Family expenses cf. FC 100 (3), FC 121(5) and FC 94 (1), (4), (5) G.R. No.

177667 September 17, 2008

Cleodia U. Francisco and Ceamantha U. Francisco, represented by their grandmother Dra. Maida G. Uriarte as their Attorneyin-Fact, Petitioners, - versus Spouses Jorge C. Gonzales and PURIFicacion W. Gonzales. Respondents. FACTS: 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 Declaration of Nullity of Marriage, the Compromise Agreement entered into by the estranged couple was approved. The Compromise Agreement contained is to the effect that the spouses will transfer the conjugal property consisting of a house and lot located in Ayala Alabang, shall be transferred by way of a deed of donation to petitioners. Meanwhile, in a case for Unlawful Detainer with Preliminary Attachment filed by spouses Gonzales (respondents) was decided against Matrai and Michele,. An order was issued granting respondents' prayer for the execution MeTC Decision.[4] A notice of sale by execution was then issued by the sheriff covering the real property in the name of Spouses Francisco. Petitioners' grandmother 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. Petitioners argue that: they are the rightful owners of the property and the adjudged obligation of Michele in the ejectment case did not redound to the benefit of the family ISSUE: Whether or not the subject property may be held answerable for the judgment debt of Michele HELD: 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.

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. A wife may bind the conjugal partnership only when she purchases things necessary for the support of the family, or when she borrows money for that purpose upon her husband's failure to deliver the needed sum; when administration of the conjugal partnership is transferred to the wife by the courts or by the husband; or when the wife gives moderate donations for charity.

Failure to establish any of these circumstances means that the conjugal asset may not be bound to answer for the wife's personal obligation.[20] Considering that the foregoing circumstances are evidently not present in this case as the liability incurred by Michele arose from a judgment rendered in an unlawful detainer case against her and her partner Matrai. It should be noted that the judgment debt for which the subject property was being made to answer was incurred by Michele and her partner,[25] Matrai. By no stretch of one's imagination can it be concluded that said debt/obligation was incurred for the benefit of the conjugal partnership or that some advantage accrued to the welfare of the family. Respondents bare allegation that petitioners lived with Michele on the leased property is not sufficient to support the conclusion that the judgment debt against Michele and Matrai in the ejectment suit redounded to the benefit of the family of Michele and Cleodualdo and petitioners. To hold the property in Taal St. liable for the obligations of Michele and Matrai would be going against the spirit and avowed objective of the Civil Code to give the utmost concern for the solidarity and well-being of the family as a unit.

Subsidiary liabilities, Art. 94 (9) G.R. No. 145222 SPOUSES ROBERTO BUADO and VENUS BUADO, Petitioners, - versus THE HONORABLE COURT OF APPEALS, Former Division, and ROMULO NICOL, Respondents. FACTS: Spouses Roberto and Venus Buado (petitioners) filed a complaint for damages against Erlinda Nicol (Erlinda). Said action originated from Erlinda Nicols civil liability arising from the criminal offense of slander. Trial court rendered a decision ordering Erlinda to pay damages. The trial court issued a writ of execution. Finding Erlinda Nicols personal properties insufficient to satisfy the judgment, a notice of levy was issued which was annotated on the title of the subject property. The auction sale proceeded with petitioners as the highest bidder. Romulo Nicol (respondent), the husband of Erlinda Nicol, filed a complaint for annulment of certificate of sale. Petitioners maintain that the obligation of the wife redounded to the benefit of the conjugal partnership and the husband is liable for the tort committed by his wife. Petitioners argue that the obligation of the wife arising from her criminal liability is chargeable to the conjugal partnership . ISSUE: Whether the obligation of the judgment debtor redounded to the benefit of the conjugal partnership or not. HELD: We do not agree. There is no dispute that contested property is conjugal in nature. Article 122 of the Family Code[16] explicitly provides that payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal partnership except insofar as they redounded to the benefit of the family. Unlike in the system of absolute community where liabilities incurred by either spouse by reason of a crime or quasi-delict is chargeable to the absolute community of property, in the absence or insufficiency of the exclusive property of the debtorspouse, 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.

Joint Administration, FC 96; FC 90 [G.R. No. 143016. August 30, 2000] MR. & MRS. RONNIE DAR, MR. & MRS. RANDY ANGELES, MR. & MRS. JOY CONSTANTINO and MR. & MRS. LIBERTY CRUZ, petitioners, vs. HON. ROSE MARIE ALONZO-LEGASTO, in her capacity as the Presiding Judge in the Metropolitan Trial Court of Metro Manila, Branch 41, Quezon City and NENITA CO BAUTISTA represented by VICTORIO A. BAUTISTA, respondents. DECISION KAPUNAN, J.: FACTS: Petitioners Ronnie Dar, Randy Angeles, Joy Constantino and Liberty Cruz signed the Certification of Non-Forum Shopping, their respective spouses did not sign the same. It appears from the records that herein private respondent Nenita Co Bautista filed a case for unlawful detainer against herein petitioners. They were sued as Mr. and Mrs. in the said case. Petitioners now contend that since what is involved in the instant case is their common rights and interest to abode under the system of absolute community of property, either of the spouses can sign the petition. HELD: We find merit in the petition. In the instant case, the Court of Appeals should have taken into consideration the fact that the petitioners were sued jointly, or as Mr. and Mrs. over a property in which they have a common interest. Such being the case, the signing of one of them in the certification substantially complies with the rule on certification of non-forum shopping.

Sole administration - incapacity, FC 96 (2) no court order [G.R. No. 109557. November 29, 2000] JOSE UY and his Spouse GLENDA J. UY and GILDA L. JARDELEZA, petitioners, vs. COURT OF APPEALS and TEODORO L. JARDELEZA, respondents. DECISION PARDO, J.: FACTS: Dr. Ernesto Jardeleza, Sr. had stroke which left him comatose and bereft of any motor or mental faculties. Said Ernesto Jardeleza, Sr. is the father of herein respondent Teodoro Jardeleza and husband of herein private respondent Gilda Jardeleza. Upon learning that one piece of real property belonging to the senior Jardeleza spouses was about to be sold, petitioner Teodoro Jardeleza filed a petition. The petitioner averred that the present physical and mental incapacity of Dr. Ernesto Jardeleza, Sr. prevent him from competently administering his properties, and in order to prevent the loss and dissipation of the Jardelezas real and personal assets, there was a need for a court-appointed guardian to administer said properties. It was prayed therein that Letters of Guardianship be issued in favor of herein private respondent Gilda Ledesma Jardeleza, wife of Dr. Ernesto Jardeleza, Sr. It was further prayed that in the meantime, no property of Dr. Ernesto Jardeleza, Sr. be negotiated, mortgaged or otherwise alienated to third persons. Respondent Gilda L. Jardeleza filed a petition regarding the declaration of incapacity of Ernesto Jardeleza, Sr., assumption of sole powers of administration of conjugal properties, and authorization to sell the same. RTC rendered its Decision, finding that it was convinced that Ernesto Jardeleza, Sr. was truly incapacitated to participate in the administration of the conjugal properties. ISSUE: Whether petitioner Gilda L. Jardeleza as the wife of Ernesto Jardeleza, Sr. who suffered a stroke, rendering him comatose, without motor and mental faculties, and could not manage their conjugal partnership property may assume sole powers of administration of the conjugal property under Article 124 of the Family Code HELD: Article 124 of the Family Code provides as follows: 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. (165a). In regular manner, the rules on summary judicial proceedings under the Family Code govern the proceedings under Article 124 of the Family Code. The situation contemplated is one where the spouse is absent, or separated in fact or has abandoned the other or consent is withheld or cannot be obtained. Such rules do not apply to cases where the non-consenting spouse is incapacitated or incompetent to give consent. In such case, the proper remedy is a judicial guardianship proceedings under Rule 93 of the 1964 Revised Rules of Court. Even assuming that the rules of summary judicial proceedings under the Family Code may apply to the wife's administration of the conjugal property, the law provides that the wife who assumes sole powers of administration has the same powers and duties as a guardian under the Rules of Court. Consequently, a spouse who desires to sell real property as such administrator of the conjugal property must observe the procedure for the sale of the wards estate required of judicial guardians under Rule 95, 1964 Revised Rules of Court, not th e summary judicial proceedings under the Family Code.

Causes for dissolution of ACP, FC 99 - (a) Death, FC 103 cf. Rule 73 Sec. 12 ROC G.R. No. 157537 September 7, 2011

THE HEIRS OF PROTACIO GO, SR. and MARTA BAROLA, namely: LEONOR, SIMPLICIO, PROTACIO, JR., ANTONIO, BEVERLY ANN LORRAINNE, TITA, CONSOLACION, LEONORA and ASUNCION, all surnamed GO, represented by LEONORA B. GO, Petitioners, vs. ESTER L. SERVACIO and RITO B. GO, Respondents. DECISION BERSAMIN, J.: DOCTRINE: 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. FACTS: On February 22, 1976, Jesus B. Gaviola sold two parcels of land (17,140 SQM) to Protacio B. Go, Jr. Twenty three years later, Protacio, Jr. executed an Affidavit of Renunciation and Waiver 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). Marta Barola Go died. She was the wife of Protacio, Sr. and mother of the petitioners. Protacio, Sr. and his son Rito B. Go sold a portion of the property to Ester L. Servacio (Servacio). The petitioners demanded the return of the property, but Servacio refused to heed their demand. They sued Servacio and Rito for the annulment of the sale of the property. PETITIONERS: 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. Servacio and Rito countered that Protacio, Sr. had exclusively owned the property because he had purchased it with his own money. RTCs RULING: Affirmed the validity of the sale. O However, declared the property was the conjugal property and not the exclusive property of Protacio, Sr., because there were three vendors in the sale to Servacio (namely: Protacio, Sr.,Rito, and Dina).

O The participation of Rito and Dina as vendors had been by virtue of their being heirs of the late Marta. O 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. ISSUE: Whether or not the sale by Protacio, Sr. to Servacio was void for being made without prior liquidation? NO HELD: 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. 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,
16 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 . The ensuing implied ordinary co-ownership was governed by Article 493 of the Civil Code, 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 do ne either by agreement or by judicial decree. Until then, all that he had was an ideal or abstract quota in Martas share.
18 17

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

20

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.

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-ownerseller are transferred, thereby making the buyer a co-owner of the property.

Causes for dissolution of ACP, FC 99 - (d) Judicial separation of property, FC 134-138 G.R. No. 130623 LOREA DE UGALDE, Petitioner, - versus JON DE YSASI, Respondent. CARPIO, J.: The Antecedent Facts On 15 February 1951, Lorea de Ugalde (petitioner) and Jon de Ysasi (respondent) got married before Municipal Judge Remigio Pea of Hinigaran, Negros Occidental. On 1 March 1951, Rev. Msgr. Flaviano Arriola solemnized their church wedding at the San Sebastian Cathedral in Bacolod City. Petitioner and respondent did not execute any ante-nuptial agreement. They had a son named Jon de Ysasi III. Petitioner and respondent separated sometime in April 1957. On 26 May 1964, respondent allegedly contracted another marriage with Victoria Eleanor Smith (Smith) before Judge Lucio M. Tanco of Pasay City. Petitioner further alleged that

respondent and Smith had been acquiring and disposing of real and personal properties to her prejudice as the lawful wife. Petitioner alleged that she had been defrauded of rental income, profits, and fruits of their conjugal properties. On 12 December 1984, petitioner filed a petition for dissolution of the conjugal partnership of gains against respondent before the Regional Trial Court of Negros Occidental, Bacolod City, Branch 48 (trial court). The case was docketed as Special Proceedings No. 3330. In particular, petitioner asked for her conjugal share in respondents inheritance as per the settlement of the estate of respondents parents, Juan Ysasi and Maria Aldecoa de Ysasi, who died on 17 November 1975 and 25 February 1979, respectively. Petitioner also prayed for a monthly support of P5,000 to be deducted from her share in the conjugal partnership; the appointment of a receiver during the pendency of the litigation; the annulment of all contracts, agreements, and documents signed and ratified by respondent with third persons without her consent; and payment of appearance and attorneys fees. Respondent countered that on 2 June 1961, he and petitioner entered into an agreement which provided, among others, that their conjugal partnership of gains shall be deemed dissolved as of 15 April 1957. Pursuant to the agreement, they submitted an Amicable Settlement in Civil Case No. 47911 then pending before the Court of First Instance of Negros Occidental (CFI). The Amicable Settlement stipulates:

2. That the petitioner shall pay the respondent the sum of THIRTY THOUSAND PESOS (P30,000.00) in full satisfaction of and/or consideration for and to cover any and all money and/or property claims she has or may have against the petitioner in the future, including but not limited to pensions, allowances, alimony, support, share in the conjugal property (if any), inheritance, etc.; 3. That for and in consideration of the foregoing premises and the payment of THIRTY THOUSAND pesos (P30,000.00), the receipt of which sum is hereby acknowledged and confessed by and to the entire satisfaction of the respondent, she hereby completely and absolutely transfer, convey, assign, set over, waive, remise, release and forever quitclaim, unto petitioner, his successors and administrators, any and all rights, claims and interests which the respondent has or may hereafter have against the petitioner arising, directly or indirectly, from the fact that the petitioner and respondent were married on March 1, 1951, including but not limited to any and all money and/or property claims mentioned in the paragraph immediately preceding; 4. That, except with reference to the custody of the boy, the parties herein hereby waive any and all rights to question the validity and effectivity of the provisions of this amicable settlement, as well as the right to raise these matters on appeal. In its Order dated 6 June 1961, the CFI approved the Amicable Settlement. Respondent further alleged that petitioner already obtained a divorce from him before the Supreme Court of Mexico. Petitioner then contracted a second marriage with Richard Galoway (Galoway). After Galoways death, petitioner contracted a third marriage with Frank Scholey. Respondent moved for the dismissal of the petition for dissolution of the conjugal

partnership of gains on the grounds of estoppel, laches, and res judicata. In his Supplemental Affirmative Defense, respondent alleged that the marriage between him and petitioner was void because it was executed without the benefit of a marriage license. The Ruling of the Trial Court On 22 November 1991, the trial court rendered judgment as follows: WHEREFORE, after collating the evidence, the evidence for the respondent is preponderant to prove his affirmative and special defenses that the petition does not state a sufficient cause of action. On these bases and under the doctrine of res judicata, the petition is hereby DISMISSED. Without pronouncements as to costs and attorneys fees. SO ORDERED. The trial court ruled that the existence of a conjugal partnership of gains is predicated on a valid marriage. Considering that the marriage between petitioner and respondent was solemnized without a marriage license, the marriage was null and void, and no community of property was formed between them. The trial court further ruled that assuming that the marriage was valid, the action was barred by res judicata. The trial court noted that petitioner and respondent entered into an amicable settlement in Civil Case No. 4791. The amicable settlement was approved by the CFI and petitioner may no longer repudiate it.

Finally, the trial court ruled that there was no proof to show that during their union, petitioner and respondent acquired properties. The Ruling of the Court of Appeals On 21 November 1996, the Court of Appeals affirmed the trial courts Decision. The Court of Appeals ruled that the absence of a marriage license is fatal and made the marriage between petitioner and respondent a complete nullity. Hence, the trial court did not err in finding that there was no conjugal partnership of gains between petitioner and respondent. The Court of Appeals further ruled that the compromise agreement is a valid contract between the parties Since the compromise agreement was entered into freely, voluntarily, and with the full understanding of its consequences, it is conclusive and binding on the parties. The Court of Appeals also ruled that the action was barred by laches since it was filed by petitioner 23 years from the time the CFI approved the additional amicable settlement in Civil Case No. 4791. The Court of Appeals sustained the trial courts ruling that respondents right over the estate of his deceased parents was only inchoate and there was no evidence that petitioner and respondent acquired any property that could be considered conjugal. Petitioner filed a motion for reconsideration. In its 2 September 1997 Resolution, the Court of Appeals denied the motion for lack of merit. Hence, the petition before this Court, raising the following assignment of errors: The lower court erred in ruling that since the marriage of the plaintiff and respondent was void due to the absence of a marriage license, no conjugal partnership arose from their union. The lower court erred in ruling that the amicable settlement in Civil Case No. 4791 bars all claims by the plaintiff under the principle of res judicata. The lower court erred in ruling that respondents right to [the] estate of his deceased parents was merely inchoate, thus, no property devolved to respondent and no conjugal partnership was formed. The lower court erred in ruling that the appellants petition did not sufficiently state a cause of action. ISSUE: Whether or not the Court of Appeals committed a reversible error in affirming the trial courts Decision which dismissed the action for dissolution of conjugal partnership of gains. The Ruling of this Court The petition is without merit. Validity of Petitioner and Respondents Marriage is the Subject of a Different Court Proceeding

Special Proceedings No. 3330 is an action for Dissolution of Conjugal Partnership of Gains. In its 22 November 1991 Decision, the trial court ruled that the existence of conjugal partnership of gains is predicated on a valid marriage. The trial court then proceeded to rule on the validity of petitioner and respondents marriage. The trial court ruled that it was shown by competent evidence that petitioner and respondent failed to obtain a marriage license. Hence, the marriage between petitioner and respondent was null and void, and no community of property was formed between them. The trial court exceeded its jurisdiction in ruling on the validity of petitioner and respondents marriage, which was only r aised by respondent as a defense to the action for dissolution of the conjugal partnership of gains. The validity of petitioner and respondents marriage was the subject of another action, Civil Case No. 430 for Judicial Declaration of Absolute Nullity of Marriage before the Regional Trial Court of Himamaylan, Negros Occidental, Branch 55. In a Decisiondated 31 May 1995, Civil Case No. 430 was resolved, as follows:

In this jurisdiction it is required, except in certain cases, that the marriage license must first be secured by the parties and shown to the judge before the latter can competently solemnize the marriage. In this present case, none was ever secured. Failure to comply with the formal and essential requirements of the law renders the marriage void ab initio. Since void marriage can be assailed anytime as the action on assailing it does not prescribe, the plaintiff is well within his right to seek judicial relief. WHEREFORE, premises considered[,] judgment is hereby rendered declaring the marriage between JON A. DE YSASI and LOREA DE UGALDE as NULL and VOID AB INITIO. The Local Civil Registrar for the Municipality of Hinigaran is hereby directed to cancel the entry of marriage between JON A. DE YSASI and LOREA DE UGALDE from the Marriage register and to render the same of no force and effect. Lastly, furnish copy of this decision the National Census and Statistics Office, Manila, to make the necessary cancellation of the entry of marriage between the plaintiff and the defendant. SO ORDERED. No appeal or motion for reconsideration of the 31 May 1995 Decision in Civil Case No. 430 has been filed by any of the parties, and a Certification of finality was issued on 20 November 1995. Thus, the marriage between petitioner and respondent was already judicially annulled as of 20 November 1995. The trial court had no jurisdiction to annul again in Special Proceedings No. 3330 the marriage of petitioner and respondent. Conjugal Partnership of Gains Dissolved in Civil Case No. 4791 The finality of the 6 June 1961 CFI Order in Civil Case No. 4791 resulted in the dissolution of the petitioner and r espondents conjugal partnership of gains. Petitioner and respondent were married on 15 February 1951. The applicable law at the time of their marriage was Republic Act No. 386, otherwise known as the Civil Code of the Philippines (Civil Code) which took effect on 30 August 1950. Pursuant to Article 119 of the Civil Code, the property regime of petitioner and respondent was conjugal partnership of gains, thus:

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. Article 142 of the Civil Code defines conjugal partnership of gains, as follows: 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. Under Article 175 of the Civil Code, the judicial separation of property results in the termination of the conjugal partnership of gains: Art. 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 finality of the 6 June 1961 Order in Civil Case No. 4791 approving the (Emphasis supplied) parties separatio n of property resulted in the

termination of the conjugal partnership of gains in accordance with Article 175 of the Family Code. Hence, when the trial court decided Special Proceedings No. 3330, the conjugal partnership between petitioner and respondent was already dissolved. Petitioner alleges that the CFI had no authority to approve the Compromise Agreement because the case was for custody, and the creditors were not given notice by the parties, as also required under Article 191 of the Civil Code. Petitioner cannot repudiate the Compromise Agreement on this ground. A judgment upon a compromise agreement has all the force and effect of any other judgment, and conclusive only upon parties thereto and their privies, and not binding on third persons who are not parties to it. The Amicable Settlement had become final as between petitioner and respondent when it was approved by the CFI on 6 June 1961. The CFIs approval of the Compromise Agreement on 6 June 1961 resulted in the dissolution of the conjug al partnership of gains between petitioner and respondent on even date. WHEREFORE, we DENY the petition. We AFFIRM the result of the 21 November 1996 Decision and of the 2 September 1997 Resolution of the Court of Appeals in CA-G.R. CV No. 41121.

SO ORDERED.

Liquidation procedure

G.R. No 176556

July 4, 2012

BRIGIDO B. QUIAO, Petitioner, vs. RITA C. QUIAO, KITCHIE C. QUIAO, LOTIS C. QUIAO, PETCHIE C. QUIAO, represented by their mother RITA QUIAO, Respondents. DECISION REYES, J.: The family is the basic and the most important institution of society. It is in the family where children are born and molded either to become useful citizens of the country or troublemakers in the community. Thus, we are saddened when parents have to separate and fight over properties, without regard to the message they send to their children. Notwithstanding this, we must not shirk from our obligation to rule on this case involving legal separation escalating to questions on dissolution and partition of properties. The Case This case comes before us via Petition for Review on Certiorari1 under Rule 45 of the Rules of Court. The petitioner seeks that we vacate and set aside the Order2 dated January 8, 2007 of the Regional Trial Court (RTC), Branch 1, Butuan City. In lieu of the said order, we are asked to issue a Resolution defining the net profits subject of the forfeiture as a result of the decree of legal separation in accordance with the provision of Article 102(4) of the Family Code, or alternatively, in accordance with the provisions of Article 176 of the Civil Code. Antecedent Facts On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a complaint for legal separation against herein petitioner Brigido B. Quiao (Brigido).3 Subsequently, the RTC rendered a Decision4 dated October 10, 2005, the dispositive portion of which provides: WHEREFORE, viewed from the foregoing considerations, judgment is hereby rendered declaring the legal separation of plaintiff Rita C. Quiao and defendant-respondent Brigido B. Quiao pursuant to Article 55. As such, the herein parties shall be entitled to live separately from each other, but the marriage bond shall not be severed. Except for Letecia C. Quiao who is of legal age, the three minor children, namely, Kitchie, Lotis and Petchie, all surnamed Quiao shall remain under the custody of the plaintiff who is the innocent spouse.

Further, except for the personal and real properties already foreclosed by the RCBC, all the remaining properties, namely: 1. coffee mill in Balongagan, Las Nieves, Agusan del Norte; 2. coffee mill in Durian, Las Nieves, Agusan del Norte; 3. corn mill in Casiklan, Las Nieves, Agusan del Norte; 4. coffee mill in Esperanza, Agusan del Sur; 5. a parcel of land with an area of 1,200 square meters located in Tungao, Butuan City; 6. a parcel of agricultural land with an area of 5 hectares located in Manila de Bugabos, Butuan City; 7. a parcel of land with an area of 84 square meters located in Tungao, Butuan City; 8. Bashier Bon Factory located in Tungao, Butuan City; shall be divided equally between herein [respondents] and [petitioner] subject to the respective legitimes of the children and the payment of the unpaid conjugal liabilities of [P]45,740.00. [Petitioners] share, however, of the net profits earned by the conjugal partnership is forfeited in favor of the common children. He is further ordered to reimburse [respondents] the sum of [P]19,000.00 as attorney's fees and litigation expenses of [P]5,000.00[.] SO ORDERED.5 Neither party filed a motion for reconsideration and appeal within the period provided for under Section 17(a) and (b) of the Rule on Legal Separation.6 On December 12, 2005, the respondents filed a motion for execution7 which the trial court granted in its Order dated December 16, 2005, the dispositive portion of which reads: "Wherefore, finding the motion to be well taken, the same is hereby granted. Let a writ of execution be issued for the immediate enforcement of the Judgment. SO ORDERED."8 Subsequently, on February 10, 2006, the RTC issued a Writ of Execution9 which reads as follows:

NOW THEREFORE, that of the goods and chattels of the [petitioner] BRIGIDO B. QUIAO you cause to be made the sums stated in the afore-quoted DECISION [sic], together with your lawful fees in the service of this Writ, all in the Philippine Currency. But if sufficient personal property cannot be found whereof to satisfy this execution and your lawful fees, then we command you that of the lands and buildings of the said [petitioner], you make the said sums in the manner required by law. You are enjoined to strictly observed Section 9, Rule 39, Rule [sic] of the 1997 Rules of Civil Procedure. You are hereby ordered to make a return of the said proceedings immediately after the judgment has been satisfied in part or in full in consonance with Section 14, Rule 39 of the 1997 Rules of Civil Procedure, as amended.10 On July 6, 2006, the writ was partially executed with the petitioner paying the respondents the amount of P46,870.00, representing the following payments: (a) P22,870.00 as petitioner's share of the payment of the conjugal share; (b) P19,000.00 as attorney's fees; and (c) P5,000.00 as litigation expenses.11 On July 7, 2006, or after more than nine months from the promulgation of the Decision, the petitioner filed before the RTC a Motion for Clarification,12 asking the RTC to define the term "Net Profits Earned." To resolve the petitioner's Motion for Clarification, the RTC issued an Order13 dated August 31, 2006, which held that the phrase "NET PROFIT EARNED" denotes "the remainder of the properties of the parties after deducting the separate properties of each [of the] spouse and the debts."14 The Order further held that after determining the remainder of the properties, it shall be forfeited in favor of the common children because the offending spouse does not have any right to any share of the net profits earned, pursuant to Articles 63, No. (2) and 43, No. (2) of the Family Code.15 The dispositive portion of the Order states: WHEREFORE, there is no blatant disparity when the sheriff intends to forfeit all the remaining properties after deducting the payments of the debts for only separate properties of the defendant-respondent shall be delivered to him which he has none. The Sheriff is herein directed to proceed with the execution of the Decision. IT IS SO ORDERED.16 Not satisfied with the trial court's Order, the petitioner filed a Motion for Reconsideration17 on September 8, 2006. Consequently, the RTC issued another Order18 dated November 8, 2006, holding that although the Decision dated October 10, 2005 has become final and executory, it

may still consider the Motion for Clarification because the petitioner simply wanted to clarify the meaning of "net profit earned."19 Furthermore, the same Order held: ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set aside. NET PROFIT EARNED, which is subject of forfeiture in favor of [the] parties' common children, is ordered to be computed in accordance [with] par. 4 of Article 102 of the Family Code.20 On November 21, 2006, the respondents filed a Motion for Reconsideration,21 praying for the correction and reversal of the Order dated November 8, 2006. Thereafter, on January 8, 2007,22 the trial court had changed its ruling again and granted the respondents' Motion for Reconsideration whereby the Order dated November 8, 2006 was set aside to reinstate the Order dated August 31, 2006. Not satisfied with the trial court's Order, the petitioner filed on February 27, 2007 this instant Petition for Review under Rule 45 of the Rules of Court, raising the following: Issues I IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE COMMON PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE DECREE OF LEGAL SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF THE FAMILY CODE? II WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE CONJUGAL PARTNERSHIP FOR PURPOSES OF EFFECTING THE FORFEITURE AUTHORIZED UNDER ARTICLE 63 OF THE FAMILY CODE? III WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE HUSBAND AND WIFE WHO GOT MARRIED IN 1977? CAN THE FAMILY CODE OF THE PHILIPPINES BE GIVEN RETROACTIVE EFFECT FOR PURPOSES OF DETERMINING THE NET PROFITS SUBJECT OF FORFEITURE AS A RESULT OF THE DECREE OF LEGAL SEPARATION WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER THE CIVIL CODE? IV WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE SHARE OF THE GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP AS A RESULT OF THE ISSUANCE OF THE DECREE OF LEGAL SEPARATION?23 Our Ruling

While the petitioner has raised a number of issues on the applicability of certain laws, we are well-aware that the respondents have called our attention to the fact that the Decision dated October 10, 2005 has attained finality when the Motion for Clarification was filed.24 Thus, we are constrained to resolve first the issue of the finality of the Decision dated October 10, 2005 and subsequently discuss the matters that we can clarify. The Decision dated October 10, 2005 has become final and executory at the time the Motion for Clarification was filed on July 7, 2006. Section 3, Rule 41 of the Rules of Court provides: Section 3. Period of ordinary appeal. - The appeal shall be taken within fifteen (15) days from notice of the judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within thirty (30) days from notice of the judgment or final order. The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of time to file a motion for new trial or reconsideration shall be allowed. In Neypes v. Court of Appeals,25 we clarified that to standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, we held that "it would be practical to allow a fresh period of 15 days within which to file the notice of appeal in the RTC, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration."26 In Neypes, we explained that the "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the RTCs; Rule 42 on petitions for review from the RTCs to the Court of Appeals (CA); Rule 43 on appeals from quasi-judicial agencies to the CA and Rule 45 governing appeals by certiorari to the Supreme Court. We also said, "The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution."27 In other words, a party litigant may file his notice of appeal within a fresh 15-day period from his receipt of the trial court's decision or final order denying his motion for new trial or motion for reconsideration. Failure to avail of the fresh 15-day period from the denial of the motion for reconsideration makes the decision or final order in question final and executory. In the case at bar, the trial court rendered its Decision on October 10, 2005. The petitioner neither filed a motion for reconsideration nor a notice of appeal. On December 16, 2005, or after 67 days had lapsed, the trial court issued an order granting the respondent's motion for execution; and on February 10, 2006, or after 123 days had lapsed, the trial court issued a writ of execution. Finally, when the writ had already been partially executed, the petitioner, on July 7, 2006 or after 270 days had lapsed, filed his Motion for Clarification on the definition of the "net profits earned." From the foregoing, the petitioner had clearly slept on his right to question the RTCs Decision dated October 10, 2005. For 270 days, the petitioner never raised a single issue until the decision had already been partially executed. Thus at the time the petitioner filed his motion for

clarification, the trial courts decision has become final and executory. A judgment becomes final and executory when the reglementary period to appeal lapses and no appeal is perfected within such period. Consequently, no court, not even this Court, can arrogate unto itself appellate jurisdiction to review a case or modify a judgment that became final.28 The petitioner argues that the decision he is questioning is a void judgment. Being such, the petitioner's thesis is that it can still be disturbed even after 270 days had lapsed from the issuance of the decision to the filing of the motion for clarification. He said that "a void judgment is no judgment at all. It never attains finality and cannot be a source of any right nor any obligation."29 But what precisely is a void judgment in our jurisdiction? When does a judgment becomes void? "A judgment is null and void when the court which rendered it had no power to grant the relief or no jurisdiction over the subject matter or over the parties or both."30 In other words, a court, which does not have the power to decide a case or that has no jurisdiction over the subject matter or the parties, will issue a void judgment or a coram non judice.31 The questioned judgment does not fall within the purview of a void judgment. For sure, the trial court has jurisdiction over a case involving legal separation. Republic Act (R.A.) No. 8369 confers upon an RTC, designated as the Family Court of a city, the exclusive original jurisdiction to hear and decide, among others, complaints or petitions relating to marital status and property relations of the husband and wife or those living together.32 The Rule on Legal Separation33 provides that "the petition [for legal separation] shall be filed in the Family Court of the province or city where the petitioner or the respondent has been residing for at least six months prior to the date of filing or in the case of a non-resident respondent, where he may be found in the Philippines, at the election of the petitioner."34 In the instant case, herein respondent Rita is found to reside in Tungao, Butuan City for more than six months prior to the date of filing of the petition; thus, the RTC, clearly has jurisdiction over the respondent's petition below. Furthermore, the RTC also acquired jurisdiction over the persons of both parties, considering that summons and a copy of the complaint with its annexes were served upon the herein petitioner on December 14, 2000 and that the herein petitioner filed his Answer to the Complaint on January 9, 2001.35 Thus, without doubt, the RTC, which has rendered the questioned judgment, has jurisdiction over the complaint and the persons of the parties. From the aforecited facts, the questioned October 10, 2005 judgment of the trial court is clearly not void ab initio, since it was rendered within the ambit of the court's jurisdiction. Being such, the same cannot anymore be disturbed, even if the modification is meant to correct what may be considered an erroneous conclusion of fact or law.36 In fact, we have ruled that for "[as] long as the public respondent acted with jurisdiction, any error committed by him or it in the exercise thereof will amount to nothing more than an error of judgment which may be reviewed or corrected only by appeal."37 Granting without admitting that the RTC's judgment dated October 10, 2005 was erroneous, the petitioner's remedy should be an appeal filed within the reglementary period. Unfortunately, the petitioner failed to do this. He has already lost the chance to question the trial court's decision, which has become immutable and unalterable. What we can only do is to clarify the very question raised below and nothing more.

