in the same
proportion the husband is, to the property or properties
acquired by the marriage. In the same breadth, respondent
must be considered to be entitled to the same extent.
Petitioner's claim that the seed money in that business was
provided by her mother and that, had it not been for that
reason, the properties now subject of controversy could not
have been acquired. That may be true but the Court is not
prone to believe so because of insufficient evidence to prove
such contention but petitioner's self-serving allegations. Of
course, attempts to establish respondent as an irresponsible
and unfaithful husband, as well as family man were made but
the testimonies adduced towards that end, failed to fully
convince the Court that respondent should be punished by
depriving him of his share of the conjugal property because of
his indiscretion.16
In the instant case, both the trial and appellate courts agreed
that the subject properties were in fact acquired during the
marriage of Virginia and Deogracio. We give due deference to
factual findings of trial courts, especially when affirmed by the
appellate court, as in this case. A reversal of this finding can
only occur if petitioners show sufficient reason for us to doubt
its correctness. There is none, in this case.
Likewise, we note that the former spouses both substantially
agree that they acquired the subject properties during the
subsistence of their marriage.17 The certificates of titles and
tax declarations are not sufficient proof to overcome the
presumption under Article 116 of the Family Code. All
properties acquired by the spouses during the marriage,
regardless in whose name the properties are registered, are
presumed conjugal unless proved otherwise. The presumption
is not rebutted by the mere fact that the certificate of title of
the property or the tax declaration is in the name of one of
the spouses only. Article 116 expressly provides that the
presumption remains even if the property is "registered in the
name of one or both of the spouses."18 Thus, the failure of
Virginia to rebut this presumption, said properties were
obtained by the spouses' joint efforts, work or industry, and
shall be jointly owned by them in equal shares. Accordingly,
the partition of the former spouses' properties on the basis of
co-ownership, as ordered by the RTC and the appellate court,
should be affirmed, and not on the regime of conjugal
partnership of gains.
WHEREFORE, the petition is DENIED. The Decision dated
August 11, 2010 and the Resolution dated October 5, 2011 of
the Court of Appeals in CA-G.R. CV No. 82318
are AFFIRMED. The case isREMANDED to the trial court for
proper disposition.
SO ORDERED.cralawlawlibrary
ERLINDA A. AGAPAY, petitioner, vs. CARLINA (CORNELIA) V.
PALANG and HERMINIA P. DELA CRUZ, respondents.
DECISION
ROMERO, J.:
Before us is a petition for review of the decision of the Court of
Appeals in CA-G.R. CV No. 24199 entitled Erlinda Agapay v. Carlina
(Cornelia) Palang and Herminia P. Dela Cruz dated June 22, 1994
involving the ownership of two parcels of land acquired during the
cohabitation of petitioner and private respondents legitimate spouse.
Miguel Palang contracted his first marriage on July 16, 1949
when he took private respondent Carlina (or Cornelia) Vallesterol as a
wife at the Pozorrubio Roman Catholic Church in Pangasinan. A few
months after the wedding, in October 1949, he left to work in
Hawaii. Miguel and Carlinas only child, Herminia Palang, was born on
May 12, 1950.
Miguel returned in 1954 for a year. His next visit to the
Philippines was in 1964 and during the entire duration of his year-long
sojourn he stayed in Zambales with his brother, not in Pangasinan with
his wife and child. The trial court found evidence that as early as 1957,
Miguel had attempted to divorce Carlina in Hawaii. [1] When he returned
for good in 1972, he refused to live with private respondents, but
stayed alone in a house in Pozorrubio, Pangasinan.
On July 15, 1973, the then sixty-three-year-old Miguel contracted
his second marriage with nineteen-year-old Erlinda Agapay, herein
petitioner.[2] Two months earlier, on May 17, 1973, Miguel and Erlinda,
as evidenced by the Deed of Sale, jointly purchased a parcel of
agricultural land located at San Felipe, Binalonan, Pangasinan with an
area of 10,080 square meters. Consequently, Transfer Certificate of
Title No. 101736 covering said rice land was issued in their names.
A house and lot in Binalonan, Pangasinan was likewise
purchased on September 23, 1975, allegedly by Erlinda as the sole
vendee. TCT No. 143120 covering said property was later issued in
her name.
On October 30, 1975, Miguel and Cornelia Palang executed a
Deed of Donation as a form of compromise agreement to settle and
end a case filed by the latter.[3] The parties therein agreed to donate
their conjugal property consisting of six parcels of land to their only
child, Herminia Palang.[4]
Miguel and Erlindas cohabitation produced a son, Kristopher A.
Palang, born on December 6, 1977. In 1979, Miguel and Erlinda were
convicted of Concubinage upon Carlinas complaint.[5] Two years later,
on February 15, 1981, Miguel died.
On July 11, 1981, Carlina Palang and her daughter Herminia
Palang de la Cruz, herein private respondents, instituted the case at
bar, an action for recovery of ownership and possession with damages
against petitioner before the Regional Trial Court in Urdaneta,
Pangasinan (Civil Case No. U-4265). Private respondents sought to
get back the riceland and the house and lot both located at Binalonan,
Pangasinan allegedly purchased by Miguel during his cohabitation with
petitioner.
Petitioner, as defendant below, contended that while the riceland
covered by TCT No. 101736 is registered in their names (Miguel and
Erlinda), she had already given her half of the property to their son
Kristopher Palang. She added that the house and lot covered by TCT
No. 143120 is her sole property, having bought the same with her own
money. Erlinda added that Carlina is precluded from claiming aforesaid
properties since the latter had already donated their conjugal estate to
Herminia.
After trial on the merits, the lower court rendered its decision on
June 30, 1989 dismissing the complaint after declaring that there was
little evidence to prove that the subject properties pertained to the
conjugal property of Carlina and Miguel Palang. The lower court went
on to provide for the intestate shares of the parties, particularly of
Kristopher Palang, Miguels illegitimate son. The dispositive portion of
the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered-
1) Dismissing the complaint, with costs against plaintiffs;
2) Confirming the ownership of defendant Erlinda Agapay of the residential
lot located at Poblacion, Binalonan, Pangasinan, as evidenced by TCT No.
143120, Lot 290-B including the old house standing therein;
3) Confirming the ownership of one-half (1/2) portion of that piece of
agricultural land situated at Balisa, San Felipe, Binalonan, Pangasinan,
consisting of 10,080 square meters and as evidenced by TCT No. 101736, Lot
1123-A to Erlinda Agapay;
4) Adjudicating to Kristopher Palang as his inheritance from his deceased
father, Miguel Palang, the one-half (1/2) of the agricultural land situated at
Balisa, San Felipe, Binalonan, Pangasinan, under TCT No. 101736 in the
name of Miguel Palang, provided that the former (Kristopher) executes,
within 15 days after this decision becomes final and executory, a quit-claim
forever renouncing any claims to annul/reduce the donation to Herminia
Palang de la Cruz of all conjugal properties of her parents, Miguel Palang and
Carlina Vallesterol Palang, dated October 30, 1975, otherwise, the estate of
deceased Miguel Palang will have to be settled in another separate action;
5) No pronouncement as to damages and attorneys fees.
SO ORDERED.[6]
On appeal, respondent court reversed the trial courts
decision. The Court of Appeals rendered its decision on July 22, 1994
with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the appealed decision is hereby
REVERSED and another one entered:
1. Declaring plaintiffs-appellants the owners of the properties in question;
2. Ordering defendant-appellee to vacate and deliver the properties in question
to herein plaintiffs-appellants;
3. Ordering the Register of Deeds of Pangasinan to cancel Transfer Certificate
of Title Nos. 143120 and 101736 and to issue in lieu thereof another
certificate of title in the name of plaintiffs-appellants.
No pronouncement as to costs.[7]
Hence, this petition.
Petitioner claims that the Court of Appeals erred in not sustaining
the validity of two deeds of absolute sale covering the riceland and the
house and lot, the first in favor of Miguel Palang and Erlinda Agapay
and the second, in favor of Erlinda Agapay alone. Second, petitioner
contends that respondent appellate court erred in not declaring
Kristopher A. Palang as Miguel Palangs illegitimate son and thus
entitled to inherit from Miguels estate. Third, respondent court erred,
according to petitioner, in not finding that there is sufficient pleading
and evidence that Kristoffer A. Palang or Christopher A. Palang should
be considered as party-defendant in Civil Case No. U-4625 before the
trial court and in CA-G.R. No. 24199.[8]
After studying the merits of the instant case, as well as the
pertinent provisions of law and jurisprudence, the Court denies the
petition and affirms the questioned decision of the Court of Appeals.
The first and principal issue is the ownership of the two pieces of
property subject of this action. Petitioner assails the validity of the
deeds of conveyance over the same parcels of land.There is no
dispute that the transfers of ownership from the original owners of the
riceland and the house and lot, Corazon Ilomin and the spouses
Cespedes, respectively, were valid.
The sale of the riceland on May 17, 1973, was made in favor of
Miguel and Erlinda. The provision of law applicable here is Article 148
of the Family Code providing for cases of cohabitation when a man
and a woman who are not capacitated to marry each other live
exclusively with each other as husband and wife without the benefit of
marriage or under a void marriage. While Miguel and Erlinda
contracted marriage on July 15, 1973, said union was patently void
because the earlier marriage of Miguel and Carlina was still susbsisting
and unaffected by the latters de facto separation.
Under Article 148, only the properties acquired by both of the
parties through their actual joint contribution of money, property or
industry shall be owned by them in common in proportion to their
respective contributions. It must be stressed that actual contribution is
required by this provision, in contrast to Article 147 which states that
efforts in the care and maintenance of the family and household, are
regarded as contributions to the acquisition of common property by
one who has no salary or income or work or industry. If the actual
contribution of the party is not proved, there will be no co-ownership
and no presumption of equal shares.[9]
In the case at bar, Erlinda tried to establish by her testimony that
she is engaged in the business of buy and sell and had a sari-
sari store[10] but failed to persuade us that she actually contributed
money to buy the subject riceland. Worth noting is the fact that on the
date of conveyance, May 17, 1973, petitioner was only around twenty
years of age and Miguel Palang was already sixty-four and a pensioner
of the U.S. Government. Considering her youthfulness, it is unrealistic
to conclude that in 1973 she contributed P3,750.00 as her share in the
purchase price of subject property,[11] there being no proof of the same.
 Petitioner now claims that the riceland was bought two months
before Miguel and Erlinda actually cohabited. In the nature of an
afterthought, said added assertion was intended to exclude their case
from the operation of Article 148 of the Family Code. Proof of the
precise date when they commenced their adulterous cohabitation not
having been adduced, we cannot state definitively that the riceland
was purchased even before they started living together. In any case,
even assuming that the subject property was bought before
cohabitation, the rules of co-ownership would still apply and proof of
actual contribution would still be essential.
Since petitioner failed to prove that she contributed money to the
purchase price of the riceland in Binalonan, Pangasinan, we find no
basis to justify her co-ownership with Miguel over the
same. Consequently, the riceland should, as correctly held by the
Court of Appeals, revert to the conjugal partnership property of the
deceased Miguel and private respondent Carlina Palang.
Furthermore, it is immaterial that Miguel and Carlina previously
agreed to donate their conjugal property in favor of their daughter
Herminia in 1975. The trial court erred in holding that the decision
adopting their compromise agreement in effect partakes the nature of
judicial confirmation of the separation of property between spouses
and the termination of the conjugal partnership. [12] Separation of
property between spouses during the marriage shall not take place
except by judicial order or without judicial conferment when there is an
express stipulation in the marriage settlements. [13] The judgment which
resulted from the parties compromise was not specifically and
expressly for separation of property and should not be so inferred.
With respect to the house and lot, Erlinda allegedly bought the
same for P20,000.00 on September 23, 1975 when she was only 22
years old. The testimony of the notary public who prepared the deed of
conveyance for the property reveals the falsehood of this claim. Atty.
Constantino Sagun testified that Miguel Palang provided the money for
the purchase price and directed that Erlindas name alone be placed as
the vendee.[14]
The transaction was properly a donation made by Miguel to
Erlinda, but one which was clearly void and inexistent by express
provision of law because it was made between persons guilty of
adultery or concubinage at the time of the donation, under Article 739
of the Civil Code. Moreover, Article 87 of the Family Code expressly
provides that the prohibition against donations between spouses now
applies to donations between persons living together as husband and
wife without a valid marriage,[15] for otherwise, the condition of those
who incurred guilt would turn out to be better than those in legal
union.[16]
The second issue concerning Kristopher Palangs status and
claim as an illegitimate son and heir to Miguels estate is here resolved
in favor of respondent courts correct assessment that the trial court
erred in making pronouncements regarding Kristophers heirship and
filiation inasmuch as questions as to who are the heirs of the decedent,
proof of filiation of illegitimate children and the determination of the
estate of the latter and claims thereto should be ventilated in the
proper probate court or in a special proceeding instituted for the
purpose and cannot be adjudicated in the instant ordinary civil action
which is for recovery of ownership and possession.[17]
As regards the third issue, petitioner contends that Kristopher
Palang should be considered as party-defendant in the case at bar
following the trial courts decision which expressly found that Kristopher
had not been impleaded as party defendant but theorized that he had
submitted to the courts jurisdiction through his mother/guardian ad
litem.[18] The trial court erred gravely. Kristopher, not having been
impleaded, was, therefore, not a party to the case at bar. His mother,
Erlinda, cannot be called his guardian ad litem for he was not involved
in the case at bar. Petitioner adds that there is no need for Kristopher
to file another action to prove that he is the illegitimate son of Miguel, in
order to avoid multiplicity of suits.[19] Petitioners grave error has been
discussed in the preceeding paragraph where the need for probate
proceedings to resolve the settlement of Miguels estate and
Kristophers successional rights has been pointed out.
