PADILLA V PADILLA 74 PHIL 377

FACTS: This case is an incident of the settlement of the testate estate of the late Narciso Padilla. In order that his
property may be divided according to his last will and testament, it is necessary first to liquidate the conjugal
partnership.
December 12, 1912 Narciso Padilla and Concepcion Paterno were married. The husband, being a
medical student contributed a small capital to the conjugal partnership while the wife brought to the
marriage considerable property in real estate, cash and jewelry
February 12, 1934 Narciso died. Having no children, he executed a will giving his whole estate to his
mother, Isabel Bibby vda. De Padilla. The property included in the inventory was appraised at P 261,000.
7 pieces of the real estate are in controversy since the remaining 10 were left by Narciso as part of the
conjugal partnership
Concepcion filed a petition praying that her paraphernal property be segregated from the inventoried
estate and delivered to her together with the corresponding reimbursements and indemnities; that she
be given of the conjugal partnership property and that the usufructuary right
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over of the portion
pertaining to the heir in Narcisos will be recognized
CFI ordered that certain pieces of real estate property , jewelry and cash were paraphernal and as such
should be delivered to Concepcion

ISSUE: Whether or not the properties in question are conjugal owing to the improvements made which came from
conjugal funds; whether or not improvements made on the paraphernal properties could be reimbursed to the
wife

HELD: Art. 1404 (2) of the Spanish Code provides that the improvements made on the separate property of the
spouses through advancements from the partnership or through the industry of either the husband or wife, belong
to the conjugal partnership.

Buildings constructed, at the expense of the partnership, during the marriage on land belonging to one of the
spouses also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who owns the
same.

In the instant case, the husband constructed buildings on the wifes lots. Isabel alleged that the CFI erred in since
from the time of the construction of the buildings, the conjugal partnership became the owner of the whole
property, that any increase in value should accrue to the conjugal partnership and any depreciation should be
suffered by the same.

Based on the above provision, the ownership of the land is retained by the wife until she is paid the value of the
lot, as a result of the liquidation of the conjugal partnership. Mere construction of a building from common funds
does not automatically convey the ownership of the wifes land to the conjugal partnership. Construction and
improvements are simply an exercise of the usufruct pertaining to the conjugal partnership over the wifes land.
Subsequently, the conjugal partnership is not bound to pay any rent during the occupation of the wifes land.
Before the payment of the value of land is made from the common funds, all the increase or decrease in its value
must be for her benefit or loss and she can only demand payment after the conjugal partnership is liquidated.
Furthermore, the wife should not be allowed to demand payment of the lot during the marriage and before
liquidation because this would disturb the husbands management of the conjugal partnership.
Whether the value of the paraphernal buildings which were demolished to construct new ones using conjugal
funds, are reimbursable to the wife. Concepcion maintains that is doubtful if the demolished buildings were of any
value. However, the SC maintained that however small the value of the buildings at the time of the demolition
should be, considering the principle of justice equity, reimbursed to the wife.
There is also the issue of money borrowed by the husband for horse race, pastime and for payment of personal
debt of the husband. Applying Art. 1386 of the Spanish Code which reads, the personal obligations of the husband
cannot be enforced against the fruits of the paraphernal property, unless it is proven that they redounded to the
benefit of the family, said amount cannot be applied to the conjugal partnership and should be paid by the

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Right that allows the use of property that belongs to another.
husband alone. While it is true that under Art. 1408, all debts and obligations contracted by the husband during
the marriage are chargeable to against the conjugal partnership, Art. 1386 is an exception and exempts the fruits
of the paraphernal property from the payment of the personal obligations of the husband unless there is proof
that the redounded to the benefit of the family. In this case, it clearly did not and as a result, they should be taken
from the husbands funds.
If the conjugal partnership assets are derived almost entirely, if not entirely, from the fruits of the paraphernal
property, as in this case, it is neither lawful nor equitable to apply article 1411 because by so doing, the fruits of
the paraphernal property would in reality be the only kind of property to bear the husband's gambling losses. In
other words, what the husband loses in gambling should be shouldered by him and not by the conjugal partnership
if the latter's assets come solely from the fruits of the paraphernal property. This is but just, because gambling
losses of the husband cannot by any process of reasoning be considered beneficial to the family. By the same
token, to charge the gambling losses against the conjugal partnership in such a situation would fly in the case of
the stern prohibition of article 1386, which protects the fruits of the paraphernal property precisely against
expenses of the husband that are of no help to the family.