For our convenience, the following matters cannot anymore be disturbed since the October 10, 2005 judgment has already become immutable and unalterable, to wit: (a) The finding that the petitioner is the offending spouse since he cohabited with a woman who is not his wife;38 (b) The trial court's grant of the petition for legal separation of respondent Rita;39 (c) The dissolution and liquidation of the conjugal partnership;40 (d) The forfeiture of the petitioner's right to any share of the net profits earned by the conjugal partnership;41 (e) The award to the innocent spouse of the minor children's custody;42 (f) The disqualification of the offending spouse from inheriting from the innocent spouse by intestate succession;43 (g) The revocation of provisions in favor of the offending spouse made in the will of the innocent spouse;44 (h) The holding that the property relation of the parties is conjugal partnership of gains and pursuant to Article 116 of the Family Code, all properties acquired during the marriage, whether acquired by one or both spouses, is presumed to be conjugal unless the contrary is proved;45 (i) The finding that the spouses acquired their real and personal properties while they were living together;46 (j) The list of properties which Rizal Commercial Banking Corporation (RCBC) foreclosed;47 (k) The list of the remaining properties of the couple which must be dissolved and liquidated and the fact that respondent Rita was the one who took charge of the administration of these properties;48 (l) The holding that the conjugal partnership shall be liable to matters included under Article 121 of the Family Code and the conjugal liabilities totaling P503,862.10 shall be charged to the income generated by these properties;49 (m) The fact that the trial court had no way of knowing whether the petitioner had separate properties which can satisfy his share for the support of the family;50 (n) The holding that the applicable law in this case is Article 129(7);51

(o) The ruling that the remaining properties not subject to any encumbrance shall therefore be divided equally between the petitioner and the respondent without prejudice to the children's legitime;52 (p) The holding that the petitioner's share of the net profits earned by the conjugal partnership is forfeited in favor of the common children;53 and (q) The order to the petitioner to reimburse the respondents the sum of P19,000.00 as attorney's fees and litigation expenses of P5,000.00.54 After discussing lengthily the immutability of the Decision dated October 10, 2005, we will discuss the following issues for the enlightenment of the parties and the public at large. Article 129 of the Family Code applies to the present case since the parties' property relation is governed by the system of relative community or conjugal partnership of gains. The petitioner claims that the court a quo is wrong when it applied Article 129 of the Family Code, instead of Article 102. He confusingly argues that Article 102 applies because there is no other provision under the Family Code which defines net profits earned subject of forfeiture as a result of legal separation. Offhand, the trial court's Decision dated October 10, 2005 held that Article 129(7) of the Family Code applies in this case. We agree with the trial court's holding. First, let us determine what governs the couple's property relation. From the record, we can deduce that the petitioner and the respondent tied the marital knot on January 6, 1977. Since at the time of the exchange of marital vows, the operative law was the Civil Code of the Philippines (R.A. No. 386) and since they did not agree on a marriage settlement, the property relations between the petitioner and the respondent is the system of relative community or conjugal partnership of gains.55 Article 119 of the Civil Code provides: Art. 119. The future spouses may in the marriage settlements agree upon absolute or relative community of property, or upon complete separation of property, or upon any other regime. In the absence of marriage settlements, or when the same are void, the system of relative community or conjugal partnership of gains as established in this Code, shall govern the property relations between husband and wife. Thus, from the foregoing facts and law, it is clear that what governs the property relations of the petitioner and of the respondent is conjugal partnership of gains. And under this property relation, "the husband and the wife place in a common fund the fruits of their separate property and the income from their work or industry."56 The husband and wife also own in common all the property of the conjugal partnership of gains.57 Second, since at the time of the dissolution of the petitioner and the respondent's marriage the operative law is already the Family Code, the same applies in the instant case and the applicable law in so far as the liquidation of the conjugal partnership assets and liabilities is concerned is

Article 129 of the Family Code in relation to Article 63(2) of the Family Code. The latter provision is applicable because according to Article 256 of the Family Code "[t]his Code shall have retroactive effect insofar as it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or other law."58 Now, the petitioner asks: Was his vested right over half of the common properties of the conjugal partnership violated when the trial court forfeited them in favor of his children pursuant to Articles 63(2) and 129 of the Family Code? We respond in the negative. Indeed, the petitioner claims that his vested rights have been impaired, arguing: "As earlier adverted to, the petitioner acquired vested rights over half of the conjugal properties, the same being owned in common by the spouses. If the provisions of the Family Code are to be given retroactive application to the point of authorizing the forfeiture of the petitioner's share in the net remainder of the conjugal partnership properties, the same impairs his rights acquired prior to the effectivity of the Family Code."59 In other words, the petitioner is saying that since the property relations between the spouses is governed by the regime of Conjugal Partnership of Gains under the Civil Code, the petitioner acquired vested rights over half of the properties of the Conjugal Partnership of Gains, pursuant to Article 143 of the Civil Code, which provides: "All property of the conjugal partnership of gains is owned in common by the husband and wife."60 Thus, since he is one of the owners of the properties covered by the conjugal partnership of gains, he has a vested right over half of the said properties, even after the promulgation of the Family Code; and he insisted that no provision under the Family Code may deprive him of this vested right by virtue of Article 256 of the Family Code which prohibits retroactive application of the Family Code when it will prejudice a person's vested right. However, the petitioner's claim of vested right is not one which is written on stone. In Go, Jr. v. Court of Appeals,61 we define and explained "vested right" in the following manner: A vested right is one whose existence, effectivity and extent do not depend upon events foreign to the will of the holder, or to the exercise of which no obstacle exists, and which is immediate and perfect in itself and not dependent upon a contingency. The term "vested right" expresses the concept of present fixed interest which, in right reason and natural justice, should be protected against arbitrary State action, or an innately just and imperative right which enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny. To be vested, a right must have become a titlelegal or equitableto the present or future enjoyment of property.62 (Citations omitted) In our en banc Resolution dated October 18, 2005 for ABAKADA Guro Party List Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo R. Ermita,63 we also explained: The concept of "vested right" is a consequence of the constitutional guaranty of due process that expresses a present fixed interest which in right reason and natural justice is protected

against arbitrary state action; it includes not only legal or equitable title to the enforcement of a demand but also exemptions from new obligations created after the right has become vested. Rights are considered vested when the right to enjoyment is a present interest, absolute, unconditional, and perfect or fixed and irrefutable.64 (Emphasis and underscoring supplied) From the foregoing, it is clear that while one may not be deprived of his "vested right," he may lose the same if there is due process and such deprivation is founded in law and jurisprudence. In the present case, the petitioner was accorded his right to due process. First, he was well-aware that the respondent prayed in her complaint that all of the conjugal properties be awarded to her.65 In fact, in his Answer, the petitioner prayed that the trial court divide the community assets between the petitioner and the respondent as circumstances and evidence warrant after the accounting and inventory of all the community properties of the parties.66 Second, when the Decision dated October 10, 2005 was promulgated, the petitioner never questioned the trial court's ruling forfeiting what the trial court termed as "net profits," pursuant to Article 129(7) of the Family Code.67 Thus, the petitioner cannot claim being deprived of his right to due process. Furthermore, we take note that the alleged deprivation of the petitioner's "vested right" is one founded, not only in the provisions of the Family Code, but in Article 176 of the Civil Code. This provision is like Articles 63 and 129 of the Family Code on the forfeiture of the guilty spouse's share in the conjugal partnership profits. The said provision says: Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her share of the conjugal partnership profits, which shall be awarded to the children of both, and the children of the guilty spouse had by a prior marriage. However, if the conjugal partnership property came mostly or entirely from the work or industry, or from the wages and salaries, or from the fruits of the separate property of the guilty spouse, this forfeiture shall not apply. In case there are no children, the innocent spouse shall be entitled to all the net profits. From the foregoing, the petitioner's claim of a vested right has no basis considering that even under Article 176 of the Civil Code, his share of the conjugal partnership profits may be forfeited if he is the guilty party in a legal separation case. Thus, after trial and after the petitioner was given the chance to present his evidence, the petitioner's vested right claim may in fact be set aside under the Civil Code since the trial court found him the guilty party. More, in Abalos v. Dr. Macatangay, Jr.,68 we reiterated our long-standing ruling that: [P]rior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into title until it appears that there are assets in the community as a result of the liquidation and settlement. The interest of each spouse is limited to the net remainder or "remanente liquido" (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution. Thus, the right of the husband or wife to one-half of the conjugal assets does not vest until the dissolution and liquidation of the conjugal partnership, or after dissolution of the marriage, when it is finally determined that, after settlement of conjugal

obligations, there are net assets left which can be divided between the spouses or their respective heirs.69 (Citations omitted) Finally, as earlier discussed, the trial court has already decided in its Decision dated October 10, 2005 that the applicable law in this case is Article 129(7) of the Family Code.70 The petitioner did not file a motion for reconsideration nor a notice of appeal. Thus, the petitioner is now precluded from questioning the trial court's decision since it has become final and executory. The doctrine of immutability and unalterability of a final judgment prevents us from disturbing the Decision dated October 10, 2005 because final and executory decisions can no longer be reviewed nor reversed by this Court.71 From the above discussions, Article 129 of the Family Code clearly applies to the present case since the parties' property relation is governed by the system of relative community or conjugal partnership of gains and since the trial court's Decision has attained finality and immutability. The net profits of the conjugal partnership of gains are all the fruits of the separate properties of the spouses and the products of their labor and industry. The petitioner inquires from us the meaning of "net profits" earned by the conjugal partnership for purposes of effecting the forfeiture authorized under Article 63 of the Family Code. He insists that since there is no other provision under the Family Code, which defines "net profits" earned subject of forfeiture as a result of legal separation, then Article 102 of the Family Code applies. What does Article 102 of the Family Code say? Is the computation of "net profits" earned in the conjugal partnership of gains the same with the computation of "net profits" earned in the absolute community? Now, we clarify. First and foremost, we must distinguish between the applicable law as to the property relations between the parties and the applicable law as to the definition of "net profits." As earlier discussed, Article 129 of the Family Code applies as to the property relations of the parties. In other words, the computation and the succession of events will follow the provisions under Article 129 of the said Code. Moreover, as to the definition of "net profits," we cannot but refer to Article 102(4) of the Family Code, since it expressly provides that for purposes of computing the net profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2), Article 102(4) applies. In this provision, net profits "shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution."72 Thus, without any iota of doubt, Article 102(4) applies to both the dissolution of the absolute community regime under Article 102 of the Family Code, and to the dissolution of the conjugal partnership regime under Article 129 of the Family Code. Where lies the difference? As earlier shown, the difference lies in the processes used under the dissolution of the absolute community regime under Article 102 of the Family Code, and in the processes used under the dissolution of the conjugal partnership regime under Article 129 of the Family Code.

Let us now discuss the difference in the processes between the absolute community regime and the conjugal partnership regime. On Absolute Community Regime: When a couple enters into a regime of absolute community, the husband and the wife becomes joint owners of all the properties of the marriage. Whatever property each spouse brings into the marriage, and those acquired during the marriage (except those excluded under Article 92 of the Family Code) form the common mass of the couple's properties. And when the couple's marriage or community is dissolved, that common mass is divided between the spouses, or their respective heirs, equally or in the proportion the parties have established, irrespective of the value each one may have originally owned.73 Under Article 102 of the Family Code, upon dissolution of marriage, an inventory is prepared, listing separately all the properties of the absolute community and the exclusive properties of each; then the debts and obligations of the absolute community are paid out of the absolute community's assets and if the community's properties are insufficient, the separate properties of each of the couple will be solidarily liable for the unpaid balance. Whatever is left of the separate properties will be delivered to each of them. The net remainder of the absolute community is its net assets, which shall be divided between the husband and the wife; and for purposes of computing the net profits subject to forfeiture, said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution.74 Applying Article 102 of the Family Code, the "net profits" requires that we first find the market value of the properties at the time of the community's dissolution. From the totality of the market value of all the properties, we subtract the debts and obligations of the absolute community and this result to the net assets or net remainder of the properties of the absolute community, from which we deduct the market value of the properties at the time of marriage, which then results to the net profits.75 Granting without admitting that Article 102 applies to the instant case, let us see what will happen if we apply Article 102: (a) According to the trial court's finding of facts, both husband and wife have no separate properties, thus, the remaining properties in the list above are all part of the absolute community. And its market value at the time of the dissolution of the absolute community constitutes the "market value at dissolution." (b) Thus, when the petitioner and the respondent finally were legally separated, all the properties which remained will be liable for the debts and obligations of the community. Such debts and obligations will be subtracted from the "market value at dissolution." (c) What remains after the debts and obligations have been paid from the total assets of the absolute community constitutes the net remainder or net asset. And from such net asset/remainder of the petitioner and respondent's remaining properties, the market value

at the time of marriage will be subtracted and the resulting totality constitutes the "net profits." (d) Since both husband and wife have no separate properties, and nothing would be returned to each of them, what will be divided equally between them is simply the "net profits." However, in the Decision dated October 10, 2005, the trial court forfeited the half-share of the petitioner in favor of his children. Thus, if we use Article 102 in the instant case (which should not be the case), nothing is left to the petitioner since both parties entered into their marriage without bringing with them any property. On Conjugal Partnership Regime: Before we go into our disquisition on the Conjugal Partnership Regime, we make it clear that Article 102(4) of the Family Code applies in the instant case for purposes only of defining "net profit." As earlier explained, the definition of "net profits" in Article 102(4) of the Family Code applies to both the absolute community regime and conjugal partnership regime as provided for under Article 63, No. (2) of the Family Code, relative to the provisions on Legal Separation. Now, when a couple enters into a regime of conjugal partnership of gains under Article 142 of the Civil Code, "the husband and the wife place in common fund the fruits of their separate property and income from their work or industry, and divide equally, upon the dissolution of the marriage or of the partnership, the net gains or benefits obtained indiscriminately by either spouse during the marriage."76 From the foregoing provision, each of the couple has his and her own property and debts. The law does not intend to effect a mixture or merger of those debts or properties between the spouses. Rather, it establishes a complete separation of capitals.77 Considering that the couple's marriage has been dissolved under the Family Code, Article 129 of the same Code applies in the liquidation of the couple's properties in the event that the conjugal partnership of gains is dissolved, to wit: Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply: (1) An inventory shall be prepared, listing separately all the properties of the conjugal partnership and the exclusive properties of each spouse. (2) Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either spouse shall be credited to the conjugal partnership as an asset thereof. (3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property or for the value of his or her exclusive property, the ownership of which has been vested by law in the conjugal partnership. (4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the

unpaid balance with their separate properties, in accordance with the provisions of paragraph (2) of Article 121. (5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them. (6) Unless the owner had been indemnified from whatever source, the loss or deterioration of movables used for the benefit of the family, belonging to either spouse, even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any. (7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code. (8) The presumptive legitimes of the common children shall be delivered upon the partition in accordance with Article 51. (9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom the majority of the common children choose to remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise. In case there is no such majority, the court shall decide, taking into consideration the best interests of said children. In the normal course of events, the following are the steps in the liquidation of the properties of the spouses: (a) An inventory of all the actual properties shall be made, separately listing the couple's conjugal properties and their separate properties.78 In the instant case, the trial court found that the couple has no separate properties when they married.79 Rather, the trial court identified the following conjugal properties, to wit: 1. coffee mill in Balongagan, Las Nieves, Agusan del Norte; 2. coffee mill in Durian, Las Nieves, Agusan del Norte; 3. corn mill in Casiklan, Las Nieves, Agusan del Norte; 4. coffee mill in Esperanza, Agusan del Sur; 5. a parcel of land with an area of 1,200 square meters located in Tungao, Butuan City; 6. a parcel of agricultural land with an area of 5 hectares located in Manila de Bugabos, Butuan City;

7. a parcel of land with an area of 84 square meters located in Tungao, Butuan City; 8. Bashier Bon Factory located in Tungao, Butuan City.80 (b) Ordinarily, the benefit received by a spouse from the conjugal partnership during the marriage is returned in equal amount to the assets of the conjugal partnership;81 and if the community is enriched at the expense of the separate properties of either spouse, a restitution of the value of such properties to their respective owners shall be made.82 (c) Subsequently, the couple's conjugal partnership shall pay the debts of the conjugal partnership; while the debts and obligation of each of the spouses shall be paid from their respective separate properties. But if the conjugal partnership is not sufficient to pay all its debts and obligations, the spouses with their separate properties shall be solidarily liable.83 (d) Now, what remains of the separate or exclusive properties of the husband and of the wife shall be returned to each of them.84 In the instant case, since it was already established by the trial court that the spouses have no separate properties,85 there is nothing to return to any of them. The listed properties above are considered part of the conjugal partnership. Thus, ordinarily, what remains in the above-listed properties should be divided equally between the spouses and/or their respective heirs.86 However, since the trial court found the petitioner the guilty party, his share from the net profits of the conjugal partnership is forfeited in favor of the common children, pursuant to Article 63(2) of the Family Code. Again, lest we be confused, like in the absolute community regime, nothing will be returned to the guilty party in the conjugal partnership regime, because there is no separate property which may be accounted for in the guilty party's favor. In the discussions above, we have seen that in both instances, the petitioner is not entitled to any property at all. Thus, we cannot but uphold the Decision dated October 10, 2005 of the trial court. However, we must clarify, as we already did above, the Order dated January 8, 2007. WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial Court, Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for Clarification dated July 7, 2006 in the Regional Trial Court, the Order dated January 8, 2007 of the Regional Trial Court is hereby CLARIFIED in accordance with the above discussions. SO ORDERED.

Termination due to death, FC 104

G.R. No. 127358

March 31, 2005

NOEL BUENAVENTURA, Petitioner, vs. COURT OF APPEALS and ISABEL LUCIA SINGH BUENAVENTURA, respondents. x-------------------x 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 support pendente lite of their son Javy Singh Buenaventura. Petitioner filed an opposition thereto, praying that it be denied or that such incident be set for oral argument.3 On September 2, 1996, the Court of Appeals issued a Resolution increasing the support pendente lite to P20,000.4 Petitioner filed a motion for reconsideration questioning the said Resolution.5 On October 8, 1996, the appellate court promulgated a Decision dismissing petitioners appeal for lack of merit and affirming in toto the trial courts decision.6 Petitioner filed a motion for reconsideration which was denied. From the abovementioned Decision, petitioner filed the instant Petition for Review on Certiorari. On November 13, 1996, through another Resolution, the Court of Appeals denied petitioners motion for reconsideration of the September 2, 1996 Resolution, which increased the monthly support for the son.7 Petitioner filed a Petition for Certiorari to question these two Resolutions. On July 9, 1997, the Petition for Review on Certiorari8 and the Petition for Certiorari9 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 DEFENDANTAPPELLEE 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 defendant appellee 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 221917 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 void ab initio, the property regime applicable and to be liquidated, partitioned and distributed is that of equal coownership. 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 coownership 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 coownership 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, 200526 and has, therefore, attained the age of majority. With regard to the issues on support raised in the Petition for Certiorari, these would also now be moot, owing to the fact that the son, Javy Singh Buenaventura, as previously stated, has attained the age of majority. WHEREFORE, the Decision of the Court of Appeals dated October 8, 1996 and its Resolution dated December 10, 1996 which are contested in the Petition for Review (G.R. No. 127449), are hereby MODIFIED, in that the award of moral and exemplary damages, attorneys fees, expenses of litigation and costs are deleted. The order giving respondent one-half of the retirement benefits of petitioner from Far East Bank and Trust Co. and one-half of petitioners shares of stock in Manila Memorial Park and in the Provident Group of Companies is sustained but on the basis of the liquidation, partition and distribution of the co-ownership and not of the regime of conjugal partnership of gains. The rest of said Decision and Resolution are AFFIRMED. The Petition for Review on Certiorari (G.R. No. 127358) contesting the Court of Appeals Resolutions of September 2, 1996 and November 13, 1996 which increased the support pendente lite in favor of the parties son, Javy Singh Buenaventura, is now MOOT and ACADEMIC and is, accordingly, DISMISSED. No costs. SO ORDERED.

G.R. No. 178044

January 19, 2011

ALAIN M. DIO , Petitioner, vs. MA. CARIDAD L. DIO, Respondent. 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. Tayags psychological 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.1avvphil Under Article 40, "[t]he absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void." Thus we ruled: x x x where the absolute nullity of a previous marriage is sought to be invoked for purposes of contracting a second marriage, the sole basis acceptable in law, for said projected marriage to be free from legal infirmity, is a final judgment declaring a previous marriage void.11 Article 45 of the Family Code, on the other hand, refers to voidable marriages, meaning, marriages which are valid until they are set aside by final judgment of a competent court in an action for annulment.12 In both instances under Articles 40 and 45, the marriages are governed either by absolute community of property13 or conjugal partnership of gains14 unless the parties agree to a complete separation of property in a marriage settlement entered into before the marriage. Since the property relations of the parties is governed by absolute community of property or conjugal partnership of gains, there is a need to liquidate, partition and distribute the properties before a decree of annulment could be issued. That is not the case for annulment of

marriage under Article 36 of the Family Code because the marriage is governed by the ordinary rules on co-ownership. In this case, petitioners marriage to respondent was declared void under Article 3615 of the Family Code and not under Article 40 or 45. Thus, what governs the liquidation of properties owned in common by petitioner and respondent are the rules on co-ownership. In Valdes, the Court ruled that the property relations of parties in a void marriage during the period of cohabitation is governed either by Article 147 or Article 148 of the Family Code.16 The rules on co-ownership apply and the properties of the spouses should be liquidated in accordance with the Civil Code provisions on co-ownership. Under Article 496 of the Civil Code, "[p]artition may be made by agreement between the parties or by judicial proceedings. x x x." It is not necessary to liquidate the properties of the spouses in the same proceeding for declaration of nullity of marriage. WHEREFORE, we AFFIRM the Decision of the trial court with the MODIFICATION that the decree of absolute nullity of the marriage shall be issued upon finality of the trial courts decision without waiting for the liquidation, partition, and distribution of the parties properties under Article 147 of the Family Code. SO ORDERED.

G.R. No. 189207

June 15, 2011

ERIC U. YU, Petitioner, vs. HONORABLE JUDGE AGNES REYES-CARPIO, in her official capacity as Presiding Judge, Regional Trial Court of Pasig-Branch 261; and CAROLINE T. YU, Respondents. DECISION VELASCO, JR., J.: The Case This is a Petition for Certiorari under Rule 65 which seeks to annul and set aside the March 31, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 106878. The CA Decision affirmed the Orders dated August 4, 20082 and October 24, 20083 of the Regional Trial Court (RTC), Branch 261 in Pasig City. The Facts The instant petition stemmed from a petition for declaration of nullity of marriage filed by petitioner Eric U. Yu against private respondent Caroline T. Yu with the RTC in Pasig City. The case was initially raffled to Branch 163. On May 30, 2006, Judge Leili Cruz Suarez of the RTC-Branch 163 issued an Order, stating that petitioners Partial Offer of Evidence dated April 18, 2006 would already be submitted for resolution after certain exhibits of petitioner have been remarked. But the exhibits were only relative to the issue of the nullity of marriage of the parties.4 On September 12, 2006, private respondent moved to submit the incident on the declaration of nullity of marriage for resolution of the court, considering that the incidents on custody, support, and property relations were mere consequences of the declaration of nullity of the parties marriage.5 On September 28, 2006, petitioner opposed private respondents Motion, claiming that the incident on the declaration of nullity of marriage cannot be resolved without the presentation of evidence for the incidents on custody, support, and property relations.6 Petitioner, therefore, averred that the incident on nullity of marriage, on the one hand, and the incidents on custody, support, and property relations, on the other, should both proceed and be simultaneously resolved. On March 21, 2007, RTC-Branch 163 issued an Order in favor of petitioners opposition. Particularly, it stated that:

The Court agrees with the contention of the Petitioner that it would be more in accord with the rules if the Parties were first allowed to present their evidence relative to the issues of property relations, custody and support to enable the Court to issue a comprehensive decision thereon.7 Subsequently, private respondent was able to successfully cause the inhibition of Judge Cruz Suarez of the RTC-Branch 163. Consequently, the case was re-raffled to another branch of the Pasig RTC, particularly Branch 261, presided by Judge Agnes Reyes-Carpio.8 Thereafter, while the case was being heard by the RTC-Branch 261, private respondent filed an Omnibus Motion on May 21, 2008. The Omnibus Motion sought (1) the strict observation by the RTC-Branch 261 of the Rule on Declaration of Absolute Nullity of Void Marriages, as codified in A.M. No. 02-11-10-SC, in the subject proceedings; and (2) that the incident on the declaration of nullity of marriage be already submitted for resolution.9 Conversely, private respondent prayed that the incident on the declaration of nullity of marriage be resolved ahead of the incidents on custody, support, and property relations, and not simultaneously. Quite expectedly, petitioner opposed the Omnibus Motion, arguing that the issues that were the subject of the Omnibus Motion had already been resolved in the March 21, 2007 Order. Concurrently, petitioner prayed that the incidents on nullity, custody, support, and property relations of the spouses be resolved simultaneously.10 In its Order dated August 4, 2008, the RTC-Branch 261 granted the Omnibus Motion. Judge Reyes-Carpio explained that: At the outset, the parties are reminded that the main cause of action in this case is the declaration of nullity of marriage of the parties and the issues relating to property relations, custody and support are merely ancillary incidents thereto. xxxx Consistent, therefore, with Section 19 of A.M. No. 02-11-10-SC, the Court finds it more prudent to rule first on the petitioners petition and respondents counter-petition for declaration of nullity of marriage on the ground of each others psychological incapacity to perform their respective marital obligations. If the Court eventually finds that the parties respective petitions for declaration of nullity of marriage is indeed meritorious on the basis of either or both of the parties psychological incapacity, then the parties shall proceed to comply with Article[s] 50 and 51 of the Family Code before a final decree of absolute nullity of marriage can be issued. Pending such ruling on the declaration of nullity of the parties marriage, the Court finds no legal ground, at this stage, to proceed with the reception of evidence in regard the issues on custody and property relations, since these are mere incidents of the nullity of the parties marriage.11 On August, 28, 2008, petitioner moved for the reconsideration of the August 4, 2008 Order. On October 24, 2008, Judge Reyes-Carpio issued an Order denying petitioners motion for reconsideration. In denying the motion, Judge Reyes-Carpio reasoned:

x x x [I]t is very clear that what petitioner seeks to reconsider in the Courts Order dated August 4, 2008 is the procedure regarding the reception of evidence on the issues of property relations, custody and support. He opposes the fact that the main issue on declaration of nullity is submitted for decision when he has not yet presented evidence on the issues on property relations, custody and support. Considering that what he seeks to set aside is the procedural aspect of the instanct case, i.e. the reception of evidence which is a matter of procedure, there is no question that it is A.M. 02-11[10]-SC which should be followed and not the procedures provided in Articles 50 and 51 of the Family Code. While it is true that the Family Code is a substantive law and rule of procedure cannot alter a substantive law, the provisions laid in Articles 50 and 51 relative to the liquidation and dissolution of properties are by nature procedural, thus there are no substantive rights which may be prejudiced or any vested rights that may be impaired. In fact, the Supreme Court in a number of cases has even held that there are some provisions of the Family Code which are procedural in nature, such as Article[s] 185 and 50 of the Family Code which may be given retroactive effect to pending suits. Adopting such rationale in the instant case, if the Court is to adopt the procedures laid down in A.M. No. 02-11-[10]-SC, no vested or substantive right will be impaired on the part of the petitioner or the respondent. Even Section 17 of A.M. No. 02-11-[10]-SC allows the reception of evidence to a commissioner in matters involving property relations of the spouses. xxxx Lastly, it is the policy of the courts to give effect to both procedural and substantive laws, as complementing each other, in the just and speedy resolution of the dispute between the parties. Moreover, as previously stated, the Court finds it more prudent to rule first on the petitioners petition and respondents counter-petition for declaration of nullity of marriage on the ground of each others psychological incapacity to perform their respective marital obligations. If the Court eventually finds that the parties respective petitions for declaration of nullity of marriage is indeed meritorious on the basis of either or both of the parties psychological incapacity, then the parties shall proceed to comply with Article[s] 50 and 51 of the Family Code before a final decree of absolute nullity of marriage can be issued.12 The Ruling of the Appellate Court On January 8, 2009, petitioner filed a Petition for Certiorari under Rule 65 with the CA, assailing both the RTC Orders dated August 4, 2008 and October 24, 2008. The petition impleaded Judge Reyes-Carpio as respondent and alleged that the latter committed grave abuse of discretion in the issuance of the assailed orders. On March 31, 2009, the CA affirmed the judgment of the trial court and dismissed the petition. The dispositive portion of the CA Decision reads:

All told, absent any arbitrary or despotic exercise of judicial power as to amount to abuse of discretion on the part of respondent Judge in issuing the assailed Orders, the instant petition for certiorari cannot prosper. WHEREFORE, the petition is hereby DISMISSED. SO ORDERED.13 The Issues This appeal is, hence, before Us, with petitioner maintaining that the CA committed grave abuse of discretion in upholding the assailed orders issued by the trial court and dismissing the Petition for Certiorari. Particularly, petitioner brings forth the following issues: A. Whether or not the [CA] committed grave abuse of discretion amounting to lack of jurisdiction in holding that a petition for certiorari is not a proper remedy of the Petitioner B. Whether or not the [CA] committed grave abuse of discretion amounting to lack [or excess] of jurisdiction in upholding the Respondent Judge in submitting the main issue of nullity of marriage for resolution ahead of the reception of evidence on custody, support, and property relations C. Whether or not the reception of evidence on custody, support and property relations is necessary for a complete and comprehensive adjudication of the parties respective claims and [defenses].14 The Courts Ruling We find the petition without merit. A Petition for Certiorari under Rule 65 is the proper remedy in assailing that a judge has committed grave abuse of discretion amounting to lack or excess of jurisdiction. Section 1, Rule 65 of the Rules of Court clearly sets forth when a petition for certiorari can be used as a proper remedy: 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 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. (Emphasis Ours.) The term "grave abuse of discretion" has a specific meaning. An act of a court or tribunal can only be considered as with grave abuse of discretion when such act is done in a "capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction."15 The abuse of discretion

must be so patent and gross as to amount to an "evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility."16 Furthermore, the use of a petition for certiorari is restricted only to "truly extraordinary cases wherein the act of the lower court or quasi-judicial body is wholly void."17 From the foregoing definition, it is clear that the special civil action of certiorari under Rule 65 can only strike an act down for having been done with grave abuse of discretion if the petitioner could manifestly show that such act was patent and gross.18 But this is not the case here. Nowhere in the petition was it shown that the acts being alleged to have been exercised with grave abuse of discretion(1) the Orders of the RTC deferring the presentation of evidence on custody, support, and property relations; and (2) the appellate courts Decision of upholding the Orderswere patent and gross that would warrant striking down through a petition for certiorari under Rule 65. At the very least, petitioner should prove and demonstrate that the RTC Orders and the CA Decision were done in a capricious or whimsical exercise of judgment.19 This, however, has not been shown in the petition. It appears in the records that the Orders in question, or what are alleged to have been exercised with grave abuse of discretion, are interlocutory orders. An interlocutory order is one which "does not finally dispose of the case, and does not end the Courts task of adjudicating the parties contentions and determining their rights and liabilities as regards each other, but obviously indicates that other things remain to be done by the Court."20 To be clear, certiorari under Rule 65 is appropriate to strike down an interlocutory order only when the following requisites concur: (1) when the tribunal issued such order without or in excess of jurisdiction or with grave abuse of discretion; and (2) when the assailed interlocutory order is patently erroneous and the remedy of appeal would not afford adequate and expeditious relief.21 In this case, as We have discussed earlier, petitioner failed to prove that the assailed orders were issued with grave abuse of discretion and that those were patently erroneous. Considering that the requisites that would justify certiorari as an appropriate remedy to assail an interlocutory order have not been complied with, the proper recourse for petitioner should have been an appeal in due course of the judgment of the trial court on the merits, incorporating the grounds for assailing the interlocutory orders.22 The appellate court, thus, correctly cited Triplex Enterprises, Inc. v. PNB-Republic Bank and Solid Builders, Inc., penned by Chief Justice Renato Corona, which held: Certiorari as a special civil action is proper when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion, and there is no appeal nor any plain, speedy and adequate remedy at law. The writ may be issued only where it is convincingly proved that the lower court committed

grave abuse of discretion, or an act too patent and gross as to amount to an evasion of a duty, or to a virtual refusal to perform the duty enjoined or act in contemplation of law, or that the trial court exercised its power in an arbitrary and despotic manner by reason of passion or personal hostility. While certiorari may be maintained as an appropriate remedy to assail an interlocutory order in cases where the tribunal has issued an order without or in excess of jurisdiction or with grave abuse of discretion, it does not lie to correct every controversial interlocutory ruling. In this connection, we quote with approval the pronouncement of the appellate court: In this jurisdiction, there is an "erroneous impression that interlocutory [orders] of trial courts on debatable legal points may be assailed by certiorari. To correct that impression and to avoid clogging the appellate court with future certiorari petitions it should be underscored that the office of the writ of certiorari has been reduced to the correction of defects of jurisdiction solely and cannot legally be used for any other purpose." The writ of certiorari is restricted to truly extraordinary cases wherein the act of the lower court or quasi-judicial body is wholly void. Moreover, it is designed to correct errors of jurisdiction and not errors in judgment. The rationale of this rule is that, when a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. Otherwise, every mistake made by a court will deprive it of its jurisdiction and every erroneous judgment will be a void judgment. When the court has jurisdiction over the case and person of the defendant, any mistake in the application of the law and the appreciation of evidence committed by a court may be corrected only by appeal. The determination made by the trial court regarding the admissibility of evidence is but an exercise of its jurisdiction and whatever fault it may have perpetrated in making such a determination is an error in judgment, not of jurisdiction. Hence, settled is the rule that rulings of the trial court on procedural questions and on admissibility of evidence during the course of a trial are interlocutory in nature and may not be the subject of a separate appeal or review on certiorari. They must be assigned as errors and reviewed in the appeal properly taken from the decision rendered by the trial court on the merits of the case. Here, petitioner assails the order of the trial court disallowing the admission in evidence of the testimony of Roque on the opinion of the OGCC. By that fact alone, no grave abuse of discretion could be imputed to the trial court. Furthermore, the said order was not an error of jurisdiction. Even assuming that it was erroneous, the mistake was an error in judgment not correctable by the writ of certiorari.23 Be that as it may, even dwelling on the merits of the case just as the CA has already done and clearly explicated, We still find no reason to grant the petition. It must be noted that Judge Reyes-Carpio did not disallow the presentation of evidence on the incidents on custody, support, and property relations. It is clear in the assailed orders that the trial court judge merely deferred the reception of evidence relating to custody, support, and property relations, to wit:

August 4, 2008 Order Consistent, therefore, with Section 19 of A.M. No. 02-11-10-SC, the Court finds it more prudent to rule first on the petitioners petition and respondents counter-petition for declaration of nullity of marriage on the ground of each others psychological incapacity to perform their respective marital obligations. If the Court eventually finds that the parties respective petitions for declaration of nullity of marriage is indeed meritorious on the basis of either or both of the parties psychological incapacity, then the parties shall proceed to comply with Article[s] 50 and 51 of the Family Code before a final decree of absolute nullity of marriage can be issued. Pending such ruling on the declaration of nullity of the parties marriage, the Court finds no legal ground, at this stage, to proceed with the reception of evidence in regard the issues on custody and property relations, since these are mere incidents of the nullity of the parties marriage.24 October 24, 2008 Order Lastly, it is the policy of the courts to give effect to both procedural and substantive laws, as complementing each other, in the just and speedy resolution of the dispute between the parties. Moreover, as previously stated, the Court finds it more prudent to rule first on the petitioners petition and respondents counter-petition for declaration of nullity of marriage on the ground of each others psychological incapacity to perform their respective marital obligations. If the Court eventually finds that the parties respective petitions for declaration of nullity of marriage is indeed meritorious on the basis of either or both of the parties psychological incapacity, then the parties shall proceed to comply with Article (sic) 50 and 51 of the Family Code before a final decree of absolute nullity of marriage can be issued.25 And the trial judges decision was not without basis. Judge Reyes-Carpio finds support in the Court En Banc Resolution in A.M. No. 02-11-10-SC or the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages. Particularly, Secs. 19 and 21 of the Rule clearly allow the reception of evidence on custody, support, and property relations after the trial court renders a decision granting the petition, or upon entry of judgment granting the petition: Section 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. xxxx Section 21. Liquidation, partition and distribution, custody, support of common children and delivery of their presumptive legitimes. - Upon entry of the judgment granting the petition, or, in case of appeal, upon receipt of the entry of judgment of the appellate court granting the petition, the Family Court, on motion of either party, shall proceed with the liquidation, partition and distribution of the properties of the spouses, including custody, support of common children and delivery of their presumptive legitimes pursuant to Articles 50 and 51 of the Family Code unless such matters had been adjudicated in previous judicial proceedings.

Evidently, Judge Reyes-Carpio did not deny the reception of evidence on custody, support, and property relations but merely deferred it, based on the existing rules issued by this Court, to a time when a decision granting the petition is already at hand and before a final decree is issued. Conversely, the trial court, or more particularly the family court, shall proceed with the liquidation, partition and distribution, custody, support of common children, and delivery of their presumptive legitimes upon entry of judgment granting the petition. And following the pertinent provisions of the Court En Banc Resolution in A.M. No. 02-11-10-SC, this act is undoubtedly consistent with Articles 50 and 51 of the Family Code, contrary to what petitioner asserts. Particularly, Arts. 50 and 51 of the Family Code state: Article 50. x x x 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 the previous judicial proceedings. xxxx 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. (Emphasis Ours.) Finally, petitioner asserts that the deferment of the reception of evidence on custody, support, and property relations would amount to an ambiguous and fragmentary judgment on the main issue.26 This argument does not hold water. The Court En Banc Resolution in A.M. No. 02-1110-SC clearly allows the deferment of the reception of evidence on custody, support, and property relations. Conversely, the trial court may receive evidence on the subject incidents after a judgment granting the petition but before the decree of nullity or annulment of marriage is issued. And this is what Judge Reyes-Carpio sought to comply with in issuing the assailed orders. As correctly pointed out by the CA, petitioners assertion that ruling the main issue without receiving evidence on the subject incidents would result in an ambiguous and fragmentary judgment is certainly speculative and, hence, contravenes the legal presumption that a trial judge can fairly weigh and appraise the evidence submitted by the parties.271wphi1 Therefore, it cannot be said at all that Judge Reyes-Carpio acted in a capricious and whimsical manner, much less in a way that is patently gross and erroneous, when she issued the assailed orders deferring the reception of evidence on custody, support, and property relations. To reiterate, this decision is left to the trial courts wisdom and legal soundness. Consequently, therefore, the CA cannot likewise be said to have committed grave abuse of discretion in upholding the Orders of Judge Reyes-Carpio and in ultimately finding an absence of grave abuse of discretion on her part.

WHEREFORE, the petition is DISMISSED. The CA Decision in CA-G.R. SP No. 106878 finding that Judge Agnes Reyes-Carpio did not commit grave abuse of discretion amounting to lack or excess of jurisdiction is AFFIRMED. SO ORDERED

For marriages before FC, FC 104

G.R. No. L-32820-21 January 30, 1976 DOROTEA DE OCAMPO VDA. DE DELIZO and her nine (9) children, named REGINO, CRISPINA, CARMEN, BASILIO, HILARIO, MACARIO, SENDON MARCIANO and HERMOGENES, all surnamed DELIZO y OCAMPO, petitionersappellants, vs. URBANA DELIZO, assisted by her husband, AMBROCIO FLORA, SEVERINO DELIZO and the Heirs of FRANCISCO DELIZO, namely, RANCIVILLANO SOLTRIFILO, JOSEFINA, EUPROCINA, AUREA, EDITA and FE all surnamed DELIZO, and ROSENDA GENOVE VDA. DE DELIZO, respondents-appellees. Leandro C. Sevilla for petitioners-appellants. Romeo J. Callejo respondents-appellees.

ANTONIO, J.: These two cases involve the partition of the conjugal partnership properties of two marriages contracted by Nicolas Delizo. The first, was with Rosa Villasfer, which lasted from April 20, 1891 until Rows death on December 7, 1909, or a period of eighteen (18) years; and the second, with Dorotea de Ocampo, which existed for a period of forty-six (46) years, or from October, 1911 until the death of Nicolas Delizo on May 3, 1957 at the age of ninety (90) years. The action for partition was instituted on April 15, 1957 by a daughter and a son of the first marriage, namely, Urbana Delizo and Severino Delizo, and the heirs of Francisco Delizo, another son, who died in 1943, specifically, Rancivillano Soltrifilo Josefina, Eufrocina, Aurea, Edita, and Fe, all surnamed Delizo (the last three being minors were represented by their mother, Rosenda Genove) all against their father, Nicolas Delizo, and his second wife, Dorotea de Ocampo, and their nine (9) children, the herein petitioners-appellants, namely Regino, Crispina, Carmen, Basilio, Hilario, Macario, Sendon, Marciano, and Hermogenes, all surnamed Delizo. The aforesaid defendants opposed the partition, claiming that the properties described in the complaint were those of the second marriage. On May 3, 1957, Nicolas Delizo died and was substituted by his children in the second m as party defendants. In the meantime, Special Proceedings No. 1058 (Intestate Estate of the late Nicolas Delizo) was filed by Dorotea de Ocampo on June 3, 1957. Thereafter, or on August 23, 1971, Severino De died intestate and is now represented by his children, namely, Federico, Severina, Angelina, Segundina and Brigida, all surnamed Delizo. Involved are the properties acquired by Nicolas Delizo, among which are sixty-six (66) hectares of agricultural lands in San Jose City, Nueva Ecija; fifty-eight (58) hectares of riceland in

Muoz of the same province; and a square meter lot at 1056-M P. Campa, Sampaloc, Manila. The properties are specifically described as follows: (1) Lots Nos. 210, 211, 388, 389, 390, and 407 of the San Jose Cadastre situation in Rizal, San Jose with a combined area of about sixty-six (66) hectares covered by OCT No. 6176-N.E. issued in the name of Nicolas Delizo, married to Dorotea de Ocampo (Exh. F or 11); (2) Lot No. 1915 of the San Jose Cadastre with an area of about 1,056 square meters and covered by OCT No. 5783 in the name of Nicolas Delizo, married to Dorotea de Ocampo (Exh. G or 12); (3) Lot No. 498 of the San Jose Cadastre with an area of about 3,366 square meters and covered by OCT No. 5622, N.E. issued in the name of Nicolas Delizo, married to Dorotea de Ocampo (Exh. H. or 13); (4) A parcel of land in San Jose, Nueva Ecija containing an area of 13.2948 hectares and covered by TCT No. 2985-N.E. (Exh. I. or 13-A); (5) An agricultural land of about 17.4753 hectares situated in sitio Rangayan, Muoz and covered by TCT No. 5162 (Exh. J or 14); (6) A parcel of land in Barrio Caanawan, San Jose, with an area of about 14.0354 hectares and covered by TCT No. 11910 (Exh. K or 10); (7) A cornland in Barrio Rangayan, Muoz, Nueva Ecija, of about 1,500 square meters and covered by Tax Declaration No. 5476; (8) Riceland in Barrio San Andres, Muoz of about 5,083 square meters and covered by Tax Declaration No. 7083; (9) Riceland in Barrio Rangayan, Muoz, Nueva Ecija, containing an area of about 17.4755 hectares and covered by Tax Declaration No. 812; (10) Lot No. 847-a riceland in Barrio Bayan, Muoz, with an area of about 13.0902 hectares and covered by TCT No. 3585 issued in the name of Nicolas Delizo, married to Dorotea de Ocampo on April 25,1929 (Exhs. L or 15 & 15-A); (11) A camarin of strong materials, with galvanized iron roofing in San Jose, Nueva Ecija, about eight (8) meters by twelve (12) meters; (12) A residential house and lot at Sanchez Street, San Jose, Nueva Ecija; (13) Lot No. 1790 of San Jose Cadastre of about 2,840 square meters and covered by Original Certificate of Title No. 8131 in the names of spouses Silvestre Batara and Maria Soriano issued on November 16, 1927 (Exh. M or 16), superseded by Transfer

Certificate of Title No. NT-29524 issued in the name of Juan T. Gualberto on May 25,1959 (Exh. N or 17) claimed by the heirs of Nicolas Delizo and Dorotea de Ocampo pursuant to deed of sale (Exh. N1); (14) An urban lot and coconut plantation in San Fabian, Pangasinan; (15) A lot and residential house consisting Of a two-door accessoria at No. 1056-58 (formerly 562) P. Campa, Sampaloc, Manila; (16) A sawmill with accessories, bulldozers, etc. in San Jose, Nueva Ecija (bulldozer is now in Gordon, Isabels in the possession of Regino Delizo and Basilio Delizo); and (17) Several heads of carabaos. After trial, the lower court rendered judgment on April 27, 1964, distributing the aforesaid properties as follows: (a) onehalf () pro indiviso to the three (3) children of the first marriage, namely, Urbana Delizo, Severino Delizo, and the heirs of the deceased Francisco Delizo, viz.: Rancivillano Soltrifilo Josefina, Eufrocina, Aurea, Edita, and Fe (b) one-fourth () pro indiviso to the surviving spouse, Dorotea de Ocampo; and (c) one-fourth () pro in equal shares to the children of both marriages, nine (9) of whom were begotten during the second marriage, or into thirteen (13) parts. From said judgment. petitioners-appellants appealed to the Court of Appeals. On August 12, 1970, the Appellate Court rendered judgment, affirming with modifications the trial court's decision. The facts as found by the Appellate Court are as follows:
As regards the Caanawan lands situated in Caanawan, San Jose, Nueva Ecija, comprising some 66 hectares, defendants capitalize on the undisputed fact that Original Certificate of Title No. 6176 (Exh. F or 11) issued on August 21, 1924, covering these lands is in the name of Nicolas Delizo, ma to Dorotea de Ocampo. Defendants further point out that the testimonies of defendant Dorotea de Ocampo and octogenarian Moises Patricio prove that these lands were acquired during the second marriage. However, the fact that the disputed lands situated in Caanawan were registered in the name of 'Nicolas Delizo, married to Dorotea de Ocampo's no proof that the property is owned by the second conjugal partnership. The phrase 'married to' is merely descriptive of the civil status of Nicolas Delizo (Gonzales vs. Miller, 69 Phil. 340; De Jesus vs. Padilla, CA-G.R. No. 12191-R, April 19, 1955; Muoz & Tan Go Inc. vs. Santos CA-G.R. No. "27759-R, October 3, 1963; Pratts vs. Sheriff of Rizal, 53 Phil. 51, 53). Neither is the testimony of Dorotea de Ocampo that the said lands were acquired by her and her spouse, altogether clear and persuasive. For while the admitted fact is that she and Nicolas Delizo were married in 1911, she declared on the witness stand that the aforesaid properties were given by Pedro Salvador to her and her spouse in 1908 (t.s.n., p. 288, March 8, 1963), thereby leading the trial court to infer an admission that these lands were acquired during the first marriage of Nicolas Delizo. It may likewise be noted that as per her testimony, she and her father arrived in Caanawan, San Jose, Nueva Ecija, when Rosa Villasfer was still alive. That would be sometime before 1911. But she admitted that her father then was not able to acquire lands from Pedro Salvador, their grantor, because he had no more lands to distribute to settlers. Accordingly, it is farfetched that after Rosa's death and the subsequent marriage of Nicolas Delizo to Dorotea de Ocampo, Pedro Salvador would still have those 67 hectares which

defendants claimed were acquired by the spouses Nicolas Delizo and Dorotea de Ocampo by grant from Pedro Salvador (t.s.n., pp. 459-46, March 15, 1963). Moises Patricio tried to confirm the widow, declaring that Nicolas Delizo was married to defendant Dorotea de Ocampo, when he was given lands in Caanawan by Pedro Salvador (t.s.n., p. 493, June 7, 1963). However, he placed the acquisition sometime during the founding of Barrio Sto. Tomas, San Jose, Nueva Ecija (Id., p. 492) which took place some four years after the Spanish-Filipino revolution of 1896 (t.s.n., pp. 548-549, June 21, 1963), or approximately 1900. Therefore, it could not be Dorotea de Ocampo, but Rosa Villasfer, who was admittedly still alive and the wife of Nicolas Delizo at the time of the acquisition. Ranged against these unreliable testimonies for the defendants, is the testimony of Lorenzo Delizo, who being a brother of deceased Nicolas Delizo, stands in equal relationship to the plaintiffs, who were Nicolas' children by the first marriage, and the defendants, who were children of Nicolas in his second marriage. His testimony therefore carries great weight. This witness averred that 16 hectares were acquired as homestead by his deceased brother, Nicolas Delizo, from Pedro Salvador and Mauricio Salvador who were then 'cabecillas' distributing lands to homesteaders in 1905 (t.s.n., p. 12, January 20, 1961); that Nicolas acquired by sale the 16-hectare homestead of Nicolas Dacquel in 1906, another 16- hectare homestead of Mariano Antolin in 1907 and the 16hectare homestead of Francisco Pascua in 1908 (id., pp. 14-15). Lorenzo's declarations are supported by the testimonies of (1) Urbana Delizo, a daughter of Nicolas by his first marriage and who was already 17 when her mother, Rosa Villasfer, died in 1909 ( id., p. 19); (2) Sabiniano Villanueva, a son of one of Nicolas' tenants on the controverted Caanawan lands (id., pp. 93-168) and (3) Raymundo Eugenio, a former clerk in the municipal treasurer's office who u to collect taxes on the land belonging to Nicolas and later became municipal "president of San Jose, Nueva Ecija (t.s.n., pp. 367-368, Jan. 31, 1964), although these Caanawan lands cannot be traced back to TD 431, Exhibit P-9 issued in 1906, cited by appellants (see notations at bottom of reverse side of alleged succeeding TDs) aside from the fact that the notations on the reverse side thereof are suspicious (see years when tax commenced and when issued) and the discrepancy between areas (8 Ha. in Exhibit P-9 and 57 Ha. for lots 210 and 211). Accordingly, we find with the trial court that the Caanawan lands, comprising lots Nos. 210, 211, 388, 390, 398 and 407.1-under Original Certificate of Title No. 6176 (Exh. F or 11) were acquired during the existence of the first marriage of Nicolas Delizo to Rosa Villasfer and there being no affirmative showing that they belonged exclusively to said Nicolas Delizo, should therefore correspond to the first conjugal partnership of Nicolas Delizo and Rosa Villasfer. So with the lot and house at 562 P. Campa St., Sampaloc, Manila, known as Lot 47, Block 83 covered by TCT No. 9616-Manila which was ceded during the second marriage in payment of, or substitution for, the Caanawan property, because the Asiatic Petroleum Company to which it had been mortgaged as bond for Juan Par as agent foreclosed the mortgage, when the agent defaulted in his obligation to the company, Exhibits 6, 7 & 19 (Art. 153 [formerly, 140], par. 1, new Civil Code). However, with regard to the other properties in question, like lot No. 498 of the San Jose Cadastre, under Original certificate of Title No. 5622, likewise issued in the name of Nicolas Delizo, married to Dorotea de Ocampo'; a parcel of land in San Jose, Nueva Ecija under TCT No. 2985 (Exh. I or 13)' and agricultural land of about 17.4753 hectares in Sitio Rangayan, Muoz Nueva Ecija under TCT No. 5162 (Exh. J or 14); another parcel of land in Caanawan, San Jose, with an area of about 14.0354 hectares under TCT No. 11910 (Exh. K or 10); a coin land in barrio Rangayan, Muoz, Nueva Ecija, of about 1,500 square me ' quarters under Tax Declaration No. 5476; a riceland in barrio San Andres, Muoz Nueva Ecija, of about 5,083 square meters under Tax Dec. 7083;

another riceland in Rangayan, Muoz, of about 17.4755 hectares under Tax Dec. No. 812; a riceland, lot No. 847, of about 13.0902 hectares covered by TCT No. 3585 issued on April 29, 1929 in the name of 'Nicolas Delizo, married to Dorotea de Ocampo'(Exh. L or 1.5)-, a camarin of strong materials with galvanized iron roofing in San Jose, Nueva Ecija, about 8 meters by 12 meters; a residential lot at Sanches Street, San Jose, Nueva Ecija; lot No. 1790 of the San Jose Cadastre consisting of 2,840 square meters, more or less, under Original Certificate of Title No. 8131 in another name but claimed by the heirs under deed of sale, Exhibit N1 a sugar cane mill in San Jose, Nueva Ecija and several heads of carabaos (Exh. 0); Lots Nos. 495 and 496 of the San Jose Cadastre, possessed by defendants although adjudicated in the name of Marcelo Tomas and Guillermo Cabiso, respectively; lot No. 494-A, of the San Jose Cadastre, adjudicated in the name of Nicolas Delizo and Dorotea de Ocampo (RA, pp. 96-97),-there is no controversy that these were all acquired during the existence of the second marriage of Nicolas Delizo.

On the basis of the foregoing facts, the Court of Appeals rendered judgment as follows:
But the trial court held that because there was no liquidation of the conjugal partnership property of the first marriage, upon the death of the first wife, 'the conjugal partnership was converted into one of co-ownership between Nicolas Delizo and his children of the first marriage .... Hence, all the fruits or increase of the properties acquired thereafter shall belong to such co-ownership.' We cannot agree with this legal conclusion. One-half of the conjugal properties of the first marriage constituted the separate property of the husband at the formation of the second conjugal partnership upon his remarriage in October 1911 (Art. 145, NCC). Moreover, the fruits of the Caanawan property were acquired through the labor and industry of Nicolas Delizo and Dorotea Ocampo; and indeed, two witnesses for the plaintiffs admitted that at the time of the death of Rosa Villasfer, only about 20 hectares of the Caanawan property had been cleared and cultivated (pp. 22-23; 113, 117, 383-4, t.s.n.). This property was practically virgin land, and the rest thereof or about 47 hectares were therefore cleared and cultivated only during the marriage of Nicolas Delizo and Dorotea Ocampo. This is impliedly admitted in plaintiffs' complaint that 'from the time of death of the said Rosa Villasfer, the defendants ... have WORKED upon, TILLED and CULTIVATED, or otherwise offered in tenancy the whole of the agricultural lands described' (par. 2). The Caanawan property left to itself could not produce any fruits for they did not have any permanent improvements thereon. What was produced according to the evidence was palay, and the production of palay requires tilling, cultivation, seedlings, gathering, preservation and marketing. It was thru the labor and industry of Nicolas Delizo and Dorotea de Ocampo that the Caanawan property was able to produce fruits. Whatever it produced thru the labor and industry of the spouses belongs to their conjugal partnership. While it is true that to the owner of the land belongs the fruits, whether natural, industrial or civil (Art. 441, NCC formerly Art. 354, Spanish Civil Code), this does not mean that all that is produced belongs to the owner of the land. The owner, according to Art. 443, NCC (formerly Art. 356, Spanish Civil Code) who receives the fruits, has the obligation to pay the expenses made by a person in their production, gathering and preservation. When Dorotea Ocampo admitted that the Muoz property was purchased partly with the fruits of the Caanawan property, she was referring to the gross production, not deducting therefrom what could have pertained to the person who produced the fruits. So it seems "that if we are to determine with mathematical certainty what portion of the Muoz property and other properties acquired during the second marriage should pertain to the first marriage as corn spending to the value of its share in the fruits of the Caanawan property, and what should belong to the second marriage as corresponding to the value of the labor and industry of the spouses Delizo and Ocampo, we have to find how much was produced during the second marriage and determine what will be the share of the owner of the land what will correspond to the one who produced the fruits. The burden of proof lies upon the plaintiffs under the rules of evidence. But, of course, this is an impossibility. For no

records have been kept and it is not in accordance with the Filipino customs for the surviving spouse-whether he remarries or not-to keep the record of the produce of the properties left by the deceased spouse. tradition thereto, according to Dorotea Ocampo, part of the price used in the purchase of Muoz property was the proceeds of a loan which, together with the properties purchased with it, belongs to the conjugal partnership of Nicolas Delizo and Dorotea Ocampo. Under these circumstances, it would be impossible to determine with mathematical precision what portion of the properties acquired during the second marriage of Nicolas Delizo should belong to the second conjugal partnership and what portion should belong to the heirs of the first conjugal partnership, one half of which pertains to the husband. However, considering that 1. At the time of the dissolution of the first marriage or about five years after acquisition, according to plaintiffs' evidence, only about 20 hectares of the Caanawan property had been cultivated, the remaining 47 hectares were therefore cleared and improved during the second marriage thru the labor and industry of the spouses Nicolas Delizo and Dorotea Ocampo for 46 years (1911-1967). These improvements were made in good faith considering that Nicolas Delizo administered the properties of the first marriage. The second marriage is entitled to reimbursement for the increase in value of these 47 hectares (Art. 516, NCC Even the Muoz property acquired during the second marriage had to be improved by the spouses Nicolas Delizo and Dorotea Ocampo. 2. The one-half of the fruits of the Caanawan property which should pertain to the heirs of Rosa Villasfer refers only to one-half o f the net after deducting the expenses of clearing the land, cultivating, gathering and preservation. Forty-seven hectares of the Caanawan property were cleared and cultivated only during the second marriage. Even under a liberal apportionment of the produce, the heirs of the second marriage could not be entitled to more than 30% of the produce. 3. Part of the price used in the purchase of the properties acquired during the second marriage were the proceeds of a loan. This is conjugal property of the "second marriage (Palanca vs. Smith, Bell and Co., 9 Phil. 131,133; Castillo Jr. vs. Pasco, 11 SCRA 102, 106-7). 4. The improvements on 47 hectares of the Caanawan property and on the Muoz property were made at the expense of the second conjugal partnership of Nicolas Delizo and Dorotea Ocampo, and thru their labor and industry which lasted for 46 years, whereas the first conjugal partnership had the Caanawan property for less than 6 years. Taking into account all the foregoing circumstances and equities of the case, an adjudication of 20% of all the properties acquired during the second marriage, including the Muoz property, to the children of the first marriage, and 80% to the conjugal partnership of Nicolas Delizo and Dorotea Ocampo is fair and equitable. So the properties of the estate should be partitioned thus: One-half of the Caanawan property and the house and lot at 562 P. Campa Street, Manila, covered by TCT No. 9616 as the share of Rosa Villasfer in the first conjugal partnership of Nicolas Delizo and Rosa Villasfer or 1/6 thereof for each child of the first marriage; and 20% of all the other properties or 1/15 thereof for each such child. To Nicolas Delizo should be adjudicated one-half of the Caanawan property and the house and lot on P. Campa, but in view of the death of Nicolas Delizo his share descends to all the children, both of the first and second marriages and the surviving spouse, Dorotea Ocampo, and should therefore be divided by the number of children plus one or 1/26 thereof for each heir. tightly per cent of all the properties acquired during the marriage of Nicolas Delizo and Dorotea Ocampo constitute the conjugal partnership of Nicolas Delizo and Dorotea Ocampo; one-half thereof is the share of Nicolas Delizo, to be divided

among his heirs in accordance with the preceding statement, or 2/65 thereof for each heir; the other half constitutes the share of Dorotea Ocampo in the conjugal partnership, or 2/5 thereof. WHEREFORE, paragraph 1 of the judgment appealed from is hereby modified as follows: 1. Declaring that (a) of the Caanawan property and the house and lot at 562 P. Campa Street, Manila covered by TCT No. 9616-8139 (1/6 + 1/26) thereof pro indiviso shall pertain to each of the children of Nicolas Delizo "of the first marriage, namely: Urbana, Severino and the late Francisco Delizo (the last represented by his children Rancivillano Soltrifilo Josefina, Eufrocina, Aurea, Edita and Fe and 1/26 thereof pro indiviso shall pertain to each of the children of the second marriage and their mother Dorotea Ocampo; (a) of all other properties required during the second marriage-19/195 thereof pro indiviso shall pertain to each of the three children by the first marriage, 2/65 thereof pro indiviso shall pertain to each of the nine children of the second marriage, while 28/65 thereof pro indiviso shall pertain to the widow Dorotea Ocampo. The rest of the judgment particularly paragraphs 2 and 3 are affirmed; without pronouncement as to costs in both instances.