WHEREFORE, the instant petition is hereby DENIED. The
questioned decision of the Court of Appeals is AFFIRMED. Costs
against petitioner.
SO ORDERED.
Regalado, (Chairman), Puno, and Mendoza, JJ., concur.
EUSTAQUIO MALLILIN, JR., petitioner,
vs.
MA. ELVIRA CASTILLO, respondent.
MENDOZA, J.:
This is a petition for review of the amended decision1 of the Court of
Appeals dated May 7, 1998 in CA G.R. CV No. 48443 granting
respondent's motion for reconsideration of its decision dated
November 7, 1996, and of the resolution dated December 21, 1998
denying petitioner's motion for reconsideration.
The factual and procedural antecedents are as follows:
On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a
complaint2 for "Partition and/or Payment of Co-Ownership Share,
Accounting and Damages" against respondent Ma. Elvira Castillo. The
complaint, docketed as Civil Case No. 93-656 at the Regional Trial
Court in Makati City, alleged that petitioner and respondent, both
married and with children, but separated from their respective spouses,
cohabited after a brief courtship sometime in 1979 while their
respective marriages still subsisted. During their union, they set up the
Superfreight Customs Brokerage Corporation, with petitioner as
president and chairman of the board of directors, and respondent as
vice-president and treasurer. The business flourished and petitioner
and respondent acquired real and personal properties which were
registered solely in respondent's name. In 1992, due to irreconcilable
differences, the couple separated. Petitioner demanded from
respondent his share in the subject properties, but respondent refused
alleging that said properties had been registered solely in her name.
In her Amended Answer,3 respondent admitted that she engaged in the
customs brokerage business with petitioner but alleged that the
Superfreight Customs Brokerage Corporation was organized with other
individuals and duly registered with the Securities and Exchange
Commission in 1987. She denied that she and petitioner lived as
husband and wife because the fact was that they were still legally
married to their respective spouses. She claimed to be the exclusive
owner of all real personal properties involved in petitioner's action for
partition on the ground that they were acquired entirely out of her own
money and registered solely in her name.
On November 25, 1994, respondent filed a Motion for Summary
Judgment,4 in accordance with Rule 34 of the Rules of Court.5 She
contended that summary judgment was proper, because the issues
raised in the pleadings were sham and not genuine, to wit:
A.
The main issue is — Can plaintiff validly claim the partition
and/or payment of co-ownership share, accounting and
damages, considering that plaintiff and defendant are
admittedly both married to their respective spouses under
still valid and subsisting marriages, even assuming as
claimed by plaintiff, that they lived together as husband and
wife without benefit of marriage? In other words, can the
parties be considered as co-owners of the properties, under
the law, considering the present status of the parties as both
married and incapable of marrying each other, even
assuming that they lived together as husband and wife (?)
B.
As a collateral issue, can the plaintiff be considered as an
unregistered co-owner of the real properties under the
Transfer Certificates of Title duly registered solely in the
name of defendant Ma. Elvira Castillo? This issue is also
true as far as the motor vehicles in question are concerned
which are also registered in the name of defendant.6
On the first point, respondent contended that even if she and petitioner
actually cohabited, petitioner could not validly claim a part of the
subject real and personal properties because Art. 144 of the Civil
Code, which provides that the rules on co-ownership shall govern the
properties acquired by a man and a woman living together as husband
and wife but not married, or under a marriage which is void ab initio,
applies only if the parties are not in any way incapacitated to contract
marriage.7 In the parties' case, their union suffered the legal
impediment of a prior subsisting marriage. Thus, the question of fact
being raised by petitioner, i.e., whether they lived together as husband
and wife, was irrelevant as no co-ownership could exist between them.
As to the second issue, respondent maintained that petitioner cannot
be considered an unregistered co-owner of the subject properties on
the ground that, since titles to the land are solely in her name, to grant
petitioner's prayer would be to allow a collateral attack on the validity of
such titles.
Petitioner opposed respondent's Motion for Summary Judgment.8 He
contended that the case presented genuine factual issues and that Art.
144 of the Civil Code had been repealed by the Family Code which
now allows, under Art. 148, a limited co-ownership even though a man
and a woman living together are not capacitated to marry each other.
Petitioner also asserted that an implied trust was constituted when he
and respondent agreed to register the properties solely in the latter's
name although the same were acquired out of the profits made from
their brokerage business. Petitioner invoked the following provisions of
the Civil Code:
Art. 1452. If two or more persons agree to purchase property
and by common consent the legal title is taken in the name
of one of them for the benefit of all, a trust is created by force
of law in favor of the others in proportion to the interest of
each.
Art. 1453. When the property is conveyed to a person in
reliance upon his declared intention to hold it for, or transfer
it to another grantor, there is an implied trust in favor of the
person whose benefit is contemplated.
On January 30, 1995, the trial court rendered its decision9 granting
respondent's motion for summary judgment. It ruled that an
examination of the pleadings shows that the issues involved were
purely legal. The trial court also sustained respondent's contention that
petitioner's action for partition amounted to a collateral attack on the
validity of the certificates of title covering the subject properties. It held
that even if the parties really had cohabited, the action for partition
could not be allowed because an action for partition among co-owners
ceases to be so and becomes one for title if the defendant, as in the
present case, alleges exclusive ownership of the properties in
question. For these reasons, the trial court dismissed Civil Case No.
93-656.
On appeals, the Court of Appeals on November 7, 1996, ordered the
case remanded to the court of origin for trial on the merits. It cited the
decision in Roque v. Intermediate Appellate Court 10 to the effect that
an action for partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a determinate
portion of the properties involved. If the defendant asserts exclusive
title over the property, the action for partition should not be dismissed.
Rather, the court should resolve the case and if the plaintiff is unable to
sustain his claimed status as a co-owner, the court should dismiss the
action, not because the wrong remedy was availed of, but because no
basis exists for requiring the defendant to submit to partition. Resolving
the issue whether petitioner's action for partition was a collateral attack
on the validity of the certificates of title, the Court of Appeals held that
since petitioner sought to compel respondent to execute documents
necessary to effect transfer of what he claimed was his share,
petitioner was not actually attacking the validity of the titles but in fact,
recognized their validity. Finally, the appellate court upheld petitioner's
position that Art. 144 of the Civil Code had been repealed by Art. 148
of the Family Code.
Respondent moved for reconsideration of the decision of Court of
Appeals. On May 7, 1998, nearly two years after its first decision, the
Court of Appeals granted respondent's motion and reconsidered its
prior decision. In its decision now challenged in the present petition, it
held —
Prefatorily, and to better clarify the controversy on whether this suit is a
collateral attack on the titles in issue, it must be underscored that
plaintiff-appellant alleged in his complaint that all the nine (9) titles are
registered in the name of defendant-appellee, Ma. Elvira T. Castillo,
except one which appears in the name of Eloisa Castillo (seepar. 9,
Complaint). However, a verification of the annexes of such initiatory
pleading shows some discrepancies, to wit:
1. TCT No. 149046 (Annex A) = Elvira T. Castillo, single
2. TCT No. 168208 (Annex B) = — do —
3. TCT No. 37046 (Annex C) = — do —
4. TCT No. 37047 (Annex D) = — do —
5. TCT No. 37048 (Annex E) = — do —
6. TCT No. 30368 (Annex F) = Steelhaus Realty & Dev.
Corp.
7. TCT No. 30369 (Annex G) = — do —
8. TCT No. 30371 (Annex F) = — do —
9. TCT No. (92323) 67881 (Annex I) = Eloisa Castillo
In this action, plaintiff-appellant seeks to be declared as 1/2 co-owner
of the real properties covered by the above listed titles and eventually
for their partition [par. (a), Prayer; p. 4 Records]. Notably, in order to
achieve such prayer for a joint co-ownership declaration, it is
unavoidable that the individual titles involved be altered, changed,
cancelled or modified to include therein the name of the appellee as a
registered 1/2 co-owner. Yet, no cause of action or even a prayer is
contained filed. Manifestly, absent any cause or prayer for the
alteration, cancellation, modification or changing of the titles involved,
the desired declaration of co-ownership and eventual partition will
utterly be an indirect or collateral attack on the subject titled in this suit.
It is here that We fell into error, such that, if not rectified will surely lead
to a procedural lapse and a possible injustice. Well settled is the rules
that a certificate of title cannot be altered, modified or cancelled except
in a direct proceeding in accordance with law.
In this jurisdiction, the remedy of the landowner whose property has
been wrongfully or erroneously registered in another name is, after one
year from the date of the decree, not to set aside the decree, but
respecting it as incontrovertible and no longer open to review, to bring
an action for reconveyance or, if the property had passed into the
hands of an innocent purchaser for value, for damages. Verily, plaintiff-
appellant should have first pursued such remedy or any other relief
directly attacking the subject titles before instituting the present
partition suit. Apropos, the case at bench appears to have been
prematurely filed.
Lastly, to grant the partition prayed for by the appellant will in effect
rule and decide against the properties registered in the names of
Steelhouse Realty and Development Corporation and Eloisa Castillo,
who are not parties in the case. To allow this to happen will surely
result to injustice and denial of due process of law. . . . 11
Petitioner moved for reconsideration but his motion was denied by the
Court of Appeals in its resolution dated December 21, 1998. Hence
this petition.
Petitioner contends that: (1) the Court of Appeals, in its first decision of
November 7, 1996, was correct in applying the Roque ruling and in
rejecting respondent's claim that she was the sole owner of the subject
properties and that the partition suit was a collateral attack on the titles;
(2) the Court of Appeals correctly rules in its first decision that Art. 148
of the Family Code governs the co-ownership between the parties,
hence, the complaint for partition is proper; (3) with respect to the
properties registered in the name of Steelhouse Realty, respondent
admitted ownership thereof and, at the very least, these properties
could simply be excluded and the partition limited to the remaining real
and personal properties; and (4) the Court of Appeals erred in not
holding that under the Civil Code, there is an implied trust in his
favor. 12
The issue in this case is really whether summary judgment, in
accordance with Rule 35 of the Rules of Court, is proper. We rule in
the negative.
First. Rule 35, §3 of the Rules of Court provides that summary
judgment is proper only when, based on the pleadings, depositions,
and admissions on file, and after summary hearing, it is shown that
except as to the amount of damages, there is no veritable issue
regarding any material fact in the action and the movant is entitled to
judgment as a matter of law. 1 Conversely, where the pleadings tender
a genuine issue, i.e., an issue of fact the resolution of which calls for
the presentation of evidence, as distinguished from an issue which is
sham, fictitious, contrived, set-up in bad faith, or patently unsubstantial,
summary judgment is not proper. 14
In the present case, we are convinced that genuine issues exist.
Petitioner anchors his claim of co-ownership on two factual grounds:
first, that said properties were acquired by him and respondent during
their union from 1979 to 1992 from profits derived from their brokerage
business; and second, that said properties were registered solely in
respondent's name only because they agreed to that arrangement,
thereby giving rise to an implied trust in accordance with Art. 1452 and
Art. 1453 of the Civil Code. These allegations are denied by
respondent. She denies that she and petitioner lived together as
husband and wife. She also claims that the properties in question were
acquired solely by her with her own money and resources. With such
conflicting positions, the only way to ascertain the truth is obviously
through the presentation of evidence by the parties.
The trial court ruled that it is immaterial whether the parties actually
lived together as husband and wife because Art. 144 of the Civil Code
can not be made to apply to them as they were both incapacitated to
marry each other. Hence, it was impossible for a co-ownership to exist
between them.
We disagree.
Art. 144 of the Civil Code provides:
When a man and a woman live together as husband and
wife, but they are not married, or their marriage is void from
the beginning, the property acquired by either or both of
them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership.
This provision of the Civil Code, applies only to cases in which a man
and a woman live together as husband and wife without the benefit of
marriage provided they are not incapacitated or are without
impediment to marry each other, 15 or in which the marriage is void ab
initio, provided it is not bigamous. Art. 144, therefore, does not cover
parties living in an adulterous relationship. However, Art. 148 of the
Family Code now provides for a limited co-ownership in cases where
the parties in union are incapacitated to marry each other. It states:
In cases of cohabitation not falling under the preceding
article, 16 only the properties acquired by both of the parties
through their actual joint contribution of money, property or
industry shall be owned by them in common in proportion to
their respective contributions. In the absence of proof to the
contrary, their contributions and corresponding shares are
presumed to be equal. The same rule and presumption shall
apply to joint deposits of money and evidences of credits.