CALTEX V FELIAS 108 PHIL 873

FACTS: This is a petition for certiorari to review CA decision which modified the RTC decision by declaring plaintiff
Felias exclusive owner of lot in question instead of Vincente Dysekco and affirming said decision in so far as it
declared Caltex Inc., absolute ownder of the coconut land described the in complaint
March 31, 1928 spouses Juliano Felias and Eulalia Felion originally owned lot no. 107 but donated it to
their daughter, Felisa Felias (respondent), making it her paraphernal property
March 26, 1941 CFI rendered judgment in case Texaco v Simeon Sawamoto (Felisas husband), ordering
Simeon to pay Texaco the sum of P66.94 with legal interest from the date the complaint was filed plus
fees. A writ of execution to the provincial sheriff who levied upon lot no. 107 together with
improvements, and a small parcel of coconut land in Look.
Upon expiration of the one year period without judgment debtor Sawamoto making the redemption, the
sheriff executed final deed of sale to Caltex on January 25, 1947
February 3, 1950, Felisa Felias filed an action to declare herself exclusive owner of the two parcels in
question
January 4, 1955, CFI rendered decision that: lot 107 is the exclusive property of Dysekco; sale at auction of
the provincial sheriff to Caltex is null and void; Caltex is the exclusive owner of the coconut land in
question

ISSUES:
1. Whether or not CA erred in failing to declare that even if lot no. 107 was paraphernal, it became conjugal
as a result of the construction of the conjugal house thereon
2. Whether or not CA erred in failing to declare that even if lot no. 107 is paraphernal, it is subject to levy of
execution in enforcing just obligation of Sawamoto

HELD: The property in question was sold by the sheriff as conjugal property of Felisa and Sawamoto on the theory
that under Art. 1404 (2) that Buildings constructed during the marriage on the land belonging to one of the
spouse shall also belong to the partnership, but the value of the land shall be paid to the spouse owning the same
(Art. 158 NCC). Said lot automatically became conjugal when during the marriage, and with conjugal partnership
funds, a building was constructed on the lot. But according to the records, the construction began as early as
September 1927 while it was only donated to Felisaon March 31, 1928. At the time of the construction, the land
still belonged to the spouses Felias. Given this, Art. 1404 is not applicable. When the lot was donated to Felisa by
her parents, the lot became her paraphernal property. The donation transmitted to her the rights of a landowner
over a building constructed on it. As such, at the time of the levy and the sale of the sheriff, lot no. 107 did not
belong to the conjugal partnership but as paraphernal property of Felisa. Because of this, it was not liable for the
obligations contracted by her husband in favor of Caltex. Since the structure was burned during WWII, at the time
when the sheriff executed the final deed of sale on January 27
,
1947, the house which was included in both deeds
was no longer in existence.

VDA DE PADILLA V PATERNO 3 SCRA 678

FACTS: This is an appeal from an order of CFI regarding the settlement of the testate estate of the decased Narciso
Padilla involving the same properties had been brought to the SC by the executrix-appellant Isabel Bibby vda. De
Padilla (G.R. no. L-48137 October 4, 1943 and G.R. no. L-4130 September 30, 1953)
February 12, 1934 Narciso Padilla died, leaving a childless widow Concepcion Paterno, whom he had
married in 1912. In his last will, Narciso declared his mother, Isabel Bibby vda De Padilla as universal
heiress
Paterno filed a civil case for the delivery of her paraphernal property with reimbursements and
indemnities as well as of the conjugal property as her share. Paterno also prayed that her usufructuary
right as surviving spouse be imposed on the corresponding portion of her husbands assets. Padilla
opposed said claims
January 15, 1940 The court declared certain personal and real properties as paraphernal. Other realties,
although originally paraphernal, were considered part of the conjugal assets. The court ordered the
appointment of commissioners to estimate the amount to be reimburse, divide the conjugal property and
determine which specific portion of the deceaseds estate is to be encumbered with the widows usufruct.
October 4, 1943 SC upheld the same despite Padillas appeals. The same year, Paterno died and was
survived by her testate heirs and legatees
July 3, 1950 RTC judge approved the majority of the commissioners report except that he declared: 1.
Lot on J. Luna St. was conjugal; 2. The usufruct of the widow shall be constituted on the 1/3 estate
March 15, 1954 Vda. De Padilla submitted an accounting of the credit balances of the estate for the
years 1951-1953 but objected to the accounting of the fruits of the properties declared as paraphernal
because 1. Said properties were actually conjugal, subject only to paraphernal claims and; 2. Their income
belonged to the conjugal estate and had been periodically divided between Padilla and Paternos estate