From this adverse judgment, petitioners-appellants interposed the present petition for review. The thrust of petitioners- appellants' petition is that the Appellate Court acted under a misapprehension of the facts or decided the legal issues in a way which is not in consonance with law and with the applicable decisions of this Court, (a) since, the 67hectare Caanawan properties could not have been properties of the first marriage because they were then public lands being homesteads, and while the first conjugal partnership may have had possessory rights over said properties, it was only during the second marriage that the requirements of the public land law were complied with, resulting in the confirmation, registration and issuance of the Torrens Title over said properties to Nicolas Delizo and his second wife, Dorotea de Ocampo; (b) apart from the fact that the legal presumption that all properties of the marriage belong to the conjugal partnership of Nicolas Delizo and Dorotea de Ocampo were not sufficiently rebutted, these properties were actually. In the adverse possession under claim of title of petitioners-appellants continuously for a period of 47 years (1911 to 1957), and consequently, the claim of respondents-appellees for partition should have been considered barred by acquisitive and extinctive prescription, laches and estoppel; d (c) in any event, there being serious doubts as to whether. said properties belong to the first marriage, it would have been more equitable if the said partnership properties were divided between the different partnerships in proportion to the duration of each and the capital of the spouses,-pursuant to Article 189 of the Civil Code. From the findings of the Appellate Court that sixty-six (66) hectares of the Caanawan properties w ere acquired by Nicolas Delizo as homesteads during the period of the first marriage, thus: sixteen (16) hectares as a homestead from the Government in 1905; and the 16-hectare homestead of Nicolas Dacquel, the 16-hectare homestead of Mariano Antolin, and the 16-hectare homestead of Francisco Pascua by purchase in 1%6, .1907 and 1908, respectively, it does not necessarily follow that they should be considered as properties of the first marriage, considering that being homesteads they were part of the public domain, and it was not shown that all the requirements of the

Homestead Law to warrant the grant of a patent to the homesteader have been complied with prior to the death in 1909 of Delizo's first wife, Rosa Villasfer. Under Act 926, 1 which was then the applicable law, the right of the homesteader to the patent does not become absolute until after he has complied with all the requirements of the law. One of the most important requirements is that the "person filing the application shall prove by two credible witnesses that he has resided upon and cultivated the land for the term of five years immediately succeeding the time of filing the application aforesaid, and shall make affidavit that no part of said land has been alienated or encumbered ... (Section 3 of Act 926, italics supplied). Prior to the fulfillment of such requirement, the- applicant has no complete equitable estate over the homestead which he can sell and convey, mortgage for lease. 2 Until a homestead right is established and registered under Section 3 of Act 926, there is only an inchoate right to the property and it has not ceased to be a part of the public domain and, therefore, not susceptible to alienation as such. 3 Conversely, when a "homesteader has complied with all the terms and conditions which entitled him to a patent for a particular tract of public land, he acquires a vested interest therein and has to be regarded an equitable owner thereof." 4 The decisive factor, therefore, in the determination of whether a parcel of land acquired by way of homestead is conjugal property of the first or the second marriage, is not necessarily the time of the issuance of the homestead patent but the time of the fulfillment of the requirements of the public land law for the acquisition of such right to the patent. 5 As testified to by Lorenzo Delizo, his brother, Nicolas Delizo, and the latter's wife, Rosa Villasfer, arrived in Barrio Caanawan, San Jose, Nueva Ecija, from Barrio Ungag, Cuyapo, Nueva Ecija, during the year 1905. It was during that same year that Pedro Salvador and Mauricio Salvador, who were then the cabecillas were distributing lands to homesteaders in Barrio Caanawan. Nicolas Dacquel, Mariano Antolin and Francisco Pascua must have received their respective homesteads from the same officers of the government that same year, considering that their respective homesteads are all adjacent to the homestead of Nicolas Delizo and according to the evidence, this was the time when the homesteads in that barrio were parceled out to the new settlers. Indeed, the Homestead Act was then of recent vintage, having been enacted by the Philippine Commission by authority of the United States Government, only on October 7, 1903. Considering that Nicolas Dacquel must have been in possession of his homestead for barely a year when he transferred his rights in 1906, Mariano Antolin for about two years with respect to his homestead in 1907, and Francisco Pascua for about three years in 1908 as regards to his homestead, at the time of their respective conveyances to Nicolas Delizo, it is, therefore, obvious that not one of them could have complied with the requirements of Act No. 926 to entitle any one of them to the issuance of a homestead patent before they sold or assigned their rights to Nicolas Delizo. The law was quite specific, that "No certificate shall be given or patent issued for the land applied for until the motion of five year. From the date of the filing of the application and if, at the expiration of such time or at any time within three years thereafter, the person filing such application shall prove by two credible witnesses that he has resided upon

and cultivate the land for the term of five years immediately succeeding the time of filing the application aforesaid, and shall make affidavit that no part of said land has been I alienated or encumbered, and that he has borne true allegiance to the Government of the United States and that of the Philippine Islands, then, upon payment of a fee of ten pesos, Philippine currency to such officer as may be designated by law as local land officer, or in case there be no such officer then to the Chief of the Bureau of Lands, he shall be entitled to a patent." (Section 3, Act No. 926, italics supplied). Having neither legal nor equitable title thereon, what was transferred by them to Nicolas Delizo were, therefore, not rights of ownership, but inchoate rights as applicants for homesteads over portions of the public domain. Similarly, having received the homestead only in 1905, Nicolas Delizo could not have perfected his rights thereon by the completion of the fiveyear occupancy and cultivation requirement of the law, in 1909. Buttressing the conclusion that Nicolas Delizo could not have perfected his rights to the four homesteads before 1909 is the specific limitation imposed by section 3 of Act No. 926 which provides that "No person who is the owner of more than sixteen hectares of land in said Islands or who has had the benefits of any gratuitous allotment of sixteen hectares of land since the acquisition of the Islands by the United States, shall be entitled to the benefits of this chapter." The foregoing sufficiently show that the Appellate Court erred in, holding that the entire Caanawan properties belong to the conjugal partnership of Nicolas Delizo and Rosa Villasfer. Considering, however, that about twenty (20) hectares were cultivated and rendered productive during the period from 1905 to 1909, judgment and equity demand that the rights to said properties be apportioned to the parties in proportion to the extent to which the requirements of the public land laws had been complied with during the existence of each conjugal partnership. II In connection with the other properties, such as Lot No. 498 of the San Jose Cadastre, under Original Certificate of Title No. 5622; a parcel of land in San Jose, Nueva Ecija, under Transfer Certificate of Title No. 2985 (Exh. I or 13), and agricultural land of about 17.4753 hectares in Sitio Rangayan, Muoz Nueva Ecija, under Transfer Certificate of Title No. 5162 (Exh. J or 14); a parcel of land in Caanawan, San Jose, with an area of about 14.0354 hectares, under Transfer Certificate of Title No. 11910 (Exh. K or 10); a cornland in Barrio Rangayan, Muoz, Nueva Ecija, of about 1,500 square meters under Tax Declaration No. 5476; a riceland in Rangayan, Muoz of about 17.4755 hectares, under Tax Declaration No. 812; a riceland, Lot No. 847, of about 13.0902 hectares covered by Transfer Certificate of Title No. 3585, issued on April 29, 1929 in the name of "Nicolas Delizo, married to Dorotea de Ocampo" (Exh. L or 15); a camarin of strong materials with galvanized iron roofing in San Jose, Nueva Ecija; a residential lot at Sanchez Street, San Jose, Nueva Ecija; Lot No. 1790 of the San Jose Cadastre, consisting of about 2,840 square meters, more or less, under Original Certificate of Title No. 8131 "in another name but claimed by the heirs under deed of sale, Exhibit N1 a sugar mill in San Jose, Nueva Ecija and several heads of carabaos (Exh. 0); Lots Nos. 495 and 496 of the San Jose Cadastre, possessed by defendants although adjudicated

in the name of Marcelo Tomas and Guillermo Cabiso respectively; and another lot, Lot No. 494A of the San Jose Cadastre adjudicated in the ' C, name of Nicolas Delizo, married to Dorotea de Ocampo, the Appellate Court decision penned by Justice Arsenio Solidum held that "there is no controversy that these were all acquired during the existence of the second marriage of Nicolas Delizo" The same opinion, however, held that since these properties were acquired from the produce of the Caanawan properties although such produce is the result of the labor and industry of the spouses Nicolas Delizo and Dorotea de Ocampo, only eighty per cent (80%) of said properties acquired during the second marriage should appertain to the second conjugal partnership, while twenty per cent (20%) thereof adjudicated to the children of the first marriage. The two concurring Appellate Justices, although of the view that the legal presumption that those properties acquired during the regime of the second conjugal partnership belong to said partnership has not been rebutted by respondents-appellees and, therefore, would hold that such after-acquired properties should belong to the second conjugal partnership, concurred nevertheless in the result aforesaid, in order to reach a judgment in the case. It would have been facile to hold that those after-acquired properties belong to the second conjugal partnership in view of the statutory presumption enunciated in Article 1407 of the old Civil Code (now Article 160, New Civil Code). 6 There are, however, important considerations which preclude Us from doing so. There is the established fact that the produce of the Caanawan lands contributed considerably to the acquisition of these properties, and We have held that the children of the first marriage, as a matter of equity, should share in the Caanawan properties. To deny the respondents-appellees a share in such properties would have exacerbated discord instead of enhancing family solidarity and understanding. Considering these circumstances and since the capital of either marriage or the contribution of each spouse cannot be determined with mathematical precision, the total mass of these properties should be divided between the two conjugal partnerships in proportion to the duration of each partnership. 7 Under this criterion, the second conjugal partnership should be entitled to 46/64 or 23/32 of the total mass of properties, and the first conjugal partnership. to 18/64 or 9/32 thereof pro indivision. The share of the estate of Nicolas Delizo is one-half (1/2) pro indiviso of the net remainder 8 of the conjugal partnership of gains of the first and second marriages, which would amount to 32/64 or 1/2 of the whole estate. This should be distributed in equal shares to his children of both marriages, 9 with the widow having the same share as that of legitimate child. 10 The widow. Dorotea de Ocampo, is entitled to one-half () of the net remainder of the second conjugal partnership and to her share as heir of her deceased husband which amounts to 23/64 of said properties, plus 1/13 of 32/64 pro indivision. The share of the heirs of Rosa Villasfer would be 9/64 thereof. The foregoing is recapitulated as follows:
Share of Rosa Villasfer, lst wife 9/64 of whole estate to be divided among three (3) children

Share of Dorotea de Ocampo, 23/64 of whole estate plus her 2nd wife share in Nicolas Delizo s estate. Share of Nicolas Delizo, husband 32/64 of whole estate to be divided into thirteen (13) equal parts. Whole Estate 64/64 Computation of Sharing 3/64 + 1/26 = 142/1664] 3/64 + 1/26 = 142/1664] - Share of each child of 3/64 + 1/26 = 142/1664] lst marriage 1/26 = 64/1664] 1/26 = 64/1664] 1/26 = 64/1664] 1/26 = 64/1664] - Share of each child of 1/26 = 64/1664] 2nd marriage 1/26 = 64/1664] 1/26 = 64/1664] 1/26 = 64/1664] 1/26 = 64/1664] 23/64 + 1/26 = 662/1664 - Share of Dorotea Ocampo. 32/64 + 13/26= 1664/1664 - Whole Estate

In the partition of the properties, the probate court should take into account the fact that the respondents-appellees are in possession of the Muoz lands, while the petitionersappellants have been in possession of the Caanawan properties as well as the house and lot at 562 P. Campa Street. Sampaloc, Manila, as directed in the trial court's order of April 23, 1958 record on Appeal, pp. 76-77). Should it be convenient for the parties,

their respective shares should be taken from the properties presently under their custody. Having reached the foregoing conclusions. it is unnecessary to resolve the other legal questions raised in the appeal. WHEREFORE, the appealed decision of the Court of Appeals is hereby modified as herein indicated. The records of these cases should be, as they are hereby, remanded to the trial court for further proceedings in accordance with this judgment. No costs.

Conjugal Partnership of Gains

G.R. No. 89667 October 20, 1993 JOSEPHINE B. BELCODERO, petitioner, vs. THE HONORABLE COURT OF APPEALS, et al., respondents. Jaime I. Infante and Joanes G. Caacbay for petitioners. Lamberto C. Nanquil & Associates Law Office for private respondents.

VITUG, J.: This case involves the question of ownership over a piece of land acquired by a husband while living with a paramour and after having deserted his lawful wife and children. The property had been bought by the husband on installment basis prior to the effectivity of the Civil Code of 1950 but the final deed, as well as the questioned conveyance by him to his common law spouse, has ensued during the latter Code's regime. Now, of course, we have to likewise take note of the new Family Code which took effect on 03 August 1988. Let us begin by paraphrasing the factual findings of the appellate court below. The husband, Alayo D. Bosing, married Juliana Oday on 27 July 1927, with whom he had three children, namely, Flora, Teresita, and Gaido. In 1946, he left the conjugal home, and he forthwith started to live instead with Josefa Rivera with whom he later begot one child, named Josephine Bosing, now Josephine Balcobero. On 23 August 1949, Alayo purchased a parcel of land on installment basis from the Magdalena Estate, Inc. In the deed, he indicated his civil status as, "married to Josefa R. Bosing," the common-law wife. In a letter, dated 06 October 1959, which he addressed to Magdalena Estate, Inc., he authorized the latter to transfer the lot in the name of his "wife Josefa R. Bosing." The final deed of sale was executed by Magdalena Estate, Inc., on 24 October 1959. A few days later, or on 09 November 1959, Transfer Certificate of Title No. 48790 was issued in the name of "Josefa R. Bosing, . . . married to Alayo Bosing, . . ." On 06 June 1958, Alayo married Josefa even while his prior marriage with Juliana was still subsisting. Alayo died on 11 march 1967. About three years later, or on 17 September 1970, Josefa and Josephine executed a document of extrajudicial partition and sale of the lot in question, which was there described as "conjugal property" of Josefa and deceased Alayo. In this deed, Josefa's supposed one-half (1/2) interest as surviving spouse of Alayo, as well as her one-fourth (1/4) interest as heir, was conveyed

to Josephine for a P10,000.00 consideration, thereby completing for herself, along with her one-fourth (1/4) interest as the surviving child of Alayo, a full "ownership" of the property. The notice of extrajudicial partition was published on 04, 05 and 06 November 1970 in the Evening Post; the inheritance and estate taxes were paid; and a new Transfer Certificate of Title No. 198840 was issued on 06 June 1974 in the name of Josephine. On 30 October 1980, Juliana (deceased Alayo's real widow) and her three legitimate children filed with the court a quo an action for reconveyance of the property. On the basis of he above facts, the trial court ruled in favor of the plaintiffs, and it ordered that
. . . Josephine Bosing executed a deed of reconveyance of the property in question to the legal heirs of the deceased Alayo D. Bosing, and that both defendants pay, jointly and severally, actual damages by way of attorney's fees and expenses in litigation, TEN THOUSAND (P10,000.00) PESOS as moral damages, pus TEN THOUSAND (P10,000.00) PESOS exemplary damages to prevent future frauds.

The defendants went to the Court of Appeals which affirmed the trial court's order for reconveyance but reversed the decision on the award for damages, thus
WHEREFORE, the judgment appealed from is hereby AFFIRMED insofar as defendant Josephine Bosing is ordered to execute a deed of reconveyance of the property granting the same to the legal heirs of the deceased Alayo D. Bosing, and REVERSED insofar as 1 it awards actual, moral and exemplary damages.

Hence, the instant petition for review 2 submitting that

1. THE RESPONDENT COURT ERRED IN NOT HOLDING THAT THE ACTION FOR RECONVEYANCE HAD LONG PRESCRIBED. 2. THE RESPONDENT COURT ERRED IN FINDING THAT, THE ACTION FOR RECONVEYANCE IS BASED UPON AN IMPLIED OR CONSTRUCTIVE TRUST. 3. THE RESPONDENT COURT ERRED IN NOT HOLDING THAT, THE PROPERTY IN QUESTION BELONGS EXCLUSIVELY TO THE PETITIONERS. 4. THE RESPONDENT COURT ERRED IN NOT GRANTING PETITIONER'S MOTION FOR NEW TRIAL BASED ON NEWLY DISCOVERED EVIDENCE, AND LIKEWISE ERRED IN HOLDING THAT EVEN IF A NEW TRIAL IS GRANTED THE SAME WOULD NOT SERVE A USEFUL PURPOSE.

We rule for affirmance. The first three issues are interrelated, and the same will thus be jointly discussed. Whether the property in question was acquired by Alayo in 1949 when an agreement for its purchase on installment basis was entered into between him and Magdalena Estate, Inc., or in 1959 when a deed of sale was finally executed by Magdalena Estate, Inc., the

legal results would be the same. The property remained as belonging to the conjugal partnership of Alayo and his legitimate wife Juliana. Under both the new Civil Code (Article 160) and the old Civil Code (Article 1407), "all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife." This presumption has not been convincingly rebutted. It cannot be seriously contended that, simply because the property was titled in the name of Josefa at Alayo's request, she should thereby be deemed to be its owner. The property unquestionably was acquired by Alayo. Alayo's letter, dated 06 October 1959, to Magdalena Estate, Inc., merely authorized the latter to have title to the property transferred to her name. More importantly, she implicitly recognized Alayo's ownership when, three years after the death of Alayo, she and Josephine executed the deed of extrajudicial partition and sale in which she asserted a one-half (1/2) interest in the property in what may be described as her share in the "conjugal partnership" with Alayo, plus another one-fourth (1/4) interest as "surviving widow," the last one-fourth (1/4) going to Josephine as the issue of the deceased. Observe that the above adjudication would have exactly conformed with a partition in intestacy had they been the sole and legitimate heirs of the decedent. The appellate court below, given the above circumstances, certainly cannot be said to have been without valid basis in concluding that the property really belonged to the lawful conjugal partnership between Alayo and his true spouse Juliana. As regards the property relation between common-law spouses, Article 144 of the Civil Code merely codified the law established through judicial precedents under the old code (Margaret Maxey vs. Court of Appeals, G.R. No. L-45870, 11 May 1984). In both regimes, the co-ownership rule had more than once been repudiated when either or both spouses suffered from an impediment to marry (Jeroniza vs. Jose, 89 SCRA 306). The present provisions under Article 147 and Article 148 of the Family Code did not much deviate from the old rules; in any case, its provisions cannot apply to this case without interdicting prior vested rights (Article 256, Family Code). It was at the time that 'the adjudication of ownership was made following Alayo's demise (not when Alayo merely allowed the property to be titled in Josefa's name which clearly was not intended to be adversarial to Alayo's interest), that a constructive trust was deemed to have been created by operation of law under the provisions of Article 1456 of the Civil Code.
Article 1456. If the property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

The applicable prescriptive period for an action seeking a reconveyance of the property by the beneficiaries thereof is ten (10) years (Article 1144, Civil Code). Ordinarily, that period starts from the establishment of the implied trust being the day when the cause of action would be considered to have accrued (Article 1150, Civil Code). Unfortunately

for Josefa and Josephine, however, the property involved in this case is a realty titled under the Torrens System. The prescriptive period is thus to be counted from the time the transaction affecting the property is registered with the corresponding issuance of a new certificate of title. 3 Between the time Transfer of Certificate of Title No. 198840 was issued on 06 June 1974, and the filing of the action for the reconveyance of the property with the court a quo on 30 October 1980, barely a period of six (6) years and four (4) months had elapsed. The case has accordingly been initiated seasonably. The four-year prescriptive period, mentioned in passing by the petitioners, would have had some value and relevance had the private respondents or their predecessor in interest been parties to the extrajudicial partition and sale. In that event, the latter's action could only then be predicated on a vitiation of consent 4 where the applicable statutory limitation would be four years. 5 The last issue raises the supposed error in the rejection of a new trial on the basis of newly discovered evidence. We concur with the resolution of the appellate court below (on appellants' [petitioners herein] motion for reconsideration thereat), thus
Appellants' prayer for a new trial based upon what they claim is newly discovered evidence deserves scant consideration. Appellant proposes to prove (1) that Josefa Bosing sold certain property for P8,000.00 in 1948 and was therefore in a financial position to make the payments to Magdalena Estate Inc. and (2) that appellee Juliana Bosing got married in 1961 to one Burayos Ballit, and thus, "forfeited" her right to the conjugal partnership. The first ground is not meritorious. It is not newly discovered evidence. As described in appellants' Motion the documents were "not discovered or considered as necessary evidence during the trial of the case below" by the former counsel; it is therefore more properly considered as forgotten evidence, which the appellant knew or should have known during the trial (Tesoro vs. Court of Appeals, 54 SCRA 296; Republic vs. Vda. de Castelvi, 58 SCRA 336). Moreover, assuming the sale is proven, it does not follow that the proceeds were used to pay the lot in question; the payments were made in installments, not in one lump sum. Neither is the second ground deserving of merit. Assuming that the marriage to Ballit in 1961 is duly proven, and that this provided a cause for legal separation and consequent disqualification of the guilty spouse to succeed to the husband's intestate estate under Article 1002 of the Civil Code, the fact remains that no action for legal separation was brought by the husband during his lifetime and within the period provided by law. It is too late to raise the issue at this time. Accordingly, assuming that the Motion for New Trial complies with the formal requisites for such motion (See Minister of Natural Resources vs. Heirs of Orval Hughes, et al., G.R. No. 62662, prom. November 12, 1987), a question We don't find necessary to decide, a new trial would not serve a useful purpose in altering the result of the questioned decision.

WHEREFORE, the decision appealed from in the instant petition for review on certiorari is AFFIRMED.

SO ORDERED.

G.R. No. 111547 January 27, 1997 SPS. TRINIDAD S. ESTONINA and PAULINO ESTONINA, petitioners, vs. COURT OF APPEALS SPS. CELSO ATAYAN and NILDA HICBAN and CONSUELO VDA. DE GARCIA, REMEDIOS, ELVIRA, OFELIA, VIRGILIO, MARILOU, and LOLITA all surnamed GARCIA, and HEIRS OF CASTOR GARCIA and of SANTIAGO GARCIA, JR., respondents. RESOLUTION

FRANCISCO, J.: The instant controversy involves Lot C of the amended plan Psu-22983 Amd., situated in Barrio Santisima Cruz, Sta. Cruz, Laguna with an area of 273 square meters. The said parcel of land was covered by Transfer Certificate of Title No. T-19175 issued in the name of Santiago Garcia who died on October 2, 1967. Some six years after Santiago Garcia's death, or on March 10, 1973, the then Court of First Instance of Manila issued an order granting Trinidad Estonina's application for a writ of preliminary attachment in Civil Case No. 88430 entitled "Trinidad Estonina et al., plaintiffs -versusConsuelo Garcia et al., defendants". Consequently, a notice of attachment was inscribed as a memorandum of encumbrance at the back of TCT No. T-19175 in favor of Trinidad Estonina covering all the rights, title, interest, and participation that Consuelo Garcia, the widow of Santiago Garcia, may have in and to the parcel of land covered by the said title. As a result of a prior sale made by Santiago Garcia to Anselmo Balasoto of a sixty square meter portion of the said parcel of land, TCT. No. T-19175 was cancelled and in lieu thereof, TCT No. 77215 was issued on July 25, 1975 in the name of Santiago Garcia covering the remaining 213 square meters. TCT No. 77215 was in turn cancelled on June 27, 1977 because of another sale purportedly made during his lifetime by Santiago Garcia to his wife's niece, Ofelia Garcia, and TCT No. 82229 was issued in the name of the latter. On August 14, 1977, the children of Santiago Garcia with his first wife, Adela Isoreta, namely Ofelia, Remedios, Elvira and Castor, all surnamed Garcia, executed a deed selling, transferring and conveying unto the spouses Celso Atayan and Nilda Hicban (hereinafter referred to as the spouses Atayan for brevity) their "title, rights, interest and participation which is four tenths (4/10) pro indiviso share" in the said parcel of land covered by TCT No. T-82229. About a year after, Santiago Garcia's second wife and widow, Consuelo Garcia and their children, Virgilio, Marilou and Lolita, all surnamed Garcia, followed suit and also sold to the spouses Atayan, their four-tenths (4/10) pro indidviso share in the same parcel of land. On February 22, 1980, Estrella R. Garcia, the widow of Santiago Garcia, Jr. (Santiago Garcia's son from his first marriage), and

their children, Roderick, Elizabeth, Dorothy and Erlinda, likewise sold to the spouses Atayan, their one-tenth (1/10) pro indiviso share in the parcel of land covered by TCT No. T-82229. 1 Subsequent to a favorable decision obtained by Trinidad Estonina in Civil Case No. 88430 against Consuelo Garcia, execution pending appeal was made on the parcel of land formerly covered by TCT No. T-19175 (now covered by TCT No. T-82229) on July 20, 1979. The said parcel of land was sold at a public auction where Trinidad Estonina was the highest bidder. Consuelo Garcia appealed the decision in Civil Case No. 88430 before the then Intermediate Appellate Court which, however, ruled in favor of Trinidad Estonina. Thus, on February 29, 1984, the Intermediate Appellate Court rendered a decision declaring "owner's copy of Certificate of Title No. T-82229 a NULLITY and/or CANCELLED". Upon the finality of the said decision, TCT No. T-82229 was cancelled by the Register of Deeds of Laguna and in lieu thereof, TCT No. T-99961 was issued in favor of "Trinidad Estonina married to Paulino Estonina". 2 On July 25, 1985, the spouses Atayan filed a complaint for annulment of sheriff's sale and transfer certificate of title with damages before Branch 28 of the Regional Trial Court (RTC) of Santa Cruz, Laguna, impleading as defendants therein the spouses Trinidad and Paulino Estonina (hereinafter referred to as the spouses Estonina for brevity), Nicanor E. Silvano, Reynaldo G. Javier, Edmund R. Solidum, the Register of Deeds of Laguna, and the heirs of Santiago Garcia who sold to the spouses Atayan their pro indiviso shares in the parcel of land covered by TCT No. T-82229. The complaint prayed:
that the sale at public auction of the parcel of land covered by TCT No. 77215 . . . and the Sheriff's final deed . . . be declared null and void; that the Register of Deeds be ordered to cancel TCT No. T-99961 in the name of Trinidad S. Estonina married to Paulino Estonina . . . ; that the plaintiffs be declared owners of nine-tenths (9/10) pro indiviso interests, shares and participation in the parcel of land covered by TCT No. T-77215, . . . , and the Register of Deeds ordered to issue a new certificate of title corresponding thereto; and that the defendants Nicanor E. Silvano, Reynaldo G. Javier and Edmund R. Solidum be ordered to pay, jointly and severally, the plaintiffs spouses and (sic) amount of P30,000 for attorney's fees, P15,000 for litigation expenses incurred, 3 P20,000 for moral damages and P15,000 for exemplary damages . . .

In their amended answer to the plaintiff's complaint, the spouses Estonina claimed that:
the plaintiffs (spouses Atayan) had acted in bad faith in allegedly purchasing the parcel of land, they being aware that it was the subject of a lawful and valid attachment; that there was no valid extrajudicial settlement of agreement executed by the heirs of Santiago Garcia by which their rights could have been adjusted and settled before doing anything with his property; that the deeds of sale executed by his heirs were anomalous, fictitious and simulated intended to defeat the adverse judgment rendered by the Court against them and the writ of attachment issued pursuant thereto as they were derived from a falsified deed of sale purportedly executed by Santiago Garcia on June 23, 1967; that the property in question is presumed to be conjugal answerable for obligations and liabilities of the conjugal partnership incurred during the existence of the partnership; and that the 4 plaintiffs were guilty of laches (pp. 90-99, rec.).

After trial, the RTC rendered a decision dismissing the complaint for lack of merit. It found, among others, that the property covered by TCT No. T-19175 and now covered by TCT No. T-82229, was acquired during the marriage of Santiago Garcia and Consuelo Gaza, and is presumed to be conjugal in nature. Upon the death of Santiago Garcia on October 2, 1967, his conjugal share of one-half (l/2) of the said parcel of land was transmitted to his heirs by intestate succession. By the law on intestate succession, his nine children, five by his first wife and four out of the subsequent marriage, and Consuelo Garcia, his second wife and widow, inherited the same at one-tenth (1/10) each pro indiviso. The remaining one-half (1/2) pertained to the conjugal share of Consuelo Garcia. Thus, inasmuch as Consuelo Garcia inherited one-tenth (1/10) of her husband's conjugal share in the said property and is the owner of one-half (1/2) thereof as her conjugal share, she owns a total of 55% (or 1/10 plus 1/2) of the said parcel of land. 5 Finding as such, the RTC held that what could be attached by the spouses Estonina and later levied on execution and sold at public auction was only Consuelo Garcia's rights and interests which is fifty five per cent (55%) of the property. Thus, the RTC ordered the Register of Deeds of the Province of Laguna, to cancel Transfer Certificate of Title No. T-99961 in the name of TRINIDAD S. ESTONINA, married to Paulino Estonina, and issue another one, also in her name, married to the same person, stating therein that said person is the owner of the property therein covered to the extent of 55% pro indiviso, and the remaining 45% belongs to the heirs of Santiago Garcia pro indiviso. 6 Both the spouses Atayan and the heirs of Santiago Garcia appealed to the herein public respondent Court of Appeals. After a thorough review of the evidence on record, the Court of Appeals concluded that contrary to the finding of the RTC, the parcel of land in question was not the conjugal property of Santiago and Consuelo Garcia, but was the former's exclusive property. It was therefore the entire property that formed part of Santiago Garcia's estate upon his death. When Santiago Garcia died, his nine children and Consuelo Garcia inherited the said property each to the extent of one-tenth (1/10) pro indiviso share. Hence, it was only Consuelo Garcia's one-tenth(l/l0) pro indiviso share in the parcel of land in question which could be validly attached, levied and sold in execution to satisfy the judgment against her and in favor of Trinidad Estonina in Civil Case No. 88430. On August 12, 1993, the Court of Appeals rendered a decision, the dispositive portion of which reads as follows:
WHEREFORE, the judgment appealed from is REVERSED and SET ASIDE. Accordingly, Transfer Certificate of Title No. T-99961, covering Lot 2-C (LRC) Psd 223486, situated in Sta. Cruz, Laguna issued in the name of Trinidad S. Estonina, married to Paulino Estonina . . . , is hereby ordered cancelled and nullified and the Register of Deeds of Laguna ordered to issue another in lieu thereof covering the same parcel of land in the name of Trinidad S. Estonina, widow, one-tenth (1/10) pro indiviso share, and spouses Celso Atayan and Nilda Hicban, nine-tenths (9/10) pro indiviso 7 share.