If one of the parties is validly married to another, his or her
share in the co-ownership shall accrue to the absolute
community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in the
manner provided in the last paragraph of the preceding
article.
The foregoing rules on forfeiture shall likewise apply even if
both parties are in bad faith.
It was error for the trial court to rule that, because the parties in this
case were not capacitated to marry each other at the time that they
were alleged to have been living together, they could not have owned
properties in common. The Family Code, in addition to providing that a
co-ownership exists between a man and a woman who live together as
husband and wife without the benefit of marriage, likewise provides
that, if the parties are incapacitated to marry each other, properties
acquired by them through their joint contribution of money, property or
industry shall be owned by them in common in proportion to their
contributions which, in the absence of proof to the contrary, is
presumed to be equal. There is thus co-ownership eventhough the
couple are not capacitated to marry each other.
In this case, there may be a co-ownership between the parties herein.
Consequently, whether petitioner and respondent cohabited and
whether the properties involved in the case are part of the alleged co-
ownership are genuine and material. All but one of the properties
involved were alleged to have been acquired after the Family Code
took effect on August 3, 1988. With respect to the property acquired
before the Family Code took effect if it is shown that it was really
acquired under the regime of the Civil Code, then it should be
excluded.
Petitioner also alleged in paragraph 7 of his complaint that:
Due to the effective management, hardwork and enterprise
of plaintiff assisted by defendant, their customs brokerage
business grew and out of the profits therefrom, the parties
acquired real and personal properties which were, upon
agreement of the parties, listed and registered in defendant's
name with plaintiff as the unregistered co-owner of all said
properties. 17
On the basis of this, he contends that an implied trust existed pursuant
to Art. 1452 of the Civil Code which provides that "(I)f two or more
persons agree to purchase property and by common consent the legal
title is taken in the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion to the
interest of each." We do not think this is correct. The legal relation of
the parties is already specifically covered by Art. 148 of the Family
Code under which all the properties acquired by the parties out of their
actual joint contributions of money, property or industry shall constitute
a co-ownership. Co-ownership is a form of trust and every co-owner is
a trustee for the other. 18 The provisions of Art. 1452 and Art. 1453 of
the Civil Code, then are no longer material since a trust relation
already inheres in a co-ownership which is governed under Title III,
Book II of the Civil Code.
Second. The trial court likewise dismissed petitioner's action on the
ground that the same amounted to a collateral attack on the certificates
of title involved. As already noted, at first, the Court of Appeals ruled
that petitioner's action does not challenge the validity of respondent's
titles. However, on reconsideration, it reversed itself and affirmed the
trial court. It noted that petitioner's complaint failed to include a prayer
for the alteration, cancellation, modification, or changing of the titles
involved. Absent such prayer, the appellate court ruled that a
declaration of co-ownership and eventual partition would involve an
indirect or collateral attack on the titles. We disagree.
A torrens title, as a rule, is conclusive and indefeasible. Proceeding
from this, P.D. No. 1529, 19 §48 provides that a certificate of title shall
not be subject to collateral attack and can not be altered, modified, or
canceled except in a direct proceeding. When is an action an attack on
a title? It is when the object of the action or proceeding is to nullify the
title, and thus challenge the judgment pursuant to which the title was
decreed. The attack is direct when the object of an action or
proceeding is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral
when, in an action to obtain a different relief, an attack on the judgment
is nevertheless made as an incident thereof. 20
In his complaint for partition, consistent with our ruling in Roque
regarding the nature of an action for partition, petitioner seeks first, a
declaration that he is a co-owner of the subject properties; and second,
the conveyance of his lawful shares. He does not attack respondent's
titles. Petitioner alleges no fraud, mistake, or any other irregularity that
would justify a review of the registration decree in respondent's favor.
His theory is that although the subject properties were registered solely
in respondent's name, but since by agreement between them as well
as under the Family Code, he is co-owner of these properties and as
such is entitled to the conveyance of his shares. On the premise that
he is a co-owner, he can validly seek the partition of the properties in
co-ownership and the conveyance to him of his share.
Thus, in Guevara v. Guevara, 21 in which a parcel of land bequeathed
in a last will and testament was registered in the name of only one of
the heirs, with the understanding that he would deliver to the others
their shares after the debts of the original owner had been paid, this
Court ruled that notwithstanding the registration of the land in the name
of only one of the heirs, the other heirs can claim their shares in "such
action, judicial or extrajudicial, as may be necessary to partition the
estate of the testator." 22
Third. The Court of Appeals also reversed its first decision on the
ground that to order partition will, in effect, rule and decide against
Steelhouse Realty Development Corporation and Eloisa Castillo, both
strangers to the present case, as to the properties registered in their
names. This reasoning, however, ignores the fact that the majority of
the properties involved in the present case are registered in
respondent's name, over which petitioner claims rights as a co-owner.
Besides, other than the real properties, petitioner also seeks partition
of a substantial amount of personal properties consisting of motor
vehicles and several pieces of jewelry. By dismissing petitioner's
complaint for partition on grounds of due process and equity, the
appellate court unwittingly denied petitioner his right to prove
ownership over the claimed real and personal properties. The
dismissal of petitioner's complaint is unjustified since both ends may be
amply served by simply excluding from the action for partition the
properties registered in the name of Steelhouse Realty and Eloisa
Castillo.
WHEREFORE, the amended decision of the Court of Appeals, dated
May 7, 1998, is REVERSED and the case is REMANDED to the
Regional Trial Court, Branch 59, Makati City for further proceedings on
the merits.
SO ORDERED.
Bellosillo, Quisumbing and De Leon, Jr., JJ., concur.
Buena, J., took no part.
FIRST DIVISION
G.R. No. 132529. February 2, 2001
SUSAN NICDAO CARIÑO, petitioner,
vs.
SUSAN YEE CARIÑO, respondent.
DECISION
YNARES-SANTIAGO, J.:
The issue for resolution in the case at bar hinges on the validity of the
two marriages contracted by the deceased SPO4 Santiago S. Cariño,
whose “death benefits” is now the subject of the controversy between
the two Susans whom he married. 1âwphi1.nêt
Before this Court is a petition for review on certiorari seeking to set
aside the decision 1 of the Court of Appeals in CA-G.R. CV No. 51263,
which affirmed in toto the decision 2 of the Regional Trial Court of
Quezon City, Branch 87, in Civil Case No. Q-93-18632.
During the lifetime of the late SPO4 Santiago S. Cariño, he contracted
two marriages, the first was on June 20, 1969, with petitioner Susan
Nicdao Cariño (hereafter referred to as Susan Nicdao), with whom he
had two offsprings, namely, Sahlee and Sandee Cariño; and the
second was on November 10, 1992, with respondent Susan Yee
Cariño (hereafter referred to as Susan Yee), with whom he had no
children in their almost ten year cohabitation starting way back in 1982.
In 1988, SPO4 Santiago S. Cariño became ill and bedridden due to
diabetes complicated by pulmonary tuberculosis. He passed away on
November 23, 1992, under the care of Susan Yee, who spent for his
medical and burial expenses. Both petitioner and respondent filed
claims for monetary benefits and financial assistance pertaining to the
deceased from various government agencies. Petitioner Susan Nicdao
was able to collect a total of P146,000.00 from “MBAI, PCCUI,
Commutation, NAPOLCOM, [and] Pag-ibig,” 3 while respondent Susan
Yee received a total of P21,000.00 from “GSIS Life, Burial (GSIS) and
burial (SSS).” 4
On December 14, 1993, respondent Susan Yee filed the instant case
for collection of sum of money against petitioner Susan Nicdao
praying, inter alia, that petitioner be ordered to return to her at least
one-half of the one hundred forty-six thousand pesos (P146,000.00)
collectively denominated as “death benefits” which she (petitioner)
received from “MBAI, PCCUI, Commutation, NAPOLCOM, [and] Pag-
ibig.” Despite service of summons, petitioner failed to file her answer,
prompting the trial court to declare her in default.
Respondent Susan Yee admitted that her marriage to the deceased
took place during the subsistence of, and without first obtaining a
judicial declaration of nullity of, the marriage between petitioner and
the deceased. She, however, claimed that she had no knowledge of
the previous marriage and that she became aware of it only at the
funeral of the deceased, where she met petitioner who introduced
herself as the wife of the deceased. To bolster her action for collection
of sum of money, respondent contended that the marriage of petitioner
and the deceased is void ab initio because the same was solemnized
without the required marriage license. In support thereof, respondent
presented: 1) the marriage certificate of the deceased and the
petitioner which bears no marriage license number; 5 and 2) a
certification dated March 9, 1994, from the Local Civil Registrar of San
Juan, Metro Manila, which reads –
This is to certify that this Office has no record of marriage license of
the spouses SANTIAGO CARINO (sic) and SUSAN NICDAO, who are
married in this municipality on June 20, 1969. Hence, we cannot issue
as requested a true copy or transcription of Marriage License number
from the records of this archives.
This certification is issued upon the request of Mrs. Susan Yee Cariño
for whatever legal purpose it may serve. 6
On August 28, 1995, the trial court ruled in favor of respondent, Susan
Yee, holding as follows:
WHEREFORE, the defendant is hereby ordered to pay the plaintiff the
sum of P73,000.00, half of the amount which was paid to her in the
form of death benefits arising from the death of SPO4 Santiago S.
Cariño, plus attorney’s fees in the amount of P5,000.00, and costs of
suit.
IT IS SO ORDERED. 7
On appeal by petitioner to the Court of Appeals, the latter affirmed in
toto the decision of the trial court. Hence, the instant petition,
contending that:
I.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN AFFIRMING THE FINDINGS OF THE LOWER
COURT THAT VDA. DE CONSUEGRA VS. GSIS IS
APPLICABLE TO THE CASE AT BAR.
II.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN APPLYING EQUITY IN THE INSTANT CASE
INSTEAD OF THE CLEAR AND UNEQUIVOCAL
MANDATE OF THE FAMILY CODE.
III.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN NOT FINDING THE CASE OF VDA. DE
CONSUEGRA VS GSIS TO HAVE BEEN MODIFIED,
AMENDED AND EVEN ABANDONED BY THE
ENACTMENT OF THE FAMILY CODE. 8
Under Article 40 of the Family Code, the absolute nullity of a previous
marriage may be invoked for purposes of remarriage on the basis
solely of a final judgment declaring such previous marriage void.
Meaning, 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 the previous marriage
void. 9 However, for purposes other than remarriage, no judicial action
is necessary to declare a marriage an absolute nullity. For other
purposes, such as but not limited to the determination of heirship,
legitimacy or illegitimacy of a child, settlement of estate, dissolution of
property regime, or a criminal case for that matter, the court may pass
upon the validity of marriage even after the death of the parties thereto,
and even in a suit not directly instituted to question the validity of said
marriage, so long as it is essential to the determination of the
case. 10 In such instances, evidence must be adduced, testimonial or
documentary, to prove the existence of grounds rendering such a
previous marriage an absolute nullity. These need not be limited solely
to an earlier final judgment of a court declaring such previous marriage
void. 11
It is clear therefore that the Court is clothed with sufficient authority to
pass upon the validity of the two marriages in this case, as the same is
essential to the determination of who is rightfully entitled to the subject
“death benefits” of the deceased.
Under the Civil Code, which was the law in force when the marriage of
petitioner Susan Nicdao and the deceased was solemnized in 1969, a
valid marriage license is a requisite of marriage, 12 and the absence
thereof, subject to certain exceptions, 13 renders the marriage void ab
initio. 14
In the case at bar, there is no question that the marriage of petitioner
and the deceased does not fall within the marriages exempt from the
license requirement. A marriage license, therefore, was indispensable
to the validity of their marriage. This notwithstanding, the records
reveal that the marriage contract of petitioner and the deceased bears
no marriage license number and, as certified by the Local Civil
Registrar of San Juan, Metro Manila, their office has no record of such
marriage license. In Republic v. Court of Appeals, 15 the Court held that
such a certification is adequate to prove the non-issuance of a
marriage license. Absent any circumstance of suspicion, as in the
present case, the certification issued by the local civil registrar enjoys
probative value, he being the officer charged under the law to keep a
record of all data relative to the issuance of a marriage license.
Such being the case, the presumed validity of the marriage of
petitioner and the deceased has been sufficiently overcome. It then
became the burden of petitioner to prove that their marriage is valid
and that they secured the required marriage license. Although she was
declared in default before the trial court, petitioner could have squarely
met the issue and explained the absence of a marriage license in her
pleadings before the Court of Appeals and this Court. But petitioner
conveniently avoided the issue and chose to refrain from pursuing an
argument that will put her case in jeopardy. Hence, the presumed
validity of their marriage cannot stand.