ISSUE: Whether or not the subject properties included in the estate are paraphernal in character and that all their
income belongs to widow Paterno

HELD: Paterno is the sole owner of those properties that never became conjugal since the conjugal improvements
on the subject properties were destroyed before they could be reimbursed to the widow Paterno. Paterno is also
the sole owner of all their income that accured during their administration by Vda. De Padilla until they were
finally delivered to the estate of Paterno minus the administration expenses incurred by Vda. De Padilla with
respect to these properties.



MUNOZ JR. V RAMIREZ G.R. NO. 156125 (AUGUST 25, 2010)

FACTS: The case concerns a 77sqm residential house in Mandaluyong City covered by TCT no. 7650 of the Registry
of Deeds in the name of petitioner Francisco Munoz Jr. Said lot was previous owned by Erlinda Ramirez and Eliseo
Carlos
April 6, 1989 Eliseo, with Erlindas consent, mortgaged said property to GSIS to secure a P136,500
housing loan payable in 20 years with monthly amortization of P1,687.66. Erlinda, thereon, constructed a
2-storey residential house on the lot
July 14, 1993 Erlinda executed a deed of absolute sale to sell subject property for P602,000 in favor of
Munoz
September 24, 1993 Ramirez filed a complaint before the RTC for the nullification of the deed of
absolute sale, alleging that there was no sale but only a mortgage transaction and the documents
referring to the petitioners title were falsified
Respondent alleged that the subject property is paphernal in nature since it was registered in Erlindas
name and that it was inherited by Erlinda from her parents, Pedro Ramirez and Fructuosa Urcla
Respondent alleged that Erlinda retained ownership of the subject property since the house constructed
was less than the value of the land

ISSUE: Whether or not the subject property is paraphernal or conjugal

HELD: As a general rule, all property acquired during the marriage, whether the acquisition appears to have been
made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary
is proved. Pursuant to Arts. 96 and 109, properties acquired by gratuitous title by either spouse, during the
marriage, shall be excluded from the community property and be the exclusive property of each spouse. As such,
the subject lot is Erlindas exclusive paraphernal property.

Article 120 of the Family Code, which supersedes Article 158 of the Civil Code, provides the solution in determining
the ownership of the improvements that are made on the separate property of the spouses, at the expense of the
partnership or through the acts or efforts of either or both spouses. Under this provision, when the cost of the
improvement and any resulting increase in value are more than the value of the property at the time of the
improvement, the entire property of one of the spouses shall belong to the conjugal partnership, subject to
reimbursement of the value of the property of the owner-spouse at the time of the improvement; otherwise, said
property shall be retained in ownership by the owner-spouse, likewise subject to reimbursement of the cost of the
improvement.

In the present case, Eliseo paid a portion only of the GSIS loan through monthly salary deductions. From April 6,
1989 to April 30, 1992, Eliseo paid about P60,755.76, 44 not the entire amount of the GSIS housing loan plus
interest, since the petitioner advanced the P176,445.27 45 paid by Erlinda to cancel the mortgage in 1992.
Considering the P136,500.00 amount of the GSIS housing loan, it is fairly reasonable to assume that the value of
the residential lot is considerably more than the P60,755.76 amount paid by Eliseo through monthly salary
deductions.

Thus, the subject property remained the exclusive paraphernal property of Erlinda at the time she contracted with
the petitioner; the written consent of Eliseo to the transaction was not necessary.