Aggrieved, the spouses Estonina filed this petition and raised the following issues:
I.

The Court of Appeals, in declaring the property in question as exclusive property of Santiago Garcia, DISREGARDED the long established doctrine that the trial court's findings especially as to the credibility of the witnesses should be respected. II. The Court of Appeals, in issuing the questioned decision, solely centered on the nature of the property in question, and conveniently brushed aside the following legal issues raised on appeal (thereby leading to an erroneous judgment), to wit: (a) That the plaintiffs-appellant (Sps. Atayan and now private respondents) have no cause of action and/or lack cause of action against Estoninas (now petitioners). Assuming, arguendo that they have, the same is now barred by laches. The same is true with the appellants Garcias (now also private respondents). Hence, the title of Estonina should have been declared valid. (b) That the plaintiffs-appellants (Sps. Atayan and now private respondents) are not parties to Civil Case No. 88430 where the writ of attachment was issued and which resulted in the execution pending appeal. Hence, they cannot attack the validity of the execution in this proceedings especially so when judgment therein had already attained finality. III. Consequently, by virtue of the foregoing errors, the Court of Appeals erred in not granting herein petitioners' prayer that the trial court's findings be modified by upholding Estonina's title to the property under TCT No. T-99961, and affirming in all other respect 8 the order of the trial court.

The settled rule is that the factual findings of the appellate court are deemed conclusive. 9 Thus, the jurisdiction of this Court in cases brought to it from the Court of Appeals is generally limited to the review and revision of errors of law allegedly committed by the appellate court. As such, this Court is generally not duty-bound to analyze and weigh all over again the evidence already considered in the proceedings below. 10 This is, however, subject to several exceptions, one of which is when there is a conflict between the factual findings of the Court of Appeals and the trial court, as in this case, warranting a review by this Court of such factual findings. 11 In concluding that the parcel of land in question was the conjugal property of Santiago and Consuelo Garcia, the trial court relied solely on the fact that when TCT No. T-19175 covering the said land was issued, Santiago Garcia was already married to Consuelo Garcia, thus giving rise to the presumption that the same was indeed conjugal. It found the testimony of Consuelo Garcia that the said property was inherited by Santiago Garcia from his deceased mother to be self-serving and completely disregarded the said testimony. And as regards the inscription at the back of the TCT No. T-19175 that:
[t]he property described in this title is subject to the claims of the heirs of the deceased Eugenia Clemente, within two (2) years from January 27, 1961, in accordance with the 12 provision of Section 4, Rule 74 of the Rules of Court,

the trial court held that "there is no showing at all from said inscription that said property came from the parents of Santiago Garcia." 13 On the other hand, the Court of Appeals in taking the stance that the said land was the exclusive property of Santiago Garcia, gave credence to the unrebutted testimony of Consuelo Garcia that the said parcel of land was inherited by Santiago Garcia from his deceased mother Eugenia Clemente and that it used to be part of a big tract of land which was divided among Santiago and his sisters. The evidence on record as well as established jurisprudence on the matter, lead us to concur with the finding of the Court of Appeals that the property involved in this dispute is indeed the exclusive property of the deceased Santiago Garcia. It has been repeatedly held by this Court that the presumption under Article 160 of the Civil Code that all property of the marriage belong to the conjugal partnership applies only when there is proof that the property was acquired during the marriage. Otherwise stated, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of the conjugal partnership. 14 In the case at bench, the petitioners have been unable to present any proof that the property in question was acquired during the marriage of Santiago and Consuelo. They anchor their claim solely on the fact that when the title over the land in question was issued, Santiago was already married to Consuelo as evidenced by the registration in the name of "Santiago Garcia married to Consuelo Gaza". This, according to the spouses Estonina, suffices to establish the conjugal nature of the property. The foregoing contention has no merit. In the case of Jocson v. Court of Appeals 15 we held that:
The certificates of title, however, upon which petitioner rests his claim in insufficient. The fact that the properties were registered in the name of "Emilio Jocson, married to Alejandra Poblete" is no proof that the properties were acquired during the spouses' coverture. 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 erdsting . . . . It may be that the properties under dispute were acquired by Emilio Jocson when he was still a bachelor but were registered only after his marriage to Alejandra Poblete, which explains why he was described in the certificates of title as married to the latter. Contrary to petitioner's position, the certificates of title show, on their face, that the properties were exclusively Emilio Jocson's, the registered owner. This is so because the words "married to" preceding "Alejandra Poblete" are merely descriptive of the civil status of Emilio Jocson . . . . In other words, the import from the certificates of title is that Emilio Jocson is the owner of the properties, the same having been registered in his name alone, and that he is married to Alejandra 16 Poblete.

Being the exclusive property of Santiago Garcia, it was the entire parcel of land in question that formed part of his estate and which passed to his ten heirs by compulsory succession upon his death. And as correctly held by the Court of Appeals, what could therefore be attached and sold at public auction in Civil Case No. 88430 was only the one-tenth (1/10) pro indiviso share of Consuelo Garcia in the said parcel of land. The sale at public auction of the disputed property in its entirety by the Sheriff in favor of Trinidad Estonina over and above the one-tenth (1/10) share of Consuelo Garcia is null

and void, belonging as it does to the other heirs of Santiago Garcia and later to the spouses Atayan. Worth reiterating is the basic precept that the power of the court in the execution of judgments extends only over properties uncluestionably belonging to the judgment debtor. The levy by the sheriff of a property by virtue of a writ of attachment may be considered as made under the authority of the court only when the property levied upon belongs to the defendant. 17 For, as the saying goes, one man's goods shall not be sold for another man's debts. 18 The right of a third-party claimant to file an independent action to vindicate his claim of ownership over the properties seized is reserved by Section 17, Rule 39 of the Rules of Court:
Sec. 17. Proceedings where property claimed by third person. If property levied on be claimed by any other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto or his right to the possession thereof, stating the grounds of his right or title, and serve the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater 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. The officer is not liable for damages, for the taking or the keeping of the property, to any third-party claimant unless a claim is made by the latter and unless an action for damages is brought by him against the officer within one hundred twenty (120) days from the date of the filing of the bond. But nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property by any other proper action. xxx xxx xxx (Emphasis supplied.)

As stated in the case of Sy v. Discaya, 19 this "proper action" would have for its object the recovery of ownership or possession of the property seized by the sheriff, as well as damages resulting from the allegedly wrongful seizure and detention thereof despite the third party claim and it may be brought against the sheriff and such other parties as may be alleged to have colluded with him in the supposedly wrongful execution proceedings, such as the judgment creditor himself. Such "proper action", as above pointed out, is and should be an entirely separate and distinct action from that in which execution has issued, if instituted by a stranger to the latter suit. 20 In the case at bench, the filing by the spouses Atayan of an independent action with the court other than the one which issued the writ of execution is proper as they were strangers to Civil Case No. 88430. Such an independent action cannot be considered as an encroachment upon the jurisdiction of a co-equal and coordinate court. 21 While it is true that property in custody of the law may not be interfered with, without the permission of the proper court, this rule is confined to cases where the property belongs to the defendant or one in which the defendant has proprietary interests. But when the Sheriff, acting beyond the bounds of his office seizes a stranger's property, the rule

does not apply and interference with his custody is not interference with another court's custody. 22 The foregoing puts to rest any and all questions raised regarding the propriety of the course of action taken by the spouses Atayan in vindication of their claim over the land in question. Anent the contention that the spouses Atayan are guilty of laches, suffice it to state that this residual argument deserves scant consideration. Being strangers to Civil Case No. 88430 where the writ of execution over the land in question was issued, they cannot be faulted for filing the "proper action" only in 1985 or six (6) years after the levy on execution. Besides, it was only in 1984 that the Court of Appeals rendered a decision finally cancelling the title of their predecessors-in-interest and issuing another one in favor of Trinidad Estonina. The action filed by the spouses Atayan seeking the annulment of the sheriffs sale and the transfer certificate of title with damages immediately thereafter or on July 25, 1985 cannot be considered as undue delay nor does it imply a lack of interest to enforce their claim over the disputed property. WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals is affirmed in toto. SO ORDERED.

G.R. No. 178611

January 14, 2013

ESTRELLA ADUAN ORPIANO, Petitioner, vs. SPOUSES ANTONIO C. TOMAS and MYRNA U. TOMAS, Respondents. DECISION DEL CASTILLO, J.: Considerations of expediency cannot justify a resort to procedural shortcuts. The end does not justify the means; a meritorious case cannot overshadow the condition that the means employed to pursue it must be in keeping with the Rules. Assailed in this Petition for Review on Certiorari1 are the May 7, 2007 Decision2 of the Court of Appeals (CA) which dismissed the petition in CA-G.R. SP No. 97341, and its June 28, 2007 Resolution3 denying petitioner's motion for reconsideration. Factual Antecedents Petitioner Estrella Aduan Orpiano (Estrella) is the widow of Alejandro Orpiano (Alejandro). Part of their conjugal estate is an 809.5-square meter lot in Quezon City covered by Transfer Certificate of Title (TCT) No. RT-23468 (the lot). In 1979, a Decision was rendered by the defunct Juvenile and Domestic Relations Court (JDRC) of Quezon City declaring Estrella an absent/absentee spouse and granting Alejandro the authority to sell the lot. The JDRC Decision was annotated on the back of TCT No. RT-23468. On March 19, 1996, Alejandro sold the lot on installment basis to respondent spouses Antonio and Myrna Tomas (the Tomas spouses) for P12,170,283.00. That very same day, a new title TCT No. N-152326 was issued in the name of the Tomas spouses despite the fact that the purchase price has not been paid in full, the spouses having been given until December of that same year to complete their payment. On October 28, 1996, Alejandro filed Civil Case No. Q-96-29261 (the collection case) in the Regional Trial Court (RTC) of Quezon City, Branch 226 (the collection court), seeking collection of the balance of the price in the amount of P4,314,100.00 supposedly left unpaid by the Tomas spouses, with damages.[4] During the pendency of the collection case, Alejandro passed away. His heirs, Estrella included, were substituted in his stead in the collection case. Estrella moved to amend the Complaint to one for rescission/annulment of sale and cancellation of title, but the court denied her motion. She next moved to be dropped as party plaintiff but was again rebuffed. On June 11, 2005, Estrella filed Civil Case No. Q-05-56216 (the annulment case) for annulment of the March 1996 sale and cancellation of TCT No. N-152326, with damages, against the

Tomas spouses and the Register of Deeds of Quezon City which was impleaded as a nominal party.5 The case was raffled to Branch 97 of the Quezon City RTC (the annulment court). In her Complaint, Estrella claimed that the 1979 declaration of her absence and accompanying authority to sell the lot were obtained by Alejandro through misrepresentation, fraud and deceit, adding that the May 1979 JDRC Decision was not published as required by law and by the domestic relations court. Thus, the declaration of absence and Alejandros authority to sell the lot are null and void. Correspondingly, the ensuing sale to the Tomas spouses should be voided, and TCT No. N-152326 cancelled. In their Answer to the annulment Complaint, the Tomas spouses prayed for the dismissal thereof on the ground of forum shopping, arguing that the filing of the annulment case was prompted by the denial of Estrellas motion initiated in the collection case to amend the Complaint to one for annulment of sale. The annulment case is Estrellas attempt at securing a remedy which she could not obtain in the collection case. The Tomas spouses added that the dismissal of the annulment case would preclude the possibility that the two courts might render conflicting decisions. After pre-trial in the annulment case, the court proceeded to tackle the issue of forum shopping. The parties submitted their respective memoranda touching on the sole issue of whether Estrella is guilty of forum shopping. Ruling of the Regional Trial Court On September 25, 2006, the trial court issued an Order6 dismissing the annulment case. It sustained the view taken by the Tomas spouses that Estrella filed the annulment case only because the collection court denied her motion to amend the case to one for annulment of the sale, and thus the annulment case was Estrellas attempt at obtaining a remedy which she could not secure in the collection case. It added that because the two cases involve the same subject matter, issues, and parties, there indeed is a possibility that conflicting decisions could be rendered by it and the collection court, the possibility made even greater because the two cases involve antithetical remedies. Estrella moved for reconsideration but the court was unmoved. Ruling of the Court of Appeals On December 27, 2006, Estrella filed with the CA a Petition for Certiorari7 questioning the September 25, 2006 Order of the annulment court. The appellate court, however, could not be persuaded. Finding no grave abuse of discretion in the annulment court's dismissal of the annulment case, the CA found that Estrella was indeed guilty of forum shopping in filing the annulment suit while the collection case was pending. Applying the test articulated in a multitude of decided cases that where a final judgment in one case will amount to res judicata in another it follows that there is forum shopping. The CA held that a final judgment in the collection case ordering the Tomas spouses to pay the supposed balance of the price will necessarily result in a finding that the sale between Alejandro and the Tomas spouses is a valid sale. This then would prevent a declaration of nullity of the sale in the annulment case.

Accordingly, the CA dismissed Estrellas Petition for Certiorari. Her Motion for Reconsideration was likewise denied, hence the present Petition. Issue The sole issue to be resolved in this case is whether there is indeed forum shopping. Petitioners Arguments Estrella argues that it was Alejandro and not she who initiated the collection case, and that she, their two children, and Alejandros four illegitimate children were merely substituted in the case as his heirs by operation of law; thus, she should not be bound by the collection case. She claims that in the first place, she was not privy to Alejandros sale of the lot to the Tomas spouses. Having been unwillingly substituted in the collection case, she forthwith moved to amend the Complaint in order to include, as one of the remedies sought therein, annulment of the sale insofar as her conjugal share in the lot is concerned. But the court denied her motion. Next, she moved to be dropped or stricken out as plaintiff to the collection case, but again, the trial court rebuffed her. Estrella maintains that on account of these repeated denials, she was left with no other alternative but to institute the annulment case. She claims that since the collection case does not further her interest which is to seek annulment of the sale and recover her conjugal share and the collection court would not grant her motions to amend and to be dropped or stricken out as party plaintiff therein, she thus has a right to maintain a suit to have the sale annulled. It is therefore erroneous for the CA to state that she initiated the annulment suit only for the purpose of obtaining a favorable ruling in said court, which she could not achieve in the collection court. She further adds that there is obviously no identity of parties, cause of action, or reliefs prayed for between the collection and annulment cases; the two involve absolutely opposite reliefs. She stresses the fact that she is seeking annulment of the sale with respect only to her conjugal share, and not those of her co-heirs. Respondents Arguments The Tomas spouses, apart from echoing the trial court and the CA, emphasize that the rule prohibiting forum shopping precisely seeks to avoid the situation where the two courts the collection court and the annulment court might render two separate and contradictory decisions. If the annulment case is allowed to proceed, then it could result in a judgment declaring the sale null and void, just as a decision in the collection case could be issued ordering them to pay the balance of the price, which is tantamount to a declaration that the sale is valid. They add that Estrella could no longer question the 1979 JDRC Decision, having failed to challenge the same immediately upon obtaining notice thereof; she did not even bother to have her declaration of absence lifted. They claim that after the lapse of 26 years, prescription has finally set in. They likewise argue that if both cases are allowed to remain pending, a ridiculous situation could arise where, after having paid the balance as ordered by the collection court, they

could lose not only the lot but also their payments in case a decision in the annulment court is rendered nullifying and canceling the sale and ordering the return of the lot to Alejandros heirs, Estrella included. Our Ruling The petition must be denied. "Forum shopping is defined as an act of a party, against whom an adverse judgment or order has been rendered in one forum, of seeking and possibly getting a favorable opinion in another forum, other than by appeal or special civil action for certiorari. It may also be the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. x x x It is expressly prohibited x x x because it trifles with and abuses court processes, degrades the administration of justice, and congests court dockets. A willful and deliberate violation of the rule against forum shopping is a ground for summary dismissal of the case, and may also constitute direct contempt."8 Although the Court believes that Estrella was not prompted by a desire to trifle with judicial processes, and was acting in good faith in initiating the annulment case, still the said case should be dismissed because it produces the same effect which the rule on forum shopping was fashioned to preclude. If the collection case is not dismissed and it, together with the annulment case, proceeds to finality, not only do we have a possibility of conflicting decisions being rendered; an unfair situation, as envisioned by the Tomas spouses, might arise where after having paid the balance of the price as ordered by the collection court, the cancellation of the TCT and return of the property could be decreed by the annulment court. Besides, allowing the two cases to remain pending makes litigation simply a game of chance where parties may hedge their position by betting on both sides of the case, or by filing several cases involving the same issue, subject matter, and parties, in the hope of securing victory in at least one of them. But, as is already well known, the "trek to justice is not a game of chance or skill but rather a quest for truth x x x."9 Moreover, allowing Estrella to proceed with the annulment case while the collection case is still pending is like saying that she may accept the deed of sale and question it at the same time. For this is the necessary import of the two pending cases: joining as plaintiff in the collection case implies approval of the deed, while suing to declare it null and void in the annulment court entails a denunciation thereof. This may not be done. "A person cannot accept and reject the same instrument"10 at the same time. It must be remembered that "the absence of the consent of one (spouse to a sale) renders the entire sale null and void, including the portion of the conjugal property pertaining to the spouse who contracted the sale."11 The Court realizes the quandary that Estrella motivated by the solitary desire to protect her conjugal share in the lot from what she believes was Alejandros undue interference in disposing the same without her knowledge and consent finds herself in. While raring to file the annulment case, she has to first cause the dismissal of the collection case because she was by necessity substituted therein by virtue of her being Alejandros heir; but the collection court nonetheless blocked all her attempts toward such end. The collection court failed to comprehend

her predicament, her need to be dropped as party to the collection case in order to pursue the annulment of the sale. As plaintiff in the collection case, Estrella though merely succeeding to Alejandros rights was an indispensable party, or one without whom no final determination can be had in the collection case.12 Strictly, she may not be dropped from the case. However, because of her dual identity, first as heir and second as owner of her conjugal share, she has been placed in the unique position where she has to succeed to her husbands rights, even as she must protect her separate conjugal share from Alejandros perceived undue disposition. She may not seek to amend the cause of action in the collection case to one for annulment of sale, because this adversely affects the interests of her co-heirs, which is precisely to obtain payment of the supposed balance of the sale price. Nor may Estrella simultaneously maintain the two actions in both capacities, as heir in the collection case and as separate owner of her conjugal share in the annulment case. This may not be done, because, as was earlier on declared, this amounts to simultaneously accepting and rejecting the same deed of sale. Nor is it possible to prosecute the annulment case simultaneously with the collection case, on the premise that what is merely being annulled is the sale by Alejandro of Estrellas conjugal share. To repeat, the absence of the consent of one spouse to a sale renders the entire sale null and void, including the portion of the conjugal property pertaining to the spouse who contracted the sale. Undoubtedly, Estrella had the right to maintain the annulment case as a measure of protecting her conjugal share. There thus exists a just cause for her to be dropped as party plaintiff in the collection case so that she may institute and maintain the annulment case without violating the rule against forum shopping. Unless this is done, she stands to lose her share in the conjugal property. But the issue of whether the sale should be annulled is a different matter altogether.1wphi1 Under the Rules, parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just.13 Indeed, it would have been just for the collection court to have allowed Estrella to prosecute her annulment case by dropping her as a party plaintiff in the collection case, not only so that she could protect her conjugal share, but also to prevent the interests of her co-plaintiffs from being adversely affected by her conflicting actions in the same case. By seeking to be dropped from the collection case, Estrella was foregoing collection of her share in the amount that may be due and owing from the sale. It does not imply a waiver in any manner that affects the rights of the other heirs. While Estrella correctly made use of the remedies available to her amending the Complaint and filing a motion to drop her as a party she committed a mistake in proceeding to file the annulment case directly after these remedies were denied her by the collection court without first questioning or addressing the propriety of these denials. While she may have been frustrated by the collection courts repeated rejection of her motions and its apparent inability to appreciate her plight, her proper recourse nevertheless should have been to file a petition for certiorari or otherwise question the trial courts denial of her motion to be dropped as plaintiff, citing just

reasons which call for a ruling to the contrary. Issues arising from joinder or misjoinder of parties are the proper subject of certiorari.14 In fine, we reiterate that considerations of expediency cannot justify a resort to procedural shortcuts. The end does not justify the means; a meritorious case cannot overshadow the condition that the means employed to pursue it must be in keeping with the Rules. WHEREFORE, premises considered, the Petition is DENIED for lack of merit. SO ORDERED.

When CPG commences and applies? Marriages before FC

G.R. No. 143297

February 11, 2003

SPOUSES VIRGILIO and MICHELLE CASTRO, MOISES B. MIAT and ALEXANDER V. MIAT, petitioners, vs. ROMEO V. MIAT, respondent. DECISION PUNO, J.: This is a petition for review on certiorari of the decision rendered by the Court of Appeals in CA-G.R. CV No. 43053, entitled "Romeo V. Miat vs. Spouses Virgilio and Michelle Castro, Moises B. Miat and Alexander V. Miat," dated November 29, 1999.1 The evidence shows that the spouses Moises and Concordia Miat bought two (2) parcels of land during their coverture. The first is located at Wawa La Huerta, Airport Village, Paraaque, Metro Manila2 and covered by TCT No. S-33535.3 The second is located at Paco, Manila,4 and covered by TCT No. 163863.5 Concordia died on April 30, 1978. They had two (2) children: Romeo and Alexander. While at Dubai, United Arab Emirates, Moises agreed that the Paraaque and Paco properties would be given to Romeo and Alexander.6 However, when Moises returned in 1984, he renegotiated the agreement with Romeo and Alexander. He wanted the Paraaque property for himself but would leave the Paco property to his two (2) sons. They agreed.7 It appears that Moises and Concordia bought the Paco property on installment basis on May 17, 1977.8 However, it was only on December 14, 1984 that Moises was able to pay its balance.9 He secured the title over the property in his name as a widower.10 According to Romeo, Moises violated the agreement that their (Romeos and Alexanders) names would be registered in the title once the balance was paid.11 Upon demand, Moises gave the owners duplicate of the Paco property title to Romeo. Romeo and Alexander lived on the Paco property. They paid its realty taxes and fire insurance premiums.12 In early August 1985, Alexander and his first wife left the house for personal reasons. In April 1988, Alexander agreed to sell to Romeo his share in the Paco property for P42,750.00.13 He received a partial payment of P6,000.00 from Romeo.14 Nonetheless, he never executed a deed of assignment in favor of Romeo, as he "had lots of work to do and had no time and x x x there [wa]s nothing to worry [as] the title [wa]s in [Romeos] possession."15 In February 1988, Romeo learned from his godmother in his wedding, Mrs. Rosalina Castro, mother of petitioner Virgilio Castro, that she had given Moises P30,000.00 as downpayment for the sale by Moises of the Paco property to her son Virgilio.16

On December 1, 1988, Romeo was brought by petitioner Virgilio Castro to the chambers of Judge Anunciacion of the Metropolitan Trial Court of Manila where the status of the Paco property was discussed.17 On December 16, 1988, he received a letter from petitioner Castros lawyer asking for a conference. Romeo was informed that the Paco property had been sold to Castro by Moises by virtue of a deed of sale dated December 5, 198818 for ninety-five thousand (P95,000.00) pesos.19 Ceferino Miat, brother of petitioner Moises,20 testified that even before the death of Concordia21 there was already an agreement that the Paco property would go to Romeo and Alexander.22 This was reiterated at the deathbed of Concordia.23 When Moises returned to Manila for good, the agreement was reiterated24 in front of the extended Miat family members.25 Initially, Romeo and Alexander orally26 divided the Paco property between themselves.27 Later, however, Alexander sold his share to Romeo.28 Alexander was given P6,000.00 as downpayment. This was corroborated by Pedro Miranda and Virgilio Miat. Miranda worked with Moises at the Bayview Hotel and the Hotel Filipinas.29 His wife is the cousin of Romeo and Alexander.30 Virgilio is the brother of Moises. Moises confirmed that he and his wife Concordia bought the Paco property on installment from the Fraval Realty, Inc. There was still a balance of P12,000.00 on the lot at the time of his wifes death.31 He paid P3,500.00 in 198132 and P8,500.00 in 1984.33 He registered the title in his name. Romeo then borrowed the title as he was going to mortgage it to his friend Lorenzo.34 Later, Moises ran into financial difficulties and he mortgaged for P30,000.00 the Paco property to the parents of petitioner Virgilio Castro.35 He informed Romeo and Alexander that he would be forced to sell the Paco property if they would not redeem the mortgage. He accompanied his children to the Manila City Hall to discuss its sale with a judge and a lawyer. Also present in the meeting were petitioner Virgilio Castro and his parents. After the conference, he proceeded to sell the property to the petitioners-spouses Castro.36 Alexander testified that after the sale, his father got one-third (1/3) of the proceeds while he received two-thirds (2/3). Romeo did not get a single centavo but was given the right to till their Nueva Ecija property.37 From his share of the proceeds, Alexander intended to return to Romeo the P6,000.00 given him earlier by the latter. He considered the money to be a personal debt due Romeo, not Romeos downpayment of his share in the Paco property.38 The buyer of the property, petitioner Virgilio P. Castro, testified that he informed Romeo that his father Moises was selling the Paco property. Romeo replied: "Bahala siya."39 The second time he informed Romeo about the pending sale was when he brought Romeo, Alexander and Moises to Judge Anunciacion to "consult him [as to] who has [the] right over the [Paco] property."40 He further declared that he "went to the Metropolitan Trial Court because [he] wanted to be sure whether [he] could buy the property."41 During the meeting, he was told by Romeo that the Paco property was already given to him (Romeo) by Moises. He admitted knowing that the title to the Paco property was in the possession of Romeo.42 However, he proceeded with the sale. Moises assured him that he would be able to get the title from Romeo.43

These events precipitated the case at bar. Romeo filed an action to nullify the sale between Moises and the Castro spouses; to compel Moises and Alexander to execute a deed of conveyance or assignment of the Paco property to him upon payment of the balance of its agreed price; and to make them pay damages.44 After trial, the Regional Trial Court rendered its decision,45 which in its dispositive portion states as follows: "WHEREFORE, in view of the foregoing, the Court hereby orders the following: 1) Defendant Alexander V. Miat to execute a deed of sale of his share in the property upon payment by plaintiff Romeo of the balance of the purchase price in the sum of P36,750.00; 2) Plaintiff Romeo V. Miat to recognize as valid the sale of defendant Moises share in the house and lot located at No. 1495-C Fabie Estate, Paco, Manila; 3) the dismissal of defendants counter-claim; and 4) defendants to pay the costs of suit." Both parties appealed to Court of Appeals. On November 29, 1999, the appellate Court modified the Decision as follows:46 "WHEREFORE, the appealed decision is MODIFIED as follows: (1) The deed of sale entered into between defendants-appellants Moises Miat and spouses Virgilio and Michelle Castro is hereby NULLIFIED. (2) Defendant-appellants Moises Miat and Alexander Miat are ordered to execute a deed of conveyance over the Paco property with TCT No. 16383 (sic) in favor of plaintiffappellant Romeo Miat, upon payment by Romeo Miat of the balance of the purchase price in the sum of P36,750.00. (3) Defendants-appellants are ordered, jointly and severally, to pay plaintiff-appellant attorneys fees in the amount of P30,000.00 and to pay the costs of suit." Reconsideration was denied on May 17, 2000. Hence, this petition where the petitioners assign the following errors: "THE RESPONDENT COURT OF APPEALS GRAVELY ERRED AND DID PETITIONERS AN INJUSTICE IN MODIFYING OR REVERSING THE DECISION OF THE TRIAL COURT DATED MARCH 17, 1993 WHICH ORDERED RESPONDENT ROMEO MIAT TO RECOGNIZE AS VALID THE DEED OF SALE ENTERED INTO BETWEEN PETITIONERS MOISES MIAT AND SPS. VIRGILIO AND MICHELLE CASTRO PERTAINING TO PETITIONER MOISES MIATS SHARE IN THE HOUSE AND LOT LOCATED IN PACO, MANILA, WHEN IT DECLARED SAID DEED OF SALE NULLIFIED. THE RESPONDENT COURT OF APPEALS PATENTLY ERRED IN AFFIRMING OR UPHOLDING THE TRIAL COURTS DECISION ORDERING ALEXANDER MIAT AND INCLUDING MOISES MIAT TO EXECUTE A DEED OF CONVEYANCE OVER THE

PACO PROPERTY WITH TCT NO. 16383 IN FAVOR OF ROMEO MIAT UPON PAYMENT BY THE LATTER OF THE BALANCE OF THE PURCHASE PRICE IN THE SUM OF P36,750.00. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN FURTHER ORDERING PETITIONERS TO PAY RESPONDENT, JOINTLY AND SEVERALLY, ATTORNEYS FEES IN THE AMOUNT OF P30,000.00 AND AFFIRMING THE COURT A QUOS ORDER FOR THE PETITIONERS TO PAY THE COST OF SUIT."47 The issues can be simplified thus: 1. Whether the Paco property is conjugal or capital; 2. Whether there was a valid oral partition covering the said property; and 3. Whether the spouses Castro were buyers in good faith. I The petitioners contend that the Paco property is the capital property of Moises. They allege that the spouses Moises and Concordia purchased the property on installment basis in 1977 but stress that it was Moises who paid the balance of twelve thousand (P12,000.00) pesos in 1984. At that time, Concordia had long been dead. She died in 1978. We disagree. Since Moises and Concordia were married before the effectivity of the Family Code, the provisions of the New Civil Code apply. Article 153(1) of the New Civil Code48 provides as follows: "The following are conjugal partnership property: (1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; x x x." The records show that the Paco property was acquired by onerous title during the marriage out of the common fund. It is clearly conjugal property. Petitioners also overlook Article 160 of the New Civil Code. It provides that "all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife." This article does not require proof that the property was acquired with funds of the partnership. The presumption applies even when the manner in which the property was acquired does not appear.491a\^/phi1.net