It is beyond cavil, therefore, that the marriage between petitioner
Susan Nicdao and the deceased, having been solemnized without the
necessary marriage license, and not being one of the marriages
exempt from the marriage license requirement, is undoubtedly void ab
initio.
It does not follow from the foregoing disquisition, however, that since
the marriage of petitioner and the deceased is declared void ab initio,
the “death benefits” under scrutiny would now be awarded to
respondent Susan Yee. To reiterate, under Article 40 of the Family
Code, for purposes of remarriage, there must first be a prior judicial
declaration of the nullity of a previous marriage, though void, before a
party can enter into a second marriage, otherwise, the second
marriage would also be void.
Accordingly, the declaration in the instant case of nullity of the previous
marriage of the deceased and petitioner Susan Nicdao does not
validate the second marriage of the deceased with respondent Susan
Yee. The fact remains that their marriage was solemnized without first
obtaining a judicial decree declaring the marriage of petitioner Susan
Nicdao and the deceased void. Hence, the marriage of respondent
Susan Yee and the deceased is, likewise, void ab initio.
One of the effects of the declaration of nullity of marriage is the
separation of the property of the spouses according to the applicable
property regime. 16 Considering that the two marriages are void ab
initio, the applicable property regime would not be absolute community
or conjugal partnership of property, but rather, be governed by the
provisions of Articles 147 and 148 of the Family Code on “Property
Regime of Unions Without Marriage.”
Under Article 148 of the Family Code, which refers to the property
regime of bigamous marriages, adulterous relationships, relationships
in a state of concubine, relationships where both man and woman are
married to other persons, multiple alliances of the same married
man, 17 -
“... [O]nly the properties acquired by both of the parties through their
actual joint contribution of money, property, or industry shall be owned
by them in common in proportion to their respective contributions ...”
In this property regime, the properties acquired by the parties through
their actual joint contribution shall belong to the co-ownership.
Wages and salaries earned by each party belong to him or her
exclusively. Then too, contributions in the form of care of the home,
children and household, or spiritual or moral inspiration, are excluded
in this regime. 18
Considering that the marriage of respondent Susan Yee and the
deceased is a bigamous marriage, having been solemnized during the
subsistence of a previous marriage then presumed to be valid
(between petitioner and the deceased), the application of Article 148 is
therefore in order.
The disputed P146,000.00 from MBAI [AFP Mutual Benefit
Association, Inc.], NAPOLCOM, Commutation, Pag-ibig, and PCCUI,
are clearly renumerations, incentives and benefits from governmental
agencies earned by the deceased as a police officer. Unless
respondent Susan Yee presents proof to the contrary, it could not be
said that she contributed money, property or industry in the acquisition
of these monetary benefits. Hence, they are not owned in common by
respondent and the deceased, but belong to the deceased alone and
respondent has no right whatsoever to claim the same. By intestate
succession, the said “death benefits” of the deceased shall pass to his
legal heirs. And, respondent, not being the legal wife of the deceased
is not one of them.
As to the property regime of petitioner Susan Nicdao and the
deceased, Article 147 of the Family Code governs. This article applies
to unions of parties who are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage is nonetheless
void for other reasons, like the absence of a marriage license. Article
147 of the Family Code reads -
Art. 147. When a man and a woman who are capacitated to marry
each other, live exclusively with each other as husband and wife
without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former’s efforts
consisted in the care and maintenance of the family and of the
household.
xxx
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the co-ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any or
all of the common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all
cases, the forfeiture shall take place upon termination of the
cohabitation.
In contrast to Article 148, under the foregoing article, wages and
salaries earned by either party during the cohabitation shall be owned
by the parties in equal shares and will be divided equally between
them, even if only one party earned the wages and the other did not
contribute thereto. 19 Conformably, even if the disputed “death benefits”
were earned by the deceased alone as a government employee,
Article 147 creates a co-ownership in respect thereto, entitling the
petitioner to share one-half thereof. As there is no allegation of bad
faith in the present case, both parties of the first marriage are
presumed to be in good faith. Thus, one-half of the subject “death
benefits” under scrutiny shall go to the petitioner as her share in the
property regime, and the other half pertaining to the deceased shall
pass by, intestate succession, to his legal heirs, namely, his children
with Susan Nicdao.
In affirming the decision of the trial court, the Court of Appeals relied
on the case of Vda. de Consuegra v. Government Service Insurance
System, 20 where the Court awarded one-half of the retirement benefits
of the deceased to the first wife and the other half, to the second wife,
holding that:
“... [S]ince the defendant’s first marriage has not been dissolved or
declared void the conjugal partnership established by that marriage
has not ceased. Nor has the first wife lost or relinquished her status as
putative heir of her husband under the new Civil Code, entitled to
share in his estate upon his death should she survive him.
Consequently, whether as conjugal partner in a still subsisting
marriage or as such putative heir she has an interest in the husband’s
share in the property here in dispute....” And with respect to the right of
the second wife, this Court observed that although the second
marriage can be presumed to be void ab initio as it was celebrated
while the first marriage was still subsisting, still there is need for judicial
declaration of such nullity. And inasmuch as the conjugal partnership
formed by the second marriage was dissolved before judicial
declaration of its nullity, “[t]he only just and equitable solution in this
case would be to recognize the right of the second wife to her share of
one-half in the property acquired by her and her husband, and
consider the other half as pertaining to the conjugal partnership of the
first marriage.” 21
It should be stressed, however, that the aforecited decision is premised
on the rule which requires a prior and separate judicial declaration of
nullity of marriage. This is the reason why in the said case, the Court
determined the rights of the parties in accordance with their existing
property regime.
In Domingo v. Court of Appeals, 22 however, the Court, construing
Article 40 of the Family Code, clarified that a prior and separate
declaration of nullity of a marriage is an all important condition
precedent only for purposes of remarriage. That is, if a party who is
previously married wishes to contract a second marriage, he or she
has to obtain first a judicial decree declaring the first marriage void,
before he or she could contract said second marriage, otherwise the
second marriage would be void. The same rule applies even if the first
marriage is patently void because the parties are not free to determine
for themselves the validity or invalidity or their marriage. However, for
purposes other than to remarry, like for filing a case for collection of
sum of money anchored on a marriage claimed to be valid, no prior
and separate judicial declaration of nullity is necessary. All that a party
has to do is to present evidence, testimonial or documentary, that
would prove that the marriage from which his or her rights flow is in
fact valid. Thereupon, the court, if material to the determination of the
issues before it, will rule on the status of the marriage involved and
proceed to determine the rights of the parties in accordance with the
applicable laws and jurisprudence. Thus, in Niñal v. Bayadog, 23 the
Court explained:
[T]he court may pass upon the validity of marriage even in a suit not
directly instituted to question the same so long as it is essential to the
determination of the case. This is without prejudice to any issue that
may arise in the case. When such need arises, a final judgment of
declaration of nullity is necessary even if the purpose is other than to
remarry. The clause “on the basis of a final judgment declaring such
previous marriage void” in Article 40 of the Family Code connoted that
such final judgment need not be obtained only for purpose of
remarriage.
WHEREFORE, the petition is GRANTED, and the decision of the Court
of Appeals in CA-G.R. CV No. 51263 which affirmed the decision of
the Regional Trial Court of Quezon City ordering petitioner to pay
respondent the sum of P73,000.00 plus attorney’s fees in the amount
of P5,000.00, is REVERSED and SET ASIDE. The complaint in Civil
Case No. Q-93-18632, is hereby DISMISSED. No pronouncement as
to costs.1âwphi1.nêt
SO ORDERED.
Davide, Jr., C.J. (Chairman), Kapunan, and Pardo, JJ., concur.
Puno J., on official leave.
JACINTO SAGUID, petitioner, vs. HON. COURT OF
APPEALS, THE REGIONAL TRIAL COURT, BRANCH 94,
BOAC, MARINDUQUE and GINA S. REY,respondents.
DECISION
YNARES-SANTIAGO, J.:
The regime of limited co-ownership of property governing the
union of parties who are not legally capacitated to marry each other,
but who nonetheless live together as husband and wife, applies to
properties acquired during said cohabitation in proportion to their
respective contributions. Co-ownership will only be up to the extent of
the proven actual contribution of money, property or industry. Absent
proof of the extent thereof, their contributions and corresponding
shares shall be presumed to be equal.[1]
Seventeen-year old Gina S. Rey was married,[2] but
separated de facto from her husband, when she met petitioner Jacinto
Saguid in Marinduque, sometime in July 1987.[3] After a brief courtship,
the two decided to cohabit as husband and wife in a house built on a
lot owned by Jacintos father.[4] Their cohabitation was not blessed with
any children. Jacinto made a living as the patron of their fishing vessel
Saguid Brothers.[5] Gina, on the other hand, worked as a fish dealer,
but decided to work as an entertainer in Japan from 1992 to 1994
when her relationship with Jacintos relatives turned sour. Her periodic
absence, however, did not ebb away the conflict with petitioners
relatives. In 1996, the couple decided to separate and end up their 9-
year cohabitation.[6]
 On January 9, 1997, private respondent filed a complaint for
Partition and Recovery of Personal Property with Receivership against
the petitioner with the Regional Trial Court of Boac, Marinduque. She
alleged that from her salary of $1,500.00 a month as entertainer in
Japan, she was able to contribute P70,000.00 in the completion of their
unfinished house. Also, from her own earnings as an entertainer and
fish dealer, she was able to acquire and accumulate appliances,
pieces of furniture and household effects, with a total value of
P111,375.00. She prayed that she be declared the sole owner of these
personal properties and that the amount of P70,000.00, representing
her contribution to the construction of their house, be reimbursed to
her.
Private respondent testified that she deposited part of her
earnings in her savings account with First Allied Development
Bank.[7] Her Pass Book shows that as of May 23, 1995, she had a
balance of P21,046.08.[8] She further stated that she had a total of
P35,465.00[9] share in the joint account deposit which she and the
petitioner maintained with the same bank.[10] Gina declared that said
deposits were spent for the purchase of construction materials,
appliances and other personal properties.[11]
In his answer[12] to the complaint, petitioner claimed that the
expenses for the construction of their house were defrayed solely from
his income as a captain of their fishing vessel. He averred that private
respondents meager income as fish dealer rendered her unable to
contribute in the construction of said house. Besides, selling fish was a
mere pastime to her; as such, she was contented with the small
quantity of fish allotted to her from his fishing trips. Petitioner further
contended that Gina did not work continuously in Japan from 1992 to
1994, but only for a 6-month duration each year. When their house
was repaired and improved sometime in 1995-1996, private
respondent did not share in the expenses because her earnings as
entertainer were spent on the daily needs and business of her
parents. From his income in the fishing business, he claimed to have
saved a total of P130,000.00, P75,000.00 of which was placed in a
joint account deposit with private respondent. This savings, according
to petitioner was spent in purchasing the disputed personal properties.
On May 21, 1997, the trial court declared the petitioner as in
default for failure to file a pre-trial brief as required by Supreme Court
Circular No. 1-89.[13]
On May 26, 1997, petitioner filed a motion for
reconsideration[14] of the May 21, 1997 order, which was denied on
June 2, 1997, and private respondent was allowed to present
evidenceex parte.[15] Petitioner filed another motion for reconsideration
but the same was also denied on October 8, 1997.
On July 15, 1998, a decision[16] was rendered in favor of private
respondent, the dispositive portion of which reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in
favor of the plaintiff Gina S. Rey against defendant Jacinto Saguid:
a) Ordering the partition of the house identified as plaintiffs Exhibit C and D
and directing the defendant to return and/or reimburse to the plaintiff the
amount of seventy thousand pesos (P70,000,00) which the latter actually
contributed to its construction and completion;
b) Declaring the plaintiff as the exclusive owner of the personal properties
listed on Exhibit M;
c) Ordering the defendant, and/or anyone in possession of the aforesaid
personal properties, to return and/or deliver the same to the plaintiff; and
d) Ordering the defendant to pay the plaintiff moral damages in the sum of
fifty thousand pesos (P50,000.00) plus the costs of suit.
SO ORDERED.[17]
On appeal, said decision was affirmed by the Court of Appeals;
however, the award of P50,000.00 as moral damages was deleted for
lack of basis.[18] The appellate court ruled that the propriety of the order
which declared the petitioner as in default became moot and academic
in view of the effectivity of the 1997 Rules of Civil Procedure. It
explained that the new rules now require the filing of a pre-trial brief
and the defendants non-compliance therewith entitles the plaintiff to
present evidence ex parte.
Both parties filed motions for reconsideration which were denied;
hence, petitioner filed the instant petition based on the following
assigned errors:
A.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A
REVERSIBLE ERROR IN APPLYING RETROACTIVELY THE 1997
RULES OF CIVIL PROCEDURE IN THE PRESENT CASE AND
HOLDING THE FIRST ASSIGNED ERROR THEREIN MOOT AND
ACADEMIC THUS, FAILED TO RULE ON THE PROPRIETY OF THE
TRIAL COURTS REFUSAL TO SET ASIDE THE ORDER OF DEFAULT
DUE TO MISTAKE AND/OR EXCUSABLE NEGLIGENCE COMMITTED
BY PETITIONER.