Embrado vs. CA 233 SCRA 335

FACTS: This is petition for review on certiorari from the decision of respondent Court of Appeals upholding the
validity of the Deed of Sale over Lot No. 564 executed by petitioner Lucia Embrado in favor of private respondent
Eda Jimenez.
Lot No. 564 is a 366-square meter lot situated in Dipolog City originally owned by Juan, Pastor and Matias
Carpitanos.
July 1946 - a Venta Definitiva, a notarized document written entirely in Spanish, was executed by the
Carpitanos whereby they sold Lot No. 564 to "Srta. LUCIA C. EMBRADO
February 13 1948 - The sale was registered and Transfer Certificate of Title No. T-was issued in the name
of Lucia Embrado alone, who was by then already married to petitioner Oreste Torregiani since 1943.
October 19, 1970 - the word "single" appearing in TCT No. T-99 was canceled and replaced by the phrase
"married to Oreste Torregiani."
In 1958 - Torregianis then made their conjugal abode on the lot and constructed a residential/commercial
building thereon.
May 1, 1971 - Lucia Embrado Torregiani sold Lot No. 564, described as her "own paraphernal property," to
her adopted daughter, herein private respondent Eda Jimenez, for the sum of P1,000.00.
March 6, 1972 - Eda Jimenez sold sixty-five (65) square meters of Lot 564 to Marcos Salimbagat for
P6,500.00.
August 1, 1972 - Eda Jimenez conveyed 301 square meters of the same lot to Pacifico Cimafranca for
P30,000.
September 25, 1972 - The Torregianis instituted in the CFI an action for declaration of nullity of contract,
annulment of sales, reconveyance and damages against the spouses Santiago and Eda Jimenez, Marcos
Salimbagat and Pacifico Cimafranca alleging that the sale of lot 564 by Lucia Embrado to Eda Jimenez was
void not only for lack of consideration but also because Oreste Torregiani did not consent to the sale,
which consent was necessary because Lot 564 was conjugal property.
The CFI held that the sale of Lot 564 to Eda Jimenez and its subsequent transfers to Marcos Salimbagat
and Pacifico Cimafranca, who were declared buyers in bad faith, were void and of no effect; ordered
defendants Eda and Santiago Jimenez to return to defendant Pacifico Cimafranca the sum of P30,000.00
paid by him for the 301 square meters and the house in question, and to defendant Marcos Salimbagat
the P6,500.00 paid by him for the 65 square meters.
The CA reversed the foregoing judgment which held that since Lucia Embrado actually agreed with Juan,
Pastor and Matias Carpitanos, the original owners, to the purchase of Lot 564 on 15 April 1941 when she
was not yet married, then the lot was her paraphernal property since a sale is considered perfected the
moment the parties agree on the object and cause of the contract. In addition, the respondent court
declared Salimbagat and Cimafranca buyers in good faith since the contrary was not proved.

ISSUE: Whether Lot 564 was paraphernal property of Lucia Embrado or conjugal with her husband Oreste
Torregiani.

HELD: While we agree with respondent court that Lot 564 was originally the paraphernal property of Lucia, we
cannot adopt its conclusion that because Lucia and the original owners agreed in 1941 for its purchase and
sale, ownership was already acquired by Lucia at that moment. Under Art. 1496 of the Civil Code, "ownership
of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified
in articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred
from the vendor to the vendee," and under Art. 1498, "(w)hen the sale is made through a public instrument,
the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if
from the deed the contrary does not appear or cannot clearly be inferred."

In the case at bar, the Venta Definitiva over Lot 564 in favor of Lucia Embrado was executed by the
Carpitanoses on 2 July 1946 when her marriage to petitioner Oreste Torregiani was already subsisting.
Although ownership was acquired during the marriage and hence presumed conjugal, the presumption of
conjugality was successfully overcome by the terms of the Venta Definitiva which contains a positive assertion
of exclusive ownership, which was duly supported by the testimony of Matias Carpitanos, one of the original
sellers of the lot.

However, a decisive fact appears which prevents us from ultimately affirming the validity of her sale of Lot 564
to private respondent Eda Jimenez. The trial court found as a fact the construction in 1958 of a
residential/commercial building on said lot a part of which was leased to third persons and another part
serving as the Torregianis' conjugal dwelling.

Although no evidence was presented on the source of funds used in the construction to determine whether
the same was conjugal or paraphernal, other than the testimony of Torregiani, petitioners nevertheless enjoy
in their favor the presumption that the funds used were conjugal.

The second paragraph of Article 158 of the Civil Code provides that "[b]uildings constructed, at the expense of
the partnership, during the marriage on land belonging to one of the spouses, also pertain to the partnership,
but the value of the land shall be reimbursed to the spouse who owns the same." Under this article, the land
becomes conjugal upon the construction of the building without awaiting reimbursement before or at the
liquidation of the partnership upon the concurrence of two conditions, to wit: (a) the construction of the
building at the expense of the partnership; and, (b) the ownership of the land by one of the spouses. The
conditions have been fully met in the case at bench. Thus, even if Lot 564 was originally the paraphernal
property of Lucia as evident from the "Venta Definitiva", the same became conjugal upon the construction of
the residential/commercial building in 1958.