Petitioners reliance on Lorenzo vs. Nicolas50 is misplaced. That case involved two (2) parcels of land that Magdalena Clemente purchased on installment and started paying for when she was not yet married to Manuel Lorenzo. When she married Manuel Lorenzo she continued to pay the installments in her own name. Upon completion of payment, the deed of final conveyance was executed in her sole favor and the land was registered in the exclusive name of Magdalena Clemente. The Court ruled that the two (2) parcels of land were the paraphernal properties of Magdalena Clemente, thus: "x x x the fact that all receipts for installments paid even during the lifetime of the late husband Manuel Lorenzo were issued in the name of Magdalena Clemente and that the deed of sale or conveyance of parcel no. 6 was made in her name in spite of the fact that Manuel Lorenzo was still alive shows that the two parcels of land belonged to Magdalena Clemente."51 (emphasis supplied) In the case at bar, Moises and Concordia bought the Paco property during their marriage Moises did not bring it into their marriage, hence it has to be considered as conjugal. Likewise, Jovellanos vs. Court of Appeals52 cited by the petitioners is inapropos. In said case, Daniel Jovellanos, while he was still married to his first wife, Leonor Dizon, entered into a "contract of lease and conditional sale" with Philamlife. He continued paying the rental after the death of his first wife and during the subsistence of his marriage with his second wife, Anette Jovellanos. He completed the payment during the existence of his second marriage. The Court ruled that the property belonged to the conjugal partnership with the second wife as Daniel Jovellanos "acquired ownership thereof only upon full payment of the said amount hence, although he had been in possession of the premises since September 2, 1955, it was only on January 8, 1975 that the Philamlife executed the deed of absolute sale thereof in his favor. x x x Since as early as 1967, he was already married to Annette H. Jovellanos, this property necessarily belonged to his conjugal partnership with his second wife."53 In the case at bar, Moises and Concordia executed a Deed of Sale with Mortgage. The contract is one of sale the title passed to them upon delivery of the Paco property.54 In fine, title was gained during the conjugal partnership. II The next issue is whether the oral partition between Moises and his sons, Romeo and Alexander, involving the said property is valid. In ruling in favor of its validity which we affirm, the appellate court relied on a portion of Moises letter to Romeo, which reads as follows:55 "KAYA PAG-USAPAN LANG NINYONG MABUTI ANG ANONG BALAK AT GUSTO NINYONG PAGHATI SA BAHAY, AT YAN AY PAGPAPASIYAHAN KO KONG (sic) MAKAKABUTI SA INYONG DALAWA. AT WALA AKONG HIGIT NA PAPABURAN SA INYONG DALAWA PAREHO KAYONG MAHAL SA AKIN, HINDI AKO TULAD SA IBANG MAGULANG NA HINDI PAREHO ANG PAGTINGIN SA MGA ANAK. ANG BAHAY56 AY PARA SA INYONG DALAWA, LALO NA NGAYONG MAY ASAWA NA KAYONG PAREHO. x x x" [All caps in the original]

Ceferino Miat, brother of Moises, testified that before Concordia died, there was an agreement that the Paraaque property would go to Moises while the Paco property would go to Romeo and Alexander. This was reiterated at the deathbed of Concordia. When Moises returned to Manila for good, the agreement was affirmed in front of the extended Miat family members. Initially, Romeo and Alexander orally divided the Paco property between them. Later, Alexander sold his share to Romeo. This agreement was attested to by the extended Miat Family members in a document marked as Exhibit "D," which reads as follows:57 "Pebrero 18, 1989 SINUMPAANG SALAYSAY SA MGA KINAUUKULAN, Kami, na nakalagda sa ibaba, ay nanunumpa sa harapan ng Punong Barangay, na si G. REYNALDO P. WONG: Na kami ay mga saksi sa kasunduan nina G. MOISES B. MIAT, asawa ng yumao na, na si Gng. CONCORDIA VALENZUELA MIAT, at mga anak nitong sina G. ROMEO V. MIAT at G. ALEXANDER V. MIAT: Na ang kasunduan ay ang mga sumusunod: 1. Na ang pag-aaring lupa (132 sq. m.) ng mag-asawa (MOISES at CONCORDIA) sa Airport Village sa Paraaque, Metro Manila ay mapupunta kay G. MOISES B. MIAT; 2. Na ang pag-aaring lupa at bahay (70 sq. m.) ng mag-asawa ring nabanggit ay sa magkapatid na ROMEO at ALEXANDER mapupunta at ito ay nasa address na 1495-C FABIE, PACO, MANILA. MGA SUMUMPA:58
(Sgd.) 1) Ceferino B. Miat (kapatid ni Moises) (Sgd.) 6) Lorenzo C. Valenzuela (kapatid ni Concordia)

(Sgd.) 2) Avelina J. Miat (asawa ni Ceferino)

(Sgd.) 7) Patricio C. Valenzuela (kapatid ni Concordia)

(Sgd.) 3) Virgilio Miat (kapatid ni Moises)

(Sgd.) 8) Victor C. Valenzuela (kapatid ni Concordia)

(Sgd.) 4) Aurea Miat-Joson (kapatid ni Moises)

(Sgd.) 9) Elsa P. Miranda

(Sgd.) 5) Jose A. Joson (asawa ni Aurea) (Sgd.) REYNALDO P. WONG Kapitan ng Barangay Sta. Maria, Licab, N.E."(emphasis supplied) The consideration for the grant to Romeo and Alexander of the Paco property was best expressed by Moises himself in his letter to Romeo, which reads as follows: "Labis akong nagpapasalamat at nauunawaan ninyo ang mga pagkakamali ko at mga kasalanan kong nagawa sa inyong mag-iina, huwag kayong mag-alala at lahat nang naipundar namin nang (sic) inyong nanay ay sa inyong dalawang magkapatid mapupunta."59 We also hold that the oral partition between Romeo and Alexander is not covered by the Statute of Frauds. It is enforceable for two reasons. Firstly, Alexander accepted the six thousand (P6,000.00) pesos given by Romeo as downpayment for the purchase of his share in the Paco property. Secondly, Romeo and his witnesses, Ceferino Miat and Pedro Miranda, who testified regarding the sale of Alexanders share to Romeo, were intensely questioned by petitioners counsel.601awphi1.nt In the recent case of Pada-Kilario vs. Court of Appeals, we held:61 "[N]o law requires partition among heirs to be in writing and be registered in order to be valid. The requirement in Sec. 1, Rule 74 of the Revised Rules of Court that a partition be put in a public document and registered, has for its purpose the protection of creditors and the heirs themselves against tardy claims. The object of registration is to serve as constructive notice to others. It follows then that the intrinsic validity of partition not executed with the prescribed formalities is not undermined when no creditors are involved. Without creditors to take into consideration, it is competent for the heirs of an estate to enter into an agreement for distribution thereof in a manner and upon a plan different from those provided by the rules from which, in

the first place, nothing can be inferred that a writing or other formality is essential for the partition to be valid. The partition of inherited property need not be embodied in a public document so as to be effective as regards the heirs that participated therein. The requirement of Article 1358 of the Civil Code that acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property, must appear in a public instrument, is only for convenience, non-compliance with which does not affect the validity or enforceability of the acts of the parties as among themselves. And neither does the Statute of Frauds under Article 1403 of the New Civil Code apply because partition among heirs is not legally deemed a conveyance of real property, considering that it involves not a transfer of property from one to the other but rather, a confirmation or ratification of title or right of property that an heir is renouncing in favor of another heir who accepts and receives the inheritance. x x x." III The appellate court also correctly held that the petitioners-spouses Castro were not buyers in good faith. A purchaser in good faith is one who buys property and pays a full and fair price for it at the time of the purchase or before any notice of some other persons claim on or interest in it. The rule is settled that a buyer of real property, which is in the possession of persons other than the seller, must be wary and should investigate the rights of those in possession.1a\^/phi1.net Otherwise, without such inquiry, the buyer can hardly be regarded as buyer in good faith.62 This finding of the appellate court that the Castro spouses were not buyers in good faith is supported by evidence. Petitioner Virgilio Castro admitted in his testimony that Romeo told him that Moises had given the Paco property to them. In fact, they consulted Judge Anunciacion on who had the right to the property Moises or Romeo. As well pointed out by the appellate court: "In the case at bench, the said spouses have actual knowledge of the adverse claim of plaintiffappellant. The most protuberant index that they are not buyers in good faith is that before the sale, Virgilio Castro talked with Romeo Miat on the supposed sale. Virgilio testified that together with Romeo, Alexander and Moses Miat, they went to Judge Anunciacion of Manila in order to find out if Romeo has a right over the property. Romeo told Virgilio in that meeting that Romeo has a right over the Paco property by virtue of an oral partition and assignment. Virgilio even admitted that he knew Romeo was in possession of the title and Romeo then insisted that he is the owner of the property. xxxxxxxxx "Virgilio Castro is further aware that plaintiff is in possession of the property, they being neighbors. A purchaser who was fully aware of another persons possession of the lot he purchased cannot successfully pretend to be an innocent purchaser for value."63 It is abundantly clear that the petitioners-spouses Castro did not buy the Paco property in good faith. They have no right to the property.

WHEREFORE, the decision of the appellate court in CA-G.R. CV No. 43053 is affirmed. Costs against petitioners. SO ORDERED.

What is included in the CPG, FC

G.R. No. 169548

March 15, 2010

TITAN CONSTRUCTION CORPORATION, Petitioner, vs. MANUEL A. DAVID, SR. and MARTHA S. DAVID, Respondents. DECISION DEL CASTILLO, J.: The review of factual matters is not the province of this Court.1 The Supreme Court is not a trier of facts, and is not the proper forum for the ventilation and substantiation of factual issues.2 This Petition for Review assails the July 20, 2004 Decision3 of the Court of Appeals (CA) in CAG.R. CV No. 67090 which affirmed with modification the March 7, 2000 Decision4 of the Regional Trial Court (RTC) of Quezon City, Branch 80. Also assailed is the August 31, 2005 Resolution5 of the CA denying the motion for reconsideration. Factual Antecedents Manuel A. David, Sr. (Manuel) and Martha S. David (Martha) were married on March 25, 1957. In 1970, the spouses acquired a 602 square meter lot located at White Plains, Quezon City, which was registered in the name of "MARTHA S. DAVID, of legal age, Filipino, married to Manuel A. David" and covered by Transfer Certificate of Title (TCT) No. 156043 issued by the Register of Deeds of Quezon City.6 In 1976, the spouses separated de facto, and no longer communicated with each other.7 Sometime in March 1995, Manuel discovered that Martha had previously sold the property to Titan Construction Corporation (Titan) for P1,500,000.00 through a Deed of Sale8 dated April 24, 1995, and that TCT No. 156043 had been cancelled and replaced by TCT No. 130129 in the name of Titan. Thus, on March 13, 1996, Manuel filed a Complaint9 for Annulment of Contract and Recovenyance against Titan before the RTC of Quezon City. Manuel alleged that the sale executed by Martha in favor of Titan was without his knowledge and consent, and therefore void. He prayed that the Deed of Sale and TCT No. 130129 be invalidated, that the property be reconveyed to the spouses, and that a new title be issued in their names. In its Answer with Counterclaim,10 Titan claimed that it was a buyer in good faith and for value because it relied on a Special Power of Attorney (SPA) 11 dated January 4, 1995 signed by Manuel which authorized Martha to dispose of the property on behalf of the spouses. Titan thus prayed for the dismissal of the complaint.

In his unverified Reply,12 Manuel claimed that the SPA was spurious, and that the signature purporting to be his was a forgery; hence, Martha was wholly without authority to sell the property. Subsequently, Manuel filed a Motion for Leave to File Amended Complaint13 which was granted by the trial court. Thus, on October 15, 1996, Manuel filed an Amended Complaint14 impleading Martha as a co-defendant in the proceedings. However, despite personal service of summons15 upon Martha, she failed to file an Answer. Thus, she was declared in default.16 Trial then ensued. Ruling of the Regional Trial Court On March 7, 2000, the RTC issued a Decision which (i) invalidated both the Deed of Sale and TCT No. 130129; (ii) ordered Titan to reconvey the property to Martha and Manuel; (iii) directed the Register of Deeds of Quezon City to issue a new title in the names of Manuel and Martha; and (iv) ordered Titan to pay P200,000.00 plus P1,000.00 per appearance as attorneys fees, and P50,000.00 as costs of suit. The RTC found that: 1) The property was conjugal in character since it was purchased by Manuel and Martha with conjugal funds during their marriage. The fact that TCT No. 156043 was registered in the name of "MARTHA S. DAVID x x x married to Manuel A. David" did not negate the propertys conjugal nature. 2) The SPA professing to authorize Martha to sell the property on behalf of the spouses was spurious, and did not bear Manuels genuine signature. This was the subject of expert testimony, which Titan failed to rebut. In addition, despite the fact that the SPA was notarized, the genuineness and due execution of the SPA was placed in doubt since it did not contain Manuels residence certificate, and was not presented for registration with the Quezon City Register of Deeds, in violation of Section 64 of Presidential Decree No. 1529.17 3) The circumstances surrounding the transaction with Martha should have put Titan on notice of the SPAs dubious veracity. The RTC noted that aside from Marthas failure to register the SPA with the Register of Deeds, it was doubtful that an SPA would have even been necessary, since the SPA itself indicated that Martha and Manuel lived on the same street in Navotas. The dispositive portion of the trial courts Decision reads: Wherefore, judgment is hereby rendered: 1.) Declaring the Deed of Sale dated April 24, 1995 as void ab initio and without force and effect.

2.) Declaring null and void TCT No. 130129 issued by the Register of Deeds of Quezon City in the name of defendant Titan Construction Corporation. 3.) Ordering defendant Titan Construction Corporation to reconvey the subject property to plaintiff and his spouse. 4.) Ordering the Register of Deeds of Quezon City to make and issue a new title in the name of plaintiff Manuel David and his Spouse, Martha David. 5.) Ordering defendant to pay P200,000.00 plus P1,000.00 per appearance as attorneys fees and P50,000.00 as costs of suit. SO ORDERED.18 Ruling of the Court of Appeals In its Decision dated July 20, 2004, the CA affirmed the Decision of the trial court but deleted the award of attorneys fees and the amount of P50,000.00 as costs. The dispositive portion of the Decision reads: WHEREFORE, with the MODIFICATION by deleting the award of attorneys fees in favor of plaintiff-appellee Manuel A. David, Sr. and the amount of P50,000.00 as costs, the Decision appealed from is AFFIRMED in all other respects, with costs against defendant-appellant Titan Construction Corporation.19 Titan moved for reconsideration but the motion was denied on August 31, 2005. Hence, this petition. Issues Titan raises the following assignment of errors: A. THE COURT OF APPEALS PATENTLY ERRED IN DECLARING THE SUBJECT DEED OF SALE NULL AND VOID AND FAILED TO APPLY TO THIS CASE THE PERTINENT LAW AND JURISPRUDENCE ON THE TORRENS SYSTEM OF LAND REGISTRATION. B. THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT TITAN WAS NOT A BUYER IN GOOD FAITH CONTRARY TO THE STANDARDS APPLIED BY THIS HONORABLE COURT IN CASES INVOLVING SIMILAR FACTS. C. THE COURT OF APPEALS PATENTLY ERRED BY DISCARDING THE NATURE OF A NOTARIZED SPECIAL POWER OF ATTORNEY CONTRARY TO JURISPRUDENCE AND BY GIVING UNDUE WEIGHT TO THE ALLEGED EXPERT TESTIMONY VIS--VIS THE

CONTESTED SIGNATURES AS THEY APPEAR TO THE NAKED EYE CONTRARY TO JURISPRUDENCE. D. THE COURT OF APPEALS PATENTLY ERRED BY FAILING TO DETECT BADGES OF CONNIVANCE BETWEEN RESPONDENTS. E. THE COURT OF APPEALS PATENTLY ERRED BY NOT RULING THAT ASSUMING THE SPA WAS NULL AND VOID, THE SAME IS IMMATERIAL SINCE THE RESPONDENTS SHOULD BE CONSIDERED ESTOPPED FROM DENYING THAT THE SUBJECT PROPERTY WAS SOLELY THAT OF RESPONDENT MARTHA S. DAVID. F. THE COURT OF APPEALS PATENTLY ERRED BY NOT RULING THAT ASSUMING THE SALE WAS VOID, ON GROUNDS OF EQUITY MARTHA S. DAVID SHOULD REIMBURSE PETITIONER OF HIS PAYMENT WITH LEGAL INTEREST.20 Petitioners Arguments Titan is claiming that it was a buyer in good faith and for value, that the property was Marthas paraphernal property, that it properly relied on the SPA presented by Martha, and that the RTC erred in giving weight to the alleged expert testimony to the effect that Manuels signature on the SPA was spurious. Titan also argues, for the first time, that the CA should have ordered Martha to reimburse the purchase price paid by Titan. Our Ruling The petition is without merit. The property is part of the spouses conjugal partnership. The Civil Code of the Philippines,21 the law in force at the time of the celebration of the marriage between Martha and Manuel in 1957, provides: Article 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. Article 153 of the Civil Code also provides: Article 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; xxxx These provisions were carried over to the Family Code. In particular, Article 117 thereof provides:

Art. 117. The following are conjugal partnership properties: (1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; xxxx Article 116 of the Family Code is even more unequivocal in that "[a]ll 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." We are not persuaded by Titans arguments that the property was Marthas exclusive property because Manuel failed to present before the RTC any proof of his income in 1970, hence he could not have had the financial capacity to contribute to the purchase of the property in 1970; and that Manuel admitted that it was Martha who concluded the original purchase of the property. In consonance with our ruling in Spouses Castro v. Miat,22 Manuel was not required to prove that the property was acquired with funds of the partnership. Rather, the presumption applies even when the manner in which the property was acquired does not appear.23 Here, we find that Titan failed to overturn the presumption that the property, purchased during the spouses marriage, was part of the conjugal partnership. In the absence of Manuels consent, the Deed of Sale is void. Since the property was undoubtedly part of the conjugal partnership, the sale to Titan required the consent of both spouses. Article 165 of the Civil Code expressly provides that "the husband is the administrator of the conjugal partnership". Likewise, Article 172 of the Civil Code ordains that "(t)he wife cannot bind the conjugal partnership without the husbands consent, except in cases provided by law". Similarly, Article 124 of the Family Code requires that any disposition or encumbrance of conjugal property must have the written consent of the other spouse, otherwise, such disposition is void. Thus: Art. 124. The administration and enjoyment of the conjugal partnership 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, 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 disposition or encumbrance without 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.

The Special Power of Attorney purportedly signed by Manuel is spurious and void. The RTC found that the signature of Manuel appearing on the SPA was not his genuine signature. As to the issue of the validity or invalidity of the subject Special Power of Attorney x x x the Court rules that the same is invalid. As aptly demonstrated by plaintiffs evidence particularly the testimony of expert witness Atty. Desiderio Pagui, which the defense failed to rebut and impeach, the subject Special Power of Attorney does not bear the genuine signature of plaintiff Manuel David thus rendering the same as without legal effect. Moreover, the genuineness and the due execution of the Special Power of Attorney was placed in more serious doubt as the same does not contain the Residence Certificate of the plaintiff and most importantly, was not presented for registration with the Quezon City Register of Deeds which is a clear violation of Sec. 64 of P.D. No. 1529. As regards defendant Titan Construction Corporations assertion that plaintiffs failure to verify his Reply (wherein the validity of the Special Power of Attorney is put into question) is an implied admission of its genuineness and due execution, [this] appears at first blush a logical conclusion. However, the Court could not yield to such an argument considering that a rigid application of the pertinent provisions of the Rules of Court will not be given premium when it would obstruct rather than serve the broader interest of justice.24 Titan claims that the RTC gave undue weight to the testimony of Manuels witness, and that expert testimony on handwriting is not conclusive. The contention lacks merit. The RTCs ruling was based not only on the testimony of Manuels expert witness finding that there were significant differences between the standard handwriting of Manuel and the signature found on the SPA, but also on Manuels categorical denial that he ever signed any document authorizing or ratifying the Deed of Sale to Titan.25 We also note that on October 12, 2004, Titan filed before the CA a Manifestation with Motion for Re-Examination of Another Document/ Handwriting Expert26 alleging that there is "an extreme necessity"27 for a conduct of another examination of the SPA by a handwriting expert "as it will materially affect and alter the final outcome"28 of the case. Interestingly, however, Titan filed on January 6, 2005 a Manifestation/Motion to Withdraw Earlier Motion for ReExamination of PNP Laboratory Expert29 this time praying that its motion for re-examination be withdrawn. Titan claimed that "after a circumspect evaluation, deemed it wise not to pursue anymore said request (re-examination) as there is a great possibility that the x x x [PNP and the NBI] might come out with two conflicting opinions and conclusions x x x that might cause some confusion to the minds of the Honorable Justices in resolving the issues x x x as well as the waste of material time and resources said motion may result".30 In any event, we reiterate the well-entrenched rule that the factual findings of trial courts, when adopted and confirmed by the CA, are binding and conclusive and will generally not be reviewed on appeal.31 We are mandated to accord great weight to the findings of the RTC, particularly as

regards its assessment of the credibility of witnesses32 since it is the trial court judge who is in a position to observe and examine the witnesses first hand.33 Even after a careful and independent scrutiny of the records, we find no cogent reason to depart from the rulings of the courts below.34 Furthermore, settled is the rule that only errors of law and not of fact are reviewable by this Court in a petition for review on certiorari under Rule 45 of the Rules of Court. This applies with even greater force here, since the factual findings by the CA are in full agreement with those of the trial court.35 Indeed, we cannot help but wonder why Martha was never subpoenaed by Titan as a witness to testify on the character of the property, or the circumstances surrounding the transaction with Titan. Petitioners claim that she could not be found is belied by the RTC records, which show that she personally received and signed for the summons at her address in Greenhills, San Juan. Titan neither filed a cross claim nor made any adverse allegation against Martha. On the Failure to Deny the Genuineness and Due Execution of the SPA Titan claimed that because Manuel failed to specifically deny the genuineness and due execution of the SPA in his Reply, he is deemed to have admitted the veracity of said document, in accordance with Rule 8, Sections 7 and 8,36 of the Rules of Court. On this point, we fully concur with the findings of the CA that: It is true that the reply filed by Manuel alleging that the special power of attorney is a forgery was not made under oath. However, the complaint, which was verified by Manuel under oath, alleged that the sale of the subject property executed by his wife, Martha, in favor of Titan was without his knowledge, consent, and approval, express or implied; and that there is nothing on the face of the deed of sale that would show that he gave his consent thereto. In Toribio v. Bidin, it was held that where the verified complaint alleged that the plaintiff never sold, transferred or disposed their share in the inheritance left by their mother to others, the defendants were placed on adequate notice that they would be called upon during trial to prove the genuineness or due execution of the disputed deed of sale. While Section 8, Rule 8 is mandatory, it is a discovery procedure and must be reasonably construed to attain its purpose, and in a way as not to effect a denial of substantial justice. The interpretation should be one which assists the parties in obtaining a speedy, inexpensive, and most important, a just determination of the disputed issues.1avvphi1 Moreover, during the pre-trial, Titan requested for stipulation that the special power of attorney was signed by Manuel authorizing his wife to sell the subject property, but Manuel refused to admit the genuineness of said special power of attorney and stated that he is presenting an expert witness to prove that his signature in the special power of attorney is a forgery. However, Titan did not register any objection x x x. Furthermore, Titan did not object to the presentation of Atty. Desiderio Pagui, who testified as an expert witness, on his Report finding that the signature on the special power of attorney was not affixed by Manuel based on his analysis of the questioned and standard signatures of the latter, and even cross-examined said witness. Neither did Titan object to the admission of said Report when it was offered in evidence by Manuel on the ground

that he is barred from denying his signature on the special power of attorney. In fact, Titan admitted the existence of said Report and objected only to the purpose for which it was offered. In Central Surety & Insurance Company v. C.N. Hodges, it was held that where a party acted in complete disregard of or wholly overlooked Section 8, Rule 8 and did not object to the introduction and admission of evidence questioning the genuineness and due execution of a document, he must be deemed to have waived the benefits of said Rule. Consequently, Titan is deemed to have waived the mantle of protection given [it] by Section 8, Rule 8.37 It is true that a notarial document is considered evidence of the facts expressed therein.38 A notarized document enjoys a prima facie presumption of authenticity and due execution39 and only clear and convincing evidence will overcome such legal presumption.40 However, such clear and convincing evidence is present here.1avvph!1 While it is true that the SPA was notarized, it is no less true that there were defects in the notarization which mitigate against a finding that the SPA was either genuine or duly executed. Curiously, the details of Manuels Community Tax Certificate are conspicuously absent, yet Marthas are complete. The absence of Manuels data supports his claim that he did not execute the same and that his signature thereon is a forgery. Moreover, we have Manuels positive testimony that he never signed the SPA, in addition to the expert testimony that the signature appearing on the SPA was not Manuels true signature. Moreover, there were circumstances which mitigate against a finding that Titan was a buyer in good faith. First, TCT No. 156043 was registered in the name of "MARTHA S. DAVID, of legal age, Filipino, married to Manuel A. David" but the Deed of Sale failed to include Marthas civil status, and only described the vendor as "MARTHA S. DAVID, of legal age, Filipino citizen, with postal address at 247 Governor Pascual, Navotas, Rizal." And it is quite peculiar that an SPA would have even been necessary, considering that the SPA itself indicated that Martha and Manuel lived on the same street (379 and 247 Governor Pascual Street, respectively). Second, Titans witness Valeriano Hernandez, the real estate agent who brokered the sale between Martha and Titan, testified that Jerry Yao (Yao), Titans Vice President for Operations (and Titans signatory to the Deed of Sale), specifically inquired why the name of Manuel did not appear on the Deed of Sale.41 This indicates that Titan was aware that Manuels consent may be necessary. In addition, Titan purportedly sent their representative to the Register of Deeds of Quezon City to verify TCT No. 156043, so Titan would have been aware that the SPA was never registered before the Register of Deeds. Third, Valeriano Hernandez also testified that during the first meeting between Martha and Yao, Martha informed Yao that the property was mortgaged to a casino for P500,000.00. Without even seeing the property, the original title, or the SPA, and without securing an acknowledgment receipt from Martha, Titan (through Yao) gave Martha P500,000.00 so she could redeem the property from the casino.42 These are certainly not actions typical of a prudent buyer. Titan cannot belatedly claim that the RTC should have ordered Martha to reimburse the purchase price.

Titan argues that the CA erred in not ruling that, even assuming the sale was void, on grounds of equity, Martha should reimburse petitioner its payment with legal interest. We note that this equity argument was raised for the first time before the CA, which disposed of it in this manner: Anent defendant-appellants claim that the court a quo and this Court never considered the substantial amount of money paid by it to Martha David as consideration for the sale of the subject property, suffice it to say that said matter is being raised for the first time in the instant motion for reconsideration. If well-recognized jurisprudence precludes raising an issue only for the first time on appeal proper, with more reason should such issue be disallowed or disregarded when initially raised only in a motion for reconsideration of the decision of the appellate court. Nonetheless, record shows that only defendant-appellant was initially sued by plaintiff-appellee in his complaint for annulment of contract and reconveyance upon the allegation that the sale executed by his wife, Martha David, of their conjugal property in favor of defendant-appellant was without his knowledge and consent and, therefore, null and void. In its answer, defendantappellant claimed that it bought the property in good faith and for value from Martha David and prayed for the dismissal of the complaint and the payment of his counterclaim for attorneys fees, moral and exemplary damages. Subsequently, plaintiff-appellee filed a motion for leave to file amended complaint by impleading Martha David as a defendant, attaching the amended complaint thereto, copies of which were furnished defendant-appellant, through counsel. The amended complaint was admitted by the court a quo in an Order dated October 23, 1996. Martha David was declared in default for failure to file an answer. The record does not show [that] a cross-claim was filed by defendant-appellant against Martha David for the return of the amount of PhP1,500,000.00 it paid to the latter as consideration for the sale of the subject property. x x x Thus, to hold Martha David liable to defendant-appellant for the return of the consideration for the sale of the subject property, without any claim therefore being filed against her by the latter, would violate her right to due process. The essence of due process is to be found in the reasonable opportunity to be heard and submit any evidence one may have in support of his defense. It is elementary that before a person can be deprived of his property, he should be first informed of the claim against him and the theory on which such claim is premised.43 (Emphasis supplied) While it is true that litigation is not a game of technicalities,44 it is equally true that elementary considerations of due process require that a party be duly apprised of a claim against him before judgment may be rendered. Thus, we cannot, in these proceedings, order the return of the amounts paid by Titan to Martha. However, Titan is not precluded by this Decision from instituting the appropriate action against Martha before the proper court. WHEREFORE, the petition is DENIED. The July 20, 2004 Decision of the Court of Appeals in CA-G.R. CV No. 67090 which affirmed with modifications the March 7, 2000 Decision of the Regional Trial Court of Quezon City, Branch 80, and its August 31, 2005 Resolution denying the motion for reconsideration, are AFFIRMED, without prejudice to the recovery by petitioner Titan Construction Corporation of the amounts it paid to Martha S. David in the appropriate action before the proper court. SO ORDERED.