B.
THE HONORABLE COURT OF APPEALS COMMIT[TED] A
REVERSIBLE ERROR IN RELYING ON THE FACTUAL FINDINGS OF
THE TRIAL COURT WHICH RECEIVED THE EVIDENCE OF HEREIN
RESPONDENT ONLY EX PARTE.[19]
The issues for resolution are: (1) whether or not the trial court
erred in allowing private respondent to present evidence ex parte; and
(2) whether or not the trial courts decision is supported by evidence.
Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure,
the failure of the defendant to file a pre-trial brief shall have the same
effect as failure to appear at the pre-trial, i.e., the plaintiff may present
his evidence ex parte and the court shall render judgment on the basis
thereof.[20] The remedy of the defendant is to file a motion for
reconsideration[21] showing that his failure to file a pre-trial brief was
due to fraud, accident, mistake or excusable neglect.[22] The motion
need not really stress the fact that the defendant has a valid and
meritorious defense because his answer which contains his defenses
is already on record.[23]
In the case at bar, petitioner insists that his failure to file a pre-
trial brief is justified because he was not represented by counsel. This
justification is not, however, sufficient to set aside the order directing
private respondent to present evidence ex parte, inasmuch as the
petitioner chose at his own risk not to be represented by counsel. Even
without the assistance of a lawyer, petitioner was able to file a motion
for extension to file answer,[24] the required answer stating therein the
special and affirmative defenses,[25] and several other motions.[26] If it
were true that petitioner did not understand the import of the April 23,
1997 order directing him to file a pre-trial brief, he could have inquired
from the court or filed a motion for extension of time to file the
brief. Instead, he waited until May 26, 1997, or 14 days from his
alleged receipt of the April 23, 1997 order before he filed a motion
asking the court to excuse his failure to file a brief. Pre-trial rules are
not to be belittled or dismissed because their non-observance may
result in prejudice to a partys substantive rights. Like all rules, they
should be followed except only for the most persuasive of reasons
when they may be relaxed to relieve a litigant of an injustice not
commensurate with the degree of his thoughtlessness in not complying
with the procedure prescribed.[27]
In the instant case, the fact that petitioner was not assisted by a
lawyer is not a persuasive reason to relax the application of the
rules. There is nothing in the Constitution which mandates that a party
in a non-criminal proceeding be represented by counsel and that the
absence of such representation amounts to a denial of due process.
The assistance of lawyers, while desirable, is not indispensable. The
legal profession is not engrafted in the due process clause such that
without the participation of its members the safeguard is deemed
ignored or violated.[28]
However, the Court of Appeals erred in ruling that the effectivity
of the 1997 Rules of Civil Procedure, specifically, Section 6, Rule 18
thereof, rendered moot and academic the issue of whether or not the
plaintiff may be allowed to present evidence ex parte for failure of the
defendant to file a pre-trial brief. While the rules may indeed be applied
retroactively, the same is not called for in the case at bar. Even before
the 1997 Rules of Civil Procedure took effect on July 1, 1997, the filing
of a pre-trial brief was required under Circular No. 1-89 which became
effective on February 1, 1989. Pursuant to the said circular, [f]ailure to
file pre-trial briefs may be given the same effect as the failure to
appear at the pre-trial, that is, the party may be declared non-suited or
considered as in default.[29]
Coming now to the substantive issue, it is not disputed that Gina
and Jacinto were not capacitated to marry each other because the
former was validly married to another man at the time of her
cohabitation with the latter. Their property regime therefore is governed
by Article 148[30] of the Family Code, which applies to bigamous
marriages, adulterous relationships, relationships in a state of
concubinage, relationships where both man and woman are married to
other persons, and multiple alliances of the same married man. Under
this regime, only the properties acquired by both of the parties through
their actual joint contribution of money, property, or industry shall be
owned by them in common in proportion to their respective
contributions ...[31] Proof of actual contribution is required.[32]
In the case at bar, although the adulterous cohabitation of the
parties commenced in 1987, which is before the date of the effectivity
of the Family Code on August 3, 1998, Article 148 thereof applies
because this provision was intended precisely to fill up the hiatus in
Article 144 of the Civil Code.[33] Before Article 148 of the Family Code
was enacted, there was no provision governing property relations of
couples living in a state of adultery or concubinage. Hence, even if the
cohabitation or the acquisition of the property occurred before the
Family Code took effect, Article 148 governs.[34]
In the cases of Agapay v. Palang,[35] and Tumlos v.
Fernandez,[36] which involved the issue of co-ownership of properties
acquired by the parties to a bigamous marriage and an adulterous
relationship, respectively, we ruled that proof of actual contribution in
the acquisition of the property is essential. The claim of co-ownership
of the petitioners therein who were parties to the bigamous and
adulterous union is without basis because they failed to substantiate
their allegation that they contributed money in the purchase of the
disputed properties.Also in Adriano v. Court of Appeals,[37] we ruled
that the fact that the controverted property was titled in the name of the
parties to an adulterous relationship is not sufficient proof of co-
ownership absent evidence of actual contribution in the acquisition of
the property.
As in other civil cases, the burden of proof rests upon the party
who, as determined by the pleadings or the nature of the case, asserts
an affirmative issue. Contentions must be proved by competent
evidence and reliance must be had on the strength of the partys own
evidence and not upon the weakness of the opponents
defense.[38] This applies with more vigor where, as in the instant case,
the plaintiff was allowed to present evidence ex parte. The plaintiff is
not automatically entitled to the relief prayed for. The law gives the
defendant some measure of protection as the plaintiff must still prove
the allegations in the complaint. Favorable relief can be granted only
after the court is convinced that the facts proven by the plaintiff warrant
such relief.[39] Indeed, the party alleging a fact has the burden of
proving it and a mere allegation is not evidence.[40]
In the case at bar, the controversy centers on the house and
personal properties of the parties. Private respondent alleged in her
complaint that she contributed P70,000.00 for the completion of their
house. However, nowhere in her testimony did she specify the extent
of her contribution. What appears in the record are receipts[41] in her
name for the purchase of construction materials on November 17,
1995 and December 23, 1995, in the total amount of P11,413.00.
On the other hand, both parties claim that the money used to
purchase the disputed personal properties came partly from their joint
account with First Allied Development Bank. While there is no question
that both parties contributed in their joint account deposit, there is,
however, no sufficient proof of the exact amount of their respective
shares therein. Pursuant to Article 148 of the Family Code, in the
absence of proof of extent of the parties respective contribution, their
share shall be presumed to be equal. Here, the disputed personal
properties were valued at P111,375.00, the existence and value of
which were not questioned by the petitioner. Hence, their share therein
is equivalent to one-half, i.e., P55,687.50 each.
The Court of Appeals thus erred in affirming the decision of the
trial court which granted the reliefs prayed for by private
respondent. On the basis of the evidence established, the extent of
private respondents co-ownership over the disputed house is only up
to the amount of P11,413.00, her proven contribution in the
construction thereof. Anent the personal properties, her participation
therein should be limited only to the amount of P55,687.50.
As regards the trial courts award of P50,000.00 as moral
damages, the Court of Appeals correctly deleted the same for lack of
basis.
WHEREFORE, in view of all the foregoing, the Decision of the
Court of Appeals in CA-G.R. CV No. 64166 is AFFIRMED with
MODIFICATION. Private respondent Gina S. Rey is declared co-owner
of petitioner Jacinto Saguid in the controverted house to the extent of
P11,413.00 and personal properties to the extent of
P55,687.50. Petitioner is ordered to reimburse the amount of
P67,100.50 to private respondent, failing which the house shall be sold
at public auction to satisfy private respondents claim.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ.,
concur.
G.R. No. 159310 February 24, 2009
CAMILO F. BORROMEO, Petitioner,
vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who
acquired real properties in the country as against his former Filipina
girlfriend in whose sole name the properties were registered under the
Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after
he was assigned by his employer, Simmering-Graz Panker A.G., an
Austrian company, to work at a project in Mindoro. In 1984, he
transferred to Cebu and worked at the Naga II Project of the National
Power Corporation. There, he met respondent Antonietta Opalla-
Descallar, a separated mother of two boys who was working as a
waitress at St. Moritz Hotel. Jambrich befriended respondent and
asked her to tutor him in English. In dire need of additional income to
support her children, respondent agreed. The tutorials were held in
Antonietta’s residence at a squatters’ area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in a
rented house in Hernan Cortes, Mandaue City. Later, they transferred
to their own house and lots at Agro-Macro Subdivision, Cabancalan,
Mandaue City. In the Contracts to Sell dated November 18, 19851 and
March 10, 19862 covering the properties, Jambrich and respondent
were referred to as the buyers. A Deed of Absolute Sale dated
November 16, 19873 was likewise issued in their favor. However, when
the Deed of Absolute Sale was presented for registration before the
Register of Deeds, registration was refused on the ground that
Jambrich was an alien and could not acquire alienable lands of the
public domain. Consequently, Jambrich’s name was erased from the
document. But it could be noted that his signature remained on the left
hand margin of page 1, beside respondent’s signature as buyer on
page 3, and at the bottom of page 4 which is the last page. Transfer
Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the
properties were issued in respondent’s name alone.
Jambrich also formally adopted respondent’s two sons in Sp. Proc. No.
39-MAN,4 and per Decision of the Regional Trial Court of Mandaue
City dated May 5, 1988.5
However, the idyll lasted only until April 1991. By then, respondent
found a new boyfriend while Jambrich began to live with another
woman in Danao City. Jambrich supported respondent’s sons for only
two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986.
Petitioner was engaged in the real estate business. He also built and
repaired speedboats as a hobby. In 1989, Jambrich purchased an
engine and some accessories for his boat from petitioner, for which he
became indebted to the latter for about P150,000.00. To pay for his
debt, he sold his rights and interests in the Agro-Macro properties to
petitioner for P250,000, as evidenced by a "Deed of Absolute
Sale/Assignment."6 On July 26, 1991, when petitioner sought to
register the deed of assignment, he discovered that titles to the three
lots have been transferred in the name of respondent, and that the
subject property has already been mortgaged.
On August 2, 1991, petitioner filed a complaint against respondent for
recovery of real property before the Regional Trial Court of Mandaue
City. Petitioner alleged that the Contracts to Sell dated November 18,
1985 and March 10, 1986 and the Deed of Absolute Sale dated
November 16, 1987 over the properties which identified both Jambrich
and respondent as buyers do not reflect the true agreement of the
parties since respondent did not pay a single centavo of the purchase
price and was not in fact a buyer; that it was Jambrich alone who paid
for the properties using his exclusive funds; that Jambrich was the real
and absolute owner of the properties; and, that petitioner acquired
absolute ownership by virtue of the Deed of Absolute Sale/Assignment
dated July 11, 1991 which Jambrich executed in his favor.
In her Answer, respondent belied the allegation that she did not pay a
single centavo of the purchase price. On the contrary, she claimed that
she "solely and exclusively used her own personal funds to defray and
pay for the purchase price of the subject lots in question," and that
Jambrich, being an alien, was prohibited to acquire or own real
property in the Philippines.
At the trial, respondent presented evidence showing her alleged
financial capacity to buy the disputed property with money from a
supposed copra business. Petitioner, in turn, presented Jambrich as
his witness and documentary evidence showing the substantial
salaries which Jambrich received while still employed by the Austrian
company, Simmering-Graz Panker A.G.
In its decision, the court a quo found—
Evidence on hand clearly show that at the time of the purchase and
acquisition of [the] properties under litigation that Wilhelm Jambrich
was still working and earning much. This fact of Jambrich earning
much is not only supported by documentary evidence but also by the
admission made by the defendant Antoniet[t]a Opalla. So that,
Jambrich’s financial capacity to acquire and purchase the properties . .
. is not disputed.7
xxx
On the other hand, evidence . . . clearly show that before defendant
met Jambrich sometime in the latter part of 1984, she was only
working as a waitress at the St. Moritz Hotel with an income
of P1,000.00 a month and was . . . renting and living only in . . . [a]
room at . . . [a] squatter area at Gorordo Ave., Cebu City; that Jambrich
took pity of her and the situation of her children that he offered her a
better life which she readily accepted. In fact, this miserable financial
situation of hers and her two children . . . are all stated and reflected in
the Child Study Report dated April 20, 1983 (Exhs. "G" and "G-1")
which facts she supplied to the Social Worker who prepared the same
when she was personally interviewed by her in connection with the
adoption of her two children by Wilhelm Jambrich. So that, if such facts
were not true because these are now denied by her . . . and if it was
also true that during this time she was already earning as much
as P8,000.00 to P9,000.00 as profit per month from her copra
business, it would be highly unbelievable and impossible for her to be
living only in such a miserable condition since it is the observation of
this Court that she is not only an extravagant but also an expensive
person and not thrifty as she wanted to impress this Court in order to
have a big saving as clearly shown by her actuation when she was
already cohabiting and living with Jambrich that according to her . . .
the allowance given . . . by him in the amount of $500.00 a month is
not enough to maintain the education and maintenance of her
children.8
This being the case, it is highly improbable and impossible that she
could acquire the properties under litigation or could contribute any
amount for their acquisition which according to her is worth more
than P700,000.00 when while she was working as [a] waitress at St.