G.R. No. 187023

November 17, 2010

EVANGELINE D. IMANI,* Petitioner, vs. METROPOLITAN BANK & TRUST COMPANY, Respondent. DECISION NACHURA, J.: On appeal is the July 3, 2008 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 93061, setting aside the November 22, 2005 Order2 of the Regional Trial Court (RTC) of Makati City, Branch 64, as well as its subsequent Resolution dated March 3, 2009,3 denying petitioners motion for reconsideration. On August 28, 1981, Evangeline D. Imani (petitioner) signed a Continuing Suretyship Agreement in favor of respondent Metropolitan Bank & Trust Company (Metrobank), with Cesar P. Dazo, Nieves Dazo, Benedicto C. Dazo, Cynthia C. Dazo, Doroteo Fundales, Jr., and Nicolas Ponce as her co-sureties. As sureties, they bound themselves to pay Metrobank whatever indebtedness C.P. Dazo Tannery, Inc. (CPDTI) incurs, but not exceeding Six Million Pesos (P6,000,000.00). Later, CPDTI obtained loans of P100,000.00 and P63,825.45, respectively. The loans were evidenced by promissory notes signed by Cesar and Nieves Dazo. CPDTI defaulted in the payment of its loans. Metrobank made several demands for payment upon CPDTI, but to no avail. This prompted Metrobank to file a collection suit against CPDTI and its sureties, including herein petitioner. The case was docketed as Civil Case No. 15717. After due proceedings, the RTC rendered a decision4 in favor of Metrobank. The dispositive portion of the decision reads: WHEREFORE, in view of the foregoing, the Court renders a judgment in favor of [Metrobank] ordering defendants, C.P. Dazo Tannery, Inc., Cesar P. Dazo, Nieves Dazo, Benedicto C. Dazo, Evangelina D. Imani, Cynthia C. Dazo, Doroteo Fundales, Jr., and Nicolas Ponce to pay [respondent] Metropolitan Bank and Trust Company: 1. Under the First Cause of Action, the sum of P175,451.48 plus the stipulated interest, penalty charges and bank charges from March 1, 1984 and until the whole amount is fully paid; 2. Under the Second Cause of Action, the sum of P92,158.85 plus the stipulated interest, penalty charges and bank charges from February 24, 1985, and until the whole amount is fully paid; 3. The sum equivalent to ten percent (10%) of the total amount due under the First and Second Cause of Action; and

4. Ordering the defendants to pay the costs of suit and expenses of litigation. SO ORDERED.5 Therein defendants appealed to the CA. On September 29, 1997, the CA issued a Resolution dismissing the appeal.6 Consequently, on October 22, 1997, the CA issued an Entry of Judgment.7 Metrobank then filed with the RTC a motion for execution,8 which was granted on December 7, 1999.9 A writ of execution10 was issued against CPDTI and its co-defendants. The sheriff levied on a property covered by Transfer Certificate of Title (TCT) No. T-27957 P(M) and registered in the name of petitioner. A public auction was conducted and the property was awarded to Metrobank, as the highest bidder. Metrobank undertook to consolidate the title covering the subject property in its name, and filed a Manifestation and Motion,11 praying that spouses Sina and Evangline Imani be directed to surrender the owners copy of TCT No. T-27957 P(M) for cancellation. Petitioner opposed the motion and filed her Comment with Urgent Motion to Cancel and Nullify the Levy on Execution, the Auction Sale and Certificate of Sale Over TCT No. T-27957 P(M).12 She argued that the subject property belongs to the conjugal partnership; as such, it cannot be held answerable for the liabilities incurred by CPDTI to Metrobank. Neither can it be subject of levy on execution or public auction. Hence, petitioner prayed for the nullification of the levy on execution and the auction sale, as well as the certificate of sale in favor of Metrobank. On June 20, 2005, the RTC issued an Order13 denying Metrobanks motion, explaining that: [Petitioner] Evangelina D. Imani incurred the obligation to [Metrobank] by the mere fact that she executed the Continuing Suretyship Agreement in favor of [Metrobank]. The loan proceeds were not intended for [petitioner] Evangelina D. Imani. It cannot therefore be presumed that the loan proceeds had redounded to the benefit of her family. It is also worth stressing that the records of this case is bereft of any showing that at the time of the signing of the Suretyship Agreement and even at the time of execution and sale at public auction of the subject property, [petitioner] Evangelina D. Imani has the authority to dispose of or encumber their conjugal partnership properties. Neither was she conferred the power of administration over the said properties. Hence, when she executed the Suretyship Agreement, she had placed the Conjugal Partnership in danger of being dissipated. The law could have not allowed this in keeping with the mandate of protecting and safeguarding the conjugal partnership. This is also the reason why the husband or the wife cannot dispose of the conjugal partnership properties even onerously, if without the consent of the other, or gratuitously, as by way of donation.14 The RTC decreed that: WHEREFORE, in view of the foregoing, [Metrobanks] motion for issuance of an Order directing Spouses Sina Imani and Evangeline Dazo-Imani to surrender the owners copy of TCT No. T-27957 P(M) to the Register of Deeds of Meycauayan, Bulacan for cancellation, is DENIED.

On the other hand, [petitioners] Motion to Cancel and Nullify the Levy on Execution, the Auction Sale and Certificate of Sale with respect to the real property covered by TCT No. T27957 P(M) is GRANTED. The Levy on Execution and the Sale by Public Auction of the property covered by TCT No. T27957 P(M) are nullified and the Certificate of Sale over the same property is hereby Cancelled. SO ORDERED.15 Metrobank filed a motion for reconsideration. Petitioner opposed the motion, asserting that the property belongs to the conjugal partnership.16 Attached to her opposition were an Affidavit17executed by Crisanto Origen, the former owner of the property, attesting that spouses Sina and Evangeline Imani were the vendees of the subject property; and the photocopies of the checks18 allegedly issued by Sina Imani as payment for the subject property. However, despite petitioners opposition, the RTC issued an Order dated August 15, 2005, setting aside its June 20, 2005 Order. Thus: WHEREFORE, premises considered, the Motion for Reconsideration is GRANTED. The Order dated June 20, 2005 is set aside. Evangelina Dazo-Imani is hereby ordered to surrender TCT No. T-27957 P(M) to the Register of Deeds of Meycauayan, Bulacan for cancellation. The effectivity of the Levy on Execution, the Auction Sale and the Certificate of Sale with respect to the real property covered by TCT No. T-27957 P(M) is reinstated. SO ORDERED.19 But on petitioners motion for reconsideration, the RTC issued an Order dated November 22, 2005,20 reinstating its June 20, 2005 Order. In so ruling, the RTC relied on the affidavit of Crisanto Origen, and declared the property levied upon as conjugal, which cannot be held answerable for petitioners personal liability. Metrobank assailed the November 22, 2005 Order via a petition for certiorari in the CA, ascribing grave abuse of discretion on the part of the RTC for annulling the levy on execution and the auction sale, and for canceling the certificate of sale. On July 3, 2008, the CA rendered the now challenged Decision reversing the RTC, the dispositive portion of which reads: WHEREFORE, the instant petition is hereby GRANTED. ACCORDINGLY, the Order dated November 22, 2005 of the Regional Trial Court of Makati City, Branch 64, is hereby REVERSED and new one is entered declaring the Levy on Execution, Sale by Public Auction of the property covered by Transfer Certificate of Title T-27957 [P](M) and the Certificate of Sale over said property as valid and legal. SO ORDERED.21

Petitioner filed a motion for reconsideration, but the CA denied it on March 3, 2009.22 Hence, this recourse by petitioner, arguing that: I THE HONORABLE COURT OF APPEALS ERRS (sic) IN REVERSING THE FINDING OF FACT OF THE TRIAL COURT THAT THE PROPERTY IS CONJUGAL IN NATURE BASED ON MERE SPECULATIONS AND CONJECTURES.23 II THE UNSUPPORTED TEMPORARY RULING THAT THE PROPERTY IS NOT CONJUGAL AND THE SUGGESTION TO VINDICATE THE RIGHTS OF SINA IMANI AND THE CONJUGAL PARTNERSHIP IN A SEPARATE ACTION UNDER SEC. 16, RULE 39 ENCOURAGE MULTIPLICITY OF SUITS AND VIOLATE THE POLICY OF THE RULES FOR EXPEDIENT AND INEXPENSIVE DISPOSITION OF ACTIONS. III THE PROPERTY IN QUESTION, B[EI]NG A ROAD RIGHT OF WAY, IS NOT SUBJECT TO EXECUTION UNDER SEC. 50, 2ND PARAGRAPH, OF PD [NO.] 1529.24 First, the procedural issue on the propriety of the course of action taken by petitioner in the RTC in vindication of her claim over the subject property. Petitioner takes exception to the CA ruling that she committed a procedural gaffe in seeking the annulment of the writ of execution, the auction sale, and the certificate of sale. The issue on the conjugal nature of the property, she insists, can be adjudicated by the executing court; thus, the RTC correctly gave due course to her motion. She asserts that it was error for the CA to propose the filing of a separate case to vindicate her claim. We agree with petitioner. The CA explained the faux pas committed by petitioner in this wise: Under [Section 16, Rule 39], a third-party claimant or a stranger to the foreclosure suit, can opt to file a remedy known as terceria 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. By the terceria, the officer shall not be bound to keep the property and could be answerable for damages. A thirdparty 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 despite the third-party claim. 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. Both

remedies are cumulative and may be availed of independently of or separately from the other. Availment of the terceria is not a condition sine qua non to the institution of a "separate action." It is worthy of note that Sina Imani should have availed of the remedy of "terceria" authorized under Section 16 of Rule 39 which is the proper remedy considering that he is not a party to the case against [petitioner]. Instead, the trial court allowed [petitioner] to file an urgent motion to cancel and nullify the levy of execution the auction sale and certificate of sale over TCT No. T27957 [P](M). [Petitioner] then argue[s] that it is the ministerial duty of the levying officer to release the property the moment a third-party claim is filed. It is true that once a third-party files an affidavit of his title or right to the possession of the property levied upon, the sheriff is bound to release the property of the third-party claimant unless the judgment creditor files a bond approved by the court. Admittedly, [petitioners] motion was already pending in court at the time that they filed the Affidavit of Crisanto Origen, the former owner, dated July 27, 2005. In the instant case, the one who availed of the remedy of terceria is the [petitioner], the party to the main case and not the third party contemplated by Section 16, Rule 39 of the Rules of Court. Moreover, the one who made the affidavit is not the third-party referred to in said Rule but Crisanto Origen who was the former owner of the land in question.25 Apparently, the CA lost sight of our ruling in Ong v. Tating,26 elucidating on the applicability of Section 16 of Rule 39 of the Rules of Court, thus: When the sheriff thus seizes property of a third person in which the judgment debtor holds no right or interest, and so incurs in error, the supervisory power of the Court which has authorized execution may be invoked by the third person. Upon due application by the third person, and after summary hearing, the Court may command that the property be released from the mistaken levy and restored to the rightful owner or possessor. What the Court can do in these instances however is limited to a determination of whether the sheriff has acted rightly or wrongly in the performance of his duties in the execution of the judgment, more specifically, if he has indeed taken hold of property not belonging to the judgment debtor. The Court does not and cannot pass upon the question of title to the property, with any character of finality. It can treat the matter only in so far as may be necessary to decide if the Sheriff has acted correctly or not. x x x. xxxx Upon the other hand, if the claim of impropriety on the part of the sheriff in the execution proceedings is made by a party to the action, not a stranger thereto, any relief therefrom may only be applied with, and obtained from, only the executing court; and this is true even if a new party has been impleaded in the suit.27 The filing of the motion by petitioner to annul the execution, the auction sale, and the certificate of sale was, therefore, a proper remedy. As further held by this Court:

Certain it is that the Trial Court has plenary jurisdiction over the proceedings for the enforcement of its judgments. It has undeniable competence to act on motions for execution (whether execution be a matter of right or discretionary upon the Court), issue and quash writs, determine if property is exempt from execution, or fix the value of property claimed by third persons so that a bond equal to such value may be posted by a judgment creditor to indemnify the sheriff against liability for damages, resolve questions involving redemption, examine the judgment debtor and his debtors, and otherwise perform such other acts as may be necessary or incidental to the carrying out of its decisions. It may and should exercise control and supervision over the sheriff and other court officers and employees taking part in the execution proceedings, and correct them in the event that they should err in the discharge of their functions.28 Contrary to the CAs advice, the remedy of terceria or a separate action under Section 16, Rule 39 is no longer available to Sina Imani because he is not deemed a stranger to the case filed against petitioner: [T]he husband of the judgment debtor cannot be deemed a "stranger" to the case prosecuted and adjudged against his wife.29 Thus, it would have been inappropriate for him to institute a separate case for annulment of writ of execution. In Spouses Ching v. Court of Appeals,30 we explained: Is a spouse, 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 Mariano v. Court of Appeals, we answered this question in the negative. In that case, the CFI of Caloocan City declared the wife to be the judgment obligor and, consequently, a writ of execution was issued against her. Thereupon, the sheriff proceeded to levy upon the conjugal properties of the wife and her husband. The wife initially filed a petition for certiorari with the Court of Appeals praying for the annulment of the writ of execution. However, the petition was adjudged to be without merit and was accordingly dismissed. The husband then filed a complaint with the CFI of Quezon City for the annulment of the writ of execution, alleging therein that the conjugal properties cannot be made to answer for obligations exclusively contracted by the wife. The executing party moved to dismiss the annulment case, but the motion was denied. On appeal, the Court of Appeals, in Mariano, ruled that the CFI of Quezon City, in continuing to hear the annulment case, had not interfered with the executing court. We reversed the Court of Appeals' ruling and held that there was interference by the CFI of Quezon City with the execution of the CFI of Caloocan City. We ruled that the husband of the judgment debtor cannot be deemed a "stranger" to the case prosecuted and adjudged against his wife, which would allow the filing of a separate and independent action. The facts of the Mariano case are similar to this case. Clearly, it was inappropriate for petitioners to institute a separate case for annulment when they could have easily questioned the execution of their conjugal property in the collection case. We note in fact that the trial court in the Rizal annulment case specifically informed petitioners that Encarnacion Ching's rights could be ventilated in the Manila collection case by the mere expedient of intervening therein. Apparently,

petitioners ignored the trial court's advice, as Encarnacion Ching did not intervene therein and petitioners instituted another annulment case after their conjugal property was levied upon and sold on execution. There have been instances where we ruled that a spouse may file a separate case against a wrongful execution. However, in those cases, we allowed the institution of a separate and independent action because what were executed upon were the paraphernal or exclusive property of a spouse who was not a party to the case. In those instances, said spouse can truly be deemed a "stranger." In the present case, the levy and sale on execution was made upon the conjugal property. Ineluctably, the RTC cannot be considered whimsical for ruling on petitioners motion. The CA, therefore, erred for declaring otherwise. Now, on the merits of the case. Petitioner asserts that the subject property belongs to the conjugal partnership. As such, it cannot be made to answer for her obligation with Metrobank. She faults the CA for sustaining the writ of execution, the public auction, and the certificate of sale. We sustain the CA ruling on this point. Indeed, all property of the marriage is presumed to be conjugal. However, for this presumption to apply, the party who invokes it must first prove that the property was acquired during the marriage. Proof of acquisition during the coverture is a condition sine qua non to the operation of the presumption in favor of the conjugal partnership.31 Thus, the time when the property was acquired is material.32 Francisco v. CA33 is instructive, viz.: Article 160 of the New Civil Code provides that "all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife." However, the party who invokes this presumption must first prove that the property in controversy was acquired during the marriage. Proof of acquisition during the coverture is a condition sine qua non for the operation of the presumption in favor of the conjugal partnership. The party who asserts this presumption must first prove said time element. Needless to say, the presumption refers only to the property acquired during the marriage and does not operate when there is no showing as to when property alleged to be conjugal was acquired.34 To support her assertion that the property belongs to the conjugal partnership, petitioner submitted the Affidavit35 of Crisanto Origen, attesting that petitioner and her husband were the vendees of the subject property, and the photocopies of the checks36 allegedly issued by Sina Imani as payment for the subject property.

Unfortunately for petitioner, the said Affidavit can hardly be considered sufficient evidence to prove her claim that the property is conjugal. As correctly pointed out by Metrobank, the said Affidavit has no evidentiary weight because Crisanto Origen was not presented in the RTC to affirm the veracity of his Affidavit: The basic rule of evidence is that unless the affiants themselves are placed on the witness stand to testify on their affidavits, such affidavits must be rejected for being hearsay. Stated differently, the declarants of written statements pertaining to disputed facts must be presented at the trial for cross-examination. 37 In the same vein, the photocopies of the checks cannot be given any probative value. In Concepcion v. Atty. Fandio, Jr.38 and Intestate Estate of the Late Don Mariano San Pedro y Esteban v. Court of Appeals,39 we held that a photocopy of a document has no probative value and is inadmissible in evidence. Thus, the CA was correct in disregarding the said pieces of evidence. Similarly, the certificate of title could not support petitioners assertion. As aptly ruled by the CA, the fact that the land was registered in the name of Evangelina Dazo-Imani married to Sina Imani is no proof that the property was acquired during the spouses coverture. 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.40 Indubitably, petitioner utterly failed to substantiate her claim that the property belongs to the conjugal partnership. Thus, it cannot be rightfully said that the CA reversed the RTC ruling without valid basis. As a last ditch effort, petitioner asserts that the property is a road right of way; thus, it cannot be subject of a writ of execution. The argument must be rejected because it was raised for the first time in this petition.lawphil.net In the trial court and the CA, petitioners arguments zeroed in on the alleged conjugal nature of the property. It is well settled that issues raised for the first time on appeal and not raised in the proceedings in the lower court are barred by estoppel. Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal. To consider the alleged facts and arguments raised belatedly would amount to trampling on the basic principles of fair play, justice, and due process.41 WHEREFORE, the petition is DENIED. The Decision and the Resolution of the Court of Appeals in CA-G.R. SP No. 93061 sustaining the validity of the writ of execution, the auction sale, and the certificate of sale are AFFIRMED. SO ORDERED.

G.R. No. 179010

April 11, 2011

ELENITA M. DEWARA, epresented by her Attorney-in-Fact, FERDINAND MAGALLANES, Petitioner, vs. SPOUSES RONNIE AND GINA LAMELA and STENILE ALVERO, Respondents. DECISION NACHURA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision1 dated November 6, 2006 and the Resolution2 dated July 10, 2007 of the Court of Appeals (CA) in CA-G.R. CV No. 64936, which reversed and set aside the Decision3 dated September 2, 1999 of the Regional Trial Court (RTC), Branch 54, Bacolod City, in Civil Case No. 93-7942. The Facts Eduardo Dewara (Eduardo) and petitioner Elenita Magallanes Dewara (Elenita) were married before the enactment of the Family Code. Thus, the Civil Code governed their marital relations. Husband and wife were separated-in-fact because Elenita went to work in California, United States of America, while Eduardo stayed in Bacolod City. On January 20, 1985, Eduardo, while driving a private jeep registered in the name of Elenita,4 hit respondent Ronnie Lamela (Ronnie). Ronnie filed a criminal case for serious physical injuries through reckless imprudence5 against Eduardo before the Municipal Trial Court in Cities (MTCC), Branch IV, Bacolod City. The MTCC found Eduardo guilty of the charge and sentenced him to suffer the penalty of imprisonment of two (2) months and one (1) day to (3) months, and to pay civil indemnity of Sixty-Two Thousand Five Hundred Ninety-Eight Pesos and Seventy Centavos (P62,598.70) as actual damages and Ten Thousand Pesos (P10,000.00) as moral damages. On appeal, the RTC6 affirmed the decision of the MTCC7 and it became final and executory.8 The writ of execution on the civil liability was served on Eduardo, but it was returned unsatisfied because he had no property in his name. Ronnie requested the City Sheriff, respondent Stenile Alvero, to levy on Lot No. 234-C, Psd. 26667 of the Bacolod Cadastre, with an area of One Thousand Four Hundred Forty (1,440) square meters (sq m), under Transfer Certificate of Title (TCT) No. T-80054, in the name of "ELENITA M. DEWARA, of legal age, Filipino, married to Eduardo Dewara, and resident of Bacolod City," to satisfy the judgment on the civil liability of Eduardo. The City Sheriff served a notice of embargo on the title of the lot and subsequently sold the lot in a public auction. In the execution sale, there were no interested buyers other than Ronnie. The City Sheriff issued a certificate of sale to spouses Ronnie and Gina Lamela to satisfy the civil liability in the decision against Eduardo.9 Ronnie then caused the consolidation of title in a Cadastral Proceeding before the RTC, which ordered the cancellation of TCT No. T-

80054 in the name of Elenita and the issuance of a new certificate of title in the name of respondent spouses.10 The levy on execution, public auction, issuance of certificate of sale, and cancellation of title of the lot in the name of Elenita were done while Elenita was working in California.11 Thus, Elenita, represented by her attorney-in-fact, Ferdinand Magallanes, filed a case for annulment of sale and for damages against respondent spouses and ex-officio sheriff Stenile Alvero before the RTC of Bacolod City. Petitioner claimed that the levy on execution of Lot No. 234-C was illegal because the said property was her paraphernal or exclusive property and could not be made to answer for the personal liability of her husband. Furthermore, as the registered owner of the property, she received no notice of the execution sale. She sought the annulment of the sale and the annulment of the issuance of the new TCT in the name of respondent spouses.12 On the other hand, respondent spouses averred that the subject lot was the conjugal property of petitioner Elenita and Eduardo. They asserted that the property was acquired by Elenita during her marriage to Eduardo; that the property was acquired with the money of Eduardo because, at the time of the acquisition of the property, Elenita was a plain housewife; that the jeep involved in the accident was registered in the name of petitioner; and that Elenita did not interpose any objection pending the levy on execution of the property.13 On September 2, 1999, the RTC rendered a decision in favor of petitioner, the fallo of which reads: WHEREFORE, judgment is hereby rendered in favor of the [petitioner] and against the [respondents]: 1. The levy on execution on Lot No. 234-C of the Bacolod Cadastre covered by TCT No. 80054 in the name of [petitioner] Elenita M. Dewara, the public auction of the property, and the consolidation of the title and issuance of new TCT No. 167403 in the name of [respondent] Ronnie Lamela, are hereby declared null and void; 2. The Register of Deeds of Bacolod City is ordered to cancel TCT No. 167403 in the name of [respondent] Ronnie Lamela and TCT No. 80054 be reinstated or a new one issued in the name of [petitioner] Elenita M. Dewara; 3. There is no pronouncement on damages with cost de officio. SO ORDERED.14 The RTC declared that said property was paraphernal in nature. It arrived at this conclusion by tracing how Elenita acquired the subject property. Based on the documentary evidence submitted, Elenitas grandfather, Exequiel Magallanes, originally owned Lot No. 234-C. Upon his demise, his children, Jesus (Elenitas father), Salud, and Concepcion, inherited the property, each entitled to a share equal to one-third (1/3) of the total area of the land. They were issued a new title (TCT No. T-17541) for the property. On July 6, 1966, petitioners aunt, Salud, executed a waiver of rights duly registered with the Office of the Register of Deeds under Entry No.

76392, thereby waiving her rights and participation over her 1/3 share of the property in favor of her siblings, Jesus and Concepcion. The two siblings then became the owners of the property, each owning one-half (1/2) of the property. Jesus subsequently sold his share to his daughter, Elenita, for the sum of Five Thousand Pesos (P5,000.00), based on the deed of sale dated March 26, 1975. The deed of sale was duly registered with the Register of Deeds under Entry No. 76393. Concepcion also sold her share to her niece, Elenita, for the sum of Ten Thousand Pesos (P10,000.00), based on the deed of sale dated April 29, 1975, which was duly registered with the Register of Deeds under Entry No. 76394. By virtue of the sale transactions, TCT No. T-17541 was cancelled and a new title, TCT No. T-80054, was issued in the name of Elenita.15 The RTC gave credence to the testimony of Elenita on the circumstances surrounding the sale of the property. First, it was sold to her by her father and her aunt so that the family would remain on the lot. Second, the minimal and inadequate consideration for the 1,440 sq m property was for the purpose of helping her expand her capital in her business at the time. Thus, the sale was essentially a donation and was therefore gratuitous in character.16 Having declared that the property was the paraphernal property of Elenita, the RTC ruled that the civil liability of Eduardo, which was personal to him, could not be charged to the exclusive property of his wife.17 On appeal, the CA reversed the decision of the RTC. The dispositive portion of the Decision reads: WHEREFORE, in view of all the foregoing, the instant appeal is GRANTED. The assailed decision of the Regional Trial Court of Bacolod City, Branch 54, dated September 2, 1999, in Civil Case No. 93-7942 is hereby REVERSED and SET ASIDE, and a new Decision is entered DISMISSING the complaint for lack of merit. Let a copy of this Decision be furnished to the Office of the Register of Deeds of Bacolod City, Negros Occidental [which] is hereby ordered to cancel Transfer Certificate of Title No. T-80054 or any transfer certificate of title covering Lot No. 234-C issued in the name of Elenita M. Dewara, and reinstate Transfer Certificate of Title No. 167403 or issue a new transfer certificate of title covering Lot No. 234-C in the name of Ronnie Lamela. No pronouncement as to costs. SO ORDERED.18 In reversing the decision of the RTC, the CA elucidated that the gross inadequacy of the price alone does not affect a contract of sale, except that it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract. Except for the assertions of Elenita, there was nothing in the records that would indicate a defect in Jesus and Concepcion Magallanes consent to the sale.19 The CA ruled that Elenita and Eduardo acquired the property by onerous title during their marriage through their common fund. Thus, it belonged to the conjugal partnership of gains and might be levied upon to answer for civil liabilities adjudged against Eduardo.20 Hence, this petition.

The Issue The sole issue for resolution is whether the subject property is the paraphernal/exclusive property of Elenita or the conjugal property of spouses Elenita and Eduardo. The answer to this question will define whether the property may be subject to levy and execution sale to answer for the civil liability adjudged against Eduardo in the criminal case for serious physical injuries, which judgment had already attained finality. The Ruling of the Court 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.21 Registration in the name of the husband or the wife alone does not destroy this presumption.22 The separation-in-fact between the husband and the wife without judicial approval shall not affect the conjugal partnership. The lot retains its conjugal nature.23 Moreover, the presumption of conjugal ownership applies even when the manner in which the property was acquired does not appear. The use of the conjugal funds is not an essential requirement for the presumption to arise.24 There is no dispute that the subject property was acquired by spouses Elenita and Eduardo during their marriage. It is also undisputed that their marital relations are governed by the conjugal partnership of gains, since they were married before the enactment of the Family Code and they did not execute any prenuptial agreement as to their property relations. Thus, the legal presumption of the conjugal nature of the property applies to the lot in question. The presumption that the property is conjugal property may be rebutted only by strong, clear, categorical, and convincing evidencethere must be strict proof of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it.25 Aside from the assertions of Elenita that the sale of the property by her father and her aunt was in the nature of a donation because of the alleged gross disparity between the actual value of the property and the monetary consideration for the sale, there is no other evidence that would convince this Court of the paraphernal character of the property. Elenita proffered no evidence of the market value or assessed value of the subject property in 1975. Thus, we agree with the CA that Elenita has not sufficiently proven that the prices involved in the sales in question were so inadequate for the Court to reach a conclusion that the transfers were in the nature of a donation rather than a sale. Furthermore, gross inadequacy of the price does not affect a contract of sale, except as it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract.26 The records are bereft of proof that the consent of petitioners father and her aunt were vitiated or that, in reality, they intended the sale to be a donation or some other contract. Inadequacy of the price per se will not rule out the transaction as one of sale; the price must be grossly inadequate or shocking to the conscience, such that the mind would revolt at it and such that a reasonable man would neither directly nor indirectly consent to it.27

However, even after having declared that Lot No. 234-C is the conjugal property of spouses Elenita and Eduardo, it does not necessarily follow that it may automatically be levied upon in an execution to answer for debts, obligations, fines, or indemnities of one of the spouses. Before debts and obligations may be charged against the conjugal partnership, it must be shown that the same were contracted for, or the debts and obligations should have redounded to, the benefit of the conjugal partnership. Fines and pecuniary indemnities imposed upon the husband or the wife, as a rule, may not be charged to the partnership. However, if the spouse who is bound should have no exclusive property or if the property should be insufficient, the fines and indemnities may be enforced upon the partnership assets only after the responsibilities enumerated in Article 161 of the Civil Code have been covered. In this case, it is just and proper that Ronnie be compensated for the serious physical injuries he suffered. It should be remembered that even though the vehicle that hit Ronnie was registered in the name of Elenita, she was not made a party in the said criminal case. Thus, she may not be compelled to answer for Eduardos liability. Nevertheless, their conjugal partnership property may be held accountable for it since Eduardo has no property in his name. The payment of indemnity adjudged by the RTC of Bacolod City in Criminal Case No. 7155 in favor of Ronnie may be enforced against the partnership assets of spouses Elenita and Eduardo after the responsibilities enumerated under Article 161 of the Civil Code have been covered. This remedy is provided for under Article 163 of the Civil Code, viz.: Art. 163. The payment of debts contracted by the husband or the wife before the marriage shall not be charged to the conjugal partnership.1wphi1 Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership. However, the payment of debts contracted by the husband or the wife before the marriage, and that of fines and indemnities imposed upon them, may be enforced against the partnership assets after the responsibilities enumerated in Article 161 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 purposes above-mentioned.28 Article 161 of the Civil Code enumerates the obligations which the conjugal partnership may be held answerable, viz.: 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 the 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. The enumeration above-listed should first be complied with before the conjugal partnership may be held to answer for the liability adjudged against Eduardo. Finally, the indemnity imposed against Eduardo shall earn an interest at the rate of twelve percent per annum, in accordance with our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals.29 WHEREFORE, in view of the foregoing, the Decision dated November 6, 2006 and the Resolution dated July 10, 2007 of the Court of Appeals in CA-G.R. CV No. 64936 are hereby ANNULLED and SET ASIDE. The decision dated September 2, 1999 of the Regional Trial Court of Bacolod City in Civil Case No. 93-7942 is hereby REINSTATED WITH MODIFICATION that the conjugal properties of spouses Elenita Dewara and Eduardo Dewara shall be held to answer for the judgment of Seventy-Two Thousand Five Hundred Ninety-Eight Pesos and Seventy Centavos (P72,598.70), plus an interest rate of twelve (12) percent per annum from the date of finality of the decision of the Regional Trial Court of Bacolod City in Criminal Case No. 7155, after complying with the provisions of Article 161 of the Civil Code. SO ORDERED.