Moritz Hotel earning P1,000.00 a month as salary and tips of more or
less P2,000.00 she could not even provide [for] the daily needs of her
family so much so that it is safe to conclude that she was really in
financial distress when she met and accepted the offer of Jambrich to
come and live with him because that was a big financial opportunity for
her and her children who were already abandoned by her husband. 9
xxx
The only probable and possible reason why her name appeared and
was included in [the contracts to sell dated November 18, 1985 and
March 10, 1986 and finally, the deed of absolute sale dated November
16, 1987] as buyer is because as observed by the Court, she being a
scheming and exploitive woman, she has taken advantage of the
goodness of Jambrich who at that time was still bewitched by her
beauty, sweetness, and good attitude shown by her to him since he
could still very well provide for everything she needs, he being earning
(sic) much yet at that time. In fact, as observed by this Court, the
acquisition of these properties under litigation was at the time when
their relationship was still going smoothly and
harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff
and against the defendant Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over the
residential house of strong materials and three parcels of
land designated as Lot Nos. 1, 3 and 5 which are covered by
TCT Nos. 24790, 24791 and 24792 issued by the Register of
Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791 and
24792 issued in the name of defendant Antoniet[t]a
Descallar by the Register of Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to cancel
TCT Nos. 24790, 24791 and 24792 in the name of
defendant Antoniet[t]a Descallar and to issue new ones in
the name of plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K"
and "L" as avoided insofar as they appear to convey rights
and interests over the properties in question to the defendant
Antoniet[t]a Descallar;
5) Ordering the defendant to pay plaintiff attorney’s fees in
the amount of P25,000.00 and litigation expenses in the
amount of P10,000.00; and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a Decision dated
April 10, 2002,12 the appellate court reversed the decision of the trial
court. In ruling for the respondent, the Court of Appeals held:
We disagree with the lower court’s conclusion. The circumstances
involved in the case cited by the lower court and similar cases decided
on by the Supreme Court which upheld the validity of the title of the
subsequent Filipino purchasers are absent in the case at bar. It should
be noted that in said cases, the title to the subject property has been
issued in the name of the alien transferee (Godinez et al., vs. Fong
Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds
of Manila, 79 Phils. 461; United Church Board for World Ministries vs.
Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De
Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138
SCRA 78). In the case at bar, the title of the subject property is not in
the name of Jambrich but in the name of defendant-appellant. Thus,
Jambrich could not have transferred a property he has no title
thereto.13
Petitioner’s motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
DISREGARDING RESPONDENT’S JUDICIAL ADMISSION AND
OTHER OVERWHELMING EVIDENCE ESTABLISHING JAMBRICH’S
PARTICIPATION, INTEREST AND OWNERSHIP OF THE
PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE
TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
HOLDING THAT JAMBRICH HAS NO TITLE TO THE PROPERTIES
IN QUESTION AND MAY NOT THEREFORE TRANSFER AND
ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR OF
PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE WELL-REASONED DECISION OF THE TRIAL
COURT AND IN IMPOSING DOUBLE COSTS AGAINST HEREIN
PETITIONER (THEN, PLAINTIFF-APPELLEE).14
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who
between respondent and Jambrich possesses the financial capacity to
acquire the properties in dispute. At the time of the acquisition of the
properties in 1985 to 1986, Jambrich was gainfully employed at
Simmering-Graz Panker A.G., an Austrian company. He was earning
an estimated monthly salary of P50,000.00. Then, Jambrich was
assigned to Syria for almost one year where his monthly salary was
approximately P90,000.00.
On the other hand, respondent was employed as a waitress from 1984
to 1985 with a monthly salary of not more than P1,000.00. In 1986,
when the parcels of land were acquired, she was unemployed, as
admitted by her during the pre-trial conference. Her allegations of
income from a copra business were unsubstantiated. The supposed
copra business was actually the business of her mother and their
family, with ten siblings. She has no license to sell copra, and had not
filed any income tax return. All the motorized bancas of her mother
were lost to fire, and the last one left standing was already scrap.
Further, the Child Study Report15 submitted by the Department of
Social Welfare and Development (DSWD) in the adoption proceedings
of respondent’s two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she was
accepted as a waitress at St. Moritz Restaurant in 1984. At first she
had no problem with money because most of the customers of St.
Moritz are (sic) foreigners and they gave good tips but towards the end
of 1984 there were no more foreigners coming because of the situation
in the Philippines at that time. Her financial problem started then. She
was even renting a small room in a squatters area in Gorordo Ave.,
Cebu City. It was during her time of great financial distress that she
met Wilhelm Jambrich who later offered her a decent place for herself
and her children.16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw
Antonietta Descallar, one of the waitresses of the said Restaurants. He
made friends with the girl and asked her to tutor him in [the] English
language. Antonietta accepted the offer because she was in need of
additional income to support [her] 2 young children who were
abandoned by their father. Their session was agreed to be scheduled
every afternoon at the residence of Antonietta in the squatters area in
Gorordo Avenue, Cebu City. The Austrian was observing the situation
of the family particularly the children who were malnourished. After a
few months sessions, Mr. Jambrich offered to transfer the family into a
decent place. He told Antonietta that the place is not good for the
children. Antonietta who was miserable and financially distressed at
that time accepted the offer for the sake of the children. 18
Further, the following additional pieces of evidence point to Jambrich
as the source of fund used to purchase the three parcels of land, and
to construct the house thereon:
(1) Respondent Descallar herself affirmed under oath, during
her re-direct examination and during the proceedings for the
adoption of her minor children, that Jambrich was the owner
of the properties in question, but that his name was deleted
in the Deed of Absolute Sale because of legal constraints.
Nonetheless, his signature remained in the deed of sale,
where he signed as buyer.
(2) The money used to pay the subject parcels of land in
installments was in postdated checks issued by Jambrich.
Respondent has never opened any account with any bank.
Receipts of the installment payments were also in the name
of Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with Jambrich
and her two children for ten months, where she was
completely under the support of Jambrich.
(4) Jambrich executed a Last Will and Testament, where he,
as owner, bequeathed the subject properties to respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and
participation over the subject properties to petitioner by virtue of the
Deed of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The findings
of fact of the trial court are accorded great weight and respect, if not
finality by this Court, subject to a number of exceptions. In the instant
case, we find no reason to disturb the factual findings of the trial court.
Even the appellate court did not controvert the factual findings of the
trial court. They differed only in their conclusions of law.
Further, the fact that the disputed properties were acquired during the
couple’s cohabitation also does not help respondent. The rule that co-
ownership applies to a man and a woman living exclusively with each
other as husband and wife without the benefit of marriage, but are
otherwise capacitated to marry each other, does not apply.19 In the
instant case, respondent was still legally married to another when she
and Jambrich lived together. In such an adulterous relationship, no co-
ownership exists between the parties. It is necessary for each of the
partners to prove his or her actual contribution to the acquisition of
property in order to be able to lay claim to any portion of it.
Presumptions of co-ownership and equal contribution do not apply.20
Second, we dispose of the issue of registration of the properties in the
name of respondent alone. Having found that the true buyer of the
disputed house and lots was the Austrian Wilhelm Jambrich, what now
is the effect of registration of the properties in the name of respondent?
It is settled that registration is not a mode of acquiring ownership. 21 It is
only a means of confirming the fact of its existence with notice to the
world at large.22 Certificates of title are not a source of right. The mere
possession of a title does not make one the true owner of the property.
Thus, the mere fact that respondent has the titles of the disputed
properties in her name does not necessarily, conclusively and
absolutely make her the owner. The rule on indefeasibility of title
likewise does not apply to respondent. A certificate of title implies that
the title is quiet,23and that it is perfect, absolute and
indefeasible.24 However, there are well-defined exceptions to this rule,
as when the transferee is not a holder in good faith and did not acquire
the subject properties for a valuable consideration.25 This is the
situation in the instant case. Respondent did not contribute a single
centavo in the acquisition of the properties. She had no income of her
own at that time, nor did she have any savings. She and her two sons
were then fully supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring private
land. This is embodied in Section 7, Article XII of the 1987
Constitution,26 which is basically a reproduction of Section 5, Article
XIII of the 1935 Constitution,27 and Section 14, Article XIV of the 1973
Constitution.28 The capacity to acquire private land is dependent on the
capacity "to acquire or hold lands of the public domain." Private land
may be transferred only to individuals or entities "qualified to acquire or
hold lands of the public domain." Only Filipino citizens or corporations
at least 60% of the capital of which is owned by Filipinos are qualified
to acquire or hold lands of the public domain. Thus, as the rule now
stands, the fundamental law explicitly prohibits non-Filipinos from
acquiring or holding title to private lands, except only by way of legal
succession or if the acquisition was made by a former natural-born
citizen.29
Therefore, in the instant case, the transfer of land from Agro-Macro
Development Corporation to Jambrich, who is an Austrian, would have
been declared invalid if challenged, had not Jambrich conveyed the
properties to petitioner who is a Filipino citizen. In United Church Board
for World Ministries v. Sebastian,30 the Court reiterated the consistent
ruling in a number of cases31 that if land is invalidly transferred to an
alien who subsequently becomes a Filipino citizen or transfers it to a
Filipino, the flaw in the original transaction is considered cured and the
title of the transferee is rendered valid. Applying United Church Board
for World Ministries, the trial court ruled in favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of
the properties under litigation [were] void ab initio since [they were]
contrary to the Constitution of the Philippines, he being a foreigner, yet,
the acquisition of these properties by plaintiff who is a Filipino citizen
from him, has cured the flaw in the original transaction and the title of
the transferee is valid.
The trial court upheld the sale by Jambrich in favor of petitioner and
ordered the cancellation of the TCTs in the name of respondent. It
declared petitioner as owner in fee simple of the residential house of
strong materials and three parcels of land designated as Lot Nos. 1, 3
and 5, and ordered the Register of Deeds of Mandaue City to issue
new certificates of title in his name. The trial court likewise ordered
respondent to pay petitioner P25,000 as attorney’s fees and P10,000
as litigation expenses, as well as the costs of suit.
We affirm the Regional Trial Court.
The rationale behind the Court’s ruling in United Church Board for
World Ministries, as reiterated in subsequent cases,32 is this – since
the ban on aliens is intended to preserve the nation’s land for future
generations of Filipinos, that aim is achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by
naturalization or those transfers made by aliens to Filipino citizens. As
the property in dispute is already in the hands of a qualified person, a
Filipino citizen, there would be no more public policy to be protected.
The objective of the constitutional provision to keep our lands in
Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the
Court of Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002 and
its Resolution dated July 8, 2003 are REVERSED and SET ASIDE.
The Decision of the Regional Trial Court of Mandaue City in Civil Case
No. MAN-1148 is REINSTATED.
SOLEDAD L. LAVADIA, Petitioner,
vs.
HEIRS OF JUAN LUCES LUNA, represented by GREGORIO Z.
LUNA and EUGENIA ZABALLERO-LUNA,Respondents.
DECISION
BERSAMIN, J.:
Divorce between Filipinos is void and ineffectual under the nationality
rule adopted by Philippine law. Hence, any settlement of property
between the parties of the first marriage involving Filipinos submitted
as an incident of a divorce obtained in a foreign country lacks
competent judicial approval, and cannot be enforceable against the
assets of the husband who contracts a subsequent marriage.
The Case
The petitioner, the second wife of the late Atty. Juan Luces Luna,
appeals the adverse decision promulgated on November 11,
2005,1 whereby the Court of Appeals (CA) affirmed with modification
the decision rendered on August 27, 2001 by the Regional Trial Court
(RTC), Branch 138, in Makati City.2 The CA thereby denied her right in
the 25/100 pro indiviso share of the husband in a condominium unit,
and in the law books of the husband acquired during the second
marriage.
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner in the
prestigious law firm Sycip, Salazar, Luna, Manalo, Hernandez &
Feliciano Law Offices at that time when he was living with his first wife,
herein intervenor-appellant Eugenia Zaballero-Luna (EUGENIA),
whom he initially married ina civil ceremony conducted by the Justice
of the Peace of Parañaque, Rizal on September 10, 1947 and later
solemnized in a church ceremony at the Pro-Cathedral in San Miguel,
Bulacan on September 12, 1948. In ATTY. LUNA’s marriage to
EUGENIA, they begot seven (7) children, namely: Regina Maria L.
Nadal, Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L.
Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia, and Cesar
Antonio Luna. After almost two (2) decades of marriage, ATTY. LUNA
and EUGENIA eventually agreed to live apart from each other in
February 1966 and agreed to separation of property, to which end,
they entered into a written agreement entitled "AGREEMENT FOR
SEPARATION AND PROPERTY SETTLEMENT" dated November 12,
1975, whereby they agreed to live separately and to dissolve and
liquidate their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of his
marriage with EUGENIA from the Civil and Commercial Chamber of
the First Circumscription of the Court of First Instance of Sto. Domingo,
Dominican Republic. Also in Sto.Domingo, Dominican Republic, on the
same date, ATTY. LUNA contracted another marriage, this time with
SOLEDAD. Thereafter, ATTY. LUNA and SOLEDAD returned to the
Philippines and lived together as husband and wife until 1987.
Sometime in 1977, ATTY. LUNA organized a new law firm named:
Luna, Puruganan, Sison and Ongkiko (LUPSICON) where ATTY.
LUNA was the managing partner.
On February 14, 1978, LUPSICON through ATTY. LUNA purchased
from Tandang Sora Development Corporation the 6th Floor of Kalaw-
Ledesma Condominium Project(condominium unit) at Gamboa St.,
Makati City, consisting of 517.52 square meters, for P1,449,056.00, to
be paid on installment basis for 36months starting on April 15, 1978.
Said condominium unit was to be usedas law office of LUPSICON.
After full payment, the Deed of Absolute Sale over the condominium
unit was executed on July 15, 1983, and CCT No. 4779 was issued on
August 10, 1983, which was registered bearing the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E.
ONGKIKO, married to Sonia P.G. Ongkiko (25/100); GREGORIO R.
PURUGANAN, married to Paz A. Puruganan (17/100); and TERESITA
CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x"
Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of Atty.
Gregorio R. Puruganan in the condominium unit was sold to Atty.
Mario E. Ongkiko, for which a new CCT No. 21761 was issued on
February 7, 1992 in the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E.
ONGKIKO, married to Sonia P.G. Ongkiko (50/100); TERESITA CRUZ
SISON, married to Antonio J.M. Sison (12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the condominium
unit was partitioned by the partners but the same was still registered in
common under CCT No. 21716. The parties stipulated that the interest
of ATTY. LUNA over the condominium unit would be 25/100 share.
ATTY. LUNA thereafter established and headed another law firm with
Atty. Renato G. Dela Cruzand used a portion of the office
condominium unit as their office. The said law firm lasted until the
death of ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the condominium unit
including the lawbooks, office furniture and equipment found therein
were taken over by Gregorio Z. Luna, ATTY. LUNA’s son of the first
marriage. Gregorio Z. Luna thenleased out the 25/100 portion of the
condominium unit belonging to his father to Atty. Renato G. De la Cruz
who established his own law firm named Renato G. De la Cruz &
Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit
as well as the law books, office furniture and equipment became the
subject of the complaint filed by SOLEDAD against the heirs of ATTY.
JUAN with the RTC of Makati City, Branch 138, on September 10,
1999, docketed as Civil Case No. 99-1644. The complaint alleged that
the subject properties were acquired during the existence of the
marriage between ATTY. LUNA and SOLEDAD through their joint
efforts that since they had no children, SOLEDAD became co-owner of
the said properties upon the death of ATTY. LUNA to the extent of ¾
pro-indiviso share consisting of her ½ share in the said properties plus
her ½ share in the net estate of ATTY. LUNA which was bequeathed to
her in the latter’s last will and testament; and thatthe heirs of ATTY.
LUNA through Gregorio Z. Luna excluded SOLEDAD from her share in
the subject properties. The complaint prayed that SOLEDAD be
declared the owner of the ¾ portion of the subject properties;that the
same be partitioned; that an accounting of the rentals on the
condominium unit pertaining to the share of SOLEDAD be conducted;
that a receiver be appointed to preserve ad administer the subject
properties;and that the heirs of ATTY. LUNA be ordered to pay
attorney’s feesand costs of the suit to SOLEDAD. 3
Ruling of the RTC
On August 27, 2001, the RTC rendered its decision after trial upon the
aforementioned facts,4 disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro-indiviso share in the condominium unit
located at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) SQUARE METERS is adjudged to
have been acquired by Juan Lucas Luna through his sole
industry;
(b) Plaintiff has no right as owner or under any other concept
over the condominium unit, hence the entry in Condominium
Certificate of Title No. 21761 of the Registry of Deeds of
Makati with respect to the civil status of Juan Luces Luna
should be changed from "JUAN LUCES LUNA married to
Soledad L. Luna" to "JUAN LUCES LUNA married to
Eugenia Zaballero Luna";
(c) Plaintiff is declared to be the owner of the books Corpus
Juris, Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports found in the condominium
unit and defendants are ordered to deliver them to the
plaintiff as soon as appropriate arrangements have been
madefor transport and storage.
No pronouncement as to costs.
SO ORDERED.5
Decision of the CA
Both parties appealed to the CA.6
On her part, the petitioner assigned the following errors to the RTC,
namely:
I. THE LOWER COURT ERRED IN RULING THAT THE
CONDOMINIUM UNIT WAS ACQUIRED THRU THE SOLE
INDUSTRY OF ATTY. JUAN LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT
PLAINTIFFAPPELLANT DID NOT CONTRIBUTE MONEY
FOR THE ACQUISITION OF THE CONDOMINIUM UNIT;
III. THE LOWER COURT ERRED IN GIVING CREDENCE
TO PORTIONS OF THE TESTIMONY OF GREGORIO
LUNA, WHO HAS NO ACTUAL KNOWLEDGE OF THE
ACQUISITION OF THE UNIT, BUT IGNORED OTHER
PORTIONS OF HIS TESTIMONY FAVORABLE TO THE
PLAINTIFF-APPELLANT;
IV. THE LOWER COURT ERRED IN NOT GIVING
SIGNIFICANCE TO THE FACT THAT THE CONJUGAL
PARTNERSHIP BETWEEN LUNA AND INTERVENOR-
APPELLANT WAS ALREADY DISSOLVED AND
LIQUIDATED PRIOR TO THE UNION OF PLAINTIFF-
APPELLANT AND LUNA;
V. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE ABSENCE OF THE DISPOSITION
OF THE CONDOMINIUM UNIT IN THE HOLOGRAPHIC
WILL OF THE PLAINTIFF-APPELLANT;
VI. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE FACTTHAT THE NAME OF
PLAINTIFF-APPELLANT DID NOT APPEAR IN THE DEED
OF ABSOLUTE SALE EXECUTED BY TANDANG SORA
DEVELOPMENT CORPORATION OVER THE
CONDOMINIUM UNIT;
VII. THE LOWER COURT ERRED IN RULING THAT
NEITHER ARTICLE 148 OF THE FAMILYCODE NOR
ARTICLE 144 OF THE CIVIL CODE OF THE PHILIPPINES
ARE APPLICABLE;
VIII. THE LOWER COURT ERRED IN NOT RULING THAT
THE CAUSE OF ACTION OF THE INTERVENOR-
APPELLANT HAS BEEN BARRED BY PESCRIPTION AND
LACHES; and
IX. THE LOWER COURT ERRED IN NOT
EXPUNGING/DISMISSING THE INTERVENTION FOR
FAILURE OF INTERVENOR-APPELLANT TO PAY FILING
FEE.7
In contrast, the respondents attributedthe following errors to the trial
court, to wit:
I. THE LOWER COURT ERRED IN HOLDING THAT
CERTAIN FOREIGN LAW BOOKS IN THE LAW OFFICE
OF ATTY. LUNA WERE BOUGHT WITH THE USE OF
PLAINTIFF’S MONEY;
II. THE LOWER COURT ERRED IN HOLDING THAT
PLAINTIFF PROVED BY PREPONDERANCE OF
EVIDENCE (HER CLAIM OVER) THE SPECIFIED
FOREIGN LAW BOOKS FOUND IN ATTY. LUNA’S LAW
OFFICE; and
III. THE LOWER COURT ERRED IN NOT HOLDING THAT,
ASSUMING PLAINTIFF PAID FOR THE SAID FOREIGN
LAW BOOKS, THE RIGHT TO RECOVER THEM HAD
 PRESCRIBED AND BARRED BY LACHES AND
ESTOPPEL.8
On November 11, 2005, the CA promulgated its assailed modified
decision,9 holding and ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until
the latter’s death on July 12, 1997. The absolute divorce decree
obtained by ATTY. LUNA inthe Dominican Republic did not terminate
his prior marriage with EUGENIA because foreign divorce between
Filipino citizens is not recognized in our jurisdiction. x x x10
xxxx
WHEREFORE, premises considered, the assailed August 27, 2001
Decision of the RTC of MakatiCity, Branch 138, is hereby
MODIFIEDas follows:
(a) The 25/100 pro-indiviso share in the condominium unit at
the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) (sic) SQUARE METERS is hereby
adjudged to defendants-appellants, the heirs of Juan Luces
Luna and Eugenia Zaballero-Luna (first marriage), having
been acquired from the sole funds and sole industry of Juan
Luces Luna while marriage of Juan Luces Luna and Eugenia
Zaballero-Luna (first marriage) was still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as owner
or under any other concept over the condominium unit,
hence the entry in Condominium Certificate of Title No.
21761 of the Registry of Deeds ofMakati with respect to the
civil status of Juan Luces Luna should be changed from
"JUAN LUCES LUNA married to Soledad L. Luna" to "JUAN
LUCES LUNA married to Eugenia Zaballero Luna";
(c) Defendants-appellants, the heirs of Juan Luces Luna and
Eugenia Zaballero-Luna(first marriage) are hereby declared
to be the owner of the books Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme
Court Reports found in the condominium unit.
No pronouncement as to costs.
SO ORDERED.11
On March 13, 2006,12 the CA denied the petitioner’s motion for
reconsideration.13
Issues
In this appeal, the petitioner avers in her petition for review on
certiorarithat:
A. The Honorable Court of Appeals erred in ruling that the
Agreement for Separation and Property Settlement executed
by Luna and Respondent Eugenia was unenforceable;
hence, their conjugal partnership was not dissolved and
liquidated;
B. The Honorable Court of Appeals erred in not recognizing
the Dominican Republic court’s approval of the Agreement;
C. The Honorable Court of Appeals erred in ruling that
Petitioner failed to adduce sufficient proof of actual
contribution to the acquisition of purchase of the
subjectcondominium unit; and
D. The Honorable Court of Appeals erred in ruling that
Petitioner was not entitled to the subject law books.14
The decisive question to be resolved is who among the contending
parties should be entitled to the 25/100 pro indivisoshare in the
condominium unit; and to the law books (i.e., Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme Court
Reports).
The resolution of the decisive question requires the Court to ascertain
the law that should determine, firstly, whether the divorce between
Atty. Luna and Eugenia Zaballero-Luna (Eugenia) had validly dissolved
the first marriage; and, secondly, whether the second marriage entered
into by the late Atty. Luna and the petitioner entitled the latter to any
rights in property. Ruling of the Court
We affirm the modified decision of the CA.
1. Atty. Luna’s first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both Filipinos, was
solemnized in the Philippines on September 10, 1947. The law in force
at the time of the solemnization was the Spanish Civil Code, which
adopted the nationality rule. The Civil Codecontinued to follow the
nationality rule, to the effect that Philippine laws relating to family rights
and duties, or to the status, condition and legal capacity of persons
were binding upon citizens of the Philippines, although living
abroad.15 Pursuant to the nationality rule, Philippine laws governed
thiscase by virtue of bothAtty. Luna and Eugenio having remained
Filipinos until the death of Atty. Luna on July 12, 1997 terminated their
marriage.
From the time of the celebration ofthe first marriage on September 10,
1947 until the present, absolute divorce between Filipino spouses has
not been recognized in the Philippines. The non-recognition of
absolute divorce between Filipinos has remained even under the
Family Code,16 even if either or both of the spouses are residing
abroad.17 Indeed, the only two types of defective marital unions under
our laws have beenthe void and the voidable marriages. As such, the
remedies against such defective marriages have been limited to the
declaration of nullity ofthe marriage and the annulment of the marriage.
It is true that on January 12, 1976, the Court of First Instance (CFI) of
Sto. Domingo in the Dominican Republic issued the Divorce Decree
dissolving the first marriage of Atty. Luna and Eugenia.18 Conformably
with the nationality rule, however, the divorce, even if voluntarily
obtained abroad, did not dissolve the marriage between Atty. Luna and
Eugenia, which subsisted up to the time of his death on July 12, 1997.
This finding conforms to the Constitution, which characterizes marriage
as an inviolable social institution,19 and regards it as a special contract
of permanent union between a man and a woman for the
establishment of a conjugal and family life.20 The non-recognition of
absolute divorce in the Philippines is a manifestation of the respect for
the sanctity of the marital union especially among Filipino citizens. It
affirms that the extinguishment of a valid marriage must be grounded
only upon the death of either spouse, or upon a ground expressly
provided bylaw. For as long as this public policy on marriage between
Filipinos exists, no divorce decree dissolving the marriage between
them can ever be given legal or judicial recognition and enforcement in
this jurisdiction.