What is excluded from CPG (a) Brought as exclusive property

G.R. No. L-16991

March 31, 1964

ROBERTO LAPERAL, JR., ET AL., plaintiffs-appellants, vs. RAMON L. KATIGBAK, ET AL., defendants-appellees. William H. Quasha and Associates for plaintiffs-appellants. Bausa, Ampil and Suarez for defendant-appellee Evelina Kalaw Katigbak. Ramon L. Katigbak in his own behalf as defendant-appellee. REGALA, J.: This is an appeal from a decision of the Court of First Instance of Manila declaring the property covered by TCT No. 57626 in the City of Manila to be the separate or paraphernal property of the defendant-appellee Evelina Kalaw. Plaintiffs-appellants, the spouses Laperal, disagree with the said finding. Hence they appealed from the said decision. They maintain that the realty in question, with its improvements and income, are conjugal assets of the spouses Evelina Kalaw and Ramon Katigbak. This litigation is a sequel to the one instituted by the Laperals against Katigbak and Kalaw way back in August, 1950. In that case, Civil Case No. 11767 of the Court of First Instance of Manila, the Laperals sought from the therein defendants "recovery of P14,000 evidenced by various promissory notes executed in favor of the Laperals by Katigbak, and for the return of jewelry valued at P97,500.00, delivered by the Laperals to Katigbak for sale on commission, or a total of P111,500.00." On November 1, 1950, upon a confession of judgment by Katigbak, the trial court rendered judgment against him to pay the Laperals the sum of P14,000.00, and to return the jewelry involved, or in lieu thereof, to pay plaintiffs P97,500.00, with interest from August 8, 1950. About a month after this decision was rendered, Kalaw filed a complaint against her husband Katigbak, for "judicial separation of property and separate administration," docketed as Civil Case No. 12860, of the Court of First Instance of Manila. Prior to the trial, Katigbak and Kalaw submitted an agreement or stipulation of facts on the basis of which, the court granted the prayer for the "judicial separation of property and separate administration." On February 1, 1955, the Laperals filed another complaint against Kalaw and Katigbak, Civil Case No. 25235 in the Court of First Instance of Manila, seeking among other things, annulment of the proceedings had in Civil Case No. 12860 for "judicial separation of property and separate administration," to enforce the judgment secured by the Laperals in Civil Case No. 11767 on the fruits of Kalaw's paraphernal property, and to secure a ruling declaring the real property covered by TCT No. 57626 as conjugal property of Katigbak and Kalaw. After trial, the court dismissed the complaint, which dismissal the Laperals appealed to this Court. Acting on the same, We rendered judgment under G.R. No. L-11418, promulgated on December 27, 1958, the pertinent portion of which reads:

However, our holding does not write a finis to the case. Because the trial court held that the conjugal partnership was not liable, it naturally, saw no reason or necessity for ruling upon the other issues involved, such as the legality of the proceedings in Civil Case No. 12860 for the dissolution of the conjugal partnership and whether or not the property covered by Transfer Certificate of Title No. 57626 belongs to the conjugal partnership. In conclusion we hold that while the fruits of the paraphernal property of Kalaw are not liable for the enforcement of the obligations contracted by Katigbak, nevertheless, the conjugal properties are.1wph1.t The case is hereby ordered remanded for further proceedings to make trial court, the latter to make the necessary findings indicated and then render a decision on the basis of said findings in accordance with our decision. No costs. In compliance with the above endorsement, the trial court, after submission by the parties of their respective memoranda, there being already sufficient evidence in the record rendered judgment declaring the property covered by TCT No. 57626 as paraphernal. Hence, this appeal. The facts upon which trial court predicated its conclusion that the realty in question is paraphernal are as follows: For the reason that it established, without contradiction in the records that the spouses Ramon Katigbak and Evelina Kalaw were married in 1938 (tsn, p. 20, hearing of Jan. 31, 1956) and neither of them had brought properties unto the marriage that Ramon's occupation was that of Asst. Atty. of the Bank of the Phil. Islands wherein his monthly salary P200.00 (id); that the property under TCT No. 57626 was registered in the name of "Evelina Kalaw-Katigbak, married to Ramon Katigbak" on December 6, 1939, only two years after marriage and the property was and is in Calle Evangelista, which was and is a business district; the Court, not withstanding the presumption that all properties acquired during the marriage are conjugal, is led to believe that, as Evelina declares, her mother Pura Villanueva was the one that had bought property for her and had placed it only in her name as the practice of her mother; that is, buying properties placing them directly in the names of her children; and this is recognized by Article 1448; and the Court is all the more led to the conclusion when it sees that Ramon Katigbak, in the same year 1939, that is, long before the spouses had come to the parting of ways, made a manifestation that he had no interest in the properties Ramon Katigbak, the husband of the vendor signed this document only for the purpose of assisting his wife but he has no interest in the property. (Sgd.) Ramon L. Katigbak (Exh. 5-a, p. 189, Record) As this case is before Us now, therefore, the issue is whether or not the above findings warrant a rejection of the presumption that the property disputed, for the reason that it was acquired during the marriage, is conjugal.

We find for the appellee. There is no denying that all properties acquired during the marriage are, by law, presumed conjugal. (Art. 160, Civil Code) The presumption, however, is not conclusive but merely rebuttable, for the same law is un equivocal that it exists only "unless it be proved that it (the property) belongs exclusively to the husband or the wife." And, examining the records and evidence in this suit, We hold that this is a case where the presumption has been sufficiently and convincingly disproven. The facts recited by the trial judge in explanation of his view that the property in dispute is paraphernal despite its having been acquired during coverture, impress Us as adequate and conclusive. As a matter of fact, the factors he took into account in rejecting the presumption, on the whole, tally with Our own views in the cases of Casiano v. Samaniego, 30 Phil. 135 and Coingco v. Flores, 82 Phil. 284. In the Casiano case, the deeds to the property in question were in the name of the defendant who testified that they were "purchased by her mother for herself" and that the purchase price was paid with money furnished by her mother. On the foregoing, the trial judge rendered judgment in favor of the defendant, and declared the real properties to be paraphernal. On appeal to this Court, declaring the ruling as essentially factual, We said: We do not question the correctness of the doctrine contended for, but we think it is sufficient to say that the legal presumption established by article 1407 of the Civil Code has been overcame by the evidence of record. There is nothing in the record which would justify us in disturbing the findings, of the trial judge as to the credibility of the witnesses called by the defense, and if we believe the defendant herself there can be no doubt the land in question was purchased for the wife with her own separate funds. It should be further noted that the husband in the aforecited case, apart from relying on the presumption established by the Civil Code, sought to show the conjugal nature of the disputed property by presenting a number of documentary evidence. He exhibited, for instance, "certified copies of reports on file in the City Assessor's Office showing that the land was assessed in his name; a certified copy of an inspector's report in which the name of the husband appears as the owner; and, a tax declaration made in November, 1905, relating to the property in dispute, in the name of the husband." Yet, even then, this Court declined to give effect to the presumption as the wife's evidence to the contrary were more preponderant. In the present case, on the other hand, We note that other than invoking the presumption, the burden of denying the evidence so presented was shifted to the appellant. In this latter task, the appellant failed completely. Again, in the Coingco case, We ruled: The second question raised in the motion for reconsideration is, whether the presumption that the properties in litigation are conjugal properties because they were acquired during the coverture may be sufficiently rebutted by any one of the following facts: (1) the titles to them are in the name of wife alone; (2) that the husband gave his marital consent to their being mortgaged by the wife; (3) that the wife financially able to buy those

properties. While it is true that each one of them, taken separately, may not be sufficient to overcome the above-quoted presumption established by Art. 14 of the Civil Code, it is nonetheless true that all of them taken together, with all the other facts and circumstances established by the evidence, might be, and were, considered by the lower court as sufficient to rebut the same presumption. In the case before Us now for review, the deed to the disputed land is in the name of the wife. At the time of its purchase, the property was already of such substantial value as admittedly, the husband, by himself could not have afforded to buy, considering that singular source of income then was his P200.00 a month salary from a Manila Bank. As in the Casiano case, supra, the defendant herein testified, and was believe by the trial court, that the purchase price was furnish by her mother so she could buy the property for herself. Furthermore, it was established during the trial that it was a practice of defendant's parents to so provide their children with money to purchase realties for themselves. These facts, quite obviously, more than measure up to the circumstances obtaining in the two cases previous cited wherein We held the conjugal presumption to have been rebutted. IN VIEW OF THE FOREGOING, the judgment of the lower Court declaring the property covered by TCT No. 57626 of the Register of Deeds of Manila as paraphernal is hereby affirmed, with costs against the appellants.

G.R. No. L-16991

March 31, 1964

ROBERTO LAPERAL, JR., ET AL., plaintiffs-appellants, vs. RAMON L. KATIGBAK, ET AL., defendants-appellees. William H. Quasha and Associates for plaintiffs-appellants. Bausa, Ampil and Suarez for defendant-appellee Evelina Kalaw Katigbak. Ramon L. Katigbak in his own behalf as defendant-appellee. REGALA, J.: This is an appeal from a decision of the Court of First Instance of Manila declaring the property covered by TCT No. 57626 in the City of Manila to be the separate or paraphernal property of the defendant-appellee Evelina Kalaw. Plaintiffs-appellants, the spouses Laperal, disagree with the said finding. Hence they appealed from the said decision. They maintain that the realty in question, with its improvements and income, are conjugal assets of the spouses Evelina Kalaw and Ramon Katigbak. This litigation is a sequel to the one instituted by the Laperals against Katigbak and Kalaw way back in August, 1950. In that case, Civil Case No. 11767 of the Court of First Instance of Manila, the Laperals sought from the therein defendants "recovery of P14,000 evidenced by various promissory notes executed in favor of the Laperals by Katigbak, and for the return of jewelry valued at P97,500.00, delivered by the Laperals to Katigbak for sale on commission, or a total of P111,500.00." On November 1, 1950, upon a confession of judgment by Katigbak, the trial court rendered judgment against him to pay the Laperals the sum of P14,000.00, and to return the jewelry involved, or in lieu thereof, to pay plaintiffs P97,500.00, with interest from August 8, 1950. About a month after this decision was rendered, Kalaw filed a complaint against her husband Katigbak, for "judicial separation of property and separate administration," docketed as Civil Case No. 12860, of the Court of First Instance of Manila. Prior to the trial, Katigbak and Kalaw submitted an agreement or stipulation of facts on the basis of which, the court granted the prayer for the "judicial separation of property and separate administration." On February 1, 1955, the Laperals filed another complaint against Kalaw and Katigbak, Civil Case No. 25235 in the Court of First Instance of Manila, seeking among other things, annulment of the proceedings had in Civil Case No. 12860 for "judicial separation of property and separate administration," to enforce the judgment secured by the Laperals in Civil Case No. 11767 on the fruits of Kalaw's paraphernal property, and to secure a ruling declaring the real property covered by TCT No. 57626 as conjugal property of Katigbak and Kalaw. After trial, the court dismissed the complaint, which dismissal the Laperals appealed to this Court. Acting on the same, We rendered judgment under G.R. No. L-11418, promulgated on December 27, 1958, the pertinent portion of which reads:

However, our holding does not write a finis to the case. Because the trial court held that the conjugal partnership was not liable, it naturally, saw no reason or necessity for ruling upon the other issues involved, such as the legality of the proceedings in Civil Case No. 12860 for the dissolution of the conjugal partnership and whether or not the property covered by Transfer Certificate of Title No. 57626 belongs to the conjugal partnership. In conclusion we hold that while the fruits of the paraphernal property of Kalaw are not liable for the enforcement of the obligations contracted by Katigbak, nevertheless, the conjugal properties are.1wph1.t The case is hereby ordered remanded for further proceedings to make trial court, the latter to make the necessary findings indicated and then render a decision on the basis of said findings in accordance with our decision. No costs. In compliance with the above endorsement, the trial court, after submission by the parties of their respective memoranda, there being already sufficient evidence in the record rendered judgment declaring the property covered by TCT No. 57626 as paraphernal. Hence, this appeal. The facts upon which trial court predicated its conclusion that the realty in question is paraphernal are as follows: For the reason that it established, without contradiction in the records that the spouses Ramon Katigbak and Evelina Kalaw were married in 1938 (tsn, p. 20, hearing of Jan. 31, 1956) and neither of them had brought properties unto the marriage that Ramon's occupation was that of Asst. Atty. of the Bank of the Phil. Islands wherein his monthly salary P200.00 (id); that the property under TCT No. 57626 was registered in the name of "Evelina Kalaw-Katigbak, married to Ramon Katigbak" on December 6, 1939, only two years after marriage and the property was and is in Calle Evangelista, which was and is a business district; the Court, not withstanding the presumption that all properties acquired during the marriage are conjugal, is led to believe that, as Evelina declares, her mother Pura Villanueva was the one that had bought property for her and had placed it only in her name as the practice of her mother; that is, buying properties placing them directly in the names of her children; and this is recognized by Article 1448; and the Court is all the more led to the conclusion when it sees that Ramon Katigbak, in the same year 1939, that is, long before the spouses had come to the parting of ways, made a manifestation that he had no interest in the properties Ramon Katigbak, the husband of the vendor signed this document only for the purpose of assisting his wife but he has no interest in the property. (Sgd.) Ramon L. Katigbak (Exh. 5-a, p. 189, Record) As this case is before Us now, therefore, the issue is whether or not the above findings warrant a rejection of the presumption that the property disputed, for the reason that it was acquired during the marriage, is conjugal.

We find for the appellee. There is no denying that all properties acquired during the marriage are, by law, presumed conjugal. (Art. 160, Civil Code) The presumption, however, is not conclusive but merely rebuttable, for the same law is un equivocal that it exists only "unless it be proved that it (the property) belongs exclusively to the husband or the wife." And, examining the records and evidence in this suit, We hold that this is a case where the presumption has been sufficiently and convincingly disproven. The facts recited by the trial judge in explanation of his view that the property in dispute is paraphernal despite its having been acquired during coverture, impress Us as adequate and conclusive. As a matter of fact, the factors he took into account in rejecting the presumption, on the whole, tally with Our own views in the cases of Casiano v. Samaniego, 30 Phil. 135 and Coingco v. Flores, 82 Phil. 284. In the Casiano case, the deeds to the property in question were in the name of the defendant who testified that they were "purchased by her mother for herself" and that the purchase price was paid with money furnished by her mother. On the foregoing, the trial judge rendered judgment in favor of the defendant, and declared the real properties to be paraphernal. On appeal to this Court, declaring the ruling as essentially factual, We said: We do not question the correctness of the doctrine contended for, but we think it is sufficient to say that the legal presumption established by article 1407 of the Civil Code has been overcame by the evidence of record. There is nothing in the record which would justify us in disturbing the findings, of the trial judge as to the credibility of the witnesses called by the defense, and if we believe the defendant herself there can be no doubt the land in question was purchased for the wife with her own separate funds. It should be further noted that the husband in the aforecited case, apart from relying on the presumption established by the Civil Code, sought to show the conjugal nature of the disputed property by presenting a number of documentary evidence. He exhibited, for instance, "certified copies of reports on file in the City Assessor's Office showing that the land was assessed in his name; a certified copy of an inspector's report in which the name of the husband appears as the owner; and, a tax declaration made in November, 1905, relating to the property in dispute, in the name of the husband." Yet, even then, this Court declined to give effect to the presumption as the wife's evidence to the contrary were more preponderant. In the present case, on the other hand, We note that other than invoking the presumption, the burden of denying the evidence so presented was shifted to the appellant. In this latter task, the appellant failed completely. Again, in the Coingco case, We ruled: The second question raised in the motion for reconsideration is, whether the presumption that the properties in litigation are conjugal properties because they were acquired during the coverture may be sufficiently rebutted by any one of the following facts: (1) the titles to them are in the name of wife alone; (2) that the husband gave his marital consent to their being mortgaged by the wife; (3) that the wife financially able to buy those

properties. While it is true that each one of them, taken separately, may not be sufficient to overcome the above-quoted presumption established by Art. 14 of the Civil Code, it is nonetheless true that all of them taken together, with all the other facts and circumstances established by the evidence, might be, and were, considered by the lower court as sufficient to rebut the same presumption. In the case before Us now for review, the deed to the disputed land is in the name of the wife. At the time of its purchase, the property was already of such substantial value as admittedly, the husband, by himself could not have afforded to buy, considering that singular source of income then was his P200.00 a month salary from a Manila Bank. As in the Casiano case, supra, the defendant herein testified, and was believe by the trial court, that the purchase price was furnish by her mother so she could buy the property for herself. Furthermore, it was established during the trial that it was a practice of defendant's parents to so provide their children with money to purchase realties for themselves. These facts, quite obviously, more than measure up to the circumstances obtaining in the two cases previous cited wherein We held the conjugal presumption to have been rebutted. IN VIEW OF THE FOREGOING, the judgment of the lower Court declaring the property covered by TCT No. 57626 of the Register of Deeds of Manila as paraphernal is hereby affirmed, with costs against the appellants.

G.R. No. 102330 November 25, 1998 TERESITA C. FRANCISCO, petitioner, vs. HON. COURT OF APPEALS; and CONCHITA EVANGELISTA and Her Husband SIMEON EVANGELISTA; ARACELI F. MARILLA and Her Husband FREDDY MARILLA; ANTONIO V. FRANCISCO; and EUSEBIO FRANCISCO, respondents.

QUISUMBING, J.: This petition for review on certiorari seeks to reverse respondent appellate court's decision 1 promulgated on October 7, 1991, affirming in toto the judgment of the Regional Trial Court which ruled, 2 thus:
WHEREFORE, premises considered, this Court renders judgment in favor of the defendants and against the plaintiff, as follows: 1) Ordering the dismissal of the Complaint with costs against the plaintiff; 2) Declaring the defendant Eusebio Francisco the administrator of the properties described in paragraph eight (8) of the Complaint; and 3) Sentencing the plaintiff to pay the defendants the sum of P10,000.00 as and for attorney's fees. SO ORDERED.

Petitioner is the legal wife of private respondent Eusebio Francisco (Eusebio) by his second marriage. Private respondents Conchita Evangelista, Araceli F. Marilla and Antonio Francisco are children of Eusebio by his first marriage. Petitioner alleges that since their marriage on February 10, 1962, she and Eusebio have acquired the following: (1) a sari-sari store, a residential house and lot, and an apartment house, all situated at Col. S. Cruz St., Barangay Balite, Rodriguez (formerly Montalban), Rizal, and; (2) a house and lot at Barrio San Isidro, Rodriguez, Rizal. Petitioner further avers that these properties were administered by Eusebio until he was invalidated on account of tuberculosis, heart disease and cancer, thereby, rendering him unfit to administer them. Petitioner also claims that private respondents succeeded in convincing their father to sign a general power of attorney which authorized Conchita Evangelista to administer the house and lot together with the apartments situated in Rodriguez, Rizal. On August 31, 1988, petitioner filed a suit for damages and for annulment of said general power of attorney, and thereby enjoining its enforcement. Petitioner also sought to be declared as the administratrix of the properties in dispute. In due course, the trial court rendered judgment in favor of private respondents. It held that the petitioner failed

to adduce proof that said properties were acquired during the existence of the second conjugal partnership, or that they pertained exclusively to the petitioner. Hence, the court ruled that those properties belong exclusively to Eusebio, and that he has the capacity to administer them. On appeal, the Court of Appeals affirmed in toto the decision of the trial court. Hence, this petition. Petitioner raised the following errors allegedly committed by the appellate court:
FIRST ASSIGNMENT OF ERROR RESPONDENT COURT ERRED IN APPLYING ARTICLES 160 AND 158, UNDER TITLE VI OF THE (NEW) CIVIL CODE BECAUSE SAID TITLE, TOGETHER WITH THE OTHERS, HAVE (SIC) ALREADY BEEN REPEALED BY ARTICLE 253 OF THE FAMILY CODE. SECOND ASSIGNMENT OF ERROR RESPONDENT COURT FURTHER ERRED IN NOT APPLYING ARTICLE 124 OF THE 3 FAMILY CODE.

But in her reply, petitioner posed the sole issue "whether or not Article 116 of the Family Code applies to this case because Article 253 of the same Code [which] expressly repeals Arts. 158 and 160 of the Civil Code" 4 To our mind, the crucial issue in this petition is whether or not the appellate court committed reversible error in affirming the trial court's ruling that the properties, subject matter of controversy, are not conjugal but the capital properties of Eusebio exclusively. Indeed, Articles 158 5 and 160 6 of the New Civil Code have been repealed by the Family Code of the Philippines which took effect on August 3, 1988. The aforecited articles fall under Title VI, Book I of the New Civil Code which was expressly repealed by Article 254 7 (not Article 253 as alleged by petitioner in her petition and reply) of the Family Code. Nonetheless, we cannot invoke the new law in this case without impairing prior vested rights pursuant to Article 256 8 in relation to Article 105 9 (second paragraph) of the Family Code. Accordingly, the repeal of Articles 158 and 160 of the New Civil Code does not operate to prejudice or otherwise affect rights which have become vested or accrued while the said provisions were in force. 10 Hence, the rights accrued and vested while the cited articles were in effect survive their repeal. 11 We shall therefore resolve the issue of the nature of the contested properties based on the provisions of the New Civil Code. Petitioner contends that the subject properties are conjugal, thus, she should administer these on account of the incapacity of her husband. On the other hand, private respondents maintain that the assets in controversy claimed by petitioner as "conjugal" are capital properties of Eusebio exclusively as these were acquired by the latter either

through inheritance or through his industry prior to his second marriage. Moreover, they stress that Eusebio is not incapacitated contrary to petitioner's allegation. We find petitioner's contention lacks merit, as hereafter elucidated. Art. 160 of the New Civil Code provides that "all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife". However, the party who invokes this presumption must first prove that the property in controversy was acquired during the marriage. 12 Proof of acquisition during the coverture is a condition sine qua non for the operation of the presumption in favor of the conjugal partnership. 13 The party who asserts this presumption must first prove said time element. Needless to say, the presumption refers only to the property acquired during the marriage and does not operate when there is no showing as to when property alleged to be conjugal was acquired. 14 Moreover, this presumption in favor of conjugality is rebuttable, but only with strong, clear and convincing evidence; there must be a strict proof of exclusive ownership of one of the spouses. 15 In this case, petitioner failed to adduce ample evidence to show that the properties which she claimed to be conjugal were acquired during her marriage with Eusebio. With respect to the land at Col. Cruz St., Balite, Rodriguez, Rizal, petitioner failed to refute the testimony of Eusebio that he inherited the same from his parents. Interestingly, petitioner even admitted that Eusebio brought into their marriage the said land, albeit in the concept of a possessor only as it was not yet registered in his name. Whether Eusebio succeeded to the property prior or subsequent to his second marriage is inconsequential. The property should be regarded as his own exclusively, as a matter of law, pursuant to Article 148 16 of the New Civil Code. Essentially, property already owned by a spouse prior to the marriage, and brought to the marriage, is considered his or her separate property. 17 Acquisitions by lucrative title refers to properties acquired gratuitously and include those acquired by either spouse during the marriage by inheritance, devise, legacy, or donation. 18 Hence, even if it be assumed that Eusebio's acquisition by succession of the land took place during his second marriage, the land would still be his "exclusive property" because it was acquired by him, "during the marriage, by lucrative title." 19 As regards the house, apartment and sari-sari store, private respondents aver that these properties were either constructed or established by their father during his first marriage. On the other hand, petitioner insists that the said assets belong to conjugal partnership. In support of her claim, petitioner relied on the building permits for the house and the apartment, with her as the applicant although in the name of Eusebio. She also invoked the business license for the sari-sari store issued in her name alone.

It must be emphasized that the aforementioned documents in no way prove that the improvements were acquired during the second marriage. And the fact that one is the applicant or licensee is not determinative of the issue as to whether or not the property is conjugal or not. As the appellate court aptly noted:
. . . . And the mere fact that plaintiff-appellant [petitioner herein] is the licensee of the sarisari store (Exhibit "F-3"; Exhibit "G", pp. 44-47, Record) or is the supposed applicant for a building permit does not establish that these improvements were acquired during her marriage with Eusebio Francisco, especially so when her exhibits ("D-1", "E", "E-I", "T", "T-1", "T-2", "U", "U-l" and "U-2"; pp. 38-40; 285-290, Record; TSN, January 17, 1989, page 6-7) are diametrically opposed to her pretense as they all described Eusebio Francisco as the owner of the structures (Article 1431, New Civil Code; Section 4. Rule 129, Revised Rules on Evidence). Neither is it plausible to argue that the sari-sari store constructed on the land of Eusebio Francisco has thereby become conjugal for want of evidence to sustain the proposition that it was constructed at the expense of their partnership (second paragraph, Article 158, New Civil Code). Normally, this absence of evidence on the source of funding will call for the application of the presumption under Article 160 of the New Civil Code that the store is really conjugal but it cannot be so in this particular case again, by reason of the dearth in proof that it was erected during the alleged second marriage (5 Sanchez Roman 840-841; 9 Manresa; cited in Civil Code of the Philippines by Tolentino, Volume 1, 1983 Edition, page 20 421).

Regarding the property at San Isidro, Rodriguez, Rizal, private respondents assert that their father purchased it during the lifetime of their mother. In contrast, petitioner claims ownership over said property in as much as the title thereto is registered in the name of "Eusebio Francisco, married to Teresita Francisco." It must be stressed that the certificate of title upon which petitioner anchors her claim is inadequate. The fact that the land was registered in the name of "Eusebio Francisco, married to Teresita Francisco", is no proof that the property was acquired during the spouses coverture. Acquisition of title and registration thereof are two different acts. 21 It is well settled that registration does not confer title but merely confirms one already existing. 22 The phrase "married to" preceding "Teresita Francisco" is merely descriptive of the civil status of Eusebio Francisco. 23 In the light of the foregoing circumstances, the appellate court cannot be said to have been without valid basis in affirming the lower court's ruling that the properties in controversy belong exclusively to Eusebio. Now, insofar as the administration of the subject properties is concerned, it follows that Eusebio shall retain control thereof considering that the assets are exclusively his capital. 24 Even assuming for the sake of argument that the properties are conjugal, petitioner cannot administer themn inasmuch as Eusebio is not incapacitated. Contrary to the allegation of petitioner, Eusebio, as found by the lower court, is not suffering from serious illness so as to impair his fitness to administer his properties. That he is handicapped due to a leg injury sustained in a bicycle accident, allegedly aggravated

when petitioner pushed him to the ground in one of their occasional quarrels, did not render him, in the Court's view, incapacitated to perform acts of administration over his own properties. WHEREFORE, petition is hereby DENIED. The Decision of the Court of Appeals is AFFIRMED. Costs against petitioner. SO ORDERED.

What is excluded from CPG - (b) Acquired by gratuitous title during marriage

G.R. No. L-8715

October 24, 1914

MARIANO VELOSO, plaintiff-appellant, vs. LUCIA MARTINEZ, personally and as administratrix of the estate of Domingo Franco, deceased-appellee. Martin M. Levering for appellant. Pantaleon E. del Rosario for appellee.

JOHNSON, J.: On the 1st day of July, 1911, the plaintiff commenced an action in the Court of First Instance of the Province of Cebu to recover of the defendant, personally and as administratrix of the estate of Domingo Franco, deceased, the possession of a certain parcel of land particularly described in the second paragraph of the complaint, together with the sum of P125 per month, from the 1st day of June, 1911. The defendant presented a demurrer to said complaint, which was overruled. No exception was taken to the ruling of the court upon the demurrer. Later the defendant answered, setting up a general denial and a special defense. The special defense consisted First. Of a counterclaim in the sum of P18,500, as attorney's fees for services rendered by the deceased, Domingo Franco, to the plaintiff; and, second, for the recovery of certain jewelry, of the value of P6,000, particularly described in the answer of the defendant, alleged to be in the possession of the plaintiff. The first special defense, relating to attorney's fees, was later withdrawn by the defendant. The only questions left for litigation were: . First. Whether the plaintiff was entitled to the recovery of the parcel of land in question; and, second, whether the defendant was entitled to recover from the plaintiff the jewelry described in her answer. After hearing the evidence, the Honorable Adoph Wislizenus, judge, in a carefully prepared opinion, found that the plaintiff was entitled to recover the possession of the land in question, together with the sum of P100 for each month from the month of June, 1911, until the possession of the land was returned to him. The lower court further found that the defendant was entitled to the possession of said jewelry, and ordered the plaintiff to return the same to her and in case of the plaintiff's failure to return said jewelry to the defendant, then and in that case, he shall pay to the defendant, for such failure, the sum of P6,000.

From the judgment of the lower court, each of the parties, plaintiff and defendant, appealed to this court. Later the defendant withdrew her appeal, thereby allowing that part of the judgment relating to the plaintiff's right to the possession of the land in question, together with damages, to become final. The only question remaining, therefore, for this court to decide is as to the ownership and right of possession of said jewels. It is admitted that the jewels in question, before the possession of the same was given to the plaintiff, belonged to the defendant personally and that she had inherited the same from her mother. The defendant, Lucia Martinez, is the widow of Domingo Franco, and after the death of her husband she was appointed administratrix of his estate. The record further shows (Exhibit C) that a short time before the death of Domingo Franco he borrowed from the plaintiff the sum of P4,500 and gave as security for the payment of said sum the jewelry described in the complaint. The money was borrowed on the 7th day of April, 1911, under promise to repay the same, with 12 per cent interest, on the 7th day of May, 1911. It is not clear whether or not the jewelry, at the time of the execution of said document (Exhibit C), was in fact delivered to the plaintiff. Said exhibit states that the jewelry was contained "dentro de una caja que queda cerrada despues de demonstradas las alhajas a D. Mariano Veloso" (in a box which remains closed after the jewels were shown to Mariano Veloso). The document further admits the "la llava quedara en poder de D. Domingo Franco" (the key shall remain in possession of Domingo Franco). After the death of Domingo Franco it appears that said jewelry was found in the same "caja" and that the key was in the possession of the defendant. It is very doubtful, indeed, under the facts, whether the plaintiff ever obtained the actual possession of the jewelry. His possession, however, seems to be admitted by the defendant in the present action. So far as the record shows the jewelry was in the same box where it was found at the time of the execution and delivery of said Exhibit C and that the defendant still has the key to said box. During the trial of the cause the plaintiff attempted to show that the jewels in question were pawned to him by Domingo Franco, with the full knowledge and consent of the defendant. And not only that, the plaintiff further attempts to show that after the death of Domingo Franco, the defendant promised to pay the amount for which the said jewels were pawned. The defendant positively denies that she knew that her husband had pawned her jewels or that she promised to redeem the same by paying the amount due. No explanation is contained in the record why the jewels were placed in said box (presumably a money safe). In view of the fact, however, that the record shows that the jewels were the sole and separate property of the wife, acquired from her mother, and in the absence of further proof, we must presume that they constituted a part of her paraphernal property. As such paraphernal property she exercised dominion over the same. (Article 1382, Civil Code.) She had the exclusive control and management of the same, until and unless she had delivered it to her husband, before a notary public, with the intent that the husband might administer it properly. (Article 1384, Civil Code.) There is no proof in the record that she had ever delivered the same to her husband, in any manner, or for any purpose. That being true, she could not be deprived of the same by any act of her husband, without her consent, and without compliance with the provisions of the Civil Code above cited.1awphil.net For the foregoing reasons, we find that the defendant is entitled to the possession of said jewels, or to their value, amounting to P6,000. The judgment of the lower court is therefore affirmed, with costs.