2. The Agreement for Separation and Property Settlement
was void for lack of court approval
The petitioner insists that the Agreement for Separation and Property
Settlement (Agreement) that the late Atty. Luna and Eugenia had
entered into and executed in connection with the divorce proceedings
before the CFI of Sto. Domingo in the Dominican Republic to dissolve
and liquidate their conjugal partnership was enforceable against
Eugenia. Hence, the CA committed reversible error in decreeing
otherwise.
The insistence of the petitioner was unwarranted.
Considering that Atty. Luna and Eugenia had not entered into any
marriage settlement prior to their marriage on September 10, 1947, the
system of relative community or conjugal partnership of gains
governed their property relations. This is because the Spanish Civil
Code, the law then in force at the time of their marriage, did not specify
the property regime of the spouses in the event that they had not
entered into any marriage settlement before or at the time of the
marriage. Article 119 of the Civil Codeclearly so provides, to wit:
Article 119. The future spouses may in the marriage settlements agree
upon absolute or relative community of property, or upon complete
separation of property, or upon any other regime. In the absence of
marriage settlements, or when the same are void, the system of
relative community or conjugal partnership of gains as established in
this Code, shall govern the property relations between husband and
wife.
Article 142 of the Civil Codehas defined a conjugal partnership of gains
thusly:
Article 142. By means of the conjugal partnership of gains the husband
and wife place in a common fund the fruits of their separate property
and the income from their work or industry, and divide equally, upon
the dissolution of the marriage or of the partnership, the net gains or
benefits obtained indiscriminately by either spouse during the
marriage.
The conjugal partnership of gains subsists until terminated for any of
various causes of termination enumerated in Article 175 of the Civil
Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article
191.
The mere execution of the Agreement by Atty. Luna and Eugenia did
not per sedissolve and liquidate their conjugal partnership of gains.
The approval of the Agreement by a competent court was still required
under Article 190 and Article 191 of the Civil Code, as follows:
Article 190. In the absence of an express declaration in the marriage
settlements, the separation of property between spouses during the
marriage shall not take place save in virtue of a judicial order. (1432a)
Article 191. The husband or the wife may ask for the separation of
property, and it shall be decreed when the spouse of the petitioner has
been sentenced to a penalty which carries with it civil interdiction, or
has been declared absent, or when legal separation has been granted.
xxxx
The husband and the wife may agree upon the dissolution of the
conjugal partnership during the marriage, subject to judicial approval.
All the creditors of the husband and of the wife, as well as of the
conjugal partnership shall be notified of any petition for judicialapproval
or the voluntary dissolution of the conjugal partnership, so that any
such creditors may appear atthe hearing to safeguard his interests.
Upon approval of the petition for dissolution of the conjugal
partnership, the court shall take such measures as may protect the
creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of articles
214 and 215 shall apply. The provisions of this Code concerning the
effect of partition stated in articles 498 to 501 shall be applicable.
(1433a)
But was not the approval of the Agreement by the CFI of Sto. Domingo
in the Dominican Republic sufficient in dissolving and liquidating the
conjugal partnership of gains between the late Atty. Luna and
Eugenia?
The query is answered in the negative. There is no question that the
approval took place only as an incident ofthe action for divorce
instituted by Atty. Luna and Eugenia, for, indeed, the justifications for
their execution of the Agreement were identical to the grounds raised
in the action for divorce.21 With the divorce not being itself valid and
enforceable under Philippine law for being contrary to Philippine public
policy and public law, the approval of the Agreement was not also
legally valid and enforceable under Philippine law. Consequently, the
conjugal partnership of gains of Atty. Luna and Eugenia subsisted in
the lifetime of their marriage.
3. Atty. Luna’s marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the second marriage
between Atty. Luna and Soledad?
The CA expressly declared that Atty. Luna’s subsequent marriage to
Soledad on January 12, 1976 was void for being bigamous,22 on the
ground that the marriage between Atty. Luna and Eugenia had not
been dissolved by the Divorce Decree rendered by the CFI of Sto.
Domingo in the Dominican Republic but had subsisted until the death
of Atty. Luna on July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous, or
incestuous are void. Article 71 of the Civil Codeclearly states:
Article 71. All marriages performed outside the Philippines in
accordance with the laws in force in the country where they were
performed, and valid there as such, shall also be valid in this country,
except bigamous, polygamous, or incestuous marriages as determined
by Philippine law.
Bigamy is an illegal marriage committed by contracting a second or
subsequent marriage before the first marriage has been legally
dissolved, or before the absent spouse has been declared
presumptively dead by means of a judgment rendered in the proper
proceedings.23 A bigamous marriage is considered void ab initio.24
Due to the second marriage between Atty. Luna and the petitioner
being void ab initioby virtue of its being bigamous, the properties
acquired during the bigamous marriage were governed by the rules on
co-ownership, conformably with Article 144 of the Civil Code, viz:
Article 144. When a man and a woman live together as husband and
wife, but they are not married, ortheir marriage is void from the
beginning, the property acquired by eitheror both of them through their
work or industry or their wages and salaries shall be governed by the
rules on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried the burden
of proof to confirm such fact.1âwphi1 To establish co-ownership,
therefore, it became imperative for the petitioner to offer proof of her
actual contributions in the acquisition of property. Her mere allegation
of co-ownership, without sufficient and competent evidence, would
warrant no relief in her favor. As the Court explained in Saguid v. Court
of Appeals:25
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which
involved the issue of co-ownership ofproperties acquired by the parties
to a bigamous marriage and an adulterous relationship, respectively,
we ruled that proof of actual contribution in the acquisition of the
property is essential. The claim of co-ownership of the petitioners
therein who were parties to the bigamous and adulterousunion is
without basis because they failed to substantiate their allegation that
they contributed money in the purchase of the disputed properties.
Also in Adriano v. Court of Appeals, we ruled that the fact that the
controverted property was titled in the name of the parties to an
adulterous relationship is not sufficient proof of coownership absent
evidence of actual contribution in the acquisition of the property.
As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts an
affirmative issue. Contentions must be proved by competent evidence
and reliance must be had on the strength of the party’s own evidence
and not upon the weakness of the opponent’s defense. This applies
with more vigor where, as in the instant case, the plaintiff was allowed
to present evidence ex parte.1âwphi1 The plaintiff is not automatically
entitled to the relief prayed for. The law gives the defendantsome
measure of protection as the plaintiff must still prove the allegations in
the complaint. Favorable relief can be granted only after the court
isconvinced that the facts proven by the plaintiff warrant such relief.
Indeed, the party alleging a fact has the burden of proving it and a
mereallegation is not evidence.26
The petitioner asserts herein that she sufficiently proved her actual
contributions in the purchase of the condominium unit in the aggregate
amount of at least P306,572.00, consisting in direct contributions
ofP159,072.00, and in repaying the loans Atty. Luna had obtained from
Premex Financing and Banco Filipino totaling P146,825.30;27 and that
such aggregate contributions of P306,572.00 corresponded to almost
the entire share of Atty. Luna in the purchase of the condominium unit
amounting to P362,264.00 of the unit’s purchase price
of P1,449,056.00.28 The petitioner further asserts that the lawbooks
were paid for solely out of her personal funds, proof of which Atty.
Luna had even sent her a "thank you" note;29 that she had the financial
capacity to make the contributions and purchases; and that Atty. Luna
could not acquire the properties on his own due to the meagerness of
the income derived from his law practice.
Did the petitioner discharge her burden of proof on the co-ownership?
In resolving the question, the CA entirely debunked the petitioner’s
assertions on her actual contributions through the following findings
and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence that
her own independent funds were used to buy the law office
condominium and the law books subject matter in contentionin this
case – proof that was required for Article 144 of the New Civil Code
and Article 148 of the Family Code to apply – as to cases where
properties were acquired by a man and a woman living together as
husband and wife but not married, or under a marriage which was void
ab initio. Under Article 144 of the New Civil Code, the rules on co-
ownership would govern. But this was not readily applicable to many
situations and thus it created a void at first because it applied only if
the parties were not in any way incapacitated or were without
impediment to marry each other (for it would be absurd to create a co-
ownership where there still exists a prior conjugal partnership or
absolute community between the man and his lawful wife). This void
was filled upon adoption of the Family Code. Article 148 provided that:
only the property acquired by both of the parties through their actual
joint contribution of money, property or industry shall be owned in
common and in proportion to their respective contributions. Such
contributions and corresponding shares were prima faciepresumed to
be equal. However, for this presumption to arise, proof of actual
contribution was required. The same rule and presumption was to
apply to joint deposits of money and evidence of credit. If one of the
parties was validly married to another, his or her share in the co-
ownership accrued to the absolute community or conjugal partnership
existing in such valid marriage. If the party who acted in bad faith was
not validly married to another, his or her share shall be forfeited in the
manner provided in the last paragraph of the Article 147. The rules on
forfeiture applied even if both parties were in bad faith. Co-ownership
was the exception while conjugal partnership of gains was the strict
rule whereby marriage was an inviolable social institution and divorce
decrees are not recognized in the Philippines, as was held by the
Supreme Court in the case of Tenchavez vs. Escaño, G.R. No. L-
19671, November 29, 1965, 15 SCRA 355, thus:
xxxx
As to the 25/100pro-indivisoshare of ATTY. LUNA in the condominium
unit, SOLEDAD failed to prove that she made an actual contribution to
purchase the said property. She failed to establish that the four (4)
checks that she presented were indeed used for the acquisition of the
share of ATTY. LUNA in the condominium unit. This was aptly
explained in the Decision of the trial court, viz.:
"x x x The first check, Exhibit "M" for P55,000.00 payable to Atty.
Teresita Cruz Sison was issued on January 27, 1977, which was
thirteen (13) months before the Memorandum of Agreement, Exhibit
"7" was signed. Another check issued on April 29, 1978 in the amount
of P97,588.89, Exhibit "P" was payable to Banco Filipino. According to
the plaintiff, thiswas in payment of the loan of Atty. Luna. The third
check which was for P49,236.00 payable to PREMEX was dated May
19, 1979, also for payment of the loan of Atty. Luna. The fourth check,
Exhibit "M", forP4,072.00 was dated December 17, 1980. None of the
foregoing prove that the amounts delivered by plaintiff to the payees
were for the acquisition of the subject condominium unit. The
connection was simply not established. x x x"
SOLEDAD’s claim that she made a cash contribution of P100,000.00 is
unsubstantiated. Clearly, there is no basis for SOLEDAD’s claim of co-
ownership over the 25/100 portion of the condominium unit and the
trial court correctly found that the same was acquired through the sole
industry of ATTY. LUNA, thus:
"The Deed of Absolute Sale, Exhibit "9", covering the condominium
unit was in the name of Atty. Luna, together with his partners in the law
firm. The name of the plaintiff does not appear as vendee or as the
spouse of Atty. Luna. The same was acquired for the use of the Law
firm of Atty. Luna. The loans from Allied Banking Corporation and Far
East Bank and Trust Company were loans of Atty. Luna and his
partners and plaintiff does not have evidence to show that she paid for
them fully or partially. x x x"
The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in
the name of "JUAN LUCES LUNA, married to Soledad L. Luna" was
no proof that SOLEDAD was a co-owner of the condominium unit.
Acquisition of title and registration thereof are two different acts. It is
well settled that registration does not confer title but merely confirms
one already existing. The phrase "married to" preceding "Soledad L.
Luna" is merely descriptive of the civil status of ATTY. LUNA.
SOLEDAD, the second wife, was not even a lawyer. So it is but logical
that SOLEDAD had no participation in the law firm or in the purchase
of books for the law firm. SOLEDAD failed to prove that she had
anything to contribute and that she actually purchased or paid for the
law office amortization and for the law books. It is more logical to
presume that it was ATTY. LUNA who bought the law office space and
the law books from his earnings from his practice of law rather than
embarrassingly beg or ask from SOLEDAD money for use of the law
firm that he headed.30
The Court upholds the foregoing findings and conclusions by the CA
both because they were substantiated by the records and because we
have not been shown any reason to revisit and undo them. Indeed, the
petitioner, as the party claiming the co-ownership, did not discharge
her burden of proof. Her mere allegations on her contributions, not
being evidence,31 did not serve the purpose. In contrast, given the
subsistence of the first marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of his own
personal funds and effort remained. It should then be justly concluded
that the properties in litislegally pertained to their conjugal partnership
of gains as of the time of his death. Consequently, the sole ownership
of the 25/100 pro indivisoshare of Atty. Luna in the condominium unit,
and of the lawbooks pertained to the respondents as the lawful heirs of
Atty. Luna.
WHEREFORE, the Court AFFIRMS the decision promulgated on
November 11, 2005; and ORDERS the petitioner to pay the costs of
suit.
SO ORDERED.